RESOURCES & ENERGY GROUP LIMITED ACN 110 005 822

NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME: 11:00 AM (AEST)

DATE: 21 December 2018

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

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

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.

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 7:00pm (AEST) on 19 December 2018.

Independent Expert's Report: Shareholders should carefully consider the Independent Expert's Report prepared for the purposes of ASX Listing Rule 10.1 and section 611 item 7 of the Corporations Act. The Independent Expert's Report comments on the fairness and reasonableness of the transactions the subject of Resolutions 1, 8 and 9 to the non-associated Shareholders. The Independent Expert has determined the transactions the subject of Resolutions 1, 8 and 9 are NOT FAIR BUT REASONABLE.

AGENDA

1. RESOLUTION 1 – APPROVAL OF ACQUISITION OF MENZIES PROJECT

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

"That, subject to and conditional upon the passing of Resolutions 2, 3 and 9, for the purposes of ASX Listing Rules 10.1 and 10.11 and for all other purposes, approval is given for:

(a) the Company to acquire Menzies, the RIQO Tenements and the AMP Tenements from the Related Vendors; and
(b) the Company to issue the Related Vendors 23,920,000 Shares,
on the terms and conditions set out in the Explanatory Statement.

Voting Exclusion – ASX Listing Rules: The Company will disregard any votes cast in favour of the Resolution by a party to the Acquisition, the Poole Parties or any of their associates. 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.

Independent Expert's Report: Shareholders should carefully consider the report prepared by the Independent Expert for the purposes of the Shareholder approval required under ASX Listing Rule 10.1. The Independent Expert's Report comments on the fairness and reasonableness of the transactions the subject of Resolutions 1, 8 and 9 to the nonassociated Shareholders in the Company. The Independent Expert has determined the issues of Shares the subject of Resolutions 1, 8 and 9 are NOT FAIR BUT REASONABLE to the non-associated Shareholders. A copy of the Independent Expert's Report accompanies this Notice and is also available on the Company's website (http://www.rezgroup.com.au/). If requested by a Shareholder, the Company will send to the Shareholder a hard copy of the Independent Expert's Report at no cost.

2. RESOLUTION 2 – ISSUE OF SHARES TO UNRELATED VENDORS – MENZIES ACQUISITION

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

"That, subject to and conditional upon the passing of Resolutions 1, 3 and 9, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue 2,480,000 Shares on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or 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 UNRELATED VENDORS – LARCA ACQUISITION

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

"That, subject to and conditional upon the passing of Resolutions 1, 2 and 9, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue 6,000,000 Shares on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion – ASX Listing Rules: The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or 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.

4. RESOLUTION 4 – APPROVAL TO CONVERT DEBT OWING TO RELATED PARTIES

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

"That, subject to and conditional upon the passing of Resolution 9 (if applicable), for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue up to 15,000,000 Shares to Fontelina Pty Ltd (or its nominee) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion – ASX Listing Rules: The Company will disregard any votes cast in favour of the Resolution by or on behalf of the Poole Parties or any of their associates. 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 – ISSUE OF SETTLEMENT SHARES TO UNRELATED PARTIES ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS

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 Rules 6.23.2 and 7.1 and for all other purposes, approval is given for the Company to issue up to 9,480,000 Shares and cancel up to 3,950,000 Noteholder Options on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion – ASX Listing Rules: The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company), a person who holds Noteholder Options the subject of Resolution 5, or an associate of that person (or 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 – ISSUE OF SETTLEMENT SHARES TO A RELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – FONTELINA PTY LTD

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

"That, subject to and conditional upon the passing of Resolution 9 (if applicable), for the purposes of ASX Listing Rules 6.23.2 and 10.11 and for all other purposes, approval is given for the Company to issue up to 15,000,000 Shares to Fontelina Pty Ltd (or its nominee) and cancel up to 6,250,000 Noteholder Options on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion – ASX Listing Rules: The Company will disregard any votes cast in favour of the Resolution by or on behalf of the Poole Parties, a person who holds Noteholder Options the subject of Resolution 6, or any of their associates. 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.

7. RESOLUTION 7 – ISSUE OF SETTLEMENT SHARES TO A RELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – VANTAGE HOUSE

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

"That, for the purposes of ASX Listing Rules 6.23.2 and 10.11 and for all other purposes, approval is given for the Company to issue up to 10,000,000 Shares to Vantage House (or its nominee) and cancel up to 4,166,667 Noteholder Options on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion – ASX Listing Rules: The Company will disregard any votes cast in favour of the Resolution by or on behalf of Vantage House (or its nominees), a person who holds Noteholder Options the subject of Resolution 7 or any of their associates. 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.

8. RESOLUTION 8 – ISSUE OF SETTLEMENT SHARES TO AN UNRELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – GAFFWICK PTY LIMITED

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

"That, for the purposes of section 611 (Item 7) of the Corporations Act, ASX Listing Rule 6.23.2 and for all other purposes, approval is given for the Company to issue up to 60,880,000 Shares to and cancel up to 22,342,857 Noteholder Options held by Gaffwick Pty Limited on the terms and conditions set out in the Explanatory Statement, which in addition to the 7,333,334 Shares already held, may result in Gaffwick Pty Limited's voting power increasing from 8.09% to up to a maximum of 45.02%** in the capital of the Company."

** The maximum voting power assumes the unlikely outcome that the Capital Raising does not proceed, the Company issues the full number of Shares pursuant to this Resolution, but no other Shares are issued under this Notice or for any other purposes.

The Company considers that the most likely outcome will be that the Transaction completes (the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice). In such circumstances, the voting power of Gaffwick would be a maximum of 20.46%.

Voting Exclusion – Corporations Act: No votes may be cast in favour of this Resolution by: (a) the person proposing to make the acquisition and their associates; or

(b) the persons (if any) from whom the acquisition is to be made and their associates. Accordingly, the Company will disregard any votes cast on this Resolution by Gaffwick Pty Limited and any of its associates.

Voting Exclusion – ASX Listing Rules: The Company will disregard any votes cast in favour of the Resolution by Gaffwick (or its nominees) or any of their associates. 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

Expert's Report: Shareholders should carefully consider the report prepared by the Independent Expert for the purposes of the Shareholder approval required under section 611 Item 7 of the Corporations Act. The Independent Expert's Report comments on the fairness and reasonableness of the transactions the subject of Resolutions 1, 8 and 9 to the non-associated Shareholders in the Company.

9. RESOLUTION 9 – APPROVAL OF ISSUE OF SECURITIES TO THE POOLE PARTIES

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

"That, for the purposes of section 611 (Item 7) of the Corporations Act and for all other purposes, approval is given for the Company to issue up to 53,920,000 Shares to the Poole Parties, comprising of:

(a) 23,920,000 Shares issued pursuant to the Acquisition the subject of Resolution 1;
(b) up to 15,000,000 Shares issued pursuant to the Debt Conversion the subject of Resolution 4; and
(c) up to 15,000,000 Shares issued pursuant to the PDN Conversion the subject of Resolution 6;

on the terms and conditions set out in the Explanatory Statement which in addition to the 14,067,302 Shares already held, may result in the Poole Parties' voting power increasing from 15.52% to up to a maximum of 44.42%** in the capital of the Company."

** The maximum voting power assumes the unlikely outcome that the Capital Raising does not proceed, the Acquisition completes, the maximum number of Shares are issued under the Acquisition Resolutions and Resolutions 4 (Conversion of the Debt) and 6 (Conversion of Fontelina PDNs), and no other Shares are issued under this Notice or for any other purpose.

Voting Exclusion – Corporations Act: No votes may be cast in favour of this Resolution by:

(a) the person proposing to make the acquisition and their associates; or

(b) the persons (if any) from whom the acquisition is to be made and their associates. Accordingly, the Company will disregard any votes cast on this Resolution by the Poole Parties and any of their associates.

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 Resolutions.

1. BACKGROUND TO THE TRANSACTION

1.1 General Background

On 9 November 2018, the Company announced to ASX that it had entered into agreements to acquire a 100% interest in the Menzies Project (Acquisition Agreements), a gold project located in Western Australia (Menzies Project) (Acquisition).

The Acquisition is conditional, amongst other things, on the Company obtaining all necessary regulatory and Shareholder approvals to effect the Acquisition. A summary of the material terms of the Acquisition Agreements are set out in Section 1.2.

In conjunction with the Acquisition, the Company is proposing to conduct a twotranche capital raising to raise up to $5,000,000 (Capital Raising). The first tranche of the Capital Raising will consist of a placement of up to 20,000,000 Shares (together with the issue of up to 20,000,000 Options) to raise $1,000,000. The second tranche of the Capital Raising will consist of a placement of up to 80,000,000 Shares to raise up to $4,000,000.

In addition, the Company is intending to reduce its debt and accordingly is offering:

(a) holders of project development notes (Project Development Notes) (PDN Noteholders) the opportunity to completely or partially redeem their Project Development Notes (PDN Conversion); and
(b) Fontelina Pty Ltd (Fontelina), the holder of $750,000 of debt (the Debt) (Debtholder), the opportunity to completely or partially convert the Debt (Debt Conversion).

Further details of the PDN Conversion and the Debt Conversion are set out in Sections 1.3.1 and 1.3.2.

Further details on the Menzies Project are included in the Company's announcements to ASX on 9 November 2018 and the Independent Technical Report on the Menzies Project accompanying this Notice as Appendix C.

Additionally, the Independent Technical Report (accompanying this Notice as Appendix C), contains and references information in respect of the Company's existing assets previously announced to ASX. The Company confirms that it is not aware of any new information or data that materially affects the announcements referred to.

1.2 The Acquisition

The Menzies Project consists of the Tenements set out in Schedule 1, which are currently held by Menzies Goldfield Limited (Menzies), RIQO Pty Ltd (RIQO), Australian Mineral Partners Pty Ltd (AMP) and Larca Pty Ltd (Larca).

The Acquisition will be implemented through the settlement of the four Acquisition Agreements:

(a) the share sale agreement between the Company and the holders of the issued capital in Menzies (Vendors) pursuant to which the Company has conditionally agreed to purchase 100% of the issued capital in Menzies (Share Sale Agreement); and
(b) the asset sale agreements between the Company and:
- (i) RIQO (RIQO Agreement);
- (ii) AMP (AMP Agreement);
- (iii) Larca (Larca Agreement),

(together the Tenement Holders), pursuant to which the Company has conditionally agreed to purchase tenements held by the Tenement Holders (Tenement Sale Agreements).

The Acquisition Agreements are inter-conditional, meaning that the completion of each of the Tenement Sale Agreements and the Share Sale Agreement must occur on or around the same time (Completion).

If the conditions precedent under each of the Acquisition Agreements (as set out in Sections 1.2.1(a) and 1.2.2(a) below) are not satisfied or waived by 31 March 2019 (or such other date as agreed between the parties) (the End Date) then a party to the agreement may by notice in writing to the other party elect to terminate the relevant agreement and Completion will not occur.

The consideration payable by the Company on Completion is set out in the table below:

Vendor1	CashConsideration2	Consideration Shares3	Value of ConsiderationShares4
Share Sale Agreement
Fontelina Pty Ltd	$144,000	9,920,000 Shares	$496,000
MinervaGeologicalServices PtyLimited	$36,000	2,480,000 Shares	$124,000
Subtotal	$180,000	12,400,000 Shares	$620,000
Tenement Sale Agreements
RIQO	$300,000	10,000,000 Shares	$500,000
AMP	Nil	4,000,000 Shares	$200,000
Larca	Nil	6,000,000 Shares	$300,000
Subtotal	$300,000	18,000,000 Shares	$1,000,000
TOTAL	$480,000	30,400,000 Shares	$1,620,000

Notes:

Fontelina Pty Ltd (the holder of 80% of the issued capital of Menzies), RIQO and AMP are entities controlled by Richard Poole, a Director of the Company. Refer to Sections 1.11.1 and 11.2(a) for further details of the nature and extent of Mr Poole's control over these entities. Minerva Geological Services Pty Limited and Larca are not controlled by or associated with any of the Directors.

1. The payment of Cash Consideration is subject to the ASX being satisfied that the cash payment is reimbursement of expenditure incurred in developing the respective tenements as required by Chapter 10 of the ASX Listing Rules. If the ASX determines that the Cash Consideration exceeds the expenditure that has been incurred in developing the respective tenements, then the Cash Consideration will be reduced. No additional Shares will be issued at Completion. Following Completion, the Related Vendors may elect to convert the reduction in Cash Consideration to Shares (at the issue price of $0.05). Any such issue will be subject to additional Shareholder approval required in accordance with the Corporations Act and the ASX Listing Rules at the time of issue.
1. The Consideration Shares are expected to be subject to escrow for 12 months from the date of issue in accordance with the ASX Listing Rules.
1. The Consideration Shares will be issued at a deemed issue price of $0.05 per Share.

Further details of the material terms of the Acquisition Agreements, including the conditions precedent under each agreement, are set out below.

1.2.1 Share Sale Agreement

The material terms of the Share Sale Agreement are as follows:

(a) Conditions Precedent

The conditions precedent which must be satisfied prior to Completion are:

(i) the Company confirming in writing to the Vendors that it is satisfied in its sole discretion with its due diligence review of:
- (A) the business, assets, operations, financial position and financial performance of Menzies; and
- (B) the Menzies Tenements;
(ii) the Company obtaining all necessary approvals pursuant to the ASX Listing Rules and Corporations Act to allow the Company to lawfully complete the Acquisition. This Notice of Meeting has been prepared to seek shareholder approval for the matters required to complete the Acquisition;
(iii) Menzies obtaining, in a form satisfactory to the Company, all third-party approvals, consents and regulatory approvals necessary to give effect to, and to allow the Company to complete the matters set out in the Share Sale Agreement;
(iv) no breach of any warranty given by the Vendors occurring prior to Completion; and
(v) no event, occurrence or matter, which individually or when aggregated with all such events, occurrences or matters of a similar kind, taking place at any time prior to the date of Completion which has a material adverse effect on the Menzies Tenements or the financial condition, operations or prospects of Menzies.

As noted at Section 1.2 above, these conditions must be satisfied or waived by the End Date.

(b) Consideration

The consideration payable by the Company on Completion is set out at Section 1.2.

(c) Royalty

The Company will pay the Vendors a royalty of 1% of net smelter return from the Menzies Tenements, to be apportioned in respect of their respective shareholdings in Menzies.

(d) Warranties

The Share Sale Agreement contains standard warranties and representations on behalf of the parties typical for an agreement of this nature.

(e) Other

The Share Sale Agreement otherwise contain terms and conditions typical for an agreement of this nature.

1.2.2 Tenement Sale Agreements

The material terms of each of the Tenement Sale Agreements are as follows:

(a) Conditions Precedent

The conditions precedent which must be satisfied prior to Completion are:

(i) the Company confirming in writing to the Tenement Holders that it is satisfied in its sole discretion with its due diligence review of the tenements held by the Tenement Holders;
(ii) the grant of the necessary approvals by the Minister or an officer of the Department acting with the authority of the Minister under sections 64(1)(b) or 82(1)(d) of the Mining Act to the transactions contemplated by the Tenement Sale Agreements; and
(iii) the Company obtaining all necessary approvals pursuant to the ASX Listing Rules and Corporations Act to allow the Company to lawfully complete the Acquisition. This Notice of Meeting has been prepared to seek shareholder approval for the matters required to complete the Acquisition.

These conditions precedent must be satisfied or waived by 5:00pm on the End Date.

(b) Consideration

The consideration payable by the Company on Completion is set out at Section 1.2.

(c) Royalty

The Company will pay the Tenement Holders a royalty of 1% of net smelter return from their respective tenements.

(d) Warranties

The Tenement Sale Agreements contain standard warranties and representations on behalf of the parties typical for agreements of this nature.

(e) Other

The Tenement Sale Agreements otherwise contain terms and conditions typical for agreements of this nature.

1.3 Conversion of Debt

The Company is intending to reduce its debt and accordingly is offering PDN Noteholders the opportunity to completely or partially redeem and convert their Project Development Notes and the Debtholder, the opportunity to completely or partially convert its Debt.

1.3.1 Debt Conversion

The Company has agreed, subject to obtaining Shareholder approval, to issue up to 15,000,000 Settlement Shares to Fontelina (or its nominee) in consideration for the complete or partial redemption and cancellation of debt to the value of $750,000 (Debt).

The Debt comprises of cash advances that were provided to the Company by the Poole Parties for working capital purposes. The Debt is interest free and unsecured.

1.3.2 PDN Conversion

As announced on 22 April 2016, 2 December 2016 and 29 September 2017, the Company has issued Project Development Notes to the value of $4,768,000 to the PDN Noteholders to raise funds to facilitate the continuing development of the Radio Gold project and the exploration of the Mt Mackenzie prospect. The Project Development Notes were issued together with free attaching Options (Noteholder Options).

The Company is intending to reduce its debt and accordingly is offering the PDN Noteholders the opportunity to completely or partially redeem and convert their Project Development Notes through:

(a) the issue of Shares in the capital of the Company (Settlement Shares) at a conversion price of $0.05 per Settlement Share;
(b) the pro rata cancellation of unexercised Noteholder Options; and
(c) the payment of all accrued interest owing in respect of the redeemed portion of the Project Development Notes within 24 months of the date of issue of the Settlement Shares,

at which point there will be no obligations of the Company regarding the redeemed portion of the Project Development Notes (the PDN Conversion).

Unrelated PDN Noteholders currently hold Project Development Notes to the value of $3,518,000 and 26,292,857 Noteholder Options. The Company has agreed, subject to obtaining Shareholder approval, to issue up to 70,360,000 Settlement Shares to the unrelated PDN Noteholders (or their nominees) in consideration for the complete or partial redemption of their Project Development Notes and the pro rata cancellation of their Noteholder Options.

Resolution 5 seeks Shareholder approval for the issue of up to 9,480,000 Settlement Shares to unrelated PDN Noteholders (or their nominee) in consideration for the complete or partial redemption of their Project Development Notes to the value of $474,000 and the pro rata cancellation of up to 3,950,000 Noteholder Options.

Resolution 8 seeks Shareholder approval for the issue of up to 60,880,000 Settlement Shares (Gaffwick Shares) to an unrelated PDN Noteholder, Gaffwick Pty Limited (Gaffwick) in consideration for the complete or partial redemption of its Project Development Notes to the value of $3,044,000 (Gaffwick PDNs) and the pro rata cancellation of up to 22,342,857 Noteholder Options. Following the issue of the Gaffwick Shares, Gaffwick will have a relevant interest in up to 68,213,334 Shares and a voting power of between 20.46% and 45.02% (depending on the number of Shares the Company issues under the Capital Raising and under the other Resolutions set out in this Notice). Accordingly, the Company is seeking a separate Shareholder approval pursuant to section 611 item 7 of the Corporation Act for the issue of the Gaffwick Shares. Further details of the potential control implications of the Resolutions set out in this Notice are summarised in Section 10.3(b).

Fontelina Pty Ltd (Fontelina), a related party of the Company by virtue of being controlled by Director Richard Poole, holds Project Development Notes to the value of $750,000 (Fontelina PDNs) and 6,250,000 Noteholder Options (Fontelina Options). The Company has agreed, subject to obtaining Shareholder approval, to issue up to 15,000,000 Settlement Shares to Fontelina (or its nominee) in consideration for the complete or partial redemption of the Fontelina PDNs and the pro rata cancellation of the Fontelina Options.

Vantage House Limited (Vantage House), a related party of the Company by virtue of being controlled by a son of Director Gavin Rezos, holds Project Development Notes to the value of $500,000 (Vantage House PDNs) and 4,166,667 Noteholder Options (Vantage House Options). The Company has agreed, subject to obtaining Shareholder approval, to issue up to 10,000,000 Settlement Shares to Vantage House (or its nominee) in consideration for the complete or partial redemption of the Vantage House PDNs and the pro rata cancellation of the Vantage House Options.

The conversion of the Fontelina PDNs, the Vantage House PDNs and the Gaffwick PDNs will be conducted on the same terms as the conversion of Project Development Notes held by unrelated PDN Noteholders, for which Shareholder approval is sought under Resolution 5.

1.4 Pro forma balance sheet

An unaudited pro-forma balance sheet of the Company following completion of the Transaction (assuming all Resolutions are approved by Shareholders and other assumptions as described) is set out in Schedule 2.

1.5 Pro forma capital structure

The capital structure of the Company following completion of the Transaction, assuming that the Acquisition completes, all Project Development Notes are fully redeemed and converted, the Debt is fully converted and the full 100,000,000 Shares are issued under the Capital Raising is set out below. In addition, the above table assumes that each of the Resolutions set out in this Notice is approved by Shareholders.

	Number

Shares on issue as at the date of this Notice
Fully paid ordinary shares	90,643,845
Total	90,643,845
Shares on issue on completion of the Transaction
Shares to be issued pursuant to the Acquisition1, 2	32,400,0001
Shares to be issued pursuant to the PDN Conversion3	95,360,000
Shares to be issued pursuant to the Debt Conversion4	15,000,000
Shares to be issued pursuant to the Capital Raising	100,000,000
Total	333,403,845

Notes:

1. Further details in respect of the Acquisition are set out in Section 1.2. The Acquisition is conditional upon Shareholders approving Resolutions 1, 2, 3 and 9 (Acquisition Resolutions). If any one of the Acquisition Resolutions is not approved by Shareholders, the Acquisition will not complete.
1. The Consideration Shares are expected to be subject to escrow for 12 months from the date of issue in accordance with the ASX Listing Rules.
1. The Company is seeking Shareholder approval for the issue of the Settlement Shares upon conversion of the Project Development Notes. Refer to Resolutions 5, 6 and 7 for further details.
1. The Company is seeking Shareholder approval for the issue of the Conversion Shares upon conversion of the Debt. Refer to Resolution 4 for further details.

Options

	Number
Options on issue as at the date of this Notice
Unquoted Options exercisable at $0.06each on or before31December 2018	1,000,000
Unquoted Options exercisable at $0.12 each on or before31December 2019	1,000,000
Unquoted Options exercisable at $0.12 each on or before31March 2021	26,316,6671
Unquoted Options exercisable at $0.14 each on or before31March 2021	250,0002
Unquoted Options exercisable at $0.14 each on or before30November 2021	18,142,857
Unquoted Options exercisable at $0.14 each on or before15December 2022	2,000,0002
Total	48,709,524
Cancellation of Options

	Number
Unquoted Options exercisable at $0.12each on or before 31March 2021	18,566,667
Unquoted Options exercisable at $0.14 each on or before 30November 2021	18,142,857
Total	36,709,524
Options to be issued pursuant to the Capital Raising
Unquoted Options exercisable at $0.10each on or before 30November 2021	20,000,000
Options on issue on completion of the Transaction
Unquoted Options exercisable at $0.06each on or before31December 2018	1,000,000
Unquoted Options exercisable at $0.10each on or before 30November 2021	20,000,000
Unquoted Options exercisable at $0.12 each on or before31December 2019	1,000,000
Unquoted Options exercisable at $0.12 each on or before31March 2021	7,750,0001
Unquoted Options exercisable at $0.14 each on or before31March 2021	250,0002
Unquoted Options exercisable at $0.14 each on or before15December 2022	2,000,0002
Total	32,000,000

Notes:

1. 250,000 of these Options are subject to vesting conditions.
1. These Options are subject to vesting conditions.
1. This assumes that all Project Development Notes as per Resolutions 5, 6 and 7 are fully redeemed and converted and the Noteholder Options are cancelled.

Performance Shares

	Number
Performance Shares on issue as at the date of this Notice
Performance Shares	7,500,000
Total	7,500,000
Performance Shares on issue on completion of the Transaction
Performance Shares	7,500,000
Total	7,500,000

Notes:

The Company is currently reviewing the non-satisfaction of the vesting conditions for the Performance Shares.

1.6 Risk factors

Following the Acquisition, there will be no material change in the nature of the Company's business activities as the Company will continue to conduct exploration activities on mineral projects. Accordingly, the risk profile will be analogous to that of the Company's existing business which has previously been disclosed to Shareholders. The relevant risks include: exploration risks, reliance on key personnel, liquidity and volatility, operational and technical risks, commodity prices and exchange rate fluctuations, environmental regulations and tenure and native title risks.

In addition, the Company will be exposed to the following risks as a result of entering into the Acquisition Agreements, the Acquisition and the Transaction:

(a) Reinstatement of Company's securities to official quotation on ASX

The Company's securities have been suspended from trading on ASX since 12 April 2018. It is expected that the Company's securities will remain suspended from quotation until the Company has released its audited financial statements for the year ended 30 June 2018 and its quarterly reports for periods ending March 2018, June 2018 and September 2018.

There is a risk that the Company's Shares may remain suspended from official quotation until the Company has demonstrated to ASX that it has sufficient funding and level of activities to warrant the reinstatement to trading of its securities.

(b) Control risk

Gaffwick and the Poole Parties (together, the Substantial Shareholders) are currently substantial Shareholders of the Company holding a relevant interest in 8.09% and 15.52% of the issued capital of the Company respectively. The Poole Parties are also a related party of the Company by virtue of being controlled by Richard Poole, a Director of the Company.

The issue of Shares in accordance with the Resolutions set out in this Notice may result in the voting power of one or both of the Substantial Shareholders increasing above 20%.

The Company considers that the most likely outcome will be that the Transaction completes (the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice and no other Shares are issued for any other purposes). In this circumstance, the voting power of Gaffwick would be 20.46% and the voting power of the Poole Parties would be 20.39%.

However, in the unlikely event that the Capital Raising does not proceed, the Acquisition completes, the maximum number of Shares are issued under the Acquisition Resolutions and Resolutions 4 (Conversion of the Debt) and 6 (Conversion of Fontelina PDNs), and no other Shares are issued under this Notice or for any other purposes, the voting power of the Poole Parties will increase to 44.42%.

Alternatively, in the event that the Capital Raising does not proceed, the maximum number of Shares are issued under Resolution 8 (Issue of Gaffwick Shares) and no other Shares are issued under this Notice or for any other purposes, the voting power of Gaffwick will increase to 45.02%.

Further details of the potential control impact of the Resolutions set out in this Notice are summarised in Sections 10.3(b) and 11.2(b) .

If either Gaffwick or the Poole Parties hold a significant interest in the capital of the Company, they would be in a position to potentially influence the financial decisions of the Company, and their interests may not align with those of all other Shareholders.

(c) Contractual

Under the terms of the Acquisition Agreements, the Company has agreed to acquire the Menzies Project, subject to the satisfaction of a number of conditions (as outlined in Sections 1.2.1(a) and 1.2.2(a) above).

The ability of the Company to acquire the Menzies Project and fulfil its stated objectives is subject to the performance by the Vendors and the Tenement Holders of their obligations under the Acquisition Agreements. If the Vendors or the Tenement Holders default in the performance of their obligations, it may delay the completion of any stage of the Acquisition (if it completes at all) and it may be necessary for the Company to approach a court to seek a legal remedy, which can be uncertain and costly.

(d) Going concern

The Company's financial report for the half year period ended 31 December 2017 (released to ASX on 15 March 2018) (Half Yearly Report) includes a note on the financial condition of the Company and the existence of a material uncertainty that may cast significant doubt on the consolidated entity's ability to continue as a going concern.

Although the Company has not released its annual report for the year ended 31 June 2018, the Directors anticipate that until the Capital Raising and/or conversion of Project Development Notes or other debt is completed it is possible that the report will include a note on the financial condition of the Company and the existence of a material uncertainty that may cast significant doubt on the consolidated entity's ability to continue as a going concern.

1.7 Indicative Timetable

Subject to the requirements of the ASX Listing Rules, the Company anticipates completion of the Acquisition will be in accordance with the following timetable:

Event	Date
ASX announcement of Acquisition	9 November2018
Capital Raising Notice of Meeting despatched toShareholders	9 November2018
Acquisition Notice of Meeting despatched to Shareholders(this Notice)	21November 2018
General Meeting to approve Capital Raising	12 December2018
General Meeting to approve Acquisition	21December2018

Completion of the Acquisition*	24December2018

* These dates are indicative only and subject to change.

1.8 Advantages of the Acquisition

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder's decision on how to vote on the Acquisition Resolutions:

(a) the Menzies Project is highly prospective for gold mineralisation which complements the Company's existing assets;
(b) the Menzies Project is at a more advanced stage of exploration than the Company's existing assets and includes a mining lease;
(c) the consideration payable under the Acquisition Agreements is predominantly scrip, therefore conserving the Company's cash reserves;
(d) by approving the Capital Raising, and each of the Resolutions set out in this Notice, the Company will be in a much stronger financial position to pursue development of its mineral assets;
(e) in the event that the full number of Shares are issued under the Capital Raising and each of the Resolutions set out in this Notice, the increase in the voting power of Gaffwick and the Poole Parties (to 20.46% and 20.39% respectively) will not result in either party obtaining full and unfettered control over the Company;
(f) the consideration paid for the Acquisition, being $2.1 million (details of which are set out in Section 1.2) is below the assessed value of the Menzies Project of between $2.3 million and $3.5 million with a preferred value of $2.9 million (as assessed in the Independent Technical Report accompanying this Notice as Appendix C);
(g) if the Capital Raising, the Acquisition, the Debt Conversion and the PDN Conversion are not approved by Shareholders or completed, and in the absence of an alternative transaction, capital raising or support from existing financiers and shareholders, the Company may not be able to continue as a going concern and trading in Shares may not resume; and
(h) the potential increase in market capitalisation of the Company following completion of the Acquisition may lead to increased coverage from investment analysts, access to improved equity capital market opportunities and increased liquidity which are not currently present.

1.9 Disadvantages of the Acquisition

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder's decision on how to vote on the Acquisition Resolutions:

(a) current Shareholders will have their voting power in the Company diluted;
(b) the voting power of the Poole Parties will increase to above 20%;
(c) there is no guarantee that Menzies Project will be successful for gold discovery or that any gold can be economically extracted;
(d) if the Capital Raising, PDN Conversion and Debt Conversion are approved and completed, the likelihood of the Company receiving a takeover offer without the agreement of Gaffwick and the Poole Parties may diminish; and
(e) current Shareholders will be exposed to the additional risks associated with the Acquisition as set out in Section 1.6.

1.10 Summary of the Resolutions

A summary of the Resolutions is as follows:

(a) Resolution 1 seeks Shareholder approval, for the purposes of ASX Listing Rules 10.1 and 10.11, for the Acquisition, including the issue at Completion of 23,920,000 Shares to the Related Vendors, in consideration for the acquisition of 100% of the issued capital of Menzies;
(b) Resolution 2 seeks Shareholder approval, for the purposes of ASX Listing Rule 7.1, for the issue at Completion of 2,480,000 Shares to an unrelated vendor in consideration for the acquisition of Menzies;
(c) Resolution 3 seeks Shareholder approval, for the purposes of ASX Listing Rule 7.1, for the issue at Completion of 6,000,000 Shares in consideration for the acquisition of the Larca Tenements;
(d) Resolution 4 seeks Shareholder approval, for the purposes of ASX Listing Rule 10.11, for the issue at Completion of up to 15,000,000 Shares to Fontelina (or its nominee) in consideration for the Debt Conversion;
(e) Resolution 5 seeks Shareholder approval, for the purposes of ASX Listing Rules 6.23.2 and 7.1, for the issue at Completion of up to 9,480,000 Shares to the unrelated PDN Noteholders in consideration for the complete or partial redemption and conversion of their Project Development Notes and the pro rata cancellation of the Noteholder Options;
(f) Resolution 6 seeks Shareholder approval, for the purposes of ASX Listing Rules 6.23.2 and 10.11, for the issue at Completion of up to 15,000,000 Shares to Fontelina (or its nominee) in consideration for the complete or partial redemption and conversion of the Fontelina PDNs and the pro rata cancellation of the Fontelina Options;
(g) Resolution 7 seeks Shareholder approval, for the purposes of ASX Listing Rules 6.23.2 and 10.11, for the issue at Completion of up to 10,000,000 Shares to Vantage House (or its nominee) in consideration for the complete or partial redemption and conversion of the Vantage House PDNs and the pro rata cancellation of the Vantage House Options;
(h) Resolution 8 seeks Shareholder approval, for the purposes of section 611 (item 7) of the Corporations Act and ASX Listing Rule 6.23.2, for the issue of up to 60,880,000 Shares to the Gaffwick in consideration for the complete or partial redemption and conversion of the Gaffwick PDNs and the pro rata cancellation of the Gaffwick Options, which, in addition to the 7,333,334 Shares already held, which may result in the voting power of Gaffwick increasing from 8.09% to more than 20%. Further details of the potential control implications are set out in Sections 9 and 10 of this Notice; and

(i) Resolution 9 seeks Shareholder approval, for the purposes of section 611 (item 7) of the Corporations Act, for the issue of up to 53,920,000 Shares to the Poole Parties (pursuant to Resolutions 1, 4 and 6), which, in addition to the 14,067,302 Shares already held, which may result in the voting power of the Poole Parties increasing from 15.52% to more than 20%. Further details of the potential control implications are set out in Sections 9 and 11 of this Notice.

The Acquisition is conditional upon Shareholders approving Resolutions 1, 2, 3 and 9 (the Acquisition Resolutions). If any one of the Acquisition Resolutions is not approved by Shareholders, the Acquisition will not complete.

1.11 Directors' Interests in the Transaction

1.11.1 Richard Poole

Director, Richard Poole, and his associated entities currently have a relevant interest in 14,06,302 Shares representing voting power in the Company of 15.52%.

Richard Poole has an interest in the Acquisition through his shareholding and directorship interests in RIQO, AMP and Fontelina (the holder of 80% of the issued capital of Menzies) (together, the Related Vendors). Richard Poole is the sole director and controller of each of the Related Vendors. The Company has agreed, subject to obtaining Shareholder approval, to issue 23,920,000 Shares to the Related Vendors in consideration for the Acquisition.

The Related Vendors are each a related party of the Company as they are controlled by Richard Poole who is a related party of the Company under section 228(1) of the Corporations Act by virtue of being a Director. Further details in respect of the interests of the Related Vendors are set out in Section 11.2(a).

In addition, Mr Poole has an interest in the PDN Conversion and the Debt Conversion through his shareholding and directorship of Fontelina. Mr Poole is the sole director and controller of Fontelina. The Company has agreed, subject to obtaining Shareholder approval, to issue up to 30,000,000 Shares to Fontelina (or its nominee), comprising of:

(a) up to 15,000,000 Shares upon complete or partial conversion of the Debt (Resolution 4); and
(b) up to 15,000,000 Shares upon complete or partial conversion of the Fontelina PDNs (Resolution 6).

Further details of the Debt and the Fontelina PDNs are set out in Sections 1.3.1 and 1.3.2.

The Company considers that the most likely outcome will be that the Transaction completes (the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice) and no other Shares are issued for any other purposes. In this circumstance, the voting power of the Poole Parties would be 20.39%

Accordingly, the Company is seeking a separate Shareholder approval (Resolution 9) pursuant to section 611 item 7 of the Corporation Act for the issue of the Poole Shares. Further details of the potential control implications of the Resolutions set out in this Notice are summarised in Section 11.2(b).

1.11.2 Gavin Rezos

The Company has agreed, subject to obtaining Shareholder approval, to issue up to 10,000,000 Settlement Shares to Vantage House (or its nominee) in consideration for the complete or partial cancellation of all or a portion of the Vantage House PDNs and the pro rata cancellation of the Vantage House Options.

Vantage House is a related party of the Company as it is controlled by Bayard Rezos, who is a son of Gavin Rezos, a Director of the Company. Bayard Rezos is a related party of the Company under section 228(3) of the Corporations Act by virtue of being the child of a Director.

For the avoidance of doubt, Gavin Rezos and Vantage House are not associates and any issue under Resolution 7 will not result in an increase in Gavin Rezos' relevant interest.

1.11.3 Other Directors

None of the Directors have any interest in the Transaction, other than as disclosed in this Section.

1.12 Intentions if Acquisition is not approved

If any of the Acquisition Resolutions is not passed, the Acquisition will not complete and the Company will continue to explore on its Radio Project located in Western Australia and Mount Mackenzie Project in Central Queensland.

2. RESOLUTION 1 – APPROVAL OF ACQUISITION OF MENZIES PROJECT

2.1 General

This Notice of Meeting has been prepared to seek Shareholder approval for the matters required to complete the Acquisition. Resolution 1 seeks Shareholder approval for the purposes of:

(a) ASX Listing Rule 10.1 for the acquisition of a substantial asset from a related party and substantial holder of the Company; and
(b) ASX Listing Rule 10.11 for the issue of 23,920,000 Consideration Shares to a related party of the Company.

2.2 Independent Expert's Report

ASX Listing Rule 10.10.2 requires a notice of meeting containing a resolution under ASX Listing Rule 10.1 to include a report on the transaction from an independent expert.

The Independent Expert's Report accompanying this Notice sets out a detailed independent examination of the Acquisition to enable non-associated Shareholders to assess the merits and decide whether to approve Resolutions 1, 8 and 9. The Independent Expert has concluded that the issues of Shares the subject of Resolutions 1, 8 and 9 are NOT FAIR BUT REASONABLE to the nonassociated Shareholders.

Shareholders are urged to carefully read the Independent Expert's Report to understand its scope, the methodology of the valuation and the sources of information and assumptions made.

The Independent Expert's Report is also available on the Company's website (http://www.rezgroup.com.au/). If requested by a Shareholder, the Company will send to the Shareholder a hard copy of the Independent Expert's Report at no cost.

2.3 ASX Listing Rule 10.1

ASX Listing Rule 10.1 provides that an entity must ensure that neither it, nor any of its child entities, acquires a substantial asset from, or disposes of a substantial asset to, amongst other persons:

(a) a related party of the entity
(b) a substantial holder of the entity;
(c) an associate of a substantial holder of the entity,

without the prior approval of holders of the entity's ordinary securities.

Acquisition by the Company

Completion of the Acquisition will result in an acquisition by the Company.

Substantial Asset

For the purposes of ASX Listing Rule 10.1, an asset is substantial if its value, or the value of the consideration for it is, or in ASX's opinion is, 5% or more of the equity interests of the entity as set out in the latest accounts given to ASX under the ASX Listing Rules.

The equity interests of the Company as defined by the ASX Listing Rules and as set out in the latest accounts given to ASX under the ASX Listing Rules (being for the financial year ending 30 December 2017 were $784,974). A substantial asset is therefore an asset of value greater than $39,248.70.

As the consideration for the Acquisition includes the issue of Shares representing $620,000 (in addition to the Cash Consideration), the value of the consideration exceeds 5% of the equity interests of the Company, and therefore the Acquisition will result in the acquisition of a substantial asset.

Related party

As set out at Section 1.11, Richard Poole is the sole director and the majority shareholder of the Related Vendors, and is a related party by virtue of being a Director of the Company therefore the Related Vendors are related parties for the purposes of ASX Listing Rule 10.1.

Substantial holder

For the purposes of ASX Listing Rule 10.1, a substantial holder is a person who has a relevant interest (either directly or through its associates) or had at any time in the six months before the transaction, in at least 10% of the total votes attaching to the voting securities of the Company.

As the Related Vendors, which are controlled by Richard Poole, currently hold a relevant interest in 15.52% of the issued capital of the Company, Richard Poole is considered to be a substantial holder for the purpose of ASX Listing Rule 10.1. Further details of the consideration payable under the Acquisition Agreements and the relationship between Richard Poole and each of the Related Vendors is set out in Sections 1.11 and 11.2(a).

Requirement for shareholder approval

As a result of the above conclusions, the completion of the Acquisition will result in the acquisition of a substantial asset from a related party and/or a substantial holder (or associates of a substantial holder) of the Company. The Company is therefore required to seek Shareholder approval under ASX Listing Rule 10.1.

As stated above, ASX Listing Rule 10.10.2 requires a notice of meeting containing a resolution under ASX Listing Rule 10.1 to include a report on the transaction from an independent expert.

Shareholders are urged to carefully read the Independent Expert's Report annexed to this Notice.

2.4 ASX Listing Rule 10.11

Listing Rule Summary

ASX Listing Rule 10.11 requires shareholder approval to be 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.

The Related Vendors are a related party of the Company as they are controlled by Richard Poole who is a related party of the Company under section 228(1) of the Corporations Act by virtue of being a Director.

As the transaction involves the issue of equity securities to a related party of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors (other than Mr Richard Poole who has a material personal interest in the Acquisition) that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

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

Technical Requirements

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to the issue of Consideration Shares to the Related Vendors:

(a) the Consideration Shares will be issued to the Related Vendors (or their nominees);

(b) the maximum number of Consideration Shares to be issued to the Related Vendors is 23,920,000 Shares, comprising of:
- (i) 9,920,000 Shares in respect of the Menzies Acquisition;
- (ii) 10,000,000 Shares in respect of the RIQO Acquisition; and
- (iii) 4,000,000 Shares in respect of the AMP Acquisition;
(c) the Consideration Shares will be issued on Completion (and no later than one month 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 all Consideration Shares will occur on the same date;
(d) the Consideration Shares are being issued for nil cash consideration as consideration, under the terms of the Share Sale Agreement, the RIQO Agreement and the AMP Agreement;
(e) the Consideration Shares are being issued to the Related Vendors which are related parties of the Company by virtue of being controlled by Mr Richard Poole a Director of the Company under section 228(1) of the Corporations Act;
(f) the Consideration 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
(g) no funds will be raised from the issue of the Consideration Shares as they are being issued as consideration under the terms of the Share Sale Agreement, the RIQO Agreement and the AMP Agreement.

2.5 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 issue of Consideration Shares will result in the issue of Shares which constitutes giving a financial benefit and the Related Vendors are a related party of the Company.

The Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the issue of Consideration Shares as the terms of the Acquisition including the agreed consideration have been negotiated on arm's length terms for the purpose of section 210 of the Corporations Act.

3. RESOLUTION 2 – ISSUE OF SHARES TO UNRELATED VENDORS – MENZIES ACQUISITION

3.1 General

The Company has agreed under the Share Sale Agreement, subject to obtaining Shareholder approval to issue an aggregate of 12,400,000 Shares to the Vendors in part consideration for the acquisition of Menzies. Further details of the consideration payable under the Share Sale Agreement are set out in Section 1.2.

Resolution 1 seeks Shareholder approval, for the purposes of ASX Listing Rules 10.1 and 10.11, for the issue of 23,920,000 Shares to Related Vendors, this includes approval for the issue of 9,920,000 Consideration Shares to Fontelina in respect of the acquisition of Menzies. Fontelina is a related party of the Company which holds 80% of the issued capital of Menzies.

Minerva Geological Services Pty Limited (Minerva), is the entity which holds the remaining 20% of the issued capital of Menzies.

Resolution 2 seeks Shareholder approval for the issue of 2,480,000 Consideration Shares to Minerva (Minerva Shares) which, subject to Shareholder approval, will be issued as consideration for the Company's acquisition of the shares in Menzies held by Minerva.

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 2 will be to allow the Company to issue the Minerva Shares 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.

3.2 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 Resolution 2:

(a) the maximum number of Consideration Shares to be issued is 2,480,000;
(b) the Consideration 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 Consideration Shares will occur on the same date;
(c) the Consideration Shares will be issued for nil cash consideration in consideration for the acquisition of Menzies;
(d) the Consideration Shares will be issued to Minerva, who is not a related party of the Company;
(e) the Consideration 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) no funds will be raised from the issue as the Consideration Shares are being issued in part consideration for the acquisition of Menzies.

4. RESOLUTION 3 – ISSUE OF SHARES TO UNRELATED VENDORS – LARCA ACQUISITION

4.1 General

Resolution 3 seeks Shareholder approval for the issue of 6,000,000 Consideration Shares in consideration for the Larca Acquisition (Larca Consideration Shares).

The effect of Resolution 3 will be to allow the Company to issue the Shares pursuant to the Larca Acquisition 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.

4.2 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 Resolution 3:

(a) the maximum number of Consideration Shares to be issued is 6,000,000;
(b) the Consideration 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 Consideration Shares will occur on the same date;
(c) the Consideration Shares will be issued for nil cash consideration in consideration for the Larca Acquisition;
(d) the Consideration Shares will be issued to Larca, who is not a related party of the Company;
(e) the Consideration 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) no funds will be raised from the issue as the Consideration Shares are being issued in consideration for the Larca Acquisition.

5. RESOLUTION 4 – APPROVAL TO CONVERT DEBT OWING TO RELATED PARTIES

5.1 General

A summary of the Debt is set out in Section 1.3.1.

Fontelina is a related party of the Company as it is controlled by Richard Poole who is a related party of the Company under section 228(1) of the Corporations Act by virtue of being a Director.

Resolution 4 seeks Shareholder approval for the grant of the Conversion Shares to Fontelina (or its nominee).

5.2 Chapter 2E of the Corporations Act and ASX Listing Rule 10.11

A summary of ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act is set out in Sections 2.4 and 2.5 above respectively.

The grant of the Conversion Shares constitutes giving a financial benefit and, as set out in Section 1.11, Fontelina is a related party of the Company by virtue of being controlled by a Director.

The Directors (other than Richard Poole who has a material personal interest in the Resolution) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the Debt Conversion because the agreement to issue the Conversion Shares, was negotiated on an arm's length basis.

As the grant of the Conversion Shares involves the issue of securities to a related party of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

5.3 Technical Information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to Resolution 4:

(a) the Conversion Shares will be granted to Fontelina (or its nominee). Fontelina is a related party of the Company by virtue of being controlled by Director, Richard Poole;
(b) the maximum number of Conversion Shares to be issued is 15,000,000;
(c) the Conversion Shares will be granted no later than 1 month 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 Conversion Shares will occur on the same date;
(d) the Conversion Shares will be issued for nil cash consideration, in satisfaction of the cancellation of the Debt;
(e) the Conversion 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; and
(f) no funds will be raised from the issue of the Conversion Shares.

Approval pursuant to ASX Listing Rule 7.1 is not required for the grant of the Conversion Shares as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the grant of Settlement Shares to Fontelina (or its nominee) will not be included in the use of the Company's 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

6. RESOLUTION 5 – ISSUE OF SETTLEMENT SHARES TO UNRELATED PARTIES ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS

6.1 General

A summary of the PDN Conversion is set out in Section 1.3.2.

Resolution 5 seeks Shareholder approval for the issue of up to 9,480,000 Settlement Shares to the unrelated PDN Noteholders, in consideration for the complete or partial redemption and cancellation of Project Development Notes up to the value of $474,000 and the pro rata cancellation of up to 3,950,000 Noteholder Options. Shareholder approval for the issue of Settlement Shares to Fontelina, Vantage House and Gaffwick is sought pursuant to Resolutions 6, 7 and 8.

6.2 ASX Listing Rule 6.23.2

ASX Listing Rule 6.23.2 provides that a change which has the effect of cancelling an option for consideration can only be made if holders of ordinary securities approve the change.

Pursuant to the PDN Conversion, the Company is proposing to offer the PDN Noteholders the opportunity to completely or partially redeem and convert their Project Development Notes through:

(a) the issue of Settlement Shares at a conversion price of $0.05 per Settlement Share;
(b) the pro rata cancellation of unexercised Noteholder Options; and
(c) the payment of all interest owing in respect of the redeemed portion of the Project Development Notes within 24 months of the date of issue of the Settlement Shares (the accrued interest owed to unrelated PDN Noteholders as at 31 October 2018 is $33,856).

As the issue of the Settlement Shares and the cancellation of the unexercised Noteholder Options will occur simultaneously, Resolution 5 seeks Shareholder approval for the cancellation of up to 3,950,000 Noteholder Options under ASX Listing Rule 6.23.2.

6.3 ASX Listing Rule 7.1

A summary of ASX Listing Rule 7.1 is set out in Section 4 above.

The effect of Resolution 5 will be to allow the Company to issue the Settlement Shares 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.

6.4 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 Resolution 5:

(a) the maximum number of Settlement Shares to be issued is 9,480,000;
(b) the Settlement 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 Settlement Shares will be issued for nil cash consideration in consideration for the complete or partial redemption and cancellation of the Project Development Notes held by unrelated parties;
(d) the Settlement Shares will be issued to the unrelated PDN Noteholders, each of whom is not a related party of the Company; and
(e) the Settlement 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;
(f) no funds will be raised from the issue of the Settlement Shares.

7. RESOLUTION 6 – ISSUE OF SETTLEMENT SHARES TO A RELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – FONTELINA PTY LTD

7.1 General

A summary of the PDN Conversion is set out in Section 1.3.2.

Resolution 6 seeks Shareholder approval for the issue of up to 15,000,000 Settlement Shares to Fontelina (or its nominee), in consideration for the complete or partial redemption and cancellation of the Fontelina PDNs and the pro rata cancellation of up to 6,250,000 Noteholder Options. This will be conducted on the same terms as the conversion of Project Development Notes held by unrelated PDN Noteholders, for which Shareholder approval is sought under Resolution 5.

Fontelina is a related party of the Company as it is controlled by Richard Poole who is a related party of the Company under section 228(1) of the Corporations Act by virtue of being a Director.

7.2 ASX Listing Rule 6.23.2

A summary of ASX Listing Rule 6.23.2 is set out in Section 6.2.

As the issue of the Settlement Shares and the pro rata cancellation of the unexercised Noteholder Options will occur simultaneously, Resolution 6 seeks Shareholder approval for the pro rata cancellation of up to 6,250,000 Noteholder Options under ASX Listing Rule 6.23.2.

7.3 Chapter 2E of the Corporations Act and ASX Listing Rule 10.11

A summary of ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act is set out in Sections 2.4 and 2.5 above respectively.

The grant of the Settlement Shares constitutes giving a financial benefit and, as set out in Section 1.11, Fontelina is a related party of the Company by virtue of being controlled by a Director.

The Directors (other than Richard Poole who has a material personal interest in the Resolution) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the grant of Settlement Shares because the agreement to issue the Settlement Shares, was negotiated on an arm's length basis on the same terms as the agreements with the other PDN Noteholders as set out in Resolution 5.

As the grant of the Settlement Shares involves the issue of securities to a related party of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

7.4 Technical Information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to Resolution 6:

(a) the Settlement Shares will be granted to Fontelina (or its nominee). Fontelina is a related party of the Company by virtue of being controlled by Director, Richard Poole;
(b) the maximum number of Settlement Shares to be issued is 15,000,000;
(c) the Settlement Shares will be granted no later than 1 month 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 Settlement Shares will occur on the same date;
(d) the Settlement Shares will be issued for nil cash consideration in satisfaction of the complete or partial redemption and cancellation of the Fontelina PDNs;
(e) the Settlement 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; and
(f) no funds will be raised from the issue of the Settlement Shares.

Approval pursuant to ASX Listing Rule 7.1 is not required for the grant of the Settlement Shares as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the grant of Settlement Shares to Fontelina (or its nominee) will not be included in the use of the Company's 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

8. RESOLUTION 7 – ISSUE OF SETTLEMENT SHARES TO A RELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – VANTAGE HOUSE

8.1 General

A summary of the PDN Conversion is set out in Section 1.3.2.

Resolution 7 seeks Shareholder approval for the issue of up to 10,000,000 Settlement Shares to Vantage House (or its nominee), in consideration for the complete or partial redemption and cancellation of the Vantage House PDNs and the pro rata cancellation of up to 4,166,667 Noteholder Options. This will be conducted on the same terms as the conversion of Project Development Notes held by unrelated PDN Noteholders, for which Shareholder approval is sought under Resolution 5.

As set out in Section 1.3.2 as part of the PDN Conversion, the Company has agreed to repay the accrued interest owing in respect of the converted PDNs within 24 months of the date of issue of the Settlement Shares (the accrued interest owed to Vanatage House as at 31 October 2018 is $43,288.

8.2 ASX Listing Rule 6.23.2

A summary of ASX Listing Rule 6.23.2 is set out in Section 6.2.

As the issue of the Settlement Shares and the cancellation of the unexercised Noteholder Options will occur simultaneously, Resolution 7 seeks Shareholder approval for the pro rata cancellation of up to 4,166,667 Noteholder Options under ASX Listing Rule 6.23.2.

8.3 Chapter 2E of the Corporations Act and ASX Listing Rule 10.11

A summary of ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act is set out in Sections 2.4 and 2.5 above respectively.

The grant of the Settlement Shares constitutes giving a financial benefit and, as set out in Section 1.11, Vantage House is a related party of the Company by virtue of being controlled by the child of a Director.

The Directors (other than Gavin Rezos who may be seen to have a material personal interest in the Resolution) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the grant of Settlement Shares because the agreement to issue the Settlement Shares, was negotiated on an arm's length basis on the same terms as the agreements with the other PDN Noteholders as set out in Resolution 5.

8.4 Technical Information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to Resolution 7:

(a) the Settlement Shares will be granted to Vantage House (or its nominee). Vantage House is a related party of the Company by virtue of being controlled by a son of Director, Gavin Rezos;
(b) the maximum number of Settlement Shares to be issued is 10,000,000;
(c) the Settlement Shares will be granted no later than 1 month 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 Settlement Shares will occur on the same date;
(d) the Settlement Shares will be issued for nil cash consideration in satisfaction of the complete or partial redemption and cancellation of the Vantage House PDNs;
(e) the Settlement 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; and
(f) no funds will be raised from the issue of the Settlement Shares.

Approval pursuant to ASX Listing Rule 7.1 is not required for the grant of the Settlement Shares as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the grant of Settlement Shares to Vantage House (or its nominee) will not be included in the use of the Company's 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

9. BACKGROUND TO RESOLUTIONS 8 AND 9

9.1 General

Resolutions 8 and 9 seek Shareholder approval for the purposes of item 7 of section 611 of the Corporations Act, to permit the voting power of each of Gaffwick and the Poole Parties to increase to more than 20% following the issue of Shares under this Notice.

The Company considers that the most likely outcome will be that the Transaction completes (the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice) and no Shares are issued for any other purpose. In this circumstance, the voting power of Gaffwick would be 20.46% and the voting power of the Poole Parties would be 20.39%

Alternatively, in the unlikely event that the Capital Raising does not proceed, the Acquisition does not complete, the maximum number of Shares are issued under Resolution 8 (Issue of Gaffwick Shares) and no other Shares are issued under this Notice or for any other purposes, the voting power of the Gaffwick will increase to 45.02%.

The Company notes that there are certain circumstances in which the voting power of Gaffwick and/or the Poole Parties will not increase above 20%. For example, if the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice, other than Resolution 8 (Issue of the Gaffwick Shares), no Shares will be issued to Gaffwick and the voting power of Gaffwick would fall to 2.69%. Alternatively, if the Company issues the maximum number of Shares under the Capital Raising and Resolutions 5 (Conversion of Project Development Notes held by Unrelated Parties), 7 (Conversion of Vantage House PDNs) and 8 (Conversion of Gaffwick PDNs), no Shares would be issued to any of the Poole Parties and the voting power of the Poole Parties would fall to 5.19%. In these circumstances, the Company will not require approval under section 611 item 7 of the Corporations Act.

Although the voting power of Gaffwick and the Poole Parties may remain below 20% in certain circumstances, the Company is seeking Shareholder approval for the purposes of item 7 of section 611 of the Corporations Act, to permit the voting power of Gaffwick to increase to a maximum of 45.02% and the voting power of the Poole Parties to increase to a maximum of 44.42%.

The maximum voting power of Gaffwick assumes that the Capital Raising does not proceed, the Company issues the full number of Shares pursuant to Resolution 8 and no other Shares are issued under this Notice or for any other purpose. The Directors are of the opinion that this outcome is unlikely to occur.

The maximum voting power of the Poole Parties assumes that that the Capital Raising does not proceed, the Acquisition completes, the maximum number of Shares are issued under the Acquisition Resolutions and Resolutions 4 (Conversion of the Debt) and 6 (Conversion of Fontelina PDNs), and no other Shares are issued under this Notice or for any other purpose. The Directors are of the opinion that this outcome is unlikely to occur.

The Company considers that the most likely outcome will be that the Transaction completes (the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice). In such circumstances, the voting power of Gaffwick would be a maximum of 20.46% and the voting power of the Poole Parties would be a maximum of 20.39%.

The Acquisition is conditional upon the approval by Shareholders of Resolution 9. If Resolution 9 is not approved by Shareholders, the Acquisition will not complete and the Company will continue to explore on its Radio Project located in Western Australia and Mount Mackenzie Project located in Central Queensland.

9.2 Item 7 of section 611 of the Corporations Act

(a) Section 606 of the Corporations Act – statutory prohibition

Pursuant to section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in an unlisted company with more than 50 members if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person's or someone else's voting power in the company increases:

(i) from 20% or below to more than 20%; or
(ii) from a starting point that is above 20% and below 90%,

(Prohibition).

(b) Voting power

The voting power of a person in a body corporate is determined in accordance with section 610 of the Corporations Act. The calculation of a person's voting power in a company involves determining the voting shares in the company in which the person and the person's associates have a relevant interest.

(c) Associates

For the purposes of determining voting power under the Corporations Act, a person (second person) is an "associate" of the other person (first person) if:

(i) (pursuant to section 12(2) of the Corporations Act) the first person is a body corporate and the second person is:
- (A) a body corporate the first person controls;
- (B) a body corporate that controls the first person; or
- (C) a body corporate that is controlled by an entity that controls the first person;
(ii) the second person has entered or proposes to enter into a relevant agreement with the first person for the purpose of controlling or influencing the composition of the company's board or the conduct of the company's affairs; or
(iii) the second person is a person with whom the first person is acting or proposes to act, in concert in relation to the company's affairs.

Associates are, therefore, determined as a matter of fact. For example where a person controls or influences the board or the conduct of a company's business affairs, or acts in concert with a person in relation to the entity's business affairs.

(d) Relevant Interests

Section 608(1) of the Corporations Act provides that a person has a relevant interest in securities if they:

(i) are the holder of the securities;
(ii) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(iii) have power to dispose of or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

In addition, section 608(3) of the Corporations Act provides that a person has a relevant interest in securities that any of the following has:

(i) a body corporate in which the person's voting power is above 20%; and
(ii) a body corporate that the person controls.

The Corporations Act defines "control" broadly. Under section 50AA of the Corporations Act control means the capacity to determine the outcome of decisions about the financial and operating policies of the Company.

9.3 Independent Expert's Report

The Independent Expert's Report prepared by Grant Thornton Corporate Finance Pty Ltd (a copy of which is attached as Annexure A to this Explanatory Statement) assesses whether the issues of Shares contemplated by Resolutions 1, 8 and 9 are fair and reasonable to the non-associated Shareholders of the Company.

The Independent Expert's Report concludes that the issues of Shares contemplated by Resolutions 1, 8 and 9 are NOT FAIR BUT REASONABLE to the nonassociated Shareholders of the Company.

Shareholders are urged to carefully read the Independent Expert's Report to understand the scope of the report, the methodology of the valuation, the sources of information and assumptions made and the advantages and disadvantages of the issue of the Shares pursuant to these Resolutions.

10. RESOLUTION 8 – ISSUE OF SETTLEMENT SHARES TO AN UNRELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – GAFFWICK PTY LIMITED

10.1 Background

Resolution 8 seeks Shareholder approval for the purposes of item 7 of section 611 of the Corporations Act, to permit Gaffwick's voting power in the Company to increase from 8.09% to more than 20% by virtue of the Company issuing up to 60,880,000 Shares to Gaffwick (Gaffwick Shares) in consideration for the complete or partial cancellation of Project Development Notes up to the value of $3,044,000 (Gaffwick PDNs).

In addition, the Company seeks Shareholder approval for the purposes of ASX Listing Rule 6.23.2 for the pro rata cancellation of up to 22,342,857 Noteholder Options held by Gaffwick.

Gaffwick currently has a relevant interest in 7,333,334 Shares in the Company, representing a voting power of 8.09% in the Company. Following the issue of the Gaffwick Shares, Gaffwick will have a relevant interest in up to 68,213,334 Shares.

In the event that the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice and no other Shares are issued for any other purpose, Gaffwick will have a voting power of 20.46% in the Company. The Directors are of the opinion that this is the most likely outcome.

In the unlikely event that the Capital Raising does not proceed, the Gaffwick Shares are issued pursuant to this Resolution and no other Shares are issued under this Notice or for any other purposes, Gaffwick will have a voting power of 45.02% in the Company.

Item 7 of section 611 of the Corporations Act provides an exception to the Prohibition, whereby a person may acquire a relevant interest in a company's voting shares with shareholder approval.

Accordingly, Resolution 8 seeks Shareholder approval for the purpose of Item 7 of section 611 and all other purposes in order to permit Gaffwick's voting power in the Company to increase up to a maximum of 45.02% in the unlikely event that the Capital Raising does not proceed, the Gaffwick Shares are issued pursuant to this Resolution and no other Shares are issued under this Notice or for any other purposes.

10.2 ASX Listing Rule 6.23.2

A summary of ASX Listing Rule 6.23.2 is set out in Section 6.2.

As the issue of the Settlement Shares and the pro rata cancellation of the unexercised Noteholder Options will occur simultaneously, Resolution 8 seeks Shareholder approval for the cancellation of up to 22,342,857 Noteholder Options under ASX Listing Rule 6.23.2.

10.3 Specific Information required by Item 7 of Section 611 of the Corporations Act and ASIC Regulatory Guide 74

The following information is required to be provided to Shareholders under the Corporations Act and ASIC Regulatory Guide 74 in respect of obtaining approval under item 7 of section 611 of the Corporations Act. Shareholders are also referred to the Independent Expert's Report enclosed with this Notice.

(a) Identity of the Acquirer

Gaffwick is a private Australian company incorporated on 26 June 1985. Gaffwick's principal activity is investing.

(b) Relevant Interest and Voting Power

(i) Relevant Interest

(ii) Voting Power

The table below sets out the potential voting power of Gaffwick in three different scenarios. The Company considers that the most likely outcome will be that the Transaction completes (the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice) and no other Shares are issued for any other purpose. In this circumstance, the voting power of Gaffwick would be a maximum of 20.46%.

However, in the unlikely event that the Company issues the maximum number of Shares under Resolution 8 and no other Shares are issued under this Notice or for any other purpose, the voting power of Gaffwick would be a maximum of 45.02%.

	Shares heldby Gaffwick	Total Shareson Issue	VotingPower
Current	7,333,334	90,643,845	8.09%
CompletionoftheTransaction1	68,213,334	333,403,845	20.46%
Completion of theAcquisition the Debt	68,213,334	233,403,845	29.23%

Conversion and thePDN Conversion2
Issue of the GaffwickShares3	68,213,334	151,523,845	45.02%

Notes:

1. Assuming the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice and no other Shares are issued.
1. Assuming the Capital Raising does not proceed, and the Company issues the maximum number of Shares under each of the Resolutions set out in this Notice and no other Shares are issued.
1. Assuming the Capital Raising does not proceed, the Acquisition does not complete, and the maximum number of Shares under this Resolution 8 are issued and no other Shares are issued.

As stated in Section 9.1, there are certain circumstances in which the voting power of Gaffwick will not increase above 20%, and the Company will not require approval under section 611 item 7 of the Corporations Act.

Further details on the voting power of Gaffwick is set out in the Independent Expert's Report.

(iii) Summary of Increases

The maximum relevant interest that Gaffwick will hold after the issue of the Gaffwick Shares will be 68,213,334 Shares and the maximum voting power that Gaffwick will hold is 45.02%.

(c) Reasons for the proposed issue of securities

As set out in Section 1.3.2, the Company is intending to reduce its debt and accordingly is offering the PDN Noteholders the opportunity to completely or partially redeem and convert their Project Development Notes.

Gaffwick has indicated to the Company that it wishes to convert its existing Project Development Notes into Shares in the Company, on the same terms as the PDN Conversion. According, Resolution 8 seeks Shareholder approval for the conversion of the Gaffwick PDNs.

(d) Material terms of proposed issue of securities

As set out in Section 1.3.2, the Company is proposing to:

(i) issue up to 60,880,000 Settlement Shares to Gaffwick;
(ii) cancel up to 22,342,857 unexercised Noteholder Options held by Gaffwick (on a pro rata basis); and
(iii) repay the accrued interest owing in respect of the converted Gaffwick PDNs within 24 months of the date of issue of the Settlement Shares (the accrued interest as at 31 October 2018 is $263,535).

The conversion of the Gaffwick PDNs will be conducted on the same terms as the conversion of Project Development Notes held by unrelated PDN Noteholders, for which Shareholder approval is sought under Resolution 5.

The material terms of the PDN Conversion are set out in Section 1.3.2.

(e) Date of proposed issue of securities

The issue of the Gaffwick Shares is expected to occur within three months of the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules).

(f) Interests of Directors

(i) The current Directors recommend that Shareholders vote in favour of Resolution 8.
(i) Neither Gaffwick nor the Directors are aware of any other information other than as set out in this Notice of Meeting 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 Resolution 8.

(g) Intentions of Gaffwick

Other than as disclosed elsewhere in this Explanatory Statement, Gaffwick:

(i) has no present intention of making any significant changes to the business of the Company;
(ii) will consider participating in further capital raisings of the Company to maintain their shareholding interest;
(iii) has no present intention of making changes regarding the future employment of the present employees of the Company (with future changes, if any, to be made in consultation with the Company's management team);
(iv) does not intend to redeploy any fixed assets of the Company;
(v) does not intend to transfer any property between the Company and any other entity; and
(vi) has no intention to change the Company's existing policies in relation to financial matters or dividends.

These intentions are based on information concerning the Company, its business and the business environment which is known to Gaffwick at the date of this document.

These present intentions may change as new information becomes available, as circumstances change or in the light of all material information, facts and circumstances necessary to assess the operational, commercial, taxation and financial implications of those decisions at the relevant time. Accordingly, the statements set out above are statements of current intentions only.

(h) Capital Structure

The capital structure, assuming Shareholders approve each of the Resolutions set out in this Notice and the Company completes the Capital Raising, is set out in Section 1.5.

10.4 Advantages of the Issue

The Directors are of the view that the non-exhaustive list of advantages set out in Section 1.8 of this Notice and also detailed in the attached Independent Expert's Report may be relevant to a Shareholder's decision on how to vote on Resolution 8.

10.5 Disadvantages of the Issue

The Directors are of the view that the non-exhaustive list of disadvantages set out in Section 1.9 of this Notice and also detailed in the attached Independent Expert's Report may be relevant to a Shareholder's decision on how to vote on Resolution 8.

10.6 Independent Expert's Report

The Independent Expert's Report prepared by Grant Thornton Corporate Finance Pty Ltd (a copy of which is attached as Annexure A to this Explanatory Statement) assesses whether the issue of Shares contemplated by Resolutions 1, 8 and 9 is fair and reasonable to the non-associated Shareholders of the Company.

The Independent Expert's Report concludes that the issue of Shares contemplated by Resolutions 1, 8 and 9 is NOT FAIR BUT REASONABLE to the nonassociated Shareholders of the Company.

11. RESOLUTION 9 – APPROVAL OF ISSUE OF SECURITIES TO THE POOLE PARTIES

Resolution 9 seeks Shareholder approval for the purposes of item 7 of section 611 of the Corporations Act, to permit the Poole Parties' voting power in the Company to increase from 15.52% to more than 20% by virtue of the Company issuing up to by virtue of the Company issuing up to 52,920,000 Shares to the Poole Parties (the Poole Shares), comprising of:

(a) 23,920,000 Shares to the Related Vendors, in consideration for the acquisition of 100% of the issued capital of Menzies (Resolution 1); and
(b) up to 30,000,000 Shares to Fontelina (or its nominee), comprising of:
- (i) up to 15,000,000 Shares in consideration for the Debt Conversion (Resolution 4); and
- (ii) up to 15,000,000 Shares in consideration for the complete or partial redemption and conversion of the Fontelina PDNs (Resolution 6).

The Poole Parties currently have a relevant interest in 14,067,302 Shares in the Company, representing a voting power of 15.52%. Following the issue of the Poole Shares, the Poole Parties will have a relevant interest in up to 67,987,302 Shares.

In the event that completion of the Transaction occurs (assuming the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice) and no other Shares are issued for any other purpose, the Poole Parties will have a voting power in the Company of 20.39%. The Directors are of the opinion that this is the most likely outcome.

However, in the unlikely event that completion of the Acquisition occurs, the maximum number of Shares are issued pursuant to Resolutions 4 (Conversion of Debt) and 6 (Conversion of Fontelina PDNs), and no other Shares are issued under this Notice or for any other purpose, the Poole Parties will have a voting power in the Company of 44.42%.

Item 7 of section 611 of the Corporations Act provides an exception to the Prohibition, whereby a person may acquire a relevant interest in a company's voting shares with shareholder approval.

Accordingly, Resolution 9 seeks Shareholder approval for the purpose of Item 7 of section 611 and all other purposes in order to permit the Poole Parties' voting power in the Company to increase by up to a maximum of 44.42% in the unlikely event that completion of the Acquisition occurs, the maximum number of Shares are issued pursuant to Resolutions 4 (Conversion of Debt) and 6 (Conversion of Fontelina PDNs), and no other Shares are issued under this Notice or for any other purpose.

11.2 Specific Information required by Item 7 of Section 611 of the Corporations Act and ASIC Regulatory Guide 74

(a) Identity of the Acquirer and its Associates

Richard Poole was appointed as a Director on 12 July 2004. Richard commenced his career as a lawyer specialising in mergers and acquisitions. He left the law in 1990 to build a research and development operation with operations 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.

Fontelina is a private Australian company incorporated on 18 August 2010. Richard Poole is the sole director of Fontelina. The issued capital of Fontelina is held by Richard Poole and his wife.

AMP is a private Australian company incorporated on 24 May 2009. Richard Poole is the sole director of AMP. AMP is a wholly owned subsidiary of Fontelina.

RIQO is a private Australian company incorporated on 19 October 2011. Richard Poole is the sole director and majority shareholder of RIQO.

Each of the Related Vendors is a related party of the Company as they are controlled by Richard Poole who is a related party of the Company under section 228(1) of the Corporations Act, by virtue of being a Director.

(b) Relevant Interest and Voting Power

(i) Relevant Interest

Richard Poole has a relevant interest in 14,067,302 Shares in the Company and will have a relevant interest in up to 67,987,302 Shares following the issue of Shares pursuant to the Resolutions set out in this Notice. The details of the Poole Parties who hold these Shares are set out in the table below.

Party	Relevant interestas at the date ofthis Notice ofMeeting	Relevant interest afterthe issue of Sharespursuant to Resolutionsset out in this Notice
RIQO	Nil	10,000,000
AMP	Nil	4,000,000
Fontelina	14,067,302	53,987,302
Total (beingRichard Poole'srelevantinterest)	14,067,302	67,987,302

(ii) Voting Power

Following the issue of the Poole Shares, the Poole Parties will have a relevant interest in up to 67,987,302 Shares. This will represent a voting power of between 14.46% and 44.42% in the Company.

The table below sets out the potential voting power of the Poole Parties in four different scenarios. The Company considers that the most likely outcome will be that the Transaction completes (the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice) and no other Shares are issued for any other purpose. In this circumstance, the voting power of the Poole Parties would be a maximum of 20.39%.

However, in the event that the Company issues the maximum number of Shares under the Acquisition Resolutions, Resolution 4 (Conversion of Debt) and 6 (Conversion of Fontelina PDNs) and no other Shares are issued, the voting power of the Poole Parties could be a maximum of 44.42%.

			Sharesheldby the PooleParties	TotalShareson Issue	VotingPower
Current			14,067,302	90,643,845	15.52%
CompletionTransaction1	of	the	67,987,302	333,403,845	20.39%

Completion of theAcquisition the DebtConversion and thePDN Conversion2	67,987,302	233,403,845	29.13%
Completion of theAcquisition and theissue of the PooleShares3	67,987,302	153,043,845	44.42%
IssueofthePooleShares4	44,067,302	120,643,845	36.53

Notes:

1. Assuming the Company issues the maximum number of Shares under the Capital Raising and each of the Resolutions set out in this Notice and no other Shares are issued. The Directors are of the opinion that this is the most likely outcome.
1. Assuming the Capital Raising does not proceed, and the Company issues the maximum number of Shares under each of the Resolutions set out in this Notice and no other Shares are issued.
1. Assuming the Capital Raising does not proceed, the Acquisition completes, the Company issues the maximum number of Shares under each of the Acquisition Resolutions and Resolutions 4 (Conversion of the Debt) and 6 (Conversion of Fontelina PDNs) and no other Shares are issued.
1. Assuming the Capital Raising does not proceed, the Acquisition does not complete, and the maximum number of Shares under Resolutions 4 (Conversion of the Debt) and 6 (Conversion of Fontelina PDNs) are issued and no other Shares are issued.

As stated in Section 9.1, there are certain circumstances in which the voting power of the Poole Parties will not increase above 20%, and the Company will not require approval under section 611 item 7 of the Corporations Act.

Further details on the voting power of the Poole Parties is set out in the Independent Expert's Report.

(iii) Summary of Increases

The maximum relevant interest that the Poole Parties will hold after the issue of the Shares pursuant to the Acquisition, the conversion of the Fontelina PDNs and the Debt Conversion will be 67,987,302 Shares and the maximum voting power that the Poole Parties will hold is 44.42%.

(c) Reasons for the proposed issue of securities

As set out in Section 1.1, the Company has entered into agreements to acquire a 100% interest in the Menzies Project. In part consideration for the Acquisition, the Company has agreed to issue 12,400,000 Shares to the Vendors, 10,000,000 Shares to RIQO and 4,000,000 Shares to AMP. Further details of the consideration are set out in Section 1.2.

In connection with the Acquisition, as set out in Section 1.3, the Company is intending to reduce its debt and accordingly is offering the PDN Noteholders the opportunity to completely or partially redeem and convert their Project Development Notes and the Debtholder the opportunity to completely or partially redeem and convert the Debt.

Fontelina has indicated to the Company that it wishes to completely or partially convert its existing Project Development Notes into Shares in the Company, on the same terms on which the unrelated PDN Holders are converting their Project Development Notes and to completely or partially convert its existing Debt into Shares in the Company. The Debt Conversion will occur on the same terms on which the PDN Holders are converting their Project Development Notes.

According, Resolution 9 seeks Shareholder approval for the issue of the Consideration Shares, conversion of the Fontelina PDNs and the conversion of the Debt.

(d) Material terms of proposed issue of securities

The Company is proposing to:

(i) issue 23,920,000 Shares to the Related Vendors (or their nominees) in consideration for the Acquisition;
(ii) issue up to 15,000,000 Shares to Fontelina (or its nominee) in consideration for the conversion of the Debt;
(iii) issue up to 15,000,000 Shares to Fontelina (or its nominee) in consideration for the complete or partial conversion of the Fontelina PDNs; and
(iv) repay the accrued interest owing in respect of the converted Fontelina PDNs within 24 months of the date of issue of the Shares on conversion (the accrued interest as at 31 October 2018 is $62,932).

The material terms of the Acquisition, the Debt Conversion and the PDN Conversion are set out in Sections 1.2, 1.3.1 and 1.3.2.

(e) Date of proposed issue of securities

The issue of the Poole Shares is expected to occur within one month of the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules).

(f) Interests of Directors

(i) The current Directors (other than Richard Poole) recommend that Shareholders vote in favour of Resolution 9.
(ii) The Poole Parties nor the Directors are aware of any other information other than as set out in this Notice of Meeting 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 Resolution 9.

(g) Intentions of the Poole Parties

Other than as disclosed elsewhere in this Explanatory Statement, the Poole Parties:

(i) have no present intention of making any significant changes to the business of the Company;

(ii) will consider participating in further capital raisings of the Company to maintain their shareholding interest;
(iii) have no present intention of making changes regarding the future employment of the present employees of the Company (with future changes, if any, to be made in consultation with the Company's management team);
(iv) do not intend to redeploy any fixed assets of the Company;
(v) do not intend to transfer any property between the Company and any other entity; and
(vi) have no intention to change the Company's existing policies in relation to financial matters or dividends.

These intentions are based on information concerning the Company, its business and the business environment which is known to the Poole Parties at the date of this document.

(h) Capital Structure

The capital structure, assuming Shareholders approve each of the Resolutions set out in this Notice and the Company completes the Capital Raising, is set out in Section 1.5.

11.3 Advantages of the Issue

The Directors are of the view that the non-exhaustive list of advantages, set out in Section 1.8 of this Notice and also detailed in the attached Independent Expert's Report may be relevant to a Shareholder's decision on how to vote on Resolutions 1 and 9.

11.4 Disadvantages of the Issue

11.5 Independent Expert's Report

The Independent Expert's Report prepared by Grant Thornton Corporate Finance Pty Ltd (a copy of which is attached as Annexure A to this Explanatory Statement) assesses whether the issue of Shares contemplated by Resolutions 1, 8 and 9 is fair and reasonable to the non-associated Shareholders of the Company.

The Independent Expert's Report concludes that the issue of Shares contemplated by Resolutions 1, 8 and 9 is NOT FAIR BUT REASONABLE to the nonassociated Shareholders of the Company.

GLOSSARY

$ means Australian dollars.

Acquisition has the meaning given in Section 1.1.

Acquisition Agreements has the meaning given in Section 1.1.

Acquisition Resolutions means Resolutions 1, 2, 3 and 9.

AMP means Australian Mineral Partners Pty Ltd (ACN 137 293 899).

AMP Agreement has the meaning given in Section 1.2.

AMP Tenements means the tenements listed in item 3 of Schedule 1.

ASIC means the Australian Securities & Investments Commission.

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

ASX Listing Rules means the Listing Rules of ASX.

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.

Capital Raising means the issue of up to 100,000,000 Shares at an issue price of $0.05 per Share to raise up to $5,000,000.

Chair means the chair of the Meeting.

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

Completion has the meaning given in Section 1.2.

Constitution means the Company's constitution.

Conversion Shares means the Shares to be issued to Fontelina (or its nominee) on conversion of the Debt.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

End Date has the meaning given in Section 1.2.

Explanatory Statement means the explanatory statement accompanying the Notice.

Fontelina means Fontelina Pty Ltd (ACN 145 837 547) .

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

Independent Expert means Grant Thornton Corporate Finance Pty Ltd (ACN 003 265 987).

Independent Expert's Report means the report prepared for the purposes of ASX Listing Rule 10.1 and section 611 item 7 of the Corporations Act, completed by the Independent Expert in relation to the issues of Shares contemplated by Resolutions 1, 8 and 9 accompanying the Notice as Annexure A.

Larca means Larca Pty Ltd (ACN 008 971 515).

Larca Agreement has the meaning given in Section 1.2.

Larca Tenements means the tenements Item 4 of Schedule 1.

Menzies means Menzies Goldfield Limited (ACN 161 730 758).

Menzies Agreement has the meaning given in Section 1.2.

Menzies Project has the meaning given in Section 1.1.

Menzies Tenements means the tenements listed in item 1 of Schedule 1.

Noteholder Options has the meaning given in Section 1.3.

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.

PDN Conversion has the meaning given in Section 1.1.

PDN Noteholder has the meaning given in Section 1.1.

Poole Parties means Richard Poole, AMP, RIQO and Fontelina.

Poole Shares means the Shares to be issued to the Poole Parties, for which Shareholder approval is sought under Resolutions 1, 4 and 6.

Project Development Notes has the meaning given in Section 1.1.

Proxy Form means the proxy form accompanying the Notice.

Related Vendors has the meaning given in Section 1.11.1, being AMP, RIQO and Fontelina, who are the various vendors under the Acquisition Agreements that are related parties to the Company.

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

RIQO means RIQO Pty Ltd (ACN 153 832 967).

RIQO Agreement has the meaning given in Section 1.2.

RIQO Tenements means the tenements listed in Item 2 of Schedule 1.

Section means a section of the Explanatory Statement.

Settlement Shares has the meaning given in Section 1.3.2.

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

Share Sale Agreement has the meaning given in Section 1.2.

Shareholder means a registered holder of a Share.

Tenement Holders means AMP, Larca and RIQO.

Tenement Sale Agreements means the AMP Agreement, the Larca Agreement and the RIQO Agreement.

Transaction means the completion of the Acquisition, the Debt Conversion, the PDN Conversion and the Capital Raising (assuming that the maximum number of Shares are issued under each of the Resolutions set out in this Notice and the Capital Raising) at which point the Company will have 333,403,845 Shares on issue.

Vendors means the holders of the issued capital in Menzies.

WST means Western Standard Time as observed in Perth, Western Australia.

SCHEDULE 1

Tenements	Status	Jurisdiction	Manager	Project	Holder
M29/0141	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2106	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2161	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2162	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2163	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2164	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2174	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2175	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2220	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2221	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2223	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2224	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2225	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2226	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2227	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2228	LIVE	WA	*AMPL	MENZIES	Vendor
P29/2270	LIVE	WA	*AMPL	MENZIES	Vendor

Item 1: Menzies Tenements

Item 2 Larca Tenements

Tenements	Status	Jurisdiction	Manager	Project	Holder1
P29/2391	LIVE	WA	Larca	Menzies	Larca
P29/2408	LIVE	WA	Larca	Menzies	Larca
P29/2409	LIVE	WA	Larca	Menzies	Larca
P29/2395	LIVE	WA	Larca	Menzies	Larca
P29/2455	Pending	WA	Larca	Menzies	Larca
P29/2457	Pending	WA	Larca	Menzies	Larca
P29/2459	Pending	WA	Larca	Menzies	Larca
P29/2460	Pending	WA	Larca	Menzies	Larca
P29/2461	Pending	WA	Larca	Menzies	Larca
P29/2469	Pending	WA	Larca	Menzies	Larca
P29/2470	Pending	WA	Larca	Menzies	Larca
P29/2471	Pending	WA	Larca	Menzies	Larca
P29/2472	Pending	WA	Larca	Menzies	Larca
P29/2473	Pending	WA	Larca	Menzies	Larca
P29/2474	Pending	WA	Larca	Menzies	Larca
P29/2456	Pending	WA	Larca	Menzies	Larca
P29/2458	Pending	WA	Larca	Menzies	Larca
P29/2492	Pending	WA	Larca	Menzies	Larca
P29/2500	Pending	WA	Larca	Menzies	Larca
P29/2494	Pending	WA	Larca	Menzies	Larca
P29/2495	Pending	WA	Larca	Menzies	Larca

Item 2 Larca Tenements (continued)

Tenements	Status	Jurisdiction	Manager	Project	Holder1

P29/2496	Pending	WA	Larca	Menzies	Larca
P29/2497	Pending	WA	Larca	Menzies	Larca

Item 3: AMP Tenements

Tenements	Status	Jurisdiction	Manager	Project	Holder
E29/979	LIVE	WA	AMPL	Menzies	AMPL

Item 4: RIQO Tenements

TenementId	Status	Jurisdiction	Manager	Project	Holder
L29/0061	LIVE	WA	*AMPL	MENZIES	RIQO
M29/0189	LIVE	WA	*AMPL	MENZIES	RIQO
P29/2242	LIVE	WA	*AMPL	MENZIES	RIQO
P29/2243	LIVE	WA	*AMPL	MENZIES	RIQO
P29/2244	LIVE	WA	*AMPL	MENZIES	RIQO
P29/2245	LIVE	WA	*AMPL	MENZIES	RIQO
P29/2246	LIVE	WA	*AMPL	MENZIES	RIQO
P29/2247	LIVE	WA	*AMPL	MENZIES	RIQO
P29/2248	LIVE	WA	*AMPL	MENZIES	RIQO

SCHEDULE 2 – PRO FORMA BALANCE SHE ET

Financial Impact of the transactions on the Company

The impact of the transactions contemplated by resolutions 1 to 9 on the Company's balance sheet are set out in the pro-forma balance sheet below.

Resources & Energy Group Limited – Proforma Balance Sheet at 30 June 2018 assuming proposed resolutions 1 to 9 have been approved and completed.

	ConsolidatedGroup		ConsolidatedGroup		Proforma Adjustments		ConsolidatedGroup
	30-Jun-18	Placement	30-Jun-18	PDNConversion1	Debtconversion2	MenziesAcquisition3	30-Jun-18
	Unaudited	In progress	Unaudited,amended				Proforma
Assets
Current assets
Cash and cash equivalents	108,027	4,700,000	4,808,027	-	-	(480,000)	4,328,027
Trade and other receivables	48,717	-	48,717	-	-	-	48,717
Financial assets	20,000	-	20,000	-	-	-	20,000
Total current assets	176,744	4,700,000	4,876,744	-	-	(480,000)	4,396,744
Non-current Assets
Property, plant and equipment	457,568	-	457,568	-	-	-	457,568
Exploration and evaluation assets	1,712,668	-	1,712,668	-	-	2,100,000	3,812,668
Mine development	3,029,343	-	3,029,343	-	-	-	3,029,343
Total non-current assets	5,199,579	-	5,199,579	-	-	2,100,000	7,299,579
Total assets	5,376,323	4,700,000	10,076,323	-	-	1,620,000	11,696,323

Notes

Impact of resolutions 5 to 8 resulting from the conversion of PDN and cancellation of related options

1. Impact of resolutions 4 resulting from the conversion of debts owed to related parties
1. Impact of resolutions 1 to 3 resulting from the Menzies Acquisition

	ConsolidatedGroup		ConsolidatedGroup		Proforma Adjustments		ConsolidatedGroup
	30-Jun-18	Placement	30-Jun-18	PDNConversion1	Debtconversion2	MenziesAcquisition3	30-Jun-18
	Unaudited	In progress	Unaudited,amended				Proforma
Liabilities
Current liabilities
Trade and other payables	2,167,207	-	2,167,207	(301,288)	(750,000)	-	1,115,919
Interest-bearing loans and borrowings	739,756	-	739,756	(557,000)	-	-	182,756
Provisions	20,476	-	20,476	-	-	-	20,476
Total current liabilities	2,927,439	-	2,927,439	(858,288)	(750,000)	-	1,319,151
Non-current liabilities
Trade and other payables	-	-	-	301,288	-	-	301,288
Interest-bearing loans and borrowings	3,391,055	-	3,391,055	(3,391,055)	-	-	-
Total non-current liabilities	3,391,055	-	3,391,055	(3,089,767)	-	-	301,288
Total liabilities	6,318,494	-	6,318,494	(3,948,055)	(750,000)	-	1,620,439
Net assets	(942,171)	4,700,000	3,757,829	3,948,055	750,000	1,620,000	10,075,884
Equity
Issued capital	14,712,060	4,700,000	19,412,060	4,768,000	750,000	1,620,000	26,550,060
Reserves	1,627,962	471,223	2,099,185	(819,945)			1,279,240
Retained earnings	(19,651,029)	(471,223)	(20,122,252)				(20,122,252)
Total equity attributable to theshareholders of Resources & EnergyGroup Limited	(3,311,007)	4,700,000	1,388,993	3,948,055	750,000	1,620,000	7,707,048
Non-controlling interests	2,368,836	-	2,368,836				2,368,836
Total equity	(942,171)	4,700,000	3,757,829	3,948,055	750,000	1,620,000	10,075,884

Resources and Energy Group Limited

Independent Expert's Report and Financial Services Guide

20 November 2018

Summary of opinion

Grant Thornton Corporate Finance has concluded that the Proposed Transactions are NOT FAIR BUT REASONABLE to the Non-Associated Shareholders.

Independent Directors Resources and Energy Group Limited Level 33, 52 Martin Place Sydney NSW 2000

20 November 2018

Dear Independent Directors

Independent Expert's Report and Financial Services Guide

Introduction

Resources & Energy Group Limited ("REZ" or the "Company") is an Australian public company listed on the Australian Securities Exchange ("ASX"). The Company is focused on building a portfolio of gold prospects with near term development or high exploration potential. The Company currently has two gold mining sites in exploration or development stage– Mount Mackenzie, which is located 150 km north west of Rockhampton, Queensland and Radio which is located 8 km north-west of Bullfinch, Western Australia (collectively "Existing Projects"). The Company's shares ("REZ Shares") have been suspended from trading on the ASX since 10 April 20181 .

On 9 November 2018, the Company announced a number of transactions as outlined below:

Menzies Acquisition – Subject to shareholders' approval ("REZ Shareholders"), the Company had entered into a number of agreements to acquire the East Menzies Gold Project2 ("Menzies Project") for a consideration of $2.1 million3 to be satisfied via the issue of 32.4 million REZ Shares at a price of 5 cents per share and the payment of a cash consideration of $480,000. The areas comprising the East Menzies Gold Project are currently owned by various parties some of which are controlled by interests associated with Mr Richard Poole ("Poole Parties), a director of REZ and accordingly a related party to the Company in accordance with the Corporations Act. The Poole Parties currently hold 14,067,302 REZ Shares equivalent to 15.52% of the issued capital of REZ on an undiluted basis. The Poole Parties will receive 23,920,000 of the consideration shares and up to $444,000 of the cash consideration.

1 Originally pending the release of an announcement on a potential acquisition and capital raising and now subject to finalisation of the FY18 Annual Report

2 The East Menzies Gold Project includes certain tenements that are held by Menzies Goldfields Pty Ltd, Larca Pty Ltd ("Larca Tenements"), RIQO Pty Ltd ("RIQO Tenements") and Australian Mineral Partners Pty Ltd ("AMP Tenements"). In addition to the tenements held by Menzies Goldfields, the Larca Tenements, RIQO Tenements and AMP Tenements are also proposed to be acquired as part of the acquisition.

3 REZ has also agreed to pay to the vendors a royalty of 1% of the net smelter return from the relevant tenements the subject of the agreements.

Capital Raising Undertake a capital raising of up to $5 million at 5 cents per REZ Share with professional and sophisticated investors ("Capital Raising"). The funds raised from the Capital Raising will be applied to advance the development of the Existing Projects and subject to the settlement of the Menzies Acquisition, the East Menzies Gold Project.
Debt for Equity Swap Subject to completion of both the Menzies Acquisition and the Capital Raising4 (both these conditions can be waived), the Company intends to offer to the holders of the Project Development Notes ("PDNs")5 and various other creditors, the opportunity to convert the outstanding debt into REZ Shares at an issue price of 5 cents per share. The Company currently owes $4.7 million to the PDN holders and it expects to convert into equity PDN and other debt outstanding between a minimum $4.5 million and a maximum of $5.5 million. We have been advised that as at the date of this report, PDN and other debt holders who are owed $4.6 million have agreed to participate in the debt for equity conversion. The Poole Parties are owed $0.7 million of debt ("Poole Parties Debt") and $0.7 million in PDN ("Poole Parties PDN") which will be converted pursuant to the Debt for Equity Swap.

In conjunction with the Menzies Acquisition and the Debt for Equity Swap, the Poole Parties will be issued the following REZ Shares:

23,920,000 REZ Shares in respect of the Menzies Acquisition (we note that there are other tenements which form a part of the Menzies Acquisition and that are owned by other unrelated parties).
15,000,000 REZ Shares upon conversion of the Poole Parties PDN.
15,000,000 REZ Shares upon conversion of Poole Parties Debt.

As a result of the above transactions, the Poole Parties may increase their interest in REZ as outlined below:

From 15.52% to 20.39% on an undiluted basis if the Menzies Acquisition, the $5 million Capital Raising and the Debt for Equity Swap all complete.
From 15.52% to 44.42% if the Capital Raising does not proceed, the Menzies Acquisition completes, the Poole Parties Debt and the Poole Parties PDN are converted and no other REZ Shares are issued.

In addition to the above, we note that Resolution 8 seeks REZ Shareholders' approval for the issue of up to 60,880,000 REZ Shares to Gaffwick Pty Ltd ("Gaffwick") in consideration for the conversion of $3.04 million worth of PDN into REZ Shares (Gaffwick PDN). Gaffwick is currently a substantial shareholder of REZ holding 8.09% of the issued capital on an undiluted basis.

As a result of the above transactions, Gaffwick may increase the interest into REZ as outlined below:

4 It is a condition precedent that REZ completes the Capital Raising in full (i.e. $5 million).

5 PDN are debt instruments that were issued for furthering the development work at the Company's Mount Mackenzie and Radio Gold mine. These PDNs had options attached to them wherein the Financier could elect to set-off any liability attributable to the PDNs by exercising the options and receiving equity shares.

From 8.09% to 20.46% on an undiluted basis if the Menzies Acquisition, the $5 million Capital Raising and the Debt for Equity Swap all complete.
From 8.09% to 45.02% if the Capital Raising does not proceed, 60,880,000 REZ Shares are issued to Gaffwick under Resolution 8 and no other REZ Shares are issued. We note that in these circumstances, Gaffwick will be required to waive the completion of the Capital Raising and the Menzies Acquisition as conditions precedent for the conversion of the Gaffwick PDN.

As indicated in the Notice of Meeting and Explanatory Memorandum, the Company considers the most likely outcome to be that the Capital Raising of $5 million, the Menzies Acquisition and the Debt for Equity Swap (collectively referred to as the "Proposed Transactions") all complete which accordingly we have assumed as the base case scenario in our valuation assessment.

We also note that there is a strict interdependence between the Proposed Transactions as outlined below:

The Menzies Acquisition is contingent upon obtaining shareholders' approval in relation to the issue of REZ Shares to the Poole Parties as vendors of certain Menzies tenements and upon conversion of the Poole Parties Debt and the Poole Parties PDN.
The PDNs conversion into equity is subject to completion of the Capital Raising of $5m and completion of the Menzies Acquisition, however we note both these conditions can be waived by the PDNs holders.

The substance of the above is that all the Proposed Transactions are interdependent upon each other. Accordingly, in our valuation assessment we have considered the Proposed Transactions as a whole.

The independent directors of REZ ("Independent Directors") have recommended the Proposed Transactions and will be voting all REZ shares ("REZ Shares) held by them in favour of the Proposed Transactions.

Purpose of the report and approach

The Independent Directors have engaged Grant Thornton Corporate Finance Pty Ltd ("Grant Thornton Corporate Finance") to prepare an independent expert's report stating whether, in its opinion:

The issue of 53,920,000 REZ Shares to the Poole Parties upon completion of the Menzies Acquisition and the conversion of the Poole Parties PDN and the Poole Parties Debt is fair and reasonable to the Non-Associated Shareholders for the purposes of Item 7 of Section 611 of the Corporations Act.
The issue of 60,880,000 REZ Shares to the Gaffwick upon conversion of the Gaffwick PDN is fair and reasonable to the Non-Associated Shareholders for the purposes of Item 7 of Section 611 of the Corporations Act.

The Menzies Acquisition is fair and reasonable to the Non-Associated Shareholders for the purposes ASX Listing Rules 10.1.

Given that all the Proposed Transactions are inter-dependent upon each other, in our fairness assessment, we have considered the Proposed Transactions as a whole. However considering that certain condition precedents can be waived, we have also undertaken a sensitivity analysis to consider certain alternative scenarios.

ASIC Regulatory Guide 111 "Content of Expert's Report" ("RG 111") paragraph 63 indicates that an expert can only conduct one analysis of whether the transaction is fair and reasonable even if the report has been prepared for a reason other than the transaction being a related party transaction (i.e. section 611/7 requirements). Accordingly, we have analysed the Proposed Transactions in accordance with the requirements of section 611 Item 7 of the Corporations Act which also satisfies the requirements of ASX Listing Rule 10.1

For the purposes of this report, Grant Thornton Corporate Finance has engaged Agricola Mining Consultants ("Agricola") to undertake a valuation assessment of the mineral assets of REZ and of the Menzies Project. Agricola's review was completed in accordance with the VALMIN Code and it is attached in Appendix C ("Agricola Report").

Summary of opinion

Grant Thornton Corporate Finance has concluded that the Proposed Transactions are NOT FAIR BUT REASONABLE to the Non-Associated Shareholders.

Fairness Assessment

Summary of opinion
Grant Thornton Corporate Finance has concluded that the Proposed Transactions are NOTFAIR BUT REASONABLE to the Non-Associated Shareholders.
In forming our opinion, Grant Thornton Corporate Finance has considered whether the ProposedTransactions is fair and reasonable to the Non-Associated Shareholders and other quantitative andqualitative considerations.
Fairness Assessment
In forming our opinion in relation to the fairness of the Proposed Transactions to the Non-AssociatedShareholders, Grant Thornton Corporate Finance has compared the value per REZ Share before theProposed Transactions on a control basis to the assessed value per REZ Share after the ProposedTransactions on a minority basis.The following table summarises our valuation assessment:
Summary of Proposed TransactionsCents/share	SectionReference	Low	High
Value of REZ on a control basis before the Proposed Transactions	Section 7	5.98	9.48
Value of REZ on a minority basis after the Proposed Transactions	Section 8	4.38	5.61
Premium / (discount)		(27%)	(41%)
Transaction conclusionSource: GTCF Calculations		NOT FAIR
Having regard to the above, we have concluded that the Proposed Transactions is NOT FAIR to theNon-Associated Shareholders given that the low and high value points of REZ after the Proposed

Transactions are lower than the low and high value points of REZ before the Proposed Transactions and most of the valuation range does not overlap.

As discussed above, given the inter-dependence of all the Proposed Transactions, our opinion is based on the following:

The Company successfully raises $5 million at the price of $0.05/share.
The Company successfully completes the Menzies Acquisition.
The Company completes the Debt for Equity Swap of c. $5.5 million6 .

REZ Shareholders should be aware that our assessment of the value per REZ Share does not reflect the price at which REZ Shares will trade if the Proposed Transactions are approved. The price at which REZ Shares will ultimately trade depends on a range of factors including the liquidity of REZ Shares, REZ's cash position, macro-economic conditions, gold prices, project development progress, and the underlying performance of REZ's business. Value of REZ on a control basis before the Proposed Transactions 5.98 9.48 Value of REZ on a minority basis after the Proposed Transactions 4.25 6.83 Premium / (discount) (29%) (28%)

Sensitivity assessment of the alternative scenarios

We have summarised below our fairness assessment if the Capital Raising does not proceed, the Menzies Acquisition completes, the Poole Parties Debt and the Poole Parties PDN are converted and no other REZ Shares are issued ("Alternative Scenario 1"). Under these circumstances, the Poole Parties will increase their shareholdings in REZ from 15.52% to 44.42%.

Fairness assessment of the Proposed Transactions under Alternative Scenario 1
Cents/share	Low	High

Source: GTCF Calculations

Having regard to the above, we would conclude that the Alternative Scenario 1 is not fair to the Non-Associated Shareholders given that the low and high value points of REZ after the Proposed Transactions is lower than the low and high value points of REZ before the Proposed Transactions and most of the valuation range does not overlap.

We have summarised below our fairness sensitivity analysis if the Capital Raising does not proceed, 60,880,000 REZ Shares are issued to Gaffwick under Resolution 8 and no other REZ Shares are issued ("Alternative Scenario 2"). We note that under these circumstances, Gaffwick will be required to waive the completion of the Capital Raising and the Menzies Acquisition as condition precedent for the conversion of the Gaffwick PDN. Under these circumstances, Gaffwick will increase its shareholding in REZ from 8.09% to 45.02%.

6 Comprising $4.7 million of PDN outstanding balance and c. $0.7 million of unsecured loans issued by the Poole Parties.

		6




Fairness assessment of the Proposed Transactions under Alternative Scenario 2Cents/share	Low	High
Value of REZ on a control basis before the Proposed Transactions	5.98	9.48
Value of REZ on a minority basis after the Proposed Transactions	4.18	6.23
Premium / (discount)	(30%)	(34%)
Source: GTCF Calculations

Having regard to the above, we would conclude that the Alternative Scenario 2 is not fair to the Non
Associated Shareholders given that the low and high value points of REZ after the Proposed

Having regard to the above, we would conclude that the Alternative Scenario 2 is not fair to the Non-Associated Shareholders given that the low and high value points of REZ after the Proposed Transactions is lower than the low and high value points of REZ before the Proposed Transactions and most of the valuation range does not overlap.

Reasonableness Assessment

RG111 establishes that an offer is reasonable if it is fair. It might also be reasonable if, despite being not fair, there are sufficient reasons for the security holders to accept the offer in the absence of any superior proposal. In assessing the reasonableness of approving the Proposed Transactions, we have considered the following advantages, disadvantages and other factors.

Advantages

Ability to continue as a going concern

Before the Proposed Transactions, in our opinion, the Company is in a situation of financial distress due to the following:

It has PDNs with a face value of circa $4.7 million plus accrued interest of $373,215. If the PDNs are not repaid by the exercise of the attaching option7 , which in our opinion is unlikely given that the exercise price varies between 12c and 14c per share, the PDNs are required to be repaid at the end of 3 years from the date of the draw down of each advance (at 29 April 2019 through to 28 January 2023).
It has outstanding loans at call totalling $0.7 million with the Poole Parties.
In the balance sheet as at 31 December 20178 , REZ had net assets of $0.8 million and whilst the half year accounts were prepared on a going concern basis, this was contingent on the continued support of the current financiers, creditors and shareholders.

By approving the Proposed Transactions, the Company will implement the Debt for Equity Swap and it will be in a much stronger financial position to pursue the development of its mineral assets. Further, the Company will not be required to make the periodic interest payments at 8% per annum in relation to the PDNs.

7 The holders of the PDNs have the ability to satisfy the repayment of the PDNs via the exercise of options to acquire for ordinary shares in the Company at an exercise price varying between 12c and 14c per share. At the election of the PDN holders, any amounts owned under the PDNs may be applied either in part or whole to the exercise price owned on issue of the ordinary shares. 8 REZ is yet to release full statutory accounts for 30 June 2018.

No controlling interest

If all the Proposed Transactions are approved, the Poole Parties and Gaffwick will increase their shareholdings in REZ from 15.52% to 20.39% and from 8.09% to 20.46% respectively.

However, we note that our valuation assessment of REZ before the Proposed Transactions is on a 100% basis and incorporates the application of a full premium for control in accordance with the requirements of RG111. The equity interests that the Poole Parties and Gaffwick will hold under these circumstances are slightly above the 20% threshold which triggers the change of control transaction provision in the Corporations Act which accordingly does not represent full and unfettered control over the Company.

Consideration paid for the Menzies Acquisition

As set out in the Agricola Report, the assessed value of the East Menzies Project9 is between $2.3 million and $3.5 million with a preferred value of $2.9 million. The purchase price paid for the Menzies Acquisition is $2.1 million which is below the assessed value range of the East Menzies Project and accordingly by executing the Proposed Transactions, REZ does not provide any financial benefits to the related parties (the Poole Parties) or the substantial shareholder (Gaffwick) in accordance with the requirements of ASX listing rules 10.1 and RG 111.

Disadvantages

The Offer is not fair

We have concluded that the Proposed Transactions are not fair based on our valuation assessment of REZ on a 100% and control basis before the Proposed Transactions and the value of REZ on a minority basis after the Proposed Transactions.

Likelihood of receiving a takeover offer in the future

In our opinion, if the Proposed Transactions are approved and completed, the likelihood of the Company receiving a takeover offer without the agreement of Gaffwick and the Poole Parties may diminish. However, we note that this is unlikely to impact the Non-Associated Shareholders given that the Poole Parties and Gaffwick are also the main financiers of the REZ and as a result of the Proposed Transactions their interests (as financiers and shareholders) will align more closely with the Non-Associated Shareholders.

Other factors

The Non-Associated Shareholders' position if the Proposed Transactions are not approved

If the Proposed Transactions are not approved or completed, the Non-Associated Shareholders will continue to share in any benefits and risks in relation to REZ ongoing business. However, in the absence of an alternative transaction, capital raising or support from existing financiers and shareholders, REZ may not be able to continue as a going concern.

9 Including the Larca Tenements, AMP Tenements and RIQO Tenements

Trading prices of REZ

REZ Shares are currently suspended from trading on the ASX. If the Proposed Transactions are not approved by the Non-Associated Shareholders and in the absence of an alternative transaction, capital raising or support from existing financiers and shareholders, trading in REZ Shares may not resume.

Reasonableness conclusion

In our opinion, the advantages outweigh the disadvantages as set out above and on this basis, it is our opinion that the Proposed Transactions are REASONABLE to the Non-Associated Shareholders.

Overall conclusion

After considering the abovementioned quantitative and qualitative factors, Grant Thornton Corporate Finance has concluded that the Proposed Transactions are NOT FAIR BUT REASONABLE to the Non-Associated Shareholders.

As discussed in the Executive Summary, we have based our conclusions after considering the Proposed Transactions as a whole. For completeness, we note that our opinion or conclusions would not change even if we consider the Alternative Scenario 1 or Alternative Scenario 2.

Other matters

Grant Thornton Corporate Finance has prepared a Financial Services Guide in accordance with the Corporations Act. The Financial Services Guide is set out in the following section.

The decision of whether or not to approve the Proposed Transactions is a matter for each REZ Shareholder to decide based on their own views of the value of REZ and expectations about future market conditions, REZ's performance, risk profile and investment strategy. If REZ Shareholders are in doubt about the action they should take in relation to the Proposed Transactions, they should seek their own professional advice.

Yours faithfully GRANT THORNTON CORPORATE FINANCE PTY LTD

ANDREA DE CIAN JANNAYA JAMES Director Director

20 November 2018

Financial Services Guide

1 Grant Thornton Corporate Finance Pty Ltd

Grant Thornton Corporate Finance carries on a business, and has a registered office, at Level 17, 383 Kent Street, Sydney NSW 2000. Grant Thornton Corporate Finance holds Australian Financial Services Licence No 247140 authorising it to provide financial product advice in relation to securities and superannuation funds to wholesale and retail clients.

Grant Thornton Corporate Finance has been engaged by REZ to provide general financial product advice in the form of an independent expert's report in relation to the Proposed Transactions. This report is included in REZ's Notice of Meeting and Explanatory Memorandum.

2 Financial Services Guide

This Financial Services Guide ("FSG") has been prepared in accordance with the Corporations Act, 2001 and provides important information to help retail clients make a decision as to their use of general financial product advice in a report, the services we offer, information about us, our dispute resolution process and how we are remunerated.

3 General financial product advice

In our report we provide general financial product advice. The advice in a report does not take into account your personal objectives, financial situation or needs.

Grant Thornton Corporate Finance does not accept instructions from retail clients. Grant Thornton Corporate Finance provides no financial services directly to retail clients and receives no remuneration from retail clients for financial services. Grant Thornton Corporate Finance does not provide any personal retail financial product advice directly to retail investors nor does it provide market-related advice directly to retail investors.

4 Remuneration

When providing the Report, Grant Thornton Corporate Finance's client is the Company. Grant Thornton Corporate Finance receives its remuneration from the Company. In respect of the Report, Grant Thornton Corporate Finance will receive from REZ a fixed fee of $55,000 (plus GST), which is based on commercial rate plus reimbursement of out-of-pocket expenses for the preparation of the report. Our directors and employees providing financial services receive an annual salary, a performance bonus or profit share depending on their level of seniority.

Except for the fees referred to above, no related body corporate of Grant Thornton Corporate Finance, or any of the directors or employees of Grant Thornton Corporate Finance or any of those related bodies or any associate receives any other remuneration or other benefit attributable to the preparation of and provision of this report.

5 Independence

Grant Thornton Corporate Finance is required to be independent of REZ in order to provide this report. The guidelines for independence in the preparation of independent expert's reports are set out in Regulatory Guide 112 Independence of expert issued by the Australian Securities and Investments Commission ("ASIC"). The following information in relation to the independence of Grant Thornton Corporate Finance is stated below.

"Grant Thornton Corporate Finance and its related entities do not have at the date of this report, and have not had within the previous two years, any shareholding in or other relationship with REZ (and associated entities) that

could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation the Proposed Transactions.

Grant Thornton Corporate Finance has no involvement with, or interest in the outcome of the transaction, other than the preparation of this report.

Grant Thornton Corporate Finance will receive a fee based on commercial rates for the preparation of this report. This fee is not contingent on the outcome of the transaction. Grant Thornton Corporate Finance's out of pocket expenses in relation to the preparation of the report will be reimbursed. Grant Thornton Corporate Finance will receive no other benefit for the preparation of this report.

Grant Thornton Corporate Finance considers itself to be independent in terms of Regulatory Guide 112 "Independence of expert" issued by the ASIC."

6 Complaints process

Grant Thornton Corporate Finance has an internal complaint handling mechanism and is a member of the Financial Ombudsman Service (membership no. 11800). All complaints must be in writing and addressed to the Chief Executive Officer at Grant Thornton Corporate Finance. We will endeavour to resolve all complaints within 30 days of receiving the complaint. If the complaint has not been satisfactorily dealt with, the complaint can be referred to the Financial Ombudsman Service who can be contacted at:

Financial Ombudsman Service Limited GPO Box 3 Melbourne, VIC 3001 Telephone: 1800 367 287

Grant Thornton Corporate Finance is only responsible for this report and FSG. Complaints or questions about the General Meeting should not be directed to Grant Thornton Corporate Finance. Grant Thornton Corporate Finance will not respond in any way that might involve any provision of financial product advice to any retail investor.

Compensation arrangements

Grant Thornton Corporate Finance has professional indemnity insurance cover under its professional indemnity insurance policy. This policy meets the compensation arrangement requirements of section 912B of the Corporations Act, 2001.

1	Outline of the Proposed Transactions	11
2	Purpose and scope of the report	15
3	Profile of the industry	19
4	Profile of REZ	23
5	Profile of East Menzies Project	29
6	Valuation methodologies	31
7	Valuation assessment of REZ before the Proposed Transactions	34
8	Valuation assessment of REZ after the Proposed Transactions	37
9	Sources of information, disclaimer and consents	40
	Appendix A – Valuation methodologies	42
	Appendix B – Glossary	43
	Appendix C – Technical Expert's Report	44

Page

1 Outline of the Proposed Transactions

1.1 Terms of the Proposed Transactions

1.1.1 Summary of the Proposed Transactions

							11



1	Outline of the Proposed Transactions
1.1	Terms of the Proposed Transactions

1.1.1	Summary of the Proposed Transactions


							The table below provides a brief summary of all the transactions the Company intends to undertake:



	Summary of Proposed Transaction
		Description of the	No. of Consideration Shares issued at		Value of
	Counterparties	transaction	5 cents per share	Consideration Shares ($)	liability settled	Total Consideration	Comments
Capital Raising		Issue of up to 100million shares at 5cents per share	100,000,000
	Menzies Goldfields Pty Ltd2		12,400,000	$620,000		$800,000	Refer footnote 2
	RIQO Pty Ltd	Acquisition of East	10,000,000	$500,000		$800,000	Associate of Mr. Richard Poole
East Menzies Gold Project	AMP Pty Ltd		4,000,000	$200,000		$200,000	Associate of Mr. Richard Poole
	Larca Pty Ltd	Menzies Gold Project	6,000,000	$300,000		$300,000
				$1,620,000		$2,100,000
Total purchase price			15,000,000	$750,000	$750,000		Associate of Mr. Richard Poole
	Fontelina Pty Ltd	Conversion of the
Conversion of Project	Gaffwick Pty Ltd	Project	60,880,000	$3,044,000	$3,044,000
DevelopmentNotes ("PDNs")	Vantage House Pty Ltd	development notesupto $4.7 million	10,000,000	$500,000	$500,000		Company owned by a son of Mr. Gavin Rezos
	Other PDN holders		9,480,000	$474,000	$474,000
Total face value of PDNs				$4,768,000	$4,768,000
Poole Unsecured	Fontelina Pty Ltd	Conversion of theunsecured debt of	15,000,000	$750,000	$750,000		Associate of Mr. Richard Poole
Debt	Total number of shares being issued	c. $0.7 million	242,760,000

Note 2: The acquisition of Menzies Goldfields Pty Ltd will involve the payment of consideration to its two shareholders – Fontelina Pty Ltd which is an associate of Mr. Richard Poole. Minerva Geological Services Pty Ltd is the other shareholder and is an unrelated party to REZ.

We have briefly discussed each of the transactions below.

1.1.2 Capital Raising

The Company plans to raise $5 million by issuing 100 million shares at 5 cents per share as follows:

The placement of the first $1 million, comprising 20 million REZ Shares will occur as set out below:
- The first 17 million shares will be issued under the Company's existing capacity limit.
- The remaining 3 million shares subject to Shareholders' approval.
- Subject to Shareholders' approval each share issued will be accompanied by an option to subscribe for 1 share at 10 cents per share with a maturity date of 30 November 2021.
Subject to or following Shareholders' approval, the Company intends to issue a further 80 million shares at 5 cents per share in order to raise $4 million.

				12




In conjunction with the Capital Raising, the Company will incur transaction costs of 6% the amount raised.


The funds raised through the Capital Raising will be applied in the following manner:

Summary of application of funds in scenarios where including and excluding acquisition of East Menzies Gold Project	Excluding East Menzies Gold Project		Including East Menzies Gold Project
	$	%of fund	$	%of fund
Investigation and exploratory drilling of the Company's mining	800,000	16%	800,000	16%
leases located at Mount Mackenzie in Central Queensland
Exploratory drilling and evaluation of the Company's mining leaseslocated at Radio Gold in Western Australia	600,000	12%	600,000	12%
Exploration and development activities at Mount Mackenzie and	2,400,000	48%	1,920,000	38%
Radio Gold, East Menzies subject to initial results
General working capital and creditors	1,200,000	24%	1,200,000	24%

Cash Consideration for the East Menzies Gold Project	-	0%	480,000	10%
	5,000,000	100%	5,000,000	100%

1.1.3 The Menzies Acquisition

Menzies Goldfields Pty Limited ("Menzies Goldfields") owns certain tenements in the Menzies Gold Project, which will be acquired as a result of the acquisition of 100% of the shares in Menzies Goldfields Pty Ltd. Additionally, the Menzies Gold Project also includes the tenements owned by RIQO Pty Ltd, Australian Mineral Partners Pty Ltd and Larca Pty Ltd (collectively "Tenement Sale Agreements"), which will be acquired subject to completion of the Menzies Acquisition. For the avoidance of doubt, no funds will be spent on the East Menzies Gold Project unless the Menzies Goldfields is completed.

We have set out below some key terms of the legal agreements:

Conditions Precedent The following are the conditions precedent for the acquisition of Menzies Goldfields:
- The Company confirming in writing with the vendors that it is satisfied with its due diligence review of the business, assets, operations, financial position and financial performance of Menzies Goldfields and the tenements held by it.
- The Company obtaining all necessary approvals pursuant to ASX Listing Rules and Corporations Act to enable the Company to complete the Menzies Acquisition.
- Menzies Goldfields obtaining all necessary third-party approvals, consents and regulatory approvals necessary to give effect to all the matters as set out in the share sale agreement.
- No breach of any warranty given by vendors occurring prior to completion of the transaction.
- No event, occurrence or matter which has a material adverse effect on the tenements or the financial condition, operations or prospects of Menzies Goldfields.
Royalty The Company will pay the vendors of the Menzies Acquisition a royalty of 1% of net smelter return from the ore extracted from the relevant tenements.

Tenement Sale Agreements

Inter conditionality of the agreements The Tenement Sale Agreements are inter-conditional such that the completion of each of the Tenement Sale Agreements and the Menzies Acquisition must be completed on or around the same time.
Conditions Precedent The conditions precedent which must be satisfied prior to completion of the transactions are:
- The Company being satisfied with its due diligence review of the tenements held by the vendors.
- The grant of the necessary approvals under the Mining Act to the transactions contemplated by the Tenement Sale Agreements.
- The Company obtaining all necessary approvals pursuant to ASX Listing Rules and Corporations Act to enable the Company to complete the Other Acquisitions.
Royalty The Company will pay the vendors of the Tenement Sale Agreements and the Menzies Acquisition a royalty of 1% of net smelter return from the respective tenements.
1.1.4 Conversion of the PDNs

The Company has issued Project Development Notes with a face value of $4.7 million to raise funds to facilitate the continuing development of the Existing Projects. The PDNs were issued together with free attaching Options. Refer to section 5 for the terms of the PDNs.

The Company is intending to reduce its debt and accordingly is offering the PDN Noteholders the opportunity to completely or partially redeem and convert their PDNs through:

Issue 95.36 million shares at a conversion price of 5 cents per share.
The pro-rata cancellation of unexercised options.
The payment of all accrued interest owing in respect of the redeemed portion of the PDN within 24 months of the date of the issue of the shares discussed above.

Of the above, the following are PDNs held by related parties:

Face value of $0.7 million held by the Poole Parties.
Face value of $0.5 million held by Vantage House Pty Ltd ("Vantage House")

The face value of PDNs held by non-related parties is c. $3.5 million of which c. $3 million is held by Gaffwick.

The successful completion of the Capital Raising, the acquisition of the East Menzies Project and obtaining the shareholder approvals is a condition precedent to the conversion of the debt.

1.1.5 Poole Unsecured Debt

As at the date of this Report, the Company has received an unsecured loan of $0.7 million from the Poole Parties. Subject to shareholder approval, the Company intends to issue up to 15 million shares at a conversion price of 5 cents per share in consideration for the complete or partial redemption and cancellation of debt to the value of $0.7 million.

2 Purpose and scope of the report

2.1 Purpose

Item 7 of Section 611 of the Corporations Act

Section 606 of the Corporations Act prohibits the acquisition of a relevant interest in the issued voting shares of a company if the acquisition results in the person's voting power in the company increasing from either below 20% to more than 20%, or from a starting point between 20% and 90%, without making an offer to all shareholders of the company.

Item 7 of Section 611 of the Corporations Act allows the shareholders not associated with the acquiring company (i.e. the Non-Associated Shareholders) to waive this prohibition by passing a resolution at a general meeting. Regulatory Guide 74 "Acquisitions agreed to by shareholders" ("RG 74") and Regulatory Guide 111 "Content of expert reports" ("RG 111") issued by ASIC set out the view of ASIC on the operation of Item 7 of Section 611 of the Corporations Act.

RG 74 requires that shareholders approving a resolution pursuant to Item 7 of Section 611 of the Corporations Act be provided with a comprehensive analysis of the proposal, including whether or not the proposal is fair and reasonable to the Non-Associated Shareholders. The Directors may satisfy their obligations to provide such an analysis by either:

Commissioning an independent expert's report; or
Undertaking a detailed examination of the proposal themselves and preparing a report for the Non-Associated Shareholders.

As a result of the above Proposed Transactions, the Poole Parties may increase the interest in REZ as outlined below:

From 15.52% to 20.39% on an undiluted basis if the Menzies Acquisition, the $5 million Capital Raising and the Debt for Equity Swap all complete.
From 15.52% to 44.42% if the Capital Raising does not proceed, the Menzies Acquisition completes, the Poole Parties Debt and the Poole Parties PDN are converted and no other REZ Shares are issued.

In addition, Gaffwick may increase the interest into REZ as outlined below:

From 8.09% to 20.46% on an undiluted basis if the Menzies Acquisition, the $5 million Capital Raising and the Debt for Equity Swap all complete.
From 8.09% to 45.02% if the Capital Raising does not proceed, 60,880,000 REZ Shares to Gaffwick under Resolution 8 and no other REZ Shares are issued. We note that under these circumstances, Gaffwick will be required to waive the completion of the Capital Raising and the Menzies Acquisition as condition precedent for the conversion of the Gaffwick PDN.

We note that as indicated in the Notice of Meeting and Explanatory Memorandum, the Directors consider the most likely outcome to be that the Capital Raising of $5 million, the Menzies Acquisition and the Debt for Equity Swap all complete.

Accordingly, the Independent Directors have engaged Grant Thornton Corporate Finance to prepare an independent expert's report stating whether, in its opinion, the Proposed Transactions are fair and reasonable to the Non-Associated Shareholders for the purposes of Item 7 of Section 611 of the Corporations Act.

Chapter 10 of the ASX Listing Rules

Chapter 10 of the ASX Listing Rules requires the approval from the non-associated shareholders of a company if the company proposes to acquire or dispose a substantial asset from a related party or a substantial holder.

ASX Listing Rule 10.2 states that an asset is substantial if its value, or the value of the consideration, is 5% or more of the equity interest of the entity as set out in the latest financial statement provided to the ASX ("Substantial Asset"). Based on ASX Listing Rule 10.1.3, a substantial holder is a person who has a relevant interest, or had a relevant interest at any time in the six months before the transaction, in at least 10% of the voting power of the company.

ASX Listing Rule 10.10.2 requires that the Notice of Meeting and Explanatory Memorandum be accompanied by a report from an independent expert stating whether the transaction is fair and reasonable to the non-associated shareholders.

The acquisitions of certain assets comprising the Menzies Acquisition from the Poole Parties represent the acquisition of a substantial assets from a related party.

Accordingly, the Independent Directors have requested Grant Thornton Corporate Finance to prepare an independent expert's report stating, whether in its opinion the Menzies Acquisition is fair and reasonable to the Non-Associated Shareholders in accordance with Listing Rules.

2.2 Basis of assessment

In preparing our report, Grant Thornton Corporate Finance has had regard to the Regulatory Guides issued by ASIC, particularly RG 111, which states that an issue of shares requiring approval under Item 7 of Section 611 of the Corporations Act should be analysed as if it were a takeover bid. Accordingly, we have assessed the Proposed Issue with reference to Section 640 of the Corporations Act. RG 111 states that:

An offer is considered fair if the value of the offer price or consideration is equal to or greater than the value of the securities that are the subject of the offer. The comparison should be made assuming 100% ownership of the target company irrespective of whether the consideration offered is scrip or cash and without consideration of the percentage holding of the offeror or its associates in the target company.
An offer is considered reasonable if it is fair. If the offer is not fair it may still be reasonable after considering other significant factors which justify the acceptance of the offer in the absence of a higher

bid. ASIC has identified the following factors which an expert might consider when determining whether an offer is reasonable:

The offeror's pre-existing entitlement, if any, in the shares of the target company.
Other significant shareholding blocks in the target company.
The liquidity of the market in the target company's securities.
Taxation losses, cash flow or other benefits through achieving 100% ownership of the target company.
Any special value of the target company to the offeror, such as particular technology and the potential to write off outstanding loans from the target company.
The likely market price if the offer is unsuccessful.
The value to an alternative offeror and likelihood of an alternative offer being made.

Grant Thornton Corporate Finance has determined whether the Proposed Transactions are fair to the Non-Associated Shareholders by comparing the fair market value of REZ Shares before the Proposed Transactions on a 100% control basis with the fair market value of REZ Shares after approval of the Proposed Transactions on a minority basis.

We note that according to RG 111 paragraph 63, an expert can only conduct one analysis of whether the transaction is fair and reasonable even if the report has been prepared for a reason other than the transaction being a related party transaction (i.e. section 611/7 requirements). Accordingly we have considered the requirements of the IER under section 611/7 of the Corporations Act and ASX LR 10.1 simultaneously.

In considering whether the Proposed Transactions are reasonable to the Non-Associated Shareholders, we have considered a number of factors, including:

Whether the Proposed Transactions are fair.
The implications to REZ and the Non-Associated Shareholders if the Proposed Transactions are not approved.
Other likely advantages and disadvantages associated with the Proposed Transactions as required by RG111.
Other costs and risks associated with the Proposed Transactions that could potentially affect the Non-Associated Shareholders of REZ.

2.3 Independence

Prior to accepting this engagement, Grant Thornton Corporate Finance (a 100% subsidiary of Grant Thornton Australia Limited) considered its independence with respect to the Proposed Transactions with reference to the ASIC Regulatory Guide 112 "Independence of Expert's Reports" ("RG 112").

Grant Thornton Corporate Finance has no involvement with, or interest in, the outcome of the approval of the Proposed Transactions other than that of an independent expert. Grant Thornton Corporate Finance is entitled to receive a fee based on commercial rates and including reimbursement of out-of-pocket expenses for the preparation of this report.

Except for these fees, Grant Thornton Corporate Finance will not be entitled to any other pecuniary or other benefit, whether direct or indirect, in connection with the issuing of this report. The payment of this fee is in no way contingent upon the success or failure of the Proposed Transactions.

2.4 Consent and other matters

Our report is to be read in conjunction with the Notice of Extraordinary General Meetings and Explanatory Memorandums dated on or around 12 December 201810 and 20 December 201811 in which this report is included, and is prepared for the exclusive purpose of assisting the Non-Associated Shareholders in their consideration of the Proposed Transactions. This report should not be used for any other purpose.

Grant Thornton Corporate Finance consents to the issue of this report in its form and context and consents to its inclusion in the Notice of Extraordinary General Meeting and Explanatory Memorandum.

This report constitutes general financial product advice only and in undertaking our assessment, we have considered the likely impact of the Proposed Transactions to the Non-Associated Shareholders as a whole. We have not considered the potential impact of the Proposed Transactions on individual Non-Associated Shareholders. Individual shareholders have different financial circumstances and it is neither practicable nor possible to consider the implications of the Proposed Transactions on individual shareholders.

The decision of whether or not to approve the Proposed Transactions is a matter for each Non-Associated Shareholder based on their own views of value of REZ and expectations about future market conditions, REZ's performance, risk profile and investment strategy. If the Non-Associated Shareholders are in doubt about the action they should take in relation to the Proposed Transactions, they should seek their own professional advice.

10 Which has been called for approval of the Capital Raising.

11 Which has been called for approval of the Menzies Acquisitions, the Debt for Equity Swap together which result in Mr. Poole and Gaffwick's shareholding increasing beyond 20%.

3 Profile of the industry

Gold (Au) is a relatively soft, ductile and malleable metal. Demand for gold is supported both through mine production and gold recycling. Since ancient times gold has been used in jewellery, coinage, ornaments and it has been a form of currency. More recently, gold is also being increasing applied for industrial uses in the electronics, industrial, dental or medical industries. Other uses are primarily based on the concept of gold as a store wealth and is held by central Banks, financial institutions, ETF's and other financial products. It is considered a safe haven investment during periods of economic uncertainty and political turbulence. This is particularly evident in financial markets as gold is viewed as more resilient and less volatile than world currencies and considered a hedge against economic uncertainty. Anecdotally, demand for gold has an inverse relationship with global economic performance i.e. when the global economy worsens, demand for gold and its value increases. Consequently, recent economic uncertainty (driven by trade wars or potential reduction in liquidity) and higher political turbulence have supported gold prices.

3.1 Supply

The supply of gold is mainly sourced from mine production and the recycling of scrap gold. The graph below illustrates historical gold supply by category:

World gold supply (quarterly basis)

Source: World Gold Council, Q-3 2018

Historically, quarterly gold supply comprising mine production, net producer hedging and recycling has ranged between 1,000 tonnes to 1,200 tonnes. In the first half of 2018, world gold supply rose by 2.7 per cent from c. 2,129.3 tonnes in first half of 2017 to 2,186.2 tonnes in the first half of 2018, driven by rising mine production. The largest gold producer China experienced a decline of 5.0 percent year-on-year in gold production due to the impact of environmental reforms introduced in 2017.

Global mine production is expected to increase at an average annual growth rate of 2.1 per cent in 2019 to 3,370 tonnes, and at 1.2 percent to 3,409 tonnes in 2020. This is primarily driven by strong mine output and gold scrap output which are due to a relatively large number of mining projects expected to commence in Australia and Russia with miners focusing on expansion and joint-venture partnerships after years of cost cutting and subdued prices.

3.2 Demand

The following is the historical demand for gold.

World gold demand (quarterly basis)

Source: World Gold Council, Q-3 2018

Note 1: ETFs and similar products are shown as reductions from demand in the quarters during which the sale of ETFs and similar products would have been greater than the purchase.

Historically, almost half of the gold demand is primarily driven by demand for jewellery. In the first half of 2018, world gold demand fell by 7.4 per cent from 1,910.5 tonnes in the first half of 2017 to 1,768 tonnes in the first half of 2018 due to a stronger US dollar and lower purchases from China, India, Germany and the US. The demand from emerging markets such as China and India was also partly influenced by a bullish equity market and strong economic growth in those respective countries which lowered demand for gold. To offset this decline, there was an increase in the industrial demand of gold which increased by c. 39%

World gold consumption is forecast to increase by 3.3 per cent in 2019 and 1.9 per cent in 2020. Growth is expected to be driven by increased consumption from India and China. Fears of further Chinese currency weakness and bearish sentiment across the broader emerging markets will support demand as gold. China's recent fiscal stimulus is expected to also boost gold demand in the current year. In addition, escalating trade tensions, rising inflation rates in advanced economies and increasing uncertainty (i.e. Turkey, Argentina and United Kingdom) will most likely have an effect on consumer and business confidence. As a result, a higher demand for safe-haven assets such as gold is expected over the forecast period.

3.3 Gold prices

The following is a chart showing historical gold prices since 2011.

Source: LBMA gold prices

After peaking at US$1,890 in 2011, gold prices have declined and reached a low of US$ 1,060 as at December 2015 due to improved market sentiment and increased risk appetite of investors. During the first half of 2016 gold prices increased again to c. US$ 1,350 due to heightened uncertainty following the US Presidential election and the United Kingdom's potential exit from the European Union. In the second half of 2016 gold prices somewhat stabilised and remained steady. The gold price was US$ 1,345 as at January 2018.

Gold price reached a 20 month low on 17th August 2018, falling to US$ 1,179 an ounce. This was partly driven by monetary policy tightening in the United States and the strengthening of the US dollar. Some easing in geopolitical risks, rising US interest rates and strengthening US dollar are expected to continue putting pressure on gold prices for the remainder of 2018 due to the reduced attractiveness of gold.

Gold prices are expected to recover modestly in 2019 and beyond, as the US interest rates continue to increases. Gold price is expected to increase to US$ 1,264 in 2021 after which it will gradually increase to US$ 1,313 in 202612 .

3.4 Gold exploration

As can be observed from the graph below, in the first half of 2018 Australia's gold exploration expenditures rose by 16 percent year-on-year to $223 million, most likely driven by the expected rise in gold prices in 2019 and beyond. Western Australia remained the centre of Australia's gold exploration activity, accounting for 74 per cent of total gold exploration expenditure.

12 Consensus Economics September 2018, US$ nominal

Gold exploration expenditures - Australia

Source: ABS Stat, Australian Bureau of Statistics, Mineral Exploration

Australia is the second largest producer of gold in the world. Australia's gold mine production increased by 3.5 per cent in FY18 to 303 tonnes, driven by increases in production in several large gold mines in the Northern Territory (i.e. Tanami gold mine) and Western Australia.

According to the Australian government, Australia's gold mine production is forecast to grow by 1.1 per cent in 2018-19 to 306 tonnes after which growth accelerates to 4.5 per cent in 2020 to reach 320 tonnes in 2019-20. Growth is driven by mine expansions and by the commencement of production at several new gold mine projects with junior gold producers assisting in further production growth. Together with rising demand from India and China, this is expected to positively influence the outlook for exploration expenditure.

4 Profile of REZ

4.1 Overview

REZ was formed in 2005, and has operated as a gold exploration and development company since 2015. The Company has leases over two gold prospects – Mt Mackenzie located in Queensland and Radio located in Western Australia. The following is a brief description of the two projects:

Mount Mackenzie – The Mount Mackenzie site is located 150 km north-west of Rockhampton, Queensland. It comprises 4 land areas that have been subject to a number of exploration campaigns targeting shallow depth gold mineralisation. Of the 4 land areas, REZ owns two parcels of land within the mining lease site. The location of the mining leases is set out in the map below:

Source: REZ website

It is part of the Connors Magmatic Arc & New England Fold Belt region which has produced 50 million ounces of gold and large amounts of copper and silver, suggesting a strong mining history with relatively good quality of ore.

Based on drilling results, total resources are expected to be 100,000 oz. of gold at a grade of 1.3 g/t and c. 624,000 oz. of silver. Further drilling work is required to be undertaken to determine the area where mining work is expected to commence.

Refer to the Technical Expert's Report for a more detailed understanding of the mine.

Radio – The Radio mine site is located 8 km north-west of Bullfinch, Western Australia. It is within 5 hours of Perth. Between 1917 and 1971, the Radio mine has produced $110 million of gold at an average grade of 38.5 g/t. The mine was worked to a depth of 100m until activities ceased in 1974 on account of flooding. The mining leases have remained unutilised since 1974 until REZ's acquisition of Bright Sun Enterprises Pty Ltd. Although there has been limited activity on the site since 1974, it is considered attractive given that it is located 6 km from the Copperhead mine, which has produced over 1 million oz. of gold and other well established mines, which are set out in the picture below:

Source: Company announcements

Both projects have limited indicated and inferred resources as outlined in the table below:

Resources and Energy Group Limited - Mineral Resources estimate - JORC 2012
Deposits

Source: Company announcement

Note: Differences may be due to rounding off

4.2 Financial information

4.2Financial information
The following is the audited13 financial position for the Company as at 30 June 2017, 31 December 2017and unaudited financial position as at 30 June 2018. We note that the Company is yet to lodge auditedfinancial statement for the year ending 30 June 2018.
Consolidated Balance SheetAuditedReviewed$Jun-17Dec-17	UnauditedJun-18
Assets
Cash and cash equivalents323,710284,288	108,027
Trade and other receivables298,156118,388	48,717
Financial assets120,00020,000	20,000
Other current assets--	-
Total current assets741,866422,676	176,744
Property, plant and equipment466,402481,250	457,568
Exploration and evaluation assets1,581,1481,763,107	1,712,668
Mine development3,033,1473,061,697	3,029,343
Total non-current assets5,080,6975,306,054	5,199,579
Total assets5,822,5635,728,730	5,376,323
Liabilities
Trade and other payables373,054920,045	1,669,759
Interest-bearing loans and borrowings1,043,067456,178	1,225,446
Provisions31,25526,007	20,476
Total current liabilities1,447,3761,402,230	2,915,681
Interest-bearing loans and borrowings2,086,8653,541,526	3,402,814
Total non-current liabilities2,086,8653,541,526	3,402,814
	6,318,495
Total liabilities3,534,2414,943,756

The exploration and evaluation assets and mine development cost represent the historical cost of exploration undertaken at the Mount Mackenzie and Radio gold mines.
Trade and other payable includes consideration payable in relation to Radio mine ($0.4 million), amounts owed to the Poole Parties ($0.8 million) and the directors ($0.1 million).
The current and non-current portion of interest-bearing loans and borrowings is the value of the PDNs.

4.2.1 PDNs terms

The Company has presently subscribed to two PDNs, the PDN 1 with a face value of $2.2 million and the PDN 2 with face value of $2.5 million. The interest rate payable on these PDNs is 8.0% per annum compounded quarterly. The key terms of the PDNs are as follows:

13 The financial position for the half-year 31 December 2017 is reviewed by the auditors.

Right to subscribe: The Financiers have the right to subscribe for one fully paid ordinary share of the Company for each share option held at an issue price of 12 cents for PDN 1 and 14 cents for PDN 2 each any time after 31 March 2017 for PDN 1 and 30 November 2017 for PDN 2 and until the expiry of the share options on 31 March 2021 for PDN 1 and 30 November 2021 for PDN 2.
Right of offset: At the election of the Financiers, any amounts owed under the PDNs may be applied either in part or whole to the exercise price owed on issue of the ordinary shares. The Company has issued 18,566,667 options for PDN 1 and 11,000,000 for PDN 2 that are convertible into one share which may be used to satisfy the obligations owed under PDN.
Number of ordinary shares to be issued: If all of the PDN options are exercised, a maximum of 29,566,667 fully paid ordinary shares of the Company would be issued.
Right to acquire: Within 6 months prior to the expiry date of the PDNs, the Company may seek to acquire the PDN Options from the issuers at a volume weighted average price calculated for a 1 month period ended 3 days before the election notice is provided to the Financiers.
Terms of repayment: If the Financiers elect to not exercise the options and the PDNs becomes repayable based on the relevant terms. Any PDNs not repaid by exercise of the attached option and application of the exercise price to repayment (refer below) are repaid either at the end of 3 years from the date of drawdown of each advance or in repayments equal to 50% of the Company's positive pre-tax cash from operations (each quarter) until the balance owed under the PDNs and any outstanding interest is repaid in full.

4.2.2 Poole Parties Debt

Whilst there is no formal legal agreement in place for the Poole Parties Debt, the Independent Directors have instructed us to assume the following terms:

The Poole Parties Debt has no fixed maturity and it is of call. There is no specific time period for making the payment once the debt is called upon but, in the absence of other information, we have been advised to assume a 14 day period is available to make the payment.
The loans are unsecured and non-interest bearing.

4.3 Capital structure

4.3.1 Shareholding

4.3Capital structure4.3.1ShareholdingTop 10 shareholders as at 30 June 2018Number of shares held%of shareholdingArthur Phillip Nominees Pty Ltd20,503,58320.9%JP Morgan Nominees Australia Limited8,750,0008.9%Seefield Investments Pty Ltd5,752,0045.9%HSBC Custody Nominees Australia Ltd5,640,0005.7%Mr Roger Kwok and Ms. Katherine Kwok4,000,8084.1%Sanjur Pty Ltd3,988,8024.1%Gaffwick Pty Ltd3,833,3343.9%























Ms Amanda Croser3,597,0223.7%
Mr. Paul Healey3,000,0003.1%
Riverbend Investments Pty Ltd2,583,3342.6%
Netwealth Investments Pty Ltd2,500,0002.5%
Total shareholding of top 10 shareholders64,148,88765.4%
Other shareholders33,994,95834.6%
Total ordinary shares on issue98,143,845100.0%Source: Management information

Whilst trading in REZ Shares has been suspended since 12 April 2018, for completeness, we have set out
below the VWAP and the share price movement of REZ.

The following is the VWAP and monthly share price liquidity over the last 12 months from 11 April 2018.

Source: S&P Global

Historical share trading prices and volume for REZ

Source: S&P Global

				28




	Volume	Monthly	Total value of
Month end	traded('000)	VWAP($)	shares traded($'000)	Volume traded as %of total shares
May2017	948	0.1238	117	1.0%
Jun 2017	2,651	0.1079	286	2.8%
Jul 2017	109	0.1100	12	0.1%
Aug 2017Sep 2017	27395	0.11130.1197	347	0.0%0.4%
Oct 2017	498	0.1235	62	0.5%
Nov2017	186	0.1296	24	0.2%
Dec 2017	-	NA	NA	0.0%
Jan 2018Feb 2018	471519	0.12500.1002	5952	0.5%0.5%
Mar 2018	54	0.1093	6	0.1%
Min				0.00%
Average				0.55%
Median				0.41%
MaxSource: S&P Global, GTCF Calculations				2.77%

4.3.2Options

We have set out below a summary of the Options outstanding as at the date of this report.
Summary of options on issue
Unquoted options exercisable at $0.06 each on or before 31 December 2018			1,000,000
Unquoted options exercisable at $0.12 each on or before 31 December 2019			1,000,000
Unquoted options exercisable at $0.12 each on or before 31 March 2021			26,316,667
Unquoted options exercisable at $0.14 each on or before 31 March 2021			250,000
Unquoted options exercisable at $0.14 each on or before 30 November 2021			18,142,857
Unquoted options exercisable at $0.14 each on or before 15 December 2022			2,000,000
Total unquoted options outstanding			48,709,524

4.3.2 Options

Source: S&P Global, GTCF Calculations

Options
4.3.2We have set out below a summary of the Options outstanding as at the date of this report.Summary of options on issue
Unquoted options exercisable at $0.06 each on or before 31 December 2018		1,000,000
Unquoted options exercisable at $0.12 each on or before 31 December 2019		1,000,000
Unquoted options exercisable at $0.12 each on or before 31 March 2021		26,316,667
Unquoted options exercisable at $0.14 each on or before 31 March 2021		250,000
Unquoted options exercisable at $0.14 each on or before 30 November 2021		18,142,857
Unquoted options exercisable at $0.14 each on or before 15 December 2022		2,000,000
Total unquoted options outstanding		48,709,524

5 Profile of East Menzies Project

5.1 Overview

East Menzies Project is a gold deposit located within the Norseman Wiluna Greenstone Belt in Western Australia. Spread across 16 km in a north-south direction, the project area is located immediately east of Menzies, approximately 130 km north of Kalgoorlie. The Project comprises a number of Mining Leases ("ML") and Prospecting Leases ("PL").

Source: Management information

The tenements cover the historic workings of Goodenough, Kensington, Maranoa, Springfield, Cigar, Emu, King Dam and Broughton, as well as more recently defined prospects. There is a large amount of prospect-scale mapping, soil geochemistry and drill hole data from previous company exploration dating back to the 1980s. In 2011 resource assets obtained high-resolution geophysical and satellite imagery over the area, to improve the geological understanding of the area.

Whilst the mineral resource estimates for all the tenements are not defined, a brief description of three key prospects (collectively, "Key Prospects") along with the resource estimate is set out below:

Maranoa Prospect – The Maranoa tenement forms part of the broader East Menzies Gold Project operated by Australian Mineral Partners Pty Ltd ("AMP"). In May 2016, AMP undertook reverse

circulation14 drilling to confirm existence of gold ore. With new data confirming mineralisation, AMP approached Geko-Co Pty Ltd to combine historic and new data to generate a resource estimate for Maranoa. The methods applied to complete the current estimate in line with the JORC code have excluded areas of likely mineralisation (due mainly to local distances from sample data).

Granny-Venn Prospect Mineral resource estimates have been prepared in accordance with JORC 2012 and were first commissioned by Peak Resources Ltd who hired DataGeo Geological Consultants.
Other ill-defined Prospects Other Prospects that are part of the East Menzies Project include Aunt Kate, Jenny Venn Prospect, Springfield Blowfly, Emu and Cigar Prospects, Spion Kopp and King Dam, Ant Bore, Robbie's Reward, Cock Robin and Picnic Hill.

14 Reverse circulation drilling is a method of drilling which allows the drill cuttings to be transported back to the surface in a continuous steady flow. It is typically used in sample rock cuttings instead of rock cores.

6 Valuation methodologies

6.1 Introduction

As part of assessing whether or not the Proposed Transactions are fair to the Non-Associated Shareholders, Grant Thornton Corporate Finance has compared the fair market value of REZ on a 100% basis before the Proposed Transactions to fair market value of REZ on a minority basis after the Proposed Transactions.

In each case, Grant Thornton Corporate Finance has assessed value using the concept of fair market value. Fair market value is commonly defined as:

"the price that would be negotiated in an open and unrestricted market between a knowledgeable, willing but not anxious buyer and a knowledgeable, willing but not anxious seller acting at arm's length."

Fair market value excludes any special value. Special value is the value that may accrue to a particular purchaser. In a competitive bidding situation, potential purchasers may be prepared to pay part, or all, of the special value that they expect to realise from the acquisition to the seller.

We note, RG111 requires the fairness assessment to be made assuming 100% ownership of the target company and irrespective of whether the consideration offered is script or cash and without consideration of the percentage holding of the offeror or its associates in the target company.

6.2 Valuation methodologies

RG 111 outlines the appropriate methodologies that a valuer should generally consider when valuing assets or securities for the purposes of, amongst other things, share buy-backs, selective capital reductions, schemes of arrangement, takeovers and prospectuses. These include:

Application of earnings multiples to the estimated future maintainable earnings or cash flows of the entity, added to the estimated realisable value of any surplus assets ("FME Method").
Discounted cash flow method and the estimated realisable value of any surplus assets ("DCF Method").
Amount available for distribution to security holders on an orderly realisation of assets ("NAV Method").
Quoted price for listed securities, when there is a liquid and active market ("Quoted Security Price Method").
Any recent genuine offers received by the target for any business units or assets as a basis for valuation of those business units or assets.

Further details on these methodologies are set out in Appendix A to this report. Each of these methodologies is appropriate in certain circumstances.

RG111 does not prescribe the above methodologies as the method(s) that an expert should use in preparing their report. The decision as to which methodology to use lies with the expert based on the expert's skill and judgement and after considering the unique circumstances of the entity or asset being

6.3 Selected valuation methods

6.3.1 Primary valuation methodology

valued. In general, an expert would have regard to valuation theory, the accepted and most commonmarket practice in valuing the entity or asset in question and the availability of relevant information.Selected valuation methodsPrimary valuation methodologyAll the mineral projects of REZ and Menzies are early stage projects with an untested potential forconversion of exploration targets into successful gold production. Accordingly, Grant Thornton CorporateFinance has engaged Agricola Mining Consultants Pty Ltd ("Agricola") to independently evaluate theMineral resources and exploration potential associated with the projects which we have adopted in ourvaluation assessment.The 2015 VALMIN Code provides an indicative guidance in relation to the likely method that may be usedin the valuation of projects at various stages. This is set out in the table below:Valuation approaches for projects at various stagesExploration projectsPre-development projectsDevelopment projectsProduction projectsYesYesYesYes


	6.3
	6.3.1


	Valuation approach
	Market
NoIn some casesYesYes	Income
YesIn some casesYesYesSource: VALMIN Code 2015	Cost

has adopted a market approach. More specifically, the valuation methods include the comparable

Based on the mineral asset classification15 included in the Technical Expert's report, the Technical Expert has adopted a market approach. More specifically, the valuation methods include the comparable transactions and Unit value - $/oz.16 .

We believe the approach adopted by the Technical Expert to be appropriate due to the following:

The mineral projects are early stage exploration projects with the majority of resources (if any) being inferred resources. According to JORC 2012, while it is reasonable to expect that the majority of Inferred Mineral Resources would upgrade to Indicated Mineral Resources with continued exploration, due to the uncertainty of Inferred Mineral Resources, it should not be assumed that such upgrading will always occur. Confidence in the estimate of Inferred Mineral resources is not sufficient to allow the results of the application of technical and economic parameters to be used for detailed planning in Pre-Feasibility or Feasibility studies. For this reason, there is no direct link from an Inferred Mineral Resource to any category of Ore Reserves17 .
Given the uncertainty associated with Inferred Mineral Resources and the relatively large proportion of Inferred Resources, we do not consider it reasonable to use of income-based methods such as discounted cash flows ("DCF") in the valuation assessment.

6.3.2 Cross-check

The Technical Expert has already cross-checked his valuation assessment based on a number of

15 The mineral asset classification adopted by the Technical Expert classifies the Mineral Resources (Indicated and Inferred) of the Project as Advanced exploration projects and the Exploration ground at the Project as Early stage exploration projects.

16 The Unit value - $/oz. has been used in the mineral resource valuation of Mt Mackenzie, Radio and East Menzies Project.

17 According to JORC 2012, the category of Ore Reserves is Probable and Prove Ore Reserves

methodologies. As discussed above, Grant Thornton has had regard to the value of the mineral assets of REZ implied in the trading prices before suspension. This is only a high level cross check given the limited liquidity of REZ trading prices.

6.3.3 Independent technical specialist

For the purposes of this report, Grant Thornton Corporate Finance has engaged Agricola to assess the value of the Mineral resources and the exploration potential of the Menzies Project and the Company's exploration assets. Agricola's engagement was completed in accordance with the VALMIN Code18. A copy of the Agricola's Report is included as Appendix C.

18 The VALMIN Code is binding on members of the Australasian Institute of Mining and Metallurgy when preparing public independent expert reports required by the Corporations Act concerning mineral and petroleum assets and securities. The purpose of the VALMIN Code is to provide a set of fundamental principles and supporting recommendations regarding good professional practice to assist those involved in the preparation of independent expert reports that are public and required for the assessment and / or valuation of mineral and petroleum assets and securities so that the resulting reports will be reliable, thorough, understandable and include all the material information required by investors and their advisers when making investment decisions.

7 Valuation assessment of REZ before the Proposed Transactions

7Valuation assessment of REZ before the Proposed Transactions

Set out below is our valuation assessment of the REZ before the Proposed Transactions.
Valuation summary before the Proposed Transactions	Section
$000	Reference	Low	High
Value of Mount Mackenzie	Note 1	8,400	11,300
Value of Radio	Note 1	3,300	4,300
Cash and cash equivalents	Note 2	108	108
Trade and other receivables	Note 2	49	49
Financial assets	Note 2	20	20
Property, plant and equipment	Note 2	458	458
Trade and other payables	Note 2	(920)	(920)
Interest-bearing loans and borrowings1	Note 2	(668)	(668)
Provisions	Note 2	(20)	(20)
Accrued interest in respect of PDNs3		(96)	(96)
Poole Parties Debt	Note 3	(750)	(750)
Value of the Options	Note 5	(97)	(283)
Value of the PDN	Note 4	(4,366)	(4,903)
Equity value of REZ on a control basis		5,417	8,594
Number of shares outstanding2	Section 4.3	90,644	90,644
Value per share on a control basis (cents)		5.98	9.48
Source: Company annual report, Technical Expert's Report, GTCF CalculationsNote 1: We have excluded a balance of $557,000 included in the interest-bearing loans and borrowings since this pertains to the PDNs whichhave been considered separately.

We make the following observations in relation to the above valuation:

Note 1 The equity value of the Existing Projects is based on the assessment undertaken by the Technical Expert as set out in Appendix C.
Note 2 We have assumed that the other non-financial items on the balance sheet have a market value in line with the carrying value in the unaudited accounts as at 30 June 2018.
Note 3 Poole Parties Debt Whilst the Poole Parties Debt does not bear any interest, which considering the circumstances of the Company, would lead to assume the market value substantially lower than the face value, given our valuation assessment is on 100% basis, we have not impaired the face value of the Poole Parties Debt. In other words, if the market value of the Poole Parties Loan was below its face value, a pool of potential purchasers would be able to purchase the loan at the lower value and simultaneously call the face value of the loan, generating arbitrage profits.
Note 4 Value of the PDNs In our valuation of the PDNs, we have adopted an equity value methodology having regard to the following assumptions:
- Strike Price We have considered a strike price equal to the conversion price of 12c for PDN1 and 14c for PDN2
Spot Price We have considered the Capital Raising price and the prices implied in our valuation assessment before the Proposed Transactions.
Volatility We have assessed the volatility at 60% based on the comparable companies.
Risk-free rate We have adopted a risk-free rate that closely aligns to the tenure of the loan facility based on the capital market yield on government bonds as published by the RBA. Accordingly, we have adopted a risk-free rate of circa 2.1%.
Interest rate the PDNs bears an annual interest rate of 8%. Based on the benchmark, we have undertaken of instruments with a similar risk profile and the returns required by equity providers, we have assumed a market commercial interest rate of 18% in our valuation of the PDNs.
Tenure We had regard to the various maturity dates from 29 April 2019 through to 28 January 2023 in determining the tenure of the PDNs.

Dividend – We have not assumed any distributions to impact the valuation of the embedded option.

Note 5 - Value of the Options – We have assessed the value of the existing options as outlined in section 3.3.2 based on the binomial model adopting the same assumptions (as applicable) disclosed in the valuation of the PDNs.

7.1 High level cross check

High level cross check
As a high-level cross check to our valuation assessment, we have had regard to the "see-through" value of
the mineral assets having regard to the trading prices before suspension and the balance sheet of REZ

Calculation of see through value
	0.105
Share price as at 5 March 20181
Number of shares outstanding2	98,143,845
Market capitalisation at the time of suspension	10,305
Value of PDNs3	5,148
Poole Parties Debt4	750
	include in the reviewed accounts as at 31 December 2017.We have set out our calculations in the table below.

The valuation assessment of the Existing Projects between $11.7 million and $15.6 million does not seem unreasonable when compared with the value of the Existing Projects implied in the trading prices before the suspension of $16.2 million

Whilst this high-level cross check needs to be considered with caution given the limited liquidity in REZ trading prices, the see through value of the mineral assets of REZ implied in the trading prices supports the valuation assessment of the Existing Projects included in the Agricola Report.

8 Valuation assessment of REZ after the Proposed Transactions

8.1 Valuation summary

8Valuation assessment of REZ after the Proposed Transactions
8.1Valuation summary

Set out below is our valuation assessment of REZ after the Proposed Transactions.
Valuation summary after the Proposed Transactions$000's	SectionReference	Low	High
Value of Mount Mackenzie as per Technical Expert	Note 1	8,400	11,300
Value of Radio as per Technical Expert	Note 1	3,300	4,300
Acquisitions:
Value of Menzies Project	Note 1	2,300	3,500
Enterprise value of REZ on a control basis		14,000	19,100
Minority discount	Note 3	16.7%	16.7%
Enterprise value of REZ on a minority basis		11,667	15,917
Cash consideration paid for the Menzies Projects	Note 2	(480)	(480)
Cash and cash equivalents	Note 4	108	108
Trade and other receivables	Note 4	49	49
Financial assets	Note 4	20	20
Property, plant and equipment	Note 4	458	458
Trade and other payables1	Note 4	(920)	(920)
Interest-bearing loans and borrowings	Note 4	(668)	(668)
Other liabilities	Note 4	(20)	(20)
Accrued interest in respect of PDNs2	Note 5	(96)	(96)
Proceeds from capital raising (net of transaction costs)	Note 6	4,700	4,700
Value of the Options issued	Note 7	(214)	(366)
Equity value of REZ on a minority basis		14,602	18,700
Number of shares outstanding	Note 4A & 8	333,404	333,404
Value per share on a minority basis (cents)		4.38	5.61
Source: REZ financial statements, Technical Expert's ReportNote 1: The unsecured loans of $0.7 million provided by the Poole Parties are expected to be converted. Accordingly, we have adjusted the valueof the trade and other payables where this balance was originally included.Note 2: The accrued interest on the PDNs is from the 1 July 2018 to 30 September 2018

We make the following observations in relation to the above valuation:

Note 1 The equity value of the Existing Projects and the Menzies Projects are based on the assessment undertaken by the Technical Expert as set out in Appendix C.
Note 2 Payment of the cash consideration to the Menzies vendors.
Note 3 Minority Discount In our valuation assessment of REZ after the Proposed Transactions, in accordance with the requirements of RG111, we have applied a minority discount to the valuation of the mineral assets. Typically, control premiums observed in Australian markets range from 20% to 40% and our implied control premium is at the lower end of the range. Given that REZ is an early stage exploration company with a relatively limited resource base, in our opinion, a hypothetical market participant would pay a control premium that is likely to be at the lower end of the control premium range. The minority discount applied is the inverse of a 20% premium for control.
Note 4 We have assumed that the other non-financial items on the balance sheet have a market value in line with the carrying value in the unaudited accounts as at 30 June 2018.
Note 4A the PDNs and the Poole Parties Debt will convert into ordinary shares at an issue price of 5c per share.
Note 5 the interest accrued on the PDNs of $380,395 will remain as a liability on the balance sheet and it will be repaid within 24 months. Of the total interest, $284,251 of accrued interest has already been recorded on the balance sheet. Accordingly, we have included the balance i.e. 96,144 in our valuation assessment
Note 6 Capital raising of $5 million at 5 cents per share is completed. We note that REZ is expected to incur transaction cost of 6% of the amount raised which we have deducted from the cash inflow.
Note 7 Value of the Options

	5c per share.
	valuation assessment			Note 5 – the interest accrued on the PDNs of $380,395 will remain as a liability on the balance sheetand it will be repaid within 24 months. Of the total interest, $284,251 of accrued interest has alreadybeen recorded on the balance sheet. Accordingly, we have included the balance i.e. 96,144 in our
				Note 6 – Capital raising of $5 million at 5 cents per share is completed. We note that REZ is expectedto incur transaction cost of 6% of the amount raised which we have deducted from the cash inflow.

	Note 7 - Value of the Options
	issue after the Proposed Transactions.Summary of outstanding options on issueVesting condition	Grant date	Expiry date	these options plus the pre-existing options have been included in the valuation assessment. As aresult of the cancellation of the PDNs and the associated options the following options will remain onExercise price ($/option)	Number of options
Class
CD	VWAP > 7 centsReferral of projects	10-Apr-1509-Nov-15	31-Dec-1831-Dec-19	0.060.12	1,000,0001,000,000
F	na	20-Jun-16	31-Mar-21	0.12	5,000,000
G	Continuing service	20-Jun-16	31-Mar-21	0.12	2,500,000
I	Continuing service	06-Dec-16	30-Nov-21	0.12	250,000
J	Continuing service	06-Dec-16	31-Mar-21	0.14	250,000
L	Continuing service	18-Dec-17	15-Nov-21	NA	1,000,000
M	Continuing service	18-Dec-17	15-Nov-21	0.14	1,000,000
	New placement	09-Nov-18	30-Nov-21	0.10	20,000,000
	Total outstanding options				32,000,000
	Source: Management informationNote 1: The grant date of the options has been assumed to be the date on which the Company announced the Capital Raising

Note 8 – Shares outstanding

We have set out below the calculations of the number of shares outstanding following completion of the Proposed Transactions.

Number of shares outstanding after Proposed Transactions
Calculation of the number of shares outstanding										90,643,845
Number of shares issued towards:
	Menzies Goldfields Tenements							12,400,000
RIQO Tenements								10,000,000
AMP Tenements								4,000,000
Larca Tenements								6,000,000
	Pursuant to PDN conversion - Fontellina							15,000,000
	Pursuant to Debt conversion - FontellinaPursuant to PDN Conversion - Gaffwick							15,000,00060,880,000
	Pursuant to PDN Conversion - Vantage House							10,000,000
	Pursuant to PDN Conversion							9,480,000
Capital raising								100,000,000		242,760,000
Total number of shares outstanding										333,403,845
Source: GTCF Calculations
8.2	Sensitivity analysis

Given that the Capital Raising is not underwritten and there is no minimum amount required, we have
included below the value per share after the Proposed Transactions in conjunction with a capital raising
between nil and $5 million.
Value per share post Proposed Transactions
Capital raise ($000)	5,000	4,500	4,000	3,500	3,000	2,500	2,000	1,500	1,000	500
Low (cents)	4.38	4.37	4.36	4.35	4.34	4.32	4.31	4.29	4.28	4.26	4.24
High (cents)	5.61	5.64	5.67	5.70	5.73	5.77	5.81	5.85	5.90	5.94	6.00
Source: GTCF CalculationsNote 1: The total capital raised presented in the table above is before transaction costs.

In our assessment of the value per share in the table above, we have included the impact of transaction
costs at 6%.

8.2 Sensitivity analysis

Value per share post Proposed Transactions

In the sensitivity calculations above, we have considered a constant value of the option expense.

9 Sources of information, disclaimer and consents

9.1 Sources of information

In preparing this report Grant Thornton Corporate Finance has used various sources of information, including:

Notice of Meeting and Explanatory Memorandum.
Annual reports/ consolidated accounts of REZ for FY16, FY17 & HY18.
Announcements made by REZ on the ASX.
REZ's website.
S&P Capital IQ.
IBISWorld.
Other publicly available information.
Discussions with REZ's Management or its advisors.

9.2 Qualifications and independence

Grant Thornton Corporate Finance Pty Ltd holds Australian Financial Service Licence number 247140 under the Corporations Act and its authorised representatives are qualified to provide this report.

Grant Thornton Corporate Finance provides a full range of corporate finance services and has advised on numerous takeovers, corporate valuations, acquisitions, and restructures. Prior to accepting this engagement, Grant Thornton Corporate Finance considered its independence with respect to and all other parties involved in the Proposed Issue with reference to the ASIC Regulatory Guide 112 "Independence of expert" and APES 110 "Code of Ethics for Professional Accountants" issued by the Accounting Professional and Ethical Standard Board. We have concluded that there are no conflicts of interest with respect to REZ, its shareholders and all other parties involved in the Proposed Transactions.

Grant Thornton Corporate Finance and its related entities do not have at the date of this report, and have not had within the previous two years, any shareholding in or other relationship with REZ or its associated entities that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the Proposed Transactions.

Grant Thornton Corporate Finance has no involvement with, or interest in the outcome of the Proposed Transactions, other than the preparation of this report.

Grant Thornton Corporate Finance will receive a fee based on commercial rates for the preparation of this report. This fee is not contingent on the outcome of the Proposed Transactions. Grant Thornton Corporate Finance's out of pocket expenses in relation to the preparation of the report will be reimbursed. Grant Thornton Corporate Finance will receive no other benefit for the preparation of this report.

9.3 Limitations and reliance on information

This report and opinion is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time.

Grant Thornton Corporate Finance has prepared this report on the basis of financial and other information provided by REZ and publicly available information. Grant Thornton Corporate Finance has considered and relied upon this information. Grant Thornton Corporate Finance has no reason to believe that any information supplied was false or that any material information has been withheld. Grant Thornton Corporate Finance has evaluated the information provided by REZ through inquiry, analysis and review, and nothing has come to our attention to indicate the information provided was materially misstated or would not afford reasonable grounds upon which to base our report. Nothing in this report should be taken to imply that Grant Thornton Corporate Finance has audited any information supplied to us, or has in any way carried out an audit on the books of accounts or other records of REZ.

This report has been prepared to assist the Directors in advising the Non-Associated Shareholders in relation to the Proposed Transactions. This report should not be used for any other purpose. In particular, it is not intended that this report should be used for any purpose other than as an expression of Grant Thornton Corporate Finance's opinion as to whether the Proposed Transactions is fair and reasonable to the Non-Associated Shareholders.

REZ has indemnified Grant Thornton Corporate Finance, its affiliated companies and their respective officers and employees, who may be involved in or in any way associated with the performance of services contemplated by our engagement letter, against any and all losses, claims, damages and liabilities arising out of or related to the performance of those services whether by reason of their negligence or otherwise, excepting gross negligence and wilful misconduct, and which arise from reliance on information provided by REZ, which REZ knew or should have known to be false and/or reliance on information, which was material information REZ had in its possession and which REZ knew or should have known to be material and which did not provide to Grant Thornton Corporate Finance. REZ will reimburse any indemnified party for all expenses (including without limitation, legal expenses) on a full indemnity basis as they are incurred.

9.4 Consents

Grant Thornton Corporate Finance consents to the issuing of this report in the form and context in which it is included in the Notice of Meeting and Explanatory Memorandum to be sent to the Non-Associated Shareholders. Neither the whole nor part of this report nor any reference thereto may be included in or with or attached to any other document, resolution, letter or statement without the prior written consent of Grant Thornton Corporate Finance as to the form and content in which it appears.

Appendix A – Valuation methodologies

Capitalisation of future maintainable earnings

The capitalisation of future maintainable earnings multiplied by appropriate earnings multiple is a suitable valuation method for businesses that are expected to trade profitably into the foreseeable future. Maintainable earnings are the assessed sustainable profits that can be derived by a company's business and excludes any abnormal or "one off" profits or losses.

This approach involves a review of the multiples at which shares in listed companies in the same industry sector trade on the share market. These multiples give an indication of the price payable by portfolio investors for the acquisition of a parcel shareholding in the company.

Discounted future cash flows

An analysis of the net present value of forecast cash flows or DCF is a valuation technique based on the premise that the value of the business is the present value of its future cash flows. This technique is particularly suited to a business with a finite life. In applying this method, the expected level of future cash flows are discounted by an appropriate discount rate based on the weighted average cost of capital. The cost of equity capital, being a component of the WACC, is estimated using the Capital Asset Pricing Model.

Predicting future cash flows is a complex exercise requiring assumptions as to the future direction of the company, growth rates, operating and capital expenditure and numerous other factors. An application of this method generally requires cash flow forecasts for a minimum of five years.

Orderly realisation of assets

The amount that would be distributed to shareholders on an orderly realisation of assets is based on the assumption that a company is liquidated with the funds realised from the sale of its assets, after payment of all liabilities, including realisation costs and taxation charges that arise, being distributed to shareholders.

Market value of quoted securities

Market value is the price per issued share as quoted on the ASX or other recognised securities exchange. The share market price would, prima facie, constitute the market value of the shares of a publicly traded company, although such market price usually reflects the price paid for a minority holding or small parcel of shares, and does not reflect the market value offering control to the acquirer.

Comparable market transactions

The comparable transactions method is the value of similar assets established through comparative transactions to which is added the realisable value of surplus assets. The comparable transactions method uses similar or comparative transactions to establish a value for the current transaction.

Comparable transactions methodology involves applying multiples extracted from the market transaction price of similar assets to the equivalent assets and earnings of the company. The risk attached to this valuation methodology is that in many cases, the relevant transactions contain features that are unique to that transaction and it is often difficult to establish sufficient detail of all the material factors that contributed to the transaction price.

Appendix B – Glossary

$	Australian Dollar
AMP Tenements	The tenements owned by AMP Pty Ltd
APES	Accounting Professional and Ethical Standards
APES110	Code of ethics for Professional Accounting
ASIC	Australian Securities and Investments Commission
ASX	Australian Securities Exchange
Capital Raising	The transaction involving issue of 100 million shares at 5 cents per share
Capital Raising Options	The issue of 20 million options with an exercise price of 10 cents per option
Corporations Act	Corporations Act 2001 (Cth)
Debt for Equity Swap	The conversion of the PDNs and debts owed to related parties
Directors	The Directors of REZ
East Menzies Project	The project owned by Menzies Goldfields Limited
EGM	Extraordinary General Meeting
EV	Enterprise Value
Fontelina	Fontelina Pty Ltd
FSG	Financial Services Guide
FYXX	Financial year ended 30 June 20XX
Gaffwick	Gaffwick Pty Ltd
Grant Thornton Corporate Finance	Grant Thornton Corporate Finance Pty Ltd

JORC/ JORC Code	Mineral Resource as defined in the Australasian Code for Reporting of Exploration Results, Mineral
koz	Resources and Ore.000's ounces
Larca Tenements	The JORC (the "Joint Ore Reserves Committee") Code is a standard used for the public disclosure ofThe tenements owned by Larca Pty Ltd
Menzies Goldfields	Menzies Goldfields Pty Ltd
Mineral Resources	Mineral resources reported in accordance with the JORC Code
NOM	Notice of meeting
Non-Associated Shareholders	Shareholders of REZ not associated with the Related Party Shareholders
oz	Ounce
PDNs	Project Development Notes
Poole Parties	Mr. Richard Poole and his associates
Proposed Transactions	Comprising the Capital Raising, Debt for Equity Swap and the Acquisitions
REZ	Resources and Energy Group Limited
RG	Regulatory Guide
RG 111	ASIC Regulatory Guide 111 "Contents of expert reports"
RG 112	ASIC Regulatory Guide 112 "Independence of Experts"
RG 74	ASIC Regulatory Guide 74 "Acquisitions agreed to by shareholders"
RIQO Tenements	The tenements owned by RIQO Pty Ltd

Appendix C – Technical Expert's Report

INDEPENDENT VALUATION OF THE Mt MACKENZIE PROJECT in QUEENSLAND and the RADIO and MENZIES PROJECTS in WESTERN AUSTRALIA

12 November 2018

Georgius Agricola, De Re Metallica, 1556

15 November 2018

The Directors Grant Thornton Australia Level 17, 383 Kent Street Sydney NSW, 2000

Dear Sirs,

Re: INDEPENDENT VALUATION OF THE Mt MACKENZIE PROJECT in QUEENSLAND and the

RADIO and MENZIES PROJECTS in WESTERN AUSTRALIA

Resources & Energy Limited (ASX:REZ) (the "Company") requires an independent expert report (IER) for the sale of securities from one significant shareholder to another. This requires an independent expert to provide an opinion on whether the advantages of the sale outweigh the disadvantages to shareholders. Grant Thornton Australia has been appointed as independent expert.

Agricola Mining Consultants Pty Ltd ("Agricola") was commissioned by the Directors of Grant Thornton Australia (the "Expert" or the "Client") to provide a Mineral Asset Valuation Report (the "Report") on the mineral assets in the Mt Mackenzie, Radio and East Menzies Projects. This report serves to comment on the geological setting and exploration results on the properties and presents a technical and market valuation for the assets based on the information in this Report.

Agricola is independent of, and is perceived to be independent of, interested parties and has a clear written agreement with the Expert concerning the purpose and scope of the Specialist's work.

The present status of the tenements is based on information made available by the Company and independently verified by Agricola. The Report has been prepared on the assumption that the tenements are lawfully accessible for evaluation.

The Mineral Assets

The Mount Mackenzie Project is located 150kms north west of Rockhampton, Queensland. The tenements encompass 4 areas, which have been subject to a number of exploration campaigns focussed on shallow depth gold mineralisation.

The Radio Project is located 8km north west of Bullfinch, Western Australia. From 1918 to 1974, the underground mining at the Radio Gold Mine produced over 71,000 ounces of gold at a grade of 38.5 grams per tonne. The mine was worked to a depth of 100m and then activities ceased in 1974.

The East Menzies Project includes a number of Mining Leases and Prospecting Licences east of the Goldfields town of Menzies covering the historic workings of Goodenough, Kensington, Maranoa, Springfield, Cigar, Emu, King Dam and Broughton, as well as more recently defined prospects.

Valuation Opinion

Based on an assessment of the factors involved, the estimate of the market value for 100% equity in the Mt Mackenzie Project, is in the range of:

A$8.4 million to A$11.3 million with a preferred value of A$9.9 million.

Based on an assessment of the factors involved, the estimate of the market value for 100% equity in the Radio Project, is in the range of:

A$3.3 million to A$4.3 million with a preferred value of A$3.8 million.

Based on an assessment of the factors involved, the estimate of the market value for 100% equity in the Menzies Group Project, is in the range of:

A$2.3 million to A$3.5 million with a preferred value of A$2.9 million.

The value of the Company's Mineral Assets is estimated to be in the range of:

A$14.0 million to A$19.1 million with a preferred value of A$16.5 million.

This valuation is effective on 15 November 2018.

REZ	Market Value, A$M
OVERVIEW	Low	High	Preferred
Mt MackenzieProject	8.4	11.3	9.9
Radio Project	3.3	4.3	3.8
Menzies Group
Menzies Vendor Tenements	1.3	2.0	1.6
RIQO Tenements	0.6	0.8	0.7
Larca Tenements	0.3	0.4	0.4
AMP Tenements	0.2	0.3	0.2
TOTAL	14.0	19.1	16.5

This mineral asset valuation endeavours to ascertain the unencumbered price which a willing but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not too anxious purchaser could reasonably expect to have to pay for the property if the vendor and the purchaser had got together and agreed on a price in friendly negotiation (the Spencer Test).

Agricola's opinion should be considered as a whole as the various elements of its analysis are often interdependent. Agricola cautions against examination of individual elements of its analysis as this may create a misleading impression of the overall opinion.

TENEMENT SCHEDULE 6
PROJECT REVIEW10
MOUNTMACKENZIE 10
Geology and Geological Interpretation 10
Mineral Resource Estimate – Mt Mackenzie 2015 12
RADIOMINE,BULLFINCH,WA. 16
History and past production 16
Geological Context 17
Previous Exploration 18
Mineral Resource Estimate – Radio Mine 2012 20
Development at the Radio Mine 21
EASTMENZIESPROJECT,WESTERN AUSTRALIA 23
Structure of the Central Synclinal Domain 23
Structure of the Eastern Domain 24
Goodenough Prospect 24
Maranoa Prospect 28
REFERENCES 31
VALUATION CONSIDERATIONS32
FAIR MARKET VALUE OF MINERAL ASSETS 35
METHODS OF VALUING MINERAL ASSETS 36
AGRICOLA'S PREFERRED VALUATION METHODOLOGY 39
REZVALUATION ASSESSMENT 47
CHOICE OF VALUATION METHOD 48
VALUATION OF MINERAL RESOURCES 49
PROJECT QUALITY ASSESSMENT –MINERAL RESOURCES 49
COMPARABLE TRANSACTIONS FOR MINERAL RESOURCES -$/OZ 51
TECHNICAL VALUE 53
GEO-FACTOR RATING – EXPLORATION GROUND 54
GEO FACTOR ASSESSMENT 56
TECHNICAL VALUE 59
RISKS FOR EXPLORATION COMPANIES 60
MARKET VALUE 62
MARKET PREMIUM OR DISCOUNT 62
MARKET VALUE SUMMARY 63
SECONDARY VALUATION METHOD CROSS CHECK 64
VALUATION OPINION 69
DECLARATIONS, RISK AND INDEPENDENCE 71
SCOPE OF THE VALUATION REPORT 71
DECLARATIONS 72
RISKS FOR EXPLORATION COMPANIES 74
QUALIFICATIONS,EXPERIENCE AND COMPETENCE 76
INDEPENDENCE 77
CONSENT 78
APPENDICES – COMPARATIVE TRANSACTIONS 80

TENEMENT SCHEDULE

MOUNT MACKENZIE PROJECT, Queensland
Tenement	Status	Holder1	Area, km2	Grant Date	Expiry Date
EPM
10006	LIVE	Mt Mackenzie Mines Pty Ltd	27.00	29/3/94	28/3/23
Total Area		1 tenements	27.00

RADIO PROJECT
Tenement	Status	HolderBrightsun Enterprises Pty	Area, km2	Grant Date	ExpiryDate
M77/633	LIVE	Ltd	979.95Ha	25/8/94	24/8/36
Total Area		1 tenement	9.80km2

MENZIES GROUP EXPLORATION TENEMENTS

Menzies Vendor Tenements
Tenements	Status	Jurisdiction	Manager	Holder	Area, km2
M29/0141	LIVE	WA	*AMPL	Vendor	0.38
P29/2106	LIVE	WA	*AMPL	Vendor	0.30
P29/2225	LIVE	WA	*AMPL	Vendor	1.52
P29/2161	LIVE	WA	*AMPL	Vendor	1.97
P29/2162	LIVE	WA	*AMPL	Vendor	1.42
P29/2163	LIVE	WA	*AMPL	Vendor	1.74
P29/2164	LIVE	WA	*AMPL	Vendor	1.76
P29/2174	LIVE	WA	*AMPL	Vendor	1.33
P29/2175	LIVE	WA	*AMPL	Vendor	0.03
P29/2220	LIVE	WA	*AMPL	Vendor	1.21
P29/2221	LIVE	WA	*AMPL	Vendor	1.22
P29/2223	LIVE	WA	*AMPL	Vendor	1.86
P29/2224	LIVE	WA	*AMPL	Vendor	1.96
P29/2226	LIVE	WA	*AMPL	Vendor	2.00
P29/2227	LIVE	WA	*AMPL	Vendor	1.67
P29/2228	LIVE	WA	*AMPL	Vendor	1.84
P29/2270	LIVE	WA	*AMPL	Vendor	1.96
				17	24.17

AMP Tenements
Tenements	Status	Jurisdiction	Manager	Holder	Area, km2
E29/979	LIVE	WA	AMPLAMPL		21.00
				1 tenement	21.00

RIQO Tenements
Tenement Id	Status	Jurisdiction	Manager	Holder		Area, km2
L29/0061	LIVE	WA	*AMPL	RIQO
M29/0189	LIVE	WA	*AMPL	RIQO		5.26
P29/2244	LIVE	WA	*AMPL	RIQO		1.96
P29/2242	LIVE	WA	*AMPL	RIQO		1.99
P29/2243	LIVE	WA	*AMPL	RIQO		1.98
P29/2245	LIVE	WA	*AMPL	RIQO		1.99
P29/2246	LIVE	WA	*AMPL	RIQO		2.00
P29/2247	LIVE	WA	*AMPL	RIQO		2.00
P29/2248	LIVE	WA	*AMPL	RIQO		2.00
					8	19.18

Larca Tenements
Tenements	Status	Jurisdiction	Manager	Holder	Area, km2
P29/2391	LIVE	WA	Larca	Larca	1.93
P29/2408	LIVE	WA	Larca	Larca	1.79
P 29/2409	LIVE	WA	Larca	Larca	1.76
P 29/2395	LIVE	WA	Larca	Larca	0.70
				4 tenements	6.18
P29/2455	Pending	WA	Larca	Larca	1.94
P29/2457	Pending	WA	Larca	Larca	1.68
P29/2459	Pending	WA	Larca	Larca	1.62
P29/2460	Pending	WA	Larca	Larca	2.00
P29/2461	Pending	WA	Larca	Larca	2.00
P29/2469	Pending	WA	Larca	Larca	1.98
P29/2470	Pending	WA	Larca	Larca	1.98
P29/2471	Pending	WA	Larca	Larca	2.00
P29/2472	Pending	WA	Larca	Larca	1.92
P29/2473	Pending	WA	Larca	Larca	0.77
P29/2474	Pending	WA	Larca	Larca	1.98
P29/2456	Pending	WA	Larca	Larca	1.88
P29/2458	Pending	WA	Larca	Larca	1.16
P29/2492	Pending	WA	Larca	Larca	0.10
P29/2500	Pending	WA	Larca	Larca	1.21
P29/2494	Pending	WA	Larca	Larca	1.99
P29/2495	Pending	WA	Larca	Larca	1.21
P29/2496	Pending	WA	Larca	Larca	1.76
P29/2497	Pending	WA	Larca	Larca	1.59
				19 tenements	43.13

The vendors of the East Menzies tenements will receive a net smelter royalty (NSR) of 1%. The mineral Asset valuation relates to the value at the time of the Report. Agricola considers that the net smelter royalty may be payable some time in the future if the mineral assets are brought into production. Agricola

considers that this should be addressed at the Feasibility stage. To a large extent the value of the NSR will depend on the assumptions for gold price and operating costs and Agricola has made no allowance for the NSR in this valuation for the East Menzies projects.

The status of the tenements has been independently verified by Agricola, based on a recent inquiry of on-line databases for Western Australia and Queensland operated by the Mines Departments in those states pursuant to section 7.2 of the VALMIN Code, 2015. The tenements are believed to be in good standing based on this inquiry.

Mt Mackenzie Project Tenements (Source: REZ)

Radio Project Tenement M77/633 (Source: DMP WA)

Menzies Project Tenements (Source: REZ)

PROJECT REVIEW

MOUNT MACKENZIE

Location of the Mt Mackenzie Project. (Source: REZ)

Geology and Geological Interpretation

The Mount Mackenzie area is recognized as a high sulphidation epithermal system. There has been significant work completed since the 1980's. The current work focused on interpretation of a broader mineralisation envelope utilising available geochemistry, interpreted alteration and lithological logging. The mineralised envelopes generated are a representation of the location and volumes of broadly mineralised material.

Mount Mackenzie Drill Hole Plan and Mineralised Envelopes

Source: REZ ASX Release 7 September 2015. Competent Person: Andrew Richmond

Previous work at Mount Mackenzie consisted of historic drill hole logging and assays, past interpretations, and data acquired during the 2015 drilling program by the Company.

Cross Section through North Knoll

Source: REZ ASX Release 7 September 2015. Competent Person: Andrew Richmond

Cross Section through North Knoll

Source: REZ ASX Release 7 September 2015. Competent Person: Andrew Richmond

Mineral Resource Estimate – Mt Mackenzie 2015

Mineral Resource estimates have been prepared for the Mt Mackenzie deposit in accordance with the JORC Code, 2012.

The Company announced the Mineral Resource Estimates to the ASX on 7 September 2015: "REZ announces Resource Estimate (incl indicated and inferred) of 100,000 oz of Gold and 624,000 oz of Silver derived from analysis of recent drilling and historical results".

Agricola is not aware of any new information or data that materially affects the information included in the ASX release of 7 September 2015 and all the material assumptions and technical parameters underpinning the estimates continue to apply. The form and context in which the findings of the ASX release are presented have not been materially modified.

				Indicated					Inferred				Indicated +Inferred
Material	Cut-off(g/tAu)	Tonnes	Au	Ag.	Au	Ag	Tonnes	Au	Ag	Au.	Ag	Tonnes	Au	Ag.	Au	Ag
		(kt)
Oxide	0.43	450	1.18	٥	17	130	520	1.18	4	20	67	970I	1.18		37I	197
Primary	0.58	700	1.42	14		315	700	1.37		31	112	1400	1.39	٥	63	427
Total		1150			49	445	1220			51	179	2370			100	624

Mount Mackenzie 2015 Mineral Resource Estimate

Source: REZ ASX Release 7 September 2015. Competent Person: Andrew Richmond

Agricola has estimated the gold equivalent grade for the Mt Mackenzie resource estimate based on the current metal price and recoveries of US$1325 and 85% or gold and US$16.47 and 80% for silver. Equivalence factors of 1.000 for gold and 0.012 for silver were used to estimate the gold equivalent grade of 1.47g/t AuEq for Indicated Resource and 1.34g/t AuEq for Inferred Resource. These estimates were used in the valuation of the resource.

Notes to Accompany the Resources Estimate1

The current resource estimate used sectional interpretation and threedimensional interpretations, which resulted in the final mineralisation envelopes. In general the interpretations are similar, but they vary locally over time with the addition of new data. Support has not been found for an alternative interpretation that would materially alter the gross resource.

The distribution of mineralisation is expected to relate to pre-mineralisation permeability and post mineralisation structural displacement. There is a general association between alteration and mineralisation. The resource estimate was constrained by a number of mineralisation envelope wireframes.

Grade distribution is thought to be dependent on permeability, inherent permeability of the pre- mineralisation lithology and permeability related to structure. Work on the Mount Mackenzie area has involved iterative mapping and geological interpretation exercises. The area has been subject to several stages of deformation. The most recent interpretation suggests late stage generally northwesterly trending dextral faulting may have offset the mineralised geology on a project scale. The unconformity below the Coppermine Tuff Unit daylighting on Mount Mackenzie and dipping shallowly off to the west, is interpreted as post gold mineralisation. The wireframe envelopes limit the estimation of grade.

Drilling Techniques

The exploration results are based on drilling programs comprising combination of HQ/NQ, Reverse Circulation (RC) drilling, and Open Hole DTH Percussion drilling. Recent cored holes have been orientated and RC holes have been surveyed down hole using a gyroscope.

Sampling and Sub-sampling Techniques

The majority of samples used for grade estimation were obtained from 5.25" percussion drill holes, with lesser amounts obtained from 5.5" RC drilling, and minor HQ3, and NQ2 coring. For percussion and RC drilling the sample intervals typically were either 1m or 2m over the drilled interval. Cored intervals were generally sampled at 1m or less if a change in lithology or alteration was noted within the sample interval.

1 Source: REZ ASX Release 7 September 2015. Competent Person: Andrew Richmond

Sample Analysis Method

Reverse circulation and core drilling was used to obtain 1m samples from which approximately 3 to 5kg was collected and pulverized to produce a 50g charge for fire assay with an AAS finish. In addition a 30g sample for multi element analysis by ICP, or Acid Digestion was prepared and analysed. DTH Percussion drilling was used to obtain 2m composite samples, which were pulverized to produce a 30g charge for fire assay.

Estimation Methodology

The mineral resource was constrained to mineralisation envelopes or domains in 3D that were created using a nominal 0.1 g/t Au cut-off and minimum 2 m down hole interval. Where drill density decreased extrapolation was restricted to a distance generally equal to half the typical hole spacing i.e. if holes were spaced at 20 metres the interpretation extended 10 metres beyond the last hole.

The resource blocks were estimated using Ordinary Kriging (OK) at a parent block size of 5 m by 5 m by 5 m using 2 m composites. Each mineralised domain was estimated independently using hard boundaries, i.e. only composites that fell within the mineralised domain.

In situ bulk density was assigned to each block based on the degree of oxidation noted in geological logs, which was modelled as a series of surfaces. Completely oxidised, partially oxidised, and primary material were assigned bulk densities of 2.4 t/m3, 2.5 t/m3, and 2.7 t/m3 respectively. These values are averages of the samples measured by traditional waxed water immersion methods (including one clay sample) and have been rounded to reflect their degree of uncertainty.

Classification Criteria

The mineral classification has been assigned on a block-by-block basis, initially via the search parameters. Additional consideration was given to the number of samples used for kriging and the kriging slope of regression. Indicated Resource blocks required a minimum of 4 drill holes within 50m (strike and down dip) by 15m (across the structure) for the North Knoll mineralised domains. The remainder of the estimated blocks at the North Knoll and SW Slopes were classified as Inferred Resources.

Cut-off Grades

The resource is reported for marginal cut-off Au grades of 0.43 g/t for oxide and 0.58 g/t for primary material, calculated using a A$1,500/oz gold price (consistent with the prevailing gold price) and other mining parameters and assumptions listed below. The resource is reported solely on the Au cut-off grade, and Ag has not been considered in the calculation of the marginal cut-off grades or in assessing resource blocks.

Mining Parameters and Assumptions

In August 2015 Mining Dynamics was retained by MMM to conduct a preliminary pit optimisation study using Whittle software (Lerchs-Grossman algorithm) at Mount Mackenzie that assumed the following:

free selection of the 5m by 5m by 5m blocks
no dilution and/or ore loss
A$1,700/oz Au and A$20/oz Ag price
Au recoveries of 85% for oxide and 90% for primary material
Ag recoveries of 65% for oxide and 75% for primary material
Mining cost of A$4.50/t
Processing cost of A$17.50/t for oxide material and A$25.00/t for primary material
Overall slope angle of 40 degrees

Metallurgical Parameters and Assumptions

Preliminary metallurgical test work on mineralised samples from Mount Mackenzie was undertaken in 1991. Based on the metallurgical test work undertaken to date gold recoveries of 85% for oxide (and partially oxidised) and 90% for primary material for a CIP/CIL operation were assumed. These recoveries are in line with usual industry values for non-refractory material. However, the metallurgical test work has indicated that there may be spatial variability in the recovery factors that has not been considered in the resource estimate.

Other Material Modifying Factors Considered

At the time of the report there were no known environmental, permitting, legal, title, taxation, socio-economic, or political issues that would adversely affect the reported mineral resources. Any future exploration and/or mining work would be subject to Queensland regulations in place at that time.

Competent Person Statement – Mineral Resource

This Mineral Resource is based upon and accurately reflects data compiled or supervised by Dr Andrew Richmond, a Principal Geostatistician employed fulltime by Martlet Consultants Pty Ltd, who is a Fellow of the Australian Institute of Geoscientists (4840) and a Member of the Australasian Institute of Mining and Metallurgy (11459). Dr Richmond has sufficient experience that is relevant to the style of mineralisation and the type of deposit under consideration and to the activity, which he has undertaken to qualify as a Competent Person as defined in the 2012 edition of the 'Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Dr Richmond consents to the inclusion in the report of the matters based on his information in the form and context in which it appears in the ASX Release of 7 September 2015.

RADIO MINE, BULLFINCH, WA.

History and past production

The Radio Gold Mine is 8 kilometres north of Bullfinch, bordering the west side of the Mount Jackson Road. The northern section contains deep trenches, costeans, alluvial workings and possibly shafts. Directly southwest is two small old water filled open pits, with apparently underground workings. Directly east is a large tank, remnants of former processing plants and a large tailings area. Extending southwest are alluvial workings and to the south another tailings area.

The Radio, Radio Deeps, and Radio North were historically neighbouring mines, but in modern times have been lumped together under one tenement as the Radio Mine.

During the 1920's and 1930's, the Radio Mine was considered to be the richest privately owned two man mine in Australia. It was discovered by Alex Barr and Jack Hughes in 1914. Barr and Hughes had spent 12 months in the area previously discovering very little. A five head battery was erected soon after the discovery. Alex Barr remained as half owner and mine manager until at least the end of World War Two. It is thought Barr and Clements earned a total of 220 000 pounds from the mine in early 20th Century figures.

Samuel Lang owned the neighbouring Radio Deeps Mine, which accessed the Golden Harp Lode, a parallel lode to the Radio Mine, via a shaft. While not as rich as the Radio Mine, he earned a not too shabby 80 000 pounds from the mine over the years. He took the lease within a year of the Radio Mine being active, and mined continuously also until at least the end of World War Two.

Limited information was found on Radio North which was not as rich, and worked by prospectors in the 1920's and 1930's. The earliest source states the mine was owned by E. Contessi in 1921. He erected a battery removed from the Corinthian Mine. E.B. Newman went into partnership but they fell out over crushing arrangements.

E. Broughton-Jensen gave a detailed geology report on the mine in 1925. He states a north northeast trending granite intrusion has produced a crushed zone in which the lode occurs. The lodes form 3 series: the Hanging Wall, Middle and Footwall lodes. Some sources states the lodes are narrow, but pinch and swell along the strike and also vertically. They tend to narrow to the south. Gold is found in the upper levels in schist, but lower in the 3 quartz shoots. The middle shoot was unusually rich. The gold is primary, with no indication of enrichment.

Most mining has not progressed further than 100 metres below the surface, and strikes for 150 metres along the lode. In total the mine has produced 57,333 tonnes of ore at 38.5 g/t Au, which is extremely high, yielding 71,050 ounces. Active production ceased in 1974. Mineralisation is thought to continue beyond

the boundaries of the historic workings. The processing plant was sold and largely removed in 1988.

Several eastern states companies took out brief options over the mines at various times from 1914 to 1940, but for a number of reasons the owners took back control fairly quickly. In 1954, Uranium Oxide NL and Austral Mining Co took out a 12-month option over the Radio Mine.

Official mines department records assert a total production of 38,726.11 fine ounces from 14,264.65 tons of ore suggesting a mined grade of 77.89g/T to 31/12/1940 from underground mining of the Radio Mine. Production from 1911 to 1955 was 49,497.12 fine ounces from 28,757.40 tons for a recovered grade of 58.93g/T. In addition, the recovery of 35 dwts/long ton (54.43g/T) from 24 inches of core recovered in underground drilling (the only hole to intersect the ore body to 1955.

Source: Mindat – Radio Gold Mine (Radio Deeps; Radio North), Bullfinch, Yilgarn Shire, Western Australia, Australia (https://www.mindat.org/loc-266574.html

Geological Context

The Radio Mine lies on the eastern side of the Southern Cross Greenstone Belt, overlapping onto the western margin of the granitoid Ghooli Dome. The host rock to the mineralized lodes is a foliated heterogeneous granitoid containing abundant rafts of partially assimilated greenstones adjacent to the main greenstone belt.

Gold mineralization occurs in 2 sub-parallel quartz lodes that occur in shears that strike north east and dip to the south east. The lodes are referred to as the Foot wall (West and Main Reefs) and the Hanging wall (East Reef). The lodes appear to be continuous over a strike length of 130m and can be traced, although discontinuously on the surface for a total strike length of 720m. The host rocks to the lodes are generally granitic gneiss/migmatite, which is intercalated with mafic rocks. Usually a thin sericite alteration zone is present.

The underground workings of the Radio Mine extend to a vertical depth of 100m. The lodes occur as parallel and en echelon vein arrays, which, as one individual vein wanes in the hanging wall, a new vein develops in the footwall. The largest veins or groups of veins are from 100 to 300m in length. The depth of weathering on the lodes is about 20m vertical.

The mineralisation was characterized as follows:

Lode system dips at 30°-40° towards a dip direction of between 100°N-120°N
Envelope of stoping on all lodes pitches generally at 068° in the plane of the lode system
Stoping of the lodes has occurred over a strike length of 150m
Stoping patterns and detailed records of lode assays show a higher-grade shoot development transverse to the pitch direction ie. Pitching away to 170° at about 20°.
Individual laminated quartz veins or shear arrays can be traced for 50 to 100m
No apparent lithological control on mineralisation?
The earliest structure is a reverse dip-slip array which controls the Hanging wall and Middle lode systems and is orientated approximately 192°/35°E. with a Riedel shear plane orientated 182°/59°E and a compressional shear plane orientated 180°/15°E
The resultant intersection lineation plunges 8°/188° with an elongation lineation plunging 40°/110°

Previous Exploration

Surveys and Mining Ltd re-opened the mine in 1969, and erected a processing plant capable of 200 tonnes of ore per day. The mine was operated by its subsidiary, Western Australian Gold Development NL. Several companies have explored the mine to a limited degree in modern times. Gilt Edge Mining/Alliance Group Pty Ltd 1980's, Carn Brae NL/Golden Valley Mines NL 1991, Gryphon Minerals Ltd 2008, Southern Cross Goldfields 2011, Talga 2011, Renaissance Minerals Ltd 2014

In 1983 Fecund Gold associates reported on a program of clearing out the shaft and the establishment of 5 costeans along strike from the main shear at Radio. Golden Valley Mines NL undertook brief geological mapping in the areas of the historical workings. A number of very shallow RAB drill holes were completed but these holes did not test the basement rocks, they generally only sampled the cover.

Troy Resources NL operated a joint venture with Golden Valley Mines during 1986 -87. Troy drilled a number of RAB holes. Several of these holes drilled into stopes or were abandoned due to problems probably due to underground workings but significant intersections were returned from drill Hole RR3, 4m at 13.08 g/t gold from 31m and RR22, 4m at 7.75 g/t gold from 40m. Troy concluded that the remnant ore offered scope for a profitable mining operation and more work was warranted

Mawson Pacific during the period 1988 to 1991 explored the area of the Radio Mine conducting geochemical surveys, geological mapping, completed 80 RAB drill holes around the mine area, flew an aeromagnetic survey and interpreted the data. Mawson Pacific also de-watered the Radio Mine to gain access to the workings underground, which they sampled.

Carn Brae Resources NL entered into a Joint Venture agreement with Golden Valley Mines NL in 1991. Carn Brae's work focused on the Radio Mine with the

intention of bringing it back into production. In 1991 Carn Brae dewatered the mine and accessed the workings through the vertical shaft. The shaft and underground working were in very good condition, only the ladders in the shaft required replacing. Carn Brae mapped and sampled all of the workings. Carn Brae concluded that the underground stoping pattern confirms the structural interpretation that the mineralization was controlled by two intersecting shears and that there is no indication of the system terminating below the current workings at 12 level. Structural repetitions are a distinct possibility at the intersections of shears associated with the two hosting structures at Radio, Radio Deeps and the area between the two areas along the hosting structure are priority exploration areas of interest.

The following areas of interest and estimates of resources and mining reserves of remnant ore and extensions to the known mineralization were identified by Carn Brae. These areas of mineralization have the potential to bring Radio back into production with a minimum of drilling and appraisal work:

The East Lode was not stoped below Level 5 east of the inclined shaft.. Additional drilling is required to determine the resource. Only minimal development from the existing workings would be required to access this mineralization.
Main Lode Shoot Pitch Extension. Below Level 9 south of the inclined shaft the Main Lode remains in place. It has not been exploited in the southeast pitch direction of the high grade shoot level. Driving a further 30m south on Levels 10 and 11 will access the down pitch extension of these high grade shoots.
Main Lode North Extension. The Main Lode remains from 50m north of the inclined shaft between Levels 8 and 11. This mineralization would be easily tested with a minor amount of underground drilling from existing cross cuts.
Depth Extensions of the East and Main Lodes. There is no evidence to suggest that the Main and East Lodes do not extend below the level of the current workings over the known strike length of mineralization.

A joint venture between Golden Valley Mines and Burmine Operations Ltd was executed in September 1995. Burmine became operator of the Radio Joint Venture with an 80% interest. Sons of Gwalia Ltd assumed control of the project in May 1996 after the merger of Sons of Gwalia Ltd and Burmine. Burmine became a 100% subsidiary of Sons of Gwalia. Sons of Gwalia commenced exploration at Radio with a RAB drilling program (118 drill holes for 4180m) followed by a reverse circulation drilling program (38 drill holes for 3181m). This drilling tested the down dip continuity of the Radio Mine mineralization and several BIF units that supported a number of old gold workings in the tenement.

The mining leases have remained in private hands and not utilised since 1974 until Resources & Energy acquired it through the acquisition of BrightSun Enterprises Pty Ltd.

Mineral Resource Estimate – Radio Mine 2012

Mineral Resource estimates have been prepared for the Radio Mine in accordance with the JORC Code, 2012. The Resource Estimate is included in a company report "Radio Gold Mine – Maiden 2012 JORC Resource" released to the ASX on 3rd July 2018.

Agricola is not aware of any new information or data that materially affects the information included in the report of July 2018 and all the material assumptions and technical parameters underpinning the estimates continue to apply. The form and context in which the findings of the report are presented have not been materially modified.

Radio Gold Mine - Resources
Lode	Cut-off		Indicated			Inferred		Total Resources
	$(g/t , Au)$	kt	g/t Au	koz Au	kt	a/t Au	koz Au	kt	$q/t$ Au	koz Au
Main Lode	1.0	25.8	3.81	3.2	76.1	3.47	8.5	101.9	3.55	11.6
East Lode	1.0	24.5	5.33	4.2	84.4	4.72	12.8	108.9	4.85	17.0
Total	4.557.450.3			160.4	4.12	21.3	210.7	4.23	28.6

The Radio Mine Resource Estimate July 2018

Source: "Radio Gold Mine – Maiden 2012 JORC Resource" Competent Person: Todd Axford

Notes to Accompany the Resources Estimate2

Data Validation

The Radio database included no information as to the accuracy of historical collars. However, all collars drilled by Sons of Gwalia were located by DGPS with sub-meter accuracies as standard procedure (discussions with an ex SOGs employee). This would have included the pick-up of historical holes.

Holes drilled by Gryphon Minerals (excluding RDRC069 – RDRC088) have down hole survey data for dip and azimuth at 10m intervals. There is no down hole survey data for historical holes. For the holes that were surveyed the hole deviation is not severe.

Resource Domain Model

The resource domain model consists of two separate domains:

Main lode
East lode

2 Source: Gryphon, 2008 "Radio Mine, Resource Statement" Competent Person: Shane Hibbird

The specific gravity of these lodes from testing of 7 samples of fresh rock by ALS Laboratories gave the following averages:

An average ore SG of 2.6 g/t was used in the resource model for sulphide material. The base of weathering was modelled using drill hole data and assigned to the block models. A SG of 1.8 was assigned to the oxide material. This SG was used as an approximation for the SG of oxide material at other granite hosted ore bodies.

Detailed underground mapping of each lode was used to generate a model of the stopes within the Radio Mine. The stopes were digitised and then sub-setted from the resource model. In doing this, the internal detail of the stopes (i.e. pillars) was not incorporated. Because of this the amount of modelled stoped material has been increased, giving an over estimate of the true size of the voids.

Resource Modelling Methodology

The Radio database was sub-setted to include only RC and DH drill holes and then validated. A geological domain boundary was constructed of the Main, Eastern and Repeater lodes to be used in the preliminary estimates. Wireframes were generated by snapping to assays and a 3D model constructed. Initial resource calculations were conducted using the geological boundary to test the sensitivity of the estimate.

The model was subsequently refined based on the boundary of mineralisation, a minimum width of 2 metres down hole and minimum composite grade of 0.2 g/t Au was modelled for the three lodes. The wireframes were extended approximately 50m past the extent of drilling. None of the upper, low-grade lodes were modelled. The mineralisation hard domain was used in the final estimate.

The wireframes were visually validated to make sure they encompassed all the assay points associated with the lodes. Only assays contained within the modelled lodes were used for the estimate. Models were then assigned to the assay file and the assays flagged according to the relevant lode.

Resource Estimation

The Radio Mine has an estimated Indicated Mineral Resource of 50,300 tonnes @ 4.55 g/t Au and and Inferred Mineral Resource of 160,000 tonnes @ 4.1 g/t Au.

Development at the Radio Mine3

The Company has undertaken the development of the Radio Project in 2017 – 18. The bulk sampling operation, the establishment of the mine infrastructure and

3 Resource & Energy Group Limited, 2017, Quarterly Activities 31 December 2017", ASX Release,

development of mining areas to support the bulk sampling have been the focus of activities.

Mining inventory – Reports by earlier workers and companies have suggested that additional mineralisation exits at various locations within the mine. These include remnant pillars and mineralisation left behind in stopes and beyond the mine development drives. This mineralisation has not been quantified in sufficient detail to be included in a Mineral Resource Estimate in accordance with the JORC Code, 2012.

Radio Mine Long Section showing selected lode samples [width@grade]

Source: REZ, ASX Announcement 4 June 2018, Competent Person: Michael Johnstone

Technical Studies – The most recent mineral resource estimate for the Radio Project dates from 2012 and classifies the resource as Indicated and Inferred.

Formal assessment of all Modifying Factors is required in order to determine how much available Measured and Indicated Mineral Resources can be converted to Ore Reserves. A Pre-Feasibility Study will consider the application and description of all Modifying factors to demonstrate economic viability and to support an Ore Reserve Public Report.

The Code does not require that a full Feasibility Study has been undertaken to convert Mineral Resources to Ore Reserves, but it does require that at least a Pre-Feasibility Study will have been carried out that will have determined a mine plan based on Indicated and Measured categories that is technically achievable and economically viable, and that material Modifying Factors have been considered.

Mining – Development mining and the breakthrough has been completed from the 9A & 9B Level crosscuts and the scraper drive has been setup for haulage. A rock development up-dip has commenced in this area to further define the first bulk sampling block in preparation for stoping once the second means of egress has been established.

Additional ore drives are concurrently being developed on the 9 Level Main Lode South (9 MLS), 10 Level Main lode South (10 MLS) and the 9 East Lode South Lode (9 ELS). These ore drives expand the mining footprint and further delineate the resource potential to the south of the existing workings allowing for additional bulk sampling locations.

Processing – Approximately 860 tonnes of broken rock is on the Radio "run of mine" pad in preparation for the second processing of Radio Gold ore since activities commenced. This material comprises of 780 tonnes of development rock and the remainder of underground clean-up material removed from the old workings in the course of the mine access & rehabilitation. Milling options have been drafted with a number of process plants in the region and are nearing completion. Early ore from bulk sampling will be treated offsite initially to generate capital to fund continued activities onsite.

Material processed off site during the quarter, which was largely material extracted as part of clearing mine areas, resulted in a recovery of 35 ounces of gold at a grade of approximately 2.9 grams/tonne. Revenue of $58,530 was recorded.

EAST MENZIES PROJECT, Western Australia

The East Menzies Project includes a number of Mining Leases and Prospecting Licences east of the Goldfields town of Menzies. The tenements cover the historic workings of Goodenough, Kensington, Maranoa, Springfield, Cigar, Emu, King Dam and Broughton, as well as more recently defined prospects. There is a large amount of prospect-scale mapping, soil geochemistry and drill-hole data from previous company exploration dating back to the 1980s. In 2011 Resource Assets obtained high-resolution geophysical and satellite imagery over the area, to improve the geological understand of the area.

Structure of the Central Synclinal Domain4

Between the Menzies Shear Zone and the eastern domain is the broad open south-plunging Goodenough Syncline. This is defined by outcrop patterns and bedding measurements in the two interflow cherty horizons, as well as foliation in the upper felsic unit and the basalt. Stereographic plots of 38 dip and strike measurements of bedding and foliation around this syncline gives a diffuse but

4 Gee, D. 2012, "Geology And Gold Prospects Of Menzies Tenements

recognizable Beta axis plunging 250-420 to azimuth 1960. This plunge has important bearing on the attitude of the Goodenough mineralization.

The most conspicuous feature of the Goodenough Syncline is the cutting-out of the lower part of the basalt against the upper felsic unit unit. This feature can only be interpreted as north-easterly thrusting on the two ferruginous chert units. The continuity of the felsic unit layer around the Goodenough Syncline and the King Dam Anticline to the south therefore requires thrusting on the correlate of the Goodenough Chert in the south of the greater tenement area.

A most conspicuous feature on the magnetic images within the basalts of the syncline is a series of north- northeast trending low-magnetic zones, which correlate with the Kensington-style gold reef lines. These are interpreted either as zones of alteration on faults or fold axes.

Structure of the Eastern Domain

The eastern domain is poorly exposed and interpretation relies on the magnetic images, augmented by geological logs from RAB drilling. It is characterized by north-trending elongate domal syn-tectonic granites, mantled by highly deformed massive dacite, in a "matrix" of crumpled synformal ultramafic schist containing gabbro-pyroxenite sills. A penetrative shallow south-plunging lineation is prevalent in both granite and meta-dacite.

Two significant ovate granite bodies occur in the eastern domain – the Oliver Twist Granite and Gigante Granite, both of which are significant in one style of gold mineralization discussed later in this report. Superficially they appear as upright domal granites, but one exploration operator (Goldfields Exploration) suggests on the basis of gravity they are flat, floored bodies.

Venn – Springfield Fault

A major dislocation conspicuous expresses the boundary between the central and eastern structural domains on magnetic imagery. This feature, called the Venn-Springfield Fault originates at Granny Venn gold deposit in the far north, passes well east of Goodenough Mine and Jowett Well, and extends to the Springfield Mine area, then south to Spion Kop.

To the south – in the King Dam Anticline, the Venn-Springfield discontinuity dissipates along the base of the upper felsic unit Fsu, where it participates in the anticlinal folding. The discontinuity is interpreted as an early transpression structure that has participated in the structural sequencing associated with the continued rise of the Jorgenson Granite dome and the pushing of the greenstone volcanic pile toward and over the Moriarty Shear Zone.

Goodenough Prospect

Goodenough Gold Mine lies in a synclinal setting where it forms gentle plunging shoots within a ferruginous chert ("Goodenough Chert") on the contact between

felsic schist below, and high- Mg basalt above. The chert is conspicuously gossanous on the surface.

The Goodenough chert is folded on a scale of tens of meters – a feature not readily apparent on the magnetic imagery but clearly evident from near-mine surface mapping. These folds are of an angular kink style, and seem to relate to the northeast trending linear zones prominent on the magnetic imagery.

A 100m-long shallow open-pit and two underlay shafts mark the historic workings. Early historical production was 8,453 oz at 24.2g/t. Old historic workings of Kensington style lie just a few hundred meters to the south, and provide clues to the nature of mineralization at Goodenough.

On the basis of 29 Percussion holes and 17 RC holes by an Aberfoyle JV between 1987–2001, Jones Mining sunk the Vujcich Shaft in 1897 to a depth of 78 m, and developed the mine on two levels. Production was 8,478t for 1955 oz at 7.16g/t. Details of these early percussion holes are not available, and have not been included in subsequent geological or resource estimates

In 2002 – 2004 Yilgarn Gold drilled 88 vertical RC holes (GEN 35 – 121, average depth 74m) on 25m spaced east-west lines, and variable 10-40m centres. Collar positions are shown on Figure 3, where it is evident that the grid spacing to the south broadened to about 60 x 40m. Of the 88 holes drilled, 69 recorded intersections of >1.0g/t (Taylor 2004). It is also evident that drilling was constrained by the southern boundary of the ML 29/141 where it abuts a tenement not owned by the operator of the day.

The main intersections occur in the cherty meta-sediment, but many holes have significant multiple intersections higher up in the overlying basalt, indicating a potential connection with Kensington style mineralization.

The Eastern Shoot comes off the eastern end of the historic Goodenough openpit. Apparent "non-hits" within this shoot are in relatively shallow holes that failed to reach the chert. Otherwise good continuity is inferred. The shoot is open to the south.

The Central Shoot stems from the western end of the historic Goodenough openpit. It is made up of 15 intersections >8gm*m. It is not closed off down-plunge where there is a sparse 60 x 40m drill pattern. The three holes at the downplunge extremity record significant intersections without making the designated 8gm*m. The Central Shoot lies on the same structural strike as old workings known as Brown Hill, only 250m to the southwest (Figure 3),

The Resource Assets tribute shaft is centred on the up-plunge extremity of the Western Shoot. It is not closed-off down-plunge by the broad drill pattern in the down-plunge area.

West of the Western Shoot, RC drilling still records significant intersections, although many of these holes did not penetrate down to the chert layer. Importantly, the western extremity of the RC drilling does not cover the trace of the sharp Four O'Clock Anticline in the chert, which should present a favourable area of interest. The un-drilled area along the structural line between the anticline and the Four O'Clock workings 140 meters southwest, is highly prospective.

From the GEN data set, Ravensgate interpreted a broad open crumpled synclinal mineralized zone plunging gently southwest. Ravensgate noted "structural and lithological complexities", and open-ended mineralization to the west and downdip. Pit optimization of the Ravensgate block model, invoking haulage and custom milling at Leonora failed to generate a significant pit shell. The Ravensgate block model did not adequately identify the obvious mineralised shoots within the otherwise low-grade layer.

Recent mining tributers have sunk a shaft (Figure 3) to 24 meters through the basalt, then driven horizontally for 10 meters on a bearing of 0250 to intersect the underlying chert. Tributers have then driven upwards within the chert at 350, on a bearing of 3500 to reach the surface for a secondary egress. Ore was taken from this 350 rise, but there is no face sampling to give any indication of gold distribution at the mine scale.

As a general model gold mineralization is controlled by the intersection of the northeast trending (Kensington) structures with the Goodenough Chert. The plunge of this axis of intersection is approximately co-axial with, but genetically un-related to, the earlier stretching lineation.

As these faults align with the axial plane of the Goodenough Syncline, the plunge of the ore shoots will be close to azimuth 1960 with a minimum plunge of 250 and maximum plunge of 420. The historic underlay shafts had an angle of 280, is a clear indicator of the plunge of the Central Shoot, and a good indication of the other shoots.

The down plunge extent of the mineralised shoots, and the western extent of the mineralized layer is not tested by any RC drilling. Similarly, feeder zones in the underlying felsic schist have not been tested, even at shallow level immediately north the outcropping chert, despite the presence of scattered old prospector pits.

Mineral Resource Estimate – Goodenough Prospect5

Mineral Resource estimates have been prepared for the Goodenough deposit in accordance with the JORC Code, 2012.

5 Source: Stratum Metals, 2012, Competent Person: Stephen Hyland (Released to the ASX)

The Resource Estimate is included in a release to the ASX: by Stratum Metals "Response to ASX query on Goodenough Resource Status", 19 November 2012

Agricola is not aware of any new information or data that materially affects the information included in the ASX Release of November 2012 and all the material assumptions and technical parameters underpinning the estimates continue to apply. The form and context in which the findings of the report are presented have not been materially modified.

Ravensgate completed a block model of the Goodenough deposit and estimated the Mineral Resource in June 2004 for Yilgarn Gold. Three-dimensional mineralised shells using a 0.5g/t delineation envelope was constructed which displayed a shallow southerly dip and a plunge to the south west. Ordinary Kriging (OK) was used to determine the grade values within the model.

A constant specific gravity of 2.4 meters cubed per tonne (t/m3) was used in the estimation since little oxide and transitional material is present at the Goodenough deposit. Fresh rock was intersected close to the surface in all the drill holes. Some modelling from underground survey for previous mining was subtracted from the reported resource volumes. The resource was estimated and categorised according to the JORC Dec 2012 guidelines (Updated from an earlier estimate by Statum Metals)

Category			Total
	Cut off g/t Gold	Tonnes (Millions)	Grade (g/t)	Contained Metal (oz)
Measured
Indicated	1.0	414,000	2.10	27,800
Inferred	1.0	133,000	2.00	8,600
Total	1.0	547,000	2.10	36,400

Goodenough Resource Estimate Classification.

Source: Stratum Metals, 2012, Competent Person: Stephen Hyland

It is the opinion of Ravensgate that no significant changes have occurred or are required such that the historically reported resource estimate now needs significant revision, excepting comments related to minor underground development carried out up until January 2012 detailed as follows.

Subsequent to the resource estimate, private company Resource Assets Pty Ltd carried out limited small scale underground mining and gold extraction from January 2011 until January

Tribute mining ceased at Goodenough on 27 January 2012. It is also understood that no further work has been completed at the Project since Feb 28th, 2012.

Resource Assets Pty Ltd stated in a 2012 Annual Technical Report state that the Goodenough production was 12,786 tonnes at a recovered grade of 7.27g/t. A further 400 tonnes remains on the ROM pad. Mill recovery data is not available.

This reported production has not yet been depleted from the mineralisation since a detailed resource re- estimate would be required to remove production volumes from a specific localized area in the resource block model. However, the reduction in the estimate is not expected to be significant and within the order of accuracy of the mineral resource estimate.

Maranoa Prospect

These form multiple northeast-trending quartz veins, conspicuously displayed by lines of old workings on the high-resolution satellite imagery. Apart from the Kensington reef itself; others in the suite include True Blue, Alexandra, Picton, Maranoa, Sunday Gift, Viking, Brilliant and Luxemburg. In addition, and of particular significance to the Goodenough model, is the line of workings called Four O'Clock, Brown Hill and Rising Sun which head to within 300m of the Goodenough Chert. The projected intersections of these three lodes with the Goodenough chert are potential areas of interest for Goodenough-style gold shoots at depth.

In summary they are planar tabular quartz veins mostly 0.1 – 1.0 meters wide, exceptionally achieving 2.0m width, generally dipping 700-800 southeast. The veins show lamination with crack-seal textures. Amphibole growing across the lamination is the principle alteration mineral. Old production records show they are high grade, for example Kensington 31.8g/t, Maranoa 14.8g/t, and Sunday Gift 53.6g/t. However there is only minimal wall rock alteration and the basalt country rock is totally barren.

It is not clear if these veins are in fault zones or axial planes of the kink folds in the foliation. However it is clear they are late dilational planar structures, not related to shear zones.

Mineral Resource Estimate – Maranoa Prospect6

Mineral Resource estimates have been prepared for the Maranoa deposit in accordance with the JORC Code, 2012.

The Resource Estimate is included in a report: Maranoa Resource Modelling & Mineralisation Report, January 2018.

The Maranoa tenement (P29/2106) forms part of the broader East Menzies Gold Project operated by Australian Mineral Partners Pty Ltd (AMP) wholly owned subsidiary Menzies Goldfield Limited. Since commencing operation of the Project

6 Source: Axford, T. 2018, Mineralisation Report. Competent Person: Todd Axford

in 2016 AMP have completed drilling at Maranoa as well as defined and mined gold resources at the Caesar Prospect. A gold resource has now been estimated for the Maranoa Prospect. The resource estimate was completed under the principles of the JORC Code (2012) and has been prepared in support of a Mining Lease Application over the subject area (P29/2106).

In May 2016, AMP undertook RC drilling on a number of prospects in the east Menzies area. As a part of that drill program six RC holes were completed on the Maranoa Prospect with the aim to verify gold mineralisation indicated by historic mining and drilling data.

Records of past mining indicate underground mining methods have been applied in the area to extract high grade gold ores along a zone of amphibolite shearing in the meta-basalt country rock. AMP's drilling focused along the main shear strike containing existing workings known as 'Main Shaft', 'Whip Shaft' & 'Quartz Blow Shaft'.

Level (RL)	Tonnes	Grade (g/t)	Ounces
465-455	3,473	2.69:	300
455-445	11,898	2.55:	977
445-435	15,185	2.85	1,391
435-425	9,457	3.98	1,209
425-415	1,860	7.80	466
415-405	403	16.81	218
405-395	2,822	6.98	634
395-385	4,675	9.52	1,431
385-375	3,031	12.24	1,193
375-365	1,111	12.29	439
465-365	53,914	4.76	8,258

Maranoa Deposit – Total remnant resource by RL

Source: Axford, T. 2018, Mineralisation Report. Competent Person: Todd Axford

With new data confirming mineralisation, AMP approached Geko-Co Pty Ltd to combine the historic and new data to generate a resource estimate for Maranoa. The resource estimate relies on historic mine plans and sampling records, RC holes drilling in the mid-1980's, RC holes drilled prior to 20121, and RC holes drilled by MGL in 2016.

Once data was located in UTM grid co-ordinates and combined into a single database, a wireframe constraining the mineralised shear was constructed, along with a wireframe to represent the historic underground mine stopes. These wireframes were then utilised in constraining the grade interpolation into a block model and allow reporting of remnant resources.

The estimated resources remaining outside the historic mine voids are tabulated below at various lower cut-off grades. The methods applied to complete the

current estimate in line with the JORC code have excluded areas of likely mineralisation (due mainly to local distances from sample data), resulting in the total estimated resource being less than the reserve calculated in the 1980's. The resources in table 1 are considered to be a conservative estimate.

Granny Venn Prospect

DataGeo Geological Consultants was contracted by Peak Resources Ltd to estimate the remnant mineral resource for the Granny Venn Deposit part of the Menzies Project located east of the town of Menzies in Western Australia. The Deposit was mined by open cut methods in 1999.

The estimate is based on the relevant data for this deposit as provided in digital form, which was loaded into the Vulcan application.

DataGeo carried out the mineralisation interpretation on a series of sections approximately 20m part. The deposit is interpreted to consist of flat lying zones in the weathering horizon with a steeply dipping zone occurring to the north within the fresh rock. The deposit is defined by RC drilling on a regular grid however there is no QA/QC information nor any description of the drilling procedures available.

All lodes were solid modelled and the drill information intersected with 1m down hole length (majority of samples) chosen as the composite length. The solids were loaded into a block model and grade was estimated using Ordinary Kriging methods for those zones with sufficient sample information. Small zones usually defined by single intercepts or intercepts on one section had grade assigned. Grade normalisation was by top-cutting "outlier" composites.

The following comments are relevant to the estimation

The style of estimation technique used and the constraints applied will provide for a robust global estimate of mineral resource at or about the mineralisation interpretation boundary.
Whilst there is a significant amount of drill hole data there is no supporting information for the location of the holes (apart from the proximity to the Granny Venn mined pit) and no QA/QC, thus no classification other than Inferred is considered appropriate.
Whilst the mineralisation interpretation appears to be consistent with the descriptive information provided there is no influence of geology in the model – this is not thought to be a significant risk
No specific gravity information was provided and thus default values were applied according to position within the weathering profile. The default values are taken from knowledge of similar deposits in similar weathered geological profiles. Whilst there is a risk involved in applying locally unsupported values it is not considered significant and potentially errs on the conservative. It the

remnant mineral resource quoted is considered economically "viable" in a mining scenario then a program of specific gravity analysis should be undertaken.

From what reconciliation with production could be undertaken there is an indication that the mineral resource estimate may be under calling the Au grade.

Other Prospects have been identified for further work at Aunt Kate, Jenny Venn, Springfield, Blowfly, Emu, Cigar, Spion Kopp, King Dam Ant Bore, Robbie's Reward , Cock Robin and Picnic Hill.

REFERENCES

Axford, T. 2018, "Maranoa Mining Lease Application, Modelling and Mineralisation Report" Report to WA Department of Mines, January 2018

Gee, D. 2012, "Geology And Gold Prospects Of Menzies Tenements Held By Resource Assets Pty Ltd", October 2012

Gryphon Limited, 2008 "Radio Mine, Bullfinch, Western Australia Geological and Inferred Resource Statement" December 2008.

Resource & Energy Group Limited, 2015, "REZ announces Resource Estimate (incl indicated and inferred) of 100,000 oz of Gold and 624,000 oz of Silver derived from analysis of recent drilling and historical results." ASX Release 7 September 2015

Resource & Energy Group Limited, 2017, "Activities Report & Quarterly Cash Flow Quarter Ended 30 June 2017", ASX Release, 31 July 2017

Resource & Energy Group Limited, 2017, "Activities Report & Quarterly Cash Flow Quarter Ended 31 December 2017", ASX Release, 31 January 2018

Resource & Energy Group Limited, 2017, "Radio Gold Positive Sampling Results, Development Ore 6.2g/T "ASX Release, 4 June 2018

Resource & Energy Group Limited, 2018 "Radio Gold Mine – Maiden 2012 JORC Resource" ASX Release 3rd July 2018.

Resource & Energy Group Limited, 2018 "Acquisition and Capital Raising Presentation – November 2018", ASX Release 9 November 2018

Resource & Energy Group Limited, 2018 'Acquisition of East Menzies Gold Project, Placement to raise up to $5 million, Strong support from existing shareholders who have provided early stage funding – agreement to convert $4.5m - $5.5m debt to equity', ASX Release 9 November 2018

DataGeo Geological Consultants, 2011, "Peak Resources Limited Menzies Gold Project Granny Venn Deposit Remnant Mineral Resource Estimate" November 2011

Stratum Metals, 2012, "Response to ASX query on Goodenough Resource Status", ASX Anouncement, 19 November 2012

VALUATION CONSIDERATIONS

Valuation of mineral properties has become more critical through the current market cycle. Valuation of mineral properties at the exploration stage is an area where both specialists and users of valuations need to understand the challenges and uncertainties involved. Sorting the wheat from the chaff can be challenging for non-technical readers of such valuation reports. However, there are a number of aspects that readers should look for to satisfy themselves as to the quality of the work and the confidence they can have in the assigned values.

The specialist must have the appropriate qualifications, and exploration experience relevant to the property being valued, so that the requirements of the relevant national reporting standard (CIMVal Standards and Guidelines in Canada, VALMIN Code in Australia, SAMVAL Code in South Africa) can be satisfied. His or her certificate, attesting to which must be explained and the specialist should be independent of the commissioning entity.

Values should be derived using more than one valuation method whenever possible. The method applied depends on the nature of the valuation, the development status of the mineral property and the extent and reliability of available information. There are three generally accepted valuation approaches in the mining industry:

Income Approach. Based on expected benefits, usually in the form of discounted cash flow.

Market Approach. Based on actual or comparable transactions.

Cost Approach. Based on principle of contribution to value through past exploration expenditures or exploration commitments and perceived prospectivity.

Income approaches are applied to later-stage Mineral Resource and development properties, with Cost or Market approaches being used for exploration and early-stage Mineral Resource properties. Any Mineral Resources relied upon should comply with, or be reconciled with, the relevant national reporting standard.

The following table lists a number of valuation methods for mineral properties, classifies them as to approach and specifies whether they are ranked as primary or secondary methods.

With respect to the Cost approach, there are different philosophies on the use of expenditure that is planned or committed but not spent at the time of the valuation. One view (to which the author subscribes) is such planned expenditures should not be included, while another view is that it is reasonable to include warranted future costs. The Multiple of Exploration Expenditure approach assesses the outcome of past expenditureand whether it has increases

(or decreased) the value of the project. The Geoscience Factor method is based on the minimum required expenditure for the initial exploration period adjusted by the perceived prospectivity based on technical features of the project.

Valuation Approach	Valuation Method
	Discounted Cash Flow (DCF)
	Monte Carlo Simulation of DCF
Income	Real Option
	Actual Transactions on Property
	Comparable Transactions on projects at a similar stage
Market	Comparable Transactions –Value per unit of metal
	Comparable Transactions – Value per unit of area
	Option, Farm In, JV Agreement Terms
Cost	Geoscience (Geo Rating) Factor
	Multiple of Exploration Expenditure
	Market Capitalisation
Company	Enterprise Value
	Book Value

One of the main primary Market approaches is Comparable Transactions (sometimes known as the Real Estate method). This method can provide very useful data on which to base a valuation if a reasonable number of truly comparable transactions can be found. Unfortunately, this is often not the case, and professional judgements have to be made on the basis of a few (if any) truly comparable transactions and a larger number of only partly comparable transactions. If a reasonable database of values can be compiled, derivative methods such as value per unit area of the property or value per unit of contained metal in Mineral Resources can be applied.

Market valuation approaches may involve 33ineraliz the terms of an exploration option or joint venture agreement in order to convert them into the equivalent of a cash transaction at the time of the deal. This is based on the rationale that, in being prepared to incur expenditure to earn an interest in (or "farm-in to") an exploration property, the purchaser is placing a monetary value on the vendor's (or owner's) interest at the time that the deal is made. That value is referred to as the "deemed expenditure", and it usually represents the full value of the property at the time of the deal. There are generally four components to a joint venture or farm-in agreement:

Cash: This is usually relatively easy to convert to present value. However, if the transaction involves time payment deals or payments dependent on future events, such as a decision to mine, the relevant cash amounts need to be discounted for time and probability of the future event occurring.

Shares: These should be converted to cash using the share price at the time of the deal and treated like cash payments for future amounts. Conversion can be more complex if the shares are in an unlisted company.

Exploration expenditures: Annual exploration commitments are usually part of option/farm-in/JV agreements, with those after the first year optional along with the cash and share commitments. These also need to be discounted for time and for the probability that they will be incurred.

Conditional payments: For example, royalties, feasibility study, sole funding etc. These require adjustment for time, the probability of the project going ahead and, in the case of royalties, the likely parameters on which the royalty could be based. The author's experience is that the influence of conditional payments on value is usually small because of time / probability discounts and because such payments are generally only a small part of the deal.

Given the subjectivity of the valuation methods used for exploration properties, it is not usually sensible to produce values more detailed than the nearest $0.1 million for significant projects or than the nearest $10,000 for lesser projects. The final valuation is an experience-based judgement based on weighting of the individual values. It should always be expressed as a range in order to reflect the uncertainty and subjectivity of the exercise.

Specialists must ensure that they exercise their independence and do not succumb to client pressure to produce a desired result. The client often has a vested interest in whether a valuation is on the high side, as, for example in a take-over defence, or the low side, as, for example in an assessment of tax liability. Valuators must remain true to their professional obligations and ethics, and resist any such pressure.

The valuation report should be clear, transparent and logically presented, and explain why and by whom the valuation was requested. It should explain why certain methods were used and others were not, and any limitations on their applicability. It must contain all the material information necessary to allow both experts and non-experts to understand how the valuation was derived, including a description of the key risks, assumptions, limitations, and uncertainties. It should compare the result with previous valuations of the property.

Finally and most importantly, the valuation must be consistent with values likely to be assigned in real life.

A key test is: Would you pay the estimated value for the property if it was your money?

The Current Valuation Report – VALMIN 2015

The author of this report (the Technical Specialist) is a Member of the Australasian Institute of Mining and Metallurgy ("AusIMM") and therefore, is

obliged to prepare mineral asset valuations in accordance with the Australian reporting requirements as set out in the VALMIN Code (2015 Edition).

The opinions expressed and conclusions drawn with respect to this valuation are appropriate at the date stated in the Report. The valuation is valid for this date and may change with time in response to variations in economic, market, legal or political conditions in addition to on-going exploration results.

The objective of a mineral asset valuation is to establish a "fair market" value for an asset in the context of the factors outlined in the body of this report and in line with the Spencer Test.

Fair Market Value of Mineral Assets

Mineral assets are defined in the VALMIN Code as all property including, but not limited to real property, mining and exploration tenements held or acquired in connection with the exploration, the development of and the production from those tenements together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of minerals in connection with those tenements.

The VALMIN Code defines fair market value of a mineral asset as the estimated amount of money or the cash equivalent of some other consideration for which, in the opinion of the Specialist reached in accordance with the provisions of the VALMIN Code, the mineral asset should change hands on the valuation date between a willing buyer and a willing seller in an arms length transaction, wherein each party has acted knowledgeably, prudently and without compulsion.

In effect therefore, the valuation Specialist is assumed to have the knowledge and experience necessary to establish a realistic value for a mineral asset. The real value of a tenement or other mineral right can only be established in an open market situation where an informed public is able to bid for an asset. The most open and public valuation of mineral assets occur when they are sold to the public through a public share offering by a company wishing to become a public listed resource company, or by a company raising additional finance. In this instance, the public is given a free hand to make the decision, whether to buy or not buy shares at the issue price, and once the shares of the company are listed, the market sets a price.

It is well known to most valuation Specialists that where mineral tenement or other mineral right valuation is concerned there are two quite distinct markets operating. Almost without exception, the values achieved for mineral assets sold through public flotation are higher than where values are established through, say, the cash sale by a liquidator, or the sale by a small prospector to a large company neighbour, or through joint venture arrangements.

The VALMIN Code notes that the value of a mineral asset usually consists of two components; the underlying or Technical Value, and the Market component which is a premium relating to market, strategic or other considerations which, depending on circumstances at the time, can be either positive, negative or neutral. When the Technical and Market components of value are added together the resulting value is referred to as the Market Value.

The value of mineral assets is time and circumstance specific. The asset value and the market premium (or discount) changes, sometimes significantly, as overall market conditions, commodity prices, exchange rates, political and country risk change. Other factors that can influence the valuation of a specific asset include the size of the company's interest, whether it has sound management and the professional competence of the asset's management. All these issues can influence the market's perception of a mineral asset over and above its technical value.

Methods of Valuing Mineral Assets

Estimated Mineral Resources in accordance with the JORC Code 2012

Where Mineral Resources have been defined, Agricola's approach is to excise them from the mineral property and to value them separately on a value per ounce/resource tonne/metal unit basis. The value of the exploration potential of the remainder of the property can then be assessed. Where appropriate, the quality of the mineral resource is assessed on the basis of available information and discounts are applied to represent uncertainty in the information.

In Agricola's opinion, a Specialist charged with the preparation of a development or production project valuation must give consideration to a range of technical issues as well as make a judgement about the 'market'.

Comparable market value

When the economic viability of a resource has not been determined by scoping or higher-level studies, then a 'rule of thumb' or comparable market value approach is typically applied. The comparable market value approach for resources is a similar process to that for exploration property however a dollar value per resource tonne / metal in the ground is determined.

As no two mineral assets are the same, the Specialist must be cognisant of the quality of the assets in the comparable transactions. Key technical issues that need to be taken into account include:

Mineral Resources – Technical Value

JORC Category overall confidence in the Mineral Resource estimate;
The grade of the resource; by products and co products
Mining factors difficulty and cost of extraction; economies of scale; the amount of pre-strip (for open pits) or development (for

underground mines) necessary; the likely ore to waste ratio (for open pits);

Metallurgical factors processing characteristics; the metallurgical qualities of the resource; waste disposal;
Environmental factors Chemical safeguards (cyanidation)
Infrastructure -; the proximity to infrastructure such as an existing mill, roads, rail, power, water, skilled work force, equipment, .
Likely operating and capital costs; Profitability

Exploration Stage Projects with no Estimated Mineral Resources

When valuing an exploration or mining property without resources, the Specialist is attempting to arrive at a value that reflects the potential of the property to yield a mineable Ore Reserve and which is, at the same time, in line with what the property will be judged to be worth when assessed by the market.

It is obvious that on such a matter, opinions are based entirely on professional judgement, where the judgement reflects the Specialist's previous geological experience, local knowledge of the area, knowledge of the market and so on, that no two Specialists are likely to have identical opinions on the merits of a particular property and therefore, their assessments of value are likely to differ.

The most commonly employed methods of exploration asset valuation are:

Geo Factor (Geoscience) rating methods such as the Kilburn method (potential based); - assessing various aspects relating to future prospectivity;
Multiple of exploration expenditure method (exploration based) also known as the premium or discount on costs method or the appraised value method – assessing the value outcome of previous exploration expenditure, and
Comparable market value method Comparing other mineral asset sales with the current mineral asset;

It is possible to identify positive and negative aspects of each of these methods. It is notable that most specialists have a single favoured method of valuation for which they are prepared to provide a spirited defence and, at the same time present arguments for why other methods should be disregarded. The Specialist must be cognisant of actual transactions taking place in the industry in general to ensure that the value estimates are transparent, reasonable and realistic.

Transparency requires that the reader of a Public Report is provided with sufficient information, the presentation of which is clear and unambiguous, to understand the report and not be misled by this information or by omission of Material information. (VALMIN Code 2015, clauses 3.3)

Reasonableness requires that an assessment that is impartial, rational, realistic and logical in its treatment of the inputs to a Valuation or Technical Assessment has been used, to the extent that another Practitioner with the same information would make a similar Technical Assessment or Valuation. (VALMIN Code 2015, clauses 4.1)

In Agricola's opinion, a Specialist charged with the preparation of a tenement valuation must give consideration to a range of technical issues as well as make a judgement about the 'market'. Key technical issues that need to be taken into account include:

Exploration Ground – Technical Value

Evidence of mineralization and mines on adjacent properties;
Proximity to existing production facilities of the property;
Geological setting of the property;
Existing 38ineralized deposits within tenement boundaries;
The relative size of the landholding;
Proportion of prospective ground within tenement boundaries
Results of exploration activities on the tenement;
Implications for future successful exploration outcomes;

Market Value

In addition to these technical issues the Specialist has to take particular note of the market's demand for the type of property being valued. Obviously this depends upon professional judgement. As a rule, adjustment of the technical value by a market factor must be applied most judiciously. It is Agricola's view that an adjustment of the technical value of a mineral tenement should only be made if the technical and market values are materially different.

Market Value

Legal issues; Native Title; State and National reserves and restrictions
Commercial issues; royalties; Joint Venture/Farm In; Administration Risk
Market Conditions; supply and demand
Commodity Price outlook
Country Risk
Community resistance
Competing projects

It is Agricola's opinion that the market may pay a premium over the technical value for high quality mineral assets (i.e. assets that hold defined resources that are likely to be mined profitably in the short-term or projects that are believed to have the potential to develop into mining operations in the short term even though no resources have been defined). On the other hand exploration tenements that have no defined attributes apart from interesting geology or a 'good address' may well trade at a discount to technical value. Deciding upon the level of discount or premium is entirely a matter of the Specialist's professional judgement. This judgement must of course take account of the commodity potential of the tenement, the proximity of an asset to an established processing facility and the size of the land holding.

Agricola's Preferred Valuation methodology

It is Agricola's opinion that no single valuation approach should be used in isolation as each approach has its own strengths and weaknesses. Where practicable, Agricola undertakes its valuations using a combination of valuation techniques in order to help form its opinion.

Mineral Resource estimates

For the valuation of Mineral Resource and Exploration Target estimates, Agricola's approach is to value these assets by assigning a dollar value to the in situ metal. To establish a benchmark market value for in-ground metal, where possible, Agricola has completed a search of the publicly available information on recent market transactions over the preceding three year period. Agricola's search is not intended to be a definitive listing of all market transactions in this period, but rather a list of transactions that offer comparability to the projects in terms of reported tonnes, grade or the state of the project as a whole. The level of disclosure and complexity of some of the transactions reviewed limited Agricola's ability to assign meaningful cash equivalent values and these were therefore disregarded for the purpose of this analysis.

The quality of the mineral asset under consideration is assessed based on a number of aspects outlined in the JORC Code (and discussed above) and the overall assessment compared to the range of comparable sales.

The Comparable Transactions database for mineral Resources is included as an appendix to this report. The data was reviewed in terms of natural groups to provide some differentiation and a framework for ascribing a range of "% of Spot Price" factors to the current mineral Resources.

The distribution of groups and the characteristics are included in the following table.

Mineral Resources–Comparable Transactions Method
Group	Characteristics
A	Low Priority Projectsincluding marginal grades, metallurgical difficulties, andenvironmental restrictions. Mainly Exploration Targets and Inferred Resources.% of Spot Price: 0.20% to 0.30%
B	Early Exploration Projects requiring further work. Includes mainly Inferredresources and Minot Indicated Resource.% of Spot Price: 0.30% to 0.60%
C	Advanced Projects with significant, well-regarded Mineral Resources. IncludesMeasured and Indicated resources.% of Spot Price: 0.60% to 2.00%
D	Projects with Scoping Feasibility studies and possibly at development stage. Notsufficiently advanced for Discounted Cash Flow analysis.% of Spot Price: 2.00% to 3.50%
E	Exceptional well placedprojects with special strategic features. High averagegrades and good mining and metallurgical characteristics% of Spot Price: 3.50% to >20.00%

Exploration potential – Geo Rating Method

Having considered the various methods used in the valuation of exploration properties, Agricola is of the opinion that the Kilburn method provides the most appropriate approach to utilise in the technical valuation of the exploration potential of mineral properties on which there are no defined resources. Kilburn, a Canadian mining engineer was concerned about the haphazard way in which exploration tenements were valued. He proposed an approach, which essentially requires the specialist to justify the key aspects of the valuation process.

The specialist must specify the key aspects of the valuation process and must specify and rank aspects, which enhance or downgrade the intrinsic value of each property. The intrinsic value is the base acquisition cost ("BAC") which is the average cost incurred to acquire a base unit area of mineral tenement and to meet all statutory expenditure commitments for a period of 12 months. Different practitioners use slightly differing approaches to calculate the BAC.

The Geo Factor method systematically assesses and grades four key technical attributes of a tenement to arrive at a series of multiplier factors, usually as a range of values. The multipliers are then applied to the BAC of each tenement with the values being multiplied together to establish the overall technical value of each mineral property. A fifth factor, the market factor, is then multiplied by the technical value to arrive at the fair market value. An overview of the factors influencing the current market is outlined in more detail in the section entitled: Market and commodity overview.

The successful application of this method depends on the selection of appropriate multipliers that reflect the tenement prospectivity. Furthermore,

there is the expectation that the outcome reflects the market's perception of value, hence the application of the market factor.

Agricola is philosophically attracted to the Geo Factor type of approach because it endeavours to implement a system that is systematic and defendable. It also takes account of the key factors that can be reasonably considered to impact on the exploration potential.

Geoscientific Ranking Factors
Ranking	Off Property Factors	On Property Factors	Anomaly Factors	Geological Factors
	A	B	c	D
0.50.9			Extensive previousexploration with poorresults to date. Furtherexploration may bewarranted.	Generally unfavourablegeological setting/Poorgeological setting.Generally favourablesetting, under cover.

1.0	No KnownMineralisation in thedistrict	No knownmineralisation withinthe tenement	No targets defined.Exploration has beenextensive.	Generally favourablegeological setting
1.5	Mineralisationidentified	Mineralisationidentified	Targets identified withinitial positiveindications.Scattered	exposed over part of thetenement.
2.0	Resource Targets	Exploration targetsidentified. Historic	soil/geophysics/RABresults. Drillingrecommended.	Favourable geologicalsetting. Prospective host
2.5	Identified with goodpotential	resources may bepresent.	Significantintersections from	rocks over most of thetenement.
3.0	Along Strike oradjacent to known	Mine or abundantworkings with	drilling with noevidence of extent.	Mineralised zones
3.5	significantmineralisation	significant previousproduction	Several Significant Ore	exposed in prospectivehost rocks.
4.0	Along Strike from amajor mine	Major mine withsignificant historical	grade intersectionsthat can be correlatedbetween sections.Extent could be
5.0	Along strike from aworld class mine	production	significant.
	Prospectivity Index = ABC*D

It has also been argued that the Geo Rating method is a valuation-by-numbers approach. In Agricola's opinion, the strength of the method is that it reveals to the public, in the most open way possible, just how a tenement's value was systematically determined. It is an approach that lays out the subjective judgements made by the Specialist.

In arriving at a technical value for the projects, Agricola has taken into consideration the company's equity position if the tenements are subject to a farm-in, joint venture or option to purchase arrangement. Agricola has reviewed

the status of the tenure and elected to only value tenement applications where it is satisfied that there is no cause to doubt their eventual granting and where there is no pre-existing or related title. A discount is usually applied to tenements that have not been granted.

Base Acquisition Cost (BAC)

The keystone of the method is the Basic Acquisition Cost (BAC also known as the base holding cost), which provides a standard base from which to commence a valuation. The acquisition and holding costs of a tenement for one year provides a reasonable, and importantly, consistent starting point. Presumably when a tenement is pegged for the first time by an explorer the tenement has been judged to be worth at least the acquisition and holding cost.

Australian Holding Costs

It may be argued that on occasions an exploration licence may be converted to a mining lease expediently for strategic reasons rather than based on exploration success, and hence it is unreasonable to value such a mining lease starting at a relatively high BAC compared to that of an exploration licence. In Agricola's opinion, Exploration ground should be valued on the basis of an Exploration Licence without regard to the actual tenement type.

Agricola has researched and reviewed information on application fees, annual rent and exploration commitments for the states of Australia and compiled the following table.

			Conceptual Minimum Year 1 Exploration ProgramRange of values for each State, A$/km2
State		Application Fee		Rent		Exploration
	Low	High	Low	High	Low	High
WA	15.00	17.00	30.00	35.00	325	375
NSW	14.00	16.00	22.00	25.00	350	400
QLD	10.00	12.00	35.00	40.00	375	425
TAS	16.00	17.00	25.00	30.00	250	300
NT	10.00	12.00	35.00	40.00	350	400
SA	13.00	15.00	10.00	15.00	275	325
VIC	13.00	15.00	35.00	40.00	350	400

Source: State Government publications and websites; Agricola estimates

Mining Leases and Prospecting Licences may cover old workings or simply be an expedient or strategic method of securing ground at the expiry of an Exploration Licence rather than based on exploration success. While these Licences carry all the obligations set out in the Mining Act, from a valuation point of view they are equivalent to Exploration Licences and it is unreasonable to value such these

MLs or PLs starting at a relatively high holding cost compared to that of an EL where only exploration results are available. To value these areas at the higher levels of BAC may not be considered to be reasonable under the VALMIN Code.

Conceptual Minimum Year 1 Exploration Program
					Average BAC values for each State, A$/km2
	WA	NSW	QLD	TAS	NT	SA	VIC	Ave.
Application Fee	16.00	15.00	11.00	16.50	11.00	14.00	14.00	14.00
Annual Rent	32.50	23.50	37.50	27.50	37.50	12.50	37.50	30.00
Exploration
Commitment	350.00	375.00	400.00	275.00	375.00	300.00	375.00	350.00
Administration	35.00	37.50	40.00	27.50	37.50	30.00	37.50	35.00
Total	433.50	451.00	488.50	346.50	461.00	356.50	464.00	429.00
Agricola's
Preferred BAC	430.00	450.00	490.00	350.00	460.00	360.00	460.00	430.00

The valuation metrics for the Australian States and Agricola's preferred BAC are shown below. Values have been rounded in accordance with the JORC Code.

- Advanced projects where Mineral Resources have been estimated in accordance with the JORC Code

The Geo Rating method is considered to be the most appropriate for valuing exploration projects where Mineral resources have not yet been estimated. The method may also be used as a cross check or second valuation method for areas with estimates of mineral resource based on an increased exploration cost commensurate with the scale of exploration activity required to advance the project to scoping and pre-feasibility level.

In Agricola's experience and opinion, an exploration budget may escalate to $1,730 to $2,275 per square kilometre. This activity would include RC and Diamond drilling and metallurgical test work.

Conceptual Advanced Exploration Program, A$/km2
Australian and Overseas Tenements
	Low	High	Preferred
Rent, A$/km2	30	40	35
Surface Exploration, A$/km2	1,500	2,000	1,750
Administration, A$/km2	150	175	160
Legal, A$/km2	50	60	55
Total	1,730	2,275	2,000

The preferred Exploration cost for overseas advanced projects is selected at A$2,000 per square kilometre.

A Review of Geo Rating value estimates was compiled and several groups identified according to project characteristics.

	Exploration Ground – Geo Rating
GROUP	Characteristics
A	Greenfields Projects with prospective geology; may include extensive exploration history andsome areas of interest. Some targets yet to be explored.
	Prospectivity Factor: LOW: <4.00; HIGH: <8.00
B	Mineralised Regional area Adjacent to known small scale resources or old workings;
	Prospectivity Factor: LOW: 4.00 to 10.00; HIGH: 8.00 to 20.00
	Mineralised areas of interest within tenements with significant exploration encouragement
C	Prospectivity Factor: LOW 10.00 to 40.00; HIGH: 20.00 to 60.00
D	Brownfields areas adjacent to resources; may include Historic Resources
	Prospectivity Factor: LOW 40.00 to 120.00; HIGH: 60.00 to 150.00

Comparable Transactions – Exploration Ground

The Comparable Transactions database for Exploration Ground is included as an appendix to this report. The data was reviewed and sub divided into groups to provide some differentiation and a framework for ascribing a range of "% of Spot Price" factors to the current exploration ground.

The distribution of groups and the characteristics are included in the following table.

	Exploration Ground – Comparable Transactions Method
group	Characteristics
A	Greenfields Projects with prospective geology; may include extensive exploration historyand some areas of interest.Comparable Trans. % of Spot Price 50% to 200%
B	Adjacent to known small scale resources or old workings; extensions, along strike or downdip possible but not fully tested and areas of interest warranting further exploration.Comparable Trans. % of Spot Price 200% to 400%
C	Advanced Projects surrounding significant Mineral Resources. Extensions warrant furtherwork with sowe drilling confirming mineralisation.Comparable Trans. % of Spot Price 400% to 1000%
D	Brownfields projects surrounding significant resources with Scoping Feasibility studies andpossibly at development stage.Comparable Trans. % of Spot Price 1000% to 2000%

Multiple of Exploration Expenditure Valuation Method

The cost approach to exploration property valuation is sometimes used, as a secondary method to valuation of exploration properties not yet advanced enough to estimate Mineral Resources. Various valuation methods exist which make reference to historical exploration expenditure. One such method is based on a 'multiple of historical exploration expenditure'. Successful application of this method relies on the specialist assessing the extent to which past exploration expenditure is likely to lead to a resource being discovered, as well as working out the appropriate multiple to apply to such expenditure.

The direct use of historical costs raises several issues:

The exploration must be relevant
The exploration must be effective
Exploration companies accounting methods are different and administration can be excessive
Old expenditure must be adjusted for time
Duplication of work might have taken place
Recommended PEMs do not have meaningful derivation

The ""multiple of exploration expenditure"" method of mineral valuation is applicable to exploration properties from the earliest stage of exploration to a moderately advanced stage but for which no resources have been delineated. While not recommended as a primary valuation method by some workers, others believe it to be the most satisfactory method of valuing exploration properties until it is possible to employ a DCF technique.

In many situations facing the specialist, the method may represent the only semiquantitative option available and is frequently used. Significantly it often forms the starting point in discussions to farm-in on an exploration tenement.

The multiple of exploration expenditure method uses previous exploration expenditure and/or future committed exploration expenditure to derive a base value for the tenements. This base value is multiplied by a prospectivity enhancement multiplier (PEM) with adjustments for market premium or discount and consideration of the quality of the exploration team to derive a fair value for the tenements.

	Prospectivity Enhancement Multiplier Factors
PEM	Criteria	Exploration Work
0.2-0.5	Exploration (past and present) has downgraded the
	tenement prospectivity. No mineralised zones identified.
	Exploration potential has been maintained (rather than	Regional Mapping, Satellite
0.5-1.0	enhanced) by past and present activity with areas	imagery, Airborne regional
	available from regional mapping	geophysics
1.0-1.25	Exploration has maintained, or slightly enhanced (but	Geological Mapping,
	not downgraded) the prospectivity	geochemistry, geophysics
1.25-1.5	Exploration has considerably increased the	Geological Mapping,
	prospectivity by identifying surface anomalies	geochemistry, geophysics
	Exploration has considerably increased the
1.5-1.75	prospectivity by defining shallow anomalies possibly	Trenching, shallow RAB drilling
	relating to deeper mineralisation
1.75-2.0	Scout drilling has identified interesting intersections of	RAB drilling, isolated RC
	mineralisation	drilling
	Detailed Drilling has defined areas with potential
2.0-2.5	economic interest with the potential to contain medium	RC drilling and some DD
	sized deposits. Small Inferred Resources may be	drilling
	estimated.
2.5-3.0	A medium sizedInferred resource has been defined.	Grid RC drilling and some DD
	Scoping Study level.	drilling
	Indicated Resource for medium to large deposit have	Infill RC drilling and some DD
3.0-4.0	been identified that are likely to form the basis for a Pre	drilling
	Feasibility Study.
	Indicated and Measured Resources have been
4.0-5.0	identified and economic parameters are determined to	Feasibility Study investigations
	allow conversion to Reserves. Definitive Feasibility
	level.

REZ Valuation Assessment

	Mineral Assets Classification
Pre	Mineral assets with Feasibility Studies – Tenure holdings where
development	Mineral Resources have been identified and their extent
projects	estimated (possibly incompletely), but where a decision to
	proceed with development has not been made. Properties at the
	early assessment stage, properties for which a decision has been
	made not to proceed with development, properties on care and
	maintenance and properties held on retention titles are included
	in this category if Mineral Resources have been identified, even if
	no further work is being undertaken;
	Projects: none
	Valuation Methods: Comparable Transactions, Discounted CashFlow (if Ore Reserves have been estimated)
Advanced	Mineral assets with Mineral Resources – Tenure holdings where
exploration	considerable exploration has been undertaken and specific areas
projects	of interest identified that warrant further detailed evaluation,
	usually by drill testing, trenching or some other form of detailed
	geological sampling. A Mineral Resource estimate may or may not
	have been made, but sufficient work will have been undertaken
	on at least one prospect to provide both a good understanding of
	the type of mineralization present and encouragement thatfurther work will elevate one or more of the prospects to the
	Mineral Resources category;
	Projects: Mineral Resources at Mt Mackenzie, Radio and
	East Menzies

	Valuation Methods: Unit Value - $/oz, Comparable Transactions.
	Geo Rating.
Early stage	Mineral assets in the exploration stage – Tenure holdings where
exploration	mineralization may or may not have been identified, but where
projects	Mineral Resources have not been identified;
	Projects: Exploration ground at Mt Mackenzie, Radio and
	East Menzies. Also used as a cross check method
	Valuation Methods: Geo Rating, Comparable Transactions

Agricola's preferred valuation method is in bold print

Choice Of Valuation Method

Mineral Resource Estimates – Comparable Transactions Method

For the valuation of Mineral resource estimates, Agricola's approach is to value these assets by assigning a dollar value per tonne/ounce to the estimated quantity of the commodity based on publicly available information on recent market transactions (sometimes expressed as EV/resource tonne).

Agricola has selected comparable market transactions for projects at a similar state of development, usually with mineral resource estimates in accordance with JORC Code 2012 but not yet with a valid scoping study or pre feasibility study. The review is not intended to be a definitive listing of all market transactions, but rather a list of transactions that offer comparability to the projects in terms of reported tonnes, grade or the state of the project as a whole.

Exploration potential – Geo Rating Method

Agricola is of the opinion that the Geo Rating method provides the most appropriate approach to the exploration potential of mineral properties on which there are no defined resources. The method may also be used as a cross check against the comparable transactions valuation.

An estimate of technical value has been compiled for the tenements based on an assessment of off site, on site, anomaly and geology factors applied to the base acquisition or holding cost.

The exploration ground has been valued on the basis of the geo rating as the primary method. The outcome is compared to a review of exploration projects based on the A$/km2 range of values to demonstrate confidence in the valuation.

The two methods are compared for reasonableness and transparency. Agricola considers that the Geo Rating method for exploration ground is more meaningful in the current circumstances and has been used in this valuation Report.

Where possible, Agricola has compiled a secondary valuation for the three projects based on past exploration Expenditure and applied a 'Prospectivity Enhancement Multiplier' to the components of expenditure.

In some cases other valuations or matters that may be relevant to the valuation, such as recent purchase price in the case of East Menzies, are discussed as background to the current valuation.

VALUATION OF MINERAL RESOURCES

	Mt
REZ - Resources	Mackenzie	Radio	East Menzies Project
			Goodenough	Maranoa
Indicated
Mtonnes	1.150	0.050	0.414
Grade, g/t AuEq	1.470	4.550	2.100
M Ounces	0.054	0.007	0.028
Inferred
Mtonnes	1.220	0.160	0.133	0.054
Grade, g/t AuEq	1.340	4.120	2.000	4.760
M Ounces	0.053	0.021	0.009	0.008
Total Tonnes	2.370	0.211	0.547	0.054
Total MOunces	0.107	0.029	0.037	0.008

Mineral Resources Unit Value Estimate - $/Oz

Grade for Mt Mackenzie is g/t AuEq. Other Projects are g/t Au

Project Quality Assessment – Mineral Resources

The Mineral Resources have been assessed for Project quality based on a number of attributes in accordance with the JORC Code. This has been compiled on a qualitative basis and ratings allocated as low, average, and high with an assessment of JORC Category, Mining factors, Metallurgical factors, Environmental factors, Infrastructure, Costs and Market sentiment specific to the Project.

The term 'reasonable prospects for eventual economic extraction' implies an assessment (albeit preliminary) by the Competent Person when preparing a Mineral Resource Estimation in respect of all matters likely to influence the prospect of economic extraction including the approximate mining parameters.

JORC Mineral Resource Category

Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. Exploration Targets and non-JORC mineral inventories are recognized as a category with lower confidence. Mineral inventories that have not been estimated in accordance with the JORC Code, historical and foreign estimated may also be considered in the assessment and attract a significant discount.

The mineral resources at Mt Mackenzie, Radio and Goodenough are distributed between Indicated and Inferred categories. Maranoa is Inferred Resource.

Mining factors or assumptions

Potential mining methods are considered. The assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous.

The deposits are considered to be amenable to normal open pit and underground mining methods.

Metallurgical factors or assumptions

Potential metallurgical methods are considered. The assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous.

The deposits are considered to be amenable to normal metallurgical methods with reasonable recovery rates. Past mining and processing information supports this assumption.

Environmental factors or assumptions

Assumptions made regarding possible waste and process residue disposal options are considered including the potential environmental impacts of the mining and processing operation. While the determination of potential environmental impacts, particularly for a project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reviewed.

The Project areas have a significant history of mining activity and no additional environmental impacts are known to be present.

Infrastructure factors or assumptions

For remote projects road and rail infrastructure need to be considered. Access agreements may not be in place and negotiations can be difficult.

The project areas are well connected to existing road networks.

Operating Costs, Capital Costs assumptions

Implications of open cut operating costs and capital expenditure can be significant for a remote project. This may include availability of labour and housing as well as major capital works.

The Project areas have a history of mining activity and operating and capital costs are well known and manageable.

Profitability, Product Marketing and Sales assumptions

Direct sales to the Perth Mint for gold is the likely scenario. For other commodities product quality will be an important factor in negotiating sales off take agreements and ultimately affect the price paid for the product.

Prior mining for the deposits have suggested in the past that the deposits may produce reasonable profitability. This could change with changing economic conditions.

Legal and Commercial issues

Local, State and Commonwealth support for mining ventures must be considered. Community attitudes can have an impact on the project.

No negative impacts are known to exist.

Comparable Transactions for Mineral Resources - $/Oz

To determine the fair market value for the Company's Project, Agricola has reviewed recent market transactions for exploration assets involving sale and purchase of tenements with estimated Mineral Resources reported in accordance with the JORC Code.

To determine the reasonable value of the company's Project based on the existing Mineral Resource, Agricola analysed the quality of the Project based on a number of factors.

REZ - Resources	Project Quality Assessment
	Mt MacKenzie	RadioEast Menzies Project
			Goodenough	Maranoa
Technical Value
JORC Category
Measured	0%	0%	0%	0%
Indicated	51%	26%	77%	0%
Inferred	49%	74%	23%	100%
Resource Extensions
Along Strike	likely	likely	unknown	unknown
Down Dip	Likely	Likely	unknown	unknown
Repetitions	Likely	Likely	unknown	unknown
Mining factors	Low	Average	Average	Average
Metallurgical factors	Average	Average	Average	Average
Environmental factors	Average	Average	Average	Average
Infrastructure	High	Average	Average	Average
Opex, Capex	Average	High	Average	Average
Profitability	Average	High	Average	Average

The comparative transactions have been subdivided based on 'project quality' with a range of values (A$/oz) and a preferred value. Details of the transactions are included in the table following.

	Mt
	MacKenzie	Radio	East Menzies Project
Market Value			Goodenough	Maranoa
Legal	Average	Average	Average	Average
Commercial	Average	Average	Average	Average
Market Conditions	High	High	Average	Average
Valuation Assessment - % of Spot Price
High	1.40%	2.40%	0.70%	0.30%
Low	1.90%	2.90%	1.20%	0.50%

Agricola has identified a number of transactions relating to projects in Australia that can be considered relevant in assessing the fair market value of the Company's Projects. These market transactions are summarised here.

Quartile	Range	A$/oz	REZ Projects	Characteristics
	% of Spot Price	at the current
		Gold Price

Low Priority Projectsincluding marginal grades, metallurgical difficulties, and environmental restrictions.Mainly Exploration Targets and Inferred Resources.% of Spot Price: 0.05% to 0.30%
1st	0.05% to 0.30%	$0.40 to $5.00	None
Resource.	% of Spot Price: 0.30% to 0.50%		Early Exploration Projects requiring further work. Includes mainly Inferred resources	and Minot Indicated
2nd	0.30% to 0.50%	$5.00 to $8.50	Maranoa (0.3% to 0.5%)	Inferred Resource
resources.	% of Spot Price: 0.50% to 1.20%		Advanced Projects with significant, well-regarded Mineral Resources. Includes Measured and Indicated
3rd	0.50% to 1.20%	$8.50 to $20.00	Goodenough (0.7% to 1.2%)	Indicated &
				Inferred Resource
	for Discounted Cash Flow analysis.% of Spot Price: 1.20% to 4.00%		Projects with Scoping Feasibility studies and possibly at development stage. Not sufficiently advanced
4th	1.20% to 4.00%	$20 to >$50	Mt Mackenzie (1.4% to 1.9%)	Scoping Study
			Radio (2.4% to 2.9%)	Development
Exceptional well placedprojects with special strategic features. High average grades and good miningand metallurgical characteristics% of Spot Price: >4.00%
Outliers	Over 4.00%	>$50	None

Summary of Mineral Resource Comparable Transactions database (see Appendix)

Chart of Gold Price 5 years, Source: indexmundi.com

Considering the recent volatility in the commodity market, Agricola has opted to apply the '% of Spot Price metric assessed in the table on page 46 to the current gold price in AUD/oz at the date of this Report. The gold price increased from around $1,350/oz in late 2014, before peaking at $1,775/oz in July 2016. Current gold price is approximately A$1725 per ounce (Source: Perth Mint).

In assessing a valuation factor for gold resource ounces, Agricola analysed these transactions and considered those to be suitable comparatives for the valuation of the Company's Project. The transactions were analysed in terms of the implied purchase price and the Mineral Resource at the time of the transaction. Share prices at the time of the announcement of the transactions were considered, where shares formed a part of the consideration and the timing of payments, as set out in the initial agreements, was also taken into account.

Technical Value

Considering the location, geological factors, and other technical parameters (including market sentiment and prices) which could affect the Project economics, in Agricola's opinion, the implied value of delineated mineralization within the Company's Projects should be in the range This value shown is considered appropriate for the Project at this stage of development reflecting the uncertainty of eventual extraction of a mineral resource.

The mineral resources were assessed based on the distribution of '% of Spot Price' and the range selected for the Projects resources is 0.8% to 1.2% for Mt Mackenzie and 0.7% to 1.0% for the Menzies Group. The Preferred value was chosen as the average of the low and high values. This is considered consistent with the stage of development and exploration of the mineral resources.

A summary of Agricola's market based valuation is presented below.

REZ - Resources	Technical Value, A$M
	Mt MackenzieRadio			East Menzies Project
			Goodenough	Maranoa
Percent of Spot Prive	High	High	Average	Average
Low	1.40%	2.40%	0.70%	0.30%
High	1.90%	2.90%	1.20%	0.50%
Current Gold Price	$1,725.00	(Source: Perth Mint)
Range - A$/oz
Low	$24.15	$41.40	$12.08	$5.18
High	$32.78	$50.03	$20.70	$8.63
Au Mounces	0.107	0.029	0.037	0.008
Low	2.58	1.18	0.44	0.04
High	3.50	1.43	0.76	0.07
Preferred	3.04	1.31	0.60	0.06

Technical Value of Mineral Resources by Comparable Transactions Method

REZ - Resources	Technical Value, A$M
AVERAGE	Low	High	Preferred
Mt Mackenzie	2.58	3.50	3.04
Radio Project	1.18	1.43	1.31
Goodenough	0.44	0.76	0.60
Maranoa	0.04	0.07	0.06
Total	4.25	5.76	5.01

Summary of Mineral Resources Technical Value

GEO-FACTOR RATING – Exploration Ground

The valuation of exploration ground specifically excludes the mineral Resources valued in the previous section and considered the exploration potential in the surrounding parts of the tenement group. This aspect of the valuation is additional to the Mineral Resources value.

The Geo Rating Method (also known as the Kilburn Method) attempts to convert a series of scientific opinions about a property into a numeric evaluation system. The success of this method relies on the selection of multiplying factors that reflect the tenement's prospectivity. The issues that need to be addressed for exploration properties include:

Possible extensions of mineralization from adjacent areas
Exploration potential for other mineralization within the tenements

Base Acquisition Cost (BAC)

The Basic Acquisition Cost is the important input to the Geo Rating Method and it is assessed by estimating the statutory expenditure for a period of 12 months for a first stage exploration tenement such as an Exploration Licence (the first year holding cost). Advanced tenements such as Mining Leased may attract a higher BAC than early stage exploration Licences.

The Western Australian Projects are valued on the basis of a BAC of A$430.
The Queensland Project is valued on the basis of a BAC of A$490.

Please refer to the discussion of BAC in the Valuation Considerations section of this report.

Tenement Status

Uncertainty may exist where a tenement is in the application stage. Competing applications may be present where a ballot is required to determine the successful applicant or Native Title issues and negotiations may add to the risk of timely grant. Other issues may also be present such as state parks or forestry and wildlife reserves, competing land use and compensation agreements. There is an inherent risk that the tenement may not be granted and this needs to be recognized in the base value assessment. A 'grant factor' of zero may be applied where there is no realistic chance of approval (e.g. sacred sites) and where no significant impediments are known the factor may increase to about 60% to reflect delays and compliance with regulations.

REZ - Exploration	Tenement Details
Tenement	Number	Area, Km2	Status	Percent	Expl. Area

Mt Mackenzie Project	1	27.00	Live	100%	27.00
Radio Project	1	9.80	Live	100%	9.80
Menzies Group
Menzies Vendor
Tenements	17	24.17	Live	100%	24.17
RIQO Tenements	8	19.18	Live	100%	19.18
Larca Tenements, Granted	4	6.18	Live	100%	6.18
Larca Tenements, Pending	19	43.13	Pending	100%	43.13
AMP Tenements	1	21.00	Live	100%	21.00
Total	51	150.46			150.46

The tenements are all granted and attract a 'grant factor' of 100%

Equity

The equity a Company may hold in a tenement through joint venture arrangements or royalty commitments may be addressed in assessing base value but it is often considered separately at the end of a valuations report.

The Projects are valued initially on the basis of 100% equity

Prospectivity Assessment Factors

Geo Ratings

The Geo Rating (Kilburn) method provides the most appropriate approach to utilise in the technical valuation of the exploration potential of mineral properties on which there are no defined resources.

The Kilburn method systematically assesses and grades four key technical attributes of a tenement to arrive at a series of multiplier factors. The multipliers are then applied serially to the BAC of each tenement with the values being multiplied together to establish the overall technical value of each mineral property.

Location with respect to any off-property mineral occurrence of value, or favourable geological, geochemical or geophysical anomalies;
Location and nature of any mineralization, geochemical, geological or geophysical anomaly within the property and the tenor (grade) of any mineralization known to exist on the property being valued;
Geophysical and/or geochemical areas of interest and the number and relative position of anomalies on the property being valued;
Geological patterns and models appropriate to the property being valued.

The geo factors were arrived at after careful consideration of the results so far obtained and the potential for future discoveries.

Geo Factor Assessment

Off Site

Physical indications of favourable evidence for mineralization, such as workings and mining on the nearby properties. Such indications are mineralized outcrops, old workings through to world-class mines;

The Mt Mackenzie Project is located in a known mining field with a number of advanced prospects. The Radio Project is a mining area that has produced gold from a number of mines in the immediate area. East Menzies is a well known mining area with a long history of mining.

On Site

Local mineralization within the tenements and the application of conceptual models within the tenements. Location and nature of any mineralization, geochemical, geological or geophysical anomaly within the property;

All three Project areas have estimated mineral resources within the tenements.

Anomalies

Identified anomalies warranting follow up within the tenements. Geophysical and/or geochemical areas of interest and the number and relative position of anomalies on the property being valued;

Extensions to the mineral resources, repeats and related mineralised zones are known to exist within the tenements

Geology

The proportion of structural and lithological settings within the tenements and difficulty encountered by cover rocks and other factors.;

All three Project areas are located in a well-known mining areas with a very favourable geology setting. All Projects are categorized as 'strongly favourable lithologies'.

REZ - Exploration	Prospectivity Factors
Tenement	Off Site	On Site	Anomaly	Geology	Factor
Mt Mackenzie Project
Low	3.50	3.50	3.50	2.50	107.2
High	3.75	3.75	3.75	2.75	145.0
Radio Project
Low	3.50	3.50	3.50	2.50	107.2
High	3.75	3.75	3.75	2.75	145.0
Menzies Vendor Tenements
Low	3.00	3.50	3.00	2.50	78.8
High	3.25	3.75	3.25	2.75	108.9
RIQO Tenements
Low	3.00	3.00	3.00	2.50	67.5
High	3.25	3.25	3.25	2.75	94.4
Larca Tenements
Low	2.00	2.50	2.00	2.00	20.0
High	2.25	2.75	2.25	2.25	31.3
AMP Tenements
Low	2.00	2.50	2.00	2.00	20.0
High	2.25	2.75	2.25	2.25	31.3
Prospectivity Factor rounded in accordance with the uncertainty

Base Value

The base value represents the exploration cost for a set period of the tenement adjusted for the grant status of the Tenement and the equity held. The current Base Acquisition Cost (BAC) for exploration projects or tenements at an early stage is the average expenditure for the first year of the licence tenure. This is considered to be a BAC of A$490 per square kilometre for Queensland and A$430 per square kilometres for Western Australia. Pending tenement attract a 40% discount to the BAC The Advanced projects at Mt Mackenzie and Radio are valued at a BAC of $2000 per square kilometre. (Refer to earlier discussion of BAC, page 41).

REZ - ExplorationTenement	Base Acquisition Cost (BAC)
Tenement	State	BAC, A$	Grant	Equity	BAC, A$
Mt Mackenzie Project	QLD	2000	100%	100%	2,000
Radio Project	WA	2000	100%	100%	2,000
Menzies Vendor Tenements	WA	430	100%	100%	430
RIQO Tenements	WA	430	100%	100%	430
Larca Tenements, Granted	WA	430	100%	100%	430
Larca Tenements, Pending	WA	430	60%	100%	258
AMP Tenements	WA	430	100%	100%	430

Technical Value Rate, A$/km2:

REZ - Exploration
	Base	Prospectivity Index			Technical Value Rate, A$/km2
	Value	Low	High	Low	High	Preferred
Mt Mackenzie Project	2,000	107.2	145.0	214,400	290,000	252,200
Radio Project	2,000	107.2	145.0	214,400	290,000	252,200
Menzies Vendor
Tenements	430	78.8	108.9	33,900	46,800	40,350
RIQO Tenements	430	67.5	94.4	29,000	40,600	34,800
Larca Tenements,
Granted	430	20.0	31.3	8,600	13,500	11,050
Larca Tenements,
Pending	258	20.0	31.3	5,200	8,100	6,650
AMP Tenements	430	20.0	31.3	8,600	13,500	11,050
Base Value = [Grant Factor][Equity Factor][BAC]
Prospectivity Index = [Off Site Factor][On Site Factor][Anomaly Factor]*[Geology Factor]
Technical Value Rate/km2 = [Base Value]*[Prospectivity Index]
Preferred Value = average of Low to High

Technical Value

An estimate of technical value has been compiled for the tenements based on the base value, and ratings for prospectivity. For the purpose of this valuation the preferred value is selected as the average of Low and High values.

REZ - Exploration			Summary Technical Value, A$M
	Area, km2	Low	High	Preferred
Mt Mackenzie Project
A$/km2		214,400	290,000	252,200
Value. A$M	27.00	5.79	7.83	6.81
Radio Project
A$/km2		214,400	290,000	252,200
Value. A$M	9.80	2.10	2.84	2.47
Menzies Vendor Tenements
A$/km2		33,900	46,800	40,350
Value. A$M	24.17	0.82	1.13	0.98
RIQO Tenements
A$/km2		29,000	40,600	34,800
Value. A$M	19.18	0.56	0.78	0.67
Larca Tenements, Granted
A$/km2		8,600	13,500	11,050
Value. A$M	6.18	0.05	0.08	0.07
Larca Tenements, Pending
A$/km2		5,200	8,100	6,650
Value. A$M	43.13	0.22	0.35	0.29
AMP Tenements
A$/km2		8,600	13,500	11,050
Value. A$M	21.00	0.18	0.28	0.23
Total		7.62	10.46	9.04
Summary Technical Value = [Area] * [Technical Value Rate]

REZ - Exploration	Technical Value, A$M
	Low	High	Preferred
Mt Mackenzie Project	5.79	7.83	6.81
Radio Project	2.10	2.84	2.47
Menzies Vendor Tenements	0.82	1.13	0.98
RIQO Tenements	0.56	0.78	0.67
Larca Tenements	0.28	0.43	0.36
AMP Tenements	0.18	0.28	0.23
Total	9.72	13.30	11.51

Summary of Exploration Ground Technical Value

RISKS FOR EXPLORATION COMPANIES

Agricola has identified a range of risk elements or risk factors, which may affect the future operations, and financial performance of the Company's Projects. Some of the risk factors are completely external, which is beyond the control of management. However, advance planning can mitigate the project specific risks.

Exploration and mining companies are subject to the regulatory environments in which they operate and exploration and mining companies throughout the world are subject to the inherent risks of the minerals industry.

Risks inherent in exploration and mining include, among other things, successful exploration and identification of mineral Resources; satisfactory performance of mining operations if a mineable deposit is discovered; and competent management;
Risks associated with obtaining the grant of any or all of the mining tenements or permits which are applications, or renewal of tenements upon expiry of their current term, including the grant of subsequent titles where applied for over the same ground.
The grant or refusal of tenements is subject to ministerial discretion and there is no certainty that the tenements applied for will be granted.
Applications are also subject to additional processes and requirements under the Native Title Act in Australia. The right to negotiate process under Native Title matters can result in significant delays to the implementation of any project or stall it. Negotiated native title agreements may adversely impact on the economics of projects depending on the nature of any commercial terms agreed.
Risks arising because of the rights of indigenous groups in overseas jurisdictions which may affect the ability to gain access to prospective exploration areas and to obtain exploration titles and access, and to obtain production titles for mining if exploration is successful. If negotiations for such access are successful, compensation may be necessary in settling indigenous title claims lodged over any of the tenements held or acquired by the Company. The level of impact of these matters will depend, in part, on the location and status of the tenements;
The risks associated with being able to negotiate access to land, including by conducting heritage and environmental surveys, to allow for prospecting, exploration and mining, is time and capital consuming and may be over budget and is not guaranteed of success.
The risk of material adverse changes in the government policies or legislation of the host country affect the level and practicality of mining and exploration activities;
Environmental management issues with which the holder may be required to comply from time to time. There are very substantive legislative and regulatory regimes with which the holder needs to comply for land access, exploration and mining that can lead to significant delays.
Poor access to exploration areas as a result of remoteness or difficult terrain;
Poor weather conditions over a prolonged period which might adversely affect mining and exploration activities and the timing of earning revenues;
Unforeseen major failures, breakdowns or repairs required to key items of exploration equipment and vehicles, mining plant and equipment or mine structure resulting in significant delays, notwithstanding regular programs of repair, maintenance and upkeep;
The availability and high cost of quality management, contractors and equipment for exploration, mining, and the corporate and administration functions in the current economic climate and the cost of identifying, negotiating with and engaging the same; and

Resources & Reserve Risk

Mineral Resources have been estimated for the Projects in accordance with the JORC Code 2012 and attract the normal risks associated with such estimates. Resource estimation for Mt Mackenzie was compiled in 2015. The Radio Project is based on an Inferred Resource updated in 2018.

Extraction and Processing Route Risk

A Feasibility Study for the Radio Mine has not been released by the Company. Internal studies may have addressed issues of Metallurgy and Processing based on prior treatment parameters. Bulk sampling is currently underway.

It may be possible that unfavourable results from the future samples may jeopardise project viability. This may include problems with the future production of saleable concentrates.

Commodity Price Risk

Metal price, supply and demand are cyclical in nature and subject to significant fluctuations, and any significant decline in the gold price or demand could materially and adversely affect the Company's business and financial condition results of operations and prospects. Commodity markets are highly competitive and are affected by factors beyond the Company's control, which include but not limited to:

Global Economic Condition;
Government and Central Banks actions; and
Fluctuations in industries with high demand.

If there is a fall in long term metal prices, there would be a substantial reduction in the viability of the exploration project.

Project Infrastructure Associated Risk

Although, accessibility of the project is good with existing road infrastructure, a significant infrastructure facility including access tracks for drill rigs and equipment may need to be upgraded before commencement of mining and further exploration activity.

Exploration Approvals, Tenure, and Permits

Prior to commencement of mining, government permits and approvals may be required to commence development or earth moving activities and the associated access roads. Any delays in obtaining the required approvals may affect the future timing of cash inflows.

Associated interruptions may occur in the future and that this may have a material impact on the value of the concession.

Environmental and Social Risks

While environmental and social risks and management plans have been considered, it is possible that failure to comply with the environment criteria or failure to maintain good relationships with the local community in Australia or Argentina will have an impact on the project. These risks are not considered to be greater for these Projects than any other mineral project.

MARKET VALUE

Market Premium or Discount

Mineral Assets are volatile in nature and show marked cyclicity. In boom times the market in Australia may pay a premium over the technical value for high quality Assets (i.e. assets that hold defined resources that are likely to be mined profitably in the short-term or projects that are believed to have the potential to develop into mining operations in the short term even though no resources have been defined). On the other hand in times of bust conditions exploration tenements that have no defined attributes apart from interesting geology or a good address may well trade at a discount to technical value.

A review of the Australian gold prices over the last 10 years suggests that market premiums/discounts are in line with the estimated range of technical value. Other considerations may play a part in ascribing a premium of discount. Deciding on the level of discount or premium is entirely a matter of the technical expert's professional judgment. This judgment must of course take account of the commodity potential of the tenement, the proximity of an asset to an established processing facility and the size of the land holding.

Australian Gold Price variations 2007 to 2017

In view of the alignment of historical gold prices and the 25th-75th percentile range no premium or discount has been applied to the Technical Value for Mt Mackenzie. Radio and East Menzies Projects.

The Company has undertaken the development of the Radio Project in 2017 – 18. The bulk sampling operation, the establishment of the mine infrastructure and development of mining areas to support the bulk sampling have been the focus of activities. Previous geological reports suggest that additional mineralisation exits at various locations within the mine.

These include remnant pillars and mineralisation left behind in stopes and beyond the mine development drives. This mineralisation has not been quantified in sufficient detail to be included in a Mineral Resource Estimate in accordance with the JORC Code, 2012. However it appears likely that there is considerable upside to the estimated mineral resource which would be taken into account by a prospective purchaser under the definition of the Spencer Test. Agricola has taken this recent activity into assount in the valuation assessment.

The value of the development work carried out at Radio is considered at this stage to represent exploration expenditure in the collection of bulk and testwork samples and has not been separately valued. It is incorporated into the market premium ascribed to the project.

Market Value Summary

Agricola considers that the most appropriate valuation method for Mineral Resources is by the Comparable Transactions method. The Geo Rating cross check assessment is consistent with this method.

The Geo Rating Method is considered to be more accurate for the exploration ground and is the preferred method. The valuation is considered in a range of Comparable Transactions as a cross check.

REZ - Resources	Market Value, A$M				Preferred ValueMetric
AVERAGE	Factor	Low	High	Preferred	Moz	$/oz
Mt Mackenzie	100%	2.58	3.50	3.04	0.107	28.50
Radio Project	100%	1.18	1.43	1.31	0.029	45.70
Goodenough	100%	0.44	0.76	0.60	0.037	16.40
Maranoa	100%	0.04	0.07	0.06	0.008	6.90
Total		4.25	5.76	5.01	0.180	27.80
Market Value = [Market Factor]*[Summary Technical Value]

Market Value - Mineral Resources –Comparable Transactions Method

Please refer to the detailed estimate of value for the Mineral Resources on page 40 to 48 of the Report.

					Preferred	Value
REZ - Exploration		Market Value, A$M				Metric
	Factor	LowHighPreferred			AREA	$/KM2
Mt MackenzieProject	100%	5.79	7.83	6.81	27.00	25,220
Radio Project	100%	2.10	2.84	2.47	9.80	25,220
MenziesTenements	100%	0.82	1.13	0.98	24.17	4,040
RIQO Tenements	100%	0.56	0.78	0.67	19.18	3,480
Larca Tenements	100%	0.28	0.43	0.36	49.31	720
AMP Tenements	100%	0.18	0.28	0.23	21.00	1,110
Total		9.72	13.30	11.51	150.46
Larca Tenements includes Granted and Pending
Market Value = [Market Factor]*[Summary Technical Value]

Market Value - Exploration Ground – Geo Rating Method

Please refer to the detailed estimate of value for the Exploration Ground on page 49 to 54 of the Report.

Secondary Valuation Method Cross Check

Mt Mackenzie Project

GEOS 2014 Valuation for Mt Mackenzie

The company announced the Mount Mackenzie Valuation and Assessment Report to the ASX on 18 September 2014. The report was prepared by GEOS Mineral Consultants Pty Ltd that valued the Mt Mackenzie Project as at 1 August 2014 within a range of $4.93M to $9.50M with a preferred value od $7.50M. The valuation for the Mt Mackenzie Project relied largely on the Attributable Exploration Expenditure method ('Replacement Cost'), with lesser reliance on the Comparable transactions method.

The 2014 valuation was based on expenditure on three tenements. EPM 10006 covered an area of 11 sub blocks in 2014 and has now been reduced to 9 sub blocks. It has been renewed and extended to 2023.

EPM12546 (4 sub blocks) was relinquished in January 2018. EPM 17515 (15 sub blocks, reduced to 4 sub blocks) was relinquished in 2018. In summary, the total area in 2014 was 30 sub blocks and the current valuation considers an area of 9 sub blocks (30% of the original area).

The GEOS 2014 report records attributable expenditure in 2014 dollars as $6.0 million for RC and Diamond drilling at Mt Mackenzie which led to defining a zone of mineralisation. GEOS comments that it considered a large amount of RC drilling at Mt Mackenzie to be largely wasteful. Other expenditure included $1.34 million expenditure on geochemistry, geophysics and RC drilling on other prospects. It is understood that almost all of the expenditure was focussed on EPM10006 including the mineral Resource area and other areas of interest.

The Company announced the Mineral Resource Estimate for Mt Mackenzie on 7 September 2015 at 100,000 ounces of gold and 624,000 ounces of Silver (ASX Release: "REZ announces Resource Estimate (incl indicated and inferred) of 100,000 oz of Gold and 624,000 oz of Silver derived from analysis of recent drilling and historical results", 7 September 2015). This mineral resource estimate was compiled after the GEOS report and was the outcome of the earlier expenditure.

Mt Mackenzie PROJECT
Geos 2014 Budget Estimate -			Multiple of Exploration Expenditure method
			PEM		Technical Value, A$M
Program	Cost,	Low	High	Low	High
	A$M
Historic Exploration 1967 to 2000
Regional Geochemistry	0.03	0.75	1.00	0.02	0.03
ProspectGeochemistry	0.30	0.75	1.00	0.23	0.30
Prospect Geophysics	0.05	0.75	1.00	0.04	0.05
Regional Geophysics	0.05	0.75	1.00	0.04	0.05
Percussion drilling	1.50'	0.75	1.00	1.13	1.50
Diamond/RC Drilling	2.00	0.75	1.00	1.50	2.00
Diamond/RC Drilling	0.65	0.75	1.00	0.49	0.65
Miscellaneous	0.16	0.75	1.00	0.12	0.16
Subtotal	4.74			3.56	4.74
Recent Exploration 2000 to 2008
Airborne Geophysics	0.20	1.25	1.50	0.25	0.30
Prospect Geophysics	0.06	1.25	1.50	0.08	0.09
Diamond/RC Drilling	2.50	2.00	2.25	5.00	5.63
Subtotal	2.76			5.33	6.02
TOTAL	7.50			8.88	10.76

This assessment by the Multiple of Exploration Expenditure method suggested the following value compared to the Comparable Transactions Method.

Mt Mackenzie PROJECT	Technical Value, A$M
	Low	High	Preferred
Primary Method	8.37	11.33	9.85
Multiple of Expenditure	8.88	10.76	9.82

Primary Method includes valuation of Mineral Resources by Comparable Transactions and the exploration ground by Geo Ratings.

Radio Project

The Company has recorded recent development costs on the Radio Project of $3.575 million dollars. This work has accessed remnant mineralisation within the old workings that has yet to be estimated as a Mineral Resource in accordance with the JORC Code 2012. Never the less the development has added to the value of the exploration ground assessed in this Report.

Agricola has apportioned this expenditure and applied 'Prospectivity Enhancement Multipiers' according to the following table.

Radio Project		PEM			Technical Value, A$M
	Cost,A$M	Low	High	Low	High
Development Expenditure
Development	1.00	1.25	1.50	1.25	1.50
Equipment	1.58	1.00	1.00	1.58	1.58
Administration	1.00	1.00	1.00	1.00	1.00
	3.58			3.83	4.08

This assessment by the Multiple of Exploration Expenditure method suggested the following value compared to the Comparable Transactions Method.

Radio Project	Technical Value, A$M
	Low	High	Preferred
Primary Method	3.29	4.27	3.78
Multiple of Expenditure	3.83	4.08	3.95

Primary Method includes valuation of Mineral Resources by Comparable Transactions and the exploration ground by Geo Ratings.

East Menzies Project

The Company recently announced (ASX Release, 9 November 2018) that, subject to shareholder approvals, it has entered into agreements to acquire the East Menzies Gold Project located in central Western Australia for a total consideration of $2.1m. .

Historical Production is recorded in the Company's presentation of 9 November 2018 as surface - 8,453t @ 24.2g/t; underground -19,328t @ 16.7g/t; tribute mining (2011-2012) - 2,[email protected]/t; totalling 17,500oz.

Exploration recorded for the project includes the following estimates of previous RC drilling: Goodenough – 7,000 metres; Granny Venn – 14,668 metres; Maranoa – 3,000 metres. Budget estimates for RC drilling is $100/m.

East Menzies Project		PEM		Technical Value, A$M
	Cost,A$M	Low	High	Low	High
Exploration Expenditure
Goodenough	0.70	1.25	1.50	0.88	1.05
Granny Venn	1.47	1.25	1.50	1.83	2.20
Maranoa	0.30	1.25	1.50	0.38	0.45
	2.47			3.08	3.70

Agricola has estimated appropriate budget expenditure and applied 'Prospectivity Enhancement Multipiers' according to the following table.

This assessment by the Multiple of Exploration Expenditure method suggested the following value compared to the Geo Rating Method.

East Menzies Project	Technical Value, A$M
	Low	High	Preferred
Primary Method	2.32	3.45	2.89
Multiple of Expenditure	3.08	3.70	3.39

Primary Method includes valuation of Mineral Resources at Goodenough and Maranoa by Comparable Transactions and the exploration ground by Geo Ratings.

Comparative Transactions – Exploration Ground

The exploration Ground assessment by the Geo Rating method was compared to the Comparable Transactions database for similar projects as a check on reasonableness and transparency.

An assessment of the database is included in the following table on the basis of % of Spot Price and A$ per square kilometre.

The Company's projects are consistent with comparable transactions and are presented below.

Quartile	Range	A$/km2	REZ Projects	Characteristics
	% of Spot Price	at the current	A$/km2
		Gold Price
			Greenfields Projects with prospective geology; may include extensive exploration history and some
areas of interest.Prospectivity Factor: 10 to 35; Comparable Trans. % of Spot Price 60% to 120%
1st	60% to 120%	$1,000 to $2,000	Larca ($720) (Incl. PendingTenements)	Historic workings ,extensive
				exploration history
			AMP ($1,100)
	down dip possible but not fully tested		and areas of interest warranting further exploration.
			Prospectivity Factor: 35 to 70; Comparable Trans. % of Spot Price 120% to 300%
2nd	120% to 300%	$2,000 to $5,000	Menzies Vendor ($4,000)	Surrounds
				Resource,
			RIQC Tenements ($3,500)	Multiple workings
further work		with sowe drilling confirming mineralisation.
			Prospectivity Factor: 70 to 100; Comparable Trans. % of Spot Price 300% to 600%
3rd	300% to 600%	$5,000 to $10,000	None
			Brownfields projects surrounding significant resources with Scoping Feasibility studies and possibly at
	development stage.
Prospectivity Factor: >100; Comparable Trans. % of Spot Price >600%
4th	>600%	>$10,000	Mt Mackenzie($25,000)	Scoping Study
			Radio ($25,000)	Development

Summary of Exploration Ground Comparable Transactions database (see Appendix)

VALUATION OPINION

Summary of the Valuation Elements:

REZ	Market Value, A$M
SUMMARY	Low	High	Preferred
Mt Mackenzie Project
Mineral Resource	2.58	3.50	3.04
Exploration	5.79	7.83	6.81
Subtotal	8.37	11.33	9.85
Radio Project
Mineral Resource	1.18	1.43	1.31
Exploration	2.10	2.84	2.47
Subtotal	3.29	4.27	3.78
Menzies Vendor Tenements
Mineral Resource	0.48	0.83	0.66
Exploration	0.82	1.13	0.98
Subtotal	1.30	1.96	1.63
RIQO Tenements
Exploration	0.56	0.78	0.67
Subtotal	0.56	0.78	0.67
Larca Tenements
Exploration	0.28	0.43	0.36
AMP Tenements
Exploration	0.18	0.28	0.23
TOTAL	13.97	19.06	16.52

Valuation Opinion

Based on an assessment of the factors involved, the estimate of the market value for 100% equity in the Mt Mackenzie Project, is in the range of:

A$8.4 million to A$11.3 million with a preferred value of A$9.9 million.

Based on an assessment of the factors involved, the estimate of the market value for 100% equity in the Radio Project, is in the range of:

A$3.3 million to A$4.3 million with a preferred value of A$3.8 million.

Based on an assessment of the factors involved, the estimate of the market value for 100% equity in the Menzies Group Project, is in the range of: A$2.3 million to A$3.5 million with a preferred value of A$2.9 million.
The value of the Company's Mineral Assets is estimated to be in the range of:

A$14.0 million to A$19.1 million with a preferred value of A$16.5 million.

This valuation is effective on 15 November 2018.

REZ		Market Value, A$M
OVERVIEW	Low	High	Preferred
Mt MackenzieProject	8.4	11.3	9.9
Radio Project	3.3	4.3	3.8
Menzies Group
Menzies Vendor Tenements	1.3	2.0	1.6
RIQO Tenements	0.6	0.8	0.7
Larca Tenements	0.3	0.4	0.4
AMP Tenements	0.2	0.3	0.2
TOTAL	14.0	19.1	16.5

This Gold Asset valuation endeavours to ascertain the unencumbered price which a willing but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not too anxious purchaser could reasonably expect to have to pay for the property if the vendor and the purchaser had got together and agreed on a price in friendly negotiation (the Spencer Test). It applies to the direct sale of existing equity in the Projects at the date of this Report.

DECLARATIONS, RISK AND INDEPENDENCE

Scope of the Valuation Report

A valuation report expresses an opinion as to monetary value of a mineral asset but specifically excludes commentary on the value of any related corporate securities. Agricola prepared this Report utilizing information relating to exploration methods and expectations provided to it by various sources. Where possible, Agricola has verified this information from independent sources. This Report has been prepared for the purpose of providing information to the Expert.

This is commonly known as the Spencer Test after the Australian High Court decision upon which these principles are based and to which the Courts have used in their determinations of market value of a property7. In attributing the price that would be paid to the hypothetical vendor by the hypothetical purchaser it is assumed that the property will be put to its "highest and best use".

Applying the Spencer Test may not be confined to a technical valuation exercise but may involve a consideration of market factors. In a highly speculative market during 'boom' conditions or a depressed market during 'bust' conditions the hypothetical purchaser may expect to pay a premium or receive a discount commensurate with the current market for mineral properties.

The findings of the valuation Report include an assessment of the technical value (i.e. the value implied by a consideration of the technical attributes of the asset) and a market value (which considers the influences of external market forces and risk). A range of values (high, low and preferred) has been determined and stated in the Report to reflect any uncertainties in the data and the interaction of the various assumptions made.

The main requirements of the Valuation Report are:

Prepared in accordance with the 'Australasian Code for Public Reporting of Technical Assessments and Valuations of Mineral Assets' ('VALMIN Code

7 Spencer v. Commonwealth 5 CLR 418, 1907.

https://www.ato.gov.au/law/view/document?Docid=JUD/5CLR418/00002&PiT =99991231235958

2015') and the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' ('JORC Code 2012');

Contain all the information that investors and their professional advisors would reasonably require and expect to find to make an informed decision on the subject of the report;
Experience and qualifications of key personnel to be set out;
Details of valuation methodologies to be described;
Reasoning for the selection of the valuation approach adopted explained;
Details of the valuation calculations included; and
Conclusion on value as a range with a preferred value.

The report includes the following:

A competent person's statement, that demonstrates the requirements of a practitioner under section 2.2 of the VALMIN Code 2015;
The basis of the consideration and approximate fee for the report to comply with section 6.3 of the VALMIN Code 2015; and
Compliance with section 7.2 of the VALMIN Code 2015, relating to Status of Tenure.

Declarations

Relevant codes and guidelines

This Report has been prepared as a Valuation Report in accordance with the Australasian Code for Public Reporting of Technical Assessment of Mineral Assets (the "VALMIN Code", 2015 Edition), which is binding upon Members of the Australasian Institute of Mining and Metallurgy ("AusIMM") and the Australian Institute of Geoscientists ("AIG"), as well as the rules and guidelines issued by the ASIC which pertain to Independent Expert Reports (Regulatory Guides RG111 and RG112, March 2011). Agricola regards RG112.31 to be in compliance whereby there are no business or professional relationships or interests, which would affect the expert's ability to present an unbiased opinion within this report.

Where exploration results and Mineral Resources have been referred to in this report, the information was prepared and first disclosed under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves

("JORC Code" 2012), prepared by the Joint Ore Reserves Committee of the AusIMM, the AIG and the Minerals Council of Australia. 8

Rounding to Significant Figures

Estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the mineral occurrence and on the available sampling results. Reporting of figures should reflect the relative uncertainty of the estimate by rounding off to appropriately significant figures and to emphasize the imprecise nature of a Mineral Asset Valuation. (Adapted from JORC Code 2012, Clause 25)

Status of Tenure

A determination of the Status of Tenure is necessary and must be based on a sufficiently recent inquiry to ensure that the information is accurate for the purposes of the Report. Tenure that is Material must be or recently have been verified independently of the Commissioning Entity. (Adapted from VALMIN Code 2015, Clause 7.2). This has not been possible in the case of the Silaila Mining Lease.

Sources of Information

The statements and opinion contained in this report are given in good faith and this review is based on information provided by the title holders, along with technical reports by consultants, previous tenements holders and other relevant published and unpublished data for the area. Agricola has endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this report is based. A final draft

8 ASIC, 2011, Content of Expert Reports, Regulatory Guideline 111, March 2011. Available from: https://asic.gov.au/regulatory-resources/find-a-document /regulatory-guides/rg-111 content-of-expert-reports/

ASIC, 2011, Independence of Experts, Regulatory Guideline 111, March 2011. Available from: https://asic.gov.au/regulatory-resources/find-a-document /regulatory-guides/ rg-112 independence-of-experts/

JORC, 2012. Australasian Code for Reporting of Exploration Results, Coal Resources and Ore Reserves (The JORC Code) [online]. Available from: http://www.jorc.org (The Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia).

VALMIN, 2015, Australasian Code for Public Reporting of Technical Assessments and Valuations of Mineral Assets (The VALMIN Code) [online]. Available from: http://www.valmin.org (The VALMIN Committee of the Australasian Institute of Mining and Metallurgy and Australian Institute of Geoscientists).

of this report was provided to the Company, along with a written request to identify any material errors or omissions in the technical information prior to lodgement.

In compiling this report, Agricola did not carry out a site visit to the Project areas. Based on its professional knowledge, experience and the availability of extensive databases and technical reports made available by various Government Agencies and the early stage of exploration, Agricola considers that sufficient current information was available to allow an informed appraisal to be made without such a visit.

This Report may contain statements that are made in, or based on statements made in previous geological reports that are publicly available from either a government department or the ASX. These statements are included in accordance with ASIC Corporations (Consents to Statements) Instrument 2016/72 (clauses 6 and 7). 9

The independent valuation report has been compiled based on information available up to and including the date of this report. The information has been evaluated through analysis, enquiry and review for the purposes of forming an opinion as to value. However, Agricola does not warrant that its enquiries have identified or verified all of the matters that an audit, extensive examination or "due diligence" investigation might disclose.

Agricola or Malcolm Castle is not aware of any new information or data, other than that disclosed in this Report, that materially affects the assessments included in this Report and that all material assumptions and parameters underpinning Exploration Results and Mineral Resource Estimates continue to apply and have not materially changed.

Risks for Exploration Companies

Agricola has identified a range of risk elements or risk factors, which may affect the exploration outcomes of the Company's Projects. Some of the risk factors are completely external, which is beyond the control of management. However, advance planning can mitigate the project specific risks.

Risks inherent in exploration and mining include, among other things, successful exploration and identification of Mineral Resources; satisfactory performance of mining operations if a mineable deposit is discovered; and competent management;

9 ASIC Corporations (Consents to Statements) Instrument 2016/72, 11 March 2016. Available online from: https://www.legislation.gov.au/Details/F2016L00326

Security of Tenure

Risks are associated with obtaining the grant of any or all of the mining tenements or permits which are applications, or renewal of tenements upon expiry of their current term, including the grant of subsequent titles where applied for over the same ground;
The grant or refusal of tenements is subject to ministerial discretion and there is no certainty that the tenements applied for will be granted;
Applications are also subject to additional processes and requirements under the Native Title Act in Australia. The right to negotiate process under Native Title matters can result in significant delays to the implementation of any project or stall it. Negotiated native title agreements may adversely impact on the economics of projects depending on the nature of any commercial terms agreed;

Land Access

Risks arising because of the rights of indigenous groups in domestic and overseas jurisdictions which may affect the ability to gain access to prospective exploration areas and to obtain exploration titles and access, and to obtain production titles for mining if exploration is successful. If negotiations for such access are successful, compensation may be necessary in settling indigenous title claims lodged over any of the tenements held or acquired by the Company. The level of impact of these matters will depend, in part, on the location and status of the tenements;
The risks associated with being able to negotiate access to land, including by conducting heritage and environmental surveys, to allow for prospecting, exploration and mining, is time and capital consuming and may be over budget and is not guaranteed of success;

Government Policy and Environment

The risk of material adverse changes in the government policies or legislation of the host country affect the level and practicality of mining and exploration activities;
Environmental management issues with which the holder may be required to comply from time to time. There are very substantive legislative and regulatory regimes with which the holder needs to comply for land access, exploration and mining that can lead to significant delays;

Access and Equipment and Management

Poor access to exploration areas as a result of remoteness or difficult terrain;
Poor weather conditions over a prolonged period which might adversely affect mining and exploration activities and the timing of earning revenues;
Unforeseen major failures, breakdowns or repairs required to key items of exploration equipment and vehicles, mining plant and equipment or mine structure resulting in significant delays, notwithstanding regular programs of repair, maintenance and upkeep;
The availability and high cost of quality management, contractors and equipment for exploration, mining, and the corporate and administration functions in the current economic climate and the cost of identifying, negotiating with and engaging the right people.

Qualifications, Experience and Competence

The person responsible for the preparation of this report is:

Malcolm Castle, B.Sc.(Hons), GCertAppFin (Sec Inst), MAusIMM

Malcolm Castle has over 50 years' experience in exploration geology and property evaluation, working for major companies for 20 years as an exploration geologist. He established a consulting company over 30 years ago and specializes in exploration management, technical audit, due diligence and property valuation at all stages of development. He has wide experience in a number of commodities including uranium, gold, base metals, iron ore and mineral sands. He has been responsible for project discovery through to feasibility study in Australia, Fiji, Southern Africa and Indonesia and technical audits in many countries. He has completed numerous Independent Geologist's Reports and Mineral Asset Valuations over the last decade as part of his consulting business.

Malcolm Castle has extensive and wide ranging experience as an exploration geologist over the last five decades and has experience in a range of commodities including gold, copper, base metals, uranium, iron ore, mineral sands, specialty metals including tungsten, lithium, graphite and vanadium. Please refer to the list of recent assignments at the end of this Report.

Mr Castle is competent in valuing exploration projects and projects with mineral resources using several well credentialed methods and has completed assignments for stamp duty assessment purposed using discounted cash flow compilation and interpretation.

Mr Castle completed studies in Applied Geology with the University of New South Wales in 1965 and has been awarded a B.Sc.(Hons) degree. He has completed postgraduate studies with the Securities Institute of

Australia in 2001 and has been awarded a Graduate Certificate in Applied Finance and Investment in 2004.

Mr Castle is the Principal Consultant for Agricola Mining Consultants Pty Ltd, an independent geological consultancy established 30 years ago. He is a Member of the Australasian Institute of Mining and Metallurgy ("MAusIMM").

Mr Castle is appropriately qualified geologist and is a member of a relevant recognized professional association;
He has the necessary technical and securities qualifications, expertise, competence and experience appropriate to the subject matter of the report; and
He has at least five years of suitable and recent experience in the particular technical or commercial field in which he is to report.

Declaration – VALMIN Code: The information in this report that relates to Technical Assessment and Valuation of Mineral Assets reflects information compiled and conclusions derived by Malcolm Castle, who is a Member of The Australasian Institute of Mining and Metallurgy. Malcolm Castle is not a permanent employee of the Company. Malcolm Castle has sufficient experience relevant to the Technical Assessment and Valuation of the Mineral Assets under consideration and to the activity, which he is undertaking to qualify as a Practitioner as defined in the 2015 edition of the 'Australasian Code for the Public Reporting of Technical Assessments and Valuations of Mineral Assets'. Malcolm Castle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Competent Persons Statement – JORC Code: The information in this report that relates to Exploration Results and Mineral Resources of the Company is based on, and fairly represents, information and supporting documentation reviewed by Malcolm Castle, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Castle has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activity, which they are undertaking to qualify as an Expert and Competent Person as defined under the VALMIN Code and in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Castle consents to the inclusion in this report of the matters based on the information and supporting documentation in the form and context in which they appear.

Independence

Agricola or its employees and associates are not, nor intend to be a director, officer or other direct employee of the Company and have no material interest in the projects. The relationship with the Company is solely one of professional

association between client and independent consultant. The review work and this report are prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report.

Agricola has had no material association during the previous two years with the owners/promoters of the mineral assets, the company acquiring the assets or any of the assets to be acquired and has no material interest in the projects;
There are no business relationships between Agricola and the Company. Agricola or its employees and associates are not, nor intend to be a director, officer or other direct employee of the Company. The relationship with the Company is solely one of professional association between client and independent consultant;
Agricola does not hold and has no interest in the securities of the company under review; Agricola has no relevant pecuniary interest, association or employment relationship with the Company and its subsidiaries; Agricola has no interest in the material tenements, the subject of the Report;
Agricola is not a substantial creditor of an interested party, or has a financial interest in the outcome of the proposal. The review work and this report are prepared in return for professional fees of $10,000 plus GST based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report.

Consent

Agricola Mining Consultants Pty Ltd consents to the inclusion of the Independent Valuation Report in the Company's documents in the form in which it appears.

Agricola provides its consent on the understanding that the assessment expressed in the individual sections of this report will be considered with, and not independently of, the information set out in full in this report. Agricola has no reason to doubt the authenticity or substance of the information provided.

Agricola Mining Consultants Pty Ltd has not withdrawn this consent prior to the release of this Valuation Report.

Valuation Assignments completed by Agricola, 2017 and 2018

Independent Valuation Reports Aspire Mining Limited, 27 Aug 18 (in Mongolia) Peel Mining Limited, 16 Oct 17 (Gold in WA) Apollo Minerals Limited, 7 Nov 17 (Gold in WA) Blaze International Limited, 6 Nov 17 (Base Metals in NT) Castle Resources Limited, 26 Mar 18 (Gold in Ghana) Domingo Lithium Limited, 27 Apr 18 (Lithium in Argentina) Draig Resources Limited, 20 Dec 17 (Gold in WA) East Energy Resources Limited, 19 Feb 18 (Coal in Qld) Emmerson Resources Limited, 26 Mar 18 (Gold in NT) Fox Resources Limited, 6 May 18 (Coal in Queensland) Gondwana Resources Limited, 10 Oct 17 (Gold in WA) Kalia Limited, 12 Mar 18 (Gold in Bougainville) Kontrarian Resource Fund No 1, July 2017 (Coal in Qld) MRG Metals Limited, 22 May 18 (Mineral Sands in Mozambique) Orminex Limited, 11 Feb 18 (Gold in WA) Polymetallica Minerals Limited, 13 Mar 18 (Uranium in WA) Resource and Energy Limited, 2 June 18 (Gold in WA) Summit Resources Limited, 14 Aug 18 (Uranium in Qld) Tanami Gold NL, 5 Apr 18 (Gold and Base Metals in NT) Tungsten Mining Limited, 4 Oct 18 (Tungsten in NT)

APPENDICES – Comparative Transactions

A. Comparable Transactions – Mineral resources

B. Comparable Transactions - Exploration Ground Assessment

A. Comparable Transactions – Mineral resources

	AUSTRALIAN GOLD PROJECTS with MINERAL RESOURCES
	Date	Asset	Location	Buyer	Seller	Deal A$M	ContainedAu (Oz)	ResourceA$/oz	Gold Price(A$/oz)	% of Spot
1	Nov-14	Tunkillia,SA	SA	Helix Resources	WPG Resources	0.10	260,421	0.38	1,621	0.02%
2	Mar-17	Warrawona,WA	WA	Keras Gold	Pharmanet	0.60	410,000	1.46	1,394	0.10%
3	8-Mar-17	Anthill,WA	WA	Intermin Resources	Echo Resources	0.30	166,734	1.80	1,394	0.13%
4	Jun-15	Ulysses Gold Deposit	WA	Genesis Minerals	Ulysses Mining P/L	0.32	138,000	2.32	1,530	0.15%
5	Aug-15	Redcliffe Gold Project	WA	Northern Manganese Limited	Redcliffe Resources Limited	0.88	278,100	3.16	1,533	0.21%
6	23-Feb-17	Blayney,NSW	WA	Regis Resources	Aeris Resources	3.25	1,095,144	2.97	1,392	0.21%
7	Jul-16	Lake Carey, PhantomWell, Wilga	WA	Matsa Resources Limited	Hammer Metals Limited	1.75	385,300	4.54	1,776	0.26%
8	19-Jan-16	Plutonic Dome,WA	WA	Dampier Gold	Vango Mining	2.00	496,343	4.03	1,520	0.27%
9	Oct-15	Glencoe,NT	WA	NT Mining Oper Pty	Ark Mines	0.20	42,760	4.68	1,755	0.27%
10	Jul-15	Gloster Gold Deposit	WA	Regis Resources Ltd	Private individual	1.50	365,000	4.11	1,522	0.27%
11	May-16	Sandstone gold project	WA	Middle Island ResourcesLimited	Black oak Minerals	2.25	479,746	4.70	1,721	0.27%
12	Jul-16	Great Southern Project	WA	ACHMinerals Pty Ltd	Silver Lake ResourcesLimited	5.00	1,002,300	4.99	1,776	0.28%
13	Dec-15	Mt Holland	WA	Kidman Resources	MH Gold Pty Ltd	0.00	3.61	4.29	1,474	0.29%
14	17-Dec-15	Great Southern,WA	WA	ACH	Silver Lake	4.99	1,001,849	4.98	1,683	0.30%
15	21-Jul-16	Fortitude,WA	WA	MatsaResources	Administrator	1.75	384,172	4.56	1,525	0.30%
16	Jun-14	Weerianna,WA	WA	Undisclosed	Artemis Resources	0.30	55,881	5.37	1,621	0.33%
17	Feb-15	Central Tanami Project	WA	Metals X Limited	Tanami Gold NL	14.23	2,625,000	5.42	1,575	0.34%
18	Oct-15	Karlawinda Gold Project	WA	Malagasy Minerals	Greenmount Resources	3.95	650,800	6.07	1,609	0.38%
19	Sep-16	Klondyke Deposit,Warrawoona	WA	Keras	Arcadia	2.59	374,000	6.93	1,758	0.39%

20	Jan-16	Redwing Gold Deposit	WA	Hanking Gold Mining	Audax Minerals	0.70	108,387	6.46	1,625	0.40%
21	Aug-15	Kailis, king of the Hills	WA	Saracen Mineral Holdings Ltd	St Barbara Ltd	2.44
							393,000	6.20	1,533	0.40%
22	Nov-16	Livingstone Gold,WA	WA	Trillbar Resources	Kingston Resources	0.30	49,000	6.12	1,391	0.44%
23	20-Aug-15	King of the Hills,WA	WA	St Barbara Limited	Saracen Holdings	2.93	401,241	7.31	1,641	0.45%
24	6-Jul-16	Quinns/Mt Ida,WA	WA	Latitude Consolidated	MGK Resources	0.78	98,863	7.89	1,522	0.52%
25	Jul-15	Grosvenor Gold Project	WA	Metals X Limited	RNI Ltd	18.23	2,220,000	8.21	1,530	0.54%
26	Apr-15	White Foil, Frog's Leg	WA	Evolution Mining Ltd	Orascom TMTInvestments	22.28	2,637,000	8.45	1,550	0.55%
27	Nov-15	Comet Project	WA	Metals X Limited	Silver Lake Resources	3.00	353,000	8.50	1,520	0.56%
28	27-Jan-15	Beatons Creek,WA	WA	Nova Resources Corp	Creasy Group	3.99	429,212	9.29	1,621	0.57%
29	8-Sep-17	Apollo Hill,WA	WA	Saturn Metals	Peel Mining	4.00	503,223	7.95	1,384	0.57%
30	1-Mar-17	Forrestania,WA	WA	Classic Minerals	Fortuna Mining	1.80	172,323	10.45	1,394	0.75%
31	Jul-15	Mt Henry	WA	Metals X Limited	Panoramic Resources Ltd	22.27	1,656,000	13.45	1,522	0.88%
32	Feb-14	Wiluna,WA	WA	Apex Minerals NL	Blackham Resources	50.00	2,845,660	17.57	1,586	1.11%
33	May-16	Wiluna plant tailings	WA	Blackham Resources	Intermin Resources	1.15	59,486	19.33	1,721	1.12%
34	27-Jan-17	Windarra,WA	WA	GTI Resources	PoseidenNickel	3.00	183,902	16.31	1,391	1.17%
35	Jan-18	Mount Ida South,WA	WA	Latitude Consolidated	Alt Resources	2.00	96,452	20.74	1,660	1.25%
36	31-Mar-16	Gunga West,WA	WA	Metals X	Kidman Resources	1.52	72,802	20.88	1,609	1.30%
37	26/9/17	Red October,WA	WA	Matsa Resources	Saracen Holdings	2.00	103,377	19.35	1,384	1.40%
38	Jun-14	Kathleen Valley,WA	WA	Xstrata	Ramelius Resources	3.60	129,632	27.77	1,621	1.71%
39	Nov-15	Moyagee Gold Project	WA	Musgrave Minerals Limited	Silver Lake ResourcesLimited	3.33	126,900	26.28	1,520	1.73%
40	Aug-13	Gympie,QLD	QLD	Fe Limited	Private	2.50	61,086	40.93	1,614	2.54%
41	Oct-14	Hargraves,NSW	NSW	Hill End Gold	LionGold Corp	12.00	251,740	47.67	1,648	2.89%
42	Aug-16	Battler, Britsh Hill andParker Dome GoldProjects	WA	IMD Gold Pty Ltd	Black oak Minerals (InLiquidation) (Receivers andManagers Appointed)	2.00	37,500	53.33	1,768	3.02%

43	Mar-13	Comet Vale,WA	WA	Reed Resources	Crest Minerals	6.00	123,780	48.47	1,573	3.08%
44	Feb-17	Indee Gold,WA	WA	Northwest Non Ferrous	De Gray Mining	15.00	344,656	43.52	1,392	3.13%
45	Dec-17	Euraka Gold,WA	WA	Central Iron Ore	Tyranna Resources	3.20	70,732	45.24	1,384	3.27%
46	Jul-16	Challenger Gold Mineand West Gawler Craton	SA	WPGResources Ltd	Diversified Minerals Pty Ltd	18.00	277,000	64.98	1,776	3.66%

		AUSTRALIAN PROJECTS with GOLD EXPLORATION AREAS
	Date Announced	Project	Country	Buyer	Seller	Deal A$M	Area(km2)	A$/km2	Gold Price(A$/oz)	% of Spot
1	Aug-16	Marda-DiemelsGreenstone	WA	Indus Energy Ltd	IMD Gold Mines Pty Ltd	2.98	2,761.00	1,078	1,755	61.4%
2	Jul-16	Monument Project	WA	Syndicated Metals Limited	Monument Exploration PtyLtd	0.23	210.00	1,095	1,776	61.7%
3	Mar-16	Sandstone	WA	Enterprise Uranium	Sandstone Exploration	0.88	723.00	1,217	1,721	70.7%
4	Mar-16	Avoca & Bailieston Gold	WA	Matsa Resources	Currawong Resources	0.25	194.00	1,289	1,666	77.3%
5	Sep-16	Ida South	WA	Latitude Consolidated	Private Consortium	0.35	196.00	1,787	1,747	102.2%
6	Oct-15	Garden Gully -PaynesFind	WA	Thundelarra Limited	Red Dragon Mines Ltd	1.24	739.50	1,680	1,609	104.4%
7	May-16	Mt Venn Greenstone belt	WA	Enterprise Uranium	Sandstone Exploration	0.38	206.00	1,829	1,721	106.3%
8	2008/2018	Narnoo	WA	A1 Minerals	Desertex	0.93	470.00	1,987	1,656	120.0%
9	Oct-17	Pilbara Gold	WA	Kalamazoo Resources	Private Company	0.50	252.00	1,984	1,641	120.9%
10	Aug-15	Talga, Warrawoona,Mosquito Ck	WA	Beatons Creek Gold Pty Ltd	Talga Resources Ltd	0.54	215.90	2,504	1,533	163.3%
11	2008/2018	Western Shaw, WA	WA	Atlas Iron	Buxton	0.40	127.00	3,152	1,656	190.4%
12	2008/2018	Dundas, WA	WA	Australasia Gold	Private	2.20	660.00	3,327	1,656	200.9%
13	2008/2018	Yagahong	WA	Silver Swan	Mercator	2.43	600.00	4,043	1,656	244.2%
14	2008/2018	Mt Zephyr, WA	WA	Newsrest	Regal	1.14	254.00	4,489	1,656	271.1%
15	2008/2018	E40/212, WA	WA	Lumacom	Undisclosed	0.23	50.00	4,609	1,656	278.4%
16	2008/2018	Scorpion Well, WA	WA	Meteoric	Image Resources	1.21	244.00	4,971	1,656	300.3%
17	Oct-17	Hardey	WA	Elysium Resources	Hardey Resources	2.65	512.00	5,180	1,641	315.6%
18	2008/2018	Yalgoo, WA	WA	Ausorex	Prosperity	2.83	457.00	6,184	1,656	373.5%
19	2008/2018	Hogans, WA	WA	Newmont	Gladiator	2.26	325.00	6,942	1,656	419.3%
20	2008/2018	Kuaby Well	WA	Silver Swan	Mawson West	0.61	84.00	7,220	1,656	436.1%

B. Comparable Transactions - Exploration Ground Assessment

21	2008/2018	Revere, WA	WA	Revere	Enterprize	11.22	1,403.00	7,997	1,656	483.0%
22	Mar-17	Mount Monger	WA	Undisclosed	Poz Minerals	0.63	72.80	8,654	1,614	536.1%
23	2008/2018	Sunday, WA	WA	Aust. Min. Fields	Hannans Reward	0.46	49.00	9,407	1,656	568.1%
24	2008/2018	Star of Mangaroon	WA	Prime	Fox Resources	0.76	72.00	10,614	1,725	615.3%
25	2008/2018	Talga Peak	WA	Mining Prospects	Oakover	2.13	180.00	11,860	1,725	687.6%
26	Aug-15	Spargos Reward GoldProject	WA	Mithril Resources	Corona Minerals	0.38	31.00	12,407	1,725	719.2%
27	Dec-16	Sunrise Dam South	WA	Cervantes Corporation	Raven Resources Pty	0.94	46.30	20,259	1,725	1174.4%
28	2008/2018	Mt Monger, WA	WA	Integra	Solomon	0.64	30.00	21,430	1,725	1242.3%
29	Jul-13	Valley Floor	WA	Tychean Resources	Valley Floor Resources	0.15	6.00	25,000	1,725	1449.3%
30	Feb-13	Aurora Tank	WA	Appollo Minerals	Marmota Energy	1.20	48.00	25,000	1,725	1449.3%
31	Apr-13	Mt Egarton	WA	3D Resources	Tech-Sol Pty	0.52	19.00	27,368	1,725	1586.6%

PROXY FORM

RESOURCES & ENERGY GROUP LIMITED ACN 110 005 822

	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 11:00am (AEST) on 21 December 2018at the offices of Arthur Phillip Pty Ltd, Level 33, 52 Martin Place, Sydney, New South Wales, 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 (except where I/we have indicated a different voting intention below) even though Resolutions 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	FOR	AGAINST	ABSTAIN
Resolution 1	Approval of acquisition of Menzies Project
Resolution 2	Issue of Shares to unrelated vendors – Menzies acquisition
Resolution 3	Issue of Shares to unrelated vendors – Larca acquisition
Resolution 4	Approval to convert debt owing to related parties
Resolution 5	Issue of Settlement Shares to unrelated parties on conversion of ProjectDevelopment Notes and cancellation of Noteholder Options
Resolution 6	Issue of Settlement Shares to a related party on conversion of ProjectDevelopment Notes and cancellation of Noteholder Options – Fontelina PtyLtd
Resolution 7	Issue of Settlement Shares to a related party on conversion of ProjectDevelopment Notes and cancellation of Noteholder Options – VantageHouse
Resolution 8	Issue of Settlement Shares to an unrelated party on conversion of ProjectDevelopment Notes and cancellation of Noteholder Options – Gaffwick PtyLimited
Resolution 9	Approval of issue of securities to the Poole Parties

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	Shareholder 2	Shareholder 3

Sole Director/Company Secretary	Director		Director/Company Secretary
Date:
Contact name:		Contact ph (daytime):
E-mail address:		Consent for contact by e-mail inrelation to this Proxy Form:	YESNO

Instructions for completing Proxy Form

1. (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.
1. (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.

3. (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.
1. (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.
1. (Return of Proxy Form): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
- (a) post to Resources & Energy Group Limited, GPO Box 2537 Sydney NSW 2000; or
- (b) facsimile to the Company on facsimile number +61 2 9227 8901; or
- (c) email to the Company at [email protected],

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

AI assistant

RESOURCES & ENERGY GROUP LIMITED — Proxy Solicitation & Information Statement 2018

65687_rns_2018-11-21_6c881161-c304-41e5-83cf-408c782e7fdf.pdf

RESOURCES & ENERGY GROUP LIMITED ACN 110 005 822

NOTICE OF GENERAL MEETING

AGENDA

1. RESOLUTION 1 – APPROVAL OF ACQUISITION OF MENZIES PROJECT

2. RESOLUTION 2 – ISSUE OF SHARES TO UNRELATED VENDORS – MENZIES ACQUISITION

3. RESOLUTION 3 – ISSUE OF SHARES TO UNRELATED VENDORS – LARCA ACQUISITION

4. RESOLUTION 4 – APPROVAL TO CONVERT DEBT OWING TO RELATED PARTIES

5. RESOLUTION 5 – ISSUE OF SETTLEMENT SHARES TO UNRELATED PARTIES ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS

6. RESOLUTION 6 – ISSUE OF SETTLEMENT SHARES TO A RELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – FONTELINA PTY LTD

7. RESOLUTION 7 – ISSUE OF SETTLEMENT SHARES TO A RELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – VANTAGE HOUSE

8. RESOLUTION 8 – ISSUE OF SETTLEMENT SHARES TO AN UNRELATED PARTY ON CONVERSION OF PROJECT DEVELOPMENT NOTES AND CANCELLATION OF NOTEHOLDER OPTIONS – GAFFWICK PTY LIMITED

9. RESOLUTION 9 – APPROVAL OF ISSUE OF SECURITIES TO THE POOLE PARTIES

EXPLANATORY STATEMEN T

1. BACKGROUND TO THE TRANSACTION

1.1 General Background

1.2 The Acquisition

Notes:

1.2.1 Share Sale Agreement

(a) Conditions Precedent

(b) Consideration

(c) Royalty

(d) Warranties

(e) Other

1.2.2 Tenement Sale Agreements

(a) Conditions Precedent

(b) Consideration

(c) Royalty

(d) Warranties

(e) Other

1.3 Conversion of Debt

1.3.1 Debt Conversion

1.3.2 PDN Conversion

1.4 Pro forma balance sheet

1.5 Pro forma capital structure

Shares

Notes:

Options

Notes:

Performance Shares

Notes:

1.6 Risk factors

(a) Reinstatement of Company's securities to official quotation on ASX

(b) Control risk

(c) Contractual

(d) Going concern

1.7 Indicative Timetable

1.8 Advantages of the Acquisition

1.9 Disadvantages of the Acquisition

1.10 Summary of the Resolutions

1.11 Directors' Interests in the Transaction

1.11.1 Richard Poole

1.11.2 Gavin Rezos

1.11.3 Other Directors

1.12 Intentions if Acquisition is not approved

2. RESOLUTION 1 – APPROVAL OF ACQUISITION OF MENZIES PROJECT

2.1 General

2.2 Independent Expert's Report

2.3 ASX Listing Rule 10.1

Acquisition by the Company

Substantial Asset

Related party

Substantial holder

Requirement for shareholder approval

2.4 ASX Listing Rule 10.11

Listing Rule Summary

Technical Requirements

2.5 Chapter 2E of the Corporations Act

3. RESOLUTION 2 – ISSUE OF SHARES TO UNRELATED VENDORS – MENZIES ACQUISITION

3.1 General

3.2 Technical information required by ASX Listing Rule 7.3

4. RESOLUTION 3 – ISSUE OF SHARES TO UNRELATED VENDORS – LARCA ACQUISITION

4.1 General

4.2 Technical information required by ASX Listing Rule 7.3

5. RESOLUTION 4 – APPROVAL TO CONVERT DEBT OWING TO RELATED PARTIES

5.1 General

5.2 Chapter 2E of the Corporations Act and ASX Listing Rule 10.11

5.3 Technical Information required by ASX Listing Rule 10.13

RESOURCES & ENERGY GROUP LIMITED Proxy Solicitation & Information Statement 2018