ELYSIUM RESOURCES LIMITED A B N 4 5 1 1 5 5 9 3 0 0 5

NOTICE OF GENERAL MEETING AND EXPLANATORY STATEMENT

General Meeting to be held at Ming Room, Level 2, 3 Spring Street, Sydney NSW 2000 on Friday 19[th] August 2016 commencing at 11am (AEST)

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR ATTENTION.

This Notice of General Meeting and Explanatory Statement should be read in its entirety. If Shareholders are in doubt as to how to vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of Shareholders of Elysium Resources Limited (ACN 115 593 005) (“Company”) will be held at Ming Room, Level 2, 3 Spring Street, Sydney NSW 2000 on Friday 19[th] August 2016 commencing at 11am (AEST).

Where not otherwise defined, capitalised terms used in this Notice have the meanings given to those terms in the Glossary on page 19 of the accompanying Explanatory Statement.

2 Notice of General Meeting (setting out the proposed resolutions)
7 Explanatory Statement (explaining the proposed resolutions)
19 Glossary
21 Schedule 1 23 Schedule 2 25 Schedule 3
27 Schedule 4 Proxy Form (attached)

ORDINARY BUSINESS

1. Resolution 1 – Approval of Placement of 250,000,000 Ordinary shares

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“That for the purposes of ASX Listing Rule 7.4, shareholders ratify and approve the previous issue of 250,000,000 fully paid ordinary shares as detailed in the Explanatory Memorandum annexed to and forming part of this Notice of Meeting.“

Voting Exclusion

The Company will disregard any votes cast on this Resolution 1 by any person who participated in the issues of ordinary shares described in the Explanatory Memorandum and any of their associates. However the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

2. Resolution 2 – Share Placement (to raise up to $5m)

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“That for the purposes of ASX Listing Rule 7.1 and all other purposes, approval is given for the issue and allotment of up to 500,000,000 Post-Consolidation Shares, and 250,000,000 Options to purchase Post-Consolidation Shares, for at least $0.01 per Post-Consolidation Share, with one Option over a Post-Consolidation Share attaching to every two shares issued, on the terms and conditions set out in the Explanatory Statement”

Voting Exclusion

The Company will disregard any votes cast on this Resolution 2 by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed. However the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

3. Resolution 3 – Grant of Options to Brokers and Financial Advisers

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“ That for all purposes under ASX Listing Rule 7.1 and all other purposes, approval is given for the issue and allotment of up to 50,000,000 Options to purchase Post-Consolidation Shares to certain brokers and financial service providers identified by the Board, on the terms and for the purposes set out in the Explanatory Statement. ”

Voting Exclusion

In accordance with ASX Listing Rule 7.1, the Company will disregard any votes cast on this resolution by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, if the resolution is passed. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

4. Resolution 4 – Consolidation of Share Capital (1 for 25)

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“That, for the purposes of Section 254H of the Corporations Act 2001 (Cth) and for all other purposes, the issued capital of the Company be consolidated on a one for twenty-five basis, with any fractions rounded up to the nearest whole number.”

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

5. Resolution 5 – Grant of Options to Mr Maxim James Carling

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“ That for all purposes under the Corporations Act 2001(Cth) (including section 208) and the Listing Rules of the ASX Limited (including Listing Rule 10.11) and for all other purposes, approval be given and the Company be authorised to issue to Mr Maxim James Carling or his nominee Options to purchase Post-Consolidation Shares, in the quantity, on the terms and for the purposes set out in the Explanatory Memorandum annexed to and forming part of this Notice of Meeting. ”

Voting Exclusion

In accordance with ASX Listing Rule 14.11 and section 224 of the Corporations Act 2001 (Cth) the Company will disregard any votes cast on this resolution by Mr Maxim James Carling and any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

Voting Prohibition Statement :

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) a member of the Key Management Personnel; or

(b) a Closely Related Party of such a member.

However, a person described above may vote on this Resolution if:

(a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and

(b) the vote is not cast on behalf of a person described in sub-paragraphs (a) or (b) above.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

6. Resolution 6 – Grant of Options to Mr Michael Douglas Tilley

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“ That for all purposes under the Corporations Act 2001(Cth) (including section 208) and the Listing Rules of the ASX Limited (including Listing Rule 10.11) and for all other purposes, approval be given and the Company be authorised to issue to Mr Michael Douglas Tilley or his nominee Options to purchase Post-Consolidation Shares, in the quantity, on the terms and for the purposes set out in the Explanatory Statement annexed to and forming part of this Notice of Meeting. ”

Voting Exclusion

In accordance with ASX Listing Rule 14.11 and section 224 of the Corporations Act 2001 (Cth) the Company will disregard any votes cast on this resolution by Mr Michael Douglas Tilley and any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

Voting Prohibition Statement :

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) a member of the Key Management Personnel; or

(b) a Closely Related Party of such a member. However, a person described above may vote on this Resolution if:

(a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and

(b) the vote is not cast on behalf of a person described in sub-paragraphs (a) or (b) above.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

7. Resolution 7 – Grant of Options to Mr Robin Armstrong

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“ That for all purposes under the Corporations Act 2001(Cth) (including section 208) and the Listing Rules of the ASX Limited (including Listing Rule 10.11) and for all other purposes, approval be given and the Company be authorised to issue to Mr Robin Armstrong or his nominee Options to purchase Post-Consolidation Shares, in the quantity, on the terms and for the purposes set out in the Explanatory Statement annexed to and forming part of this Notice of Meeting. ”

Voting Exclusion

In accordance with ASX Listing Rule 14.11 and section 224 of the Corporations Act 2001 (Cth) the Company will disregard any votes cast on this resolution by Mr Robin Armstrong and any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

Voting Prohibition Statement :

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) a member of the Key Management Personnel; or

(b) a Closely Related Party of such a member.

However, a person described above may vote on this Resolution if:

(a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and

(b) the vote is not cast on behalf of a person described in sub-paragraphs (a) or (b) above.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

8. Resolution 8 – Grant of Options to Mr Terence Clee

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“ That for all purposes under the Corporations Act 2001(Cth) (including section 208) and the Listing Rules of the ASX Limited (including Listing Rule 10.11) and for all other purposes, approval be given and the Company be authorised to issue to Mr Terence Clee or his nominee Options to purchase Post-Consolidation Shares, in the quantity, on the terms and

for the purposes set out in the Explanatory Statement annexed to and forming part of this Notice of Meeting. ”

Voting Exclusion

In accordance with ASX Listing Rule 14.11 and section 224 of the Corporations Act 2001 (Cth) the Company will disregard any votes cast on this resolution by Mr Terence Clee and any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

Voting Prohibition Statement :

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) a member of the Key Management Personnel; or

(b) a Closely Related Party of such a member.

However, a person described above may vote on this Resolution if:

(a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and

(b) the vote is not cast on behalf of a person described in sub-paragraphs (a) or (b) above.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

9. Resolution 9 – Grant of Options to Mr Mark Theodore Ohlsson

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“ That for all purposes under ASX Listing Rule 7.1 of the ASX Limited and for all other purposes, approval be given and the Company be authorised to issue to Mr Mark Theodore Ohlsson or his nominee Options to purchase Post-Consolidation Shares, in the quantity, on the terms and for the purposes set out in the Explanatory Statement annexed to and forming part of this Notice of Meeting. ”

Voting Exclusion

In accordance with ASX Listing Rule 7.1, the Company will disregard any votes cast on this resolution by Mr Mark Theodore Ohlsson and any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

10. Resolution 10 – Approval of Issue of 24,800,000 Ordinary shares and 12,400,000 attaching Options

To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“That for the purposes of ASX Listing Rule 10.11, approval is given for the issue and allotment of 24,800,000 Pre-Consolidation Shares and 12,400,000 attaching Options to purchase Pre-Consolidation Shares as detailed in the Explanatory Statement annexed to and forming part of this Notice of Meeting.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution 10 by any person who will participate in the issue of Shares described in the Explanatory Statement and any of their associates. However the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on a proxy form; or it is cast by the person chairing the meeting as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

Accompanying Explanatory Statement

The accompanying Explanatory Statement forms part of this Notice and should be read in conjunction with it.

Shareholders are specifically referred to the Glossary in the Explanatory Statement which contains definitions of capitalised terms used in this Notice and the Explanatory Statement.

Proxies

Please note that:

(a) a Shareholder entitled to attend and vote at the General Meeting is entitled to appoint a proxy;
(b) a proxy need not be a member of the Company;
(c) a Shareholder may appoint a body corporate or an individual as its proxy;
(d) a body corporate appointed as a Shareholder’s proxy may appoint an individual as its representative to exercise any of the powers that the body may exercise as the Shareholder’s proxy; and
(e) Shareholders entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed proxy form provides further details on appointing proxies and lodging proxy forms. If a Shareholder appoints a body corporate as its proxy and the body corporate wishes to appoint an individual as its representative, the body corporate should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company’s representative. The authority may be sent to the Company or its share registry in advance of the General Meeting or handed in at the General Meeting when registering as a corporate representative.

In the case of Shareholders who are companies, the proxy form must be signed:

(a) if it has a sole director who is also sole secretary, by that director (and stating the fact next to or under the signature on the proxy form);
(b) in the case of any other company, by either two directors or a director and a secretary.

Completed proxy forms (along with copies of any power of attorney under which the form is signed) must be delivered no later than 48 hours prior the General Meeting in any of the following ways:

By post or by hand delivery to:

Suite 1412, 3 Spring Street Sydney NSW 2000 By facsimile to:08 8323 2033

Voting Entitlements

In accordance with the Corporations Act 2001 (Cth), the Board has determined that a person’s entitlement to vote at the General Meeting will be the entitlement of that person set out in the register of Shareholders as at 11am (AEST) on 17[th] August 2016. Accordingly, transactions registered after that time will be disregarded in determining Shareholder’s entitlement to attend and vote at the General Meeting.

By Order of the Board of Directors

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Mark Ohlsson Company Secretary

20[th] July 2016

Explanatory Statement

This Explanatory Statement has been prepared for the information of Shareholders in relation to the business to be conducted at the Company’s General Meeting.

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the resolution in the accompanying Notice.

This Explanatory Statement should be read in conjunction with the Notice. Capitalised terms in this Explanatory Statement are defined in the Glossary.

1. Resolution 1 – Placement of 250,000,000 Ordinary shares

Introduction

The purpose of Resolution 1 is for shareholders to approve and ratify, under ASX Listing Rule 7.4, issues of securities which have occurred during the 12 months before the date of this meeting and count toward the Company’s 15% limit under ASX Listing Rule 7.1.

ASX Listing Rules 7.1; 7.4

ASX Listing Rule 7.1 provides, subject to certain exceptions, that prior approval of shareholder is required for an issue of securities if the securities will, when aggregated with the securities issued by the entity during the previous 12 months, exceed 15% of the number of ordinary securities at the commencement of that 12 month period.

The issue of securities detailed in this resolution did not exceed the 15% threshold, however, ASX Listing Rule 7.4 provides that where an entity ratifies an issue of securities, the issue will be treated as having been made with the approval for the purpose of Listing Rule 7.1, thereby replenishing that entity’s 15% capacity and enabling it to issue further securities up to that limit.

Resolution 1 proposes the ratification and approval of the issue of securities for the purpose of satisfying the requirements of Listing Rule 7.4.

Information required by the ASX Listing Rules

In compliance with Listing Rule 7.5 the following information is provided with respect to the issue of securities:

(a) Number of securities issued : 250,000,000 fully paid ordinary shares.
(b)
Price at which securities were issued : $0.001 per share.
(c) Names of persons to whom the Company issued the securities : Suburban Holdings Pty Ltd , Esselmont Pty Ltd , Chifley Portfolios Pty Ltd and HSBC Custody Nominees (Australia) Limited - A/C 3.
(d) Terms of securities : The shares rank equally with existing ordinary shares. The shares were issued for cash.
(e) Use of the funds raised : Working capital purposes.
(f) Voting exclusion statement : See Notice of General Meeting above, Resolution 1.
(g) Other information : date of issue – 20 May 2016

The directors unanimously recommend that Shareholders vote in favour of Resolution 1.

2. Resolution 2 – Share Placement

The purpose of Resolution 2 is to gain Shareholder approval to raise up to $5,000,000 through a placement of Shares and Options.

ASX Listing Rule 7.1

The Company is bound by ASX Listing Rule 7.1, known as the ‘15% rule’, which in broad terms prevents a company, in a twelve month period, from issuing more than 15% of the total number of ordinary securities on issue at the beginning of the twelve month period, unless the issue permitted by an exception under ASX Listing Rule 7.2, or is approved by shareholders of the company. The Company seeks the approval of its shareholders for that purpose.

Information required by the ASX Listing Rules

For the purposes of ASX Listing Rule 7.3, the following information is provided regarding the share placement contemplated by Resolution 2:

(a) Maximum number of securities the entity is to issue : 500,000,000 PostConsolidation Shares and 250,000,000 attaching Options to acquire PostConsolidation Shares.
(b) Date of issue : The Shares and Options will be issued as soon as practicable, but in any event, within three months of the date of the general meeting notified of herein.
(c) Issue price : The issue price for each Post-Consolidation Share is a minimum of $0.01 per share (“the Placement Price”), with one Option to attach to every two Post-Consolidation Shares issued (Options to be exercisable at 150% of the Placement Price).
(d) Names of the persons to whom the entity will issue the securities or the basis upon which those persons will be identified: The Shares and Options will be issued to professional and sophisticated investors identified by the Board.
(e) Terms of issue : The terms of the Options are as set out in Schedule 1 hereto.
(f) Use of funds: The funds are to be used by the Company to carry out its business plan with respect to its operations at Burraga and to increase its general working capital.
(g) Voting exclusion statement : See Notice of General Meeting above, Resolution 2.

Directors’ recommendation

The directors unanimously recommend that Shareholders vote in favour of Resolution 2.

3. Resolution 3 – Grant of Options to Brokers and Financial Advisers

Introduction

The purpose of Resolution 3 is to grant Options to brokers and financial service providers who successfully implement the share placement contemplated by Resolution 2 in or toward payment of their fees.

ASX Listing Rule 7.1

The Company seeks approval for the grant of Options contemplated by Resolution 3 under ASX Listing Rule 7.1, the operation of which is explained in Section 2 of this Explanatory Statement.

Information required by the ASX Listing Rules

For the purposes of ASX Listing Rule 7.3, the following information is provided regarding the grant of options placement contemplated by Resolution 3:

(a) Maximum number of securities the entity is to issue : 50 million Options to acquire Post-Consolidation Shares.
(b) Date of issue : As soon as practicable upon completion of the share placement contemplated by Resolution 2, but in any event not later than 3 months after the date of the meeting.
(c) Issue price : The Options will be issued for no consideration; the exercise price of the Options will be 150% of the Placement Price.
(d) Names of the persons to whom the entity will issue the securities or the basis upon which those persons will be identified: Brokers and financial service providers selected by the Board who successfully implement the share placement contemplated by Resolution 2.
(e) Terms of issue : See below ‘ Terms and Conditions of the Options ’ section.
(f) Use of funds : No funds will be raised by the issue of the Options. The funds raised from the exercise of the Options will form part of the working capital of the Company.
(g) Voting exclusion statement : See Notice of General Meeting above, Resolution 3.

Terms and Conditions of the Options

The terms and conditions of the Options to be issued pursuant to Resolution 3 are as set out in Schedule 3 hereto.

Directors’ recommendation

The directors unanimously recommend that Shareholders vote in favour of Resolution 3.

4. Resolution 4 – Consolidation of Capital

Introduction

The purpose of Resolution 4 is to consolidate the share capital of the Company on a one for twenty-five basis.

Section 254H of the Corporations Act

Section 254H of the Corporations Act 2001 (Cth) states that a company may convert all or any of its shares into a larger or smaller number by resolution passed at a general meeting. In accordance with Section 254H(2) of the Corporations Act and Appendix 7A of the ASX Listing Rules, the Consolidation will take effect the day the resolution is passed. If Resolution 4 is passed, the Company will lodge a copy of the resolution with ASIC within 1 month of it being passed in accordance with section 254H(4) of the Corporations Act .

Purpose of Consolidation

The Company has a very large number of Shares on issue (namely, 2,160,079,658 as at the date of this Explanatory Statement). Therefore, the purpose of the consolidation contemplated by Resolution 2 is to provide the Company with a more appropriate capital structure for a company of its size and nature.

Effect of Share Consolidation

The effect the 25 to 1 share consolidation will have on the capital structure of the Company is as follows:

	Shares on Issue
Pre-consolidation	2,160,079,658
Post-consolidation*	86,403,186

This table does not take into account any rounding discrepancies or fractional entitlement occurrences

	Options on Issue
Pre-consolidation	117,872,674 listed options exercisable at $0.003 before 30 September 2016
	17,000,000 unlisted options exercisable at $0.02 before 30 June 2017
	94,000,000 unlisted options exercisable at $0.014 before 30 April 2018
Post-consolidation *	4,714,906 listed options exercisable at $0.075 before 30 September 2016
	680,000 unlisted options exercisable at $0.50 before 30 June 2017
	3,760,000 unlisted options exercisable at $0.35 before 30 April 2018

This table does not take into account any rounding discrepancies or fractional entitlement occurrences

Taxation consequences

It is not expected that any taxation consequences will arise for Shareholders as a consequence of the share consolidation. However, Shareholders should seek their own tax advice on the effect of the share consolidation, and neither the Company nor its directors accept any responsibility for the individual taxation consequences arising from the share consolidation.

Timetable

In accordance with Appendix 7A of the ASX Listing Rules, the proposed timetable of the share consolidation contemplated by Resolution 4 is as follows:

Key event	Indicative date
General Meeting	19 August 2016
Notification to ASX that Share Consolidation is approved	19 August 2016
Last day for trading in pre-consolidated securities	22 August 2016
Trading in the consolidated securities on a deferred settlement basis commences	23 August 2016
Last day the registrar transfers on a pre- consolidation basis	24 August 2016
Share Consolidation effective; registration of securities ona post-consolidationbasis	25 August 2016
Despatch of new holding statements	25 August 2016
Deferred settlement trading ends	31 August 2016
Normaltrading starts	1September 2016

Directors’ Recommendation

The directors unanimously recommend that Shareholders vote in favour of Resolution 4.

5. Resolutions 5, 6, 7, 8 and 9 – Grant of Options to Directors and Company Secretary

The Company proposes to grant Options to the Officeholders of the Company each at an exercise price of 110% of the Placement Price (for the purposes of this section, each an “Option” and together the “Options”). The number of Options to be granted to each Officeholder is set out in the “ Information required by the ASX Listing Rules 10.13 and 7.1 ” section below. The issue of the Options is designed to align the interests of the

Officeholders with those of the Company and its shareholders and is intended to provide incentive for them to further enhance the growth and value of the Company.

Introduction

The ASX Listing Rules and the Corporations Act 2001 (Cth) (“Corporations Act”) (in certain circumstances) require shareholder approval to be obtained for the issue of the Options to Directors and other officeholders. Accordingly, approval for the issue of the Options:

a) to the Directors – is sought in accordance with the provisions of Listing Rule 10.11 of the ASX Listing Rules and Chapter 2E of the Corporations Act; and
b) to the Company Secretary – is sought under Listing Rule 7.1 of the ASX Listing Rules.

The proposed Resolutions 5 – 8, if passed, will approve the issue of securities to and confer financial benefits upon Directors of the Company. Because the Directors are ‘related parties’ under the Corporations Act 2001 (Cth) and the ASX Listing Rules, the Company seeks to obtain member approval in accordance with the requirements of Chapter 2E of the Corporations Act and ASX Listing Rule 10.11. Because this approval is being sought, separate approval under ASX Listing Rule 7.1 is not necessary.

Conversely, because the Company Secretary is not a ‘related party’ under the Corporations Act 2001 (Cth) and the ASX Listing Rules, shareholder approval for the issue of options to the Company Secretary is sought under ASX Listing Rule 7.1.

Accordingly, information required under the ASX Listing Rules and the Corporations Act as well as information that will properly enable shareholders to consider Resolutions 5 – 9 is presented below.

Corporations Act

Section 208 of the Corporations Act provides that for a public company to give a financial benefit to a related party it must obtain the prior approval of its members. Note that this section of the Corporations Act 2001 (Cth) is not applicable to the granting of options to the Company Secretary contemplated by Resolution 9.

A “related party” for the purposes of the Corporations Act includes, in relation to a public company, a director of the company. A “financial benefit” for the purposes of the Corporations Act is widely defined and includes a public company granting options to a related party. The granting of Options to Directors as contemplated by Resolutions 5 – 8 constitute the giving of a financial benefit and accordingly, the Company is seeking shareholder approval under section 208 of the Corporations Act to approve the grant of the Options.

Resolutions 5 – 8 are also put because of section 195(4) of the Corporations Act. Section 195(1) provides that a director of a public company who has a material personal interest in a matter that is being considered at a directors’ meeting must not be present when the matter is being considered at the meeting or vote on the matter. As all of the directors have an interest in Resolutions 5 to 8, it is necessary that htye be referred to the Company in general meeting for approval.

ASX Listing Rules

ASX Listing Rule 10.11 provides that a company must not issue or agree to issue equity securities to a related party of the company, such as a director, without the company first obtaining the approval by ordinary resolution of its shareholders (unless an exception in ASX Listing Rule 10.12 applies). This Listing Rule is not applicable to the granting of options to the Company Secretary contemplated by Resolution 9.

For the purposes of the ASX Listing Rules, Messrs Tilley, Carling, Armstrong and Clee are related parties. Accordingly, the Company is seeking approval of shareholders under ASX Listing Rule 10.11 for the proposed grant of Options. If shareholders approve the issue of 11

the Options under ASX Listing Rule 10.11, separate approval is not required under ASX Listing Rule 7.1. Accordingly, if Resolutions 5 – 8 are passed, the grant of Options will not be taken into account in the 15% calculation of the Company’s annual placement capacity imposed by ASX Listing Rule 7.1.

If the Options are exercised for shares, the shares will be issued on the same terms as all other ordinary shares of the Company currently on issue. The Options are issued on the terms set out under the heading “ Terms and Conditions of the Options ” set out below.

Information required by the ASX Listing Rules 10.13 and 7.1

Pursuant to ASX Listing Rule 10.13 in respect of Resolutions 5 – 8, and ASX Listing Rule 7.1 in respect of Resolution 9, the following information is provided:

(a) Name of the person; maximum number of securities to be issued : The number of Options are to be 10.3% of the number of Shares issued under the share placement contemplated by Resolution 2, being a maximum of 51,500,000 Options in aggregate, and will be divided amongst the Officeholders as follows:
(i) Mr Tilley – 13.6%, being a maximum of 7,000,000 Options;
(ii) Mr Carling – 52.4%, being a maximum of 27,000,000 Options;
(iii) Mr Armstrong – 12.6%, being a maximum of 6,500,000 Options;
(iv) Mr Clee – 8.7%, being a maximum of 4,500,000 Options; and
(v) Mr Ohlsson – 12.6%, being a maximum of 6,500,000 Options.
(b) Date of issue : Subject to shareholder approval, the Options will be granted as soon as practicable after the date of the General Meeting and in any event no later than 1 month after the date of the General Meeting.
(c) Issue Price : The Options will be issued for no consideration; the exercise price of the Options will be 110% of the Placement Price.
(d) Terms of issue : The terms and conditions of the Options proposed to be granted are set out below.
(e) Use of funds : The funds raised from the exercise of the Options will form part of the working capital of the Company.
(f) Voting exclusion statement : See Notice of General Meeting above, Resolutions 5 – 9.

Terms and Conditions of the Options

The terms and conditions of the Options to be issued pursuant to Resolutions 5 – 9 are as set out in Schedule 2 hereto.

Corporate Governance

The Options granted to the Officeholders constitute equity-based remuneration. The Board believes that the Options are an effective tool to provide incentives to the Officeholders and promote the interests of the Company and its shareholders.

The Board has obtained advice from Guerdon Associates, who are remuneration consultants, as to what would constitute reasonable remuneration for the Officeholders of the Company having regard to the financial circumstances of the Company. Based on this advice the Directors consider the terms of the options are reasonable given the circumstances of the Company.

The maximum number of Options to be issued to each Officeholder has been determined having regard to the advice from Guerdon Associates.

Potential Benefits – Issue of Options

If the Options are issued pursuant to the proposed Resolutions 5 – 9, the Company considers that the following benefits will arise:

(a) The Officeholders will have a vested interest in the affairs of the Company and incentives to ensure that the Company is able to create a successful and profitable business. The consequential increase in shareholder value and the market price of the shares of the Company will benefit all shareholders, notwithstanding the dilutionary effect on shareholders of the Options being exercised;
(b) the issue of the Options is a non-cash form of remuneration, thus conserving the Company’s cash reserves. The issue of the Options therefore enables the Company to provide the Officeholders with a reward for services provided and an incentive for future services they will provide to the Company to further progress the Company in a cost-effective manner, as opposed to other forms of remuneration, such as cash; and
(c) the exercise of the Options will provide working capital for the Company at no significant cost. If all of the Options proposed to be issued to the Directors are ultimately exercised and assuming an exercise price of $0.015, an amount of approximately $772,500 would be subscribed into the capital of the Company. As the Options are to be granted for no consideration there will be no cash raised by the Company in granting the Options.

Furthermore, the Board considers it important to adequately compensate the Officeholders in order to attract and retain people with appropriate qualifications and skills to be able to contribute to the success of the Company.

Potential Costs – Issue of Options

The potential cost to the Company of the issue of the Options to the Officeholders is that there will be a dilution of the issued share capital if the Options are exercised.

If the Options are exercised at a time when the market price of the Company’s shares is greater than the exercise price of the Options, there will be a detriment insofar as the Company will be required to issue shares at a price lower than it might otherwise have been able to, with the result that less funds will be raised.

From an economic and commercial point of view the Board considers that the potential cost and detriment to the Company resulting from the granting of the Options is nominal given that the Options are out of the money at the date of the issue.

If all of the Options to be issued under Resolution 5 – 9 are exercised, the capital of the Company has been consolidated pursuant to Resolution 4, the share placement contemplated by Resolution 2 is carried out (but the attaching Options are not exercised), and no further shares are issued by the Company in the meantime, the total number of ordinary fully paid shares issued would increase by 51,500,000 to 637,903,186. All such newly issued shares would comprise 8% of the issued shares at that time and the shareholding of existing shareholders would be diluted by approximately 85% (based on 2,160,079,658 Pre-Consolidation Shares currently on issue).

The lowest and highest price of shares in the Company in the past 12 months on the ASX was $0.001 on 20 April 2016 and $0.003 on 19 May 2016 respectively.

The closing price of shares in the Company on 19 July 2016, the last trading day before lodgement of the Notice of General Meeting and Explanatory Statement with the ASX was $0.002.

Valuation of Options

The Options are not currently quoted on the ASX and as such have no market value. It is not intended for the Options to be listed on the ASX. The Options will grant the Officeholders a right to one Share in the Company upon exercise of an Option and payment of the exercise price of the Option. Accordingly, the Options may have a present value at the date of their grant. The Options may acquire future value dependent upon the extent to which the shares exceed the exercise price of the Options during the term of the Options.

It is a requirement of ASIC that a dollar value be placed on the Options to be issued in these circumstances.

As a general proposition, options to subscribe for ordinary fully paid shares in a company have value. Various factors impact upon the value of options including things such as:

(a) the period outstanding before the expiry date of the options;
(b) the exercise price of the options relative to the underlying price or value of the securities into which they may be converted;
(c) the proportion of the issued capital as expanded consequent upon exercise represented by the shares issued upon exercise (i.e. whether or not the shares that might be acquired upon exercise of the options represent a controlling or other significant interest);
(d) the value of the shares into which the options may be converted; and
(e) whether or not the options are listed (i.e. readily capable of being liquidated),

There are various formulae which can be applied to determining the theoretical value of options including the formula known as the Black-Scholes option price calculation.

The Black-Scholes option price calculation method has been used to value the Options based on the assumed exercise price of $0.011. In determining the value of the Options, the following inputs have been assumed:

(a) the Options are granted for no consideration and vest as to 50% in activity each Performance Hurdle;
(b) assumed exercise price: $0.011;
(c) grant date: 1 October 2016;
(d) expiry date: 1 October 2020;
(e) share price at grant date: $0.01;
(f) expected price volatility of the Company’s shares: 100%;
(g) expected dividend yield: 0%, and
(h) risk-free interest rate: 2%.

Using the Black-Scholes option price calculation method and the assumed data outlined above, the Options have been valued at $0.0063 each.

Accordingly, assuming that 500,000,000 shares are issued under the share placement contemplated by Resolution 2 and that the number of Options to be granted to the Officeholders is the maximum number 51,500,000, the total value of the proposed Options to be granted to:

(a) Mr Tilley is $44,100 over the term of the Options;
(b) Mr Carling is $170,100 over the term of the Options;
(c) Mr Armstrong is $40,950 over the term of the Options;
(d) Mr Clee is $28,350 over the term of the Options, and
(e) Mr Ohlsson is $40,950 over the term of the Options.

Accordingly, the total balance sheet impact attributable to the granting of the Options is $324,450 over the term of the Options. In determining the number and terms of the Options to be issued to the Officeholders, consideration was given to the relevant experience and role of each of the Officeholders and their respective remuneration terms, the current market price of shares in the Company and the terms of the recent option packages granted to Officeholders of other companies within the sector in which the Company operates.

Identifying the Related Parties

The related party to whom:

(a) Resolution 5 would permit financial benefits to be given is Mr Carling;
(b) Resolution 6 would permit financial benefits to be given is Mr Tilley;
(c) Resolution 7 would permit financial benefits to be given is Mr Armstrong;
(d) Resolution 8 would permit financial benefits to be given is Mr Clee.

Mr Ohlsson is not a related party as defined in the Corporations Act 2001 (Cth) or the ASX Listing Rules.

Current remuneration and interests

Details of each Officeholder’s proposed annualised pro-rata remuneration, as well as their interests (both direct and indirect) in the Company as at the date of the Notice are outlined below.

Officeholder	Salary/fees p.a. (incl. superannuation)	Share interests	Option interests
Michael Tilley	$84,000	60,441,667	21,250,000
Max Carling	$280,000	203,584,519	60,166,667
Robin Armstrong	$60,000	500,000	Nil
Terence Clee	$60,000	Nil	Nil
Mark Ohlsson	$72,000	Nil	12,250,000

Financial Benefits

The nature of financial benefits to be provided to the Officeholders is set out in the first section of the discussion on Resolutions 5 – 9.

Officeholders’ Interests in the Company

The following table sets out the current interests (both directly and indirectly) of the Officeholders to Pre-Consolidation Shares (before the share placement contemplated by Resolution 2) and their entitlement if they exercised all of the Options referred to in Resolutions 5 – 9 and no other shares are issued by the Company.

Officeholder	No. of Shares *(current)*	No. of Shares *(post* *consolidation)*	No. of Shares *(post* *exercise* *of Options)*	% of Issued Capital *(post exercise* _of Options)_**
Mr Tilley	60,441,667	2,417,667	9,417,667	1.47%
Mr Carling	203,584,519	8,143,381	35,143,381	5.51%
Mr Armstrong	500,000	20,000	6,520,000	1.02%
Mr Clee	Nil	Nil	4,500,000	0.70%
MrOhlsson	Nil	Nil	6,500,000	1.02%

As at the date of this Notice of Meeting, the following Officeholders hold the following Options over Pre-Consolidation Shares of the Company:

Mr Tilley indirectly holds the following Options in the Company: 4,250,000 Options – unlisted (exercisable at 2 cents each expiring 30 June 2017); 12,000,000 Options – unlisted (exercisable at 1.4 cents each expiring 30 April 2018); 5,000,000 Options – listed (exercisable at 0.3 cents each expiring 30 September 2016);
Mr Carling indirectly holds the following Options in the Company: 8,500,000 Options – unlisted (exercisable at 2 cents each expiring 30 June 2017); 35,000,000 Options – unlisted (exercisable at 1.4 cents each expiring 30 April 2018); 16,666,667 Options – listed (exercisable at 0.3 cents each – expiring 30 September 2016);
Mr Armstrong holds no Options in the Company;
Mr Clee holds no Options in the Company;
Mr Ohlsson holds 12,250,00 Options in the Company.

** Assumes that the 25 for 1 Share Consolidation has taken place, therefore 86,403,186 Post-Consolidation Shares on issue plus the Placement of 500,000,000 shares to total 586,403,186 shares on issue before the exercise of 51,500,000 directors and officers options.

Directors’ Interests Recommendations

Each of the directors named in Resolutions 5 – 8 has an interest in the outcome of the Resolution in which they are named by reason of the benefit that they will receive if each relevant Resolution is passed and therefore declines to make a recommendation to Shareholders in relation to that Resolution.

In accordance with ASIC’s view that it is good practice for Directors to avoid making a recommendation for resolutions about each others’ remuneration, as there may be a conflict of interest, none of the Directors make any recommendation in relation to any of Resolutions 5 – 8.

The directors unanimously recommend that shareholders vote in favour of Resolution 9.

Taxation Consequences

No stamp duty will be payable in respect of the grant of the Options. No GST will be payable by the Company in respect of the grant of the Options (or if it is then it will be recoverable as an input credit).

Other than the information above and otherwise set out in this Explanatory Statement, the Directors believe that there is no other information known to the Company or its Officeholders that will be reasonably required by shareholders to make a decision in relation to benefits contemplated by the proposed Resolutions 5 – 9.

6. Resolution 10 – Issue of Shares and Options to Zurkic Mining Consultants Pty Ltd

Introduction

The purpose of Resolution 10 is for Shareholders to approve, under ASX Listing Rule 10.11, the issue of 24,800,000 Pre-Consolidation Shares and 12,400,000 attaching Options to Zurkic Mining Consultants Pty Ltd. Zurkic Mining Consultants Pty Ltd is an entity controlled by Mr Nebojsa Zurkic, who is a former director of the Company. In the rights issue conducted by the Company, which closed on 23 July 2015, Mr Zurkic applied for 24,800,000 Pre-Consolidation Shares (with a total price of $74,400) and 12,400,000 attaching Options under the shortfall facility offered as part of the rights issue. As announced to ASX on 27 July 2015, the Company is unable to issue the Shares until such issue is approved by the Shareholders. Therefore, approval is now being sought for the issue of Shares and the attaching Options pursuant to ASX Listing Rule 10.11.

The Board considers that the issue of Shares and Options contemplated by Resolution 10 is arm’s length or better from the perspective of the Company.

ASX Listing Rule 10.11

ASX Listing Rule 10.11 provides that a company must not issue or agree to issue equity securities to a “related party” of the company without the company first obtaining the approval by ordinary resolution of its shareholders (unless an exception in ASX Listing Rule 10.12 applies). “Related party” is defined in section 228 of Corporations Act 2001 (Cth) and includes, in relation to a public company, a person who was a director of the company within the previous 6 months. Mr Zurkic ceased to be a director of the Company on 16 June 2016; therefore, Mr Zurkic is a related party.

Accordingly, the Company is seeking approval of shareholders under ASX Listing Rule 10.11 for the proposed issue of Shares and attaching Options. If shareholders approve the issue of the Shares under ASX Listing Rule 10.11, separate approval is not required under ASX Listing Rule 7.1. Therefore, if Resolution 10 is passed, the issue of Shares and attaching Options will not be taken into account in the 15% calculation of the Company’s annual placement capacity imposed by ASX Listing Rule 7.1.

Information required by the ASX Listing Rules 10.13

Pursuant to ASX Listing Rule 10.13, the following information is provided:

(a) Name of the person : The Shares and Options will be issued to Zurkic Mining Consultants Pty Ltd, an entity controlled by Mr Nebojsa Zurkic.
(b) Maximum number of securities to be issued : 24,800,000 Pre-Consolidation Shares and 12,400,000 Options to purchase Pre-Consolidation Shares will be issued.
(c) Date of issue : Subject to shareholder approval, the Shares and Options will be granted as soon as practicable after the date of the General Meeting and in any event no later than 1 month after the date of the General Meeting.
(d) Issue Price : The Shares will be issued for $0.003 each, with a total purchase price of $74,400. The Options, being attached to the Shares, will be issued for nil consideration.
(e) Terms of issue : The Shares will rank equally with other Shares and will be issued for cash. The terms of the Options are as set out below in the ‘ Terms and Conditions of the Options ’ section below.
(f) Use of funds : The funds raised from the issue of the Shares and the exercise of the attaching Options will form part of the working capital of the Company.

(g) Voting exclusion statement : See Notice of General Meeting above, Resolutions 10.

Terms and Conditions of the Options

The terms and conditions of the Options to be issued pursuant to Resolution 10 are set out in Schedule 4 hereto.

Directors’ recommendation

The Directors unanimously recommend that Shareholders vote in favour of Resolution 10.

Glossary

In this Explanatory Statement, the following terms have the following meaning unless the context otherwise requires:

AEST Australian Eastern Standard Time, being the time in Sydney, New South Wales. ASIC the Australian Securities and Investment Commission. ASX ASX Limited (ACN 008 624 691) trading as the Australian Securities Exchange. Board the board of Directors. Chairman Mr Michael Douglas Tilley. Closely Related Party a closely related party of a member of Key Management Personnel as defined in Section 9 of the Corporations Act, being:

(a) a spouse or child of the member; (b) a child of that member’s spouse; (c) a dependant of that member or of that member’s spouse; (d) anyone else who is one of that member’s family and may be expected to influence that member, or be influenced by that member, in that member’s dealings with the Company;

(e) a company that is controlled by that member; or (f) any other person prescribed by the regulations. Company Elysium Resources Limited (ACN 115 593 005) Company Secretary Mr Mark Theodore Ohlsson. Constitution the constitution of the Company. Corporations Act Corporations Act 2001 (Cth). Director any of Messrs Maxim James Carling, Michael Douglas Tilley, Robin Armstrong or Terence Clee. Equity Securities the meaning given in the Listing Rules. Explanatory Statement this explanatory statement accompanying the Notice. Key Management Personnel the key management personnel of the Company as defined in Section 9 of the Corporations Act and Australian Accounting Standards Board accounting standard 124, being those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any Director (whether executive or otherwise). Listing Rules the listing rules of ASX. Notice the notice of general meeting accompanying the Explanatory Statement.

Officeholders	the Directors and Company Secretary.
Option	an option to acquire a Share.
Performance Hurdle	each event described in paragraph (c) of Schedule 2 hereto.
Placement Price	the price at which the Post-Consolidation Shares (including
	attaching Options) to be placed pursuant to Resolution 2 are
	placed, being not less than $0.01 per share.
Post-Consolidation Share	a Share in the Company after the 1 for 25 share consolidation
	contemplated by Resolution 4 hereof.
Pre-Consolidation Share	a Share prior to the share consolidation contemplated by
	Resolution 4.
Proxy Form	the proxy form attached to the Notice.
Relevant Interest	the meaning given by sections 608 and 609 of the Corporations
	Act.
Resolution	a resolution contained in the Notice.
Section	a section contained in this Explanatory Statement.
Share	a fully paid ordinary share in the capital of the Company.
Shareholder	a holder of Shares.
VWAP	the volume weighted average price.

SCHEDULE 1

TERMS AND CONDITIONS OF OPTIONS TO BE ISSUED PURSUANT TO PROPOSED RESOLUTION 2

This Schedule 1 sets out the terms and conditions of the Options to be issued pursuant to Resolution 2. For the avoidance of doubt, these are not the terms applicable to Options issued pursuant to Resolutions 3, 5, 6, 7, 8 or 9.

Subject to shareholder approval, the Options will be issued on the following terms:

(a) Each Option entitles the holder to subscribe for one Post-Consolidation Share in the Company at a price of 150% of the Placement Price.
(b) The Options will be issued for no consideration.
(c) The Options will be issued (effective as at the date of this meeting) as soon as practicable after the date of the meeting and in any event not later than one month from the date of the meeting.
(d) The Options will have an expiry date of the fourth anniversary of the date of the meeting. The Options will vest immediately.
(e) The Options may be exercised by notice in writing to the Directors of the Company accompanied by payment of the exercise price.
(f) The Company will not apply to the ASX for official quotation of the Options but will apply for granting of official quotation of shares issued pursuant to exercise of the Options as soon as practicable after the date of allotment of the shares.
(g) Shares issued on the exercise of the Options will rank equally with the then existing issued fully paid ordinary shares in the Company.
(h) If there is a pro rata issue (except a bonus issue) to shareholders, the exercise price of the option may be reduced according to the following formula:

O’ = O - E[P-(S+D)] N + 1

Where

O’ = the new exercise price of the option;

O = the Old exercise price of the option;

E = the number of underlying securities into which one option is Exercisable;

Note: E is one unless the number has changed because of a bonus issue.

P = the average market Price per security (weighted by reference to volume) of the underlying securities during the 5 trading days ending on the day before the ex rights date or ex entitlements date;

S = the Subscription price for a security under the pro rata issue;

D = the Dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue); and

N = the Number of securities with rights or entitlements that must be held to receive a right to one new security.

(i) In the event of any reorganisation (including reconstruction, consolidation, subdivision, reduction or return) of the issued capital of the Company, the Options will be reorganised as required by the ASX Listing Rules, so that the holder will not receive a benefit that the existing holders of ordinary shares do not receive but in all other respects the terms of exercise will remain the same.
(j) In the event of the Company effecting a Rights Issue at a discount, the exercise price of the Options shall be adjusted in accordance with the ASX Listing Rules.
(k) Holders of the Options will not be entitled to participate in new issues of capital which may be offered to shareholders during the currency of the Options without first exercising their Options.
(l) If a takeover bid is made for the shares of the Company then, at any time during the Takeover Period, any unvested Options will vest and the Option holder may exercise each Option at the exercise price, despite the fact that it is then outside an exercise period specified in the Option. The “Takeover Period” referred to is from the start of the offer period until one month after the end of the offer period.
(m) The Options will otherwise be in accordance with the requirements of the ASX Listing Rules.

If all of the Options are exercised the amount of funds raised from the Options the subject of Resolution 2 will amount to a total of $3,750,000. The funds raised from the exercise of the Options will form part of the working capital of the Company.

SCHEDULE 2

TERMS AND CONDITIONS OF OPTIONS TO BE ISSUED PURSUANT TO PROPOSED RESOLUTIONS 5 – 9

This Schedule 2 sets out the terms and conditions of the Options to be issued pursuant to Resolutions 5 – 9. For the avoidance of doubt, these are not the terms applicable to Options issued pursuant to Resolution 2 or 3. Subject to shareholder approval, the Options will be issued on the following terms:

(a) Each Option entitles the holder to subscribe for one Post-Consolidation Share in the Company at a price of 110% of the Placement Price.
(b) The Options will be issued for no consideration.
(c) The Options will vest and will vest as to 50% on each of the following performance hurdles being achieved:
(i) $3,000,000 having been raised by the placement contemplated by Resolution 2; and
(ii) issue of the Environmental Impact Statement in respect of the Burraga Project.
(d) The Options will be issued (effective as at the date of this meeting) as soon as practicable after the date of the meeting and in any event not later than one month from the date of the meeting.
(e)
The Options will have an expiry date of 1 October 2020.
(f) The Options may be exercised by notice in writing to the Directors of the Company accompanied by payment of the exercise price.
(g) The Company will not apply to the ASX for official quotation of the Options but will apply for granting of official quotation of shares issued pursuant to exercise of the Options as soon as practicable after the date of allotment of the shares.
(h) Shares issued on the exercise of the Options will rank equally with the then existing issued fully paid ordinary shares in the Company.
(i) If there is a pro rata issue (except a bonus issue) to shareholders, the exercise price of the option may be reduced according to the following formula:

O’ = O - E[P-(S+D)] N + 1

Where

O’ = the new exercise price of the option;

O = the Old exercise price of the option;

E = the number of underlying securities into which one option is Exercisable;

Note: E is one unless the number has changed because of a bonus issue.

P = the average market Price per security (weighted by reference to volume) of the underlying securities during the 5 trading days ending on the day before the ex rights date or ex entitlements date;

S = the Subscription price for a security under the pro rata issue;

D = the Dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue); and

N = the Number of securities with rights or entitlements that must be held to receive a right to one new security.

(j) In the event of any reorganisation (including reconstruction, consolidation, subdivision, reduction or return) of the issued capital of the Company, the Options will be reorganised as required by the ASX Listing Rules, so that the holder will not receive a benefit that the existing holders of ordinary shares do not receive but in all other respects the terms of exercise will remain the same.
(k) In the event of the Company effecting a Rights Issue at a discount, the exercise price of the Options shall be adjusted in accordance with the ASX Listing Rules.
(l) Holders of the Options will not be entitled to participate in new issues of capital which may be offered to shareholders during the currency of the Options without first exercising their Options.
(m) If a takeover bid is made for the shares of the Company then, at any time during the Takeover Period, any unvested Options will vest and the Option holder may exercise each Option at the exercise price, despite the fact that it is then outside an exercise period specified in the Option. The “Takeover Period” referred to is from the start of the offer period until one month after the end of the offer period.
(n) The Options will otherwise be in accordance with the requirements of the ASX Listing Rules.

The Options will be issued for Nil cost and no funds will be raised from the issue of the Options unless and until they are exercised. If all of the Options are exercised the amount of funds raised from the Options the subject of Resolutions 5 – 9 will amount to a total of $772,500. The funds raised will form part of the working capital of the Company.

SCHEDULE 3

TERMS AND CONDITIONS OF OPTIONS TO BE ISSUED PURSUANT TO PROPOSED RESOLUTION 3

This Schedule 3 sets out the terms and conditions of the Options to be issued pursuant to Resolution 3. For the avoidance of doubt, these are not the terms applicable to Options issued pursuant to Resolutions 2, 5, 6, 7, 8 or 9.

Subject to shareholder approval, the Options will be issued on the following terms:

(a) Each Option entitles the holder to subscribe for one Post-Consolidation Share in the Company at a price of 150% of the Placement Price.
(b) The Options will be issued for no consideration.
(c) The Options will be issued (effective as at the date of this meeting) as soon as practicable after the date of the meeting and in any event not later than one month from the date of the meeting.
(d) The Options will have an expiry date of the second anniversary of the date of the meeting. The Options will vest immediately.
(e) The Options may be exercised by notice in writing to the Directors of the Company accompanied by payment of the exercise price.
(f) The Company will not apply to the ASX for official quotation of the Options but will apply for granting of official quotation of shares issued pursuant to exercise of the Options as soon as practicable after the date of allotment of the shares.
(g) Shares issued on the exercise of the Options will rank equally with the then existing issued fully paid ordinary shares in the Company.
(h) If there is a pro rata issue (except a bonus issue) to shareholders, the exercise price of the option may be reduced according to the following formula:

O’ = O - E[P-(S+D)] N + 1

Where

O’ = the new exercise price of the option;

O = the Old exercise price of the option;

E = the number of underlying securities into which one option is Exercisable;

Note: E is one unless the number has changed because of a bonus issue.

P = the average market Price per security (weighted by reference to volume) of the underlying securities during the 5 trading days ending on the day before the ex rights date or ex entitlements date;

S = the Subscription price for a security under the pro rata issue;

D = the Dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue); and

N = the Number of securities with rights or entitlements that must be held to receive a right to one new security.

(i) In the event of any reorganisation (including reconstruction, consolidation, subdivision, reduction or return) of the issued capital of the Company, the Options will be reorganised as required by the ASX Listing Rules, so that the holder will not receive a benefit that the existing holders of ordinary shares do not receive but in all other respects the terms of exercise will remain the same.
(j) In the event of the Company effecting a Rights Issue at a discount, the exercise price of the Options shall be adjusted in accordance with the ASX Listing Rules.
(k) Holders of the Options will not be entitled to participate in new issues of capital which may be offered to shareholders during the currency of the Options without first exercising their Options.
(l) If a takeover bid is made for the shares of the Company then, at any time during the Takeover Period, any unvested Options will vest and the Option holder may exercise each Option at the exercise price, despite the fact that it is then outside an exercise period specified in the Option. The “Takeover Period” referred to is from the start of the offer period until one month after the end of the offer period.
(m) The Options will otherwise be in accordance with the requirements of the ASX Listing Rules.

If all of the Options are exercised the amount of funds raised from the Options the subject of Resolution 3 will amount to a total of $750,000. The funds raised from the exercise of the Options will form part of the working capital of the Company.

SCHEDULE 4

TERMS AND CONDITIONS OF OPTIONS TO BE ISSUED PURSUANT TO PROPOSED RESOLUTION 10

This Schedule 4 sets out the terms and conditions of the Options to be issued pursuant to Resolution 10. For the avoidance of doubt, these are not the terms applicable to Options issued pursuant to Resolutions 2, 3, 5, 6, 7, 8 or 9.

Subject to shareholder approval, the Options will be issued on the following terms:

1.1 Interpretation

In this Schedule 4:

(a) ASX means ASX Limited (ACN 008 624 691);
(b) Board means the board of directors of the Company;
(c) Business Day means a day not being a Saturday, Sunday or public holiday, on which banks are generally open for business in New South Wales;
(d) Corporations Act means the Corporations Act 2001 (Cth) as amended from time;
(e) Listing Rules means the official listing rules of the ASX;
(f) New Option and New Options means the options to be issued to the Option holder on the terms detailed in this Schedule 4;
(g) Official List has the meaning given to that term in the Listing Rules;
(h) Quotation has the meaning given to that term in the Listing Rules;
(i) Shareholder and Shareholders means a person who owns Shares in the capital of the Company, notwithstanding that those Shares may not be fully paid; and
(j) Shares means fully paid ordinary shares in the capital of the Company.
1.2 Entitlement
(a) Each New Option entitles the Option holder to subscribe for, and be allotted, one ordinary Share in the capital of the Company.
(b) Shares issued on the exercise of New Options will rank equally with all existing Shares on issue, as at the exercise date, and will be subject to the provisions of the Constitution of the Company and any escrow restrictions imposed on them by the ASX.

1.3 Exercise of New Option

(a) The New Options are exercisable at any time from the date of issue.
(b) The final date and time for exercise of the New Options is 5pm (Sydney time) on 30 September 2016. If such date falls on a day that is not a Business Day, the final date will be the next Business Day.
(c) The exercise price of each New Option is $0.003.

(d) Each New Option is exercisable by the Option holder signing and delivering a notice of exercise of New Option together with the exercise price in full for each Share to be issued upon exercise of each New Option to the Company’s Share Registry.
(e) Remittances must be made payable to ‘ Elysium Resources Limited –Share Purchase Amount ’ and cheques should be crossed ‘Not Negotiable’.
(f) All New Options will lapse on the earlier of the:
- (i) receipt by the Company of notice from the Option holder that the Option holder has elected to surrender the New Option; and
- (ii) expiry of the final date and time for exercise of the New Option as set out in paragraph (b).
(g) In the event of liquidation of the Company, all unexercised New Options will lapse.
(h) For every New Option that is exercised, the Option holder will receive 1 Share.
1.4 Quotation
(a) Subject to the requirements of the Listing Rules, the Company intends to apply to the ASX for Official Quotation of the New Shares and Options.
(b) If the Shares of the Company are quoted on the ASX, the Company will apply to the ASX for, and will use its best endeavours to obtain, quotation of all Shares issued on the exercise of any New Options within 10 Business Days (as defined in the Listing Rules) of issue. The Company gives no assurance that such quotation will be granted.
1.5 Participation in Securities Issues

Subject to clause 1.6 of this Schedule 4, the holder is not entitled to participate in new issues of securities without exercising the New Options.

Participation in a Reorganisation of Capital

(a) In the event of any reconstruction or reorganisation (including consolidation, subdivision, reduction or return of the capital of the Company), the rights of an Option holder will be changed in accordance with the Listing Rules of the ASX applying to a restructure or reorganisation of the capital at the time of that restructure or reorganisation, provided always that the changes to the terms of the New Options do not result in any benefit being conferred on the Option holder which is not conferred on Shareholders of the Company.
(b) In any reorganisation as referred to in paragraph 1.6(a), New Options will be treated in the following manner:
(i) in the event of a consolidation of the share capital of the Company, the number of New Options will be consolidated in the same ratio as the ordinary share capital of the Company and the exercise price will be amended in inverse proportion to that ratio;
(ii) in the event of a subdivision of the share capital of the Company, the number of New Options will be subdivided in the same ratio as the

ordinary share capital of the Company and the exercise price will be amended in inverse proportion to that ratio;

  - (iii) in the event of a return of the share capital of the Company, the number of New Options will remain the same and the exercise price will be reduced by the same amount as the amount returned in relation to each ordinary share;

  - (iv) in the event of a reduction of the share capital of the Company by a cancellation of paid up capital that is lost or not represented by available assets where no securities are cancelled the number of New Options and the exercise price of each New Option will remain unaltered;

  - (v) in the event of a pro-rata cancellation of shares in the Company, the number of New Options will be reduced in the same ratio as the ordinary share capital of the Company and the exercise price of each New Option will be amended in inverse proportion to that ratio; and

  - (vi) in the event of any other reorganisation of the issued capital of the Company, the number of New Options or the exercise price or both will be reorganised (as appropriate) in a manner which will not result in any benefits being conferred on the Option holder which are not conferred on shareholders.

1.7 Adjustments to New Options and Exercise Price
(a) Adjustments to the number of Shares over which New Options exist and/or the exercise price may be made as described in paragraph 1.6(a) to take account of changes to the capital structure of the Company by way of pro-rata bonus and cash issues.
(b) The method of adjustment for the purpose of clause 1.7(a) shall be in accordance with the Listing Rules of the ASX from time to time, which, under Listing Rules 6.22.2 and 6.22.3, currently provide:
- (i) Pro Rata Cash Issues

Where a pro-rata issue is made (except a bonus issue) to the holders of underlying securities, the exercise price of a New Option may be reduced according to the following formula:

O’ = O – E[P-(S+D)] N+1

where:

O’ = the new exercise price of the New Option.

O = the old exercise price of the New Option.

E = the number of underlying securities into which one New Option is exercisable

P = the average market price per security (weighted by reference to volume) of the underlying securities during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

S = the subscription price for a security under the pro-rata issue.

D = the dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro-rata issue).

N = the number of securities with rights or entitlements that must be held to receive a right to one new security.

(ii)

Pro Rata Bonus Issues

If there is a bonus issue to the holders of the underlying securities, on the exercise of any New Options, the number of Shares received will include the number of bonus Shares that would have been issued if the New Options had been exercised prior to the record date for bonus issues. The exercise price will not change.

1.8 Takeovers and Schemes of Arrangement
(a) If during the currency of any New Options and prior to their exercise a takeover offer or a takeover announcement (within the meaning of the Corporations Act) is made to holders of Shares then within 10 Business Days after the Company becomes aware of the offer, the Company must forward a notice notifying the Option holder of the offer and from the date of such notification, the Option holder has 60 days within which to exercise the New Options notwithstanding any other terms and conditions applicable to the New Options or arrangement. If the New Options are not exercised within 60 days after notification of the offer, the New Options may be exercised at any other time according to their terms of issue.
(b) If an offer for shares in the Company is made to Shareholders pursuant to a scheme of arrangement which has been approved in accordance with the Corporations Act, the Option holder will be entitled to exercise New Options within the period notified by the Company.

1.9 Transfers

The New Options are freely transferable.

1.10 Notices

Notices may be given by the Company to the Option holder in the manner prescribed by the Constitution of the Company for the giving of notices to Shareholders and the relevant provisions of the Constitution of the Company will apply with all necessary modification to notices to be given to the Option holder.

1.11 Rights to Accounts

The Option holder will be sent all reports and accounts required to be laid before Shareholders in general meeting and all notices of general meeting of Shareholders, however, if the Option holder is not a Shareholder, the Option holder will not have any right to attend or vote at these meetings.

AI assistant

PATERSON RESOURCES LTD — Proxy Solicitation & Information Statement 2016

65618_rns_2016-07-19_4d887af0-328a-4bb5-b731-c58a05a65981.pdf

ELYSIUM RESOURCES LIMITED A B N 4 5 1 1 5 5 9 3 0 0 5

NOTICE OF GENERAL MEETING AND EXPLANATORY STATEMENT

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR ATTENTION.

NOTICE OF GENERAL MEETING

CONTENTS

ORDINARY BUSINESS

1. Resolution 1 – Approval of Placement of 250,000,000 Ordinary shares

Voting Exclusion

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

2. Resolution 2 – Share Placement (to raise up to $5m)

Voting Exclusion

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

3. Resolution 3 – Grant of Options to Brokers and Financial Advisers

Voting Exclusion

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

4. Resolution 4 – Consolidation of Share Capital (1 for 25)

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

5. Resolution 5 – Grant of Options to Mr Maxim James Carling

Voting Exclusion

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

6. Resolution 6 – Grant of Options to Mr Michael Douglas Tilley

Voting Exclusion

Voting Prohibition Statement :

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

7. Resolution 7 – Grant of Options to Mr Robin Armstrong

Voting Exclusion

Voting Prohibition Statement :

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

8. Resolution 8 – Grant of Options to Mr Terence Clee

Voting Exclusion

Voting Prohibition Statement :

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

9. Resolution 9 – Grant of Options to Mr Mark Theodore Ohlsson

Voting Exclusion

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

10. Resolution 10 – Approval of Issue of 24,800,000 Ordinary shares and 12,400,000 attaching Options

Voting Exclusion

PLEASE READ THE EXPLANATORY STATEMENT FOR THIS RESOLUTION

Accompanying Explanatory Statement

Proxies

Voting Entitlements

By Order of the Board of Directors

Mark Ohlsson Company Secretary

Explanatory Statement

1. Resolution 1 – Placement of 250,000,000 Ordinary shares

Introduction

ASX Listing Rules 7.1; 7.4

Information required by the ASX Listing Rules

2. Resolution 2 – Share Placement

ASX Listing Rule 7.1

Information required by the ASX Listing Rules

Directors’ recommendation

3. Resolution 3 – Grant of Options to Brokers and Financial Advisers

Introduction

ASX Listing Rule 7.1

Information required by the ASX Listing Rules

Terms and Conditions of the Options

Directors’ recommendation

4. Resolution 4 – Consolidation of Capital

Introduction

Section 254H of the Corporations Act

Purpose of Consolidation

Effect of Share Consolidation

Taxation consequences

Timetable

Directors’ Recommendation

5. Resolutions 5, 6, 7, 8 and 9 – Grant of Options to Directors and Company Secretary

Introduction

Corporations Act

ASX Listing Rules

Terms and Conditions of the Options

Corporate Governance

Potential Benefits – Issue of Options

Potential Costs – Issue of Options

Valuation of Options

Identifying the Related Parties

Current remuneration and interests

PATERSON RESOURCES LTD Proxy Solicitation & Information Statement 2016