PAINCHEK LTD — Governance Information 2012

Apr 26, 2012

MERAH RESOURCES LTD ACN 146 035 127 Level 2 79 Hay Street SUBIACO, WESTERN AUSTRALIA, 6008

T +61 892004436 F +61 8 92004437 E admin@merahresources.com.au

W merahresources.com.au

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SECURITIES TRADING POLICY

1. The board of directors of Merah Resources Limited (“ Merah ” or the “ Company ”) has adopted the following policy and procedure on dealing in Merah securities by the directors, officers and employees of Merah and its related bodies corporate. It also applies where appropriate to Company contractors and consultants. For the purposes of this Policy references to Merah or the Company include a reference to Merah and its related bodies corporate existing at the time.

2. This Policy imposes basic trading restrictions on all directors, officers and employees of the Company who possess inside or unpublished price sensitive information. In this Policy references to "directors, officers and employees of the Company" includes:

3. (a) all key management personnel of the Company as defined in Australian Accounting Standard AASB 124: Related Party Disclosure, being those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director of the Company; and

4. (b) all associates (as that term is defined in the Corporations Act 2001 (Cth) (“ Corporations Act ”)) of the directors, officers and employees of the Company which includes the family and spouse of the director, officer or employee and companies or trusts in which they have an interest or significant influence and control.

5. This Policy applies additional trading restrictions on “ Restricted Persons ” who are defined in this Policy as:

6. (a) all directors, officers and employees of the Company;

7. (b) all key management personnel of the Company as defined in Australian Accounting Standard AASB 124: Related Party Disclosure, being those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director of the Company; and

8. (c) any contractors or consultants of the Company considered appropriate by the managing director of the Company (“ Managing Director ”) or the chairperson of the Company (“ Chairperson ”) from time to time.

9. Restricted Persons generally hold positions where it can be assumed that they will have inside information regarding the Company.

INSIDER TRADING

Company Securities

1. Any person, including directors, officers and employees of the Company, who wishes to trade in Merah securities must first have regard to the statutory provisions of the Corporations Act dealing with insider trading. Insider trading is the practice of dealing in a company's securities (eg shares or options) by a person in possession of information that is not generally available, and if it were generally available a reasonable person would expect it to have a material effect on the price or value of the company’s securities. It will also include arranging for another person to trade, and the passing on of this information to another. Legally, it is an offence which carries severe penalties, including imprisonment.

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1. Examples of information which if generally available may have a material effect on the price or value of the Company’s securities depending on the circumstances includes:

2. (a) information concerning a proposed major acquisition or disposition of assets by the Company;

3. (b) a significant business development or a proposed change in the nature of the Company’s business;

4. (c) results of exploration or studies;

5. (d) details of material contracts that are being negotiated by the Company;

6. (e) an actual or proposed takeover or merger;

7. (f) potential litigation that would have a substantial effect on the Company;

8. (g) the financial performance of the Company;

9. (h) a proposed change in the share capital structure of the Company; and

10. (i) a major change to the board or senior management of the Company.

11. A person must not:

12. (a) buy or sell (or arrange for another person to buy or sell) any of the securities of a body corporate (including Merah) at any time when in possession of unpublished pricesensitive information in relation to those securities.

13. (b) “tip” or communicate unpublished price-sensitive information in relation to a body corporate (including Merah) to another person who will or is likely to trade in the securities of that body corporate.

Securities of Other Companies

1. The prohibition on insider trading applies not only to information concerning Merah securities. If a person has inside information in relation to securities of another company, that person must not deal in those securities.

Further Information

1. This Policy does not contain an exhaustive analysis of the restrictions imposed on, and the very serious legal ramifications of, insider trading. Directors, officers and employees or other Restricted Persons of the Company who wish to obtain further advice in this matter should contact the Company Secretary.

REQUIREMENTS BEFORE TRADING

1. In addition to the restrictions or requirements set out in the Corporations Act and this Policy, Restricted Persons should not deal or give instructions for dealing in Merah securities without:

2. (a) first providing written notice of the intention to deal (“ Clearance Request ”) to the Chairperson (and in the case of the Chairperson intending to deal, notice must be given to the Managing Director), which shall include a declaration that he or she is not in possession of inside information. The Clearance Request must outline the name of the security holder, proposed transaction type (sale, purchase etc) and number of securities involved;

3. (b) receiving a notice of receipt in return (“ Clearance Notice ”) stating that there is no reason to preclude the deal in Merah's securities as notified in the Clearance Request; and

4. (c) complying with any conditions on dealing imposed by the Chairperson (and in the case of the Chairperson intending to deal, conditions imposed by the Managing Director).

5. The Clearance Request and Clearance Notice must be evidenced by written communication which includes mail, email or facsimile and will generally be answered within 48 hours. Where clearance is obtained trading must occur within 7 days of the date of receipt of the Clearance Notice. The Company Secretary is to maintain a register of notifications and acknowledgements given in relation to trading in Merah’s securities.

6. Following completion of the proposed dealing, the Restricted Person in question must immediately provide confirmation to the Company Secretary that the dealing has occurred including details of the deal (eg price per security, date etc.). Directors of the Company must notify the Company Secretary of any dealings in Merah securities within 3 business days of the date of any such dealings in order to comply with the requirements of the Corporations Act and the ASX Listing Rules.

PROHIBITED TRADING PERIODS

1. In addition to the overriding prohibition against dealing in Merah's securities when a person is in possession of inside information, Restricted Persons are at all times prohibited from dealing in Merah securities during a Prohibited Period. A " Prohibited Period " for the purposes of this Policy means Closed Periods, any period imposed by Merah from time to time when the Company is considering matters which are subject to ASX Listing Rule 3.1A as resolved by the Board, and any other period as advised by Merah to ASX from time to time.

2. The " Closed Periods " for Merah are one week immediately leading up to, including, and the day after each of the following days:

3. (a) the day Merah's quarterly report is released;

4. (b) the day Merah’s half year financial report is released;

5. (c) the day Merah’s full year financial results are released; and

6. (d) the day of Merah’s annual general meeting.

7. The Closed Periods may be varied by the Merah's board of directors and circulated with appropriate notice to all Restricted Persons.

Exceptional Circumstances

1. In exceptional circumstances, and only in accordance with the procedure set out in paragraphs 10 to 12 of this Policy, a Restricted Person may be permitted to sell (but not to purchase) Merah’s securities during a Prohibited Period when that Restricted Person would be otherwise prohibited from doing so but not while there exists any matter which constitutes inside information in relation to Merah’s securities that has not been previously released at the time of the Clearance Notice.

2. Examples of circumstances where clearance may be given include severe financial hardship where the Restricted Person has a pressing financial commitment that cannot be satisfied other than by disposing of securities; or the sale or disposal of securities under a court order or court enforceable undertaking (such as a family court settlement).

3. The determination of whether exceptional circumstances exist for this purpose is made at the sole discretion of the person responsible for the Clearance Notice.

Application to Financial Products

1. In addition to Merah securities, the prohibitions on trading imposed by the Company and set out in this Policy will also apply to trading in any financial products issued or created over or in respect of Merah’s securities.

TRADING EXCLUDED FROM THIS POLICY

1. The following forms of trading activity are excluded from the operation of this Policy but remain subject to the insider trading provisions of the Corporations Act:

2. (a) transfers of securities which result in no change in the beneficial ownership of the securities;

3. (b) transfers of securities already held in a person’s own name into a superannuation fund or other saving scheme to which that person is a beneficiary;

4. (c) investments in, or trading in units of, a fund or other scheme (other than a scheme only investing in securities of the Company) where the assets of the fund or other scheme are invested at the discretion of a third party;

5. (d) where the Restricted Person is a trustee, trading in the Company’s securities by that trust provided that the Restricted Person is not a beneficiary of the trust and any decision made to trade during a Prohibited Period is taken by the other trustees or by the investment managers independently of the Restricted Person;

6. (e) trading under an offer or invitation made to all or most of the security holders such as a rights issue, a security purchase plan, a dividend or distribution reinvestment plan and an equal access buy-back, where the plan that determines the timing and structure of the offer has been approved by the Board. This includes decisions relating to whether or not to take up the entitlements and the sale of entitlements required to provide for the take up of the balance of entitlements under a renounceable pro rata issue;

7. (f) the application for an option or right under an employee incentive scheme, where the final date for the application of the option or right falls during a Prohibited Period and the Company has been in an exceptionally long Prohibited Period or the Company has had a number of consecutive Prohibited Periods and the Restricted Person could not reasonably have been expected to apply for the option or right at a time when free to do so;

8. (g) the exercise (but not the sale of securities following exercise) of an option or right under an employee incentive scheme, where the final date for the exercise of the option or right, or the conversion of the security, falls during a Prohibited Period and the Company has been in an exceptionally long Prohibited Period or the Company has had a number of consecutive Prohibited Periods and the Restricted Person could not reasonably have been expected to exercise it at a time when free to do so;

9. (h) trading under a non-discretionary plan for which prior written clearance has been provided in accordance with procedures set out in this Policy and where:

   • (i) the Restricted Person did not enter into the plan or amend the plan during a Prohibited Period; and

10. (ii) the trading plan does not permit the Restricted Person to exercise any influence or discretion over how, when, or whether to trade;

11. (i) acceptance of, or agreement to accept, a takeover offer; and

12. (j) disposal of securities that is a result of a secured lender exercising its rights, for example, under a margin loan agreement.

MARGIN LOAN ARRANGEMENTS

1. A Restricted Person who enters into a margin loan or similar funding arrangement in relation to Merah securities must bear in mind Merah’s obligation to disclose the existence and terms of those arrangements to the market where that information would, or would be likely to, have a material effect on the price or value of securities issued by Merah.

2. Accordingly, any Restricted Person who proposes to enter into a margin loan or similar funding arrangement (eg securities lending, non-discretionary trading plan) for Merah securities must first apply for and obtain prior written clearance in accordance with this Policy and immediately disclose the key terms of such arrangements to when so applying and to the Company Secretary.

3. Further, where there is, or the Restricted Person reasonably believes there will be, a margin call, event of default or other similar occurrence in relation to the arrangements, the Restricted Person must immediately inform the Company Secretary.

ADDITIONAL RESTRICTIONS ON SHORT TERM TRADING

1. The Company encourages Restricted Persons to take a long term approach to their investment in the Company’s securities. As a result Restricted Persons should not engage in trading of the Company’s securities that is short term or speculative.

GENERAL

1. The requirements imposed by this Policy are separate from and additional to the legal prohibitions in the Corporations Act on insider trading.

2. This is an important document. It is the personal responsibility of each individual who is covered by its terms to read this Policy carefully, familiarise themselves with it terms and to comply with this Policy. If you do not understand any aspect of this Policy, or require further information, it is strongly recommended that you contact the Company Secretary.

3. All Company directors, officers and employees will be provided with a copy of this Policy and, within 21 days of request, each such person is required to return a copy of this Policy with a signed (a) acknowledgement that they have received, read and considered the Policy and (b) undertaking that they undertake without qualification to comply with the letter and spirit and intent in all their dealings with the Company.

4. All Company directors, officers and employees have a personal responsibility to ensure their associates (as defined under the Corporations Act) comply with the restrictions applicable to their associates under this Policy.

5. The Company regards a breach of this Policy as a serious matter that warrants investigation and may lead to appropriate remedial or disciplinary action.