TESORO GOLD LTD — Proxy Solicitation & Information Statement 2019

Oct 20, 2019

PLUKKA LIMITED ACN 106 854 175 (TO BE RENAMED ‘TESORO RESOURCES LIMITED’) NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 9.00 AM (WST) DATE : 21 November 2019 PLACE : RSM, Level 32, 2 The Esplanade, Perth, WA, 6000

The business of the Meeting affects your shareholding and your vote is important.

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

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 4.00 PM (WST) on 19 November 2019.

IMPORTANT INFORMATION

Time and place of Meeting

Notice is given that the Meeting will be held at RSM, Level 32, 2 The Esplanade, Perth WA, 6000 on 21 November 2019 at 9.00AM (WST).

Your vote is important

The business of the Meeting affects your shareholding and your vote is important.

Voting in person

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

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

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

• each Shareholder has a right to appoint a proxy;

• the proxy need not be a Shareholder of the Company; and

• a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise onehalf of the votes.

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes are set out below.

Proxy vote if appointment specifies way to vote: Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (ie as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on, the proxy must vote on a poll, and must vote that way (ie as directed); and

• if the proxy is not the chair, the proxy need not vote on the poll, but if the if the proxy is not the chair, the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (ie as directed).

Transfer of non-chair proxy to chair in certain circumstances: Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies:

• Ø the proxy is not recorded as attending the meeting; or

• Ø the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 3 9614 2444.

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BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – ISSUE OF PERFORMANCE RIGHTS TO MR GEOFFREY MCNAMARA

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

“That, subject to and conditional upon the passing of all Essential AGM Resolutions and Resolution 2, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 73,812,805 Performance Rights to Mr Geoffrey McNamara (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion Statement : The Company will disregard any votes cast in favour of this Resolution by or on behalf of Mr McNamara (or his nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

2. RESOLUTION 2 – ISSUE OF PERFORMANCE RIGHTS TO MR ZEFFRON REEVES

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

“That, subject to and conditional upon the passing of all Essential AGM Resolutions and Resolution 1, for the purposes of section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 63,027,195 Performance Rights to Mr Zeffron Reeves (as trustee for the Palin Account Trust) (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion Statement : The Company will disregard any votes cast in favour of this Resolution by or on behalf of Mr Reeves (as trustee of the Palin Account Trust) (or its nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Dated: 21 October 2019

By order of the Board

John Toll Non-Executve Chairman

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EXPLANATORY STATEMENT

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

1. BACKGROUND

1.1 Background to this Notice

Plukka Limited (ASX: PKA) ( Company or PKA ) is an Australian public company which has been listed on the Official List of the ASX since 28 January 2004. Most recently the Company’s activities have consisted of a multi-brand, omni-channel fine jewellery platform connecting designers of fine jewellery with consumers all over the world. In January 2018, the Company announced its plan to close its fine jewellery business and that is was seeking to acquire a new asset or business to help maximise shareholder value.

The Company announced on 5 August 2019 that it had entered into a binding term sheet ( Term Sheet ) pursuant to which the Company agreed to acquire 100% of the issued capital of Tesoro Resources Limited (ACN 618 093 306) ( Tesoro ) ( Acquisition ). As announced on 3 October 2019, the Company and Tesoro have entered into a full form share purchase agreement in relation to the proposed Acquisition, superseding the Term Sheet ( Acquisition Agreement ).

The Acquisition is conditional on the Company obtaining all necessary regulatory and Shareholder approvals to effect the Acquisition and satisfying all other requirements of ASX for the reinstatement to official quotation of the Company’s Shares on the ASX (among other things) ( Official Quotation ).

On 7 October 2019, the Company dispatched its Notice of Annual General Meeting ( AGM Notice ) to Shareholders. Capitalised terms defined in the AGM Notice have the same meaning where used in this Explanatory Statement.

The AGM Notice included resolutions for all Shareholder approvals necessary to effect the Acquisition and satisfy all other requirements of ASX for Official Quotation, in particular resolutions to approve:

• (a) the Acquisition under ASX Listing Rule 11.1.2 (because the Acquisition, if successfully completed, will represent a significant change in the nature and scale of the Company’s operations) (AGM Resolution 3);

• (b) the consolidation of the Company’s Shares on a 15 to 4 basis ( Consolidation ) (AGM Resolution 4);

• (c) the issue of the Consideration Shares to the Tesoro Shareholders in consideration for the Acquisition (AGM Resolution 5);

• (d) the Company undertaking a capital raising by issuing a minimum of 150,000,000 Shares at $0.03 per Share to raise a minimum of $4,500,000 ( Capital Raising ) with the ability to issue up to an additional 33,333,333 Shares to raise up to $5,500,000 (AGM Resolution 6);

• (e) the participation of Director, Mr John Toll and of both Mr Zeffron Reeves and an entity related to Mr Geoffrey McNamara (who are both proposed Directors) in the Capital Raising (AGM Resolutions 7 to 9);

• (f) the issue of Shares in satisfaction of $300,000 of converting loans owed by Tesoro (AGM Resolution 10);

• (g) the issue of Performance Rights to proposed Directors Messrs Geoffrey McNamara and Zeffron Reeves (or their nominees) (AGM Resolutions 12 and 13);

• (h) the issue of Shares in satisfaction for the debt owed to creditors of the Company (including Proposed Director, Mr Geoffrey McNamara and associated entities) (AGM Resolutions 14 and 15); and

• (i) the issue of Shares to PAC Partners in consideration for services provided to Tesoro and the Company (AGM Resolutions 16 and 17).

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Further details of the AGM Resolutions are set out in the AGM Notice.

The issue of the Performance Rights to Messrs McNamara and Reeves (or their nominees) requires Shareholder approval under section 208 of the Corporations Act, which was contemplated under AGM Resolutions 12 and 13. However, due to an oversight, the AGM Notice was not lodged with ASIC as required by section 218 of the Corporations Act prior to being dispatched to Shareholders. Accordingly, the Company will withdraw AGM Resolutions 12 and 13 and has convened the Meeting the subject of this Notice to seek Shareholder approval for the issue of the Performance Rights to Messrs McNamara and Reeves (or their nominees). This Notice was lodged with ASIC under section 218 of the Corporations Act prior to being dispatched to Shareholders.

The issue of the Performance Rights to Messrs McNamara and Reeves (or their nominees) is a term of the Acquisition Agreement, and completion of the Acquisition is conditional on Shareholders approving the issue. This means that, should Shareholders fail to approve the issue of the Performance Rights to Messrs McNamara and Reeves (or their nominees) at the Meeting the subject of this Notice, the Acquisition will not proceed.

1.2 Background to the Acquisition

Tesoro is an Australian unlisted public company that was established with a strategy of acquiring, developing and building mining projects in the Coastal Cordillera region of Chile with a focus on gold and currently holds option agreements to acquire interests in two highly prospective gold projects, up to 80% of the El Zorro Gold Project and up to 100% of the Espina Gold Projects, in the Coastal Cordillera region which is host to multiple world class copper and gold mines. Please refer to Section 4 of the AGM Notice for further details in relation to Tesoro and the El Zorro and Espina Gold Projects.

The key terms of the Acquisition Agreement are set out in Schedule 1 of the AGM Notice.

The consideration for the Acquisition will be satisfied by the issue to the Tesoro Shareholders (or their nominees) of 112,294,158 Shares (on a post-Consolidation basis) ( Consideration Shares ).

Trading in the Company’s Shares is currently suspended and will remain suspended until the Company re-complies with Chapters 1 and 2 of the Listing Rules following completion of the Acquisition. The Acquisition is conditional on the Company obtaining all necessary regulatory and Shareholder approvals to effect the Acquisition and satisfying all other requirements of ASX for the reinstatement to Official Quotation of the Company’s Shares on the ASX (among other things).

ASX has an absolute discretion in deciding whether or not to re-admit the Company to the Official List and to reinstate the Company’s Shares to Official Quotation and therefore the Acquisition may not proceed if ASX exercises that discretion. Investors should take account of these uncertainties in deciding whether or not to buy or sell the Company’s Securities.

1.3 Summary of Resolutions

As noted above, this Notice contains Resolutions to approve the issue of Performance Rights to proposed Directors Messrs Geoffrey McNamara and Zeffron Reeves (or their nominees) on the same terms as AGM Resolutions 12 and 13.

AGM Resolutions 12 and 13 will be withdrawn from the AGM Notice and will not be considered at the AGM.

The Resolutions the subject of this Notice are conditional upon and subject to the Essential AGM Resolutions. If the Essential AGM Resolutions are not passed at the AGM, the Acquisition will not proceed and the Company will not proceed with the Meeting the subject of this Notice.

The Resolutions the subject of this Notice are also inter-conditional, which means that both Resolutions must be passed for the Resolutions to be effective.

As noted above, the issue of the Performance Rights to Messrs McNamara and Reeves (or their nominees) is a term of the Acquisition Agreement, and completion of the Acquisition is conditional on Shareholders approving the issue. This means that, should Shareholders fail to approve the issue of the Performance Rights to Messrs McNamara and Reeves (or their nominees) at the Meeting the subject of this Notice, the Acquisition will not proceed.

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2.

RESOLUTIONS 1 AND 2 – ISSUE OF PERFORMANCE RIGHTS TO THE PROPOSED DIRECTORS

2.1 General

The Company has agreed, subject to obtaining Shareholder approval, to issue 136,840,000 Performance Rights ( Performance Rights ) to Messrs Geoffrey McNamara and Zeffron Reeves (or their nominees) ( Proposed Directors ) in the numbers and on the terms and conditions set out below.

Performance Rights

Name	Class A	Class B	Class C	Class D
MR ZEFFRON REEVES **A/C>	15,782,575	28,794,620	9,225,000	9,225,000
LINKWOOD HOLDINGS PTE LTD (AS THE NOMINEE OR MR GEOFFREY MCNAMARA)	30,937,425	21,265,380	10,805,000	10,805,000
Total	46,720,000	50,060,000	20,030,000	20,030,000

2.2 Chapter 2E of the Corporations Act

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

• (a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and

(b) give the benefit within 15 months following such approval,

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

The issue of the Performance Rights constitutes giving a financial benefit and the Proposed Directors are related parties of the Company by virtue of being Proposed Directors of the Company or an entity controlled by a Proposed Director of the Company.

2.3 ASX Listing Rule 10.11

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

It is the view of the Company that the exceptions set out in sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the issue of the Performance Rights to the Proposed Directors.

2.4 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of section 219 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed issue of the Performance Rights to the Proposed Directors:

• (a) the related parties are the Proposed Directors (or their nominees) and they are related parties by virtue of being a proposed director of the Company or an entity associated with a proposed director of the Company;

• (b) the number of Performance Rights (being the nature of the financial benefit being provided) to be issued to the Proposed Directors (subject to the Milestones set out in Schedule 1) is:

• (i) 63,027,195 Performance Rights to Mr Zeffron Reeves ATF Palin A/C; and

• (ii) 73,812,805 Performance Rights to Linkwood Holdings Pte Ltd (or its nominee) as nominee of Mr Geoffrey McNamara,

• (c) the Company has received a waiver from the requirements of ASX Listing Rule 10.13.3, permitting the Company to issue the Performance Rights to the

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Proposed Directors (or their nominees) no later than 3 months after the date of the Meeting (or such later date as permitted by any further ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Performance Rights will be issued on one date;

• (d) the Performance Rights are being issued to the Proposed Directors (or their nominees) for nil cash consideration, accordingly no funds will be raised;

• (e) no loan will be provided to the Proposed Directors (or their nominees) with respect to the Performance Rights;

• (f)

the terms and conditions of the Performance Rights are set out in Schedule 1;

• (g) the relevant interests of the Proposed Directors in Securities of the Company upon completion of the Acquisition are set out below;

Director/Proposed Director	Shares	% (undiluted)	Performance Rights	% (diluted)
Zeffron Reeves	19,630,5552	5.01	63,027,1953	15.64
Geoffrey McNamara	47,186,0714	12.05	73,812,8055	22.90

Notes:

1. Assumes the Maximum Subscription is achieved for the Capital Raising and no other Shares or Securities are issued.

2. Comprising (with reference to the resolutions contained within the Notice of Annual General Meeting), 12,963,889 Consideration Shares to be issued pursuant to AGM Resolution 5 and 6,666,666 Shares to be issued by virtue of Mr Reeve’s participation in the Capital Raising pursuant to AGM Resolution 8.

3. To be issued subject to receipt of Shareholder approval for Resolution 2.

4. Comprising 23,694,438 Consideration Shares to be issued pursuant to AGM Resolution 5, 16,824,967 Shares to be issued in relation to conversion of debt pursuant to AGM Resolutions 14 and 15, and 6,666,666 Shares issued by virtue of Mr McNamara’s participation in the Capital Raising pursuant to AGM Resolution 9.

5. To be issued subject to receipt of Shareholder approval for Resolution 1.

6. (h) the Proposed Directors have not received any remuneration or emoluments from the Company in the previous or current financial year. It is proposed that the Proposed Directors will receive the following remuneration from the Company when they join the Company’s Board (as Managing Director and Non-Executive Director) on completion of the Acquisition:

7. (i) Zeffron Reeves (proposed Managing Director) $240,000 per annum (plus superannuation and any performance bonuses which may approved by the Board); and

8. (ii) Geoffrey McNamara: $50,000 per annum (inclusive of superannuation) plus $1,800 per day for duties outside of normal directors’ duties,

9. (i) refer to sections 4.10, 4.11 and 4.19(a)(iii) of the AGM Notice for details of the dilutive impact of the Acquisition (including the issue of the Performance Rights) on existing Shareholders on a post-Consolidation basis;

10. (j) trading in the Company’s Shares has been suspended since 4 October 2018, so there has been no trading of the Company’s Shares in the 12 months prior to the date of this Notice;

11. (k) at the Capital Raising issue price of $0.03 per Share, the Performance Rights are valued as follows for accounting valuation purposes (assumes all Milestones have been satisfied and all Performance Rights have vested) at:

12. (i) Performance Rights to be issued to the nominee of Mr McNamara: $2,214,384; and

13. (ii) Performance Rights to be issued to Mr Reeves: $1,890,815.

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Given the Performance Rights are subject to performance-based Milestones and are subject to a real risk of forfeiture, the Company considers that the value of the Performance Milestones as at the date of this Notice and on issue is substantially lower than that amount;

(l) the primary purpose of the issue of the Performance Rights to the Proposed Directors is to provide a performance linked incentive component to each of the Proposed Directors to motivate and reward the Proposed Directors performance, each of whom is a related party of the Company in their respective roles as proposed Directors;

• (m) each of the current Directors recommend that Shareholders vote in favour of Resolutions 1 and 2 for the following reasons:

• (i) the issue of Performance Rights to the Proposed Directors , in particular, the vesting conditions of the Performance Rights will align the interests of the Proposed Directors with those of Shareholders; and

• (ii) the issue of the Performance Rights is a reasonable and appropriate method to provide cost effective remuneration as the non-cash form of this benefit will allow the Company to spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were given to the Proposed Directors;

• (n) in forming their recommendations, each Director considered the experience of the Proposed Directors, the value of Shares implied by the Acquisition and the Capital Raising, current market practice when determining the number of Performance Rights to be granted as well as the Milestones attaching to the Performance Rights and the expiry dates of those Performance Rights; and

• (o) with the exception of Mr McNamara in respect of Resolution 1 and Mr Reeves in respect of Resolution 2, none of the current or Proposed Directors has a personal interest in the outcomes of Resolutions 1 or 2; and

• (p) the Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolutions 1 and 2.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Performance Rights to the Proposed Directors as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Performance Rights to the Proposed Directors will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

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GLOSSARY

Capitalised terms defined in the AGM Notice have the same meaning where used in this Explanatory Statement.

$ means Australian dollars.

Acquisition means the Company’s proposed acquisition of Tesoro as set out in section 4.1 of the Notice of Annual General Meeting

Acquisition Agreement means the full form share purchase agreement executed by the Company and Tesoro on or about 3 October 2019 pursuant to which the Company agreed to acquire 100% of the issued capital of Tesoro in consideration for the Consideration Shares and otherwise as set out at section 4.1 of the Notice of Annual General Meeting.

AGM means the Company’s Annual General Meeting to be held on 7 November 2019.

AGM Notice means the Company’s notice of Annual General Meeting that was lodged with the ASX on 7 October 2019.

AGM Resolution means a resolution in the AGM Notice.

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chair of the Meeting.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act.

Company or PKA means Plukka Limited (ACN 106 854 175).

Completion means completion of the Acquisition in accordance with the terms of the Acquisition Agreement. Constitution means the Company’s constitution.

Consideration Shares means 112,294,158 Shares to be issued to the Tesoro Shareholders on Completion as consideration of the Acquisition.

Consolidation has the meaning in Section 1.1.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Essential Resolutions means the resolutions contemplated by the Notice of Annual General Meeting that are necessary to complete the Acquisition and associated transactions, and otherwise set out in section 4.2 of the Notice of Annual General Meeting.

Explanatory Statement means the explanatory statement accompanying the Notice.

General Meeting or Meeting means the meeting convened by the Notice.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

Maximum Subscription means the maximum amount to be raised pursuant to the Capital Raising, being $5,500,000.

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Milestones refers to the milestones that must be satisfied in relation to the Performance Rights as detailed in Schedule 1.

Minimum Subscription means the minimum amount to be raised pursuant to the Capital Raising, being $4,500,000.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Official Quotation means official quotation by ASX in accordance with the ASX Listing Rules.

Performance Right has the meaning given at Section 2.1 to issue on the terms and condition set out in Schedule 1.

Proposed Directors means Mr Geoffrey McNamara and Mr Zeffron Reeves.

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in this Notice, or any one of them, as the context requires.

Section means a section of the Explanatory Statement.

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

Shareholder means a registered holder of a Share.

Tesoro means Tesoro Resources Limited (ACN 618 093 306).

WST means Australian Western Standard Time as observed in Perth, Western Australia.

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SCHEDULE 1 – TERMS AND CONDITIONS OF PERFORMANCE RIGHTS

The following is a summary of the key terms and conditions of the Performance Rights that are to be issued by PKA:

• (a) ( Notification to holder ): PKA shall notify the holder in writing when the relevant milestones applicable to the particular Performance Right have been satisfied.

• (b) ( Vesting ): Subject to (e), (g) and (h), Performance Rights, that have not lapsed, shall vest on the later to occur of:

• (i) the date that the Milestone relating to that Performance Right has been satisfied; and

• (ii) the date that the holder gives a notice to PKA confirming that the holder would like the Performance Rights to vest.

• (c) ( Milestones ): The relevant milestones attaching to the Performance Rights are as follows

Class	Number	Milestone	Expiry Date
Class A	46,720,000	PKA establishing an Inferred Resource of equal or greater than 250,000 ounces equivalent at a gold grade of 1 gram per tonne or greater, as defined by the JORC Code at the El Zorro Project or the Espina Project.	18 months after Completion.
Class B	50,060,000	PKA establishing an Inferred Resource of equal or greater than 1 million ounces equivalent, at a gold grade 1 gram per tonne or greater, as defined by the JORC Code at the El Zorro Project or the Espina Project.	36 months after Completion.
Class C	20,030,000	PKA establishing an Inferred Resource of equal or greater than 2 million ounces equivalent, at a gold grade 1 gram per tonne or greater, as defined by the JORC Code at the El Zorro Project or the Espina Project.	48 months after Completion.
Class D	20,030,000	PKA completing either a Bankable Feasibility Study or a Definitive Feasibility Study in relation to any resource (as defined by the JORC Code) at the El Zorro Project or the Espina Project, confirming the relevant project is commercially viable.	60 months after Completion.

• (d) ( Consideration ): The Performance Rights will be issued for nil consideration each and no consideration will be payable upon the vesting of the Performance Rights.

• (e) ( Conversion ): Upon satisfaction of the relevant Milestone, each Performance Right will, at the election of the holder, vest and convert into one (1) Share.

• (f) ( Lapsing ): Unless otherwise determined by the Board in its sole and absolute discretion, any unvested Performance Rights will lapse on the earlier of:

• (i) the date that the Milestone relating to that Performance Right must have been satisfied;

• (ii) where a holder has acted fraudulently, dishonestly or wilfully breaching their duties to PKA; or

• (iii) the expiry date of the Performance Right (if any).

• (g) ( Share ranking ): All Shares issued upon the vesting of Performance Rights will upon issue rank pari passu in all respects with other Shares.

• (h) ( Listing of Shares on ASX ): PKA will not apply for quotation of the Performance Rights on ASX. However, PKA will apply for quotation of all Shares issued pursuant to the vesting of Performance Rights on ASX within the period required by ASX.

• (i) ( Transfer of Performance Rights ): A Performance Right is not transferable.

• (j) ( Participation in new issues ): There are no participation rights or entitlements inherent in the Performance Rights and holders will not be entitled to participate in new issues of capital offered to PKA shareholders during the currency of the Performance Rights.

• (k) ( Adjustment for bonus issue ): If securities are issued pro-rata to PKA shareholders generally by way of bonus issue (other than an issue in lieu of dividends or by way of

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dividend reinvestment), the number of Performance Rights to which each holder is entitled, will be increased by that number of securities which the holder would have been entitled if the Performance Rights held by the holder were vested immediately prior to the record date of the bonus issue, and in any event in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the bonus issue.

• (l) ( Adjustment for reconstruction ): If, at any time, the issued capital of PKA is reorganised (including consolidation, subdivision, reduction or return), all rights of a holder of a Performance Right (including the Vesting Conditions) are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reorganisation.

• (m) ( Dividend and Voting Rights ): A Performance Right does not confer upon the holder an entitlement to vote or receive dividends.

• (n) ( No rights to return of capital ) A Performance Right does not entitle the holder to a return of capital, whether in a winding up, upon a reduction of capital or otherwise of PKA.

• (o) ( No rights on winding up ): A Performance Right does not entitle the holder to participate in the surplus profits or assets of PKA upon winding up.

• (p) ( No other rights ): A Performance Right gives the holder no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

• (q) ( change of control ) If there is a change in control event in relation to PKA (eg, a takeover bid for all the Shares in PKA which obtains acceptances for at least 50.1% and is declared unconditional or via a scheme of arrangement by which more than 50% of the Shares in PKA change ownership and which is approved by shareholders at a court convened meeting) then any unvested Performance Rights will automatically vest on a one-for-one basis up to a maximum number of shares that is equal to 10% of the PKA shares on issue immediately following conversion under this paragraph. The conversion will be completed on a pro rata basis across each class of Performance Right then on issue as well as on a pro rata basis for each holder.

• (r) ( Deferral of conversion if resulting in a prohibited acquisition of Shares ) If the conversion of a Performance Right would result in any person being in contravention of section 606(1) of the Corporations Act 2001 (Cth) ( General Prohibition ) then the conversion of that Performance Right shall be deferred until such later time or times that the conversion would not result in a contravention of the General Prohibition. In assessing whether a conversion of a Performance Right would result in a contravention of the General Prohibition:

• (i) holders may give written notification to PKA if they consider that the conversion of a Performance Right may result in the contravention of the General Prohibition. The absence of such written notification from the holder will entitle PKA to assume the conversion of a Performance Right will not result in any person being in contravention of the General Prohibition.

• (ii) PKA may (but is not obliged to) by written notice to a holder request a holder provide the written notice referred to the paragraph immediately above within seven days, if PKA considers that the conversion of a Performance Right may result in a contravention of the General Prohibition. The absence of such written notification from the holder will entitle PKA to assume the conversion of a Performance Right will not result in any person being in contravention of the General Prohibition.

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