PEAKO LIMITED — AGM Information 2021

Oct 24, 2021

20 October 2021

Dear Shareholder

A Notice of Annual General Meeting of Peako Limited (Peako or the Company) to be held on Friday 26th November 2021 at 2:30pm AEDT is now available at https://www.peako.com.au/asxannouncements/.

Safety of our shareholders and staff is our paramount concern, and therefore we will hold the General Meeting by way of live video conference. There will be no physical meeting.

The consequences of this are as follows:

• 1. If you wish to attend the virtual meeting, you must email info@peako.com.au and you will be provided with a link to enable you to join the video conference;
• 1. We recommend that any questions concerning the business of the meeting are submitted to info@peako.com.au in advance of the meeting;
• 1. All resolutions will be determined by way of a poll. The poll will be conducted based on votes submitted by proxy and Shareholders who have indicated that they intend to vote at the Meeting in accordance with the instructions below.
• 1. Due to the virtual nature of the Meeting, shareholders who wish to vote during the Meeting must notify the Company Secretary of their intention by emailing info@peako.com.au by no later than 2:30pm AEDT on Wednesday 24th November 2021 and provide their registered Shareholding details and the Company Secretary will verify their Shareholding. Shareholders will be able to submit their electronic vote immediately after the Chair calls for a vote on each Resolution.

Shareholders are strongly encouraged to lodge a proxy form to vote at the General Meeting at least 48 hours before the meeting.

Yours sincerely

Robert Wright Company Secretary

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PEAKO LIMITED

(ABN 79 131 843 868)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting (Meeting) of the Members of Peako Limited (Company) will be held by videoconference, at 2:30pm (AEDT) on Friday, 26th November 2021.

ORDINARY BUSINESS

Annual Financial Report

To receive and consider the Financial Statements of the Company for the year ended 30 June 2021 and the reports of the Directors and Auditor thereon.

Resolution 1: Adoption of the Remuneration Report for the year ended 30 June 2021

To consider and if thought fit, to pass the following as a non-binding and advisory resolution in accordance with section 250R of the Corporations Act:

"To adopt the Remuneration Report as included in the Directors' Report for the year ended 30 June 2021."

Resolution 2: To consider the election of P.A. Kitto as a Director of the Company

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

"That Paul Anthony Kitto, who retires as a Director pursuant to the Constitution and, being eligible, offers himself for re-election and is hereby elected as a Director of the Company."

Resolution 3: To consider the re-election of E.G. Albers as a Director of the Company

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

"That Ernest Geoffrey Albers, who retires as a Director pursuant to the Constitution and, being eligible, offers himself for re-election and is hereby elected as a Director of the Company."

Resolution 4: Grant of Options to a consultant

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

"That, in accordance with, and for the purposes of Listing Rule 7.1 and in accordance with Listing Rule 7.3, approval is given to grant a consultant of the Company an aggregate 500,000 options on the terms and conditions set out in the Explanatory Statement."

Resolution 5: Grant of Options to director - Dr PA Kitto

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

"That, for the purposes of Chapter 2E of the Corporations Act and Listing Rule 10.11.1, approval is given to grant Dr PA Kitto 3,000,000 options on the terms and conditions set out in the Explanatory Statement."

SPECIAL BUSINESS

Resolution 6. 10% Placement Capacity under Listing Rule 7.1A

To consider and if thought fit, to pass the following resolution as a special resolution:

"That for the purposes of Listing Rule 7.1A and for all other purposes, the issue of up to 10% of the Company's share capital, calculated in accordance with Listing Rule 7.1A and on the terms and conditions set out in the Explanatory Memorandum, is approved."

OTHER BUSINESS

To transact any other business which may be properly brought before the Meeting in accordance with the Company's Constitution and the Corporations Act.

NOTES

Requisite Majorities

Resolutions 1 to 5 are ordinary resolutions and will be passed only if supported by a simple majority of the votes cast by Shareholders entitled to vote on the resolutions.

Resolution 6 is a special resolution and will passed only of supported by 75% of votes cast by members present and eligible to vote at the Meeting.

Voting Exclusion Statement

Resolution 1 - Remuneration Report

A vote may not be cast (in any capacity) on Resolution 1 by or on behalf of any of the following persons:

• (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
• (b) a Closely Related Party of a member of the Key Management Personnel.

However, a person described in (a) or (b) may cast a vote on Resolution 1 if:

• (c) the person does so as a proxy appointed in writing that specifies how the proxy is to vote on the proposed resolution; and
• (d) the vote is not cast on behalf of a person described in (a) or (b).

Resolution 4 Grant of Options to Consultant

In accordance with the provisions of Chapter 2E of the Corporations Act 2001 and the requirements of ASX Listing Rule 7.1 the Company will disregard any votes cast in favour of this Resolution by or on behalf of the consultant (Robert Wright) who is expected to obtain a material benefit as a result of, the proposed grant (except a benefit solely by reason of being a Shareholder) or any associates of that person. However, the Company will not disregard a vote if:

(a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way; or

the Chair of the Meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (b) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and
• (c) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Please note, in accordance with sections 250BD(1) and (2) of the Corporations Act, the Chairman will not vote any undirected proxies in relation to these Resolutions unless the Shareholder expressly authorises the Chairman to vote in accordance with the Chairman's stated voting intentions.

Resolution 5 – Grant of Options to Director - PA Kitto

In accordance with the provisions of Chapter 2E of the Corporations Act 2001 and the requirements of ASX Listing Rule 10.13, the Company will disregard any votes cast in favour of Resolution 5 by PA Kitto, or any Associate of PA Kitto and any other person who will obtain a material benefit as a result of the issue of the (except a benefit solely by reason of being a holder of ordinary securities in the entity). However, the Company will not disregard a vote if:

(a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way; or

the Chair of the Meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (b) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and
• (c) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Please note, in accordance with sections 250BD(1) and (2) of the Corporations Act, the Chairman will not vote any undirected proxies in relation to these Resolutions unless the

Shareholder expressly authorises the Chairman to vote in accordance with the Chairman's stated voting intentions.

Resolution 6 – 10% Placement Capacity

In accordance with the provisions of Chapter 2E of the Corporations Act 2001 and the requirements of ASX Listing Rule 7.1 the Company will disregard any votes cast in favour of this Resolution by or on behalf of a person who is expected to participate in, or will obtain a material benefit as a result of, the proposed grant (except a benefit solely by reason of being a Shareholder) or any associates of those persons. However, the Company will not disregard a vote if:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way; or
• (b) the Chair of the Meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or
• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:
  • (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and
  • (ii) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

At the date of the Notice the Company had not approached any Member or an identifiable class of Members to participate in the issue of equity securities. No Member's vote will therefore be excluded under the voting exclusion statements in the Notice.

Explanatory Memorandum

The Explanatory Memorandum accompanying this Notice of Meeting is incorporated in and comprises part of this Notice of Meeting.

By order of the Board

PEAKO LIMITED

Robert Wright Company Secretary 20 October 2021

EXPLANATORY NOTES TO THE BUSINESS OF THE MEETING

Note 1: Annual Financial Report of the Company

The Financial Statements and related reports for the last financial year are contained in the Company's 2020 Annual Report and will be laid before the Meeting. While no Resolution is required, Members are encouraged to ask questions of the Directors and the Auditor and make comments on the Financial Statements and reports.

The Auditor responsible for preparing the Auditor's Report for the year ended 30 June 2021, (or his representative) will attend the Meeting. The Chairman will also allow a reasonable opportunity for Members to ask the Auditor questions about the:

• a) conduct of the audit;
• b) preparation and content of the Auditor's Report;
• c) accounting policies adopted by the Company in relation to the preparation of the Consolidated Financial Statements; and
• d) independence of the Auditor in relation to the conduct of the audit.

To assist the Directors and the Auditor in responding to questions, please submit your questions by mail to Peako Limited, Level 1, 10 Yarra Street, South Yarra Vic 3141 or by email to info@peako.com.au so they are received by no later than 5:00pm (AEDT) on Friday, 19 November 2021, being five (5) business days prior to the Meeting.

As required under section 250PA of the Corporations Act, at the Meeting the Company will distribute a list setting out the questions directed to the Auditor that have been received in writing from Members, being questions the Auditor considers relevant to the content of the Auditor's Report or the conduct of the audit of the Consolidated Financial Statements for the year ended 30 June 2021. The Chairman will allow reasonable opportunity for the Auditor to respond to the questions set out in this list.

Note 2: Resolution 1 - Remuneration Report

The Remuneration Report, which is included in the Directors' Report section of the Company's 2021 Annual Report, will be laid before the Meeting. While the Resolution to adopt it is not binding on the Company or the Directors, Members are encouraged to ask questions and make comments on the Remuneration Report. You should also note that the following voting restrictions apply in relation to voting on the Remuneration Report.

Voting exclusion statement

A vote may not be cast (in any capacity) on Resolution 1 by or on behalf of any of the following persons:

• a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
• b) a Closely Related Party of a member of the Key Management Personnel.

However, a person described in (a) or (b) may cast a vote on Resolution 1 if:

• c) the person does so as a proxy appointed in writing that specifies how the proxy is to vote on the proposed Resolution; and
• d) the vote is not cast on behalf of a person described in (a) or (b).

The Directors unanimously recommend eligible Members vote in favour of adopting the Remuneration Report.

Note 3: Resolutions 2 and 3 - Election and Re-election of Director

Resolution 2. Dr Paul Kitto was appointed by the directors as a non-executive director on 20 September 2021. The Company's Constitution requires that where a person is appointed as an additional director since the last Annual General Meeting that person must retire from office but is eligible for election. Dr Kitto retires in accordance with that Rule and is seeking election at the Meeting. Biographical information for Dr Kitto can be found in the Company's annual report and on the company's website: https://www.peako.com.au/. The Directors, other than Dr Kitto, unanimously recommend all Members vote in favour of the election of Dr Kitto.

Resolution 3. The Company's Constitution requires that at every Annual General Meeting one third of the Directors (other than the Managing Director) shall, by rotation, retire from office and provides that such Director or Directors are eligible for re-election. Mr Albers retires by rotation and is seeking re-election at the Meeting. Biographical information for Mr Albers can be found in the Company's annual report and on the company's website: https://www.peako.com.au/. The Directors, other than Mr Albers, unanimously recommend all Members vote in favour of the re-election of Mr Albers.

Note 4: Resolution 4: Proposed Grant of Options to Consultant (Robert Wright)

Background

The Board considers that the grant of Options to a consultant is a cost effective method of aligning the interests of consultants and shareholders whilst preserving the Company's cash reserves.

The Board resolved on 14 October 2021 to grant (subject to Shareholder approval) 500,000 unlisted Options to a consultant.

As at the date the Board resolved to issue Options to the consultant the 5-day VWAP of the Company's shares (ASX Code: PKO) was $0.0226 per share.

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.

The effect of Resolution 4 will be to allow the Company to issue the consultant options during the period of one month after the Meeting (or a longer period, if allowed by ASX), without using the Company's 15% annual placement capacity.

In the event that shareholders do not approve the grant of the consultant options, the options will still be granted and the Company's 15% annual placement capacity will be used for this purpose.

Application of Listing Rules 7.1 and 7.3

In compliance with Listing Rules 7.1 and 7.3 the following information is provided in relation to resolution 4 on the Notice of Meeting.

• (a) The maximum number of Options which will be issued under the resolution is 500,000 Options in total as specified in resolution 4.
• (b) The date by which Peako will issue the Options will be not later than 26 December 2021 which is not later than one (1) month after the date of the Meeting.
• (c) The Options are issued free of cost as incentive Options.
• (d) The person to whom the options will be granted is Robert Wright.

(e) The purpose of the grant is to incentivise the consultant with a cost effective method of aligning the interests of consultants and shareholders whilst preserving the Company's cash reserves.

Terms of options

The proposed terms of grant of options are as follows:

• a) Each of the 500,000 options granted shall, subject to the terms and conditions set out below, entitle the holder to subscribe for one ordinary share in Peako Limited (the Company) upon the payment of the Exercise Price.
• b) The Exercise Price of the options is $0.06 (6 cents)
• c) The options will lapse at 5.00pm (AEDT) on 25 November 2024 (Expiry Date) subject to the provisions of (h).
• d) The options are not transferable to any person other than an Associate of the grantee (within the meaning of the Corporations Act 2001) without the prior approval of the Board of Directors of the Company.
• e) There are no participating rights or entitlements inherent in these options and holders of the options will not be entitled to participate in new issues of capital that may be offered to shareholders during the currency of the option or in the payment of any dividend without having exercised the option prior to the record date to determine entitlements to any such entitlements or distributions.
• f) In the event of any re-organisation (including reconstruction, consolidation, subdivision, reduction or return of capital) of the issued capital of the Company, the options will be reorganised in respect to number and exercise price as required by the Listing Rules, but in all other respects the terms of exercise will remain unchanged.
• g) Contingent upon the holder's continuing involvement with the Company in the form of ongoing employment and or consultancy arrangements, the options are exerciseable at any time during the period and on or before the Expiry Date (subject to the right set out in provision (h)), by the delivery to the registered office of the Company of a notice in writing (Notice) stating the intention of the optionholder to exercise the option accompanied by an Option Certificate or Holding Statement and a cheque or electronic transfer made payable to the Company for the subscription monies for the shares to be issued on exercise of the options the subject of the Notice. The Notice and cheque or electronic transfer must be received by the Company during the exercise period. An exercise of only some options shall not affect the rights of the optionholder to the balance of the options held by him.
• h) In the event that the holder ceases involvement with the Company before the Expiry Date, then the holder shall have the right for a further period of three months from the date of cessation of ongoing employment, and or consultancy arrangement, in which to exercise the options, provided that such extended period shall be limited to a date no later than the Expiry Date (Extended Expiry Date). In this circumstance, the options will lapse on the Extended Expiry Date. The decision as to the date of cessation of involvement with the Company and the end of the Extended Expiry Date shall be a matter at the sole discretion of the Board of Directors of the Company.

• i) The Company shall allot the resultant shares and deliver a statement of shareholdings with a Holders' Identification Number within 5 business days of exercise of the options.
• j) The shares allotted shall rank, from the date of allotment, equally with the existing ordinary shares of the Company in all respects.
• k) No monies are required for the grant of the Options.
• l) In accordance with the requirements of ASX Listing Rule 7.1 the Company advises that it will disregard any votes cast on Resolution 4 on the Notice of Meeting by the person named in paragraph (d) above and any associates of that person.

Note 5: Resolution 5 – Grant of Options to director - Dr PA Kitto

Background

On 20 September 2021 the Company appointed Dr Paul Kitto as Non-Executive Director. In conjunction with Dr Kitto's appointment the Company agreed to issue 3,000,000 incentive options to Dr Kitto.

The Board has determined that the grant of Options to Dr Kitto proposed by Resolution 5 constitutes an important incentive to motivate and reward the performance of Dr Kitto in his role. In addition, by providing incentive remuneration in the form of options, the company retains that additional cash for use in other aspects of its operations. The Board acknowledges the issue of options to Dr Kitto who is a non-executive Director is contrary to Recommendation 8.2 of the ASX Corporate Governance Principles and Recommendations. However, the Board considers the issue of the Options to Dr Kitto reasonable in the circumstances, given the necessity to attract and retain the highest calibre of professionals to the Company, whilst maintaining the Company's cash reserves.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Director Options to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Director Options to the Related Parties will not be included in the 15% calculation of the Company's annual placement capacity pursuant to ASX Listing Rule 7.1.

Accordingly, the grant of the Director Options to Dr Kitto will not reduce the Company's 15% capacity for the purposes of Listing Rule 7.1.

In the event that shareholders do not approve the grant of the director options, the options will not be granted. No other form of replacement incentive is currently available to directors should the options not be granted.

As at the date the Board resolved to issue Options to the director the 5-day VWAP of the Company's shares was $0.0226 per share.

Terms of options

The proposed terms of grant of options are as follows:

a) Each of the 3,000.000 options granted shall, subject to the terms and conditions set out below, entitle the holder to subscribe for one ordinary share in Peako Limited (the Company) upon the payment of the Exercise Price.

• b) The Exercise Price of the options is as follows :
  • 1,000,000 at $0.06 (6 cents)
  • 1,000,000 at $0.10 (10 cents)
  • 1,000,000 at $0.15 (15 cents)
• c) The options will lapse at 5.00pm (AEDT) on
  • 1,000,000 29 March 2024 (Expiry Date 1) subject to the provisions of (h).
  • 1,000,000 25 November 2024 (Expiry Date 2) subject to the provisions of (h).
  • 1,000,000 25 November 2025 (Expiry Date 3) subject to the provisions of (h).
• d) The options are not transferable to any person other than an Associate of the grantee (within the meaning of the Corporations Act 2001) without the prior approval of the Board of Directors of the Company.
• e) There are no participating rights or entitlements inherent in these options and holders of the options will not be entitled to participate in new issues of capital that may be offered to shareholders during the currency of the option or in the payment of any dividend without having exercised the option prior to the record date to determine entitlements to any such entitlements or distributions.
• f) In the event of any re-organisation (including reconstruction, consolidation, subdivision, reduction or return of capital) of the issued capital of the Company, the options will be reorganised in respect to number and exercise price as required by the Listing Rules, but in all other respects the terms of exercise will remain unchanged.
• g) Contingent upon the holder's continuing involvement with the Company in the form of ongoing directorship, employment and or consultancy arrangements, the options are exerciseable at any time during the period and on or before the Expiry Date (subject to the right set out in provision (h)), by the delivery to the registered office of the Company of a notice in writing (Notice) stating the intention of the optionholder to exercise the option accompanied by an Option Certificate or Holding Statement and a cheque or electronic transfer made payable to the Company for the subscription monies for the shares to be issued on exercise of the options the subject of the Notice. The Notice and cheque or electronic transfer must be received by the Company during the exercise period. An exercise of only some options shall not affect the rights of the optionholder to the balance of the options held by him.
• h) In the event that the holder ceases involvement with the Company before the Expiry Date, then the holder shall have the right for a further period of three months from the date of cessation of ongoing directorship, employment, and or consultancy arrangement, in which to exercise the options, provided that such extended period shall be limited to a date no later than the Expiry Date (Extended Expiry Date). In this circumstance, the options will lapse on the Extended Expiry Date. The decision as to the date of cessation of involvement with the Company and the end of the Extended Expiry Date shall be a matter at the sole discretion of the Board of Directors of the Company.
• i) The Company shall allot the resultant shares and deliver a statement of shareholdings with a Holders' Identification Number within 5 business days of exercise of the options.

• j) The shares allotted shall rank, from the date of allotment, equally with the existing ordinary shares of the Company in all respects.
• k) No monies are required for the grant of the Options.
• l) In accordance with the requirements of ASX Listing Rule 7.1 the Company advises that it will disregard any votes cast on Resolution 5 on the Notice of Meeting by the person named in paragraph (d) above and any associates of that person.

Application of Listing Rules 10.11,10.13 and 10.13.8

In compliance with Listing Rules 10.11,10.13 and 10.13.8 the following information is provided in relation to resolution 5 on the Notice of Meeting.

• (a) The name of the grantee of the Options is as set out in resolution 5 (PA Kitto).
• (b) The Related Party is Dr PA Kitto who is a related party under Listing Rule 10.11.1 by virtue of being a Director.
• (c) The maximum number of Options which will be issued under Resolution 5 is 3,000,000 options.
• (d) The date by which the Company will issue the Options will be not later than 26 December 2021 which is not later than one (1) month after the date of the Meeting.
• (e) The grantee of the Option; the subject of Resolution 5, is a director of the Company as named in the resolution.
• (f) The Options are issued free of cost as incentive Options. The Exercise Price of the options is as follows: 1,000,000 at $0.06 (6 cents) 1,000,000 at $0.10 (10 cents) and 1,000,000 at $0.15 (15 cents)
• (g) No monies are required for the grant of the Options.
• (h) The only director to have an interest in the outcome of the resolution 5 is Dr Kitto and his respective benefits are that he will be granted the Options as provided in resolution 5 and will be the recipient of any financial benefit flowing from the grant of such options.
• (i) A voting exclusion for the resolution is included in the Notice of Meeting.
• (j) The purpose of the grant is to incentivise the Director.
• (k) the remuneration from the Company to the Director for the previous financial year and the proposed remuneration and emoluments for the current financial year are set out below:

Related Party	Current	Previous
	Financial	Financial
	Year	Year
PA Kitto	$35,0001	$Nil

1 excluding any value attributable to options proposed to be granted in resolution 5

In relation to Resolutions 5, if approval is given by such resolution to grant options to the director named in such resolution under Listing Rule 10.11 further approval to grant such options is not required under Listing Rule 7.1.

1,000,000 Options – Exercise Price – Expiry Date 29 March 2024

The exercise price of the Director Options will be $0.6 (6 cents).

The options proposed to be granted have a pro forma valued based on current share prices using Black Scholes binomial model. That valuation has determined a current value of $0.0058 for each option with total values as shown in the table below:

Director	No. of Options	Valuation
PA Kitto	1,000,000	$5,767

The director has received one payment of $7,800 in October 2021 for services provided.

Dr Kitto's relevant interests in existing securities in the capital of the Company is as follows.

Director	No. of Fully Paid	No of
	Shares held	Options held
PA Kitto	Nil	Nil

Option pro forma Valuation

The valuation of the options as at 13 October 2021 using a binomial model shows a current value per option of $0.0058 per option, based on the following assumptions:

• A current share price of $0.024;
• an exercise price of $0.06
• the options being granted on 26 November 2021 and expiring 29 March 2024;
• a risk free rate of 0.09% for Commonwealth Treasury Bond yields with a maturity approximating the expiry date of the options.
• a volatility factor of 89% calculated by reference to the average volatility of various other relevant companies.

1,000,000 Options – Exercise Price – Expiry Date 25 November 2024

The exercise price of the Director Options will be $0.10 (10 cents).

The options proposed to be granted have a pro forma valued based on current share prices using Black Scholes binomial model. That valuation has determined a current value of $0.0058 for each option with total values as shown in the table below:

Director	No. of Options	Valuation
PA Kitto	1,000,000	$5,915

Option pro forma Valuation

The valuation of the options as at 13 October 2021 using a binomial model shows a current value per option of $0.0059 per option, based on the following assumptions:

• A current share price of $0.024;
• an exercise price of $0.10
• the options being granted on 26 November 2021 and expiring 25 November 2024;
• a risk free rate of 0.39% for Commonwealth Treasury Bond yields with a maturity approximating the expiry date of the options.
• a volatility factor of 89% calculated by reference to the average volatility of various other relevant companies.

1,000,000 Options – Exercise Price – Expiry Date 25 November 2025

The exercise price of the Director Options will be $0.15 (15 cents).

The options proposed to be granted have a pro forma valued based on current share prices using Black Scholes binomial model. That valuation has determined a current value of $0.0058 for each option with total values as shown in the table below:

Director	No. of Options	Valuation
PA Kitto	1,000,000	$6,252

Option pro forma Valuation

The valuation of the options as at 13 October 2021 using a binomial model shows a current value per option of $0.0063 per option, based on the following assumptions:

• A current share price of $0.024;
• an exercise price of $0.15
• the options being granted on 26 November 2021 and expiring 25 November 2024;
• a risk free rate of 0.94% for Commonwealth Treasury Bond yields with a maturity approximating the expiry date of the options.
• a volatility factor of 89% calculated by reference to the average volatility of various other relevant companies.

Recent market prices of Peako shares on ASX

During the 90-day period to 13 October 2021, the shares traded in a range of $0.022 to $0.044 per share. Volume weighted average share price ("VWAP") for various periods are set out below:

Subject to shareholder approval and prior to grant the offer option exercise price will be fully determined and valued in accordance with Black Scholes method appropriate to the offer.

VWAPPeriod	VWAP	Volume	ValueTraded $
30 Day	$ 0.0278	26,714,152	743,611
90 Day	$ 0.0316	118,607,616	3,745,089

Related Party Requirements of Chapter 2E of the Corporations Act 2001

The requirements of Section 219 of the Act as set out in Chapter 2E thereof require that certain information must be provided to members to enable them to vote in relation to each of the resolutions to be put to the meeting.

The Director named in the resolution proposing the grant of options to that Director has an interest in the outcome of that resolution. The nature of the financial benefit which may be obtained the named Director as a related party of the Company is that the Director will be granted the options which have the value as summarised above.

It is important for members to recognise that for the value in the related party benefit constituted by the grant of the options to be realisable by the optionholder, that the options must be exercised as they are, generally, not transferable.

The acquisition by any person of options does not change voting power. That voting power will only change in accordance with changes in the relevant interests in shareholdings of any member or of those of his associates.

Director's recommendations

The Corporations Act requires in Section 219, inter alia, that, in relation to each director of the company, it must be set out herein:

• (l) if the director wanted to make a recommendation to members about the proposed resolution—the recommendation and his or her reasons for it; or
• (m) if not—why not; or

(n) if the director was not available to consider the proposed resolution—why not.

Dr Kitto abstains from making any recommendation to members in relation to resolution 5 as he has an interest in the outcome of the resolution

All other Directors recommend that members vote in favour of resolution 5 as they consider that the grant of the Options to Dr Kitto constitutes an important incentive to motivate and reward the performance of Dr Kitto in his role.

Within the knowledge of the directors, there is no other information reasonably required by members in order to decide whether or not it is in the interest of the members to pass proposed resolution 5. The effect of passing the resolutions will, if the Options are exercised, be to dilute members' interests proportionately and to reduce the respective voting power of each of them proportionately.

Note 6: Resolution 6 - Approval of 10% Placement Capacity under Listing Rule 7.1A

Under Resolution 6, the Company is seeking members' approval of a Special Resolution to renew the Company's capacity to issue the maximum number of additional equity securities permitted under ASX Listing Rule 7.1A. This Listing Rule (LR) permits the placement of new equity securities (calculated in accordance with LR 7.1A.2) as described here:

ASX Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

A = The number of fully paid ordinary shares on issue at the commencement of the 12 months immediately preceding the date of issue or agreement to issue:

plus the number of fully paid ordinary securities issued in the 12 months under an exception to ASX Listing Rule 7.2 other than exception 9, 16 or 17;

plus the number of fully paid ordinary securities issued in the relevant period on the conversion of convertible securities within ASX Listing Rule 7.2 exception 9 where:

• the convertible securities were issued or agreed to be issued before the commencement of the relevant period; or
• the issue of, or agreement to issue the convertible securities was approve or taken under these rules to have been approved under ASX Listing Rule 7.1 or 7.4;

plus the number of fully paid ordinary securities issued in the relevant period under an agreement to issue securities within ASX Listing Rule 7.2 exception 16 where:

• the agreement was entered into before the commencement of the relevant period; or
• the agreement or issue was approved, or taken under these rules to have been approved under ASX Listing Rule 7.1 or rule 7.4;

plus the number of any other fully paid ordinary securities that became fully paid in the relevant period

less the number of fully paid ordinary securities cancelled in the last 12 months

Note that A has the same meaning in ASX Listing Rule 7.1 when calculating an entity's 15% placement capacity.

• D = 10%
• E = the number of equity securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the last 12 months immediately preceding the date or issue of the shares where the issue or agreement has not been subsequently approved by the holders of its ordinary securities under ASX Listing Rule 7.4

As Resolution 6 is a Special Resolution, it requires approval of 75% of the votes cast by members present and eligible to vote at the Meeting.

Eligibility criteria

Under LR 7.1A an eligible entity may, subject to shareholder approval by way of special resolution, make such a 10% Placement in addition to the 15% new issue capacity available to ASX-listed entities under LR 7.1. An eligible entity for the purposes of LR 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is not included in the S&P/ASX 300 Index and has a market capitalisation of significantly less than $300 million, so is an eligible entity.

Placement capacity under Listing Rule7.1A

As at the date of this Notice, the Company had 308,454,101 ordinary shares on issue. Therefore, in addition to any equity securities it can issue under LR 7.1, if Resolution 6 is approved, the Company will have capacity to issue up to 30,845,410 equity securities under LR 7.1A, being up to 10% of the 308,454,101 fully paid ordinary shares presently on issue. However, the number of equity securities that may be issued under LR 7.1A may increase beyond 308,454,101, as the actual number of fully paid shares on issue may increase by the date of any issue that may be made should Resolution 6 be approved.

Minimum issue price

In accordance with LR 7.1A, equity securities issued under the 10% Placement can only be issued at a price that is equivalent to not less than 75% of the volume weighted average price (VWAP) of the Company's equity securities of the same class calculated over the 15 trading days on which trades in its Shares were recorded immediately before:

• the date on which the issue price of the equity securities is agreed; or
• the issue date (if the equity securities are not issued within ten trading days of the date on which the issue price is agreed).

10% Placement Period

Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A commences on the date of the annual general meeting at which the approval is obtained and expires on the first to occur to the following:

• the date that is 12 months after the date of the annual general meeting at which the approval is obtained;
• the time and date of the Company's next annual general meeting; or

• the time and date of the approval by shareholders of ordinary securities of a transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking.

Shareholder approval under LR 7.1A does not lapse if the Company's market capitalisation subsequently exceeds $300 million or it is included in the S&P/ASX 300 Index at some time during the placement period; provided the Company meets the criteria under LR 7.1A on the date of the Meeting.

Dilution to existing shareholdings

If Resolution 6 is approved by members and the Company issues equity securities under the 10% Placement, there is a potential risk of economic and voting dilution to existing shareholders as a result.

Further, as the market price of the equity securities may be significantly lower on the issue date of the 10% Placement than on the date of approval at the Meeting, and because equity securities may be issued at a price that is at a discount to the market price on the issue date, there is a risk that the 10% Placement may raise less funding than it would if it was based on current market prices.

The economic dilution will reflect that existing shareholders who do not participate in the 10% Placement will have their underlying economic interests in the Company's assets diluted pro rata to the dilution in their shareholdings.

Additionally, as the issue price of any equity securities issued under the 10% Placement capacity may be at a discount to the equivalent VWAP of the Company's Shares traded over the 15 trading days prior to their issue price being set or the equity securities being issued, a further economic effect of such a placement may be a reduction in the market price or value of their then existing equity holding in the capital of the Company. Whether such a reduction in market price or value occurs, and if so for how long it continues, will depend on factors not presently known, including the purpose for which the 10% Placement may be made. The converse outcomes may also occur.

It is not possible to set out further economic effects which may arise from the 10% Placement, as they are unknown in advance of such a placement being made.

Details of all issues of equity securities by Peako during the 12 months preceding the date of the meeting as required by Listing Rule 7.3A6.

Placement share and options granted in July 2021 were ratified and/or approved by members at a general meeting held 26 July 2021.

There were no issuances in the preceding 12 months.

Table showing various hypothetical scenarios as required by Listing Rule 7.3A.4

As required by LR 7.3A.4, the table below shows a number of hypothetical scenarios for the 10% Placement where Variable "A" in the formula in LR 7.1A.2 (representing the Company's share capital) has increased by either 50% or 100% and the share price has decreased by 50% or increased by 100% from the approximate share price as at the date of this Notice.

DILUTION
		10% Placement	10% Placement	10% Placement
		Issue Price	Issue Price	Issue Price
		$0.011	$0.022	$0.044
Variable "A" in LR 7.1A.2 ispresently 308,451,101 fully paid		(being a 50%		(being a 100%
shares		decrease in Issue	(being the	increase in Issue
		Price below	current Share	Price above
		current share	Price)	current share
		price)		price)
Current Capital comprises308,454,101 sharesNo increase in capital.	Number ofShares	30,845,410	30,845,410	30,845,410
Variable A remains 308,451,101shares	Funds raised2	$339,300	$678,599	$1,357,198
50% increase in capital to462,681,152 shares by issue of154,277,051 shares. Variable A	Number ofShares3	46,268,115	46,268,115	46,268,115
increases to 462,681,152 shares	Funds raised	$508,949	$1,017,899	$2,035,797
100% increase in capital to616,908,202 shares by issue of308,454,101 shares.	Number ofShares3	61,690,820	61,690,820	61,690,820
Variable A increases to616,908,202 fully paid shares	Funds raised2	$678,599	$1,357,198	$2,714,396

2 Rounded to nearest whole dollar

**3**No of Shares rounded to nearest whole Share

The table has been prepared on the following hypothetical assumptions but the Company does not represent the assumptions will necessarily occur:

• the Company issues the maximum number of Shares available under the 10% Placement.
• any increase in Variable A (being the Company's issued share capital at the time of issue under the 10% Placement) is due solely to an issue of Shares which is an exception in LR 7.2; for example a pro-rata rights issue. However, a 15% placement under LR 7.1 does not increase Variable "A" for the purposes of calculating the placement capacity under LR 7.1A.
• the table shows only the effect of issues of shares under LR 7.1A, not under the 15% placement capacity available to ASX listed entities under LR 7.1.
• the table does not show the dilution that may be caused to any particular Shareholder by reason of placements of Shares under LR 7.1A, based on that Shareholder's holding at the date of the Meeting. For instance, Shareholders will have different outcomes depending on whether or not they participate in a pro-rata issue which has the effect of increasing Variable "A"; and
• the current price for shares is assumed to be $0.022, being the price on 12 October 2021 immediately prior to lodgement of this Notice with ASX.

Purpose of the 10% Placement

The Company may seek to issue equity securities under the 10% Placement at a cash issue price, in which case the Company would use the funds for existing projects, to fund new venture opportunities, as working capital generally or for other corporate purposes.

Allocation policy

The allottees of any equity securities to be issued under the 10% Placement capacity have not yet been determined. However, the allottees of equity securities could consist of current shareholders or new investors (or both), none of whom will be related parties of the Company.

No priority of application will be accorded to existing shareholders and, unless the 10% Placement was made with disclosure, the allottees will be excluded offerees under section 708(8), 708(10) or 708(11) of the Corporations Act.

Subject to the above provisos, the Company will determine the allottees and the manner of their selection at the time of the issue of the 10% Placement, having regard for the following factors:

• the purpose of the issue of equity securities;
• alternative methods for raising funds available to the Company at that time including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;
• the effect of the issue of equity securities on the control of the Company;
• the circumstances of the Company including, but not limited to, the financial position and solvency of the Company;
• prevailing market conditions; and
• advice from corporate, financial and broking advisors (if applicable).

Recommendation

As at the date of the Notice containing these Explanatory Notes, the Company has no plans to raise additional capital utilising the 10% Placement authority provided by Resolution 6. However, many eligible resource companies are, as a matter of corporate prudence, seeking to obtain this form of available shareholder approval to enable capital raisings to be made, if appropriate, during the 12 months following the Meeting. Accordingly, Members' approval of Resolution 6 is considered prudential.

The Directors believe Resolution 6 will provide the Company with the flexibility to raise capital quickly if advantageous terms are available or if required for funding the Company and where doing so is in the best interests of the Company.

The Directors unanimously recommend that all Members vote in favour of resolution 6.

Note 7: Voting Generally

• The Company has determined that, in accordance with regulation 7.11.37 of the Corporations Regulations 2001 (Cth), the holders of shares of the Company who are on the Company's share register as at 2:30pm (AEDT) on Wednesday 24th November 2021 will be taken for the purposes of the Meeting to be held by the persons who held them at that time. Accordingly, those persons will be entitled to attend and vote at the Meeting.
• A Member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the Member's voting rights.
• A proxy duly appointed need not be a Member.
• A proxy form accompanies this Notice and to be effective, the form and any document necessary to show the validity of the form must be lodged with the Company not less than 48 hours before the time appointed for the Meeting. Any proxy lodged after that time will be treated as invalid.
• Directors and Officers of corporate shareholders should note that unless the corporate shareholder either:
  • a) completes and lodges with the Company a valid form of appointment of proxy in accordance with the instructions on the enclosed proxy form; or
  • b) completes and either lodges with the Company prior to the Meeting a form of appointment of personal representative in accordance with the provisions of Section 250D of the Corporations Act or causes such personal representative to attend the Meeting with such form of appointment; or
  • c) has appointed an attorney,
  • d) and such proxy, personal representative or attorney attends the Meeting, then such corporate shareholder will be unable to exercise any votes at the Meeting.
• Proxy and corporate appointment of representative forms may be returned to the Company in the manner detailed at point 6 on the reverse of the proxy form.
• Corporate shareholders should comply with the execution requirements set out above and on the reverse of the proxy form and otherwise comply with the provisions of Section 127 of the Corporations Act, as detailed at point 7 on the reverse of the proxy form.
• Completion of a proxy form will not prevent individual Members from attending the Meeting in person if they wish. Where a Member completes and lodges a valid proxy form and attends the Meeting in person then the proxy's authority to speak and vote for that Member is suspended while the Member is present at the Meeting.

Where a proxy form or form of appointment of personal representative is lodged and is executed under power of attorney the power of attorney must be lodged in like manner as a proxy.