PROSPECT RESOURCES LIMITED — Capital/Financing Update 2021

Jan 10, 2021

Proposed issue of securities

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Announcement Summary

Entity name

PROSPECT RESOURCES LIMITED

Announcement Type

New announcement

Date of this announcement

Monday January 11, 2021

The Proposed issue is:

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A placement or other type of issue

Total number of +securities proposed to be issued for a placement or other type of issue

		Maximum Number of
ASX +security code	+Security description	+securities to be issued
n/a	Unlisted and unvested options exercisable at $0.24 per	2,000,000
	option, expiring 7 January 2025.
Proposed +issue date
Friday February 26, 2021

Refer to next page for full details of the announcement

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Part 1 - Entity and announcement details

1.1 Name of +Entity

PROSPECT RESOURCES LIMITED

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

ACN

Registration Number

124354329

1.3 ASX issuer code

PSC

1.4 The announcement is

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New announcement

1.5 Date of this announcement

Monday January 11, 2021

1.6 The Proposed issue is:

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A placement or other type of issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity Yes

7A.1a Conditions

Approval/Condition	Date for determination	Is the date estimated or	** Approval
+Security holder approval	Friday February 26, 2021	actual?	received/condition met?
		Estimated

Comments

The securities proposed to be issued are to a director of the Company and therefore shareholder approval for the issue of the securities will be sought under listing rule 10.11.

Part 7B - Issue details

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional No securities in a class that is already quoted or recorded by ASX)? New class

Details of +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from Will the entity be seeking quotation ASX that the terms of the proposed of the 'new' class of +securities on +securities are appropriate and ASX? equitable under listing rule 6.1? No No

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ASX +security code

New class-code to be confirmed

+Security description Unlisted and unvested options exercisable at $0.24 per option, expiring 7 January 2025.

+Security type

Options

Number of +securities proposed to be issued

2,000,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? No

Please describe the consideration being provided for the +securities

Options issued as part remuneration of new Non-Executive Chairman subject to the achievement of two milestones: 1) 50% vest at FID (Final investment Decision) before end of 2021 for stage 1 of the Arcadia development, FID occurs after all elements of the project are procured and sufficient capital is secured to fully fund the stage 1 project; and

• 2) 50% vest with first on-spec product shipped within 18 months of the FID decision

Please provide an estimate of the AUD equivalent of the consideration being provided for the +securities

Will all the +securities issued in this class rank equally in all respects from their issue date? Yes

Options details +Security currency Exercise price Expiry date AUD - Australian Dollar AUD 0.2400 Tuesday January 7, 2025 Details of the type of +security that will be issued if the option is exercised PSC : ORDINARY FULLY PAID

Number of securities that will be issued if the option is exercised

One fully paid ordinary share per option exercised.

Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities proposed to be issued or provide the information by separate announcement. https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02329553-6A1015156?access_token=8 3ff96335c2d45a094df02a206a39ff4

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Part 7C - Timetable

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7C.1 Proposed +issue date

Friday February 26, 2021

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the entire issue under listing rule 7.1? No

7D.1b Are any of the +securities proposed to be issued without +security holder approval using the entity's 15% placement capacity under listing rule 7.1? No 7D.1c Are any of the +securities proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A (if applicable)? No

7D.2 Is a party referred to in listing rule 10.11 participating in the proposed issue? Yes 7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No

7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? No

7E.2 Is the proposed issue to be underwritten? No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue

Part 7F - Further Information

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7F.01 The purpose(s) for which the entity is issuing the securities

Remuneration of new Chairman subject to the achievement of:

• 1) 50% vest at FID (Final investment Decision) before end of 2021 for stage 1 of the Arcadia development; and

2) 50% vest with first on-spec product shipped within 18 months of the FID decision

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue

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