PO VALLEY ENERGY LIMITED — Proxy Solicitation & Information Statement 2005

Nov 17, 2005

NOTICE OF GENERAL MEETING

• TIME: 11,00 AM EST
• DATE: 21 December 2005
• Level 32, HSBC Centre, 580 George Street, Sydney NSW 2000 PLACE:

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.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (08) 9278 2533.

Registered Office: Level 28, 140 St George's Terrace, Perth WA 6000, Australia

Phone: +61 8 9278 2533 Fax: +61 8 9278 2525

CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolutions)
Explanatory Statement (explaining the proposed resolutions)	5.
Proxy Form

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The General Meeting of the Shareholders of Po Valley Energy Limited which this Notice of Meeting relates to will be held at 11.00AM EST on 21 December 2005 at:

Level 32, HSBC Centre, 580 George Street, Sydney NSW 2000

YOUR VOTE IS IMPORTANT

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

VOTING IN PERSON

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

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed:

• send the proxy form by post to Po Valley Energy Limited, Locked Bag A14, $\alpha$ Sydney South NSW 1235
• $(b)$ by facsimile to the Company on facsimile number (02) 9287 0309

so that it is received not later than 11.00 AM EST on 19 DECEMBER 2005

Proxy forms received later than this time will be invalid.

NOTICE OF GENERAL MEETING

Notice is given that the General Meeting of Shareholders of Po Valley Energy Limited will be held at Level 32, HSBC Centre, 580 George Street, Sydney NSW 2000 at 11,00AM EST on 21 December 2005.

The Explanatory Statement to this Notice Meeting provides additional information on matters to be considered at the General Meeting. The Explanatory Statement and the proxy form are part of this Notice of Meeting.

The Directors have determined pursuant to Reaulation 7.11.37 of the Corporations Requlations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company on 19 December 2005 at 11,00AM EST.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

Resolution 1 - Ratification of Share Issue

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

"That, for the purposes of Listina Rule 7.4 of the Listina Rules of Australian Stock Exchange Limited and for all other purposes, the Company ratifies the allotment and issue of 10,500,000 fully paid ordinary shares in the capital of the Company on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on Resolution 1 by a person who participated in the issue and any associate of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form, or it is cast by the person chairing the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 2 - Allotment and Issue of Shares

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

"That, for the purposes of Listing Rule 7.1 of the Listing Rules of Australian Stock Exchange Limited and for all other purposes, the Company approves and authorises the directors of the Company to allot and issue 2,000,000 fully paid ordinary shares in the capital of the Company on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on Resolution 2 by a person who may participate in the issue and any associate of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the direction on the proxy form, or it is cast by the person chairing the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

DATED: 18 NOVEMBER, 2005

BY ORDER OF THE BOARD

MR DOM DEL BORRELLO COMPANY SECRETARY PO VALLEY ENERGY LIMITED

Voting Exclusion Note:

Where a voting exclusion applies, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the proxy form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at the General Meeting to be held at Level 32, HSBC Centre, 580 George Street, Sydney NSW 2000 on 21 December 2005 at 11.00AM EST).

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

RESOLUTION 1 - RATIFICATION OF SHARE ISSUE

Resolution 1 seeks Shareholder approval for the issue and allotment of 10,122,000 Shares to Harbert Distressed Investment Master Fund Ltd (Harbert) and 378,000 Shares to Alpha US Sub Fund VI, LLC (Alpha).

ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach 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.

Ratification by the shareholders of the Company is now sought pursuant to ASX Listing Rule 7.4 in order to reinstate the Company's capacity to issue up to 15% of its issued capital, if required in the next 12 months without shareholder approval.

ASX Listing Rule 7.5 requires that the following information be provided to shareholders:

• $(a)$ the total number of securities issued by the Company was 10,500,000 Shares:
• $(b)$ the Shares were issued at a price of $0.70 each to raise $7,350,000 (before expenses of the issue);
• ${C}$ the Shares were allotted and issued to Harbert and Alpha in the amounts set out above:
• $(d)$ the Shares allotted and issued rank equally in all respects with the Company's existing Shares on issue;

Registered Office: Level 28, 140 St George's Terrace, Perth WA 6000, Australia

• $(e)$ no Shares were issued to any related party of the Company; and
• $(f)$ the funds raised will be applied towards the drilling of the Pandino prospect, further test works at Sillaro. Vitalba and Santa Maddelana and the advancement of existing and new exploration targets ($6,963,000) and to meet issue expenses ($387,000).

RESOLUTION 2 - ALLOTMENT AND ISSUE OF NEW SHARES

Resolution 2 seeks Shareholder approval for the issue and allotment of 2,000,000 Shares to Harbert and Alpha.

ASX Listing Rule 7.1

A brief summary of ASX Listing Rule 7.1 is outlined above.

One circumstance where an issue is not taken into account in the calculation of this 15% threshold is where the issue has the prior approval of shareholders in general meeting.

ASX Listing Rule 7.3 requires that the following information be disclosed to shareholders for the purpose of obtaining shareholder approval pursuant to ASX Listina Rule 7.1:

• the total number of securities the Company is to issue is 2,000,000 Shares; $(a)$
• the allotment and issue of the Shares will take place no later than three $(b)$ (3) months after the date of the Meeting (or such later date as permitted by ASX);
• ${C}$ the Shares are to be issued at a price of $0.70 per Share to raise $1,400,000 (before expenses of the issue);
• the Shares are to be allotted and issued to Harbert and Alpha (in such $(d)$ proportions as agreed between the parties);
• $(e)$ the Shares to be allotted and issued will rank equally in all respects with the Company's existing Shares on issue;
• $(f)$ no Shares will be issued to any related party of the Company; and
• the funds raised will be used to replenish general working capital $(g)$ ($1,325,000) and to meet issue expenses ($75,000).

PO VALLEY ENERGY LIMITED ABN 33 087 741 571

APPOINTMENT OF PROXY

If you would like to attend and vote at the General Meeting, please bring this form with you. This will assist in registering your attendance

Please return this form for Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Telephone: (02) 8280 7111 Facsimile: (02) 9287 0309 ASX Code: PVE Email: registrars@linkmarketservices.com.au

Website: www.linkmarketservices.com.au

You can also lodge your vote on-line at www.linkmarketservices.com.au

X99999999999

I/We being a member(s) of PO Valley Energy Limited and entitled to attend and vote hereby appoint

the Chairman of the Meeting (mark box)

OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered securityholder) you are appointing as your proxy

or failing the person/body corporate named, or if no person/body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following instructions (or if no directions have been given, as the proxy sees fit) at the General Meeting of the Company to be held at 11:00am on Wednesday, 21 December 2005 and at any adjournment of that meeting.

Where more than one proxy is to be appointed or where voting intentions cannot be adequately expressed using this form an additional form of proxy is available on request from the share registry. Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the meeting. The Chairman of the Meeting intends to vote undirected proxies in favour of all items of business.

To direct your proxy how to vote on any resolution please insertв				in the appropriate box below.
Resolution 1Ratification of Share Issue	For	Against	Abstain*
Resolution 2Allotment and Issue of Shares

IMPORTANT: FOR ITEMS 1 AND 2 ABOVE

If the Chairman of the Meeting is to be your proxy and you have not directed your proxy how to vote on Items 1 and 2 above, please place a mark in this box. By marking this box you acknowledge that the Chairman of the Meeting may exercise your proxy even though he has an interest in the outcome of those Items and that votes cast by him, other than as proxyholder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on Items 1 and 2 and your votes will not be counted in computing the required majority if a poll is called on these Items. The Chairman of the Meeting intends to vote undirected proxies in favour of Items 1 and 2.

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

SIGNATURE OF SECURITYHOLDERS - THIS MUST BE COMPLETED

Securityholder 1 (Individual)

C

D

Joint Securityholder 2 (Individual)

Joint Securityholder 3 (Individual)

Sole Director and Sole Company Secretary

Director/Company Secretary (Delete one)

Director

This form should be signed by the securityholder. If a joint holding, either securityholder may sign. If signed by the securityholder's attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the securityholder's constitution and the Corporations Act 2001 (Cwlth).

Link Market Services Limited advises that Chapter 2C of the Corporations Act 2001 requires information about you as a securityholder (including your name, address and details of the securities you hold) to be included in the public register of the entity in which you hold securities. Information is collected to administer your securityholding and if some or all of the information is not collected then it might not be possible to administer your securityholding. Your personal information may be disclosed to the entity in which you hold securities. You can obtain access to your personal information by contacting us at the address or telephone number shown on this form. Our privacy policy is available on our website (www.linkmarketservices.com.au). PVE PRX542

How to complete this Proxy Form

1 Your Name and Address

This is your name and address as it appears on the company's share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your shares using this form.

2 Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in section A. If the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person in section A. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a shareholder of the company. A proxy may be an individual or a body corporate.

3 Votes on Items of Business

You should direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

4 Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company's share registry or you may copy this form.

To appoint a second proxy you must:

(a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

(b) return both forms together.

5 Signing Instructions

You must sign this form as follows in the spaces provided:

• Individual: where the holding is in one name, the holder must sign.
• Joint Holdina: where the holding is in more than one name, either security holder may sign.
• Power of Attorney: to sign under Power of Attorney, you must have already fodged the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.
• Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry.

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 11:00am on Monday, 19 December 2005, being not later than 48 hours before the commencement of the meeting. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy forms may be lodged using the reply paid envelope or:

• by posting, delivery or facsimile to PO Valley Energy Limited's share registry as follows: PO Valley Energy Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Facsimile: (02) 9287 0309
• fodging it online at Link's website (www.linkmarketservices.com.au) in accordance with the instructions given there (you will be taken to have signed your proxy form if you lodge it in accordance with the instructions given on the website);
• delivering it to Level 8, 580 George Street, Sydney NSW 2000.