RAREX LIMITED — AGM Information 2019

Oct 27, 2019

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SAGON RESOURCES LIMITED ACN 105 578 756

NOTICE OF ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held at the offices of the Company at Suite 23, 513 Hay Street, Subiaco, Western Australia on Thursday, 28 November 2019 at 11.00 am (WST).

The Notice of Annual General Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on + 61 8 6143 6720

Shareholders are urged to attend or vote by lodging the proxy form attached to the Notice

A C N 1 0 5 5 7 8 7 5 6

SAGON RESOURCES LIMITED

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the annual general meeting of Shareholders of Sagon Resources Limited ( Company ) will be held at the offices of the Company at Suite 23, 513 Hay Street, Subiaco, Western Australia on Thursday, 28 November 2019 at 11.00 am (WST) ( Meeting ).

The Explanatory Memorandum provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of the Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders of the Company on Tuesday, 26 November 2019 at 5 pm (WST).

Terms and abbreviations used in the Notice are defined in Schedule 1.

AGENDA

1. Annual Report

To consider the Annual Report of the Company and its controlled entities for the financial year ended 30 June 2019, which includes the Financial Report, the Directors' Report and the Auditor's Report.

2. Resolution 1 – Remuneration Report

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

"That the Remuneration Report be adopted by Shareholders on the terms and conditions in the Explanatory Memorandum."

Voting Prohibition

In accordance with sections 250BD and 250R of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a member of the Key Management Personnel details of whose remuneration are included in the Remuneration Report, or a Closely Related Party of such a member.

A vote may be cast by such person if the vote is not cast on behalf of a person who is excluded from voting on this Resolution, and:

• (a) the person is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or

• (b) the voter is the Chair and the appointment of the Chair as proxy does not specify the way the proxy is to vote on this Resolution, but expressly authorises the Chair to exercise the proxy even if this Resolution is connected with the remuneration of a member of the Key Management Personnel.

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3. Resolution 2 – Election of Director – Mr Jeremy Robinson

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

"That, in accordance with Articles 7.2(b) and 7.6(b) of the Constitution, Listing Rule 14.4 and for all other purposes, Mr Jeremy Robinson, a Director who was appointed on 27 September 2019, retires and, being eligible, is elected as a Director on the terms and conditions in the Explanatory Memorandum."

4. Resolutions 3(a) and 3(b) – Approval of issue of Director Options

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

“That, pursuant to and in accordance Listing Rule 10.11, section 195(4) of the Corporations Act and for all other purposes, approval is given for the issue of Options to Directors (or their nominees) as follows:

• (a) up to 3,000,000 Options to Mr Shaun Hardcastle; and

• (b) up to 3,000,000 Options to Mr Scott Patrizi,

(together, the Director Options ) on the terms and conditions set out in the Explanatory Memorandum and Schedule 2."

Voting Exclusion

The Company will disregard any votes cast in favour of:

• (a) Resolution 3(a) by or on behalf of Mr Hardcastle (and his nominees), or any of their respective associates; and

• (b) Resolution 3(b) by or on behalf of Mr Patrizi (and his nominees), or any of their respective associates.

However, the Company need not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibitions

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

• (a) the proxy is either a member of the Key Management Personnel or a Closely Related Party of such member; and

• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

• (a) the proxy is the Chair; and

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

5. Resolution 4 – Approval to change Company Name

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

"That pursuant to and in accordance with section 157 of the Corporations Act and for all other purposes, approval is given for the name of the Company to be changed to "RareX Limited" with effect from the date that ASIC alters the details of the Company's registration."

6. Resolution 5 – Ratification of Prior Issue of Creditor Shares

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

"That, pursuant to and in accordance with Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 5,629,412 Shares on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast in favour of this Resolution by or on behalf of a person who participated in the issue of the Creditor Shares or any of their respective associates.

However, the Company need not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

7. Resolutions 6(a) and 6(b) – Ratification of Prior Issue of Placement Shares

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

"That, pursuant to and in accordance with Listing Rule 7.4 and for all other purposes, Shareholders ratify the following issues of Shares:

• (a) 1,670,864 Placement Shares under Listing Rule 7.1A; and

• (b) 19,162,469 Placement Shares under Listing Rule 7.1,

on the terms and conditions in the Explanatory Memorandum."

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Voting Exclusion

The Company will disregard any votes cast in favour of Resolutions 6(a) or 6(b) by or on behalf of any person who participated in the Placement, or any associates of those persons.

However, the Company need not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

8. Resolution 7 – Approval of 10% Placement Facility

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

"That, pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities totalling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast in favour of this Resolution by or on behalf of any persons who are expected to participate in, or who will obtain a material benefit as a result of, an issue under the 10% Placement Facility (except a benefit solely by reason of being a holder of Shares) or any associate of those persons.

However, the Company need not disregard a vote if:

• (a) it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

• (b) it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

9. Resolution 8 – Amendment of Constitution

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

“"That, pursuant to and in accordance with section 136(2) of the Corporations Act and for all other purposes, approval is given for the Company to modify its Constitution by making the amendment contained in the document tabled at the Meeting and signed by the Chair for the purposes of identification, with effect from 1 December 2019.”

BY ORDER OF THE BOARD

Ms Oonagh Malone Company Secretary Sagon Resources Limited Dated: 24 October 2019

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A C N 1 0 5 5 7 8 7 5 6

SAGON RESOURCES LIMITED

EXPLANATORY MEMORANDUM

1. Introduction

The Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Meeting to be held at Suite 23, 513 Hay Street, Subiaco, Western Australia on Thursday, 28 November 2019 at 11.00 am (WST).

The Explanatory Memorandum forms part of the Notice which should be read in its entirety. The Explanatory Memorandum contains the terms and conditions on which the Resolution will be voted.

The Explanatory Memorandum includes the following information to assist Shareholders in deciding how to vote on the Resolution:

Section 2	Action to be taken by Shareholders
Section 3	Annual Report
Section 4	Resolution 1 – Remuneration Report
Section 5	Resolution 2 – Election of Director – Mr Jeremy Robinson
Section 6	Resolutions 3(a) and 3(b) – Approval of issue of Director Options
Section 7	Resolution 4 – Approval to change Company Name
Section 8	Resolution 5 – Ratification of Prior Issue of Creditor Shares
Section 9	Resolutions 6(a) and 6(b) – Ratification of Prior Issue of Placement Shares
Section 10	Resolution 7 – Approval of 10% Placement Facility
Section 11	Resolution 8 – Amendment of Constitution
Schedule 1	Definitions
Schedule 2	Terms and Conditions of Director Options
Schedule 3	Securities issued in the previous 12 months

A Proxy Form is located at the end of the Explanatory Memorandum.

2. Action to be taken by Shareholders

Shareholders should read the Notice including the Explanatory Memorandum carefully before deciding how to vote on the Resolution.

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2.1 Voting in person

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

2.2 Proxies

• (a) Voting by proxy

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a 'proxy') to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions thereon. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

Please note that:

• (i) a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy;

• (ii) a proxy need not be a member of the Company; and

• (iii) 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 or number is not specified, each proxy may exercise half of the votes.

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

• (b) Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does:

• (i) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed);

• (ii) if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands;

• (iii) if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• (iv) if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

• (c) Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• (i) an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members;

• (ii) the appointed proxy is not the chair of the meeting;

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• (iii) at the meeting, a poll is duly demanded on the resolution; and

• (iv) either the proxy is not recorded as attending the meeting or the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

2.3 Voting Prohibition by Proxy Holders (Remuneration of Key Management Personnel)

In accordance with sections 250BD and 250R of the Corporations Act, votes on Resolutions 1 and 3 must not be cast (in any capacity) by, or on behalf of:

• (a) a member of the Key Management Personnel; or

• (b) a Closely Related Party of such member.

However, a person described above may cast a vote on Resolution 1 and/or 3 if the vote is not cast on behalf of a person who is excluded from voting on the relevant Resolution and:

• (a) the person is appointed as proxy by writing that specifies the way the proxy is to vote on the Resolution; or

• (b) the person is the Chair and the appointment of the Chair as proxy does not specify the way the proxy is to vote on the resolution, but expressly authorises the Chair to exercise the proxy even if the Resolution is connected with the remuneration of a member of the Key Management Personnel.

2.4 Chair's voting intentions

The Chair intends to exercise all available proxies in favour of all Resolutions, unless the Shareholder has expressly indicated a different voting intention.

If the Chair is appointed as your proxy and you have not specified the way the Chair is to vote on Resolution 1 or 3 by signing and returning the Proxy Form, you are considered to have provided the Chair with an express authorisation for the Chair to vote the proxy in accordance with the Chair's intention, even though the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel of the Company.

3. Annual Report

In accordance with section 317 of the Corporations Act, Shareholders will be offered the opportunity to discuss the Annual Report, including the Financial Report, the Directors' Report and the Auditor's Report for the financial year ended 30 June 2019.

There is no requirement for Shareholders to approve the Annual Report.

At the Meeting, Shareholders will be offered the opportunity to:

• (a) discuss the Annual Report which will be available online at www.sagonresources.com.au;

• (b) ask questions about, or comment on, the management of the Company; and

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• (c) ask the auditor questions about the conduct of the audit and the preparation and content of the Auditor's Report.

In addition to taking questions at the Meeting, written questions to the Chair about the management of the Company, or to the Company's auditor about:

• (a) the preparation and content of the Auditor's Report;

• (b) the conduct of the audit;

• (c) accounting policies adopted by the Company in relation to the preparation of the financial statements; and

• (d) the independence of the auditor in relation to the conduct of the audit,

may be submitted no later than 5 business days before the Meeting to the Company Secretary at the Company's registered office.

4. Resolution 1 – Remuneration Report

In accordance with subsection 250R(2) of the Corporations Act, the Company must put the Remuneration Report to the vote of Shareholders. The Directors' Report contains the Remuneration Report which sets out the remuneration policy for the Company and the remuneration arrangements in place for the executive Directors, specified executives and non-executive Directors.

In accordance with subsection 250R(3) of the Corporations Act, Resolution 1 is advisory only and does not bind the Directors. If Resolution 1 is not passed, the Directors will not be required to alter any of the arrangements in the Remuneration Report.

If the Company's Remuneration Report receives a 'no' vote of 25% or more ( Strike ) at two consecutive annual general meetings, Shareholders will have the opportunity to remove the whole Board, except the managing director (if any).

Where a resolution on the Remuneration Report receives a Strike at two consecutive annual general meetings, the Company will be required to put to Shareholders at the second annual general meeting a resolution on whether another meeting should be held (within 90 days) at which all Directors (other than the managing director, if any) who were in office at the date of approval of the applicable Directors' Report must stand for re-election.

The Company's Remuneration Report did not receive a Strike at the 2018 annual general meeting. If the Remuneration Report receives a Strike at this Meeting, Shareholders should be aware that if a second Strike is received at the 2020 annual general meeting, this may result in the re-election of the Board.

The Chair will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on the Remuneration Report.

Resolution 1 is an ordinary resolution.

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5. Resolution 2 – Election of Director – Mr Jeremy Robinson

5.1 General

Article 7.6(a) of the Constitution allows the Board to appoint at any time a person to be a Director either to fill a casual vacancy or as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution.

Pursuant to Article 7.6(b) of the Constitution, any Director so appointed may retire at the next general meeting of the Company and is then eligible for re-election by Shareholders.

Listing Rule 14.4 also provides that a Director appointed as an addition to the Board must not hold office (without re-election) past the next annual general meeting.

In addition, Article 7.2(b) of the Constitution requires that there must be an election of Directors at each annual general meeting which may be satisfied by a director appointed in accordance with Article 7.6(a) standing for election.

Mr Jeremy Robinson was appointed as an Executive Director of the Company on 27 September 2019.

Accordingly, Mr Robinson retires as a Director at the Meeting and, being eligible, seeks approval to be elected as a Director pursuant to Resolution 2.

If elected, Mr Robinson is not considered to be an independent Director, as Mr Robinson is an executive Director.

Resolution 2 is an ordinary resolution.

The Board (other than Mr Robinson) recommends that Shareholders vote in favour of Resolution 2.

5.2 Mr Jeremy Robinson

Mr Robinson is an experienced mining executive having held senior roles at Mungana Goldmines Limited and Apex Minerals Limited. Mr Robinson holds a Bachelor of Commerce from the University of Western Australia majoring in Corporate Finance, Investment Finance and Marketing.

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6. Resolutions 3(a) and 3(b) – Approval of issue of Director Options

6.1 General

The Company is proposing to issue a total of 6,000,000 Options to Directors (or their nominees) as part of their remuneration as Directors of the Company as follows ( Director Options ):

Director		Director Options
	Tranche 1	Tranche 2	Tranche 3
Shaun Hardcastle	1,000,000	1,000,000	1,000,000
Scott Patrizi	1,000,000	1,000,000	1,000,000
TOTAL	2,000,000	2,000,000	2,000,000

The Director Options provide an incentive component to Messrs Hardcastle and Patrizi's remuneration packages, and align their interests with those of Shareholders.

The Board considers that the number of Director Options to be granted to Messrs Hardcastle and Patrizi is commensurate with their value to the Company and is an appropriate method to provide cost effective remuneration.

The Director Options will be issued for nil consideration and on the following key terms:

Tranche	Exercise Price	Vesting Conditions	Expiry Date
1	143% of the 5 day VWAP of Shares immediately before the date of issue of the Director Options	The 20-Day VWAP of Shares exceeding $0.10	Three years from date of issue
2		The 20-Day VWAP of Shares exceeding $0.15
3		The 20-Day VWAP of Shares exceeding $0.20

The terms and conditions of the Director Options are set out in Schedule 2.

Resolution 3 seeks Shareholder approval pursuant to Listing Rule 10.11 for the issue of the Director Options.

6.2

Listing Rule 10.11

Listing Rule 10.11 requires Shareholder approval to be obtained where an entity issues or agrees to issue securities to a related party or a person whose relationship with the entity or a related party is in ASX's opinion such that approval should be obtained unless an exception in Listing Rule 10.12 applies.

Messrs Hardcastle and Patrizi are related parties of the Company by virtue of their positions as Directors.

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As the issue of Director Options to Messrs Hardcastle and Patrizi (or their nominees) involves the issue of Options to a related party of the Company, Shareholder approval pursuant to Listing Rule 10.11 is required unless an exception applies. It is the view of the Board (excluding Messrs Hardcastle and Patrizi) that the exceptions set out in Listing Rule 10.12 do not apply in the current circumstances.

As Shareholder approval is sought under Listing Rule 10.11, approval under Listing Rule 7.1 is not required. Accordingly, the issue of Director Options will not be included in the issue of the Company's 15% annual placement capacity pursuant to Listing Rule 7.1.

6.3 Chapter 2E of the Corporations Act

In accordance with Chapter 2E of the Corporations Act, in order to give a financial benefit to a related party, the Company must:

• (a) obtain Shareholder approval in the manner set out in section 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval, unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The grant of the Director Options constitutes giving a financial benefit and Messrs Hardcastle and Patrizi are related parties of the Company by virtue of being Directors.

The Directors (other than Director Mr Shaun Hardcastle who has a personal interest in Resolution 3(a)) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the issue of the Director Options to Mr Hardcastle because the grant of the Director Options is considered reasonable remuneration given the Company's circumstances.

The Directors (other than Director Mr Scott Patrizi who has a personal interest in Resolution 3(b)) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the issue of the Director Options to Mr Patrizi because the grant of the Director Options is considered reasonable remuneration given the Company's circumstances.

6.4 Specific information required Listing Rule 10.13

Pursuant to and in accordance with Listing Rule 10.13, the following information is provided in relation to the proposed issue of Director Options:

• (a)

• a maximum of 6,000,000 Director Options will be issued as follows:

• (i) up to 3,000,000 Director Options will be issued to Director Mr Shaun Hardcastle (or his nominees); and

• (ii) up to 3,000,000 Director Options will be issued to Director Mr Scott Patrizi (or his nominees);

• (b) the Director Options will be issued no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules);

• (c) the Director Options will be issued for nil cash consideration as they will be issued as part of Messrs Hardcastle and Patrizi’s remuneration packages;

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• (d) the Director Options will be issued with an exercise price equal to 143% of the 5 day VWAP of Shares immediately before the date of issue of the Options and an expiry date three years after the date of issue, and otherwise on the terms set out in Schedule 2;

• (e) the Director Options will be issued for nil cash consideration and therefore no funds will be raised as a result of the issue; and

• (f) a voting exclusion statement is included in the Notice.

6.5 Section 195 of the Corporations Act

Section 195 of the Corporations Act essentially provides that a director of a public company may not vote or be present during meetings of directors when matters in which that director holds a 'material personal interest' are being considered.

Messrs Hardcastle and Patrizi have a personal interest in the outcome of Resolutions 3(a) and 3(b) respectively. Accordingly, Resolutions 3(a) and 3(b) also seek the approval of Shareholders for the purposes of section 195 of the Corporations Act, as in the absence of such approval, the Directors may not be able to form a quorum at a Director's meeting necessary to carry out the terms of these Resolutions.

6.6 Additional information

Each of the Resolutions which form part of this Resolution 3 is a separate ordinary resolution.

The Directors decline to make a recommendation in relation to Resolutions 3(a) and 3(b) due to the personal interests of Messrs Hardcastle and Patrizi in the Resolutions. The Chair intends to exercise all available proxies in favour of Resolutions 3(a) and 3(b).

7. Resolution 4 – Approval to change Company Name

Section 157(1)(a) of the Corporations Act provides that a company may change its name if the Company passes a special resolution adopting a new name.

Resolution 4 seeks the approval of Shareholders for the Company to change its name to "RareX Limited".

The proposed name has been reserved by the Company with ASIC. If Resolution 4 is passed the change of name will take effect when ASIC alters the details of the Company's registration.

The Board proposes this change of name as part of a general corporate refresh following the Company’s acquisition of the Cummins Range Rare Earths Project.

Resolution 4 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

The Board recommends that Shareholders vote in favour of Resolution 4.

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8. Resolution 5 – Ratification of Prior Issue of Creditor Shares

8.1 Background

On 27 September 2019, the Company issued 5,629,412 Shares in lieu of fees payable to service providers for the provision of company secretarial, serviced office, administration, bookkeeping and accounting services to the Company ( Creditor Shares ).

Resolution 5 seeks the approval of Shareholders pursuant to Listing Rule 7.4 to ratify the issue of the Creditor Shares.

The Creditor Shares were issued within the 15% annual limit permitted under Listing Rule 7.1, without the need for prior Shareholder approval.

The Board recommends that Shareholders vote in favour of Resolution 5.

Resolution 5 is an ordinary resolution.

The Chair intends to exercise all available proxies in favour of Resolution 5.

8.2 Listing Rules 7.1 and 7.4

Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more Equity Securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period without shareholder approval.

Listing Rule 7.4 provides an exception to Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to Listing Rule 7.1 (and provided that the previous issue did not breach Listing Rule 7.1), those securities will be deemed to have been made with shareholder approval for the purpose of Listing Rule 7.1.

The effect of Resolution 5 will be to allow the Company to retain the flexibility to issue Equity Securities in the future up to the 15% annual placement capacity set out in Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

The effect of Resolution 5 will be to allow the Company to retain the flexibility to issue Equity Securities in the future up to the 15% annual placement capacity set out in Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

8.3 Specific information required by Listing Rule 7.5

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to the ratification of the issue of the Creditor Shares:

• (a) a total of 5,629,412 Creditor Shares were issued;

• (b) the Creditor Shares issued were fully paid ordinary shares in the capital of the Company and rank equally in all respects with the Company's existing Shares on issue;

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• (c) the Creditor Shares were issued for nil cash consideration and at a deemed issue price of $0.017 per Share to service providers in lieu of accrued fees, none of whom is a related party of the Company;

• (d) no funds were raised from the issue of the Creditor Shares; and

• (e) a voting exclusion statement is included in the Notice.

9. Resolutions 6(a) and 6(b) – Ratification of Prior Issue of Placement Shares

9.1 Background

On 16 October 2019, the Company announced that it had received firm commitments for a placement of 20,833,333 Shares ( Placement Shares ) to a single leading Australian fund manager at $0.06 per Share to raise $1.25 million (before costs).

On 21 October 2019, the Company issued 19,162,469 Placement Shares within the Company's 15% annual limit permitted under Listing Rule 7.1 and 1,670,864 Placement Shares within the Company's additional 10% annual limit permitted under Listing Rule 7.1A, without the need for prior Shareholder approval.

Each of the resolutions which form part of Resolution 6 seeks Shareholder approval pursuant to Listing Rule 7.4 for the ratification of the Placement Shares.

Each of the resolutions which form part of Resolution 6 is a separate ordinary resolution.

The Board recommends that Shareholders vote in favour of each of the resolutions which form part of Resolution 6.

The Chair intends to exercise all available proxies in favour of each of the resolutions which form part of Resolution 6.

9.2 Listing Rules 7.1, 7.1A and 7.4

A summary of Listing Rules 7.1 and 7.4 is set out in Section 8.2 above.

Listing Rule 7.1A provides that an eligible entity may seek shareholder approval at its annual general meeting to allow it to issue Equity Securities comprising up to 10% of its issued capital. The Company obtained this approval at its annual general meeting held on 30 November 2018.

Listing Rule 7.4 also provides that where a company in general meeting ratifies the previous issue of securities made pursuant to Listing Rule 7.1A (and provided that the previous issue did not breach Listing Rule 7.1A) those securities will be deemed to have been made with Shareholder approval for the purpose of Listing Rule 7.1A.

The effect of each of the resolutions which form part of Resolution 6 will be to allow the Company to retain the flexibility to issue Equity Securities in the future up to 15% annual placement capacity set out in Listing Rule 7.1 and the additional 10% annual placement capacity set out in Listing Rule 7.1A without the requirement to obtain prior Shareholder approval.

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9.3 Specific information required by Listing Rule 7.5

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to the ratification of the issue of the Placement Shares:

• (a) the total number of Placement Shares issued was 20,833,333 Shares as follows:

• (i) 19,162,469 Placement Shares were issued under Listing Rule 7.1; and (ii) 1,670,864 Placement Shares were issued under Listing Rule 7.1A;

• (b) the Placement Shares were issued at an issue price of $0.06 per Share;

• (c) the Placement Shares issued are fully paid ordinary shares in the capital of the Company and rank equally in all respects with the Company's existing Shares on issue;

• (d) the Placement Shares were issued to a single leading Australian fund manager, who is not a related party of the Company;

• (e) the funds raised from the issue of the Placement Shares are intended to be used for advancement activities at the Cummins Range Rare Earths Project and general working capital; and

• (f)

• a voting exclusion statement is included in the Notice.

10. Resolution 7 – Approval of 10% Placement Facility

10.1 General

Listing Rule 7.1A enables an eligible entity to issue Equity Securities up to 10% of its issued share capital through placements over a 12 month period after the annual general meeting ( 10% Placement Facility ). The 10% Placement Facility is in addition to the Company's 15% annual placement capacity under Listing Rule 7.1.

Resolution 7 seeks Shareholder approval by way of a special resolution to provide the Company the ability to issue Equity Securities under the 10% Placement Facility during the 10% Placement Period (refer to Section 10.2(f) below). The number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 10.2(c) below).

Resolution 7 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

The Board recommends that Shareholders vote in favour of Resolution 7.

10.2 Listing Rule 7.1A

(a) Is the Company an eligible entity?

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less.

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The Company is an eligible entity as it is not included in the S&P/ASX 300 Index and has a market capitalisation of approximately $16.2 million, based on the closing price of Shares ($0.052 on 23 October 2019.

(b) What Equity Securities can be issued?

Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities of the company.

As at the date of the Notice, the Company has on issue one quoted class of Equity Securities; Shares.

(c)

How many Equity Securities can be issued?

Listing Rule 7.1A.2 provides that under the approved 10% Placement Facility, the Company may issue or agree to issue a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

Where:

• A is the number of Shares on issue 12 months before the date of issue or agreement:

• (A) plus the number of fully paid Shares issued in the 12 months under an exception in Listing Rule 7.2;

• (B) plus the number of partly paid shares that became fully paid in the 12 months;

• (C) plus the number of fully paid Shares issued in the 12 months with Shareholder approval under Listing Rule 7.1 and 7.4. This does not include any issue of Shares under the Company's 15% annual placement capacity without Shareholder approval; and

• (D) less the number of fully paid Shares cancelled in the 12 months.

Note that "A" has the same meaning in Listing Rule 7.1 when calculating the Company's 15% annual placement capacity.

• D is 10%.

• E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with Shareholder approval under Listing Rule 7.1 or 7.4.

(d) What is the interaction with Listing Rule 7.1?

The Company's ability to issue Equity Securities under Listing Rule 7.1A will be in addition to its 15% annual placement capacity under Listing Rule 7.1.

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(e) At what price can the Equity Securities be issued?

The issue price of Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the VWAP of Equity Securities in the same class calculated over the 15 Trading Days on which trades in that class were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed; or

• (ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued,

( Minimum Issue Price ).

(f) When can Equity Securities be issued?

Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A will be valid from the date of Meeting and will expire on the earlier to occur of:

• (i) the date that is 12 months after the date of the Meeting; or

• (ii) the date of Shareholder approval of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking),

( 10% Placement Period ).

• (g) What is the effect of Resolution 7?

The effect of Resolution 7 will be to allow the Directors to issue the Equity Securities under Listing Rule 7.1A during the 10% Placement Period without further Shareholder approval or using the Company's 15% annual placement capacity under Listing Rule 7.1.

10.3 Specific information required by Listing Rule 7.3A

Pursuant to and in accordance with Listing Rule 7.3A, the following information is provided in relation to the 10% Placement Facility:

• (a) Minimum issue price

If the Company issues Equity Securities for cash consideration under the 10% Placement Facility, then the issue price will be not less than the Minimum Issue Price.

If the Company issues Equity Securities for non-cash consideration under the 10% Placement Facility, then, in accordance with the Listing Rules, the Company will provide a valuation of the non-cash consideration to the market that demonstrates that the issue price of the Equity Securities complies with Listing Rule 7.1A.3.

(b) Risk of economic and voting dilution

If this Resolution is approved by Shareholders and the Company issues Equity Securities under the 10% Placement Facility, the existing Shareholders'

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economic and voting power in the Company will be diluted as shown in the below table (in the case of Options, only if the Options are converted into Shares).

The below table shows:

• (i) the dilution of existing Shareholders based on the current market price of Shares and the current number of Shares for "A" calculated in accordance with the formula in Listing Rule 7.1A.2 (see Section 10.2(c)) as at the date of the Notice ( Variable A );

• (ii) two examples where Variable A has increased, by 50% and 100%; and

• (iii) two examples of where the issue price of Shares has decreased by 50% and increased by 100% as against the current market price.

Share on issue Variable A in Listing Rule 7.1A.2		Dilution	Dilution
	Issue price per Share	$0.026 50% decrease in Issue Price	$0.052 Issue Price	$0.104 100% increase in Issue Price
311,749,618 Shares Current Variable A	10% Voting Dilution	31,174,962 Shares	31,174,962 Shares	31,174,962 Shares
	Funds raised	$810,549.01	$1,621,098.01	$3,242,196.03
467,624,427 Shares 50% increase in current Variable A	10% Voting Dilution	46,762,443 Shares	46,762,443 Shares	46,762,443 Shares
	Funds raised	$1,215,823.51	$2,431,647.02	$4,863,294.04
623,499,236 Shares 100% increase in	10% Voting Dilution	62,349,924 Shares	62,349,924 Shares	62,349,924 Shares
current Variable A	Funds raised	$1,621,098.01	$3,242,196.03	$6,484,392.05

Notes:

1. The table has been prepared on the following assumptions:

2. (a) the issue price is $0.052 being the closing price of the Shares on ASX on 23 October 2019, being the last day that the Company's Shares traded on the ASX before this Notice was printed;

3. (b) Variable A is 311,749,618, comprising all existing Shares on issue as at the date of this Meeting, assuming:

   • (i) the Company has not issued any other Shares in the 12 months prior to the Meeting that were not issued under an exception in Listing Rule 7.2 or with Shareholder approval under Listing Rule 7.1 and 7.4; and

   • (ii) a total of 5,629,412 Shares are ratified if Resolution 5 is passed at the Meeting;

   • (iii) a total of 20,833,333 Shares are ratified if Resolutions 6(a) and 6(b) are passed at the Meeting;

4. (c) the Company issues the maximum number of Equity Securities available under the 10% Placement Facility;

5. (d) no convertible securities (including any issued under the 10% Placement Facility) are exercised or converted into Shares before the date of the issue of the Equity Securities; and

6. (e) the issue of Equity Securities under the 10% Placement Facility consists only of Shares. If the issue of Equity Securities includes Options, it is

7. 19 -

assumed that those Options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders.

1. The number of Shares on issue (i.e. Variable A) may increase as a result of issues of Shares that do not require Shareholder approval (for example, a pro rata entitlements issue, scrip issued under a takeover offer or upon exercise of convertible securities) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders' meeting.

2. The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.

3. The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Facility, based on that Shareholder's holding at the date of the Meeting.

4. The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.

Shareholders should note that there is a risk that:

• (i) the market price for the Company's Equity Securities may be significantly lower on the date of the issue of the Equity Securities than on the date of the Meeting; and

• (ii) the Equity Securities may be issued at a price that is at a discount to the market price for the Company's Equity Securities on the issue date or the Equity Securities are issued as part of consideration for the acquisition of a new asset,

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

(c) Final date for issue

The Company will only issue the Equity Securities under the 10% Placement Facility during the 10% Placement Period.

Shareholder approval of the 10% Placement Facility will cease to be valid if Shareholders approve a transaction under Listing Rule 11.1.2 or 11.2.

(d) Purposes of issues under 10% Placement Facility

The Company may seek to issue Equity Securities under the 10% Placement Facility for the following purposes:

• (i) cash consideration, in which case the Company intends to use funds raised for continued investment in the Company's current assets, the acquisition of new resources assets or investments (including expenses associated with such an acquisition), and/or for general working capital; or

• (ii) non-cash consideration for the provision of services to the Company or the acquisition of new resources projects, assets and investments. In such circumstances the Company will provide a valuation of the non-cash consideration as required under Listing Rule 7.1A.3.

The Company will comply with the disclosure obligations under Listing Rules 7.1A.4 and 3.10.5A upon issue of any Equity Securities.

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(e) Allocation policy

The Company's allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:

• (i) the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate;

• (ii) the effect of the issue of the Equity Securities on the control of the Company;

• (iii) financial situation and solvency of the Company; and

• (iv) advice from corporate, financial and broking advisers (if applicable).

The allottees under the 10% Placement Facility have not been determined as at the date of the Notice but may include existing substantial Shareholders and/or new Shareholders who are not a related party or an associate of a related party of the Company.

Further, if the Company is successful in acquiring new projects, assets or investments, it is possible that the allottees under the 10% Placement Facility will be the vendors of the new projects, assets or investments.

(f)

Issues in the past 12 months

The Company has previously obtained Shareholder approval under Listing Rule 7.1A at its annual general meeting held on 30 November 2018.

In the 12 months preceding the date of the Meeting and as at the date of this Notice, the Company has issued 237,173,998 Equity Securities (on a postconsolidation basis). This represents 101% of the total number of Equity Securities (on a post-consolidation basis) on issue at the commencement of that 12 month period.

Details of each issue of Equity Securities by the Company during the 12 months preceding the date of the Meeting are set out in Schedule 3.

(g)

Voting exclusion statement

A voting exclusion statement is included in the Notice.

At the date of the Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder's votes will therefore be excluded under the voting exclusion in the Notice.

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11. Resolution 8 - Amendment of Constitution

11.1 General

Under section 136(2) of the Corporations Act, a company may modify or repeal its constitution or a provision of its constitution by special resolution of Shareholders.

Resolution 8 seeks the approval of Shareholders to modify the Company's Constitution by inserting a new definition and new Article 2.7 as set out in Section 11.2 below.

A copy of the amended constitution is available for review by Shareholders at the office of the Company. A copy of the amended constitution can also be sent to Shareholders upon request to the Company Secretary. Shareholders are invited to contact the Company if they have any queries or concerns.

Resolution 8 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

The Board recommends that Shareholders vote in favour of Resolution 8.

11.2 Proposed amendment

ASX is proposing to introduce a number of changes to the escrow regime in the Listing Rules in December 2019 to make aspects of the listing process and ongoing compliance with the Listing Rules more efficient for issuers and for ASX.

Amongst these, ASX is proposing to introduce a two-tier escrow regime where ASX can and will require certain more significant holders of restricted securities and their controllers to execute a formal escrow agreement in the form of Appendix 9A, as is currently the case. However, for less significant holdings, ASX will instead permit entities to rely on a provision in their constitution imposing appropriate escrow restrictions on the holder of restricted securities and to simply give a notice to the holder of restricted securities in the form of a new Appendix 9C advising them of those restrictions.

Accordingly, the Company is seeking Shareholder approval to amend the Constitution to meet the requirements of proposed amended Listing Rules 9 and 15.12 as follows:

Insert a new defined term in Article 1.1:

" Restricted Securities has the meaning given to it by the Listing Rules."

Insert new Article 2.7:

" 2.7 Restricted Securities

• (a) While the Company is on the official list of ASX, the Company must recognise and comply with the Listing Rules with respect to Restricted Securities.

• (b) Notwithstanding the generality of article 2.7(a):

• (i) a holder of Restricted Securities must not dispose of, or agree or offer to dispose of, the securities during the escrow period applicable to those securities except as permitted by the Listing Rules or ASX;

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• (ii) if the Restricted Securities are in the same class as quoted securities, the holder will be taken to have agreed in writing that the Restricted Securities are to be kept on the Company's issuer sponsored subregister and are to have a holding lock applied for the duration of the escrow period applicable to those securities;

• (iii) the Company will refuse to acknowledge any disposal (including, without limitation, to register any transfer) of Restricted Securities during the escrow period applicable to those securities except as permitted by the Listing Rules or ASX;

• (iv) a holder of Restricted Securities will not be entitled to participate in any return of capital on those securities during the escrow period applicable to those securities except as permitted by the Listing Rules or ASX; and

• (v) if a holder of Restricted Securities breaches a Restriction Deed or a provision of the Constitution restricting a disposal of those securities, the holder will not be entitled to any dividend or distribution, or to exercise any voting rights, in respect of those securities for so long as the breach continues."

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Schedule 1 – Definitions

In the Notice, words importing the singular include the plural and vice versa.

10% Placement Facility has the meaning given in Section 10.1.

10% Placement Period has the meaning given in Section 10.2(f).

20-Day VWAP has the meaning given in Schedule 2.

• $ or A$ means Australian Dollars.

Annual Report means the Directors' Report, the Financial Report, and Auditor's Report, in respect to the year ended 30 June 2019.

ASIC means the Australian Securities and Investments Commission.

Article means an article of the Constitution.

ASX means the ASX Limited ABN 98 008 624 691 and where the context permits the Australian Securities Exchange operated by ASX Limited.

Auditor's Report means the auditor's report on the Financial Report.

Board means the board of Directors of the Company.

Business Day means Monday to Friday inclusive, except New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the person appointed to chair the Meeting of the Company convened by the Notice.

Closely Related Party means:

• (a) a spouse or child of the member; or

• (b) has the meaning given in section 9 of the Corporations Act.

Company means Sagon Resources Limited ACN 105 578 756.

Constitution means the constitution of the Company as at the date of the Meeting.

Corporations Act means the Corporations Act 2001 (Cth).

Creditor Shares has the meaning given in Section 8.1.

Director means a director of the Company.

Director Options has the meaning given in Section 6.1.

Directors' Report means the annual directors' report prepared under Chapter 2M of the Corporations Act for the Company and its controlled entities.

Equity Security has the same meaning as in the Listing Rules.

Explanatory Memorandum means the explanatory memorandum which forms part of the Notice.

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

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

Listing Rules means the listing rules of ASX.

Meeting has the meaning given in the introductory paragraph of the Notice.

Option means an option to acquire a Share.

Notice means this notice of general meeting.

Placement Shares has the meaning given in Section 9.1.

Proxy Form means the proxy form attached to the Notice.

Remuneration Report means the remuneration report of the Company contained in the Directors' Report.

Resolution means a resolution referred to in the Notice.

Schedule means a schedule to the Notice.

Section means a section of the Explanatory Memorandum.

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

Shareholder means a shareholder of the Company.

VWAP means volume weighted average market price.

WST means Western Standard Time, being the time in Perth, Western Australia.

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Schedule 2 – Terms and Conditions of Director Options

1. Entitlement

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

2. Issue Price

The Options have a nil issue price.

3. Exercise Price

The exercise price of the Options will be 143% of the 5 day VWAP of the Company's Shares immediately before the date of issue of the Options ( Exercise Price ).

4. Expiry Date

Each Option will expire at 5.00pm (WST) on a date that is three years from the date of issue ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

5. Exercise Period

Upon vesting, the Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

6.

Vesting Conditions

• (a) The Vesting Conditions are as follows:

Tranche	Vesting Conditions
1	The 20-Day VWAP exceeding $0.10
2	The 20-Day VWAP exceeding $0.15
3	The 20-Day VWAP exceeding $0.20

• (b) For the purposes of this paragraph, 20-Day VWAP means the volume weighted average price of Shares traded on ASX during any 20 consecutive trading days on which Sales were recorded on ASX.

7. Notice of Exercise

Subject to paragraph 6, vested Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate or as otherwise agreed with the Company ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company ( Consideration ).

8. Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of:

• (a) the Notice of Exercise; and

• (b) the Consideration

• ( Exercise Date ).

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9. Timing of issue of Shares on exercise

Within 15 Business Days after the Exercise Date, the Company will:

• (a) allot and issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (b) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (c) if admitted to the official list of ASX at the time, subject to any restriction or escrow arrangements imposed by ASX, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under paragraph 9(b) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

10. Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

11. Quotation

The Options are unquoted. No application for quotation of the Options will be made by the Company unless otherwise determined by the Board in its sole discretion.

12. Reconstruction of capital

In the event of any reconstruction (including consolidation, subdivision, reduction or return of capital) of the issued capital of the Company prior to the expiry date of the Options, all rights of the Option holder will be varied in accordance with the Listing Rules.

13. Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options. However, the Company will give the holders of Options notice of the proposed issue prior to the date for determining entitlements to participate in any such issue.

14. Change in Exercise Price

There will be no change to the Exercise Price of the Options or the number of Shares over which the Options are exercisable in the event of the Company making a pro-rata issue of Shares or other securities to the holders of Shares in the Company (other than a bonus issue).

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15. Adjustment for bonus issues

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment):

• (a) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the holder would have received if the holder of the Options had exercised the Option before the record date for the bonus issue; and

• (b) no change will be made to the Exercise Price.

16.

Transferability

The Options are transferable only with the prior written consent of the Board, which consent may be withheld at its sole discretion.

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Schedule 3 – Securities issued in the previous 12 months

Details of each issue of Equity Securities by the Company during the 12 months preceding the date of the Meeting are set out in the table below. Note the number of Equity Securities has been stated on a post-consolidation basis.

Date of Issue	Number of Securities	Type of Security	Recipient of Security	Issue Price and details of any discount to Market Price1 (if applicable)	Consideration, Use of Funds and Current Value2 as at the date of this Notice
18/01/19	2,000,000	Performance Rights	Consultant to Company	Nil issue price (nil cash consideration)	Performance based remuneration for services to be provided by a consultant to the Company. These rights were subsequently cancelled on 13 June 2019. Current Value: Nil
5/08/19	620,000	Shares	Mr Shaun Hardcastle Mr Scott Patrizi Mr David Scoggin	Nil issue price (nil cash consideration)	Conversion of performance rights following successful achievement of milestone. Current Value: $32,240
27/09/19	60,000,000	Shares	Vendors of RareX Pty Ltd as approved at a Shareholder meeting held on 26 September 2019	Nil issue price (nil cash consideration).	As part of consideration for acquisition of RareX Pty Ltd. The shares were issued for a deemed issue price of $0.017 each. Current Value: $3,120,000
27/09/19	13,338,261	Shares	Element 25 Limited	Nil issue price (nil cash consideration)	As part of consideration for acquisition of Cummins Range Rare Earths Project. The shares were issued for a deemed issue price of $0.0375 each. Current Value: $693,590

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Date of Issue	Number of Securities	Type of Security	Recipient of Security	Issue Price and details of any discount to Market Price1 (if applicable)	Consideration, Use of Funds and Current Value2 as at the date of this Notice
27/09/19	68,823,540	Shares	Sophisticated and professional investors under a placement approved at a Shareholder meeting held on 26 September 2019	Issue price: $0.017 each Discount to Market Price: 164%	$1.17 million raised (before costs) of which nil has been spent to date. The funds will be primarily used to undertake work on the Company’s Cummins Range Rare Earths Project and for general working capital.
27/09/19	2,329,412	Shares	Mr Shaun Hardcastle and Mr Scott Patrizi as approved at a Shareholder meeting held on 26 September 2019	Nil issue price (nil cash consideration)	In lieu of accrued fees payable to non- executive directors, Messrs Hardcastle and Patrizi. The shares were issued at a deemed issue price of $0.017 each. Current Value: $121,129
27/09/19	5,629,412	Shares	Creditors of the Company	Nil issue price (nil cash consideration)	In lieu of accrued fees payable for services rendered to the Company. The shares were issued for a deemed issue price of $0.017 each. Current Value: $292,729
27/09/19	25,000,000	Unquoted Options3	Vendors of RareX Pty Ltd as approved at a Shareholder meeting held on 26 September 2019	$0.00001 each	As part of consideration for acquisition of RareX Pty Ltd. $250 was raised which has been expended on costs. Current Value: $890,000

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Date of Issue	Number of Securities	Type of Security	Recipient of Security	Issue Price and details of any discount to Market Price1 (if applicable)	Consideration, Use of Funds and Current Value2 as at the date of this Notice
27/09/19	15,000,000	Unquoted Options4	Mr Jeremy Robinson	$0.00001 each	As part of remuneration package for services provided to the Company as Executive Director. $150 was raised which has been expended on costs. Current Value: $234,329
11/10/19	18,000,000	Unquoted Options5	Consultant to Company	$0.00001 each	Performance-based remuneration for services provided to the Company in lieu of consultancy fees. $180 was raised which has been expended on costs. Current Value: $484,200
21/10/19	20,833,333	Shares	Single Leading Australian Fund Manager	Issue Price: $0.06 each Premium / Discount to Market Price: Nil	$1.25 million raised (before costs) of which nil has been spent to date. The funds will be primarily used to undertake work on the Company’s Cummins Range Rare Earths Project and for general working capital.

Notes:

1. "Market Price" means the closing price on ASX (excluding special crossings, overnight sales and exchange traded option exercises). For the purposes of this table the discount is calculated on the Market Price on the last trading day on which a sale was recorded prior to the date of issue of the relevant Equity Securities.

2. In respect of quoted Equity Securities the current value is based on the closing price of the Shares ($0.052) on ASX on 23 October 2019. The value of unquoted Equity Securities is measured using the Black & Scholes pricing model. Measurement inputs include the Share price on the measurement date, the exercise price, the term of the Equity Security, the impact of dilution, the expected volatility of the underlying Share (based on weighted average historic volatility adjusted for changes expected due to publicly available information), the expected dividend yield and the risk-free interest rate for the term of the Equity Security. No account is taken of any performance conditions included in the terms of the Equity Security other than market-based performance conditions (i.e. conditions linked to the price of Shares).

3. Unquoted Options exercisable at $0.025 each on or before 27 September 2021.

4. Unquoted Options exercisable at $0.025 each on or before 27 September 2022 vesting as follows:

• a. 5,000,000 vesting on 6 months employment and 20 day VWAP exceeding $0.05;

• b. 5,000,000 vesting on 6 months employment and 20 day VWAP exceeding $0.10; and

• c. 5,000,000 vesting on 6 months employment and 20 day VWAP exceeding $0.15.

5. Unquoted Options exercisable at $0.085 each on or before 11 October 2022.

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