REACH RESOURCES LIMITED — Proxy Solicitation & Information Statement 2017

May 28, 2017

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CERVANTES CORPORATION LIMITED ACN 097 982 235

NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 10:00am (WST) DATE : 27 June 2017 PLACE : Royal Perth Golf Club, Labouchere Road, South Perth, WA 6151

DRESS POLICY: Royal Perth Golf Club requires all members, guests and visitors to be dressed in smart casual. Denim, t-shirts, thongs and runners are not permitted . Men’s shirts must be tucked in. These dress standards also apply to service providers. Admittance to the venue will be refused to those not adhering to the dress policy.

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 8 6436 2300.

CONTENTS
Chairman’s Letter	3
Agenda (setting out the proposed Resolutions)	4
Explanatory Statement (explaining the proposed Resolutions)	8
Glossary	21
Schedule 1 (Terms and Conditions of Incentive Options)	23
Schedule 2 (Valuation of Related Party Securities)	25
Proxy Form	Enclosed
IMPORTANT INFORMATIO N

Place of Meeting

Notice is given that the Meeting will be held at:

Royal Perth Golf Club Labouchere Road South Perth WA 6151

Royal Perth Golf Club requires all members, guests and visitors to be dressed in smart casual. Denim, t-shirts, thongs and runners are not permitted . Men’s shirts must be tucked in. These dress standards also apply to service providers. Admittance to the venue will be refused to those not adhering to the dress policy.

Your vote is important

The business of the Meeting affects your shareholding and your vote is important.

Voting eligibility

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 Shareholders at 10:00am (WST) on 25 June 2017.

Voting in person

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

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

• each Shareholder has a right to appoint a proxy;

• the proxy need not be a Shareholder of the Company; and

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• a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes are set out below.

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 :

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

• 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; and

• 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 (ie as directed); and

• 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 (ie as directed).

Transfer of non-chair proxy to chair in certain circumstances

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

• 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; and

• the appointed proxy is not the chair of the meeting; and

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

• either of the following applies:

• ➢ 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.

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CHAIRMAN’S LETTER

Dear Shareholder,

We are extremely pleased to be able to present to you for your consideration the opportunity to vote on acquiring a group of permits in the Payne’s Find area of Western Australia for your company, as an add on project to our other assets, as it transitions to an active gold explorer and hopefully a gold producer in the near future.

The Payne’s Find Project comprises some 18 permits within the well-known Payne’s Find Gold Field, which effectively controls the heart of this Gold Field. The area has produced high grade gold results over a considerable period of years, albeit on a fragmented basis by way of ownership and exploration.

Cervantes is, where possible, actively acquiring other permits within the area to add to the portfolio. Ideally putting together a comprehensive area of both prospecting licences and mining permits will ensure maximum benefits from our anticipated exploration programs in due course.

The major benefits of this project are that it is only 4.5 hours’ drive from Perth on a bitumen road, in a safe and supporting mining and exploration province of Australia, adjoining a roadhouse for accommodation and services for contractors and employees, an air strip is nearby, previous exploration and drill results provide us with a head start, and the permits are not subject to native title issues.

Cervantes has a number of permits for gold in Meekatharra, including an Exploration Licence immediately adjoining Thundelarra Ltd in Garden Gully, who has been very actively exploring their ground in recent months. We also control a group of 6 adjoining prospecting licences in Meekatharra which includes a well-known mine called the Albury Heath. The Albury Heath has recently had its mineral resources upgraded to JORC 2012 of some 27,000 ounces of gold as per our announcement of the 7[th] February 2017[1] . Mills are within economical distances for each of our Meekatharra projects.

We also have a strategically located exploration licence in the Fraser Range immediately adjoining Mount Ridley Ltd, who have also been actively exploring for Nickel and copper.

Your board has for a considerable number of years accepted very low directors fees for the responsibilities and liabilities attached to the position of being Directors of a public listed company. New York Securities Pty Ltd has previously introduced numerous exploration assets free of fees and continues to provide serviced offices including book keeping services at a very low cost. This has all been for the benefit of the company and shareholders as we continue to develop the company.

The incentive options proposed to be issued will be taxable in the hands of the directors in the year of receipt regardless of value, will be unlisted, and will require the directors to pay some $140,000 to exercise them into fully paid shares, providing the company with additional cash for working capital.

I fully recommend and am seeking your support to vote in favour of all the resolutions put to you at this meeting, so we can expedite the acquisition of the Payne’s Find project, and exploration of all of our valuable assets.

Subject to your positive vote, we expect to provide you as shareholders with a regular news flow of positive news over the next 6 to 12 months, as we develop all of our projects.

Collin Vost Managing Director

1 The Company is not aware of any new information or data that materially affects the mineral resource information in the ASX announcement and all material assumptions and technical parameters underpinning the mineral resource estimate continue to apply and have not materially changed.

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AGENDA

1. RESOLUTION 1 – ISSUE OF SHARES TO EUROPEAN LITHIUM LIMITED

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

“That, subject to the passing of Resolutions 2 – 6 (inclusive), for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 25,000,000 Shares to European Lithium Limited or its nominee on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if 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, it is cast by the 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.

2. RESOLUTION 2 – ISSUE OF SHARES TO GREG BARNES

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

“That, subject to the passing of Resolution 1 and Settlement of the Transaction, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue 1,000,000 Shares to Greg Barnes or his nominee on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if 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, it is cast by the 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.

3. RESOLUTION 3 – ISSUE OF SHARES TO RELATED PARTY – NEW YORK SECURITIES PTY LTD

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

“That, subject to the passing of Resolution 1 and Settlement of the Transaction, for the purposes of ASX Listing Rule 10.11 and Sections 195(4) and 208 of the Corporations Act and for all other purposes, approval is given for the Company to issue 5,000,000 Shares to New York Securities Pty Ltd or its nominee on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by New York Securities Pty Ltd (or its nominee/s) and any of their associates ( Resolution 3 Excluded Party ). However, the Company need not disregard a vote if 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, provided the Chair is not a Resolution 3 Excluded Party, it is cast by the 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.

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Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• (a) the proxy is either:

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

• (ii) a Closely Related Party of such a member; and

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

Provided the Chair is not a Resolution 3 Excluded Party, the above prohibition does not apply if:

(c) the proxy is the Chair; and

(d) 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.

4. RESOLUTION 4 – ISSUE OF SHARES AND OPTIONS TO RELATED PARTY – JUSTIN VOST

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

“That, subject to the passing of Resolution 1 and Settlement of the Transaction, for the purposes of ASX Listing Rule 10.11 and Sections 195(4) and 208 of the Corporations Act and for all other purposes, approval is given for the Company to issue 2,000,000 Shares and 2,000,000 Options to Justin Vost or his nominee on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Justin Vost (or his nominee/s) and any of their associates ( Resolution 4 Excluded Party ). However, the Company need not disregard a vote if 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, provided the Chair is not a Resolution 4 Excluded Party, it is cast by the 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.

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• (a) the proxy is either:

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

• (ii) a Closely Related Party of such a member; and

• (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 4 Excluded Party, the above prohibition does not apply if: (c) the proxy is the Chair; and

(d) 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 5 – ISSUE OF SHARES AND OPTIONS TO RELATED PARTY – TIMOTHY CLARK

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

“That, subject to the passing of Resolution 1 and Settlement of the Transaction, for the purposes of ASX Listing Rule 10.11 and Sections 195(4) and 208 of the Corporations Act and for all other purposes, approval is given for the Company to issue 2,000,000 Shares and 2,000,000 Options to Timothy Clark or his nominee on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Timothy Clark (or his nominee/s) and any of their associates ( Resolution 5 Excluded Party ). However, the Company need not disregard a vote if 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, provided the Chair is not a Resolution 5 Excluded Party, it is cast by the 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.

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Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• (a) the proxy is either:

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

• (ii) a Closely Related Party of such a member; and

(b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 5 Excluded Party, the above prohibition does not apply if:

• (c) the proxy is the Chair; and

(d) 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.

6. RESOLUTION 6 – ISSUE OF OPTIONS TO RELATED PARTY – COLLIN VOST

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

“That, subject to the passing of Resolution 1 and Settlement of the Transaction, for the purposes of ASX Listing Rule 10.11 and Sections 195(4) and 208 of the Corporations Act and for all other purposes, approval is given for the Company to issue 10,000,000 Options to Collin Vost or his nominee on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Collin Vost (or his nominee/s) and any of their associates ( Resolution 6 Excluded Party ). However, the Company need not disregard a vote if 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, provided the Chair is not a Resolution 6 Excluded Party, it is cast by the 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.

Voting Prohibition Statement: A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• (a) the proxy is either:

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

• (ii) a Closely Related Party of such a member; and

• (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 6 Excluded Party, the above prohibition does not apply if: (c) the proxy is the Chair; and

• (d) 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.

7. RESOLUTION 7 – RATIFICATION OF PRIOR 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 ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 41,599,457 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if 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, it is cast by the 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.

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8. RESOLUTION 8 – ISSUE OF SHARES PURSUANT TO CAPITAL RAISING

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 75,000,000 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if 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, it is cast by the 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.

9. RESOLUTION 9 – ISSUE OF SHARES TO GREG BARNES – ALBURY HEATH

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

“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue 1,000,000 Shares to Greg Barnes or his nominee on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if 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, it is cast by the 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.

Dated: 26 May 2017

By order of the Board

Collin Vost Managing Director

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EXPLANATORY STATEMEN T

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolution.

1. ISSUE OF SHARES TO EUROPEAN LITHIUM LIMITED

1.1 Background

As announced to the ASX on 22 December 2016, the Company, through its wholly owned subsidiary Cervantes Gold Pty Ltd ( Purchaser ), has executed a binding terms sheet ( Terms Sheet ) with European Lithium Limited ( Vendor ) to acquire as a going concern the Paynes Find Gold Project located in Western Australia, subject to the satisfaction of certain conditions precedent ( Transaction ).

Consideration for the Transaction consists of cash and Shares in the Company as follows:

• (a) $500,000 to be satisfied through the issue of 25,000,000 Shares in the Company, on Settlement of the Transaction. The Vendor has agreed to the Shares being subject to a 6 month voluntary escrow from the date of issue; and

• (b) $500,000 in cash, paid in the following instalments:

• (i) $5,000 on signing of the Terms Sheet (which has been paid);

• (ii) $20,000 on satisfaction of due diligence in relation to the Paynes Find Gold Project (which has been paid);

• (iii) $25,000 on signing of a formal agreement (which it is anticipated will be executed before the Meeting);

• (iv) $100,000 on Settlement of the Transaction;

• (v) $150,000 on the later of the Company completing a $1m capital raising, or Settlement of the Transaction; and

• (vi) $200,000 on the later of 60 days following the Company completing the $1m capital raising, or Settlement of the Transaction.

Settlement of the Transaction is conditional on receipt of all necessary shareholder, regulatory and third party approvals by the Vendor, the Purchaser and the Company and a formal agreement being entered into ( Formal Agreement ).

The conditions must be satisfied or waived by 30 June 2017 or such later date as agreed by the parties.

1.2 Paynes Find Project

The Paynes Find Gold Project comprises the following mining tenements ( Tenements ) together with alluvial processing plant and associated equipment located on the Tenements ( Equipment ), and all mining information relating to the Tenements ( Mining Information ) and certain contractual rights:

P59/1959	P59/1958	P59/1957
P59/1956	P59/1942	P59/1941
P59/1924	P59/1909	P59/1908
P59/1907	M59/663	M59/662
M59/396	M59/244	M59/235
M59/10	M59/2	P59/2101

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Background

The Company has entered into the agreement to acquire the Paynes Find Gold Project area as an add-on complementary portfolio of highly prospective gold permits to its currently held prospective areas of Garden Gully and Albury Heath in the Meekatharra District.

The tenements which make up the Paynes Find project cover a substantial area over historically prospective ground in the Payne’s Find district of Western Australia (Figure 1).

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Figure 1 – Payne’s Find Project Location

Included within the tenement holdings are the main Paynes Find and Carnation fields (Figure 2), which were historically exploited as small scale underground mines since 1911. During this time, Battery records recorded that 2,204kg of gold was produced at an average recovered grade of 24.5g/t Au.

The region has been explored in a cursory fashion up until the late 1990s, most particularly by Falcon Australia Limited, which exploited the small Pansy Deposit in the south of the project tenements and by Kirkwood Gold NL, which drilled several holes in the main Paynes Find field from 1996 to 1998.

However it was not until 2011 - 2012 that more systematic modern exploration took place after the historically disparate leases were consolidated and used as the basis for the IPO of Paynes Find Gold Limited (ASX:PNE).

Exploration by PNE ceased in early 2013 due to lack of funds, but during their tenure, several substantial phases of drilling were undertaken in one small area of the project, focussing on the initial drilling by Kirkwood Gold NL. The results from these programs were reported by PNE at the time.

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The Company released historical exploration results for the Paynes Find gold project on the ASX on 4 May 2017. Additional background information in relation to Paynes Find Gold Limited is available on the following websites:

• (a) on the ASX website under the company’s listed code PNE at http://www.asx.com.au/ on the ASX announcements platform (in particular, Shareholders may find it helpful to refer to the exploration and activity reports for Paynes Find Gold Limited from 2011 – 2012); and

• (b) on the Company’s website at http://www.cervantescorp.com.au/ (in particular, Shareholders may find it helpful to refer to the Prospectus used in relation to the IPO for Paynes Find Gold Limited).

Geology

The regional geology of the Paynes Find region comprises a thick series of Archaean-aged folded mafic volcanic rocks that are separated by large granitoid intrusions although outcrop is largely concealed by an extensive cover of alluvium and laterite. The rock types consist of interlayered, basaltic and dacitic, meta-volcanics, subordinate banded iron formations and ultramafic schists. These rocks host rich gold-bearing lodes that in the past have been extensively mined to depths in excess of 300 metres.

The mineralisation within the Paynes Find area is structurally controlled and associated with late tectonic ductile to brittle structures. The Primrose Fault Zone which bifurcates to the south, is an east verging, sinistral transpressional thrust fault zone which juxtaposes a hanging wall amphibolite with the Paynes Find gneiss (Figure 2).

Much of the exploited historic mineralisation is associated with boudinaged quartz veins hosted along subsidiary structures to the Primrose Fault and within the Paynes Find Gneiss. These lodes comprised high-grade zones associated with the quartz vein boudins.

West of the Primrose Fault, penetrative shearing of the amphibolite also host mineralisation which previous work suggested may represent a more consistent style of mineralisation.

It is apparent that the Primrose Fault was an important structure for the emplacement control of mineralisation in the Paynes Find area. In addition, the shearing along the contacts between rheologically contrasting lithologies was associated with the brittle to brittle ductile subsidiary faulting developing within the relatively strong lithological host.

While several major drilling programs were undertaken in a small area of the Paynes Find Gneiss, it is thought that most previous work was based upon a flawed understanding of structural and lithological controls to gold mineralisation and was to a large extent ineffectual.

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Figure 2 – Primrose Fault Zone and Geology

Resources and Reserves

No JORC-2012 compliant Resource or Reserve Estimates currently exist within the Paynes Find project leases.

Falcon Australia Limited undertook a small drilling program beneath the Pansy pit in 1987 in order to determine its ongoing potential and an historical “Resource Estimate” was published at the time. However this was before the JORC Code and is therefore not considered reportable under current guidelines.

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Contained within the Independent Geologists Report of the original Paynes Find Gold Limited Prospectus in late 2010, was a highly speculative “Exploration Target” that was compliant with JORC 2004 and the listing rules of the time. However, since this was published, significant work has been undertaken on the project that must now be taken into account, such that this “Exploration Target” is no longer considered current or relevant.

Competent Persons Statement

The information contained in the report set out in section 1.2 (Paynes Find Project) of this Explanatory Statement relates to the summarising of Historical Exploration Results and is based on, and fairly represents, information compiled by Mr Bradley George, a competent person who is a member of the Australian Institute of Geoscientists. Mr George is an employee of Total Earth Solutions Pty Ltd and consults to Cervantes Gold Pty Ltd on a part time basis.

Mr George has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.

Mr George attests that the information in the above report related to Historical Exploration Activities is an accurate representation of the available data and studies for the Paynes Find project. Mr George consents to the inclusion in the report of the matters based on this information in the form and context in which it is appears.

1.3 General

Resolution 1 seeks Shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of 25,000,000 Shares at a deemed issue price of $0.02 per Share to the Vendor, on Settlement of the Transaction, in part consideration for the Vendor transferring the Paynes Find Gold Project to the Purchaser.

ASX 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.

The effect of this Resolution will be to allow the Company to issue the Shares to the Vendor in accordance with the Terms Sheet (and any Formal Agreement) during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

1.4 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to this Resolution:

• (a) the maximum number of Shares to be issued is 25,000,000;

• (b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);

• (c)

• the issue price will be $0.02 per Share;

• (d) the Shares will be issued to European Lithium Limited (or its nominee), which is not a related party of the Company, and European Lithium Limited will ensure that its nominee(s) (if any) will not be a related party of the Company;

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• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company, issued on the same terms and conditions as the Company’s existing Shares and subject to a 6 month voluntary escrow restriction;

• (f) no funds will be raised from the issue of the Shares as they will be issued in part consideration for the Vendor transferring the Paynes Find Gold Project to the Purchaser; and

• (g) it is intended that the issue date will be the date of Settlement of the Transaction.

2. ISSUE OF SHARES TO GREG BARNES

2.1 General

Resolution 2 seeks Shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of 1,000,000 Shares to Greg Barnes in satisfaction of an $8,000 fee for referring the Paynes Find Gold Project to New York Securities Pty Ltd, which subsequently introduced that project to the Company.

A summary of the requirements of ASX Listing Rule 7.1 is set out in section 1.3 above.

The effect of this Resolution will be to allow the Company to issue the Shares to Greg Barnes during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

2.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to this Resolution:

• (a) the maximum number of Shares to be issued is 1,000,000;

• (b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);

• (c) the deemed issue price will be $0.008 per Share;

• (d) the Shares will be issued to Greg Barnes (or his nominee), who is not a related party of the Company, and Greg Barnes will ensure that his nominee(s) (if any) will not be a related party of the Company;

• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company, issued on the same terms and conditions as the Company’s existing Shares;

• (f) no funds will be raised from the issue of the Shares as they will be issued for nil cash consideration; and

• (g) it is intended that the issue date will be the date of Settlement of the Transaction.

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3. RESOLUTIONS 3 TO 6 – ISSUE OF SHARES AND OPTIONS TO RELATED PARTIES

3.1 General

The Company has agreed, subject to obtaining Shareholder approval, to issue a total of 9,000,000 Shares and 14,000,000 Related Party Incentive Options (together, the Related Party Securities ) to the following related parties on the terms and conditions set out further below:

• (a) 5,000,000 Shares to New York Securities Pty Ltd (or its nominee) in order to satisfy a fee of $44,000 (inclusive of GST) payable by the Company to New York Securities Pty Ltd for the introduction of the Transaction to the Company;

• (b) 2,000,000 Shares and 2,000,000 Options exercisable at $0.01 each expiring 5 years after grant ( Incentive Options ) to Justin Vost (or his nominee);

• (c) 2,000,000 Shares and 2,000,000 Incentive Options exercisable at $0.01 each expiring 5 years after grant to Timothy Clark (or his nominee); and

• (d) 10,000,000 Incentive Options exercisable at $0.01 each expiring 5 years after grant to Collin Vost (or his nominee).

3.2 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in sections 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 Related Party Securities constitutes giving a financial benefit and Collin Vost, Justin Vost and Timothy Clark are related parties of the Company by virtue of being Directors, and New York Securities Pty Ltd is a related party of the Company by virtue of being controlled by Director Mr Collin Vost.

It is the view of the Company that the exceptions set out in sections 210 to 216 of the Corporations Act do not apply in the current circumstances.

3.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires that shareholder approval is 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 ASX Listing Rule 10.12 applies.

It is the view of the Company that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

3.4 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of section 219 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed grant of Related Party Securities to New York Securities Pty Ltd (or its nominee), Collin Vost (or his nominee), Justin Vost (or his nominee) and Timothy Clark (or his nominee) (the Related Parties ):

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• (a) Collin Vost, Justin Vost and Timothy Clark are related parties by virtue of being Directors of the Company, and New York Securities Pty Ltd is a related party by virtue of being controlled by Collin Vost, a Director of the Company;

• (b) the maximum number of Related Party Securities (being the nature of the financial benefit being provided) to be granted to the Related Parties is:

• (i) 5,000,000 Shares to New York Securities Pty Ltd (or its nominee);

• (ii) 2,000,000 Shares and 2,000,000 Incentive Options to Justin Vost (or his nominee); and

• (iii) 2,000,000 Shares and 2,000,000 Incentive Options to Timothy Clark (or his nominee); and

• (iv) 10,000,000 Incentive Options to Collin Vost (or his nominee).

• (c) the Related Party Securities will be granted to the Related Parties no later than 1 month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Related Party Securities will be issued on one date;

• (d) the Related Party Securities will be granted for nil cash consideration, accordingly no funds will be raised;

• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company, issued on the same terms and conditions as the Company’s existing Shares;

• (f)

• the terms and conditions of the Incentive Options are set out in Schedule 1;

• (g) the value of the Related Securities and the pricing methodology is set out in Schedule 2;

• (h) the relevant interests of the Related Parties in securities of the Company as at the date of this Notice of Meeting are set out below:

Related Party	Shares
New York Securities PtyLtd	0
Timothy Clark	1,520,000 (held by Li Hwa Pty Ltd as trustee for the ATF Li Hwa Trust)
Justin Vost	12,337,223 Shares, being comprised of: 2,037,223 (held by AVOST Holdings Pty Ltd as trustee for the Bluesky Trust) 10,000,000 (held by Justin Vost) 300,000 (held by Justin Vost and Jennifer Vost as trustees for the Avost Superfund)
Collin Vost	48,570,000 Shares, being comprised of: 40,800,000 (held by New York Holdings Pty Ltd as trustee for the CV Superfund) 7,770,000(held byNew York Holdings PtyLtd)

(i) the remuneration and benefits paid from the Company to the Related Parties for the previous financial year and the proposed remuneration and emoluments for the current financial year (excluding the Related Party Securities contemplated by Resolutions 3 – 6) are set out below:

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Related Party	Current Financial Year	Previous Financial Year
New York Securities Pty Ltd	$78,000	$78,000
Timothy Clark	$25,200	$25,200
Justin Vost	$24,000	$24,000
Collin Vost	$24,000	$24,000

• (j) if the Incentive Options granted to the Related Parties are exercised, a total of 14,000,000 Shares would be issued. This will increase the number of Shares on issue from 332,329,716 to 346,329,716 (assuming that no other Options are exercised and no Shares other than the total of 9,000,000 Shares contemplated by Resolutions 3 – 5 of this Notice are issued) with the effect that the shareholding of existing Shareholders would be diluted by an aggregate of 4.0% (being 14,000,000 divided by 346,329,716), comprising 2.9% by Collin Vost, 0.6% by Justin Vost and 0.6% by Timothy Clark;

• (k) the market price for Shares during the term of the Incentive Options would normally determine whether or not the Incentive Options are exercised. If, at any time any of the Incentive Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Incentive Options, there may be a perceived cost to the Company;

• (l) as at the date of this Notice, the Shares are trading on ASX at a price greater than the exercise price of the Incentive Options. The Board resolved to issue the Related Party Options, subject to Shareholder approval, on the terms and conditions set out in this Notice at a time when the Shares were trading on ASX at a price lower than the exercise price of the Incentive Options, but Shareholder approval has not been able to be obtained until this Meeting. The Board resolved to issue those Incentive Options to the Related Parties on 22 December 2016 when the previous closing price of Shares on ASX was $0.008; and

• (m) the trading history of the Shares on ASX in the 12 months before the date of this Notice is set out below:

Notice is set out below:
	Price	Date
Highest	$0.015	5 May2017
Lowest	$0.008	28 November 2016
Last	$0.015	5 May2017

• (n) the primary purpose of the grant of the Related Party Securities to the Related Parties is as set out below:

• (i) 5,000,000 Shares are to be issued to New York Securities Pty Ltd (or its nominee) in order to satisfy the fee of $44,000 (inclusive of GST) payable by the Company to New York Securities Pty Ltd for the introduction of the Transaction to the Company;

• (ii) 2,000,000 Shares and 2,000,000 Incentive Options are to be issued to Justin Vost (or his nominee) in recognition for past services as a Director and as an incentive for his future involvement as a Director and to grow the Company’s business;

• (iii) 2,000,000 Shares and 2,000,000 Incentive Options are to be issued to Timothy Clark (or his nominee) in recognition for past services as a Director and as an incentive for his future involvement as a Director and to grow the Company’s business; and

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• (iv) 10,000,000 Incentive Options are to be issued to Collin Vost (or his nominee) in recognition for past services as a Director and as an incentive for his future involvement as a Director and to grow the Company’s business;

• (o) Collin Vost declines to make a recommendation to Shareholders in relation to Resolution 3 and 6 due to his material personal interest in the outcome of the Resolutions on the basis that New York Securities Pty Ltd is to be granted Shares in the Company should Resolution 3 be passed and he is to be granted Incentive Options in the Company should Resolution 6 be passed. However, in respect of Resolutions 4 and 5, Collin Vost recommends that Shareholders vote in favour of those Resolutions for the following reasons:

• (i) the grant of Incentive Securities under those Resolutions will align the interests of Justin Vost and Timothy Clark with those of Shareholders;

• (ii) the grant of the Incentive Securities is a reasonable and appropriate method to provide cost effective consideration as the non-cash form of this benefit will allow the Company to spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were given to the Related Parties; and

• (iii) it is not considered that there are any significant opportunity costs to the Company or benefits foregone by the Company in granting the Related Party Securities upon the terms proposed;

• (p) Justin Vost declines to make a recommendation to Shareholders in relation to Resolution 4 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Related Party Securities in the Company should Resolution 4 be passed. However, in respect of Resolutions 3, 5 and 6, Justin Vost recommends that Shareholders vote in favour of those Resolutions for the reasons set out in paragraph (o);

• (q) Timothy Clark declines to make a recommendation to Shareholders in relation to Resolution 5 due to his material personal interest in the outcome of the Resolution on the basis that he is to be granted Related Party Securities in the Company should Resolution 5 be passed. However, in respect of Resolutions 3, 4 and 6, Timothy Clark recommends that Shareholders vote in favour of those Resolutions for the reasons set out in paragraph (o);

• (r) with the exception of Collin Vost, no other Director has a personal interest in the outcome of Resolution 3 and 6;

• (s) with the exception of Justin Vost, no other Director has a personal interest in the outcome of Resolution 4;

• (t) with the exception of Timothy Clark, no other Director has a personal interest in the outcome of Resolution 5;

• (u) in forming their recommendations, each Director considered the experience of each other Related Party, the current market price of Shares, the current market practices when determining the number of Related Party Securities to be granted as well as the exercise price (being $0.01 in respect of the Incentive Options) and expiry date of those Incentive Options and their respective contributions to the Company, including the contribution of New York Securities Pty Ltd in relation to the Transaction; and

• (v) the Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolutions 3, 4, 5 and 6.

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Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Related Party Securities to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Related Party Securities to the Related Parties will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

4. RESOLUTION 7 – RATIFICATION OF PRIOR ISSUE OF SHARES

4.1 General

Between the date of this Notice and the date of the Meeting, The Company intends to use its remaining placement capacity under ASX Listing Rule 7.1 to issue up to 41,599,457 Shares at an issue price of $0.01 per Share to raise approximately $415,995 before raising costs.

Resolution 7 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of the above Shares ( Ratification ).

A summary of ASX Listing Rule 7.1 is set out in section 1.3 above.

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

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

4.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

• (a) it is anticipated that 41,599,457 Shares will be issued. If fewer than this number are issued, the Company will announce an addendum to this Notice before the Meeting specifying the number that have been issued;

• (b) the issue price will be $0.01 per Share;

• (c) the Shares will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (d) the Shares will be issued to sophisticated, professional and other investors that fall within section 708 of the Corporations Act who are yet to be identified by the Company. None of these subscribers will be related parties of the Company; and

• (e) the funds raised from this issue will be used for working capital, exploration of existing assets, assessment of new assets, to meet the progressive payments for the acquisition of the Payne’s Find Gold project, and any expenses and costs related thereto.

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5. RESOLUTION 8 – ISSUE OF SHARES PURSUANT TO CAPITAL RAISING

5.1 General

Resolution 8 seeks Shareholder approval for the issue of up to 75,000,000 Shares at an issue price of not less than 80% of the 5 day volume weighted average price ( VWAP ) to raise funds for working capital, exploration of existing assets, assessment of new assets, and in respect of the Share issues on or about 29 June 2017, to meet progressive payments for the acquisition of the Paynes Find Gold Project and any expenses and costs related thereto ( Capital Raising ).

In addition, the funds raised pursuant to the Capital Raising will be used to pay a capital raising fee of 6% of funds raised to New York Securities Pty Ltd (the holder of Australian Financial Services Licence number 3117392), of which 5% will be paid to other financial service companies which hold an Australian Financial Services Licence that raise funds and lodge the necessary application forms.

A summary of ASX Listing Rule 7.1 is set out in section 1.3 above.

The effect of this Resolution will be to allow the Company to issue the Shares pursuant to the Capital Raising during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

5.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to this Resolution:

• (a) the maximum number of Shares to be issued is 75,000,000;

• (b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares will occur progressively;

• (c) the issue price will be not less than 80% of the volume weighted average price for Shares calculated over the 5 days on which sales in the Shares are recorded before the day on which the issue is made or, if there is a prospectus, over the last 5 days on which sales in the securities were recorded before the date the prospectus is signed;

• (d) the Shares will be issued to sophisticated and professional investors and other investors who fall within section 708 of the Corporations Act or to investors under a prospectus. None of these subscribers will be related parties of the Company;

• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and

• (f) the Company intends to use the funds raised from the Capital Raising for working capital, exploration of existing assets, assessment of new assets, to meet progressive payments for the acquisition of the Paynes Find Gold Project and any expenses and costs related thereto. In addition, the funds raised pursuant to the Capital Raising will be used to pay a capital raising fee of 6% of funds raised to New York Securities Pty Ltd (the holder of Australian Financial Services Licence number 3117392), of which 5% will be paid to other financial service companies which hold an Australian Financial Services Licence that raise funds and lodge the necessary application forms.

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6. RESOLUTION 9 - ISSUE OF SHARES TO GREG BARNES – ALBURY HEATH

6.1 Background

Subsequent to its ASX announcement on 10 October 2016, on 16 December 2016 the Company and Greg Barnes executed a Binding Terms Sheet ( Albury Heath Terms Sheet ), pursuant to which, amongst other things, Mr Barnes agreed to sell to the Company his right title and interest in and to Prospecting Licence P51/2937 ( Albury Heath Prospecting Licence ) free from all encumbrances for the non-cash consideration of 1,000,000 Shares to be issued by the Company to Mr Barnes at a deemed issue price of $0.01 per Share, on the terms and conditions set out therein, and a production royalty of $5 per net ounce gold produced and sold from the Albury Heath Prospecting Licence.

6.2 General

Resolution 9 seeks Shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of 1,000,000 Shares to Greg Barnes as non-cash consideration for the transfer by Greg Barnes to the Company of the Albury Heath Prospecting Licence in accordance with the terms of the Albury Heath Terms Sheet.

A summary of the requirements of ASX Listing Rule 7.1 is set out in section 1.3 above.

The effect of this Resolution will be to allow the Company to issue the Shares to Greg Barnes during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

6.3 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to this Resolution:

• (a) the maximum number of Shares to be issued is 1,000,000;

• (b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);

• (c) the deemed issue price will be $0.01 per Share;

• (d) the Shares will be issued to Greg Barnes (or his nominee), who is not a related party of the Company, and Greg Barnes will ensure that his nominee(s) (if any) will not be a related party of the Company;

• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company, issued on the same terms and conditions as the Company’s existing Shares;

• (f) no funds will be raised from the issue of the Shares as they will be issued for nil cash consideration; and

• (g) it is intended that the issue date will occur as soon as reasonably practicable after Shareholder approval is obtained for the issue.

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GLOSSARY

$ means Australian dollars.

ASIC means the Australian Securities & Investments Commission.

ASX Listing Rules means the Listing Rules of ASX.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

Board means the current 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 chair of the Meeting.

Company means Cervantes Corporation Limited (ACN 097 982 235).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Equipment has the meaning given in section 1.2 of the Explanatory Statement.

Explanatory Statement means the explanatory statement accompanying the Notice.

Formal Agreement is defined in section 1.1 of the Explanatory Statement.

General Meeting or Meeting means the meeting convened by the Notice.

Incentive Option means an Option with the terms and conditions set out in Schedule 1.

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.

Mining Information has the meaning given in section 1.2 of the Explanatory Statement.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Paynes Find Gold Project has the meaning given in section 1.2 of this Explanatory Statement.

Proxy Form means the proxy form accompanying the Notice.

Related Party Securities means the Shares and Incentive Options to be issued by this Notice of Meeting.

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

Section means a section of the Explanatory Statement.

Settlement means the settlement of the sale and purchase of the Paynes Find Gold Project in accordance with the terms and conditions of the Terms Sheet (or any formal agreement that replaces the Terms Sheet).

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

Shareholder means a registered holder of a Share.

Tenements has the meaning given in section 1.2 of the Explanatory Statement

Terms Sheet has the meaning given in section 1.1 of the Explanatory Statement.

Transaction has the meaning given in section 1.1 of the Explanatory Statement.

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SCHEDULE 1 – TERMS AND CONDITIONS OF INCENTIVE OPTIONS

(a) Entitlement

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

(b) Exercise Price

Subject to paragraph (i), the amount payable upon exercise of each Option will be $0.01 ( Exercise Price )

(c)

Expiry Date

Each Option will expire at 5:00 pm (WST) on the date 5 years after the date of issue of the Options ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d)

Exercise Period

The Options are exercisable at any time until the Expiry Date ( Exercise Period ).

(e)

Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( 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.

(f)

Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g) Timing of issue of Shares on exercise

Within 15 Business Days after the later of the following:

• (i) the Exercise Date; and

• (ii) when excluded information in respect to the Company (as defined in section 708A(7) of the Corporations Act) (if any) ceases to be excluded information,

but in any case no later than 20 Business Days after the Exercise Date, the Company will:

• (iii) 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;

• (iv) 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

• (v) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

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If a notice delivered under (g)(iv) 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.

(h) Shares issued on exercise

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

(i) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(j) 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.

(k) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(l) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

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SCHEDULE 2 – VALUATION OF RELATED PARTY SECURI TIES

The Related Party Securities to be issued to the Related Parties pursuant to this Notice of Meeting have been valued by Stantons International Securities Pty Ltd ABN 42 128 908 289 (AFS Licence Number 448697) ( Stantons ).

Shares:

The value of Shares is the price of Shares traded on the ASX, which varies over time. The trading history of the Shares on ASX in the 12 months before the date of this Notice is set out below:

	Price	Date
Highest	$0.015	5 May 2017
Lowest	$0.008	28 November 2016
Last	$0.015	5 May 2017

Incentive Options

Using the Black & Scholes option valuation methodology and based on the assumptions set out below, the Incentive Options were ascribed the following value:

Assumptions:
Valuation date	18 April 2017
Market price of Shares	1.50 cents (being the closing price of a listed share in the Company as at the close of 10 April 2017). This is the price that has been used in determining the value of the Options.
Exercise price	The exercise price of the 14,000,000 Incentive Options is 1 cent per Option
Expiry date (length of time from issue)	5 years from the date of issue
Risk free interest rate	A risk-free rate of a five-year Australian Government bond of approximately 2.05% (as at 18 April 2017) has been used.
Volatility (discount)	The Incentive Options do not have any vesting conditions. To reflect the unlisted status of the Incentive Options a discount rate of 20% may be applied. For the purpose of this valuation, a discount rate has not been applied. Volatility percentage: 100%
Indicative value per Option (before discount)	1.198 cents
Total Value of Options	$167,720 (being 1.198 cents x 14,000,000 Incentive Options)
- Justin Vost	$23,960
- Timothy Clark	$23,960
- Collin Vost	$119,800

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Note:

1. The valuation noted above is not necessarily the market prices that the Incentive Options could be traded at and is not automatically the market prices for taxation purposes. The recipient of the Incentive Options should seek its own tax advice as to the tax treatment of receiving Incentive Options in the Company and the value for taxation purposes.

2. This Incentive Option valuation methodology has been used with the expectation that the majority of the Incentive Options would be exercised towards the end of the term of the Incentive Options.

3. The valuation has been provided for International Financial Reporting Standards purposes only. The Incentive Options will need to again be valued for International Financial Reporting Standards purposes following shareholder approval.

4. It is assumed that no dividends are expected to be declared or paid by the Company during the term of the Incentive Options.

5. The lowest share price of a Share in the Company was 0.8 cents and the highest was 1.3 cents (since the announcement of the proposal to acquire the Paynes Find Gold Project Tenements, however the one-year low share price to 10 April 2017 was 0.3 cents in May 2016). The volumes of trades are extremely low so the simple volatility since the Paynes Find announcement has been ignored (the basic volatility taking into account the movement between low and high since the Paynes Find announcement is around 87.5%). The Company’s Share price will, after being dormant for a long period of time, be sensitive to ASX announcements particularly with the opportunities in relation to the Paynes Find Gold Project Tenements, which it is assumed will be acquired. In the opinion of Stantons, after taking into account the various ASX announcements, the basic volatility, the relatively medium term of the Incentive Options (5 years), and the general trend in the shares of the companies in similar businesses and trading on the ASX over the past 3 and 6 months, Stantons is of the opinion that the volatility factor for the purposes of valuation should be 100% as at 18 April 2017.

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PROXY FORM

CERVANTES CORPORATION LIMITED ACN 097 982 235

Please insert your registered name and address here :

GENERAL MEETING

I/We of: being a Shareholder entitled to attend and vote at the Meeting, hereby appoint: Name: OR: the Chair of the Meeting as my/our proxy.

or failing the person so named or, if no person is named, the Chair, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the Meeting to be held at 10:00am (WST), on 27 June 2017 at Royal Perth Golf Club, Labouchere Road, South Perth, WA 6151, and at any adjournment thereof.

AUTHORITY FOR CHAIR TO VOTE UNDIRECTED PROXIES ON REMUNERATION RELATED RESOLUTIONS

Where I/we have appointed the Chair as my/our proxy (or where the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolutions 3, 4, 5 and 6 (except where I/we have indicated a different voting intention below) even though Resolutions 3, 4, 5 and 6 are connected directly or indirectly with the remuneration of a member of the Key Management Personnel, which includes the Chair. CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES

The Chair intends to vote undirected proxies in favour of all Resolutions. In exceptional circumstances the Chair may change his/her voting intention on any Resolution. In the event this occurs an ASX announcement will be made immediately disclosing the reasons for the change.

Voting on business of the Meeting	Voting on business of the Meeting	FOR	AGAINST	ABSTAIN
Resolution 1	Issue of Shares to European Lithium Limited
Resolution 2	Issue of Shares to Greg Barnes
Resolution 3	Issue of Shares to Related Party – New York Securities Pty Ltd
Resolution 4	Issue of Shares and Options to Related Party – Justin Vost
Resolution 5	Issue of Shares and Options to Related Party – Timothy Clark
Resolution 6	Issue of Options to Related Party – Collin Vost
Resolution 7	Ratification of prior issue of Shares
Resolution 8	Issue of Shares pursuant to Capital Raising
Resolution 9	Issue of Shares to Greg Barnes – Albury Heath

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is:

%

Signature of Shareholder(s):

Individual or Shareholder 1 Sole Director/Company Secretary Date: Contact name:	Individual or Shareholder 1 Sole Director/Company Secretary Date: Contact name:	Shareholder 2 Director Contact ph (daytime):	Shareholder 3
			Director/Company Secretary

Consent for contact by e-mail in relation to this Proxy Form: YES NO

E-mail address:

Instructions for completing Proxy Form

1.

2.

3.

( Appointing a proxy ): A Shareholder entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on their behalf at the Meeting. If a Shareholder is entitled to cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointments do not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a Shareholder.

( Direction to vote ): A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. The direction may specify the proportion or number of votes that the proxy may exercise by writing the percentage or number of Shares next to the box marked for the relevant item of business. Where a box is not marked the proxy may vote as they choose subject to the relevant laws. Where more than one box is marked on an item the vote will be invalid on that item.

( Signing instructions ):

• ( Individual ): Where the holding is in one name, the Shareholder must sign.

• ( Joint holding ): Where the holding is in more than one name, all of the Shareholders should sign.

• ( Power of attorney ): If you have not already provided the power of attorney with the registry, please attach a certified photocopy of the power of attorney to this Proxy Form when you return it.

• ( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held. In addition, if a representative of a company is appointed pursuant to Section 250D of the Corporations Act to attend the Meeting, the documentation evidencing such appointment should be produced prior to admission to the Meeting. A form of a certificate evidencing the appointment may be obtained from the Company.

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( Attending the Meeting ): Completion of a Proxy Form will not prevent individual Shareholders from attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the Meeting in person, then the proxy’s authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the Meeting.

• ( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

• (a) post to Cervantes Corporation Limited, PO Box 1196, SOUTH PERTH, WA, AUSTRALIA, 6951; or

• (b) facsimile to the Company on facsimile number +61 8 9367 2450; or

• (c) email to the Company at admin@cervantescorp.com.au ,

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy Forms received later than this time will be invalid.