TERRACOM LIMITED — AGM Information 2019

Oct 17, 2019

TerraCom Limited ACN 143 533 537

Notice of Annual General Meeting and Explanatory Statement

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TIME: 10:00am (Brisbane time) DATE: Tuesday, 19 November 2019 LOCATION: Sofitel Brisbane Central St Germain Room 249 Turbot Street, Brisbane, Queensland, 4000 Australia

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

If you are unable to attend the Meeting, please complete and return the enclosed proxy form in accordance with the specified instructions.

If you have any questions about the Resolutions or other information contained in this Notice of Meeting or in the Explanatory Statement, please contact the Company Secretary on +61 7 4983 2038, Monday to Friday between the hours of 9:00am and 5:00pm.

NOTICE OF MEETING

Time and place of meeting

Notice is given that the 2019 Annual General Meeting of Shareholders of TerraCom Limited ( Company ) will be held at 10:00am (Brisbane time) on Tuesday, 19 November 2019 at Sofitel Brisbane Central, St Germain Room, 249 Turbot Street, Brisbane Queensland 4000

This Notice of Meeting incorporates, and should be read together with, the Explanatory Statement and accompanying Proxy Form.

Voting entitlements

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that, for the purposes of the Meeting, a Shareholder’s voting entitlement will be taken to be the entitlement of the persons shown in the register of Shareholders as at 7.00pm (Sydney time) on Sunday, 17 November 2019. Share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

Voting at the meeting

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

Ordinary resolutions require the support of more than 50% of those Shareholders voting in person, by proxy, by representative or by attorney. Special resolutions require the support of at least 75% of those Shareholders voting in person, by proxy, by representative or by attorney.

On a show of hands, every Shareholder present (in person, or by proxy, attorney or representative) and entitled to vote, has one vote. On a poll, every Shareholder present (in person, by proxy, attorney or representative) and entitled to vote, has one vote for every fully paid Ordinary Share held (subject to any voting restrictions that may apply).

Voting by proxy

Please note that:

• (a) every Shareholder entitled to attend the Meeting and vote has a right to appoint a proxy. A Shareholder entitled to attend and cast two or more votes at the Meeting is entitled to appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise;

• (b) a proxy appointed to attend and vote for a Shareholder has the same rights as the Shareholder to speak at the meeting, to vote (but only to the extent allowed by the appointment) and to join in a demand for a poll;

• (c)

• a proxy need not be a shareholder of the Company;

• (d) an instrument appointing a proxy may be in the form of the proxy form attached to this Notice of Meeting;

• (e) if a Shareholder appoints two proxies, and the appointment does not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the Shareholder’s votes;

• (f) a Shareholder may specify the manner in which a proxy is to vote in respect of a particular Resolution. In this instance, the proxy may only vote on a Resolution as directed by the Shareholder. If the Shareholder has directed the proxy how to vote on a particular Resolution and either the proxy fails to attend the meeting, or chooses not to vote on a poll for a Resolution, then the Chair of the meeting will be deemed to be the Shareholder's proxy and will vote the Shares as directed by the Shareholder;

• (g) if a Shareholder does not direct the proxy how to vote on a particular Resolution, the shareholder is authorising the proxy to vote as the proxy decides, subject to any applicable voting exclusions/prohibitions;

• (h) if a shareholder appoints the Chair of the Meeting as their proxy using the enclosed proxy form (or the Chair becomes proxy by default) without specifying the way the proxy is to vote on a particular Resolution, by completing and signing the proxy form the Shareholder will be expressly authorising the

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Chair to exercise the proxy as he or she sees fit, even if the Resolution is connected directly or indirectly with the remuneration of a member of the Company's key management personnel;

• (i) to be a valid appointment of a proxy, a proxy form must be signed by the Shareholder or the Shareholder’s attorney. Proxies given by corporations must be signed either under section 127 of the Corporations Act 2001 (Cth) ( Corporations Act ) or in accordance with the Constitution of the corporation. In the case of joint holdings, at least one of the joint holders must sign the proxy form;

• (j) if a proxy form is signed by a person who is not the registered Shareholder, then the relevant authority (e.g. in the case of proxy forms signed by an attorney, the power of attorney or a certified copy of the power of attorney) must either have been provided previously to the Company or be enclosed with the proxy form;

• (k) if a body corporate is appointed as a proxy, please write the full name of that body corporate (e.g. Company X Pty Ltd). Do not use abbreviations. The body corporate will need to ensure that it:

• a) appoints an individual as its corporate representative to exercise its powers at Meetings, in accordance with Section 250D of the Corporations Act; and

• b) provides satisfactory evidence to the Company or share registry of its corporate representative’s appointment before the Meeting.

If no such evidence is received before the Meeting, then the body corporate (through its representatives) will not be permitted to act as a proxy; and

• (l) to be effective, proxy forms must be received no later than 10.00am (Brisbane time) on Sunday, 17 November 2019 by the Company at the Company's registered address or at any of the following:

in person: TerraCom Limited c/- Link Market Services Limited 1A Homebush Bay Drive, Rhodes NSW 2138 online: www.linkmarketservices.com.au by mail: TerraCom Limited c/- Link Market Services Limited Locked Bag A14 SYDNEY SOUTH NSW 1235 by facsimile: + 61 2 9287 0309

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BUSINESS OF THE MEETING – AGENDA

Financial statements and reports

To receive and consider the Annual Report of the Company and its controlled entities for the financial year ended 30 June 2019, which includes the Company's Financial Report, the Directors’ Report (which includes the review of operations and the Remuneration Report), and the Independent Auditor’s Report.

Note: There is no requirement for Shareholders to approve these reports.

Resolutions

1 Adoption of remuneration report

To consider, and if thought fit, pass the following Resolution as an ordinary resolution:

“That the Remuneration Report of the Company (which forms part of the Directors’ Report) for the financial year ended 30 June 2019 be adopted.”

The Remuneration Report is set out on pages 17-23 of the TerraCom Limited 2019 Annual Financial Report.

Notes:

• Under the Corporations Act, the vote on this Resolution is advisory only and does not bind the Directors or the Company.

• The Chair of the Meeting intends to vote all available proxies in favour of this item of business.

• A voting exclusion applies to this Resolution as set out in the Explanatory Statement.

2 Re-election of Directors

To consider, and if thought fit, pass each of the following Resolutions as an ordinary resolution:

2(a) “That Mr. Tsogt Togoo, a director who retires by rotation in accordance with rule 15.3 of the Company's Constitution and, being eligible, be elected as a Director of the Company.”

2(b) “That Mr. Philip Forrest, a director who retires by rotation in accordance with rule 15.3 of the Company's Constitution and, being eligible, be elected as a Director of the Company.”

2(c) “That Mr. James Soorley, a director who retires by rotation in accordance with rule 15.3 of the Company's Constitution and, being eligible, be elected as a Director of the Company.”

Note: The Chair of the Meeting intends to vote all available proxies in favour of the above items of business 2(a) to 2(c).

3 Approval of increase to maximum annual aggregate remuneration for Non-Executive Directors

To consider, and if thought fit, pass the following Resolution as an ordinary resolution:

“That for the purposes of clause 15.4 of the Company’s constitution, ASX Listing Rule 10.17 and for all other purposes, the maximum aggregate remuneration which may be paid to non-executive directors in any year be increased by $250,000 from $1,000,000 to $1,250,000.”

Notes:

• The Chair of the Meeting intends to vote all available proxies in favour of this item of business.

• • A voting exclusion applies to this Resolution as set out in the Explanatory Statement.

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4 Approval of Share issue to Mr Wallace King AO under Non-Executive Chairman Appointment Agreement

To consider, and if thought fit, pass the following Resolution as an ordinary resolution:

“That for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 362,138 fully paid Ordinary Shares to Mr Wallace King AO (or his nominee/s) under the NonExecutive Chairman Appointment Agreement on the terms and conditions set out in the Explanatory Statement for this Meeting.”

Notes:

• The Chair of the Meeting intends to vote all available proxies in favour of this item of business.

• A voting exclusion applies to this Resolution as set out in the Explanatory Statement.

5 Approval to issue Options to Directors

To consider, and if thought fit, pass each of the following Resolutions as an ordinary resolution:

5(a) “That for the purposes of Listing Rule 10.14 and for all other purposes, approval be given for the Company to grant 103,783 Options to Mr Wallace King AO (or his nominee/s) and (where applicable) to issue, allocate or transfer the resulting Ordinary Shares in the Company to him (or his nominee) on the terms and conditions set out in the TerraCom Limited Long Term Incentive Plan and the Explanatory Statement for this Meeting”.

5(b) “That for the purposes of Listing Rule 10.14 and for all other purposes, approval be given for the Company to grant 86,486 Options to Mr Craig Wallace (or his nominee/s) and (where applicable) to issue, allocate or transfer the resulting Ordinary Shares in the Company to him (or his nominee) on the terms and conditions set out in the TerraCom Limited Long Term Incentive Plan and the Explanatory Statement for this Meeting”.

5(c) “That for the purposes of ASX Listing Rule 10.14 and for all other purposes, approval be given for the Company to grant 43,243 Options to Mr Matthew Hunter (or his nominee/s) and (where applicable) to issue, allocate or transfer the resulting Ordinary Shares in the Company to him (or his nominee) on the terms and conditions set out in the TerraCom Limited Long Term Incentive Plan and the Explanatory Statement for this Meeting”.

5(d) “That for the purposes of ASX Listing Rule 10.14 and for all other purposes, approval be given for the Company to grant 43,243 Options to Mr Paul Anderson (or his nominee/s) and (where applicable) to issue, allocate or transfer the resulting Ordinary Shares in the Company to him (or his nominee) on the terms and conditions set out in the TerraCom Limited Long Term Incentive Plan and the Explanatory Statement for this Meeting”.

5(e) “That for the purposes of Listing Rule 10.14 and for all other purposes, approval be given for the Company to grant 102,960 Options to Mr Tsogt Togoo (or his nominee/s) and (where applicable) to issue, allocate or transfer the resulting Ordinary Shares in the Company to him (or his nominee) on the terms and conditions set out in the TerraCom Limited Long Term Incentive Plan and the Explanatory Statement for this Meeting”.

5(f) “That for the purposes of Listing Rule 10.14 and for all other purposes, approval be given for the Company to grant 86,486 Options to Mr Philip Forrest (or his nominee/s) and (where applicable) to issue, allocate or transfer the resulting Ordinary Shares in the Company to him (or his nominee) on the terms and conditions set out in the TerraCom Limited Long Term Incentive Plan and the Explanatory Statement for this Meeting”.

5(g) “That for the purposes of Listing Rule 10.14 and for all other purposes, approval be given for the Company to grant 86,486 Options to Mr James Soorley (or his nominee/s) and (where applicable) to issue, allocate or transfer the resulting Ordinary Shares in the Company to him (or his nominee) on the terms and conditions set out in the TerraCom Limited Long Term Incentive Plan and the Explanatory Statement for this Meeting”.

Notes:

• The Chair of the Meeting intends to vote all available proxies in favour of this item of business.

• A voting exclusion applies to each of Resolutions 5(a)-5(g) as set out in the Explanatory Statement.

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6 Ratification of the issue of securities

To consider, and if thought fit, to pass each of the following Resolutions as an ordinary resolution:

6(a) “That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders approve and ratify the issue of 1,500,000 unlisted options in total to Foster Stockbroking Pty Limited as described in the Explanatory Statement for this Meeting.”

6(b) “That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders approve and ratify the issue and allotment of 16,666,667 fully paid Ordinary Shares in the Company to Noble Resources International Pte Ltd on the terms and conditions set out in the Explanatory Statement for this Meeting.”

6(c) “That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders approve and ratify the issue and allotment of 9,230,769 fully paid Ordinary Shares in the Company to Springsure Investments Limited on the terms and conditions set out in the Explanatory Statement for this Meeting.”

Notes:

• The Chair of the Meeting intends to vote all available proxies in favour of the above items of business.

• A voting exclusion applies to each of Resolutions 6(a)-6(c) as set out in the Explanatory Statement.

7 Issue of Convertible Notes to OCP Asia (Singapore) Pte Limited

To consider, and if thought fit, to pass the following Resolution as an ordinary resolution:

“That for the purposes of ASX Listing Rule 7.1 and for all other purposes, the Shareholders approve the issue of US$20,000,000 Convertible Notes to OCP Asia (Singapore) Pte Limited on the terms and conditions set out in the Explanatory Statement for this Meeting."

Notes:

• The Chair of the Meeting intends to vote all available proxies in favour of this item of business.

• A voting exclusion applies to this Resolution as set out in the Explanatory Statement.

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Approval of 10% Additional Placement Capacity

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

“That, for the purpose of ASX Listing Rule 7.1A and for all other purposes, approval be given for the Company to issue or agree to issue equity securities (as defined in the ASX Listing Rules) equivalent to an additional 10% of the issued capital of the Company calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement for this Meeting.”

Notes:

• The Chair of the Meeting intends to vote all available proxies in favour of this item of business.

• A voting exclusion applies to this Resolution as set out in the Explanatory Statement.

By Order of the Board

Dated: 16 October 2019

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Nathan Boom Company Secretary

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EXPLANATORY STATEMENT

This Explanatory Statement contains an explanation of, and information about, the Resolutions to be considered at the Annual General meeting. Shareholders should read this Explanatory Statement in full. The Explanatory Statement forms part of the accompanying Notice of Meeting and should be read with the Notice of Meeting.

Financial statements and reports

As required by the Corporations Act, the TerraCom Limited Annual Report (comprising the Financial Report, Directors’ Report and Auditor’s Report for the Company) for the year ended 30 June 2019 will be laid before the Meeting. There is no requirement for Shareholders to vote on these reports.

A copy of the Annual Report is available on the Company’s website at www.terracomresources.com.

Shareholders will be given a reasonable opportunity at the Meeting to ask questions about, and make comments on, the financial statements and reports.

Shareholders will also be given an opportunity at the Meeting to ask the Company’s auditor, Ernst & Young, questions relevant to audit matters, including the Independent Auditor’s Report.

In addition to taking questions at the Meeting, written questions may be sent by mail (registered office) or email (admin@terracomresources.com) to the Chair or to the Company’s auditor. Written questions to the auditor must be in relation to the content of the auditor’s report and the conduct of the audit. All written questions to the Chair or the auditor must be submitted no later than 5 business days before the Meeting.

Resolution 1 – Remuneration Report

The Remuneration Report is set out on pages 17 to 23 of the Company’s 2019 Annual Report. A copy of the annual report is available on the Company’s website at www.terracomresources.com.

The Remuneration Report:

• explains the Board’s policy in relation to the nature and level of remuneration paid to Directors and KMP within the Company;

• discusses the link between the Board’s remuneration policy and the Company’s performance;

• provides a detailed summary of performance conditions, why they were chosen and how performance is measured against them; and

• sets out remuneration details for each Director and for each member of the Company’s senior executive management team.

A reasonable opportunity will be provided for discussion of the Remuneration Report at the Annual General Meeting.

"Two Strikes" Rule

Section 250R(3) of the Corporations Act provides that the vote on the adoption of the Remuneration Report is for advisory purposes only and will not bind the Directors or the Company. However under the Corporations Act, if a company's Remuneration Report receives an 'against' vote of 25% or more at two consecutive annual general meetings, a resolution must then be put to Shareholders at the later annual general meeting as to whether another meeting should be held (within 90 days) at which all Directors (other than the managing director) who were in office at the date of that resolution must stand for re-election. So, Shareholders will be entitled to vote in favour of holding a general meeting to re-elect the Board if the Remuneration Report receives "two strikes".

At the Company’s 2018 Annual General Meeting, less than 25% of the votes cast opposed the adoption of the Remuneration Report and therefore the “two strikes” process was not invoked.

Voting Exclusion Statement

In accordance with the Corporations Act, the Company will disregard any votes cast on Resolution 1:

• i. by or on behalf of a member of the Company’s key management personnel ( KMP ) (including Directors) details of whose remuneration are included in the Remuneration Report for the year ended 30 June 2019 or their Closely Related Parties, regardless of the capacity in which the vote is cast; or

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• ii. as a proxy by a person who is a member of the KMP at the date of the Meeting or their Closely Related Parties,

• iii. unless the vote is cast as proxy for a person entitled to vote on the Resolution:

• iv. in accordance with a direction on the proxy form; or

• v. by the Chair of the Meeting where the appointment expressly authorises the chair to exercise the proxy, even if the Resolution is connected directly or indirectly with the remuneration of a member of the KMP.

Closely Related Party is defined in the Corporations Act and includes the KMP’s spouse, dependents and certain other close family members, as well as any companies controlled by a member of the KMP.

Noting that each Director has a personal interest in their own remuneration from the Company, as set out in the Remuneration Report, the Directors unanimously recommend that Shareholders vote in favour of Resolution 1.

The Chair intends to vote all available proxies in favour of Resolution 1.

Resolution 2(a)-(c) - Re-Election of Directors

As per section 15.3 of the Company’s Constitution, dealing with the retirement of Directors, the following Directors will retire from office at the 2019 Annual General Meeting. A Director who retires in accordance with these requirements is eligible for re-election.

Resolution 2(a) Re-election of Mr. Tsogt Togoo

Biographic information for Tsogt Togoo is set out below:

Appointment details:	Non-Executive, Independent Director: appointed 25 February 2013
Qualifications:	Master of Business Administration
	Master of Economics
	Bachelor of Economics (First Class Honours)
Experience:	Mr Tsogt has close to two decades of experience in the Mongolian public
	sector. He worked in the senior management of the Mongolian national oil
	company, overseeing commercial and operational functions, including
	petroleum product imports and internal distribution to filling stations.
	Mr Tsogt also led the privatisation division of the State Property Committee and
	has played extensive roles in the privatisation of Mongolia's most valuable state
	owned companies. Mr Tsogt was in charge of the privatisation of the national
	oil company, banks and other state-owned enterprises, restructuring power
	generation and energy distribution enterprises and the deregulation of the
	energy and oil sectors.
Other current directorships:	Nil
Former directorships (last 3 years):	Nil
Special responsibilities:	Nil
Interest in contracts:	Nil

The Directors (other than Mr. Togoo) unanimously endorse Mr. Togoo as a candidate for re-election and recommend his reappointment to the Board.

Resolution 2(b) Re-election of Mr. Philip Forrest

Biographic information for Philip Forrest is set out below:

Appointment details: Non-Executive, Independent Director: appointed 9 April 2015. Qualifications: Fellow of the Australian Institute of Company Directors Certified Public Accountant Bachelor of Commerce (University of Queensland)

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Experience:

For over 30 years, Mr Forrest has lived in South East Asia and contributed to the Australia/Asia commercial relationship. He is reinforcing that contribution through directorships, involvement in not for profit organisations, and the provision of consultation and advice. Since arriving in Singapore in 1992, he has headed three international banks (Westpac, NatWest and ANZ), with wide-ranging regional responsibilities. His most recent banking position was Asia Head for ANZ Bank, with responsibility for all of the Bank’s activities in eleven countries from Japan to Indonesia.

Philip is a Fellow of the Australian Institute of Company Directors, a Fellow of CPA Australia, and a Fellow of the Australian Institute for Business and Economics. He is a Member of the Thai Institute of Directors and of the Singapore Mining Club. He received an award in 2014 for forty years of membership of CPA Australia. Other Current Directorships: Mr Forrest's current non-executive directorships include: Voyager Estate (Singapore), Readymix Holdings International, Gemstar Technology Asia, and EVOLVE Agribusiness Pte Ltd. He is currently a Director of The Australian Chamber of Commerce Singapore, and a Member of the Governing Council of the Singapore Institute of Directors. Former directorships (last 3 years): Nil Special responsibilities: Chairman of the Audit Committee Member of the Remuneration Committee (resigned 18 June 2019) Interest in contracts: Nil

The Directors (other than Mr. Forrest) unanimously endorse Mr. Forrest as a candidate for re-election and recommend his reappointment to the Board.

Resolution 2(c) Re-election of Mr. James Soorley

Biographic information for James Soorley is set out below:

Appointment details:	Non-Executive, Independent Director: appointed 8 March 2017
Qualifications:	Master of Organisation Development
	Bachelor of Arts
Experience:	Mr Soorley has been a highly successful leader in local government and business,
	which is demonstrated through previously being Lord Mayor of the City of Brisbane
	for 12 years. Mr Soorley's wealth of experience allows him to provide guidance
	and leadership in stakeholder relations and management to the TerraCom team
	both within Australian and overseas.
	He has also served on a number of key government committees and boards
	including the A.C.T Land Development Agency and Brisbane International Film
	Festival.
Other Current Directorships:	Mr Soorley is currently the inaugural Chairman of Unitywater and Chairman of CS
	Energy, a Queensland Government owned electricity generator producing a third
	of Queensland’s electricity. Mr Soorley is also the former inaugural Chairman for
	the Queensland Partnership Group (now PROPEL).
Former directorships (last 3 years):	Nil
Special responsibilities:	Member of the Audit Committee and Remuneration Committee
Interest in contracts:	Nil

The Directors (other than Mr. Soorley) unanimously endorse Mr. Soorley as a candidate for re-election and recommend his reappointment to the Board.

The Chair intends to vote all available proxies in favour of Resolutions 2(a)-2(c).

Resolution 3 – Approval for increase to maximum annual aggregate remuneration for non-executive directors

For the purposes of clause 15.4 of the Constitution, ASX Listing Rule 10.17 and any other purpose, approval is being sought at the Annual General Meeting to increase the maximum aggregate amount which can be paid as remuneration to the Company’s non-executive directors by $250,000 from $1,000,000 to $1,250,000.

Increasing the maximum amount of non-executive directors’ remuneration which can be paid will enhance the Board’s ability to attract non-executive directors with the appropriate experience, expertise, skills and diversity to oversee the Company’s business and strategic direction. It is not intended that the new maximum aggregate will be used immediately.

The maximum aggregate amount approved by Shareholders applies only in relation to the fees payable to non-executive directors. It does not include the following:

• i. Salaries paid to executive directors in their capacity as executives of the Company (Executive directors do not receive remuneration in the form of directors’ fees in addition to their salaries).

• ii. Any Shares issued to Wallace King AO pursuant to Resolution 4.

• iii. Any Options issued to directors pursuant to Resolutions 5(a) to 5(g).

In the preceding three years, 647,777 options over Ordinary Shares have been approved to be issued to the non-executive directors under listing rule 10.11 or 10.14, all approved by Shareholders. The 647,777 options were approved at the 2018 AGM under Resolutions 9 to 12 and 14 to 16 and under the approved terms of these Resolutions will be issued to the directors within 12 months of the 2018 AGM, that is by no later than 27 November 2019. The 647,777 options have been approved at the 2018 AGM to be issued to the following directors:

directors:
2018 AGM Resolution Number	Director Name	Number of Options Approved at the 2018 AGM(1)
9	Wallace King AO	128,761
10	Craig Wallace	115,663
11	Matthew Hunter	52,814
12	Paul Anderson	52,814
14	Tsogt Togoo	133,869
15	Philip Forrest	48,193
16	James Soorley	115,663
	TOTAL	647,777

(1) The 647,777 options were approved at the 2018 AGM under Resolutions 9 to 12 and 14 to 16 and under the approved terms of these Resolutions will be issued to the directors within 12 months of the 2018 AGM, that is by no later than 27 November 2019.

Voting Exclusion Statement

In accordance with the Listing Rules, the Company will disregard any votes cast in favour of Resolution 3 by non-executive Directors of the Company and any associates of such non-executive Directors. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or by the Chair of 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.

In addition, in accordance with the Corporations Act, any vote cast on Resolution 3 by a member of the KMP at the date of the meeting (including any Director), or by a Closely Related Party of such a member, as a proxy for a Shareholder will be disregarded unless the vote is cast as proxy for a person entitled to vote, in accordance with a direction on the proxy form; or by the Chair of the Meeting as proxy for a person who is entitled to vote and the proxy appointment expressly authorises the Chair to exercise the proxy, even if the Resolution is connected directly or indirectly with the remuneration of a member of the KMP.

**Due to the operation of section 250BD(2) of the Corporations Act 2001 (Cth) and the terms and conditions of the Proxy Form accompanying this Notice, if you appoint the Chair of the Meeting as your proxy and do not direct how the Chair of the Meeting is to vote on Resolution 3 on the Proxy Form, you will be expressly authorising the Chair of the Meeting to exercise your proxy as he sees fit notwithstanding that the Resolution is connected directly or indirectly with the remuneration of the KMP, which includes the Chair of the Meeting.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 3.

The Chair intends to vote all available proxies in favour of Resolution 3.

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Resolution 4 – Approval of Share issue to Mr Wallace King AO under Non-Executive Chairman Appointment Agreement

Mr Wallace King AO was appointed as a Non-Executive Independent Director on 17 May 2017 and subsequently appointed as Non-Executive Chairman and Independent Director on 1 September 2017.

Under the terms of the Non-Executive Chairman Appointment Agreement with the Company, Mr Wallace King AO, is remunerated with $150,000 of fully paid Ordinary Shares on an annual basis, in advance, subject to a condition precedent that Shareholders approval be obtained before the Shares are issued.

The Company is seeking approval for the issuance of fully paid Ordinary Shares to the value of $150,000 for the period 1 January 2020 to 31 December 2020 ( Engagement Period ).

The parties have agreed on a Share issue price per fully paid Ordinary Share of $0.4142. Accordingly, 362,138 fully paid Ordinary Shares are to be issued for the Engagement Period, subject to Shareholder approval. This Share issue price has been based on the 30 day VWAP for the period 1 September 2019 to 30 September 2019. If approved, the Shares are to be issued within 1 month after the date of the Annual General Meeting. The Shares will rank equally with all other fully paid Ordinary Shares from their date of issue. No funds will be raised from the issue of the Shares.

For the avoidance of doubt, it is noted that the Shares proposed to be issued to Mr King are in addition to the directors' fees payable to him under clause 15.4 of the Company's Constitution.

Voting Exclusion Statement

In accordance with the Listing Rules, the Company will disregard any votes cast in favour of Resolution 4 by Mr King and any of his associates. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or the Chair of 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.

In addition, in accordance with the Corporations Act, any vote cast on the Resolution by a member of the KMP at the date of the meeting (including any Director), or by a closely related party of such a member, as a proxy for a Shareholder will be disregarded unless the vote is cast as proxy for a person entitled to vote, in accordance with a direction on the proxy form or by the Chair of the Meeting as proxy for a person who is entitled to vote and the proxy appointment expressly authorises the Chair to exercise the proxy, even if the Resolution is connected directly or indirectly with the remuneration of a member of the KMP.

**Due to the operation of section 250BD(2) of the Corporations Act 2001 (Cth) and the terms and conditions of the Proxy Form accompanying this Notice, if you appoint the Chair of the Meeting as your proxy and do not direct how the Chair of the Meeting is to vote on Resolution 4 on the Proxy Form, you will be expressly authorising the Chair of the Meeting to exercise your proxy as he sees fit notwithstanding that the Resolution is connected directly or indirectly with the remuneration of the KMP, which includes the Chair of the Meeting.

The Directors (other than Mr. King) unanimously recommend that shareholders vote in favour of Resolution 4.

The Chair intends to vote all available proxies in favour of Resolution 4.

Resolutions 5(a)-(g) - Approval for the Company to issue Options to Eligible Directors

Background

Listing Rule 10.14 states that a listed company must not permit a Director to acquire securities under an employee incentive scheme without the prior approval of Shareholders by ordinary resolution.

At the 2018 Annual General Meeting shareholders approved the Company’s Long Term Incentive Plan. Relevant information relating to this approval can be found at the following address – http://terracomresources.listedcompany.com/newsroom/43zmv1sckc2clw.pdf.

The purpose of Resolutions 5(a)-(g) is for Shareholders to approve the following proposed grants of Options (and any resulting issue, transfer or allocation of Shares) under the Company’s Long Term Incentive Plan to the following Directors ( Eligible Directors ):

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Name	Role	Proposed Grant of Options
Wallace King AO	Non-Executive Chair and Independent Director of the Company	103,783 Options
Craig Wallace	Deputy Chair and Independent Director of the Company	86,486 Options
Matthew Hunter	Non‐Executive Director of the Company	43,243 Options
Paul Anderson	Non‐Executive Director of the Company	43,243 Options
Tsogt Togoo	Non‐Executive and Independent Director of the Company	102,960 Options
Philip Forrest	Non‐Executive and Independent Director of the Company	86,486 Options
Jim Soorley	Non‐Executive and Independent Director of the Company	86,486 Options
Directors Sub-Total		552,687 Options

The Board has considered the application of Chapter 2E of the Corporations Act to the grant of Options to Eligible Directors and considers that the financial benefit given by such grants constitutes reasonable remuneration to each of them given (i) the circumstances of the Company and (ii) the role and responsibilities of each of them as officers or employees of the Company. Accordingly, it is the Board’s view that section 211(1) of the Corporation Act applies and therefore the Company is not seeking Shareholder approval for the purposes of section 208 of the Corporations Act.

If approval is given by Shareholders under Listing Rule 10.14 in relation to a grant of Options, separate Shareholder approval is not required under Listing Rules 7.1 or 10.11 for that grant or any resulting issue of Shares.

If exercised, any Options granted under the Long Term Incentive Plan may be fulfilled by the issue of new Shares, the acquisition of Shares (on-market or off-market), or the allocation of Shares currently held within an employee Share trust. Resolutions 5(a)-(g) are being put to Shareholders to preserve the flexibility for the Company to undertake such fulfilment in any manner it sees fit at the relevant time (including the issue of Shares).

In accordance with Listing Rule 10.15, the following information is provided to Shareholders in relation to Resolutions 5(a)-(g).

Requirements of Listing Rule 10.15

The following information is provided to Shareholders for the purposes of Listing Rule 10.15:

• Maximum number of securities : The maximum number of Options that may be granted to the Eligible Directors is 552,687 in aggregate. Each Option entitles an Eligible Director to receive, upon vesting and exercise, one fully paid Ordinary Share in the Company.

• Price of securities : The Options will be granted for no consideration.

• Securities granted under the Long Term Incentive Plan since last approval : The Long Term Incentive Plan was approved by shareholders at the 2018 Annual General Meeting. Relevant information relating to this approval can be found at http://terracomresources.listedcompany.com/newsroom/43zmv1sckc2clw.pdf.

In the preceding three years, 647,777 options over Ordinary Shares have been approved to be issued to the non-executive directors under listing rule 10.11 or 10.14, all approved by Shareholders. The 647,777 options were approved at the 2018 AGM under Resolutions 9 to 12 and 14 to 16 and under the approved terms of these Resolutions will be issued to the directors within 12 months of the 2018 AGM, that is by no later than 27 November 2019. The 647,777 options have been approved at the 2018 AGM to be issued to the following directors:

Resolution Number	Director Name	Number of Options
9	Wallace King AO	128,761
10	Craig Wallace	115,663
11	Matthew Hunter	52,814
12	Paul Anderson	52,814
14	Tsogt Togoo	133,869
15	Philip Forrest	48,193
16	James Soorley	115,663
	TOTAL	647,777

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• Eligible participants: The Eligible Directors are the only directors at the date of the Meeting who are entitled to participate in the Long Term Incentive Plan.

• No loans given to acquire securities : No loan will be provided by the Company in connection with the grant of the Options to Eligible Directors.

• Voting exclusion statement : A voting exclusion statement in relation to Resolutions 5(a)-(g) is set out below in this Explanatory Statement.

• Details: Any Options issued under the Long Term Incentive Plan will be published in each annual report of the Company relating to any period in which the Options have been issued, as will confirmation that approval for the issue of the Options was obtained under Listing Rule 10.14 (if such approval is obtained).

• Issue of Options : Subject to Shareholder approval of Resolutions 5(a)-(g), the Company will issue the Options to Eligible Directors as soon as practicable after the Meeting and in any event within 12 months after the date of the Meeting.

• Vesting conditions attaching to proposed grant to Eligible Directors: The proposed Options to be granted to each Eligible Director will vest if both of the following conditions are satisfied or waived in accordance with the Plan Rules in relation to each Eligible Director:

Vesting Condition #1: The Eligible Director remains continuously engaged by a Group Company between 1 July 2019 and 1 July 2022 (inclusive).

Vesting Condition #2: The vesting schedule below shall apply to the Options to be granted to each Eligible Director.

Relative Growth	Proportion of Awards that will satisfy Vesting Condition #2
If the Relative Growth < 1.1	Nil
1.1 ≤ Relative Growth ≤ 1.5	Straight line pro-rata vesting between 12.5% and 100% (inclusive)
Relative Growth > 1.5	100%

For the purposes of the calculations required for Vesting Condition #2:

Relative Growth means the Share Price Movement divided by the ASX200 Movement. Share Price Movement means the amount calculated as follows:

𝑇𝐸𝑅20 −𝑇𝐸𝑅19 𝑇𝐸𝑅19

where:

TER20 = TER Share Price at close on final trading day of FY20 TER19 = TER Share Price at close on final trading day of FY19

When determining the TER Share Price at close on a given date, the closing price of TerraCom Limited Shares (ASX:TER) on that date shall be used. ASX200 Movement means the amount calculated as follows:

𝐼𝑛𝑑𝑒𝑥20 − 𝐼𝑛𝑑𝑒𝑥19 𝐼𝑛𝑑𝑒𝑥19

where:

Index20 = ASX200 Index at close on final trading day of FY20 Index19 = ASX200 Index at close on final trading day of FY19

When determining the ASX200 Index at close on a given date, the closing price of the S&P/ASX200 (INDEXASX: XJO) on that date shall be used.

• Other relevant conditions:

• i. The Options will expire on the fifth anniversary of the date of grant. An Eligible Director's Options may lapse if the Options are not exercised before the applicable expiry date.

• ii. A participant must pay an exercise price per Option equal to $0.555, being the TER Share Price at close on final trading day of FY19 (subject to any adjustments required by the Listing Rules).

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Voting exclusion statement

In accordance with the Listing Rules, the Company will disregard any votes cast in favour of Resolution 5(a), 5(b), 5(c), 5(d), 5(e), 5(f) or 5(g) by the Director of the Company referred to in the relevant Resolution or their associate. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or the Chair of 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.

In addition, in accordance with the Corporations Act, any vote cast on Resolutions 5(a)-(g) by a member of the KMP at the date of the meeting (including any Director), or by a Closely Related Party of such a member, as a proxy for a Shareholder will be disregarded unless the vote is cast as proxy for a person entitled to vote, in accordance with a direction on the proxy form; or by the Chair of the Meeting as proxy for a person who is entitled to vote and the proxy appointment expressly authorises the Chair to exercise the proxy, even if the Resolution is connected directly or indirectly with the remuneration of a member of the KMP.

**Due to the operation of section 250BD(2) of the Corporations Act and the terms and conditions of the Proxy Form accompanying this Notice, if you appoint the Chair of the Meeting as your proxy and do not direct how the Chair of the Meeting is to vote on the relevant Resolution –5(a)-(g) on the Proxy Form, you will be expressly authorising the Chair of the Meeting to exercise your proxy as he sees fit notwithstanding that the relevant Resolution is connected directly or indirectly with the remuneration of the KMP, which includes the Chair of the Meeting.

All Directors (other than the relevant Eligible Director under each respective Resolution) recommend that Shareholders vote in favour of Resolution 5(a)-(g). No recommendation is made in relation to Resolutions 5(a)(g) by the relevant Eligible Director that is referred to in the respective Resolution.

The Chair intends to vote all available proxies in favour of Resolutions 5(a)-(g).

Resolution 6(a)-(c) – Ratification of issues of equity securities

Resolutions 6(a)-(c) each seek Shareholder ratification pursuant to ASX Listing Rule 7.4 for the following issues of equity securities, as detailed below:

• 1,500,000 ordinary share unlisted options to Foster Stockbroking Pty Limited;

• 16,666,667 fully paid Ordinary Shares to Noble Resources International Pte Ltd; and

• 9,230,769 fully paid Ordinary Shares to Springsure Investments Limited.

ASX Listing Rule 7.1 provides that a company must not, without shareholder approval and 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 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 made with shareholder approval for the purpose of ASX Listing Rule 7.1. The Company confirms that the issue of the following equity securities did not breach ASX Listing Rule 7.1:

• 1,500,000 ordinary share unlisted options to Foster Stockbroking Pty Limited;

• 16,666,667 fully paid Ordinary Shares to Noble Resources International Pte Ltd; and

• 9,230,769 fully paid Ordinary Shares to Springsure Investments Limited.

By ratifying these previous issues of securities under Resolution 6, the Company will again then have 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.

Resolution 6(a) Ratification of the issue of unlisted options to Foster Stockbroking Pty Limited

On 21 September 2018 the Company issued unlisted ordinary share options to Foster Stockbroking Pty Limited ( Fosters ) in accordance with a Corporate Services Engagement. Under the Agreement, 1,500,000 ordinary share options were issued with a strike price equal to $0.60 and an expiry date of 31 August 2020. Fosters accepted the issue of 1,500,000 unlisted ordinary share options.

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Resolution 6(a) seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of the 1,500,000 ordinary share unlisted options to Fosters.

In accordance with ASX Listing Rule 7.5 the following information is provided in relation to the ratification of Resolution 6(a):

• i. 1,500,000 unlisted options were issued with a strike price of $0.60 and an expiry date of 31 August 2020;

• ii. Unlisted options once vested to fully paid ordinary shares will be on the same terms and conditions as the Company’s existing share;

• iii. Unlisted options were issued to Foster Stockbroking Pty Limited; and

• iv. If vested, the unlisted options will raise up to $900,000 in cash. Any cash raised will be used as working capital by the Company.

Voting exclusion statement

The Company will disregard any votes cast on this Resolution by Foster Stockbroking Pty Limited and any of its associates. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or the Chair of 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.

Resolution 6(b) Ratification of the issue of Shares to Noble Resources International Pte Ltd

On 21 December 2018 the Company completed a debt to equity swap with Noble Resources International Pte Limited ( Noble ). Under the terms of the agreement, the Company and Noble agreed to convert US$9,000,000 of Noble’s Blair Athol Prepayment Facility with Orion Mining Pty Limited (wholly owned subsidiary of the Company) into 16,666,667 fully paid Ordinary Shares of the Company.

The Company utilised its placement capacity under ASX Listing Rule 7.1 for the issue of Ordinary Shares to Noble.

Resolution 6(b) seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of the 16,666,667 fully paid Ordinary Shares.

In accordance with ASX Listing Rule 7.5 the following information is provided in relation to the ratification of Resolution 6(b):

• i. 16,666,667 fully paid Ordinary Shares were issued;

• ii. Issue price was $0.75 per Share;

• iii. Shares issued were all fully paid Ordinary Shares on the same terms and conditions as the Company’s existing Shares and rank equally with them from the date of issue;

• iv. Shares were issued to Noble; and

• v. No funds were received at the time of issue of the shares; however, the Company did receive the US$9,000,000 in loan drawdowns to facilitate the Blair Athol mine restart and ramp up.

Voting Exclusion Statement

In accordance with the Listing Rules, the Company will disregard any votes cast in favour of Resolution 6(b) by Noble and any of its associates. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or the Chair of 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.

Resolution 6(c) - Ratification of the issue of Shares to Springsure Investments Limited

On 27 March 2019 the Company acquired a further 51% interest in Springsure Mining Pty Limited from Springsure Investments Limited ( Springsure ), thereby increasing its ownership percentage to 86.97%. The purchase price was $6,000,000 and was satisfied by the issue of 9,230,769 fully paid Ordinary Shares of the Company.

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The Company utilised its placement capacity under ASX Listing Rule 7.1 for the issue of fully paid Ordinary Shares to Springsure.

Resolution 6(c) seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of the 9,230,769 fully paid Ordinary Shares.

In accordance with ASX Listing Rule 7.5 the following information is provided in relation to the ratification of Resolution 6(c):

• i. 9,230,769 fully paid Ordinary Shares were issued;

• ii. Issue price was $0.65 per Share;

• iii. Shares issued were all fully paid Ordinary Shares on the same terms and conditions as the Company’s existing Shares and rank equally with them from the date of issue;

• iv. Shares were issued to Springsure Investments Limited; and

• v. No funds were raised at the time as the Shares were issued in return for a further 51% ownership in Springsure Mining Pty Limited.

Voting Exclusion Statement

In accordance with the Listing Rules, the Company will disregard any votes cast in favour of Resolution 6(c) by Springsure Investments Limited and any of its associates. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or the Chair of 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.

The Directors unanimously recommend that Shareholders vote in favour of Resolutions 6(a)-(c).

The Chair intends to vote all available proxies in favour of Resolutions 6(a)-(c).

Resolution 7 – Issue of Convertible Notes to OCP Asia (Singapore) Pte Limited

Background

Under Listing Rule 7.1, subject to certain exceptions, the prior approval of the Shareholders is required in order to issue equity securities which, when aggregated with securities issued by the Company during the previous 12 months, exceed 15% of the number of ordinary securities the Company has on issue at the commencement of that 12 month period.

The Company proposes to issue US$20,000,000 of Convertible Notes to OCP Asia (Singapore) Pte. Limited (including one or more of its managed funds) on or around 31 October 2019. Under the terms of issue of the Convertible Notes, they will be convertible into fully paid Ordinary Shares in the Company. They are, therefore, equity securities for the purpose of Listing Rule 7.1.

The issue of Convertible Notes is subject to ASX Listing Rule 7.1 on the basis that the maximum number of Shares into which the notes could convert, which in the case of these Convertible Notes (and assuming a AUD:USD of 0.65) is 44,208,665 fully paid Ordinary Shares of the Company.

The future issue of shares on conversion of the Convertible Notes will fall within the scope of the exemption in ASX Listing Rule 7.2, exception 4; if the issue of the Convertible Notes is approved.

A summary of the terms of the Convertible Notes is set out below:

Number of securities issued	200 Convertible Notes, at US$10,000 face value per Convertible Note, will be issued.
Proposed issue date	The Convertible Notes will be issued on or around 25 November 2019.
Issue price	The Convertible Notes will be issued at an aggregate issue price of US$20,000,000.
Recipient of issue	The Convertible Notes will be issued to OCP. The notes are transferrable.
Key terms of issue	The key terms of the Convertible Notes are as follows: Maturity date: 3 years from the issue date, which is expected to be on or around 31 October 2019; Interest: 9.95% per annum, payable quarterly in arrears;

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Key terms of issue (continued)

Upfront Fee:3% of the Facility Amount. Conversion Price: AU$0.696 per share, subject to adjustment in accordance with the Note Trust Deed; and Conversion date: the Convertible Notes may be converted into fully paid Ordinary Shares of the Company at any time prior to maturity, at the Conversion Price. Repayments:Subject to conversion at the sole discretion of the Lender, bullet repayment in full on the Maturity Date. Security:This facility will rank pari passu with the US$80M term loan facility. Should the US$80M term loan facility be fully repaid during the term then the Convertible Bond would become a second ranking security on satisfactory terms to the holders of the Convertible Bond. Creep Covenant:If Shareholder Approval is not obtained, then, for so long as any Convertible Notes remain outstanding, the Company must maintain sufficient issuing capacity under ASX Listing Rule 7.1 and 7.1A to allow the Noteholders, at all times, to convert such number of Convertible Notes that will allow the Noteholders to be issued the maximum number of Ordinary Shares able to be issued to them under item 9 of section 611 of the Corporations Act.

Intended use of funds

The funds raised by the issue of Convertible Notes will be used to partially redeem the Listed (Euroclear) Bonds.

Other relevant information

It is noted that OCP is a substantial holder in the Company, and currently holds 18.92% of the voting power in the Company (based on its most recent substantial holder notice). Merely because Resolution 7 is passed OCP will not be able to exercise its conversion rights under the Convertible Notes if the acquisition of Ordinary Shares upon such conversion would result in a breach of takeover laws. Resolution 7 will merely approve the issue of the Convertible Notes.

However, OCP may exercise the conversion rights in a matter that does not contravene the takeover laws (e.g., relying on the "creep" exception). The Company may also seek shareholder approval under the takeover laws in the future for OCP to exercise the Convertible Notes and acquire the resulting shares.

Voting Exclusion Statement

The Company will disregard any votes cast in favour of the resolution (Resolution 7) by or on behalf of a person who participates in the issue (being OCP) or an associate of that person. However, the Company will not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions in the proxy form or if 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.

The Directors (with Matthew Hunter[1] abstaining) unanimously recommend that Shareholders vote in favour of Resolution 7. The Chair intends to vote all available proxies in favour of Resolution 7.

Resolution 8 – Approval of 10% Additional Placement Capacity

Listing Rule 7.1A enables an eligible entity, subject to receiving the requisite Shareholder approval, to issue, or enter into an agreement to issue, equity securities representing up to 10% of its issued capital over a period of up to 12 months after its Annual General Meeting (calculated in accordance with the formula prescribed in Listing Rule 7.1A.2) ( 10% Additional Placement Capacity ). The 10% Additional Placement Capacity is in addition to an eligible entity’s ability to issue, or enter into an agreement to issue, securities representing up to 15% of its issued capital over a 12 month period (calculated in accordance with the formula prescribed in Listing Rule 7.1) without Shareholder approval pursuant to Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that:

• has a market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of A$300 million or less; and

• is not included in the S&P/ASX 300 Index.

As at the date of this Notice (and as at the date of the Meeting unless advised otherwise), the Company is an eligible entity for the purposes of Listing Rule 7.1A.

1 For Mr Hunter is also a consultant engaged by OCP Asia.

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The Company is seeking Shareholder approval by way of a special resolution to have the ability to issue, or enter into an agreement to issue, securities under the 10% Additional Placement Capacity during the 12 month period after the Meeting.

Resolution 8 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present (in person or by proxy, attorney or representative) and eligible to vote at the Meeting must be in favour of Resolution 8 for it to pass.

Listing Rule 7.1A

(a) securities which can be issued under the 10% Additional Placement Capacity

Any securities issued under the 10% Additional Placement Capacity must be in the same class as an existing quoted class of equity securities of the Company.

The Company only has one class of securities quoted on the ASX as at the date of this Notice, being fully paid Ordinary Shares (ASX Code: TER).

(b) Formula for calculating the 10% Additional Placement Capacity

The exact number of securities which can be issued under the 10% Additional Placement Capacity will be determined in accordance with the following formula prescribed in Listing Rule 7.1A.2:

(A x D) – E

Where:

• A is the number of fully paid Ordinary Shares on issue twelve (12) months before the date of issue or agreement to issue:

• plus the number of fully paid Ordinary Shares issued in the twelve (12) months under an exception in Rule 7.2;

• plus the number of partly paid Ordinary Shares that became fully paid in the twelve (12) months;

• plus the number of fully paid Ordinary Shares issued in the twelve (12) months with approval of Shareholders under Rule 7.1 or Rule 7.4;

• less the number of fully paid Ordinary Shares cancelled in the twelve (12) months.

D is 10%

• E is the number of Ordinary Shares issued or agreed to be issued under Rule 7.1A.2 in the twelve (12) months before the date of issue or agreement to issue that are not issued with the approval of Shareholders under Listing Rule 7.1 or 7.4.

The actual number of securities that the Company will have capacity to issue under the 10% Additional Placement Capacity will be calculated at the date of the issue of the securities (or agreement to issue them) in accordance with the formula in Listing Rule 7.1A.2.

Specific information required by Listing Rule 7.3A

Listing Rule 7.3A sets out the information required to be disclosed to Shareholders when seeking approval for the 10% Additional Placement Capacity. The information set out below is intended to satisfy this requirement.

Minimum Issue Price

The minimum price at which the securities may be issued under the 10% Additional Placement Capacity is 75% of the volume weighted average market price of securities in that class, calculated over the 15 trading days on which trades in that class were recorded immediately before:

• (1) the date on which the price at which the securities are to be issued is agreed; or

• (2) if the securities are not issued within 5 trading days of the date in paragraph (1) above, the date on which the securities are issued.

The Company will disclose the issue price to ASX on the date of issue or date of agreement to issue the securities under the 10% Additional Placement Capacity.

Risk of economic and voting dilution

Any issue of securities under the 10% Additional Placement Capacity carries a risk of economic and voting dilution to existing Shareholders who do not receive any securities under the issue.

17

There is a specific risk that:

• the market price for the Company’s securities may be significantly lower on the date of issue of, or date of agreement to issue, the securities under the 10% Additional Placement Capacity than on the date of the approval at this Meeting; and

• the securities may be issued under the 10% Additional Placement Capacity at a price that is at a discount to the market price for the Company’s securities on the issue date

each of which may have an effect on the amount of funds raised by the issue under the 10% Additional Placement Capacity.

The table below shows the potential economic and voting dilution effect on Shareholders in circumstances where the issued Share capital of the Company has doubled and the market price of Shares has halved. The table also shows additional scenarios in which the issued Share capital of the Company has increased (by both 50% and 100%) and the market price of Shares has (1) decreased by 50% and (2) increased by 50%.

Variable “A” in Listing Rule 7.1A.2 (*)		Issue Price: $0.40 (current Share price on 4 October 2019)	Issue Price: $0.20 (50% decrease in current Share price)	Issue Price: $0.60 (50% increase in current Share price)
380,085,413 (Current)	Shares issued 10% voting dilution. Funds raised.	46,715,274 $18,686,109	46,715,274 $9,343,055	46,715,274 $28,029,164
570,128,120 (50% increase in Shares on issue)	Shares issued 10% voting dilution. Funds raised.	70,072,910 $28,029,164	70,072,910 $14,014,582	70,072,910 $42,043,746
760,170,826 (100% increase in Shares on issue)	Shares issued 10% voting dilution. Funds raised.	93,430,547 $37,372,219	93,430,547 $18,686,109	93,430,547 $56,058,328

(*) The number of Ordinary Shares on issue (variable A) could increase as a result of the issue of Ordinary Shares which does not require Shareholder approval or that are issued with Shareholder approval under Listing Rule 7.1.

The table above has been prepared on the following assumptions:

• the issue price is the closing price of the Company’s Shares on 4 October 2019;

• the number of Shares on issue is at 4 October 2019. This could increase as a result of the issue of Ordinary Shares which does not require Shareholder approval or that are issued with Shareholder approval under Listing Rule 7.1;

• the maximum number of Shares is issued by the Company as permitted under Resolution 8;

• the table shows only the effect of issues of Ordinary Shares under Listing Rule 7.1A and does not show the effect of issues of Shares under the 15% placement capacity under ASX Listing Rule 7.1; and

• the table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Additional Placement Capacity.

Date of issue

The Company may only issue securities under the 10% Additional Placement Capacity in the period commencing on the date of this Meeting and ending on the earlier of:

• 12 months after the date of this Meeting; and

• the date of approval by Shareholders of a transaction under Listing Rule 11.1.2 (significant change to the nature or scale of the Company’s activities) or Listing Rule 11.2 (disposal of the Company’s main undertaking).

Purpose of issue

The Company may issue securities under the 10% Additional Placement Capacity for the following purposes:

• as cash consideration in which case the Company intends to use funds raised for the acquisition of new assets and investments (including expenses associated with such an acquisition), continued expenditure on the Company’s current assets and general working capital; or

• as non-cash consideration for the acquisition of new assets and investments (in such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule

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7.1A.3), including expenses associated with such an acquisition, continued expenditure on the Company’s current assets and general working capital.

Allocation policy

The Company’s allocation policy for issues under the 10% Additional Placement Capacity is dependent on the prevailing market conditions at the time of any proposed issue. The identity of the allottees of securities will be determined on a case-by-case basis having regard to a number of factors, including (but not limited to) the following:

• the purpose of the issue;

• the methods of raising funds that are available to the Company, including (but not limited to) rights issues or other issues in which existing Shareholders can participate and other forms of equity and debt financing;

• the effect of the issue of the securities on the control of the Company;

• the circumstances of the Company, including but not limited to, the financial situation and solvency of the Company; and

• advice from corporate, financial and broking advisers (if applicable).

The allottees of securities under the 10% Additional Placement Capacity have not been determined as at the date of this Notice but may include existing substantial Shareholders or new Shareholders (or both), none of whom will be related parties or associates of a related party of the Company.

The Company will comply with the disclosure obligations under Listing Rules 7.1A.4 and 3.10.5A upon issue of any securities under the 10% Additional Placement Capacity.

Previous approval under ASX Listing Rule 7.1A

The Company has previously obtained Shareholder approval under Listing Rule 7.1A.

In the 12 months preceding the date of the Meeting, the Company issued nil Shares under Listing Rule 7.1A.

Voting exclusion statement

In accordance with the Listing Rules, the Company will disregard any votes cast in favour of Resolution 8 by:

• i. a person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if this Resolution is passed; and

• ii. an associate of that person.

However, the Company will not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or the Chair of 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.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 8.

The Chair intends to vote all available proxies in favour of Resolution 8.

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TerraCom Limited ABN 35 143 533 537

LODGE YOUR VOTE

ONLINE  www.linkmarketservices.com.au

BY MAIL  TerraCom Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia

 BY FAX +61 2 9287 0309

 BY HAND Link Market Services Limited 1A Homebush Bay Drive, Rhodes NSW 2138

 ALL ENQUIRIES TO Telephone: +61 1300 554 474

LODGEMENT OF A PROXY FORM BY MOBILE DEVICE Our voting website is designed specifically for voting online. You can now lodge your proxy by scanning the QR code adjacent or enter the voting link www.linkmarketservices.com.au your mobile device. Log in using the Holder Identifier and postcode for your shareholding. To scan the code you will need a QR code reader application which can be downloaded for free on your mobile device. HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM To appoint a second proxy you must: votes. Fractions of votes will be disregarded; and (b) return both forms together. SIGNING INSTRUCTIONS Individual: Joint Holding:

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given above by 10:00am (Brisbane time) on Sunday, 17 November 2019, being not later than 48 hours before the commencement of the Meeting. Any Proxy Form received after that time will not be valid for the scheduled Meeting.

Proxy Forms may be lodged using the reply paid envelope or:

 ONLINE BY MOBILE DEVICE QR Code www.linkmarketservices.com.au Our voting website is designed specifically for voting online. You can now lodge your proxy by scanning the QR code adjacent or Login to the Link website using the holding details as shown enter the voting link www.linkmarketservices.com.au into on the Proxy Form. Select ‘Voting’ and follow the prompts to your mobile device. Log in using the Holder Identifier and lodge your vote. To use the online lodgement facility, shareholders will need their “Holder Identifier” - Securityholder postcode for your shareholding. Reference Number (SRN) or Holder Identification Number (HIN). To scan the code you will need a QR code reader application which can be downloaded for free on your mobile device.

YOUR NAME AND ADDRESS

To appoint a second proxy you must: (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and

This is your name and address as it appears on the Company’s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your shares using this form.

APPOINTMENT OF PROXY

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chairman of the Meeting as your proxy, please write the name of that individual or body corporate in Step 1. A proxy need not be a shareholder of the Company.

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

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, either shareholder may sign.

DEFAULT TO CHAIRMAN OF THE MEETING

Any directed proxies that are not voted on a poll at the Meeting will default to the Chairman of the Meeting, who is required to vote those proxies as directed. Any undirected proxies that default to the Chairman of the Meeting will be voted according to the instructions set out in this Proxy Form, including where the Resolutions are connected directly or indirectly with the remuneration of KMP.

Power of Attorney: to sign under Power of Attorney, you must lodge the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001 ) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

VOTES ON ITEMS OF BUSINESS – PROXY APPOINTMENT

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

CORPORATE REPRESENTATIVES

If a representative of the corporation is to attend the Meeting the appropriate “Certificate of Appointment of Corporate Representative” must be produced prior to admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the Company’s share registry or online at www.linkmarketservices.com.au.

APPOINTMENT OF A SECOND PROXY

You are entitled to appoint up to two persons as proxies to attend the Meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the Company’s share registry or you may copy this form and return them both together.

IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING, PLEASE BRING THIS FORM WITH YOU. THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE.

NAME SURNAME ADDRESS LINE 1 ADDRESS LINE 2 ADDRESS LINE 3 ADDRESS LINE 4 ADDRESS LINE 5 ADDRESS LINE 6

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PROXY FORM

I/We being a member(s) of TerraCom Limited and entitled to attend and vote hereby appoint:

APPOINT A PROXY

the Chairman of the OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or body Meeting (mark box) corporate you are appointing as your proxy or failing the person or body corporate named, or if no person or body corporate is named, the Chairman of the Meeting, as my/our proxy to act on my/our behalf (including to vote in accordance with the following directions or, if no directions have been given and to the extent permitted by the law, as the proxy sees fit) at the Annual General Meeting of the Company to be held at 10:00am (Brisbane time) on Tuesday, 19 November 2019 at Sofitel Brisbane Central, St Germain Room, 249 Turbot Street, Brisbane, Queensland, 4000 Australia (the Meeting ) and at any postponement or adjournment of the Meeting. Important for Resolutions 1, 3, 4, 5a, 5b, 5c, 5d, 5e, 5f and 5g: If the Chairman of the Meeting is your proxy, either by appointment or by default, and you have not indicated your voting intention below, you expressly authorise the Chairman of the Meeting to exercise the proxy in respect of Resolutions 1, 3, 4, 5a, 5b, 5c, 5d, 5e, 5f and 5g, even though the Resolutions are connected directly or indirectly with the remuneration of a member of the Company’s Key Management Personnel ( KMP ). The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. VOTING DIRECTIONS Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the Meeting. Please read the voting instructions overleaf before marking any boxes with an T Resolutions * * For Against Abstain For Against Abstain 5d Approval for the Company to Issue 1 Adoption of remuneration report Options to Mr Paul Anderson 2a Re-Election of Mr. Tsogt Togoo 5e Approval for the Company to Issue Options to Mr Tsogt Togoo 2b Re-Election of Mr. Philip Forrest 5f Approval for the Company to Issue Options to Mr Philip Forrest 2c Re-Election of Mr. James Soorley 5g Approval for the Company to Issue Options to Mr James Soorley 3 Approval of increase to maximum 6a Ratification of the issue of annual aggregate remuneration for 1,500,000 unlisted options Non-Executive Directors 4 Approval of Share issue to Mr Wallace 6b Ratification of the issue and King AO under Non-Executive Chairman allotment of 16,666,667 fully paid Appointment Agreement Ordinary Shares

• 6c Ratification of the issue and allotment of 9,230,769 fully paid Ordinary Shares

• 5a Approval for the Company to Issue Options to Mr Wallace King AO

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• 5b Approval for the Company to Issue Options to Mr Mr Craig Wallace

• 7 Issue of Convertible Notes to OCP Asia (Singapore) Pte Limited

• 5c Approval for the Company to Issue Options to Mr Matthew Hunter

• 8 Approval of 10% Additional Placement Capacity

 * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED

Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual) Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director

This form should be signed by the shareholder. If a joint holding, either shareholder may sign. If signed by the shareholder’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).

TER PRX1901N