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Taruga Minerals Limited ACN 153 868 789

NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM

Friday, 2 July 2021

1:00pm (WST)

Ascent Capital Level 1, 33 Ord Street West Perth WA 6005 Australia

This Notice of General Meeting and Explanatory Memorandum should be read in its entirety. If Shareholders are in doubt as to how to vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

Should you wish to discuss any matter please do not hesitate to contact the Company by telephone on +61 (8) 9486 4036.

NOTICE OF GENERAL MEETING

Notice is given that the General Meeting of Shareholders of Taruga Minerals Limited will be held at the Ascent Capital, Level 1, 33 Ord Street, West Perth WA 6005, on Friday, 2 July 2021 at 1:00 pm (WST).

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

The Directors have determined pursuant to regulations 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 30 June 2021 at 4:00pm (WST).

Terms and abbreviations used in this Notice and Explanatory Memorandum can be found in the Definitions section at page 15.

AGENDA

Resolution 1 – Ratification of prior issue of Consideration Shares

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

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the issue of 40,000,000 Consideration Shares on the terms and conditions set out in the Explanatory Memorandum.”

Voting Exclusion Statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution by or on behalf of:

(a) a person who participated in the issue or is a counterparty to the agreement being approved (namely Strikeline Resources Pty Ltd); or
(b) an associate of that person or those persons.
However, this does not apply to a vote cast in favour of a resolution by:
(a) a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or
(b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or
(c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:
(i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and
(ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Resolution 2 – Ratification of Shares issued to Ashanti Capital Pty Ltd

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

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the prior issue of 900,000 Shares issued pursuant to ASX Listing Rule 7.1, at a deemed issue price of $0.01 per Share to Ashanti Capital Pty Ltd, on the terms and conditions set out in the Explanatory Memorandum"

Voting Exclusion Statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution by or on behalf of:

(a) a person who participated in the issue or is a counterparty to the agreement being approved (namely Ashanti Capital Pty Ltd); or
(b) an associate of that person or those persons.

However, this does not apply to a vote cast in favour of a resolution by:

(a) a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or
(b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or
(c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:
(i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and
(ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way

Resolution 3 – Ratification of Shares issued to DJ Carmichael Pty Ltd

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

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the prior issue of 750,000 Shares issued pursuant to ASX Listing Rule 7.1, at a deemed issue price of $0.01 per Share to DJ Carmichael Pty Ltd, on the terms and conditions set out in the Explanatory Memorandum"

Voting Exclusion Statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution by or on behalf of:

(a) a person who participated in the issue or is a counterparty to the agreement being approved (namely DJ Carmichael Pty Ltd); or
(b) an associate of that person or those persons.

However, this does not apply to a vote cast in favour of a resolution by:

(a) a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or
(b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

(c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:
(i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and
(ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way

Resolution 4 – Ratification of Shares issued to Shaw and Partners Limited

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

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the prior issue of 750,000 Shares issued pursuant to ASX Listing Rule 7.1, at a deemed issue price of $0.01 per Share to Shaw and Partners Limited, on the terms and conditions set out in the Explanatory Memorandum"

Voting Exclusion Statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution by or on behalf of:

(a) a person who participated in the issue or is a counterparty to the agreement being approved (namely Shaw and Partners Limited); or
(b) an associate of that person or those persons.
However, this does not apply to a vote cast in favour of a resolution by:
(a) a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or
(b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or
(c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:
(i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and
(ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way

Resolution 5 – Ratification of Shares issued to Talltree Holdings Pty Ltd

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

"That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the prior issue of 1,500,000 Shares issued pursuant to ASX Listing Rule 7.1, at a deemed issue price of $0.01 per Share to Talltree Holdings Pty Ltd, on the terms and conditions set out in the Explanatory Memorandum"

Voting Exclusion Statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution by or on behalf of:

(a) a person who participated in the issue or is a counterparty to the agreement being approved (namely Talltree Holdings Pty Ltd); or

(b) an associate of that person or those persons.

However, this does not apply to a vote cast in favour of a resolution by:

(a) a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or
(b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or
(c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:
(i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and
(ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way

Resolution 6 – Approval to issue Advisor Shares to Glamour Division Pty Ltd

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

"That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 2,100,000 Shares to Glamour Division Pty Ltd, on the terms and conditions set out in the Explanatory Memorandum"

Voting Exclusion Statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution by or on behalf of:

(a) Glamour Division Pty Ltd (or their nominee);
(b) any other person who will obtain a material benefit as a result of the issue of securities (except a benefit solely by reason of being a holder of ordinary securities in the Company): or
(c) an associate of that person or those persons.
However, this does not apply to a vote cast in favour of a resolution by:
(a) a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or
(b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or
(c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:
(i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and
(ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Dated 31 May 2021

BY ORDER OF THE BOARD

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Gary Steinepreis Director

EXPLANATORY MEMORANDUM

1 Introduction

This Explanatory Memorandum has been prepared for the information of members of Taruga Minerals Limited ( Taruga ) in connection with the business to be conducted at the General Meeting to be held on Friday, 2 July 2021 commencing at 1:00pm (WST) at Ascent Capital, Level 1, 33 Ord Street, West Perth WA 6005.

This Explanatory Memorandum forms part of and should be read in conjunction with the accompanying Notice of General Meeting.

Shareholders should note that all the Directors approved the proposal to put the resolutions to Shareholders as outlined in the Notice of General Meeting and to prepare this Explanatory Memorandum.

The purpose of this Explanatory Memorandum is to provide information for Shareholders in deciding whether or not to pass the Resolutions in the Notice of General Meeting.

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.

2.1 Voting in person

To vote in person, attend the Meeting at the time, date and place set out above.

In light of the status of the evolving COVID-19 situation and the Commonwealth and State government restrictions on public gatherings in place at the date of this Notice of Meeting, the Directors strongly encourage all Shareholders to lodge a directed proxy form prior to the Meeting. The Chairman will adjourn the Meeting where the number of attendees may lead to the breach local public health laws and regulations.

2.2 Voting by proxies

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.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

(a) each Shareholder has a right to appoint a proxy;
(b) a proxy need not be a member of the Company; and
(c) a Shareholder who is entitled to cast two (2) or more votes may appoint two (2) proxies and may specify the proportion or number of votes each proxy is appointed to

exercise. If the member appoints two (2) proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that:

(a) if proxy holders vote, they must cast all directed proxies as directed; and
(b) any directed proxies, which are not voted will automatically default to the Chair, who must vote the proxies as directed.

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

2.3 Corporate representatives

Shareholders who are body corporates may appoint a person to act as their corporate representative at the Meeting by providing that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as the body corporate’s representative. The authority may be sent to the Company and/or registry in advance of the Meeting or handed in at the Meeting when registering as a corporate representative.

An appointment of corporate representative form is available from the website of the Company’s share registry (https://www.automicgroup.com.au/).

2.4 Eligibility to vote

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 Shareholders at 4:00pm (WST) on 30 June 2021.

This Explanatory Memorandum has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

2.5 Voting via poll

All Resolutions under this Notice will be determined by poll.

2.6 Submitting questions

Shareholders may submit questions in advance of the Meeting to the Company. Questions must be submitted by emailing the Company Secretary at [email protected] by 4:00 pm (WST) on 30 June, 2021.

Shareholders will also have the opportunity to submit questions during the Meeting in respect to the formal items of business. In order to ask a question during the Meeting, please follow the instructions from the Chair.

The Chair will attempt to respond to the questions during the Meeting. Shareholders are limited to a maximum of two questions each (including any submitted in advance of the Meeting). The Chair will request prior to a Shareholder asking a question that they identify themselves (including the entity name of their shareholding and the number of Shares they hold).

3. Background to Resolutions 1 to 6

On 14 May 2020, the Company announced that it had entered into a 12-month Option Agreement ( Option Agreement ) with Strikeline Resources Pty Ltd ( Strikeline Resources ), granting the Company the ability to purchase a 100% interest in the Flinders Project, a highly prospective Iron-Oxide-Copper-Gold (IOCG)-style Project in South Australia ( Acquisition ). Strikeline Resources was introduced to the Company by Ashanti Capital Pty Ltd ( Ashanti Capital ). The Option Agreement was varied 1 July 2020 to include the Torrens IOCG Project and the Mt Craig Copper Project as part of the Acquisition.

In consideration for the introduction, the Company agreed to issue Ashanti Capital (or their nominee/s) with up to 12,000,000 Shares in the Company pursuant to Listing Rule 7.1, with 6,000,000 Shares being issued upon signing the Option Agreement ( Advisor Shares ) and a further 6,000,000 Shares to be issued in the event the Company completes the Acquisition. The first tranche of the Advisor Shares were issued on 22 May 2020. There are no other fees payable to Ashanti Capital (or their nominee/s) in relation to the introduction of Strikeline Resources.

The summary of the material terms of the Ashanti Capital lead manager mandate is contained within Schedule 2 and the nominees of the Advisor Shares are set out in Section 5.

Pursuant to the Option Agreement, the Company had until 14 May 2021 to exercise its option to acquire Strikeline Resources. A condition of exercising the option includes the expenditure of a minimum of $250,000 on the Strikeline Resources projects during the option period. In the event that the Company elects to exercise its option to acquire Strikeline Resources (as defined in Schedule 2), Taruga would, amongst other things, be required to issue the sellers (or their nominee/s) with 40,000,000 Shares in the Company ( Consideration Shares ). Taruga exercised its option over Strikeline Resources on 11 May 2021 and subsequently issued the Consideration Shares to the vendors of the company on 11 May 2021.

The summary of the material terms of the Acquisition of Strikeline Resources is contained within Schedule 1 and in the Company’s ASX announcement dated 14 May 2020.

4. Resolution 1 – Ratification of Shares issued to Strikeline Resources Vendors

4.1 Background

On 11 May 2021, the Company exercised its option over Strikeline Resources, and issued Consideration Shares to the sellers of Strikeline Resources on 11 May 2021.

The Consideration Shares were issued pursuant to the Company’s 15% placement capacity under Listing Rule 7.1.

4.2 ASX Listing Rule Requirements

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

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

The issue of the Consideration Shares does not fit within any of the exceptions set out in Listing Rule 7.2 and, as it has not yet been approved by Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval under Listing Rule 7.1 for the 12 month period following the date of issue of the Consideration Shares.

The Company wishes to retain as much flexibility as possible to issue additional equity securities in the future without having to obtain Shareholder approval for such issues under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Consideration Shares.

Resolution 1 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Consideration Shares.

4.3 Technical information required by ASX Listing Rule 7.5

In compliance with the information requirements of ASX Listing Rule 7.5, Shareholders are advised of the following in relation to the Resolution 1:

(a) the Consideration Shares were issued to the Strikeline Resources Vendors;
(b) Thomas Line, a 70% shareholder of Strikeline Resources, is a member of the Company’s Key Management Personnel;
(c) the issue of the Consideration Shares was more than 1% of the issued capital of the Company;
(d) the Consideration Shares were issued on 11 May 2021;
(e) the Consideration Shares (comprising 40,000,000 Shares) were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(f) the Shares were issued at a nil cash issue price as they were issued as consideration for the Acquisition. Based on the trading price of Shares at the time of

settlement the deemed value per Share was $0.09. The Company has not and will not receive any other consideration for the issue of the Consideration Shares;

(g)
the deemed issue price of the Consideration Shares was $0.01 per Share;
(h) the purpose of the issue of the Shares was to satisfy the Company’s obligations under the Option Agreement as required to complete the Acquisition; and
(i) the Consideration Shares were issued under the Option Agreement. A summary of the material terms of the Option Agreement is set out in Schedule 1 and for further details refer to the Company’s announcement dated 14 May 2020.

4.4 Technical information required by ASX Listing Rule 14.1A

If Resolution 1 is passed, the Consideration Shares will be excluded in calculating the Company’s 15% limit in Listing Rule 7.1, effectively increasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Consideration Shares.

If Resolution 1 is not passed, the Consideration Shares will be included in calculating the Company’s 15% limit in Listing Rule 7.1, effectively decreasing the number of equity securities that the Company can issue without Shareholder approval the 12 month period following the date of issue of the Consideration Shares.

5. Resolutions 2 to 5 – Ratification of issue of Shares to Talltree Holdings Pty Ltd, Ashanti Capital Pty Ltd, DJ Carmichael Pty Ltd and Shaw and Partners Limited

5.1 Background

Resolutions 2 to 5 seek Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of the Advisor Shares ( Advisor Shares Ratification ), as set out below:

Resolution	Recipient of Advisor Shares	Shares
2	Talltree Holdings Pty Ltd (Talltree)	1,500,000
3	Ashanti Capital Pty Ltd (Ashanti Capital)	900,000
4	DJ Carmichael Pty Ltd (DJ Carmichael)	750,000
5	Shaw and Partners Limited (Shaw and Partners)	750,000

Apart from the proposed issue to Glamour Division Pty Ltd (which is the subject of Resolution 6) none of the recipients of the Advisor Shares are related parties of the Company.

5.2 ASX Listing Rule Requirements

By ratifying these issues, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1, without the requirement to obtain prior Shareholder approval.

5.3 Technical information required by ASX Listing Rule 7.5

In compliance with the information requirements of ASX Listing Rule 7.5, Shareholders are advised of the following in relation to Resolutions 2 to 5:

(a) number of securities issued: 3,000,000 of the Advisor Shares were issued to DJ Carmichael or their nominees (being 1,500,000 to Talltree, 750,000 to Shaw and Partners and 750,000 to DJ Carmichael), and 3,000,000 of the Advisor Shares were issued (or agreed to be issued) to Ashanti Capital or their nominees (being 900,000 shares issued to Ashanti and a further 2,100,000 to be issued to Glamour Division Pty Ltd pursuant to Resolution 6), all pursuant to ASX Listing Rule 7.1;
(b) the deemed issue price of the Advisor Shares was $0.01 per Share;
(c) the Shares are ordinary fully paid shares in the capital of the Company and rank equally in all respects with the existing Shares on issue;
(d) none of Talltree, Ashanti Capital, DJ Carmichael or Shaw and Partners are related parties of the Company;
(e) the Advisor Shares issued to Talltree, Ashanti Capital, DJ Carmichael or Shaw and Partners were issued on 11 May 2021; and
(f) no funds were raised through the issue of the Advisor Shares.

5.4 Technical information required by ASX Listing Rule 14.1A

If either of Resolutions 2, 3, 4 or 5 is passed, the Advisor Shares issued to Talltree, Ashanti Capital, DJ Carmichael or Shaw and Partners respectively will be excluded in calculating the Company’s 15% limit in Listing Rule 7.1, effectively increasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date of issue of the relevant Advisor Shares.

If either of Resolutions 2, 3, 4 or 5 is not passed, the Advisor Shares issued to Talltree, Ashanti Capital, DJ Carmichael or Shaw and Partners respectively will be included in calculating the Company’s 15% limit in Listing Rule 7.1, effectively decreasing the number of equity securities that the Company can issue without Shareholder approval the 12 month period following the date of issue of the relevant Advisor Shares.

5.5 Directors’ Recommendation

The Directors unanimously recommend that Shareholders vote in favour of Resolutions 2, 3, 4 and 5 respectively as this will allow the Company to preserve the Company’s 15% annual limit permitted by ASX Listing Rule 7.1.

6. Resolution 6 – Approval to issue Advisor Shares to Glamour Division Pty Ltd

6.1 Corporations Act Requirements

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company's members in the manner set out in sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

The proposed issue of 2,100,000 of the Advisor Shares to Glamour Division Pty Ltd ( Glamour Division) (a company controlled by Eric de Mori), as a nominee of Ashanti Capital, constitutes giving a financial benefit and Mr de Mori, is a related party of the Company by virtue of being a Director.

The Company consider that the issue of 2,100,000 of the Advisor Shares to Glamour Division, falls under the arm’s length exception in section 210 of the Corporations Act, as the first tranche of the Advisor Shares issued to Glamour Division were approved by Shareholders at a general meeting held on 28 August 2020, prior to Mr de Mori’s appointment as a director, and as such the giving of the financial benefit is on arm’s length terms. Accordingly, the Company considers that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the issue of the Advisor Shares.

6.2 ASX Listing Rule 10.11

ASX Listing Rule 10.11 provides that unless one of the exceptions in ASX Listing Rule 10.12 applies, a listed company must not issue or agree to issue securities to:

10.11.1 a related party;
10.11.2 a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder in the company;
10.11.3 a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder in the company and who has nominated a director to the board of the company pursuant to a relevant agreement which gives them a right or expectation to do so;
10.11.4 an associate of a person referred to in Listing Rules 10.11.1 to 10.11.3; or

10.11.5 a person whose relationship with the company or a person referred to in Listing Rules 10.11.1 to 10.11.4 is such that, in ASX’s opinion, the issue or agreement should be approved by its shareholders,

unless it obtains the approval of its shareholders.

As the issue of the 2,100,000 of the Advisor Shares involves the issue of Shares to a related party of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

6.3 Technical information required by ASX Listing Rule 14.1A

If Resolution 6 is passed, the Company will be able to proceed with the issue of the Advisor Shares within one month after the date of the Meeting (or such date as permitted by any ASX waiver or modification of the ASX Listing Rules). Approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the Advisor Shares pursuant to this Resolution 6 as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Advisor Shares to Glamour Division (or its nominee/s) will not be included in the use of the Company's 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

If Resolution 6 is not passed, the Company will not be able to proceed with the issue of the Advisor Shares to Glamour Division and it may need to consider alternative compensation payable to Glamour Division.

6.4 Technical information required by ASX Listing Rule 10.13

In compliance with the information requirements of ASX Listing Rule 10.13, the following information is provided in relation to Resolution 6:

(a) the Advisor Shares will be issued to Glamour Division (a nominee of Ashanti Capital), an entity controlled by non-executive director, Eric de Mori;
(b) the maximum number of Advisor Shares to be issued to Glamour Division is 2,100,000;
(c) the Advisor Shares are being issued under an agreement as set out in section 3;
(d) the Advisor Shares to be issued to Glamour Division will be issued no later than one month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules);
(e) the Advisor Shares to be issued to Glamour Division are being issued for nil cash consideration;
(f) no funds will be raised through the issue of the Advisor Shares to Glamour Division; and
(g) the Advisor Shares to be issued to Glamour Division are ordinary fully paid shares and will rank equally in all respects with the existing Shares on issue.

6.5 Directors Recommendation

The Directors, other than Mr de Mori, recommend that Shareholders vote in favour of Resolution 6.

Definitions

In this Notice and the Explanatory Memorandum:

$ means Australian Dollars.

ASX means ASX Limited (ACN 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX.

Board means the board of Directors.

Business Day has the meaning contained in the Listing Rules.

Chair or Chairman means the person appointed to chair the Meeting conveyed by this Notice.

Company means Taruga Minerals Limited (ACN 153 868 789).

Constitution means the constitution of the Company as at the commencement of the Meeting.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Explanatory Memorandum means the explanatory memorandum attached to the Notice.

Listing Rules means the listing rules of ASX.

Meeting or General Meeting means the meeting convened by this Notice (as adjourned from time to time).

Notice or Notice of General Meeting means this notice of general meeting.

Proxy Form means the proxy form attached to the Notice.

Related Party has the meaning given in the Listing Rules 7.2.

Resolution means a resolution contained in the Notice.

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.

Strikeline Resources means Strikeline Resources Pty Ltd (ACN 631 241 355).

Trading Day means a day determined by ASX to be a trading day in accordance with the Listing Rules.

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

VWAP means volume weighted average market price as defined in Chapter 19 of the ASX Listing Rules.

In this Notice and the Explanatory Memorandum words importing the singular include the plural and vice versa.

Schedule 1 – Strikeline Resources Option Agreement

The Company entered into a 12-month Option Agreement ( Option Agreement ) (as varied on 1 July 2020 and 23 July 2020) with Strikeline Resources Pty Ltd ( Strikeline Resources ), Thomas Line and Mark Freeman ( Vendors ), granting the Company the ability to acquire 100% of the issued capital in Strikeline Resources from the Vendors. Taruga exercised the Option to acquire Strikeline Resources from the Vendors on 10 May 2021.

The material terms of the Option Agreement are as follows:

(a) ( Option ): the Vendors granted the Company the sole and exclusive right and option for $40,000 payment (which was paid), to acquire a 100% interest in Strikeline Resources (including the right title and interest in the Flinders, Torrens and Mt Craig Copper projects ( Projects ), subject to the Company by no later than 14th May 2021 meeting minimum expenditures of $250,000 on the project ( Expenditure ):
(b) ( Conditions Precedent ): The agreement is conditional upon satisfaction or waiver of:
(i) the Company obtaining all necessary shareholder (including for the purposes of Listing Rule 7.1) and regulatory approvals if required to complete the acquisition and issue all consideration;
(ii) the Company completing commercial, legal and technical due diligence investigations in respect of the Project to the satisfaction of the Company;
(iii) there being no material adverse change in the business, financial or trading position, or assets, liabilities or profitability or prospects of Strikeline Resources, or any event reasonably likely to result in such a material adverse change; and
(iv) there is no material breach, and there are no facts or circumstances that may reasonably be expected to lead to a material breach, of any warranties before Completion; and
(v) the parties obtaining all necessary regulatory approvals or waivers pursuant to the ASX Listing Rules, Corporations Act 2001 (Cth) or any other law and all third-party approvals, consents and necessary documentation required to lawfully complete the matters Acquisition.
(c) ( Consideration ): Subject to valid exercise of the Option and satisfaction of the Conditions Precedent, the Company will have the following obligations to the sellers of Strikeline:
(i) On or before 14 May 2021, and subject to any required shareholder approvals, Taruga shall issue to the sellers (or their nominee/s) 40 million fully paid ordinary shares in Taruga ( Consideration Shares );
(ii) Performance Milestone 1: Following Taruga delineating a JORC Indicated Resource (as defined in JORC 2012) of 150,000t Cu Equivalent (Cu, Au, Ag) at the Project, Taruga will make a milestone payment to the sellers of A$400,000 which may at the election of Taruga be paid in cash or Ordinary Fully Paid Shares at the 14-day VWAP of Taruga’s Share price as traded on the ASX;
(iii) Performance Milestone 2: Following Taruga completing a positive Bankable Feasibility Study (as defined in JORC 2012) in relation to the Project, Taruga will make a milestone payment to the sellers of A$500,000 which may at the election of Taruga be paid in cash or Ordinary Fully Paid Shares at the 14-day VWAP of Taruga’s Share price as traded on the ASX; and

(iv) Performance Milestone 3: Following Taruga commencing commercial production (being first concentrate sales) at the Project, the Company will make a payment to the sellers of A$500,000 which may at the election of Taruga be paid in cash or Ordinary Fully Paid Shares at the 14-day VWAP of Taruga’s Share price as traded on the ASX.
(d) ( Royalty ) The parties will execute an NSR agreement on the exercise of the Option, pursuant to which the Company will grant to the Vendors a 1% NSR in respect of all precious, industrial minerals and base metals produced, sold and proceeds received from the Project. Taruga will have the right to buy back the NSR from the sellers for total consideration of A$500,000 which may at the election of Taruga be paid in cash or Ordinary Fully Paid Shares at the 30-day VWAP of Taruga’s Share price as traded on the ASX, or alternatively can be settled by part payment of cash and part issue of Ordinary Fully Paid Shares at Taruga’s discretion.

The Option Agreement otherwise contains terms and conditions standard for an agreement of its nature including warranties, indemnities, and confidentiality provisions.

Schedule 2 – Ashanti Lead Manager Mandate

The Company entered into a lead manager mandate with Ashanti Capital Pty Ltd (ACN 614 939 981) (AFSL No. 493204) ( Ashanti ) pursuant to which Ashanti agreed to act as the Company’s corporate advisor and lead manager to the capital raising placement ( Lead Manager Mandate) . The Company has paid Ashanti a selling fee, management fee and are seeking to issue shares to Ashanti pursuant to the facilitation fee.

The material terms of the Lead Manager Mandate are as follows:

(a) ( Selling Fee ): On completion of any successful equity financing transaction, the Company shall pay Ashanti a cash fee equal to 5% of the gross amount of capital raised by the Company, out of which the Ashanti shall pay all fees to other brokers, investment houses or intermediaries as agreed by Ashanti and in consultation with the Company.
(b) ( Issue Management Fee ): On the completion of any successful equity financing transaction, the Company shall pay Ashanti a cash feed equal to 1% of the gross amount of capital raised by the Company.
(c) ( Facilitation Fee ): The Company will issue 3,000,000 fully paid ordinary shares upon announcing the capital raising placement, and a further 3,000,000 upon exercising the option to acquire 100% of Strikeline Resources.
(d) ( Expenses ): The Company agrees to reimburse Ashanti for any out of pocket expenses reasonably incurred by Ashanti under the Lead Manager Mandate ( Costs ). The consent of the Company must be obtained before Ashanti incurs any individual Cost in excess of $1,000 or aggregate expenses in excess of $2,000 during the course of its duties.

The Lead Manager Mandate otherwise contains terms and conditions standard for an agreement of its nature including indemnities and confidentiality provisions.

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TARUGA MINERALS LIMITED — Proxy Solicitation & Information Statement 2021

65895_rns_2021-05-30_93a6e662-7c15-415b-b394-87ff991f90f2.pdf

Taruga Minerals Limited ACN 153 868 789

NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM

NOTICE OF GENERAL MEETING

AGENDA

Resolution 1 – Ratification of prior issue of Consideration Shares

Voting Exclusion Statement

Resolution 2 – Ratification of Shares issued to Ashanti Capital Pty Ltd

Voting Exclusion Statement

Resolution 3 – Ratification of Shares issued to DJ Carmichael Pty Ltd

Voting Exclusion Statement

Resolution 4 – Ratification of Shares issued to Shaw and Partners Limited

Voting Exclusion Statement

Resolution 5 – Ratification of Shares issued to Talltree Holdings Pty Ltd

Voting Exclusion Statement

Resolution 6 – Approval to issue Advisor Shares to Glamour Division Pty Ltd

Voting Exclusion Statement

Dated 31 May 2021

BY ORDER OF THE BOARD

EXPLANATORY MEMORANDUM

1 Introduction

2. Action to be taken by Shareholders

2.1 Voting in person

2.2 Voting by proxies

2.3 Corporate representatives

2.4 Eligibility to vote

2.5 Voting via poll

2.6 Submitting questions

3. Background to Resolutions 1 to 6

4. Resolution 1 – Ratification of Shares issued to Strikeline Resources Vendors

4.1 Background

4.2 ASX Listing Rule Requirements

4.3 Technical information required by ASX Listing Rule 7.5

4.4 Technical information required by ASX Listing Rule 14.1A

5. Resolutions 2 to 5 – Ratification of issue of Shares to Talltree Holdings Pty Ltd, Ashanti Capital Pty Ltd, DJ Carmichael Pty Ltd and Shaw and Partners Limited

5.1 Background

5.2 ASX Listing Rule Requirements

5.3 Technical information required by ASX Listing Rule 7.5

5.4 Technical information required by ASX Listing Rule 14.1A

5.5 Directors’ Recommendation

6. Resolution 6 – Approval to issue Advisor Shares to Glamour Division Pty Ltd

6.1 Corporations Act Requirements

6.2 ASX Listing Rule 10.11

6.3 Technical information required by ASX Listing Rule 14.1A

6.4 Technical information required by ASX Listing Rule 10.13

6.5 Directors Recommendation

Definitions

Schedule 1 – Strikeline Resources Option Agreement

Schedule 2 – Ashanti Lead Manager Mandate

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TARUGA MINERALS LIMITED Proxy Solicitation & Information Statement 2021