PATERSON RESOURCES LTD — Proxy Solicitation & Information Statement 2018

Apr 2, 2018

HARDEY RESOURCES LIMITED

ACN 115 593 005

NOTICE OF GENERAL MEETING

TIME : 10:00am (WST) DATE : Monday, 30[th ] April 2018 PLACE : 54 Kings Park Road WEST PERTH WA 6005

The business of the Meeting affects your shareholding and your vote is important.

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 10:00am (WST) on 28 April 2018.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary, on (+61 8) 6559 1792

BUSINESS OF THE GENERAL MEETING

AGENDA

1. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE OF SHARES - TRANCHE 1 PLACEMENT SHARES

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 148,757,837 Shares to investors on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or an associate of that person (or those persons). 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 directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. RESOLUTION 2 – APPROVAL FOR ISSUE OF SHARES - TRANCHE 2 PLACEMENT SHARES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue 193,752,363 Shares, on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or those persons). 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 directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. RESOLUTION 3 – APPROVAL FOR ISSUE OF OPTIONS - ATTACHING OPTIONS UNDER PLACEMENT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 342,500,200 free Attaching Options, on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or those persons). 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 directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

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DATED: 27 MARCH 2018

BY ORDER OF THE BOARD

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SARAH SMITH COMPANY SECRETARY

Voting in person

To vote in person, attend the Meeting at the time, date and place set out above.

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

• each Shareholder has a right to appoint a proxy;

• the proxy need not be a Shareholder of the Company; and

• a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

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EXPLANATORY STATEMENT

This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

1. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE OF SHARES - TRANCHE 1 PLACEMENT SHARES

1.1 General

On 16 March 2018, the Company announced that it had received applications for 342,500,200 fully paid ordinary shares in Hardey ( Shares ) at a price of $0.004 per Share to raise approximately A$1.37 million (before costs) through a placement to sophisticated and professional investors ( Placement ). It was intended for the Placement to be conducted in two tranches, with the first tranche of 148,747,837 Shares ( Tranche 1 Placement Shares ) issued under the Company’s 15% placement capacity under Listing Rule 7.1 on 20 March 2018. Tranche 2 of the Placement, comprising of 193,752,363 Shares is subject to Shareholder approval (refer to Resolution 2).

In addition, participants in the Placement are to receive one (1) free attaching listed option for every one (1) Share subscribed for in the Placement, exercisable at $0.02 each on or before 30 April 2020 ( Attaching Options ), subject to Shareholder approval (refer to Resolution 3). The Attaching Options will be issued on the same terms and conditions as the existing listed options class on issue (EYMOC) as summarised in Schedule 1.

Resolution 1 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of the 148,747,837 Tranche 1 Placement Shares.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with Shareholder approval for the purpose of ASX Listing Rule 7.1.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

1.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Resolution 1:

• (a) 148,747,837 Shares were issued;

• (b) the issue price was $0.004 per Share;

• (c) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

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• (d) the Shares were issued to sophisticated and professional investors, none of these investors were related parties of the Company; and

• (e) the funds raised were used (and are intended to be used) to further the Company’s exploration efforts for Hardey’s existing projects, with a particular focus on the Burraga Project, including the recommencement of the Burraga drilling programme devised in 2017. In addition, the funds are intended to be used 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 issue of the Tranche 1 Placement Shares the subject of Resolution 1 increased the number of Shares on issue from 1,019,315,630 to 1,168,063,467 with the effect that the shareholding of Shareholders was diluted by 12.7%.

2. RESOLUTION 2 – APPROVAL FOR ISSUE OF SHARES - TRANCHE 2 PLACEMENT SHARES

2.1 General

Pursuant to the Placement outlined in Section 1.1 above, Resolution 2 seeks Shareholder approval, under ASX Listing Rule 7.1, for the Company to issue up to 193,752,363 Shares, being the second tranche of the Placement ( Tranche 2 Placement Shares ).

A summary of ASX Listing Rule 7.1 is set out in Section 1.1 above.

The effect of Resolution 2 will be to allow the Company to issue the Tranche 2 Placement Shares pursuant to Resolution 2 during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

2.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to Resolution 2:

• (a) the maximum number of Shares to be issued is 193,752,363;

• (b) the Tranche 2 Placement Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Tranche 2 Placement Shares will occur progressively;

• (c) the issue price will be $0.004 per Share;

• (d) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (e) the Shares will be issued to the participants of the Placement the subject of Resolution 1, none of these persons are related parties of the Company; and

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• (f) the funds raised are intended to be used to further the Company’s exploration efforts for Hardey’s existing projects, with a particular focus on the Burraga Project, including the recommencement of the Burraga drilling programme devised in 2017. In addition, the funds are intended to be used 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.

If all of the Tranche 2 Placement Shares the subject of Resolution 2 are issued, and assuming no other Shares are issued, this will increase the number of Shares currently on issue from 1,168,063,467 to 1,361,815,830 with the effect that the shareholding of existing Shareholders will be diluted by 14%.

3. RESOLUTION 3 – APPROVAL FOR ISSUE OF OPTIONS - ATTACHING OPTIONS UNDER PLACEMENT

3.1 General

Resolution 3 seeks Shareholder approval, under ASX Listing Rule 7.1, for the Company to issue up to 342,500,200 Attaching Options to participants of the Placement the subject of Resolutions 1 and 2 .

A summary of ASX Listing Rule 7.1 is set out in Section 1.1 above.

The effect of Resolution 3 will be to allow the Company to issue the Attaching Options pursuant to Resolution 3 during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

3.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Resolution 3:

• (a) the maximum number of Attaching Options to be issued is 342,500,200 being one free Attaching Option for every Placement Share;

• (b) the Attaching Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Attaching Options will occur progressively;

• (c) the issue price of the Attaching Options will be nil as they will be issued free attaching with the Placement Shares on a 1:1 basis;

• (d) the Attaching Options will be exercisable at $0.02 each on or before 30 April 2020 and will be issued on the same terms and conditions as the existing listed options class on issue (EYMOC) as summarised in Schedule 1;

• (e) The Attaching Options will be issued to investors who participated in the Placement on the basis of one (1) Attaching Options for every one (1) Placement Share subscribed for and issued pursuant to Resolutions 1 and 2; and

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(f) No funds will be raised from this issue as the Attaching Options are free attaching to the Placement Shares.

If all of the Tranche 2 Placement Shares the subject of Resolution 2 are issued and the Attaching Options the subject of Resolution 3 are issued and exercised, assuming no other Shares are issued, this will increase the number of Shares currently on issue from 1,168,063,467 to 1,704,316,030 with the effect that the shareholding of existing Shareholders will be diluted by 31%.

4. ENQUIRIES

Shareholders are requested to contact Company Secretary, Sarah Smith on (+ 61 8) 6559 1792 if they have any queries in respect of the matters set out in these documents.

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GLOSSARY

$ means Australian dollars.

Attaching Options has the meaning as per Section 1.1 of the Explanatory Statement being an Option with the terms summarised in Schedule 1

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Company or Hardey means Hardey Resources Limited (ABN 45 115 593 005).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice of Meeting.

General Meeting or Meeting means the meeting convened by the Notice.

Notice or Notice of Meeting or Notice of General Meeting means this notice of general meeting including the Explanatory Statement and the Proxy Form.

Option means an option to acquire a Share.

Placement means the two-tranche placement announced 16 March 2018 for the issue of 342,500,200 Shares at a price of $0.004 per Share with Attaching Options to raise approximately A$1.37 million.

Placement Shares means Shares issued under the Placement and include the Tranche 1 Placement Shares and Tranche 2 Placement Shares as applicable.

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

Section means a section the Explanatory Statement.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

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Tranche 1 Placement Shares has the meaning as per Section 1.1.

Tranche 2 Placement Shares has the meaning as per Section 2.1.

WST means Western Standard Time as observed in Perth, Western Australia.

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SCHEDULE 1 – TERMS AND CONDITIONS OF THE ATTACHING OPTIONS

Terms and condition of Attaching Options (Resolution 3)

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (i), the amount payable upon exercise of each Option will be $0.02 ( Exercise Price ).

(c) Expiry Date

Each Option expires at 5:00 pm (WST) on 30 April 2020 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f) Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g) Timing of issue of Shares on exercise

Within 15 Business Days after the Exercise Date, the Company will:

• (i) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

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If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(i) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(j) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(k) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(l) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

(m) Quotation

The Company will apply for quotation of the Options on ASX.

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Lodge your vote:

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
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Online:

www.investorvote.com.au



By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

HDY

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 369 046 (outside Australia) +61 3 9946 4431

Proxy Form

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Vote online



• Go to www.investorvote.com.au or scan the QR Code with your mobile device. • Follow the instructions on the secure website to vote.

Your access information that you will need to vote:

Control Number: 999999 SRN/HIN: I9999999999 PIN: 99999 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

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 For your vote to be effective it must be received by 10:00am (WST) Saturday, 28 April 2018

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote or abstain as they choose (to the extent permitted by law). If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions for Postal Forms

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the help tab, "Printable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

GO ONLINE TO VOTE,  or turn over to complete the form

Samples/000001/000001/i12

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ‘ X ’) should advise your broker of any changes.

I 9999999999 I ND

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Proxy Form

Please mark

to indicate your directions

Appoint a Proxy to Vote on Your Behalf

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I/We being a member/s of Hardey Resources Limited hereby appoint

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the Chairman of the Meeting

OR

 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the General Meeting of Hardey Resources Limited to be held at 54 Kings Park Road, West Perth, Western Australia on Monday, 30 April 2018 at 10:00am (WST) and at any adjournment or postponement of that meeting.

Items of Business 

PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

Resolution 1 Ratification of prior issue of Shares - Tranche 1 Placement Shares Resolution 2 Approval for issue of Shares - Tranche 2 Placement Shares Resolution 3 Approval for issue of Options - attaching Options under Placement

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The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. In exceptional circumstances, the Chairman of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

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SIGN
Signature of Securityholder(s) This section must be completed.
Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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