LOTUS RESOURCES LIMITED — Capital/Financing Update 2019

Sep 11, 2019

12 SEPTEMBER 2019

ASX ANNOUNCEMENT

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ISSUE OF 1[ST] PLACEMENT SHARES

Hylea Metals Limited ( HCO, Hylea or the Company ) wishes to provide the following update:

The Company is pleased to advise that subsequent to the announcement on 23 July 2019, the company has now issued a total of 124,965,202 fully paid ordinary shares ( Placement ) at an issue price of 2.0 cents per share to raise approximately $2.5million before costs.

A total of 124,965,202 shares were issued under the Placement approved by Shareholders at the General Meeting held on 29 August 2019 (together with 1 free attaching option for every 2 shares subscribed for the issued under the placement totalling 62,482,626 issued) to raise approximately $2,5000,000.

Proceeds of the Placement, together with Hylea’s existing cash reserves will be utilised to proceed with the Kayelekera Project acquisition as previously announced on 24[th] June 2019.

The Company will pay to BW Equities a 3% capital raising fee and a 2% management fee on the funds raised pursuant to the Placement. The Company also incurred miscellaneous expenses including legal and listing fees in connection with the placement.

An Appendix 3B is attached in respect of the Placement.

For further information, contact:

Simon Andrew

Managing Director +61 (08) 9278 2441

Hylea Metals Limited ABN 38 119 992 175

Ph: +61 8 9278 2441 www.hyleametals.com.au

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Hylea Metals Limited

ABN

38 119 992 175

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued	Fully paid Ordinary Shares Options
	124,965,202 fully paid ordinary shares 62,482,626 Options (subject to reconciliation and rounding of entitlements) as free attaching options to the Entitlements issue Shares

• See chapter 19 for defined terms.

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Appendix 3B Page 1

Appendix 3B New issue announcement

3 Principal terms of the[+] securities (e.g. if options, exercise price Fully Paid Ordinary Shares and expiry date; if partly paid +securities, the amount outstanding and due dates for + Options will be issued as free attaching payment; if convertible options (1 for every 2 Shares subscribed for securities, the conversion price and issued) under the prospectus and will and dates for conversion) have a 3 year expiry from the date of issue and will be exercisable at $0.04 each.

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

4 Do the[+] securities rank equally For the Shares – the Shares issued under the in all respects from the[+] issue placement will rank equally with the fully date with an existing[+] class of paid ordinary shares on issue. quoted[+] securities? For the Options Shares issued on exercise of If the additional[+] securities do the Options will rank equally with the fully not rank equally, please state:  the date from which they do paid ordinary shares on issue.  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration $0.02 per Share 6 Purpose of the issue Shares issued under the Placement (If issued as consideration for approved by shareholders at the General the acquisition of assets, clearly Meeting held on 29 August 2019 (together identify those assets) with 1 free attaching Option for every 2 Shares subscribed for and issued under the Entitlements issue). 6a Is the entity an[+] eligible entity No – the Company’s previous approval that has obtained security holder under Listing Rule 7.1A ceased to apply on approval under rule 7.1A? shareholders approving the acquisition of an indirect 65% interest in the Kayelekera If Yes, complete sections 6b – 6h uranium mine at the general meeting held in relation to the[+] securities the on 29 August 2019. subject of this Appendix 3B , and comply with section 6i 6b The date the security holder N/A resolution under rule 7.1A was passed 6c Number of[+] securities issued Nil without security holder approval under rule 7.1 6d Number of[+] securities issued Nil with security holder approval under rule 7.1A

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)	Nil
	124,965,202 Ordinary 62,482,626 Options	Shares
	N/A
	N/A
	7.1 – Nil 7.1A – N/A
	10 September 2019
	Number	+Class
	225,158,338	Fully Paid Ordinary Shares

• See chapter 19 for defined terms.

Appendix 3B Page 4

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number +Class
	535,714 7,142,857 62,482,626 1,167,071 1,167,071 $0.84 31 Dec 19 Share options $0.28 2 Feb 19 Share options $0.04 expiry 3 year from issue Share options Class A Performance Shares Class B Performance Shares
	N/A

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	No
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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Appendix 3B Page 5

Appendix 3B New issue announcement

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance?	BW Equities Pty Ltd
	5%
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 32 How do security holders dispose of their entitlements (except by sale through a broker)?

N/A

• 33 +Issue date

N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000

• 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Appendix 3B Page 7

Appendix 3B New issue announcement

Entities that have ticked box 34(b)

ntities that have ticked box 34(b)
38 Number of+securities for which +quotation is sought 39 +Class of+securities for which quotation is sought 40 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another+security, clearly identify that other+security) 42 Number and +class of all +securities quoted on ASX (_including_the+securities in clause 38)	N/A
	N/A
	N/A
	N/A
	Number	+Class

• See chapter 19 for defined terms.

Appendix 3B Page 8

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 12 September 2019 (Company secretary)

Print name: Amanda Burgess

== == == == ==

• See chapter 19 for defined terms.

04/03/2013

Appendix 3B Page 9

Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

• Insert number of fully paid[+] ordinary 100,139,194 (post consolidation) securities on issue 12 months before the + issue date or date of agreement to issue Add the following: Nil • Number of fully paid[+] ordinary securities issued in that 12 month period under an exception in rule 7.2

• • Number of fully paid[+] ordinary securities issued in that 12 month period with shareholder approval

• • Number of partly paid[+] ordinary securities that became fully paid in that 12 month period

• Note: • Include only ordinary securities here – other classes of equity securities cannot be added

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• Subtract the number of fully paid[+] ordinary Nil securities cancelled during that 12 month period “A” 100,139,194

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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Step 2: Calculate 15% of “A”
“B” 0.15
[Note: this value cannot be changed]
Multiply “A” by 0.15 15,020,879
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1
that has already been used
Insert number of [+] equity securities issued The Company has agreed to issue
or agreed to be issued in that 12 month $3,000,000 worth of fully paid ordinary
period not counting those issued: shares as deferred consideration for the
acquisition of an indirect 65% interest in the
• Under an exception in rule 7.2 Kayelekera uranium mine. The number of
shares to be issued will be calculated using
• Under rule 7.1A the lower of:
• With security holder approval under rule (A) the price at which shares were
7.1 or rule 7.4 issued under the most recent
capital raising undertaken by the
Note: Company within 90 days prior to
• This applies to equity securities, unless issue; and
specifically excluded – not just ordinary
securities (B) the 30-day VWAP for shares up to
• Include here (if applicable) the securities and including the business day
the subject of the Appendix 3B to which prior to issue.
this form is annexed
• It may be useful to set out issues of The deferred consideration shares will be
securities on different dates as separate issued on the 3 [rd] anniversary of completion
line items of the acquisition.
The Company has agreed to issue the
maximum number of deferred consideration
shares it can issue under its placement
capacity at the relevant time.
The maximum number of shares which
could currently issue without shareholder
approval under rule 7.1 is 15,020,879
shares.
As the issue of the deferred consideration
shares is not subject to shareholder
approval, Listing Rule 7.1 operates so that
the Company is deemed to have utilised all
of its available placement capacity under
Listing Rule 7.1 by agreeing to issue these
shares.
“C” 15,020,879
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	15,020,879
Subtract“C” Note: number must be same as shown in Step 3	15,020,879
Total[“A” x 0.15] – “C”	Nil_[Note: this is the remaining placement_ capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 12

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Appendix 3B New issue announcement

Part 2

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Rule 7.1A – Additional placement capacity for eligible entities
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Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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“A” N/A
Note: number must be same as shown in
Step 1 of Part 1
Step 2: Calculate 10% of “A”
“D” 0.10
Note: this value cannot be changed
Multiply “A” by 0.10
Step 3: Calculate “E”, the amount of placement capacity under rule
7.1A that has already been used
Insert number of [[+]] equity securities issued
or agreed to be issued in that 12 month
period under rule 7.1A
Notes:
• This applies to equity securities – not
just ordinary securities
• Include here – if applicable – the
securities the subject of the Appendix
3B to which this form is annexed
• Do not include equity securities issued
under rule 7.1 (they must be dealt with
in Part 1), or for which specific security
holder approval has been obtained
• It may be useful to set out issues of
securities on different dates as separate
line items
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Insert number of [[+]] equity securities issued
or agreed to be issued in that 12 month
period under rule 7.1A
Notes:
• This applies to equity securities – not
just ordinary securities
• Include here – if applicable – the
securities the subject of the Appendix
3B to which this form is annexed
• Do not include equity securities issued
under rule 7.1 (they must be dealt with
in Part 1), or for which specific security
holder approval has been obtained
• It may be useful to set out issues of
securities on different dates as separate
line items
“E”
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

“A” x 0.10 Note: number must be same as shown in Step 2 Subtract “E” Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 14

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