PERPETUAL RESOURCES LIMITED - AGM Information 2021

Perpetual Resources Limited ACN 154 516 533

Notice of Annual General Meeting

Notice is given that the Meeting will be held at:

Time: 12:00pm (Sydney time) Date: 29 November 2021 Place: The Meeting will be held as a virtual meeting.

The Meeting will be held via the Zoom Video Communications online platform. https://zoom.us/webinar/register/WN_6YyAimDmSLObNYb7Hjuwkw

Please refer to page 6 of the Notice for details on how to vote at the Meeting, and how to lodge proxies.

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 7:00pm (Sydney time) on 27 November 2021.

Business of the Meeting

Agenda

1. Financial Statements and Reports

To table and consider the Annual Report of the Company and its controlled entities for the financial year ended 30 June 2021, which includes the Financial Report, the Directors’ Report, the Remuneration Report and the Auditor’s Report.

2. Resolution 1 – Adoption of Remuneration Report

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution :

“That, for the purposes of section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Annual Report for the financial year ended 30 June 2021.”

Note: The vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of either 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 such a member.

However, a person (the voter ) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either:

(a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or
(b) the voter is the Chair and the appointment of the Chair as proxy:
(i) does not specify the way the proxy is to vote on this Resolution; and
(ii) expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

3. Resolution 2 – Re-election of Director – Julian Babarczy

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

“That, for the purposes of clause 13.3 of the Constitution, and for all other purposes, Mr Julian Babarczy, a Director, retires by rotation, and being eligible, is re- elected as a Director.”

4. Resolution 3 - Ratification of prior issue of Shares and Options, 22 February 2021 – ASX Listing Rule 7.1

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 7.4 and for a ll other purposes, Shareholders ratify the issue of 25,000,000 Shares and 5,000,000 Options to Delphi Unternehmensberatung AG and Deutsche Balaton AG under ASX Listing Rule 7.1 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 any person who participated in the issue, or any associates of those persons.

5. Resolution 4 - Ratification of prior issue of Shares – Vendor of Arrowsmith West Tenement - Listing Rule 7.1

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 7.4 and for all other purposes, Shareholders ratify the issue of 222,227 Shares to Mining Equities Pty Ltd under ASX Listing Rule 7.1 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 any person who participated in the issue, or any associates of those persons.

6. Resolution 5 - Ratification of prior issue of Options, 30 July 2021 – Corporate Advisory and Investor Relations Agreements - Listing Rule 7.1

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 7.4 and for all other purposes, Shareholders ratify the issue of 10,000,000 Options to providers of corporate advisory and investor relations services under ASX Listing Rule 7.1 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 any person who participated in the issue, or any associates of those persons.

7. Resolution 6 – Approval to issue Performance Rights to Director – Julian Babarczy

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

“That, for the purposes of section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 5,000,000 Performance Rights to Julian Babarczy (or his nominee/s), on the terms and conditions set out in the Explanatory Statement”

Voting Exclusion : The Company will disregard any votes cast in favour of this Resolution by or on behalf of Julian Babarczy (or his nominee/s), and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or any associates of those persons.

Voting Prohibition Statement: In accordance with section 224 of the Corporations Act, a vote on this Resolution may not be cast (in any capacity) by or on behalf of a related party of the company to whom the Resolution would permit a financial benefit be given or any of their associates ( Restricted Party ). However, a Restricted Party may cast a vote on the Resolution as a proxy if they are appointed as a proxy by writing that specifies the way the proxy is to vote and the vote is not cast on behalf of any Restricted Party.

In addition, in accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, provided the Chair is not a Restricted Party, the above prohibition does not apply if:

(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

8. Resolution 7 – Approval to issue Performance Rights to Director – Robert Benussi

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

“That, for the purposes of section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 5,000,000 Performance Rights to Robert Benussi (or his nominee/s), on the terms and conditions set out in the Explanatory Statement”

Voting Exclusion : The Company will disregard any votes cast in favour of this Resolution by or on behalf of Robert Benussi (or his nominee/s), and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or any associates of those persons.

In addition, in accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, provided the Chair is not a Restricted Party, the above prohibition does not apply if:

(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

9. Resolution 8 – Approval to issue Performance Rights to Director – Brett Grosvenor

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

“That, for the purposes of section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 1,000,000 Performance Rights to Brett Grosvenor (or his nominee/s), on the terms and conditions set out in the Explanatory Statement”

Voting Exclusion : The Company will disregard any votes cast in favour of this Resolution by or on behalf of Brett Grosvenor (or his nominee/s), and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company), or any associates of those persons.

Voting Prohibition Statement: In accordance with section 224 of the Corporations Act, a vote on this Resolution may not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit be given or any of their associates ( Restricted Party ). However, a Restricted Party may cast a vote on the Resolution as a proxy if they are appointed as a proxy by writing that specifies the way the proxy is to vote and the vote is not cast on behalf of any Restricted Party.

In addition, in accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, provided the Chair is not a Restricted Party, the above prohibition does not apply if:

(a) the proxy is the Chair; and

(b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

10. Resolution 9 – Approval to issue Performance Rights to Director – George Karafotias

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

“That, for the purposes of section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 1,000,000 Performance Rights to George Karafotias (or his nominee/s), on the terms and conditions set out in the Explanatory Statement”

Voting Exclusion : The Company will disregard any votes cast in favour of this Resolution by or on behalf of George Karafotias (or his nominee/s), and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company), or any associates of those persons.

Voting Prohibition Statement: In accordance with section 224 of the Corporations Act, a vote on this Resolution may not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit be given or any of their associates ( Restricted Party ). However, a Restricted Party may cast a vote on the Resolution as a proxy if they are appointed as a proxy by writing that specifies the way the proxy is to vote and the vote is not cast on behalf of any Restricted Party.

In addition, in accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, provided the Chair is not a Restricted Party, the above prohibition does not apply if:

(c) the proxy is the Chair; and
(d) the appointment expressly authorises the Chair to exercise the proxy even though though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

11. Resolution 10 – Approval of 10% Additional Issuance Capacity

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, approval is given for the Company to issue Equity Securities totalling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Statement.”

Dated: 29 October 2021 By order of the Board

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George Karafotias Company Secretary

Voting Exclusion Statements

Each Voting Exclusion Statement that applies to a Resolution as noted in the Agenda, does not apply to a vote cast in favour of that Resolution by:

(a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or
(b) provided the chair is not a Restricted Party in respect of the relevant Resolution (refer to Resolutions 6, 7, 8, and 9), 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.

Voting during the Meeting

Due to current COVID-19 restrictions the Company is conducting the Annual General Meeting as a virtual meeting, and there will be no physical meeting.

To vote online during the Meeting you will need to visit web.lumiagm.com/330076980 on your smartphone, tablet or computer. You will need the latest versions of Chrome, Safari, Edge or Firefox. Please ensure your browser is compatible. For further instructions on how to participate online please view the online meeting user guide at https://www.computershare.com/news/Lumi_Lite_Online_Voting_Guide.pdf..

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:

(a) each Shareholder has a right to appoint a proxy;
(b) the proxy need not be a Shareholder of the Company; and
(c) 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:

(a) if proxy holders vote, they must cast all directed proxies as directed; and
(b) any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

How to lodge a proxy

Shareholders are encouraged to lodge proxy forms online at: www.investorvote.com.au.

Alternatively, you may request a proxy form from the Company’s share registry, Computershare Investor Services Pty Limited at www.investorcentre.com/contact or by phone on +61 03 9415 4000 (outside Australia) or on 1300 850 505 (within Australia) between 8.30am and 8.00pm Monday to Friday, to obtain a copy.

Proxy forms may be delivered by mail or by fax to the Share Registry’s office as follows:

By mail: Computershare Investor Services Pty Limited GPO Box 242 Melbourne, Victoria, 3001, Australia

By fax 1800 783 447 (within Australia) +61 3 9473 2555 (outside Australia)

Custodians may lodge their proxy forms online by visiting www.intermediaryonline.com.

Proxy forms must be lodged by 12.00pm (Sydney time) on 27 November 2021.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on + 61 421 086 550.

Explanatory Statement

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

1. Annual Report

The Corporations Act requires that the reports of the Directors, Auditor and the financial statements of the Company (collectively the Annual Report ) be laid before shareholders at the Annual General Meeting. The Corporations Act does not require a vote of shareholders on these reports or statements.

The 2021 Annual Report was released to the ASX on 20 August 2021. As a result of legislative changes, the 2021 Annual Report has not been automatically mailed to all shareholders. The 2021 Annual Report can be accessed on the Company’s website at www.perpetualresourceslimited.com.au. Alternatively, printed copies can be supplied to shareholders on request.

Shareholders will be given a reasonable opportunity at the Annual General Meeting to ask questions of the Board in relation to the Annual Report and the management of the Company. Shareholders will also be given reasonable opportunity to ask the Auditor questions relevant to the conduct of the audit, the preparation and content of the Independent Auditor’s Report, the accounting policies adopted by the Company in relation to the preparation of its financial statements and the independence of the Auditor in relation to the conduct of the audit.

2. Resolution 1 – Adoption of Remuneration Report

2.1 General

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the company or the directors of the company.

The remuneration report sets out the company’s remuneration arrangements for the directors and senior management of the company. The remuneration report is part of the directors’ report contained in the annual financial report of the company for a financial year.

The chair of the meeting must allow a reasonable opportunity for its shareholders to ask questions about or make comments on the remuneration report at the annual general meeting.

2.2 Voting consequences

The vote on Resolution 1 is advisory only and does not bind the Company or its Directors. However, the Board will actively consider the outcome of the vote and comments made by Shareholders on the Remuneration Report when reviewing the Company’s future remuneration policies and practices.

A company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company ( Spill Resolution ) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting ( Spill Meeting ) within 90 days of the second annual general meeting.

All of the directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting.

Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company.

2.3 Previous voting results

At the Company’s previous annual general meeting the votes cast against the remuneration report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Meeting.

3. Resolution 2 - Re-election of Director – Julian Babarczy

3.1 General

Under Clause 13.3(a) of the Company’s Constitution, no Director may hold office for a period of in excess of three (3) years, or beyond the third annual general mee ting following the Director’s election, whichever is longer, without submitting himself or herself for re-election. Under clause 13.3(b) of the Constitution, there must be an election of Directors at each annual general meeting, and under subclause 13.3(b)(i), a Director required to retire under clause 13.3(a) may stand for re-election.

Mr Julian Babarczy was last re-elected as a director at the 2018 annual general meeting held on 16 November 2018. Accordingly, Mr Babarczy retires and stands for re-election.

3.2 Qualifications and other material directorships

Mr Babarczy is a successful and experienced finance industry professional, having worked at Regal Funds Management for many years as a Portfolio Manager for the Regal Emerging Companies Strategy. Mr Babarczy has extensive experience investing across all areas of the financial markets, with a particular focus on natural resources investments.

Mr Babarczy also acts as a director of Ioneer Limited (ASX: INR) and IXUP Limited (ASX: IXU).

3.3 Independence

The Board considers that Mr Babarczy is not an independent director, having regard to the indicia for independence in the ASX Corporate Governance Council Principles and Recommendations, as he is a substantial shareholder of the Company and is engaged in an executive role.

3.4 Board recommendation

The Board supports the election of Mr Babarczy and recommends that Shareholders vote in favour of Resolution 2 because the Board considers that the experience, expertise and skills of Mr Babarczy assist the Board in fulfilling its responsibilities and do and will continue to assist the Company in achieving growth and delivering value to Shareholders.

4. Resolution 3 – Ratification of issue of Shares and Options - Investor Placement, 22 February 2021

4.1 Capital Raising announced on 22 February 2021

On 22 February 2021, the Company announced it had completed a fundraising to raise up to approximately $2 million ( Capital Raising ). The Capital Raising consisted of a strategic placement to Delphi Unternehmensberatung AG and Deutsche Balaton AG, both German-based institutions

( Investors ). The Company issued a total of 25,000,000 fully paid ordinary shares ( Placement Shares ) at an issue price of $0.08 each and 5,000,000 free attaching Options exercisable at $0.12 each within 24 months of the date of grant ( Placement Options ).

The total number of equity securities that the Company issued under the Capital Raising was within the Company’s placement capacity under ASX Listing Rule 7.1 at the time, as explained further below.

The Company ’s cash balance as at the end of the December 2020 quarter was approximately $2.034m. Funds raised under the Capital Raising were to be used for development of the Beharra Silica Sand Project.

Resolution 3 seeks Shareholder ratification of the issue of Placement Shares and Placement Options.

4.2 Relevant ASX Listing Rules

The Company issued the Placement Shares and Placement Options without prior shareholder approval using its existing placement capacity under ASX Listing Rule 7.1.

Resolution 3 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of 25,000,000 Placement Shares and 5,000,000 Placement Options issued under ASX Listing Rule 7.1.

4.3 Listing Rule 7.1

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 ( Placement Capacity ).

4.4 Listing Rule 7.4

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.

4.5 Effect of the Resolutions

The issue of the 25,000,000 Placement Shares and 5,000,000 Placement Options effectively used up some of the 15% limit in ASX Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval under ASX Listing Rule 7.1 for the 12 month period following the date of their issue.

If Shareholders pass this Resolution, the issue of these Placement Shares and Placement Options will no longer use up a portion of the Company’s Placement Capacity, and the base figure (referred to as variable “A” in the formula in ASX Listing Rule 7.1) from which the Company’s 15% Placement Capacity is calculated, will include the Placement Shares, which in turn will allow a proportionately higher number of securities to be issued without prior Shareholder approval.

If Shareholders do not pass this Resolution, the issue of these Placement Shares and Placement Options will continue to use up a portion of the Company’s Placement Capacity until that date that is 12 months from their date of issue, and the Company will therefore have a reduced ability to issue equity securities without seeking Shareholder approval until that time.

4.6 Board Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 3.

4.7 Technical information required by ASX Listing Rule 7.5

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to Resolution 3:

(a) the Placement Shares and Placement Options were issued to Delphi Unternehmensberatung AG and Deutsche Balaton AG. Neither of these subscribers were a related party of the Company or an associate of any of them, or a party to whom an issue of equity securities requires Shareholder approval under ASX Listing Rule 10.11;
(b) the total number of Equity Securities was:
(i) 25,000,000 Shares; and
(ii) 5,000,000 Placement Options;
(c) the Placement 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;
(d) the Placement Options issued are exercisable at $0.13 each on or before 22 February 2023 and otherwise on the terms set out in Schedule 1;
(e) the Placement Shares and Placement Options were issued on 22 February 2021;
(f) the Placement Shares were issued at an issue price of $0.08 each, and the Placement Options were issued for no additional consideration attaching to Placement Shares on the basis of one (1) Option for every five (5) Placement Shares issued;
(g) the Company received $2,000,000 (before costs of the Capital Raising) from the issue of the Placement Shares, which it is using to provide capital for development of the Beharra Silica Sands Project; and
(h) there are no other material terms to the Investors’ agreement to subscribe for the Placement Shares and Placement Options.

5. Resolution 4 – Ratification of issue of Shares – Vendor consideration for Arrowsmith West Tenement

5.1 General

On 6 July 2021, the Company announced that it had entered an option agreement with Mining Equities Pty Ltd ( Vendor ) over the Arrowsmith West tenement, being Exploration Licence Application E70/5798 ( Tenement ), located near the Company’s Beharra Silica Sand Project (the Option Agreement ). Under the Option Agreement, the Company agreed to pay to the Vendor a total of $100,000, payable in the following tranches:

(a) an initial option payment of $33,334, payable in Shares at a deemed issue price of $0.15 (being the 5 day VWAP preceding the signing of the Option Agreement);
(b) Milestone 1: $33,333, payable in Shares to be issued at a deemed issue price of $0.125 per Share upon granting of the Arrowsmith West Tenement; and
(c) Milestone 2: $33,333, payable in Shares to be issued at a deemed issue price of $0.125 per Share upon confirmation of a single test results showing the sand on the Tenement can achieve >99.5 SiO2 and <300 ppm Fe2O3 using gravity and magnetic separation beneficiation processes only.

The Company also agreed to grant the Vendor a 1% gross revenue royalty in relation to minerals extracted, produced and sold from the Tenement.

The Company issued 222,227 Shares to the Vendor on 7 July 2021 in payment of the initial option payment under the Option Agreement. The Company issued the Shares using its Placement Capacity under Listing Rule 7.1. This is the only tranche of the consideration payable under the Option Agreement that has so far been issued.

Resolution 5 seeks Shareholder ratification of the issue of these Shares.

5.2 Relevant ASX Listing Rules

Listing Rule 7.1 is summarised at Section 4.3. Listing Rule 7.4 is summarised at Section 4.4.

5.3 Effect of the Resolutions

The issue of the 222,227 Shares to the Vendor effectively used up some of the 15% limit in ASX Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval under ASX Listing Rule 7.1 for the 12 month period following the date of their issue.

If Shareholders pass this Resolution, the issue of these Shares will no longer use up a portion of the Company’s Placement Capacity, and the base figure (referred to as variable “A” in the formula in ASX Listing Rule 7.1) from which the Company’s 15% and 10% annual placement capacities are calculated, will be a higher number which in turn will allow a proportionately higher number of securities to be issued without prior Shareholder approval.

If Shareholders do not pass this Resolution, the issue of these Shares will continue to use up a portion of the Company’s Placement Capacity until that date that is 12 months from their date of issue, and the Company will therefore have a reduced ability to issue equity securities without seeking Shareholder approval until that time.

5.4 Board Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 4.

5.5 Technical information required by ASX Listing Rule 7.5

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to Resolution 5:

(a) the Shares were issued to Mining Equities Pty Ltd;
(b)
the number of Equity Securities was 222,227 Shares;
(c) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms a nd conditions as the Company’s existing Shares;
(d)
the Shares were issued on 8 July 2021;
(e) the Shares were issued for non-cash consideration at a deemed issue price of $0.15 each, and no funds were raised from the issue of the Shares;
(f) the Company issued the Shares as payment of the initial option payment under the Option Agreement in respect of the acquisition of the Tenement; and
(g) the Shares were issued pursuant to the terms of the Option Agreement, the material terms of which are summarised at Section 5.1.

6. Resolution 5 – Ratification of issue of Options – Corporate Advisory Agreement and Investor Services Agreements

6.1 General

On 30 July 2021, the Company announced the issue of 10,000,000 Options exercisable at $0.16 on or before 30 July 2023 to Cannacord Genuity and Evolution Equities as part of their fees under a Corporate Advisory Agreement and Investor Relations Agreement ( Corporate Advisory Options ). The Company issued the Options using its Placement Capacity under Listing Rule 7.1.

The term of the agreement is for a minimum of 12 months from engagement, on a non-exclusive basis. The Company undertakes in good faith to negotiate with the Advisors in the event of any capital raising with an additional fee payable on agreement by both parties. All other terms and conditions are typical of this type of agreement.

Resolution 5 seeks Shareholder ratification of the issue of these Options.

6.2 Relevant ASX Listing Rules

Listing Rule 7.1 is summarised at Section 4.3. Listing Rule 7.4 is summarised at Section 4.4.

6.3 Effect of the Resolutions

The issue of the 10,000,000 Corporate Advisory Options effectively used up some of the 15% limit in ASX Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval under ASX Listing Rule 7.1 for the 12 month period following the date of their issue.

If shareholders pass this Resolution, the issue of these Options will no longer use up a portion of the Company’s Placement Capacity. This will give the Company greater flexibility to issue Equity Securities without Shareholder approval under Listing Rule 7.1.

If shareholders do not pass this Resolution, the issue of these Options will continue to use up a portion of the Company’s Placement Capacity until that date that is 12 months from their date of issue, and the Company will therefore have a reduced ability to issue Equity Securities without seeking Shareholder approval until that time.

6.4 Board Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 5.

6.5 Technical information required by ASX Listing Rule 7.5

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to Resolution 6:

(a) the Options were issued to Cannacord Genuity and Evolution Equities;
(b) the number of Equity Securities was 10,000,000 Options;
(i) 5,000,000 issued to Cannacord Genuity; and
(ii) 5,000,000 issued to Evolution Equities;
(c) the Options issued are exercisable at $0.16 each on or before 30 July 2023 and otherwise on the terms and conditions set out in Schedule 2;
(d) the Options were issued on 30 July 2021;

(e) the Options were issued for non-cash consideration and no funds were raised by the issue of the Options;
(f) the Company issued the Options in part consideration for services provided under the Corporate Advisory Agreement and Investor Relations Agreement; and
(g) the Shares were issued pursuant to the terms of the Corporate Advisory Agreement and Investor Relations Agreement, which are summarised at Section 6.1.

7. Resolutions 6 to 9 – Issue of Performance Rights to Directors

7.1 General

The Company has agreed, subject to obtaining Shareholder approval, to issue a total of 12,000,000 Performance Rights to Messrs Babarczy, Benussi, Grosvenor and Karafotias (or their respective nominees) on the terms and conditions set out below ( Performance Rights ).

The terms of the Performance Rights are set out in Schedule 3. The terms of the Performance Rights conform to the requirements for such securities in ASX Listing Rules Guidance Note 19.

Resolutions 6 to 9 seek Shareholder approval for the issue of these equity incentives to the Directors or their respective nominees.

7.2 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The issue of the Performance Rights constitutes giving a financial benefit. Each of Messrs Babarczy, Benussi, Grosvenor and Karafotias is a related party of the Company by reason of being a Director.

Section 211 of the Corporations Act provides that shareholder approval under section 208 is not required if the financial benefit to be provided to the related party is remuneration as an officer or employee of the company and to give remuneration would be reasonable given the circumstances of the company giving the remuneration and the related party’s circumstances (including responsibilities involved in the office or employment).

Section 195 of the Corporations Act provides that a director of a public company must not vote or be present during meetings of directors when matters in which that director holds a ‘material personal interest’ are being considered. The Directors do not have a material personal interest in these Resolutions other than the Resolution to issue Performance Rights to himself or herself. However, in the interests of good corporate practice consistent with ASIC Regulatory Guide 76 (Table 2) for directors to avoid ma king a recommendation for resolutions about each other’s remuneration as they may have a conflict of interest) the Directors have not considered whether an exception set out in sections 210 to 216 of the Corporations Act applies to these Resolutions. Therefore, the Board has determined in accordance with section 195(4) of the Corporations Act to seek Shareholder approval for the issue of the Performance Rights.

7.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 provides that unless one of the exceptions in ASX Listing Rule 10.12 applies, a listed company must not issue or agree to issue equity securities to:

(a) a related party;
(b) a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder in the company;
(c) a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder in the company and who has nominated a director to the board of the company pursuant to a relevant agreement which gives them a right or expectation to do so;
(d) an associate of a person referred to in (a) to (c) above; or
(e) a person whose relationship with the company or a person referred to in (a) to (d) above is such that, in ASX’s opinion, the issue or agreement should be approved by its shareholders,

unless it obtains the approval of its shareholders.

It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances to the proposed issue of the Performance Rights.

The Company therefore seeks the required Shareholder approval for the issue of the Performance Rights, under and for the purposes of Listing Rule 10.11. There is a separate Resolution in respect of the issue of Performance Rights to each individual Director.

7.4 ASX Listing Rule 7.1

A summary of Listing Rule 7.1 is set out in Section 4.3. Under Listing Rule 7.2 exception 14, an issue of equity securities with approval under Listing Rule 10.11 is an exception from Listing Rule 7.1.

7.5 Effect of the Resolutions

If any or all of Resolutions 6, 7, 8, and 9 are passed, then the Company will be able to proceed with the issue of Performance Rights to the Director the subject of each of the Resolutions that is passed.

If any or all of those Resolutions is not passed, then the Company will not be able to proceed with the issue of Performance Rights to the Director the subject of each Resolution that is not passed. The Company may have to consider alternative methods of providing incentivisation or remuneration to the relevant Director(s) to whom Performance Rights cannot be granted, which may take the form of cash- based payments, which would potentially reduce the Company’s cash reserves.

Resolutions 6 to 9 inclusive are ordinary resolutions. The Resolutions are not inter-conditional.

7.6 Board Recommendation

Given either the material personal interest of a Director in the Resolution expressly relevant to them and in the interests of good corporate practice consistent with ASIC Regulatory Guide 76 (Table 2) for directors to avoid making a recommendat ion for resolutions about each other’s remuneration as they may a conflict of interest), the Directors do not consider it appropriate to give a recommendation on any of Resolutions 6 to 9 inclusive.

7.7 Technical information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to the issue of the Performance Rights the subject of Resolutions 6 to 9:

(a) the Performance Rights will be issued to each of the following Directors:
(i) Resolution 6: Julian Babarczy (or his nominee(s));
(ii) Resolution 7: Robert Benussi (or his nominee(s));
(iii) Resolution 8: Brett Grosvenor (or his nominee(s)); and
(iv) Resolution 9: George Karafotias (or his nominee(s)).
(b) each of Julian Babarczy, Robert Benussi, Brett Grosvenor and George Karafotias is a Director of the Company, and therefore each falls into the category of related party of the Company in terms of Listing Rule 10.11.1;
(c) the maximum number of Performance Rights to be issued to be issued to each Director (or his nominee(s) is as follows:
(i) Resolution 6 (Julian Babarczy (or his nominee(s)): 5,000,000 Performance Rights;
(ii) Resolution 7 (Robert Benussi (or his nominee(s)): 5,000,000 Performance Rights; and
(iii) Resolution 8 (Brett Grosvenor (or his nominee(s)): 1,000,000 Performance Rights; and
(iv) Resolution 9 (George Karafotias (or his nominee(s)): 1,000,000 Performance Rights.
(d) the Performance Rights will be divided into three tranches, and each Performance Right will be convertible into one (1) Share each upon satisfaction of the relevant vesting condition:
(i) Tranche 1 (50%); Delivery of a feasibility study at any Project of the Company with an assessed internal rate of return of >20%;
(ii) Tranche 2 (25%) Securing binding offtakes for at least 750,000 tonnes per annum; (iii) Tranche 3 (25%): First sales of product from any project of the Company.

The Performance Rights will all have an expiry date of 3 years from the date of grant, and otherwise be on the terms and conditions set out in Schedule 3;

(e) the Performance Rights will be issued no later than 1 month 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 the Performance Rights will all be granted on the same date;
(f) the Performance Rights will be issued for nil cash consideration. Accordingly, no funds will be raised from the issue of the Performance Rights as the purpose of the issue is to provide an equity incentive as part of the remuneration package for each of the Directors;
(g) the Performance Rights are being offered as an incentive-based component of the relevant Director’s remuneration package which is considered a cost -effective remuneration practice and will allow the Company to spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were given. In addition, it is considered that the grant of the Performance Rights will align the interests of the Directors with those of Shareholders;
(h) the current total remuneration package of each of the Directors (before the issue of the Performance Rights the subject of Resolutions 6 to 9) is as follows:

(i) Julian Babarczy

(i) Julian Babarczy
Salary(inclusive of superannuation)	$250,000 per annum
Total	$250,000

Performance Rights
(subject to shareholder approval of Resolution 7)	5,000,000 Performance Rights Refer to the valuation of these Performance Rights in Section 7.8(d) below

(ii) Robert Benussi

(ii) Robert Benussi
Salary (inclusive of superannuation)	$225,000 per annum
Total	$225,000
Performance Rights
(subject to Shareholder approval of Resolution 8)	5,000,000 Performance Rights Refer to the valuation of these Performance Rights in Section 7.8(d) below

(iii) Brett Grosvenor

(iii) Brett Grosvenor
Salary(inclusive of superannuation)	$32,331 per annum
Performance Shares (2020)	$105,600 (value in Share based payments in 2020 Remuneration Report)
Total	$137,931
Performance Rights
(subject to shareholder approval of Resolution 9)	1,000,000 Performance Rights Refer to the valuation of these Performance Rights in Section 7.8(d) below

(iv) George Karafotias

Salary(inclusive of superannuation)	$39,600 per annum
Total	$39,600
Performance Rights
(subject to shareholder approval of Resolution 9)	1,000,000 Performance Rights Refer to the valuation of these Performance Rights in Section 7.8(d) below

7.8 Technical information required by Chapter 2E of the Corporations Act

Pursuant to and in accordance with section 219 of the Corporations Act, the following information (in addition to the information provided in Section 7.7) is provided in relation to the issue of the Performance Rights the subject of Resolutions 6 to 9:

(a) the Performance Rights will be issued to each of the Directors specified in Section 7.7(a);
(b) the nature of the financial benefit being provided is the Performance Rights. The quantity and terms of the Performance Rights are set out in Sections 7.7(c) and 7.7(d);
(c) each Director’s interests in the Resolutions and the reasons for not giving a recommendation on these Resolutions is set out in Section 7.6;
(d) the value of the Performance Rights is set out in the table below. The valuation has been completed by an external consultant using the binomial option price model and based on the assumptions set out below.

	Tranche 1	Tranche 2	Tranche 3
Assumption
Valuation Date	15 October 2021	15 October 2021	15 October 2021
Underlying security spotprice	$0.115	$0.115	$0.115
Exerciseprice	Nil	Nil	Nil
Term(Years)	3	3	3
Risk free interest rate	0.574%	0.574%	0.574%
Volatility (expected)	131%	131%	131%
Indicative Value ($) (per Performance Right)	$0.113	$0.113	$0.113
Quantity	6,000,000	3,000,000	3,000,000
Value($) (Total)	$678,261	$339,131	$339,131
Value ($) (per Director)
Julian Babarczy	$282,609 (2,500,000 Performance Rights)	$141,304 (1,250,000 Performance Rights)	$141,304 (1,250,000 Performance Rights)
Robert Benussi	$282,609 (2,500,000 Performance Rights)	$141,304 (1,250,000 Performance Rights)	$141,304 (1,250,000 Performance Rights)
Brett Grosvenor	$56,522 (500,000 Performance Rights)	$28,261 (250,000 Performance Rights)	$28,261 (250,000 Performance Rights)
George Karafotias	$56,522 (500,000 Performance Rights)	$28,261 (250,000 Performance Rights)	$28,261 (250,000 Performance Rights)

(e) the relevant interests in securities of the Company of the Directors the subject of Resolutions 6 to 9 are set out below:

Director	Shares	Options	Performance Shares
Julian Babarczy1	29,866,328	Nil	5,133,334
Robert Benussi2	28,716,666	Nil	3,666,667
Brett Grosvenor3	1,760,000	Nil	2,640,000
George Karafotias4	6,990,000	Nil	2,200,000

Securities held by Julian Babarczy:
Shares held by Jigsaw Investment Trust, of which Mr Babarczy is a beneficiary.
5,133,334 Performance Shares approved at EGM on 27 May 2020: 2,566,666 Class A and 2,566,667 Class D
Securities held by Robert Benussi:
Shares held by Benussi Rovigno Pty Ltd of which Mr Benussi is a beneficiary; and Intrepid Concepts Pty Ltd, of which Mr Benussi is sole director and shareholder.
3,666,667 Performance Shares on terms approved at EGM on 27 May 2020: 1,833,334 Class A and 1,833,334 Class D
Securities held by Brett Grosvenor:
Shares held by Salvador Consulting Pty Ltd of which Mr Grosvenor is the director and beneficiary.
2,640,000 Performance Shares on terms disclosed at AGM held on 30 November 2020: 880,000 Class A, 880,000 Class D and 880,000 Class E
Securities held by George Karafotias:
2,200,000 Performance Shares on terms approved at EGM 26 May 2020: 1,100,000 Class A and 1,000,000 Class D

Performance Shares Vesting Criteria:

(J Babarczy, R Benussi and G Karafotias):
Class A; announcemnt of JORC Inferred Resource of at least 50mT of white sands (minimum 99% SiO2) at Beharra, independently verified
ClassD : first trial shipment of silica sand from any project in Company portfolio
(B Grosvenor)
Class A: completion of a trial shipment
Class D: delivery of a successful BFS or site works commencement
Class E: first trial shipment of beneficiated high purity silica sand to an offtake partner
(f) the current total annual remuneration from the Company to the Directors the subject of Resolutions 6 to 9 is set out in Section 7.7 (h);
(g) if the Performance Rights are granted and then vest and are exercised, a total of 12,000,000 Shares would be issued. This will increase the number of Shares on issue from 492,150,631 (being the number of Shares on issue at the date of this Notice) to 504,150,631 assuming that no other Options are exercised or other convertible securities converted, and no other Shares are issued) with the effect that the shareholding of existing Shareholders would be diluted by an aggregate of approximately 2.38%, comprising approximately 0.99% by Julian Babarczy, 0.99% by Robert Benussi, 0.19% by Brett Grosvenor and 0.19% by George Karafotias;
(h) If, at any time any of the Performance Rights vest and are exercised there may be a perceived cost to the Company as the Shares are trading on ASX at a price that is higher than the price of the Director Performance Rights (being nil).

The highest and lowest closing prices of Shares on ASX during the 12 months preceding the date of this Notice, and the closing price on the trading day before the date of this Notice, are set out below:

Price

Date

Highest	$0.14	12 August 2021
Lowest	$0.042	30 October 2020
Last	$0.12	18 October 2021

(i) the Board acknowledges the grant of the Performance Rights to each of Messrs Grosvenor and Karafotias (who are Non-Executive Directors) is contrary to Recommendation 8.2 of The Corporate Governance Principles and Recommendations (4th Edition) as published by The ASX Corporate Governance Council. However, the Board considers the grant of the Performance Rights is reasonable in the circumstances for the reasons set out in paragraph (k);
(j) the primary purpose of the grant of the Performance Rights is to provide a performancelinked incentive component in their remuneration package to motivate and reward their performance in their respective roles as Directors;
(k) the Directors consider the grant of the Performance Rights is a reasonable and appropriate method to provide cost effective remuneration as:
(i) The achievement of the relevant performance hurdles is considered value accretive to shareholders, which means that the relevant remuneration is linked to successful performance only, which should enhance the value of the project and therefore the value of every shareholder’s investment;
(ii) the non-cash form of this benefit will allow the Company to spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were given;
(iii) the grant of the Performance Rights will align the interests of the Directors with those of Shareholders and this Performance Right issue is being used in place of a formal incentive plan which would otherwise be used to make the relevant incentive grants to the Directors and Executives of the Company; and
(iv) it is not considered that there are any significant opportunity costs to the Company or benefits foregone by the Company in granting the Performance Rights upon the terms proposed.

In forming their reasoning and determining the quantity of Performance Rights to be granted each Director considered:

(i) the experience and role of each other Director,
(ii) the cash remuneration of each other Director. The Company considers the Directors’ emoluments prior to the issue of these Performance Rights, are at the level at or below the base remuneration for directors and executives at mineral exploration companies at a similar stage of development;
(iii) the market price of Shares and the current market practices when determining the number of Performance Rights to be granted
(iv) the vesting conditions, and expiry date of the Performance Rights;

(v) the performance milestones are based on measurable project hurdles being achieved which will add value to the Company’s projects . The Company considers these hurdles serve as appropriate indicators of the Company’s successful performance to which vesting of the performance securities is to be linked;
(vi) all Directors who are proposed to receive Performance Rights will be involved according to their respective responsibilities in setting the Company’s strategy and overseeing the implementation of the Company’s explora tion and development activities in relation to its Projects; and
(vii) the Company considers it is appropriate that the Directors should have an incentive component to their remuneration that will vest only if the Company’s value increases.
(l) the Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolutions 6 to 9.

8. Resolution 10 – Approval of 10% Issuance Capacity

8.1 General

Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary securities it had on issue at the start of that period.

Under Listing Rule 7.1A, however, an eligible entity can seek approval from its members, by way of a special resolution passed at its annual general meeting, to increase this 15% limit by an extra 10% to 25%.

An "eligible entity" means an entity which is not included in the S&P/ASX300 Index and which has a market capitalisation of $300 million or less. The Company is an eligible entity for these purposes.

Resolution 10 seeks Shareholder approval by way of special resolution for the Company to have the additional 10% capacity provided for in Listing Rule 7.1A to issue equity securities without Shareholder approval ( Additional Issuance Capacity ).

If Resolution 10 is not passed, the Company will not be able to access the Additional Issuance Capacity and will remain subject to the 15% limit on issuing equity securities without Shareholder approval set out in Listing Rule 7.1.

The Board considers it is in the Company’s best interests to have the opportun ity to take advantage of the flexibility to issue additional securities provided under ASX Listing Rule 7.1A. As at the date of this Notice, no decision has been made by the Board to undertake any issue of securities under the Additional Issuance Capacity if Shareholders approve Resolution 10.

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

The information below provides more background on ASX Listing Rule 7.1A and the disclosure required by ASX Listing Rule 7.3A.

8.2 Description of ASX Listing Rule 7.1A

(a) Calculating Additional Issuance Capacity under Listing Rule 7.1A.2

ASX Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an Annual General Meeting may during the period of the approval issue or agree to issue a number of Equity Securities calculated in accordance with the following formula:

(AxD)-E

Where:

A is the number of fully paid ordinary shares on issue at the commencement of the 12 month period before the date of issue or agreement:

Plus the number of fully paid shares issued in the 12 months under an exception in ASX Listing Rule 7.2 (other than exceptions 9, 16 or 17);

Plus the number of fully paid ordinary shares issued in the 12 months 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 approved, or taken under the ASX Listing Rules to be approved, under ASX Listing Rule 7.1 or ASX Listing Rule 7.4

Plus the number of fully paid ordinary securities issued in the 12 months under an agreement to issue securities within ASX Listing Rule 7.2 exception 16 where:

the agreement was entered into or approved before the commencement of the 12 months; or
the agreement or issue was approved, or taken under the ASX Listing Rules to have been approved, under ASX Listing Rule 7.1 or 7.4

Plus the number of fully paid shares issued in the 12 months with approval of holders of shares under ASX Listing Rule 7.1 and 7.4. (This does not include an issue of fully paid shares under the entity’s 15% Placement Capacity without shareholder approval, until ratified);

Plus the number of partly paid shares that became fully paid in the 12 months;

Less the number of fully paid shares cancelled in the 12 months.

D is 10%.

E is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months immediately preceding the date of the issue or agreement to issue where the issue or agreement has not been subsequently approved by shareholders under ASX Listing Rule 7.4.

(b) Securities which may be issued under the Additional Issuance Capacity

Under the Additional Issuance Capacity, the Company can only issue Equity Securities belonging to an existing quoted class of the Company's Equity Securities. As at the date of this Notice, the Company has on issue only one class of quoted Equity Securities, being fully paid ordinary shares (ASX Code: PEC).

(c) Minimum issue price

Equity Securities issued under the Additional Issuance Capacity must be issued for cash consideration per security which is not less than 75% of the volume weighted average market price for the securities in that class, calculated over the 15 ASX trading days on which trades of securities in that class were recorded immediately before:

(i) the date on which the price at which the securities are to be issued is agreed by the Company and the recipient of the securities; or
(ii) if the securities are not issued within 10 ASX trading days of the date in paragraph (i) above, the date on which the securities are issued.

The Company will disclose this information when Equity Securities are issued under the Additional Issuance Capacity.

(d) Period for which approval will be valid

Shareholder approval of the Additional Issuance Capacity will be valid for the period commencing on the date of the Meeting and expiring on the first to occur of the following:

(i) the date that is 12 months after the date of the Meeting; or
(ii) the time and date of the Company’s next annual general meeting; or
(iii) if the Company receives Shareholder approval for a proposed transaction under ASX Listing Rule 11.1.2 (significant change to the nature or scale of activities) or ASX Listing Rule 11.2 (disposal of main undertaking), the time and date of that approval,

( Additional Issuance Period ).

(e)

Dilution risks

If Equity Securities are issued under the Additional Issuance Capacity, there is a risk of economic and voting dilution of existing Shareholders, including the following risks:

(i) the market price for Equity Securities in the class of securities issued under the Additional Issuance Capacity may be significantly lower on the issue date than on the date of the approval under ASX Listing Rule 7.1A (that is, the date of the Meeting, if Resolution 10 is approved); and
(ii) the Equity Securities may be issued under the Additional Issuance Capacity at a discount to the market price for those Equity Securities on the issue date,

which may have an effect on the amount of funds raised by the issue of the Equity Securities.

The below table shows the potential dilution of existing Shareholders on the basis of the market price of Shares and the number of ordinary securities for variable "A" calculated in accordance with the formula in ASX Listing Rule 7.1A.2, both as at 26 October 2021.

The table also shows:

(i) two examples where variable "A" has increased, by 50% and 100%. Variable "A" is based on the number of ordinary securities the Company has on issue as at 26 October 2021. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlement offer or securities issued under a takeover offer) or future specific placements under Listing Rule 7.1 that are approved at a future general meeting; and
(ii) two examples of where the issue price of ordinary securities has decreased by 50% and increased by 50% as against the market price as at 26 October 2021.

Number of Shares on Issue (Variable ‘A’ in ASX Listing Rule 7.1A2)	Issue Price (per Share)	$0.0575 50% decrease in Issue Price	$0.115 Issue Price	$0.1725 50% increase in Issue Price
492,150,631 (Current Variable A)	Shares issued - 10% voting dilution	49,215,063	49,215,063	49,215,063
	Funds Raised	$2,829,866	$5,659,732	$8,489,598
738,225,946 (50% increase in Variable A)	Shares issued– 10% voting dilution	73,822,594	73,822,594	73,822,594
	Funds Raised	$4,244,799	$8,489,598	$12,734,397
984,301,262 (100% increase in Variable A)	Shares issued– 10% voting dilution	98,430,126	98,430,126	98,430,126
	Funds Raised	$5,659,732	$11,319,464	$16,979,196

*The number of Shares on issue (Variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a pro-rata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

The table above uses the following assumptions:

There are currently 492,150,631 Shares on issue.
The issue price set out above is the closing price of the Shares on the ASX on 26 October 2021.
The Company issues the maximum possible number of Equity Securities under the Additional Issuance Capacity.
The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.
The issue of Equity Securities under the Additional Issuance Capacity consists only of Shares and the consideration provided for those Shares is cash. It is assumed that no Options are exercised into Shares before the date of issue of the Equity Securities.
The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.
This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.
The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.

Shareholders should note that there is a risk that:

(i) the market price for the Company’s Shares may be significantly lower on the issue date than on the date of the Meeting; and
(ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.
(f) Purpose of issues under Additional Issuance Capacity

The Company may issue Equity Securities under the Additional Issuance Capacity to raise cash to fund the following:

(i) general working capital expenses;
(ii) activities associated with its current business;
(iii) repayment of debt; or

(iv) the acquisition of new assets and investments (including any expenses associated with such an acquisition).

The Company will comply with the disclosure requirements of ASX Listing Rule 7.1A.4 on issue of any Equity Securities pursuant to the approval sought by Resolution 10.

(g) Allocation policy under Additional Issuance Capacity

The Company's allocation policy and the identity of the recipients of Equity Securities issued under the Additional Issuance Capacity will be determined on a case-by-case basis at the time of issue and in the Company's discretion.

No decision has been made in relation to an issue of Equity Securities under the Additional Issuance Capacity, including whether the Company will engage with new investors or existing Shareholders, and if so the identities of any such persons.

However, when determining the allocation policy and the identity of the recipients, the Company will have regard to the following considerations:

(i) prevailing market conditions;
(ii) the purpose for the issue of the Equity Securities;
(iii) the financial situation and solvency of the Company;
(iv) impacts of the placement on control;
(v) other methods of raising capital; and
(vi) advice from corporate, financial and broking advisers (if applicable).

Recipients may include existing Shareholders or new investors, but not persons who are related parties or associates of related parties of the Company. If the issue is made in connection with the acquisition of assets, the recipients may be the sellers of those assets.

(h) Previous issues under the Additional Issuance Capacity

The Company has not issued any Shares under the Additional Issuance Capacity since its last approval at the 2020 AGM.

Glossary

$ means Australian dollars.

AEST means Australian Eastern Standard Time as observed in Sydney, NSW

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

Annual Report means the Directors' Report, the Financial Report and Auditor's Report in respect to the financial year ended 30 June 2021.

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules or 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.

Chair means the chair of the Meeting.

Closely Related Party of a member of the Key Management Personnel means:

(a) a spouse or child of the member;
(b) a child of the member’s spouse;
(c) a dependent of the member or the member’s spouse;
(d) anyone else who is one of the member’s family and may be expected to influence the member, or be i nfluenced by the member, in the member’s dealing with the entity;
(e) a company the member controls; or
(f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act .

Company means Perpetual Resources Limited ACN 154 516 533

Corporate Advisory Options means the options on the terms and conditions set out in Schedule 2.

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.

Financial Report means the annual financial report prepared under Chapter 2M of the Corporations Act of the Company and its controlled entities.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group

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

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Performance Rights means a Performance Right on the terms and conditions set out in Schedule 3.

Placement Option means an option to acquire a Share on the terms and conditions set out in Schedule 1. Placement Shares means the Shares the subject of Resolution 4.

Placement Securities means the Placement Shares and Placement Options.

Proxy Form means the proxy form accompanying the Notice.

Remuneration Report means the remuneration report set out in the Director’s Report.

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

Schedule means a schedule to this Notice.

Section means a section of the Explanatory Statement.

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

Shareholder means a registered holder of a Share.

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

Schedule 1 Terms and Conditions of Placement Options

(a) Entitlement

Each Option entitles the holder to subscribe for one fully paid ordinary share in the capital of PEC ( Share ) upon exercise of the Option.

(b) Exercise Price

The amount payable upon exercise of each Option will be $0.13 ( Exercise Price

(c) Expiry Date

Each Option will expire at 5:00 pm (AEST) on 22 February 2023 ( 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.

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 ).

Timing of issue of Shares on exercise

Within five ASX 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.
(iv) If a notice delivered under paragraph (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 ASX 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 Option holder 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 of PEC 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.

Schedule 2 Terms and Conditions of Corporate Advisory Options

(a) Entitlement

Each Option entitles the holder to subscribe for one fully paid ordinary share in the capital of PEC ( Share ) upon exercise of the Option.

(b)

Exercise Price

The amount payable upon exercise of each Option will be $0.16 ( Exercise Price ).

(c)

Expiry Date

Each Option will expire at 5:00 pm (AEST) on the date that is 24 months from the date of issue ( 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

(f)

Exercise Date

(g)

Timing of issue of Shares on exercise

Within five ASX 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.
(iv) If a notice delivered under paragraph (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 ASX 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

(j) Participation in new issues

(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.

Schedule 3 Terms and Conditions of Performance Rights

(1)

Entitlement

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

(2) Grant and exercise price

No cash consideration is payable on the issue of or exercise of a Performance Right.

(3)

Expiry Date

Each Performance Right will expire at 5:00 pm (WST) on that date that is three years from the date of issue ( Expiry Date ). A Performance Right not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(4) Vesting Conditions

The Performance Rights will vest as follows:

(a) Tranche 1 : Delivery of a feasibility study at any Project of the Company with an assessed internal rate of return of >20%;
(b) Tranche 2 : Securing binding offtakes for at least 750,000 tonnes per annum; and
(c) Tranche 3 : First sales of product from any project of the Company.

(each, a Vesting Condition ).

(5)

Exercise Period

The Performance Rights are exercisable at any time on and from the date upon which the relevant Vesting Condition has been satisfied, until the Expiry Date ( Exercise Period ).

(6)

Notice of Exercise

The Performance Rights may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Performance Rights certificate ( Notice of Exercise ).

(7)

Timing of issue of Shares on exercise

Following the date of receipt of a validly issued Notice of Exercise and within the time period specified by the ASX Listing Rules, the Company will:

(a) issue the number of Shares required under these terms and conditions in respect of the number of Performance Rights specified in the Notice of Exercise; and
(b) 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.

Also, if required, the Company will give ASX a notice that complies with section 708A(5)(e) of the Corporations Act ( Cleansing Notice ), or, if the Company is unable to issue a Cleansing 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. If a Cleansing Notice 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.

(8) Shares issued on exercise

Shares issued on exercise of the Performance Rights rank equally with the then issued Shares of the Company.

(9) Reconstruction of capital

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

(10) Participation in new issues

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

(11) Change in exercise price or number of underlying securities

A Performance Right does not confer a change in the number of underlying securities over which the Performance Right can be exercised.

(12) No voting or dividend rights

A Performance Right does not carry any voting rights or entitle the holder to any dividends.

(13) Rights on winding up

A Performance Right does not confer any right to participate in the surplus profits or assets of the Company upon winding up of the Company. The Performance Rights do not confer any right to a return of capital, whether in winding up, upon reduction of capital or otherwise.

(14) Transferability

A Performance Right is not transferable.

AI assistant

PERPETUAL RESOURCES LIMITED — AGM Information 2021

65540_rns_2021-10-28_0c683621-51f2-40ca-9c07-b5c2001b9d98.pdf

Perpetual Resources Limited ACN 154 516 533

Notice of Annual General Meeting

Business of the Meeting

Agenda

1. Financial Statements and Reports

2. Resolution 1 – Adoption of Remuneration Report

Voting Prohibition Statement:

3. Resolution 2 – Re-election of Director – Julian Babarczy

4. Resolution 3 - Ratification of prior issue of Shares and Options, 22 February 2021 – ASX Listing Rule 7.1

5. Resolution 4 - Ratification of prior issue of Shares – Vendor of Arrowsmith West Tenement - Listing Rule 7.1

6. Resolution 5 - Ratification of prior issue of Options, 30 July 2021 – Corporate Advisory and Investor Relations Agreements - Listing Rule 7.1

7. Resolution 6 – Approval to issue Performance Rights to Director – Julian Babarczy

8. Resolution 7 – Approval to issue Performance Rights to Director – Robert Benussi

9. Resolution 8 – Approval to issue Performance Rights to Director – Brett Grosvenor

10. Resolution 9 – Approval to issue Performance Rights to Director – George Karafotias

11. Resolution 10 – Approval of 10% Additional Issuance Capacity

Dated: 29 October 2021 By order of the Board

Voting Exclusion Statements

Voting during the Meeting

Voting by proxy

How to lodge a proxy

Explanatory Statement

1. Annual Report

2.

Resolution 1 – Adoption of Remuneration Report

2.1

General

2.2 Voting consequences

2.3 Previous voting results

3.

Resolution 2 - Re-election of Director – Julian Babarczy

3.1 General

3.2 Qualifications and other material directorships

3.3 Independence

3.4 Board recommendation

4. Resolution 3 – Ratification of issue of Shares and Options - Investor Placement, 22 February 2021

4.1

Capital Raising announced on 22 February 2021

4.2

Relevant ASX Listing Rules

4.3

Listing Rule 7.1

4.4

Listing Rule 7.4

4.5 Effect of the Resolutions

4.6 Board Recommendation

4.7 Technical information required by ASX Listing Rule 7.5

5. Resolution 4 – Ratification of issue of Shares – Vendor consideration for Arrowsmith West Tenement

5.1 General

5.2 Relevant ASX Listing Rules

5.3 Effect of the Resolutions

5.4

Board Recommendation

5.5 Technical information required by ASX Listing Rule 7.5

6. Resolution 5 – Ratification of issue of Options – Corporate Advisory Agreement and Investor Services Agreements

6.1

General

6.2

Relevant ASX Listing Rules

6.3 Effect of the Resolutions

6.4 Board Recommendation

6.5

Technical information required by ASX Listing Rule 7.5

7. Resolutions 6 to 9 – Issue of Performance Rights to Directors

7.1 General

7.2 Chapter 2E of the Corporations Act

7.3 ASX Listing Rule 10.11

7.4 ASX Listing Rule 7.1

7.5 Effect of the Resolutions

7.6 Board Recommendation

7.7 Technical information required by ASX Listing Rule 10.13

(iii) Brett Grosvenor

(iv) George Karafotias

7.8 Technical information required by Chapter 2E of the Corporations Act

Performance Shares Vesting Criteria:

8. Resolution 10 – Approval of 10% Issuance Capacity

8.1

PERPETUAL RESOURCES LIMITED AGM Information 2021