LOTUS RESOURCES LIMITED — AGM Information 2009

Oct 27, 2009

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N O T I C E O F A N N U A L G E N E R A L M E E T I N G E X P L A N A T O R Y M E M O R A N D U M P R O X Y F O R M

Date of Meeting

Thursday, 26 November 2009

Time of Meeting

10.00 am (WST)

Place of Meeting

Suite 8, 1297 Hay Street West Perth, Western Australia

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NOTICE OF ANNUAL GENERAL MEETING

The Annual General Meeting of Dragon Energy Ltd ( Dragon Energy or Company ) is to be held on Thursday, 26 November 2009, at Suite 8, 1297 Hay Street, West Perth, Western Australia, commencing at 1.00 pm (WST).

The Explanatory Statement that accompanies and forms part of this Notice describes the matters to be considered at this meeting.

BUSINESS

Financial Report

To receive and consider the financial report for the year ended 30 June 2009 together with the directors’ report and auditor’s report.

Resolution 1 – Adoption of Remuneration Report

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

“To adopt the Remuneration Report for the year ended 30 June 2009.”

Resolution 2 – Election of Director – Mr Jie Chen

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

“That Mr Jie Chen, having been appointed as a director of the Company on 18 December 2008, who retires in accordance with clause 13.5 of the Company’s Constitution and being eligible and offering himself for re-election, be elected as a director of the Company."

Resolution 3 – Election of Director – Mr Qingyong Guo

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

“That Mr Qingyong Guo, having been appointed as a director of the Company on 18 December 2008, who retires in accordance with clause 13.5 of the Company’s Constitution and being eligible and offering himself for re-election, be elected as a director of the Company."

Resolution 4 – Election of Director – Mr Anthony Ho

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

“That Mr Anthony Ho, having been appointed as a director of the Company on 18 December 2008, who retires in accordance with clause 13.5 of the Company’s Constitution and being eligible and offering himself for re-election, be elected as a director of the Company."

Resolution 5 – Re-election of Director – Mr Wenle Zeng

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

“That, Mr Wenle Zeng, who retires by rotation in accordance with clause 13.2 of the Company’s Constitution, be re-elected as a Director of the Company."

DATED THIS 28[th] DAY OF OCTOBER 2009 BY ORDER OF THE BOARD

Anthony Ho Company Secretary

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IMPORTANT NOTES

1. A member entitled to attend and vote is entitled to appoint not more than two proxies to attend and vote on behalf of the member. A proxy need not be a member of the Company, but must be a natural person (not a corporation). A proxy may also be appointed by reference to an office held by the proxy (eg “the Company Secretary”).

2. Where more than one proxy is appointed, each proxy may be appointed to represent a specified proportion of the member’s voting rights. If no such proportion is specified, each proxy may exercise half of the member’s votes.

3. A proxy form is enclosed. A separate form must be used for each proxy. An additional form can be obtained by writing to the Company at Suite 8, 1297 Hay Street, West Perth, Western Australia or by fax to (61 8) 9322 6128. Alternatively, you may photocopy the enclosed form.

4. A duly completed proxy form and (where applicable) any power of attorney or a certified copy of the power of attorney must be received by the Company at its registered office or the address or fax number set out below, not less than 48 hours before the time for commencement of the meeting. Please send by post to PO Box 1968, West Perth, Western Australia, 6872 or by fax to (61-8) 9322 6128.

5. The Company will accept proxy appointments by a corporate member executed in accordance with either section 127(1) (not under seal) or section 127(2) (under seal) of the Corporations Act.

6. For the purposes of section 1074E(2) of the Corporations Act 2001 and regulation 7.11.37 of the Corporations Regulations 2001 , the Company determines that members holding ordinary shares at 10.00 am WST on Tuesday, 24 November 2009 will be entitled to attend and vote at the Annual General Meeting.

7. The Explanatory Memorandum attached to this Notice forms part of this Notice.

ELECTRONIC ANNUAL REPORT

In accordance with section 314 (1AA)(c) of the Corporations Act 2001 , the Company advises the 2009 Annual Report is available from the Company’s website (www.dragonenergyltd.com.au).

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EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared to provide Shareholders with material information to enable them to make an informed decision on the business to be conducted at the Annual General Meeting of Dragon Energy Ltd (“Company” or “Dragon Energy”).

The Directors recommend shareholders read this Explanatory Memorandum in full before making any decision in relation to the resolutions.

Financial Statements and Report

Under the Corporations Act 2001 , the directors of the Company must table the financial report, the directors’ report and the auditor’s report for Dragon Energy for the year ended 30 June 2009 at the meeting.

These reports are set out in the 2009 Annual Report. Shareholders who elected to receive a printed copy of annual reports should have received the 2009 Annual Report with this Notice of Annual General Meeting. The 2009 Annual Report is available from the Company’s website (www.dragonenergyltd.com.au).

Shareholders will be given reasonable opportunity at the meeting to ask questions and make comments on the financial report, the directors’ report and the auditor’s report.

Resolution 1 – Adoption of Remuneration Report

Under the Corporations Act 2001 , the Company is required to include, in the Directors’ Report, a detailed remuneration report setting out the prescribed information in relation to the remuneration of directors and executives of Dragon Energy and the Company’s remuneration practices.

Shareholders will be given reasonable opportunity at the meeting to ask questions and make comments on the Remuneration Report.

The Remuneration Report is required to be submitted for adoption by a resolution of shareholders at the meeting. The vote on this resolution is advisory only and does not bind the directors or the Company. However, the Board will take the outcome of the vote into consideration when reviewing remuneration practices and policies.

Resolution 2 – Election of Director – Mr Jie Chen

Clause 13.5 of the Constitution states that the Directors may at any time appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors.

Mr Chen was appointed to the Board on 18 December 2008 and in accordance with the Company’s Constitution, seeks election as a director.

Mr Chen has over 30 years of operational and management experience in the mining industry in the People’s Republic of China (“PRC”). He started his mining and management career in 1979 with a large China state-owned coal mining enterprise in the PRC. Mr Chen is currently the chairman of the Shandong Taishan Sunlight Group Company Limited (“Shandong Group”) since 2002. Under his leadership, the Shandong Group formed three vertically integrated businesses in coal, iron ore mining, processing and manufacturing with operations in Shandong, Guizhou, Ningxia and Xinjiang. The coal mine under his management holds a safety record of over 5,000 days with no fatality.

Mr Chen has a masters degree in economics and is currently working on a doctorate degree in mine engineering with the China University of Mining and Technology. He has received numerous distinguished awards at provincial and national levels for his achievements in entrepreneurship and leadership including being one of the 10 excellent entrepreneurs in Shandong Province, top 20 best mine managers in the PRC and PRC’s excellent entrepreneur. Mr Chen is a resident in the PRC.

Directors’ Recommendation

The Board (other than Mr Chen) recommends shareholders vote in favour of the Resolution.

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EXPLANATORY MEMORANDUM (cont’d)

Resolution 3 – Election of Director – Mr Qingyong Guo

Clause 13.5 of the Constitution states that the Directors may at any time appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors.

Mr Guo was appointed to the Board on 18 December 2008 and in accordance with the Company’s Constitution, seeks election as a director.

Mr Guo is a graduate in mine engineering from the China University of Mining and Technology. He was a mine engineer for a large China state-owned coal mine. Mr Guo is the General Manager of the Coal Project Generation Department for the Shandong Group. He was credited for securing Chinese government approvals of two iron ore mining licenses in Shandong province and one coal mining license in Northwest China.

In 2004 he completed his masters degree in mine engineering and is currently working on his doctorate degree in project management. Mr Guo is a resident in Australia.

Directors’ Recommendation

The Board (other than Mr Guo) recommends shareholders vote in favour of the Resolution.

Resolution 4 – Election of Director – Mr Anthony Ho

Clause 13.5 of the Constitution states that the Directors may at any time appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors.

Mr Ho was appointed to the Board on 18 December 2008 and in accordance with the Company’s Constitution, seeks election as a director.

Mr Ho is a commerce graduate of the University of Western Australia. He qualified as a Chartered Accountant in 1983 with Deloittes and is presently the principal of a public practice, specialising in providing corporate and financial services to ASX-listed companies.

Prior to establishing his practice in 1991, he spent 7 years in a senior corporate role with a major investment and resource group in Western Australia. He is currently a non executive director of Brumby Resources Limited and Redisland Australia Limited which are companies listed on ASX. Mr Ho is a resident in Australia.

Directors’ Recommendation

The Board (other than Mr Ho) recommends shareholders vote in favour of the Resolution.

Resolution 5 – Re-election of Director – Mr Wenle Zeng

Clause 13.2 of the Constitution requires that at every annual general meeting, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then such number as is appropriate to ensure that no director other than Managing Director holds office for more than 3 years, shall retire from office. A retiring director is eligible for re-election.

Mr Zeng retires by rotation in accordance with the Company’s Constitution and, being eligible, offers himself for re-election.

Mr Zeng is a science graduate in economic geology from the Nanjing University in the PRC and has over 20 years’ experience in the uranium exploration and mining industry. He is presently the deputy director of the Geology and Mineral Resources Division of the Jiangxi Nuclear Industry Geological Bureau responsible for the bureau’s uranium exploration and mining activities. Mr Zeng is currently overseeing the development of two state uranium projects in Jiangxi province in the PRC.

He has extensive experience and understanding of the regulatory aspects of the uranium industry in the PRC. In particular, Mr Zeng is well regarded in the PRC for his knowledge and experience of the volcanic and granite types of uranium mineralisation. He is currently completing a doctorate degree in economic geology at Guangzhou Institute of Geochemistry Chinese Academy of Sciences. Mr Zeng is a resident in the PRC.

Directors’ Recommendation

The Board (other than Mr Zeng) recommends shareholders vote in favour of the Resolution.

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P R O X Y F O R M

MR SAM SAMPLE UNIT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE WA 6060

1. Appointment of Proxy

I/We being a member/s of Dragon Energy Ltd hereby appoint

the Chairman OR of the Meeting

If you are appointing someone other than the Chairman of the Meeting, write here the name of the company or person you are appointing;

or, failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if not directions have been given, as the proxy sees fit) at the Annual General Meeting of Dragon Energy Ltd to be held at Suite 8, 1297 Hay Street, West Perth, Western Australia at 10.00 am (WST) on Thursday, 26 November 2009 and at any adjournment of that meeting.

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

2. Items of Business

Please mark to indicate your voting directions.

		FOR	AGAINST	ABSTAIN
1.	Adoption of Remuneration Report	�	�	�
2.	Election of Director – Mr Jie Chen	�	�	�
3.	Election of Director – Mr Qingyong Guo	�	�	�
4.	Election of Director – Mr Anthony Ho	�	�	�
5.	Re-election of Director – Mr Wenle Zeng	�	�	�

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

3. Appointment of a Second Proxy

I/We wish to appoint a second proxy

Please mark if you wish to appoint a AND % OR second proxy.

State the percentage of your voting rights or the number of securities for this Proxy Form.

4. Signature of Securityholder(s)

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

IndividualorSecurityholder 1 Individual/ Sole Director and Sole Company Secretary	Securityholder 2 Director	Securityholder3
		Director/ Company Secretary

Contact Name

Contact Daytime Telephone

Date

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H O W T O C O M P L E T E T H E P R O X Y F O R M

1. Appointment of Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the company or person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that company or person. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company.

If you have appointed a company as your proxy and a representative of that company wishes to attend the meeting, the representative will be required to provide the Company with the appropriate written documentation evidencing that the person is a representative of the proxy. Should you require it, the Company will provide you with an appointment of corporate representative form free of charge. Please contact the Company Secretary if you require an appointment of corporate representative form.

2. Items of Business

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

3. Appointment of a Second Proxy

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

To appoint a second proxy you must:

• (a) indicate that you wish to appoint a second proxy by marking the box.

• (b) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

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

4. Signing Instructions

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

Individual: Where the holding is in one name, the securityholder must sign. Joint Holding: Where the holding is in more than one name, all of the securityholders must sign. Power of Attorney: To sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it. Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001 ) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held.

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at the address given below no later than 48 hours before the commencement of the meeting at 10.00 am (WST) on Thursday, 26 November 2009. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Documents may be lodged by posting, delivery or facsimile to Dragon Energy Ltd:-

PO Box 1968 West Perth, WA 6872 Fax: (08) 9322 6128

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate "Certificate of Appointment of Corporate Representative" prior to admission. A form of the certificate may be obtained from the Company's share registry.