S2 RESOURCES LTD — Capital/Financing Update 2017

Oct 24, 2017

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

Unlisted Options

• 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)
• (1) 450,000 service provider options (2) 2,950,000 ESOP options
• (1) As disclosed in the 2017 Notice of AGM
• (2) Pursuant to the ESOP plan released to the market in October 2015

Unlisted options with exercise price of $0.23 and an expiry of 20/10/2021 vesting 12 months after they are issued

4	Do the +securities rank equallyin all respects from the +issuedate with an existing +classofquoted +securities?	On exercise of the unlisted options, thesecurities will rank equally with the fullypaid ordinary shares
	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
5	Issue price or consideration	NIL
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	(1)UnlistedoptionsissuedunderService Provider Option plan(2) Unlisted options issued under ESOPOption plan released to the marketin October 2017
6a	Is the entity an +eligible entitythathasobtainedsecurityholder approval under rule 7.1A?If Yes, complete sections 6b – 6hin relation to the +securities the	Yes.
	subject of this Appendix 3B, andcomply with section 6i
6b	The date the security holderresolution under rule 7.1A waspassed	(1)17 October 2017(2) N/a
6c	Number of +securities issuedwithout security holder approvalunder rule 7.1	Nil
6d	Number of +securities issuedwith security holder approvalunder rule 7.1A	Nil.

• 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 Nil
• 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.

Nil

Not applicable.

Not applicable.

See Annexure 1

20 October 2017

		Number	+Class
8	+classNumberandofall+securitiesquotedonASX+securities(includingtheinsection 2 if applicable)	246,052,452	Fully paid ordinaryshares
		Number	+Class
9	+classNumberandofall+securitiesnot quoted on ASX	28,450,000	Optionswithanexercisepriceof
	+securities(includingtheinsection 2 if applicable)		$0.31 and an expiryof 14/09/2019

	exercisepriceof
	$0.31 and an expiry
	of 14/09/2019
50,000	Optionswithan
	exercisepriceof
	$0.31 and an expiry
	of 9/10/2019
400,000	Optionswithan
	exercisepriceof
	$0.31 and an expiry
	of 23/10/2019
400,000	Optionswithan
	exercisepriceof
	$0.31 and an expiry
	of 28/11/2019
600,000	Optionswithan
	exercisepriceof
	$0.31 and an expiry
	of 17/04/2020
9,450,000	Optionswithan
	exercisepriceof
	$0.31 and an expiry
	of 17/04/2020
1,000,000	Optionswithan
	exercisepriceof
	$0.35and an expiry
	of 28/04/2020
7,750,000	Optionswithan
	exercisepriceof
	$0.23and an expiry
	of 17/10/2021
450,000	ServiceProvider
	Options:exercise
	priceof$0.23,
	vesting20/10/2018
	andanexpiryof
	20/10/2021
2,950,000	ESOPOptions:
	exercisepriceof
	$0.23,vesting
	20/10/2018andan
	expiry of 20/10/2021

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

Not applicable.

Part 2 - Pro rata issue Not applicable

Part 3 - Quotation of securities Not applicable

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 which quotation 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 quotationnow	Not applicable.
	Example: In the case of restricted securities, endof restriction period
	(if issued upon conversion ofanother +security, clearly identifythat other +security)

42 Number and +class of all +securities quoted on ASX (including the +securities in clause 38)

Number	+Class
Not applicable.	Not applicable.

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.

(Company secretary)

Sign here: ............................................................ Date: 23 October 2017

Print name: Tony Walsh

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for +eligible entities

Introduced 01/08/12

Part 1

Rule 7.1 –Issues exceeding 15% of capital
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
Insert number of fully paid ordinarysecurities on issue 12 months before dateof issue or agreement to issue	246,002,452
Add the following:
•Number of fully paid ordinary securitiesissued in that 12 month period under anexception in rule 7.2	50,000
•Number of fully paid ordinary securitiesissued in that 12 month period withshareholder approval	Nil
•Number of partly paid ordinary securitiesthat became fully paid in that 12 monthperiod	Nil
Note:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid ordinarysecurities cancelled during that 12 monthperiod	Nil
"A"	246,052,451

Step 2: Calculate 15% of "A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15	36,907,867
Step 3: Calculate "C", the amount of placement capacity under rule7.1 that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:	Nil
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
"C"	Nil
Step 4: Subtract "C" from ["A" x "B"] to calculate remainingplacement capacity under rule 7.1
"A" x 0.15	36,907,867
Note: number must be same as shown inStep 2
Subtract "C"	Nil
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"	36,907,867
	[Note: this is the remaining placementcapacity under rule 7.1]

Rule 7.1A –Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"	246,052,451
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10	24,605,245
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of equity securities issued oragreed to be issued in that 12 month periodunder rule 7.1A	Nil
"E"

Step 4: Subtract "E" from ["A" x "D"] to calculate remainingplacement capacity under rule 7.1A
"A" x 0.10	24,605,245
Note: number must be same as shown inStep 2
Subtract "E"	Nil
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"	24,605,245
	Note: this is the remaining placementcapacity under rule 7.1A

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