MOUNT RIDLEY MINES LIMITED — Proxy Solicitation & Information Statement 2007

Feb 26, 2007

AXG MINING LIMITED

ACN 092 304 964

NOTICE OF GENERAL MEETING

The General Meeting of the Company will be held at The West Australian Club at 101 St George's Terrace Perth Western Australia on Wednesday 28 March 2007 at 11.30am (WST)

This Notice should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on +61 $(08)$ 9481 1144.

AXG MINING LIMITED

ACN 092 304 964

NOTICE OF GENERAL MEETING

Notice is hereby given that a General Meeting of Shareholders of the Company will be held at the West Australian Club on 28 March 2007 at 11.30am (WST) ("Meeting").

The Proxy Form forms part of this Notice of General Meeting ("Notice").

The Directors have determined pursuant to regulation 7.11.38 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders of the Company at 5.00pm on Friday, 23 March 2007 (WDST).

AGENDA

$\mathbf 1$ Resolution 1 - Ratification of Tranche 1 Placement

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

"That, in accordance with ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the issue of 4,500,000 Shares each at an issue price of \$0.08 together with one free attaching Option for every two Shares issued raising up to \$360,000 ("Tranche 1 Placement") to institutional and professional and sophisticated investors on the terms and conditions outlined in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on a resolution by a person who participated in the Tranche 1 Placement, or an associate of those persons.

However, the Company will not disregard a vote if:

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

Resolution 2-Authorise Tranche 2 Placement $2¹$

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

"That, in accordance with ASX Listing Rule 7.1 and for all other purposes, the Company approves and authorises the Directors to

issue 7,500,000 Shares each at an issue price of \$0.08 together with one free attaching Option for every two Shares issued to raise \$600,000 ("Tranche 2 Placement") to institutional and professional and sophisticated investors on the terms and conditions outlined in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who may participate in the issue and might obtain a benefit (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or any associate of that person.

However, the Company will not disregard a vote if:

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

$3₁$ Resolution 3-Authorise Participation of Mr Gordon Sklenka

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

"That, subject to Resolution 2 being passed, and in accordance with Listing Rule 10.11 and Chapter 2E of the Corporations Act and for all other purposes, the Shareholders authorise and approve Mr Gordon Sklenka or his nominee to participate in the Tranche 2 Placement and to subscribe for up to, and the Company to issue up to 1,000,000 Shares together with 1 free attaching option for every 2 Shares issued."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by Mr Gordon Sklenka, or any associate of Mr Sklenka.

However, the Company need not disregard a vote if:

• it is cast by Mr Sklenka as proxy for a person who is entitled to vote, in $(a)$ accordance with directions on the Proxy Form; or
• it is cast by the person chairing the Meeting as proxy for a person who is $(b)$ entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Resolution 4 – Authorise Participation of Mr Roland 4. Berzins

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

"That, subject to Resolution 2 being passed, and in accordance with Listing Rule 10.11 and Chapter 2E of the Corporations Act and for all other purposes, the Shareholders authorise and approve Mr Roland Berzins or his nominee to participate in the Tranche 2 Placement and to subscribe for up to, and the Company to issue up to 500,000 Shares together with 1 free attaching option for every 2 Shares issued."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by Mr Roland Berzins, or any associate of Mr Berzins.

However, the Company need not disregard a vote if:

• $(a)$ it is cast by Mr Berzins as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
• $(b)$ it is cast by the 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.

5. Resolution 5 - Authorise Participation of Mr Alex Bajada

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

"That, subject to Resolution 2 being passed, and in accordance with Listing Rule 10.11 and Chapter 2E of the Corporations Act and for all other purposes, the Shareholders authorise and approve Mr Alex Bajada or his nominee to participate in the Tranche 2 Placement and to subscribe for up to, and the Company to issue up to 500,000 Shares together with 1 free attaching option for every 2 Shares issued."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by Mr Alex Bajada, or any associate of Mr Bajada.

However, the Company need not disregard a vote if:

• $(a)$ it is cast by Mr Bajada as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
• it is cast by the person chairing the Meeting as proxy for a person who is $(b)$ entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

$6.$ Resolution 6 - Section 195 Approval

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

"That, for the purposes of section 195(4) of the Corporations Act and for all other purposes, Shareholders approve and authorise the Directors to complete the transactions as contemplated in this Notice."

By Order of the Board

Roland Berzins Company Secretary 27 February 2007

AXG MINING LIMITED

ACN 092 304 964

EXPLANATORY MEMORANDUM

$\mathbf 1$ Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the General Meeting to be held at The West Australian Club on 28 March 2007 at 11.30am (WST).

The purpose of this Explanatory Memorandum is to provide information that the Board of Directors believes is material to Shareholders in relation to the resolutions set out in the Notice of General Meeting. The Explanatory Memorandum explains the resolutions and identifies the Directors' decisions for putting them to Shareholders.

$\mathcal{P}$ Resolution 1 - Ratification of Tranche 1 Placement

$2.1$ General

Resolution 1 seeks Shareholder approval for the ratification of the Tranche 1 Placement.

$2.2$ Listing Rule 7.4

The Shares issued under the Tranche 1 Placement were issued within the 15% limit permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 1 by ratifying the Tranche 1 Placement will be to restore the Company's ability to issue securities within that limit, to the extent of the 4,500,000 Shares and 2,250,000 Options.

$2.3$ Specific Information required by Listing Rule 7.5

Listing Rule 7.5 requires that the following information be provided to Shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 7.4:

• $(a)$ The Shares will be issued to RM Capital Pty Ltd and clients of RM Capital Pty Ltd (who are not a related parties of the Company) prior to the Meeting.
• 4.500,000 Shares will be issued prior to the Meeting each at an issue price of $(b)$ \$0.08 to raise \$360,000 (prior to costs). 2,250,000 Options will also be issued (and 2.250,000 Shares on their exercise) for no consideration on the basis of one Option for each two Shares issued;
• $(c)$ The Shares issued will be fully paid ordinary Shares in the capital of the Company once issued. The Options have an exercise price of \$0.20 and an expiry date of 31 August 2010 and further terms and conditions contained in Schedule 2:
• A voting exclusion statement is included in the Notice; and $(d)$

$(e)$ The funds raised by the Tranche 1 Placement will be used to supplement working capital and assist in evaluating and identifying new projects.

3. Resolution 2 – Authorise Tranche 2 Placement

Resolution 2 seeks Shareholder approval for the authority to undertake the Tranche 2 Placement.

$3.1$ Listing Rule 7.1 - Shareholder Approval

Listing Rule 7.1 requires Shareholder approval for the Tranche 2 Placement. Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company's securities then on issue.

Although the Tranche 2 Placement does not represent more than the 15% of the Company's securities on issue for the purposes of Listing Rule 7.1, if Resolution 1 is passed by Shareholders, the Company is seeking Shareholder approval of the Tranche 2 Placement so that the Company's future ability to issue up to 15% of the Company's Share capital in accordance with Listing Rule 7.1 without Shareholder approval is maintained. Accordingly, Shareholder approval is sought in accordance with Listing Rule 7.3.

$3.2$ Specific information required by Listing Rule 7.3

For the purposes of Shareholder approval of the Tranche 2 Placement and the requirements of Listing Rule 7.3, information is provided as follows:

• $(a)$ the maximum number of Shares the Company can issue under the Tranche 2 Placement is 7,500,000 Shares each at an issue price of \$0.08 to raise \$600,000 (prior to costs). 3,750,000 Options will also be issued (and 3,750,000 Shares on their exercise) for no consideration on the basis of one Option for each two Shares issued:
• the Company will issue the Shares and Options no later than 3 months after $(b)$ the date of the General Meeting (or such longer period of time as ASX may, in its discretion, allow pursuant to a waiver of ASX Listing Rule 7.3.2);
• the Shares and Options will be issued to RM Capital Pty Ltd and any clients of $(c)$ RM Capital Pty Ltd (who are not related parties of the Company) and Mr Gordon Sklenka, Mr Roland Berzins and Mr Alex Bajada (Directors of the Company);
• $(d)$ the Shares to be issued are ordinary fully paid shares in the capital of the Company. The Options have an exercise price of \$0.20 and an expiry date of 31 August 2010 and further terms and conditions contained in Schedule 2:
• the funds raised by the Tranche 2 Placement will be used to supplement (e) working capital and to assist in evaluating and identifying new projects;
• the allotment of Shares and Options will occur progressively; and $(f)$
• a voting exclusion statement is included in the Notice. $(g)$

Resolutions 3, 4 and 5 - Authorise Participation of Mr $\mathbf{4}$ Gordon Sklenka, Mr Roland Berzins and Mr Alex Bajada

Mr Gordon Sklenka, a Director, and/or his associates, proposes to subscribe for 1,000,000 Shares together with 1 for 2 free attaching Options under the Tranche 2 Placement.

Mr Roland Berzins a Director and Company Secretary and Mr Alex Bajada, a Director, and/or their associates, propose to subscribe for 500,000 Shares each together with 1 for 2 free attaching Options, under the Tranche 2 Placement.

The terms and conditions upon which Mr Sklenka, Mr Berzins and Mr Bajada will subscribe for Shares under the Tranche 2 Placement will be the same terms and conditions under which others will subscribe for Shares under the Tranche 2 Placement.

4.1 Introduction

The Company proposes to issue the Shares to align the Directors' interests with the performance of the Company and to provide an incentive for them to maximise the performance of the Company. Resolutions 3, 4 and 5 seek Shareholder approval pursuant to Listing Rule 10.11 and Chapter 2E of the Corporations Act for the Directors to issue 1,000,000 Shares to Mr Sklenka and 500,000 Shares each to Mr Berzins and Mr Bajada together with 1 free attaching Option for every 2 Shares issued.

4.2 Reason for Resolutions 3, 4 and 5

Shareholder approval is required under Listing Rule 10.11 and Chapter 2E of the Corporations Act because Mr Sklenka, Mr Berzins and Mr Bajada, as Directors, are related parties of the Company.

Listing Rule 10.11 and Chapter 2E of the Corporations Act restrict the Company's ability to issue equity securities to Directors, unless approval is obtained from the Shareholders. The effect of passing Resolutions 3, 4 and 5 will be to allow the Directors to issue 1,000,000 Shares to Mr Sklenka and 500,000 Shares each to Mr Berzins and Mr Bajada together with 1 free attaching Option for every 2 Shares subscribed for during the month after the Meeting (or a longer period, if allowed by ASX) in compliance with Chapter 2E of the Corporations Act, without breaching ASX Listing Rule 10.11 or using up the Company's 15% placement capacity under ASX Listing Rule 7.1.

Shareholder approval is required under section 208 (contained in Chapter 2E) of the Corporations Act because Mr Sklenka, Mr Berzins and Mr Bajada, as Directors, are related parties of the Company.

Resolutions 3, 4 and 5 are separate resolutions and are in no way dependent on each other.

4.3 Specific Information required by section 219 of the Corporations Act

For the purposes of section 219 of the Corporations Act, information regarding the issue of the Shares is provided as follows:

$(a)$ the related parties to whom Resolutions 3, 4 and 5 would permit financial benefits to be given are Mr Gordon Sklenka, Mr Roland Berzins and Mr Alex Bajada (or their nominees);

• $(b)$ the nature of the financial benefits are 1,000,000 Shares to Mr Sklenka, 500,000 Shares each to Mr Berzins and Mr Bajada together with 1 free attaching Option for every 2 Shares issued;
• $(c)$ Mr Charles Mostert (the Director who does not have an interest in the outcome of Resolutions 3, 4 or 5) recommends that Shareholders vote in favour of Resolutions 3, 4 and 5 as it is considered that the performance of Mr Sklenka, Mr Berzins and Mr Bajada and the performance and value of the Company are closely related as the Directors participate in setting the direction of the Company. Mr Sklenka. Mr Berzins and Mr Bajada are also an invaluable source of advice to the Company's management and consequently the Company's management feels strongly that they should participate in the upside of the Company. This aligns the interests of the Company and the Directors.
• $(d)$ Mr Sklenka, Mr Berzins and Mr Bajada have an interest in the outcome of Resolutions 3, 4 and 5, and do not propose to make a recommendation in relation to Resolutions 3, 4 or 5.
• The following table demonstrates the dilution of all other Shareholders' $(e)$ holdings in the Company, upon issue of the Shares to Mr Sklenka, Mr Berzins and Mr Bajada in accordance with Resolutions 3, 4 and 5:

Shares on issue at date of this notice	45,250,000
Shares to be issued under Resolutions 1 and 2	12,000,000
Shares issued to Mr Sklenka, Mr Berzins and Mr Bajada under Resolutions 3, 4 and 5	2,000,000
Dilution Effect of issues to related parties	3.49%

Shares on issue fully diluted	87,113,000
Shares to be issued under Resolutions 1 and 2 (including Options on exercise)	18,000,000
Shares issued to Mr Sklenka, Mr Berzins and Mr Bajada under Resolutions 3, 4 and 5 (including Options on exercise)	3,000,000
Dilution Effect of issues to related arties	2.85%

• $(f)$ The above Shares to Mr Sklenka, Mr Berzins and Mr Bajada will raise \$160,000 which will be used as in section 3.2(e) of the Explanatory Memorandum.
• $(g)$ Mr Sklenka's, Mr Berzins' and Mr Bajada's remuneration is as follows:

	Current remuneration
l Gordon Sklenka	\$90,000
Roland Berzins	\$88,000
Alex Bajada	\$30,000

$(h)$ Mr Sklenka's, Mr Berzins' and Mr Bajada's interests in the Company (both current and if Resolutions 3, 4 and 5 are passed) are as follows:

	Current interest	Following issue of Shares and Options
Gordon Sklenka	1,000,000 Options	1,000,000 Shares and 1,500,000 Options
Roland Berzins	10,000 Shares 190,000 Options	510,000 Shares and 440,000 Options
Alex Bajada	Nil	500,000 Shares and 250,000 Options

The trading history of the Company's Share and Option price over the last 12 $(i)$ months (20 February 2006 to 19 February 2007) is as follows:

	Shares	Options
Highest	\$0.145	\$0.05
Lowest	\$0.06	\$0.01
Board approval for Tranche 1 & 2 Placement - 29 December 2006	\$0.073	\$0.035
Closing price on 19 February 2007	\$0.094	\$0.040

• $(j)$ In receiving the Shares and the attaching Options, Mr Sklenka, Mr Berzins and Mr Bajada may be receiving a financial benefit from the Company. Their financial benefit may be valued as follows:
• the price of the Shares being issued to Mr Sklenka, Mr Berzins and $\left(\mathbf{i}\right)$ Mr Bajada may be at a discount to the current market price for the Shares. Assuming an issue price of the Shares of \$0.08 and that the Options are free attaching, if the Shares to be issued to Mr Sklenka, Mr Berzins and Mr Bajada were sold at the price on:
  • $(A)$ the date of approval of the Tranche 1 & 2 Placements then each would make a loss of \$0.007 per Share (being a loss of

\$7,000 in total for Mr Sklenka and a loss of \$3,500 in total for Mr Berzins and Mr Baiada):

• on 19 February 2007 then each would make a gain of \$0.014 $(B)$ per Share (being a gain of \$14,000 in total for Mr Sklenka and a gain of \$7,000 in total for Mr Berzins and Mr Bajada);
• $(ii)$ in relation to the Options, Mr Sklenka, Mr Berzins and Mr Bajada are receiving the Options for nil consideration. The Options are listed options and accordingly may be sold. If the Options to be issued to Mr Sklenka, Mr Berzins and Mr Bajada were sold at the price on:
• $(A)$ the date of approval of the Tranche 1 & 2 Placements then each would make a gain of \$0.033 per Option (\$17,500 in total for Mr Sklenka and \$8,750 in total for Mr Berzins and Mr Baiada):
• $(B)$ on 19 February 2007 then each would make a gain of \$0.040 per Option (\$20,000 in total for Mr Sklenka and \$10,000 in total for Mr Berzins and Mr Bajada);
• $(k)$ Other than the information above and otherwise set out in this Explanatory Memorandum, the Company believes that there is no other information that would be reasonably required by Shareholders to pass Resolutions 3, 4 and 5.

4.4 Specific Information Required by ASX Listing Rule 10.13

For the purposes of ASX Listing Rule 10.13, information regarding the issue of Shares and the free attaching Options to Mr Sklenka, Mr Berzins and Mr Bajada are provided as follows:

• $(a)$ The Shares and Options will be issued to Mr Sklenka, Mr Berzins and Mr Bajada who are Directors of the Company, or their nominees.
• $(b)$ The maximum number of securities the Company can issue under Resolutions 3, 4 and 5 is 2,000,000 Shares and 1,000,000 Options.
• $(c)$ The Shares will be issued progressively no later than one month after the Meeting (or such longer period of time as ASX may in its discretion allow).
• The Shares will be issued by the Company at 8 cents per Share with 1 option $(d)$ free for every 2 Shares subscribed for.
• The Shares are ordinary fully paid Shares in the capital of the Company. The $(e)$ terms of the free Options attaching to the Tranche 2 Placement are in Schedule 2 of the Explanatory Memorandum.
• $(f)$ The issue of the Shares and the Options will raise \$160,000, which will be used as described in section 3.2(e) of the Explanatory Memorandum.
• $(q)$ A voting exclusion statement is included in the Notice.

Resolution 6 - Section 195 Approval 5.

Section 195 of the Corporations Act essentially provides that a director of a public company may not vote or be present during meetings of directors when matters in which that director holds a "material personal interest" are being considered.

Some of the Directors have a material personal interest in the outcome of Resolutions 2, 3, 4 and 5. In the absence of this Resolution 6, the Directors may not be able to form a quorum at directors meetings necessary to carry out the terms of Resolutions 2, $3, 4$ and $5.$

The Directors have accordingly exercised their right under section 195(4) of the Corporations Act to put the issue to Shareholders to resolve upon.

6. Action to be taken by Shareholders

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

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a "proxy") to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, to sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preciude a Shareholder from attending and voting at the Meeting in person.

Schedule 1 - Definitions

In this Explanatory Memorandum and Notice:

"General Meeting" means the General Meeting of the shareholders of the Company to be held by the Company at the West Australian Club, 101 St George's Terrace Perth, Western Australia on 28 March 2007 at 11.30 (WST).

"ASIC" means Australian Securities and Investments Commission.

"ASX" means Australian Stock Exchange Limited ACN 008 624 691.

"Board" means the board of Directors of the Company.

"Company" or "AXG" means AXG Mining Limited ACN 092 304 964.

"Constitution" means the Constitution of the Company.

"Corporations Act" means the Corporations Act 2001 (Cth).

"Directors" means the directors of the Company.

"Explanatory Memorandum" means this explanatory memorandum.

"Listing Rules" means the official listing rules of ASX.

"Notice" means this Notice of General Meeting.

"Option" means an option issued on the terms and conditions in Schedule 2.

"Proxy Form" means the proxy form attached to this Notice.

"Resolution" means a resolution referred to in the Notice.

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

"Shareholder" means a shareholder of the Company.

"Tranche 1 Placement" has the meaning in Resolution 1.

"Tranche 2 Placement" has the meaning in Resolution 2.

"WST" means Western Standard Time, being the time in Perth, Western Australia.

"WDST" means Western Daylight Savings Time, being the time in Perth, Western Australia.

Schedule 2 - Options

1. Entitlement

The Options entitle the holder to subscribe for one Share upon exercise of each Option.

$2.$ Exercise Price and Expiry Date

The Options have an exercise price of \$0.20 ("Exercise Price").

The Options have an expiry date of 31 August 2010 ("Expiry Date").

3. Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date.

4. Notice of Exercise

The Options may be exercised by notice in writing to the Company and payment of the Exercise Price for each Option being exercised. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

5. Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then Shares of the Company.

6. Quotation of Shares on exercise

Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options.

$\overline{7}$ . Timing of issue of Shares

After a Option is validly exercised, the Company must, at the later to occur of, 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the Options and 5 Business Days of the Company being in a position to comply with paragraph (b)(ii) below:

• a) issue and allot the Share; and
• p) do all such acts matters and things to:
• $(1)$ obtain the grant of quotation for the Share on ASX; and
• ensure that the sale of the Share within 12 months of issue does not cause a $(ii)$ breach of the Corporations Act.

8. Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give the holders of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

9. Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment):

• the number of Shares which must be issued on the exercise of an Option will be a) increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and
• p) no change will be made to the Exercise Price.

$10₁$ Adjustment for rights issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu of in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

New exercise price =
$$
O - \frac{E[P-(S+D)]}{N+1}
$$

• $O =$ the old Exercise Price of the Option.
• $E =$ the number of underlying Shares into which one Option is exercisable.
• $P =$ average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.
• $S =$ the subscription price of a Share under the pro rata issue.
• $D =$ the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).
• the number of Shares with rights or entitlements that must be held to receive a right to $N =$ one new share.

$11.$ Adjustments for reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders may be varied to comply the ASX Listing Rules which apply to the reconstruction at the time of the reconstruction.

$12.$ Quotation of Options

The Options will be unlisted Options and no application for quotation of the Options will be made by the Company until such time as the Company in its absolute discretion determines otherwise. Should the Company make an application for a quotation of the Options and the ASX accepts the application for quotation of the Options then the Options will be listed Options from the time that the ASX accepts such application.

$13.$ Options transferable

The Options are non-transferable while they are unlisted. Should the Options become listed Options in accordance with item 12 above then the Options will be transferable.

14. Lodgement Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's Registry.

AXG MINING LIMITED ACN 092 304 964

PROXY FORM

The Company Secretary AXG Mining Limited
By delivery:	By post:	By facsimile.
1171 Hay Street WEST PERTH WA 6005	PO Box 1922 WEST PERTH WA 6872	+61 8 9481 1155
I/We
of

being a Shareholder/Shareholders of the Company and entitled to

votes in the Company, hereby appoint 2

or failing such appointment the chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the General Meeting of the Company to be held at The West Australian Club, 101 St George's Terrace Perth Western Australia on 28 March 2007 at 11.30am (WST) and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes of this proxy is authorised to exercise is * [ ]% of the Shareholder's votes*/ [ J of the Shareholder's votes. (An additional Proxy Form will be supplied by the Company, on request).

INSTRUCTIONS AS TO VOTING ON THE RESOLUTION

IMPORTANT:

If the chairman of the general meeting is to be your proxy and you have not directed your proxy how to vote on Resolutions 2 and 5, please tick this box. By marking this box you acknowledge that the chairman of the general meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 2 and 5 and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the chairman of the general meeting will not cast your votes on Resolutions 2 and 5 and your votes will not be counted in computing the required majority if a poll is called on this Resolution.

The chairman of the general meeting intends to vote undirected proxies in favour of each Resolution.

The proxy is to vote for or against the Resolution referred to in the Notice as follows:

		The provy is to your for or against the resolution referred to in the notice as follows.	For		Against Abstain
Resolution 1	Ratification of Tranche 1 Placement
Resolution 2	Authorise Tranche 2 Placement
Resolution 3	Authorise Participation of Mr Gordon Sklenka
Resolution 4	Authorise Participation of Mr Roland Berzins
Resolution 5	Authorise Participation of Mr Alex Bajada
Resolution 6	Section 195 Approval
Authorised signature/s	your voting instructions to be implemented.	This section must be signed in accordance with the instructions overleaf to enable
Individual or Shareholder 1		Shareholder 2		Shareholder 3
Secretary	Sole Director and Sole Company	Director			Director/Company Secretary
Contact Name		Contact Daytime Telephone	Date
	Insert name and address of shareholder	2 Insert name and address of proxy			*Omit if not applicable

20070228 Notice of General Meeting for shares and options word format

Proxy Notes:

A Shareholder entitled to attend and vote at the Meeting may appoint a person or a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that Meeting. If the Shareholder is entitled to cast 2 or more votes at the Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that meeting, the representative of the corporation to attend the meeting must produce the appropriate Certificate of Appointment of Representation prior to admission. A form of the certificate may be obtained from the Company's share registry.

You must sign this form as follows in the spaces provided:

• Joint Holdina: where the holding is in more than one name all of the holders must sign.
• Power of Attorney: if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it.
• Companies: a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the Meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company's Share Registry.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received by facsimile transmission at the Registered office of the Company (1171 Hay Street, West Perth) or by post to PO Box 1922 West Perth WA 6872, or Facsimile (08) 9481 1155 if faxed from within Australia or +61 8 9481 1155 if faxed from outside Australia not less than 48 hours prior to the time of commencement of the Meeting (WDST).