QPM ENERGY LIMITED - Proxy Solicitation & Information Statement 2012

ACN 125 368 658

of Level 7, 231 Adelaide Terrace, Perth WA 6000

Circular to Shareholders

including NOTICE OF GENERAL MEETING EXPLANATORY MEMORANDUM PROXY FORM

General Meeting of Eagle Nickel Limited

to be held at

The Goodearth Hotel, 195 Adelaide Terrace, Perth, Western Australia on the 30th day of March 2012 commencing at 10:00 am (WST).

This document should be read in its entirety. If after reading this Circular to Shareholders, you have any questions or doubts as to how you should vote, you should contact your stockbroker, solicitor, accountant or professional adviser.

Corporate Directory
Directors	Dr Zhukov (Zeke) Pervan MB,BS(WA), FRACGP, FAICD
	Chairman
	Robert Sebek B.App.Sc, B.Sc (Hons), MBA, MAusIMM
	Director
	David Zohar BSc DipEd
	Director
Company Secretary	Suraj Sanghani BCom (UWA), CA, GradDipACG
Head Office	Level 7
	231 Adelaide Terrace
	PERTH WA 6000
	Phone: (08) 9225 4718
	Fax: (08) 9225 6474
	Website: www.eaglenickel.com.au
Registered Office	Level 7, 231 Adelaide Terrace,
	PERTH, WESTERN AUSTRALIA 6000
Auditors	Rothsay Chartered Accountants
	96 Parry Street
	PERTH, WESTERN AUSTRALIA 6000
Share Registry	Computershare Investor Services Pty Ltd
	Level 2, 45 St Georges Terrace,
	PERTH, WESTERN AUSTRALIA 6000
ASX Code	ENL
	ENLO

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT a General Meeting of the Company will be held at The Goodearth Hotel, 195 Adelaide Terrace, Perth, Western Australia on the 30[th] day of March 2012 commencing at 10:00 am WST.

Information on the proposals regarding the resolutions set out below is contained in the Explanatory Memorandum, which accompanies and forms part of this Notice of Meeting.

BUSINESS OF THE GENERAL MEETING

1. Resolution 1 - Approval for Proposed Share Placement and Grant of Options to Darshing International Holdings Limited (or its nominee)

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

“Subject to Resolutions 2, 3, 4, 5, 6 and 7 being passed, that for the purposes of ASX Listing Rule 7.1, item 7 of section 611 of the Corporations Act and for all other purposes, approval and authority be given for the Company to issue to Darshing International Holdings Limited (or its nominee) the following securities:

53,015,627 fully paid ordinary shares at $0.02 per share in the capital of the Company by way of a share placement to raise $1,060,312.54;
43,219,196 options to acquire fully paid ordinary shares in the capital of the Company, with an exercise price of $0.30 per option;
10,723,584 options to acquire fully paid ordinary shares in the capital of the Company, with an exercise price of $0.20 per option;
7,285,714 unquoted options to acquire fully paid ordinary shares in the capital of the Company, with an exercise price of $0.20 per option; and
9,367,347 options to acquire fully paid ordinary shares in the capital of the Company, with an exercise price of $0.03 per option,

each on the terms and conditions set out in the Explanatory Memorandum forming part of this Notice of Meeting, and for Darshing International Holdings Limited (or its nominee) to exercise these options.”

Voting Exclusion

The Company will, in accordance with ASX Listing Rule 14.11.1, disregard any votes by a person who may participate in the proposed issue and a person who might obtain a benefit (except a benefit solely in the capacity of a holder of ordinary securities) if the resolution is passed and any associates of such persons. However, the Company need not disregard a vote if:

it is cast by a person as 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 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.

2. Resolution 2 – Ratification of Prior Share Issue to Darshing International Holdings Limited (or its nominee)

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

“Subject to Resolutions 1, 3, 4, 5, 6 and 7 being passed, that for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders of the Company approve and ratify the prior issue of 8,927,030 fully paid ordinary shares at $0.02 per share to Darshing International Holdings Limited (or its nominee) as further described in the Explanatory Memorandum forming part of this Notice of Meeting.”

Voting Exclusion

The Company will, in accordance with ASX Listing Rule 14.11.1, disregard any votes by a person who participated or may participate in the proposed issue. However, the Company need not disregard a vote if:

it is cast by a person as 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 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.

3. Resolution 3 – Grant of Options to TianShan Investment Holdings Limited (or its nominee)

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

“Subject to Resolutions 1, 2, 4, 5, 6 and 7 being passed, that for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval and authority be given for the Company to grant to TianShan Investment Holdings Limited (or its nominee) 9,000,000 options to acquire fully paid ordinary shares in the capital of the Company, with an exercise price of $0.03 per option, on the terms and conditions set out in the Explanatory Memorandum forming part of this Notice of Meeting.

Voting Exclusion

The Company will, in accordance with ASX Listing Rule 14.11.1, disregard any votes by a person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed. However, the Company need not disregard a vote if:

it is cast by a person as 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 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.

4. Resolution 4 – Approval of Appointment of Xuefeng Mei as Director

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

“Subject to Resolutions 1, 2, 3, 5, 6 and 7 being passed, that pursuant to section 201G of the Corporations Act, the Company be authorised to appoint Xuefeng Mei as a Director of the Company and that Xuefeng Mei be so appointed.”

5. Resolution 5 – Approval of Appointment of Hui Guo as Director

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

“Subject to Resolutions 1, 2, 3, 4, 6 and 7 being passed, that pursuant to section 201G of the Corporations Act, the Company be authorised to appoint Hui Guo as a Director of the Company and that Hui Guo be so appointed.”

6. Resolution 6 – Approval of Appointment of Benjamin Jarvis as Director

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

“Subject to Resolutions 1, 2, 3, 4, 5 and 7 being passed, that pursuant to section 201G of the Corporations Act, the Company be authorised to appoint Benjamin Jarvis as a Director of the Company and that Benjamin Jarvis be so appointed.”

7. Resolution 7 – Approval of Change of Company Name

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

“Subject to Resolutions 1, 2, 3, 4, 5 and 6 being passed, that for the purposes of section 157(1)(a) of the Corporations Act, the Company be authorised to change the Company’s name from Eagle Nickel Limited to Eagle Minerals Limited .”

OTHER BUSINESS

To consider any other business brought forward in accordance with the Company's Constitution or the law.

ENTITLEMENT TO ATTEND AND VOTE

The Corporations Act permits the Company to specify a time, not more than 48 hours before the meeting, at which a “snap-shot” of Shareholders will be taken for the purposes of determining Shareholder entitlements to vote at the General Meeting.

The Company’s directors have determined that all shares of the Company that are quoted on ASX at 10:00 am WST, 28 March 2012 shall, for the purposes of determining voting entitlements at the General Meeting, be taken to be held by the persons registered as holding the shares at that time.

PROXIES

Please note that:

(a) a member of the Company entitled to attend and vote at the General Meeting is entitled to appoint a proxy;
(b) a proxy need not be a member of the Company;
(c) a person can appoint an individual or a body corporate as a proxy. If a body corporate is appointed as a proxy, it must ensure that it appoints a corporate representative in accordance with section 250D of the Corporations Act to exercise its powers as proxy at the General Meeting; and
(d) a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion is not specified each proxy may exercise half of the votes.

The following addresses are specified for the purposes of receipt of proxy appointments and any authorities under which proxy appointments are signed (or certified copies of those authorities):

EAGLE NICKEL LIMITED ATT: Mr Suraj Sanghani - Company Secretary Level 7, 321 Adelaide Terrace, Perth WA 6000 OR PO Box 3235, 249 Hay Street, East Perth 6892

Proxy appointments and any authorities under which they are signed (or certified copies of those authorities) may be sent by fax to facsimile number +61 8 9225 6474.

For Intermediary Online subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions.

To be effective, a proxy appointment and, if the proxy appointment is signed by the member’s attorney, the authority under which the appointment is signed (or a certified copy of the authority) must be received by the Company no later than 10:00 am WST, 28 March 2012.

The enclosed proxy form provides further details on appointing proxies and lodging

proxy forms.

UNDIRECTED PROXIES

Where permitted, the chairperson of the General Meeting in respect of each item of business intends to vote undirected proxies in favour of each resolution.

VOTING BY ATTORNEY

A member of the Company may appoint an attorney to vote on his/her behalf. For an appointment to be effective for the General Meeting, the instrument effecting the appointment (or a certified copy of it) must be received by the Company at its registered office, or the addresses listed above for the receipt of proxy appointments, no later than 10:00 am WST, 28 March 2012.

CORPORATE REPRESENTATIVES

A body corporate which is a member of the Company, or which has been appointed as a proxy, may appoint an individual to act as its representative at the General Meeting. The appointment must comply with the requirements of section 250D of the Corporations Act. The representative should bring to the General Meeting evidence of his or her appointment, including any authority under which it is signed, unless it has previously been given to the Company.

DATED: 2 February 2012

BY ORDER OF THE BOARD

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Suraj Sanghani Company Secretary Eagle Nickel Limited

EXPLANATORY MEMORANDUM

This Explanatory Memorandum is intended to provide Shareholders with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of Meeting.

All of the resolutions, except for Resolution 7, are ordinary resolutions. Ordinary resolutions require a simple majority of votes cast by Shareholders present and entitled to vote on the resolution. Resolution 7 is a special resolution that requires at least 75% of the votes cast by Shareholders present and entitled to vote on the resolution to be passed.

The Directors recommend that Shareholders read this Explanatory Memorandum in full before making any decision in relation to a Resolution.

Capitalised terms in this Explanatory Memorandum are defined in the Glossary.

BUSINESS OF THE MEETING

1. Background

Agreement between the Company and Sky Chem Industrial Co. Ltd

As announced to ASX on 8 November 2011, the Directors of the Company have entered into an agreement (" Agreement ") with Shanghai Sky Chem Industrial Co. Ltd (“ Sky Chem ”). The Agreement provides for Sky Chem (or its nominee) to acquire an interest in at least 51.0% of the Company by way of two Share issues and a grant of options (please see below for further details of the two Share issues and grant of options).

The Company has been informed by Sky Chem that:

Sky Chem is a privately owned Chinese company and was founded in 1999. Sky Chem is now one of China’s biggest importers and distributors of chemicals.
As a result of its extensive global network and business dealings, a selection of advanced resource projects has been made available to Sky Chem and its partners. Assets for potential acquisition include gold, silver and rare earth elements projects that require access to capital and experience for necessary evaluation and development.

Sky Chem has nominated an associated company, Darshing International Holdings Limited ( Darshing ), to acquire the 51.0% interest in the Company and to be granted the options.

Share Placements

Following completion of the Share issues, Sky Chem intends to vend some of its gold, silver and rare earth element exploration and mining assets, including certain mining services assets (all yet to be determined) into the Company in the future,

thereby transforming the Company into a precious metals exploration and mining company.

The Share issues will be completed in two tranches:

Tranche 1 Share Issue : the issue of 8,927,030 Shares at the issue price of $0.02 per Share, at the 15% limit imposed by ASX Listing Rule 7.1, raising $178,541 before fees and expenses; and
Tranche 2 Share Issue : the issue of 53,015,627 Shares at the issue price of $0.02 per Share, with the approval of Shareholders under ASX Listing Rule 7.1 and item 7 of section 611 of the Corporations Act, to raise $1,060,312 before fees and expenses.

The total amount raised from the Tranche 1 and 2 Share Issues will be $1,238,853 before fees and expenses.

On 3 November 2011, the Company received $178,541 from Sky Chem for the Tranche 1 Share Issue. This money is being held in trust until Sky Chem completes its due diligence. The due diligence is expected to have been completed by the date of this General Meeting and the Shares from the Tranche 1 Share Issue will have been issued to Darshing (or its nominee). However, if Sky Chem concludes that the results of its due diligence are not satisfactory, then the deposit must be immediately refunded in full to Sky Chem. In such an event, neither the Tranche 1 Share Issue nor the Tranche 2 Share Issue will proceed and none of the Resolutions will be put to Shareholders.

Grant of options

The Agreement also provides that, concurrently with completion of the Tranche 2 Share Issue, the Company will grant to Sky Chem (or its nominee), for no further consideration, options to subscribe for Shares. As stated above, Sky Chem has nominated Darshing to be granted the options.

The purpose of the grant of options is to prevent Darshing (or its nominee) from being diluted in the event that the Company's optionholders exercised their options. In such an event, Darshing (or its nominee) would be able to exercise its options in order to return its shareholding in the Company to 51%. The options will be granted to Darshing (or its nominee) on the same terms as the options outstanding at the date of this Notice of Meeting (including the options proposed to be granted to TianShan under Resolution 3) and the number of options to be granted to Darshing (or its nominee) will be a number equal to 51% (on a fully diluted basis) of such number of options outstanding.

On this basis, the Company will grant to Darshing (or its nominee):

43,219,196 options to acquire Shares, with an exercise price of $0.30 per option;
10,723,584 options to acquire Shares, with an exercise price of $0.20 per option; and

7,285,714 unquoted options to acquire Shares, with an exercise price of $0.20 per option; and
9,367,347 options to acquire Shares, with an exercise price of $0.03 per option.

TianShan Investment Holdings Ltd (“ TianShan ”) acted as agents on behalf of the Company and are to receive options in the Company as a placement fee. Under the terms of an agency agreement between TianShan and the Company, the Company is to grant to TianShan options to acquire Shares at $0.03 as a placement fee.

Other conditions

As part of the Agreement, the Company has agreed to do, amongst others, the following:

appoint three directors nominated by Sky Chem to the Board; and
change the name of the Company from Eagle Nickel Limited to Eagle Minerals Limited.

Completion of the transactions described above is to occur within 3 business days after ALL the Resolutions are approved by Shareholders and Sky Chem notifies the Company that it has completed, and is satisfied with the outcome of, its due diligence exercise.

Inter-conditionality

Importantly, the Agreement provides that the Resolutions are to be inter-conditional. In other words, if Shareholders do not approve ALL of the Resolutions, then none of the Resolutions will succeed and Sky Chem will not be obliged to proceed with the Tranche 2 Share Issue. Put differently, the Tranche 2 Share Issue is conditional upon Shareholders approving ALL Resolutions.

2. Risks, Advantages and Disadvantages

Risks of voting against the Resolutions

As explained above, the Agreement stipulates that Sky Chem may not proceed with the Tranche 2 Share Issue (set out in Resolution 1) unless ALL the Resolutions contained in this Notice of General Meeting are passed by Shareholders. If only one Resolution is not approved by Shareholders, then all of the Resolutions will fail and the Tranche 2 Share Issue will not complete.

If the Tranche 2 Share Issue does not complete, the Company will not stand to realise the benefits of the transaction as outlined below, including as highlighted in the reasons for the Directors' recommendation (see Section 3 below).

If the Tranche 2 Share Issue does not complete, the Company will need to raise capital via an issue of equity, potentially at a significant discount to the Company Share price immediately prior to the announcement of the Agreement with Sky Chem on 8 November 2011 or otherwise cease work at the Company's projects which could have potentially severe consequences with respect to the value and prospects of the Company.

Advantages of the transactions contemplated under the Resolutions

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder's decision on how to vote on the Resolutions:

Increased funding

The Tranche 2 Share Issue will provide additional funds to further advance the Company's projects. Without this funding, the Company would need to raise funds, potentially through the issue of Shares at a significant discount to the market price, in order to progress its projects.

Access to other exploration and mining assets

If the Tranche 2 Share Issue proceeds, Sky Chem intends, at a later stage, to vend into the Company certain gold, silver and rare earth element exploration and mining assets, including certain mining services assets (all yet to be determined), thereby transforming the Company into a precious metals exploration and mining company.

Darshing as a substantial shareholder of the Company

The Tranche 1 and 2 Share Issues will result in an associate of Sky Chem, being Darshing, having a significant shareholding in the Company and allows the Company to benefit from the support of a major Shareholder with substantial financial strength and significant experience in the mining services sector.

Disadvantages of the transactions contemplated under the Resolutions

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder's decision on how to vote on the Resolutions:

Reduction in voting power

Upon completion of the Tranche 1 and 2 Share Issues, Shareholders will have their voting power reduced as a result of the dilution of their holding due to the issue of additional Shares. As such, the ability of the Shareholders to influence decisions, including the composition of the Board or the acquisition or disposal of assets will be reduced accordingly.

Influence of Darshing as a major shareholder

As a major shareholder, Darshing (or its nominee) will have significant ability to influence decisions including the composition of the Board. In addition, if ALL the Resolutions are passed, Darshing (or its nominee) will have (due to its significant shareholding) the ability to block any special resolution at a meeting of Shareholders and prevent compulsory acquisition in the event of a takeover offer from any third party. This may deter the making of a takeover bid for the Company by a third party bidder.

3. Directors' Recommendation

Based on the information available, including that contained in this Explanatory Memorandum and the Independent Expert's Report (attached at Annexure “G” ), the advantages and disadvantages, the prospects and alternatives available to the Company, and having consulted with the Company’s nominated corporate and legal

advisors, the Directors consider that completion of the transactions with Sky Chem's associate, being Darshing (or its nominee) (as contained in the Agreement) which are the subject of Resolutions is FAIR AND REASONABLE insofar as Shareholders are concerned and is in the best interests of the Company and recommend that Shareholders VOTE IN FAVOUR of all Resolutions.

In addition, each Director intends to vote in favour of all Resolutions for any shares they hold or have a relevant interest in.

The reasons for the Directors’ recommendation include:

that the independent expert has noted several advantages to the transaction with Darshing as noted in paragraphs 7.2 to 7.7 inclusive of Annexure “G”:
that without this transaction the Company will have limited opportunities to vend in any other exploration tenements;
that without this transaction the Company will have trouble raising additional capital in current market conditions; and
that this transaction will give the Company greater opportunities as an explorer.

RESOLUTION 1 – APPROVAL OF PROPOSED SHARE ISSUE AND GRANT OF OPTIONS TO DARSHING (OR ITS NOMINEE)

The purpose of Resolution 1 is for the Company to seek the approval of Shareholders, for the purposes of ASX Listing Rule 7.1, item 7 of section 611 of the Corporations Act and for all other purposes, to authorise the Company to issue to Darshing International Holdings Limited (or its nominee) the following securities:

53,015,627 Shares at $0.02 per Share by way of a Share placement to raise $1,060,312.54;
43,219,196 options to acquire Shares, with an exercise price of $0.30 per option, expiring on 1 July 2012;
10,723,584 options to acquire Shares, with an exercise price of $0.20 per option, expiring on 31 December 2015;
7,285,714 unquoted options to acquire Shares, with an exercise price of $0.20 per option, expiring on 1 May 2016; and
9,367,347 options to acquire Shares, with an exercise price of $0.03 per option, expiring on 30 January 2015,

and to approve the exercise of these options by Darshing International Holdings Limited (or its nominee).

Details of the options expiring on 1 July 2012, 31 December 2015, 1 May 2016 and 30 January 2015 are contained in Annexures “ A ”, “ B ”, “ C ” and “ F ”, respectively, to this Notice of General Meeting and Explanatory Memorandum.

Resolution 1 is required to fulfil the requirements of item 7 of section 611 of the Corporations Act and ASX Listing Rule 7.1 in relation to the Shares and options to be

issued to Darshing (or its nominee).

If the Share issue in Resolution 1 is approved by Shareholders, Darshing (or its nominee) will have a relevant interest in 51.0% of the voting Shares in the Company. Note, however, if Darshing (or its nominee) subsequently exercised all of its options (and assuming no further Shares are issued), Darshing (or its nominee) would have a relevant interest in 69% of the voting Shares in the Company. Please see below for further details.

Corporations Act - Part 6.1

Section 606 of the Corporations Act prohibits a person, from acquiring a "relevant interest" (defined in the Corporations Act as including holding or controlling the vote attached to or the disposal of a security) in issued voting shares in a company where as a result of that acquisition that person's or some other person's voting power in the company increases from a level of below 20% to a level that is above 20%. A person's "voting power" for these purposes is defined as the total number of votes attached to voting shares in the company in which that person or his associate has a relevant interest expressed as a percentage of the total number of votes attached to all voting shares in the relevant company.

Item 7 of section 611 of the Corporations Act excludes from the prohibition in section 606 an acquisition of relevant interests in voting shares in a company by virtue of an allotment if the company has approved of the allotment by a resolution passed at a general meeting at which no votes were cast in relation to the resolution in respect of any shares held by, or by an associate of, the person to whom the first mentioned shares were to be allotted.

Please see Annexure “ D ” for further details of the legal principles in respect of section 611 of the Corporations Act.

Company share structure

As at the date of this Notice of Meeting, the capital of the Company is divided into 59,513,533 Shares. If the Tranche 1 Share Issue proceeds (which is subject only to the satisfactory completion of Sky Chem's due diligence exercise), the Company will issue 8,927,030 Shares to Darshing (or its nominee) at an issue price of $0.02 per share. As a result, there will be 68,440,563 Shares on issue and Darshing (or its nominee) will have a relevant interest of 13% in the voting Shares of the Company.

Should the Tranche 2 Share Issue proceed, Darshing (or its nominee) will be issued 53,015,627 additional Shares at an issue price of $0.02 per share and increase its relevant interest from 13.0% to 51.0% of the voting Shares in the Company.

As explained above, it is intended that Darshing (or its nominee) will also be granted a total of 70,595,841 options in the Company. The purpose of the grant of options is

to prevent Darshing (or its nominee) from being diluted in the event that the Company's optionholders exercised their options. In such an event, Darshing (or its nominee) would be able to exercise its options in order to return its shareholding in the Company to 51%. The options will be granted to Darshing (or its nominee) on the same terms as the options outstanding at the date of this Notice of Meeting (including the options proposed to be granted to TianShan under Resolution 3) and the number of options to be granted to Darshing (or its nominee) will be a number equal to 51% (on a fully diluted basis) of such number of options outstanding.

As at the date of this Notice of Meeting, there is a total of 58,827,377 options outstanding. These options are made up of the following tranches:

41,524,326 options exercisable at $0.30 each expiring 1 July 2012 (quoted on ASX);
10,303,051 options exercisable at $0.20 each expiring 31 December 2015 (quoted on ASX); and
7,000,000 options exercisable at $0.20 each expiring 1 May 2016 (not quoted on ASX).

In addition to the above, it is proposed that TianShan be granted 9,000,000 options to acquire Shares, with an exercise price of $0.03 per option, as a placement fee. Please see Resolution 3 in this regard.

On this basis, it is proposed that the Company will grant to Darshing (or its nominee):

43,219,196 options to acquire Shares, with an exercise price of $0.30 per option;
10,723,584 options to acquire Shares, with an exercise price of $0.20 per option;
7,285,714 unquoted options to acquire Shares, with an exercise price of $0.20 per option; and
9,367,347 options to acquire Shares, with an exercise price of $0.03 per option.

Details of the options expiring on 1 July 2012, 31 December 2015 and 1 May 2016 are contained in Annexures “A” , “B” , “C” and “F” , respectively, to this Notice of Meeting and Explanatory Memorandum.

If Darshing (or its nominee) exercises its 70,595,841 options (and assuming no further Shares are issued), Darshing (or its nominee) would have a relevant interest in up to 69% of the voting shares in the Company.

Table 1.1

The percentage interest of Darshing (or its nominee) in the Company if all the Resolutions are passed

Name	Total No of Shares held	% held	Total No of options held	% held
Darshing	61,942,657	51.0	70,595,841	51.0
TOTAL ON ISSUE	121,456,190		138,423,218

Table 1.2

The percentage interest of Darshing (or its nominee) in the Company if all the Resolutions are passed and Darshing (or its nominee) exercise their options (assuming that no further Shares are issued in the Company)

Name	Total No of Shares held	% held	Total No of options held	% held
Darshing	132,538,498	69.0	0	0
TOTAL ON ISSUE	192,052,031		67,827,377

Information required by item 7 of section 611 of the Corporations Act and ASIC Regulatory Guide 74

The Shareholders of the Company must be given all information known to Sky Chem or its associates, or known to the Company, that is material to the decision on how to vote on the Resolution.

In particular, the information that Shareholders require under item 7 of section 611 of the Corporations Act and ASIC Regulatory Guide 74 is provided as follows:

a) The identities of the person proposing to make the acquisition and their associates:

The person making the acquisition is Darshing International Holdings Limited, an associate of Shanghai Sky Chem Industrial Co Ltd. Darshing is a company incorporated in Hong Kong, with registered address at Room 1708C1 Nan Fung Tower, 173 Des Voeux Road C, Hong Kong.

Details of Darshing's associates are set out in Annexure “ E ”.

b) Full particulars (including the number and percentage) of the shares to which Darshing (or its nominee) will be entitled immediately before and after the Tranche 2 Share Issue:

Subject to the completion and satisfactory outcome of its due diligence exercise and completion of the Tranche 1 Share Issue, Darshing (or its nominee) will increase its interest in the Company from 13.0% to 51.0% if the

Tranche 2 Share Issue proceeds. Please see Table 1.1 above for further details.

However, as noted in Table 1.2 , it is proposed that Darshing (or its nominee) also be granted a total of 70,595,841 options in the Company. If these options are exercised by Darshing (and assuming no further Shares are issued), Darshing (or its nominee) would have a relevant interest in up to 69% of the voting Shares in the Company.

c) The voting power that the person would have as a result of the acquisition:

Darshing (or its nominee) will have a voting power of 51.0% in the Company if the Tranche 2 Share Issue proceeds.

d) The maximum extent of the increase in the voting power of each of that person's associates that would result from the acquisition:

Darshing’s voting power will increase by 38.0% as a result of the Tranche 2 Share Issue. In addition, if Darshing (or its nominee) exercised its 70,595,841 options, it would increase its voting power by 56%.

e) The voting power that each of that person's associates would have as result of the acquisition:

Subject to the completion and satisfactory outcome of Sky Chem's due diligence exercise, Darshing (or its nominee) will subscribe (pursuant to the Tranche 1 Share Issue) for 8,927,030 Shares in the company, thereby giving it a 13% relevant interests in the Company's voting Shares. This subscription is expected to take place before the date of the General Meeting. As at the date of the Notice of Meeting, neither Darshing nor any of its associates hold, or have a relevant interest, any Shares in the Company.

Darshing and its associates will have a relevant interest in 51.0% of the voting Shares in the Company if the Tranche 2 Share Issue proceeds. As stated above, if Darshing (or its nominee) exercises its options (and assuming no further Shares are issued), Darshing and its associates would have a relevant interest in up to 69% of the voting Shares in the Company. Please see Tables 1.1 and 1.2 above in this regard.

f) The identity, associations (with Darshing or any of its associates) and qualifications of any person who is intended to become a director if Shareholders agree to the subscription:

Please see Resolutions 4, 5 and 6 for the Darshing nominees proposed to be appointed to the Board.

g) Darshing's intentions regarding the future of the Company if Shareholders agree to the Tranche 2 Share Issue:

Darshing has informed the Company that:

it has no current intention to change the business of the Company,

although it intends, at a later stage, to vend into the Company (through its associate, Sky Chem) certain gold, silver and rare earth element exploration and mining assets, including certain mining services assets (all yet to be determined), thereby transforming the Company into a precious metals exploration and mining company;

it has no current intention to inject further capital into the Company, although if the Company undertook a rights issue, Darshing may seek to participate depending on the terms of the rights issue;
if Darshing obtains Board representation (see Resolutions 4, 5 and 6 below), Darshing intends to evaluate current employment levels and propose appropriate restructuring in order to increase efficiencies and ensure an optimal allocation of Company resources;
other than as described in the first bullet point above, it does not contemplate any other proposal whereby any assets will be transferred between the Company and Darshing (or any company in the Darshing Group) or any person associated with any of them; and
it has no current intention to otherwise redeploy the fixed assets of the Company.
h) Particulars of the terms of the Shares to be issued pursuant to the proposed Tranche 2 Share Issue and the grant of options, any contract or proposed contract between Darshing and the Company or any of their associates which is conditional upon, or directly or indirectly dependent on, Shareholders agreement to Tranche 2 Share Issue and grant of options to Darshing:

Refer to Section 1 ("Background") of this Explanatory Memorandum for a summary of the material terms of the Agreement.

As explained above, if the Tranche 2 Share Issue proceeds, Darshing intends, at a later stage, to vend into the Company (through its associate, Sky Chem) certain gold, silver and rare earth element exploration and mining assets, including certain mining services assets (all yet to be determined), thereby transforming the Company into a precious metals exploration and mining company.

i) When the allotment of the Shares under the Tranche 2 Share Issue and grant of options to Darshing (or its nominee) under the Agreement is to be made:

The Tranche 2 Share Issue and grant of options will be made to Darshing (or its nominee) no later than 3 business days after ALL the Resolutions are approved by Shareholders and Sky Chem notifies the Company that it has completed, and is satisfied with the outcome of, its due diligence exercise.

Subject to Shareholders approving ALL Resolutions, the Company anticipates that completion of the Agreement will take place on Monday, 2 April 2012.

j) An explanation of the reasons for the proposed allotment of the Shares under the Tranche 2 Share Issue and grant of options to Darshing (or its nominee):

The Shares to be issued to Darshing (or its nominee) under the Tranche 2 Share Issue will be issued in consideration for payment of $1,060,312.54 to the Company. The options to be granted to Darshing (or its nominee) will be for no consideration.

The funds raised from the Tranche 2 Share Issue will be used by the Company for its exploration expenditure requirements and general working capital.

Please see Section 2 above for the advantages, disadvantages and risks of approving the Resolutions.

k) The interests of the Directors in Resolution 1:

None of the Directors have an interest in Resolution 1.

l) Identity of the Directors who approved or voted against the proposal to put Resolution 1 to Shareholders:

All of the Directors approved the proposal to put Resolution 1 to Shareholders.

m) Any intention of Darshing to change significantly the financial or dividend policies of the Company:

Darshing does not intend to change significantly the financial or dividend policies of the Company at this time.

n) Recommendation or otherwise of each Director as to whether Shareholders should agree to the proposed allotment of Shares to Darshing (or its nominee) pursuant to the Tranche 2 Share Issue and grant of options to SDarshing (or its nominee) and the reasons for the recommendation:

Please refer to the Directors' Recommendation (Section 3) above.

o) An analysis of whether the proposed allotment of Shares pursuant to the Tranche 2 Share Issue and options to Darshing (or its nominee) the subject of Resolution 1 is fair and reasonable when considered in the context of the interests of the Shareholders other than Darshing:

The Independent Expert has opined that the Tranche 2 Share Issue is FAIR AND REASONABLE to Shareholders other than Darshing.

Please see the Independent Expert's Report attached at Annexure " G " of this Explanatory Memorandum for further details.

The Directors are not aware of any other information that may be relevant to Shareholders' decision whether or not to vote in favour of Resolution 1.

Specific Information required by ASX Listing Rule 7.3

For the purposes of ASX Listing Rule 7.3, the following information is provided in relation to the proposed Share issue and grant of options described in Resolution 1:

a) The maximum number of new Shares to be issued is 53,015,627. Darshing (or its nominee) will also be granted the following number of options:
43,219,196 options to acquire Shares, with an exercise price of $0.30 per option, expiring on 1 July 2012;
10,723,584 options to acquire Shares, with an exercise price of $0.20 per option, expiring on 31 December 2015;
7,285,714 unquoted options to Shares, with an exercise price of $0.20 per option, expiring on 1 May 2016; and
9,367,347 options to acquire Shares, with an exercise price of $0.03 per option, expiring on 30 January 2015.

If all of the above options are exercised by Darshing (or its nominee), the Company will issue an additional 70,595,841 Shares to Darshing (or its nominee);

b) The Shares will be issued and the options will be granted to Darshing (or its nominee) no later than 3 months after the date of the General Meeting;
c) The issue price of the Shares is $0.02 each. The options are being issues for no consideration and have the exercise prices set out in paragraph (a) above;
d) The allottee of the Shares under the Tranche 2 Share Issue and additional options will be Darshing International Holdings Limited (or its nominee);
e) The Shares will rank equally with the existing Shares. If exercised, the options will effectively "convert" into Shares which rank equally with the current Shares on issue. Further details of these options are set out on Annexures " A ", " B ", " C " and " F ", respectively; and
f) The funds raised from the Tranche 2 Share Issue will be used by the Company for its exploration expenditure requirements and general working capital. There will be no immediate funds raised from this issue of options, however, the proceeds from the exercise of the options will be used by the Company for its exploration expenditure requirements and general working capital.

A voting exclusion statement is set out in the Notice of General Meeting, which this Explanatory Memorandum accompanies.

This Share issue and grant of options to Darshing is part of the overall agreement that will result in Darshing investing capital into the Company and which may see an associate of Darshing, being Sky Chem, vending exploration and mining assets, including certain mining services assets (all yet to be determined) into the Company. Therefore, if Shareholders do not vote FOR ALL Resolutions, Darshing may elect not to proceed with the Tranche 2 Share Issue and may not vend any assets into the Company in future.

The Directors unanimously recommend Shareholders vote in favour of Resolution 1.

RESOLUTION 2 – RATIFICATION OF PRIOR SHARE ISSUE TO DARSHING (OR ITS NOMINEE)

Resolution 2 seeks Shareholder ratification for the issue of 8,927,030 Shares under the Tranche 1 Share Issue at an issue price of $0.02 per Share.

ASX Listing Rule 7.1 provides that a Company must not, without Shareholder approval or subject to specified exceptions, issue or agree to issue during any 12 month period equity securities if the number of those securities exceeds 15% of the number of shares 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 approves a previous issue of securities, then provided that the previous issue did not breach ASX Listing Rule 7.1, those securities will be treated as having been issued with Shareholder approval for the purpose of ASX Listing Rule 7.1.

Whilst the Tranche 1 Share Issue did not require the prior approval of Shareholders as it was within the Company’s existing 15% placement capacity, the purpose of Resolution 2 is to approve the issue of these Shares in accordance with the requirements of ASX Listing Rule 7.4 to provide the Company with flexibility to issue further securities, without obtaining Shareholder approval at the time of issue, in accordance with the limit under ASX Listing Rule 7.1 should the need arise in the future.

If Resolution 2 is not approved:

it will have no impact on the Shares issued under the Tranche 1 Share Issue; and
the Shares issued under the Tranche 1 Share Issue will be included in calculating the 15% limit of additional securities which may be issued by the Company in the next 12 month period.

However, as explained in Section 1 above, because of the inter-conditionality of the Resolutions, if Shareholders do not approve ALL of the Resolutions, then none of the Resolutions will succeed and Sky Chem will not be obliged to proceed with the Tranche 2 Share Issue.

Specific Information required by ASX Listing Rule 7.5

For the purposes of ASX Listing Rule 7.5, the following information is provided in relation to the Share issue described in Resolution 2:

a) The number of securities allotted: 8,927,030 Shares;
b) The price at which the securities were issued: $0.02 per Share;

c) The terms of the securities: the Shares issued are fully paid ordinary Shares in the capital of the Company, ranking equally in all respects with the Shares on issue;
d) The names of the allottees: subject to it completing completed, and being satisfied with the outcome of its due diligence exercise, the Shares will have been issued to an associate of Shanghai Sky Chem Industrial Co Ltd, being Darshing International Holdings Limited (or its nominee), by the date of this General Meeting; and
e) The funds raised from Tranche 1 Share Issue will be used by the Company for its exploration expenditure requirements and general working capital.

The Directors unanimously recommend Shareholders vote in favour of Resolution 2.

RESOLUTION 3 – GRANT OF OPTIONS TO TIANSHAN INVESTMENT HOLDINGS LIMITED (OR ITS NOMINEE)

As stated above, TianShan have acted as agents on behalf of the Company and are to receive options in the Company as a placement fee.

As part of an agency agreement between TianShan and the Company, the Company will issue the following options to TianShan (or its nominee), for no consideration, as a placement fee 9,000,000 options to acquire Shares at $0.03 each, expiring on 30 January 2015.

Details of the options expiring on 30 January 2015 are set out as Annexure “F” to this Notice of Meeting and Explanatory Memorandum.

The purpose of Resolution 3 is for Shareholders to approve, for purposes of ASX Listing Rule 7.1 and for all other purposes, the grant of the above options to TianShan (or its nominee).

Specific Information required by ASX Listing Rule 7.3

For the purposes of ASX Listing Rule 7.3, the following information is provided in relation to the proposed grant of options described in Resolution 3:

a) The maximum number of new options to be issued is: 9,000,000;
b) Although no date has yet been fixed, subject to ALL Resolutions being approved and the satisfactory completion of Sky Chem's due diligence exercise, the options will be granted no later than 3 months after the date of the General Meeting;
c) The options will be issued in one allotment within 3 months of the date of the General Meeting;
d) The options will be issued for no consideration. The issue price of the new

options is 9,000,000 options with an exercise price of $0.03 each;

e) The allottee of the issue of options is: TianShan Investment Holdings Limited (or its nominee);
f) The 9,000,000 options with an exercise price of $0.03 will expire on 30 January 2015. Further details of these options are set out on Annexure " F "; and
g) There will be no immediate funds raised from this issue of options, however, the proceeds from the exercise of the options will be used by the Company for its exploration expenditure requirements and general working capital.

The issue of options to TianShan is part of the overall agreement that will result in Darshing investing capital into the Company, with a view to an associate of Darshing, being Sky Chem, at a later stage, vending exploration and mining assets, including certain mining services assets (all yet to be determined) into the Company. If Shareholders do not vote FOR Resolution 3, Darshing may elect not to proceed with the Tranche 2 Share Issue and may not vend any assets into the Company at a later stage.

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

RESOLUTIONS 4, 5 AND 6 – APPROVAL OF APPOINTMENT OF DIRECTORS

As part of the Agreement between Sky Chem and the Company, the Company has agreed that, subject to Shareholder approval, Sky Chem (or its nominee) may appoint three new Directors to the Board.

The purpose of Resolutions 4, 5 and 6 is to appoint Darshing's nominated directors to the Board pursuant to section 201G of the Corporations Act.

Resolution 4 – appointment of Xuefeng Mei as Director

Xuefeng Mei established and acted as the Managing Director of Shanghai Sky Chemical Co. Limited, Wuxi Sky Chemical Co. Limited and Hangzhou Sky Chemical Co. Limited.

Mr Mei obtained a Master of Business Administration from Shanghai Jiao Tong University An Tai Management School.

Mr Mei is currently a director of Sky Chem and is the controlling shareholder (either directly or indirectly) of Darshing and each of the associated companies listed in Annexure "E". Mr Mei has an interest in the outcome of the proposed transaction by virtue of his shareholding in Darshing.

Resolution 5 – appointment of Hui Guo as Director

Hui (Annie) Guo is a senior executive with more than 9 years’

experience working in a world leading consulting firm in finance and resources sectors. On behalf of some of China’s largest private and stateowned corporations, she has facilitated a number of large acquisitions of Australian mining assets specifically in the coal, iron ore, manganese and precious metals markets.

Ms Guo is experienced in deal structuring, M&A and has a solid understanding of important cultural, technical, operational and business practice differences between Australia and China. She was educated at Macquarie University in Sydney with bachelor/masters degrees in finance.

Ms Guo's major clients in recent years include: Yanzhou Coal , CNOOC, China Sinochem Group, China Yunnan Tin Group, China Reignwood Group, Gruangdong Asset Rising Management Group, China Development and Reform Committee, China Railway Corporation Group, Chin a Hainan Airline, Bank of China and Bank of Communications Ltd.

Her relevant experience includes:

project management of Chinese inbound/outbound acquisitions;
assurance services to top tier financial services clients, including banks, insurance companies, consumer industry and telecommunications industries companies;
internal control and risk control services; and
project coordination and client relationship manager.

Ms Guo has advised the Company that she does not have any associations with the Company, Darshing or any of their respective associates. However, she has an arrangement with TianShan whereby TianShan will transfer (or procure the issue of) 2,138,889 of its options (to be granted to TianShan pursuant to Resolution 3) to her upon completion of the transactions contemplated by this Notice of Meeting.

Resolution 6 – appointment of Benjamin Jarvis as Director

Benjamin Jarvis is the Managing Director and co-founder of Six Degrees Investor Relations, an Australian advisory firm that provides investor relations and investor communication advice to a wide range of resources, technology, healthcare and industrial services companies listed on the Australian Securities Exchange.

Mr Jarvis is also a Non-Executive Director of Austral Gold Limited, which has a gold mining operations in Chile, South American Tin Limited, a company focused on tin exploration and development in Bolivia, ORO SA Limited, a gold exploration company with projects in Bolivia, and Arena Minerals Pty

Limited, a private company developing coal and iron sands projects in Indonesia. He was educated at the University of Adelaide, South Australia, where he majored in Politics.

Mr Jarvis has advised the Company that he does not have any associations with the Company, Darshing or any of their respective associates. However, he has an arrangement with TianShan whereby TianShan will transfer (or procure the issue of) 2,138,889 of its options (to be granted to TianShan pursuant to Resolution 3) to him upon completion of the transactions contemplated by this Notice of Meeting.

The appointment of the above directors is part of the overall agreement that will result in Darshing investing capital into the Company, with a view to an associate of Darshing, being Sky Chem, at a later stage, vending exploration and mining assets, including certain mining services assets (all yet to be determined) into the Company. If Shareholders do not vote FOR Resolutions 4, 5 and 6 Darshing may elect not to proceed with the Tranche 2 Share Issue and may not vend any assets into the Company at a later stage.

The Directors unanimously recommend Shareholders vote in favour of Resolutions 4, 5 and 6.

RESOLUTION 7 – APPROVAL OF CHANGE OF COMPANY NAME

As part of the Agreement between Sky Chem and the Company, the Directors have agreed to change the Company name from Eagle Nickel Limited to Eagle Minerals Limited . Resolution 7 is a Special Resolution and must be passed by at least 75% of the votes cast by Shareholders present at the General Meeting and entitled to vote on the Resolution.

Changing the name of the Company from Eagle Nickel Limited to Eagle Minerals Limited is part of the overall agreement that will result in Darshing investing capital into the Company, with a view to an associate of Darshing, being Sky Chem, at a later stage, vending exploration and mining assets, including certain mining services assets (all yet to be determined) into the Company. If Shareholders do not vote FOR Resolution 7, Darshing may elect not to proceed with the Tranche 2 Share Issue and may not vend any assets into the Company at a later stage.

The Directors unanimously recommend Shareholders vote in favour of Resolution 7.

GLOSSARY

In this Explanatory Memorandum, the following terms have the following unless the context otherwise requires:

$ means Australian dollars.

“ASX” means ASX Limited (ABN 98 008 624 691). “Board” means board of Directors.

“Company” means Eagle Nickel Limited (ACN 125 368 658). “Constitution” means the constitution of Eagle Nickel Limited.

“Corporations Act”

“Director”

“General Meeting” “Listing Rules”

“Resolutions”

“Shareholder”

“Shares”

means the Corporations Act 2001 (Cth) and all regulations made pursuant to such legislation, as amended from time to time.

means a director of the Company.

means the meeting convened by the Notice of Meeting.

means Listing Rules of ASX, as amended or replaced from time to time, except to the extent of any waiver by ASX.

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

means a holder of a Share.

means fully paid ordinary shares in the capital of the Company.

“WST” means Western Standard Time.

ANNEXURE “A”

EAGLE NICKEL LIMITED

TERMS AND CONDITIONS OF OPTIONS EXPIRING 1 JULY 2012 (AMOUNT PAYABLE: 30 CENTS)

1. Entitlement

Each Option shall entitle the holder the right to subscribe (in cash) for one (1) Share in the capital of the Company.

Option Period

Each Option will expire at 5.00pm WST on 1 July 2012 (such date being referred to as the “Option Expiry Date”). Each Option may be exercised at any time prior to the Option Expiry Date in accordance with the notice provisions set out below and any Option not so exercised shall automatically expire on the Option Expiry Date.

Ranking of Share Allotted on Exercise of Option

Each Share allotted as a result of the exercise of an Option will, subject to the Constitution of the Company, rank in all respects pari passu with the existing Shares in the capital of the Company on issue at the date of allotment.

4. Voting

A registered owner of an Option (herein referred to as an “Option Holder”) will not be entitled to attend or vote at any meeting of the members of the Company unless they are, in addition to being Option Holder, members of the Company.

5. Transfer of an Option

Each Option is transferable at any time prior to the Option Expiry Date. This right is subject to any restrictions on the transfer of an Option that may be imposed by the ASX in circumstances where the Company is listed on ASX.

6. Method of Exercise of an Option

a. The Company will provide to each Option Holder a notice that is to be completed when exercising the Options (herein such notice being called a “Notice of Exercise of Options”). Options may be exercised by the Option Holder completing the Notice of Exercise of Options and forwarding the same to the Secretary of the Company to be received prior to the Option Expiry Date. The Notice of Exercise of Options must state the number of Options exercised and the consequent number of Shares in the capital of the Company to be allotted; which number of Options must be a multiple of 10,000 if only part of the Option Holders total Options are exercised, or if the total number of Options held by an Option Holder is less than 10,000, then the total of all Options held by that Option Holder must be exercised.
b. The Notice of Exercise of Options by an Option Holder must be accompanied by payment in full for the relevant number of Shares being subscribed, being an amount of 30 cents ($0.30) per Share.
c. Subject to Clause 7 hereof, the exercise of less than all of an Option Holders Options will not prevent the Option Holder from exercising the

whole or any part of the balance of the Option Holders entitlement under the Option Holders remaining Options.

d. Within 14 days from the date the Option Holder properly exercises Options held by the Option Holder, the Company shall issue and allot to the Option Holder that number of Shares in the capital of the Company so subscribed for by the Option Holder.
e. If the Company is listed on the ASX, the Company will within seven (7) days from the date of issue and allotment of Shares pursuant to the exercise of an Option, apply to the ASX for, and use its best endeavours to obtain, Official Quotation of all such Shares, in accordance with the Corporations Act and the Listing Rules.
f. The Company will generally comply with the requirements of the Listing Rules in relation to the timetables imposed when quoted Options are due to expire. Where there shall be any inconsistency between the timetables outlined herein regarding the expiry of the Options and the timetable outlined in the Listing Rules, the timetable outlined in the Listing Rules shall apply.
Reconstruction
In the event of a reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.
Participation in New Share Issues There are no participating rights or entitlements inherent in the Options to participate in any new issues of capital, which may be made or offered by the Company to its Shareholders from time to time prior to the Option Expiry Date unless and until the Options are exercised. The Company will ensure that during the exercise period of the Options, the Record Date for the purposes of determining Entitlements to any new such issue, will be at least 9 Business Days after such new issues are announced (or such other date if required under the Listing Rules) in order to afford the Option Holder an opportunity to exercise the Options held by the Option Holder.
Change of Options’ Exercise Price or Number of Underlying Shares. There are no rights to change the exercise price or the number of underlying Shares if there is a pro-rata issue or bonus issue to the holders of Shares.

LODGEMENT INSTRUCTIONS

Cheques shall be in Australian currency made payable to Eagle Nickel Limited and crossed “Not Negotiable”. The application for shares on exercise of the options with the appropriate remittance should be forwarded to the Company’s registered office.

ANNEXURE “B”

EAGLE NICKEL LIMITED

TERMS AND CONDITIONS OF OPTIONS EXPIRING 31 DECEMBER 2015 (AMOUNT PAYABLE: 20 CENTS)

Entitlement

Each Option shall entitle the holder the right to subscribe (in cash) for one (1) Share in the capital of the Company.

Option Period

Each Option will expire at 5.00pm WST on 31 December 2015 (such date being referred to as the “Option Expiry Date”). Each Option may be exercised at any time prior to the Option Expiry Date in accordance with the notice provisions set out below and any Option not so exercised shall automatically expire on the Option Expiry Date.

Ranking of Share Allotted on Exercise of Option

Voting

Transfer of an Option

6. Method of Exercise of an Option

a. The Company will provide to each Option Holder a notice that is to be completed when exercising the Options (herein such notice being called a “Notice of Exercise of Options”). Options may be exercised by the Option Holder completing the Notice of Exercise of Options and forwarding the same to the Secretary of the Company to be received prior to the Option Expiry Date. The Notice of Exercise of Options must state the number of Options exercised and the consequent number of Shares in the capital of the Company to be allotted; which number of Options must be a multiple of 10,000 if only part of the Option Holders total Options are exercised, or if the total number of Options held by an Option Holder is less than 10,000, then the total of all Options held by that Option Holder must be exercised.
b. The Notice of Exercise of Options by an Option Holder must be accompanied by payment in full for the relevant number of Shares being subscribed, being an amount of 20 cents ($0.20) per Share.
c. Subject to Clause 7 hereof, the exercise of less than all of an Option Holders Options will not prevent the Option Holder from exercising the

whole or any part of the balance of the Option Holders entitlement under the Option Holders remaining Options.

d. Within 14 days from the date the Option Holder properly exercises Options held by the Option Holder, the Company shall issue and allot to the Option Holder that number of Shares in the capital of the Company so subscribed for by the Option Holder.
e. If the Company is listed on the ASX, the Company will within seven (7) days from the date of issue and allotment of Shares pursuant to the exercise of an Option, apply to the ASX for, and use its best endeavours to obtain, Official Quotation of all such Shares, in accordance with the Corporations Act and the Listing Rules.
f. The Company will generally comply with the requirements of the Listing Rules in relation to the timetables imposed when quoted Options are due to expire. Where there shall be any inconsistency between the timetables outlined herein regarding the expiry of the Options and the timetable outlined in the Listing Rules, the timetable outlined in the Listing Rules shall apply.
Reconstruction
In the event of a reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.
Participation in New Share Issues There are no participating rights or entitlements inherent in the Options to participate in any new issues of capital, which may be made or offered by the Company to its Shareholders from time to time prior to the Option Expiry Date unless and until the Options are exercised. The Company will ensure that during the exercise period of the Options, the Record Date for the purposes of determining Entitlements to any new such issue, will be at least 9 Business Days after such new issues are announced (or such other date if required under the Listing Rules) in order to afford the Option Holder an opportunity to exercise the Options held by the Option Holder.
Change of Options’ Exercise Price or Number of Underlying Shares. There are no rights to change the exercise price or the number of underlying Shares if there is a pro-rata issue or bonus issue to the holders of Shares.

LODGEMENT INSTRUCTIONS

ANNEXURE “C”

EAGLE NICKEL LIMITED

TERMS AND CONDITIONS OF UNQUOTED OPTIONS EXPIRING 1 MAY 2016 (AMOUNT PAYABLE: 20 CENTS)

Entitlement

Each Option shall entitle the holder the right to subscribe (in cash) for one (1) Share in the capital of the Company.

Option Period

Each Option will expire at 5.00pm WST on 1 May 2016 (such date being referred to as the “Option Expiry Date”). Each Option may be exercised at any time prior to the Option Expiry Date in accordance with the notice provisions set out below and any Option not so exercised shall automatically expire on the Option Expiry Date.

Ranking of Share Allotted on Exercise of Option

Voting

Transfer of an Option

Method of Exercise of an Option
a. The Company will provide to each Option Holder a notice that is to be completed when exercising the Options (herein such notice being called a “Notice of Exercise of Options”). Options may be exercised by the Option Holder completing the Notice of Exercise of Options and forwarding the same to the Secretary of the Company to be received prior to the Option Expiry Date. The Notice of Exercise of Options must state the number of Options exercised and the consequent number of Shares in the capital of the Company to be allotted; which number of Options must be a multiple of 10,000 if only part of the Option Holders total Options are exercised, or if the total number of Options held by an Option Holder is less than 10,000, then the total of all Options held by that Option Holder must be exercised.
b. The Notice of Exercise of Options by an Option Holder must be accompanied by payment in full for the relevant number of Shares being subscribed, being an amount of 20 cents ($0.20) per Share.

c. Subject to Clause 7 hereof, the exercise of less than all of an Option Holders Options will not prevent the Option Holder from exercising the whole or any part of the balance of the Option Holders entitlement under the Option Holders remaining Options.
d. Within 14 days from the date the Option Holder properly exercises Options held by the Option Holder, the Company shall issue and allot to the Option Holder that number of Shares in the capital of the Company so subscribed for by the Option Holder.
e. If the Company is listed on the ASX, the Company will within seven (7) days from the date of issue and allotment of Shares pursuant to the exercise of an Option, apply to the ASX for, and use its best endeavours to obtain, Official Quotation of all such Shares, in accordance with the Corporations Act and the Listing Rules.
f. The Company will generally comply with the requirements of the Listing Rules in relation to the timetables imposed when quoted Options are due to expire. Where there shall be any inconsistency between the timetables outlined herein regarding the expiry of the Options and the timetable outlined in the Listing Rules, the timetable outlined in the Listing Rules shall apply.
Reconstruction

In the event of a reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.

Participation in New Share Issues There are no participating rights or entitlements inherent in the Options to participate in any new issues of capital, which may be made or offered by the Company to its Shareholders from time to time prior to the Option Expiry Date unless and until the Options are exercised. The Company will ensure that during the exercise period of the Options, the Record Date for the purposes of determining Entitlements to any new such issue, will be at least 9 Business Days after such new issues are announced (or such other date if required under the Listing Rules) in order to afford the Option Holder an opportunity to exercise the Options held by the Option Holder.
Change of Options’ Exercise Price or Number of Underlying Shares. There are no rights to change the exercise price or the number of underlying Shares if there is a pro-rata issue or bonus issue to the holders of Shares.

LODGEMENT INSTRUCTIONS

ANNEXURE “D”

Legal principles in relation to section 611 Corporations Act

(a) Section 606 of the Corporations Act prohibits a person acquiring a relevant interest in the issued voting shares of the Company if, because of the acquisition, that person’s or another person’s voting power in the Company increases from:
(i) 20% or below to more than 20%; or
(ii) a starting point that is above 20% and below 90%.
(b) The voting power of a person in the Company is determined by reference to section 610 Corporations Act. A person’s voting power in the Company is the total of the votes attaching to the Shares in the Company in which that person and that person’s associates (within the meaning of the Corporations Act) have a relevant interest.
(c) Under section 608 Corporations Act a person will have a relevant interest in Shares if:
(i) the person is the registered holder of the Shares;
(ii) the person has the power to exercise or control the exercise of votes or disposal of the Shares; or
(iii) the person has over 20% of the voting power in a company that has a relevant interest in Shares, then the person has a relevant interest in said Shares.
(d) For the purpose of determining who is an associate you need to consider section 12 of the Corporations Act. Any reference in chapters 6 to 6C of the Corporations Act to an associate is as that term is defined in section 12. The definition of 'associate' in section 12 is exclusive. If a person is an associate under section 11, 13 or 15 of the Corporations Act then it does not apply to chapters 6 to 6C. A person is only an associate for the purpose of chapter 6 to 6C if he is an associate under section 12.
(e) A person ( second person ) will be an associate of the other person ( first person ) if:
(i) the first person is a body corporate and the second person is:
- (A) A body corporate the first person controls;
- (B) A body corporate that controls the first person: or
- (C) A body corporate that is controlled by an entity that controls the first person;

(ii) the second person has entered or proposes to enter into a relevant agreement with the first person for the purpose of controlling or influencing the composition of the board of a body corporate or the conduct of the affairs of a body corporate; and
(iii) the second person is a person with whom the first person is acting or proposes to act, in concert in relation to the affairs of a body corporate.
(f) The Corporations Act defines 'control' and 'relevant agreement' very broadly as follows:
(i) Under section 50AA of the Corporations Act control means the capacity to determine the outcome of decisions about the financial and operating policies of the Company. In determining the capacity you need to take into account the practical influence a person can exert and any practice or pattern of behaviour affecting the financial or operating policies of the Company.
(ii) Under section 9 of the Corporations Act relevant agreement means an agreement, arrangement or understanding:
- (A) whether formal or informal or partly informal and partly informal;
- (B) whether written or oral or partly written and partly oral; and
- (C) whether or not having legal or equitable force and whether or not based on legal or equitable rights.
(g) Associates are determined as a matter of fact. For example where a person controls or influences the Board or the conduct of the Company’s business affairs, or acts in concert with a person in relation to the entity’s business affairs.
(h) Section 611 of the Corporations Act has exceptions to the prohibition in section 606 of the Corporations Act. Item 7 of section 611 of the Corporations Act provides a mechanism by which Shareholders may approve an issue of Shares to a person which results in that person’s or another person’s voting power in the Company increasing from:
(i) 20% or below to more than 20%; or
(ii) a starting point that is above 20% and below 90%.

ANNEXURE “E”

SKY CHEM'S ASSOCIATES

Name	ACN	Address
Shanghai Shijian Shiye Co. Ltd	N/A	Building No. 4 / 613 Lane Changhe Road, Putuo District, Shanghai, China
Hangzhou Shixin Chemical Co. Ltd	N/A	Timber Market, Zhujiatan Village, Xintang Subdistrict, Xiaoshan District, Hangzhou, China
Wuxi Shide Chemical Co. Ltd	N/A	Huasheng Industrial, north side of Huicheng bridge, 342 Highway, Shitangwan Industrial Park, Wuxi, Jiangsu Province, China
Ningbo Shijian Chemical Co. Ltd	N/A	No. 50 North Huancheng Road, Zhenhai District,Ningbo,ZhejiangProvince, China
Nantong Shijian Chemical Co. Ltd	N/A	East of No. 3 Bridge, North Waihuan Road, Nantong, Jiangsu Province, China
Jinhua Shijian Chemical Co. Ltd	N/A	Building No. 4 / 613 Lane Changhe Road, Putuo District, Shanghai, China
Guangzhou Shiming Chemical Co. Ltd	N/A	Room 411 Building H, Huacheng Tower, Puxing Road, Tianhe District, Guangzhou, Guangdong Province, China
Shanghai Sky Chem Industrial Co. Ltd	N/A	Building 4, No. 613 Changhe Street Putuo District Shanghai, People's Republic of China

ANNEXURE “F”

EAGLE NICKEL LIMITED

TERMS AND CONDITIONS OF OPTIONS EXPIRING 30 JANUARY 2015 (AMOUNT PAYABLE: 3 CENTS)

1. Entitlement

Each Option shall entitle the holder the right to subscribe (in cash) for one (1) Share in the capital of the Company.

Option Period
Each Option will expire at 5.00pm WST on 30 January 2015 (such date being referred to as the “Option Expiry Date”). Each Option may be exercised at any time prior to the Option Expiry Date in accordance with the notice provisions set out below and any Option not so exercised shall automatically expire on the Option Expiry Date.
Ranking of Share Allotted on Exercise of Option Each Share allotted as a result of the exercise of an Option will, subject to the Constitution of the Company, rank in all respects pari passu with the existing Shares in the capital of the Company on issue at the date of allotment.

4. Voting

A registered owner of an Option (herein referred to as an “Option Holder”) will not be entitled to attend or vote at any meeting of the members of the Company unless they are, in addition to being Option Holder, members of the Company.
Transfer of an Option

6. Method of Exercise of an Option

a. The Company will provide to each Option Holder a notice that is to be completed when exercising the Options (herein such notice being called a “Notice of Exercise of Options”). Options may be exercised by the Option Holder completing the Notice of Exercise of Options and forwarding the same to the Secretary of the Company to be received prior to the Option Expiry Date. The Notice of Exercise of Options must state the number of Options exercised and the consequent number of Shares in the capital of the Company to be allotted; which number of Options must be a multiple of 10,000 if only part of the Option Holders total Options are exercised, or if the total number of Options held by an Option Holder is less than 10,000, then the total of all Options held by that Option Holder must be exercised.
b. The Notice of Exercise of Options by an Option Holder must be accompanied by payment in full for the relevant number of Shares being subscribed, being an amount of 3 cents ($0.03) per Share.
c. Subject to Clause 7 hereof, the exercise of less than all of an Option Holders Options will not prevent the Option Holder from exercising the

whole or any part of the balance of the Option Holders entitlement under the Option Holders remaining Options.

d. Within 14 days from the date the Option Holder properly exercises Options held by the Option Holder, the Company shall issue and allot to the Option Holder that number of Shares in the capital of the Company so subscribed for by the Option Holder.
e. If the Company is listed on the ASX, the Company will within seven (7) days from the date of issue and allotment of Shares pursuant to the exercise of an Option, apply to the ASX for, and use its best endeavours to obtain, Official Quotation of all such Shares, in accordance with the Corporations Act and the Listing Rules.
f. The Company will generally comply with the requirements of the Listing Rules in relation to the timetables imposed when quoted Options are due to expire. Where there shall be any inconsistency between the timetables outlined herein regarding the expiry of the Options and the timetable outlined in the Listing Rules, the timetable outlined in the Listing Rules shall apply.
Reconstruction
In the event of a reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.
Participation in New Share Issues There are no participating rights or entitlements inherent in the Options to participate in any new issues of capital, which may be made or offered by the Company to its Shareholders from time to time prior to the Option Expiry Date unless and until the Options are exercised. The Company will ensure that during the exercise period of the Options, the Record Date for the purposes of determining Entitlements to any new such issue, will be at least 9 Business Days after such new issues are announced (or such other date if required under the Listing Rules) in order to afford the Option Holder an opportunity to exercise the Options held by the Option Holder.
Change of Options’ Exercise Price or Number of Underlying Shares. There are no rights to change the exercise price or the number of underlying Shares if there is a pro-rata issue or bonus issue to the holders of Shares.

LODGEMENT INSTRUCTIONS

ANNEXURE “G”

INDEPENDENT EXPERT'S REPORT

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16 December 2011

The Directors Eagle Nickel Limited Level 7, 231 Adelaide Street PERTH WA 6000

Dear Sirs

RE: EAGLE NICKEL LTD (“EAGLE” OR “THE COMPANY”) (ACN 125 368 658) ON THE PROPOSAL THAT SHAREHOLDERS APPROVE THE ISSUE OF 53,015,627 ORDINARY SHARES AT 2 CENTS EACH TO SHANGHAI SKY CHEM INDUSTRIAL CO. LTD (“SKY CHEM”) AS NOTED BELOW TO RAISE $1,060,313 (ROUNDED) TOGETHER WITH THE ISSUE OF A TOTAL OF 70,595,841 SHARE OPTIONS AS MORE FULLY DESCRIBED BELOW. MEETING PURSUANT TO SECTION 611 (ITEM 7) OF THE CORPORATIONS ACT 2001 (“TCA”).

1. Introduction

1.1 We have been requested by the Directors of Eagle to prepare an Independent Expert’s Report to determine the fairness and reasonableness relating to the proposal to issue a total of 53,015,627 ordinary shares (“Tranche 2 Subscription Shares”) in Eagle at an issue price of 2 cents each to raise a gross $1,060,313 (rounded) to Sky Chem, together with the issue of 43,219,196 share options to acquire shares at 30 cents each on or before 1 July 2012, 10,723,584 share options to acquire shares at 20 cents each on or before 31 December 2015, 7,285,714 share options to acquire shares at 20 cents each on or before 1 May 2016 and 9,367,347 share options to acquire shares at 3 cents each on or before30 January 2015 (collectively, “the Eagle Sky Chem Share Options”) and to allow the exercise of the Sky Chem Options. Resolution 1 in the Notice of Meeting (“Notice”) and the Explanatory Memorandum (“EM”) attached to the Notice refers to further details. Resolution 2 (that technically we are not providing a formal opinion on) relates to the ratification of the issue of 8,927,030 shares (“Tranche 1 Subscription Shares”) in Eagle at 2 cents each to raise a gross $178,541 (rounded).
1.2 On 27 October 2011, the Company and Sky Chem entered into a letter of offer agreement ("Letter of Offer Agreement" or “LOO”) whereby Sky Chem will subscribe for a total of 65,004,082 Subscription Shares (since varied to a total of 61,942,657 Subscription Shares) in Eagle at a subscription price per share of 2 cents each to raise a total of $1,238,853 (“the Subscriptions”).

The LOO states that Sky Chem proposes that inter-alia:

Sky Chem subscribes for 8,927,030 shares (the Tranche 1 Subscription Shares) in Eagle at 2 cents each to raise the varied amount of $178,451 (rounded) subject to Foreign Investment Review Board (“FIRB”) approval and subject to due diligence by Sky Chem. It is expected that such shares will be subscribed for by Sky Chem before the shareholders meeting planned to be held on 15 February 2012 and resolution 2 to the Notice seeks ratification of the issue of 8,927,030 shares to Sky Chem at 2 cents per share;

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Liability limited by a scheme approved under Professional Standards Legislation

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Sky Chem subscribes for 56,077,052 (subsequently altered to 53,015,627) shares (the Tranche 2 Subscription Shares) in Eagle at 2 cents per share to raise the varied amount of $1,060,312 (rounded) subject to FIRB approval and shareholders approval. Resolution 1 in the Notice refers;
By a letter of variation, Sky Chem will also be issued 43,219,196 share options to acquire shares at 30 cents each on or before 1 July 2012, 10,723,584 share options to acquire shares at 20 cents each on or before 31 December 2015, 7,285,714 share options to acquire shares at 20 cents each on or before 1 May 2016 and 9,367,347 share options to acquire shares at 3 cents each on or before 30 January 2015 (the Sky Chem Share Options as noted above). Resolution 1 in the Notice refers. The Eagle Sky Chem Share Options (except for the share options exercisable at 3 cents each) are being issued on the same terms as the existing share options in the Company. The issue of the Eagle Sky Chem Share Options in addition to the Subscription Shares is to allow Sky Chem to preserve their potential 51% shareholding in Eagle in the event that current listed and unlisted share options are exercised in the future;
Sky Chem may nominate three Directors to the Board of Eagle (including one as the Chairman). Resolutions 4, 5 and 6 relate to the appointment of three Directors nominated by Sky Chem being Xuefeng Mei, Jason Zheng and Ben Jarvis respectively;
One current Director will resign from the Board and the current Company Secretary will resign on completion of the Subscriptions;
The Company will change its name. The proposal under Resolution 7 is to change the name to Eagle Minerals Limited;
The Company will relocate its office to Sydney.

In addition, the LOO notes that at a later stage, Sky Chem may, subject to all necessary approvals, including shareholder approvals, vend into Eagle, gold, silver and rare earth element and exploration and mining assets (yet to be determined) thus transforming the Company into a precious metals exploration and mining company. The Company is to issue 9,000,000 share options to TianShan Investment Holdings Limited (“TianShan”) exercisable at 3 cents per share, on or before 30 January 2015. These share options (‘’the Fee Options”) are being issued to TianShan as a placement fee relating to the Subscriptions.

1.3 Under section 606 of TCA, a person must not acquire a relevant interest in issued voting shares in a company if because of the transaction, that persons or someone else's voting power in the company increases:
(a) from 20% or below to more than 20%; or
(b) from a starting point that is above 20% and below 90%.

Under section 611 (Item 7) of TCA, section 606 does not apply in relation to any acquisition of shares in a company approved by resolution passed at a general meeting at which no votes were cast in favour of the resolution by the acquirer or the disposer or their respective associates. An independent expert is required to report on the fairness and reasonableness of the transaction pursuant to a section 611 (Item 7) meeting.

1.4 Following completion of the Subscriptions, Sky Chem who before the LOO was signed held no shares in Eagle would own a total of 61,942,647 Subscription Shares in Eagle representing 51% of the then shares on issue (assuming no other share issues) and 43,219,196 share options to acquire shares at 30 cents each on or before 1 July 2012, 10,723,584 share options to acquire shares at 20 cents each on or before 31 December 2015, 7,285,714 share options to acquire shares at 20 cents each on or before 1 May

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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2015 and 9,367,347 share options to acquire shares at 3 cents each on or before 30 January 2015. There would be 121,456,190 Eagle shares on issue prior to the exercise of the Eagle Sky Chem Options and any existing share options. Immediately after the issue of the Tranche 1 Subscription Shares, Sky Chem’s shareholding interest would approximate 13.05% and would then rise to 51% after the issue of the Tranche 2 Subscription Shares. In the event that all Eagle Sky Chem Share Options were exercised and no existing share options were exercised, Sky Chem’s shareholding could increase to approximately 69.01%. In the event that all share options were exercised (including the Eagle Sky Chem Share Options and the 9,000,000 share options to be issued to TianShan as per resolution 3), the shareholding of Sky Chem would reduce to 51%.

1.5 A notice prepared in relation to a meeting of shareholders convened for the purposes of section 611 (Item 7) of TCA should be accompanied by an independent expert's report stating whether it is fair and reasonable to approve the issue of 53,015,627 Tranche 1 Subscription Shares to Sky Chem at 2 cents each to raise a gross $1,060,312, the issue of the Eagle Sky Chem Share Options and allowing the exercise of the Eagle Sky Chem Share Options. To assist shareholders in making a decision on the proposals outlined in resolution 1 of the Notice the directors have requested that Stantons International Securities prepare an Independent Expert's Report, which must state whether, in the opinion of the Independent Expert, the proposals under resolution 1 are fair and reasonable to the non-associated shareholders of Eagle.
1.6 Apart from this introduction, this report considers the following:
Summary of opinion
Implications of the proposals
Corporate history and nature of business
Future direction of Eagle
Basis of valuation of Eagle shares and Eagle share options
Premium for control
Consideration as to fairness and reasonableness
Conclusion as to fairness and reasonableness
Sources of information
Appendix A and Financial Services Guide
1.7 In determining the fairness and reasonableness of the transactions pursuant to resolution 1 we have had regard to the definitions set out by the Australian Securities and Investments Commission (“ASIC”) in its Regulatory Guide 111, “Content of Expert Reports”. The Regulatory Guide 111 states that an opinion as to whether an offer is fair and/or reasonable shall entail a comparison between the offer price and the value that may be attributed to the securities under offer (fairness) and an examination to determine whether there is justification for the offer price on objective grounds after reference to that value (reasonableness). The concept of “fairness” is taken to be the value of the offer price, or the consideration, being equal to or greater than the value of the securities in the above mentioned offer. Furthermore, this comparison should be made assuming 100% ownership of the “target” and irrespective of whether the consideration is scrip or cash. An offer is “reasonable” if it is fair. An offer may also be reasonable, if despite not being ”fair”, there are sufficient grounds for security holders to accept the offer in the absence of any higher bid before the close of the offer. It also states that, where an acquisition of shares by way of an allotment is to be approved by shareholders pursuant to section 611 (Item 7) of TCA, it is desirable to commission a report by an independent expert stating whether or not the proposal is fair and reasonable, having regards to the proposed allottees and whether a premium for potential control is being paid by the allottees. Regulatory Guide 111 also provides that such an allotment should involve a comparison of the advantages and disadvantages likely to accrue to non associated shareholders if the transactions proceed compared with if they do not.

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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Accordingly, our report in relation to resolution 1 comprising the approval to issue 53,015,627 Tranche 1 Subscription Shares and the Eagle Sky Chem Share Options (and allow the exercise of the Eagle Sky Chem Share Options) to Sky Chem is concerned with the fairness and reasonableness of the proposals with respect to the existing nonassociated shareholders of Eagle and whether Sky Chem is paying a premium for control. In determining our opinion on the proposals under resolution 1, we have taken into account all of the proposals noted in the LOO and the variation letter including the proposal under resolution 2 (to ratify the issue of 8,927,030 shares to Sky Chem that are proposed to be issued prior to the holding of the shareholders meeting planned for 15 February 2012).

Summary of Opinion

1.8 For the purposes of section 611 (item 7) of TCA, in relation to the approval to issue 53,015,627 Tranche 2 Subscription Shares and the Eagle Sky Chem Share Options to Sky Chem (including the right to exercise the Eagle Sky Chem Share Options), in our opinion taking into account the factors noted elsewhere in this report including the factors (positive, negative and other factors) noted in section 7 of this report, the proposal as outlined in paragraph 1.1 and resolution 1 may on balance collectively be considered to be fair and reasonable.

2. Implications of the Proposals

2.1 As at 2 December 2011, there were 59,513,533 ordinary fully paid shares on issue in Eagle. The significant registered fully paid shareholders as at 29 November 2011, based on the top 20 shareholders list were believed to be:

David Zohar and Julie Zohar (Zohar Super Fund) Geotech International Pty Ltd (Paul Askins Super Fund) Golden Century Mining Limited Iron Mountain Mining Limited	No. of fully paid shares % of issued fully paid shares 13,000,000 21.84 9,557,213 16.06 7,000,000 11.76 2,600,000 4.37
	32,157,213 54.03

The top 20 shareholders at 29 November 2011 owned approximately 73.08% of the ordinary issued capital of the Company.

2.2 As at 2 December 2011, the following unlisted share options are outstanding:
41,524,326 listed options exercisable at 30 cents each by 1 July 2012;
10,303,051 listed options exercisable at 20 cents each by 31 December 2015; and
- 7,000,000 unlisted options exercisable at 20 cents each by 1 May 2016.
2.3 Following completion of the Subscription (of the 61,942,657 Subscription Shares), Sky Chem would own 61,942,657 shares in Eagle representing 51% of the then shares on issue (assuming no other share issues). The Company will raise $1,238,853 (rounded) from the Subscription. As noted above, after the 8,927,030 Tranche 1 Subscription Shares are issued, Sky Chem would own an initial approximately 13.04% shareholding interest in the Company and increasing to 51% after the issue of the Tranche 2 Subscription Shares. Sky Chem would also own all of the Eagle Sky Chem Share Options. If all Eagle Sky Chem Share Options were exercised (Sky Chem would need to pay Eagle a total of $16,848,639 and Sky Chem’s shareholding interest could rise to approximately 69.01% in the absence of any other share issues. If all existing share options were exercised, Sky Chem’s shareholding would reduce to approximately

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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52.83% and if the 9,000,000 Fee Options were also exercised, Sky Chem’s shareholding would reduce to approximately 51%.

2.4 We understand that some of the Subscription monies raised will be used to expedite its exploration activities and the majority of the cash will be used to investigate new mineral opportunities. The LOO notes that at a later stage, Sky Chem may, subject to all necessary approvals, including shareholder approvals, vend into Eagle, gold, silver and rare earth element and exploration and mining assets (yet to be determined) thus transforming the Company into a precious metals exploration and mining company.
2.5 In terms of the Subscription Agreement, Sky Chem will appoint three Sky Chem representatives to the Board of Eagle and one current director will step down. Refer paragraph 1.2 of this report, resolutions 4 to 6 and the Explanatory Statement attached to the Notice on the proposed new Board members. The office of Eagle will move to Sydney.
2.6 The Company is to issue 9,000,000 share options to TianShan exercisable at 3 cents per share, on or before 30 January 2015. These share options (the Fee Options as noted above) are being issued to TianShan as a placement fee relating to the Subscription.

3. Corporate History and Nature of Business

3.1 Eagle is listed on the ASX and is an Australian exploration company primarily focused on the exploration of its phosphate and Guano projects on Western Australia. Recently the Company surrended its interests on all other tenements that it had an interest in and has been concentrating on its phosphate and Guano projects (but the Company has had very limited funds to spend on exploration).
3.2 A summarised unaudited statement of financial position of Eagle as at 30 September 2011 is outlined in paragraph 5.4.1 of this report. In addition to the tenement interests and cash, the Company owns 1,269,500 shares in United Orogen Limited, 729,127 shares in Iron Mountain and 25,000 shares in Actinogen Limited, all ASX listed companies associated with David Zohar, a director of Eagle.

4. Future Directions of Eagle

4.1 We have been advised by the directors and management of Eagle that:
The immediate short-term plan is to complete the Subscription to raise a total of $1,238,853. To date, $178,541 is sitting in a trust account relating to the proposed issue of the Tranche 1 Subscription Shares but this is expected to be released and the Tranche 1 Subscription Shares issued before the shareholders meeting planned for 15 February 2012. Work will also commence on investigations into acquiring new projects as noted in paragraphs 1.2 and 2.4 above and in the Explanatory Statement attached to the Notice;
The composition of the Board of directors of Eagle is proposed to change with the appointment of three representatives of Sky Chem to the Board. It also expected that one current Board member, will resign on the appointment of the Sky Chem representatives as outlined in paragraphs 1.2 and 2.4;
No dividend policy has been set and it is not proposed to be set until such time as the Company is profitable and has a positive cash flow; and
The Company may seek to raise further capital if required (in addition to the $1,238,853 from the Subscriptions).

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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5. Basis of Valuation of Eagle

5.1 Shares

5.1.1 In considering the proposals as outlined in resolution 1, we have sought to determine whether the issue price of the Subscription Shares to Sky Chem is in excess of the current fair value of the shares in Eagle on issue and whether the proposed Subscription is at a price that Eagle could make to unrelated third parties and then conclude whether the proposal is fair and reasonable to the existing non associated shareholders of Eagle. In determining our opinion on the proposals under resolution 1, we have taken into account all of the proposals noted in the LOO and the variation letter including the proposal under resolution 2 (to ratify the issue of 8,927,030 shares to Sky Chem that are proposed to be issued prior to the holding of the shareholders meeting planned for 15 February 2012).
5.1.2 The valuation methodologies we have considered in determining a theoretical value of an Eagle share are:
capitalised maintainable earnings/discounted cash flow;
takeover bid - the price at which an alternative acquirer might be willing to offer;
adjusted net asset backing and windup value; and
the recent market prices of Eagle shares.

5.2 Capitalised maintainable earnings and discounted cash flows

5.2.1 Eagle currently does not have a reliable cash flow or profit history from a business undertaking and therefore this methodology is not considered to be appropriate.
5.3

Takeover Bid

5.3.1 It is possible that a potential bidder for Eagle could purchase all or part of the existing shares, however no certainty can be attached to this occurrence. To our knowledge, there are no current bids in the market place however that is not to say a bid may not be made in the future. However, if all of the Subscription Shares are issued, Sky Chem would control 51% of the expanded ordinary issued capital of Eagle before the exercise of any Eagle Sky Chem Share Options, outstanding share options and other share issues.
5.4 Adjusted Net Asset Backing
5.4.1 As there is no intention to wind up the Company, we have not considered wind up values for the purposes of this report. A summary of the un-audited consolidated statement of financial position as at 30 September 2011 of Eagle is summarised below (after adjusting for estimated exploration and non exploration expenditure to 31 January 2012 of approximately $55,000) along with a pro-forma consolidated statement of financial position after allowing for the following:
the issue of the Subscription Shares at 2 cents each to Sky Chem to raise a gross $1,238,853;
an allowance of $40,000 for costs relating to the Notice and entering into the agreements with Sky Chem which has been treated as capital raising costs; and
the issue of the Fee Options at a deemed fair value of approximately $72,000.

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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Current assets Cash and cash equivalents Receivables and prepayments Non current assets Plant and equipment Capitalised exploration and evaluation Financial assets (investments) Total assets Current liabilities Trade and other payables Total liabilities Net Assets Equity Issued capital Reserves Accumulated losses Net Equity	Un-audited Adjusted 30 September 2011 $000’s Pro-forma un- audited 30 September 2011 $000’s 274 1,472 8 8
	282 1,480
	2 2 - - 114 114
	116 116
	398 1,596
	46 46
	46 46
	352 1,550
	3,695 4,893 2,493 2,565 (5,836) (5,908)
	352 1,550

5.4.2 The unaudited book net tangible asset backing as at 30 September 2011 (as adjusted) equates to approximately 0.58 cents per share based on 59,513,533 ordinary shares on issue as at that date. After the issue of the Subscription Shares to raise a gross $1,238,853, the net book asset backing per share may approximate 1.27 cents (121,456,190 shares on issue).
5.4.3 We have accepted the book amounts of Eagle for all current assets and non current assets. We have been assured by the management of Eagle that they believe the carrying value of all current assets and liabilities at 30 September 2011 are fair and not materially misstated. We note that accounting policy of the Company is to expense all exploration and evaluation expenditure in relation to its mineral tenements as incurred. As a result the statement of financial position at 30 September 2011 does not reflect any capitalised tenement acquisition or exploration and evaluation costs. The exploration expenditure expensed as incurred for the year ended 30 June 2011 amounted to $585,369. An external technical valuation of the mineral assets (phosphate and guano tenements) remaining in Eagle was undertaken when such assets were acquired in May 2011 (valued in February 2011) and the preferred value was $470,000. Minimal expenditure has been spent on the phosphate and guano mineral tenements and we have been advised that the phosphate and guano tenements that have been granted are to be surrendered in 2012. Thus it is appropriate to ascribe nil value to the existing mining interests.
5.5 Market Price of Eagle Fully Paid Ordinary Shares
5.5.1 We set out below a summary of share prices of Eagle since 1 June 2011 to 7 November 2011 the day before the announcement of the proposals with Sky Chem.

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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				Volumes
2011	High Cents	Low Cents	Last Sale	Trade
			Cents	(000’s)
June	3.8	2.2	2.3	215
July	2.4	2.2	2.4	84
August	2.6	2.4	2.4	218
September	2.8	2.8	2.8	19
October	2.9	2.8	2.8	47
November
(to7th)	No trades	No trades	No trades	Nil

Since the announcement on 8 November 2011 of the proposed Subscription, the shares have traded between 1.8 cents and 3.0 cents (last sale on 12 December 2011 was 1.8 cents with only 225,000 shares being traded). Trading in shares in Eagle is extremely low and on very low values, the share price can alter dramatically as noted above.

5.5.2 We note that the market has been informed of all of the current projects, joint ventures and farm in/farm out arrangements entered into between Eagle and other parties. We also note it is not the present intention of the Directors of Eagle to liquidate the Company and therefore any theoretical value based upon wind up value or even net book value (as adjusted), is just that, theoretical. The shareholders, existing and future, must acquire shares in Eagle based on the market perceptions of what the market considers an Eagle share to be worth. However, the volume of shares traded on ASX in Eagle is extremely low and may not be a reliable indicator of long term value. In the case of Eagle, the monthly volume of trades over the last six months on the ASX is not enough to argue that an orderly market exists for the Company’s shares. We are of the opinion that it may be more suitable to consider a technical value as a more appropriate methodology to value a share in Eagle for the purposes of this report. We have considered the probability that the share price may continue to fall in the near future without positive announcements and without a substantial capital raising.

As at 30 September 2011 (as adjusted), the net cash position of the Company approximates $228,000. The Company’s financial position is arguably insufficient to continue exploration and evaluation of its existing mineral assets and pay new administration and corporate costs without a significant inflow of funds via a capital raising or loan funds.

5.5.3 Generally, the market is a fair indicator of what a share is worth, however the theoretical technical value based on the underlying value of assets and liabilities may be lower or higher. Based on the adjusted unaudited 30 September 2011 book values of Eagle assets, Eagle has a value per share (0.58 cents) significantly lower than the proposed issue price of the 2 cents under the Subscription. These adjusted book values include the value of tenement acquisition costs as noted above.
5.6 Preferred value of Eagle fully paid shares to arrive at fairness conclusion
5.6.1 Notwithstanding the prospectivity of the existing mining tenements without cash the Company cannot complete exploration and evaluation and the share price may fall. As noted above, the market is kept fully informed of the operations of the Company and normally the pre announcement share price is a fair indicator of what the market considers the Company’s shares to be worth. However, in this case, volumes of trades in Eagle shares on ASX are extremely low. The Company cannot exploit its main assets (held in the books at $nil as at 30 September 2011) without further cash and furthermore it is expected that such mineral tenement interests will be surrendered in 2012 and thus we have put a great weighting on to the asset backing approach or the technical valuation. In conclusion, we consider that the fair value of an Eagle fully paid share approximates 0.58 cents (but could be as high as 1.38 cents if the existing mineral tenements were not to be surrendered) (but note that the last sale price of an Eagle

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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share trading on ASX was 1.8 cents). Based on a technical price of say 0.58 cents per share, the issue of the Subscription Shares at 2 cents may be fair, but based on a market price of between 1.8 cents and say 2.8 cents, the issue of the shares at 2 cents would not be considered fair. As stated, the share prices do not necessarily reflect fair values in the current economic circumstances of the Company. The share price in the future is unknown but it may be fair to say that if a capital raising is not undertaken in the next six months then it is likely that the share price would probably trade below the last sale price of 1.8 cents.

5.6.2 The future value of an Eagle share will depend upon, inter alia:
The future commercialisation of the existing mineral interests and any future mineral assets it may acquire;
The state of, in the main, the mineral markets (and prices) and foreign exchange rates;
Cash position of Eagle;
The state of Australian and overseas stock markets;
Membership and control of the Board and the composition of management;
General economic conditions; and
Liquidity of shares in Eagle.

6. PREMIUM FOR CONTROL

6.1 Premium for control for the purposes of this report, has been defined as the difference between the price per share, which a buyer would be prepared to pay to obtain or improve a controlling interest in the Company and the price per share which the same person would be required to pay per share, which does not carry with it control or the ability to improve (increase) control of the Company.
6.2 Under TCA, control may be deemed to occur when a shareholder or group of associated shareholders control more than 20% of the issued capital. In this case, if Sky Chem subscribed for the Subscription Shares at 2 cents each, Sky Chem’s shareholding in Eagle could increase from nil% (before the issue of the Tranche 1 Subscription Shares) to 51% of the expanded issued capital of Eagle. If Sky Chem exercises the Eagle Sky Chem Share Options and there are no other share issues or options exercised, Sky Chem’s share holding could expand to approximately 69.01% based on an expanded capital of 192,052,021 shares. Accordingly, we have addressed whether a premium for control will be paid.
6.3 The market value of a Eagle share pre announcement of the proposal lies in the range of approximately 1.8 cents to 2.8 cents (but on extremely low volumes) with the net book asset backing disclosing a significantly lower value of around 0.58 cents (the Company’s policy is to expense all exploration and evaluation costs). Based on a more favoured technical price of 0.58 cents the value of the 61,942,657 Subscription Shares that would be issued to Sky Chem at 2 cents per share would approximate $359,267 compared with the Subscription value of 2 cents per share ($1,238,853). The issue price of the Subscription Shares is 2 cents each which is at a discount of approximately 28.57% to the last sale price (2.8 cents) of a Eagle share traded on ASX on 24 October 2011 (last sale price prior to the announcement of the Subscription proposal with Sky Chem) but at a premium of 11.11% to the last share price of 1.8 cents on 7 November 2011 and 12 December 2011. However, we believe the market traded share price is not appropriate in thus case due to the extremely low volumes of shares in Eagle traded on ASX. If we assumed the adjusted technical value of 1.31 cents is more appropriate (and we have concluded that it is), then Sky Chem may be considered to be paying a premium for potential control. It is noted that on an un-audited net asset backing basis, the value per share is 0.58 cents compared with the Subscription price by Sky Chem of 2 cents implying a premium for control of approximately 244%. On such a basis (net adjusted asset backing) Sky Chem would be paying a significant premium for control. It is noted that Eagle does not have sufficient

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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funds to continue full evaluation of its mineral assets and without an inflow of funds by way of a capital raising there is the possibility that the shares in Eagle could fall below the 12 December 2011 share price of 1.8 cents.

6.4 We note that currently Sky Chem does not have Board control of Eagle and following the passing and consummation of resolutions 1 to 7 it is proposed that one Board member will resign and three new Board members will be appointed by Sky Chem. Post completion of the Subscription and after the appointments and resignations as noted above, Sky Chem will have three representatives on the five man Board.

7. Fairness and Reasonableness of the Proposed Subscription

7.1 We set out below some of the advantages and disadvantages and other factors pertaining to the proposed issue of the 53,015,627 Tranche 2 Shares and Eagle Sky Chem Share Options to Sky Chem pursuant to resolution 1 of the Notice (and in effect the issue of the Tranche 1 Subscription Shares).

Advantages

7.2 By entering into the proposals with Sky Chem, Eagle increases its cash reserves (it will raise $1,238,853 of which $178,541 will have been raised prior to the 15 February 2012 shareholders meeting) and potentially further increase its cash reserves on the exercise of the Eagle Sky Chem Share Options. Obtaining access to a significant amount of cash funds in the current environment is difficult and thus the Company and its shareholders should benefit. This should alleviate cash flow concerns in the immediate future.
7.3 In the event that the full capital raising via the proposal with Sky Chem is not completed or the Company cannot raise adequate working capital from other sources, there is the likelihood that the Company could enter into some sort of Administration. In the current market it is difficult for small exploration companies such as Eagle to raise equity, particularly for a company with limited mineral tenements. We have been advised that management has considered that the best proposal put to them was the proposal that is being put to the shareholders via resolutions 1 and 2.
7.4 There is an incentive for Sky Chem to ensure Eagle becomes a viable mineral exploration and development company as Sky Chem will have a significant shareholding interest in Eagle. Sky Chem is taking a risk in investing further funds into Eagle as to a large extent, Eagle’s future share price may be determined by the exploitation and/or commercial success (or otherwise) of its mineral projects . There is a major incentive for Sky Chem to make Eagle a successful company and have the share price rise considerably. All shareholders would benefit from a rise in the share price.
7.5 Sky Chem represents a major cornerstone project partner for Eagle. As stated above, Sky Chem has a strong incentive to ensure the success of Eagle which can be assisted through Sky Chem’s strong presence in China. As noted above, it is proposed Sky Chem may, subject to all necessary approvals, including shareholder approvals, vend into Eagle, gold, silver and rare earth element and exploration and mining assets (yet to be determined) thus transforming the Company into a precious metals exploration and mining company.
7.6 It is normal for brokerage fees to be approximately up to 6% of the cash raised. In the case of the proposed Subscription, no commissions are payable and the only cash costs are estimated not to exceed $40,000 (relating to our costs, legal costs and costs of holding the shareholders meeting to approve the Subscription). Refer paragraph 7.3 above. However, a total of 9,000,000 Fee Options are being issued to TianShan and these have a non cash cost of approximately $72,000 (valued under the Black Scholes methodology).

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7.7 The issue price of the Subscription Shares is 2 cents that is at a premium of approximately 244% to the assessed fair value of an Eagle share based on an adjusted net asset backing.

Disadvantages

7.8 The number of fully paid ordinary shares on issue initially rises to 121,456,190 on completion of the Subscription. This represents an approximate 104% increase in the ordinary shares of the Company from the shares on issue as at 2 December 2011.
7.9 An influential shareholding of the Company is being given to Sky Chem in that they would ultimately have voting control of 51% of the expanded ordinary issued capital after the successful ratification and implementation of the proposals under resolutions 1 and 2 (and assuming no other share issues). This is very significant increase from the shareholding of nil% prior to entering into the LOO. Existing shareholders would be diluted further so that in the absence of any further capital raisings, the existing non associated shareholders interest could reduce from 100% to 49%. Should Sky Chem elect to exercise its Eagle Sky Chem Share Options without any other share issues, it will increase its percentage holding to approximately 69.01%. However, to do so, Sky Chem would need to pay the Company approximately $16,848,639.
7.10 There is always the possibility that the value of the shares may be in excess of the Subscription price of 2 cents per share particularly if Sky Chem introduces a new project into the Company. However, shareholders will benefit from an increased share price.

Other Factors

7.11 Having a cornerstone investor such as Sky Chem has advantages but it may also limit the opportunity for other parties to bid for all or part of the shares in Eagle in the future. However, a takeover bid for the Company cannot be completely ruled out.
7.12 The market value of an Eagle share may well be in excess of the exercise price at the time Sky Chem exercises the Eagle Sky Chem Share Options (or part thereof) (if at all exercised). However, based on limited sales of shares in Eagle over the past 12 months, it is unlikely that the Eagle Sky Chem Share Options would be exercised. The issue of the Eagle Sky Chem Share Options in addition to the Subscription Shares is to allow Sky Chem to preserve their potential 51% shareholding in Eagle in the event that current listed and unlisted share options and the Fee Options (if issued) are exercised in the future. It is noted that 9,000,000 Fee Options to TianShan are exercisable at 3 cents each, on or before 30 January 2015 and 9,367,347 share options to be issued to Sky Chem (as part of the Eagle Sky Chem Options) and these share options are far closer to the ASX share price (limited sales) and would have a far greater chance of being exercised. However, in all probability, TianShan and Sky Chem would not exercise such share options until the share price was well in excess of 3 cents, liquidity in the stock was far higher and the Company had a project with some chance of commercial success.
7.13 The intentions of Sky Chem is to take control of the Company (via a 51% shareholding and by controlling the Board) and Sky Chem may vend into Eagle, gold, silver and rare earth element and exploration and mining assets (yet to be determined) thus transforming the Company into a precious metals exploration and mining company. All shareholders may benefit from this action. Eagle will become a partly owned subsidiary of Sky Chem but its shares will still be listed on the ASX.

8. Conclusion as to Fairness and Reasonableness

8.1 After taking into account the factors referred to in section 7 above and elsewhere in this report, we are of the opinion that the proposed approval of the issue of 53,015,627 Tranche 2 Subscription Shares to Sky Chem at 2 cents each and the issue of the Eagle Sky Chem Share Options (including the right to exercise the

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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Eagle Sky Chem Share Options) as noted in paragraphs 1.1 and 1.2 and resolution 1 in the Notice may be considered, on balance, collectively to be fair and reasonable to the non-associated shareholders of Eagle .

9. Sources of Information

9.1 In making our assessment as to whether the proposals to issue 53,015,627 Subscription Shares to Sky Chem at 2 cents each and the issue of the Eagle Sky Chem Share Options (together with the right to exercise the Eagle Sky Chem Share Options) as outlined in paragraphs 1.1 and 1.2 are fair and reasonable, we have reviewed relevant published available information and other unpublished information of the Company and its mining assets that is relevant to the current circumstances. In addition, we have held discussions with the management of Eagle about the present and future operations of the Company. Statements and opinions contained in this report are given in good faith but in the preparation of this report, we have relied in part on information provided by the directors and management of Eagle.
9.2 Information we have received includes, but is not limited to:
draft Notices and Explanatory Statement to Shareholders of Eagle prepared to 15 December 2011;
the Letter of Offer between Eagle and Sky Chem dated 27 October 2011 and the variation letters of November and December 2011;
discussions with management of Eagle;
details of historical market trading of Eagle ordinary fully paid shares recorded by ASX for the period 1 January 2011 to 12 December 2011;
shareholding details of Eagle as at 29 November 2011;
announcements made by Eagle to the ASX from 1 January 2011 to 15 December 2011;
preliminary cash flow forecasts of Eagle to June 2012;
audited accounts of Eagle for the year ended 30 June 2011 and unaudited accounts to 30 September 2011; and
details as disclosed on the Company’s web site to 14 December 2011.
9.3 Our report includes Appendix A and our Financial Services Guide attached to this report.

Yours faithfully STANTONS INTERNATIONAL PTY LTD (Trading as Stantons International Securities)

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J P Van Dieren - FCA Director

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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APPENDIX A

AUTHOR INDEPENDENCE AND INDEMNITY

This annexure forms part of and should be read in conjunction with the report of Stantons International Securities dated 16 December 2011, relating to the issue of 53,015,627 Tranche 1 Subscription Shares at 2 cents each to Sky Chem, the issue of the Eagle Sky Chem Share Options and allowing such Eagle Sky Chem Share Options to be exercised as outlined in paragraphs 1.1 and 1.2 of the report and resolution 1 in the Notice of Meeting to Shareholders proposed to be distributed to shareholders in December 2010 or January 2012.

At the date of this report, Stantons International Securities does not have any interest in the outcome of the proposals. There are no relationships with Eagle or Sky Chem other than acting as an independent expert for the purposes of this report. Before accepting the engagement Stantons International considered all independence issues and concluded that there were no independence issues in accepting the assignment to prepare the Independent Experts Report. There are no existing relationships between Stantons International Securities and the parties participating in the transaction detailed in this report which would affect our ability to provide an independent opinion. The fee to be received for the preparation of this report is based on the time spent at normal professional rates plus out of pocket expenses and is estimated at a maximum of $12,000. The fee is payable regardless of the outcome. With the exception of the fee, neither Stantons International Securities nor John P Van Dieren have received, nor will, or may they receive, any pecuniary or other benefits, whether directly or indirectly, for or in connection with the making of this report.

Stantons International Securities does not hold any securities in Eagle or Sky Chem. There are no pecuniary or other interests of Stantons International Securities that could be reasonably argued as affecting its ability to give an unbiased and independent opinion in relation to the proposal. Stantons International Securities and Mr J Van Dieren have consented to the inclusion of this report in the form and context in which it is included as an annexure to the Notice.

QUALIFICATIONS

We advise Stantons International Securities is the holder of an Australian Financial Services Licence (no 319600) under the Corporations Act 2001 relating to advice and reporting on mergers, takeovers and acquisitions that involve securities. The directors of Stantons International Pty Ltd are the directors of Stantons International Securities. Stantons International Securities has extensive experience in providing advice pertaining to mergers, acquisitions and strategic for both listed and unlisted companies and businesses.

Mr John P Van Dieren, FCA, the person responsible for the preparation of this report, has extensive experience in the preparation of valuations for companies and in advising corporations on takeovers generally and in particular on the valuation and financial aspects thereof, including the fairness and reasonableness of the consideration offered.

The professionals employed in the research, analysis and evaluation leading to the formulation of opinions contained in this report, have qualifications and experience appropriate to the task they have performed.

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DECLARATION

This report has been prepared at the request of the Directors of Eagle in order to assist them to assess the merits of the proposals as outlined in resolution 1 and the Explanatory Statement to which this report relates. This report has been prepared for the benefit of Eagle’s shareholders and does not provide a general expression of Stantons International Securities opinion as to the longer term value of Eagle and its assets. Stantons International Securities does not imply, and it should not be construed, that is has carried out any form of audit on the accounting or other records of Eagle. Neither the whole nor any part of this report, nor any reference thereto may be included in or with or attached to any document, circular, resolution, letter or statement, without the prior written consent of Stantons International Securities to the form and context in which it appears.

DISCLAIMER

This report has been prepared by Stantons International Securities with due care and diligence. However, except for those responsibilities, which by law cannot be excluded, no responsibility arising in any way whatsoever for errors or omission (including responsibility to any person for negligence) is assumed by Stantons International Securities, Stantons International Pty Ltd, Stantons International Audit and Consulting Pty Ltd, their directors, employees or consultants for the preparation of this report.

DECLARATION AND INDEMNITY

Recognising that Stantons International Securities may rely on information provided by Eagle and its officers (save whether it would not be reasonable to rely on the information having regard to Stantons International Securities experience and qualifications), Eagle has agreed:

(a) To make no claim by it or its officers against Stantons International Securities (and Stantons International Pty Ltd and its affiliate Stantons International Audit and Consulting Pty Ltd) to recover any loss or damage which Eagle may suffer as a result of reasonable reliance by Stantons International Securities on the information provided by Eagle; and
(b) To indemnify Stantons International Securities (and Stantons International Pty Ltd and Stantons International Audit and Consulting Pty Ltd) against any claim arising (wholly or in part) from Eagle or any of its officers providing Stantons International Securities any false or misleading information or in the failure of Eagle or its officers in providing material information, except where the claim has arisen as a result of wilful misconduct or negligence by Stantons International Securities.

A draft of this report was presented to Eagle directors for a review of factual information contained in the report. Comments received relating to factual matters were taken into account, however the valuation methodologies and conclusions did not alter.

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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FINANCIAL SERVICES GUIDE FOR STANTONS INTERNATIONAL PTY LTD (Trading as Stantons International Securities) Dated 16 December 2011

Stantons International Securities ACN 103 O88 697 (“SIS” or “we” or “us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

2. Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client a Financial Services Guide (“FSG”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, Licence No: 319600;
remuneration that we and/or our staff and any associated receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

3. Financial services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide financial product advice in relation to:

Securities (such as shares, options and notes)

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

4. General Financial Product Advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

EAG1658A/IER Re Eagle Share Issue to Sky Chem

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5. Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither SIS, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

Remuneration or other benefits received by our employees

All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report.

7. Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

8. Associations and relationships

SIS is ultimately a wholly division of Stantons International Pty Ltd a professional advisory and accounting practice. Stantons International is also affiliated with Stantons International Audit and Consulting Pty Ltd that provides audit and corporate services and charges management and corporate fees to Stantons International Securities.

From time to time, SIS and Stantons International Audit and Consulting Pty Ltd and/or their related entities may provide professional services, including audit, accounting and financial advisory services, to financial product issuers in the ordinary course of its business.

9. Complaints resolution

9.1 Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to:

The Complaints Officer Stantons International Securities Level 2 1 Walker Avenue WEST PERTH WA 6005

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaints within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

9.2 Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service Limited (“FOSL”). FOSL is an independent company that has been established to provide free advice and

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assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FOSL are available at the FOSL website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service Limited PO Box 3 MELBOURNE VIC 8007

Toll Free: 1300 78 08 08 Facsimile: (03) 9613 6399

10. Contact details

You may contact us using the details set out above.

Telephone 08 9481 3188 Fax 08 9321 1204 Email [email protected]

EAG1658A/IER Re Eagle Share Issue to Sky Chem

EAGLE NICKEL LIMITED

ACN 125 368 658

Proxy Form



1 SHAREHOLDER

Name, address and daytime telephone number of shareholder of Eagle Nickel Limited.

Name ……………........................................................ Address ………….........................................................

………………………………………………………...

Daytime phone no. .......................................................

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
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2 APPOINTS

If the Chair of the meeting is appointed as your proxy, please place a mark in the box. If you do not tick this box, please write the name of your proxy in the space to the right.

Insert here the name of the person you wish to appoint as proxy; shareholders cannot appoint themselves.

Name of proxy – please print

....................................................................................

☐

The Chairman intends to vote for Resolutions 1, 2, 3, 4, 5, 6 and 7 for all undirected proxies.

By marking this box, you acknowledge that the Chair of the meeting may exercise your proxy even if he has an interest in the outcome of the resolution/s and that votes cast by the Chair of the meeting for those resolutions other than as proxy holder will be disregarded because of that interest.

If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on the resolution and your votes will not be counted in calculating the required majority if a poll is called on the resolution.

3 SIGNATURE OF SHAREHOLDER(S) 

All single or joint holders of shares must sign this  form.

Signature Signature Signature Date or in the case of a company The COMMON SEAL of the company is affixed in ) accordance with its constitution in the presence ) of:/Executed by the company by its duly authorised ) officers in accordance with sub-section 127(1) of the ) Corporations Act 2001: * )

The COMMON SEAL of the company is affixed in accordance with its constitution in the presence of:/Executed by the company by its duly authorised officers in accordance with sub-section 127(1) of the Corporations Act 2001: *

..................................................................................... Signature of Director ..................................................................................... Name of Director (Print) ..................................................................................... Signature of Director/Secretary ..................................................................................... Name of Director/Secretary (Print) or signed by ................................................................. under Power of Attorney on behalf of the company. * delete as appropriate

This proxy form must be signed by the shareholder and, in the case of joint shareholders, by each of the joint shareholders. In the case of a corporation, this proxy form must be executed in accordance with section 127 of the Corporations Act 2001. In the case of a Sole Director/Secretary company, please indicate “Sole

Director”. If this proxy form is signed under Power of Attorney the original Power of Attorney (or a copy certified as a true copy by statutory declaration) must be forwarded with the proxy form.

4 PROXY’S VOTING INSTRUCTIONS (OPTIONAL)  1. Approval of Share Placement and Options to Darshing International Holdings Ltd 2. Ratification of Prior Share Issue 3. Grant of Options to TianShan 4. Appointment of Xuefeng Mei 5. Appointment of Hui Guo 6. Appointment of Benjamin Jarvis 7. Approval of Change of Company Name	FOR	AGAINST	ABSTAIN	PROXY’S DISCRETION

If you wish to direct your proxy how to vote, place a mark on the appropriate box. If a mark is placed in a box, your total shareholding will be voted in that manner. You may, if you wish, split your voting direction by inserting the number of shares you wish to vote in the appropriate box. The direction will be invalid if a mark is made against more than one box for a particular item, or, if you have split your direction, if the total shareholding shown in “FOR”, “AGAINST”, “ABSTAIN” and “PROXY’S DISCRETION” boxes is more than your total shareholding on the share register. Each person who attends the meeting is entitled to one vote only on a show of hands. A person who holds proxies for more than one shareholder cannot vote on a show of hands if he or she holds proxies directing him or her to vote both for and against a resolution.

5 APPOINTMENT OF A SECOND PROXY (OPTIONAL)

If you want to appoint two proxies you may state here the percentage of your voting rights applicable to this proxy form. If you do not specify a particular percentage, each proxy is entitled to exercise 50% of your voting rights applicable to this proxy form.

A shareholder is entitled to appoint up to two persons (whether shareholders or not) to attend the meeting and vote as proxies. If you wish to appoint two proxies please either photocopy the proxy form or telephone Suraj Sanghani on ++618 9225 4718 to obtain a second form. Both forms should be completed with the nominated percentage of your voting rights on each form. Please return the proxy forms together.

%

Important Information

Deadline for Receipt of proxies To be effective, a completed proxy form together with the power of attorney (if any) under which it is signed, must be received by the Company at its registered office or Company office, Level 7, 231 Adelaide Terrace, Perth not less than 48 hours before the appointed time of the General Meeting ie. no later than 10 am WST on 28 March 2012.

Destination of Completed Proxy Form Once the Proxy Form is completed and all details checked by you, the form is to be sent or delivered to the Company’s office at Level 7, 231 Adelaide Terrace, Perth WA 6000, or PO Box 3235 249 Hay Street, East Perth 6892 or sent by facsimile to the registered office on ++ 618 9225 6474.

For Further Information If you need any further information about this form or attendance at the Company’s General Meeting, please contact Suraj Sanghani, Company Secretary, on ++ 618 9225 4718.

AI assistant

QPM ENERGY LIMITED — Proxy Solicitation & Information Statement 2012

65650_rns_2012-02-28_90ded21c-a245-4440-a510-4ce4b367e29a.pdf

Circular to Shareholders

General Meeting of Eagle Nickel Limited

NOTICE OF GENERAL MEETING

BUSINESS OF THE GENERAL MEETING

1. Resolution 1 - Approval for Proposed Share Placement and Grant of Options to Darshing International Holdings Limited (or its nominee)

Voting Exclusion

2. Resolution 2 – Ratification of Prior Share Issue to Darshing International Holdings Limited (or its nominee)

Voting Exclusion

3. Resolution 3 – Grant of Options to TianShan Investment Holdings Limited (or its nominee)

Voting Exclusion

4. Resolution 4 – Approval of Appointment of Xuefeng Mei as Director

5. Resolution 5 – Approval of Appointment of Hui Guo as Director

6. Resolution 6 – Approval of Appointment of Benjamin Jarvis as Director

7. Resolution 7 – Approval of Change of Company Name

OTHER BUSINESS

ENTITLEMENT TO ATTEND AND VOTE

PROXIES

UNDIRECTED PROXIES

VOTING BY ATTORNEY

CORPORATE REPRESENTATIVES

BY ORDER OF THE BOARD

EXPLANATORY MEMORANDUM

BUSINESS OF THE MEETING

1. Background

Agreement between the Company and Sky Chem Industrial Co. Ltd

Share Placements

Grant of options

Other conditions

Inter-conditionality

2. Risks, Advantages and Disadvantages

Risks of voting against the Resolutions

Advantages of the transactions contemplated under the Resolutions

Increased funding

Access to other exploration and mining assets

Darshing as a substantial shareholder of the Company

Disadvantages of the transactions contemplated under the Resolutions

Reduction in voting power

Influence of Darshing as a major shareholder

3. Directors' Recommendation

RESOLUTION 1 – APPROVAL OF PROPOSED SHARE ISSUE AND GRANT OF OPTIONS TO DARSHING (OR ITS NOMINEE)

Corporations Act - Part 6.1

Company share structure

Table 1.1

Table 1.2

Information required by item 7 of section 611 of the Corporations Act and ASIC Regulatory Guide 74

i) When the allotment of the Shares under the Tranche 2 Share Issue and grant of options to Darshing (or its nominee) under the Agreement is to be made:

j) An explanation of the reasons for the proposed allotment of the Shares under the Tranche 2 Share Issue and grant of options to Darshing (or its nominee):

Specific Information required by ASX Listing Rule 7.3

The Directors unanimously recommend Shareholders vote in favour of Resolution 1.

RESOLUTION 2 – RATIFICATION OF PRIOR SHARE ISSUE TO DARSHING (OR ITS NOMINEE)

Specific Information required by ASX Listing Rule 7.5

The Directors unanimously recommend Shareholders vote in favour of Resolution 2.

RESOLUTION 3 – GRANT OF OPTIONS TO TIANSHAN INVESTMENT HOLDINGS LIMITED (OR ITS NOMINEE)

Specific Information required by ASX Listing Rule 7.3

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

RESOLUTIONS 4, 5 AND 6 – APPROVAL OF APPOINTMENT OF DIRECTORS

Resolution 4 – appointment of Xuefeng Mei as Director

Resolution 5 – appointment of Hui Guo as Director

Resolution 6 – appointment of Benjamin Jarvis as Director

The Directors unanimously recommend Shareholders vote in favour of Resolutions 4, 5 and 6.

RESOLUTION 7 – APPROVAL OF CHANGE OF COMPANY NAME

The Directors unanimously recommend Shareholders vote in favour of Resolution 7.

GLOSSARY

ANNEXURE “A”

EAGLE NICKEL LIMITED

TERMS AND CONDITIONS OF OPTIONS EXPIRING 1 JULY 2012 (AMOUNT PAYABLE: 30 CENTS)

1. Entitlement

4. Voting

5. Transfer of an Option

6.

Method of Exercise of an Option

LODGEMENT INSTRUCTIONS

ANNEXURE “B”

EAGLE NICKEL LIMITED

TERMS AND CONDITIONS OF OPTIONS EXPIRING 31 DECEMBER 2015 (AMOUNT PAYABLE: 20 CENTS)

6.

Method of Exercise of an Option

QPM ENERGY LIMITED Proxy Solicitation & Information Statement 2012