S2 RESOURCES LTD — Capital/Financing Update 2016

Aug 21, 2016

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

S2 Resources Limited (S2R)

ABN

18 606 128 090

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued

Fully paid ordinary shares.

• 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

7,501,174 fully paid ordinary shares (New Shares) pursuant to the share placement plan announced to ASX on 26 July 2016 ("SPP").

The terms applying to S2R's existing fully paid ordinary shares will apply to the New Shares.

+ See chapter 19 for defined terms.

4	Do the +securities rank equallyin all respects from the +issuedate with an existing +classofquoted +securities?If the additional +securities donot rank equally, please state:•the date from which they do•the extent to which theyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest payment•the extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment	Yes. The New Shares will rank equally withS2R'sexisting fully paid ordinary shares.
5	Issue price or consideration	A$0.40per New Share.
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	The proceeds from the SPPwill be used toaccelerateS2R'songoingexplorationactivitiesandforgeneralcorporatepurposes.
6a	Is the entity an +eligible entitythathasobtainedsecurityholder approval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i	No.
6b	The date the security holder	Not applicable.
	resolution under rule 7.1A waspassed
6c	Number of +securities issuedwithout security holder approvalunder rule 7.1	Not applicable.

+ See chapter 19 for defined terms.

• 6d Number of +securities issued with security holder approval under rule 7.1A
• 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• 6f Number of +securities issued under an exception in rule 7.2
• 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.
• 6h If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements
• 7 +Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)

Number	+Class
246,002,452	Fully paid ordinaryshares

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

22 August 2016

+ See chapter 19 for defined terms.

		Number	+Class
9	+classNumberandofall+securities not quoted on ASX+securities(includingtheinsection 2 if applicable)	29,250,000	Optionswithanexercisepriceof$0.31 and an expiryof 14/09/2019
		50,000	Optionswithanexercisepriceof$0.31 and an expiryof 9/10/2019
		400,000	Optionswithanexercisepriceof$0.31 and an expiryof 23/10/2019
		400,000	Optionswithanexercisepriceof$0.31 and an expiryof 28/11/2019
		800,000	Optionswithanexercisepriceof$0.31 and an expiryof 17/04/2020

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Not applicable.

Part 2 - Pro rata issue

11	Issecurityholderapprovalrequired?	Not applicable.
12	Is the issue renounceable or nonrenounceable?	Not applicable.
13	Ratio in which the +securitieswill be offered	Not applicable.
14	+Class of +securities to which theoffer relates	Not applicable.

15	+Recorddatetodetermineentitlements	Not applicable.
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	Not applicable.
17	Policy for deciding entitlementsin relation to fractions	Not applicable.
18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocumentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.	Not applicable.
19	Closingdateforreceiptofacceptances or renunciations	Not applicable.
20	Names of any underwriters	Not applicable.
21	Amount of any underwriting feeor commission	Not applicable.
22	Names of any brokers to theissue	Not applicable.
23	Fee or commission payable to thebroker to the issue	Not applicable.
24	Amountofanyhandlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of security holders	Not applicable.
25	If the issue is contingent onsecurity holders' approval, thedate of the meeting	Not applicable.
26	Date entitlement and acceptanceform and offer documents will besent to persons entitled	Not applicable.
27	If the entity has issued options,andthe terms entitle option	Not applicable.

+ See chapter 19 for defined terms.

	holderstoparticipateonexercise,thedateonwhichnotices will be sent to optionholders
28	Date rights trading will begin (ifapplicable)	Not applicable.
29	Date rights trading will end (ifapplicable)	Not applicable.
30	How do security holders selltheir entitlements in full througha broker?	Not applicable.
31	How do security holders sell part
	of their entitlements through abrokerandacceptforthebalance?	Not applicable.
32	How do security holders disposeof their entitlements (except bysale through a broker)?	Not applicable.
33	+Issue date	Not applicable.

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of +securities (tick one)
• (a) +Securities described in Part 1

(b) All other +securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the +securities are +equity securities, the names of the 20 largest holders of the

additional +securities, and the number and percentage of additional +securities held by those holders

36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000

1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional +securities

Entities that have ticked box 34(b)

38	Number of +securities for which+quotation is sought	Not applicable.
39	+Class of +securities for whichquotation is sought	Not applicable.
40	Do the +securities rank equally inall respects from the +issue datewith an existing +class of quoted+securities?If the additional +securities do notrank equally, please state:•the date from which they do•theextenttowhichtheyparticipateforthenextdividend, (in the case of atrust, distribution) or interestpayment•the extent to which they donot rank equally, other than inrelation to the next dividend,distributionorinterestpayment	Not applicable.
41	Reason for request for quotationnowExample: In the case of restricted securities, endof restriction period(if issued upon conversion ofanother +security, clearly identifythat other +security)	Not applicable.
		Number	+Class

+ See chapter 19 for defined terms.

+class42Numberandofall+securitiesquotedonASX(including the +securities in clause38)	Not applicable.	Not applicable.
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Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ............................................................ Date: 22 August 2016 (Director/Company secretary)

Print name: Anna Neuling

Note: Annexure 1 of Appendix 3B intentionally omitted as not applicable.

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