MARVEL GOLD LIMITED — AGM Information 2016

Oct 16, 2016

GRAPHEX MINING LIMITED ACN 610 319 769

NOTICE OF ANNUAL GENERAL MEETING

An Annual General Meeting of the Company will be held at the Main Function Room of the Celtic Club at 48 Ord Street, West Perth on Thursday, 17 November 2016 at 3.30pm (WST).

The Notice of Annual General Meeting 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 9200 4960.

Shareholders are urged to attend or vote by lodging the proxy form attached to the Notice

GRAPHEX MINING LIMITED ACN 610 319 769

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Shareholders of Graphex Mining Limited ( Graphex or Company ) will be held at 3:30 pm (WST) on Thursday, 17 November 2016 at the Main Function Room, Celtic Club, 48 Ord Street, West Perth, Western Australia ( Meeting ).

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders at 3:30pm (WST) on Tuesday, 15 November 2016.

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Schedule 1.

AGENDA

1. Annual Report

To table and consider the Annual Report of the Company and its controlled entities for the financial year ended 30 June 2016, which includes the Financial Report, the Directors' Report and the Auditor's Report.

2. Resolution 1 – Adoption of Remuneration Report

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

“That, for the purpose of section 250R(2) of the Corporations Act, and for all other purposes, approval is given for the adoption of the Remuneration Report of the Company.”

Note: The vote on Resolution 1 will be an advisory vote of Shareholders only, and will not bind the Directors or the Company.

Please refer to the Explanatory Memorandum for details.

Resolution 1 is subject to voting exclusions as set out in section 4.3 of the Explanatory Memorandum.

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3. Resolution 2 – Election of Director – Stephen Dennis

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

“That, for the purpose of Listing Rule 14.4 and for all other purposes, Stephen Dennis, a Director who was appointed by the Directors on 3 March 2016, retires, and being eligible, is elected as a Director.”

4. Resolution 3 – Election of Director – Grant Davey

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

“That, for the purpose of Listing Rule 14.4 and for all other purposes, Grant Davey, a Director who was appointed by the Directors on 3 March 2016, retires, and being eligible, is elected as a Director.”

5. Resolution 4 - Approval of Additional 10% Capital Raising

Capacity

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

"That, pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, the Shareholders approve the Company having the additional capacity to issue Equity Securities in an amount up to 10% of the issued capital of the Company (at the time of the issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions in the Explanatory Memorandum without the need to seek further Shareholder approval."

Resolution 4 is subject to voting exclusions as set out in section 7.2 of the Explanatory Memorandum.

BY ORDER OF THE BOARD

Stuart McKenzie Company Secretary

Dated: 10 October 2016

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GRAPHEX MINING LIMITED ACN 610 319 769

EXPLANATORY MEMORANDUM

1. Introduction

The Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Meeting to be held at 3:30pm (WST) on Thursday, 17 November 2016 at the Main Function Room, Celtic Club, 48 Ord Street, West Perth, Western Australia.

The Explanatory Memorandum forms part of the Notice which should be read in its entirety. The Explanatory Memorandum contains the terms and conditions on which the Resolutions will be voted.

The Explanatory Memorandum includes the following information to assist Shareholders in deciding how to vote on the Resolutions:

Section 2:	Action to be taken by Shareholders
Section 3:	Annual Report
Section 4:	Resolution 1 – Adoption of Remuneration Report
Section 4:	Resolution 2 – Election of Director - Stephen Dennis
Section 6:	Resolution 3 – Election of Director - Grant Davey
Section 7:	Resolution 4 – Approval of Additional 10% Capital Raising Capacity
Schedule 1:	Definitions

1.1

Time and place of Meeting

Notice is given that the Meeting will be held at 3:30pm (WST) on Thursday, 17 November 2016 at the Main Function Room, Celtic Club, 48 Ord Street, West Perth, Western Australia.

1.2

Your vote is important

The business of the Meeting affects your shareholding and your vote is important.

1.3 Voting eligibility

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 3.30pm WST on Tuesday, 15 November 2016.

1.4

Defined terms

Capitalised terms in this Notice of Meeting and Explanatory Memorandum are defined either in Schedule 1 or where the relevant term is first used.

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1.5 Responsibility

This Notice of Meeting and Explanatory Memorandum have been prepared by the Company under the direction and oversight of its Directors.

1.6 ASX

A final copy of this Notice of Meeting and Explanatory Memorandum has been lodged with ASX. Neither ASX nor any of its officers take any responsibility for the contents of this document.

1.7 No internet site is part of this document

No internet site is part of this Notice of Meeting and Explanatory Memorandum. The Company maintains an internet site (www.graphexmining.com.au). Any reference in this document to this internet site is a textual reference only and does not form part of this document.

2. Action to be taken by Shareholders

Shareholders should read the Notice including the Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

2.1 Voting in person

A shareholder that is an individual may attend and vote in person at the meeting. If you wish to attend the meeting, please bring the enclosed proxy form to the meeting to assist in registering your attendance and number of votes. Please arrive 20 minutes prior to the start of the meeting to facilitate this registration process.

2.2 Voting by corporate representative

A shareholder that is a corporation may appoint an individual to act as its representative to vote at the meeting in accordance with section 250D of the Corporations Act 2001 (Cth). The representative should bring to the meeting evidence of his or her appointment, including any authority under which the appointment is signed. The appropriate “Appointment of Corporate Representative” form should be completed and produced prior to admission to the meeting. This form may be obtained from the Company’s share registry.

2.3 Appointment of proxies

Each Shareholder entitled to vote at the Meeting may appoint a proxy to attend and vote at the Meeting. To vote by proxy, please complete, sign and return the enclosed Proxy Form in accordance with its instructions. A proxy need not be a Shareholder of the Company and can be an individual or a body corporate.

A body corporate appointed as a Shareholder's proxy may appoint an individual as its representative to exercise any of the powers the body may exercise as a proxy at the Meeting. The appointment may be a standing one. Unless the appointment states otherwise, the representative may exercise all of the powers that the appointing body could exercise at a meeting or in voting on a resolution. The representative should bring to the Meeting evidence of his or her appointment, including any authority under which the appointment is signed, unless it has previously been given to the Share Registry.

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A Shareholder entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints two proxies and the appointment does not specify the proportion or number of the member’s votes to be exercised, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

• (a) Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does:

• (i) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed);

• (ii) if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands;

• (iii) if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• (iv) if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

• (b) Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• (i) an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members;

• (ii) the appointed proxy is not the chair of the meeting;

• (iii) at the meeting, a poll is duly demanded on the resolution; and

• (iv) either of the following applies:

• (A) the proxy is not recorded as attending the meeting;

• (B) the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

The Chair intends to exercise all available proxies in favour of all Resolutions.

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2.4 Lodgement of proxy documents

To be valid, your proxy form (and any power of attorney under which it is signed) must be received at an address given below by 10.00am (WST) on Tuesday, 15 November 2016. Any proxy form received after that time will not be valid for the scheduled meeting. Proxies should be returned as follows:

Online At www.investorvote.com.au

By mail Share Registry – Computershare Investor Services Pty Limited, GPO Box 242, Melbourne Victoria 3001, Australia

By fax 1800 783 447 (within Australia) +61 3 9473 2555 (outside Australia) By mobile Scan the QR Code on your proxy form and follow the prompts

Custodian voting For Intermediary Online subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

2.5 Voting exclusions

Pursuant to requirements of the Corporations Act and Listing Rules, certain voting exclusions apply to Resolution 1 and Resolution 4. Please refer to discussion of the relevant Resolutions below for details of the applicable voting exclusions.

3. Annual Report

There is no requirement for Shareholders to approve the Annual Report.

Shareholders will be offered the opportunity to:

• (a) Discuss the Annual Report (which is available online at www.graphexmining.com.au);

• (b) Ask questions or make comments on the management of the Company; and

• (c) Ask the auditor questions about the conduct of the audit and the preparation and content of the Auditor's Report.

In addition to taking questions at the Meeting, written questions to the Chairman about the management of the Company, or to the Company's auditor about:

• (a) The preparation and the content of the Auditor's Report;

• (b) The conduct of the audit;

• (c) Accounting policies of the Company in relation to the preparation of the financial statements; and

• (d) The independence of the auditor in relation to the conduct of the audit,

may be submitted no later than five Business Days before the Meeting to the Company Secretary at the Company's registered office.

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4. Resolution 1 – Adoption of Remuneration Report

4.1 Resolution 1 – Adoption of Remuneration Report

Pursuant to section 250R(2) of the Corporations Act, the Company is required to put the 2016 Remuneration Report to the vote of Shareholders. The Company’s Remuneration Report is set out in pages 10 to 16 of the Annual Report. The Remuneration Report (among other things) provides Shareholders with information relating to the Group’s remuneration policies and details of the remuneration for the Key Management Personnel (which includes the Directors (both executive and non-executive) and other specified senior managers of the Group).

Subject to the rules set out in Division 9 of Part 2G.2 of the Corporations Act described below under the heading "Consequence of voting against Resolution 1", Resolution 1 need only be an advisory vote of Shareholders and does not bind the Directors or 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 2016 Remuneration Report. However, the Board will take the outcome of the vote very seriously when considering the Company's future remuneration policy.

Accordingly, your Directors would like to reiterate that:

• (a) The remuneration policy of the Company and its subsidiaries (Group) has been designed to align Executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific short and long-term incentives based on key performance areas affecting the Group’s financial and operating results. Your Board believes the Company’s remuneration policy to be appropriate.

• (b) The structure of the Executive remuneration package remains a key focus of the Board to ensure alignment with the nature of Graphex’s business as it optimises its activities and minimises costs.

These matters are part of the Company’s strategy to ensure the remuneration of Directors, Executives and all other employees is in line with best practice for a company its size and in keeping with the wishes of Shareholders.

4.2 Consequence of voting against Resolution 1

If at least 25% of the votes cast on Resolution 1 are against the adoption of the 2016 Remuneration Report, and at least 25% of the votes cast at the next annual general meeting of the Company ( 2017 AGM ) on a resolution that the 2017 remuneration report be adopted is against the adoption of that report, then the Company will be required under section 250V of the Corporations Act to put to the vote at the 2017 AGM a spill resolution ( Spill Resolution ) to decide whether or not to convene another general meeting within 90 days of the 2017 AGM ( Spill Meeting ) where:

• (a) All the Directors of the Company who were directors at the time of the 2017 AGM (other than the Managing Director) will cease to hold office immediately before the end of the Spill Meeting; and

• (b) A resolution to fill the position of each of the Directors referred to in (a) by re-election or otherwise will be put to the vote at the Spill Meeting.

The Chair will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on, the 2016 Remuneration Report.

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4.3 Voting Exclusion

A vote on Resolution 1 must not be cast (in any capacity) by, or on behalf of a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such member.

However, a person described above may cast a vote on Resolution 1 as proxy if the vote is not cast on behalf of a person described above and either:

• (a) The person does so as a proxy appointed by writing that specifies how the person is to vote on Resolution 1; or

• (b) The person is the Chairman and the appointment of the Chairman as proxy:

• (i) does not specify the way the Chairman is to vote on Resolution 1; and

• (ii) expressly authorises the Chairman to exercise the Proxy even though Resolution 1 is connected directly or indirectly with the remuneration of Key Management Personnel.

4.4 Directors' recommendation

Noting that each Director has a personal interest in their own remuneration from the Company (as described in the Remuneration Report), the Board unanimously recommends that the Shareholders adopt the 2016 Remuneration Report and you vote in favour of Resolution 1.

The Chairman intends to exercise all undirected proxies in favour of Resolution 1. If the Chairman of the Meeting is appointed as your proxy and you have not specified the way the Chairman is to vote on Resolution 1, by signing and returning the Proxy Form, you are considered to have provided the Chairman with an express authorization for the Chairman to vote your proxy in accordance with the Chairman's intention even though Resolution 1 is connected directly or indirectly to the remuneration of Key Management Personnel.

5. Resolution 2 – Election of Director – Stephen Dennis

5.1 General

Clause 45.1 of the Company’s Constitution allows the Board to appoint a person as a Director to fill a casual vacancy. Pursuant to Clause 45.1 of the Constitution and Listing Rule 14.4, any Director so appointed holds office only until the next following annual general meeting and is then eligible for re-election.

Stephen Dennis was appointed on 3 March 2016 and accordingly will retire, and being eligible, seeks re-election. Details of Stephen Dennis’s background and experience are as follows:

Mr Stephen Dennis, BCom, LLB GDipAppFin (Finsia)

Independent, Non-Executive Chairman – Age 58

Experience and expertise

Stephen Dennis has been actively involved in the mining industry for over 30 years. He has held senior management positions at MIM Holdings Limited, Minara Resources Limited and Brambles Australia Limited. Until recently, Mr Dennis was the Chief Executive Officer and Managing Director of CBH Resources Limited, the Australian subsidiary of Toho Zinc Co., Ltd of Japan.

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Special responsibilities

Chairman of the Board

Other current directorships

Heron Resources Limited (Non-Executive Chairman)

Rox Resources Limited (Non-Executive Chairman)

Cott Oil and Gas Limited (Non-Executive Chairman)

Interests in Graphex securities

375,000 Shares 124,999 Unquoted Loyalty Options 1,000,000 Unquoted Options

5.2 Directors’ recommendation

The Board (excluding Stephen Dennis) recommends that Shareholders vote in favour of Resolution 2. The Chairman of the Meeting intends to vote undirected proxies in favour of Resolution 2.

6. Resolution 3 - Election of Director – Grant Davey

6.1 General

Clause 45.1 of the Company’s Constitution allows the Board to appoint a person as a Director to fill a casual vacancy. Pursuant to Clause 45.1 of the Constitution and Listing Rule 14.4, any Director so appointed holds office only until the next following annual general meeting and is then eligible for re-election.

Grant Davey was appointed on 3 March 2016 and accordingly will retire, and being eligible, seeks re-election. Details of Grant Davey’s background and experience are as follows:

Mr Grant Davey, BSc

Independent, Non-Executive Director – Age 44

Experience and expertise

Grant Davey has over 20 years of senior management and operational experience in the construction and operation of gold, platinum and coal mines in Africa, Australia, South America and Russia. More recently, he has been involved in venture capital investments in several Canadian and Australian listed exploration and mining projects. Mr Davey was instrumental in acquiring the Honeymoon Uranium Project in South Australia and was the Managing Director of Cradle Resources Limited and founder and Managing Director of the Panda Hill niobium project in Tanzania which is expected to commence construction in 2016.

Special responsibilities

Nil

Other current directorships

Boss Resources Limited

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Interests in Graphex securities

250,000 Shares 83,333 Unquoted Loyalty Options 1,000,000 Unquoted Options

6.2 Directors’ recommendation

The Board (excluding Grant Davey) recommends that Shareholders vote in favour of Resolution 3. The Chairman of the Meeting intends to vote undirected proxies in favour of Resolution 3.

7. Resolution 4 - Approval of Additional 10% Capital Raising Capacity

7.1 General

Under Listing Rule 7.1, the Company is permitted, without Shareholder approval, to issue Equity Securities in an amount up to 15% of the number of shares that it had on issue 12 months earlier ( 15% Capital Raising Capacity ).

The Listing Rules were amended in August 2012, to include a new Listing Rule 7.1A which enables eligible entities to seek Shareholder pre-approval for the capacity to issue additional Equity Securities, up to a further 10% of the Company’s issued capital, in the 12 month period following the Meeting. This 10% capacity under Listing Rule 7.1A is separate to and in addition to the existing 15% Capital Raising Capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P ASX 300 Index and has a market capitalization of $300 million or less. The Company is an eligible entity.

The purpose of Listing Rule 7.1A is to provide mid to small-cap companies with more options for raising capital.

Resolution 4 seeks Shareholder approval (as a special resolution) for the Company to be able to issue additional Equity Securities up to 10% of the Company’s issued share capital (“ Additional Equity Securities ”) over the 12 month period following the Meeting, each at an issue price of not less than 75% of the VWAP for the relevant Equity Securities being issued, calculated over the 15 trading days on which trades in those Equity Securities recorded immediately before either (1) the day on which the price at which those Equity Securities are to be issued is agreed; or (2) if the Equity Securities are not issued within 5 trading days of the date in paragraph (1), the date on which the Equity Securities are issued ( Additional 10% Capital Raising Capacity ).

The Additional Equity Securities that the Company is permitted to issue under the Additional 10% Capital Raising Capacity must be in an existing class of the Company’s quoted securities, which includes Shares.

If Resolution 4 is passed, the Additional 10% Capital Raising Capacity would facilitate capital raising by the Company as necessary (up to the 10% limit), without incurring the expense of having to convene a further general meeting of Shareholders.

One of ASX’s aims in introducing Listing Rule 7.1A was to help improve access to capital and funding for small to mid-cap companies and to provide greater flexibility for eligible entities by providing the ability to raise capital (up to the 10% limit),

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without incurring the administrative and cost burden associated with holding a meeting of shareholders.

As Graphex does not have a cash flow producing asset, the passing of Resolution 4 is especially important to provide the Board with the flexibility that may be required in the coming 12 months. The Board will always have regard to dilution of existing Shareholders and will take this into account when structuring future capital raisings, should the need arise.

Maximum number of Equity Securities that may be issued

The formula for calculating the number of Additional Equity Securities that the Company can issue is set out in Listing Rule 7.1A.2. In summary, it would apply to the Company as follows:

If the Company has obtained the approval of Shareholders at the Meeting (ie. if Resolution 4 is passed), the Company may issue or agree to issue, during the approval period (ie. the 12 month period after the date of the Meeting or, in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities) or Listing Rule 11.2 (disposal of main undertaking), the date of such approval, whichever occurs first), a number of Equity Securities calculated in accordance with the formula:

(A x D) – E

Where:

A = The number of Shares on issue 12 months before the date of issue or agreement,

• plus the number of Shares issued in the 12 months under an exception in Listing Rule 7.2 (which contains numerous exceptions to Listing Rule 7.1 and Listing Rule 7.1A, including in relation to issues of Shares pursuant to pro rata issues, upon the conversion of convertible securities such as Options; under off-market bids, mergers by scheme of arrangement or approved employee incentive schemes, or certain issues of preference shares, etc – refer to Listing Rule 7.2 for full details),

• plus the number of party paid Shares that became fully paid in the 12 months,

• plus the number of Shares issued with Shareholder approval under Listing Rule 7.1 (i.e the 15% Capital Raising Capacity rule) or Listing Rule 7.4 (which relates to subsequent approvals by Shareholders of an issue of Equity Securities),

• less the number of Shares cancelled in the previous 12 months.

• D = 10%

• E = The number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of Shareholders under Listing Rule 7.1 or Listing Rule 7.4.

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As at the date of this Notice, the Company has 55,930,446 Shares on issue, which would enable the Company (if Resolution 4 is passed) to issue up to an additional 5,593,045 Equity Securities. The actual number of Additional Equity Securities that the Company would be able to issue under the Additional 10% Capital Raising Capacity will be calculated at the time of issue in accordance with Listing Rule 7.1A.2.

Resolution 4 is a special resolution and as such requires approval of at least 75% of the votes cast by Shareholders present and eligible to vote at the Meeting (by proxy, attorney or otherwise).

The Directors believe that Resolution 4 is in the best interests of the Company and its Shareholders as it provides the Company with additional capital raising capacity and flexibility and unanimously recommend that Shareholders vote in favour of Resolution 4. The Chairman of the meeting intends to vote undirected proxies in favour of Resolution 4.

Capitalised terms used in this section 7 of the Explanatory Memorandum have the same meaning as in the Listing Rules unless otherwise defined in Schedule 1.

7.2 Voting Exclusion

The Company will disregard any votes cast on Resolution 4 by a person (and any associates of such a person) who may participate in the issue of Additional Equity Securities pursuant to the Additional 10% Capital Raising Limit, and a person (and any associates of such a person) who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, if Resolution 4 is passed.

However, the Company will not disregard a vote if:

• (a) It is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) It is cast by the Chairman 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.

At the date of the Notice, the Company has not approached any particular existing Shareholder to participate in the issue of the Equity Securities. No existing Shareholder's votes will therefore be excluded under this voting exclusion.

7.3 Specific information in relation to Equity Securities to be Issued Under Additional 10% Capital Raising Capacity

Pursuant to and in accordance with Listing Rule 7.3A, information is provided in relation to the approval of the Additional 10% Capital Raising Capacity as follows:

• (a) During the 12 months preceding the date of the meeting, a total of 79,031,818 Equity Securities were issued, representing 100% of the total number of Equity Securities on issue at commencement of that 12 month period.

• (b) Details of all Equity Securities issued during the 12 months preceding the date of the meeting are set out in the table below.

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	Shares	Unquoted Loyalty Options	Unquoted Options
Date of issue	1. 7 June 2016 (A) 2. 8 June 2016 (B) 3. 8 June 2016 (C) 4. 16 September 2016 (D) 5. 5 October 2016(E)	8 June 2016	1. 8 June 2016 (A) 2. 8 June 2016 (B)
Number issued	A total of 55,930,436 shares: (A) 16,454,000 (B) 3,546,000 (C) 35,000,000 (D) 500,000 (E) 430,446	11,666,502	(A) 5,927,359 (B) 6,437,957
Class/type of equitysecurity	Fully paid ordinary shares	Unquoted Options	Unquoted Options
Summary of terms	N/A	1. 9,636,917 vested on 14 September subject to the number of Shares held on the vesting date 2. Exercisable at $0.25 3. Expiry date 8 June 2019	(A) Exercisable at $0.25, expiring 8 June 2019, escrowed to 14 June 2018 (B) 3,000,000 exercisable at $0.20, expiring 9 June 2019 (2,350,000 escrowed to 14 June 2018) (C) 1,114,319 with a nil exercise price, expiring 9 June 2019, vesting 1 July 2017 (520,000 escrowed to 14 June 2018) (D) 2,323,638 with a nil exercise price, expiring 9 June 2021, vesting 1 July 2017, 1 July 2018 and 1 July 2019 (715,000 escrowed to 14 June 2018)
Persons who received equity securities	(A) Issue of Shares to IMX shareholders as consideration for the acquisition of graphite tenements (B) Issue of Shares to MMG Exploration Holdings Limited as consideration for the acquisition of graphite tenements (C) Issue of Shares pursuant to the IPO as set out in the Replacement Prospectus of 10 May 2016 (D) Issue of Shares pursuant to the exercise of Loyalty Options (E) Issue of Shares pursuant to the exercise of LoyaltyOptions	Those persons who acquired Shares under the IPO	(A) Joint lead managers and corporate advisor in connection with the IPO (B) Issued to Directors and employees
Price	$0.20 (A), (B), (C) $0.25(D), (E)	N/A	N/A
Discount to marketprice	N/A	N/A	N/A
Total cash consideration	$7,000,000 (C) $232,612 (D), E)	Loyalty Options attached to Shares issued under the IPO on a one for three basis. Cash consideration for the Loyalty Options was effectively included in the proceeds received from the IPO.	Nil
Amount of cash	$1,000,000 as consideration	N/A	N/A

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	Shares	Unquoted Loyalty Options	Unquoted Options
consideration spent	for the acquisition of graphite tenements from IMX. $2,000,000 has been used to meet costs incurred in connection with the IPO, to fund development of the Chilalo Graphite Project and forgeneral workingcapital.
Use of cash consideration	Proceeds will continue to be used to meet costs associated with the development of the Chilalo Graphite Project and for general workingcapital.	N/A	N/A
Intended use for remaining cash	As above	N/A	N/A
Non-cash consideration	Graphite tenements and other minor assets as set out in the Replacement Prospectus of 10 May 2016	N/A	(A) For services provided in connection with the IPO (B) 3,000,000 issued on successful completion of the IPO (C) 3,437,957 issued pursuant to employment agreements
Current value of non-cash consideration	$5,000,000	N/A	N/A

• (c) If the Company chooses to utilise the Additional 10% Capital Raising Capacity, the Additional Equity Securities would be issued at an issue price of not less than 75% of the VWAP for the Company's Equity Securities over the 15 Trading Days on which trades in the class of Equity Securities proposed to be issued were recorded, immediately before:

• (i) the date on which the price at which the Additional Equity Securities were to be issued is agreed; or

• (ii) if the Additional Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Additional Equity Securities were issued.

• (d) If Resolution 4 is approved by Shareholders and the Company issues Additional Equity Securities under the Additional 10% Capital Raising Capacity, the voting power and economic interest in the Company of existing Shareholders' who do not receive Additional Equity Securities would be diluted as shown in the below table (in the case of listed Options, only if the listed Options are exercised). There is a risk that:

• (i) the market price for the Company's Equity Securities may be significantly lower on the date of any issue of the Additional Equity Securities than on the date of the Meeting; and

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• (ii) the Additional Equity Securities may be issued at a price that is at a discount to the market price for the Company's Equity Securities on the issue date or the Additional Equity Securities are issued as part of consideration for the acquisition of a new asset, which may have an effect on the amount of funds raised by the issue of the Additional Equity Securities.

• (e) The below table shows the dilution of existing Shareholders on the basis of the assumed issue price of Shares being $0.36 and the current number of Shares on issue calculated in accordance with the formula in Listing Rule 7.1A.2 as at the date of this Notice.

• (f) The table also shows:

• (i) two examples where the number of shares on issue has changed, by an increase of 50% and an increase of 100%. The number of Shares on issue may increase as a result of issues of Shares that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders’ meeting; and

• (ii) two examples of where the issue price of Shares has decreased by 50% and increased by 50% as against the assumed issue price.

Number of Shares on issue
			Dilution
		$0.18	$0.36	$0.54
		50% decrease in Issue Price	Issue Price	50% increase in Issue Price
Shares currently on issue	10% Voting Dilution	5,593,045 Shares	5,593,045 Shares	5,593,045 Shares
55,930,446	Funds raised	$1,006,748	$2,013,496	$3,020,244
50% increase in number of Shares on issue	10% Voting Dilution	8,389,567 Shares	8,389,567 Shares	8,389,567 Shares
83,895,669	Funds raised	$1,510,122	$3,020,244	$4,530,366
100% increase in number of Shares on issue	10% Voting Dilution	11,186,089 Shares	11,186,089 Shares	11,186,089 Shares
111,860,892	Funds raised	$2,013,496	$4,026,992	$6,040,488

• (g) The table has been prepared on the following assumptions:

• (i) The Company issues the maximum number of Additional Equity Securities available under the Additional 10% Capital Raising Capacity;

• (ii) No Options (both listed and unlisted) (including any listed Options issued under the Additional 10% Capital Raising Capacity) are exercised into Shares before the date of the issue of the Additional Equity Securities;

• (iii) The 10% voting dilution reflects the aggregate percentage dilution against the issued Share capital at the time of issue. This is why the voting dilution is shown in each example as 10%;

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• (iv) The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the Additional 10% Capital Raising Capacity, based on that Shareholder’s holding at the date of the Meeting. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances;

• (v) The table shows only the effect of issues of Additional Equity Securities under Listing Rule 7.1A, not under the 15% Capital Raising Capacity under Listing Rule 7.1;

• (vi) The issue of Additional Equity Securities under the Additional 10% Capital Raising Capacity consists only of Shares. If the issue of Additional Equity Securities includes listed Options, it is assumed that those listed Options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders; and

• (vii) The issue price is assumed to be $0.36 being the closing price of the Shares on the ASX on 6 October 2016.

• (h) If the Company chooses to utilise the Additional 10% Capital Raising Capacity, the Company would only issue and allot the Additional Equity Securities during the 12 month period following the Meeting. The approval under Resolution 4 for the issue of the Additional Equity Securities will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities) or Listing Rule 11.2 (disposal of main undertaking).

• (i) The Company may seek to issue the Additional Equity Securities for the following purposes:

• (i) Cash consideration to meet costs associated with the development of the Chilalo Graphite Project and for general working capital; or

• (ii) Non-cash consideration for the compensation of service providers carrying out work in connection with the development of the Chilalo Project, in such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3.

• (j) The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the Additional 10% Capital Raising Capacity. The identity of the allottees of Additional Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:

• (i) the purpose of the issue;

• (ii) the alternative methods of raising funds that are available to the Company including, but not limited to, rights issues or other issues in which existing Shareholders can participate;

• (iii) the effect of the issue of the Additional Equity Securities on the control of the Company;

• (iv) the circumstances of the Company, including, but not limited to, the financial situation and solvency of the Company;

• (v) prevailing market conditions; and

• (vi) advice from corporate, financial and broking advisers (if applicable).

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• (k) The allottees under the Additional 10% Capital Raising Capacity have not been determined as at the date of this Notice but may include existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.

• (l) Further, if the Company does acquire new resources assets or investments, the allottees under the Additional 10% Capital Raising Capacity may be the vendors of the new resources assets or investments. The Company is not currently intending to issue Additional Equity Securities for the purpose of acquiring new resources assets or investments.

• (m) As the Company only commenced trading on the ASX on 14 June 2016, it has not previously obtained Shareholder approval under Listing Rule 7.1A.

7.4 Details of approvals under Listing Rule 7.1A previously obtained by the Company

As the Company only commenced trading on the ASX on 14 June 2016, it has not previously obtained Shareholder approval under Listing Rule 7.1A.

7.5 Directors' recommendation

The Directors considers it prudent for the Company to have the opportunity to take advantage of the flexibility to be able to issue additional securities provided under Listing Rule 7.1A. No decision has been made by the Board to undertake any issue of securities if Shareholders approve Resolution 4. The Directors believe that Resolution 4 is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of Resolution 4.

8. Enquiries

Shareholders are requested to contact Graphex’s company secretary, Mr Stuart McKenzie on +61 8 9200 4960 if they have any queries in respect of the matters set out in this Notice.

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Schedule 1 – Definitions

$ means Australian dollars.

Annual Report means the report to shareholders for the year ended 30 June 2016 that was lodged with ASX on 29 September 2016.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chair of the Meeting.

Chilalo Project or Chilalo Graphite Project means the Company’s graphite project located in south-east Tanzania on Prospecting Licence 6073/2009.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act.

Company or Graphex means Graphex Mining Limited (ACN 610 319 769).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Equity Security has the meaning given in the Listing Rules.

Executive means the Managing Director, Chief Financial Officer, General Manager Technical and the Commercial Manager / Company Secretary.

Explanatory Memorandum means the explanatory statement accompanying the Notice.

Annual General Meeting or Meeting means the meeting convened by the Notice.

Graphex Shareholder(s) means a holder of a Share.

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IMX means IMX Resources Limited (ACN 009 129 560).

Initial Public Offering (IPO) means the offering of Graphex shares on the ASX for the first time.

Key Management Personnel or KMP has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Memorandum and the Proxy Form.

Option means an option to acquire a Share.

Proxy Form means the proxy form accompanying the Notice.

Record Date means the record date set by Directors in accordance with Section 1.3 of the Explanatory Memorandum.

Resolutions means the resolutions set out in the Notice.

Securities mean all Equity Securities of the Company.

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

Shareholder means a registered holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

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Lodge your vote:

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
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Online:

www.investorvote.com.au



By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

GPX

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

XX

Vote and view the annual report online



• Go to www.investorvote.com.au or scan the QR Code with your mobile device.

• • Follow the instructions on the secure website to vote.

Your access information that you will need to vote:

Control Number: 999999 SRN/HIN: I9999999999 PIN: 99999

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

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 For your vote to be effective, it must be received by 3.30pm (WST) Tuesday, 15 November 2016

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box, your proxy may vote or abstain as they choose (to the extent permitted by law). If you mark more than one box on an item, your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions for Postal Forms

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 should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, 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. Delete titles as applicable.

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 Computershare or online at www.investorcentre.com under the help tab, "Printable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

GO ONLINE TO VOTE,  or turn over to complete the form

Samples/000001/000001/i12

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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

Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a  broker (reference number commences with ’ X ’) should advise your broker of any changes. I 9999999999 I ND

Proxy Form

Appoint a Proxy to Vote on Your Behalf

Please mark to indicate your directions

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I/We being a member/s of Graphex Mining Limited hereby appoint

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the Chairman of the Meeting

OR

 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

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 no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the Annual General Meeting of Graphex Mining Limited to be held at the Main Function Room of the Celtic Club at 48 Ord Street, West Perth, Western Australia on Thursday, 17 November 2016 at 3.30pm (WST) and at any adjournment or postponement of that Meeting.

Chairman authorised to exercise undirected proxies on remuneration related resolutions : Where I/we have appointed the Chairman of the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise my/our proxy on Resolution 1 (except where I/we have indicated a different voting intention below) even though Resolution 1 is connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman.

Important Note: If the Chairman of the Meeting is (or becomes) your proxy you can direct the Chairman to vote for or against or abstain from voting on Resolution 1 by marking the appropriate box in step 2 below.

STEP	2	Items	of	Business		PLEASE NOTE:If you mark theAbstainbox for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.
						For Against Abstain

			For	Again	st Abstain
Resolution	1	Adoption of Remuneration Report
Resolution	2	Election of Director – Stephen Dennis
Resolution	3	Election of Director – Grant Davey
Resolution	4	Approval of Additional 10% Capital Raising Capacity

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. In exceptional circumstances, the Chairman of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

SIGN

Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime / /
Name Telephone Date
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9 9 9 9 9 9 A