RED SKY ENERGY LIMITED. — Proxy Solicitation & Information Statement 2013

Jun 30, 2013

RED SKY ENERGY LIMITED ACN 099 116 275

NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of Red Sky Energy Limited ("the Company" or "Red Sky") will be held at The Institute of Chartered Accountants, Level 3, 600 Bourke Street, Melbourne, Vic, 3000 at 10.00am (Melbourne, Victoria time) on Friday 2[nd] August 2013.

Further details in respect of each of the resolutions proposed in this Notice of General Meeting are set out in the Explanatory Memorandum accompanying this Notice of General Meeting. The details of the resolutions contained in the Explanatory Memorandum should be read together with, and form part of, this Notice of General Meeting.

BUSINESS

RESOLUTION 1 – CONSOLIDATION OF SHARES AND EXISTING OPTIONS

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

“THAT for the purposes of Section 254H of the Corporations Act 2001 (Cth) the issued capital of the Company be consolidated on the basis that:

• (a) Every twenty (20) ordinary shares be consolidated into one (1) ordinary share; and

• (b) Every twenty (20) existing options over ordinary shares be consolidated into one (1) option over an ordinary share,

on the terms set out in the Explanatory Memorandum which accompanies and forms part of this Notice of General Meeting.”

RESOLUTION 2 – ISSUE OF OPTIONS TO MR GERRIT DE NYS, DIRECTOR

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

"THAT for the purpose of ASX Listing Rule 10.11 shareholders approve the issue of up to 2,000,000 options (on a post consolidation basis) at an exercise price to be calculated as 130% of the 20 day VWAP prior to the date of issue expiring three years from the date of issue to Mr Gerrit de Nys (or his nominee/s), a Director of the Company, as described in the Explanatory Memorandum which accompanied and formed part of the Notice of General Meeting."

Voting Exclusion Statement:

The Company will disregard any votes cast on this Resolution by:

• Mr Gerrit de Nys;

• any associate of Mr Gerrit de Nys; and

• as a proxy by a Restricted Voter.

However, the Company need not disregard a vote on this Resolution if:

• 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

• 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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RESOLUTION 3 – ISSUE OF OPTIONS TO MR ROHAN GILLESPIE, DIRECTOR

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

"THAT for the purpose of ASX Listing Rule 10.11 shareholders approve the issue of up to 6,000,000 options (on a post consolidation basis) at an exercise price to be calculated as 130% of the 20 day VWAP prior to the date of issue and expiring three years from the date of issue to Mr Rohan Gillespie (or his nominee/s), a Director of the Company, as described in the Explanatory Memorandum which accompanied and formed part of the Notice of General Meeting."

Voting Exclusion Statement:

The Company will disregard any votes cast on this Resolution by:

• Mr Rohan Gillespie;

• any associate of Mr Rohan Gillespie; and

• as a proxy by a Restricted Voter.

However, the Company need not disregard a vote on this Resolution if:

• 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

• 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.

RESOLUTION 4 – ISSUE OF OPTIONS TO MR GUY LE PAGE, DIRECTOR

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

"THAT for the purpose of ASX Listing Rule 10.11 shareholders approve the issue of up to 1,500,000 options (on a post consolidation basis) at an exercise price to be calculated as 130% of the 20 day VWAP prior to the date of issue and expiring three years from the date of issue to Mr Guy Le Page (or his nominee/s), a Director of the Company, as described in the Explanatory Memorandum which accompanied and formed part of the Notice of General Meeting."

Voting Exclusion Statement:

The Company will disregard any votes cast on this Resolution by:

• Mr Guy Le Page;

• any associate of Mr Guy Le Page; and

• as a proxy by a Restricted Voter.

However, the Company need not disregard a vote on this Resolution if:

• 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

• 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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RESOLUTION 5 – ISSUE OF OPTIONS TO MR ADRIEN WING, COMPANY SECRETARY

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

"THAT for the purpose of ASX Listing Rule 7.1 shareholders approve the issue of up to 700,000 options (on a post consolidation basis) at an exercise price to be calculated as 130% of the 20 day VWAP prior to the date of issue and expiring three years from the date of issue to Mr Adrien Wing (or his nominee/s), Company Secretary of the Company, as described in the Explanatory Memorandum which accompanied and formed part of the Notice of General Meeting."

Voting Exclusion Statement:

The Company will disregard any votes cast on this Resolution by:

• Mr Adrien Wing;

• any associate of Mr Adrien Wing; and

• as a proxy by a Restricted Voter.

However, the Company need not disregard a vote on this Resolution if:

• 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

• 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.

ADDITIONAL VOTING NOTE TO RESOLUTIONS 2 – 5

If you appoint the person chairing the meeting and you are not a Restricted Voter, by marking the box on, and submitting, the Proxy Form you authorise the person chairing the meeting (the Chair) to exercise the proxy even though Resolutions 2 – 5 are connected directly or indirectly with the remuneration of a member of the Company’s key management personnel, and you will be taken to have directed the Chair to vote in accordance with his or her stated intention to vote in favour of Resolutions 2 – 5. If you have appointed the Chair as your proxy he or she can only cast your votes on Resolutions 2 – 5 if you expressly authorise him or her to do so by marking the box on the proxy form or if you direct the Chair how to vote by marking either ‘for’, ‘against’ or ’abstain’ for this item of business.

By the order of the Board

==> picture [91 x 51] intentionally omitted <==

Adrien Wing Company Secretary

Dated 27 June 2013

The accompanying Explanatory Memorandum and the Proxy Form and Voting Instructions form part of this Notice of Meeting.

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PROXY AND VOTING INSTRUCTIONS

Proxy Instructions

A member who is entitled to vote at a meeting may appoint:

(a) one proxy if the member is only entitled to one vote; and

(b) one or two proxies if the member is entitled to more than one vote.

Where more than one proxy is appointed each proxy may be appointed to represent a specific proportion of the member’s voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes in which case any fraction of votes will be disregarded.

The proxy form (and the power of attorney or other authority, if any, under which the proxy form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the proxy form (and the power of attorney or other authority) must be lodged at the registered office of the Company or sent by facsimile transmission to the Company's registered office on (03) 9614 0550 not less than 48 hours before the time for holding the Meeting, or adjourned meeting as the case may be, at which the individual named in the proxy form proposes to vote.

The proxy form must be signed by the member or his/her attorney duly authorised in writing or, if the member is a corporation, in a manner permitted by the Corporations Act. A proxy given by a foreign corporation must be executed in accordance with the laws of that corporation’s place of incorporation.

The proxy may, but need not, be a member of the Company.

A proxy form is attached to this Notice.

If you sign the proxy form and do not appoint a proxy, you will have appointed the Chair of the meeting as your proxy. In that case, your shares will not be voted on Resolutions 2 – 5 unless you direct the Chair how to vote by marking the appropriate box on the proxy form or otherwise indicate your express consent to the Chair voting your votes on Resolutions 2 – 5.

Voting Entitlement

For the purposes of the Corporations Act and Corporations Regulations shareholders entered on the Company’s Register of Members as at 31 July 2013, 10.00am (Melbourne, Victoria time) are entitled to attend and vote at the meeting.

On a poll, members have one vote for every fully paid ordinary share held. Holders of options are not entitled to vote.

How the Chair Will Vote Undirected Proxies

The Chair of the meeting will vote undirected proxies on, and in favour of, all of the proposed resolutions. However, any undirected proxies held by the Chair of the meeting will not be voted on Resolutions 2 – 5 unless the express consent of the shareholder is given in the proxy appointment.

Proxies that are Undirected on Resolutions 2 – 5

If you appoint the Chair of the meeting as your proxy (or if he may be appointed by default) and do not either (a) direct the Chair how to vote on Resolutions 2 – 5, or (b) provide your express consent to the Chair voting your undirected proxy on Resolutions 2 – 5; the Chair will not vote your proxy on that item of business. Accordingly, if you appoint the Chair of the meeting as your proxy (or if he may be appointed by default) and you want your shares to be voted on that item of business, you should either (a) direct the Chair how to vote on Resolutions 2 – 5; or (b) tick the box on the proxy form to confirm your consent to the Chair voting your undirected proxy on Resolutions 2 – 5.

Other directors of the Company, any other of its key management personnel or any of their closely related parties will not be able to vote undirected proxies held by them on Resolutions 2 – 5. Key management personnel of the Company comprise the directors of the Company and those other persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly.

The Remuneration Report identifies key management personnel for the year ending 31 December 2012. Their closely related parties are defined in the Corporations Act 2001 (Cth) and include specified family members, dependents and companies they control.

Corporate Representatives

Any corporation which is a member of the Company may authorise (by certificate under common seal or other form of execution authorised by the laws of that corporation’s place of incorporation, or in any other manner satisfactory to the chairperson of the Meeting) a natural person to act as its representative at any general meeting.

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RED SKY ENERGY LIMITED ACN 099 116 275

("the Company")

NOTICE OF GENERAL MEETING

EXPLANATORY MEMORANDUM

PURPOSE OF INFORMATION

This Explanatory Memorandum ("this Memorandum") accompanies and forms part of the Company’s Notice of General Meeting to be held at The Institute of Chartered Accountants, Level 3, 600 Bourke Street, Melbourne, Vic, 3000 at 10.00am (Melbourne, Victoria time) on Friday 2[nd] August 2013 The Notice of General Meeting incorporates, and should be read together with, this Memorandum.

RESOLUTION 1 – CONSOLIDATION OF SHARES AND EXISTING OPTIONS

This Resolution seeks shareholder approval for the consolidation of the Company’s issued capital (shares and options) on the basis of one new share for each twenty existing shares held. Fractional entitlements will be rounded up. The passing of this Resolution will have no impact on each shareholder’s shareholding in the Company relative to each other shareholder. It is proposed that the consolidation of shares and existing options will take place in accordance with the indicative timetable attached to this Explanatory Memorandum as Annexure A.

Section 254H Corporations Act

Section 254H of the Corporations Act provides that a company may convert all of any of its shares into a smaller or larger number of shares by resolution passed at a general meeting. The ASX Listing Rules also require that the number of options on issue be consolidated at the same ratio as the Company’s ordinary share capital and that the exercise price be amended in inverse proportion to that ratio.

For the purposes of section 254H of the Corporations Act, this Resolution seeks shareholder approval for the Company to consolidate its issued capital on a 20 to 1 basis such that:

• (a) every twenty (20) ordinary shares will be consolidated into one (1) ordinary share; and

• (b) every twenty (20) options to acquire ordinary shares will be consolidated into one (1) option to acquire an ordinary share.

In accordance with the ASX Listing Rules and section 254H(2)(a) of the Corporations Act, the consolidation will take effect from the date on which this resolution is passed and in accordance with the indicative timetable set out as Annexure A to this Explanatory Memorandum. Details of the shareholding of each shareholder will be determined by notification of the change despatched six (6) business days after the date of the Annual General Meeting in accordance with the requirements of the ASX Listing Rules.

The Company proposes to undertake the consolidation of its issued capital to ensure that the number of securities on issue and the trading price of the Company’s securities are at a level broadly comparable to that of its peers and to potentially reduce the fees payable in respect of share and option sale transactions on the ASX.

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The Directors do not believe that any material disadvantage will arise for shareholder or option holders as a result of the proposed consolidation of the Company’s issued securities. However, there can be no assurances as to the level at which the Company’s shares will trade following the consolidation of the Company’s securities.

ASX Listing Rule 7.20

ASX Listing Rule 7.20 states that if an entity proposes to reorganise its capital, it must inform equity security holders in writing of each of the following:

• the effect of the proposal on the number of securities of the Company and the amount unpaid, if any, on the securities;

• the proposed treatment of any fractional entitlements arising from the reorganisation; and

• the proposed treatment of any convertible securities on issue.

Consolidation of existing shares

In accordance with ASX Listing Rule 7.20, the Company advises the following:

1. The Company does not have any partly paid securities on issue and accordingly, the proposal will have no effect on partly paid securities.

2. Any fractional entitlements as a result of the consolidation will be rounded up.

3. The impact on the number of shares currently on issue following the consolidation will be as follows:

No. of pre-consolidation shares as at the date of the Notice of General Meeting	No. of post-consolidation Shares
1,680,916,486	84,045,824*

*The precise number of post consolidation shares on issue will depend on the effect of rounding up on each shareholder’s individual holding. As previously noted, fractional entitlements will be rounded up.

Consolidation of existing options

In accordance with ASX Listing Rule 7.20, the Company advises the following:

1. The Company’s options will be consolidated on a 20 to 1 basis (on the same basis as the Company’s fully paid ordinary shares are proposed to be consolidated).

2. Any fractional entitlements as a result of the consolidation will be rounded up.

3. The exercise price of the options will be amended in inverse proportion to that ratio.

4. The impact on the number of options and their exercise price is set out in the table below:

No. of pre- consolidation options	Exercise price pre- consolidation	No. of post-consolidation options	Exercise price post- consolidation
60,000,000	2.25 cents	3,000,000	45 cents
200,000,000	4 cents	10,000,000	80 cents
100,000,000	0.9 cents	5,000,000	18 cents

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*The precise number of post consolidation options on issue will depend on the effect of rounding up on each option holder’s individual holding. As previously noted, fractional entitlements will be rounded up.

1. The expiry date of the options post consolidation will remain the same.

2. The terms and conditions of the Company’s existing options are set out in Annexure B to this Explanatory Memorandum.

Holding Statements

From the date of the consolidation, all existing holding statements for shares and options will cease to have any effect, except as evidence of entitlement to a certain number of shares and options on a post consolidation basis. After the consolidation becomes effective, the Company will arrange for new holding statements to be issued to shareholders and option holders. It is the responsibility of each shareholder and option holder to check the number of shares and options held prior to a disposal.

Taxation Implications

Shareholders and option holders are advised to seek their own taxation advice on the effect of the consolidation, and neither the Company, nor the Directors (or the Company’s advisers) accept any responsibility for the individual taxation implications arising from the consolidation.

BACKGROUND TO RESOLUTIONS 2 – 4

Resolutions 2 – 4 seek shareholder approval for the issue of unlisted options (on a post consolidation basis) to Directors of the Company (or their nominees) as follows:

Director	Maximum No of Options	Exercise Price	Expiry Date
Mr Gerrit de Nys	2,000,000	130% of the 20 day VWAP prior to the date of issue	3 years from the date of issue
Mr Rohan Gillespie	6,000,000	130% of the 20 day VWAP prior to the date of issue	3 years from the date of issue
Mr Guy Le Page	1,500,000	130% of the 20 day VWAP prior to the date of issue	3 years from the date of issue

ASX Listing Rules

In respect of the unlisted options proposed to be issued to Directors of the Company, ASX Listing Rule 10.11 requires a listed company to obtain shareholder approval by ordinary resolution prior to the issue of securities to a related party of the Company. Resolutions 2 – 4 seek shareholder approval for the issue of options to Directors, who are considered related parties of the Company. ASX Listing Rule 7.2 states that approval pursuant to ASX Listing Rule 7.1 is not required if approval is being obtained pursuant to ASX Listing Rule 10.11.

Corporations Act 2001 (Cth)

Under Chapter 2E of the Corporations Act, a public company cannot give a ‘financial benefit’ to a ‘related party’ unless one of the exceptions to the section apply or shareholders have in a general meeting approved the giving of that financial benefit to the related party.

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In the case of Resolutions 2 - 4, the issue of the relevant options to the Directors constitutes a ‘financial benefit’ as defined in the Corporations Act. The options the subject of Resolutions 2 - 4 have been valued by the Company’s internal management using a Black & Scholes option pricing model, and based on the assumptions set out below, the options the subject of Resolutions 2 - 4 were ascribed a value as follows:

	Pre-consolidation	**Post consolidation ***
Valuation Date	6 June 2013	6 June 2013
Option Exercise Price	$0.0026 (0.26 cents)	$0.052 (5.2 cents)
Share Price (closing, 5 June 2013)	$0.002 (0.2 cents)	$0.04 (4.0 cents)
Expiry Date	3 years	3 years
Risk Free Rate	2.66%	2.66%
Volatility	100%	100%
Indicated Value per Option	$0.0012 (0.12 cents)	$0.024 (2.40 cents)

*Assume relative change of 20:1 basis.

Note: The valuations noted above are not necessarily the market prices that the options the subject of Resolutions 2 - 4 could be traded at (if they were able to be traded) and they are not automatically the market prices for taxation purposes.

Based on the Black & Scholes option pricing model described above, the aggregate value of the options to be received by each of the Directors through the issues proposed at Resolutions 2 - 4 is as follows:

	Options proposed to be issued	Value (at $0.024 per option)	Other directors’ fees/remuneration (current per annum) (plus GST if applicable)
Gerrit de Nys	2,000,000	$48,000	$87,800
Rohan Gillespie	6,000,000	$144,000	$280,000
Guy Le Page	1,500,000	$36,000	$40,000

If the options the subject of Resolutions 2 - 4 were issued, the Directors’ respective (direct and indirect) share and/or option holdings would be as follows:

	Shares^	Existing (on a post consolidated basis)	Options Proposed to be issued	Total
Gerrit de Nys	500,000	1,875,000	2,000,000	3,875,000
Rohan Gillespie	9,000,000	4,725,000	6,000,000	10,725,000
Guy Le Page	Nil	750,000	1,500,000	2,250,000

^ Assumes that no existing options are exercised by the Directors prior to the issue of the options the subject of Resolutions 2 -4. Shares are expressed on a post consolidated basis.

Section 211 of the Corporations Act provides that one of the exceptions to the requirement to obtain shareholder approval for giving a financial benefit to a related party is where the benefit is given to the related party as an officer of the Company and to give the remuneration would be reasonable given:

• the circumstances of the company; and

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• the related party’s circumstances (including the responsibilities involved in the office or employment).

The Company considers the proposed issue of the options the subject of Resolutions 2 to 4 is reasonable remuneration and, as such, falls within the exception set out in section 211 of the Corporations Act. In reaching this view, the Company has considered the respective positions and responsibilities of each of the Directors, the Company’s reliance on a limited number of executive personnel, the need for the Company to effectively incentivise each of the Directors while aligning the incentive with increasing shareholder value, the desirability of preserving cash resources within the Company, and the terms of the options. The Board believes that options are an effective remuneration tool which preserves the cash reserves of the Company and its group entities whilst providing valuable remuneration.

RESOLUTION 2 – ISSUE OF OPTIONS TO MR GERRIT DE NYS, DIRECTOR

The following information is provided in accordance with the requirements of ASX Listing Rule 10.13:

• (a) The maximum total number of options to be issued to Mr Gerrit de Nys (or his nominee/s) is 2,000,000 (on a post consolidation basis), as described in the table above;

• (b) The options are to be issued to Mr de Nys for incentive and remuneration purposes.

• (c) The options will be issued no later than one (1) month after the date of the general meeting (or such later date as may be permitted by an ASX waiver of the Listing Rules, the Corporations Act 2001 and/or the Australian Securities and Investments Commission);

• (d) The terms of the options to be issued to Mr de Nys are described in Annexure C to this Explanatory Memorandum. The Company will not apply to ASX for admission of the options issued to quotation on ASX;

• (e) The options the subject of this Resolution have a nil issue price. The exercise price of the options will be 130% of the 20 day VWAP prior to the date of issue and the options will expire 3 years from the date of issue; and

• (f) There will be no funds raised by the issue of the options. Any funds raised from the exercise of the options will be applied towards the Company's working capital requirements at that time.

RESOLUTION 3 – ISSUE OF OPTIONS TO MR ROHAN GILLESPIE, DIRECTOR

The following information is provided in accordance with the requirements of ASX Listing Rule 10.13:

• (a) The maximum total number of options to be issued to Mr Rohan Gillespie (or his nominee/s) is 6,000,000 (on a post-consolidation basis), as described in the table above;

• (b) The options are to be issued to Mr Gillespie for incentive and remuneration purposes.

• (c) The options will be issued no later than one (1) month after the date of the general meeting (or such later date as may be permitted by an ASX waiver of the Listing

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Rules, the Corporations Act 2001 and/or the Australian Securities and Investments Commission);

• (d) The terms of the options to be issued to Mr Gillespie are described in Annexure C to this Explanatory Memorandum. The Company will not apply to ASX for admission of the options issued to quotation on ASX;

• (e) The options the subject of this Resolution have a nil issue price. The exercise price of the options will be 130% of the 20 day VWAP prior to the date of issue and the options will expire 3 years from the date of issue; and

• (f) There will be no funds raised by the issue of the options. Any funds raised from the exercise of the options will be applied towards the Company's working capital requirements at that time.

RESOLUTION 4 – ISSUE OF OPTIONS TO MR GUY LE PAGE, DIRECTOR

The following information is provided in accordance with the requirements of ASX Listing Rule 10.13:

• (a) The maximum total number of options to be issued to Mr Guy Le Page (or his nominee/s) is 1,500,000 (on a post-consolidation basis), as described in the table above;

• (b) The options are to be issued to Mr Le Page for incentive and remuneration purposes.

• (c) The options will be issued no later than one (1) month after the date of the general meeting (or such later date as may be permitted by an ASX waiver of the Listing Rules, the Corporations Act 2001 and/or the Australian Securities and Investments Commission);

• (d) The terms of the options to be issued to Mr Le Page are described in Annexure C to this Explanatory Memorandum. The Company will not apply to ASX for admission of the options issued to quotation on ASX;

• (e) The options the subject of this Resolution have a nil issue price. The exercise price of the options will be 130% of the 20 day VWAP prior to the date of issue and the options will expire 3 years from the date of issue; and

• (f) There will be no funds raised by the issue of the options. Any funds raised from the exercise of the options will be applied towards the Company's working capital requirements at that time.

RESOLUTION 5 – ISSUE OF OPTIONS TO MR ADRIEN WING, COMPANY SECRETARY

This Resolution is proposed to obtain shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of up to 700,000 options (on a post consolidation basis) to Mr Adrien Wing (or his nominee/s), Company Secretary of the Company, for incentive and remunerative purposes.

Each of the options the subject of this Resolution has an exercise price of 130% of the 20 day VWAP prior to the date of issue expiry date that is 3 years from the date of issue. The intended recipients of the options the subject of this Resolution is not a related party of the Company.

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The full terms of the options are set out in Annexure C.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period. One circumstance where an action or an issue is not taken into account in the calculation of this 15% threshold is where the issue has the prior approval of shareholders at a general meeting.

The following information is provided in accordance with the requirements of ASX Listing Rule 7.3:

• (a) The maximum number of options to be issued is 700,000 options each to acquire one fully paid ordinary share in the Company (on a post consolidation basis);

• (b) The options will be issued no later than three (3) months after the date of the General Meeting (or such later date as may be permitted by an ASX waiver of the Listing Rules, the Corporations Act 2001 and/or the Australian Securities and Investments Commission);

• (c) The options the subject of this Resolution each have a nil issue price and will be issued on the terms set out in Annexure C. The options will have an exercise price of 130% of the 20 day VWAP and will expire 3 years from the date of issue;

• (d) The securities will be issued to Mr Adrien Wing (or his nominee/s), who is not r a related party of the Company, for incentive and remunerative purposes;

• (e) No funds will be raised through the issue of the options the subject of this Resolution. Any funds raised on the exercise of the options will be applied to the Company’s working capital requirements at the time of exercise.

• (f) A voting exclusion statement is contained in the Notice of General Meeting.

Voting Exclusion – Resolutions 2 – 5

Note that a voting exclusion applies to Resolutions 2, 3, 4 and 5 in the terms set out in the Notice of Meeting. In particular, Restricted Voters must not cast a vote as proxy, unless the appointment gives a direction on how to vote or the proxy is given to the Chair and you mark the box on, and submit, the Proxy Form authorising the Chair to exercise the proxy even though Resolutions 2, 3, 4 and 5 are connected directly or indirectly with the remuneration of a member of the Company’s key management personnel. By marking the box on, and submitting, the Proxy Form you will be taken to have directed the Chair of the meeting to vote in accordance with the Chair’s stated intention to vote in favour of Resolutions 2, 3, 4 and 5. Shareholders are urged to carefully read the Proxy Form. Shareholders are urged to carefully read the Proxy Form.

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ANNEXURE A

CONSOLIDATION TIMETABLE

CONSOLIDATION TIMETABLE
Event	Date
Company announces to ASX that shareholders have approved consolidation	Friday 2 August 2013
Last day for ASX trading of shares on a pre-consolidated basis	Tuesday 6 August 2013
Trading in consolidated shares, on a deferred settlement basis, starts	Wednesday 7 August 2013
Record Date – last day for Company to register share transfers on a pre-consolidated basis	Tuesday 13 August 2013
Company issues holding statements for shares and options on a consolidated basis	Wednesday 14 August 2013
Company announces to ASX that despatch of the new holding statements has occurred	Tuesday 20 August 2013
Deferred settlement trading ends	Tuesday 20 August 2013
Normal T+3 trading in consolidated shares starts on ASX	Wednesday 21 August 2013
Settlement of trades conducted on a deferred settlement basis and first settlement of trades conducted on the normal T+3 basis	Monday 26 August 2013

*The above dates are indicative only and may be subject to change. Subject to the Corporations Act, the ASX Listing Rules and other applicable laws, the Company reserves the right to vary any of the above dates and times without notice.

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ANNEXURE B

EXISTING OPTION TERMS

OPTION TERMS (RESOLUTION 1)

• (a) Each option entitles the holder to acquire one ordinary fully paid share in the capital of the Company.

• (b) The exercise prices and expiry dates of the Company’s three classes of existing options are set out in the table below:

No. of pre- consolidation options	No. of post- consolidation options	Exercise price pre- consolidation	Exercise price post- consolidation	Expiry date
60,000,000	3,000,000	2.25 cents	45 cents	31 March 2016
200,000,000	10,000,000	4 cents	80 cents	18 September 2014
100,000,000	5,000,000	0.9 cents	18 cents	20 December 2016

• (c) The options are exercisable at any time prior to 5:00 pm Melbourne time on the Expiry Date by completing the option exercise form and delivering it together with the payment for the number of shares in respect of which the options are exercised to the registered office of the Company. Any option that has not been exercised prior to the Expiry Date automatically lapses. Holders shall not be entitled to exercise their options (and the Company will not be required to issue shares upon such exercise) if it would be unlawful to do so.

• (d) Subject to the Corporations Act, the ASX Listing Rules, and the Constitution of the Company and unless otherwise specified at the time of issue, options are freely transferable. All shares issued upon exercise of options will rank pari passu in all respects with, and will have the same terms as, the Company's then issued ordinary fully paid Shares. The Company will apply for official quotation by ASX of all Shares issued upon exercise of options, subject to any restriction obligations imposed by ASX.

• (e) The options will not give any right to participate in dividends until shares are issued pursuant to the exercise of the relevant options.

• (f) There are no participation rights or entitlements inherent in the options. Option holders are not entitled to participate in new issues of securities offered to shareholders without first exercising the options. Subject to any waiver granted by ASX, the Company will send notices to option holders at least five business days prior to the record date applying to offers of securities made to shareholders during the currency of the options.

• (g) In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company prior to the Expiry Date, the number of options or the exercise price of the options or both shall be reconstructed in accordance with the ASX Listing Rules applying to a reorganisation of capital at the time of the reconstruction.

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ANNEXURE C

OPTION TERMS

OPTION TERMS (RESOLUTIONS 2 – 5)

• (h) Each option entitles the holder to acquire one ordinary fully paid share in the capital of the Company.

• (i) Each option will have an exercise price of 130% of the 20 day VWAP prior to the date of issue.

• (j) The options are exercisable at any time prior to 5:00 pm Melbourne time on the date three (3) years from the date of issue ("the Expiry Date") by completing the option exercise form and delivering it together with the payment for the number of shares in respect of which the options are exercised to the registered office of the Company. Any option that has not been exercised prior to the Expiry Date automatically lapses. Holders shall not be entitled to exercise their options (and the Company will not be required to issue shares upon such exercise) if it would be unlawful to do so.

• (k) Subject to the Corporations Act, the ASX Listing Rules, and the Constitution of the Company and unless otherwise specified at the time of issue, options are freely transferable. All shares issued upon exercise of options will rank pari passu in all respects with, and will have the same terms as, the Company's then issued ordinary fully paid Shares. The Company will apply for official quotation by ASX of all Shares issued upon exercise of options, subject to any restriction obligations imposed by ASX.

• (l) The options will not give any right to participate in dividends until shares are issued pursuant to the exercise of the relevant options.

• (m) There are no participation rights or entitlements inherent in the options. Option holders are not entitled to participate in new issues of securities offered to shareholders without first exercising the options. Subject to any waiver granted by ASX, the Company will send notices to option holders at least five business days prior to the record date applying to offers of securities made to shareholders during the currency of the options.

• (n) In the event of any reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company prior to the Expiry Date, the number of options or the exercise price of the options or both shall be reconstructed in accordance with the ASX Listing Rules applying to a reorganisation of capital at the time of the reconstruction.

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RED SKY ENERGY LIMITED ACN 099 116 275

("the Company")

PROXY FORM

Full name of securityholder(s):……………………………………………………………

Address:………………………………………………………………………………….........

I/We being a member/s of Red Sky Energy Limited (“ Company ”) and entitled to attend and vote at the meeting of the Company to be held at 10.00am (Melbourne time) on Friday 2[nd] August 2013 appoint:

 the Chair of the meeting. (mark box)

OR 

(mark box)

…………………………………………… ( Full name of proxy or the office of the proxy )

or if the person or body corporate named above fails to attend the meeting, or if no person/body corporate is named, the Chair of the meeting as my/our proxy to attend that meeting and vote on my/our behalf at that meeting and any adjournment or postponement of that meeting in accordance with the following directions (or if no directions have been given, as the proxy sees fit). If two proxies are appointed, the proportion of voting rights this proxy represents is ……...%.

IMPORTANT : Directing the Chair how to vote on Resolutions 2 – 5

If you do not mark this box, and you have not directed your proxy how to vote on Resolutions 2 – 5, the Chair will not cast your votes on Resolutions 2 – 5 and your votes will not be counted in calculating the required majority if a poll is called on these Resolutions.

If you appoint the Chair of the meeting as your proxy you can direct the Chair how to vote on Resolutions 2 – 5 by either marking the relevant box below (for example if you wish to vote “against” or “abstain” from voting) or by marking this box (in which case the Chair will vote in favour of Resolutions 2 – 5). The Chair intends to vote all available proxies in favour of Resolutions 2 – 5 .

I/We (except where I/we have indicated a different voting intention below):

• a) direct the Chair of the meeting to vote in accordance with the Chair’s voting intentions on Resolutions 2 – 5 to vote in favour of these Resolutions.

• b) authorise, in respect of Resolutions 2 – 5, the Chair of the meeting to vote as described even though Resolutions 2 – 5 are connected directly or indirectly with the remuneration of a member of key management personnel of the Company; and

• c) acknowledge that the Chair of the meeting may exercise my/our proxy in respect of Resolutions 2 – 5 even though the Chair has an interest in the outcome of this Resolution and that votes cast by the Chair of the meeting for this Resolution, other than as proxy holder, will be disregarded because of that interest.

VOTING DIRECTIONS FOR YOUR PROXY

To instruct your proxy how to vote, insert ‘X’ in the appropriate column against each resolution set out below. If you do not instruct your proxy how to vote on a resolution, your proxy may vote as he/she thinks fit or abstain from voting.

I/We direct my/our proxy to vote as indicated below:

Resolution 1. Consolidation of Shares and Existing Options Resolution 2. Issue of Options to Mr Gerrit de Nys, Director Resolution 3. Issue of Options to Mr Rohan Gillespie, Director Resolution 4. Issue of Options to Mr Guy Le Page, Director Resolution 5. Issue of Options to Mr Adrien Wing, Company Secretary	For	Against	Abstain

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	If a person: ____ (Signature) ____ Name (print) Date: _//__	If a company: EXECUTED by: ___ Name of company (print) in accordance with the Corporations Act __ __ (Signature) (Signature) Date: _//__

This proxy and any power of attorney or other authority under which it is signed (or a certified copy) must be lodged at:

• Level 17, 500 Collins Street, Melbourne, Victoria, 3000; or

• by facsimile on 03 9614 0550 by 10.00am on 31[st] July 2013, being not less than 48 hours before the time for holding the meeting or adjourned meeting as the case may be.