PATERSON RESOURCES LTD — Capital/Financing Update 2018

May 15, 2018

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HARDEY

RESOURCES LIMITED

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ASX ANNOUNCEMENT 16 May 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 PLACEMENT – TRANCHE 2

Further to the announcement lodged with ASX on 7[th] May 2018, Hardey Resources Limited (“Hardey” or “the Company”) (ASX: HDY) advises that it has today issued 25,456,613 fully paid ordinary shares at $0.004 per share being the remaining Tranche 2 Placement Shares in relation to the Placement announced to ASX on 16 March 2018. In addition, the Company has issued 25,456,613 Listed Options exercisable at $0.02 on or before 30 April 2020 (HDYOC), being the free attaching Listed Options issued on a 1:1 basis to the Placement Shares.

The Tranche 2 Placement Shares and Listed Options were approved by shareholders at the General Meeting held 30 April 2018.

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

The Shares and Listed Options ( Securities ) above 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. An Appendix 3B in respect to the Securities issued is attached.

ASX Announcement 16 May 2018

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For and on behalf of the Board

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Sarah Smith (Company Secretary)

2

www.hardeyresources.com.au

Appendix 3B New issue announcement

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 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. Fully paid ordinary shares 2. Listed Options
	1. 25,456,613 2. 25,456,613
	1. Fully paid ordinary shares 2. Listed Options exercisable at $0.02; expiry 30 April 2020)

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

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 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	1. Yes 2. No – Upon exercise and conversion into ordinary shares the securities will rank equally
	1. $0.004 per share 2. Nil – free attaching options
	1. Tranche 2 of Placement to Professional and Sophisticated investors as announced to ASX on 16 March 2018. Funds raised under the Placement are intended to be used to further the Company’s exploration efforts for Hardey’s existing projects, primarily the Burraga Project including recommencement of the Burraga drilling programme. In addition, the funds are intended to be used to for maintenance and potential exploration at the Company’s gold and base metal projects located in the Pilbara region of Western Australia, being the Bellary, Hamersley, Cheela and Elsie North Projects, covering 512km² of Fortescue Group Rocks, as well as the Grace Project located in the Paterson Province in Western Australia, together with general working capital and project generation. The Tranche 2 shares were approved by shareholders at the General Meeting held 30 April 2018 2. Free attaching Listed Options to the abovementioned Placement as announced to ASX on 16 March 2018 issued on a 1:1 basis. The Listed Options were approved by shareholders at a General Meeting held 30 April 2018

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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 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	Yes
	15 November 2017
	Nil
	Nil
	25,456,613 Fully paid ordinary shares 25,456,613 Listed Options exercisable at $0.02; expiry 30 April 2020)
	N/A
	N/A
	N/A
	7.1: 200,161,125 7.1A: 135,824,083 Total: 335,985,208

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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 8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable)	16 May 2018
	Number	+Class
	1,361,815,330 818,797,372	Fully paid ordinary shares Listed Options ($0.02; 30 April 2020) (HDYOC)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	45,525,000 3,401,578	Options exercisable at $0.06 cents each expiring 19 August 2020 Options exercisable at $0.044 each expiring 1 October 2020
	There is currently no dividend policy for the Company

Part 2 - Pro rata issue

11	Is security holder	approval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the+securities will
	be offered
14	+Class of+securities to which the
	offer relates
15	+Record date to	determine
	entitlements
16	Will holdings on	different
	registers (or subregisters) be
	aggregated for	calculating
	entitlements?
17	Policy for deciding entitlements
	in relation to fractions
18	Names of countries in which the
	entity has security holders who
	will not be sent	new offer
	documents
	Note: Security holders must be	told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the issue
23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of security holders
25	If the issue is contingent on
	security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and offer documents will be
	sent to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on exercise,
	the date on which notices will be
	sent to option holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do security holders sell their
	entitlements_in full_through a
	broker?
31	How do security holders sell_part_
	of their entitlements through a
	broker and accept for the
	balance?
32	How do security holders dispose
	of their entitlements (except by
	sale through a broker)?
33	+Issue date

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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.

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Appendix 3B New issue announcement

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

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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: Date: 16 May 2018 Company secretary

Print name: Sarah Smith

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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

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

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Insert number of fully paid[+] ordinary securities 110,273,966 (post April 2017 consolidation) on issue 12 months before the[+] issue date or date of agreement to issue

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the+issue date or date of agreement to issue	110,273,966 (post April 2017 consolidation)
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid +ordinary securities issued in that 12 month period with shareholder approval Number of partly paid +ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	300,000,000 shares issued 21 July 2017 (approved by shareholders on 21 April 2017) 26,000,000 ordinary shares issued 21 July 2017 (approved by shareholders on 15 November 2017) 12,800,000 ordinary shares issued 16 August 2017 (Share Purchase Plan) 53,000,006 ordinary shares issued on 30 October 2017 (approved by shareholders on 15 November 2017) 11,111,111 ordinary shares issued on 30 October 2017 (approved by shareholders on 15 November 2017) 113,666,659 ordinary shares issued on 17 November 2017 (approved by shareholders on 15 November 2017) 277,777,777 ordinary shares issued on 15 November 2017 (approved by shareholders on 15 November 2017) 111,111,111 ordinary shares issued on 02 March 2018 (conversion of performance shares approved by shareholders on 15 November 2017) 148,747,837 ordinary shares issued 20 March 2018 (ratified by shareholders on 30 April 2018) 168,295,750 ordinary shares issued 04 May 2018 (approved by shareholders on 30 April 2018) 25,456,613 ordinary shares issued 04 May 2018 (approved by shareholders on 30 April 2018)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Subtractthe number of fully paid+ordinary securities cancelled during that 12 month period
“A”	1,358,240,830

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	203,736,125
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	3,575,000 shares issued 30 November 2017
“C”	3,575,000
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	203,736,125
Subtract“C” Note: number must be same as shown in Step 3	3,575,000

placement capacity under rule 7.1
“A” x 0.15	203,736,125
Note: number must be same as shown in
Step 2
Subtract“C”	3,575,000
Note: number must be same as shown in
Step 3

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Total [“A” x 0.15] – “C” 200,161,125 Note: this is the remaining placement capacity under rule 7.1

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Part 2	Part 2
Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” Note: number must be same as shown in Step 1 of Part 1	1,358,240,830
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	135,824,083
Step 3: Calculate “E”, the amount 7.1A that has already been used	of placement capacity under rule
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items
“E”	Nil

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	135,824,083
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	135,824,083 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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