TERRACOM LIMITED — Capital/Financing Update 2016

Jan 19, 2016

20th January 2016

ASX Announcement

Prospectus and detachable warrant deed poll

TerraCom Limited (TerraCom or the Company) (ASX: TER) is offering Precision Castparts Corp Master Trust, JP Morgan Securities Plc, OL Master Limited, Orchard Makira Master Limited, Makira SP6 Limited and Makira SP7 Limited (each a Subscriber and collectively the Subscribers) the right to subscribe for detachable warrants (New Warrants). The Subscribers are current holders of existing detachable warrants. The Company will terminate and cancel the existing detachable warrant deed poll along with the existing detachable warrants upon the issue of the New Warrants.

The Offer is not open to any person other than the Subscribers.

The Company has agreed to issue the New Warrants (and cancel the existing warrants) as part of the consideration for the current holders of the Amortising Notes and the Convertible Notes, among other things, extending the due date for payment of certain deferred payments and the maturity date of the Convertible Notes to the Adjusted Maturity Date, as set out (and defined) in the Notice of Meeting in respect of the Extraordinary General Meeting of the Company held on 30 October 2015 and the associated Explanatory Memorandum.

The Company is offering the New Warrants to the Subscribers pursuant to this Prospectus so that the Shares issued on exercise of the New Warrants can be traded without additional disclosure under Chapter 6D.2 of the Corporations Act.

The Prospectus is being issued pursuant to section 713 of the Corporations Act.

ABOUT TERRACOM – www.terracomresources.com

TerraCom has fully commissioned the Baruun Noyon Uul (BNU) coking coal mine in the South Gobi Mongolia. The Company's goal is to become one of the largest and highest quality coking coal producers in Mongolia, providing exceptional value for its steel-producing customers. TerraCom is also focused on developing two priority projects in Queensland, Australia: the large thermal coal Northern Galilee Project and the high energy prime thermal coal Springsure Project. Please contact Nathan Boom, +61 2 4268 6258 for further information.

Craig Wallace Chairman

TERRACOM LIMITED ACN 143 533 537

Prospectus

Offer of detachable warrants

This Prospectus has been signed by a director for and on behalf of TerraCom Limited (ACN 143 533 537) in accordance with section 351 of the Corporations Act.

MICHAEL AVERY Namé: $A O E O O 244$

IMPORTANT NOTICES

Regulatory information

This Prospectus is dated 20 January 2016. A copy of this Prospectus was lodged with the Australian Securities and Investments Commission (ASIC) on 18 January.

ASIC takes no responsibility for the contents of this Prospectus or the merits of the Offer contained in it.

No securities will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Not investment advice

You should read this Prospectus carefully and in its entirety before deciding whether to invest in New Warrants. In particular, you should consider the risk factors that could affect the performance of TerraCom or the value of an investment in TerraCom, some of which are outlined in section 8 of this Prospectus. Note, however, that the information contained in this Prospectus is not financial product advice and does not take into account the investment objectives, financial situation, tax position or particular needs of individual investors.

Before deciding whether to apply for New Warrants, you should consider whether they are a suitable investment for you in light of your own investment objectives and financial circumstances and having regard to the merits or risks involved. If, after reading this Prospectus, you have any questions about the Offer, you should contact your stockbroker, accountant or other professional adviser.

Disclaimer

No person is authorised to give any information, or to make any representation, in connection with the Offer, other than that which is contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied on as having been authorised by TerraCom or its Directors, or any other person in connection with the Offer. None of TerraCom, nor any other person, guarantees the future performance of TerraCom or any return on any investment made pursuant to this Prospectus.

Exposure period

No exposure period applies to the Offer.

Offering jurisdictions

This Prospectus contains an offer for New Warrants in Australia and other jurisdictions, as determined by the Company, in which offers of New Warrants may lawfully be made without the need for any lodged or registered disclosure document or filing with, or approval by, any governmental agency. New Warrants are continuously quoted securities (as defined in the Corporations Act) of TerraCom, and this Prospectus has been prepared in accordance with section 713 of the Corporations Act.

WARNING

The contents of this Prospectus have not been reviewed by any regulatory authority outside of Australia. Subscribers are advised to exercise caution in relation to the Offer. If you are in any doubt about any of the contents of this Prospectus, you should obtain independent professional advice.

No cooling off rights

Cooling off rights do not apply to an investment in New Warrants. You cannot withdraw your acceptance once it has been accepted, except as allowed by law.

Taxation consequences

The taxation consequences of any investment in New Warrants will depend upon your particular circumstances.

You must make your own enquiries concerning the taxation consequences of any investment in TerraCom. You should consult your tax adviser for advice applicable to your individual needs and circumstances.

Privacy

The information about Subscribers included on an Acceptance Form is used for the purposes of processing the Acceptance Form and to administer the Subscriber's holding of New Warrants. By submitting an Acceptance Form, each Subscriber agrees that TerraCom may use the information provided by an Subscriber on the form for the purposes set out in this privacy statement and may disclose it for those purposes to the Share Registry and TerraCom's related bodies corporate, agents and contractors and third party service providers, including mailing houses and professional advisers, and to ASX and other regulatory authorities.

The Corporations Act requires TerraCom to include information about each New Warrant holder (including name, address and details of the New Warrants held) in the Register. The information contained in the Register must remain there even if that person ceases to be a Shareholder. Information contained in the Register is also used to facilitate payments and corporate communications (including TerraCom's financial results, annual reports and other information that TerraCom wishes to communicate to its security holders) and compliance by TerraCom with legal and regulatory requirements.

Under the Privacy Act 1988 (Cth), you may request access to your personal information held by, or on behalf of, TerraCom or the Share Registry. A fee may be charged for access. You can request access to your personal information by telephoning or writing to the Share Registry as follows:

Link Market Services Limited Level 12, 680 George Street, Sydney, NSW 2000

Future performance and forward looking statements

Neither TerraCom nor any other person warrants or guarantees the future performance of the New Warrants, or any return on any investment made pursuant to this Prospectus. Forward looking statements, opinions and estimates provided in this Prospectus are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. They are subject to known and unknown risks, uncertainties and assumptions, many of which are outside the control of TerraCom and the Board, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by any forward looking statements in this Prospectus.

Investors should note that the past share performance of the warrants and Shares provides no guidance as to future price performance.

Governing law

This Prospectus, the Offer and the contracts formed on acceptance of the Acceptance Form are governed by the laws applicable in Queensland. Each applicant for New Warrants submits to the non-exclusive jurisdiction of the courts of Queensland.

1 OFFER OVERVIEW

TerraCom Limited is offering Precision Castparts Corp Master Trust, JP Morgan Securities Plc, OL Master Limited, Orchard Makira Master Limited, Makira SP6 Limited and Makira SP7 Limited (each a Subscriber and collectively the Subscribers) the right to subscribe for detachable warrants (New Warrants). The Subscribers are current holders of existing detachable warrants. The Company will terminate and cancel the existing detachable warrant deed poll along with the existing detachable warrants upon the issue of the New Warrants.

The Offer is not open to any person other than the Subscribers.

The Company has agreed to issue the New Warrants (and cancel the existing warrants) as part of the consideration for the current holders of the Amortising Notes and the Convertible Notes, among other things, extending the due date for payment of certain deferred payments and the maturity date of the Convertible Notes to the Adjusted Maturity Date, as set out (and defined) in the Notice of Meeting in respect of the Extraordinary General Meeting of the Company held on 30 October 2015 and the associated Explanatory Memorandum.

The Company is offering the New Warrants to the Subscribers pursuant to this Prospectus so that the Shares issued on exercise of the New Warrants can be traded without additional disclosure under Chapter 6D.2 of the Corporations Act.

The Prospectus is being issued pursuant to section 713 of the Corporations Act.

2 CORPORATE DIRECTORY

Company	TerraCom Limited ACN 143 533 537
Registered Office	34 Hewitt Avenue, THIRROUL, NSW, AUSTRALIA, 2515
Board of Directors	The Hon Craig Wallace
	Mr Michael Avery
	Mr Tsogt Togoo
	Mr Philip Forrest
	Ms Hwee Fang Loo
Company Secretary	Nathan Boom

3 KEY DATES

Release of Prospectus and Appendix 3B to ASX (Announcement Date)	20 January 2016
Dispatch of Prospectus and Acceptance Form to Subscriber (Opening Date)	20 January 2016
Closing Date	25 January 2016
Allotment Date of New Warrants	27 January 2016

These dates are indicative only. The Company reserves the right to change the above timetable without notice.

Queries and information availability

Subscribers can obtain a copy of this Prospectus during the period of the Offer on the Company's website at www.terracomresources.com or by contacting the Company. A copy of this Prospectus will also be available at www.asx.com.au. Persons who access the electronic version of this Prospectus should ensure that they download and read the entire Prospectus. The electronic version of this Prospectus on the Company's website will not include an Acceptance Form.

4 DETAILS OF THE OFFER

This booklet and enclosed Acceptance Form (Prospectus) have been prepared by TerraCom.

No party other than TerraCom has authorised or caused the issue of this Prospectus, or takes any responsibility for, or makes, any statements, representations or undertakings in this Prospectus.

THIS PROSPECTUS IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

You should read this Prospectus carefully and in its entirety before deciding whether to invest in the New Warrants. In particular, you should consider the risk factors outlined in Section 7 that could affect the operating and financial performance of TerraCom or the value of an investment in TerraCom.

4.1 Description of the Offer

The Subscribers are invited to subscribe for the New Warrants described in this Prospectus. The Offer is to current Noteholders in the following proportions:

• (a) 42,288,677 to Precision Castparts Corp Master Trust;
• (b) 11,482,573 to JP Morgan Securities Plc;
• (c) 57,412,868 to OL Master Limited;
• (d) 2,296,514 to Orchard Makira Master Limited;
• (e) 3,641,616 to Makira SP6 Limited; and
• (f) 9,186,058 to Makira SP7 Limited.

The terms of the New Warrants are summarised in section 9.13 and set out in full at Annexure A.

It is important for each Subscriber to read and understand all the publicly available information on TerraCom and the Offer, prior to accepting the New Warrants. In particular, please refer to this Prospectus, TerraCom's interim and annual reports and other announcements made available at www.TerraComcoal.com.au.

4.2 Acceptance

If a Subscriber wishes to subscribe for the New Warrants, please complete and return the Acceptance Form by following the instructions set out on the Acceptance Form.

4.3 Jurisdictions

This Prospectus contains an offer of New Warrants to the Subscribers in Australia and other jurisdictions, as determined by the Company, in which offers of New Warrants may lawfully be made without the need for any lodged or registered disclosure document or filing with, or approval by, any governmental agency.

5 EFFECT OF THE OFFER ON THE COMPANY

5.1 Capital structure and financing structure

The capital structure of TerraCom, assuming no existing options, warrants, convertible notes or performance rights are exercised, after the issue of the New Warrants will be as follows:

(a) Shares

	Number
Shares on issue as at the date of this Prospectus (assuming no other options, performance rights, warrants or convertible notes are exercised and no further securities issued).	1,095,928,523

(b) Options, warrants, performance rights and convertible notes

	Number
New Warrants	126,308,306

Convertible notes currently on issue with a face value of USD 10,000	1,000
----------------------------------------------------------------------	-------

(c) Financing structure

TerraCom and its subsidiaries have entered into a number of financing arrangements to support its working capital requirements and the ongoing development of its mining projects. A summary of these arrangements is set out below.

Arrangements with OCP Asia

TerraCom has entered into financing arrangements with OCP Asia and others, comprising three separate debt instruments, namely:

• (a) Convertible Notes with a total face value of US\$10 million and a maturity date of 8 July 2015 (which is to extended until 31 January 2016);
• (b) Amortising Notes with a total face value of US\$55 million and a maturity date of 8 January 2017; and
• (c) Warrants (issued in connection with the Amortising Notes) with a maturity date of 5 years from the date of issue of the Warrants,

as amended and approved by TerraCom shareholders at the Extraordinary General Meeting held on 30 October 2015. Further information regarding the Convertible Notes and Warrants as amended is set out in the explanatory notes of the Notice Of Meeting for the Extraordinary General Meeting held on 30 October 2015.

TerraCom's obligations to OCP Asia under the Notes are secured by (among other things) an 'all assets' type security interest granted by TerraCom and certain of its Subsidiaries, including mortgages over TerraCom's Australian mining tenements.

OCP Asia and TerraCom have executed a term sheet to restructure TerraCom's financing arrangements with OCP Asia and Noble (see below) (Restructuring) and continue to further defer all of their outstanding debt facility payments. This deferral is not subject to any additional conditions or requirements from the Company beyond those approved by shareholders at the Extraordinary General Meeting (EGM) held on 30 October 2015 (as to which TerraCom notes its agreement with OCP Asia to issue ordinary shares in TerraCom in lieu of making certain deferred outstanding payments, which was approved at the EGM).

Arrangements with Noble

TerraCom (together with a number of subsidiaries) has entered into a number of financing arrangements with Noble Resources International Pte Ltd (Noble) comprising:

• (a) a US\$10 million working capital facility, with a current interest rate of LIBOR (London Interbank Offered Rate) plus a margin of 10.5% and an original repayment date of 30 June 2014 (which was subsequently extended until 31 December 2015).
• (b) a US\$10 million long-term debt facility, with a current interest rate of LIBOR plus a margin of 10.5%. Principal repayments of nine equal instalments of US\$1,111,111 are payable each quarter until maturity on 30 April 2016.
• (c) an additional US\$14 million long-term debt facility, with a current interest rate of LIBOR plus a margin of 10.5%. Principal repayments of nine equal instalments of US\$1,555,555 are payable each quarter until maturity on 4 March 2016.
• (d) an additional US\$7 million working capital facility, with a current interest rate of LIBOR plus a margin of 10.5%. Principal repayment on 1 June 2015 (which was subsequently extended until 31 December 2015).

The Noble facilities are secured by, among other things, Mongolian law pledges granted by TerraCom Limited's subsidiaries over the coal stockpiles held by Tellus Marketing Pte Ltd Singapore, Tellus Commodities Pte Ltd Singapore, Terra Energy LLC Mongolia, Alag Tvesh LLC Mongolia and Tsagaan Uvuljuu LLC Mongolia.

Noble also holds:

• (a) Mongolian law share pledges over 100% of the shares in Alag Tvesh LLC Mongolia held by Tellus Marketing Pte Ltd Singapore, 100% of the shares in Enkhtunkh Orchlon LLC held by Terra Infrastructure Pte. Ltd and 100% of the shares in Tsagaan Uvuljuu LLC Mongolia held by Terra Energy LLC Mongolia;
• (b) Singapore law charge of proceed accounts, granted by Tellus Commodities Pte Ltd Singapore;
• (c) Singapore law assignments of contract, granted by Tellus Marketing Pte Ltd Singapore and Tellus Commodities Pte Ltd Singapore; and
• (d) New South Wales law guarantee and indemnity granted by Tsagaan Uvuljuu LLC Mongolia.

Separate to these financing arrangements, TerraCom has entered into an arrangement with Noble to exclusively procure Mongolian distributors to supply and sell diesel fuel to TerraCom. Under this arrangement, Noble has agreed to pay an upfront US\$8m exclusivity fee and TerraCom has agreed to pay a fixed monthly sum (being US\$368,055.56) to Noble (Premium Payments), for a period of two years, for all diesel fuel that Noble arranged to be supplied to TerraCom.

Noble is in continuing discussions on a term sheet for the Restructuring and continues to further defer the principal payments, Premium Payments and interest payments across all of its facilities with TerraCom.

Arrangements with SPG and Morning Crest Capital

As the Company announced to the ASX on 19 October 2015, the Company has reached agreement with SPG Investment Holdings Limited (SPG) to, subject to the satisfaction of certain conditions precedent, undertake a placement to SPG of approximately 583.3 million ordinary shares at a price of \$0.012 to raise \$7 million. The Company received shareholder approval for the placement at the EGM on the 12th January.

The Company has been informed that Morning Crest Capital Management Limited (Morning Crest Capital), an associate of SPG Investment Holdings Limited, has entered into an agreement to acquire 50% of the Convertible Notes, and intends to convert those Convertible Notes into equity in the Company. The Company received shareholder approval for the placement at the EGM on the 12th January.

5.2 Use of funds

No funds are payable by Subscriber in connection with the Offer of the New Warrants. The Company has agreed to issue the New Warrants (and cancel the existing warrants) as part of the consideration for the current holders of the Amortising Notes and the Convertible Notes, among other things, for extending the due date for payment of deferred fees and the maturity date of the Convertible Notes.

6 ACCEPTANCE OF OFFER

6.1 Acceptance Form

You should complete the Acceptance Form in accordance with the instructions on the Form and return it to the Company in accordance with the requirements of clause 6.2.

6.2 Delivery

You should deliver your Acceptance Form no later than the close of the Offer, on 5:00pm (AEST) on 25 January 2016 to:

The Company Secretary TerraCom Limited PO Box 548, THIRROUL, NSW, AUSTRALIA, 2515

7 RISK FACTORS

7.1 Factors influencing success and risk

Subscribers should appreciate that the market value of the New Warrants (and underlying Shares) will be influenced by the various risks associated with the Company's business, which can be broadly categorised into general risks and specific business risks. To fully understand the risks associated with an investment in the Company, this Prospectus should be read in its entirety.

The Company operates in the coal industry in both Mongolia and Australia. There are a number of factors, both specific to the Company and to the coal industry in general, which may, either individually or in combination, affect the future operating and financial performance of the Group, its prospects and/or the value of the New Warrants or Shares. Many of the circumstances giving rise to these risks are beyond the control of the Directors and the Company's management.

Careful consideration should be given to the following risk factors, as well as the other information contained in this Prospectus as well as other publicly available information, before an investment decision is made. Some of the risks may be mitigated by the Company using safeguards and appropriate systems and taking certain actions. Some of the risks may be outside the control of the Company and not capable of mitigation. There are also general risks associated with any investment in securities.

7.2 Specific business risks

Some of the specific business risks facing TerraCom are shown below:

(a) TerraCom may not be able to operate and grow its business as planned

The Company expects that the net proceeds from coal production and sales, the proceeds from the proposed placement disclosed to the ASX on 19 October 2015, other financing initiatives, and its current cash and cash equivalents, should be sufficient to meet its anticipated working capital needs in the short to medium term. However, the Company's business and operations may consume resources faster than anticipated. Revenues from the operations of the BNU Mine may not be as high as expected or may be received at a later date than expected and additional financing may not be available on acceptable terms, if at all. If adequate funds are not available on acceptable terms, the Company may be unable to fund its operations and/or any expansion plans.

(b) Dependence on retaining and attracting key personnel

If the Company is unable to attract and retain qualified employees, loses key personnel, fails to integrate replacement personnel successfully, or fails to manage its employee base effectively, it may be unable to support or maintain its current activities, effectively expand its business, or otherwise maintain or increase its revenues.

(c) Mining and operational risks

The Company's financial performance will substantially depend on the operations of the BNU Mine. The production forecasts in respect of the BNU Mine are estimates only, based on assumptions including those in relation to geology, mineral grades, mining conditions and performance and operational issues and are subject to uncertainty. Capital and operating cost estimates for the BNU Mine are also based on assumptions that are subject to differing degrees of uncertainty. An increase in capital or operating costs, technical difficulties encountered in commissioning and operating plant and equipment, mechanical failure, metallurgical problems which affect extraction rates and costs, adverse weather conditions, industrial and environmental accidents, industrial disputes, unexpected shortages or increase in the costs of transportation or other supply chain costs, consumables, spare parts, plant and equipment could have an adverse impact on the Company's overall performance.

Consistent with these risks, the BNU Mine has in recent times encountered variations in yield and resource recovery. The Company continues to work to resolve and address these issues. In addition, as the volumes have increased at the BNU Mine on a month to month basis the operation has encountered variances to plan in the third party washing capacity and capability. The volume increases have also placed stress on the third party road transport capabilities that has led to variances to plan over the past month. Actions are constantly being implemented to deliver on the development of a 'pit to end user' supply chain.

There is a risk of changes in mining or other laws, including the introduction of more stringent regulations or standards, which result in increased costs and therefore could have an adverse impact on the Company's overall performance.

There is no assurance that the Company will be able to identify additional resources at the BNU Mine to allow mining to continue beyond the identified mine life.

(d) Exploration and development Risks

Potential investors should understand that mineral exploration and development are high risk undertakings. While the Company has attempted to reduce this risk by selecting projects that have identified prospective mineral targets, there is still no guarantee of success. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited. The Company's exploration and appraisal activities are dependent upon the grant and maintenance of appropriate licences, permits, resource consents, access arrangement and regulatory authorities (authorisations) which may not be granted or may be withdrawn or made subject to limitations. Although the authorisations may be renewed following expiry or granting (as the case may be), there can be no assurance that such authorisations will be renewed or granted on the same terms. There are also risks that there could be delays in obtaining such authorisations. If the Company does not meet its work and/or expenditure obligations under it authorisations, this may lead to dilution of its interest in, or the loss of such authorisations. The business of commodity development and production involves a degree of risk. Amongst other factors, success is dependent on successful design, construction and operation of efficient gathering, processing and transportation facilities.

Even if the Company discovers or recovers potentially commercial quantities of coal from its exploration activities, there is no guarantee that the Company will be able to successfully develop these resources and transport them to commercially viable markets or sell the resources to customers to achieve a commercial return. There is a risk that circumstances (including unforeseen circumstances) may cause a delay to project development, exploration milestones or other operating factors, resulting in receipt of revenue at a later date than expected. Additionally, the construction of new projects/expansion by the Company may exceed the currently envisaged timeframe or cost for a variety of reasons outside of the control of the Company.

(e) Resources and Reserves

The future success of the Company will depend on its ability to find or acquire coal reserves that are economically recoverable. There can be no assurance that the Company's planned exploration activities will result in significant resources or reserves or that it will have success mining coal. Even if the Company is successful in finding or acquiring coal reserves or resources, reserve and resource estimates are estimates only and no assurance can be given that any particular level of recovery from coal resources or reserves will in fact be realised or that an identified coal resource will ever qualify as commercially viable which can be legally and economically exploited. Market price fluctuations in the price of coal, as well as increased production costs or reduced recovery rates may render coal reserves and resources containing relatively lower grades of mineralisation uneconomic and may ultimately result in a restatement of reserves and or resources. Short-term operating factors relating to the coal reserves and resources, such as the need for orderly development of the ore bodies and the processing of new or different mineral grades may cause a mining operation to be unprofitable in any particular accounting period and may adversely affect the Company's profitability. The mining of coal involves a high degree of risk, including that the coal mined may be of a different quality, tonnage or strip ratio from that estimated.

(f) Financing risks

To meet scheduled finance payments and capital expenditure commitments at the BNU Mine, additional funding will be required. The Company believes that there are reasonable grounds that the additional funding required will be obtained to meet current and future obligations.

The Company continues to progress efforts to restructure its debt and is working on two options – a bond option and a traditional debt facility - in parallel in its efforts to achieve the balance sheet recalibration by early 2016. Both options would provide stability and funding security to the company to enable it to successfully deliver its strategic objectives. The Company has also reached a conditional agreement with SPG Holdings Limited to issue 583.3 million placement shares at an issue price of \$0.012 to raise \$A7 million. There is a risk that if these transactions did not complete that the financial viability of the Company may be challenged. However, the Company continuously monitors and plans proactively in respect of its funding needs. Further, the Company continues to maintain a strong and supportive working relationship with its existing financial backers, Noble Group and OCP but there is no certainty that this relationship will continue.

(g) Native Title Risk

It is possible that a form of native title reflecting the entitlement of indigenous inhabitants to traditional lands may exist on the Company's tenements. In such cases exploration and/or mining restrictions may be imposed or claims for compensation could be forthcoming. The Directors will deal with any such matters by engaging relevant experts and taking expert advice.

(h) Acquisition and title to tenements

There is a risk that the Company may not be able to acquire or may lose title to its tenements if conditions attached to licences are changed or not complied with. The Company has in place policies and procedures to manage this risk and will seek to do everything possible to maintain good title to its assets. Furthermore the Company has previously acquired certain tenements in Australia and Mongolia from third parties and there is a risk that those parties may not have complied with their legal obligations in relation to those tenements prior to the acquisition by the Company which could affect the Company's ability to maintain good title to these tenements.

(i) Country risks

There is a risk that circumstances (including unforeseen circumstances) in Mongolia, China or Australia may affect the Company's ability to carry on business, or may cause a delay to project development, exploration milestones or other operating factors, resulting in receipt of revenue at a later date than expected or not at all. The Company has an exposure to changes in Government and/or changes in laws affecting its business, particularly in Mongolia (e.g. mining licences, road permits and blast permits).

(j) Competition Risk

The industry in which the Company is involved is subject to domestic and global competition. While the Company will undertake all reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or actions of its competitors, which activities or actions may, positively or negatively, affect the operating and financial performance of the Company's projects and business.

(k) Environmental Risk

The Company's projects are subject to laws and regulations regarding environmental matters. Many of the activities and operations of the Company cannot be carried out without prior approval from and compliance with all relevant authorities. The Company intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws. However, the Company could be subject to liability due to risks inherent to its activities, such as groundwater contamination, subsidence, accidental spills, leakages or other unforeseen circumstances.

(l) Commodity Prices

The Company's plans for any revenue are to be derived mainly from the sale of coal and/or coal products. Consequently, the Company's financial position, operating results and future growth will closely depend on the market price of each of these commodities. Market prices of coal products are subject to large fluctuations in response to changes in demand and/or supply and various other factors. These changes can be the result of uncertainty or several industry and macroeconomic factors beyond the control of the Company, including political instability, governmental regulation, forward selling by producers, climate, inflation, interest rates and currency exchange rates. If market prices of the commodities sold by the Company were to fall below production costs for these products and remain at that level for a sustained period of time, the Company would be likely to experience losses, having a material adverse effect on the Company. The Company has exposure to the variability of coal chain costs particularly in China where price is dictated on a capacity availability basis (low demand period equals low price) and not on a cost plus basis.

In respect of this risk, as with a number of participants in the coal market, the Company is currently experiencing sustained price pressure in respect of the sale of coal from its BNU mine.

7.3 General risks

These are risks of an investment in the New Warrants (and underlying Shares), which are considered beyond the control of TerraCom.

(a) Possible volatility of share price

The stock market does from time to time experience significant price and volume fluctuations that may be unrelated to the operating performance of particular companies. The market price of New Warrants or Shares may be volatile. Factors that may have a significant impact on the market price and marketability of New Warrants or Shares include announcements as to government regulation, variation in interest rates, the activities of any competitors, economic and other external factors, possible litigation, as well as fluctuations in the Company's operating results.

(b) Foreign exchange risk

Contracts for the sale of coal are often denominated in US dollars. Further, the Company operates and incurs costs in both Mongolia and Australia. As such, a strengthening or weakening of the Australian dollar relative to the US dollar or the Mongolian Tugrik may impact the Company's financial performance adversely or positively.

(c) Regulation

Corporate regulation and changes in accounting standards due to be implemented in the next few years will increase the compliance costs and change the presentation of companies' accounts. Whilst the Company does not expect the promulgated changes to have any adverse effect on the Company's operations, continued changes to such regulations and standards will at the very least increase the compliance costs for listed companies.

(d) Taxation risks

Australian, Mongolian and Chinese tax laws are constantly changing with the introduction of various taxation reform proposals that may affect the Company and investors. There is a risk that new taxes, fees or levies will be introduced, or the rate of existing taxes, fees or levies will be increased, and which could have an adverse impact on the Company's overall performance. In particular, the Company is exposed to various taxes, fees and levies applied along the coal logistics path from Mongolia into China.

Tax liabilities are the responsibility of each individual investor, and the Company is not responsible either for taxation or penalties incurred by investors. Investors should consult their own taxation advisers to ascertain the tax implications of their investment.

(e) Economic Climate

The future viability of the Company is also dependent on a number of other factors affecting performance of all industries and not just the exploration and mining industries including, but not limited to, the following:

• general economic conditions in Australia, Mongolia and its major trading partners;
• changes in government policies, taxation and other laws;
• war, terrorist attacks or hostilities anywhere in the world can result in a decline in economic conditions worldwide or in a particular region, which could produce an adverse effect on the business, financial position and financial performance of the Company;
• the strength of the equity and share markets in Australia and throughout the world, and in particular investor sentiment towards the commodities (resources) sector;
• movement in, or outlook on, interest rates and inflation rates; and

natural disasters, social upheaval or war in Australia or overseas.

General

If you are in doubt as to whether you should invest in TerraCom, you should consult with your stockbroker, accountant or other financial adviser.

8 ADDITIONAL INFORMATION

No party other than TerraCom has authorised or caused the issue of this Prospectus, or takes any responsibility for, or makes, any statements, representations or undertakings in this Prospectus. Any information or representation that is not in this Prospectus may not be relied on as having been authorised by TerraCom, or its related bodies corporate in connection with the Offer. None of TerraCom, nor any other person, guarantees the future performance of TerraCom or any return on any investment made pursuant to this Prospectus.

THIS PROSPECTUS IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

You should read this Prospectus carefully and in its entirety before deciding whether to take up the New Warrants. In particular, you should consider the risk factors outlined in section 7 that could affect the operating and financial performance of TerraCom or the value of an investment in TerraCom.

8.1 Nature of Prospectus and continuous disclosure obligations

This Prospectus is a short form prospectus issued under section 713 of the Corporations Act in relation to offers of options to acquire continuously quoted securities.

TerraCom is a disclosing entity for the purposes of the Corporations Act. As a disclosing entity, it is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, TerraCom is required, subject to limited exceptions, to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of TerraCom's securities.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to TerraCom which has been notified to ASX and this Prospectus does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to TerraCom before making a decision whether or not to invest.

Having taken such precautions and having made such enquires as are reasonable, TerraCom believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the period from lodgement of TerraCom's annual financial statements for the financial year ended 30 June 2015 to the issue of this Prospectus which required TerraCom to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been included in this Prospectus other than that which is considered necessary to make this Prospectus complete.

TerraCom, as a disclosing entity under the Corporations Act, states that:

• it is subject to regular reporting and disclosure obligations;
• copies of documents lodged with ASIC in relation to TerraCom (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of ASIC;
• it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:
• o the annual financial statements of TerraCom for the financial year ended 30 June 2015, being the last financial statements for a financial year of TerraCom lodged with ASIC before the issue of this Prospectus;
• o any continuous disclosure documents used to notify ASX of information relating to TerraCom in the period from lodgement of the annual financial statements referred to above until the issue of the Prospectus; and
• the following documents were used to notify ASX of information relating to TerraCom during the period after lodgement of the annual financial statements of TerraCom for the period ended 30 June 2015 and before the issue of this Prospectus:

Date	Description of announcement
12/10/2015	BNN Mine Mongolia Production Update October 2015
14/10/2015	Annual Report to shareholders
14/10/2015	Appendix 4G
19/10/2015	Finance Update October 2015
30-10-2015	30 October 2015 EGM Chairman's Script
30-10-2015	Notice of Annual General Meeting/Proxy Form
30-10-2015	Results of EGM 30 October 2015
02-11-2015	September 2015 Quarterly Report and Appendix 5B
16-11-2015	Company Update
18-11-2015	Announcing TerraCom Limited
20/11/15	Addendum to Notice of AGM
30/11/15	Results of AGM
30/11/15	Chairman's Address to Shareholders
10/12/15	Notice of EGM and Independent Expert Report
11/12/15	Company Update December 2015
24/12/15	Company Update
24/12/15	Appendix 3Z for David Stone

Date	Description of announcement
4/1/16	Company Update
12/1/16	EGM Results 12 January 2016
12/1/16	Chairman's Address to Shareholders
18/1/16	Company Secretary

ASX maintains files containing publicly disclosed information about all listed companies. TerraCom's file is available for inspection at ASX during normal business hours or from www.asx.com.au.

Information about TerraCom may also be obtained from its website at www.terracomresources.com.

8.2 Further disclosures

As per the strategic direction of the Company, a number of cash producing operating assets have been identified as potential additions to the Company's portfolio to support the BNU coking coal mine in Mongolia. These include a project currently in production in Indonesia and a project with potential to recommence production in Queensland which has the key regulatory approvals in place. The Company is continuing to undertake due diligence and is negotiating terms in respect of these projects.

8.3 Foreign jurisdictions

This Prospectus has been prepared to comply with the requirements of the securities laws of Australia.

The New Warrants being offered under this Prospectus are also being offered to Subscribers with registered addresses in Australia and other jurisdictions, as determined by the Company, in which offers of New Warrants may lawfully be made without the need for any lodged or registered disclosure document or filing with, or approval by, any governmental agency.

This Prospectus does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer. No action has been taken to register or qualify the Offer or otherwise permit the public offering of the New Warrants, in any jurisdiction other than Australia.

The distribution of this Prospectus (including an electronic copy) outside Australia is restricted by law. If you come into possession of this Prospectus outside Australia you should seek your own advice and you should observe such advice on any applicable restrictions. Any non-compliance with these restrictions may contravene applicable securities laws.

Not an offer in the United States

The Prospectus, the Offer and the New Warrants have not been, or will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States. The Offer may not be taken up by persons in the United States or by persons who are, or are acting for the account or benefit of a U.S. Person, and the New Warrants may not be offered, sold or resold in the United States or to, or for the account or benefit of, a U.S. Person, except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and applicable U.S. state securities laws. Accordingly, the New Warrants may constitute "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and, for so long as the New Warrants remain restricted securities, the New Warrants may not be deposited in any unrestricted American Depositary Receipt facility with respect to the securities of TerraCom.

8.4 Interests of Directors and advisers

Name of Director	Number of Shares	Other interests
The Hon Craig Wallace	NIL	Craig Wallace is a 16.52% shareholder of C1 Commodities Pty Ltd, which holds 100,000,000 ordinary shares of the Company.
Mr Michael Avery	NIL	Michael Avery is a beneficiary of Omaroo Pty Ltd and Crem Pty Ltd who are trustee companies for Omaroo Family Trust and Crema Family Trust respectively. Omaroo Pty Ltd and Crem Pty Ltd hold 7,362,397 and 7,444,620 shares respectively. In addition, both Omaroo Pty Ltd as trustee for the Omaroo Family Trust and Crem Pty Ltd as trustee for Crema Family Trust have 6.31% and 7.60% interests in C1 Commodities Pte Ltd and TheChairmen1 Pty Ltd respectively. Both of whom are shareholders of the Company, holding 100,000,000 and 60,593,156 shares respectively.
Mr Tsogt Togoo	NIL	Mr Tsogt is a nominee of Terra Holdings Ltd which has a 16.13% (2014: 30%) interest in Mongolian subsidiary Guildford Coal (Mongolia) Pty Ltd.
Mr Philip Forrest	500,000	NIL
Ms Hwee Fang Loo	NIL	NIL

The Directors have the following interests in TerraCom Shares, whether directly or indirectly:

Other than as set out in this Prospectus, no director and no person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus:

• holds, or has held at any time during the last two (2) years, any interest in:
• i. the formation or promotion of the Company;
• ii. any property acquired or proposed to be acquired by the Company in connection with the formation or promotion of the Company or the Offer; or iii. the Offer; or
• has been paid or has agreed to be paid any amount, or has been given or has agreed to receive any other benefit for services rendered by them in connection with the formation or promotion of the Company, or the Offer.

8.5 Rights and Liabilities attaching to TerraCom Shares

The rights and liabilities attaching to Shares arise from a combination of the constitution of the Company, statute, the ASX Listing Rules and general law.

A summary of the significant rights and liabilities attaching to Shares is set out below. This summary is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of Shareholders.

(a) Voting at a general meeting

Subject to the constitution and any rights or restrictions attached to a class of Shares, every Shareholder present in person or by proxy, attorney or representative at a meeting of Shareholders has one vote on a show of hands and one vote on a poll for every Share held. A poll may be demanded by the chair of the meeting, at least 5 Shareholders (or their proxy, attorney or representative) entitled to vote on the resolution, or a Shareholder or Shareholders who together hold at least 5% of the votes that may be cast on the resolution on a poll.

(b) Meeting of members

Each Shareholder is entitled to receive notice of and to attend general meetings of TerraCom and to receive all notices, accounts and other documents required to be sent to Shareholders under the constitution, the Corporations Act or the Listing Rules.

(c) Dividends

The Directors may resolve to pay any dividend they think appropriate. Dividends declared will (subject to any special rights or restrictions attaching to a class of Shares created under any arrangement as to dividend) be payable on Shares in accordance with the Corporations Act and the constitution.

(d) Transfer of Shares

A Shareholder may transfer Shares by a proper transfer effected in accordance with any computerised or electronic system established or recognised by ASX or the Corporations Act for the purpose of facilitating transfers in Shares or by an instrument in writing in any usual form or in any other form approved by the Directors that is permitted by law or by another method permitted by the Corporations Act. The Directors may refuse to register a transfer of Shares where the refusal to register the transfer is permitted under the Corporations Act, constitution and the Listing Rules.

(e) Issue of further Shares

The Directors may (subject to the restrictions on the issue of Shares imposed by the constitution, the Listing Rules and the Corporations Act) allot, issue, grant options in respect of, or otherwise dispose of, further Shares as they see fit.

(f) Winding up

Subject to any rights or restrictions attached to a class of Shares, on a winding up of TerraCom, any surplus must be divided among the Shareholders in the proportions which the amount paid on the Shares of a Shareholder is of the total amounts paid and payable on the Shares of all Shareholders.

(g) Unmarketable parcels

Subject to the Corporations Act, the Listing Rules and ASTC Settlement Rules, TerraCom may sell the shares of a shareholder who holds less than a marketable parcel of shares.

(h) Share buy-back

Subject to the provisions of the Corporations Act, the Listing Rules and the ASTC Settlement Rules, TerraCom may buy back shares in itself on any terms and at any time determined by the Directors.

(i) Variation of class rights

Unless otherwise provided by the constitution and by the terms of issue of a class of shares, the rights attaching to any class of shares may be varied by:

• a special resolution passed at a meeting of the holders of that class of shares; or
• the consent in writing of the holders of at least 75% of the votes that may be cast in respect of that class of shares.

(j) Alteration of the constitution

The constitution can only be amended by special resolution passed by at least three-quarters of Shareholders present and voting at a general meeting of TerraCom. TerraCom must give at least 28 days written notice of its intention to propose a resolution as a special resolution.

8.6 Rights and liabilities attaching to New Warrants

The terms of the New Warrants include customary terms for detachable warrants, including the key terms set out below. Defined terms used below which are not defined in section 4 or below have the meanings given to those terms in the Notice of Extraordinary General Meeting dated 28 September 2015.

• (a) Status: unlisted and convertible into Shares.
• (b) New Warrants: The Company will issue 126,308,306 detachable and freely tradeable warrants. Each New Warrant will entitle the holder to 1 Share at the New Warrant Exercise Price.
• (c) Transfer: the New Warrants are fully transferable (either in whole or in part) to another sophisticated or professional investor (as those terms are defined in the Corporations Act).
• (d) New Warrant Maturity Date: 5 years from the earlier of 31 October 2015, the Cross Listing Date and the date of completion of any other capital raising by the Company or any special purpose vehicle incorporated for the purposes of a capital raising.
• (e) Exercise: exercisable at holder's option in exchange for Shares in the Company.
• (f) New Warrant Exercise Price: the lower of the Cross Listing Price and the Market Price.

The Market Price is:

• if the Cross Listing Process has completed, the average of the VWAP of the Shares for each dealing day commencing on the date falling thirty Dealing Days prior to the Deferred Payment Date and ending on the Deferred Payment Date (inclusive); and
• in all other cases, the average VWAP of the Shares for each dealing day commencing on the date falling thirty Dealing Days prior to 31 October 2015 and ending on 31 October 2015 (inclusive).

The Cross Listing Price is the price offered by the Company for each Share to be issued pursuant to the Cross Listing Process, or if no offer, the opening price of Shares on the relevant stock exchange, in each case as converted into Australian dollars using the rate shown on the relevant page on Bloomberg at 12:00pm Sydney time on the date any exercise notice is delivered in accordance with the Warrant Conditions.

• (g) Restrictions: the Company will be subject to the following restrictions:

• if the Company wants to issue new Shares at a price which is discounted by more than more than 10% of the volume weighted average price for Shares for the 1 month period ending on the date that is five business days immediately preceding the proposed date of issuance by extraordinary resolution (as defined in the new detachable warrant deed poll), then the Company must obtain prior consent from the holders of the New Warrants; and

• the Company is only permitted to grant or issue convertible securities (including options) in an aggregate amount up to 10% (by number and value) of the fully diluted capital of the Company as at the date of issuance being the aggregate of: the number of Shares on issue and the number of Shares that would be issued if at the time of that calculation all Convertible Notes, detachable warrants, options, performance rights and similar securities had been converted or exercise (as applicable) and the relevant Shares so issued (together, the Restrictions).

• (h) Restrictions Commencement Date: the Restrictions will apply from the New Warrant Issue Date of the New Warrants.
• (i) Restrictions Termination Date: the Restrictions will cease to apply on the date which falls 18 months after the Restrictions Commencement Date.
• (j) Cash Settlement: if the Company is subject to the Restrictions and takes any action which does not comply with the Restrictions, upon receipt of an exercise notice from the holders of the New Warrants, the Company must:
• determine the number of Shares to which the warrant holders are entitled to on the proposed exercise date based on the initial New Warrant Exercise Price;
• determine the number of additional Shares to which the warrant holders would have been entitled on the proposed exercise date if the initial New Warrant Exercise Price was adjusted to take into account the Adjustment Events from the New Warrant Issue Date to the exercise date (Additional Shares); and
• if the warrant holders would have been entitled to any Additional Shares, the Company must at its sole election either issue such Additional Shares or, if the Company is restricted from issuing such Additional Shares, then the Company must make a cash settlement payment to the warrant holders. The cash settlement payment is determined by multiplying the number of Additional Shares by the New Warrant Exercise Price as adjusted (a Cash Settlement Payment). If the Company elects to make a Cash Settlement Payment, the amount of the Cash Settlement Payment will be set off against the New Warrant Exercise Price payable by the warrant holders at the time that the New Warrants are exercised. For the avoidance of doubt, the Company will in no circumstances be required to make an actual cash payment to a warrant holder to satisfy the Cash Settlement Payment obligation.
• (k) Payment of New Warrant Exercise Price: the warrant holder can elect to pay the New Warrant Exercise Price either:
• by paying the New Warrant Exercise Price multiplied by the number of New Warrants being exercised in cash to the Company; or
• if there are any Amortising Notes outstanding issued in favour of the warrant holder, the warrant holder can elect to 'pay' the New Warrant Exercise Price by surrendering to the Company the amount of outstanding Amortising Notes whose value is equal to the New Warrant Exercise Price multiplied by the number of New Warrants being exercised. The amount of Notes to be surrendered will be calculated on the USD/AUD spot rate of exchange quoted on Bloomberg at 12:00pm Sydney time on the date that the New Warrants are exercised.

9 DEFINITIONS

Acceptance Form	The form included with this Offer for the Subscriber to take up their Warrants.
Amortising Notes	amortising notes issued by the Company on 8 January

	2014.
ASIC	Australian Securities and Investments Commission.
ASX	ASX Limited ABN 98 008 624 691.
Board	The board of directors of the Company.
Company or TerraCom	TerraCom Limited.
Convertible Notes	convertible notes issued by the Company on 8 January 2014.
Corporations Act	The Corporations Act 2001.
Directors	The directors of the Company.
Group	The Company and its subsidiaries.
Issue Date	Date of issue of New Warrants under this Offer.
Listing Rules	The listing rules of ASX as amended or waived by ASX from time to time.
Offer	The offer of New Warrants under this Prospectus.
New Warrants	the detachable warrants issued by the Company having the terms set out in the New Detachable Warrant Deed Poll and Warrant Conditions contained in Annexure A.
Noteholders	current holders of Amortising Notes, Convertible Notes and detachable warrants.
Prospectus	This document including the Acceptance Form.
Shareholders	The holders of Shares.
Share Registry	Link Market Services Ltd Level 12, 680 George Street, Sydney, NSW 2000
Shares	Fully paid ordinary shares in the capital of the Company.
Subscriber	each of:
	(a) Precision Castparts Corp Master Trust
	(b) JP Morgan Securities Plc
	(c) OL Master Limited
	(d) Orchard Makira Master Limited
	(e) Makira SP6 Limited
	(f) Makira SP7 Limited
	(collectively, the Subscribers).
TerraCom or Company	TerraCom Limited.

ACCEPTANCE FORM

TO: TerraCom Limited (ACN 143 533 537)

We, [insert], hereby apply for the New Warrants pursuant to the Offer contained in the Prospectus issued by TerraCom Limited and dated [insert] (Prospectus).

We acknowledge that we will be granted the New Warrants in consideration for subscribing for the New Warrants as described in the Prospectus.

No additional amount is required to be subscribed for the New Warrants.

We agree as follows:

• (a) to be bound by the terms of the New Warrants as set out in the New Warrant Deed Poll and Warrant Conditions contained in Annexure A to the Prospectus; and
• (b) upon exercise of the New Warrants, to be bound by the constitution of the Company.

We represent to the Company that our subscription for the New Warrants will not cause the Company or us to violate the laws of Australia.

Terms defined in the Prospectus and used in this Acceptance Form have the same meaning in this Acceptance Form.

____________________________________________

Please register the New Warrants in the following name:

[insert]

Executed by [insert]*

* insert to complete details of Subscribers

Annexure A

Terms of New Warrants

LIFFORD c

HANCE C

CLIFFORD CHANCE

Execution Version

$\bar{\alpha}$

TERRACOM LIMITED (ABN 35 143 533 537)

THE ISSUER

DETACHABLE WARRANT DEED POLL

.
. . . . . . . . . . . . . . . . . . .

CONTENTS

Clause		Page
	Contents
1.	Definitions and Interpretation
2.	Detachable Warrants
3.	Rights and Obligations of Warrantholders
4.	General
	Schedule 1 Warrant Conditions
	Annexure 1 – Form of Certificate
	Annexure 2 – Exercise Notice
	Annexure 3 – Transfer Instrument
	Annexure 4 – Meetings of Warrantholders
	Annexure 6 – Issuer restrictions

18 January 2015 2016 Date:

By: TERRACOM LIMITED (ABN 35 143 533 537) of Level 7, 370 Flinders Street, Townsville City QLD 4810, Australia ("the Issuer").

In favour of: Each person who is from time to time a "Warrantholder" as defined in this Deed.

Recitals

• $(A)$ The Issuer proposes to grant and issue Detachable Warrants governed by the terms of this Deed in accordance with the Implementation Deed.
• (B) The Detachable Warrants will be issued in registered form.

Operative Provisions

$\overline{1}$ . DEFINITIONS AND INTERPRETATION

$1.1$ Definitions

• $(a)$ Unless the context requires otherwise, expressions used in this Deed have the meanings given to them in the Warrant Conditions.
• $(b)$ In this Deed, "Warrant Conditions" means the terms and conditions applicable to the Detachable Warrants as set out in Schedule 1 to this Deed (including the Annexures to that Schedule).

$1.2$ Headings

Headings (including those in brackets at the beginning of paragraphs) are for convenience only and do not affect the interpretation of this Deed.

1.3 References to certain general terms

Unless the contrary intention appears, this Deed is to be interpreted in accordance with paragraph 1.3 of the Warrant Conditions as though this Deed were the Warrant Conditions.

$\overline{2}$ . DETACHABLE WARRANTS

$2.1$ The Detachable Warrants

The obligations of the Issuer under the Detachable Warrants are constituted by, and specified in, this Deed (including without limitation the Warrant Conditions).

$2.2$ Undertaking to comply

The Issuer undertakes to each Warrantholder, in respect of each Detachable Warrant for which that Warrantholder's name is inscribed in the Detachable Warrant Register. to duly and punctually observe, fulfil, perform and comply with all the covenants, conditions and obligations imposed upon it under this Deed and the Warrant Conditions.

$2.3$ Appointment of Detachable Warrant Registrar

The Issuer may act as Detachable Warrant Registrar or may appoint another person as Detachable Warrant Registrar. The Issuer shall ensure the Detachable Warrant Registrar establishes and maintains a Detachable Warrant Register and do the other things the Detachable Warrant Registrar is required to do under this Deed.

$3₁$ RIGHTS AND OBLIGATIONS OF WARRANTHOLDERS

$3.1$ Deed Poll

This Deed is executed as a deed poll. Each Warrantholder and any person claiming through a Warrantholder has the benefit of, and is entitled to enforce this Deed and the Warrant Conditions in its own name even though such Warrantholder or person is not a party to, or was not in existence at the time of execution and delivery of, this Deed.

$3.2$ Rights of Warrantholders

• $(a)$ Each Warrantholder may enforce its rights under this Deed and the Warrant Conditions in its own name independently from each other Warrantholder
• $(b)$ Each Warrantholder is deemed to have notice of, and be bound by, this Deed and the Warrant Conditions.

3.3 Warrantholders Bound

Each Warrantholder, and any person claiming through or under a Warrantholder, is bound by this Deed and the Warrant Conditions.

$3.4$ Provision of Deed Poll to Warrantholders

• $(a)$ On the date this Deed is executed, the Issuer shall deposit this Deed with the Detachable Warrant Registrar who shall hold it until the date on which all of the obligations under this Deed (including without limitation, the Warrant Conditions) have been discharged in full.
• Each Warrantholder is taken to have irrevocably nominated and $(b)$ authorised the Detachable Warrant Registrar to hold this Deed on behalf of that Warrantholder.
• $(c)$ Within five Business Days of the Detachable Warrant Registrar receiving a written request from a Warrantholder to do so, the Detachable Warrant Registrar must provide to that Warrantholder a certified copy of this Deed.

$3.5$ Terms of Detachable Warrants

The Detachable Warrants are issued upon and subject to this Deed (including without limitation the Warrant Conditions), which is binding on the Issuer, and each Warrantholder and any person claiming through or under them respectively.

3.6 Issuer bound

The Issuer may not assign or otherwise transfer this Deed or its rights or obligations under this Deed.

$\overline{4}$ . GENERAL

$4.1$ Governing law and jurisdiction

• $(a)$ This Deed (including the Warrant Conditions) is governed by the law in force in New South Wales, Australia.
• $(b)$ Each party irrevocably submits to the non-exclusive jurisdiction of the courts in New South Wales, Australia.
• Each party irrevocably waives any objection to the venue of any legal $(c)$ process on the basis that the process has been brought in an inconvenient forum.
• $(d)$ Each party irrevocably waives any immunity in respect of its obligations under this Deed (including the Warrant Conditions) that it may acquire from the jurisdiction of any court or any legal process for any reason including the service of notice, attachment before judgment, attachment in aid of execution or execution.

$4.2$ Prohibition and enforceability

• Any provision of, or the application of any provision of, this Deed $(a)$ (including the Warrant Conditions) which is prohibited in any jurisdiction is, in that jurisdiction, ineffective only to the extent of that prohibition.
• $(b)$ Any provision of, or the application of any provision of, this Deed (including the Warrant Conditions) which is void, illegal or unenforceable in any jurisdiction does not affect the validity, legality or enforceability of that provision in any other jurisdiction or of the remaining provisions in that or any other jurisdiction.

4.3 Indemnities

Any indemnity in this Deed (including the Warrant Conditions) is a continuing obligation, independent of the Issuer's other obligations under this Deed and continues after this Deed ends. It is not necessary for a person to incur expense or make payment before enforcing a right of indemnity under this Deed.

$4.4$ PPSA

To the extent that a security interest (as defined in the PPSA) is created under this Deed (including the Warrant Conditions), the following applies.

$(a)$ No Warrantholder need give any notice under the PPSA (including a notice of a verification statement) under or arising out of anything

relating to that security interest or this Deed unless the notice is required by the PPSA and the giving of it cannot be excluded.

• $(b)$ The Issuer waives its right to receive anything from any Warrantholder under section 275 of the PPSA, and shall not make any request of any Warrantholder under that section.
• $(c)$ Each party contracts out of each provision of the PPSA which section 115 permits, except sections 117, 118, 123, 126, 128, 129, 134(1) and 135. However, each of those sections is contracted out of to the extent that a provision in it would be contrary to or limit an express or implied right on the part of a Warrantholder under this Deed.
• Any disposal or other exercise of any right, power or remedy under $(d)$ this Deed will only be taken to be made under a provision which has not been excluded in clause 4.4(c), if the relevant secured party so elects.

4.5 Attorneys

Any attorney executing this Deed states that the attorney has no notice of the revocation of the power of attorney appointing that attorney.

4.6 Survival of obligations

• $(a)$ Each representation or warranty in this Deed (including the Warrant Conditions) survives the execution and delivery of this Deed and the issue of the Detachable Warrants.
• $(b)$ Each indemnity, reimbursement or similar obligation in this Deed (including the Warrant Conditions):
• $(i)$ is a continuing, separate and independent obligation;
• $(ii)$ is, unless specified otherwise, payable on demand; and
• $(iii)$ survives termination or discharge of this Deed and repayment of financial accommodation.

Where a party is obliged to indemnify another party against a loss, cost, charge, liability, expense, deficiency or other amount, it shall pay on demand from time to time the amount stated by the other party to be the amount indemnified against.

$4.7$ Moratorium legislation

To the full extent permitted by law all legislation which at any time directly or indirectly:

lessens, varies or affects in favour of the Issuer any obligation under $(a)$ this Deed (including the Warrant Conditions); or

$(b)$ delays, prevents or prejudicially affects the exercise by a Warrantholder of any right, power or remedy conferred by this Deed (including the Warrant Conditions),

is excluded from this Deed.

4.8 Interest on overdue amounts

• $(a)$ Interest accrues on each unpaid amount which is due and payable by the Issuer under or in respect of this Deed (including under the Warrant Conditions or interest under this clause):
• $(i)$ on a daily basis up to the date of actual payment from (and including) the due date or, in the case of an amount payable by way of reimbursement or indemnity, the date of disbursement or loss, if earlier;
• $(ii)$ both before and after judgment (as a separate and independent obligation); and
• $(iii)$ at the Default Rate,

except where otherwise provided.

The Issuer shall pay interest accrued under this clause on demand and $(b)$ on the last Business Day of each calendar quarter. That interest is payable in the currency of the unpaid amount on which it accrues.

4.9 Determination, statement and certificate

Except where otherwise provided in this Deed (including the Warrant Conditions). any determination, statement or certificate by a Warrantholder is conclusive.

$4.10$ Officers

The Issuer irrevocably authorises each Warrantholder to rely on a certificate by a person purporting to be its director or secretary as to the identity and signatures of its Officers. The Issuer warrants that those persons have been authorised to give notices and communications under or relating to this Deed (including the Warrant Conditions).

4.11 Stamp duty

The Issuer must pay all stamp, registration and other taxes and duties (including any interest and penalties thereon or in connection with) which are payable upon or in connection with the execution and delivery of this Deed, and must indemnify each Warrantholder against any claim, demand, action, liability, damages, cost, loss or expense (including, without limitation, legal fees and any applicable value added tax) which it incurs as a result or arising out of or in relation to any failure to pay or delay in paying of the same.

$4.12$ Notices

All notices under this Deed (including the Warrant Conditions) must be given in accordance with paragraph 12 of the Warrant Conditions.

EXECUTED and unconditionally delivered as a deed poll.

EXECUTED by TERRACOM LIMITED ℩ in accordance with section $127(1)$ of the $\lambda$ Corporations Act 2001 (Cwith) by authority $\lambda$ of its directors: $\mathcal{E}$

Signature of director

Signature of director/company secretary* *delete whichever is not applicable

$\frac{1}{4}$

Name of director (block letters)

MICHAEL

Name of director/company secretary* (block letters) *delete whichever is not applicable

SCHEDULE 1 WARRANT CONDITIONS

$\mathbf{1}$ . DEFINITIONS AND INTERPRETATION

Definitions $1.1$

In these Warrant Conditions ("Warrant Conditions"), unless the context requires otherwise:

"Allocation" has the meaning given in the Implementation Deed.

"Allotted Shares" has the meaning given in paragraph 4(e)(ii).

"Amortising Notes" has the meaning given in the Note Deed.

"ASX" means the ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange operated by it, as applicable.

"Business Day" means a day other than a Saturday or Sunday on which banks generally are open for inter bank business in Sydney, New South Wales and Hong Kong or a public holiday in New South Wales and Hong Kong.

"Certificate" means a certificate in respect of the Detachable Warrants, in substantially the form set out in Annexure 1.

"Control Account" means the AUD\$ account held with Macquarie Bank Limited:

Account name:	TerraCom Ltd
Account number:	3031 86894
SWIFT:	MACOAU2S
State:	New South Wales
Country:	Australia
Postcode:	2000

"Convertible Notes" has the meaning given in the Note Deed.

"Corporations Act" means the Corporations Act 2001 (Cth).

"Cross Listing Date" means the date of completion of the Cross Listing Process.

"Cross Listing Price" means the price offered by the Issuer for each Ordinary Share to be issued on the SGX pursuant to the Cross Listing Process or, if no offer, the opening price of Ordinary Shares on the SGX on the Cross Listing Date, in each case as converted into Australian dollars using the rate shown on the relevant page on Bloomberg at 12 midday (Sydney time) on the date any Exercise Notice is delivered in accordance with the Warrant Conditions.

"Cross Listing Process" means the admission of the Issuer on the SGX and the quotation of ordinary shares in the Issuer on the SGX.

"Deed Poll" means the document entitled Detachable Warrant Deed Poll made by the Issuer in favour of the Warrantholders of which these Warrant Conditions form Schedule 1.

"Default Rate" means the rate of 14% per annum.

"Deferred Payment Date" means the date that all of the Deferred Payments (as defined in the request and confirmation letter dated 8 September 2015 from the Issuer to Madison Pacific Trust Limited (as note trustee) and copied to Elavon Financial Services Limited, UK Branch (as paying agent)) are made or satisfied in full.

"Detachable Warrant" means a detachable warrant created and issued by the Issuer, the terms and conditions of which are set out in these Warrant Conditions and the Deed Poll.

"Detachable Warrant Register" means a register of the Detachable Warrants maintained by the Detachable Warrant Registrar on behalf of the Issuer in which is entered the particulars required by this Deed.

"Detachable Warrant Registrar" means the person who maintains the Detachable Warrant Register from time to time.

"Exercise Date" means the date on which a Detachable Warrant is exercised and the Exercise Price has been paid in respect of it, in accordance with paragraph 4.

"Exercise Notice" means a notice substantially in the form set out in Annexure 2.

"Exercise Period" means, in respect of a Detachable Warrant, the period commencing on the Issue Date and ending on the Maturity Date for that Detachable Warrant.

"Exercise Price" means, in respect of each Detachable Warrant:

• $(a)$ if the Cross Listing Process has completed, the lower of (i) the Cross Listing Price and (ii) the Market Price; and
• $(b)$ in all other cases, A\$0.0262.

"Implementation Deed" means the deed entitled "Amendment and Implementation Deed" entered into by the Issuer and others dated on or around the date of this Deed.

"Initial Warrantholders" means the initial holders of the Detachable Warrants listed in Schedule 2 to the Implementation Deed.

"Issue Date" means, in respect of a Detachable Warrant, the date on which the Detachable Warrant is issued.

"Listing Rules" means the official listing rules of the ASX as amended from time to time.

"Market Price" means the average of the VWAP of the Ordinary Shares for each Trading Day commencing on date falling thirty (30) Trading Days prior to the Deferred Payment Date and ending on the Deferred Payment Date (inclusive).

"Maturity Date" means, in respect of each Detachable Warrant, the date falling on the fifth anniversary of the Issue Date.

"Meeting Provisions" means the provision for the convening of meetings of, and the passing of resolutions by, Warrantholders set out in Annexure 4.

"Note Deed" means the "Note Trust Deed" dated 20 December 2013 between the Issuer and Madison Pacific Trust Limited (company number 1619851 of 1720 17th Floor, Tower One, Admiralty Centre, 18 Harcourt Road, Hong Kong) as amended on 26 June 2015, supplemented by the waiver and amendment request and confirmation letter from the Issuer dated 8 September 2015 and as amended and restated pursuant to the Implementation Deed.

"Officer" means in relation to a company, a director or a secretary, or a person notified to be an authorised officer, of the company.

"Ordinary Share" means a fully paid ordinary share in the Issuer.

"PPSA" means the Personal Property Securities Act 2009 (Cth).

"Prospectus" has the meaning given in the Implementation Deed.

"Secured Account" has the meaning given in the Note Deed.

"SGX" means the securities exchange operated by the Singapore Exchange Limited with company registration number 199904940D, including without limitation, the Catalist exchange.

"Shareholder" means a person registered as the holder of an Ordinary Share in the Issuer's register of shareholders.

"Subsidiary" has the meaning given to that term in the Corporations Act.

"Tax" has the meaning given in the Note Deed.

"Trading Day" has the meeting given to the term "Dealing Day" in the Note Deed.

"Transfer Instrument" means an instrument of transfer substantially in the form set out in Annexure 3.

"Volume Weighted Average Price" has the meaning given in the Note Deed and "VWAP" has the same meaning.

"Warrantholder" means a person in whose name a Detachable Warrant is registered in the Detachable Warrant Register and includes, following registration on the Detachable Warrant Register, the Initial Warrantholders and any of their transferees, successors or assigns.

$12$ Headings

Headings (including those in brackets at the beginning of paragraphs) are for convenience only and do not affect the interpretation of these Warrant Conditions.

$1.3$ References to certain general terms

In these Warrant Conditions, unless the context requires otherwise, a reference to:

• $(a)$ an agreement, representation or warranty in favour of two or more persons is for the benefit of them jointly and each of them individually;
• $(b)$ anything (including an amount) is a reference to the whole and each part of it;
• $(c)$ a document (including these Warrant Conditions) includes any variation or replacement of it:
• $(d)$ a paragraph is to a paragraph of the relevant schedule or annexure;
• $(e)$ law means common law, principles of equity, and laws made by parliament (and laws made by parliament include State, Territory and Commonwealth laws and regulations and other instruments under them, and consolidations, amendments, re-enactments or replacements of any of them);
• $(f)$ an accounting term is a reference to that term as it is used in accounting standards under the Corporations Act, or, if not inconsistent with those standards, in accounting principles and practices generally accepted in Australia:
• Australian dollars, dollars, \$, AUD\$ or A\$ is a reference to the lawful $(g)$ currency of Australia:
• $(h)$ US dollars, US\$, or USD\$ is a reference to the lawful currency of the United States:
• $(i)$ a time of day is a reference to Sydney time;
• the word "person" includes an individual, a firm, a body corporate, an $(i)$ unincorporated association and an authority;
• $(k)$ a particular person includes a reference to the person's executors, administrators, successors, substitutes (including persons taking by novation) and permitted assigns:
• the words "including", "for example" or "such as" when introducing an $(1)$ example, do not limit the meaning of the words to which the example relates to that example or examples of a similar kind; and

$(m)$ the singular includes the plural and vice versa.

$\overline{2}$ . FORM, DENOMINATION AND TITLE

$2.1$ Creation of Detachable Warrants

The Detachable Warrants are obligations of the Issuer owing under the Deed Poll and these Warrant Conditions and are issued in registered form.

$2.2$ Constitution and title

• $(a)$ The obligations of the Issuer under the Detachable Warrants are subject to the Deed Poll and these Warrant Conditions.
• $(b)$ Each Detachable Warrant is subject to these Warrant Conditions and may be enforced by the Warrantholder. The Warrantholder is entitled to do so without having to join any other Warrantholder or any predecessor in title of a Warrantholder.
• $(c)$ Subject to these Warrant Conditions, a Detachable Warrant may be transferred separately from any other Detachable Warrant.
• $(d)$ Entitlement to a Detachable Warrant is conclusively determined by entries in the Detachable Warrant Register, subject to rectification for fraud or manifest error.
• $(e)$ The making of, or giving effect to, a manifest error in an entry in the Detachable Warrant Register will not void the creation or transfer of a Detachable Warrant. The Detachable Warrant Registrar will rectify any manifest error of which it becomes aware.
• $(f)$ A Detachable Warrant registered in the name of more than one person is held by those persons as joint tenants.
• A Detachable Warrant will be registered by name only without reference to $(g)$ any trusteeship, beneficial owner or any other interest therein.
• $(h)$ The person whose name appears in the Detachable Warrant Register as the Warrantholder of a Detachable Warrant will be treated by the Issuer and the Detachable Warrant Registrar as the absolute owner of the Detachable Warrant and none of them is obliged, except as ordered by a court of competent jurisdiction or required by statute, to take notice of any other claim to a Detachable Warrant.
• $(i)$ Upon a person becoming registered as the Warrantholder of a Detachable Warrant, all rights and entitlements arising under the Deed Poll (including these Warrant Conditions) in respect of that Detachable Warrant vest absolutely in the Warrantholder, so that no person who has previously been registered as the Warrantholder of the Detachable Warrant has or is entitled to assert against the Issuer, the Detachable Warrant Registrar or the Warrantholder of the Detachable Warrant from time to time any rights, benefits or entitlements in respect of the Detachable Warrant.

$(i)$ Each Warrantholder shall be recognised by the Issuer as entitled to its Detachable Warrants free of any equity, set-off or cross claim on the part of the Issuer against the original or any intermediate holder of such Warrants.

$2.3$ Detachable Warrant Register

The following information (to the extent it is relevant) must be included in the Detachable Warrant Register in respect of each Detachable Warrant:

• $(a)$ its Issue Date;
• $(b)$ the name and address of the Warrantholder who holds that Detachable Warrant from time to time:
• the date on which the Warrantholder is entered into the Detachable Warrant $(c)$ Register as the holder of that Detachable Warrant;
• $(d)$ its Exercise Price (as adjusted from time to time in accordance with these Warrant Conditions); and
• $(e)$ if applicable, the Exercise Date.

Any change in the name or address of any Warrantholder must be notified by the Warrantholder to the Detachable Warrant Registrar within two Business Days following such change by notice in accordance with paragraph 12, following which the Detachable Warrant Registrar must update the Detachable Warrant Register accordingly. On the date the Detachable Warrants are issued the Detachable Warrant Registrar will give to each Initial Warrantholder (or its nominee) a certified copy of the Detachable Warrant Register showing the Initial Warrantholder (or its nominee) as the registered holder of their respective Allocation of Detachable Warrants.

$2.4$ Inspection of Detachable Warrant Register

The Detachable Warrant Registrar will permit each Warrantholder to inspect the Detachable Warrant Register:

• $(a)$ on one Business Day's prior notice; and
• during normal business hours in the place where the Detachable Warrant $(b)$ Register is kept,

and to take copies of or extracts from it which are relevant to that Warrantholder.

$2.5$ Certificates

• Subject to applicable law, each Warrantholder will be entitled to one $(a)$ Certificate in respect of all Detachable Warrants held by it. The Issuer may, in its discretion, agree to issue more than one Certificate in respect of multiple Detachable Warrants held by a Warrantholder.

• $(b)$ Upon a Detachable Warrant being issued, the Detachable Warrant Registrar will issue a Certificate in respect of that Detachable Warrant.

• $(c)$ Upon a Detachable Warrant being transferred or exercised the Detachable Warrant Registrar will:

• $(i)$ cancel the Certificate for that Detachable Warrant: and
• $(ii)$ issue replacement Certificates in respect of any remaining Detachable Warrants included in the Certificate that have not been so retained. transferred or exercised.
• $(d)$ If a Certificate becomes worn out or defaced, the Detachable Warrant Registrar will, on delivery of that Certificate to the Detachable Warrant Registrar, cancel the Certificate and issue a new Certificate in its place.
• If a Certificate is lost, mutilated or destroyed, the Issuer will procure that the $(e)$ Detachable Warrant Registrar issue a duplicate Certificate in its place, provided that the Warrantholder provides a statutory declaration from the Warrantholder or a director, secretary or a duly authorised officer of the Warrantholder that the Certificate has been lost or destroved and has not been pledged, mortgaged, charged, sold or otherwise disposed of and, if lost, that proper searches for the same have been made.
• $(f)$ A Certificate provides details of the information contained in the Detachable Warrant Register in respect of the Detachable Warrants for which the Warrantholder named in that Certificate is recorded in the Detachable Warrant Register as the holder and is not evidence of title.

GENERAL $3.$

• $(a)$ Subject to any adjustment in accordance with these Warrant Conditions, each Detachable Warrant initially confers on a Warrantholder the right to subscribe for one Ordinary Share (or such other number of Ordinary Shares calculated in accordance with paragraph 5.10 where applicable) upon payment to the Issuer of the Exercise Price by or on behalf of a Warrantholder.
• $(b)$ Subject to these Warrant Conditions, Warrantholders will not be entitled to participate in new issues of capital that may be offered to Shareholders during the currency of the Detachable Warrants (except upon exercise of the Detachable Warrants).
• The Detachable Warrants will not be quoted on ASX, or after the Cross $(c)$ Listing Date, on SGX.
• $(d)$ An Ordinary Share allotted pursuant to an exercise of a Detachable Warrant shall rank, from the date of allotment, equally with the existing Ordinary Shares of the Issuer in all respects.
• $(e)$ The Issuer shall make an application to have those Ordinary Shares allotted pursuant to an exercise of Detachable Warrants listed for official quotation by ASX, or after the Cross Listing Date, on SGX.
• $(f)$ Notwithstanding any other provision of the Deed Poll including these Warrant Conditions, the rights of any Warrantholder will be changed to the extent

necessary to comply with the ASX Listing Rules or, after the Cross Listing Date, the rules of the SGX, including, without limitation, as they apply to a reorganisation of capital undertaken by the Issuer at the time of the reorganisation.

$\overline{4}$ EXERCISE OF DETACHABLE WARRANTS

• $(a)$ Each Detachable Warrant may be exercised at any time after its Issue Date until it expires in accordance with paragraph 4(b) below.
• Each Detachable Warrant will automatically lapse at 5pm on the Maturity $(b)$ Date unless an Exercise Notice has been delivered in relation to it.
• The Detachable Warrants are exercisable by the delivery to the registered $(c)$ office of the Issuer of an Exercise Notice in respect of all or a specified number of Detachable Warrants held by them accompanied by the relevant Certificate or Certificates and payment to the Issuer of the Exercise Price. For the purposes of the foregoing, a Warrantholder may deliver an Exercise Notice and accompanying Certificate in the form of an attached PDF to an email and such email will be deemed to have been duly delivered on return of a receipt produced by the system to which the email was sent or, where no receipt is produced or the Warrantholder has not otherwise received notification that the email was unable to be delivered, by the end of the day the email was sent if a Business Day and otherwise the next Business Day. An exercise of only some Detachable Warrants does not affect the rights of the Warrantholder to the balance of the Detachable Warrants held by them.
• $(d)$ The Warrantholder may elect to pay the Exercise Price in respect of all Detachable Warrants exercised (for the avoidance of doubt, less any Cash Settlement Payments set-off under paragraph 5.3(c)):
• $(i)$ by way of direct transfer of immediately available funds to the Control Account:
• by way of delivery to the Issuer of a bank cheque issued by an $(ii)$ Australian bank; and/or
• $(iii)$ if it holds any Amortising Notes, in accordance with paragraph 5.6 (Surrender on exercise of Detachable Warrants) of the Amortising Note Conditions and the Agency Agreement.
• $(e)$ Immediately after receipt by the Issuer of a valid Exercise Notice under paragraph 4(c) and payment of the Exercise Price (and in any event no later than one business day thereafter), the Issuer must:
• $(i)$ provide a copy of the Exercise Notice to the Detachable Warrant Registrar;
• $(ii)$ allot and issue to the Warrantholder the number of Ordinary Shares equal to the number of Detachable Warrants which have been exercised (or such other number of Ordinary Shares calculated in

accordance with paragraph 5.1 where applicable) (the "Allotted Shares");

• $(iii)$ enter the Warrantholder into the Issuer's register of members as the holder of the relevant number of Allotted Shares;
• $(iv)$ deliver to the Warrantholder a holding statement showing the Warrantholder as the holder of the relevant number of Allotted Shares;
• $(v)$ (at its own expense) apply for and use its best endeavours to obtain official quotation of the relevant number of Allotted Shares by ASX or. after the Cross Listing Date, by SGX (without restriction) as soon as practicable on such terms and conditions as are usual for quotation of securities on ASX or SGX (as the case may be);
• $(vi)$ ensure that the Allotted Shares are not subject to any restrictions. limitations or additional requirements on their transferability and tradability in excess of those restrictions, limitations or additional requirements that generally apply to other Ordinary Shares; and
• $(vii)$ notwithstanding the issue of the Prospectus, to the extent that any action is required by law to be taken in order to facilitate the on-sale of Allotted Shares by the Warrantholder, take such action (including, where required, giving to ASX (within 5 business days of issue of the Allotted Shares) a notice under section $708A(5)(e)$ of the Corporations Act in respect of the Allotted Shares that complies with section 708A(6) of the Corporations Act, or issuing a further disclosure document in respect of the Allotted Shares).
• $(f)$ Allotted Shares issued on exercise of Detachable Warrants will:
• $(i)$ be fully paid and free from all encumbrances: and
• rank equally in all respects with those Ordinary Shares already issued $(ii)$ at the Exercise Date;
• be entitled to all of the rights and entitlements applicable to the $(iii)$ Ordinary Shares already issued at the exercise date.
• $(g)$ The Issuer will pay all costs and expenses, including all stamp, issue. registration, securities transaction or other similar taxes or duties (if any) arising on the exercise of the Detachable Warrants, the issue or listing of Allotted Shares, the maintenance and amendment of the registry and any dealings with Certificates by payment directly to the relevant authorities (where relevant).

5. ADJUSTMENTS

$5.1$ Adjustments

The Exercise Price is to be adjusted as follows:

• $(a)$ in the event of any re-organisation (including reconstruction, consolidation, subdivision, reduction or return of capital) of the issued capital of the Issuer during the Exercise Period, the Detachable Warrants will be re-organised as required by the ASX Listing Rules (including Listing Rule 7.22);
• $(b)$ if there is a bonus issue to Shareholders during the Exercise Period (including in the manner contemplated by ASX Listing Rule 6.22.3), the number of Ordinary Shares over which a Detachable Warrant is exercisable will be increased by the number of Ordinary Shares which the Warrantholder would have received if the Detachable Warrants had been exercised before the record date for the bonus issue; and
• $(c)$ in the event the Issuer proceeds with a pro rata issue (except a bonus issue) of securities to Shareholders during the Exercise Period, the exercise price will be reduced in accordance with the formula set out in ASX Listing Rule 6.22.2.

$5.2$ Restrictions

From the date of the Deed Poll until the date that is 18 months after the date of this Deed Poll, the Issuer must comply with Annexure 6 (the "Restrictions"), after which Annexure 6 will cease to apply without further action by the Issuer.

$5.3$ Mandatory cash settlement

If the Issuer is subject to the Restrictions and takes any action which does not comply with the Restrictions, then (notwithstanding any other provision of the "Transaction Documents" (as defined in the Note Deed)) the only consequence to the Company of this action will be that upon receipt of an Exercise Notice from a Warrantholder (whether or not the Restrictions are still in force at the time the Exercise Notice is received), the Issuer must:

• $(a)$ determine the number of Ordinary Shares to which the Warrantholder would be entitled on the proposed Exercise Date based on the Exercise Price (before any adjustment including under paragraph 5.1), for the exercise of the Detachable Warrants specified in the Exercise Notice:
• $(b)$ determine the number of additional Ordinary Shares to which the Warrantholder would have been entitled on the proposed Exercise Date if the Exercise Price was adjusted to take into account the adjustment events under paragraph 5.1 from the Issue Date to the earlier of the proposed Exercise Date and the date on which the Restrictions ceased to apply ("Additional Shares"), for the exercise of the Detachable Warrants specified in the Exercise Notice; and
• if the Warrantholder would have been entitled to any Additional Shares, the $(c)$ Issuer must at its sole election either issue such Additional Shares or, if the Issuer is restricted from issuing such Additional Shares, then the Issuer must make a cash settlement payment to the Warrantholder. The cash settlement payment is determined by multiplying the number of Additional Shares by the Exercise Price as adjusted (a "Cash Settlement Payment"). If the Issuer elects to make a Cash Settlement Payment, the amount of the Cash Settlement

Payment will be set off against the Exercise Price payable by the Warrantholder at the time that the Detachable Warrants are exercised. For the avoidance of doubt, the Issuer will in no circumstances be required to make an actual cash payment to a Warrantholder to satisfy the Cash Settlement Payment obligation.

6. VOTING AND INFORMATION RIGHTS

$6.1$ Information

The Issuer will provide Warrantholders with all information and notices sent by the Issuer to its Shareholders at the same time as those notices and information are provided to Shareholders.

6.2 Voting

Warrantholders may attend general meetings of the Issuer but the Detachable Warrants do not carry a right to vote at a general meeting of the Issuer, unless provided for by the Corporations Act.

$7.$ TRANSFER OF DETACHABLE WARRANTS

$7.1$ Transfers

• $(a)$ Each Detachable Warrant may be transferred separately.
• $(b)$ To effect a transfer of a Detachable Warrant, a Transfer Instrument must be delivered to the Detachable Warrant Registrar detailing:
• $(i)$ the Issue Date of the Detachable Warrant the subject of the transfer:
• $(ii)$ the name and address of the transferor and the transferee:
• $(iii)$ the effective date of the transfer,

along with the Certificate or Certificates in respect of the Detachable Warrants being transferred (or the statutory declaration referred to in paragraph 2.5(e)).

For the purposes of the foregoing, a Transfer Instrument may be delivered to the Detachable Warrant Registrar in the form of an attached PDF to an email and such email will be deemed to have been duly delivered on return of a receipt produced by the system to which the email was sent or, where no receipt is produced or the sender has not otherwise received notification that the email was unable to be delivered, by the end of the day the email was sent if a Business Day and otherwise the next Business Day.

• $(c)$ Transfers will be registered without charge to the transferor or transferee.
• $(d)$ A person becoming entitled to a Detachable Warrant as a consequence of the death or bankruptcy of a Warrantholder or of a vesting order or a person administering the estate of a Warrantholder may, upon producing such evidence as to that entitlement or status as the Detachable Warrant Registrar

considers sufficient, transfer the Detachable Warrant or, if so entitled, become registered as the holder of the Detachable Warrant.

• $(e)$ The Warrantholder is responsible for any stamp duty or other Taxes payable in any jurisdiction in connection with any transfer, assignment or any other dealing with the Detachable Warrants without charge or cost by the Issuer or Detachable Warrant Registrar for the transfer.
• $(f)$ Subject to the foregoing provisions of this paragraph 7.1, the Issuer may not decline to recognise any Transfer Instrument and must register the transfer of the Detachable Warrant(s) in accordance with these Warrant Conditions. Any transfer of a Detachable Warrant which complies with this paragraph 7.1 shall be recorded in the Detachable Warrant Register promptly following receipt by the Issuer of the relevant Transfer Instrument.

$7.2$ Registration of Transfer

A transferor of a Detachable Warrant remains the owner of the Detachable Warrant transferred until the transfer is registered and the name of the transferee entered in the Detachable Warrant Register in respect of the Detachable Warrant transferred.

$\mathsf{R}^-$ JOINT HOLDERS

$8.1$ Certificates

• Joint Warrantholders will be entitled to one Certificate only in respect of $(a)$ Detachable Warrants held by them jointly and the Certificate will be delivered to the first joint Warrantholder named on the Detachable Warrant Register.
• $(b)$ Delivery of a Certificate for any Detachable Warrant to the first joint Warrantholder named in the Detachable Warrant Register in relation to that Detachable Warrant is deemed to be delivery to all the joint Warrantholders.

8.2 Payment to one Warrantholder effective discharge

If several persons are entered in the Detachable Warrant Register as joint Warrantholders in respect of a Detachable Warrant, the payment to any one of such persons of moneys from time to time payable to the joint Warrantholders will be an effective discharge by the Issuer for the moneys so paid.

8.3 Actions of joint Warrantholder

All of the joint Warrantholders in respect of any Detachable Warrants must join in any:

• $(a)$ transfer of the relevant Detachable Warrant:
• $(b)$ application for the replacement of a Certificate which has been lost or destroyed; or
• $(c)$ delivery of an Exercise Notice in respect of the Detachable Warrant.

$9₁$ MEETINGS OF WARRANTHOLDERS

Meetings of Warrantholders may be convened in accordance with the Meeting Provisions. Any such meeting may consider any matters affecting the interests of Warrantholders, including, without limitation, the variation of the terms of the Detachable Warrant by the Issuer and the granting of approvals, consents and waivers.

10. COVENANTS

The Issuer undertakes that, for so long as any Detachable Warrant remains unexercised and has not expired, except with the approval by way of an Extraordinary Resolution of the Warrantholders:

• $(a)$ it will use its reasonable endeavours to maintain the listing of its Ordinary Shares on ASX, or after the Cross Listing Date, on SGX;
• $(b)$ it will use its reasonable endeavours to comply with applicable rules of ASX or, after the Cross Listing Date, SGX (or any other relevant authority or authorities) and otherwise to comply with any undertakings given by it from time to time to such stock exchange (or any other relevant authority or authorities) in connection with the listing of any Ordinary Shares on such stock exchange and, without prejudice to the generality of the foregoing, will use its reasonable endeavours to furnish or procure to be furnished to ASX, SGX or such stock exchange (or any other relevant authority or authorities) all the information which ASX, SGX or such stock exchange (or any other relevant authority or authorities) may require in connection with the listing or trading of any Ordinary Shares on such stock exchange;
• $(c)$ it will ensure that all Ordinary Shares to be issued upon the exercise of Detachable Warrants will be duly and validly issued as fully-paid and listed for quotation on ASX or, after the Cross Listing Date, SGX;
• $(d)$ unless required by law or regulation (including under the Listing Rules) it will not close its register of Shareholders or take any other action which prevents the transfer of its Ordinary Shares generally except for the purpose of determining relevant Shareholders entitled to exercise Shareholders' rights such as voting rights or rights as to annual or interim dividends unless, under Australian law as then in effect:
• $(e)$ it will not make any reduction of its issued share capital except where the reduction is permitted by applicable law;
• $(f)$ it will not create nor issue any class of share capital other than Ordinary Shares without giving to the Warrantholders notice at least 28 days prior to the relevant record date for the determination of Shareholders entitled to vote at the general meeting of Shareholders at which an amendment to the Issuer's constitution to enable the Issuer to create such class of share capital is to be voted upon:
• $(g)$ if any bona fide, binding offer is made to all Shareholders (or such holders other than the offeror and/or any Issuer controlled by the offeror and/or

persons associated or acting in concert with the offeror) to acquire all or a portion of the Ordinary Shares and such offer comes to the knowledge of the Issuer, subject to the Issuer's compliance with its obligations at law (including obligations under any applicable listing rules), it will give notice of such offer to the Warrantholders promptly after obtaining such knowledge and, if permitted by law and applicable listing rules, as at the same time any such offer is communicated to Shareholders;

• $(h)$ it will, in a timely manner, obtain and/or maintain all applicable consents and approvals, and take any such other action:
• $(i)$ which are required for the performance of its obligations under the Deed Poll (including these Warrant Conditions);
• $(ii)$ which may be necessary to enable the Warrantholders to exercise their rights under the Detachable Warrants; and
• $(iii)$ to ensure the continuing validity of the Detachable Warrants.

and will not take any action for the purpose of avoiding or seeking to avoid the performance of any of the terms to be observed or performed under these Warrant Conditions:

• $(i)$ subject to payment in full of any amounts payable on exercise of the Detachable Warrants, it will ensure that the Ordinary Shares to be issued upon the exercise of all the Detachable Warrants will rank at least pari passu with all other Ordinary Shares then outstanding, free and clear of all liens, claims, charges, security, encumbrances or like interest:
• it will ensure that the constitution of the Issuer or its Subsidiaries is not $(i)$ amended, repealed or altered without the prior written consent of the Warrantholders (by way of an Extraordinary Resolution) if such amendments. repeals or alterations have an adverse impact on the Detachable Warrants or the rights of the Warrantholders; and
• $(k)$ it will procure that no substantial change is made to the general nature of the business of the Issuer or its subsidiaries from that carried on as at the date of these Warrant Conditions.

11. AMENDMENTS

• Subject to paragraph 11(b), these Warrant Conditions and the Deed Poll may $(a)$ only be amended by the Issuer with the approval of the Warrantholders by "Extraordinary Resolution" passed in accordance with the Meeting Provisions.
• $(b)$ Modifications to these Warrant Conditions and the Deed Poll which are of a formal, minor or technical nature (and in each case not affecting adversely the rights of the Warrantholders), or made to correct a manifest error, may be effected by an instrument by way of deed poll executed by the Issuer and expressed to be supplemental to these Warrant Conditions.

$(c)$ A variation of these Warrant Conditions and the Deed Poll must be in writing by deed poll and, if made in accordance with this paragraph 11, will take effect on the date of the amendment and will bind all persons who are Warrantholders on and after that date.

$12.$ NOTICES

$12.1$ Notices to Issuer and Detachable Warrant Registrar

A notice or other communication to the Issuer or the Detachable Warrant Registrar in connection with a Detachable Warrant must be in writing addressed as follows:

if to the Issuer, to: $(a)$

Address:	Australia	TerraCom Limited Level 7, 370 Flinders Street Townsville City QLD 4810
	Email:	MReynolds@terracomresources.com
		Facsimile No: +61 7 3834 3385
		Attention: Mark Revnolds

$(b)$ if to the Detachable Warrant Registrar, to:

Address:	1720 17 th Floor, Tower One, Admiralty Centre, 18 Harcourt Road, Hong Kong
Email:	$Trustee(\omega)$ madison pac.com; jhatch@madisonpace.com
	Facsimile No: +852 2599 9501
ttention:	Jonathan Hatch

or to such other address or facsimile number as may be notified by the Issuer or the Detachable Warrant Registrar, as the case may be, to the other and to the Warrantholders.

Notices to Warrantholders 12.2

A notice or other communication to a Warrantholder must be in writing and may be:

• $(a)$ given by prepaid post or delivery to the address of the Warrantholder as shown in the Detachable Warrant Register at the close of business 3 Business Days prior to the dispatch of the relevant notice or communication;
• $(b)$ sent by facsimile to the facsimile number of the Warrantholder as shown in the Detachable Warrant Register at the close of business 3 Business Days prior to the dispatch of the relevant notice or communication; or

$(c)$ delivered to the Warrantholder by email or such other electronic means as the Warrantholder has agreed to.

12.3 Effective on receipt

Unless a later time is specified in it, a notice, approval, consent or other communication takes effect from the time it is (or is taken to be) received, except that if it is received after 5:00 pm in the place of receipt or on a non-business day in that place, it is to be taken to be received at 9:00 am on the next succeeding business day in that place.

12.4 Proof of receipt

Subject to paragraph 12.3, a notice is taken to be received:

• $(a)$ in the case of a letter, on the third (seventh, if outside Australia) day after posting:
• $(b)$ in the case of a facsimile, on receipt by the sender of a successful transmission report, unless the recipient notifies the sender within one Business Day that the transmission was not received in its entirety in a legible form;
• $(c)$ in the case of an email, such email will be deemed to have been duly delivered on return of a receipt produced by the system to which the email was sent or, where no receipt is produced or the sender has not otherwise received notification that the email was unable to be delivered, by the end of the day the email was sent if a Business Day and otherwise the next Business Day; and
• in the case of delivery in accordance with paragraph 12.2(c) (other than by $(d)$ email), at the time such notice is actually delivered to the Warrantholder by such electronic means.

Annexure 1 – Form of Certificate

TerraCom Limited (ABN 35 143 533 537) incorporated in Commonwealth of Australia

Certificate No. [ ]

$1$ of $\lceil$ is the registered holder of [ ] Detachable Warrants in, TerraCom Limited (ABN 35 143 533 537) issued pursuant to and in accordance with the Detachable Warrants Deed Poll dated [ ] executed by TerraCom Limited ("Deed Poll").

Terms defined in the Deed Poll (including the Warrant Conditions) have the same meaning when used in this Certificate.

Number of Detachable Warrants:

Exercise Price: A\$[ ] as may be adjusted under the Warrant Conditions

Maturity Date:

This Certificate is evidence of entitlement only and is not a document of title. Entitlements are determined by the Detachable Warrant Register.

Dated [

EXECUTED by [DETACHABLE WARRANT REGISTRAR]

[execution block to be inserted]

$\overline{1}$

Annexure 2-Exercise Notice

To: The Directors TerraCom Limited Level 7, 370 Flinders Street Townsville City QLD 4810 Australia (the "Issuer")

Copy To: [Detachable Warrant Registrar]

$\overline{1}$ $\lceil \text{of} \rceil$ ] (the "Warrantholder") being the registered holder of ] Detachable Warrants issued pursuant to and in accordance with the Detachable Warrants deed Poll dated [ ] executed by the Issuer, gives notice that it wishes to exercise [ ] of the Detachable Warrants into Ordinary Shares in the capital of the Issuer. This Notice is irrevocable.

These Detachable Warrants have an Exercise Price of [ ]. [Note: this should be the thencurrent Exercise Price as notified to the Warrantholder.]

The Warrantholder authorises the Issuer to register it as the holder of Ordinary Shares in the Issuer and agrees to be bound by the Constitution of the Issuer.

Dated

Signed on behalf of [ by its duly authorised representative )
in the presence of:	Signature
	. Printed Name
	Witness
	Printed Name

Annexure 3 – Transfer Instrument

[Detachable Warrant Registrar] To:

ISSUER:	TerraCom Limited
SECURITY:	Detachable Warrants issued under a Detachable Warrant Deed Poll of the Issuer dated [insert].
	Number:
	Exercise Price:
QUANTITY	Words	Figures
FULL NAME OF TRANSFEROR(S)
CONSIDERATION	$\mathbf S$	Date of Purchase
FULL NAME OF TRANSFEREE(S)
FULL ADDRESS OF TRANSFEREE(S)
REMOVAL REQUEST	Please enter the above securities on the Detachable Warrant Register of Warrantholders
	I, the registered holder and transferor ("Transferor") named above, for the consideration specified above transfer to the transferee named above ("Transferee") the Detachable Warrants registered in my name. I, the Transferee agree to accept the transfer of those Detachable Warrants and the registration of those Detachable Warrants, and agree to be bound by the terms of issue of those Detachable Warrants.
SIGNATURE OF TRANSFEROR(S)
DATE SIGNED
SIGNATURE OF TRANSFEREE(S)
DATE SIGNED

Annexure 4 – Meetings of Warrantholders

$\mathbf{1}$ . DEFINITIONS

In this Annexure:

"Extraordinary Resolution" means a resolution passed in accordance with paragraph 18.

"Ordinary Resolution" means a resolution passed in accordance with paragraph 17.

$\overline{2}$ . REQUEST FOR MEETING BY WARRANTHOLDERS

• $(a)$ The Issuer must convene a meeting of Warrantholders upon delivery to its registered office of a written application by persons holding in aggregate not less than 10% of the aggregate number of all outstanding Detachable Warrants on issue, by giving written notice to each of the Warrantholders at the Warrantholders' address as specified in the Detachable Warrant Register and in accordance with paragraph 6.
• $(b)$ The meeting referred to in paragraph 2(a) will be held within 28 calendar days of receipt by the Issuer of the written application at a time and place determined by the Warrantholders giving the notice referred to in paragraph $2(a)$ and will be presided over by a person nominated by those Warrantholders, or if those Warrantholders do not nominate a person to preside at the meeting, by a person appointed for that purpose by the Warrantholders present at the meeting.

$\mathbf{R}$ RESOLUTIONS

• $(a)$ Warrantholders may by Extraordinary Resolution:
• $(i)$ sanction any modification or compromise or any arrangement in respect of the rights of the Warrantholders;
• $(ii)$ consent to any modification of the Deed Poll; and
• give any other consent or approval or exercise any right requiring an $(iii)$ Extraordinary Resolution.
• $(b)$ Any other matter may be sanctioned or consented to by Ordinary Resolution.

$\overline{4}$ . CONVENING OF MEETING BY ISSUER

A meeting of Warrantholders may be convened at any time by the Issuer at a time and place determined by the Issuer.

$5₁$ ATTENDANCE

• $(a)$ A meeting of Warrantholders may be held at two or more venues using any technology that gives the Warrantholders participating in the meeting a reasonable opportunity to participate.
• $(b)$ Each of the following people may attend and speak at a meeting of Warrantholders:
• $(i)$ a director or officer of, or other person authorised by, a Warrantholder or the Issuer: and
• $(ii)$ a solicitor to a Warrantholder or the Issuer

6. NOTICES OF MEETINGS

• $(a)$ A notice of a meeting of Warrantholders must:
• give at least 28 days notice of the meeting; $(i)$
• $(ii)$ specify the place, the date and time of meeting (and if the meeting is to be held at two or more venues, state this);
• $(iii)$ state the general nature of the meeting's business;
• $(iv)$ state that a Warrantholder has a right to appoint a proxy;
• $(v)$ state that a proxy does not need to be a Warrantholder; and
• $(vi)$ if an Extraordinary Resolution is to be proposed state the resolution, and the intention to propose it as such.
• $(b)$ Notice of every meeting of Warrantholders must be given by the person convening the meeting to:
• $(i)$ each Warrantholder; and
• $(ii)$ the Issuer (unless it convened the meeting).
• $(c)$ Non receipt of the notice convening a meeting of Warrantholders by, or accidental omission to give such notice to, any person entitled to receive such notice shall not invalidate the proceedings at or any resolution passed at that meeting.
• $(d)$ A person's attendance at a meeting waives any objection that, the person may have to a defect in the giving of notice of that meeting unless, at the commencement of the meeting, the person objects to the meeting being held.

7. QUORUM

$(a)$ Except for the election of a chair and the adjournment of the meeting, no business shall be transacted at a meeting of Warrantholders unless a quorum is present at the time when the meeting proceeds to business and at the time the relevant business is considered.

• $(b)$ Warrantholders who hold Detachable Warrants the number of which represents at least 10% of the aggregate number of all outstanding Detachable Warrants on issue constitute a quorum.
• $(c)$ For the purpose of determining whether a quorum is present:
• a person attending as a proxy, or as an attorney for a Warrantholder, or $(i)$ as a representative of a corporation that is a Warrantholder, is deemed to be a Warrantholder; and
• $(ii)$ if a Warrantholder has appointed more than one proxy, attorney or corporate representative, only the person most recently appointed shall be counted.
• $(d)$ If a quorum is not present within 30 minutes from the time appointed for a meeting:
• $(i)$ where the meeting was convened on the requisition of Warrantholders, the meeting shall be dissolved: or
• in any other case: $(ii)$
  • $(A)$ the meeting stands adjourned to the same time and at the same place 14 (or, where an Extraordinary Resolution has been proposed, 21) calendar days after the date of the original meeting; and
  • $(B)$ the Warrantholders present and entitled to vote at the resumed meeting constitute a quorum for all purposes including the passing of an Extraordinary Resolution.

$\mathsf{R}$ . CHAIR

• $(a)$ At a meeting of Warrantholders convened by the Issuer under paragraph 3, the Issuer may nominate a person to chair the meeting.
• $(b)$ Where a meeting of Warrantholders is held and:
• a person has not been nominated by the Issuer to act as chair of the $(i)$ meeting; or
• $(ii)$ the person nominated by the Issuer to chair the meeting is not present within 20 minutes after the time appointed for the commencement of the meetings or declines to act.

the Warrantholders present shall elect one of themselves to chair the meeting.

$(c)$ The chair is not entitled to a casting vote.

$\mathbf{Q}$ ADJOURNMENTS

• $(a)$ The chair may with the consent of any meeting at which a quorum is present and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place. Only unfinished business is to be transacted at a meeting resumed after an adjournment.
• $(b)$ Notice of an adjourned meeting, at which an Extraordinary Resolution is to be proposed, must be given:
• in the same manner as for the original meeting; and $(i)$
• $(ii)$ where the meeting is adjourned pursuant to paragraph $7(d)(ii)$ , must state that the Warrantholders present at the resumed meeting will form a quorum regardless of their number or the aggregate number of the Detachable Warrants which they hold.

$10₁$ VOTING

• $(a)$ A resolution put to the vote at a meeting will be decided on a show of hands unless a poll is demanded.
• $(b)$ Where a resolution is decided on a show of hands, a declaration by the chair is conclusive evidence of the result.
• $(c)$ A poll may be demanded by:
• $(i)$ the chair; or
• $(ii)$ a Warrantholder or Warrantholders present and entitled to vote on the resolution and holding Detachable Warrants the number of which represent at least 5% of the aggregate number of all outstanding Detachable Warrants then on issue.

either:

• $(iii)$ before the vote is taken:
• $(iv)$ before the voting results on a show of hands is declared; or
• immediately after the voting results on a show of hands is declared. $(v)$
• $(d)$ A demand for a poll may be withdrawn.

POLLS $11.$

• $(a)$ Subject to paragraph 11(b), a poll must be taken when and in the manner the chair directs.

• $(b)$ A poll demanded on the election of a chair or on a question of adjournment must be taken immediately.

• $(c)$ If a poll (other than a poll referred to in paragraph 11(b) has been taken, the chair may close the meeting before the result of the poll is declared.

• $(d)$ If a meeting is closed pursuant to paragraph $11(c)$ , the result of the poll must be declared within 2 Business Days after the closure of the meeting by notice given in accordance with the Warrant Conditions.
• $(e)$ A demand for a poll does not prevent the meeting continuing to deal with other business.

12. VOTING RIGHTS

• Subject to paragraphs 12(b) and 12(c) of this Annexure, a Warrantholder is $(a)$ entitled to:
• $(i)$ attend the meeting and vote in person or by proxy, representative or attorney:
• $(ii)$ one vote on a show of hands; and
• one vote on a poll for each Detachable Warrant held. $(iii)$
• $(b)$ In the case of joint Warrantholders, the vote of the first named Warrantholder on the Detachable Warrant Register who by any method tenders a vote shall be accepted to the exclusion of the vote of any other joint Warrantholder.
• $(c)$ If a person present at a meeting represents more than one Warrantholder personally, or by proxy, attorney or representative:
• $(i)$ on a show of hands:
  • $(A)$ the person is entitled to only one vote; and
  • a vote cast by that person will be taken to have been cast on (B) behalf of each Warrantholder represented by that person; and
• $(ii)$ on a poll, the person need not cast all votes that person has in the same way.

OBJECTIONS TO QUALIFICATION TO VOTE 13.

• An objection may be raised to the qualification of a voter only at or before the $(a)$ meeting at which the relevant vote objected to is given or tendered.
• $(b)$ Any such objection shall be referred to the chair of the meeting whose decision is final.
• A vote which has not been disallowed by the chair of the meeting after such an $(c)$ objection has been made is valid for all purposes.

$14.$ RESOLUTIONS BINDING

All Ordinary Resolutions and Extraordinary Resolutions passed at a meeting of the Warrantholders duly convened and held in accordance with this Annexure are binding on all the Warrantholders whether or not present at the meeting and each of the Warrantholders is bound to give effect to them accordingly.

$15.$ PROXIES

• $(a)$ A Warrantholder may appoint not more than two persons, neither of whom need be a Warrantholder, as proxies to attend at a meeting of Warrantholders and vote for that Warrantholder.
• $(b)$ Where two proxies are appointed, each proxy may exercise half of the votes able to be cast by the appoint unless the appointment specifies the number or proportion of the appoint o's votes that each proxy may exercise. Fractions of votes arising pursuant to this paragraph are to be disregarded.
• $(c)$ An instrument appointing a proxy shall be in writing and signed by the appoint or by the appoint or's attorney duly authorised or, if the appoint or is a corporation, under seal (if applicable), by two directors or a director and secretary, by authorised officers or attorney.
• $(d)$ An instrument appointing a proxy may specify the manner in which the proxy is to vote in respect of a particular resolution and, where an instrument of proxy so provides, the proxy is not entitled to vote on the resolution except as specified in the instrument. Otherwise the proxy may vote as the proxy thinks fit.
• $(e)$ An instrument appointing a proxy shall be deemed to confer authority to:
• $(i)$ demand or join in demanding a poll; and
• $(ii)$ vote as the proxy sees fit on:
  • $(A)$ an amendment moved to a proposed resolution, a motion that a proposed resolution not be put or similar; and
  • $(B)$ a procedural motion.
• $(f)$ An instrument appointing a proxy shall be in any normal or usual form approved by the Issuer.

• $(g)$ An instrument appointing a proxy is not valid unless the instrument and the power of attorney or other authority (if any) under which the instrument is signed, or a certified copy, is or are received at the place that is specified for that purpose in the notice of the meeting not less than 48 hours (or any lesser period that the person convening the meeting specifies) before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote.

• $(h)$ Documents to be lodged pursuant to paragraph $15(g)$ may be lodged by facsimile transmission.

• $(i)$ A vote given in accordance with the terms of an instrument of proxy or of a power of attorney is valid notwithstanding:
• $(i)$ the previous death or unsoundness of mind of the principal;
• the revocation of the instrument (or of the authority under which the $(ii)$ instrument was executed) or of the power;

if no written notice of the death, unsoundness of mind, revocation or transfer has been received by the person convening the meeting at its registered office or at the meeting before the commencement of the meeting or adjourned meeting at which the instrument is used or the power is exercised.

• $(i)$ The appointment of a proxy or attorney is not revoked by the appoint or attending and taking part in the meeting but if the appointor votes on any resolution, a proxy or attorney is not entitled (as that appointor's proxy or attorney) to, and must not, vote on that resolution.
• $(k)$ An instrument appointing a proxy is not invalid merely because it does not contain the address of the appoint or of a proxy, is not dated or does not specify the manner in which the proxy is to vote in relation to any resolutions.
• $(1)$ An instrument appointing a proxy which does not contain the name of the proxy:
• $(i)$ is not invalid merely for that reason; and
• $(ii)$ shall be deemed to be given in favour of the chair of the meeting.
• The person who has the management of the estate of a Warrantholder: $(m)$
• $(i)$ who is of unsound mind; or
• $(ii)$ whose estate is liable to be dealt with under the law relating to mental health.

may exercise the rights of the Warrantholder in relation to a meeting of Warrantholders.

$(n)$ An instrument appointing a proxy is not valid after the expiration of 12 months from its stated date of execution

16. MINUTES

Minutes of a meeting of Warrantholders purporting to be signed by the chair of that meeting or by the chair of the next succeeding meeting are, unless the contrary is proved, evidence of:

$(a)$ the matters stated:

• $(b)$ the meeting having been duly convened and held; and
• $(c)$ the validity of all proceedings at the meeting.

17. ORDINARY RESOLUTIONS

An Ordinary Resolution is passed if:

• $(a)$ (Written resolution): within one month from the date (in this paragraph (a), the "Relevant Date") stated in the copies of the resolution sent for that purpose by the Issuer or the Warrantholder proposing the resolution to the Warrantholders, Warrantholders of more than 50% by number of the outstanding Detachable Warrants on issue at the Relevant Date signed the resolution; or
• $(b)$ (At a meeting): a simple majority of the votes cast by Warrantholders (present in person or by proxy or representative) at a meeting convened for that purpose vote in favour of a resolution.

18. EXTRAORDINARY RESOLUTIONS

An Extraordinary Resolution is passed if:

• $(a)$ (Written resolution): within one month from the date (in this paragraph (a), the "Relevant Date") stated in the copies of the resolution sent for that purpose by the Issuer or the Warrantholder proposing the resolution to the Warrantholders, Warrantholders of more 75% by number of the outstanding Detachable Warrants on issue at the Relevant Date signed the resolution; or
• $(b)$ $(At a meeting):$ more than three-quarters of the votes cast by the Warrantholders (present in person or by proxy or representative) at a meeting convened for that purpose vote in favour of the resolution.

19. MAY BE MORE THAN ONE DOCUMENT

A resolution in writing signed by Warrantholders may be contained in one document or in several documents in like form each signed by one or more Warrantholders.

Annexure 5

[Intentionally omitted]

Annexure 6 – Issuer restrictions

Where this annexure applies, the Issuer will be subject to the following restrictions:

• If the Issuer wants to issue new Ordinary Shares at a price which is discounted $(a)$ by more than 10% of the Weighted Average Market Price (as defined below) for Ordinary Shares at the proposed time of issuance, then the Issuer must obtain prior consent from the Warrantholders by Extraordinary Resolution. The restriction in this paragraph (a) shall not apply to the issuance of new Ordinary Shares as consideration for the acquisition of PT Borneo Prima Coal Indonesia.
• The Issuer is only permitted to grant or issue Convertible Securities (as $(b)$ defined below) convertible or exercisable into up to 10% (by number and value) of the Fully Diluted Capital (as defined below) of the Issuer.

In this annexure:

"Convertible Securities" means:

• $(a)$ a right to a share, unit or option:
• $(b)$ an option over an issued or unissued security; or
• any security which is convertible, by their terms of issue, into a share. $(c)$

"Fully Diluted Capital" means, as at the Issue Date, the aggregate of:

• $(a)$ the number of Ordinary Shares on issue; and
• the number of Ordinary Shares that would be issued if at the time of that $(b)$ calculation all Convertible Notes, Detachable Warrants, options, performance rights and similar securities had been converted or exercised (as the case may be) and the relevant Ordinary Shares so issued.

"Weighted Average Market Price" means the daily volume weighted average sale price of Ordinary Shares sold on the ASX during normal trading over the one month period ending on the date that is five (5) Business Days immediately preceding the proposed issue of Ordinary Shares, but does not include any transaction defined in any applicable ASX rules as "special crossings".