PATERSON RESOURCES LTD — Capital/Financing Update 2018

Aug 23, 2018

HARDEY RESOURCES LIMITED

ASX ANNOUNCEMENT 24 August 2018

Manager of Company Announcements ASX Limited Level 40, Central Park 152-158 St George's Terrace PERTH WA 6000

By E-Lodgement

NOTICE UNDER SECTION 708A(5)(e) OF THE CORPORATIONS ACT

The Directors provides a notice for the purposes of section 708A(5)(e) of the Corporations Act 2001.

The Shares and Listed Options (Securities) the subject of the attached Appendix 3B are part of a class of securities quoted on ASX and may be subject to a subsequent offer for sale. The Company issued the Securities above without a disclosure document to investors under Part 6D.2 of the Corporations Act.

The Company, as at the date of this notice, has complied with:

• (a) the provisions of Chapter 2M of the Corporations Act; and
• (b) section 674 of the Corporations Act.

There is no excluded information, as defined in sections 708A(7) and 708A(8) of the Corporations Act, as at the date of this notice.

For and on behalf of the Board

Sarah Smith (Company Secretary)

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

HARDEY RESOURCES LIMITED

ABN

45 115 593 005

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

• 1 +Class of +securities issued or to be issued
• 1. Fully paid ordinary shares 2. Listed Options
• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)
• 1. 1,287,500,000 2. 1,287,500,000
• 1. Fully paid ordinary shares
• 1. Listed Options exercisable at $0.02; expiry 30 April 2020)

+ See chapter 19 for defined terms.

4 Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities?

If the additional +securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)

6a Is the entity an +eligible entity that has obtained security holder approval under rule 7.1A?

If Yes, complete sections 6b – 6h in relation to the +securities the subject of this Appendix 3B, and comply with section 6i

1. Yes

2. No – Upon exercise and conversion into ordinary shares the securities will rank equally

• 5 Issue price or consideration 1. Deemed issue price of $0.004 per share 2. Nil – free attaching options
  • 1. As per the announcement lodged with ASX on 24 August 2018, the shares were issued as consideration for the acquisitions of Nelly Vanadium Pty Ltd and Vanadium Mining Pty Ltd as detailed in the Notice of Meeting lodged with ASX on 25 July 2018. The shares were approved by shareholders at the General Meeting held 24 August 2018.
  • 1. As per the announcement lodged with ASX on 24 August 2018, the listed options were issued as consideration for the acquisitions of Nelly Vanadium Pty Ltd and Vanadium Mining Pty Ltd as detailed in the Notice of Meeting lodged with ASX on 25 July 2018. The options were approved by shareholders at the General Meeting held 24 August 2018

Yes

+ See chapter 19 for defined terms.

• 6b The date the security holder resolution under rule 7.1A was passed
• 6c Number of +securities issued without security holder approval under rule 7.1
• 6d Number of +securities issued with security holder approval under rule 7.1A
• 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• 6f Number of +securities issued under an exception in rule 7.2
• 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.
• 6h If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements

7 +Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix

15 November 2017

Nil

Nil

1,287,500,000 Fully paid ordinary shares 1,287,500,000 Listed Options exercisable at $0.02; expiry 30 April 2020)

N/A

N/A

N/A

7.1: 393,286,125

7.1A: 264,574,083 Total: 657,860,208

24 August 2018

Number +Class

+ See chapter 19 for defined terms.

8	+classNumberandofall	2,649,315,830	Fully paid ordinary shares
	+securitiesquotedonASX+securities(includingtheinsection 2 if applicable)	2,100,384,346	Listed Options ($0.02; 30 April2020) (HDYOC)

+ See chapter 19 for defined terms.

		Number	+Class
9	+classNumberandofall+securities not quoted on ASX+securities(includingtheinsection 2 if applicable)	45,525,000	Options exercisable at$0.06centseachexpiring 19 August 2020
		3,401,578	Options exercisable at$0.044 each expiring 1October 2020

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

There is currently no dividend policy for the Company

Part 2 - Pro rata issue

11	Issecurityholderapprovalrequired?
12	Is the issue renounceable or nonrenounceable?
13	Ratio in which the +securities willbe offered
14	+Class of +securities to which theoffer relates
15	+Recorddatetodetermineentitlements
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?
17	Policy for deciding entitlementsin relation to fractions
18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocuments
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.

+ See chapter 19 for defined terms.

Appendix 3B New issue announcement

19	Closingdateforreceiptofacceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting feeor commission
22	Names of any brokers to the issue
23	Fee or commission payable to thebroker to the issue
24	Amountofanyhandlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of security holders
25	If the issue is contingent onsecurity holders' approval, thedate of the meeting
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled
27	If the entity has issued options,and the terms entitle optionholders to participate on exercise,the date on which notices will besent to option holders
28	Date rights trading will begin (ifapplicable)
29	Date rights trading will end (ifapplicable)
30	How do security holders sell theirentitlements in fullthrough abroker?
31	How do security holders sell partof their entitlements through abrokerandacceptforthebalance?
32	How do security holders disposeof their entitlements (except bysale through a broker)?
33	+Issuedate

+ See chapter 19 for defined terms.

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of +securities (tick one)
• (a) +Securities described in Part 1 (b) All other +securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders – To be advised when issued
• 36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories – To be advised when issued 1 - 1,000 1,001 - 5,000
  • 5,001 10,000 10,001 - 100,000 100,001 and over
• 37 A copy of any trust deed for the additional +securities

+ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

• 38 Number of +securities for which +quotation is sought
• 39 +Class of +securities for which quotation is sought
• 40 Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities?

If the additional +securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another +security, clearly identify that other +security)

42 Number and +class of all +securities quoted on ASX (including the +securities in clause 38)

Number	+Class

			+ See chapter 19 for defined terms.

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here:	Company secretary	Date:24 August2018
Print name:	Sarah Smith
	== == == == ==

+ See chapter 19 for defined terms.

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

	Rule 7.1 –Issues exceeding 15% of capital
	Step1: Calculate "A", the base figure from which the placement capacity iscalculated
Insert number of fully paid +ordinary securitieson issue 12 months before the +issue date ordate of agreement to issue		110,273,966 (post April 2017 consolidation)
Add the following:Number of fully paid +ordinary securities•		300,000,000 shares issued 21 July 2017(approved by shareholders on 21 April 2017)
	issued in that 12 month period under anexception in rule 7.2	26,000,000 ordinary shares issued 21 July 2017(approved by shareholders on 15 November2017)
•	Number of fully paid +ordinary securitiesissued in that 12 month period withshareholder approval	12,800,000 ordinary shares issued 16 August2017 (Share Purchase Plan)
	Number of partly paid +ordinary securitiesthat became fully paid in that 12 monthperiod	53,000,006 ordinary shares issued on 30October 2017 (approved by shareholders on 15November 2017)
•	Note:Include only ordinary securities here –other classes of equity securities cannot beaddedInclude here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexedIt may be useful to set out issues ofsecurities on different dates as separateline items	11,111,111 ordinary shares issued on 30October 2017 (approved by shareholders on 15November 2017)
••		113,666,659 ordinary shares issued on 17November 2017 (approved by shareholders on15 November 2017)
		277,777,777 ordinary shares issued on 15November 2017 (approved by shareholders on15 November 2017)
		111,111,111 ordinary shares issued on 02March 2018 (conversion of performance sharesapproved by shareholders on 15 November2017)
		148,747,837 ordinary shares issued 20 March2018 (ratified by shareholders on 30 April 2018)
		168,295,750 ordinary shares issued 04 May2018 (approved by shareholders on 30 April2018)
		25,456,613 ordinary shares issued 04 May 2018(approved by shareholders on 30 April 2018)

+ See chapter 19 for defined terms.

	1,287,500,000 shares issued 24 August 2018
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod
"A"	2,645,740,830

Step 2: Calculate 15% of "A"
"B"	0.15[Note: this value cannot be changed]
Multiply "A" by 0.15	396,861,125
7.1 that has already been used	Step 3: Calculate "C", the amount of placement capacity under rule
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod not counting those issued:•Under an exception in rule 7.2•Under rule 7.1A•With security holder approval underrule 7.1 or rule 7.4Note:•This applies to equity securities, unless	3,575,000 shares issued 30 November2017
specifically excluded – not just ordinarysecurities•Include here (if applicable) thesecurities the subject of the Appendix3B to which this form is annexed•It may be useful to set out issues ofsecurities on different dates asseparate line items
"C"	3,575,000
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15Note: number must be same as shown inStep 2	396,861,125
Subtract "C"	3,575,000

Note: number must be same as shown in Step 3

+ See chapter 19 for defined terms.

Total ["A" x 0.15] – "C"	393,286,125
	Note: this is the remaining placementcapacity under rule 7.1

+ See chapter 19 for defined terms.

Part 2

Rule 7.1A –Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"Note: number must be same as shown inStep 1 of Part 1	2,645,740,830
Step 2: Calculate 10% of "A"
"D"	0.10Note: this value cannot be changed
Multiply "A" by 0.10	264,574,083
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod under rule 7.1ANotes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates asseparate line items
"E"	Nil

+ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10Note: number must be same as shown inStep 2	264,574,083
Subtract "E"Note: number must be same as shown inStep 3	Nil
Total ["A" x 0.10] – "E"	264,574,083Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.