TALIUS GROUP LIMITED — Capital/Financing Update 2012

Jan 19, 2012

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ASX ANNOUNCEMENT

20 January 2012

Proposed Change of Convertible Note Terms and Capital Raising

Variation of Convertible Note Terms

Advance Energy Ltd (Advance or Company) has today dispatched to the holders of Listed Convertible Notes (Notes) the attached Notice of Meeting seeking their approval to vary the terms of the Notes and the Trust Deed as follows:

Change in Conversion rate

Under the current Trust Deed, Noteholders can elect to convert their Notes into fully-paid ordinary shares at the greater of $0.08 or 85% of the volume weighted average price (VWAP) of shares traded on ASX in the 30 trading days in which trading occurred preceding the date that a notice of conversion is given.. Advance has discussed these terms with a number of the larger noteholders and proposes to change the conversion terms to the lesser of $ 0.08 or 85% of the 30 day VWAP of shares.

Capitalisation of Interest

The proposed Deed of Variation will also enable Advance to elect to pay interest by the issue of ordinary shares at 80% of the VWAP of shares during the five days before the relevant interest payment date.

The purpose of these proposed variations is to offer noteholders the opportunity and incentive to convert their Notes at a price that reflects the prevailing share price. It also gives the Company greater capacity to preserve cash and to evaluate and develop opportunities that it is currently assessing.

The meeting will be held on 15th February 2012 and the special resolution must be passed by noteholders present at or voting at the meeting representing not less than 75% of the aggregate value of the Notes issued. Shareholders must then approve the Deed of Variation before it can be executed. Advance is in the process of preparing a notice of meeting for shareholders to this effect.

Capital Raising

Advance will also be seeking shareholder approval for a further capital raising in order to fasttrack project assessment and to enable it to move quickly on opportunities as they are developed.

FOR FURTHER INFORMATION CONTACT

Mr Anthony Short (Managing Director) Telephone: 08 9429 2900 Facsimile: 08 9486 1011

ADVANCE ENERGY LIMITED ASX CODE: AVD www.advanceenergyltd.com.au

Advance Energy Limited A C N 1 1 1 8 2 3 7 6 2 NOTICE OF MEETING OF HOLDERS OF CONVERTIBLE NOTES

The Meeting of the holders of Convertible Notes will be held at Suite 2, 16 Ord Street, West Perth, Western Australia on 15 February 2012 at 10.00am (WST).

This Notice of Meeting should be read in its entirety. If Noteholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company by telephone on (08) 9429 2900.

Advance Energy Limited ACN 111 823 762

NOTICE OF MEETING

Notice is hereby given that a meeting of holders of Convertible Notes in Advance Energy Limited ( Company ) will be held at Suite 2, 16 Ord Street, West Perth, Western Australia on 15 February 2012 at 10.00am (WST) ( Meeting ).

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form comprise part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Noteholders on 13 February 2012 at 5.00pm (WST).

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Schedule 1.

AGENDA

1. Resolution – Amendments to Note Conditions

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

" That, subject to Shareholder Approval being obtained, for the purposes of clauses 13.2 and 17.19 of the Trust Deed and for all other purposes, Noteholders:

• (a) approve the amendments to the Note Conditions in the manner described in the Explanatory Memorandum; and

• (b) authorise the Company and the Trustee to amend the Trust Deed to effect such amendments to the Note Conditions.

Dated 19 January 2012 By Order of the Board

Mr Anthony Short Managing Director

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Advance Energy Limited A C N 111 823 762

EXPLANATORY MEMORANDUM

1. Introduction

This Explanatory Memorandum has been prepared for the information of the holders of Convertible Notes ( Noteholders ) in connection with the business to be conducted at the Meeting to be held at Suite 4, 16 Ord Street, West Perth, Western Australia on 15 February 2012 at 10.00am (WST).

2. Background

As at the date of the Notice, the Company has on issue 6,675,000 Convertible Notes.

The Convertible Notes are subject to and conditional upon the terms of a trust deed dated 13 October 2009 between the Company and The Trust Company (Australia) Limited ( Trustee ) as varied by a deed of variation dated 29 October 2009 ( Trust Deed ).

The terms and conditions of the Convertible Notes are in schedule 1 of the Trust Deed ( Note Conditions ). A summary of the Convertible Note Terms were also detailed in:

• (a) the prospectus of the Company lodged with ASIC and ASX on 28 October 2009; and

• (b) the Company's notice of general meeting dated 23 December 2009).

A copy of the Trust Deed is available for inspection at the Company’s registered office.

3. Resolution – Amendments to Note Conditions

3.1 Details of Amendments to Note Conditions

The Company is proposing to amend the Note Conditions as follows:

• (a) Conversion Price

The Note Conditions currently provide that upon a Noteholder electing to convert their Convertibles Notes into Shares, each Convertible Note will convert into such number of Shares as is equal to the Face Value ($1.00) divided by the price per Share which is the greater of $0.08 and the price per Share which is 85% of the volume weighted average price of Shares traded on ASX in the 30 trading days in which trading occurred preceding the date that a notice of conversion is given.

The minimum conversion price of $0.08 is significantly greater than the current Share price (refer to Section 3.5 of this Explanatory Memorandum). This discrepancy will most likely preclude the conversion of Convertible Notes by Noteholders.

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The Company is seeking to remove the minimum conversion price in order to provide Noteholders with the opportunity to convert their Convertible Notes at a discount to the prevailing market Share price.

The Company is therefore proposing to amend the conversion rate of the Convertible Notes so that each Convertible Note will convert into such number of Shares as is equal to the Face Value ($1.00) divided by the price per Share which is the lesser of $0.08 and the price per Share which is 80% of the volume weighted average price of Shares traded on ASX in the 30 trading days in which trading occurred preceding the date that a notice of conversion is given.

• (b) Capitalisation of Interest

The Company is also seeking to amend the Note Conditions to provide it with the ability to elect to pay interest owing to Noteholders by the issue of Shares.

It is proposed that if the Company elects to satisfy its interest payment obligations via the issue of Shares, such Shares will be issued at a discount to the prevailing market Share price. It is proposed that each Share issued in lieu of interest will be issued at a price equal to 80% of volume weighted average sales price of the Shares sold on ASX during the 5 trading days before the relevant interest payment date.

This amendment will enable the Company to preserve its cash in order to continue seeking and evaluating potential opportunities in the oil and gas sector.

The specific proposed amendments to be made to the Note Conditions are detailed in Schedule 2. Such amendments will be effected by the amendment of the Trust Deed.

Under the Resolution, Noteholders are being asked to:

• (a) approve the amendments to the Note Conditions in Schedule 2;

• (b) authorise the Company and the Trustee to amend the Trust Deed to effect such amendments to the Note Conditions; and

• (c) authorise the Trustee to concur in and execute the deed of variation in respect of the Trust Deed embodying the amendments to the Trust Deed.

The effect of passing the Resolution is that the Company and the Trustee will be authorised to execute a deed of variation in respect to the Trust Deed to effect the amendments detailed in Schedule 2.

3.2 Shareholder Approval

The amendment of the Note Conditions as contemplated by the Resolution is subject to Shareholders in a general meeting approving such amendment ( Shareholder Approval ). The Company intends to convene a general meeting of Shareholder at which the Shareholder Approval will be sought.

3.3

Requirements to amend the Trust Deed

Clause 13.2 of the Trust Deed provides that the Company and the Trustee may, with the approval of a "special resolution" passed by Noteholders, make any amendment to the Trust Deed.

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In addition, clause 17.19 expressly provides that a meeting of Noteholders has the power, by way of a "special resolution" to assent to any modification of the Trust Deed or the Note Conditions and authorise the Trustee to concur in and execute any supplemental deed embodying any such modification.

A "special resolution" for the purposes of clauses 13.2 and 17.19 of the Trust Deed means a resolution passed at a meeting of Noteholders duly convened and held in accordance with the Trust Deed and carried by a majority consisting of not less than 75% of the persons voting at the meeting upon a show of hands or if a poll is duly demanded then by a majority consisting of Noteholders representing not less than 75% of the aggregate value of all of the Convertible Notes held by the Noteholders who are present at the meeting in person, by proxy or representative.

In accordance with the requirements of the Trust Deed, the Resolution is intended to be a "special resolution".

3.4 Trustee

The Trustee is not obliged to consider the merits, or otherwise, of the proposed amendments to the Note Conditions and has not done so. Accordingly, the Trustee makes no recommendation as to how Noteholders should vote on the Resolution.

3.5

Additional Information

The following information is provided to Noteholders to assist them in considering the Resolution:

• (a) Capital Structure

As at the date of the Notice, the Company has on issue:

• (i) 217, 676,915 Shares;

• (ii) 202,931,748 options exercisable at $0.03 on or before 31 August 2012; and

• (iii) 6,675,000 Convertible Notes.

• (b) Market Price of Shares and Note Conversion

The lowest and highest market sale prices of Shares on the ASX during the 4 months immediately preceding the Notice and the respective dates of those sales were:

Highest $0.01 on 25 October 2011 Lowest $0.005 on 21 December 2011

The last sales price for Shares on the ASX on 4 January 2012 was $0.006.

3.6 Documentation available for inspection

The following documents are available for inspection without charge during normal business hours at the registered office of the Company:

• (a) the Trust Deed;

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• (b) the variation to the Trust Deed contemplated by the Resolution;

• (c)

• the Constitution; and

• (d) copies of all ASX announcement made by the Company during the period from 30 June 2011 until the date of the Notice.

Please contact the Company on (08) 9429 2900 to arrange an inspection time.

4. Action to be taken by Noteholders

Noteholders should read the Notice and this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

A Proxy Form is attached to the Notice. This is to be used by Noteholders if they wish to appoint a representative (a 'proxy') to vote in their place. All Noteholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, to sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a Noteholder from attending and voting at the Meeting in person.

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Schedule 1 – Definitions

In this Explanatory Memorandum and Notice:

ASIC means Australian Securities and Investments Commission.

ASX means ASX Limited ABN 98 008 624 691 and where the context permits the Australian Securities Exchange operated by ASX Limited.

Board means the board of Directors.

Company means Advance Energy Limited ACN 111 823 762.

Convertible Note means a listed convertible note having the Note Conditions.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company and Directors means the directors of the Company.

Dollar or $ means Australian dollars.

Explanatory Memorandum means this explanatory memorandum.

Face Value means the face value of each Convertible Note, being $1.00.

Listing Rules means the Listing Rules of ASX.

Meeting has the meaning given in the introductory paragraph of the Notice.

Note Conditions means the terms and conditions applicable to the Convertible Notes, including the terms and conditions in the Trust Deed and the terms and conditions in schedule 1 of the Trust Deed.

Noteholder means a registered holder of Convertible Notes.

Notice means the notice of meeting to which the Explanatory Memorandum is attached.

Proxy Form means the proxy form attached to the Notice.

Resolution means the resolution in the Notice.

Schedule means a schedule to this Explanatory Memorandum.

Section means a section contained in this Explanatory Memorandum.

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

Shareholder means a shareholder of the Company.

Shareholder Approval has the meaning given in Section 3.2 of this Explanatory Memorandum.

Trust Deed means the trust deed dated 13 October 2009 between the Company and the Trustee as varied by a deed of variation dated 29 October 2009.

Trustee means The Trust Company (Australia) Limited (formerly, Trust Company Fiduciary Services Limited) ACN 000 000 993.

WST means Western Standard Time, being the time in Perth, Western Australia.

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Schedule 2 – Amendments to Note Conditions

1. Delete the following in its entirety (paragraph 5(d) in schedule 1 of the Trust Deed):

2. "(d) Interest will be paid by the Company delivering to the Convertible Noteholder a cheque or draft for the Interest."; and

replace it with:

• "(d) Interest will be paid by the Company as follows:

  • (i) by the Company delivering to the Convertible Noteholder a cheque or draft for the Interest; or

  • (ii) at the election of the Company by the issue to the Convertible Noteholder of such number of Shares as is equal to the Interest divided by the price per Share which is 80% of the volume weighted average sales price of the Shares sold on ASX during the 5 trading days before the relevant Interest Payment Date."

• Insert the following new paragraph:

• "(f) If the Company elects to issue Shares to pay Interest in accordance with paragraph (d) above:

  • (i) the issue of Shares will be and be deemed for all purposes to be in full satisfaction and discharge of the payment of Interest owing to the Convertible Noteholder pursuant to the relevant Convertible Notes held by that Convertible Noteholder;

  • (ii) the Shares issued pursuant to this paragraph will rank equally in all respects with all issued Shares;

  • (iii) the Company will make application for official quotation by ASX of all Shares issued. Such application will be made as soon as reasonably practicable after the shares are issued and in any event within any period prescribed by the Listing Rules; and

  • (iv) within 10 Business Days of any issue of Shares to a Convertible Noteholder the Company will deliver to the Convertible Noteholder a holding statement in respect of the Shares issued."

• Delete the following in its entirety (paragraph 13 in Schedule 1 of the Trust Deed):

• "13. Upon exercise of the Conversion Option each Convertible Note will convert to such number of Shares as is equal to the Face Value divided by the price per Share which is the greater of $0.08 and the price per Share which is 85% of the volume weighted average price of Shares traded on ASX in the 30 trading days in which trading occurred preceding the date that the Conversion Notice is given." ; and

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replace it with:

"13. Conversion Rate

Upon exercise of the Conversion Option each Convertible Note will convert to such number of Shares as is equal to the Face Value divided by the price per Share which is the lesser of $0.08 and the price per Share which is 80% of the volume weighted average price of Shares traded on ASX in the 30 trading days in which trading occurred preceding the date that the Conversion Notice is given."

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ADVANCE ENERGY LIMITED

ACN 111 823 762

P R O X Y F O R M

The Company Secretary Advance Energy Limited

By delivery:

Suite 4, Ground Floor 16 Ord Street WEST PERTH WA 6005

By post:

By facsimile:

Suite 4, Ground Floor 16 Ord Street 08 9486 1011 WEST PERTH WA 6005

I/We[1] ________________

of ________________

being a holder of _______ Convertible Notes in the Company

hereby appoint[2 ] ___________

or failing such appointment the chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the General Meeting of the Noteholders of the Company to be held at Advance Energy Limited, Suite 4, 16 Ord Street, West Perth, Western Australia 6005 on 15 February 2010 at 10.00 AM (WST) and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes of this proxy is authorised to exercise is * [ ]% of the Noteholder’s votes*/ [ ] of the Noteholder’s votes. (An additional Proxy Form will be supplied by the Company, on request).

INSTRUCTIONS AS TO VOTING ON THE RESOLUTION

IMPORTANT:

The chairman of the extraordinary general meeting intends to vote undirected proxies in favour of the Resolutions.

The proxy is to vote for or against the Resolution referred to in the Notice as follows:

For Against Abstain

Resolution Amendments to Note Conditions

Authorised signature/s This section must be signed in accordance with the instructions overleaf to enable your voting instructions to be implemented.

Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director and Sole Company Director Director/Company Secretary Secretary ____ ____ _____ Contact Name Contact Daytime Telephone Date 1Insert name and address of shareholder 2 Insert name and address of proxy *Omit if not applicable

Proxy Notes:

A Noteholder entitled to attend and vote at the Meeting may appoint a person or a corporation as the Noteholder's proxy to attend and vote for the Noteholder at that Meeting. If the Noteholder is entitled to cast 2 or more votes at the Meeting the Noteholder may appoint not more than 2 proxies. Where the Noteholder appoints more than one proxy the Noteholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Noteholder's votes. A proxy may, but need not be, a Noteholder of the Company.

If a Noteholder appoints a corporation as the Noteholder’s proxy to attend and vote for the Noteholder at that meeting, the representative of the corporation to attend the meeting must produce the appropriate Certificate of Appointment of Representation prior to admission. A form of the certificate may be obtained from the Company’s share registry.

You must sign this form as follows in the spaces provided:

Joint Holding: where the holding is in more than one name all of the holders must sign. Power of Attorney: if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it.

Companies: a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the Meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company’s Share Registry.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received by facsimile transmission at the West Perth office of the Company (16 Ord Street, West Perth, WA, 6005, or Facsimile 08 9486 1011 if faxed from within Australia or +618 08 9486 1011 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the Meeting (WST).