REACH RESOURCES LIMITED — Proxy Solicitation & Information Statement 2004

Jul 28, 2004

ABN 79 097 982 235

NOTICE OF GENERAL MEETING

EXPLANATORY MEMORANDUM

PROXY FORM

Date of Meeting Thursday, 26 August 2004

Time of Meeting

11:30 am

Place of Meeting

The Constitutional Centre of Western Australia Courtyard Meeting Room Corner of Havelock Street and Parliament Place West Perth

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN that a General Meeting of the shareholders of Cervantes Seafood Limited ACN 097 982 235 ("Company" or "Cervantes") will be held at The Constitutional Centre of Western Australia, Courtyard Meeting Room, Corner of Havelock Street and Parliament Place, West Perth, Western Australia on Thursday 26 August 2004 at 11:30a.m., for the purpose of transacting the following business referred to in this Notice of General Meeting ("Notice").

An Explanatory Memorandum containing information in relation to each of the following Resolutions and a Proxy Form accompany this Notice.

1999 - Jacques Marian, martin a

ORDINARY BUSINESS

Resolution 1: Approval of the Allotment and Issue of Shares

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

"That, for the purposes of Listing Rule 7.1 of the Listing Rules of Australian Stock Exchange Limited and all other purposes, the Company be authorised to allot and issue to such persons that the directors in their absolute discretion think fit, provided that the directors and any of their associates are excluded from such an issue, up to 25,000,000 Shares at an issue price of 5 cents per Share, to raise up to $1,250,000 as more particularly described in the Explanatory Memorandum that forms part of this Notice."

Short Explanation: Under the Listing Rules, the Company may seek shareholder approval prior to a placement to allow it the flexibility to make future issues of securities above the threshold of 15% of its total ordinary securities in any 12-month period. Please refer to the Explanatory Statement for details.

Voting Exclusion: For the purposes of ASX Listing Rule 7.3, the Company will disregard any votes cast on this resolution by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a shareholder, if the resolution is passed, and any associates of those persons. However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the $\langle a \rangle$ proxy form; or
• $(b)$ it is cast by a person chairing the meeting 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.

Resolution 2: Approval of Non-Executive Directors Fees

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

"That, for the purposes of Listing Rule 10.17 of the Listing Rules of Australian Stock Exchange Limited, Article 13.7 of the Company's Constitution and all other purposes, the maximum aggregate directors' fees payable to non-executive directors of the Company be increased to $150,000 per annum to be divided among themselves as they shall from time to time agree."

Under Listing Rule 10.17, the Company must seek shareholder approval prior to Short Explanation: increasing the total amount of directors' fees payable to non-executive directors. Please refer to the Explanatory Statement for details.

Resolution 2: Approval of Non-Executive Directors Fees (cont'd)

Voting Exclusion: For the purposes of ASX Listing Rule 10.17, the Company will disregard any votes cast on this resolution by a director of the entity and any of their associates. However, the Company need not disregard a vote if:

• $\langle a \rangle$ it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• $\langle b \rangle$ it is cast by a person chairing the meeting 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.

Resolution 3: Approval of issue of Shares to Daylien Pty Ltd as trustee for The W.B. & J.E. McSharer Superannuation Fund

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

"That, for the purposes of Listing Rule 10.11 of the Listing Rules of Australian Stock Exchange Limited, Chapter 2E of the Corporations Act and all other purposes, Daylien Pty Ltd as trustee for The W.B. & J.E. McSharer Superannuation Fund be allotted and issued 50,000 Shares in recognition of the long-standing effort and commitment provided to the Company as part of the Company's fishing fleet."

Short Explanation: Under the Listing Rules and the Corporations Act, the Company must seek shareholder approval for the issue of securities to a related party. Please refer to the Explanatory Statement for details.

Voting Exclusion: For the purposes of Chapter 2E of the Corporations Act and Listing Rule 10.11, the Company will disregard any votes cast on this resolution by Mr McSharer and any associate of Mr McSharer. However, the Company need not disregard a vote if it is cast by a person as a proxy appointed in writing that specifies how the proxy is to vote on the proposed resolution and it is not cast on behalf of Mr McSharer.

Resolution 4: Appointment of Auditor

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

"That, for the purposes of section 327 of the Corporations Act and all other purposes, the firm Hall Chadwick, of Level 41, Bank West Tower, 108 St George's Terrace, Perth, Western Australia, 6000 (having been nominated by a member of the Company and consented in writing to act in the capacity of auditor) be appointed as auditor of the Company with immediate effect following the resignation of Stanton Partners of Level 1, 1 Havelock Street, West Perth, Western Australia, 6005, in accordance with section 329(8) of the Corporations Act."

Short Explanation: Pursuant to section 329(5) of the Corporations Act, an auditor of a company may, by notice in writing given to the company, resign as auditor of the company. The consent of the ASIC to the resignation must be obtained. Pursuant to section 328(1) of the Corporations Act, a member of the Company has nominated Hall Chadwick to be the Company's auditor. A copy of the nomination letter is attached to this Notice.

OTHER BUSINESS

To deal with any other business which may be brought forward in accordance with the Constitution and the Corporations Act 2001 (Cth).

BY ORDER OF THE BOARD

Anthony Ho Company Secretary

Dated: 29 July 2004

PROXIES

• Votes at the general meeting may be given personally or by proxy, attorney or representative.
• A shareholder entitled to attend and vote at the above meeting may appoint not more than two proxies to attend and vote at this meeting. Where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the shareholders voting rights.
• A proxy may but need not be a shareholder of the Company.
• If you have appointed a company as your proxy and a representative of that company wishes to $\bullet$ attend the meeting, the representative will be required to provide the Company with the appropriate written documentation evidencing that the person is a representative of the proxy. Should you require it, the Company will provide you with a corporate representative form free of charge. Please contact the Company Secretary if you require a corporate representative form.
• The instrument appointing a proxy or representative must be in writing, executed by the appointor or his/her attorney duly authorised in writing or, if such appointer is a corporation, either under seal or under hand of an officer or his/her attorney duly authorised.
• The instrument of proxy (and the power of attorney or other authority, if any, under which it is signed) must be lodged by person, post, courier or facsimile and reach the Registered office of the Company at least 48 hours prior to the meeting. For the convenience of shareholders a Proxy Form is enclosed.

For the purposes of section 1074E(2) of the Corporations Act 2001 and regulation 7.11.37 of the Corporations Regulations 2001, the Company determines that members holding ordinary shares at the close of business on 24 August 2004 will be entitled to attend and vote at the General Meeting.

EXPLANATORY MEMORANDUM

This Explanatory Memorandum is intended to provide shareholders with sufficient information to assess the merits of the resolutions contained in the preceding Notice of General Meeting of the Company.

The Directors recommend shareholders read this Explanatory Memorandum in full before making any decision in relation to the resolutions.

The following information should be noted in respect of the various matters contained in the accompanying Notice of Meeting:

RESOLUTION 1 - APPROVAL OF ALLOTMENT AND ISSUE OF UP TO 25,000,000 SHARES

Subject to certain exceptions, ASX Listing Rule 7.1 prohibits a company from issuing securities without shareholder approval in any 12 month period where the number of securities issued would exceed 15% of the number of fully paid ordinary securities in the company 12 months prior to the proposed issue.

The issue contemplated by Resolution 2 will cause this limit to be exceeded, and accordingly shareholders' approval is being sought under that Rule.

Funds raised will be used for working capital and for the assessment and possible investment in new opportunities.

Listing rule 7.3 sets out the information required to be disclosed to shareholders when seeking this approval. The information set out below is intended to satisfy this requirement:

• The maximum number of securities to be issued is 25,000,000 Shares. $(a)$
• $(b)$ The Shares will be issued no later than 3 months after the date of the meeting. Allotment will occur progressively.
• The issue price of the Shares to be issued under Resolution 2 is 5 cents per Share. $(c)$
• $(d)$ The Shares will be issued and allotted to such persons that the Directors in their absolute discretion think fit, provided that the Directors and any of their associates are excluded from the issue.
• The Shares will rank equally in all respects with the existing Shares. $(e)$
• The Shares will be issued to raise a maximum of $1,250,000 before costs, and will be applied to:- $(f)$ assessment and possible investment in new and complementary opportunities,
  • retirement of existing debt; and
  • general working capital.

RESOLUTION 2 - APPROVAL OF NON-EXECUTIVE DIRECTORS FEES

Article 13.7 of the Company's constitution allows payment to directors, out of the funds of the Company (as remuneration for ordinary services as directors), of such sum as may be determined by the Company in general meeting, ASX Listing Rule 10.17 prohibits a company increasing the amount of fees it pays to its directors unless the increase is approved by shareholders. Resolution 2 proposes an increase in the level of directors' fees and seeks such shareholder approval. It is proposed that the total amount payable by the Company each year to directors be increased to an aggregate amount of $150,000 (which represents an increase of $50,000 over the maximum aggregate amount that may be paid at present). Although the Company's constitution allows the directors to divide this amount between themselves in such manner and proportion as they may from time to time agree, it is currently contemplated that such amount be divided so that the Chairman receives $45,000 per annum and each non-executive director receives $30,000 per annum.

It should be noted that the Company has an increased number of non-executive directors being paid fees since the limit was first established. Whilst the proposed aggregate amount will not be utilised immediately, it allows some scope for additions to the Board, should the Board wish to appoint an additional non-executive director in the current financial year.

It is not proposed that executive directors receive any fees for acting as a director.

RESOLUTION 3 - APPROVAL OF ISSUE OF SHARES TO DAYLIEN PTY LTD AS TRUSTEE FOR THE W.B. & J.E. MCSHARER SUPERANNUATION FUND

Resolution 3 relates to the proposed issue of ordinary fully paid shares to Daylien Pty Ltd as trustee for the W.B. & J.E. McSharer Superannuation Fund, a company associated with Mr William McSharer.

On 22 March 2004, the Company announced an allotment of shares to its loyal fleet of fishing boats for the long-standing effort and commitment to the Company over an extended period of time. The issue involved the allotment of 50,000 Shares to each of the nineteen fishing boats that have continued to support the Company over that period. One of the fishing boats is owned by interests associated with Mr McSharer, and as such is considered to be a related party of the Company.

ASX Listing Rule 10.11 prohibits a Company from issuing any securities to related parties without obtaining prior shareholder approval (subject to certain exceptions which do not apply in the present instance).

ASX Listing Rule 10.13 requires the following information to be given to shareholders:

• $(a)$ The related party to whom the Shares are to be issued is Daylien Pty Ltd as trustee for The W.B. & J.E. McSharer Superannuation Fund (Daylien), a company associated with Mr William McSharer, a Director.
• $(b)$ The number of securities to be issued is 50,000 Shares.
• $(c)$ The Shares will be issued as soon as practicable after the date of this meeting and in any event within 1 month.
• The Shares are to be issued for free and no funds will be raised through the issue. $(d)$

Chapter 2E of the Corporations Act

Chapter 2E of the Corporations Act regulates the provision of financial benefits to related parties by a public company. Section 208 of the Corporations Act prohibits a public company giving a financial benefit to a related party unless one of a number of exceptions applies.

A "financial benefit" is defined in the Corporations Act in broad terms and includes a public company issuing securities.

For the purposes of Chapter 2E of the Corporations Act, Daylien is a related party of the Company by virtue of the fact that Mr McSharer is a Director of Daylien.

Section 208 of the Corporations Act provides that for a public company to give a financial benefit to a related party of that company, the public company must:

• obtain the approval of members in the manner set out in Sections 217 to 227 of the Corporations $(a)$ Act: and
• $(b)$ give the financial benefit within 15 months after the approval.

Accordingly, the Company is seeking shareholder approval for the purposes of Chapter 2E of the Corporations Act in respect of the Shares to be issued to Daylien.

The following information is provided to satisfy the requirements of Section 219 of the Corporations Act:

• $(a)$ the proposed financial benefit to be given to Davlien is the allotment and issue of 50,000 Shares;

• $(b)$ the Shares will rank pari passu with the existing Shares on issue;

• $(c)$ in the 12 months prior to the date of this Notice, the highest and lowest closing trading price of the Shares on ASX was 11.5 cents on 3 September 2003 and 2.8 cents on 24 June 2004. The latest closing Share price on ASX prior to the date of this Notice was 3.4 cents on 26 July 2004;

• Daylien has a relevant interest in 246,250 of the Company's Shares; $(d)$

• $(e)$ if shareholders approve the issue of Shares to Daylien, the effect will be to dilute the shareholding of existing shareholders. This will increase the number of Shares on issue from 121,111,112 to 121,161,112 (prior to the Share issues the subject of Resolutions 1 and 3 with the effect that the shareholding of existing shareholders will be diluted by approximately 0.04% (based on the Company's undiluted capital structure at the date of this Notice);

• $(f)$ the Shares will be issued for free; and

• the Directors are not aware of any other information that would be reasonably required by $(g)$ Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 3.

Director's recommendation

The following Directors wish to make a recommendation about the proposed Resolution 3:

Directors	Recommendation
Barry MacKinnonChen HaoRobert Grover	The Directors recommend shareholders vote in favour of Resolution 3,as the Shares are part of the Company's recognition of its fishing fleet,of whom Mr McSharer has been a part.
William McSharer	Abstained from consideration and voting in respect of thisrecommendation by the Board of Directors.

All of the Directors were available to consider the proposed resolution, other than Mr McSharer who was available but declined to make a recommendation due to his material personal interest. None of the Directors who voted in respect of the above recommendation have an interest in the outcome of the Resolution.

RESOLUTION 4 - APPOINTMENT OF AUDITOR

The recommendation to change the auditor of the Company is as a result of a change of major shareholding in the Company. Hall Chadwick of Level 41, Bank West Tower, 108 St George's Terrace, Perth, Western Australia, 6000 have been recommended to be appointed as auditor of the Company.

As a result of this recommendation, Stanton Partners, of Level 1, 1 Havelock Street, West Perth, Western Australia, 6005, has, by notice to ASIC, applied for and received ASIC's consent to its resignation as auditor of the Company, with effect from 14 July 2004, being the date that ASIC provided its consent and gave notice to the Company in those terms.

To implement these recommendations, it is proposed that Hall Chadwick of Level 41, Bank West Tower, 108 St George's Terrace, Perth, Western Australia, 6000 be appointed as auditor of the Company.

In accordance with section 328(1) of the Corporations Act, Chunagon Co., Limited, a member of the Company, has nominated Hall Chadwick to be the Company's auditor. Under section 328(3) of the Corporations Act, a copy of this nomination:

• (a) has been sent to Hall Chadwick;
• (b) has been sent to Stanton Partners; and
• (c) is attached to this Notice.

GLOSSARY

"ASIC" means the Australian Securities and Investments Commission;

"ASX" means Australian Stock Exchange Limited;

"Company" means Cervantes Seafood Limited ACN 097 982 235;

"Corporations Act" means Corporations Act 2001 (Cth);

"Director" means a director of the Company;

"Listing Rules" means the Listing Rules of the ASX;

"Notice" means the notice of meeting accompanying this Explanatory Memorandum;

"Shares" means fully paid ordinary shares in the capital of the Company;

"WST" means Western Standard Time.

CHUNAGON CO., LTD 5-17, HONMACHL NISHINOMIYA, HYOGO PHONE:0798(38)3773 CO798(35)6458

12 / May / 2004

The Company Secretary Cervantes Seafood Limited 219 York Street SUBIACO WA 6008

Dear Sir or Madam

$RE:$ NOMINATION OF AUDITOR

This company is a member of Cervantes Seafood Limited ACN 097 982 285 (the "Company").

For the purposes of section 328(1) of the Corporation Act 2001 (Cth), Chunagon Co Limited nominates Hall Chadwick of Level 41, Bankwest Tower, 108 St George's Terrace, Perth, Western Australia, 6000 to be appointed as auditor of the Company at . the General Meeting of the Company to be held in July or August 2004.

Yours sincerely

.MASAAKI TANI

Director CHUNAGON CO, LIMITED

PROXY FORM

(Name of member/s)

of

(Address of member/s)

Appointment of Proxy

I/We being a member/s of Cervantes Seafood Limited and entitled to attend and vote hereby appoint

	the Chairman ofthe Meeting(mark with an $'X'$ )		If you are appointing someone other thanthe Chairman of the Meeting, write herethe name of the company or person youare appointing
--	---------------------------------------------------------	--	------------------------------------------------------------------------------------------------------------------------------------------------

or, failing a company or person named, or if no company or person is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if not directions have been given, as the proxy sees fit) at the General Meeting of the Cervantes Seafood Limited to be held at The Constitutional Centre of Western Australia, Courtyard Meeting Room, Corner of Havelock Street and Parliament Place, West Perth, Western Australia on Thursday, 26 August 2004 commencing at 11:30 a.m. and at any adjournment of that meeting.

IMPORTANT: FOR ITEMS 1 TO 4 BELOW

If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, and you have not directed your proxy how to vote on Items 1 to 4 below, please place a mark in this box. By marking this box you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of those items and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on Items 1 to 4 and your votes will not be counted in computing the required majority if a poll is called on these items. The Chairman of the Meeting intends to vote undirected proxies in favour of each of these items.

Voting directions to your proxy - please mark $\boxtimes$ to indicate your directions

		FOR	AGAINST	ABSTAIN*
1.	Approval of the Allotment and Issue of Shares
	Approval of Non-Executive Directors Fees
З.	Approval of the Issue of Shares to Daylien Pty Ltd atf The W.B. andJ.E. McSharer Superannuation Fund
4.	Appointment of Auditor

In addition to the intention advised above, the Chairman of the Meeting intends to vote undirected proxies in favour of each of the other items of business.

* If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

PLEASE SIGN HERE

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Securityholder 1	Securityholder 2		Securityholder 3
Individual/Sole Director andSole Company Secretary	Director		Director/ Company Secretary
Contact Name	Contact Daytime Telephone		Date
Appointing a second Proxy
I/We wish to appoint a second proxy
Mark with an 'X' ifyou wish to appoint asecond proxy	$\frac{1}{2}$AND	ΟR	State the percentage of yourvoting rights or the number ofsecurities for this Proxy Form.

HOW TO COMPLETE THE PROXY FORM

$11$ Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the company or person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that company or person. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company.

If you have appointed a company as your proxy and a representative of that company wishes to attend the meeting, the representative will be required to provide the Company with the appropriate written documentation evidencing that the person is a representative of the proxy. Should you require it, the Company will provide you with a corporate representative form free of charge. Please contact the Company Secretary if you require a corporate representative form.

$\overline{2}$ . Votes on Items of Business

You may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

3. Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company's share registry or you may copy this form.

To appoint a second proxy you must:

• $(a)$ indicate that you wish to appoint a second proxy by marking the box.
• on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of $(b)$ securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.
• $(c)$ return both forms together in the same envelope.

4. Signing Instructions

You must sign this form as follows in the spaces provided:

Individual:	where the holding is in one name, the holder must sign.
Joint Holding:	where the holding is in more than one name, all of the security holders should sign.
Power of Attomey:	to sign under Power of Attorney, you must have already lodged this document with the registry. Ifyou have not previously lodged this document for notation, please attach a certified photocopy ofthe Power of Attorney to this form when you return it.
Companies:	where the company has a Sole Director who is also the Sole Company Secretary, this form must besigned by that person. If the company (pursuant to section 204A of the Corporations Act 2001) doesnot have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must besigned by a Director jointly with either another Director or a Company Secretary. Please indicate theoffice held by signing in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry.

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at the address given below no later than 48 hours before the commencement of the meeting at 11:30 a.m. on Thursday, 26 August 2004. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Documents may be lodged by posting, delivery or facsimile to Cervantes Seafood Limited:-

219 York Street Subiaco WA 6008 Fax: (61-8) 9382 1322