ORBMINCO LIMITED — Capital/Financing Update 2017

Mar 15, 2017

Our Ref: 7AUS017V:s439A report Contact: Jiin Herng Choong E-mail: jhchoong@wais.com.au

14 March 2017

CIRCULAR TO CREDITORS

Dear Sir/Madam

Level 49, 108 St George's Terrace Perth WA 6000

GPO Box E241 66 St George's Terrace Perth WA 6000 Tel 08 9463 3000

admin@wais.com.au www.wais.com.au

ABN 57 045 615 571

RE: AUSROC METALS LTD (IN LIQUIDATION) (ADMINISTRATORS APPOINTED) ACN 073 155 781 ("the Company")

I refer to the above matter and my Circular to Creditors dated 13 March 2017, including the Report by Joint and Several Voluntary Administrators ("the Administrators' Report").

I note that pages 6 to 8 of Annexure A to the Administrators' Report being the DOCA proposal were missing.

Please find enclosed the DOCA proposal in full.

Should you wish to discuss this further, please contact Ms Jiin Herng Choong of my office on (08) 9463 3034.

Yours faithfully, דאוווו ח

ADMINISTRATOR

Encls.

nuaetto ferficial stabucanuas.

over 24, standards toward 44 st reprudis to each partir westen australia 8000

491-39 6211 Surge

491-79 9218 587 5

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13 March 2017

Commercial in Confidence

Ausroc Metals Limited (In Liquidation) (Administrators Appointed) WA Insolvency Solutions Level 10, 111 St George's Terrace Perth WA 6000

Attn: Trudie Walsh

By Email to: twalsh@wais.com.au

Dear Trudie,

Ausroc Metals Limited (In Liquidation) (Administrators Appointed) ("ARK" or the "Company")

Recapitalisation Proposal

I refer to the appointment of Chris Williamson and David Hurt of WA Insolvency Solutions as Joint & Several Official Liquidators ("Liquidators") of the Company on 23 August 2016 and as Voluntary Administrators on 9 February 2017.

The purpose of this communication is to provide you with a recapitalisation proposal for the Company (Appendix A) with accompanying standard clauses (Appendix B) and supporting information as to our experience and capabilities (Appendix C).

In brief our proposal is for the shell structure of the Company, for which we propose paying a total of AU\$425,000 cash as follows, subject to certain conditions being met:

• \$425,000 payable within 14 days of the latter of:
• o execution of the DOCA:
• o The Court prospectively approving the termination of the Liquidation simultaneously with the effectuation of the DOCA (subject to shareholder approval, receipt of the \$425,000 and distribution of funds); and
• Shareholder approval of all resolutions. $\circ$

Trident would also be responsible for paying the legal fees incurred in making the application to Court to terminate the liquidation.

The proposal is not dependent upon the completion of any fund raisings.

We look forward to moving ahead with the recapitalisation as quickly as possible. Please contact Sean McCormick or myself on (08) 6211 5099 to discuss any aspect of this proposal.

Yours faithfully,

Adam Sierakowski Director

tridentcapital www.tridentcapital.com.au
Mob 0403 322 111 Ph (61-8) 6211 5099 Fax: (61-8) 9218 8875

APPENDIX A

Trident Capital Pty Ltd (or its nominees) (the "Proponent") hereby proposes to re-capitalise the Company on the following basis.

• 1. DOCA
• Establishment of a Deed of Company Arrangement ("DOCA") $1.1₁$ binding all parties to the terms of this Proposal.
• An aggregate amount of \$425,000 will be made available to the $1.2.$ Administrator for the settlement of all costs associated with the Administrator to effectuate this proposal as well as all creditor claims under the DOCA.
• Any assets and subsidiaries held by the Company shall be $1.3.$ disposed of for the benefit of Administrator's Costs and Creditors.
• If the sale of the entities mentioned in 1.3 above is not achievable $1.4.$ then Trident would review further these assets to ascertain whether any of the assets were of further interest. In the absence of further interest Trident would request that these entities be liquidated or transferred to another entity that may wish to acquire these entities.

2. APPLICATION TO TERMINATE THE LIQUIDATION

• $2.1$ The Administrators will engage a lawyer nominated by Trident ("Nominated lawyer") to undertake the application to Court to terminate the liquidation.
• $2.2$ Trident will pay the legal fees incurred by the Nominated Lawyer in making an application to the Court to terminate the Liquidation.
• $2.3$ The Administrators must bear their own expenses incurred, if any, in providing information necessary for the application to Court to terminate the Liquidation to the Nominated Lawyer.

3. LISTING FEES

• $3.1$ Any outstanding ASX Listing Fees, including any ASX Listing Fees that become payable before the DOCA is effectuated are to be paid as a priority from the \$425,000 made available to the Administrators trust account.
• $3.2$ Any outstanding ASX Listing Fees, including any ASX Listing Fees that become payable before the \$425,000 is made available to the Administrators trust account shall be paid by Trident and will reduce the amount payable by Trident to the Administrators trust account by the equivalent amount.

4. EFFECTUATION OF DOCA

A total of \$425,000 will be paid to the Administrators trust account $4.1$ to effectuate the DOCA, subject to clause 3 above, as follows:

$4.1.1$ \$425,000 payable within 14 days of the latter of Shareholder approval of the DOCA, the Reconstruction Deed arrangements, execution of the DOCA and the Court prospectively approving the termination of the Liquidation simultaneously with the effectuation of the DOCA

5. RECAPITALISATION PROPOSAL

Capital Structure

• $5.1$ Any existing Convertible Notes to prove as debt;
• $5.2$ The Company is to consolidate its capital on a 1 for 200 basis such that the existing 304,773,963 shares (or such other number as is the actual number of shares on issue) be reconstructed to 1,523,869 shares;
• 5.3 Any existing listed options to be reconstructed on a similar basis, and any unlisted options or partly paid shares are to be cancelled.

Funding

• 5.4 The DOCA proposal is not contingent upon the completion of any fundraisings, however it is contingent upon successful Shareholder approval to conduct each of the following capital raisings ("Raisings"):
• $5.4.1$ Issue of at least 750,000 shares at \$0.02 per share to raise at least \$15,000, with securities to be issued immediately following Shareholder approval ("Promoter Raising") The Promoter Raising may be conducted by way of convertible note or share placement at Trident's discretion;

Each Promoter Raising security shall have 9 free attaching options exercisable at not less than \$0.04 in certain periods, to be defined, up until their expiry, which is to be not greater than 4 years following the date of reinstatement of the Company; and

$5.4.2$ Issue of between 25,000,000 shares and 37,500,000 shares at \$0.02 per share to raise between \$500,000 and \$750,000, with securities to be issued immediately following Shareholder approval ("Seed Raising"). The Seed Raising may be conducted by way of convertible note or share placement at Trident's discretion.

The Proponent will undertake these Raisings at its own expense (which it shall be entitled to be reimbursed by the Company from the proceeds of Capital Raisings) once shareholder the I resolutions are passed. Prospective investors will predominantly be those introduced by the

Proponent in association with a syndicate of brokers and high net worth individuals

5.5 In aggregate \$425,000 shall be made available to the Company's Creditors, subject to clause 3 above.

New Board

• The Administrator must procure the resignation of all existing 5.6 directors of the Company and its subsidiaries on or before dispatch of the Notice of Meeting, or other period as requested by Trident.
• The Proponent shall procure the appointment of not less than 5.7 three new directors to be appointed on or before dispatch of the Notice of Meeting, or other period as requested by Trident.

6. CONDITIONS PRECEDENT

The binding offer is conditional on and subject to the following:

• The passing of all necessary shareholder, creditor and Court 6.1 approvals to implement the proposal.
• All secured creditors providing their written consent to be bound $6.2$ by the reconstruction deed.
• The parties executing a reconstruction deed to give legal effect to 6.3 this binding offer within 30 days of the date of acceptance of the binding offer.

If the conditions are not waived by mutual written agreement or satisfied by 31 October 2017, this binding offer will be at an end.

7. COSTS AND EXPENSES

• $7.1$ The Proponent must at its own expense (which it shall be entitled to be reimbursed by the Company out of the proceeds of the Capital Raisings) promptly prepare or procure the following documents or approvals.
• Shareholder meeting documents to give effect to the $7.1.1$ resolutions required to undertake the proposal.
• $7.1.2$ Any ASIC lodgements or approvals.
• $7.1.3$ Completion of all outstanding taxation and audit requirements (subject to required information being available).
• $7.1.4$ Draft DOCA and Reconstruction Deed for consideration and execution.

The meeting resolutions are to be inter-dependent and it will be a requirement that all resolutions be approved to give effect to the proposal.

$7.2$ The Administrator must bear its own costs of and incidental to the negotiation, review and execution of the DOCA, Reconstruction Deed and application to Court to terminate the Liquidation.

8. PROPOSED TIMETABLE

The Proponent is prepared to work towards the following proposed timeline. This timeline is indicative only and is dependent upon the timing of the
Administrators' report to Creditors and application to terminate the
Liquidation and subject to compliance with all regulatory requirements:

Proposed Event Sequence
Preparation of draft DOCA, reconstruction deed
Administrators' report to Creditors
Lodge application to terminate Liquidation
Creditors' Meeting
Execution of DOCA
Court approval to prospectively terminate the Liquidation received
Dispatch of Notice of Shareholder Meeting
Shareholders Meeting held and Shareholder approval received
Pay \$425k to Administrators trust account
Distributions made to creditors by Administrators
Liquidation terminated
Effectuation of DOCA

APPENDIX B

Distribution of Funds

• The monies paid to and held by the Deed Administrators will be utilised be 1. applied (with reference to sections 556, 560 and 561 of the Act) in the manner and order of priority as follows:
• a. To pay any liabilities properly incurred by the Liquidators, Administrators and Deed Administrators during the course of the liquidation, administration and the DOCA:
• b. To pay the Official Liquidators, Administrators and Deed Administrators' remuneration and out of pocket expenses in the course of them carrying out their duties:
• c. To pay any outstanding employee entitlements as at 10 February 2017;
• d. To pay any secured creditors of the Company as at 10 February 2017; and
• e. To pay dividends to the unsecured creditors of the Company whose debts and claims arose on or before 10 February 2017 and are admitted to proof.
• Section 444DB of the Act applies to the DOCA. $2.$
• 1. Secured creditors will release the Company of any and all debts and security over the Company.
• Secured creditors and unsecured creditors will accept the dividend that arises on $\overline{4}$ . the completion of all terms of the DOCA in full and final satisfaction of their claims against the Company.

Default

• If a payment under the DOCA is not made or an obligation/undertaking not 5. performed then the Deed Administrators may give the relevant party written notice to remedy the default within fourteen (14) days.
• 1. If any default is not remedied within the requisite time, the Deed Administrators may at their discretion make a written declaration that in their opinion the DOCA is unable to be fulfilled and the DOCA will then automatically terminate.

Termination

• The DOCA will terminate and the appointment of the Deed Administrators will 7. come to an end on any of the following events:
• a. successful completion of the terms of the DOCA.
• b. written declaration by the Deed Administrators in accordance with clause 6.
• the application by the Deed Administrators of the relevant termination $\mathbf{c}$ . provisions of the Act.

Any other terms

That any other terms and conditions considered necessary by the Administrators or their solicitors be incorporated so as to give effect to the DOCA.

APPENDIX C

TRIDENT'S EXPERIENCE http://www.tridentcapital.com.au/

Trident Capital Pty Ltd ("Trident") is a Corporate Advisory company based in Perth and is experienced in the reconstruction, recapitalisation and reinstatement on the ASX of companies. Trident is associated with Price Sierakowski Corporate, a legal firm that has worked with us on the transactions noted below.

• Supersorb Resources NL now Nucoal Resources Limited (ASX: NCR)
• Western Kingfish Limited now Cleveland Mining Limited (ASX: CDG)
• Comdek Limited now Resource Generation Limited (ASX: RES)
• Maverick Energy Limited now Triangle Energy (ASX: TEG)
• Lafayette Mining Limited now Voyager Resources Limited (ASX: VOR)
• Soil Sub Limited (ASX: SOI)
• Safety Medical Products Limited now 3D Medical Limited (ASX: 3DM)
• Coziron Resources Limited (ASX: CZR)
• Narhex Life Sciences Ltd (ASX: NLS) now ResApp Health Ltd (ASX: RAP)
• Oz Brewing Limited (ASX: OZB) now 333D Limited (ASX: T3D)
• MvATM Holdings Limited (ASX: MYA) now iWebGate Limited (ASX: IWG)
• Cell Aquaculture Limited (ASX: CAQ) Now CAQ Holdings Ltd (ASX: CAQ)
• Windimurra Vanadium Limited (ASX: WVL)
• Reclaim Industries Limited (ASX: RCM) now Rision Limited (ASX: RNL)
• Leopard Resources NL (ASX: LRR) Now G8 Communications Ltd (G8C)
• Oz Brewing Limited (ASX: OZB) Now 333D Limited (ASX: T3D)

We believe our experience and execution success should be a critical part of the Administrator and creditor decision process as:

• the timely and successful execution of the DOCA process provides an earlier, and assured, return to creditors;
• a changing environment exists within the ASX in relation to reinstatement of these companies, and one which our recent history shows we have clearly managed well. The Company may only get one chance at reinstatement, and it needs to be done correctly. Trident has never failed to complete a reconstruction; and
• our proven ability to manage all aspects of the process with lawyers experienced in this area ensures reduced costs and work for the Administrator and hence improved returns for creditors.