SOUTHERN HEMISPHERE MINING LIMITED — Proxy Solicitation & Information Statement 2011

Nov 1, 2011

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ASX: SUH TSX-V: SH

Australian Office: Southern Hemisphere Mining Limited PO Box 598 T: +61 8 9481 2122 West Perth F: +61 8 9481 2322 WA 6872 www.shmining.com.au

Chilean Office: Minera Hemisferio Sur SCM Unit 1103 Roger de Flor 2907 Los Condes, Santiago

2 November 2011

Australian Securities Exchange Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

Dear Sir/Madam

NOTICE OF MEETING

Please find attached the Notice of General meeting, as despatched to shareholders of the Company.

Yours faithfully

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Derek Hall Company Secretary

SOUTHERN HEMISPHERE MINING LIMITED NOTICE OF ANNUAL AND SPECIAL GENERAL MEETING

Notice is hereby given that an annual and special general meeting of the Shareholders of Southern – Hemisphere Mining Limited (the " Company ") will be held at Suite 1750 1185 West Georgia Street, Vancouver, British Columbia V6E 4E6 on:

WEDNESDAY, NOVEMBER 30, 2011

at the hour of 3:00 o'clock in the afternoon (Vancouver time) for the following purposes:

AGENDA

1. to receive the financial statements of the Company for its fiscal year ended June 30, 2011 and the report of the Auditors thereon;

2. to determine the number of directors and to elect directors;

3. to appoint Auditors for the ensuing year and to authorize the Directors to fix their remuneration;

4. to consider and, if thought fit, to approve the Company’s stock option plans, which make a total of 10% of the issued and outstanding shares of the Company available for issuance thereunder, as described in the Information Circular accompanying this Notice;

5. to consider, and if thought fit, approve an ordinary resolution authorising for the purposes of Listing Rule 10.17 of the ASX Listing Rules (note this will be the first time approval has been sought), the constituent documents of the Company and for all other purposes, that the maximum aggregate remuneration payable to the non-executive directors of the Company as directors' fees shall be set at AUD$500,000 per annum, and such amount or such lesser amount as the directors shall determine may be divided amongst the non-executive directors as directors' fees as the directors shall determine; and

6. to transact such other business as may properly come before the Meeting.

Accompanying this Notice are an Information Circular and Form of Proxy.

VOTING AND PROXIES

This Notice is accompanied by a Form of Proxy and an Information Circular. A Shareholder entitled to attend and vote at the Meeting is entitled to appoint a proxy holder to attend and vote in his stead. If you are unable to attend the Meeting, or any adjournment thereof in person, please read the Notes accompanying the Form of Proxy enclosed herewith and then complete and return the Form of Proxy within the time set out in the Notes so that as large a representation as possible may be had at the Meeting. The enclosed Form of Proxy is solicited by Management but, as set out in the Notes, you may amend it if you so desire by striking out the names listed therein and inserting in the space providing the name of the person you wish to represent you at the Meeting.

Holders of CDIs are invited to attend the Meeting. CDI holders must complete, sign and return the enclosed CDI Voting Instruction Form to Computershare Investor Services Pty Ltd, GPO Box 242, Melbourne, Victoria 3001 Australia (the number to fax CDI Voting Instruction Forms within Australia is

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Southern Hemisphere Mining Limited Notice of Annual and Special General Meeting

1800-783-447 and outside Australia is 61-3-9473-2555 so that each CDI holder may elect to direct CHESS Depositary Nominees Pty Ltd (" CDN ") to vote the relevant underlying common shares on his or her behalf or instruct CDN to appoint such CDI holder or his or her nominee as proxy to vote the common shares underlying the CDIs in person at the Meeting. In either case, the CDI Voting Instruction Form needs to be received at the address shown on the Form of Proxy by not less than 72 hours, Saturdays, Sundays, and holidays excepted, prior to the time of the holding of the Meeting or any adjournment thereof.

By order of the Board

Trevor Tennant President

Dated: October 26, 2011

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Southern Hemisphere Mining Limited Notice of Annual and Special General Meeting

SOUTHERN HEMISPHERE MINING LIMITED

Suite 7, 1200 Hay Street West Perth, Western Australia Australia 6005

INFORMATION CIRCULAR

SOLICITATION OF PROXIES BY MANAGEMENT

This management information circular (the “Information Circular”) is furnished in connection with the solicitation of proxies by or on behalf of the management of Southern Hemisphere Mining Limited (the “Company”) for use at the annual and special general meeting (the “Meeting”) of the shareholders of the Company (the “Shareholders”) to be held at Suite 1750 – 1185 West Georgia Street, Vancouver, British Columbia V6E 4E6 on Wednesday, November 30, 2011 at 3:00 p.m. (Vancouver time) and at any adjournments thereof for the purposes set out in the accompanying Notice of Meeting. Although it is expected that the solicitation of proxies will be primarily by mail, proxies may also be solicited personally or by telephone by directors or officers of the Company. Arrangements will also be made with clearing agencies, brokerage houses and other financial intermediaries to forward proxy solicitation material to the beneficial owners of common shares of the Company (“ Common Shares ” or “ Shares ”) pursuant to the requirements of National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer . The cost of any such solicitation will be borne by the Company.

Unless otherwise stated, the information contained in this Information Circular is given as at October 26, 2011.

APPOINTMENT OF PROXYHOLDERS AND COMPLETION AND REVOCATION OF PROXIES

The purpose of a proxy is to designate persons who will vote the proxy on a Shareholder’s behalf in accordance with the instructions given by the Shareholder in the proxy. The persons named in the enclosed proxy (the “ Management Designees ”) have been selected by the directors of the Company.

A Shareholder has the right to designate a person (who need not be a Shareholder), other than the Management Designees to represent the Shareholder at the Meeting. Such right may be exercised by inserting in the space provided for that purpose on the proxy the name of the person to be designated, and by deleting from the proxy the names of the Management Designees, or by completing another proper form of proxy and delivering the same to the transfer agent of the Company. Such Shareholder should notify the nominee of the appointment, obtain the nominee’s consent to act as proxyholder and attend the Meeting, and provide instructions on how the Shareholder’s Shares are to be voted. The nominee should bring personal identification with them to the Meeting.

To be valid, the proxy must be dated and executed by the Shareholder or an attorney authorized in writing, with proof of such authorization attached (where an attorney executed the proxy). The proxy must then be delivered to the Company’s registrar and transfer agent, Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, or by fax within North America to 1-866-249-7775, and outside North America to (416) 263-9524, at least 48 hours, excluding Saturdays, Sundays and holidays, before the time of the Meeting or any adjournment thereof. Proxies received after that time may be accepted by the Chairman of the Meeting in the Chairman’s discretion, but the Chairman is under no obligation to accept late proxies.

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Any registered Shareholder who has returned a proxy may revoke it at any time before it has been exercised. A proxy may be revoked by a registered Shareholder personally attending at the Meeting and voting their Shares. A Shareholder may also revoke their proxy in respect of any matter upon which a vote has not already been cast by depositing an instrument in writing, including a proxy bearing a later date executed by the registered Shareholder or by their authorized attorney in writing, or, if the Shareholder is a corporation, under its corporate seal by an officer or attorney thereof duly authorized, either at the office of the Company’s registrar and transfer agent at the foregoing address or the head office of the Company, at Suite 7, 1200 Hay Street, West Perth, Western Australia, Australia 6005, at any time up to and including the last business day preceding the date of the Meeting, or any adjournment thereof at which the proxy is to be used, or by depositing the instrument in writing with the Chairman of such Meeting, or any adjournment thereof. Only registered Shareholders have the right to revoke a proxy. Non-registered Shareholders who wish to change their vote must, at least seven days before the Meeting, arrange for their respective nominees to revoke the proxy on their behalf.

VOTING OF PROXIES

Voting at the Meeting will be by a show of hands, each registered Shareholder and each proxyholder (representing a registered or unregistered Shareholder) having one vote, unless a poll is required or requested, whereupon each such Shareholder and proxyholder is entitled to one vote for each Common Share held or represented, respectively. Each Shareholder may instruct their proxyholder how to vote their Common Shares by completing the blanks on the proxy. All Common Shares represented at the Meeting by properly executed proxies will be voted or withheld from voting when a poll is required or requested and, where a choice with respect to any matter to be acted upon has been specified in the form of proxy, the Common Shares represented by the proxy will be voted in accordance with such specification. In the absence of any such specification as to voting on the proxy, the Management Designees, if named as proxyholder, will vote in favour of the matters set out therein.

The enclosed proxy confers discretionary authority upon the Management Designees, or other person named as proxyholder, with respect to amendments to or variations of matters identified in the Notice of Meeting and any other matters which may properly come before the Meeting. As of the date hereof, the Company is not aware of any amendments to, variations of or other matters which may come before the Meeting. If other matters properly come before the Meeting, then the Management Designees intend to vote in a manner which in their judgment is in the best interests of the Company.

In order to approve a motion proposed at the Meeting, a majority of greater than 50% of the votes cast will be required (an “ ordinary resolution ”), unless the motion requires a “ special resolution ” in which case a majority of 66 2/3% of the votes cast will be required.

VOTING SECURITIES

The Company is authorized to issue an unlimited number of Common Shares, without nominal or par value, of which as at the date hereof 153,025,821 Common Shares are issued and outstanding.

Of the 153,025,821 Common Shares issued and outstanding on October 26, 2011, 89,595,674 Common Shares were held by CHESS Depositary Nominees Pty Ltd. (“CDN”), a wholly-owned subsidiary of the Australian Securities Exchange Limited (the “ASX”), on behalf of holders of CHESS Depositary Interests (“CDIs”). CDN has issued CDIs that represent beneficial interests in the Common Shares held by CDN. CDIs are traded on the electronic transfer and settlement system operated by the ASX.

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All references in this Information Circular to outstanding Common Shares include the Common Shares held by CDN and all references to holders of Common Shares include CDI holders.

The holders of Common Shares of record at the close of business on the record date, set by the directors of the Company to be October 26, 2011, are entitled to vote such Common Shares at the Meeting on the basis of one vote for each Common Share held.

The Articles of the Company provide that a quorum for the transaction of business at the Meeting is two shareholders, or one or more proxyholder representing two members, or one member and a proxyholder representing another member.

VOTING BY PROXY

This section headed “Voting by Proxy” only applies to the registered holders of Common Shares of the Company. Holders of CDIs should refer to the section of this Information Circular headed “CDI Holders May Give Instruction to CDN”.

Only registered Shareholders or duly appointed proxyholders are permitted to vote at the Meeting. Most Shareholders of the Company are “non-registered” or “beneficial” Shareholders because the Shares they own are not registered in their names, but are instead registered in the name of the brokerage firm, bank or trust company through which they purchased the Shares. More particularly, a person is not a registered Shareholder in respect of Shares which are held on behalf of that person (the “Beneficial Holder”) but which are registered either: (a) in the name of an intermediary (an “Intermediary”) that the Beneficial Holder deals with in respect of the Shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSP’s, RRIF’s, RESP’s and similar plans); or (b) in the name of a clearing agency (such as The Canadian Depository for Securities Limited (“CDS”)) of which the Intermediary is a participant. In accordance with the requirements of National Instrument 54-101 of the Canadian Securities Administrators, the Company has distributed copies of the Notice of Meeting, this Information Circular and the Proxy (collectively, the “Meeting Materials”) to the clearing agencies and Intermediaries for onward distribution to Beneficial Holders.

Intermediaries are required to forward the Meeting Materials to Beneficial Holders unless a Beneficial Holder has waived the right to receive them. Very often, Intermediaries will use service companies to forward the Meeting Materials to Beneficial Holders. Generally, Beneficial Holders who have not waived the right to receive Meeting Materials will either:

• (a) be given a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of Shares beneficially owned by the Beneficial Holder but which is otherwise not completed. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the Beneficial Holder when submitting the proxy. In this case, the Beneficial Holder who wishes to submit a proxy should otherwise properly complete the form of proxy and deposit it with the Company's transfer agent as provided above; or

• (b) more typically, be given a voting instruction form which is not signed by the Intermediary, and which, when properly completed and signed by the Beneficial Holder and returned to the Intermediary or its service company, will constitute voting instructions (often called a “proxy authorization form”) which the Intermediary must follow. Typically, the proxy authorization form will consist of a one page pre-printed form. Sometimes, instead of the one page pre-printed form, the proxy authorization form will consist of a regular printed proxy form accompanied by a page of

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instructions which contains a removable label containing a bar-code and other information. In order for the form of proxy to validly constitute a proxy authorization form, the Beneficial Holder must remove the label from the instructions and affix it to the form of proxy, properly complete and sign the form of proxy and return it to the Intermediary or its service company in accordance with the instructions of the Intermediary or its service company.

In either case, the purpose of this procedure is to permit Beneficial Holders to direct the voting of the Shares which they beneficially own. Should a Beneficial Holder who receives one of the above forms wish to vote at the Meeting in person, the Beneficial Holder should strike out the names of the Management Designees named in the form and insert the Beneficial Holder's name in the blank space provided. In either case, Beneficial Holders should carefully follow the instructions of their Intermediary, including those regarding when and where the proxy or proxy authorization form is to be delivered.

CDI HOLDERS MAY GIVE DIRECTIONS TO CDN

The Company will permit CDI holders to attend the Meeting.

Each CDI holder has the right to:

• (a) direct CDN how to vote in respect of their CDIs; or

• (b) instruct CDN to appoint the CDI holder or a person nominated by the holder as the holder’s proxy for the purposes of attending and voting at the Meeting.

If you are a CDI holder and you wish to direct CDN how to vote in respect of your CDIs or appoint yourself or a nominee as your proxy, you should read, complete, date and sign the accompanying CDI Voting Instruction Form and deposit it with Computershare Investor Services Pty. Ltd. GPO Box 242, Melbourne, Victoria 3001 Australia (the number to fax CDI Voting Instruction Forms within Australia is 1800-783-447 and outside Australia is 61-3-9473-2555) not less than 72 hours, Saturdays, Sundays, and holidays excepted, prior to the time of the holding of the Meeting or any adjournment thereof.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

Other than as set forth herein, management of the Company is not aware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting, other than the election of directors or the appointment of auditors, of any person or company who has been: (a) if the solicitation is made by or on behalf of management of the Company, a director or executive officer of the Company at any time since the beginning of the Company’s last financial year; (b) if the solicitation is made other than by or on behalf of management of the Company, any person or company by whom or on whose behalf, directly or indirectly, the solicitation is made; (c) each proposed nominee for election as a director of the Company; or (d) any associate or affiliate of any of the foregoing persons or companies.

PRINCIPAL HOLDERS OF VOTING SECURITIES

To the knowledge of the directors and senior officers of the Company, no person or company beneficially owns, directly or indirectly, or exercises control or direction over, voting securities carrying more than 10% of the outstanding voting rights of the Company other than:

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		PERCENTAGE OFISSUED ANDOUTSTANDING
NAME OFSHAREHOLDER	NUMBER OFSHARES
Trevor Tennant	15,934,587	10.41%

The directors have determined that all shareholders of record as of October 26, 2011 will be entitled to receive notice of and to vote at the Meeting. Those Shareholders so desiring may be represented by proxy at the Meeting.

PARTICULARS OF MATTERS TO BE ACTED UPON

TO THE KNOWLEDGE OF THE COMPANY’S DIRECTORS, THE ONLY MATTERS TO BE PLACED BEFORE THE MEETING ARE THOSE REFERRED TO IN THE NOTICE OF MEETING ACCOMPANYING THIS INFORMATION CIRCULAR. HOWEVER, SHOULD ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING, THE SHARES REPRESENTED BY THE PROXY SOLICITED HEREBY WILL BE VOTED ON SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS VOTING THE SHARES REPRESENTED BY THE PROXY.

Additional detail regarding each of the matters to be acted upon at the Meeting is set forth below.

1. FINANCIAL STATEMENTS

The audited financial statements of the company for the financial year ended June 30, 2011 (the “Financial Statements”), together with the Auditors’ Report thereon, will be presented to the shareholders at the Meeting.

2. ELECTION OF DIRECTORS

The board of directors of the Company (the “ Board ” or the “ Board of Directors ”) currently consists of six (6) directors, all of whom are elected annually. The term of office for each of the present directors of the Company expires at the Meeting. All of the current directors of the Company, apart from Mr. Yang Xifu, will be standing for re-election. It is proposed that the number of directors for the ensuing year be fixed at five (5) subject to such increases as may be permitted by the Articles of the Company. At the Meeting, the Shareholders will be asked to consider and, if thought fit, approve an ordinary resolution fixing the number of directors to be elected at the Meeting at five (5).

It is proposed that the persons named below will be nominated at the Meeting. Each director elected will hold office until the next Annual General Meeting of the Company or until his successor is duly elected or appointed pursuant to the Articles of the Company unless his office is earlier vacated in accordance with the provisions of the Business Corporations Act (British Columbia) or the Company’s Articles.

It is the intention of the management designees, if named as proxy, to vote for the election of the said persons to the Board of Directors, unless the Shareholder has specified in its proxy that its Common Shares are to be withheld from voting on the election of directors. Management does not contemplate that any of the nominees will be unable to serve as a director.

The following information relating to the nominees for election to the Board of Directors is based on information received by the Company from said nominees.

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		NUMBER OFSHARESBENEFICIALLY OWNED, DIRECTLY OR INDIRECTLY, OR OVER WHICH CONTROL ORDIRECTION IS EXERCISED AT THEDATE OF THIS INFORMATIONCIRCULAR
			PRINCIPALOCCUPATION AND IF NOT AT PRESENT AN ELECTED DIRECTOR, OCCUPATION DURING THE PAST FIVE(5) YEARS
NAME, PRESENTOFFICE HELD ANDPROVINCE OR STATE OFRESIDENCY
	DIRECTORSINCE
David Craig(1) Non-executive Chairman Western Australia	Dec. 2, 2009	80,000 Shares (0.05%) 700,000 options	Non-executive Chairman appointed June 1, 2011 (previously Non-executive Director)
Trevor Tennant President and CEO Western Australia	Dec. 17, 2007	15,934,587 Shares (10.41%) 3,013,441 options	President, Chief Executive Officer and Director
James Pearson Executive Vice President Western Australia	Dec. 17, 2007	9,087,451 Shares (5.94%) 2,435,969 options	Executive Vice-President and Director
Richard Billingsley(1) Non-executive Director B.C.,Canada	Dec. 23, 2005	50,000 Shares (0.03%) 416,666 options	Non-executive Director
John Tarrant(1) Non-executive Director Western Australia	June 1, 2011	Nil	Non-executive Director

(1) Member of the audit committee.

Directorships

Certain of the directors are also directors of other reporting issuers, as follows:

DIRECTOR	OTHERREPORTINGISSUERS
David Craig	Moly Mines Limited, Gunson Resources Limited, Forge Group Limited, Nomad Building Solutions Limited

Corporate Cease Trade Orders or Bankruptcies

To the knowledge of the Company, no director or proposed director of the Company is, or within the ten years prior to the date of this Information Circular has been, a director or executive officer of any company, including the Company, that while that person was acting in that capacity:

• (a) was the subject of a cease trade order or similar order or an order that denied the company access to any exemption under securities legislation for a period of more than 30 consecutive days; or

• (b) was subject to an event that resulted, after the director ceased to be a director or executive officer of the company being the subject of a cease trade order or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days; or

• (c) within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

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Individual Bankruptcies

To the knowledge of the Company, no director or proposed director of the Company has, within the ten years prior to the date of this Information Circular, become bankrupt or made a proposal under any legislation relating to bankruptcy or insolvency, or been subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of that individual.

Penalties or Sanctions

To the knowledge of the Company, no proposed director of the Company has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or has been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

3. APPOINTMENT OF AUDITORS

Management proposes the appointment of Deloitte Touche Tohmatsu, Chartered Accountants, of Perth, Western Australia, as Auditors of the Company for the ensuing year and that the directors be authorized to fix their remuneration. Deloitte Touche Tohmatsu have been the Company's Auditors since March 2010.

In the absence of instructions to the contrary the Common Shares represented by proxy will be voted in favour of a resolution to appoint Deloitte Touche Tohmatsu, Chartered Accountants, as Auditors of the Company for the ensuing year, at a remuneration to be fixed by the Board of Directors, unless the Shareholder has specified in the Shareholder’s proxy that the Shareholder’s Common Shares are to be withheld from voting on the appointment of auditors.

4. APPROVAL OF INCENTIVE STOCK OPTION PLANS

The Company has adopted two rolling stock option plans (the "Stock Option Plans") which, in aggregate, authorize the issuance of incentive stock options to directors, officers, employees and consultants up to an aggregate of 10% of the issued Shares from time to time. The Company found it necessary to split its former rolling stock option plan into two plans to facilitate the co-listing of its securities on the ASX. The two plans are similar in all material respects except that the first plan authorizes the issuances of incentive stock options to directors, officers and employees and the second plan authorizes the issuance of incentive stock options to consultants.

The policies of the TSX Venture Exchange require the Shareholders to approve the Stock Option Plans each year. There are currently 153,025,821 Common Shares issued and outstanding and therefore the current 10% threshold is 15,302,582 Common Shares under the Stock Option Plans. Copies of the Stock Option Plans will be made available for review at the Meeting.

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5. APPROVAL TO INCREASE NON-EXECUTIVE DIRECTORS' FEES

ASX Listing Rule 10.17 requires the Company to obtain Shareholder approval to increase the nonexecutive directors' fees payable by it.

The resolution proposes to set a maximum aggregate level of directors' fees to AUD$500,000. This is the first time approval has been sought for the purposes of the Listing Rule.

The directors may divide the total aggregate amount or such lesser amount between themselves as they shall determine.

The proposed aggregate amount is a maximum level and will not be utilised immediately. However, it allows some scope for additions to the Board, should the Board wish to appoint additional non-executive directors in the future. The aggregate sum of AUD$500,000 has been determined by the directors having regard to market-competitive remuneration levels required to attract, retain and fairly reward nonexecutive directors by way of a director's fee and to enable directors to increase directors' fees to nonexecutive directors over time without frequent reference of the aggregate sum to Shareholders for approval.

Accordingly, Shareholders will be asked to consider and, if thought fit, approve an ordinary resolution as follows:

" That for the purposes of Listing Rule 10.17 of the ASX Listing Rules, the constituent documents of the Company and for all other purposes, the maximum aggregate remuneration payable to the non-executive directors of the Company as directors' fees shall be set at AUD$500,000 per annum, and such amount or such lesser amount as the directors shall determine may be divided among the non-executive directors as directors fees as the directors shall determine. "

The Company will disregard any votes cast on this Resolution by a director of the Company and any associates of a director. However, the Company need not disregard a vote cast on this Resolution if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) it is cast by the person chairing the Meeting as a proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

EXECUTIVE COMPENSATION (For the financial year ended June 30, 2011)

For purposes of this Information Circular, “named executive officer” of the Company means an individual who, at any time during the year, was:

• (a) the Company's chief executive officer (“CEO”);

• (b) the Company's chief financial officer (“CFO”);

• (c) each of the Company's three most highly compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year and whose total compensation was, individually, more than $150,000 for that financial year; and

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• (d) each individual who would be a named executive officer under paragraph (c) but for the fact that the individual was neither an executive officer of the Company, nor acting in a similar capacity, at the end of the most recently completed financial year;

(each a “Named Executive Officer”).

Based on the foregoing definition, during the last completed financial year of the Company, there were three Named Executive Officers, namely, its President and Chief Executive Officer, Trevor Tennant, its Chief Financial Officer, Derek Hall, and its Executive Vice President, James Pearson.

Compensation Discussion and Analysis

In assessing the compensation of its executive officers, the Company does not have in place any formal objectives, criteria or analysis; instead, it relies mainly on Board discussion, with input from and upon the recommendations of, the Remuneration and Nomination Committee.

The Company’s executive compensation program has three principal components: base salary, incentive bonus plan and stock options.

Base salaries for all employees of the Company are established for each position based on individual and corporate performances.

Incentive bonuses, in the form of cash payments, are designed to add a variable component of compensation based on corporate and individual performances for executive officers and employees. No bonuses were paid to executive officers and employees during the most recently completed financial year.

The Company has no other forms of compensation, although payments may be made from time to time to individuals or companies they control for the provision of consulting services. Such consulting services are paid for by the Company at competitive industry rates for work of a similar nature by reputable arm’s length services providers.

Option-Based Awards

Stock options are granted to provide an incentive to the directors, officers, employees and consultants of the Company to achieve the longer-term objectives of the Company; to give suitable recognition to the ability and industry of such persons who contribute materially to the success of the Company; and to attract and retain persons of experience and ability, by providing them with the opportunity to acquire an increased proprietary interest in the Company. The Company awards stock options to its executive officers based upon the recommendation of the Remuneration and Nomination Committee, which recommendation is based upon the Committee’s review of a proposal from the Chief Executive Officer. Previous grants of incentive stock options are taken into account when considering new grants.

Implementation of a new incentive stock option plan and amendments to the existing stock option plan are the responsibility of the Company’s Remuneration and Nomination Committee.

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Performance Graph

The following disclosure is a discussion comparing the trend shown by the graph verses executive officer compensation:

==> picture [471 x 205] intentionally omitted <==

The trend shows that the Company’s performance graph is consistent with the Company’s executive compensation as compensation was marginally lower this year in line with the share price performance. In the current year, the Company raised AUD$20 million which equates to some dilution, however allows the Company to aggressively pursue its exploration targets.

A significant portion of compensation paid to management and directors of the Company is paid via options, therefore the value of compensation is directly related to the stock performance of the Company.

Summary Compensation Table

The following table sets forth the total compensation paid to or earned by the Named Executive Officers for the Company’s three (3) most recently completed financial years:

					NON-EQUITYINCENTIVE PLANCOMPENSATION ($)	NON-EQUITYINCENTIVE PLANCOMPENSATION ($)
			SHARE- BASED AWARDS ($)	OPTION- BASED AWARDS(4) ($)		LONG- TERM INCENTIVE PLANS			TOTAL COMPENSATION ($)
NAME AND PRINCIPAL POSITION(1), (2)					ANNUAL INCENTIVE PLANS		PENSION VALUE ($)	ALLOTHER COMPENSATION ($)
		SALARY ($)
	YEAR
Trevor Tennant Managing Director and CEO(1) Derek Hall CFO(2)	2011 2010 2009 2011	$AUD 350,000 $AUD 350,000 $CAD 150,000 $AUD 136,000	- - - -	$AUD 177,000 $AUD 477,325 - $AUD 106,000	- - - -	- - - -	- - - -	- $AUD 56,337 - -	$AUD 527,000 $AUD 883,662 $CAD 150,000 $AUD 242,000

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					NON-EQUITYINCENTIVE PLANCOMPENSATION ($)	NON-EQUITYINCENTIVE PLANCOMPENSATION ($)
			SHARE- BASED AWARDS ($)	OPTION- BASED AWARDS(4) ($)		LONG- TERM INCENTIVE PLANS			TOTAL COMPENSATION ($)
NAME AND PRINCIPAL POSITION(1), (2)					ANNUAL INCENTIVE PLANS		PENSION VALUE ($)	ALLOTHER COMPENSATION ($)
		SALARY ($)
	YEAR
John Sibenaler Former CFO(3) James Pearson Executive Vice President(1)	2011 2010 2011 2010 2009	- $AUD 150,000 $AUD 250,000 $AUD 250,000 $CAD 75,000	- - - - -	- $AUD 35,000 $AUD 106,000 $AUD 433,367 -	- - - - -	- - - - -	- - - - -	- - - $AUD 50,720 -	- $AUD 185,662 $AUD 356,000 $AUD 734,087 $CAD 75,000

(1) The Company has entered into executive service agreements with Mr. Tennant and Mr. Pearson from January 5, 2010. Following the execution of these agreements, Mr. Tennant and Mr. Pearson are no longer paid a separate director's fee for serving on the Board.

(2) Mr. Hall commenced in his role on July 30, 2010.

(3) Mr. Sibenaler commenced in his role on January 11, 2010 and resigned on July 30, 2010.

(4) The fair value of stock options granted is estimated during the last financial year using the Black-Scholes option pricing model (please refer to the Financial Statements for more information).

Other Compensation

The amounts listed as “All Other Compensation” in the above table for Mr. Tennant and Mr. Pearson respectively, represent director fees paid to each prior to the Company entering into executive service agreements with Mr. Tennant and Mr. Pearson.

Incentive Plan Awards

Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth the options granted to the Named Executive Officers to purchase or acquire securities of the Company outstanding at the end of the most recently completed financial year:

				VALUE OF UNEXERCISEDIN- THE-MONEY OPTIONS(1) ($)
	NUMBER OFSECURITIES UNDERLYINGUNEXERCISED OPTIONS (#)
		OPTION EXERCISEPRICE ($)
			OPTION EXPIRATIONDATE
NAME
Trevor Tennant (Managing Director and CEO)	1,013,441 1,000,000 1,000,000	$CAD 0.40 $AUD 0.30 $AUD 0.54	13 Jan, 2013 29 Dec, 2012 30 Jun, 2013	-
Derek Hall (CFO)	600,000	$AUD 0.54	30 Jun, 2013	-
John Sibenaler (former CFO)	-	-	-	-

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				VALUE OF UNEXERCISEDIN- THE-MONEY OPTIONS(1) ($)
	NUMBER OFSECURITIES UNDERLYINGUNEXERCISED OPTIONS (#)
		OPTION EXERCISEPRICE ($)
			OPTION EXPIRATIONDATE
NAME
James Pearson (Executive Vice President)	1,085,969 750,000 600,000	$CAD 0.40 $AUD 0.30 $AUD 0.54	13 Jan, 2013 29 Dec, 2012 30 Jun, 2013	-

(1) The aggregate dollar value of the in-the-money unexercised vested options held at the end of the last financial year, based on the difference between the market value of the Shares at the financial year end, and the exercise price. This does not mean the options were exercised or that any Shares were sold at these values.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets forth the value vested or earned during the year of option-based awards, sharebased awards and non-equity incentive plan compensation paid to Named Executive Officers during the most recently completed financial year. The aggregate value of the option based awards vested during the year is based on the difference between the Company share price on the vesting day of any options that vested during the financial year ended June 30, 2011 and the exercise price of the options.

	OPTION-BASEDAWARDS– VALUE VESTEDDURING THEYEAR ($)	NON-EQUITYINCENTIVEPLANCOMPENSATION – VALUE EARNEDDURING THEYEAR ($)
NAME
Trevor Tennant	134,833	-
Derek Hall	53,100	-
John Sibenaler	8,917	-
James Pearson	87,850	-

Director Compensation

Director Compensation Table

The following table sets forth the value of all compensation provided to directors, not including those directors who are also Named Executive Officers, for the Company’s most recently completed financial year:

		SHARE- BASED AWARDS ($)		NON-EQUITY INCENTIVE PLAN COMPENSATION ($)	PENSION VALUE ($)
			OPTION- BASED AWARDS(1) ($AUD)
	BASEFEES EARNED **($AUD) **					ALLOTHER COMPENSATION ($)
							TOTAL ($)
NAME
Richard Billingsley David Craig Yang Xifu	30,000 42,000 25,000	- - -	44,000 106,000 44,000	- - -	- - -	- - -	74,000 148,000 69,000
John Tarrant	4,000	-	-	-	-	-	4,000

(1) The fair value of stock options granted during the last financial year was estimated using the Black-Scholes option pricing model. Refer to the Financial Statements.

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The compensation paid to directors of the Company is determined on a case-by-case basis with reference to the role that each director provides to the Company. Directors may receive cash bonuses and, in addition, are entitled to participate in the Company’s stock option plan, which is designed to give each option holder an interest in preserving and maximizing shareholder value. Such grants are determined by an informal assessment of an individual’s current and expected future performance, level of responsibilities and the importance of his/her position and contribution to the Company.

The Company does not currently prescribe a set of formal objective measures to determine discretionary bonus entitlements. Rather, the Company uses informal goals typical for development and early production stage companies such as strategic acquisitions, advancement of exploration and development, equity and debt financings and other transactions and developments that serve to increase the Company’s valuation. Precise goals or milestones are not pre-set by the Board of Directors of the Company.

Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth the options granted to the directors of the Company, not including those directors who are also Named Executive Officers, to purchase or acquire securities of the Company outstanding at the end of the most recently completed financial year:

	OPTION-BASEDAWARDS-NUMBER OFSECURITIESUNDERLYING UNEXERCISEDOPTIONS (#)			VALUE OF UNEXERCISEDIN-THE- MONEYOPTIONS ($)
		OPTIONEXERCISE PRICE ($)
			OPTIONEXPIRATION DATE
NAME
Richard Billingsley	66,666 100,000 250,000	$CAD 0.20 $AUD 0.30 $AUD 0.54	1 Nov, 2011 29 Dec, 2012 30 Jun,2013	6,666(1)
David Craig	100,000 600,000	$AUD 0.30 $AUD 0.54	29 Dec, 2012 30 Jun,2013	-
YangXifu	250,000	$AUD 0.54	30 Jun,2013	-
John Tarrant	-	-	-	-

(1) Using the closing price on the TSX Venture Exchange on 30 June 2011.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets forth the value vested or earned during the year of option-based awards and nonequity incentive plan compensation paid to the directors of the Company, not including those directors who are also Named Executive Officers, during the financial year ended June 30, 2011:

	OPTION-BASEDAWARDS– VALUE VESTEDDURING THEYEAR(1) ($)	NON-EQUITYINCENTIVEPLANCOMPENSATION– VALUE EARNEDDURING THEYEAR ($)
NAME
Richard Billingsley	26,758	-
David Craig	57,733	-
YangXifu	22,125	-
John Tarrant	-	-

(1) The fair value of stock options vested during the last financial year was estimated using the Black-Scholes option pricing model. Refer to the Financial Statements.

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EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information pertaining to the Company’s equity compensation plan as at the end of the most recently completed financial year:

			NUMBER OFSECURITIESREMAINING AVAILABLE FORFUTUREISSUANCE UNDEREQUITYCOMPENSATION PLANS(EXCLUDINGSECURITIES REFLECTED INCOLUMN(A)) **(C) **
	NUMBER OFSECURITIES TO BE ISSUEDUPONEXERCISE OF OUTSTANDINGOPTIONS, WARRANTS ANDRIGHTS **(A) **	WEIGHTED-AVERAGE EXERCISEPRICE OF OUTSTANDINGOPTIONS, WARRANTS ANDRIGHTS (B)
PLANCATEGORY
Equity compensation plans approved by securityholders	12,448,396	$AUD 0.41	2,804,186
Equity compensation plans not approved by securityholders	-	-	-
TOTAL	12,448,396	$AUD 0.41	2,804,186

(1) All securities are Common Shares issuable under the plans pursuant to the exercise of outstanding options.

(2) The plans permit the issuance of that number of Common Shares equal to ten percent (10%) of the number of Common Shares outstanding from time to time. The number of Common Shares remaining available for future issuances under the plans are calculated based upon 152,525,821 Common Shares outstanding as at June 30, 2011.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

None of the directors or senior officers of the Company, no proposed nominee for election as a director of the Company, and no associates or affiliates of any of them, is or has been indebted to the Company or its subsidiaries at any time since the beginning of the Company's last completed financial year.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

No Insider of the Company, no proposed nominee for election as a director of the Company and no associate or affiliate of any of the foregoing, has any material interest, direct or indirect, in any transaction since the commencement of the Company's last financial year or in any proposed transaction, which, in either case, has materially affected or will materially affect the Company or any of its subsidiaries.

MANAGEMENT CONTRACTS

Management functions of the Company and its subsidiaries are substantially performed by the Company’s directors and executive officers. The Company has not entered into any contracts, agreements or arrangements with parties other than its directors and executive officers for the provision of such management functions.

CORPORATE GOVERNANCE

The Board believes that good corporate governance improves corporate performance and benefits all – shareholders. National Policy 58-201 Corporate Governance Guidelines provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as the Company. In addition, National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) prescribes certain disclosure by the Company of its corporate governance practices. As part of the Company’s listing application on the ASX, the Company has adopted the recommendations of the ASX Corporate

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Governance Council. The Company believes that the recommendations of the ASX Corporate Governance Council are in all material respects similar to the recommended guidelines of Canadian securities regulators. Full copies of the Company’s corporate governance policies are accessible on the Company’s website www.shmining.com.au.

Statement of Corporate Governance Practices

Disclosure Requirements	Comments
Disclose the identity of directors who are independent. Disclose the identity of directors who are not independent, and describe the basis for that determination.	The definition of independence used by the Company is that used by the Canadian Securities Administrators, which is set out in section 1.4 of NI 52-110. A director is independent if he or she has no direct or indirect material relationship to the Company. A "material relationship" is a relationship which could, in the view of the Board of Directors, be reasonably expected to interfere with the exercise of a director’s independent judgment. Certain types of relationships are by their very nature considered to be material relationships and are specified in section 1.4 of NI 52-110. The Board is comprised of six (6) directors, of whom each of David Craig, John Tarrant and Richard Billingsley are considered to be independent directors. Trevor Tennant is not considered to be independent by virtue of his position as Managing Director, President and CEO of the Company. James Pearson is not considered to be independent by virtue of his position as Executive Vice President of the Company. Yang Xifu is not considered to be independent by virtue of his shareholdings in the Company.
Disclose whether or not a majority of directors are independent.	A majority of the directors are not independent. Explanation for departure The Board believes that its current composition is sufficient to ensure that the Board can function independently of management. The Board facilitates its exercise of independent judgment in carrying out its responsibilities by deferring to recommendations made by the independent directors, particularly in circumstances where it may be considered that a conflict of interest may arise.

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Disclosure Requirements	Comments
If a director is presently a director of another issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer.	David Craig is Non-executive Chairman of Gunson Resources Limited, Non-executive Deputy Chairman of Moly Mines Limited and a Non- executive Director of Forge Group Limited and Nomad Building Solutions Limited.
Disclose whether or not the independent directors hold regularly scheduled meetings at which non independent directors and members of management are not in attendance. If the independent directors hold such meetings, disclose the number of meetings held since the beginning ofthe issuer’s most recently completed financial year end. If the independent directors do not hold such meetings, describe what the board does to facilitate open and candid discussion among its independent directors.	The independent directors do not at this time hold separate meetings at which management is not in attendance. However, to facilitate open and candid discussion among its independent directors, and to facilitate the Board's exercise of independent judgment in carrying out its responsibilities, the Company's independent directors are encouraged to meet at any time they consider necessary without any members of management or non-independent directors being present.
Disclose whether or not the chair of the Board is an independent director. If the Board has a chair or lead director who is an independent director, disclose the identity of the independent chair or lead director, and describe his role and responsibilities.	David Craig, the Chairman, is an independent director. The Chairman is responsible for chairing Board meetings and general meetings, providing leadership to the Board and Company, facilitating effective discussions at Board meetings, overseeing shareholder communications, and ensuring that there are processes and procedures in place to evaluate the performance of the Board, its committees and individual directors and that such evaluations are done.
Disclose the attendance record of each director for all board meetings held since the beginning of the issuer’s most recently completed financial year.	Twelve Board meetings were held during fiscal 2011. Below is the attendance record of each director in the most recently completed financial year. David Craig–12 (of 12) Board meetings Trevor Tennant–12 (of 12) Board meetings James Pearson–12 (of 12) Board meetings Richard Billingsley–12 (of 12) Board meetings Eduardo Valenzuela(1) –11 (of 11) Board meetings Yang Xifu(2) –4 (of 10) Board meetings John Tarrant(3) –1 (of 1) Board meetings (1)Eduardo Valenzuela resigned from the Board effective June 1, 2011. (2)Yang Xifu was appointed to the Board effective July 29, 2010. (3)John Tarrant was appointed to the Board effective June 1, 2011.
Disclose the text of the Board’s written mandate.	The mandate of the Board is to: � Oversee the management and corporate governance of the Company including its strategic direction.

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Disclosure Requirements	Comments
	� Adopt a strategic planning process, contribute to the development of, and approve a strategic plan that reflects the opportunities and risks of the Company’s business. � Monitor the Company’s organisational performance and the achievement of strategic goals and objectives. � Appoint, and, if necessary, remove senior management including the Managing Director and the Chief Financial Officer. � Assess the performance of senior management against the Company’s strategic plan, ensuring appropriate resources are available to senior management and that they are adequately experienced and trained. � Review and approve the Company’s business plans, annual budget and financial plans including major capital expenditure initiatives. � Approve and monitor the progress of major capital expenditure and other corporate projects including acquisitions and divestments. � Monitor and ensure compliance with legal and regulatory requirements and the Company’s Code of Conduct. � Monitor financial performance and reporting including approve the annual, half yearly and quarterly reports. � Review and approve the Company’s risk management systems and internal controls and ensure that reporting procedures are effective. � Delegate appropriate powers to executive directors and senior management to ensure the effective day-to-day management of the business.
Disclose whether or not the Board has developed written position descriptions for the chair and the chair of each board committee. If the Board has not developed written position descriptions for the chair and/or the chair of each Board committee, briefly describe how the Board delineates the role and responsibilities of each such position.	The Board has developed formal position descriptions for the Chairman and the Chairman of each Board committee.
Disclose whether or not the Board and CEO have developed a written position description for the CEO. If the board and CEO have not developed such a position description, briefly describe how the Board delineates the role and responsibilities of the CEO.	The Board has developed formal position descriptions for the Managing Director and the CEO.

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Disclosure Requirements	Comments
Briefly describe what measure the Board takes to orient new directors regarding: (i) the role of the Board, its committees and its directors, and (ii) the nature and operation of the issuer’s business.	New Board members receive information on the Company, the responsibilities of a Board member and the Company’s corporate governance practices.Board meetings are sometimes held at the Company’s offices and, from time to time, are combined with presentations by the Company’s management to give the directors additional insight into the Company’s business. In addition, management of the Company makes itself available for discussion with all Board members.
Briefly discuss what measures, if any, the Board takes to provide continuing education for its directors. If the Board does not provide continuing education, describe how the Board ensures that its directors maintain the skill and knowledge necessary to meet their obligations as directors.	The skills and knowledge of the Board of Directors as a whole is such that no formal continuing education process is currently deemed required. Directors maintain the skill and knowledge necessary to meet their obligations as directors through a combination of their existing education, experience as businesspersons and managers, service as directors of other issuers and advice from the Company’s legal counsel, auditors and other advisors.
Disclose whether or not the Board has adopted a written code for the directors, officers and employees. If the Board has adopted a written code: (i) disclose how a person or company may obtain a copy of the code, (ii) describe how the Board monitors compliance with its code, or if the Board does not monitor compliance, explain whether and how the Board satisfies itself regarding compliance with its code, and (iii) provide a cross-reference to any material change report filed since the beginning of the issuer’s most recently completed financial year that pertains to any conduct of a director or executive officer that constitutes a departure from the code.	The Board has adopted a written code of conduct for its directors, officers and employees. (i) Thecode of conduct is available on the Company’s website. (ii) The Board reviews its policies on a regular basis and have open lines of communication to the Managing Director and Chairman. (iii) There was no material change report filed since the beginning of the most recently completed financial year with respect to any conduct of a director or executive officer that constitutes a departure from the code.
Describe any steps the Board takes to ensure directors exercise independent judgement in considering transactions and agreements in respect of which a director or executive officer has a material interest.	The Board has found that the fiduciary duties placed on individual directors by the Company’s governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual director’s participation in decisions of the Board in which the director has a material interest have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company.

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Disclosure Requirements	Comments
Describe any other steps the Board takes to encourage and promote a culture of ethical business conduct.	Management, with the support of the Board, has put structures in place to ensure effective communication between the Company and its shareholders and the public. The Company provides disclosure as required by law, and legal counsel reviews press releases and reports to shareholders as required. The Board manages the business of the Company on behalf of the shareholders and is responsible for, among other things, strategic planning and management of the Company’s principal risks. Any responsibility that is not delegated to senior management or a committee of the Board remains with the full Board.
Describe the process by which the Board identifies new candidates for Board nomination.	In order to identify new candidates for nomination to the Board, the Board considers the advice of the Remuneration and Nomination Committee.
Disclose whether or not the Board has a nominating committee composed entirely of independent directors. If the Board does not have a nominating committee composed entirely of independent directors, describe what steps the Board takes to encourage and objective nomination process.	The Company has a Remuneration and Nomination Committee. The Remuneration and Nomination Committee is comprised of three (3) directors; Richard Billingsley, David Craig and John Tarrant all of whom are independent for the purposes of NI 58-101.
If the Board has a nominating committee, describe the responsibilities, powers and operation of the nominating committee.	The role of the Remuneration and Nomination Committee is to review and make recommendations to the Board in respect of the following nomination matters: � Determining the appropriate size and composition of the Board. � Developing criteria for the identification of suitable candidates for appointment to the Board. � The appointment and removal of directors. � The processes for evaluating the performance of the Board and key executives. � Developing a succession plan for the Board. � Ensuring there is an appropriate induction process in place for new directors and members of senior management and reviewing its effectiveness.
Describe the process by which the Board determines compensation for the issuer’s directors and officers.	The Remuneration and Nomination Committee recommends to the Board the compensation of the Company’s directors and officers which the Remuneration and Nomination Committee feels is suitable.

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Disclosure Requirements	Comments
Disclose whether or not the Board has a compensation committee composed entirely of independent directors. If the Board does not have a compensation committee composed entirely of independent directors, describe what steps the board takes to ensure an objective process for determining such compensation.	The Company has a Remuneration and Nomination Committee. The Remuneration and Nomination Committee is comprised of three (3) directors; Richard Billingsley, David Craig and John Tarrant all of whom are independent for the purposes of NI 58-101.
If the Board has a compensation committee, describe the responsibilities, powers and operation of the compensation committee.	The role of the Remuneration and Nomination Committee in relation to remuneration matters includes: � Determining remuneration policies and remuneration of directors. � Determining executive remuneration and incentive policies. � Determining and reviewing superannuation arrangements. � Determining recruitment, retention and termination policies for directors (including the Managing Director) and other senior management. � Determining the processes and criteria for evaluating the performance of the Managing Director and reviewing the Managing Director’s assessment of all other senior executive reporting directly to the Managing Director. � Determining the processes and criteria for the evaluation of the Board as a whole, committees of the Board and individual directors. � Reviewing succession plans for senior management.
If a compensation consultant or advisor has, at any time since the beginning of the issuer’s most recently completed financial year, been retained to assist in determining compensation for any of the issuer’s directors and officers, disclose the identity of the consultant or advisor and briefly summarize the mandate for which they have been retained. If the consultant or advisor has been retained to perform any other work for the issuer, state that fact and briefly describe the nature of the work.	Not applicable.
If the Board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function.	The Board has no other committees, other than the Audit Committee and the Remuneration and Nomination Committee.

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Disclosure Requirements

Comments

Disclose whether or not the Board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution. If assessments are regularly conducted, describe the process used for the assessments. If assessments are not regularly conducted, describe how the Board satisfies itself that the Board, its committees, and its individual directors are performing effectively.

The Board has traditionally monitored, but not formally assessed, its performance or the performance of individual directors or committee members or their contributions. The Remuneration and Nomination Committee has, as part of its mandate, the responsibility for determining the processes and criteria for the evaluation of the Board and the Managing Director, on an annual basis.

AUDIT COMMITTEE

Under National Instrument 52-110 – Audit Committees ("NI 52-110") reporting issuers are required to provide disclosure with respect to its Audit Committee including the text of the Audit Committee's Charter, composition of the Committee, and the fees paid to the external auditor. The Company provides the following disclosure with respect to its Audit Committee:

Audit Committee Charter

A copy of the audit committee’s charter is attached as Schedule “A” to this Information Circular.

Composition of Audit Committee

Following the election of directors pursuant to this Information Circular, the following will be members of the Audit Committee:

David Craig	Independent(1)	Financiallyliterate(2)
Richard Billingsley	Independent(1)	Financiallyliterate(2)
John Tarrant	Independent(1)	Financiallyliterate(2)

(1) A member of an audit committee is independent if the member has no direct or indirect material relationship with the Company, which could, in the view of the Board of Directors, reasonably interfere with the exercise of a member's independent judgment.

(2) An individual is financially literate if he has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company's financial statements.

Relevant Education and Experience

The relevant education and/or experience of each member of the Audit Committee is as follows: Mr. Craig is a lawyer who has held and holds executive and board positions in the fields of law, financial services and the resources industry. Mr. Billingsley has extensive experience as a company executive and director. Mr. Tarrant is a Certified Practising Accountant and a lawyer who has held senior positions in a number of listed public companies.

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Audit Committee Oversight

At no time since the commencement of the Company's most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors.

Pre-Approval Policies and Procedures

The Audit Committee is authorized by the Board of Directors to review the performance of the Company's external auditors and approve in advance provision of services other than auditing and to consider the independence of the external auditors, including a review of the range of services provided in the context of all consulting services bought by the Company. The Audit Committee is authorized to approve in writing any non-audit services or additional work which the Chairman of the Audit Committee deems is necessary, and the Chairman will notify the other members of the Audit Committee of such non-audit or additional work and the reasons for such non-audit work for the Committee's consideration, and if thought fit, approval in writing.

External Auditor Service Fees

The fees billed by the Company's external auditors in each of the last two financial years for audit and non-audit related services provided to the Company or its subsidiaries (if any) are as follows:

FINANCIALYEAR ENDINGJune 30 2011 2010		AUDITRELATED FEES $AUD 36,669 -
	AUDITFEES		TAXFEES	ALL OTHERFEES
	$AUD 30,000 $AUD 18,000		$AUD 30,015 $AUD 5,859	- -

Exemption

At no time since the commencement of the Company's most recently completed financial year has the Company relied on the exemption from NI 52-110, in whole or in part.

ADDITIONAL INFORMATION

Additional information relating to the Company is available on SEDAR at sedar.com. Financial information is provided in the Company’s audited annual financial statements and accompanying management’s discussion and analysis (“ MD&A ”) for the year ended June 30, 2011. Shareholders may obtain copies of the Company’s financial statements and related MD&A by contacting the Company at P.O. Box 598, West Perth, Western Australia, Australia 6872 or by telephone at (ph: 61-894812122).

Under National Instrument 51-102 – Continuous Disclosure Obligations , any person or company who wishes to receive interim financial statements from the Company may deliver a written request for such material to the Company or the Company’s agent, together with a signed statement that the persons or company is the owner of securities of the Company. Shareholders who wish to receive interim financial statements are encouraged to send the enclosed mail card, together with the completed form of proxy, in the addressed envelope provided, to the Company’s registrar and transfer agent, Computershare Investor Services Inc., Suite 300, 510 Burrard Street, Vancouver, B.C., V6C 3B9.

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GENERAL

Unless otherwise specified, all matters referred to herein for approval by the Shareholders require a simply majority of the Shareholders voting, in person or by proxy, at the Meeting.

Where information contained in this Information Circular, rests specifically within the knowledge of a person other than the Company, the Company has relied upon information furnished by such person.

The contents of this Information Circular have been approved and this mailing has been authorized by the Directors of the Company.

DATED at Perth, Australia as of the 26[th] day of October, 2011.

BY THE ORDER OF THE BOARD OF DIRECTORS OF SOUTHERN HEMISPHERE MINING LIMITED

s/ ” Trevor Tennant” TREVOR TENNANT President and Chief Executive Officer

SCHEDULE “A”

SOUTHERN HEMISPHERE MINING LIMITED AUDIT AND RISK COMMITTEE CHARTER

1. PURPOSE

This Charter sets out the specific responsibilities delegated by the Board of Southern Hemisphere Mining Ltd. (the “Company”) to the Audit and Risk Committee and details the manner in which the Committee will operate. The Audit and Risk Committee is a committee of the Board.

2. ROLE AND AUTHORITY OF THE COMMITTEE

2.1 Role

The role of the Committee is to assist the Board to meet its oversight responsibilities in relation to the Company’s financial reports and statements, risk management framework and system of internal control and to monitor the performance and independence of the external auditor.

2.2 Authority

The Committee reports to the Board. The external auditor reports to the Committee and the Board. The Committee has authority to:

• (a) Investigate any activity within its Charter and any matters specifically requested by the Board.

• (b) Resolve any disagreements between management and the auditor regarding financial reporting.

• (c) Delegate authority to subcommittees.

• (d) Obtain outside legal or other independent professional advice as necessary to assist the Committee.

3. MEMBERSHIP AND MEETINGS OF THE COMMITTEE

3.1 Membership and Term

• (a) The Committee shall be comprised of a minimum of 3 directors, all of whom shall be independent.

• (b) Appointment to the Committee will be for 1 year or as determined by the Board. Any member of the Committee may be removed or replaced at any time by the Board.

• (c) The duties and responsibilities of a member of the Committee shall be in addition to those duties set out for a director of the Board.

3.2 Chairman of the Committee

The role of the Chairman of the Committee is to provide overall leadership to in reviewing the

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aims, strategy, policy and direction of the Committee so as to further the best interests of the Company, including:

• (a) taking all reasonable steps to ensure that the responsibilities and duties of the Committee, as outlined in its Charter, are well understood by the Committee and its members and executed as effectively as possible;

• (b) to act as the principal sounding board and counsel to the Company with respect to audit and risk issues

• (c) setting the frequency and agenda for Committee meetings, and receiving and considering input from other Committee members, the chairman of the Board and management;

• (d) communicating information and findings of the Committee to the Board;

• (e) fostering ethical and responsible decision making by the Committee and its individual members; and encouraging free and open discussion at meetings of the Committee;

• (f) chair and manage meetings of the Remuneration and Nomination Committee.

3.3 Meetings

• (a) The Committee will meet as frequently as is necessary but not less than four times per year. Any Committee member may call a meeting of the Committee.

• (b) The Committee may invite any executive management team member, any other Board member or any other individual to attend a meeting of the Committee, as it considers appropriate. The Managing Director, Chief Financial Officer and representatives.

• (c) The Committee chairman will report to the Board (at the next Board meeting) following each meeting on the activities, findings and recommendations of the Committee.

• (d) Minutes of meetings of Committee will be distributed to all Committee members and the chairman of the Board. Committee meeting materials will be made available to any director upon request, provided that no conflict of interest exists.

• (e) A quorum at any meeting of the Committee will be a majority of members. Each member will have one vote and the chairman of the Committee will not have a second or casting vote.

• (f) All determinations of the Committee will be made by a majority of its members represented at a meeting.

4. RESPONSIBILITIES

The Committee is responsible for:

4.1 Financial Reporting

• (a) Reviewing quarterly, half-yearly and yearly financial reports and statements with management and the external auditor.

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• (b) Reviewing and making recommendations to the Board regarding significant financial, accounting and reporting issues.

• (c) Receiving representation letters from the Managing Director and Chief Financial Officer.

4.2 External Audit

• (a) Considering the appointment of the external auditor each year. Any subsequent recommendation on the appointment of the external auditor is put to the Board. If a change is approved it will be put forward to shareholders for their approval.

• (b) Reviewing and approving the terms of engagement and fees of the external auditor at the start of each audit.

• (c) Considering and reviewing the scope of work, reports and activities of the external auditor.

• (d) Reviewing the findings of the audit with the external auditor.

• (e) Reviewing the performance of the external auditors taking into account the opinions of management.

4.3 Risk Management, Internal Audit and Internal Control

• (a) Review the Company’s risk framework for identifying, monitoring and managing significant business risks.

• (b) Considering the effectiveness of the Company’s internal control system.

• (c) Reviewing the Company’s insurance policies at least annually having regard to the Company’s business and the insurable risks associated with the Company’s business.

5. ACCESS

The Committee has unrestricted access to all records and staff of the Company and the external auditors.

SOUTHERN HEMISPHERE MINING LTD ARBN 140 494 784

Lodge your vote:

By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

000001 000 SUH MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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CDI Voting Instruction Form

For your vote to be effective it must be received by 5:00 p.m. Australian Western Standard Time on Sunday 27 November 2011

How to Vote on Items of Business

Each CHESS Depositary Interest (CDI) is equivalent to one share of Company Common Stock, so that every 1 (one) CDI that you own at 25 November 2011 entitles you to one vote.

You can vote by completing, signing and returning your CDI Voting Instruction Form. This form gives your voting instructions to CHESS Depositary Nominees Pty Ltd, which will vote the underlying shares on your behalf. You need to return the form no later than the time and date shown above to give CHESS Depositary Nominees Pty Ltd enough time to tabulate all CHESS Depositary Interest votes and to vote on the underlying shares.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the Australian registry, please attach a certified photocopy of the Power of Attorney to this form when you return it. Companies: Only duly authorised officer/s can sign on behalf of a company. Please sign in the boxes provided, which state the office held by the signatory, ie Sole Director, Sole Company Secretary or Director and Company Secretary. Delete titles as applicable.

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

Turn over to complete the form

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View your securityholder information, 24 hours a day, 7 days a week: www.investorcentre.com

Your secure access information is:

Review your securityholding SRN/HIN: I9999999999 Update your securityholding

 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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I9999999999
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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a I9999999999 broker (reference number commences with ’ X ’) should advise your broker of any changes. I 9999999999 I ND

CDI Voting Instruction Form

Please mark to indicate your directions

CHESS Depositary Nominees will vote as directed

XX

Voting Instructions to CHESS Depositary Nominees Pty Ltd

I/We being a holder of CHESS Depositary Interests of Southern Hemisphere Mining Ltd hereby direct CHESS Depositary Nominees Pty Ltd to vote the shares underlying my/our holding at the Annual and Special General Meeting of Southern Hemisphere Mining Ltd to be held at Suite 1750 - 1185 West Georgia Street, Vancouver, BC, V6E 4E6 on Wednesday, 30 November 2011 at 3:00 p.m. (Vancouver Time) and at any adjournment of that meeting.

By execution of this CDI Voting Form the undersigned hereby authorises CHESS Depositary Nominees Pty Ltd to appoint such proxies or their substitutes to vote in their discretion on such business as may properly come before the meeting.

Items of Business

 PLEASE NOTE: If you mark the Abstain box for an item, you are directing CHESS Depository Nominees Pty Ltd or their appointed proxy not to vote on your behalf and your votes will not be counted in computing the required majority.

Number of Directors

For Against For Withhold

Item 1 To Set the Number of Directors at five (5)

Election of Directors

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Item 2.1 David Craig Item 2.2 Trevor Tennant Item 2.3 James Pearson Item 2.4 Richard Billingsley Item 2.5 John Tarrant

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Appointment of Auditors

For Withhold

• Item 3 Appointment of Deloitte Touche Tohmatsu, Chartered Accountants as Auditors of the Corporation for the ensuing year and authorising the Directors to fix their remuneration.

Stock Option Plans

For Withhold

Item 4 To approve the Company's stock option plans, which make a total of 10% of the issued and outstanding shares of the Company available for issuance there under.

To Increase Non-Executive Directors' Fees

For Against Withhold Item 5 To approve an ordinary resolution authorising for the purposes of Listing

Rule 10.17 of the ASX Listing Rules (note this will be the first time approval has been sought), the constituent documents of the Company and for all other purposes, that the maximum aggregate remuneration payable to the non-executive directors of the Company as directors' fees shall be set at AUD$500,000 per annum, and such amount or such lesser amount as the directors shall determine may be divided amongst the non-executive directors as directors' fees as the directors shall determine.

Other Business

For Against

Item 6 To grant the proxyholder authority to vote at his/her discretion on any amendment to the previous resolutions, or any other matters which may properly come before the Meeting.

SIGN Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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