KINGSROSE MINING LIMITED — Proxy Solicitation & Information Statement 2008

Apr 2, 2008

KINGSROSE MINING LIMITED ABN 49 112 389 910

Suite 3, 16 Kearns Crescent Applecross WA 6153 Tel: (08) 9316 2711 Fax: (08) 9316 2511 Email: info@kingsrosemining.com.au

NOTICE OF GENERAL MEETING AND EXPLANATORY STATEMENT

For a Shareholders' General Meeting to be held at The Broadwater Pagoda Hotel, 112 Melville Parade, Como, Western Australia on Tuesday, 6 May 2008 at 10.00 am

This is an important document. Please read it carefully.

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

Notice of General Meeting and Explanatory Statement re 1.2CN&ESOP

TIME AND PLACE OF MEETING AND HOW TO VOTE

Venue

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

The Broadwater Pagoda Hotel, 112 Melville Parade, Como, Western Australia, on Tuesday, 6 May 2008 commencing at 10.00 am, Western Standard Time.

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 10.00 am (Western Standard Time).

Voting by Proxy

To vote by proxy, please complete and sign the proxy form enclosed with this Notice of General Meeting as soon as possible and either:

• send the proxy form (by post or delivery) to the Company's office at Suite 3, 16 Kearns Crescent, Applecross, Western Australia; or

• send the proxy form by facsimile to facsimile number +61 8 (9316 2511).

so that it is received not later than 10.00 am (Western Standard Time) on 4 May 2008.

Your proxy form is enclosed.

Kingsrose Mining Limited Notice of General Meeting and Explanatory Statement

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KINGSROSE MINING LIMITED ABN 49 112 389 910

NOTICE OF GENERAL MEETING

Notice is hereby given that the General Meeting of the Shareholders of Kingsrose Mining Limited will be held at The Broadwater Pagoda Hotel, 112 Melville Parade, Como, Western Australia on Tuesday, 6 May 2008 at 10.00 am (Western Standard Time) for the purpose of transacting the following business.

The attached Explanatory Statement is provided to supply Shareholders with information to enable Shareholders to make an informed decision regarding the Resolutions set out in this Notice. The Explanatory Statement is to be read in conjunction with this Notice.

AGENDA

BUSINESS

Resolution 1 – Approval to Issue Options to Mr James William Phillips

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

"That for the purposes of Chapter 2E of the Corporations Act, Listing Rule 10.11 of the Listing Rules of ASX Limited and for all other purposes, approval is given for the Company to issue to Mr James William Phillips or his nominee up to 3,000,000 options to acquire fully paid ordinary shares in the capital of the Company on the terms and conditions set out in the Explanatory Statement accompanying this Notice."

Short Explanation: Under the ASX Listing Rules an issue of securities to a director requires prior shareholder approval. For the purposes of Chapter 2E of the Corporations Act and ASX Listing Rule 10.11, Shareholder approval is being sought to allow Mr Phillips as a non-executive Director to be issued Options in the Company.

The Company will disregard any votes cast on this Resolution by Mr James William Phillips and any of his associates or any person who may obtain a benefit if this Resolution is passed other than in their capacity as a holder of ordinary securities. However, the Company will not disregard a vote cast on this Resolution if:

a) it is cast by an allottee as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

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b) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form to vote as the proxy decides.

Resolution 2 – Approval to Issue Options to Airedale (Asia) Limited

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

"That for the purposes of Listing Rule 7.1 of the Listing Rules of ASX Limited and for all other purposes, approval is given for the Company to issue to Airedale (Asia) Limited or its nominee up to 2,500,000 options to acquire fully paid ordinary shares in the capital of the Company on the terms and conditions set out in the Explanatory Statement accompanying this Notice." .

Short Explanation: Under ASX Listing Rule 7.1, the Company may not issue or agree to issue equity securities in any 12 month period representing more than 15% of its ordinary share capital on issue at the commencement of that period without shareholder approval. Further, equity securities issued with prior shareholder approval are not included in the calculation under ASX Listing Rule 7.1. Airedale (Asia) Limited is not a related party of the Company. Please refer to the Explanatory Statement for details.

The Company will disregard any votes cast on this Resolution by a 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 Shareholder, if this Resolution is passed and any associate of those persons. However, the Company need not disregard a vote case on this Resolution if:

• a) it is cast by an allottee as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or

b) it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote in accordance with the directions on the proxy form to vote as the proxy decides.

Resolution 3 – Adoption of Employee Share Option Plan

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

"That for the purposes of Exception 9 of Listing Rule 7.2 of the Listing Rules of ASX Limited and for all other purposes, the Company approve the issue of securities under the employee incentive scheme for eligible employees known as the "Kingsrose Mining Employee Share Option Plan", a copy of which is annexed as Annexure "B" to the Explanatory Statement, as an exception to Listing Rule 7.1 of the Listing Rules of ASX Limited, for a period of 3 years commencing on the date of this meeting." .

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Short Explanation: For the purposes of Exception 9 of Listing Rule 7.2, Shareholders must give their approval to the issue of securities under an employee incentive scheme as an exception to the requirements of Listing Rule 7.1.

The Company will disregard any votes cast on this Resolution by a Director of the Company (except one who is ineligible to participate in the Kingsrose Mining Employee Share Option Plan) and any associate of those persons. However, the Company will not disregard a vote if:

a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or

b) it is cast by a person chairing that meeting as a proxy for a person who is entitled to vote in accordance with the directions on the proxy form to vote as the proxy decides.

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VOTING AND PROXIES

1. 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.

2. Where a voting exclusion applies, the Company need not disregard a vote if it is cast by the 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.

3. 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 4 May, 2008 at 10.00 am (Western Standard Time).

4. A proxy form is attached. If required it should be completed, signed and returned to the Company's registered office in accordance with the instructions on that form.

By order of the Board

==> picture [111 x 83] intentionally omitted <==

Ms Jeannette Smith Secretary

Dated: 26 March 2008

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KINGSROSE MINING LIMITED ABN 49 112 389 910

EXPLANATORY STATEMENT

This Explanatory Statement is intended to provide Shareholders with sufficient information to assess the merits of the Resolutions contained in this Notice.

The Directors recommend that Shareholders read this Explanatory Statement in full before making any decision in relation to the Resolutions.

1. RESOLUTION 1 – APPROVAL TO ISSUE OPTIONS TO MR JAMES WILLIAM PHILLIPS

Resolution 1 seeks Shareholder approval to the issue of up to 3,000,000 Options to Mr James William Phillips (or his nominee). Mr Phillips is a non-executive Director of the Company.

Shareholder approval is required for the purposes of Chapter 2E of the Corporations Act (Section 208) and ASX Listing Rule 10.11 because Mr Phillips as a non-executive Director is a related party of the Company.

1.1 Background

The Company was admitted to the Official List of ASX on 7 December 2007.

The Company currently has the following securities on issue:

• 65,050,020 Shares;

• 6,500,000 options exercisable at 25 cents on or before 31 December 2012; and

• 11,000,000 convertible notes.

In its prospectus lodged with ASIC on 1 November 2007 (the " November 2007 Prospectus ") for the initial public offer of its Shares, the Company stated that it intended to undertake a non-renounceable entitlements issue of options to registered shareholders within 6 months of quotation of the Shares of the Company on ASX.

The November 2007 Prospectus also stated that at the same time as undertaking the entitlements issue, the Company intends to issue options on the same terms and the same subscription price to the holders of convertible notes on the basis of one option for every two convertible notes held.

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On 18 March 2008, the Company lodged a prospectus with ASIC for the nonrenounceable rights issue of one Option for every two Shares held by Shareholders as at 5.00pm on 31 March 2008 (the " Option Entitlements Issue "). The Options are to be issued at half a cent each to raise up to approximately $162,625.

Mr Phillips is the holder of 6,000,000 convertible notes. Airedale (Asia) Limited is the holder of 5,000,000 convertible notes. The Company proposes to issue 3,000,000 Options to Mr Phillips (or his nominee) and 2,500,000 Options to Airedale (Asia) Limited (or its nominee) in accordance with the statements made in the November 2007 Prospectus.

The proposed issue of Options to Mr Phillips is the subject of Resolution 1. The proposed issue of Options to Airedale (Asia) Limited (as a non-related party) is the subject of Resolution 2.

1.2 Chapter 2E of the Corporations Act - Related Party Transaction

Chapter 2E of the Corporations Act prohibits a public company from giving a financial benefit to a related party of the public company unless either:

• (a) the giving of the financial benefit falls within one of the nominated exceptions to the provisions; or

• (b) prior shareholder approval is obtained to the giving of the financial benefit to the related party.

For the purposes of Chapter 2E, Mr Phillips as a Director is a related party of the Company.

Resolution 1 provides for the issue of Options to a related party, which is a financial benefit requiring Shareholder approval in the absence of a specified exception applying.

1.3 Information provided for the purposes of Chapter 2E

(a) The Related Party to whom the proposed Resolution would permit the Financial Benefit to be Given

The related party is Mr James William Phillips or his nominee.

(b) The Nature of the Financial Benefit

The proposed financial benefit to be given is the issue of up to 3,000,000 Options to Mr Phillips or his nominee.

The terms of the Options proposed to be issued Mr Phillips or his nominee are set out in Annexure "A". The terms are the same as the terms of the Options offered to Shareholders under the Option Entitlements Issue.

The Options will be issued within one month of the date of the Meeting.

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(c) Directors Recommendation and Basis of Financial Benefit

The Board currently consists of Mr John Morris (non-executive Chair), Mr David Hatch (Managing Director), Mr Michael Andrews (non-executive Director), Mr Dennis Franks (non-executive Director) and Mr Phillips (non-executive Director).

The particular number of Options to be issued to Mr Phillips and the terms of the Options was negotiated by the Directors independent of Mr Phillips.

The Options are being issued pursuant to statements made in the November 2007 Prospectus and at the same time as the Company undertaking the Options Entitlement Issue in order to align convertible note holders with Shareholders

Mr Phillips abstains from making a recommendation to Shareholders as to Resolution 1 as he has a material personal interest in the outcome of Resolution 1 being the recipient of the Options.

(d)

Dilution

The passing of the Resolution 1 would have the effect of issuing Options on the terms and conditions as set out Annexure "A" to Mr Phillips (or his nominee).

If any of the Options issued are exercised then the effect would be to dilute the shareholding of existing Shareholders. The market price of the Company's Shares during the period of the Options will normally determine whether or not option holders exercise the Options. At the time any Options are exercised and Shares are issued pursuant to the exercise of the Options, the Company's Shares may be valued at a price that is higher than the exercise price of the Options.

If all of the 3,000,000 Options that may be issued under Resolution 1 were exercised, the effect would be to dilute the shareholding of existing Shareholders by approximately 4% based on the current number of Shares of 65,050,020 (based on current undiluted capital).

(e) Total Remuneration Package of Mr Phillips

The remuneration received by Mr Phillips is a director’s fee of $20,000 per annum. Mr Phillips is also entitled to be paid reasonable expenses incurred by him on business of the Company.

(f) Existing Relevant Interest

Other than holding 6,000,000 convertible notes, Mr Phillips and his associates currently do not have a relevant interest in any other securities in the Company.

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(g) Trading History

The following table gives details of the highest, lowest and the latest closing price of the Company's Shares trading on the ASX over the last 12 months.

	Date	Closing Price
Highest Price	13 December 2007	41 cents
Lowest Price	1 February 2008	22 cents
Latest Price	20 March 2008	26 cents

(h) Valuation of Options

The Company's independent advisers, Paragon Consultants, have valued the Options to be issued to Mr Phillips or his nominees by reference to the Binomial valuation of share options based on the following assumptions.

Input		Note
Underlying Security spot price	$0.25	1
Exercise price	20 cents
Dividend rate	0%	2
Compound risk free rate	6.1%	3
Expiry date	31 December 2012
Volatility	64.42%	4

Note 1 The underlying security spot price used for the purposes of this valuation is based on the closing price as at 19 March 2008.

Note 2 As at the date of the valuation the Company had not forecast any future dividend payments. For the purposes of the valuation it is therefore assumed that the Company's share price is "ex-dividend". If dividend payments were forecast, the value of the Options would be reduced.

Note 3 The risk free rate is the Commonwealth Government securities rate with a maturity date approximating that of the expiration period of the Options.

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Note 4

As the Company has only recently listed on 7 December 2007, the volatility rate is based on the volatility of broadly comparable companies listed on ASX over a period equal to the expected life of the Options.

Based on the above assumptions, the Options to be issued to Mr Phillips have been valued under the Binomial valuation methodologies as follows:

	Number of Options	Value per Option
Mr Phillips	3,000,000	14 cents

(i) Other Information

The Directors are not aware of any other information that is reasonably required by Shareholders to allow them to make a decision as to whether it is in the best interests of the Company to pass Resolution 1.

1.4 ASX Listing Rule 10.11

For the purposes of ASX Listing Rule 10.11, Mr Phillips as a non-executive Director is a related party of the Company.

Accordingly, in order to issue the Options to Mr Phillips (or their nominees), the Company must obtain Shareholder approval pursuant to ASX Listing Rule 10.11.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Options as approval is being obtained under ASX Listing Rule 10.11. Shareholders should note that the issue of the Options will not be included in the 15% calculation for the purposes of ASX Listing Rule 7.1.

ASX Listing Rule 10.13 sets out a number of matters which must be included in the notice of meeting convened to seek shareholder approval under ASX Listing Rule 10.11.

For the purposes of ASX Listing Rule 10.13, the following information is provided to Shareholders in relation to the Resolution 1. This information is as follows:

• (a) The Options will be issued to Mr Phillips or his nominee.

• (b) The number of Options the Company will issue is up to 3,000,000 Options to Mr Phillips or his nominee.

• (c) The Options will be issued no later than one month after the date of this Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules).

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• (d) The Options will be issued for half a cent each (or a total of $15,000). The terms of the Options are set out at Annexure "A".

• (e) The Company will raise a total of $15,000 from the issue of the Options. These funds will be used as additional working capital.

2. RESOLUTION 2 – APPROVAL TO ISSUE OPTIONS TO AIREDALE (ASIA) LIMITED

Resolution 2 seeks Shareholder approval for the issue of up to 2,500,000 Options to Airedale (Asia) Limited (or its nominee). Airedale (Asia) Limited is the holder of convertible notes of the Company.

Shareholder approval is required for the purposes of ASX Listing Rule 7.1.

2.1

Background

The background to proposed issue of Options to Airedale (Asia) Limited is set out in paragraph 1.1 above. Based on the Binomial valuation for the Options to be issued to Mr Phillips and set out in paragraph 1.3(h) above, the Options proposed to be issued to Airedale (Asia) Limited have been valued at 14 cents each.

2.2

ASX Listing Rule 7.1

Listing Rule 7.1 requires shareholder approval to the proposed issue of Options in the Company. Listing Rule 7.1 provides, subject to certain exceptions, without shareholder approval, a listed company must not issue equity securities where the number of equity securities proposed to be issued represents more than 15% of the company’s shares then on issue.

ASX Listing Rule 7.3 sets out the matters which must be included in the notice of meeting convened to seek shareholder approval under ASX Listing Rule 7.1.

For the purposes of ASX Listing Rule 7.3, the following information is provided to shareholders in relation to Resolution 2.

• (a) The maximum number of Options to be issued by the Company is 2,500,000.

• (b) The Options will be issued no later than 3 months after the date of this Meeting (or a later date if permitted by ASX waiver).

• (c) The issue price of the Options is half a cent each.

• (d) The allottee of the Options is Airedale (Asia) Limited or its nominee, which is not a related party of the Company.

• (e) The terms of the Options are set out in Appendix A.

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• (f) The Company will raise a total of $12,500 from the issue of the Options. These funds will be used as additional working capital.

3. RESOLUTION 3 – ADOPTION OF EMPLOYEE SHARE OPTION PLAN

On 18 March 2008 the Directors resolved to adopt an employee incentive scheme to be called the "Kingsrose Mining Employee Share Option Plan" (the " Plan ").

The purpose of the Plan is to provide an incentive for eligible employees to participate in the future growth of the Company and, upon becoming shareholders, to participate in the Company’s profits and development. An eligible employee is an employee (whether fulltime or part-time) of the Company or a director of the Company.

Under the Plan, the Board may offer to eligible employees the opportunity to subscribe for employee options in the Company on the terms set out in the rules of the Plan (attached as Annexure "B"). Participation in the Plan will be offered to eligible employees at the Board’s discretion but based on a consideration of, among other things, the seniority of the person, and the length of service of the eligible employee with the Company and the potential contribution of the eligible employee to the growth of the Company.

The Company has not yet issued any options under the Plan. The rules of the Plan are set out in Annexure "B".

Shareholder approval is not required under the Corporations Act or the ASX Listing Rules for the implementation of the Plan. However, shareholder approval is being sought to allow the Company to rely on an exception to the calculation of the 15% limit imposed by ASX Listing Rule 7.1 on the number of securities that may be issued without shareholder approval. ASX Listing Rule 7.2 exception 9 provides that ASX Listing Rule 7.1 does not apply to an issue of securities under an employee incentive scheme that has been approved by shareholders within 3 years before the date of issue of the scheme.

If an offer is made to a Director to participate in the Plan then separate Shareholder approval will need to be obtained at that time.

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KINGSROSE MINING LIMITED ABN 49 112 389 910

GLOSSARY

In the Notice and this Explanatory Statement the following expressions have the following meanings:

" ASX " means ASX Limited (ACN 008 624 691).

" ASX Listing Rules " or " Listing Rules " means the Listing Rules of ASX.

" ASIC " means the Australian Securities and Investment Commission.

" Board " means the Board of Directors of the Company.

" Company " or " Kingsrose Mining " means Kingsrose Mining Limited (ABN 49 112 389 910).

" Corporations Act " means the Corporations Act 2001 (Cth).

" Director " means a director of the Company from time to time.

" Explanatory Statement " means this Explanatory Statement.

" Meeting " means the meeting convened by this Notice.

" Notice " means the notice of meeting that accompanies this Explanatory Statement.

" November 2007 Prospectus " means the prospectus lodged by the Company with ASIC on 1 November 2007 for its initial public offer of Shares.

" Option " means an option to subscribe for a Share.

" Option Entitlements Issue " means the non-renounceable rights issue of one Option for every two Shares held by Shareholders offered under a prospectus lodged with ASIC on 18 March 2008.

" Plan " means the Kingsrose Mining Employee Share Option Plan established in accordance with rules set out in Annexure "B".

" Resolution " means a resolution referred to in the Notice.

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

" Shareholder " means a registered holder of Shares in the Company.

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" WST " means Western Standard Time, Perth, Western Australia.

" $ " means Australian dollars unless otherwise stated.

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ANNEXURE "A"

TERMS AND CONDITIONS OF OPTIONS – RESOLUTIONS 1 & 2

The terms and conditions of the Options are as follows:

• (a) Each Option entitles the holder to one (1) Share.

• (b) The Options are exercisable at any time prior to 5.00 pm WST on 31 December 2012 (the " Expiry Date ").

• (c) The exercise price of the Options is twenty (20) cents per Option.

• (d)

• The Options are freely transferable.

• (e) The Company will provide to each Option holder a notice that is to be completed when exercising the Options (" Notice of Exercise "). The 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.

• (f) 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.

• (g) There will be no participating rights or entitlements inherent in the 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 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 Options prior to the date for determining entitlements to participate in any such issue.

• (h) If there is a bonus issue (" Bonus Issue ") to Shareholders, the number of Shares over which an Option is exercisable will be increased by the number of Shares which the holder would have received if the Option had been exercised before the record date for the Bonus Issue (" Bonus Shares "). The Bonus Shares must be paid up by the Company out of profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue, and upon issue will rank equally in all respects with the other Shares on issue as at the date of issue of the Bonus Shares.

• (i) In the event of any reconstruction (including consolidation, 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 the Listing Rules.

• (j) In the event that the Company makes a pro rata issue of securities, the exercise price of the Options will be adjusted in accordance with the formula set out in Listing Rule 6.22.2.

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ANNEXURE "B"

KINGSROSE MINING LIMITED ACN 112 389 910

EMPLOYEE OPTION PLAN

EMPLOYEE SHARE OPTION PLAN RULES (adopted by the board on 18 March 2008)

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INDEX

1.	DEFINITIONS AND INTERPRETATIONS..........................................................................1
2.	PURPOSE ................................................................................................................................3
3.	ESTABLISHMENT AND TERMINATION OF THE PLAN ................................................3
4.	ENTITLEMENT TO PARTICIPATE .....................................................................................3
5.	ISSUE OF INVITATIONS......................................................................................................4
6.	PERFORMANCE CRITERIA.................................................................................................4
7.	EXERCISE PRICE ..................................................................................................................4
8.	OVERRIDING RESTRICTION ON ISSUE AND EXERCISE ON OPTIONS.....................4
9.	APPLICATIONS .....................................................................................................................4
10.	GRANT AND EXERCISE OF OPTIONS ..............................................................................5
11.	LIMIT ON NUMBER OF OPTIONS TO BE GRANTED .....................................................8
12.	CEASING TO BE AN ELIGIBLE EMPLOYEE...................................................................8
13.	TRANSFER OF OPTIONS .....................................................................................................8
14.	AMENDMENTS TO THE RULES.........................................................................................9
15.	POWERS OF THE BOARD....................................................................................................9
16.	NO INCORPORATION INTO TERMS OF EMPLOYMENT OR ENGAGEMENT ...........9
17.	GOVERNING LAW..............................................................................................................10
18.	SEVERANCE ........................................................................................................................10
Annexure 1 - Application
Annexure 2 - Option Exercise Notice

Employee Share Option Plan Rules

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1. DEFINITIONS AND INTERPRETATIONS

• 1.1 These Rules will be known as the "Kingsrose Mining Employee Share Option Plan Rules".

• 1.2 In these Rules, unless the context otherwise requires:

" Applicant " has the meaning given in rule 9.1.

" Application " means an application in the form set out in Annexure 1 or in such other form as the Board may from time to time prescribe, accepting an invitation from the Board to apply for Specified Options under these Rules.

" Associated Body Corporate " means any Related Body Corporate of or other entity controlled by the Company.

" ASX " means ASX Limited (ACN 008 624 691).

" Board " means the Directors acting as the Board of the Company.

" Business Day " means a day that is not a Saturday, a Sunday or a public holiday in Perth, Western Australia.

" Certificate " means the certificate issued by the Company to a Holder in respect of an Option.

" Company " means Kingsrose Mining Limited (ACN 112 389 910).

" Corporations Act " means the Corporations Act 2001 (Cth).

" Director " means a director of the Company.

" Eligible Employee " means a person who is a full or part time employee or a director of a Group Company.

" Exercise Price " means, in respect of an Option, or a Series of Options, the subscription price per Share, determined by the Board in accordance with rule 7 payable by a Holder on exercise of the Options.

" Expiry Date " means, in relation to an Option or Series of Options, the expiry 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 5 years from the issue date of the Options.

" Grant Date " means the date on which the Board resolves to grant the Option.

" Group Company " means the Company and each Associated Body Corporate.

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" Holder " has the meaning given in rule 10.1.

" Listing Rules " means the ASX Listing Rules, as amended from time to time.

" Market Value " means if the Company is admitted to the official list of the ASX, the weighted average closing sale price of the Shares recorded on the ASX over the last 5 trading days on which sales of the Shares were recorded preceding the day on which the Board resolves to invite an Application for an Option plus a 10% premium.

" Option " means an option granted under the Plan to subscribe for one Share in the capital of the Company.

" Option Exercise Notice " means a notice for exercise of Options in accordance with these Rules in the form set out in Annexure 2 or in such other form as the Board may from time to time prescribe.

" Performance Criteria " means performance criteria determined by the Board in its absolute discretion in accordance with rule 6.1 and which must be satisfied before a Holder is permitted to exercise an Option granted under this Plan.

" Permanent Disablement " means:

the illness or incapacity of the Eligible Employee necessitating the permanent withdrawal of the Eligible Employee from the workforce, as accepted to the satisfaction of the Board; or

• (a) any other circumstances which the Board considers should be treated as Permanent Disablement for the purposes of the Plan.

" Plan " means the "Employee Share Option Plan" established in accordance with these Rules.

" Related Body Corporate " has the same meaning as given to that term in the Corporations Act.

" Rules " means these rules, as amended from time to time.

" Series " in relation to Options, means Options with a common Grant Date.

" Shares " means ordinary fully paid shares in the capital of the Company.

" Specified Option " has the meaning given in rule 5.1.

" Takeover Period ", in relation to a takeover bid in respect of shares in the Company, means the offer period as defined in section 624 of the Corporations Act.

• 1.3 Words importing:

• (a) a gender will include all other genders; and

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• (b) the singular shall include the plural and vice versa.

2. PURPOSE

The purpose of the Plan is to provide an incentive for the Eligible Employees to participate in the future growth of the Company and, upon becoming shareholders, to participate in the Company's profits and development.

3. ESTABLISHMENT AND TERMINATION OF THE PLAN

• 3.1 The Board may establish and administer the Plan in accordance with the terms and conditions set out in these Rules.

• 3.2 The Board may terminate the Plan at any time that it considers appropriate in its absolute discretion.

• 3.3 Where the Board terminates the Plan, the Board cannot grant any further Options under the Plan, but all Options already granted remain in existence and, notwithstanding the termination, the Plan continues to have effect in relation to those Options until the last of them lapses.

4.

ENTITLEMENT TO PARTICIPATE

• 4.1 The Board may from time to time and in its absolute discretion determine that an Eligible Employee may participate in the Plan and the extent of that participation. In making that determination, the Board may consider:

• (a) the seniority of the Eligible Employee and the position the Eligible Employee occupies with the relevant Group Company;

• (b) the length of service of the Eligible Employee with the Group Company;

• (c) the record of employment of the Eligible Employee with the Group Company;

• (d) the potential contribution of the Eligible Employee to the growth and profitability of the Group Company;

• (e) the extent (if any) of the existing participation of the Eligible Employee in the Plan; and

• (f) any other matters which the Board considers relevant.

• 4.2 The Board may exercise its powers in relation to the participation of any Eligible Employee on any number of occasions.

• 4.3 The Company must obtain shareholder approval under the Listing Rules and/or Corporations Act before the participation under the Plan of any Eligible Employee who is a Director of or otherwise a related party of the Company.

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5. ISSUE OF INVITATIONS

• 5.1 Subject to the Corporations Act and the Listing Rules, the Board may at such times as it determines, issue invitations (in such form as the Board decides from time to time) to Eligible Employees, or any one or more of them, inviting Applications for a grant of Options up to the number specified in the invitation (" Specified Options ") and specifying an acceptance period.

• 5.2 The number of Specified Options will be determined by the Board in its absolute discretion.

• 5.3 Options granted under the Plan will be granted free of charge.

• 5.4 The Board may impose Option Exercise Criteria in accordance with rule 6.1.

6. PERFORMANCE CRITERIA

• 6.1 Subject to rule 6.2, the Board may in its absolute discretion impose Performance Criteria that must be satisfied before a Holder is permitted to exercise an Option granted under this Plan.

• 6.2 The Holder may not exercise any of the Options in accordance with rule 10.2 until the Board notifies the Holder that the Performance Criteria (if any) has been satisfied.

7. EXERCISE PRICE

Unless otherwise determined by the Board, the Exercise Price of each Option will be the Market Value of a Share when the Board resolves to offer the Options.

8. OVERRIDING RESTRICTION ON ISSUE AND EXERCISE ON OPTIONS

Notwithstanding any terms of any Option, Options may only be issued or exercised within the limitations imposed by the Corporations Act and the Listing Rules.

9. APPLICATIONS

• 9.1 Following receipt of an invitation, the Eligible Employee (" Applicant ") may apply for the full number of Specified Options or part of them (but only in multiples of 1,000 Options) by sending to the secretary of the Company an Application.

• 9.2 The Application must be received by the Company within the acceptance period specified in the invitation.

• 9.3 The Board is entitled to receive from the Applicant any information that the Board considers necessary concerning the Applicant and the Applicant's entitlement to lodge an Application.

• 9.4 The Board may reject any Application.

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10. GRANT AND EXERCISE OF OPTIONS

10.1 Grant of Options

Upon acceptance of a duly signed and completed Application for Specified Options, the Company may grant the Options applied for to the Applicant (the " Holder "). The Company will issue an Option Certificate to each Holder in respect of Options granted to them.

• 10.2 Unless otherwise determined by the Board when it resolves to grant the Option, each Option is granted on the following terms:

Exercise of Options

• (a) If any Performance Criteria are imposed on a Holder, that Holder may only exercise their Options upon satisfaction of the Performance Criteria and prior to the Expiry Date.

• (b) Notwithstanding paragraph (a) above, all Options may be exercised:

• (i) during a Takeover Period; or

• (ii) in the Board's absolute discretion, in the event of the death or Permanent Disablement of an Eligible Employee.

• (c) If, in the reasonable opinion of the Board, an Eligible Employee acts fraudulently or dishonestly in any material respect or is in material breach of his or her obligations to any Group Company, then, notwithstanding any other provision in these Rules, the Board may deem any unexercised Options of the Eligible Employee to have lapsed.

Notice of Exercise

• (d) Options may only be exercised by delivering an Option Exercise Notice as executed by the Holder to the principal place of business of the Company. The Option Exercise Notice must specify the number of Options being exercised (which must be no less than multiples of 1,000) and must be accompanied by:

• (i) the Exercise Price for the number of Options specified in the Option Exercise Notice; and

• (ii) the Certificate for those Options, for cancellation by the Company.

The Option Exercise Notice only becomes effective when the Company has received the full amount of the Exercise Price for the number of Options in cleared funds.

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Issue of Certificates

• (e) Subject to paragraphs (a) and (d) above, the Holder having complied with the terms of the Options and subject to any necessary consents or approvals required to be obtained by the Company, within 10 Business Days of the Option Exercise Notice referred to in paragraph (d) above becoming effective, the Board must:

• (i) allot and issue the number of Shares specified in the Option Exercise Notice to the Holder;

• (ii) cancel the Certificate for the Options exercised; and

• (iii) if applicable, issue a new Certificate for any remaining unexercised Options covered by the Certificate accompanying the Option Exercise Notice.

Allotment of Shares

• (f) All Shares allotted upon the exercise of Options will be of the same class and rank equally in all respects with other Shares in the Company, and, in particular, entitle their holders to participate fully in:

• (i) dividends cleared by the Company after the date of allotment; and

• (ii) all issues of securities offered to holders of Shares where entitlements to participate in those issues are determined by reference to a record date after the date of allotment of Shares allotted upon the exercise of Options.

Official Quotation

• (g) If the Company's Shares are officially quoted by ASX, the Company must apply for official quotation by ASX of all Shares allotted pursuant to the exercise of Options not later than 10 Business Days after the date of allotment or any shorter period prescribed by the Listing Rules. The Company will not apply to have the Options granted under the Plan quoted on ASX.

New Issues

• (h) In the event of a pro rata issue (except a bonus issue) to the holders of Shares, the Exercise Price of an Option may be reduced using the formula:

==> picture [127 x 23] intentionally omitted <==

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where:

• O' = the new exercise price of the Option.

• O = the old exercise price of the Option.

• E = the number of shares into which one Option is exercisable.

• P = the average market price per share (weighted by reference to volume) of the Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

• S = the subscription price for a share under the pro rata issue.

• D = the dividend due but not yet paid on the existing Shares (except those to be issued under the pro rata issue).

• N = the number of Shares with rights or entitlements that must be held to receive a right to one new Share.

Bonus issues

• (i) If, prior to the expiry of any Options, the Company makes a bonus share issue to the holders of Shares on a pro rata basis, by way of capitalisation of profits or reserves (other than an issue in lieu of dividends) (a " Bonus Issue "), the number of Shares over which an Option is exercisable will be increased by the number of Shares which the Holder would have received if the Option had been exercised before the date the Shares the subject of the Bonus Issue had been duly allotted and issued (" Bonus Shares "). The Bonus Shares must be paid up by the Company out of profits or reserves (as the case may be) in the same manner as was applied in relation to the Bonus Issue and upon issue rank equally in all respects with the other shares of that class on issue at the date of issue of the Bonus Shares.

Reconstruction of capital

• (j) In the event that, prior to the expiry of any Options, there is a reconstruction (including consolidation, subdivision, reduction, return or pro-rata cancellation) of the issued capital of the Company, then the number of Options to which each Holder is entitled or the Exercise Price or both will be reconstructed in the manner required by the Listing Rules.

Advice

• (k) The Company must give notice to each Holder of any adjustment to the number of Shares for which the Holder is entitled to subscribe or to the Exercise Price pursuant to the provisions of paragraphs (h), (i) or (j) above.

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No Dividends

• (l) A Holder will not be entitled to dividends in respect of the Options.

11. LIMIT ON NUMBER OF OPTIONS TO BE GRANTED

An invitation or offer of Options may only be made under the Plan if the number of Shares that may be acquired on exercise of the Options when aggregated with:

• (a) the number of Shares which would be issued if each outstanding offer or Option, being an offer made or Option acquired pursuant to the Plan or any other employee share scheme was to be accepted or exercised; and

• (b) the number of Shares issued during the previous 5 years pursuant to the Plan or any other employee share scheme,

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

• (c) an offer to a person situated outside of Australia at the time of receipt of the offer; or

• (d) an offer did not require disclosure to investors because of section 708 of the Corporations Act; or

• (e) an offer made under a disclosure document (within the meaning of the Corporations Act),

does not exceed 5% of the total number of issued Shares of the Company as at the time of the invitation or offer.

12. CEASING TO BE AN ELIGIBLE EMPLOYEE

• 12.1 If at any time before the exercise of an Option, a Holder ceases to be an Eligible Employee, all Options held by the Eligible Employee will automatically lapse unless the Board otherwise determines within 30 days of the Holder ceasing to be an Eligible Employee.

• 12.2 If a Holder ceases to be an Eligible Employee at any time before the exercise of the Options, the Holder may, subject to these Rules, during the period of 30 days after the date on which the Holder ceases to be an Eligible Employee, exercise any Option which the Holder would have otherwise been entitled to exercise. Any Options held by the Holder which are unexercised at the expiry of such 30 day period will automatically lapse.

13. TRANSFER OF OPTIONS

Subject to the Listing Rules, Options issued under the Plan are not transferable except with the prior written approval of the Board. Any instrument of transfer must be in writing, signed by both parties, duly stamped and otherwise in such form as the Board

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may from time to time prescribe. The Board will not register any transfer of an Option made otherwise than in accordance with this rule.

14. AMENDMENTS TO THE RULES

• 14.1 Subject to rule 14.2, the Board may alter, delete or add to the Plan or Rules at any time, but for so long as the Company remains on the official list of ASX such alteration, deletion or addition has no effect unless the relevant requirements of the Listing Rules have been complied with.

• 14.2 No amendment to the provisions of the Plan, or to any restrictions or other conditions relating to any Option granted pursuant to the Plan, may be made which reduces the rights of Holders in respect of Options granted to them prior to the date of the amendment, other than any amendment introduced primarily:

• (a) for the purpose of complying with or conforming to present or future State or Commonwealth legislation governing or regulating the maintenance or operation of the Plan or like plans;

• (b) to correct any manifest error or mistake; or

• (c) to take into consideration possible adverse taxation implications in respect of the Plan arising from, amongst others, adverse rulings from the Commissioner of Taxation, changes to taxation legislation (including an official announcement by the Commonwealth of Australia) and/or changes in the interpretation of taxation legislation by a Court of competent jurisdiction.

• 14.3 As soon as is reasonably practicable after making any amendment under rule 14.1, the Board will give notice in writing of the amendment to any Eligible Employee affected by the amendment.

15. POWERS OF THE BOARD

The Plan will be administered by the Board which has the power to determine procedures from time to time for administration of the Plan consistent with these Rules and resolve conclusively all questions of fact or interpretation arising in connection with the Plan.

16. NO INCORPORATION INTO TERMS OF EMPLOYMENT OR ENGAGEMENT

The rights and obligations of an Eligible Employee under the terms of his/her office or employment with any Group Company are not affected by his/her participation in the Plan and these Rules do not form part of and are not incorporated into any contract of engagement or employment of any individual or entity with a Group Company and do not confer directly or indirectly on an individual or entity any legal or equitable right whatsoever against a Group Company. No Eligible Employee has any rights of compensation or damages in consequence of the termination of his/her engagement or employment for any reason whatsoever in so far as those rights arise or may arise form his/her ceasing to have rights under the Plan as a result of such termination.

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17. GOVERNING LAW

The Plan and these Rules shall in all respects be governed by and shall be construed in accordance with the laws of Western Australia.

18. SEVERANCE

If any provision in these Rules is void, voidable by any party or illegal, it shall be read down so as to be valid and enforceable or, if it cannot be so read down, the provision (or where possible, the offending words) shall be severed from these Rules without affecting the validity, legality or enforceability of the remaining provisions (or parts of those provisions) of these Rules which shall continue in full force and effect.

ANNEXURE 1

KINGSROSE MINING LIMITED ACN 112 389 910

Kingsrose Mining Limited Employee Share Option Plan

Application for Options

I ____________ of ___________ __________ hereby apply for _ Options to subscribe for an equal number of Shares in the capital of Kingsrose Mining Limited (the " Company ") at an Exercise Price of $______ per Share and I agree that upon issue of those Options I shall hold those Options and deal with them only in accordance with the terms and conditions of the said Employee Share Option Plan of the Company (a copy of which is attached hereto) and subject to and in accordance with the Constitution of the Company.

Dated this ____ day of ___ 200(*). Signed: ________ Name: _______

ANNEXURE 2

KINGSROSE MINING LIMITED ACN 112 389 910

Kingsrose Mining Limited Employee Share Option Plan

Option Exercise Notice

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

To: The Directors
Kingsrose Mining Limited (the " Company ")
I/We
___________
of ___________
___________
hereby exercise my/our Options to subscribe for:
___ Shares (full paid ordinary) in the capital of the Company at
an Exercise Price of $___ per Share and enclose payment in full of
$__.
I/We request you allot to me/us and I/we agree to accept the Shares subject to the Constitution
of the Company.
_________
Signature of the Applicant
Dated this __ day of _______ 200().
----- End of picture text -----*

KINGSROSE MINING LIMITED ABN 49 112 389 910

PROXY FORM

APPOINTMENT OF PROXY KINGSROSE MINING LIMITED ABN 49 112 389 910

I/We being a Member of Kingsrose Mining entitled to attend and vote at the General Meeting, hereby Appoint Name of Proxy

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 accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting to be held at The Broadwater Pagoda Hotel, 112 Melville Parade, Como, Western Australia on Tuesday, 6 May 2008 at 10.00 am (WST) and at any adjournment thereof.

Voting on Business of the General Meeting

			FOR	AGAINST	ABSTAIN
Resolution	1	Approval to issue Options to Mr James William Phillips
Resolution	2	Approval to issue Options to Airedale (Asia) Limited
Resolution	3	Adoption of Employee Share Option Plan

If the chair of the meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as your proxy in respect of a Resolution, please place a mark in the box. By marking this box, you acknowledge that the Chair of the meeting may exercise your proxy even if he has an interest in the outcome of the Resolutions and that the votes cast by the Chair of the meeting for those Resolutions other than as proxy holder will be disregarded because of that interest. The Chair intends to vote any such undirected proxies in favour of all Resolutions. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on the Resolutions and your votes will not be counted in calculating the required majority if a poll is called on the Resolutions.

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

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

Please return this Proxy Form to the Company Secretary, Kingsrose Mining Limited, Suite 3, 16 Kearns Crescent, Applecross or by fax to 08 9316 2511 by 10.00 am (WST) on 4 May 2008.

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

Signed this day of 2008.
By:
Individuals and joint holders Companies (affix common seal if appropriate)
Signature Director
Signature Director/Secretary
Signature Sole Director and Sole Secretary
----- End of picture text -----

KINGSROSE MINING LIMITED ABN 49 112 389 910

Instructions for Completing Appointment of Proxy Form

1. In accordance with section 249L of the Corporations Act, a shareholder of the Company who is entitled to attend and 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.

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

3. Corporate shareholders should comply with the execution requirements set out on the Proxy Form or otherwise with the provisions of section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:

4. 2 directors of the company;

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

6. for a proprietary company that has a sole director who is also the sole company secretary – that director.

For the Company to rely on the assumptions set out in 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 w ho witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

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

2. Where a Proxy Form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.

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 3, 16 Kearns Crescent, Applecross Fax Number: +61 8 9316 2511

by no later than 48 hours prior to the time of commencement of the Meeting.