MEC RESOURCES LIMITED — Capital/Financing Update 2019

Apr 9, 2019

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10 April 2019

Dear Shareholder,

We write to you as a registered holder of shares ( Shareholder ) in MEC Resources Limited ( MEC Resources or the Company ) (ASX:MMR) as at 9 April 2019.

On 9 April 2019, MEC Resources announced a pro-rata non-renounceable rights issue of up to 341,868,046 new fully paid ordinary shares in the Company ( Rights Issue ) under which its Shareholders whose registered addresses are in Australia and New Zealand ( Eligible Shareholders ) will be offered one (1) fully paid ordinary share in the Company ( New Share ) for every one (1) fully paid ordinary share in the Company held at 5:00pm AEST on Friday, 12 April 2019 ( Record Date ). The New Shares will be issued at an issue price of $0.005 per New Share, with any fractional entitlements being rounded down. The Rights Issue will raise up to approximately $1.7 million before costs. Shareholder approval is not required for the Rights Issue.

The Rights Issue is being undertaken in accordance with section 713 of the Corporations Act, meaning that the Company has issued a prospectus ( Prospectus ) for the purposes of making the offer of New Shares under the Rights Issue. The Prospectus has been lodged with the ASX and is available on the on the Company’s ASX platform at the ASX website (www.asx.com.au) and on the Company's website (https://www.mecresources.com.au/announcements/).

As announced on 9 April 2019, the proceeds of the Rights Issue will be used primarily to expand and diversify the Company’s asset base in accordance with its approved investment mandate, and/or as modified from time to time following any necessary approval from AusIndustry, ASX and/or Shareholders (as applicable). In addition, the funds will also be used to continue to support the ongoing exploration efforts, through the provision of ongoing funding to Advent Energy Limited ( Advent Energy ), one of the Company’s investee companies. Funds deployed to Advent Energy will be used for any additional costs it may incur toward planned exploration works within its petroleum titles. The balance will be allocated for the working capital requirements of the Company.

Indicative Timetable

Event	Date
Lodgement of Prospectus with ASIC, lodgement of Prospectus and Appendix 3B with ASX and dispatch of letter to Optionholders	9 April 2019
Dispatch of letter to Shareholders	10 April 2019
ExistingSharesquoted on “ex” basis	11 April 2019
Record date to determine entitlements under the Prospectus (Record Date)	12 April 2019
Prospectus and Entitlement and Acceptance Form dispatched to eligible shareholders (Opening Date)	17 April 2019
Final date and time for receipt of acceptance and payment in full (Closing Date)	5:00PM (AEST) on 3 May2019*
New Sharesquoted on a deferred settlement basis	6 May2019*
Companyto notifyASX of under subscriptions	6 May2019*
Allotment of New Shares (Issue Date)	7 May 2019*
Deferred settlement tradingends	7 May2019*
Dispatch of transaction confirmation statements (holding statements)	7 May 2019*
Date ofquotation of New Shares issued under the Offer	8 May2019*

• The Directors may extend the Closing Date by giving at least 3 Business Days' notice to ASX prior to the Closing Date. As such, the date the New Shares are expected to commence trading on ASX may vary.

Particulars of the Offer

MEC Resources Ltd

ACN 113 900 020 PO Box 882, West Perth, WA 6872 Suite 2, Level 3, 1111 Hay Street, West Perth 6005, Western Australia T: +61 8 9245 6187 F: +61 8 9200 6913 info@mecresources.com.au www.mecresources.com.au

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Type of Offer	Non-renounceable rights issue. This means that the entitlements to participate are not transferable and, therefore, cannot be traded on the ASX or any other exchange or transferred privately. Eligible Shareholders who do not take up their entitlements under the Rights Issue in full or in part, will not receive anyvalue in respect of those entitlements that theydo not take up.
Issue Ratio	1 New Share for every1 share held in the Company.
Issue Price	$0.005per New Share.
Fractional Entitlement	Where the determination of an Eligible Shareholder’s entitlement results in a fraction of a New Share, such a fraction shall be rounded down to the nearest whole New Share.
Eligible Shareholders	Shareholders who have a registered address in Australia and New Zealand on the Record Date may apply for New Shares under the Rights Issue. Shareholders who have a registered address outside Australia and New Zealand (Ineligible Shareholders) may not subscribe for New Shares under the Rights Issue. At the date of this letter, the Company’s Ineligible Shareholders reside in the following countries: USA, Singapore, Canada, India, Great Britain, France, Hong Kong, Indonesia, Oman. Holdings held on different registers (or sub registers) will not be aggregated for thepurpose of calculatingentitlements.
Shortfall Facility	Eligible Shareholders who wish to take up their entitlement under the Rights Issue in full may also apply for additional New Shares in excess of their pro-rata entitlement (Shortfall). To participate in the Shortfall, Eligible Shareholders must apply for Shortfall shares at the same time as they apply for their entitlement under the Rights Issue and will be subject to the terms and conditions outlined in the Prospectus. The Board reserves the right to allot and issue New Shares under the Shortfall in its absolute discretion.
Terms of New Shares	The New Shares will rank equally with all other fully paid ordinary shares of the Company, includingin respect of dividends, from the date of the allotment.
New Shares to be issued	Approximately 341,868,046 Assumingno options to acquire shares are exercised priorto theRecordDate
Shares on issue following completion of the Rights Issue (assuming 100% of the New Shares are issued)	Approximately 683,736,092 Assuming no options to acquire shares are exercised prior to the Record Date
Underwriter and broker to the Rights Issue	The Rights Issue is not underwritten, nor has a broker been appointed to manage the Rights Issue.

Applications

Further details of the Rights Issue can be found in the Prospectus lodged with the ASX on 9 April 2019. It is expected that the Prospectus and accompanying entitlement and acceptance form will be dispatched to Eligible Shareholders on 17 April 2019 in accordance with the indicative timetable above. Entitlement and acceptance forms must be properly completed and received by the Company no later than 5:00pm AEST on the Closing Date.

Enquiries

If you have any questions, please contact me, Ms Deborah Ambrosini, on +618 9245 6187.

Yours faithfully

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Michael Sandy Chairman

MEC Resources Ltd

ACN 113 900 020 PO Box 882, West Perth, WA 6872 Suite 2, Level 3, 1111 Hay Street, West Perth 6005, Western Australia T: +61 8 9245 6187 F: +61 8 9200 6913 info@mecresources.com.au www.mecresources.com.au