LIBERTY METALS LTD — AGM Information 2005

Oct 26, 2005

Traka Resources Lim

ACN 103 323 173

Notice of Annual General Meeting and Proxy Form

The Annual General Meeting of the Company will be held at the Company's Office at Ground Floor, 43 Ventnor Ave West Perth 6005 on Tuesday 29 November 2005 at 11.00 am.

This Notice should be read in its entirety. 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.

Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on +61 8 9322 1655.

Notice of Annual General Meeting

Traka Resources Limited ACN 103 323 173

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders of the Company will be held at Ground Floor, 43 Ventnor Ave West Perth WA 6005 on Taesday 29 November 2005 at 11.00 am, ("Meeting").

The Proxy Form forms part of this Notice of Annual General Meeting ("Notice"),

The Directors have determined persuant to regulation 7.11.38 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders of the Company at 27 November 2005.

AGENDA

ORDINARY BUSINESS

Financial Report

To receive the Financial Report of the Company for the year ended 30 June 2005 together with the Directors' Report in relation to that financial year and the Assitor's Beport on the Financial Beport.

$\mathbf{1}$ Directors' / Executives' Remuneration

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

"That the Remuneration Report be adopted by the Shareholders on the terms and conditions in the Explanatory Memorandum."

$2¹$ Re-election of Director - Mr George Petersons

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

"That Mr George Petersons who retires in accordance with the Constitution and, being eligible, offers himself for re-election, be reelected as a director."

Issue of Options to Managing Director $3.$

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

"That, for the purposes of Chapter 2E of the Corporations Act, Listing Rule 7.1 and Listing Rule 10.14 of the Listing Rules of Australian Stock Exchange Limited ("ASX") and for all other purposes, the shareholders approve and authorise the issue of 1,000,000 free options to Mr Patrick Verbeek (or his permitted nominee), to acquire fully paid ordinary shares in the capital of Traka Resources Limited on the terms and conditions stated in the Explanatory Memorandum accompanying this Notice of Meeting."

The Company will disregard any votes cast on this resolution by any person who will participate in the proposed issue of options or any associate 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 of 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.

By Order of the Board

Desmond Kelly

Company Secretary

18 October 2005

Explanatory Memorandum

Traka Resources Limited ACN 103 323 173

1. Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Annual General Meeting of the Company to be held at Ground Floor. 43 Ventnor Ave West Perth, Western Australia 6005 on Tuesday 29 November 2005 at 11.00 am.

The purpose of this Explanatory Memorandum is to provide information which the Board believes is material to Shareholders in relation to the Resolutions. The Explanatory Memorandum explains the Resolutions and identifies the Directors' reasons for putting them to Shareholders,

2. Resolution 1 - Directors' / Executives' Remuneration

Pursuant to section 250R(2) of the Corporations Act the Company is required to put the Remuneration Report to the vote of Shareholders. The Annual Report for the year ended 30 June 2005 contains a Remaneration Report which sets out the remaneration policy for the Company and reports the remuneration arrangements in place for the executive director, specified executives and nonexecutive directors.

The provisions of the Corporations Act provide that the vote is only an advisory vote of Shareholders. Resolution 1 is advisory only and does not bind the Directors of the Company. Of itself, a failure of Shareholders to pass Resolution 1 will not require the Directors to alter any of the arrangements in the Remaneration Report, however the board will take the outcome of the vote into consideration when coasidering the remuneration policy.

The Chairman of the Meeting will allow a reasonable opportunity for Shareholders as a whole to ask questions about, or make comments on the Remuneration Report.

Resolution 2– Re-election of Director Mr George Petersons $3₁$

The Constitution requires that if and for so long as there are three or more Relevant Directors, one third of those Directors must retire at each AGM. If the number of Directors is not a multiple of three, then the next nearest whole number of relevant Directors must retire from office. The Constitution excludes the Managing Director,

The Constitution provides that a Director who retires is eligible for re-election.

Pursuant to the Constitution Mr George Petersons will retire by rotation and seeks re-election.

A brief biography of Mr Petersons is in the Annual Report.

The Board supports the re-election of Mr George Petersons.

4. Resolution 3 – To Approve the Issue of Options to the Managing Director.

This resolution deals with the issue of 1,000,000 options to the Managing Director as part of his total remuneration from the Company. The Directors recommend the issue of options to Mr Verbeek as part of his remuneration.

Chapter 2E of the Corporations Act - Related Party Transactions.

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

• the giving of the financial benefit falls within one of the nominated exceptions to the provision; or $(a)$
• $(b)$ prior shareholder approval is obtained to the giving of the financial benefit.

For the purposes of Chapter 2E, Mr Verbeek, being Managing Director, is a related party of the Company.

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Traka Resources Limited ACN 103 323 173

Terms and Conditions of Options

The proposed terms and conditions of the options are as follows:

• $\bullet$ Each option entitles the holder to subscribe for one fully paid share in the capital of Traka Resources Limited;
• $\ddot{\phantom{0}}$ The amount payable on exercise of the options is 20 cents and they expire 5 years from date of allotment.
• $\bullet$ The options are exercisable by notice in writing to the Company accompanied by payment of the exercise price on or prior to the expiry date;
• The options are not transferable:
• ٠ If the Managing Director ceases to be an employee of the Company the options held by and vested in the Director will expire three months from the date of his ceasing to be an employee of the Company. Options not exercised would automatically lapse.
• All shares issued apon exercise of the options will rank pari passu in all respect with the then existing shares of the Company; $\bullet$
• $\bullet$ The Company will apply for quotation of the shares pursuant to the exercise of options within 10 days of their exercise;
• There are no participation rights or entitlements inherent in the options and their holder will not be entitled to participate in new issues $\blacksquare$ of capital offered to shareholders during the currency of the options. The Company, however, will ensure that for the parposes of determining entitlements to any such issue, the books closing date will be in accordance with the ASX Listing Rules. This will give the option holder the opportunity to exercise his options (should he otherwise be entitled to) prior to the date for determining entitlements to participate in any such issue:
• ٠ In the event of any reconstruction of the issued capital of the Company, the number of options or the exercise price of the options or both shall be reconstructed in a manner which complies with the ASX Listing Rules in force at that fime and in all other respects the terms for the exercise of the Options shall remain unchanged; and
• Options not exercised by 5.00 pm WST on the expiry date will automatically expire.

Mr Verbeek and his associates may not vote on this resolution.

Employment Agreement

The Company entered into a consultancy agreement with Malahang Pty Ltd on 14 October 2003 ("Consultancy Agreement"). In accordance with the terms of the Consultancy Agreement Malahang has agreed to provide the services of its employee. Patrick Verbeek to undertake all functions, duties, roles and authorities which the Company would require of a person engaged as Managing Director of the Company on a full time basis. The Consultancy Agreement commenced on the 20 November 2003 and continues for a period of 2 years. Either the Company or the Consultant may elect to extend the term for a further period of 2 years on terms to be agreed. The renewal is currently being negotiated and is expected to be an increase in the base consulting fee to \$185,000 pa plus expenses and include the issue of options as outlined in this resolution.

The amount paid under this consultancy agreement for the year ended June 2005 was \$165,000 plus reimbarsement of motor vehicle and telephone expenses.

Mr Verbeek has the following relevant interest in the securities of the Company.

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Listing Rule 10.14

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Traka Resources Limited ACN 103 323 173

The following information is provided to satisfy ASX Listing Rule 10.14. The maximum number of options to be issued is 1,000,000. These options will be issued to Mr Verbeek (or his nominee) within one month of the date of the meeting. The options are free. No funds will be raised by the issue of the options. If the options are all exercised, a maximum of \$200,000 will be added to working capital of the Company in due course.

The Directors, in conjunction with the Company's advisers have attempted to value the options by reference to the Black Scholes option pricing model, based on the following assumptions at the date the Directors (other than Mr Verbeek) determined (subject to shareholders approval) to grant the options):

Call Option Valuation	Inout
Share price - Average Weighted	18.8 cents
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Exercise price	20 cents
Pisk free rate	$-5.2%$
Provided Weighted Volatility (based on Bloomberg Provided accretion of the past 12 months)
Time years) to expiry	5 years

It is considered the value of each option is estimated to be 3.19 cents. This values the options at \$31,900 over a 5 year period.

Directors' Recommendation

The Directors wish to make a recommendation about the proposed Resolution 3:

Director	Recommendation
Mr Neil Tomkinson	The Options are considered by the directors to provide a cost effective
Mr Joshea Pitt	means of giving an incentive to Mr Verbeek to advance the Company's interests in accordance with the directions given from time to time by the
Mr George Petersons	board of directors. The number of options to be issued are in line with the namber issued to directors of similar companies. The directors therefore recommend that shareholders approve the issue of the options. These directors do not have an interest in the outcome of this resolution.
Mr Patrick Verbeek	As Mr Verbeek stands to gain personally from the issue of the Options, he declines to make any recommendation in relation to shareholders' consideration of the resolution.

All of the directors were available to consider the proposed resolution,

The proposed resolution would have the effect of giving power to the Directors to grant 1,000,000 free Options over unissued shares in the Company to Mr Verbeek. None of the directors who make a recommendation in favour of the resolution have an interest in the outcome of this resolution.

Shareholders should be aware that under Australian Accounting Standards Board ("AASB 2 Share Based Payments") the Company will be required to determine the fair value of options (as calculated above), issued to employees as remuneration and recognise them in the Statement of Financial Performance. The issued capital of the Company will increase by 1,000,000 shares if the options are exercised in full which will dilute existing members interests by that amount. The current number of shares on issue is 31,700,000 which would result in a dilation of 3% if the options are exercised. There are no taxation consequences for the Company in issuing these options.

These options have no trading history as they will be unlisted and in a category on their own. The company's shares have a 12 month price range of a low of 16 cents, a high of 22 cents and a current last sale at 18.0 cents on 14 October 2005.

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Proxy Form Traka Resources Limited ACN 103 323 173

The Company Secretary Traka Resources Limited

By delivery:
Ground Floor, 43 Ventnor Ave
West Perth WA 6005

By post: PO Box 601 West Perth WA 6872 By facsimile: +61 8 9322 9144

$\overline{I}$

$I/We^{i\theta}$ $0^{\frac{2}{3}}$ $\qquad$

being a Shareholder/Shareholders of the Company and entitled to ______________

votes in the Company, hereby appoint²⁶

or failing such appointment the chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 43 Ventror Ave West Perth WA 6005 on Tuesday 29 November 2005 at 11.00 am, and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of [% of the Shareholder's votes*/ [1999] [3] of the Shareholder's votes. (An additional votes that this proxy is authorised to cast is * [ Proxy Form will be supplied by the Company, on request).

INSTRUCTIONS AS TO VOTING ON THE RESOLUTION

The proxy is to vote for or against the Resolution referred to in the Notice as follows:

		FH	Against
Resolution 1	Directors' Remuneration
Resolution 2	Re-election of Director Mr George Petersons
Resolution 3	Issue of Options to Managing Director

If the Chairman of the meeting is your proxy and you have not directed your proxy how to vote, please place a mark in this box. By marking this box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of the interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the meeting will not cast your votes and your votes will not be counted in computing the required majority if a poll is called on these items. The Chairman intends to vote undirected proxies in favour of all 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 poil and that your shares are not to be counted in computing the required majority on a poll.

Authorised signature/s

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

Individual or Shareholder 1	Shareholder 2	Shareholder 3
Sole Director and Sole Company Secretary	Director	Director/Company Secretary
Contact Name.	Contact Daytime Telephone	Date
(1) Insert name and address of shareholder	(2) Insert name and address of proxy	"Omit if not applicable

Proxy Notes

Traka Resources Limited ACN 103 323 173

A Shareholder entitled to altend and vote at the Meeting may appoint a person or a corporation as the Shareholder's proxy to altend and vote for the Shareholder at that Meeting. If the Shareholder is entitled to cast 2 or more votes at the Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need sot be, a Shareholder of the Company.

If a Shareholder appoints a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that meeting, the representative of the corporation to attend the meeting must produce the appropriate Certificate of Appointment of Representation prior to admission. A form of the certificate may be obtained from the Company's share registry.

You must sign this form as follows in the spaces provided:

Joint Holding:	where the holding is in more than one name all of the holders mast sign.
Power of Attorney: I	if signed ander a Power of Attorney, you must have atready lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it.
Companies:	a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the Meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company's Share Registry.

Proxy Forms (and the power of attorney or other authority, if any, ander which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received at the Perth office of the Company (Ground Floor, 43 Ventnor Ave, West Perth WA 6005), by post to PO Box 601, West Perth WA 6872 or by Facsimile +61 8 9322 9144 not less than 48 hours prior to the time of commencement of the Meeting (WST).