MOTIO LTD - AGM Information 2012 | FinancialReports.eu

RED OCTOBER RESOURCES LTD

ACN 147 799 951

NOTICE OF ANNUAL GENERAL MEETING

TIME : 1:00pm DATE : 30 November 2012 PLACE : The Melbourne Hotel 942 Hay St Perth WA 6000

The Independent Expert has concluded that the transaction the subject of Resolution 7 outlined in this Notice of Annual General Meeting is FAIR AND REASONABLE to Shareholders.

All Shareholders should refer to the Independent Expert’s Report enclosed with this Notice of Annual General Meeting.

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary, Mr Matthew Foy, on (+61 8) 9486 4036

CONTENTS PAGE

Business of the Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	7
Glossary	18
Schedule – Nomination of Auditor	20
Proxy Form	21
Annexure A – Independent Expert’s Report	24

IMPORTANT INFORMATIO N

TIME AND PLACE OF MEETING

Notice is given that the Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 1:00pm WST on 30 November 2012 at:

The Melbourne Hotel 942 Hay St Perth WA 6000

YOUR VOTE IS IMPORTANT

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

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 Annual General Meeting are those who are registered Shareholders at 4:00pm (WST) on 28 November 2012.

VOTING IN PERSON

To vote in person, attend the Annual General Meeting at the time, date and place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, members are advised that:

each member has a right to appoint a proxy;
the proxy need not be a member of the Company; and
a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance

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with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this Annual General Meeting. Broadly, the changes mean that:

if proxy holders vote, they must cast all directed proxies as directed; and
any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes is set out below.

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 :

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); and
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; and
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
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).

Transfer of non-chair proxy to chair in certain circumstances

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

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; and
the appointed proxy is not the chair of the meeting; and
at the meeting, a poll is duly demanded on the resolution; and
either of the following applies:
the proxy is not recorded as attending the meeting;
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.

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BUSINESS OF THE MEETING

AGENDA

ORDINARY BUSINESS

Financial Statements and Reports

To receive and consider the annual financial report of the Company for the financial year ended 30 June 2012 together with the declaration of the directors, the directors’ report, the remuneration report and the auditor’s report.

1. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

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

“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 as contained in the Company’s annual financial report for the financial year ended 30 June 2012.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
(b) a Closely Related Party of such a member.

However, a person described above may vote on this Resolution if:

(c) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and
(d) the vote is not cast on behalf of a person described in sub-paragraphs (a) or (b) above.

2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR JEREMY BOND

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

“That, for the purpose of clause 13.4 of the Constitution and for all other purposes, Mr Jeremy Bond, a Director who was appointed on 1 February 2012, retires, and being eligible, is re-elected as a Director.”

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3. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MR BENJAMIN BUSSELL

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

“That, for the purpose of clause 13.4 of the Constitution and for all other purposes, Mr Benjamin Bussell, a Director who was appointed on 27 February 2012, retires, and being eligible, is re-elected as a Director.”

4. RESOLUTION 4 – RE-ELECTION OF DIRECTOR – DR SALIBA SASSINE

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

“That, for the purpose of clause 13.2 of the Constitution and for all other purposes, Dr Saliba Sassine, retires, and being eligible, is re-elected as a Director.”

5. RESOLUTION 5 – ISSUE OF SHARES ON CONVERSION OF CONVERTIBLE NOTES

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

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to 120,000,000 Shares upon the conversion of the First and Second Tranche Convertible Notes on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting 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.

6. RESOLUTION 6 – ISSUE OF SHARES TO A RELATED PARTY ON CONVERSION OF CONVERTIBLE NOTES

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

“That, subject to Resolution 5 being approved, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue up to 10 million Shares upon the conversion of the First and Second Tranche Convertible Notes to Fernland Holdings Pty Ltd, a related party of the Company, on the terms and conditions set out in the Explanatory Statement.”

ASX Voting Exclusion : The Company will disregard any votes cast on this Resolution by Fernland Holdings Pty Ltd (or its nominees) and any of its associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting 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.

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Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either a member of the Key Management Personnel or a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

(c) the proxy is the Chair of the Meeting; and
(d) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

7. RESOLUTION 7 – ISSUE OF CONSIDERATION SHARES AND ACQUISITION OF A SUBSTANTIAL ASSET FROM A SUBSTANTIAL HOLDER

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

“That, for the purpose of ASX Listing Rule 7.1 and 10.1, and for all other purposes, approval is given for:

(a) the Company to allot and issue up to 11.25 million Shares to Segue Resources Limited, a substantial holder of the Company ( Segue ); and
(b) the Company acquiring up to an initial 50% interest in the nickel and non-iron ore rights associated with the Pardoo Joint Venture held by Segue,

on the terms and conditions set out in the Explanatory Statement.”

Expert’s Report : Shareholders should carefully consider the report prepared by the Independent Expert for the purposes of the Shareholder approval under ASX Listing Rule 10.1. The Independent Expert’s Report comments on the fairness and reasonableness of the transaction the subject of this Resolution to the non-associated Shareholders in the Company.

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Segue and any of its associates. However the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting 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.

8. RESOLUTION 8 – CHANGE OF COMPANY NAME

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

“That, for the purpose of Section 157(1)(a) of the Corporations Act and for all other purposes, approval is given for the name of the Company to be changed to White Eagle Resources Limited .”

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9. RESOLUTION 9 – APPOINTMENT OF AUDITOR

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

“That, for the purposes of Section 327B of the Corporations Act and for all other purposes, BDO Audit (WA) Pty Ltd, having been nominated by a Shareholder and consented in writing to act in the capacity of auditor, be appointed as auditor of the Company."

DATED: 24 OCTOBER 2012

BY ORDER OF THE BOARD

MR MATTHEW FOY COMPANY SECRETARY

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EXPLANATORY STATEMEN T

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions which are the subject of the business of the Meeting.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2012 together with the declaration of the directors, the directors’ report, the remuneration report and the auditor’s report.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. The Company’s annual financial report is available on its website at www.redoctober.net.au.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

2.1 General

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the company or the directors of the company.

The remuneration report sets out the company’s remuneration arrangements for the directors and senior management of the company. The remuneration report is part of the directors’ report contained in the annual financial report of the company for a financial year.

The chair of the meeting must allow a reasonable opportunity for its shareholders to ask questions about or make comments on the remuneration report at the annual general meeting.

2.2 Voting consequences

Under changes to the Corporations Act which came into effect on 1 July 2011, a company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company ( Spill Resolution ) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting ( Spill Meeting ) within 90 days of the second annual general meeting.

All of the directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the previous financial year was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting.

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Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company.

2.3 Previous voting results

The Company did not hold its 2011 annual general meeting as it was under voluntary administration.

Dr Saliba Sassine is the only Director who was in office during the financial year ended 30 June 2011. As the Company was under external administration for the whole of this period, no fees were being paid to the Directors.

2.4 Proxy Restrictions

Shareholders appointing a proxy for this Resolution should note the following:

If you appoint a member of the Key Management Personnel (other than the Chair) whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such a member as your proxy

You must direct your proxy how to vote on this Resolution . Undirected proxies granted to these persons will not be voted and will not be counted in calculating the required majority if a poll is called on this Resolution.

If you appoint the Chair as your proxy (where he/she is also a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such a member).

You do not need to direct your proxy how to vote on this Resolution. However, if you do not direct the Chair how to vote, you must mark the acknowledgement on the Proxy Form to expressly authorise the Chair to exercise his/her discretion in exercising your proxy even though this Resolution is connected directly or indirectly with the remuneration of Key Management Personnel .

If you appoint any other person as your proxy

You do not need to direct your proxy how to vote on this Resolution, and you do not need to mark any further acknowledgement on the Proxy Form.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR JEREMY BOND

Clause 13.4 of the Constitution allows the Directors to appoint at any time a person to be a Director as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution.

Any Director so appointed holds office only until the next following annual general meeting and is then eligible for re-election.

Mr Bond is currently a fund manager and founder of Terra Capital Trust Pty Ltd, a small capital, natural resource fund based in Australia. This fund invests in both public and private resource deals throughout the world.

Mr Jeremy Bond, having been appointed as a Director on 1 February 2012, will retire in accordance with clause 13.4 of the Constitution and being eligible seeks re-election.

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4. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MR BENJAMIN BUSSELL

Any Director so appointed holds office only until the next following annual general meeting and is then eligible for re-election.

Mr Bussell is a senior accountant, with over 12 years’ experience in public accounting, corporate accounting and taxation. He is currently the Chief Financial Officer of ASX listed mineral exploration companies Pura Vida Energy NL, Minerals Corporation Limited and AAQ Holdings Limited and is also currently a director of ASX listed SWW Energy Limited and Terranova Minerals NL.

Mr Benjamin Bussell, having been appointed as a Director on 27 February 2012, will retire in accordance with clause 13.4 of the Constitution and being eligible seeks re-election.

5. RESOLUTION 4 – RE-ELECTION OF DIRECTOR – DR SALIBA SASSINE

Clause 13.2 of the Constitution requires that at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election.

The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots.

A Director who retires by rotation under clause 13.2 of the Constitution is eligible for re-election.

The Company currently has 3 Directors and accordingly 1 must retire.

Dr Saliba Sassine, the Director longest in office since his last election, retires by rotation and seeks re-election.

6. RESOLUTION 5 – ISSUE OF SHARES ON CONVERSION OF CONVERTIBLE NOTES

6.1 General

On 10 April 2012, the Company announced that it had entered into a Subscription Agreement with a consortium of investors to raise up to $600,000 by way of a convertible note issue. The Company will, subject to the completion of certain conditions precedent, issue the convertible notes in two tranches as follows:

(a) convertible notes with a face value of $200,000 ( First Tranche Convertible Notes ) to be issued within two business days of receipt of funds following the settlement with Kytco BV in connection with the Akjilga Silver Project in Tajikistan and Hemisphere Corporate Pty Ltd

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being satisfied with the actual and contingent liabilities of the Company ( First Tranche Conditions ); and

(b) convertible notes with a face value of $400,000 ( Second Tranche Convertible Notes ) to be issued within two business days of receipt of funds following:
(i) execution of the revised Pardoo Joint Venture Agreement with Segue Resources Ltd; and
(ii) in-principle approval from the ASX that the Company’s securities would be reinstated to trading on the ASX ( Second Tranche Conditions ).

The key terms of the First and Second Tranche Convertible Notes are as follows:

(a) the First and Second Tranche Convertible Notes will, subject to approval, convert into Shares at $0.005 per Share;
(b) the maturity date of the First and Second Tranche Convertible Notes is six months from the date of issue;
(c) the First and Second Tranche Convertible Notes will be repaid with interest immediately on the earlier to occur of the following:
(i) on which it is not possible for the Company to hold a shareholder meeting by 30 June 2012;
(ii) Shareholders do not give approval;
(d) interest will accrue daily at a rate of 9.25% per annum from the date of issue based on actual days lapsed; and
(e) conversion of the First and Second Tranche Convertible Notes to Shares will be subject to the approval of Shareholders.

If the First Tranche Conditions are not satisfied or waived on or before 5 April 2012 (or such later date as the parties agree in writing), the Subscription Agreement will automatically terminate. Furthermore, If the Second Tranche Conditions are not satisfied or waived on or before 30 June 2012 (or such later date as the parties agree in writing), the Subscription Agreement will automatically terminate. The Company has agreed with the other parties to the Subscription Agreement an extension of the date by which the Second Tranche Conditions may be met until 1 October 2012.

The First Tranche Conditions and Second Tranche Conditions have now been satisfied. The Company has issued the First Tranche Convertible Notes and anticipates issuing the Second Tranche Convertible Notes prior to the date of the Meeting.

The First and Second Tranche Convertible Notes will all convert into Shares on the date that Shareholder approval is obtained at the meeting the subject of this Notice.

In accordance with the terms of the Subscription Agreement, the Company is required to seek Shareholder approval for issue of Shares on conversion of the First and Second Tranche Convertible Notes. Specifically, Resolution 5 seeks Shareholder approval for the allotment and issue of up to 120,000,000 Shares on

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conversion of the First or Second Tranche Convertible Notes. Of this amount, a total of 10,000,000 Shares will be issued to related parties of the Company. This is the subject of Resolution 6 (therefore a total of 110,000,000 Shares will be issued upon conversion to unrelated parties of the Company under this Resolution 5).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

The effect of Resolution 5 will be to allow the Directors to issue the Shares upon conversion during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

6.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to this Resolution 5:

(a) the maximum number of Shares to be issued is 120,000,000 (of which a total of 110,000,000 will be issued upon conversion to unrelated parties of the Company under this Resolution 5 and 10,000,000 will be issued to related parties, subject to shareholder approval set out in Resolution 6);
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the First and Second Tranche Convertible Notes will convert at a price of $0.005 each. Therefore, upon conversion, each Share will have a deemed issue price of $0.005;
(d) none of these subscribers under this Resolution 5 are related parties of the Company (of which will subscribe for a total of 110,000,000 Shares);
(e) the terms for conversion of the First and Second Tranche Convertible Notes is set out in Section 6.1 above;
(f) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(g) the Shares will be issued to a consortium of sophisticated investor clients of Hemisphere Corporate Pty Ltd (none of whom are related parties of the Company); and
(h) the Company will raise a total of $600,000 from subscribers under the First and Second Tranche Convertible Notes, of which $550,000 will be raised pursuant to this Resolution 5. The Company intends to use the funds raised from the First and Second Tranche Convertible Notes for the finalisation and payment of the Company’s settlement obligations to Kytco BV in connection with the Akjilga Silver Project in Tajikistan and for general working capital.

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7. RESOLUTION 6 – ISSUE OF SHARES TO A RELATED PARTY ON CONVERSION OF CONVERTIBLE NOTES

7.1 General

It is proposed that a related party of the Company (or its nominee) ( Related Party ) participate in the conversion of the First and Second Tranche Convertible Notes as referred to in Resolution 5. Accordingly, subject to Resolution 5 being approved by Shareholders, this Resolution 6 seeks Shareholder approval for the allotment and issue of up to a maximum of 10,000,000 Shares (upon conversion of the notes) to Fernland Holdings Pty Ltd ( Fernland ).

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company’s members in the manner set out in Sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances. However, the Company is satisfied that the issue of the shares on conversion of the Convertible Notes to the Related Party falls within the ‘arm’s length’ exception under s210 of the Corporations Act as they will be issued on exactly the same terms as to the unrelated parties. Therefore approval under Chapter 2E is not required.

Accordingly, Shareholder approval is being sought for the grant of Shares to the Related Party under ASX Listing Rule 10.11 only.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Shares to the Related Partiy as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of the Shares to the Related Party will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

7.2 Shareholder Approval (ASX Listing Rule 10.11)

Pursuant to and in accordance with the requirements of ASX Listing Rule 10.13, the following information is provided in relation to the proposed issue of Shares:

(a) the related party is Fernland Holdings Pty Ltd who is a related party by virtue of Mr Jeremy Bond, a Director of the Company, being a director and controlling shareholder of Fernland.
(b) the maximum number of Shares (being the nature of the financial benefit being provided) to be issued to Fernland is up to a maximum of 10,000,000 Shares;

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(c) the First and Second Tranche Convertible Notes will convert at a price of $0.005 each. Therefore, upon conversion, each Share will have a deemed issue price of $0.005;
(d) the Shares will be issued to Fernland no later than 1 month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Shares will be issued on one date;
(e) the Company will raise a total of $50,000 from Fernland under the First and Second Tranche Convertible Notes, pursuant to this Resolution 6. The Company intends to use the funds raised towards the finalisation and payment of the Company’s settlement obligations to Kytco BV in connection with the Akjilga Silver Project in Tajikistan and for general working capital;
(f) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(g) the relevant interests of Fernland in securities of the Company is set out below:

below:
Related Party	Shares	Options
Fernland Holdings Pty Ltd	750,000	Nil

(h) if the total number of Shares are allotted and issued under Resolutions 6, the number of Shares on issue will increase from 46,100,000 (assuming that no other securities are issued or converted), to a total of 56,100,000, with the effect that the shareholding of existing Shareholders would be diluted by the issue under Resolution 6 by 17.82%.

Please note, these dilutionary figures do not take into consideration the further issues pursuant to Resolution 5 and 7 (or the exercise of any options);

(i) the Company has been seeking funding in order to finalise its settlement obligations with Kytco BV in connection with the Akjilga Silver Project in Tajikistan and to fund much needed working capital. The Company has since received interest from a consortium of investor clients of Hemisphere Corporate Pty Ltd and from related parties of the Company to help raise these funds. Prior to entering into the Subscription Agreement, the directors considered the different methods of raising funds available to the Company. The Board elected to raise funds by way of the subscription for convertible notes because of the low management costs associated with the issue, the fact that funds are received immediately from subscribers and the amount of funds that will be received is definite;
(j) if, any of the First and Second Tranche Convertible Notes are converted and the Shares are trading on ASX at a price that is higher than the conversion price of the First and Second Tranche Convertible Notes, there may be a perceived cost to the Company;

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(k) The Company’s Shares were suspended from trading on 8 June 2011. The last trading price of the Company’s Shares prior to the suspension was $0.35 on 3 June 2011.
(l) the Shares will be issued upon conversion of the First and Second Tranche Convertible Notes and the primary purpose of the issue of the First and Second Tranche Convertible Notes to Fernland is set out in 7.2(i) above;
(m) Jeremy Bond declines to make a recommendation to Shareholders in relation to Resolution 6 due to his material personal interest in the outcome of the Resolution on the basis that a company of which he controls is to be issued with First and Second Tranche Convertible Notes should Resolution 6 be passed;
(n) with the exception of Mr Jeremy Bond, no other director has a material personal interest in this Resolution;
(o) the Directors, other than Mr Jeremy Bond, recommend that Shareholders vote in favour of Resolution 6 for the following reasons:
(i) clauses 7.2(e) and (i) above;
(ii) if the Company is unable to obtain approval for the conversion of the Shares the subject of this Resolution 6, this could affect the Company’s ability to meet its settlement obligations with Kytco BV and otherwise prevent the Company from having liquid funds available to fund day to day operations of the Company; and
(iii) it is not considered that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the First and Second Tranche Convertible Notes upon the terms proposed; and
(p) the Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 6.

8. RESOLUTION 7 – ISSUE OF CONSIDERATION SHARES AND ACQUISITION OF A SUBSTANTIAL ASSET FROM A SUBSTANTIAL HOLDER

8.1 General

As announced on 10 April 2012, the Company has entered into a variation to the Joint Venture Farm In Agreement ( Farm In Agreement ) with Segue Resources Limited ( Segue ), pursuant to which the Company may now farm in and earn, in two stages, up to a 50% interest (previously 70%) in the nickel and non-iron ore rights associated with the Pardoo Project, situated in the Pilbara region of Western Australia.

The Pardoo Project consists of four granted exploration licences; E45/1866, E45/2146, E45/3383 and E45/3464 and is 100% owned by Segue.

Segue is a substantial shareholder of the Company, currently holding a 34.01% voting interest.

Under the revised Farm In Agreement, the Company may earn, in two stages up

3265-03/NOTICE OF AGM - RED OCTOBER (838014_1)

to an initial 50% interest in the nickel and non-iron ore mineral rights associated with the Project as follows:

(a) a 30% interest can be earned by spending a minimum of $1.0 million on the Project within 2 years from the date of re-instatement of the Company to trading on the ASX ( Commencement Date ), with a minimum spend of $250,000 on the Project by the earlier of six months from the Commencement Date or 31 December 2012; and
(b) Once a 30% interest is earned then a further 20% (to a total of 50%) interest in the Project can be earned by spending a further minimum total amount of $2.0 million on the Project within four years from the Commencement Date.

In consideration for agreeing to the variation to the farm-in rights in accordance with the revised Farm In Agreement, the Company is required, subject to Shareholder approval, to issue Segue 11.25 million Shares.

8.2 ASX Listing Rule 10.1 – Acquisition of a Substantial Asset from a Substantial Holder

ASX Listing Rule 10.1 provides that an entity (or any of its subsidiaries) must not acquire a substantial asset from, or dispose of a substantial asset to, inter alia, a related party or a substantial holder (if the person and the person’s associates have a relevant interest, or had a relevant interest at any time in the 6 months before the transaction, in at least 10% of the total votes attached to the voting securities).

An asset is substantial if its value, or the value of the consideration for it is, or in ASX’s opinion is, 5% or more of the equity interests of the company as set out in the latest accounts given to ASX under the Listing Rules.

For the purposes of ASX Listing Rule 10.1, Segue is a substantial shareholder of the Company by virtue of holding a 34.01% voting interest.

Based on the Company’s Annual Report for the period ending 30 June 2012, the Company’s total equity interests equated to $3,701. As a result, an asset will be deemed to be ‘substantial’ for the purposes of the Company if its value is at least 5% of this amount. The value of the consideration being paid (being 11.25m Shares) clearly exceeds this amount.

As a result, the Company is effectively acquiring a ‘substantial asset’ (being the proposed 50% interest in the Pardoo Project by way of an earn-in) from Segue, a substantial holder of the Company. Accordingly, Shareholder approval is being sought under this Resolution 7 for the purposes of ASX Listing Rule 10.1 for this proposed acquisition.

In accordance with ASX Listing Rule 10.1, accompanying this Notice at Annexure A is an Independent Expert’s Report prepared by Stantons International Audit and Consulting Pty Ltd providing a detailed analysis of the proposed transaction. The report concludes that the proposed acquisition is fair and reasonable to the non-associated Shareholders.

Please refer to the Independent Expert’s Report at Annexure A of this Notice for further details, including the advantages and disadvantages of the proposed transaction.

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Please note, the 11.25m Shares proposed to be issued to Segue will likely be classified by the ASX as restricted securities and subject to escrow restrictions for up to 12 months from their date of issue.

8.3 ASX Listing Rule 7.1

Resolution 7 also seeks Shareholder approval under ASX Listing Rule 7.1 for the allotment and issue of these 11.25 million Shares to Segue without using the Company’s 15% annual placement capacity.

A summary of ASX Listing Rule 7.1 is set out in Section 6.1 above.

The effect of Resolution 7 will be to allow the Directors to issue the Shares pursuant to this Resolution during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

8.4 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to this Resolution 7:

(a) the maximum number of Shares to be issued is 11.25 million Shares;
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the Shares will be allotted and issued to Segue Resources Limited, who is not a related party of the Company;
(d)
the Shares have a deemed issue price of $0.005 each;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(f) no funds will be raised from the issue under Resolution 7, as the Shares are being issued in consideration for agreeing to the variation to the farm-in rights in accordance with the revised Farm In Agreement.

9. RESOLUTION 8 – CHANGE OF COMPANY NAME

Section 157(1)(a) of the Corporations Act provides that a company may change its name if the company passes a special resolution adopting a new name.

Resolution 8 seeks the approval of Shareholders for the Company to change its name to White Eagle Resources Limited.

If Resolution 8 is passed, the change of name will take effect when ASIC alters the details of the Company’s registration.

The proposed name has been reserved by the Company and if Resolution 8 is passed, the Company will lodge a copy of the special resolution with ASIC following the Meeting in order to effect the change.

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10. RESOLUTION 9 – APPOINTMENT OF AUDITOR

The Directors of a public company must appoint an auditor within one month of registration. The directors have appointed BDO Audit (WA) Pty Ltd as the Company’s auditor.

The auditor of a public company so appointed within one month of registration holds office until the first annual general meeting of the Company. The auditor must be re-appointed at the first annual general meeting so that they may continue to act as auditor of the Company.

In accordance with Section 328B(1) of the Corporations Act, the Company has sought and obtained a nomination from a shareholder for BDO Audit (WA) Pty Ltd to be appointed as the Company’s auditor. A copy of this nomination is attached in the Schedule A.

BDO Audit (WA) Pty Ltd has given its written consent to act as the Company’s auditor subject to shareholder approval of this resolution.

If this resolution is passed, the appointment of BDO Audit (WA) Pty Ltd as the Company’s auditor will take effect at the close of this Meeting.

11. ENQUIRIES

Shareholders are required to contact the Company Secretary, Mr Matthew Foy, on (+61 8) 9486 4036 if they have any queries in respect of the matters set out in these documents.

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GLOSSARY

$ means Australian dollars.

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

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

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.

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

Company means Red October Resources Ltd (ACN 147 799 951).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

Key Management Personnel has the same meaning as in the accounting standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Notice or Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meeting including the Explanatory Statement and the Proxy Form.

Proxy Form means the proxy form accompanying the Notice.

Related Party has the meaning set out in section 7.1 of this Notice.

Remuneration Report means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 30 June 2012.

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Resolutions means the resolutions set out in this Notice, or any one of them, as the context requires.

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

Shareholder means a holder of a Share.

Subscription Agreement means the subscription agreement as referred to in section 6.1 of this Notice.

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

3265-03/NOTICE OF AGM - RED OCTOBER (838014_1)

SCHEDULE A – NOMINATION OF AUDITO R

Letter of Nomination to Appoint Auditor

8 October 2012

The Directors Red October Resources Limited Level 8 225 St Georges Terrace Perth WA 6000

Dear Board,

I, Matthew Foy hereby nominate BDO Audit (WA) Pty Ltd to be appointed as auditors of Red October Resources Limited at the forthcoming Annual General Meeting of Red October Resources Limited.

Yours faithfully

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Matthew Foy

3265-03/NOTICE OF AGM - RED OCTOBER (838014_1)

PROXY FORM

APPOINTMENT OF PROXY RED OCTOBER RESOURCES LTD ACN 147 799 951

ANNUAL GENERAL MEETING

I/We of

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being a member of Red October Resources Ltd entitled to attend and vote at the Annual General Meeting, hereby

Appoint

Name of proxy

OR the Chair of the Annual General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the Annual General Meeting, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the Annual General Meeting to be held at 1:00pm (WST), on 30 November 2012 at The Melbourne Hotel, 942 Hay St Perth WA 6000 and at any adjournment thereof.

Important for Resolution 1: If the Chair of the Meeting or any member of the Key Management Personnel of the Company whose remuneration details are included in the Remuneration Report or a Closely Related Party of that member is your proxy and you have not directed the proxy to vote on Resolution 1, the proxy will be prevented from casting your votes on Resolution 1. If the Chair, another member of the Key Management Personnel of the Company whose remuneration details are included in the Remuneration Report or Closely Related Party of that member is your proxy, in order for your votes to be counted on Resolution 1, you must direct your proxy how to vote on Resolution 1.

If the Chair of the Annual General Meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote as your proxy in respect of Resolutions 1 and 5 to 7 please place a mark in this box.

By marking this box, you acknowledge that the Chair of the Annual General Meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 1 and 5 to 7 and that votes cast by the Chair of the Annual General Meeting for Resolutions 1 and 5 to 7 other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on Resolutions 1 and 5 to 7 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 1 and 5 to 7.

If no directions are given, the Chair will vote in favour of all the Resolutions in which the Chair is entitled to vote undirected proxies.

OR

Voting on Business of the Annual General Meeting
	FOR	AGAINST	ABSTAIN
Resolution 1 – Adoption of Remuneration Report
Resolution 2 – Re-election of Director – Jeremy Bond
Resolution 3 – Re-election of Director – Benjamin Bussell
Resolution 4 – Re-election of Director – Saliba Sassine
Resolution 5 – Issue of Shares on conversion of Convertible Notes
Resolution 6 – Issue of Shares to a Related Party on conversion of
Convertible Notes
Resolution 7 – Issue of Consideration Shares and Acquisition of Substantial Asset
from a Substantial Holder
Resolution 8 – Change of Name
Resolution 9 – Appointment of Auditor

3265-03/NOTICE OF AGM - RED OCTOBER (838014_1)

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority on a poll.

on a poll.
If two proxies are being appointed, the	proportion of voting rights this proxy represents is		%
Signature of Member(s):			Date:
____
Individual or Member 1	Member 2	Member 3

Sole Director/Company	Director	Director/Company Secretary
Secretary
Contact Name: _____ Contact Ph (daytime): _________

3265-03/NOTICE OF AGM - RED OCTOBER (838014_1)

RED OCTOBER RESOURCES LTD ACN 147 799 951

Instructions for Completing ‘Appointment of Proxy’ Form

( Appointing a Proxy ): A member entitled to attend and cast a vote at an Annual General Meeting is entitled to appoint a proxy to attend and vote on their behalf at the meeting. If the member is entitled to cast 2 or more votes at the meeting, the member may appoint a second proxy to attend and vote on their behalf at the meeting. However, where both proxies attend the meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A member who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a member appoints 2 proxies and the appointments do not specify the proportion or number of the member’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a member of the Company.
( Direction to Vote ): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

( Signing Instructions ):

( Individual ): Where the holding is in one name, the member must sign.
( Joint Holding ): Where the holding is in more than one name, all of the members should sign.
( Power of Attorney ): If you have not already provided 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, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.
( Attending the Meeting ): Completion of a Proxy Form will not prevent individual members from attending the Annual General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the Annual General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the Annual General Meeting.
( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
(a) post to Red October Resources Limited, PO Box 7653, Cloister Square Perth WA 6850; or
(b) facsimile to the Company on facsimile number (+61 8) 9486 4799,

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy forms received later than this time will be invalid.

3265-03/NOTICE OF AGM - RED OCTOBER (838014_1)

ANNEXURE A – INDEPENDENT EXPERT’S REPORT

3265-03/NOTICE OF AGM - RED OCTOBER (838014_1)

PO Box 1908 West Perth WA 6872 Australia

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Level 2, 1 Walker Avenue West Perth WA 6005 Australia

12 October 2012

Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 41 84 144 581 519 AFS Licence No: 418019 www.stantons.com.au

The Directors Red October Resources Limited Level 8, 225 St Georges Terrace PERTH WA 6000

Dear Sirs

Re: Red October Resources Limited (“RED OCTOBER” OR “THE COMPANY”) (ACN 147 799 951) ON THE PROPOSAL TO A VARIATION TO A FARM IN AGREEMENT WITH SEGUE RESOURCES LIMITED (“SEGUE”) AND THE ISSUE OF SHARES TO SEQUE - MEETING PURSUANT TO ASX LIMITED (“ASX”) LISTING RULE 10.1 AND 7.1.

1. Introduction

1.1 We have been requested by the directors of Red October to prepare an Independent Expert’s Report to determine the fairness and reasonableness of varying a Farm In Agreement and thus issuing shares to Segue as noted below as part of a process to obtain re-quotation of the Company’s shares on the ASX. In December 2010, the Company entered into a farm in agreement with Segue for the Company to earn an initial 30% interest in the nickel and iron ore project known as the Pardoo Project in the Pilbara area of Western Australia by Red October spending $2,000,000 within three years from the Commencement Date (as defined in the Farm In Agreement) including a minimum spend of $1,500,000 within two years of the Commencement Date. Once a 30% interest had been obtained, Red October could earn a further 20% interest in the Pardoo Project by spending a minimum total of $5,000,000 within four years of the Commencement Date and once a 50% interest had been obtained, Red October could earn a further 20% interest in the Pardoo Project by spending a minimum total of $10,000,000 within five years of the Commencement Date. The Company has now agreed to a variation to the Farm In Agreement and under the Revised Farm In Agreement, Red October can earn a 30% interest by spending a minimum of $1,000,000 on the Pardoo Project within two years from the re-instatement of the Company to trading on the ASX (“New Commencement Date”) with a minimum spend of $250,000 on the Pardoo Project by the earlier of six months from the New Commencement Date or 31 December 2012; and once a 30% interest had been obtained, Red October could earn a further 20% interest in the Pardoo Project by spending a minimum total of $2,000,000 within four years of the New Commencement Date. In consideration for Segue agreeing to the new terms under the Revised Farm In Agreement, Red October agrees to issue 11,250,000 shares in Red October to Segue (‘the Segue Consideration Shares”). The issue of the Segue Consideration Shares is subject to shareholder approval (see below). Resolution 7 to the Notice of Meeting (“Notice”) and section 8 of the Explanatory Statement attached to the Notice (“ES”) provide further details.
1.2 There are a number of other proposals to be put to the shareholders of Red October. These include inter-alia the approval to issue a further $400,000 of convertible notes (“Notes”) to convertible note subscribers (“Note Subscribers”) that will be convertible at 0.5 cents per share. This new issue is the second tranche of a $600,000 Note Facility agreed to in April 2012. $200,000 of the Note Facility was drawn down in April 2012 as the First Tranche. The Notes bear interest at 9.25% per annum and conversion of all of the Notes (principal of $600,000 - that will convert to 120,000,000 new shares (“Note Shares”) in Red October. Resolution 5 refers to the approval of the issue of 120,000,000 Note Shares to the Note Subscribers.

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In addition to resolution 7 on which we are reporting, there are eight other resolutions being put to the shareholders of the Company. Resolution 1 relates to the proposal to approve the 2011/12 Remuneration Report; resolution 2 relates to the proposal to re-elect Jeremy Bond as a director of the Company; resolution 3 relates to the re-appointment of Benjamin Bussell as a director of the Company; resolution 4 relates to the re-appointment of Dr Saliba Sassine as a director of the Company; resolution 5 refers to the issue of 120,000,000 Note Shares as referred to above; resolution 6 refers to the issue of 10,000,000 Note Shares (as part of the 120,000,000 Note Shares) to Fernland Holdings Pty Ltd; resolution 8 refers to the change the name of the Company to White Eagle Resources Limited; and resolution 9 refers to the appointment of BDO Audit (WA) Pty Ltd as auditors of the Company.

In addition, as part of the re-instatement process, the Company is to undertake a 1 for 2 Rights Issue of shares at 1.5 cents (“Rights Issue Shares”) per share to raise up to $1,315,125. If all Rights Issue Shares are subscribed for, a total of 87,675,000 Rights Issue Shares would be issued. The actual number that will be issued cannot be determined. The Company may arrange for the Rights Issue to be fully underwritten but at the date of this report no agreement has been reached with any potential underwriter.

1.3 ASX Listing Rule 10.1 provides that an entity must not acquire a substantial asset from, or dispose of a substantial asset to a shareholder who holds greater than 10% of the Company’s voting securities. A substantial asset is an asset valued at greater than 5% of the equity interests of a company. For the purposes of ASX Listing Rule 10.1, Segue is a substantial shareholder of the Company (owns 15,000,000 shares in Red October). In this case, the proposed acquisition of up to a 50% interest is deemed a potential acquisition of a substantial asset. The consideration being paid (the issue of the Segue Consideration Shares) as consideration to vary the original Farm In Agreement is deemed to be worth more than 5% of the audited net assets as at 30 June 2012. Accordingly, the Company is seeking shareholder approval, for the purpose of ASX Listing Rule 10.1 for the approval to obtain an up to 50% interest in the Pardoo Project by way of a farm in, and pursuant to ASX Listing Rule 7.1 for the issue of 11,250,000 Segue Consideration Shares.
1.4 ASX Listing Rule 10.1 provides that shareholder approval sought for the purpose of ASX Listing Rule 10.1 must include a report on the proposed acquisition from an independent expert. Stantons International Securities has been requested to provide an opinion on the fairness and reasonableness to the non-associated shareholders of Red October on the proposal under resolution 7, including the issue of 11,250,000 Segue Consideration Shares.
1.5 Apart from this introduction, this report considers the following:
Summary of opinion
Implications of the proposal with Segue re issue of the Segue Consideration Shares
Corporate history and nature of business of Red October
Future direction of Red October
Basis of valuation of Red October shares
Value of consideration
Conclusion as to fairness and reasonableness of the issue of the Segue Consideration Shares
Sources of information
Appendices A and our Financial Services Guide
1.6 In determining the fairness and reasonableness of the issue of the Segue Consideration Shares as consideration to vary the original Farm In Agreement to the Revised Farm In Agreement as noted above, we have had regard for the definitions set out by the Australian Securities and Investments Commission (“ASIC”) in its Regulatory Guide 111, “Content of Expert Reports”. Regulatory Guide 111 states that an opinion as to whether an offer is fair and/or reasonable shall entail a comparison between the offer price and the value that may be attributed to the securities under offer (fairness) and an examination to determine whether there is justification for the offer price on objective grounds after reference to that value (reasonableness). The concept of “fairness” is taken to be the value of the offer price, or the consideration, being equal to or greater than the value of the securities in the above

RED0000/ IER Red October relating to issue of shares to Segue

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mentioned offer. Furthermore, this comparison should be made assuming 100% ownership of the “target” and irrespective of whether the consideration is scrip or cash. An offer is “reasonable” if it is fair. An offer may also be reasonable, if despite not being ”fair”, there are sufficient grounds for security holders to accept the offer in the absence of any higher bid before the close of the offer. Although the proposal with Segue is not in relation to a takeover offer, we have noted the above matters and definitions for readers to have an understanding of fairness and reasonableness referred to in this report.

Accordingly, our report relating to the issue of Segue Consideration Shares to Segue is concerned with the fairness and reasonableness of the proposal with respect to the existing non-associated shareholders of Red October (not associated with Segue).

1.7 After taking into account the factors referred to in 7 below (where in our opinion the advantages outweigh the disadvantages) and elsewhere in this report, we are of the opinion that the proposed changes to the original Farm In Agreement and the resultant issue of the 11,250,000 Segue Consideration Shares as noted in paragraph 1.1 and resolution 7 in the Notice may be considered, on balance, to be fair and reasonable to the non-associated shareholders of Red October not associated with Segue at the date of this report.

1.8 The opinions expressed above must be read in conjunction with the more detailed analysis and comments made in this report.

2. Implications of the Proposals

2.1 As at 11 October 2012, there were 44,100,000 fully paid ordinary shares on issue in Red October. The significant fully paid shareholders as at 8 October 2012 based on the top 20 shareholders list were believed to be:

Segue Resources Limited Karema Capital Pty Ltd JP Morgan Nominees Australia Limited Grazian Pty Ltd Boston First Capital Pty Ltd	No. of fully paid shares % of issued fully paid shares 15,000,000 3,769,114 34.01 8.55 2,000,000 4.54 1,550,000 3.51 900,000 2.04
	23,219,114 52.65

The top 20 fully paid shareholders at 8 October 2012 owned approximately 70.08% of the ordinary fully paid issued capital of the Company.

2.2 The maximum movement in the fully paid issued capital of the Company could be:

Fully paid shares on issue 11 October 2012 Issue of Note Shares at 0.5 cents each Issue of the Segue Consideration Shares Shares on Issue prior to the Rights Issue Potential issue of further fully paid shares Rights Issue Shares Potential fully paid shares on issue	Maximum Number 44,100,000 120,000,000 11,250,000 175,350,000 87,675,000 263,025,000

If the maximum Capital Raising from the Rights Issue was $1,315,125 (87,675,000 shares at 1.5 cents each), the ordinary shares on issue would be 263,025,000.

Segue prior to the Rights Issue but after the issue of the Note Shares and the Segue Consideration Shares would own 26,250,000 shares in Red October, representing approximately 14.97% of the expanded issued capital of the Company. If 87,675,000

RED0000/ IER Red October relating to issue of shares to Segue

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shares were subscribed for under the Rights Issue and assuming Segue took up 13,125,000 shares from the Rights Issue, Segue’s shareholding could total 39,375,000 or approximately 14.97% of the capital of the Company. We are uncertain as to whether all Rights Issue Shares will be subscribed for and as to whether Segue takes up any or its full entitlement.

2.3 The current Board of Directors is not expected to change in the near future as a result of the proposal with Segue or completion of the proposals with the Note Holders. The existing Board of Red October are Benjamin Bussell, Jeremy Bond and Dr Saliba Sassine.
2.4 As noted above, Red October will have in place the Revised Farm In Agreement as noted in paragraph 1.1 above.

3. Corporate History and Nature of Business

Red October

3.1 Red October is listed on the ASX since 9 May 2011. Its focus to date has been on mineral exploration in Australia and overseas. It attempted, via a Memorandum of Understanding, to acquire an effective 70% interest in the Yellowstone Copper Project in Central Kazakhstan. Red October paid US$250,000 on 27 May 2011 for a three month exclusivity to conduct due diligence on the Yellowstone Copper Project and if acquired Red October was obliged to acquire an initial effective 51% interest for US$44 million with a minimum cash payment of US$14 million and the balance in Red October shares or cash. On 18 October 2011, Red October announced that it was unable to complete a capital raising sufficient to satisfy the terms of the proposed acquisition and the proposed acquisition was aborted.

In June 2011, the Company made a successful bid of US$12 million for the Akjila Silver Project in Tajikistan. Red October funded the US$2 million deposit through existing cash reserves. On 18 October 2011, the Company advised that it had received a Notice of Breach of Contract from the vendors. On 5 April 2012, the Company announced that it had reached agreement with Kytco BV for the release of Red October from any conceivable claims past or future in respect of the Share Sale Agreement to acquire the Akjila Silver Project upon payment of US$100,000 (to be paid out of the proceeds of the second tranche of Notes referred to above.

In December 2010, the Company entered into a farm in agreement with Segue for the Company to earn an initial 30% interest in the nickel and iron ore project known as the Pardoo Project in the Pilbara area of Western Australia by Red October spending $2,000,000 within three years from the Commencement Date (as defined in the Farm In Agreement) including a minimum spend of $1,500,000 within two years of the Commencement Date. Once a 30% interest had been obtained, Red October could earn a further 20% interest in the Pardoo Project by spending a minimum total of $5,000,000 within four years of the Commencement Date and once a 50% interest had been obtained, Red October could earn a further 20% interest in the Pardoo Project by spending a minimum total of $10,000,000 within five years of the Commencement Date. The Company has now agreed to a variation to the Farm In Agreement and has entered into the Revised Farm In Agreement.

On 10 April 2012, the Company entered into the Subscription Agreement with Hemisphere Corporate Services Pty Ltd (“Hemisphere”) and others to provide the Company with funding of $600,000 via the unsecured Notes. As noted above, $200,000 Tranche 1 Notes were issued and the Tranche 2 Notes to the face value of $400,000 will be issued and the monies drawn down. The Notes will be converted into 120,000,000 Note Shares as referred to above. The completion of the issue of the Tranche 2 Notes is conditional on the entering into the Revised Farm In Agreement on the terms as outlined in paragraph 1.1 above and an in-principle approval from the ASX that following completion of the Rights Issue that the securities of Red October will be re-instated to trading on the ASX.

The Company has in effect spent all the monies raised from the IPO and Tranche 1 Notes and as at 30 June 2012 had net assets of $3,701 (refer balance sheet below).

RED0000/ IER Red October relating to issue of shares to Segue

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4. Future Directions of Red October

4.1 We have been advised by the directors and management of Red October that:
There are no proposals currently contemplated either whereby Red October will acquire any further properties or assets from Segue, however Red October will issue ordinary shares (the Segue Consideration Shares) to Segue as consideration to vary the original Farm In Agreement;
The composition of the Board and management is not proposed to change in the short term but may change as the Company’s circumstances change;
The Company may, subject to prevailing market conditions seek to raise further working capital by way of share issues later in 2012 and in the latter half of 2013 (the Company is planning a 1 for 2 Rights Issue as noted above);
No dividend policy has been set and it is not proposed to be set until such time as the Company is profitable and has a positive cash flow; and
The Company will endeavour to enhance the value of the Pardoo Project in which it is earning an interest in as noted above. The Company will also seek new projects in the minerals area.

5. Basis of Valuation of Red October Shares

5.1 Shares
5.1.1 In considering the proposal to issue the Segue Consideration Shares, we have sought to determine if the consideration payable by Red October to Segue is fair and reasonable to the existing non-associated shareholders of Red October.
5.1.2 The offer would be fair to the existing non-associated shareholders if the value of the interest in the Pardoo Project in which Red October is farming in to is greater than the implicit value of the shares in Red October being offered as consideration. Accordingly, we have sought to determine a theoretical value that could reasonably be placed on Red October shares for the purposes of this report.
5.1.3 The valuation methodologies we have considered in determining a theoretical value of a Red October share are:
Capitalised maintainable earnings/discounted cash flow;
Takeover bid - the price at which an alternative acquirer might be willing to offer;
Adjusted net asset backing and windup value; and
The market price of Red October shares trading on ASX.
5.2
Capitalised maintainable earnings and discounted cash flows.
5.2.1 Due to Red October’s current operations, a lack of profit history arising from business undertakings and the lack of a reliable future cash flow from a current business activity, we have considered these methods of valuation not to be relevant for the purpose of this report.
5.3 Takeover Bid
5.3.1 It is possible that a potential bidder for Red October could purchase all or part of the existing shares, however no certainty can be attached to this occurrence. To our knowledge, there are no current bids in the market place and the directors of Red October have formed the view that there is unlikely to be any takeover bids made for Red October in the immediate future.

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5.4 Adjusted Net Asset Backing
5.4.1 We set out below an unaudited consolidated statement of financial position (balance sheet) of Red October as at 30 June 2012, along with a pro-forma consolidated statement of financial position assuming the following:
The raising of a further $400,000 by the issue of the Tranche 2 Notes to take the total of the Notes to $600,000 on issue and converting the Notes to 120,000,000 Note Shares at 0.5 cents each and the payment of interest accrued to 30 June 2012 of $4,000;
The issue of 11,250,000 Segue Consideration shares at say a deemed issue price of 0.5 cents each (deemed cost $56,250 and expensed);
The payment of an estimated $25,000 indirect costs relating to the preparation of the Notice and which have all been expensed; and
The payment of US$100,000 to Kytco BV as a release from claims payment (assume AUS/US = 1 for 1).

Current Assets Cash Receivables/prepayments Non Current Assets Plant and equipment Capitalised exploration costs Total Assets Current Liabilities Trade and other payables Borrowings Total Current Liabilities Total liabilities Net Assets Equity Issued capital Reserves Accumulated losses Net Equity	Red October 30 June 2012 $000’s Red October Consolidated Pro-forma 30 June 2012 $000’s 107 378 21 21
	128 399
	27 27 178 178
	205 205
	333 604
	126 126 204 -
	330 126
	330 126
	3 478
	4,589 5,245 242 242 (4,828) (5,009) 3 478

5.4.2 The book net tangible asset backing per fully paid ordinary share as at 30 June 2012 equates to approximately 0.007 cents (44,100,000 ordinary fully paid shares on issue at that date). On a pro-forma basis, the asset backing rises to $478,000 or approximately 0.27 cents per share (175,350,000 shares on issue).
5.4.3 We have accepted the amounts for all current assets and non current assets. We have been assured by the management of Red October that they believe the carrying value of all current assets, fixed assets and liabilities at 30 June 2012 are fair and not materially misstated.
5.4.4 We note that the market has been informed of all of the current projects, joint ventures and farm in/farm out arrangements entered into between Red October and other parties. We also note it is not the present intention of the directors of Red October to liquidate the Company and therefore any theoretical value based upon wind up value or even net book value (as adjusted), is just that, theoretical. The shareholders, existing and future, must acquire shares in Red October based on the market perceptions of what the market considers a Red October share to be worth.

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The market has either generally valued the vast majority of mineral exploration companies at significant discounts or premiums to appraised technical values and this has been the case for a number of years although we also note that there is an orderly market for Red October shares and the market is kept fully informed of the activities of the Company. It is noted that under IFRS, the value ascribed to the Segue Consideration shares to be issued to Segue would be accounted for at the market value (as noted on ASX) of a company share at date of issue. It is noted that the cash reserves of Red October are minimal and on a working capital basis, the Company has a deficiency in working capital of approximately $202,000. The Company is arguably technically insolvent and needs to raise new capital on an urgent basis to meet 30 June 2012 creditors (assumes the Notes will be converted to Note Shares), new creditors post 30 June 2012 and meet on-going administration, corporate and exploration commitments. Prior to any capital raising and the Tranche 2 Note issue, the Company’s shares are virtually worthless except for any value ascribed to the Company as a whole as a listed ‘’shell”. It is noted that the Note Holders agreed in April 2012 to terms that required the Notes to convert at 0.5 cents each. Arguably, 0.5 cents is the considered fair value of Red October’s shares to ascribe to the Segue Consideration Shares. Technically, Red October does not have any percentage interest in the Pardoo Project and thus it is not deemed necessary to obtain a valuation of the Pardoo Project. We have considered the changed terms to the original Farm In Agreement and the “cost” of those changes (including the issue of the Segue Consideration Shares) in determining the fairness and reasonableness of the proposals pursuant to resolution 7.

5.5 Market Price of Red October Fully Paid Ordinary Shares
5.5.1 There has been no trading in the Company’s shares on ASX in the past 12 months and thus ASX market value is not suitable on this occasion.
5.5.2 The future value of a Red October share will depend upon, inter alia:
The successful exploitation of the current mineral assets of the Company (that currently is the earning of an interest in the Pardoo Project);
The state of the iron, nickel and base metal markets (and prices) in Australia and overseas;
The cash position of the Company;
The state of Australian and overseas stock markets;
The potential risk of operating outside Australia;
Foreign exchange rates;
Membership and control of the Board and the quality of management;
General economic conditions; and
Liquidity of shares in Red October.

5.6 Conclusion as to fair value of a Red October Share

5.6.1 We consider the fair value of a Red October share for the purposes of this report to be the same as the 0.5 cents Note conversion price as discussed above. It is noted that post the issue of the Note Shares and the issue of the Segue Consideration Shares following shareholder approval in late November 2012, the Company proposes to undertake a Rights Issue on a 1 new share for every 2 shares held at an issue price of 1.5 cents each.

6. Value of Consideration

6.1 Based on the Note Issue share price the Consideration would be 11,250,000 times 0.5 cents being an ascribed value of $56,250.

As discussed, the number of Segue Consideration Shares to be issued will be at the same price that Red October will issue shares under the Notes Issue. It is noted that a Capital Raising (via a Rights Issue) is planned to be undertaken in the fourth quarter of 2012 or early 2013 at 1.5 cents per Rights Issue Share. At 1.5 cents (the proposed issue price under the Right Issue), the value attributed to the 11,250,000 Segue Consideration Shares is $140,625.

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7. Consideration as to fairness and reasonableness of the issue of 11,250,000 Segue Consideration Shares

7.1 We set out below some of the advantages and disadvantages and other factors pertaining to the proposed issue of the Segue Consideration Shares as consideration to vary the original Farm In Agreement and enter into the Revised Farm In Agreement. In summary, we are of the opinion that the advantages outweigh the disadvantages at the date of this report.

Advantages

7.2 The Company’s exposure to the Pardoo Project by way of exploration commitments is reduced from a potential $10,000,000 over 5 years (to earn a 70% interest) to $3,000,000 over four years (to earn a 50% interest). The original Farm In Agreement required Red October to spend $2,000,000 within 3 years with a minimum spend of $1,500,000 within 2 years to earn a 30% interest. Under the Revised Farm In Agreement, Red October can earn a 30% interest by spending a minimum of $1,000,000 within 2 years with a minimum spend of $250,000 by the earlier of 6 months from the New Commencement Date or 31 December 2012. The Company may earn a 50% interest at a lower cost (albeit in a shorter time frame). The original Farm In Agreement required Red October to spend $5,000,000 within 4 years with a minimum to earn a 50% interest. Under the Revised Farm In Agreement, Red October can earn a 50% interest by spending $2,000,000 within 4 years from the Commencement Date. The Company may earn a 30% interest at a lower cost but in the same time frame as the original Farm In Agreement. To earn a 50% interest, the Company saves a total of $2,000,000. The outlay for this potential saving is the issue of the Segue Consideration Shares that are deemed to be worth at the date of potential issue, $56,250 as noted above. However, the Company loses the right to earn an additional 20% as the original Farm In Agreement clause re earning an additional 20% (to earn a total of 70%) by spending $10,000,000 within 5 years is no longer in the Revised Farm In Agreement.
7.3 By the Company completing the Tranche 2 Notes issue, the conversion of $600,000 of Notes to Note Shares and varying the original Farm In Agreement, the Company can obtain re-quotation of its shares on ASX and this will assist the Company in its ability to raise new capital. The completion of the issue of the Tranche 2 Notes was conditional on the entering into the Revised Farm In Agreement on the terms as outlined in paragraph 1.1 above and an in-principle approval from the ASX that following completion of the Rights Issue that the securities of Red October will be re-instated to trading on the ASX. The Company on the strength of such proposals is to undertake a 1 for 2 Rights Issue at 1.5 cents to raise up to $1,315,125 (that may be fully underwritten, although no agreement has been reached with any underwriting firm at the date of this report). All shareholders are better off by having the shares re-quoted on ASX as it provides a mechanism for shareholders to freely trade their shares.
7.4 There is an incentive to Segue to make Red October a viable mineral exploration and potential development company as Segue would still have a significant fully paid ordinary share interest in Red October of approximately 14.97% (before the Rights Issue but after the issue of the Note Shares and the Segue Consideration Shares).
7.5 Following the issue of the Note Shares and the Segue Consideration Shares, the net assets increase from around $3,000 to $478,000 (ignoring post 30 June 2012 losses). If the Rights Issue is completed, and allowing for capital raising costs of say $115,125, the Company would raise a net $1,200,000 and the net assets rise to approximately $1,678,000 and the book value per share increases to approximately 0.63 cents (263,025,000 shares on issue).
7.6 Completion of the Rights Issue (that would probably not occur without the variation to the original Farm In Agreement and Notes conversion to equity) provides the Company with new working capital to meet existing debts and six month commitments relating to the Pardoo Project ($250,000 to be spent by 31 December 2012) and if the Company decides to continue with earning an initial 30% interest will have some cash funds to assist in

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achieving this objective (needs to spend $1,000,000 within two years of Commencement Date).

Disadvantages

7.7 The number of fully paid ordinary shares on issue could initially rise from 44,100,000 (but a company with no cash funds and in a position that without an inflow of new funds over the next few months may be forced into Administration or the Company put up for sale) to 175,350,000 shares post the Notes Issue and issue of the Segue Consideration Shares and up to 263,025,000 if all Rights Issue Shares are issued.
7.8 There is a cost of $56,250 (or $168,750 if the 1.5 cent proposed Rights Issue price is used) to the issue of the 11,250,000 Segue Consideration Shares. The Company could withdraw from the Pardoo Project soon after 31 December 2012 (after spending $250,000) if early exploration results are poor. However, the Company’s new management have considered that the Pardoo Project has prospectivity and the cost is worth paying to earn an up to 50% interest in the Pardoo Project. In the absence of the recapitalisation proposals (Note issue and conversion, varying the original Farm In Agreement and completion of the proposed Rights issue), the Company would have probably lost the right to earn an interest in the Pardoo Project due to a lack of cash funds.

Other Factors

7.9 Red October may not have enough funds to meet ongoing commitments and further capital may need to be raised in the future. To earn a 50% interest in the Pardoo Project, Red October will need to incur minimum costs of $3,000,000 over four years so if this is the objective, Red October will need to raise further funds.
7.10 The Company loses the right to earn an additional 20% as the original Farm In Agreement clause re earning an additional 20% interest (to earn a total of 70%) by spending $10,000,000 within 5 years is no longer in the Revised Farm In Agreement.

8. Conclusion as to Reasonableness

8.1 After taking into account the factors referred to in 7 below (where in our opinion the advantages outweigh the disadvantages) and elsewhere in this report, we are of the opinion that the proposed changes to the original Farm In Agreement and the resultant issue of the 11,250,000 Segue Consideration Shares as noted in paragraph 1.1 and resolution 7 in the Notice may be considered, on balance, to be fair and reasonable to the non-associated shareholders of Red October not associated with Segue at the date of this report.

9. Sources of Information

9.1 In making our assessment as to whether the proposed variation of the terms of the original farm In Agreement and issue of the Segue Consideration Shares as noted in paragraph 1.1 and resolution 7 in the Notice are fair and reasonable, we have reviewed relevant published available information and other unpublished information of the Company and the Pardoo Project that is relevant to the current circumstances. In addition, we have held discussions with the management of Red October about the present and future operations of the Company. Statements and opinions contained in this report are given in good faith but in the preparation of this report, we have relied in part on information provided by the directors and management of Red October.

9.2 Information we have received includes, but is not limited to:

Draft Notice of Red October and draft Explanatory Statements to Shareholders prepared to 10 October 2012;
Discussions with management and directors of Red October;
Shareholding details of Red October as at 8 October 2012;
Annual Report of Red October for the period ended 30 June 2012;

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Announcements made by Red October to the ASX from 1 June 2011 to 11 October 2012;
The Subscription Agreement regarding the Notes dated 5 April 2012 and extension letter thereto dated 30 June 2012; and
The Revised Farm In Agreement;

9.3 Our report includes Appendices A and our Financial Services Guide attached to this report.

Yours faithfully

STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (Trading as Stantons International Securities)

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J P Van Dieren – FCA Director

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APPENDIX A

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AUTHOR INDEPENDENCE AND INDEMNITY

This annexure forms part of and should be read in conjunction with the report of Stantons International Securities dated 12 October 2012, relating to the variation to the original Farm In Agreement and the resultant issue of 11,250,000 Segue Consideration Shares as outlined in paragraph 1.1 of the report and resolution 7 in the Notice of Meeting to Shareholders and the Explanatory Statement proposed to be distributed to the Red October shareholders in October 2012.

At the date of this report, Stantons International Securities does not have any interest in the outcome of the proposals. There are no relationships with Red October and Segue other than acting as an independent expert for the purposes of this report. Before accepting the engagement Stantons International considered all independence issues and concluded that there were no independence issues in accepting the assignment to prepare the Independent Experts Report. There are no existing relationships between Stantons International Securities and the parties participating in the transaction detailed in this report which would affect our ability to provide an independent opinion. The fee to be received for the preparation of this report is based on the time spent at normal professional rates plus out of pocket expenses and is estimated at a maximum of $10,000. The fee is payable regardless of the outcome. With the exception of the fee, neither Stantons International Securities nor John P Van Dieren have received, nor will, or may they receive, any pecuniary or other benefits, whether directly or indirectly, for or in connection with the making of this report.

Stantons International Securities does not hold any securities in Red October or Segue. There are no pecuniary or other interests of Stantons International Securities that could be reasonably argued as affecting its ability to give an unbiased and independent opinion in relation to the proposal. Stantons International Securities and Mr J Van Dieren have consented to the inclusion of this report in the form and context in which it is included as an annexure to the Notice.

QUALIFICATIONS

We advise Stantons International Securities is the holder of an Australian Financial Services Licence (no 418019) under the Corporations Act 2001 relating to advice and reporting on mergers, takeovers and acquisitions that involve securities. The directors of Stantons International Audit and Consulting Pty Ltd are the directors of Stantons International Securities. Stantons International Securities has extensive experience in providing advice pertaining to mergers, acquisitions and strategic for both listed and unlisted companies and businesses.

Mr John P Van Dieren, FCA, the person responsible for the preparation of this report, has extensive experience in the preparation of valuations for companies and in advising corporations on takeovers generally and in particular on the valuation and financial aspects thereof, including the fairness and reasonableness of the consideration offered.

The professionals employed in the research, analysis and evaluation leading to the formulation of opinions contained in this report, have qualifications and experience appropriate to the task they have performed.

DECLARATION

This report has been prepared at the request of the Directors of Red October in order to assist them to assess the merits of the proposals as outlined in resolution 7 the Explanatory Statement to which this report relates. This report has been prepared for the benefit of Red October’s shareholders and does not provide a general expression of Stantons International Securities opinion as to the longer term value of Red October and its assets. Stantons International Securities does not imply, and it should not be construed, that is has carried out any form of audit on the accounting or other records of the Red October. Neither the whole nor any part of this report, nor any reference thereto may be included in or with or attached to any document, circular, resolution, letter or statement, without the prior written consent of Stantons International Securities to the form and context in which it appears.

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DISCLAIMER

This report has been prepared by Stantons International Securities with due care and diligence. However, except for those responsibilities, which by law cannot be excluded, no responsibility arising in any way whatsoever for errors or omission (including responsibility to any person for negligence) is assumed by Stantons International Securities, Stantons International Audit and Consulting Pty Ltd, their directors, employees or consultants for the preparation of this report.

DECLARATION AND INDEMNITY

Recognising that Stantons International Securities may rely on information provided by Red October and its officers (save whether it would not be reasonable to rely on the information having regard to Stantons International Securities experience and qualifications), Red October has agreed:

(a) To make no claim by it or its officers against Stantons International Securities (and Stantons International Audit and Consulting Pty Ltd) to recover any loss or damage which Red October may suffer as a result of reasonable reliance by Stantons International Securities on the information provided by Red October; and
(b) To indemnify Stantons International Securities (and Stantons International Audit and Consulting Pty Ltd) against any claim arising (wholly or in part) from Red October or any of its officers providing Stantons International Securities any false or misleading information or in the failure of Red October or its officers in providing material information, except where the claim has arisen as a result of wilful misconduct or negligence by Stantons International Securities.

A draft of this report was presented to Red October directors for a review of factual information contained in the report. Comments received relating to factual matters were taken into account, however the valuation methodologies and conclusions did not alter.

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FINANCIAL SERVICES GUIDE FOR STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (Trading as Stantons International Securities) Dated 12 October 2012

Stantons International Securities ABN 84 144 581 519 and Financial Services Licence 418019 (“SIS” or “we” or “us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

2. Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client a Financial Services Guide (“FSG”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, Licence No: 418019;
remuneration that we and/or our staff and any associated receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

3. Financial services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide financial product advice in relation to:

Securities (such as shares, options and notes)

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

4. General Financial Product Advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

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5. Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither SIS, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

6. Remuneration or other benefits received by our employees

All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report.

7. Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

8. Associations and relationships

SIS is ultimately a wholly division of Stantons International Audit and Consulting Pty Ltd a professional advisory and accounting practice. Stantons International Audit and Consulting Pty Ltd also trades as Stantons International that provides audit, corporate services, internal audit, probity, management consulting, accounting and IT audits.

From time to time, SIS and Stantons International Audit and Consulting Pty Ltd and/or their related entities may provide professional services, including audit, accounting and financial advisory services, to financial product issuers in the ordinary course of its business.

9. Complaints resolution

9.1 Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to:

The Complaints Officer Stantons International Securities Level 2 1 Walker Avenue WEST PERTH WA 6005

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaints within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

9.2 Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service Limited (“FOSL”). FOSL is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

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Further details about FOSL are available at the FOSL website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service Limited PO Box 3 MELBOURNE VIC 8007

Toll Free: 1300 78 08 08 Facsimile: (03) 9613 6399

Contact details

You may contact us using the details set out above.

Telephone 08 9481 3188 Fax 08 9321 1204 Email [email protected]

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AI assistant

MOTIO LTD — AGM Information 2012

65390_rns_2012-10-23_4fd29ea6-8601-4722-91f5-756dfd57889e.pdf

RED OCTOBER RESOURCES LTD

ACN 147 799 951

NOTICE OF ANNUAL GENERAL MEETING

CONTENTS PAGE

IMPORTANT INFORMATIO N

TIME AND PLACE OF MEETING

YOUR VOTE IS IMPORTANT

VOTING ELIGIBILITY

VOTING IN PERSON

VOTING BY PROXY

Proxy vote if appointment specifies way to vote

Transfer of non-chair proxy to chair in certain circumstances

BUSINESS OF THE MEETING

AGENDA

ORDINARY BUSINESS

Financial Statements and Reports

1. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement:

2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR JEREMY BOND

3. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MR BENJAMIN BUSSELL

4. RESOLUTION 4 – RE-ELECTION OF DIRECTOR – DR SALIBA SASSINE

5. RESOLUTION 5 – ISSUE OF SHARES ON CONVERSION OF CONVERTIBLE NOTES

6. RESOLUTION 6 – ISSUE OF SHARES TO A RELATED PARTY ON CONVERSION OF CONVERTIBLE NOTES

Voting Prohibition Statement:

7. RESOLUTION 7 – ISSUE OF CONSIDERATION SHARES AND ACQUISITION OF A SUBSTANTIAL ASSET FROM A SUBSTANTIAL HOLDER

8. RESOLUTION 8 – CHANGE OF COMPANY NAME

9. RESOLUTION 9 – APPOINTMENT OF AUDITOR

DATED: 24 OCTOBER 2012

BY ORDER OF THE BOARD

EXPLANATORY STATEMEN T

1. FINANCIAL STATEMENTS AND REPORTS

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

2.1 General

2.2 Voting consequences

2.3 Previous voting results

2.4 Proxy Restrictions

If you appoint any other person as your proxy

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR JEREMY BOND

4. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MR BENJAMIN BUSSELL

5. RESOLUTION 4 – RE-ELECTION OF DIRECTOR – DR SALIBA SASSINE

6. RESOLUTION 5 – ISSUE OF SHARES ON CONVERSION OF CONVERTIBLE NOTES

6.1 General

6.2 Technical information required by ASX Listing Rule 7.1

7. RESOLUTION 6 – ISSUE OF SHARES TO A RELATED PARTY ON CONVERSION OF CONVERTIBLE NOTES

7.1 General

7.2 Shareholder Approval (ASX Listing Rule 10.11)

8. RESOLUTION 7 – ISSUE OF CONSIDERATION SHARES AND ACQUISITION OF A SUBSTANTIAL ASSET FROM A SUBSTANTIAL HOLDER

8.1 General

8.2 ASX Listing Rule 10.1 – Acquisition of a Substantial Asset from a Substantial Holder

8.3 ASX Listing Rule 7.1

8.4 Technical information required by ASX Listing Rule 7.1

9. RESOLUTION 8 – CHANGE OF COMPANY NAME

10. RESOLUTION 9 – APPOINTMENT OF AUDITOR

11. ENQUIRIES

GLOSSARY

SCHEDULE A – NOMINATION OF AUDITO R

Letter of Nomination to Appoint Auditor

PROXY FORM

APPOINTMENT OF PROXY RED OCTOBER RESOURCES LTD ACN 147 799 951

ANNUAL GENERAL MEETING

OR

RED OCTOBER RESOURCES LTD ACN 147 799 951

Instructions for Completing ‘Appointment of Proxy’ Form

( Signing Instructions ):

Proxy forms received later than this time will be invalid.

ANNEXURE A – INDEPENDENT EXPERT’S REPORT

1. Introduction

2.

Implications of the Proposals

3. Corporate History and Nature of Business

Red October

4. Future Directions of Red October

5. Basis of Valuation of Red October Shares

5.6 Conclusion as to fair value of a Red October Share

6.

Value of Consideration

MOTIO LTD AGM Information 2012