MAGNETITE MINES LIMITED. — Director's Dealing 2012

Jul 31, 2012

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Level 3, IBM Building 1060 Hay Street, West Perth Western Australia 6005

31 July 2012

PO Box 7525 Cloisters Square, Perth Western Australia 6850

Telephone: +61 8 9322 8542 Facsimile: +61 8 9322 6577 info@royalresources.com.au

www.royalresources.com.au ABN: 34 108 102 432

Ms Sandra Wutete Adviser, Listings (Perth) ASX Compliance Pty Limited Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

By email: sandra.wutete@asx.com.au

Dear Sandra,

Royal Resources Limited (the “Company”)

With regard to the late lodgment of Appendix 3Z, in your letter dated 30 July 2012, please see below for response to your questions;

Question

1. Please explain why the Appendix 3Z was lodged late.

Response

This was an over sight for which there is no excuse.

Question

2. What arrangements does the Company have in place to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?

ROYDOC – 53 - 1237

Response

When a director joins the Company, part of the induction process is for the director to advise the Company of the notifiable interests in the Company. These interests in the Company are then confirmed with the Company’s share register and disclosed in an Appendix 3X, listing rule 3.19A.1

The Company has a “Policy for Trading in Company Securities” that all directors must comply with. The policy requires a “Request for Prior Written Clearance to Trade in Company Securities” to be sent to the company secretary, and must be approved before any company securities can be traded by the director. This formal notification of the intent to trade in Company securities alerts the Company to the possibility of disclosure that may need to be made.

If the director subsequently trades in Company securities they must then notify the Company of a change to the notifiable interest of a director so that the appropriate disclosure can be made in Appendix 3Y, listing rule 3.19A.2.

When a director ceases to be a director of the company the final interest of the director is confirmed as part of the exit interview and process. The notifiable interests of a director at the date the director ceases to be a director is then confirmed with the share register and disclosed in Appendix 3Z, listing rule 3.19A.3.

Question

1. If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.19B?

Response

The current arrangements, being enforced, are considered to be adequate for the purposes of complying with listing rule 3.19B.

If you have any queries or concerns please contact me immediately.

Yours sincerely,

[sent electronically without signature]

Tony Heslop

Chief Financial Officer & Company Secretary

ROYDOC – 53 - 1237

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ASX Compliance Pty Limited ABN 26 087 780 489 Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

GPO Box D187 PERTH WA 6840

Telephone 61 8 9224 0000 Facsimile 61 8 9221 2020 www.asx.com.au

30 July 2012

Mr Tony Heslop Company Secretary Royal Resources Limited Level 3, IBM Building 1060 Hay Street WEST PERTH 6005

By email: tony.heslop@royalresources.com.au

Dear Tony

Royal Resources Limited (the “Company”)

We refer to the following:

1. The Company’s announcement lodged with ASX Ltd (“ASX”) on 25 July 2012 regarding a final director’s interest notice for Mr Brian Dudley Richardson (“Appendix 3Z”).

2. Listing rule 3.19A which requires an entity to tell ASX the following:

   • 3.19A.1 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the following times:

     • On the date that the entity is admitted to the official list.

     • On the date that a director is appointed.

The entity must complete an Appendix 3X and give it to ASX no more than 5 business days after the entity’s admission or a director’s appointment.

• 3.19A.2 A change to a notifiable interest of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust). The entity must complete an Appendix 3Y and give it to ASX no more than 5 business days after the change occurs.

• 3.19A.3 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the date that the director ceases to be a director. The

entity must complete an Appendix 3Z and give it to ASX no more than 5 business days after the director ceases to be a director.

1. Listing rule 3.19B which states as follows.

An entity must make such arrangements as are necessary with a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) to ensure that the director discloses to the entity all the information required by the entity to give ASX completed Appendices 3X, 3Y and 3Z within the time period allowed by listing rule 3.19.A. The entity must enforce the arrangements with the director.

1. The Companies Update dated 27 June 2008, reminding listed entities of their obligation to notify ASX within 5 business days of the notifiable interests in securities held by each director and outlining the action that ASX would take in relation to breaches of listings rules 3.19A and 3.19B.

As the Appendix 3Z indicates Mr Brian Dudley Richardson ceased to be a director of the Company on 29 June 2012, the Appendix 3Z should have been lodged with the ASX by 6 July 2012. As the Appendix 3Z was lodged on 25 July 2012 it appears that the Company may be in breach of listing rules 3.19A and/or 3.19B.

Please note that ASX is required to record details of breaches of the listing rules by listed companies for its reporting requirements.

ASX reminds the Company of its contract with ASX to comply with the listing rules. In the circumstances ASX considers that it is appropriate that the Company make necessary arrangements to ensure there is not a reoccurrence of a breach of the listing rules.

Having regard to listing rules 3.19A and 3.19B and Guidance Note 22: “Director Disclosure of Interests and Transactions in Securities - Obligations of Listed Entities”, we ask that you answer each of the following questions.

1. Please explain why the Appendix 3Z was lodged late.

2. What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?

3. If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.19B?

Your response should be sent to me by e-mail to Sandra.Wutete@asx.com.au or by facsimile on facsimile number +61 8 9221 2020. It should not be sent to ASX Market Announcements.

A response is requested as soon as possible and, in any event, not later than 3:00 pm WST on 1 August 2012 .

Under listing rule 18.7A, a copy of this query and your response will be released to the market, so your response should be in a form suitable for release and must separately address each of the questions asked. If you have any queries or concerns, please contact me immediately.

Yours sincerely,

[sent electronically without signature]

Sandra Wutete Adviser, Listings (Perth)

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