RESOURCES & ENERGY GROUP LIMITED — AGM Information 2014

Oct 27, 2014

RESOURCES & ENERGY GROUP LIMITED ACN 110 005 822

NOTICE OF ANNUAL GENERAL MEETING

TIME: 11.00am (AEDT)

DATE: Friday, 28 November 2014

PLACE: The offices of Arthur Phillip Pty Ltd Level 33 52 Martin Place Sydney, New South Wales

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, Cindy Louie, on (+61 2) 9227 8900.

CONTENT S PAGE

Business of the Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	6
Glossary	17
Schedule 1–Terms of Class A Options	19
Schedule 2 – Terms of Class B Options	21
Proxy Form	attached

IMP ORTANT INFORMAT IO N

TIME AND PLACE OF MEETING

Notice is given that the Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 11.00am (AEDT) on Friday, 28 November 2014 at:

Arthur Phillip Pty Ltd Level 33 52 Martin Place Sydney, New South Wales

YOUR VOTE IS IMPORTANT

The business of the Annual General 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 Annual General Meeting are those who are registered Shareholders at 7.00pm (AEDT) on Wednesday, 26 November 2014.

VOTING IN PERSON

To vote in person, attend the Annual General 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, members are advised that:

• each member has a right to appoint a proxy;
• the proxy need not be a member of the Company; and

• a member 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.

BUSINESS OF THE M EET ING

AGENDA

ORDINARY BUSINESS

Financial Statements and Reports

To receive and consider the annual financial report of the Company for the financial year ended 30 June 2014 together with the declaration of the directors, the directors' report, the remuneration report and the auditor's report.

1. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

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

"That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company's annual financial report for the financial year ended 30 June 2014."

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

• (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
• (b) a Closely Related Party of such a member.

However, a person (the voter) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either:

• (a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the Resolution; or
• (b) the voter is the Chair and the appointment of the Chair as proxy:
  • (i) does not specify the way the proxy is to vote on this Resolution; and
  • (ii) expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company, or if the Company is part of a consolidated entity, for the entity.

2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – RICHARD POOLE

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

"That, for the purpose of clauses 11.3 and 11.4 of the Constitution and for all other purposes, Richard Poole, a Director, retires by rotation, and being eligible, is re-elected as a Director."

3. RESOLUTION 3 – RATIFICATION OF THE ACQUISITION OF THE MOUNT MACKENZIE PROJECT

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

"That, for all purposes, the acquisition by the Company of the Mount Mackenzie Project via its wholly owned subsidiary Mount Mackenzie Mines Pty Ltd as set out in the accompanying Explanatory Statement is hereby ratified and approved."

4. RESOLUTION 4 – APPROVAL OF SHARE ISSUE

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

"That for the purpose of ASX Listing Rule 7.1 and for all other purposes Shareholders approve the proposed allotment of up to 18,000,000 Shares to clients of Wilshire Capital on the terms and conditions set out in the Expanatory Statement"

ASX 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.

5. RESOLUTION 5 – APPROVAL OF OPTION ISSUE

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

"That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, Shareholders approve the allotment and issue of 2,000,000 Class A Options to Jamstep Holdings and Minerva Geological Services and 2,000,000 Class B Options to Wilshire Capital on the terms and conditions set out in the Explanatory Statement."

ASX 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.

6. RESOLUTION 6 – APPROVAL OF 10% PLACEMENT CAPACITY

To consider and, if thought fit, to pass the following resolution as a special resolution:

"That, for the purposes of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totalling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement."

ASX Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the issue of Equity Securities under this Resolution 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 will 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: 24 OCTOBER 2014

BY ORDER OF THE BOARD

CINDY LOUIE COMPANY SECRETARY

EXPLANATORY S TATEMEN 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 Resolutions which are the subject of the business of the Meeting.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2014 together with the declaration of the directors, the directors' report, the Remuneration Report and the auditor's report.

The Company will not provide a hard copy of the Company's annual financial report to Shareholders unless specifically requested to do so. The Company's annual financial report is available on the ASX platform for "REZ" at www.asx.com.au.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

2.1 General

The Corporations Act requires that at a listed company's annual general meeting, a resolution that the Remuneration Report be adopted must be put to the Shareholders. However, such a Resolution is advisory only and does not bind the Directors or the Company.

The Remuneration Report sets out the Company's remuneration arrangements for the Directors and senior management of the Company. The Remuneration Report is part of the Directors' report contained in the annual financial report of the Company for the financial year ending 30 June 2014.

A reasonable opportunity will be provided for discussion of the Remuneration Report at the Annual General Meeting.

2.2 Voting consequences

Under Corporations Act 2001, if at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report in two consecutive annual general meetings, the Company will be required to put to Shareholders a resolution proposing the calling of an extraordinary general meeting to consider the appointment of directors of the Company (Spill Resolution) at the second annual general meeting.

If more than 50% of shareholders vote in favour of the Spill Resolution, the company must convene the extraordinary general meeting (Spill Meeting) within 90 days of the second annual general meeting.

All of the directors of the company who were in office when the directors' report (as included in the Company's annual financial report for the financial year ended immediately before the second annual general meeting) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting.

At the Company's previous annual general meeting no votes were cast against the remuneration report considered at that annual general meeting. Accordingly, the Spill resolution is not relevant for this Annual General Meeting.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR RICHARD POOLE

Clause 11.3 of the Constitution requires that at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election.

A Director who retires by rotation under clause 11.3 of the Constitution is eligible for re-election pursuant to clause 11.4 of the Constitution.

Mr Richard Poole, will retire in accordance with clauses 11.3 of the Constitution and being eligible seeks re-election.

Mr Poole has an LLB, B Juris, B Comm ASIA and was appointed to the Board as Chairman on 12 July 2004. Mr Poole is a former director of Australian Power and Gas Limited, Adavale Resources Limited and BBX Holdings Limited.

Mr Poole commenced his career as a lawyer specialising in mergers and acquisitions. He left the law in 1990 to build a research and development company working with clients and investors in Japan, USA and Australia and added a manufacturing company in China in 1994. He successfully built the R&D company from its early stages to a public listed vehicle raising the necessary capital up to his departure in 1999. Since 1999 he has continued his involvement in fund raising and the development of companies. He is a principal of Arthur Phillip Pty Limited, a corporate advisory firm providing investment banking services and is an experienced corporate advisor and entrepreneur.

Mr Poole is also a member of the Audit and Finance Committee and Remuneration/Nomination Committee.The Directors (other than Mr Poole) support the re-election of Mr Poole as a Director.

4. RESOLUTION 3 – RATIFICATION OF THE ACQUISITION OF THE MOUNT MACKENZIE PROJECT

As announced on 13 June 2014, the Company's wholly owned subsidiary Mount Mackenzie Mines Pty Ltd acquired the well known Mount Mackenzie Project (Mount Mackenzie) in July 2014.

Mount Mackenzie, in Central Queensland, is one of the largest hydrothermal systems in eastern Australia. The system is gold bearing. The age of mineralisation is Late Carboniferous which places Mount Mackenzie in the middle of the most productive epoch for gold mineralisation in Eastern Queensland.

This includes the breccia and porphyry systems at Mt Leyshon (3.1Moz), Kidston (3.5moz) Mt Wright (1.1Moz) Mt Carlton (1.35Moz Au+ 30Moz Ag) and the epithermal vein system at Cracow (0.77Moz remaining resource).

The Mount Mackenzie Project is located on three granted Exploration Permits for Minerals (EPM's) at Mount Mackenzie (EPM 10006, EPM 12546, and EPM 17515).

Porphyry and high level epithermal style mineralisation is recognized along the length of the tenements, which have a strike of about 15km and collectively cover a surface area of approximately 75km2. The main prospects include:

• (a) Mount Mackenzie-High Sulphidation epithermal Au
• (b) Clive Creek-High Sulphidation epithermal, intrusive vein and Breccia Au
• (c) Instinct –Breccia and Porphyry style Au with poly-metallic (Pb, Zn, Ag, Cu) association

The Company reached agreement to purchase the EPM's as set out in the below table via its wholly owned subsidiary Mount Mackenzie Mines Pty Ltd under the following agreements:

• (a) an Asset Sale Agreement with SmartTrans Holdings Limited in respect of the interest held by SmartTrans Holdings Limited in the EPMs; and
• (b) an Asset Sale Agreement with Reproductive Health Science Limited in respect of the interest held by Reproductive Health Science Limited in the EPMs.
• (c) The Company has agreed to guarantee the performance of Mount Mackenzie Mines Pty Ltd's obligations under the Asset Sale Agreement with Reproductive Health Science Limited.

Tenement	Holder	Share
EPM 10006	Smarttrans Ltd	60%
	Reproductive Health Science Ltd	40%
EPM 12456	Smarttrans Ltd	60%
	Reproductive Health Science Ltd	40%
EPM 17515	Smarttrans Ltd	60%
	Reproductive Health Science Ltd	40%
EPM 16900	Smarttrans Ltd	100%

Under the terms of the asset sale agreements, the purchase price is respectively comprised of:

• (a) $150,000 cash payable to SmartTrans Holdings Ltd; and
• (b) $80,000 cash payable to Reproductive Health Science Ltd.

In addition to the purchase price of $150,000 payable to SmartTrans Holdings Ltd, the Company's wholly owned subsidiary, Mount Mackenzie Mines Pty Ltd, will also grant SmartTrans Holdings Ltd a 1% net smelter return royalty on production from EPM 10006, EPM 12546 and EPM 17515 for a term of seven years and six months from 12 June 2014.

While there is no legal requirement under the Corporations Act or the ASX Listing Rules for this transaction to be approved, the Directors consider it is appropriate to place this resolution before Shareholders.

SmartTrans Holdings Ltd has previously released information regarding the Mount MacKenzie Project via its Quarterly Report for the three months ended 31 March 2014 (Quarterly Report). Dr Simon Beams (a competent person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves) compiled the information in the Quarterly Report

relating to the Mount MacKenzie Project, whjich may be accessed via the ASX website (http://www.asx.com.au/asxpdf/20140430/pdf/42pbl4b53p5924.pdf). The Company is not aware of any new information or data that materially affects the information relating to the Mount MacKenzie Project included in the Quarterly Report.

5. RESOLUTION 4 – APPROVAL OF SHARE ISSUE

5.1 General

To continue the development of the Companys projects the Directors have determined to raise up to $720,000 by the placement of 18,000,000 Shares to sophisticated investors and clients of Wilshire Capital (Placement).

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 Resolution 4 will be to allow the Company to issue the Shares pursuant to the Placement 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 7.3

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

• (a) it is proposed to issue a maximum of 18,000,000 Shares to sophisticated investors;
• (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 on the same date;
• (c) the issue price will be $0.04 per Share;
• (d) the Shares will all be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company's existing Shares;
• (e) the Shares will be allotted and issued to sophisticated investors identified by Wilshire Capital none of whom will be related parties or associates of the Company; and
• (f) the funds raised from this issue of Shares will be used to finance the ongoing operations and administration costs of the Company including the requirements of the Geothermal project in South Australia and the development of the Mount McKenzie Project in Queensland and working capital.

6. RESOLUTION 5 – APPROVAL OF OPTION ISSUE

6.1 General

On 18 September 2014, the Company agreed to issue a total of 4,000,000 Options, consisting of 2,000,000 Class A Options and 2,000,000 Class B Options, in consideration for services provided by consultants involved in assisting with the acquisition of the Mt McKenzie project (including corporate advisory and associated services) (Option Placement).

Resolution 5 seeks Shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of Options pursuant to the Option Placement.

A summary of ASX Listing Rule 7.1 is set out in Section 5.1 above.

The effect of Resolution 5 will be to allow the Company to issue the Options pursuant to the Option Placement 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.

6.2 Technical Information required by ASX Listing Rule 7.3

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

• (a) a total of 4,000,000 Options will be allotted, consisting of 2,000,000 Class A Options and 2,000,000 Class B Options;
• (b) the Options 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 Options will occur on the same date;
• (c) the Options will be issued as consideration for services provided by consultants involved in assisting with the acquisition of the Mt McKenzie project (including corporate advisory and associated services) and accordingly no funds will be raised from the Option Placement;
• (d) the Options will be issued to the following parties:
  • (i) Jamstep Holdings 1,000,000 Class A Options;
  • (ii) Minerva Geological Services 1,000,000 Class A Options;
  • (iii) Wilshire Capital 2,000,000 Class B Options;
• (e) the Class A Options will be issued on the terms and conditions set out in Schedule 1 and the Class B Options will be issued on the terms and conditions set out in Schedule 2; and
• (f) Because the Options will be issued as consideration for services provided by consultants involved in assisting with the acquisition of the Mt McKenzie project (including corporate advisory and associated services), no funds will be raised from the Option Placement.

7. RESOLUTION 6 – APPROVAL OF 10% PLACEMENT CAPACITY

7.1 General

ASX Listing Rule 7.1A provides that an Eligible Entity may seek Shareholder approval at its annual general meeting to allow it to issue Equity Securities up to 10% of its issued capital (10% Placement Capacity).

The Company is an Eligible Entity.

If Shareholders approve Resolution 6, the number of Equity Securities the Eligible Entity may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out in section 7.2 below).

The effect of Resolution 6 will be to allow the Company to issue Equity Securities up to 10% of the Company's fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Meeting, without subsequent Shareholder approval and without using the Company's 15% annual placement capacity granted under Listing Rule 7.1.

Resolution 6 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 6 for it to be passed.

7.2 ASX Listing Rule 7.1A

ASX Listing Rule 7.1A came into effect on 1 August 2012 and enables an Eligible Entity to seek shareholder approval at its annual general meeting to issue Equity Securities in addition to those under the Eligible Entity's 15% annual placement capacity.

An Eligible Entity is one that, as at the date of the relevant annual general meeting:

• (a) is not included in the S&P/ASX 300 Index; and
• (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation of $318,029.

Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has one class of Equity Security on issue, being the Shares (ASX Code: REZ).

The exact number of Equity Securities that the Company may issue under an approval under Listing Rule 7.1A will be calculated according to the following formula:

Where:

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

• (i) plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2;
• (ii) plus the number of partly paid shares that became fully paid in the previous 12 months;
• (iii) plus the number of Shares issued in the previous 12 months with approval of holders of Shares under Listing Rules 7.1 and 7.4. This does not include an issue of fully paid ordinary shares under the entity's 15% placement capacity without shareholder approval; and
• (iv) less the number of Shares cancelled in the previous 12 months.

Calculation of 'Variable A':

• The Company has not issued any Shares during the previous 12 months (pursuant to an exception in ASX Listing Rule 7.2 or with the approval of Sharehodlers pursuant to ASX Listing Rules 7.1 and 7.4).
• No partly paid Shares have become fully paid in the previous 12 months.

Therefore, as at the date of this Notice, Variable A above will be 63,342,306 Shares (taking into account the 18,000,000 Shares to be issued if Resolution 4 is approved and assuming no further Shares are issued).

• D is 10%.
• E is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of holders of Ordinary Securities under ASX Listing Rule 7.1 or 7.4.

Calculation of 'Variable E':

The Company has not previously sought Listing Rule 7.1A approval and has not therefore issued any Shares under ASX Listing Rule 7.1A.2.

7.3 Technical information required by ASX Listing Rule 7.1A

Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 6:

(a) Minimum Price

The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed; or
• (ii) if the Equity Securities are not issued within 5 ASX trading days of the date in section 7.3(a)(i), the date on which the Equity Securities are issued.

(b) Date of Issue

The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following:

• (i) 12 months after the date of this Meeting; and
• (ii) the date of approval by Shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company's activities) or 11.2 (disposal of the Company's main undertaking) (after which date, an approval under Listing Rule 7.1A ceases to be valid),

(10% Placement Capacity Period).

(c) Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 6 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1A(2), on the basis of the current market price of Shares and the current number of Equity Securities on issue as at the date of this Notice.

The table also shows the voting dilution impact where the number of Shares on issue (Variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity.

	Dilution
Number ofShares onIssue	IssuePrice(per Share)	0.01750% decreasein Issue Price	0.034Issue Price	0.068100% increasein Issue Price
45,342,306(CurrentVariable A)	Sharesissued - 10%votingdilution	4,534,231Shares	4,534,231Shares	4,534,231Shares
	Funds raised	$77,082	$154,164	$308,328
68,013,459(50%increase inVariable A)	Sharesissued - 10%votingdilution	6,801,346Shares	6,801,346Shares	6,801,346Shares
	Funds raised	$115,623	$231,246	$462,492
90,684,612(100%increase in	Sharesissued - 10%votingdilution	9,068,461Shares	9,068,461Shares	9,068,461Shares

	Dilution
Number ofShares onIssue	IssuePrice(per Share)	0.01750% decreasein Issue Price	0.034Issue Price	0.068100% increasein Issue Price
Variable A)	Funds raised	$154,164	$308,328	$616,655

*The number of Shares on issue (Variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a prorata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

The table above uses the following assumptions:

• 1. There are 45,342,306 Shares on issue (being the total number of Shares on issue as at the date of this Notice of Meeting).
• 1. The issue price set out above is the closing price of the Shares on the ASX on 14 October 2014.
• 1. The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity.
• 1. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.
• 1. The issue of Equity Securities under the 10% Placement Capacity consists only of Shares. It is assumed that no Options are exercised into Shares before the date of issue of the Equity Securities.
• 1. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.
• 1. This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.
• 1. The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.
• 1. The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Capacity, based on that Shareholder's holding at the date of the Meeting.

Shareholders should note that there is a risk that:

• (i) the market price for the Company's Shares may be significantly lower on the issue date than on the date of the Meeting; and
• (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

(d) Purpose of Issue under 10% Placement Capacity

The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes:

• (i) as cash consideration in which case the Company intends to use funds raised for the potential acquisition of assets and investments (including expenses associated with such an acquisition) and continued exploration expenditure on the Company's current assets; or
• (ii) as non-cash consideration for the acquisition of potential new assets and investments, in such circumstances the Company will

provide a valuation of the non-cash consideration as required by listing Rule 7.1A.3.

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

(e) Allocation policy under the 10% Placement Capacity

The Company's allocation policy for the issue of Equity Securities under the 10% Placement Capacity will be dependent on the prevailing market conditions at the time of the proposed placement(s).

The recipients of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined. However, the recipients of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

The Company will determine the recipients at the time of the issue under the 10% Placement Capacity, having regard to the following factors:

• (i) the purpose of the issue;
• (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;
• (iii) the effect of the issue of the Equity Securities on the control of the Company;
• (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;
• (v) prevailing market conditions; and
• (vi) advice from corporate, financial and broking advisers (if applicable).

Further, if the Company is successful in acquiring new resources, assets or investments, it is likely that the recipients under the 10% Placement Capacity will be vendors of the new resources, assets or investments.

(f) Compliance with ASX Listing Rules 7.1A.4 and 3.10.5A

When the Company issues Equity Securities pursuant to the 10% Placement Capacity, it must give to ASX:

• (i) a list of the recipients of the Equity Securities and the number of Equity Securities issued to each (not for release to the market), in accordance with Listing Rule 7.1A.4; and
• (ii) the information required by Listing Rule 3.10.5A for release to the market.

7.4 Voting Exclusion

A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing Shareholder to participate in

an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing Shareholders will be excluded from voting on Resolution 6.

8. ENQUIRIES

Shareholders are requested to contact Ms Cindy Louie on (+ 61 2) 9227 8900 if they have any queries in respect of the matters set out in these documents.

GLOS SARY

$ means Australian dollars.

10% Placement Capacity has the meaning given in section 7.1 of the Explanatory Statement.

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

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Class A Option means an Option issued on the terms set out in Schedule 1.

Class B Option means an Option issued on the terms set out in Schedule 2.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;
• (a) a child of the member's spouse;
• (b) a dependent of the member or the member's spouse;
• (c) anyone else who is one of the member's family and may be expected to influence the member, or be influenced by the member, in the member's dealing with the entity;
• (d) a company the member controls; or
• (e) a person prescribed by the Corporations Regulations 2001 (Cth).

Company means Resources & Energy Group Limited (ACN 110 005 822).

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

AEDT means Australian Eastern Daylight Time as observed in Sydney, New South Wales.

AWST means Australian Western Standard Time as observed in Perth, Western Australia.

Eligible Entity means an entity that, at the date of the relevant general meeting:

• (a) is not included in the S&P/ASX 300 Index; and
• (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

Equity Securities includes a Share, a right to a Share or Option, an Option, a convertible security and any security that ASX decides to classify as an Equity Security.

Explanatory Statement means the explanatory statement accompanying the Notice.

Jamstep Holdings means Jamstep Holdings Pty Ltd ACN 602 360 403.

Key Management Personnel has the same meaning as in the accounting standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Minerva Geological Services means Minerva Geological Services Pty Ltd ACN 081 618 911.

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

Option means an option to acquire a Share.

Option Placement means the proposed placement of 4,000,000 Options, as described in Section 6.

Ordinary Securities has the meaning set out in the ASX Listing Rules.

Placement means the proposed issue of 18,000,000 Shares, as described in Section 5.

Proxy Form means the proxy form accompanying the Notice.

Remuneration Report means the remuneration report set out in the Director's report section of the Company's annual financial report for the year ended 30 June 2014.

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

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

Shareholder means a holder of a Share.

Wilshire Capital means Wilshire Capital Partners Pty Ltd ACN 169 888 920.

Variable A means "A" as set out in the calculation in section 7.2 of the Explanatory Statement.

SCHEDULE 1 – TERMS OF CLASS A OPT IONS

(a) Entitlement

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

(b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.05 (Exercise Price)

(c) Expiry Date

Each Option will expire at 5:00 pm (AWST) on 31 December 2017 (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 on or prior to 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 Exercise Date, the Company will:

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

If a notice delivered under (g)(ii) 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) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

(j) 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.

(k) 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.

(l) 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.

(m) Unquoted

The Company will not apply for quotation of the Options on ASX.

(n) Transferability

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

SCHEDULE 2 – TERMS OF CLASS B OP T IONS

(a) Entitlement

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

(b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.05 (Exercise Price)

(c) Expiry Date

Each Option will expire at 5:00 pm (AWST) on 31 December 2018 (Expiry Date). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period and Vesting Condition

Pursuant to these terms:

• (i) 1,000,000 of the Options will become exercisable if, and on and from the date on which, the 20 day volume weighted average price (VWAP) of Shares is above $0.06 by 31 December 2015; and
• (ii) 1,000,000 of the Options will become exercisable if, and on and from the date on which, the 20 day VWAP of Shares is above $0.10 by 31 December 2016,

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 Exercise Date, the Company will:

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

(iii) 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.

If a notice delivered under (g)(ii) 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) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

(j) 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.

(k) 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.

(l) 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.

(m) Unquoted

The Company will not apply for quotation of the Options on ASX.

(n) Transferability

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