QX RESOURCES LIMITED — Capital/Financing Update 2017

Apr 9, 2017

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Black Mountain Resources Limited

ABN

55147106974

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1	+Class of +securities issued or to be
	issued

1. Convertible Notes.

2. Unlisted Options.

2 Number of +securities issued or to be issued (if known) or maximum number which may be issued

1. 535,000 Convertible Notes.

2. 2,000,000 Unlisted Options.

+ See chapter 19 for defined terms.

3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

1. Convertible Notes each with a face value of A$1. The Convertible Notes will pay the holders interest at a rate of 10% per annum, payable quarterly in arrears. The Convertible Notes expire on 15 March 2018 (Expiry Date) and are convertible into ordinary shares at any time after 24 April 2017 at $0.05 or a lower price if the Company undertakes a capital raise at a lower price prior to the Expiry Date. The Convertible Notes automatically convert into ordinary shares on the Expiry Date if not converted prior to that date.

2. Unlisted Options exercisable at A$0.05 on or before 30 April 2020.

+ See chapter 19 for defined terms.

1. No – a new class of unquoted security.

	all respects from the +issue datewith an existing +classof quoted+securities?If the additional +securities do notrank equally, please state:•the date from which they do•theextenttowhichtheyparticipateforthenextdividend, (in the case of a trust,distribution)orinterestpayment•the extent to which they do notrankequally,otherthan inrelation to the next dividend,distribution or interest payment	2. No -unlisted options.On exercise of theoptions, fully paid ordinary shares issuedwill rank equally with existing quoted fullypaid ordinary shares currently on issue.
5	Issue price or consideration	1. Each convertible note issued at a face valueof A$1.2. Issued in part consideration of settlement ofthe L1 Convertible Note facilityas announcedon 5 April 2017.
6	Purpose of the issue(If issued as consideration for theacquisitionofassets,clearlyidentify those assets)	1. A$535,000 raised through issue of 535,000Convertible Notes to existing shareholders, theproceeds of which have been used to repay theL1 facility and will be used for working capitalpurposesas announced on 5 April 2017.2. Issued in part consideration of settlement ofthe L1 Convertible Note facilityas announcedon 5 April 2017.
6a	Is the entity an +eligible entity thathasobtainedsecurityholderapproval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i	Yes
6b	Thedatethesecurityholderresolution under rule 7.1A waspassed	29 November 2016

4 Do the +securities rank equally in

+ See chapter 19 for defined terms.

6c	+securitiesNumberofissuedwithout security holder approval	1. 535,000 Convertible Notes.
	under rule 7.1	2. 2,000,000 Unlisted Options.
6d	Number of +securities issued withsecurity holder approval under rule7.1A	N/A
6e	Number of +securities issued withsecurity holder approval under rule7.3, or another specific securityholder approval (specify date ofmeeting)	N/A
6f	Number of +securities issued underan exception in rule 7.2	N/A
6g	If +securities issued under rule7.1A, was issue price at least 75%of 15 day VWAP as calculatedunder rule 7.1A.3?Include the+issuedateandbothvalues.Include the source of the VWAPcalculation.	N/A
6h	If +securities were issued underrule7.1Afornon-cashconsideration, state date on whichvaluationofconsiderationwasreleasedtoASXMarketAnnouncements	N/A
6i	Calculate the entity's remaining	ASX Listing Rule 7.1 –10,275,159.
	issue capacity under rule 7.1 andrule 7.1A – complete Annexure 1andreleasetoASXMarketAnnouncements	ASX Listing Rule 7.1A -15,316,772.
7	+Issue dates
	Note: The issue date may be prescribed by ASX(refer to the definition of issue date in rule 19.12).For example, the issue date for a pro rataentitlement issue must comply with the applicabletimetable in Appendix 7A.Cross reference: item 33 of Appendix 3B.	5 April 2017

+ See chapter 19 for defined terms.

		Number	+Class
8	Number and +class of all +securitiesquoted on ASX (includingthe+securitiesinsection2ifapplicable)	101,477,348	FullyPaidOrdinaryShares. (ASX:BMZ)
		Number	+Class
9	Number and +class of all +securitiesnot quoted on ASX (including the	51,690,380	Fullypaidordinaryshares.

	Number	+Class
Number and +class of all +securitiesnot quoted on ASX (including the+securitiesinsection2if	51,690,380	Fullypaidordinaryshares.
applicable)	1,857,252	UnlistedOptionsexercisable at $0.125on or before 30 June2018.
	2,000,000	UnlistedOptionsexercisableat$0.05on or before 30 April2020.
	535,000	Convertiblenotes–face value $1; expiry15/3/18;convertibleat $0.05 (or lower ifcapital raising beforeexpiryatalowerprice).
		Note –•100,000 optionsexercisable at $1expired on 30/11/16.•300,000 optionsexercisable at $1.20expired on31/3/17.

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Not applicable

Part 2 - Pro rata issue

+ See chapter 19 for defined terms.

Appendix 3B New issue announcement

11	Issecurityholderapprovalrequired?	N/A
12	Is the issue renounceable or nonrenounceable?
13	Ratio in which the +securities will beoffered
14	+Class of +securities to which theoffer relates
15	+Recorddatetodetermineentitlements
16	Will holdings on different registers(or subregisters) be aggregated forcalculating entitlements?
17	Policy for deciding entitlements inrelation to fractions
18	Names of countries in which theentity has security holders who willnot be sent new offer documents
	Note: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.
19	Closingdateforreceiptof
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee orcommission
22	Names of any brokers to the issue
23	Fee or commission payable to thebroker to the issue
24	Amount of any handling fee payableto brokers who lodge acceptancesorrenunciationsonbehalfofsecurity holders

+ See chapter 19 for defined terms.

• 25 If the issue is contingent on security holders' approval, the date of the meeting
• 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled
• 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders
• 28 Date rights trading will begin (if applicable)
• 29 Date rights trading will end (if applicable)
• 30 How do security holders sell their entitlements in full through a broker?
• 31 How do security holders sell part of their entitlements through a broker and accept for the balance? How do security holders dispose of their entitlements (except by sale through a broker)?

33 +Issue date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of +securities (tick one)

(a) +Securities described in Part 1

(b) All other +securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

+ See chapter 19 for defined terms.

Additional securities forming a new class of securities

37 A copy of any trust deed for the additional +securities

Tick to indicate you are providing the information or documents

35	If the +securities are +equity securities, the names of the 20 largest holders of theadditional +securities, and the number and percentage of additional +securities held bythose holders
36	If the +securities are +equity securities, a distribution schedule of the additional+securities setting out the number of holders in the categories1 - 1,0001,001 - 5,0005,001 - 10,00010,001 - 100,000100,001 and over

Entities that have ticked box 34(b)

• 38 Number of +securities for which +quotation is sought
• 39 +Class of +securities for which quotation is sought
• 40 Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities?

If the additional +securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

+ See chapter 19 for defined terms.

• 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another +security, clearly identify that other +security)
• 42 Number and +class of all +securities quoted on ASX (including the +securities in clause 38)

Number	+Class

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the +securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before

+ See chapter 19 for defined terms.

+quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 10 April 2017 Company Secretary

Print name: Susan Hunter

== == == == ==

+ See chapter 19 for defined terms.

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 –Issues exceeding 15% of capitalStep 1: Calculate "A", the base figure from which the placementcapacity is calculated
Add the following:
Number of fully paid +ordinary securities•issued in that 12 month period under anexception in rule 7.2Number of fully paid +ordinary securities•issued in that 12 month period withshareholder approvalNumber of partly paid +ordinary•securities that became fully paid in that12 month period	26/10/16 - 33,190,380 Shares approved15/8/16.26/10/16 - 18,500,000 Shares approved15/8/16.26/10/16 - 45,000,000 Shares approved15/8/16.26/10/16 - 15,425,718 Shares approved15/8/16.
Note:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod	-
"A"	153,167,728

+ See chapter 19 for defined terms.

Step 2: Calculate 15% of "A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15	22,975,159
Step 3: Calculate "C", the amount of placement capacity under rule7.1 that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod not counting those issued:
•Under an exception in rule 7.2	5/4/17 – 2,000,000 options exercisable at
•Under rule 7.1A	$0.05 on or before 30 April 2020.
•With security holder approval under rule7.1 or rule 7.4	5/4/17 – 535,000 Convertible Notes(convertible into 10,700,000 Shares at$0.05).
Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
"C"	12,700,000
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15	22,975,159
Note: number must be same as shown inStep 2
Subtract "C"	12,700,000
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	10,275,159
	[Note: this is the remaining placementcapacity under rule 7.1]

+ See chapter 19 for defined terms.

Part 2

Rule 7.1A –Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"	153,167,728
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10	15,316,772
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of +equity securities issuedor agreed to be issued in that 12 monthperiod under rule 7.1A	-
Notes:•This applies to equity securities – notjust ordinary securities•Include here – if applicable – thesecurities the subject of the Appendix3B to which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt within Part 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items
"E"	-

+ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10	15,316,772
Note: number must be same as shown inStep 2
Subtract "E"	-
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	15,316,772
	Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.