RAREX LIMITED — Capital/Financing Update 2019

Jan 17, 2019

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

CLANCY EXPLORATION LIMITED

ABN

65 105 578 756

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

Performance Rights

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

(a) 20,000,000 (b) 30,000,000

Morocco

(a) Performance rights vesting on completion of formal transfer of legal title to the Bou Amzil Extension to the Company (b) Performance rights vesting on receipt of all requisite government approvals for a drill program and commencement of that drill

program on the Company's existing interests in

+ See chapter 19 for defined terms.

They are not eligible to participate in any dividendsIf the additional +securities dopayable and do not carry any voting rights.not rank equally, please state:•the date from which they do•the extent to which theyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest payment•the extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment
5Issue price or considerationNil
6Purpose of the issueIncentive securities(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)
Is the entity an +eligible entity6aYesthathasobtainedsecurityholder approval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, and
comply with section 6i
6bThe date the security holder30 November 2018resolution under rule 7.1A waspassed
Number of +securities issued6c50,000,000without security holder approvalunder rule 7.1
Number of +securities issued6dNilwith security holder approvalunder rule 7.1A
Number of +securities issued6eNilwith security holder approvalunderrule7.3,oranotherspecific security holder approval(specify date of meeting)

• 6f Number of +securities issued under an exception in rule 7.2
• 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.
• 6h If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements
• 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 rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)

Number	+Class
3,504,387,675	ORD
1,862,866,179	Optionstoacquireordinaryshares,at 0.4cents each expiring 9 May2019

N/A

Nil

N/A

See Annexure 1

18 January 2019

		Number	+Class
9	Number and +class of all+securities not quoted onASX(includingthe	120,000,000	Options to acquire ordinary shares, at$0.004 each expiring 31 May 2020
	+securities in section 2 ifapplicable)	20,000,000	Options to acquire ordinary shares, at$0.007 each expiring 30 November 2020
		30,000,000	Options to acquire ordinary shares, at$0.0065 each expiring 30 December 2020
		10,000,000	Optionsexercisableat$0.005eachexpiring 24 October 2020
		115,500,000	Performance rights vesting on 3 August2019, provided that the holder does notresign from the Board before the vestingdate
		115,500,000	Performance rights vesting 12 monthsafter the date that the 10 day VWAP forCLY shares on the ASX is $0.01 or higherwithin 3 years from the date of issue,provided that the holder does not resignfrom the Board before the vesting date
		115,500,000	Performance rights vesting 12 monthsafter the date that the 10 day VWAP forCLY shares on the ASX is $0.015 orhigher within 3 years from the date ofissue, provided that the holder does notresign from the Board before the vestingdate
		115,500,000	Performance rights vesting 12 monthsafter the date that the 10 day VWAP forCLY shares on the ASX is $0.02 or higherwithin 3 years from the date of issue,provided that the holder does not resignfrom the Board before the vesting date
		20,000,000	Performance rights vesting on completionof formal transfer of legal title to the BouAmzil Extension to the Company
		30,000,000	Performance rights vesting on receipt ofall requisite government approvals for adrill program and commencement of thatdrill program on the Company's existinginterests in Morocco

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

The Company currently has no dividend policy.

Part 2 - Pro rata issue

11	Is security holder approval required?	N/A
12	Is the issue renounceable or non-renounceable?	N/A
13	Ratio in which the +securities will be offered	N/A
14	+Class of +securities to which the offer relates	N/A
15	+Record date to determine entitlements	N/A
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	N/A
17	Policy for deciding entitlements in relation tofractions	N/A
18	Names of countries in which the entity hassecurity holders who will not be sent new offerdocuments	N/A
	Note: Security holders must be told how their entitlements are to bedealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of acceptances orrenunciations	N/A
20	Names of any underwriters	N/A
21	Amount of any underwriting fee or commission	N/A
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to the broker to theissue	N/A
24	Amount of any handling fee payable to brokerswho lodge acceptances or renunciations onbehalf of security holders	N/A
25	If the issue is contingent on security holders'approval, the date of the meeting	N/A
26	Date entitlement and acceptance form and offerdocuments will be sent to persons entitled	N/A

+ See chapter 19 for defined terms.

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

N/A

• 28 Date rights trading will begin (if applicable) N/A
• 29 Date rights trading will end (if applicable) N/A
• 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?

N/A

N/A

32 How do security holders dispose of their entitlements (except by sale through a broker)?

33 +Issue date N/A

N/A

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)

Additional securities forming a new class of 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 the additional +securities, and the number and percentage of additional +securities held by those holders
• 36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000

1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over

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

Entities that have ticked box 34(b)

38	Number of +securities for which+quotation is sought	N/A
39	+Class of +securities for whichquotation is sought	N/A
40	Do the +securities rank equally inall respects from the +issue datewith an existing +class of quoted+securities?	N/A
	If the additional +securities do notrank equally, please state:•the date from which they do•theextenttowhichtheyparticipateforthenextdividend, (in the case of atrust, distribution) or interestpayment•the extent to which they donot rank equally, other than inrelation to the next dividend,distributionorinterestpayment
41	Reason for request for quotation	N/A
	now
	Example: In the case of restricted securities, endof restriction period
	(if issued upon conversionofanother +security, clearly identifythat other +security)
		Number	+Class
42	+classNumberandofall+securitiesquotedonASX(including the +securities in clause38)

+ See chapter 19 for defined terms.

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 +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: 18 January 2019

Company secretary

Print name: Oonagh Malone

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 capital
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
Insert number of fully paid +ordinarysecurities on issue 12 months before the+issue date or date of agreement to issue	2,984,385,575
Add the following:	140,000,000 (21 March 2018)
Number of fully paid +ordinary securities•	250,000,000 (20 August 2018)
issued in that 12 month period under anexception in rule 7.2	130,000,000 (24 October 2018)
Number of fully paid +ordinary securities•issued in that 12 month period withshareholder approval
Number of partly paid +ordinary•securities that became fully paid in that12 month period
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	Nil
"A"	3,504,385,575

+ 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	525,657,836
Step 3: Calculate "C", the amount of placement capacity under rule7.1 that has already been used
Insert number of +equity securities issued	100 (21 March 2018)
or agreed to be issued in that 12 monthperiod not counting those issued:	1,000 (20 August 2018)
•Under an exception in rule 7.2	1,000 (24 October 2018)
•Under rule 7.1A	50,000,000 (18 January 2019)
•With security holder approval under rule7.1 or rule 7.4
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"	50,002,100
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15	525,657,836
Note: number must be same as shown inStep 2
Subtract "C"	50,002,100
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	475,655,736
	[Note: this is the remaining placementcapacity under rule 7.1]

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"	3,504,385,575
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	350,438,558
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 7.1ANotes:•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	Nil
"E"	Nil

+ 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	350,438,558
Note: number must be same as shown inStep 2
Subtract "E"	Nil
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	350,438,558
	Note: this is the remaining placement

capacity under rule 7.1A