TALIUS GROUP LIMITED — Proxy Solicitation & Information Statement 2012

Feb 13, 2012

Advance Energy Limited A C N 1 1 1 8 2 3 7 6 2

NOTICE OF GENERAL MEETING

The General Meeting of the Company will be held at Suite 4, 16 Ord Street, West Perth, Western Australia on 19 March 2012 at 10.00am (WST).

This Notice of General Meeting should be read in its entirety. If Shareholders 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.

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Advance Energy Limited A C N 1 1 1 8 2 3 7 6 2

NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of Shareholders of Advance Energy Limited ( Company ) will be held at Suite 4, 16 Ord Street, West Perth, Western Australia on 19 March 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 Shareholders on 17 March 2012 at 5.00pm (WST).

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

AGENDA

1. Resolution 1 – Approval of Amendments to Note Conditions

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

" That, subject to Noteholder Approval being obtained, for the purposes of Listing Rule 7.1 and for all other purposes, Shareholders approve the amendments to the Note Conditions in the manner described in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by any person who is a holder of Convertible Notes and any of their associates. However, the Company will not disregard a vote if:

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

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

2. Resolution 2 – Ratification of Prior Placement

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

“That, in accordance with Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 34,676,537 Shares issued to sophisticated and professional investors on the terms and conditions in the Explanatory Memorandum (Prior Placement) .”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who participated in the Prior Placement and any of their associates. However, the Company will not disregard a vote if:

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

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

3. Resolution 3 – Approval of Placement

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

"That, in accordance with Listing Rule 7.1 and for all other purposes, Shareholders approve the issue of up to 400,000,000 Shares each at an issue price of not less than 80% of the volume weighted average price of Shares in the five trading days prior to the date of issue of the Shares to professional and sophisticated investors on the terms and conditions in the Explanatory Memorandum ( Placement )."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who may participate in the Placement and anyone who might obtain a benefit except a benefit solely in their capacity as holders of ordinary securities if the Resolution is passed, or an associate of that person.

However, the Company will not disregard a vote if:

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

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

Dated 13 February 2012 By Order of the Board

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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 Shareholders 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 19 March 2012 at 10.00am (WST).

2. Action to be taken by Shareholders

Shareholders 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 Shareholders if they wish to appoint a representative (a "proxy") to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions thereon. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

3. Resolution 1 – Approval of Amendments to Note Conditions

3.1 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.

3.2 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 which is summarised below. 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 (Capitalisation of Interest).

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 Resolution 1, Shareholders are being asked to approve the amendments to the Note Conditions in Schedule 2. The effect of passing Resolution 1 is that the Company and the Trustee will execute a deed of variation in respect to the Trust Deed to effect the amendments detailed in Schedule 2.

3.3

Noteholder Approval

A Noteholder meeting will be held at 10 am on 15 February 2012 at Suite 2, 16 Ord Street, West Perth for Noteholders to consider and, if thought fit, to approve the Noteholder Resolution ( Noteholder Approval ).

The Noteholder Resolution is a special resolution and must be passed at a meeting of Noteholders 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.

A copy of the Noteholder Notice of Meeting is available for inspection during business hours prior to the Meeting at the registered office of the Company. The Noteholder Notice of Meeting has also been lodged on ASX.

3.4

Capital Structure and Dilution

The following information is provided to Shareholders to assist them in considering Resolution 1:

• (a) Capital Structure

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

• (i) 265,853,450 Shares (including 34,676,537 Shares issued on 7 February 2012 that are subject to ratification by Shareholders pursuant to Resolution 2);

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

• (iii) 6,675,000 Convertible Notes.

Note also that the Company proposes to issue, subject to Shareholder approval, 400,000,000 Shares under the Placement pursuant to Resolution 3.

• (b) Market Price of Shares and Note Conversion

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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 9 February 2012 was $0.005.

(c) Dilution

The following table provides possible examples of the capital structure of the Company if all of the Convertible Notes were to be converted at prices ranging from 0.3 cents to 8 cents.

8 cents.
Conversion Price ($)	0.003	0.005	**0.007 **	0.08
Current Shares on issue (incl Shares issued pursuant to Prior Placement (Resolution 2)	265,853,450	265,853,450	265,853,450	265,853,450
Shares issued pursuant to the Placement (Resolution 3)	400,000,000	400,000,000	400,000,000	400,000,000
Shares issued on conversion of 100% of the Convertible Notes	2,225,000,000	1,335,000,00 0	953,571,429	83,437,500
Capitalisation of Interest	634,125,000	380,475,000	271,767,857	23,779,688
Total Shares on issue	3,524,978,450	2,381,328,45 0	1,891,192,73 6	773,070,637
Potential Dilution of *Shareholders **	81%	72%	65%	14%

• The table assumes that Resolutions 2 and 3 are approved by Shareholders and that the Company is successful in raising the capital proposed by Resolution 3. The table also includes Shares that may be issued pursuant to the Capitalisation of Interest (refer to Section 3.2(b)) and is based on approximate quarterly payments of $157,000 (of which there are 12 interest payment dates from the date of this Notice until the Maturity Date) calculated at the indicative Share price stated above. Note that any Shares issued pursuant to the Capitalisation of Interest are to be issued at a price of a 5 day 80% VWAP prior to the date of issue.

Noteholders can elect to convert their Convertible Notes on either 30 June or 31 December in each year prior to the Maturity Date.

It should be noted that, pursuant to the Note Conditions, a Noteholder is not entitled to convert (and the Company is entitled to refuse to convert) such number of Convertible Notes that would result in:

• (a) a person acquiring voting Shares in the Company in breach of section 606 of the Corporations Act (or any equivalent provision); or

• (b) a person acquiring Shares where a notification being required to be sent under, or consent is required under, any legislation by which the Company or its Related Bodies Corporate are bound.

3.5 Rationale for amendments to the Note Conditions

• (a) Conversion Price - Proposed

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The proposed change to the conversion price will allow Noteholders to convert their Convertible Notes at a conversion price equal to the lesser of:

• (i) the price per Share which is 80% of the 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; or

• (ii) $0.08.

• (b) Conversion Price - Current

Under the existing Convertible Note terms and conditions, Noteholders are entitled to convert their Convertible Notes into Shares at the greater of:

• (i) 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; or

• (ii) $0.08.

• (c) Analysis of the Proposed Change to Conversion Price

When compared to the current Conversion Price, the proposed amendments:

• (i) significantly reduce the minimum conversion price from $0.08 to a discount to the prevailing Share price at the time of conversion; and

• (ii) increase the discount to the VWAP from 15% to 20%.

The proposed changes to the conversion price are intended to provide Noteholders with a more favourable conversion price, particularly given the current trading range of the Company’s Shares. At present, Noteholders who wish to convert their Convertible Notes into Shares must do so at a conversion price of $0.08 which is well above the recent trading prices of the Shares.

The proposed changes are favourable to Noteholders and less favourable to Shareholders as they will generally result in more Shares being issued upon conversion of the Convertible Notes than is currently the case, thereby increasing the potential for dilution of existing Shareholders. If a significant amount of the Convertible Notes are converted into Shares and the corresponding Shares are sold on ASX, there is a possibility that the price of Shares may fall.

(d) Capitalisation of Interest

The Board has endeavoured to balance the benefit offered to Noteholders by providing the Company with the ability to issue Noteholders with Shares, albeit at a discount to the prevailing Share price, in lieu of interest.

The proposed change to the Note Conditions allowing the Company to issue Shares to satisfy interest payments will reduce the Company’s cash outflows by $634,125 per annum. This is considered less favourable to Noteholders but favourable to Shareholders, as it preserves cash and caps the discount on Share price at which Shares will be issued to satisfy interest payments.

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

3.6 Consequences if the Resolution is not approved

If Shareholders do not approve Resolution 1, there will be no change to the existing terms and conditions of the Convertible Notes. The maturity date (31 December 2014) will remain unchanged and the Company will continue to pay interest on the Convertible Notes until their redemption or conversion. The next interest payment of $157,664 is due on 31 March 2012. The Company has recently completed a share purchase plan and the Prior Placement, the subject of Resolution 2, through which it raised a total of $219,706. The Company believes that it is in the best interests of both Noteholders and Shareholders for it to preserve cash and to utilise these funds to developing new opportunities that could add value to the Company.

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3.7 Listing Rule 7.1

Listing Rule 7.1 provides that without Shareholder approval, the Company must not issue or agree to issue equity securities comprising more than 15% of the Company's issued capital as at 12 months before the date of issue of the relevant securities, subject to certain additions and subtractions.

ASX has advised the Company that Shareholder approval is required under Listing Rule 7.1 for the proposed amendments to the Note Conditions. This approval is sought in Resolution 1.

ASX considers that the proposed amendments to the Note Conditions to change the conversion price and to enable the capitalisation of interest is akin to a new issue of convertible notes because they will provide Noteholders with a new, discounted conversion price which is a price different to that originally approved by Shareholders.

Resolution 1 is an ordinary resolution.

3.8 Specific information required by Listing Rule 7.3

If Resolution 1 becomes effective, it will not result in the issue of additional Convertible Notes. Rather, Noteholders will be able to convert their Convertible Notes into Shares based on the new conversion price summarised in Section 3.2 (a).

All of the proposed amendments to the Note Conditions and conditions are summarised in Section 3.2.

There will be no new allottees if Resolution 1 becomes effective.

No funds will be raised by the proposed amendments to the Note Conditions.

4. Resolution 2 – Ratification of Prior Placement

4.1 General

Under the Prior Placement, the Company issued 34,676,537 Shares on 7 February 2012 at an issue price of 0.4 cents each per Share to raise $138,706.14.

Resolution 2 seeks Shareholder ratification of the issue of the Prior Placement pursuant to Listing Rule 7.4.

4.2

Listing Rule 7.4

The Shares under the Prior Placement were issued within the Company’s 15% placement capacity permitted under Listing Rule 7.1, without the need for Shareholder approval.

Listing Rule 7.4 sets out an exception to Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to Listing Rule 7.1 (and provided that the previous issue did not breach Listing Rule 7.1) those securities will be deemed to have been made with Shareholder approval for the purpose of Listing Rule 7.1.

By ratifying the issue of the Shares issued under the Prior Placement, the Company will retain the flexibility to issue equity securities in the future up to the 15% placement capacity set out in Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

Resolution 2 is an ordinary resolution.

4.3

Specific information required by Listing Rule 7.5

Listing Rule 7.5 requires that the following information be provided to Shareholders for the purposes of obtaining Shareholder approval pursuant to Listing Rule 7.4:

• (a) the 34,676,537 Shares were allotted on 7 February 2011;

• (b) the Shares were issued at a price of 0.4 cents each per Share;

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• (c) the Shares are fully paid ordinary shares in the capital of the Company;

• (d) the Shares were allotted and issued to various sophisticated and professional investors (pursuant to sections 708(8) and 708(11) of the Corporations Act) and who are not related parties of the Company;

• (e) the funds raised from the Prior Placement will be applied towards working capital and to fund the identification and evaluation of new opportunities; and

• (f) a voting exclusion statement is included in the Notice.

5. Resolution 3 – Approval of Placement

5.1 General

Resolution 3 seeks the approval of Shareholders for the issue of up to 400,000,000 Shares at an issue price per Shares of not less than 80% of the volume weighted average price of Shares in the five trading days prior to the date of issue to professional and sophisticated investors (pursuant to sections 708(8) and 708(11) of the Corporations Act).

5.2 Listing Rule 7.1

Listing Rule 7.1 requires Shareholder approval for the proposed issue of the Shares under the Placement. Listing Rule 7.1 provides that, subject to certain exceptions, Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the company's ordinary securities then on issue.

Given the issue of the Shares under the Placement will exceed this 15% threshold and none of the exceptions in Listing Rule 7.2 apply, Shareholder approval is required in accordance with Listing Rule 7.1.

The effect of Resolution 3 will be to allow the Directors to issue Shares under the Placement during the period of 3 months after the Meeting (or a longer period if permitted by ASX) without using the Company's 15% placement capacity.

Resolution 3 is an ordinary resolution.

5.3 Specific information required by Listing Rule 7.3

Listing Rule 7.3 requires that the following information be provided to Shareholders for the purposes of obtaining Shareholder approval pursuant to Listing Rule 7.1:

• (a) the maximum number of securities the Company is to issue under the Placement is 400,000,000;

• (b) Shares under the Placement will be issued no later than 3 months from the date of the General Meeting (or such longer period of time as ASX may, in its discretion, allow pursuant to a waiver of Listing Rule 7.3.2);

• (c) Shares under the Placement will be issued at a price per Share of not less than 80% of the volume weighted average price of Shares in the five trading days prior to the date of issue;

• (d) Shares under the Placement will be issued to professional and sophisticated investors (pursuant to sections 708(8) and 708(11) of the Corporations Act) who are not related parties of the Company;

• (e) Shares under the Placement will be fully paid ordinary shares in the capital of the Company;

• (f) the funds raised from the Placement will be applied towards working capital and to fund the identification and evaluation of new opportunities.

• (g) allotment of the Shares under the Placement will occur progressively; and

• (h) a voting exclusion statement is included in this Notice.

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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.

Capitalisation of Interest has the meaning in Section 3.2(b).

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.

Interest Payment Date means the dates on which interest on the Convertible Notes is payable, namely 31 March, 30 June, 30 September and 31 December.

Listing Rules means the Listing Rules of ASX.

Maturity Date means the date on which the Convertible Notes mature, being 31 December 2014.

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.

Noteholder Approval has the meaning in Section 3.3.

Noteholder Notice of Meeting means the notice of meet sent to Noteholders for the purpose of obtaining Noteholder Approval.

Noteholder Resolution means the resolution of Noteholder's that is required under the Trust Deed to effect the amendment to the Note Conditions.

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

Placement has the meaning in Resolution 3.

Prior Placement has the meaning in Resolution 2.

Proxy Form means the proxy form attached to the Notice.

Related Bodies Corporate has the meaning in section 50 of the Corporations Act.

Resolution means a resolution in the Notice.

Schedule means a schedule to this Explanatory Memorandum.

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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.

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.

VWAP means volume weighted average share price.

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 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 Noteholder a cheque or draft for the Interest; or

  • (ii) at the election of the Company by the issue to the 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 Noteholder pursuant to the relevant Convertible Notes held by that 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 Noteholder the Company will deliver to the 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

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: By post: By facsimile: Suite 4, Ground Floor Suite 4, Ground Floor 16 Ord Street 16 Ord Street 08 9486 1011 WEST PERTH WA 6005 WEST PERTH WA 6005 I/We[1] ________________

of ________________

being a Shareholder/Shareholders of the Company and entitled to _______

votes 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 Company to be held at Advance Energy Limited, Suite 4, 16 Ord Street, West Perth, Western Australia 6005 on 19 March 2012 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 Shareholder’s votes*/ [ ] of the Shareholder’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 annual 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 1 Approval of Amendments to Note Conditions Resolution 2 Ratification of Prior Placement Resolution 3 Approval of Placement

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

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Proxy Notes:

A Shareholder entitled to attend and vote at the Meeting may appoint a person or a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that Meeting. If the Shareholder is entitled to cast 2 or more votes at the Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder 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 Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a corporation as the Shareholder’s proxy to attend and vote for the Shareholder 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).

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