TITANIUM SANDS LIMITED — Proxy Solicitation & Information Statement 2008

Jun 26, 2008

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25 June 2008

Company Announcements Office Australian Stock Exchange Limited Exchange Plaza Sherwood Court PERTH WA 6000

Dear Sir / Madam

EXTRAORDINARY GENERAL MEETING – 30 JULY 2008 NOTICE OF MEETING AND PROXY

Please find enclosed a Notice of Meeting and Proxy for the above Extraordinary General Meeting.

These documents are being mailed to shareholders today.

This letter and its attachments will be placed on the company’s website.

Yours faithfully WINDIMURRA VANADIUM LIMITED

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MATTHEW LILLY Company Secretary

Windimurra Vanadium Ltd ABN 65 009 131 533 MidWest Vanadium Pty Ltd ABN 65 113 874 712 Level 4, 76 Kings Park Road, West Perth, Western Australia 6005 Tel: +61 8 9423 1900 Fax: +61 8 9423 1999

WINDIMURRA VANADIUM LIMITED ABN 65 009 131 533

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NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

INCORPORATING

EXPLANATORY STATEMENT

AND

PROXY FORM

Date of Meeting Wednesday 30 July 2008

Time of Meeting 10.00 am WST

Place of Meeting Celtic Club 48 Ord Street West Perth WA 6005

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WINDIMURRA VANADIUM LIMITED ABN 65 009 131 533

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Shareholders of Windimurra Vanadium Limited ABN 65 009 131 533 " Company ") will be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia on Wednesday 30 July 2008 at 10.00am WST for the purpose of transacting the following business.

An Explanatory Memorandum containing information in relation to the following resolutions and a Proxy Form accompanies this Notice.

AGENDA

RESOLUTION 1: RE-ELECTION OF GARRY KORTE

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

“That Garry Korte, having been appointed as a Director of the Company since the last annual general meeting and who retires under rule 9.3(f) of the Company’s constitution, and being eligible, is re-elected as a Director of the Company.”

RESOLUTION 2: RE-ELECTION OF PHILLIP GEORGE LASKARIS

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

“That Phillip George Laskaris, having been appointed as a Director of the Company since the last annual general meeting and who retires under rule 9.3(f) of the Company’s constitution, and being eligible, is re-elected as a Director of the Company.”

RESOLUTION 3: RE-ELECTION OF NICHOLAS CHARLES MORLAND

“That Nicholas Charles Morland, having been appointed as a Director of the Company since the last annual general meeting and who retires under rule 9.3(f) of the Company’s constitution, and being eligible, is re-elected as a Director of the Company.”

RESOLUTION 4: INCREASE IN THE MAXIMUM AGGREGATE REMUNERATION OF NON-EXECUTIVE DIRECTORS

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

“That, for the purposes of rule 9.5(a) of the Company’s constitution, Listing Rule 10.17 and for all other purposes, the maximum aggregate remuneration payable by the Company to Non-Executive Directors as Non-Executive Directors’ fees be increased from $280,000 to $480,000 per annum, on and from 8 May 2008.”

004126760

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The Company will disregard any votes cast on this resolution by the Directors and any of their associates. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of the Proxy Form, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 5: ISSUE OF OPTIONS TO DR. IAIN ALEXANDER SCOTT, THE MANAGING DIRECTOR OF THE COMPANY

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

"For all purposes including for the purposes of section 208 of the Corporations Act and Listing Rules 10.11 and 10.14, the Company approves and authorises the issue of the following options:

• (a) 400,000 options exercisable immediately but not later than 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008, at an exercise price being a 10% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.12 each;

• (b) 400,000 options exercisable any time after 1 May 2009 but not later than 1 May 2012, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009 , at an exercise price being a 15% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.22 each; and

• (c) 400,000 options exercisable any time after 1 May 2010 but not later than 1 May 2013, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010 , at an exercise price being a 20% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.32 each.,

to Dr. Iain Alexander Scott, Managing Director of the Company, or his nominee, under the Company’s Executive and Employee Share Option Plan or otherwise, on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice."

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With respect to Listing Rule 10.14, the Company will disregard any votes cast on this resolution by the Directors and any of their associates. With respect to Listing Rule 10.11, the Company will disregard any votes cast on this resolution by any person who is to receive securities in relation to the Company under the resolution. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of 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.

RESOLUTION 6: ISSUE OF OPTIONS TO GARRY KORTE, A DIRECTOR OF THE COMPANY

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

"For all purposes including for the purposes of section 208 of the Corporations Act and Listing Rules 10.11 and 10.14, the Company approves and authorises the issue of the following options:

• (a) 250,000 options exercisable immediately but not later than 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008, at an exercise price being a 10% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.12 each;

• (b) 250,000 options exercisable any time after 1 May 2009 but not later than 1 May 2012 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase ofthe S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009 , at an exercise price being a 15% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.22 each; and

• (c) 250,000 options exercisable any time after 1 May 2010 but not later than 1 May 2013, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010 , at an exercise price being a 20% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.32 each.

to Garry Korte, a Director of the Company, or his nominee, under the Company’s Executive and Employee Share Option Plan or otherwise on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice."

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With respect to Listing Rule 10.14, the Company will disregard any votes cast on this resolution by the Directors and any of their associates. With respect to Listing Rule 10.11, the Company will disregard any votes cast on this resolution by any person who is to receive securities in relation to the Company under the resolution. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of 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.

RESOLUTION 7: ISSUE OF OPTIONS TO DR. WOLF GERHARD MARTINICK, A DIRECTOR OF THE COMPANY

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

"For all purposes including for the purposes of section 208 of the Corporations Act and Listing Rules 10.11 and 10.14, the Company approves and authorises the issue of the following options:

• (a) 266,667 options exercisable immediately but not later than 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008, at an exercise price being a 10% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.12 each;

• (b) 266,667 options exercisable any time after 1 May 2009 but not later than 1 May 2012, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009 , at an exercise price being a 15% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.22 each; and

• (c) 266,667 options exercisable any time after 1 May 2010 but not later than 1 May 2013, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010 , at an exercise price being a 20% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.32 each.

to Dr Wolf Gerhard Martinick, a Director and the Chairman of the Company, or his nominee, under the Company’s Executive and Employee Share Option Plan or otherwise on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice."

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With respect to Listing Rule 10.14, the Company will disregard any votes cast on this resolution by the Directors and any of their associates. With respect to Listing Rule 10.11, the Company will disregard any votes cast on this resolution by any person who is to receive securities in relation to the Company under the resolution. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of 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.

RESOLUTION 8: ISSUE OF OPTIONS TO THE EARL OF WARWICK, A DIRECTOR OF THE COMPANY

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

"For all purposes including for the purposes of section 208 of the Corporations Act and Listing Rules 10.11 and 10.14, the Company approves and authorises the issue of the following options:

• (a) 166,667 options exercisable immediately but not later than 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008, at an exercise price being a 10% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.12 each;

• (b) 166,667 options exercisable any time after 1 May 2009 but not later than 1 May 2012, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009 , at an exercise price being a 15% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.22 each; and

• (c) 166,667 options exercisable any time after 1 May 2010 but not later than 1 May 2013, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010 , at an exercise price being a 20% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.32 each.

to the Earl of Warwick, a Director of the Company, or his nominee, under the Company’s Executive and Employee Share Option Plan, or otherwise, on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice."

5

With respect to Listing Rule 10.14, the Company will disregard any votes cast on this resolution by the Directors and any of their associates. With respect to Listing Rule 10.11, the Company will disregard any votes cast on this resolution by any person who is to receive securities in relation to the Company under the resolution. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of 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.

RESOLUTION 9: ISSUE OF OPTIONS TO PHILLIP GEORGE LASKARIS, A DIRECTOR OF THE COMPANY

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

"For all purposes including for the purposes of section 208 of the Corporations Act and Listing Rules 10.11 and 10.14, the Company approves and authorises the issue of the following options:

• (a) 166,667 options exercisable immediately but not later than 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008, at an exercise price being a 10% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.12 each;

• (b) 166,667 options exercisable any time after 1 May 2009 but not later than 1 May 2012, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009 , at an exercise price being a 15% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.22 each; and

• (c) 166,667 options exercisable any time after 1 May 2010 but not later than 1 May 2013, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010 , at an exercise price being a 20% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.32 each.

to Phillip George Laskaris, a Director of the Company, or his nominee, under the Company’s Executive and Employee Share Option Plan or otherwise on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice."

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With respect to Listing Rule 10.14, the Company will disregard any votes cast on this resolution by the Directors and any of their associates. With respect to Listing Rule 10.11, the Company will disregard any votes cast on this resolution by any person who is to receive securities in relation to the Company under the resolution. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of 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.

RESOLUTION 10: ISSUE OF OPTIONS TO NICHOLAS CHARLES MORLAND, A DIRECTOR OF THE COMPANY

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

"For all purposes including for the purposes of section 208 of the Corporations Act and Listing Rules 10.11 and 10.14, the Company approves and authorises the issue of the following options:

• (a) 166,667 options exercisable immediately but not later than 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008, at an exercise price being a 10% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.12 each;

• (b) 166,667 options exercisable any time after 1 May 2009 but not later than 1 May 2012, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009 , at an exercise price being a 15% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.22 each; and

• (c) 166,667 options exercisable any time after 1 May 2010 but not later than 1 May 2013, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010 , at an exercise price being a 20% premium to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, which is equivalent to a price of $2.32 each.

to Nicholas Charles Morland, a Director of the Company, or his nominee, under the Company’s Executive and Employee Share Option Plan or otherwise on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice."

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With respect to Listing Rule 10.14, the Company will disregard any votes cast on this resolution by the Directors and any of their associates. With respect to Listing Rule 10.11, the Company will disregard any votes cast on this resolution by any person who is to receive securities in relation to the Company under the resolution. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of 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.

RESOLUTION 11: RATIFICATION OF PREVIOUS ISSUE OF SHARES TO CLIENTS OF EUROZ SECURITIES LIMITED

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

“In accordance with Listing Rule 7.4 and for all other purposes, that the issue by the Company of 12,600,000 ordinary shares in the Company to institutional and sophisticated clients of Euroz Securities Limited and otherwise on the terms and conditions set out in the Explanatory Memorandum be approved.”

The Company will disregard any votes cast on this resolution by a person who participated in the issue and any of their associates. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of the Proxy Form; or 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.

RESOLUTION 12: RATIFICATION OF PREVIOUS ISSUE OF OPTIONS TO CITICORP INTERNATIONAL LIMITED AS AGENT FOR CERTAIN FINANCIERS

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

“In accordance with Listing Rule 7.4 and for all other purposes, that the issue by the Company of 8,653,846 unlisted options over ordinary shares in the Company to Citicorp International Limited as agent for certain financiers and otherwise on the terms and conditions set out in the Explanatory Memorandum be approved.”

The Company will disregard any votes cast on this resolution by a person who participated in the issue and any of their associates. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of the Proxy Form; or 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.

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WHO MAY VOTE

Snapshot date

For the purposes of regulation 7.11.37 of the Corporations Regulations, the Company determines that members holding ordinary shares as at 5.00pm WST on Monday 28 July 2008 will be entitled to attend and vote at the Extraordinary General Meeting.

Proxies

1. A Shareholder of the Company entitled to attend and vote has a right to appoint a proxy to attend and vote instead of the Shareholder. A Shareholder of the Company entitled to attend and cast two or more votes is entitled to appoint not more that two proxies. Where more than one proxy is appointed, each proxy may be appointed to represent a specified proportion of the Shareholder’s voting rights. If the Shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half of the votes. A proxy need not be a Shareholder of the Company.

2. If a Shareholder appoints a body corporate as a proxy, that body corporate will need to ensure that it:

3. (a) appoints an individual as its corporate representative to exercise its powers at the meeting, in accordance with section 250D of the Corporations Act 2001 (Cth); and

4. (b) provides satisfactory evidence of the appointment of its corporate representative prior to commencement of the meeting.

If such evidence is not received before the meeting, then the body corporate (through its representative) will not be permitted to act as a proxy.

1. A Proxy Form accompanies this Notice and to be valid must be received by the Company by 10.00am WST on Monday 28 July 2008 (“ Proxy Deadline ”). Proxies may be submitted:-

2. (a) By hand delivery to the Company’s registered office at Level 4, 76 Kings Park Road, West Perth Western Australia 6005; or

3. (b) By post addressed to Windimurra Vanadium Limited, c/- Computershare Investor Services Pty Ltd, GPO Box D 182, Perth, WA, 6840; or

4. (c) By facsimile at (08) 9423 1999 or (08) 9323 2033.

A proxy appointment must be signed by the Shareholder or the Shareholder’s attorney. Where the appointment is signed by the appointer’s attorney, a certified copy of the authority, or the authority itself, must be lodged with the Company in one of the above ways by the Proxy Deadline. If facsimile transmission is used, the authority must be certified.

BY ORDER OF THE BOARD

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Matthew Lilly Company Secretary Date: 27 June 2008

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WINDIMURRA VANADIUM LIMITED ABN 65 009 131 533

EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared for the purposes of the Listing Rules and the Corporations Act. The purpose of this Explanatory Memorandum is to provide Shareholders with all the information known to the Company that is material to Shareholders in deciding whether or not to approve resolutions 1 to 13 as set out in this Notice.

The Directors recommend that Shareholders read this Explanatory Memorandum in full before making any decision in relation to the resolutions.

Certain capitalised terms in this Explanatory Memorandum are defined in the Glossary.

RESOLUTION 1: RE-ELECTION OF GARRY KORTE

Mr Korte was appointed by the Board as a Director since the last annual general meeting. Under the constitution of the Company he holds office only until this meeting and therefore offers himself for election.

Mr Garry Korte B.Comm, C.A.

Mr Korte is the Finance Director and Chief Financial Officer of the Company.

Mr Korte’s experience includes holding the position of CFO for a mining and materials handing contractor for 7 years as well as 3 years as a corporate finance executive for a merchant bank specializing in the mining sector. Most recently he was general manager commercial for Brambles Industrial Services responsible for negotiating mining services contracts and developing business growth proposals for board approval.

Mr Korte was appointed the Company’s Chief Financial Officer on 21 February 2007.

RESOLUTION 2: RE-ELECTION OF PHILLIP GEORGE LASKARIS

Mr Laskaris was appointed by the Board as a Director since the last annual general meeting. Under the constitution of the Company he holds office only until this meeting and therefore offers himself for election.

Mr Phillip George Laskaris LLB BA (Hons)

Mr Laskaris is a barrister practicing from Francis Burt Chambers in Perth. He started his legal career in 1987 in Fremantle, WA with a mid-sized law firm becoming a partner in 1989 and then principal of the firm in 1996. He joined the independent bar in 2002. He is on the roll in the High Court of Australia, the WA Supreme Court and the NSW Supreme Court. Mr Laskaris does not hold any other public company directorships.

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RESOLUTION 3: RE-ELECTION OF NICHOLAS CHARLES MORLAND

Mr Morland was appointed by the Board as a Director since the last annual general meeting. Under the constitution of the Company he holds office only until this meeting and therefore offers himself for election.

Mr Nicholas Charles Morland

Nicholas Morland is a London based Chartered Accountant involved in investing in, and the management of, a worldwide portfolio. This portfolio is privately owned and has an emphasis on commodities. Previous roles have concentrated on situations where change management, new business planning and capital raising have been involved. These include as CEO of MIM, an insurance start up, Group Underwriting Deputy with Alea, General Manager Europe Portfolio Engineering with QBE and Group Operations Director at Hiscox.

RESOLUTION 4: INCREASE IN THE MAXIMUM AGGREGATE REMUNERATION OF NON-EXECUTIVE DIRECTORS

Rule 9.5(a) of the Company’s constitution and Listing Rule 10.17 require that the Company must not increase the maximum amount of Non-Executive Directors’ fees payable without the approval of shareholders.

Resolution 4 proposes an increase in the aggregate level of fees that may be paid to Directors. The current aggregate level of fees paid to Non-Executive Directors is $280,000. This figure was set on the basis that non-executive directors be paid a directors fee of $35,000 per annum and the Chairman be paid fees of $75,000 per annum. The aggregate fees therefore contemplated a Chairman and nominally 6 non-executive Directors.

The Company’s Remuneration Committee, with the assistance of remuneration expert Steve McDonald of McDonald & Company (Australasia) Pty Ltd, has reviewed this current fee level.

On 8 May 2008, following review of the advice of Mr McDonald and the remuneration committee, the board resolved, subject to Shareholder approval, that the total maximum payable by the Company each year to Directors be set at an aggregate amount of $480,000. If Shareholders pass this resolution, therefore, the maximum amount will be increased by $200,000 per annum, on and from 8 May 2008.

This figure is based on the assumption that the Chairman be paid $110,000 per annum, the Deputy Chairman (a contemplated future appointment) be paid $90,000 per annum and the four remaining non-executive directors be paid $70,000 per annum. All these figures are inclusive of superannuation.

The responsibilities and obligations of directors are continually increasing as a result of the growing emphasis in today’s corporate environment on corporate governance. These increased responsibilities have necessitated an increase in the level of remuneration paid to Non-Executive Directors. The aggregate sum of $480,000 has been calculated by the Directors having regard to these increased responsibilities, Mr McDonald’s advice as to

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current market competitive remuneration levels for companies of a similar size and nature as the Company and potential future appointments.

RESOLUTION 5: ISSUE OF OPTIONS TO DR. IAIN ALEXANDER SCOTT (MANAGING DIRECTOR)

Shareholders are asked to approve the issue of 1,200,000 options to Iain Scott, who is the Managing Director of the Company. The issue of options to Iain Scott is part of his remuneration and is to act as an incentive to further improve the Company’s performance.

The options will either be issued in accordance with the Company’s Executive and Employee Share Option Plan ( Plan ) or other mechanisms permitted by the Corporations Act and Listing Rule 10.11. If the latter the issue will be made subject to rules equivalent to the Plan. The options shall be issued on the terms set out below and in Annexure A to this Explanatory Memorandum (which forms part of this Explanatory Memorandum).

The Board would prefer to issue all options under resolutions 5 to 10 under the Plan (and therefore Listing Rule 10.14), however this may not be possible due to the operation of Rule 4.2 of the Plan (refer to Annexure A). Rule 4.2 provides that, with some exceptions, the Company must not issue options under the Plan where to do so would mean that, upon exercise of those options and all other outstanding options issued under the Plan and other employee schemes, such shares (once exercised) would make up more than 5% of the issued capital of the Company.

Rule 4.2 is derived from ASIC Class Order [03/184] which provides the Company with relief from the requirement to provide a prospectus for the options under Chapter 6D of the Corporations Act.

If each of resolutions 5 to 10 are passed, not all of the options proposed to be issued to the Directors could be issued under the Plan as the total amount of options issued by the Company under the Plan would exceed 5% of its issued capital. Some of the options would therefore need to be issued under Listing Rule 10.11. If some, but not all, of resolutions 5 to 10 are passed, some options may need to be issued under Listing Rule 10.11, but this is dependent upon which resolutions are passed.

As a result, it will not be known until the conclusion of the meeting whether all the options can be issued under the Plan (and therefore with approval under Listing Rule 10.14) or whether some will need to be issued under Listing Rule 10.11. The Board is therefore seeking shareholder approval to the issue of the options under both Listing Rule 10.11 and 10.14 in order to give it the flexibility to issue options under the Plan or otherwise, depending on the outcome of the meeting. All disclosures required to be made in respect of both Listing Rule 10.11 and Listing Rule 10.14 are set out in this Explanatory Memorandum.

Each option entitles the holder to subscribe for and be issued with one fully paid ordinary share in the Company. Shares issued upon the exercise of the options will rank equally in all respects with the existing Shares on issue.

The Board of Windimurra Vanadium Limited resolved to issue options to Iain Scott at the Board meeting of 8 May 2008, after a thorough and detailed review of executive remuneration which commenced in October 2007.

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Further to this resolution, shareholder approval for the grant of the options to Iain Scott is required for the purposes of Listing Rules 10.11 and 10.14 and section 208 of the Corporations Act.

Listing Rule 10.11

Listing Rule 10.11 provides that a company must not issue or agree to issue equity securities to a related party (which includes a director) without the approval of shareholders.

In compliance with the information requirements of Listing Rule 10.13 the following information is provided with respect to those options, if any, that are issued to Iain Scott outside the operation of the Plan:

• The options will be issued to Iain Scott, who is the Managing Director of the Company, or his nominated party.

• A total of 1,200,000 options will be issued to Iain Scott.

• The options will be issued to Iain Scott within 1 month of the date of this meeting.

• The options will be issued for no consideration.

• The options will be issued on terms equivalent to those under the Plan.

• There will be no funds raised from the issue of the options.

If approval is given for the issue of the options under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

Listing Rule 10.14

Listing Rule 10.14 provides that a company must not permit Directors or their associates to acquire securities under an employment incentive scheme (such as the Plan) without the approval of shareholders. Approval under Listing Rule 10.14 is an exception to the prohibition on a company issuing securities to related parties under Listing Rule 10.11.

In compliance with the information requirements of Listing Rule 10.15 the following information is provided with respect to those options, if any, issued to Iain Scott under the Plan:

• The options will be issued to Iain Scott, who is the Managing Director of the Company, or his nominated party;

• A total of 1,200,000 options will be issued to Iain Scott;

• The options will be issued for no consideration. This does not reflect the market price of Shares;

• Details of those persons that have received options since the last shareholder approval on 27 September 2006 are as follows:

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Date	Issued to	Qty	Exercise price	Exercise price
27-Sep-06	Michael Kiernan	250,000	$2.20	cancelled
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.70	exercised
01-Dec-06	Anthony Grey	162,500	$1.50	exercised
01-Dec-06	Shaun Bunn	125,000	$1.95	exercised
04-Dec-06	Michael Tamlin	125,000	$2.80
11-Apr-07	Michael Tamlin	125,000	$3.00
11-Apr-07	Michael Kiernan	250,000	$2.20	cancelled
11-Apr-07	Les Ford	100,000	$2.80
11-Apr-07	Shaun Bunn	125,000	$2.20	cancelled
19-Apr-07	Anthony Grey	162,500	$1.50	exercised
24-May-07	Les Ford	100,000	$3.00
13-Jul-07	Michael Tamlin	125,000	$3.30
15-Oct-07	Les Ford	100,000	$3.30
15-May-08	Iain Scott	250,000	$2.00	see below
22-Feb-08	Garry Korte	125,000	$2.60	see below
20-May-08	David English	125,000	$2.03
20-May-08	Martin Reed	500,000	$2.32
20-May-08	Mathew Lilly	125,000	$2.60

Iain Scott and Garry Korte’s options referred to above were granted pursuant to their original contracts of employment. While both now have the right to be granted these options, as at the date of this Notice no option certificates for these options have been issued. The options referred to above do not form part of the options the subject of Resolutions 5 and 6 of this Notice.

• All employees and directors are eligible to participate in the Plan;

• The Company will not be providing any loan to Iain Scott in connection with the issue of options or their subsequent exercise; and

• The Company will grant the options to Iain Scott within 12 months of the date of this meeting.

Section 208 of the Corporations Act

Subject to certain exceptions, Chapter 2E of the Corporations Act (which contains section 208) provides that a public company must not give a financial benefit to a related party of that company. Iain Scott is a director of the Company and therefore a related party. The grant of options to Iain Scott constitutes the giving of a financial benefit by the Company.

For the purposes of Chapter 2E, the following information is provided where it is not provided above:

The related party to whom the proposed resolutions would permit the financial benefit to be given - the options will be granted to Iain Scott, or his nominated party.

The nature of the financial benefit - the proposed financial benefit is the grant to Iain Scott of 1,200,000 options, for no consideration.

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Directors’ recommendation - for the reasons noted above, all Directors other than Iain Scott, who have no interest in the outcome of resolution 5, recommend that Shareholders vote in favour of the resolution. Iain Scott declines to make a recommendation regarding resolution 5 as he has a material personal interest in the outcome of the resolution as it relates to the proposed grant of options to him individually.

Any other information that is reasonably required by Shareholders to make a decision and that is known to the Company or any of its officers

The Company’s accounting advisers have suggested than an appropriate valuation of the options sought to be issued may be made using an enhanced trinomial approach option pricing method outlined below.

Valuation of the options

The options to be granted to Iain Scott after approval by Shareholders are not traded on the ASX and as such have no market value. Each option grants the holder the right to obtain one Share in the Company upon exercise of the option and payment of the exercise price of the option. Accordingly, the options may have a present value at the date of their grant. The options may acquire future value depending upon the extent to which the Share prices(s) exceed the exercise price during the term of the options.

Various factors will affect the value of the options including:

• the period outstanding before the expiry date of the options;

• the exercise price of the options relative to the underlying price or value of the Shares into which they may be converted;

• the proportion of the issued capital as expanded upon exercise of the options;

• the value of the Shares into which the options may be converted; and

• whether or not the options are listed (and therefore capable of being sold).

The Board has estimated the value of the options using an enhanced trinomial approach. The model incorporates a Monte Carlo simulation, which simulates the return of Windimurra shares and the return of the ASX 300 Resources Index in order to determine the likelihood of the vesting condition being met. The enhanced trinomial approach then calculates an option value adjusted for early exercise and the vesting condition.

To calculate the option value, it is necessary to assume certain inputs. The data relied upon in applying the enhanced trinomial approach to the options valuation was as follows:

• an exercise price of $2.12, $2.22 and $2.32 cents per option. These prices have been determined by the Board by applying a 10%, 15% and 20% premium respectively to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, 8 May 2008 being the date when the Board of Windimurra Vanadium Limited resolved to adopt its remuneration committee’s recommendation regarding Directors and Executives remuneration.

• the period of time for conversion being:

• Tranche 1 (400,000 options) – between the date of this meeting and 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary

15

shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008;

• Tranche 2 (400,000 options) – between 1 May 2009 and 1 May 2012 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009 and

• Tranche 3 (400,000 options) – between 1 May 2010 and 1 May 2013 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010.

• the Company has not forecast any future dividend payments. For the purpose of the analysis, it was assumed that the Company’s share price is “ex-dividend”;

• a volatility measure of 70%. This volatility factor was based on the variations in the share price of the Company’s Shares from 9 August 2005, being the date the agreement with Xstrata was finalised, to 7 May 2008. Management believe this period of time is the most appropriate given the change in the activities of the business, which are now focussed on the re-development of the Windimurra mine.

• the risk free rate used for the purposes of the analysis was the rate on current Treasury Bond yields with a maturity date approximating the expiry date of the options being 6.54%, 6.28% and 6.28% for each tranche respectively.

• the value of the Company’s share price at 7 May 2008 which was $2.29 cents per share. The Board notes that this share price is now historical and that the price of the Company’s shares necessarily fluctuates, affecting the value of the options. Shareholders should have regard to the price of the Company’s shares at the date of the meeting and in the future when considering the value of the options and this resolution.

Using the enhanced trinomial approach and the assumed data outlined above, the Board has valued the options to be granted to Iain Scott as at 8 May 2008 as follows:

Tranche 1 2 3 Total	Quantity of options 400,000 400,000 400,000 1,200,000	$ per option $1.0563 $0.8113 $0.9694	Total option value
			$422,520 $324,520 $387,760 $1,134,800

The Board draws Shareholders attention to the fact that the stated valuation relies on assumed data, and does not constitute and should not be taken as audited financial information.

The Board notes that the Company’s current senior management, who were recruited in the first half of 2007, have achieved considerable success in their short period with the project, including:

• closing project funding in January 2008 at a time of world wide credit pressure;

• obtaining sufficient gas resource for the project at an economic rate in an environment of enormous gas shortages and record high prices;

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• de-risking the project by negotiating a number of fixed price supply contracts, principal of which is a build own operate transfer (BOOT) contract with Mineral Resources Limited dated 5 October 2007 for the for the provision of mineral beneficiation services;

• obtaining all principal environmental approvals for the project; and

• reaching 50% of construction of the project complete within the current budget and schedule at a time of increasing construction costs and high inflation.

The Board notes however that there is still much to do to successfully complete the project and hence ensure that shareholders receive full value. These include:

• completing project construction on current schedule and budget;

• successfully commissioning the plant;

• ramping up production to name plate level; and

• executing the marketing plan.

In these circumstances the Board is of the view that successful completion of the project will create value for shareholders and that senior management should be suitably incentivised and motivated to generate these outcomes and to create a strong alignment of interest between management and shareholders.

Further, the increase in demand for commodities worldwide and the large number of mining projects under development has led to a shortage of suitably skilled and experienced senior management personnel integral to the successful development of the Windimurra Vanadium project. In this environment it is considered important to retain key management with the knowledge and capability to drive the development and ramp up of the Windimurra project.

As a consequence, in a process that commenced in October 2007 and finished in April 2008, the Company’s Remuneration Committee, with the assistance of remuneration expert Steve McDonald of McDonald & Company (Australasia) Pty Ltd, has reviewed the option packages of all directors and senior executives.

Subsequently, the Board at its meeting of 8 May 2008 resolved that option packages of Iain Scott and Garry Korte, as the Company’s most senior managers, be increased subject to shareholder approval.

The number of options proposed to be provided to Iain Scott, (i.e. 1,200,000 options), has been decided upon by the Directors having had regard to the above factors, Mr McDonald’s advice as to current market competitive option levels for directors and senior executives in companies of a similar size, and as an appropriate incentive to improve the Company’s performance.

Iain Scott’s total current remuneration is $474,000 consisting of the following components:

• annual base salary of $435,000;

• 250,000 options vesting 15 May 2008 at an exercise price of $2.00, each exercisable any time within 3 years of vesting (no certificate has been issued yet for these options);

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• 250,000 options vesting 15 May 2009 at an exercise price of $2.75, each exercisable any time within 3 years of vesting; and

• annual superannuation contributions of $39,150.

The above options were granted pursuant to Iain Scott’s original contract of employment and were approved by shareholders at the Company’s annual general meeting of 26 November 2007. The options referred to above do not form part of the options the subject of Resolution 5 of this Notice.

If the options granted to Iain Scott are exercised, the effect would be to dilute the shareholdings of the existing Shareholders.

As at the date of this Notice, the total issued capital of the Company comprised 153,678,674 Shares and 11,704,846 options. On a fully diluted basis assuming all options (including those proposed to be issued to other directors of the Company under resolutions 6, 7, 8, 9 and 10) are exercised, the grant of 1,200,000 options to Iain Scott represents approximately 0.7% of the Company’s total issued capital.

As at the date of this Notice, Iain Scott has the following interest in securities of the Company:

Shares: 5,000

Options:

• 250,000 options vesting 15 May 2008 at an exercise price of $2.00, each exercisable any time within 3 years of vesting (no certificate has been issued yet for these options); and

• 250,000 options vesting 15 May 2009 at an exercise price of $2.75, each exercisable any time within 3 years of vesting.

As stated previously, the above options were granted pursuant to Iain Scott’s original contract of employment and were approved by shareholders at the Company’s annual general meeting of 26 November 2007. The options referred to above do not form part of the options the subject of Resolution 5 of this Notice.

The market price of the Shares during the term of the options will normally determine whether or not the option holder exercises the options. At the time any options are exercised and shares issued pursuant to the exercise of the options, shares may be trading on the ASX at a price which is higher than the exercise price of the options.

The following table gives details of the highest, lowest, average and latest price of the Company’s Shares trading on the ASX over the past 12 months ending on 8 May 2008:

Highest price	Date of highest price	Lowest price	Date of lowest price	Latest price on 8 May 2008	Volume Weighted Average Price
$2.54	20 June 2007	$1.50	23 January 2008	$2.35	$1.90

The options are capable of being converted to Shares by payment of the exercise price.

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Under the Company’s current circumstances, the Directors consider that the incentive to Iain Scott which would be represented by the grant of the options would be a cost-effective and efficient incentive for the Company to provide, as opposed to alternative forms of incentives.

The Directors do not consider that from an economic and commercial point of view, there are any costs or detriments, including opportunity costs or taxation consequences for the Company or benefits foregone by the Company in issuing the options to Iain Scott pursuant to resolution 5.

In order to earn the right to the options, the percentage increase in the share price of the Company’s ordinary shares must exceed any percentage increase of the benchmark index selected (S&P ASX 300 RESOURCES INDEX) for the period 1 January 2008 to 1 May 2008 for Tranche 1 options, 1 May 2009 for Tranche 2 options, and the period 1 January 2008 to 1 May 2010 for Tranche 3 options.

In this way the benefit will only be provided in circumstances where shareholders benefit from a share price performance that exceeds the peer group performance. Not only will this promote performance by key senior management to drive outcomes that will improve share price performance to the benefit of shareholders, but this benefit will only be provided where this out-performance is achieved.

In order to ensure that the share price and index at the start and end points of the appropriate measurement period accurately reflect the same price, the share price and index will be calculated based on the 30 day volume weighted average price prior to the measurement point.

Neither the Directors nor the Company are aware of any other information that would be reasonably required by Shareholders to make a decision in relation to the financial benefits contemplated by resolution 5.

The Directors consider it reasonable and appropriate to issue options to Iain Scott as part of his remuneration and to act as an incentive linked to the enhancement of Shareholder value. The Directors (other than Iain Scott) therefore recommend that Shareholders vote in favour of resolution 5.

RESOLUTION 6: ISSUE OF OPTIONS TO GARRY KORTE (EXECUTIVE DIRECTOR)

Shareholders are asked to approve the issue of 750,000 options to Garry Korte, who is a Director and the Chief Financial Officer of the Company. The issue of options to Garry Korte is part of his remuneration and is to act as an incentive to further improve the Company’s performance.

The options will either be issued in accordance with the Company’s Executive and Employee Share Option Plan ( Plan ) or other mechanisms permitted by the Corporations Act and Listing Rule 10.11. If the latter the issue will be made subject to rules equivalent to the Plan. The options shall be issued on the terms set out below and in Annexure A to this Explanatory Memorandum (which forms part of this Explanatory Memorandum).

The Board would prefer to issue all options under resolutions 5 to 10 under the Plan (and therefore Listing Rule 10.14), however this may not be possible due to the operation of Rule 4.2 of the Plan (refer to Annexure A). Rule 4.2 provides that, with some exceptions, the Company must not issue options under the Plan where to do so would mean that, upon

19

exercise of those options and all other outstanding options issued under the Plan and other employee schemes, such shares (once exercised) would make up more than 5% of the issued capital of the Company.

Rule 4.2 is derived from ASIC Class Order [03/184] which provides the Company with relief from the requirement to provide a prospectus for the options under Chapter 6D of the Corporations Act.

If each of resolutions 5 to 10 are passed, not all of the options proposed to be issued to the Directors could be issued under the Plan as the total amount of options issued by the Company under the Plan would exceed 5% of its issued capital. Some of the options would therefore need to be issued under Listing Rule 10.11. If some, but not all, of resolutions 5 to 10 are passed, some options may need to be issued under Listing Rule 10.11, but this is dependent upon which resolutions are passed.

As a result, it will not be known until the conclusion of the meeting whether all the options can be issued under the Plan (and therefore with approval under Listing Rule 10.14) or whether some will need to be issued under Listing Rule 10.11. The Board is therefore seeking shareholder approval to the issue of the options under both Listing Rule 10.11 and 10.14 in order to give it the flexibility to issue options under the Plan or otherwise, depending on the outcome of the meeting. All disclosures required to be made in respect of both Listing Rule 10.11 and Listing Rule 10.14 are set out in this Explanatory Memorandum.

Each option entitles the holder to subscribe for and be issued with one fully paid ordinary share in the Company. Shares issued upon the exercise of the options will rank equally in all respects with the existing Shares on issue.

The Board of Windimurra Vanadium Limited resolved to issue options to Garry Korte at the Board meeting of 8 May 2008, after a thorough and detailed review of executive remuneration which commenced in October 2007.

Further to this resolution, shareholder approval for the grant of the options to Garry Korte is required for the purposes of Listing Rules 10.11 and 10.14 and section 208 of the Corporations Act.

Listing Rule 10.11

Listing Rule 10.11 provides that a company must not issue or agree to issue equity securities to a related party (which includes a director) without the approval of shareholders.

In compliance with the information requirements of Listing Rule 10.13 the following information is provided with respect to those options, if any, that are issued to Garry Korte outside the operation of the Plan:

• The options will be issued to Garry Korte, who is a Director and the Chief Financial Officer of the Company, or his nominated party.

• A total of 750,000 options will be issued to Garry Korte.

• The options will be issued to Garry Korte within 1 month of the date of this meeting.

• The options will be issued for no consideration.

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• The options will be issued on terms equivalent to those under the Plan.

• There will be no funds raised from the issue of the options.

If approval is given for the issue of the options under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

Listing Rule 10.14

Listing Rule 10.14 provides that a company must permit Directors or their associates to acquire securities under an employment incentive scheme (such as the Plan) without the approval of shareholders. Approval under Listing Rule 10.14 is an exception to the prohibition on a company issuing securities to related parties under Listing Rule 10.11.

In compliance with the information requirements of Listing Rule 10.15 the following information is provided with respect to those options, if any, that are issued to Garry Korte under the Plan:

• The options will be issued to Garry Korte, who is a Director and the Chief Financial Officer of the Company, or his nominated party;

• A total of 750,000 options will be issued to Garry Korte;

• The options will be issued for no consideration. This does not reflect the market price of Shares;

• Details of those persons that have received options since the last shareholder approval on 27 September 2006 are as follows:

Date	Issued to	Qty	Exercise price	Exercise price
27-Sep-06	Michael Kiernan	250,000	$2.20	cancelled
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.70	exercised
01-Dec-06	Anthony Grey	162,500	$1.50	exercised
01-Dec-06	Shaun Bunn	125,000	$1.95	exercised
04-Dec-06	Michael Tamlin	125,000	$2.80
11-Apr-07	Michael Tamlin	125,000	$3.00
11-Apr-07	Michael Kiernan	250,000	$2.20	cancelled
11-Apr-07	Les Ford	100,000	$2.80
11-Apr-07	Shaun Bunn	125,000	$2.20	cancelled
19-Apr-07	Anthony Grey	162,500	$1.50	exercised
24-May-07	Les Ford	100,000	$3.00
13-Jul-07	Michael Tamlin	125,000	$3.30
15-Oct-07	Les Ford	100,000	$3.30
15-May-08	Iain Scott	250,000	$2.00	see below
22-Feb-08	Garry Korte	125,000	$2.60	see below
20-May-08	David English	125,000	$2.03
20-May-08	Martin Reed	500,000	$2.32
20-May-08	Mathew Lilly	125,000	$2.60

Iain Scott and Garry Korte’s options referred to above were granted pursuant to their original contracts of employment. While both now have the right to be granted these options, as at the

21

date of this Notice no option certificates for these options have been issued. The options referred to above do not form part of the options the subject of Resolutions 5 and 6 of this Notice.

• All employees and directors are eligible to participate in the Plan;

• The Company will not be providing any loan to Garry Korte in connection with the issue of options or their subsequent exercise; and

• The Company will grant the options to Garry Korte within 12 months of the date of this meeting.

Section 208 of the Corporations Act

Subject to certain exceptions, Chapter 2E of the Corporations Act (which contains section 208) provides that a public company must not give a financial benefit to a related party of that company. Garry Korte is a director of the Company and therefore a related party. The grant of options to Garry Korte constitutes the giving of a financial benefit by the Company.

For the purposes of Chapter 2E, the following information is provided where it is not provided above:

The related party to whom the proposed resolutions would permit the financial benefit to be given - the options will be granted to Garry Korte, or his nominated party.

The nature of the financial benefit - the proposed financial benefit is the grant to Garry Korte of 750,000 options, for no consideration.

Directors’ recommendation - for the reasons noted above, all Directors other than Garry Korte, who have no interest in the outcome of resolution 6, recommend that Shareholders vote in favour of the resolution. Garry Korte declines to make a recommendation regarding resolution 6 as he has a material personal interest in the outcome of the resolution as it relates to the proposed grant of options to him individually.

Any other information that is reasonably required by Shareholders to make a decision and that is known to the Company or any of its officers

The Company’s accounting advisers have suggested than an appropriate valuation of the options sought to be issued may be made using an enhanced trinomial approach option pricing method outlined below.

Valuation of the options

The options to be granted to Garry Korte after approval by Shareholders are not traded on the ASX and as such have no market value. Each option grants the holder the right to obtain one Share in the Company upon exercise of the option and payment of the exercise price of the option. Accordingly, the options may have a present value at the date of their grant. The options may acquire future value depending upon the extent to which the Share prices(s) exceed the exercise price during the term of the options.

Various factors will affect the value of the options including:

• the period outstanding before the expiry date of the options;

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• the exercise price of the options relative to the underlying price or value of the Shares into which they may be converted;

• the proportion of the issued capital as expanded upon exercise of the options;

• the value of the Shares into which the options may be converted; and

• whether or not the options are listed (and therefore capable of being sold).

The Board has estimated the value of the options using an enhanced trinomial approach. The model incorporates a Monte Carlo simulation, which simulates the return of Windimurra shares and the return of the ASX 300 Resources Index in order to determine the likelihood of the vesting condition being met. The enhanced trinomial approach then calculates an option value adjusted for early exercise and the vesting condition.

To calculate the option value, it is necessary to assume certain inputs. The data relied upon in applying the enhanced trinomial approach to the options valuation was as follows:

• an exercise price of $2.12, $2.22 and $2.32 cents per option. These prices have been determined by the Board by applying a 10%, 15% and 20% premium respectively to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, 8 May 2008 being the date when the Board of Windimurra Vanadium Limited resolved to adopt its remuneration committee’s recommendation regarding Directors and Executives remuneration;

• the period of time for conversion being:

• Tranche 1 (250,000 options) – between the date of this meeting and 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008;

• Tranche 2 (250,000 options) – between 1 May 2009 and 1 May 2012 provided that provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009; and

• Tranche 3 (250,000 options) – between 1 May 2010 and 1 May 2013 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010.

• the Company has not forecast any future dividend payments. For the purpose of the analysis, it was assumed that the Company’s share price is “ex-dividend”;

• a volatility measure of 70%. This volatility factor was based on the variations in the share price of the Company’s Shares from 9 August 2005, being the date the agreement with Xstrata was finalised, to 7 May 2008. Management believe this period of time is the most appropriate given the change in the activities of the business, which are now focussed on the re-development of the Windimurra mine.

• the risk free rate used for the purposes of the analysis was the rate on current Treasury Bond yields with a maturity date approximating the expiry date of the options being 6.54%, 6.28% and 6.28% for each tranche respectively.

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• the value of the Company’s share price at 7 May 2008 which was $2.29 cents per share. The Board notes that this share price is now historical and that the price of the Company’s shares necessarily fluctuates, affecting the value of the options. Shareholders should have regard to the price of the Company’s shares at the date of the meeting and in the future when considering the value of the options and this resolution.

Using the enhanced trinomial approach and the assumed data outlined above, the Board has valued the options to be granted to Iain Scott as at 8 May 2008 as follows:

Tranche 1 2 3 Total	Quantity of options 250,000 250,000 250,000 750,000	$ per option $1.0563 $0.8113 $0.9694	Total option value
			$264,075 $202,825 $242,350 $709,250

The Board draws Shareholders attention to the fact that the stated valuation relies on assumed data, and does not constitute and should not be taken as audited financial information.

The Board notes that the Company’s current senior management, who were recruited in the first half of 2007, have achieved considerable success in their short period with the project, including:

• closing project funding in January 2008 at a time of world wide credit pressure;

• obtaining sufficient gas resource for the project at an economic rate in an environment of enormous gas shortages and record high prices;

• de-risking the project by negotiating a number of fixed price supply contracts, principal of which is a build own operate transfer (BOOT) contract with Mineral Resources Limited dated 5 October 2007 for the for the provision of mineral beneficiation services;

• obtaining all principal environmental approvals for the project; and

• reaching 50% of construction of the project complete within current budget and schedule at a time of increasing construction costs and high inflation.

The Board notes however that there is still much to do to successfully complete the project and hence ensure that shareholders receive full value. These include:

• completing project construction on current schedule and budget;

• successfully commissioning the plant;

• ramping up production to name plate level; and

• executing the marketing plan.

In these circumstances the Board is of the view that successful completion of the project will create value for shareholders and that senior management should be suitably incentivised and

24

motivated to generate these outcomes and to create a strong alignment of interest between management and shareholders.

Further, the increase in demand for commodities worldwide and the large number of mining projects under development has led to a shortage of suitably skilled and experienced senior management personnel integral to the successful development of the Windimurra Vanadium project. In this environment it is considered important to retain key management with the knowledge and capability to drive the development and ramp up of the Windimurra project.

As a consequence, in a process that commenced in October 2007 and finished in April 2008, the Company’s Remuneration Committee, with the assistance of remuneration expert Steve McDonald of McDonald & Company (Australasia) Pty Ltd, has reviewed the option packages of all directors and senior executives.

Subsequently, the Board at its meeting of 8 May 2008 resolved that option packages of Iain Scott and Garry Korte, as the Company’s most senior managers, be increased subject to shareholder approval.

The number of options proposed to be provided to Garry Korte, (i.e. 750,000 options), has been decided upon by the Directors having had regard to the above factors, Mr McDonald’s advice as to current market competitive option levels for directors and senior executives in companies of a similar size and as an appropriate incentive to improve the Company’s performance.

Garry Korte’s total current remuneration is $261,600 consisting of the following components:

• annual base salary of $240,000;

• 125,000 options vesting 22 February 2008 at an exercise price of $2.60 each exercisable any time within 3 years of vesting (no certificate has been issued yet for these options); and

• 125,000 options vesting 22 February 2009 at an exercise price of $3.30 each exercisable any time within 3 years of vesting; and

• annual superannuation contributions of $21,600.

The above options were granted pursuant to Garry Korte’s original contract of employment. They do not form part of the options the subject of Resolution 6 of this Notice.

If the options granted to Garry Korte are exercised, the effect would be to dilute the shareholdings of the existing Shareholders.

As at the date of this Notice, the total issued capital of the Company comprised 153,678,674 Shares and 11,704,846 options. On a fully diluted basis assuming all options (including those proposed to be issued to other directors of the Company under resolutions 5, 7, 8, 9 and 10) are exercised, the grant of 750,000 options to Garry Korte represents approximately 0.4% of the Company’s total issued capital.

As at the date of this Notice, Garry Korte has the following interest in securities of the Company:

Shares: Nil Options:

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• 125,000 options vesting 22 February 2008 at an exercise price of $2.60, each exercisable any time within 3 years of vesting (no certificate has been issued yet for these options); and

• 125,000 options vesting 22 February 2009 at an exercise price of $3.30, each exercisable any time within 3 years of vesting.

As stated previously, the above options were granted pursuant to Garry Korte’s original contract of employment. They do not form part of the options the subject of Resolution 6 of this Notice.

The market price of the Shares during the term of the options will normally determine whether or not the option holder exercises the options. At the time any options are exercised and shares issued pursuant to the exercise of the options, shares may be trading on the ASX at a price which is higher than the exercise price of the options.

The following table gives details of the highest, lowest, average and latest price of the Company’s Shares trading on the ASX over the past 12 months ending on 8 May 2008.

Highest price	Date of highest price	Lowest price	Date of lowest price	Latest price on 8 May 2008	Volume Weighted Average Price
$2.54	20 June 2007	$1.50	23 January 2008	$2.35	$1.90

The options are capable of being converted to Shares by payment of the exercise price.

Under the Company’s current circumstances, the Directors consider that the incentive to Garry Korte which would be represented by the grant of the options would be a cost-effective and efficient incentive for the Company to provide, as opposed to alternative forms of incentives.

The Directors do not consider that from an economic and commercial point of view, there are any costs or detriments, including opportunity costs or taxation consequences for the Company or benefits foregone by the Company in issuing the options to Garry Korte pursuant to resolution 6.

In order to earn the right to the options, the percentage increase in the share price of the Company’s ordinary shares must exceed any percentage increase of the benchmark index selected (S&P ASX 300 RESOURCES INDEX) for the period 1 January 2008 to 1 May 2008 for Tranche 1 options, 1 May 2009 for Tranche 2 options, and the period 1 January 2008 to 1 May 2010 for Tranche 3 options.

In this way the benefit will only be provided in circumstances where shareholders benefit from a share price performance that exceeds the peer group performance. Not only will this promote performance by key senior management to drive outcomes that will improve share price performance to the benefit of shareholders, but this benefit will only be provided where this out-performance is achieved.

In order to ensure that the share price and index at the start and end points of the appropriate measurement period accurately reflect the same price, the share price and index will be

26

calculated based on the 30 day volume weighted average price prior to the measurement point.

Neither the Directors nor the Company are aware of any other information that would be reasonably required by Shareholders to make a decision in relation to the financial benefits contemplated by resolution 6.

The Directors consider it reasonable and appropriate to issue options to Garry Korte as part of his remuneration and to act as an incentive linked to the enhancement of Shareholder value. The Directors (other than Garry Korte) therefore recommend that Shareholders vote in favour of resolution 6.

RESOLUTION 7: ISSUE OF OPTIONS TO DR. WOLF GERHARD MARTINICK (CHAIRMAN)

Shareholders are asked to approve the issue of 800,000 options to Wolf Martinick, who is a Director and the Chairman of the Company. The issue of options to Wolf Martinick is part of his remuneration and is to act as an incentive to further improve the Company’s performance.

The options will either be issued in accordance with the Company’s Executive and Employee Share Option Plan ( Plan ) or other mechanisms permitted by the Corporations Act and Listing Rule 10.11. If the latter the issue will be made subject to rules equivalent to the Plan. The options shall be issued on the terms set out below and in Annexure A to this Explanatory Memorandum (which forms part of this Explanatory Memorandum).

The Board would prefer to issue all options under resolutions 5 to 10 under the Plan (and therefore Listing Rule 10.14), however this may not be possible due to the operation of Rule 4.2 of the Plan (refer to Annexure A). Rule 4.2 provides that, with some exceptions, the Company must not issue options under the Plan where to do so would mean that, upon exercise of those options and all other outstanding options issued under the Plan and other employee schemes, such shares (once exercised) would make up more than 5% of the issued capital of the Company.

Rule 4.2 is derived from ASIC Class Order [03/184] which provides the Company with relief from the requirement to provide a prospectus for the options under Chapter 6D of the Corporations Act.

If each of resolutions 5 to 10 are passed, not all of the options proposed to be issued to the Directors could be issued under the Plan as the total amount of options issued by the Company under the Plan would exceed 5% of its issued capital. Some of the options would therefore need to be issued under Listing Rule 10.11. If some, but not all, of resolutions 5 to 10 are passed, some options may need to be issued under Listing Rule 10.11, but this is dependent upon which resolutions are passed.

As a result, it will not be known until the conclusion of the meeting whether all the options can be issued under the Plan (and therefore with approval under Listing Rule 10.14) or whether some will need to be issued under Listing Rule 10.11. The Board is therefore seeking shareholder approval to the issue of the options under both Listing Rule 10.11 and 10.14 in order to give it the flexibility to issue options under the Plan or otherwise, depending on the outcome of the meeting. All disclosures required to be made in respect of both Listing Rule 10.11 and Listing Rule 10.14 are set out in this Explanatory Memorandum.

27

Each option entitles the holder to subscribe for and be issued with one fully paid ordinary share in the Company. Shares issued upon the exercise of the options will rank equally in all respects with the existing Shares on issue.

The Board of Windimurra Vanadium Limited resolved to issue options to Wolf Martinick at the Board meeting of 8 May 2008, after a thorough and detailed review of non-executive remuneration which commenced in October 2007.

Further to this resolution, shareholder approval for the grant of the options to Wolf Martinick is required for the purposes of Listing Rules 10.11 and 10.14 and section 208 of the Corporations Act.

Listing Rule 10.11

Listing Rule 10.11 provides that a company must not issue or agree to issue equity securities to a related party (which includes a director) without the approval of shareholders.

In compliance with the information requirements of Listing Rule 10.13 the following information is provided with respect to those options, if any, that are issued to Wolf Martinick outside the operation of the Plan:

• The options will be issued to Wolf Martinick, who is a Director and the Chairman of the Company, or his nominated party.

• A total of 800,000 options will be issued to Wolf Martinick.

• The options will be issued to Wolf Martinick within 1 month of the date of this meeting.

• The options will be issued for no consideration.

• The options will be issued on terms equivalent to those under the Plan.

• There will be no funds raised from the issue of the options.

If approval is given for the issue of the options under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

Listing Rule 10.14

Listing Rule 10.14 provides that a company must not permit Directors or their associates to acquire securities under an employment incentive scheme (such as the Plan) without the approval of shareholders. Approval under Listing Rule 10.14 is an exception to the prohibition on a company issuing securities to related parties under Listing Rule 10.11.

In compliance with the information requirements of Listing Rule 10.15 the following information is provided with respect to those options, if any, that are issued to Wolf Martinick under the Plan:

• The options will be issued to Wolf Martinick, who is a Director and the Chairman of the Company, or his nominated party;

• A total of 800,000 options will be issued to Wolf Martinick;

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• The options will be issued for no consideration. This does not reflect the market price of Shares;

• Details of those persons that have received options since the last shareholder approval on 27 September 2006 are as follows:

Date	Issued to	Qty	Exercise price	Exercise price
27-Sep-06	Michael Kiernan	250,000	$2.20	cancelled
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.70	exercised
01-Dec-06	Anthony Grey	162,500	$1.50	exercised
01-Dec-06	Shaun Bunn	125,000	$1.95	exercised
04-Dec-06	Michael Tamlin	125,000	$2.80
11-Apr-07	Michael Tamlin	125,000	$3.00
11-Apr-07	Michael Kiernan	250,000	$2.20	cancelled
11-Apr-07	Les Ford	100,000	$2.80
11-Apr-07	Shaun Bunn	125,000	$2.20	cancelled
19-Apr-07	Anthony Grey	162,500	$1.50	exercised
24-May-07	Les Ford	100,000	$3.00
13-Jul-07	Michael Tamlin	125,000	$3.30
15-Oct-07	Les Ford	100,000	$3.30
15-May-08	Iain Scott	250,000	$2.00	see below
22-Feb-08	Garry Korte	125,000	$2.60	see below
20-May-08	David English	125,000	$2.03
20-May-08	Martin Reed	500,000	$2.32
20-May-08	Mathew Lilly	125,000	$2.60

Iain Scott and Garry Korte’s options referred to above were granted pursuant to their original contracts of employment. While both now have the right to be granted these options, as at the date of this Notice no option certificates for these options have been issued. The options referred to above do not form part of the options the subject of Resolutions 5 and 6 of this Notice.

• All employees and directors are eligible to participate in the Plan;

• The Company will not be providing any loan to Wolf Martinick in connection with the issue of options or their subsequent exercise; and

• The Company will grant the options to Wolf Martinick within 12 months of the date of this meeting.

Section 208 of the Corporations Act

Subject to certain exceptions, Chapter 2E of the Corporations Act (which contains section 208) provides that a public company must not give a financial benefit to a related party of that company. Wolf Martinick is a director of the Company and therefore a related party. The grant of options to Wolf Martinick constitutes the giving of a financial benefit by the Company.

For the purposes of Chapter 2E, the following information is provided where it is not provided above:

29

The related party to whom the proposed resolutions would permit the financial benefit to be given - the options will be granted to Wolf Martinick, or his nominated party.

The nature of the financial benefit - the proposed financial benefit is the grant to Wolf Martinick of 800,000 options, for no consideration.

Directors’ recommendation - for the reasons noted above, all Directors other than Wolf Martinick, who have no interest in the outcome of resolution 7, recommend that Shareholders vote in favour of the resolution. Wolf Martinick declines to make a recommendation regarding resolution 7 as he has a material personal interest in the outcome of the resolution as it relates to the proposed grant of options to him individually.

Any other information that is reasonably required by Shareholders to make a decision and that is known to the Company or any of its officers

The Company’s accounting advisers have suggested than an appropriate valuation of the options sought to be issued may be made using an enhanced trinomial approach option pricing method outlined below.

Valuation of the options

The options to be granted to Wolf Martinick after approval by Shareholders are not traded on the ASX and as such have no market value. Each option grants the holder the right to obtain one Share in the Company upon exercise of the option and payment of the exercise price of the option. Accordingly, the options may have a present value at the date of their grant. The options may acquire future value depending upon the extent to which the Share prices(s) exceed the exercise price during the term of the options.

Various factors will affect the value of the options including:

• the period outstanding before the expiry date of the options;

• the exercise price of the options relative to the underlying price or value of the Shares into which they may be converted;

• the proportion of the issued capital as expanded upon exercise of the options;

• the value of the Shares into which the options may be converted; and

• whether or not the options are listed (and therefore capable of being sold).

The Board has estimated the value of the options using an enhanced trinomial approach. The model incorporates a Monte Carlo simulation, which simulates the return of Windimurra shares and the return of the ASX 300 Resources Index in order to determine the likelihood of the vesting condition being met. The enhanced trinomial approach then calculates an option value adjusted for early exercise and the vesting condition.

To calculate the option value, it is necessary to assume certain inputs. The data relied upon in applying the enhanced trinomial approach to the options valuation was as follows:

• an exercise price of $2.12, $2.22 and $2.32 cents per option. These prices have been determined by the Board by applying a 10%, 15% and 20% premium respectively to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, 8 May 2008 being the date when the Board of Windimurra Vanadium

30

Limited resolved to adopt its remuneration committee’s recommendation regarding Directors and Executives remuneration;

• the period of time for conversion being:

• Tranche 1 (266,667 options) – between the date of this meeting and 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008;

• Tranche 2 (266,667 options) – between 1 May 2009 and 1 May 2012 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009; and

• Tranche 3 (266,667 options) – between 1 May 2010 and 1 May 2013 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010.

• the Company has not forecast any future dividend payments. For the purpose of the analysis, it was assumed that the Company’s share price is “ex-dividend”;

• a volatility measure of 70%. This volatility factor was based on the variations in the share price of the Company’s Shares from 9 August 2005, being the date the agreement with Xstrata was finalised, to 7 May 2008. Management believe this period of time is the most appropriate given the change in the activities of the business, which are now focussed on the re-development of the Windimurra mine.

• the risk free rate used for the purposes of the analysis was the rate on current Treasury Bond yields with a maturity date approximating the expiry date of the options being 6.54%, 6.28% and 6.28% for each tranche respectively.

• the value of the Company’s share price at 7 May 2008 which was $2.29 cents per share. The Board notes that this share price is now historical and that the price of the Company’s shares necessarily fluctuates, affecting the value of the options. Shareholders should have regard to the price of the Company’s shares at the date of the meeting and in the future when considering the value of the options and this resolution.

Using the enhanced trinomial approach and the assumed data outlined above, the Board has valued the options to be granted to Iain Scott as at 8 May 2008 as follows:

Tranche 1 2 3 Total	Quantity of options 266,667 266,667 266,667 800,001	$ per option $1.0563 $0.8113 $0.9694	Total option value
			$281,680 $216,347 $258,507 $756,534

The Board draws Shareholders attention to the fact that the stated valuation relies on assumed data, and does not constitute and should not be taken as audited financial information.

The Company’s Remuneration Committee, with the assistance of remuneration expert, Steve McDonald of McDonald & Company (Australasia) Pty Ltd, has reviewed the option packages of all directors and senior executives.

31

The responsibilities and obligations of directors and senior executives are continually increasing as a result of the growing emphasis in today’s corporate environment on corporate governance.

The number of options proposed to be provided to Wolf Martinick, (i.e. 800,000 options), has been decided upon by the Directors having had regard to these increasing responsibilities, Mr McDonald’s advice as to current market competitive option levels for directors and senior executives in companies of a similar size and as an appropriate incentive to improve the Company’s performance.

Wolf Martinick’s total current remuneration is $35,000 consisting of the following components:

• annual base salary of $32,110; and

• annual superannuation contributions of $2,890.

If the options granted to Wolf Martinick are exercised, the effect would be to dilute the shareholdings of the existing Shareholders.

As at the date of this Notice, the total issued capital of the Company comprised 153,678,674 Shares and 11,704,846 options. On a fully diluted basis assuming all options (including those proposed to be issued to other directors of the Company under resolutions 5, 6, 8, 9 and 10) are exercised, the grant of 800,000 options to Wolf Martinick represents approximately 0.5% of the Company’s total issued capital.

As at the date of this Notice, Wolf Martinick has the following interest in securities of the Company:

Shares: Nil Options: Nil

The market price of the Shares during the term of the options will normally determine whether or not the option holder exercises the options. At the time any options are exercised and shares issued pursuant to the exercise of the options, shares may be trading on the ASX at a price which is higher than the exercise price of the options.

The following table gives details of the highest, lowest, average and latest price of the Company’s Shares trading on the ASX over the past 12 months ending on 8 May 2008:

Highest price	Date of highest price	Lowest price	Date of lowest price	Latest price on 8 May 2008	Volume Weighted Average Price
$2.54	20 June 2007	$1.50	23 January 2008	$2.35	$1.90

The options are capable of being converted to Shares by payment of the exercise price.

Under the Company’s current circumstances, the Directors consider that the incentive to Wolf Martinick which would be represented by the grant of the options would be a cost-effective and efficient incentive for the Company to provide, as opposed to alternative forms of incentives.

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The Directors do not consider that from an economic and commercial point of view, there are any costs or detriments, including opportunity costs or taxation consequences for the Company or benefits foregone by the Company in issuing the options to Wolf Martinick pursuant to resolution 7.

In order to earn the right to the options, the percentage increase in the share price of the Company’s ordinary shares must exceed any percentage increase of the benchmark index selected (S&P ASX 300 RESOURCES INDEX) for the period 1 January 2008 to 1 May 2008 for Tranche 1 options, 1 May 2009 for Tranche 2 options, and the period 1 January 2008 to 1 May 2010 for Tranche 3 options.

In this way the benefit will only be provided in circumstances where shareholders benefit from a share price performance that exceeds the peer group performance. Not only will this promote performance by key senior management to drive outcomes that will improve share price performance to the benefit of shareholders, but this benefit will only be provided where this out-performance is achieved.

In order to ensure that the share price and index at the start and end points of the appropriate measurement period accurately reflect the same price, the share price and index will be calculated based on the 30 day volume weighted average price prior to the measurement point.

Neither the Directors nor the Company are aware of any other information that would be reasonably required by Shareholders to make a decision in relation to the financial benefits contemplated by resolution 7.

The Directors consider it reasonable and appropriate to issue options to Wolf Martinick as part of his remuneration and to act as an incentive linked to the enhancement of Shareholder value. The Directors (other than Wolf Martinick) therefore recommend that Shareholders vote in favour of resolution 7.

RESOLUTION 8: ISSUE OF OPTIONS TO THE EARL OF WARWICK (NONEXECUTIVE DIRECTOR)

Shareholders are asked to approve the issue of 500,000 options to the Earl of Warwick, who is a Non-Executive Director of the Company. The issue of options to the Earl of Warwick is part of his remuneration and is to act as an incentive to further improve the Company’s performance.

The options will either be issued in accordance with the Company’s Executive and Employee Share Option Plan ( Plan ) or other mechanisms permitted by the Corporations Act and Listing Rule 10.11. If the latter the issue will be made subject to rules equivalent to the Plan. The options shall be issued on the terms set out below and in Annexure A to this Explanatory Memorandum (which forms part of this Explanatory Memorandum).

The Board would prefer to issue all options under resolutions 5 to 10 under the Plan (and therefore Listing Rule 10.14), however this may not be possible due to the operation of Rule 4.2 of the Plan (refer to Annexure A). Rule 4.2 provides that, with some exceptions, the Company must not issue options under the Plan where to do so would mean that, upon exercise of those options and all other outstanding options issued under the Plan and other employee schemes, such shares (once exercised) would make up more than 5% of the issued capital of the Company.

33

Rule 4.2 is derived from ASIC Class Order [03/184] which provides the Company with relief from the requirement to provide a prospectus for the options under Chapter 6D of the Corporations Act.

If each of resolutions 5 to 10 are passed, not all of the options proposed to be issued to the Directors could be issued under the Plan as the total amount of options issued by the Company under the Plan would exceed 5% of its issued capital. Some of the options would therefore need to be issued under Listing Rule 10.11. If some, but not all, of resolutions 5 to 10 are passed, some options may need to be issued under Listing Rule 10.11, but this is dependent upon which resolutions are passed.

As a result, it will not be known until the conclusion of the meeting whether all the options can be issued under the Plan (and therefore with approval under Listing Rule 10.14) or whether some will need to be issued under Listing Rule 10.11. The Board is therefore seeking shareholder approval to the issue of the options under both Listing Rule 10.11 and 10.14 in order to give it the flexibility to issue options under the Plan or otherwise, depending on the outcome of the meeting. All disclosures required to be made in respect of both Listing Rule 10.11 and Listing Rule 10.14 are set out in this Explanatory Memorandum.

Each option entitles the holder to subscribe for and be issued with one fully paid ordinary share in the Company. Shares issued upon the exercise of the options will rank equally in all respects with the existing Shares on issue.

The Board of Windimurra Vanadium Limited resolved to issue options to the Earl of Warwick at the Board meeting of 8 May 2008, after a thorough and detailed review of nonexecutive remuneration which commenced in October 2007.

Further to this resolution, shareholder approval for the grant of the options to the Earl of Warwick is required for the purposes of Listing Rules 10.11 and 10.14 and section 208 of the Corporations Act.

Listing Rule 10.11

Listing Rule 10.11 provides that a company must not issue or agree to issue equity securities to a related party (which includes a director) without the approval of shareholders.

In compliance with the information requirements of Listing Rule 10.13 the following information is provided with respect to those options, if any, that are issued to the Earl of Warwick outside the operation of the Plan:

• The options will be issued to the Earl of Warwick, who is a Director of the Company, or his nominated party.

• A total of 500,000 options will be issued to the Earl of Warwick.

• The options will be issued to the Earl of Warwick within 1 month of the date of this meeting.

• The options will be issued for no consideration.

• The options will be issued on terms equivalent to those under the Plan.

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• There will be no funds raised from the issue of the options.

If approval is given for the issue of the options under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

Listing Rule 10.14

Listing Rule 10.14 provides that a company must not permit Directors or their associates to acquire securities under an employment incentive scheme (such as the Plan) without the approval of shareholders. Approval under Listing Rule 10.14 is an exception to the prohibition on a company issuing securities to related parties under Listing Rule 10.11.

In compliance with the information requirements of Listing Rule 10.15 the following information is provided with respect to those options, if any, issued to the Earl of Warwick under the Plan:

• The options will be issued to the Earl of Warwick, who is a Non-Executive Director of the Company, or his nominated party;

• A total of 500,000 options will be issued to the Earl of Warwick;

• The options will be issued for no consideration. This does not reflect the market price of Shares;

• Details of those persons that have received options since the last shareholder approval on 27 September 2006 are as follows:

Date	Issued to	Qty	Exercise price	Exercise price
27-Sep-06	Michael Kiernan	250,000	$2.20	cancelled
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.70	exercised
01-Dec-06	Anthony Grey	162,500	$1.50	exercised
01-Dec-06	Shaun Bunn	125,000	$1.95	exercised
04-Dec-06	Michael Tamlin	125,000	$2.80
11-Apr-07	Michael Tamlin	125,000	$3.00
11-Apr-07	Michael Kiernan	250,000	$2.20	cancelled
11-Apr-07	Les Ford	100,000	$2.80
11-Apr-07	Shaun Bunn	125,000	$2.20	cancelled
19-Apr-07	Anthony Grey	162,500	$1.50	exercised
24-May-07	Les Ford	100,000	$3.00
13-Jul-07	Michael Tamlin	125,000	$3.30
15-Oct-07	Les Ford	100,000	$3.30
15-May-08	Iain Scott	250,000	$2.00	see below
22-Feb-08	Garry Korte	125,000	$2.60	see below
20-May-08	David English	125,000	$2.03
20-May-08	Martin Reed	500,000	$2.32
20-May-08	Mathew Lilly	125,000	$2.60

Iain Scott and Garry Korte’s options referred to above were granted pursuant to their original contracts of employment. While both now have the right to be granted these options, as at the date of this Notice no option certificates for these options have been issued. The options

35

referred to above do not form part of the options the subject of Resolutions 5 and 6 of this Notice.

• All employees and directors are eligible to participate in the Plan;

• The Company will not be providing any loan to the Earl of Warwick in connection with the issue of options or their subsequent exercise; and

• The Company will grant the options to the Earl of Warwick within 12 months of the date of this meeting.

Section 208 of the Corporations Act

Subject to certain exceptions, Chapter 2E of the Corporations Act (which contains section 208) provides that a public company must not give a financial benefit to a related party of that company. The Earl of Warwick is a director of the Company and therefore a related party. The grant of options to the Earl of Warwick constitutes the giving of a financial benefit by the Company.

For the purposes of Chapter 2E, the following information is provided where it is not provided above:

The related party to whom the proposed resolutions would permit the financial benefit to be given - the options will be granted to the Earl of Warwick, or his nominated party.

The nature of the financial benefit - the proposed financial benefit is the grant to the Earl of Warwick of 500,000 options, for no consideration.

Directors’ recommendation - for the reasons noted above, all Directors other than the Earl of Warwick, who have no interest in the outcome of resolution 8, recommend that Shareholders vote in favour of the resolution. The Earl of Warwick declines to make a recommendation regarding resolution 8 as he has a material personal interest in the outcome of the resolution as it relates to the proposed grant of options to him individually.

Any other information that is reasonably required by Shareholders to make a decision and that is known to the Company or any of its officers

The Company’s accounting advisers have suggested than an appropriate valuation of the options sought to be issued may be made using an enhanced trinomial approach option pricing method outlined below.

Valuation of the options

The options to be granted to the Earl of Warwick after approval by Shareholders are not traded on the ASX and as such have no market value. Each option grants the holder the right to obtain one Share in the Company upon exercise of the option and payment of the exercise price of the option. Accordingly, the options may have a present value at the date of their grant. The options may acquire future value depending upon the extent to which the Share prices(s) exceed the exercise price during the term of the options.

Various factors will affect the value of the options including:

• the period outstanding before the expiry date of the options;

36

• the exercise price of the options relative to the underlying price or value of the Shares into which they may be converted;

• the proportion of the issued capital as expanded upon exercise of the options;

• the value of the Shares into which the options may be converted; and

• whether or not the options are listed (and therefore capable of being sold).

The Board has estimated the value of the options using an enhanced trinomial approach. The model incorporates a Monte Carlo simulation, which simulates the return of Windimurra shares and the return of the ASX 300 Resources Index in order to determine the likelihood of the vesting condition being met. The enhanced trinomial approach then calculates an option value adjusted for early exercise and the vesting condition.

To calculate the option value, it is necessary to assume certain inputs. The data relied upon in applying the enhanced trinomial approach to the options valuation was as follows:

• an exercise price of $2.12, $2.22 and $2.32 cents per option. These prices have been determined by the Board by applying a 10%, 15% and 20% premium respectively to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, 8 May 2008 being the date when the Board of Windimurra Vanadium Limited resolved to adopt its remuneration committee’s recommendation regarding Directors and Executives remuneration;

• the period of time for conversion being:

• Tranche 1 (166,667 options) – between the date of this meeting and 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008;

• Tranche 2 (166,667 options) – between 1 May 2009 and 1 May 2012 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009; and

• Tranche 3 (166,667 options) – between 1 May 2010 and 1 May 2013 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010.

• the Company has not forecast any future dividend payments. For the purpose of the analysis, it was assumed that the Company’s share price is “ex-dividend”;

• a volatility measure of 70%. This volatility factor was based on the variations in the share price of the Company’s Shares from 9 August 2005, being the date the agreement with Xstrata was finalised, to 7 May 2008. Management believe this period of time is the most appropriate given the change in the activities of the business, which are now focussed on the re-development of the Windimurra mine.

• the risk free rate used for the purposes of the analysis was the rate on current Treasury Bond yields with a maturity date approximating the expiry date of the options being 6.54%, 6.28% and 6.28% for each tranche respectively.

37

• the value of the Company’s share price at 7 May 2008 which was $2.29 cents per share. The Board notes that this share price is now historical and that the price of the Company’s shares necessarily fluctuates, affecting the value of the options. Shareholders should have regard to the price of the Company’s shares at the date of the meeting and in the future when considering the value of the options and this resolution.

Using the enhanced trinomial approach and the assumed data outlined above, the Board has valued the options to be granted to Iain Scott as at 8 May 2008 as follows:

Tranche 1 2 3 Total	Quantity of options 166,667 166,667 166,667 500,001	$ per option $1.0563 $0.8113 $0.9694	Total option value
			$176,050 $135,217 $161,567 $472,834

The Board draws Shareholders attention to the fact that the stated valuation relies on assumed data, and does not constitute and should not be taken as audited financial information.

The Company’s Remuneration Committee, with the assistance of remuneration expert, Steve McDonald of McDonald & Company (Australasia) Pty Ltd, has reviewed the option packages of all directors and senior executives.

The responsibilities and obligations of directors and senior executives are continually increasing as a result of the growing emphasis in today’s corporate environment on corporate governance.

The number of options proposed to be provided to the Earl of Warwick, (i.e. 500,000 options), has been decided upon by the Directors having had regard to these increasing responsibilities, Mr McDonald’s advice as to current market competitive option levels for directors and senior executives in companies of a similar size and as an appropriate incentive to improve the Company’s performance.

The Earl of Warwick’s total current remuneration is $109,000 consisting of the following components:

• annual base salary of $100,000; and

• annual superannuation contributions of $9,000.

If the options granted to the Earl of Warwick are exercised, the effect would be to dilute the shareholdings of the existing Shareholders.

As at the date of this Notice, the total issued capital of the Company comprised 153,678,674 Shares and 11,704,846 options. On a fully diluted basis assuming all options (including those proposed to be issued to other directors of the Company under resolutions 5, 6, 7, 9 and 10) are exercised, the grant of 500,000 options to the Earl of Warwick represents approximately 0.3% of the Company’s total issued capital.

As at the date of this Notice, the Earl of Warwick has the following interest in securities of the Company:

Shares: 1,509,664 Options: Nil

38

The market price of the Shares during the term of the options will normally determine whether or not the option holder exercises the options. At the time any options are exercised and shares issued pursuant to the exercise of the options, shares may be trading on the ASX at a price which is higher than the exercise price of the options.

The following table gives details of the highest, lowest, average and latest price of the Company’s Shares trading on the ASX over the past 12 months ending on 8 May 2008:

Highest price	Date of highest price	Lowest price	Date of lowest price	Latest price on 8 May 2008	Volume Weighted Average Price
$2.54	20 June 2007	$1.50	23 January 2008	$2.35	$1.90

The options are capable of being converted to Shares by payment of the exercise price.

Under the Company’s current circumstances, the Directors consider that the incentive to the Earl of Warwick which would be represented by the grant of the options would be a costeffective and efficient incentive for the Company to provide, as opposed to alternative forms of incentives.

The Directors do not consider that from an economic and commercial point of view, there are any costs or detriments, including opportunity costs or taxation consequences for the Company or benefits foregone by the Company in issuing the options to the Earl of Warwick pursuant to resolution 8.

In order to earn the right to the options, the percentage increase in the share price of the Company’s ordinary shares must exceed any percentage increase of the benchmark index selected (S&P ASX 300 RESOURCES INDEX) for the period 1 January 2008 to 1 May 2008 for Tranche 1 options, 1 May 2009 for Tranche 2 options, and the period 1 January 2008 to 1 May 2010 for Tranche 3 options.

In this way the benefit will only be provided in circumstances where shareholders benefit from a share price performance that exceeds the peer group performance. Not only will this promote performance by key senior management to drive outcomes that will improve share price performance to the benefit of shareholders, but this benefit will only be provided where this out-performance is achieved.

In order to ensure that the share price and index at the start and end points of the appropriate measurement period accurately reflect the same price, the share price and index will be calculated based on the 30 day volume weighted average price prior to the measurement point.

Neither the Directors nor the Company are aware of any other information that would be reasonably required by Shareholders to make a decision in relation to the financial benefits contemplated by resolution 8.

The Directors consider it reasonable and appropriate to issue options to the Earl of Warwick as part of his remuneration and to act as an incentive linked to the enhancement of Shareholder value. The Directors (other than the Earl of Warwick) therefore recommend that Shareholders vote in favour of resolution 8.

39

RESOLUTION 9: ISSUE OF OPTIONS TO PHILLIP GEORGE LASKARIS (NONEXECUTIVE DIRECTOR)

Shareholders are asked to approve the issue of 500,000 options to Phillip Laskaris, who is a Non-Executive Director of the Company. The issue of options to Phillip Laskaris is part of his remuneration and is to act as an incentive to further improve the Company’s performance.

The options will either be issued in accordance with the Company’s Executive and Employee Share Option Plan ( Plan ) or other mechanisms permitted by the Corporations Act and Listing Rule 10.11. If the latter the issue will be made subject to rules equivalent to the Plan. The options shall be issued on the terms set out below and in Annexure A to this Explanatory Memorandum (which forms part of this Explanatory Memorandum).

The Board would prefer to issue all options under resolutions 5 to 10 under the Plan (and therefore Listing Rule 10.14), however this may not be possible due to the operation of Rule 4.2 of the Plan (refer to Annexure A). Rule 4.2 provides that, with some exceptions, the Company must not issue options under the Plan where to do so would mean that, upon exercise of those options and all other outstanding options issued under the Plan and other employee schemes, such shares (once exercised) would make up more than 5% of the issued capital of the Company.

Rule 4.2 is derived from ASIC Class Order [03/184] which provides the Company with relief from the requirement to provide a prospectus for the options under Chapter 6D of the Corporations Act.

If each of resolutions 5 to 10 are passed, not all of the options proposed to be issued to the Directors could be issued under the Plan as the total amount of options issued by the Company under the Plan would exceed 5% of its issued capital. Some of the options would therefore need to be issued under Listing Rule 10.11. If some, but not all, of resolutions 5 to 10 are passed, some options may need to be issued under Listing Rule 10.11, but this is dependent upon which resolutions are passed.

As a result, it will not be known until the conclusion of the meeting whether all the options can be issued under the Plan (and therefore with approval under Listing Rule 10.14) or whether some will need to be issued under Listing Rule 10.11. The Board is therefore seeking shareholder approval to the issue of the options under both Listing Rule 10.11 and 10.14 in order to give it the flexibility to issue options under the Plan or otherwise, depending on the outcome of the meeting. All disclosures required to be made in respect of both Listing Rule 10.11 and Listing Rule 10.14 are set out in this Explanatory Memorandum.

Each option entitles the holder to subscribe for and be issued with one fully paid ordinary share in the Company. Shares issued upon the exercise of the options will rank equally in all respects with the existing Shares on issue.

The Board of Windimurra Vanadium Limited resolved to issue options to Phillip Laskaris at the Board meeting of 8 May 2008, after a thorough and detailed review of non-executive remuneration which commenced in October 2007.

40

Further to this resolution, shareholder approval for the grant of the options to Phillip Laskaris is required for the purposes of Listing Rules 10.11 and 10.14 and section 208 of the Corporations Act.

Listing Rule 10.11

Listing Rule 10.11 provides that a company must not issue or agree to issue equity securities to a related party (which includes a director) without the approval of shareholders.

In compliance with the information requirements of Listing Rule 10.13 the following information is provided with respect to those options, if any, that are issued to Phillip Laskaris outside the operation of the Plan:

• The options will be issued to Phillip Laskaris, who is a Director of the Company, or his nominated party.

• A total of 500,000 options will be issued to Phillip Laskaris.

• The options will be issued to Phillip Laskaris within 1 month of the date of this meeting.

• The options will be issued for no consideration.

• The options will be issued on terms equivalent to those under the Plan.

• There will be no funds raised from the issue of the options.

If approval is given for the issue of the options under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

Listing Rule 10.14

Listing Rule 10.14 provides that a company must not permit Directors or their associates to acquire securities under an employment incentive scheme (such as the Plan) without the approval of shareholders. Approval under Listing Rule 10.14 is an exception to the prohibition on a company issuing securities to related parties under Listing Rule 10.11.

In compliance with the information requirements of Listing Rule 10.15 the following information is provided with respect to those options, if any, to be issued to Phillip Laskaris under the Plan:

• The options will be issued to Phillip Laskaris, who is a Non-Executive Director of the Company, or his nominated party;

• A total of 500,000 options will be issued to Phillip Laskaris;

• The options will be issued for no consideration. This does not reflect the market price of Shares;

• Details of those persons that have received options since the last shareholder approval on 27 September 2006 are as follows:

Date	Issued to	Qty	Exercise price	Exercise price
27-Sep-06	Michael Kiernan	250,000	$2.20	cancelled
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.50	exercised

41

27-Sep-06	Shaun Bunn	125,000	$1.70	exercised
01-Dec-06	Anthony Grey	162,500	$1.50	exercised
01-Dec-06	Shaun Bunn	125,000	$1.95	exercised
04-Dec-06	Michael Tamlin	125,000	$2.80
11-Apr-07	Michael Tamlin	125,000	$3.00
11-Apr-07	Michael Kiernan	250,000	$2.20	cancelled
11-Apr-07	Les Ford	100,000	$2.80
11-Apr-07	Shaun Bunn	125,000	$2.20	cancelled
19-Apr-07	Anthony Grey	162,500	$1.50	exercised
24-May-07	Les Ford	100,000	$3.00
13-Jul-07	Michael Tamlin	125,000	$3.30
15-Oct-07	Les Ford	100,000	$3.30
15-May-08	Iain Scott	250,000	$2.00	see below
22-Feb-08	Garry Korte	125,000	$2.60	see below
20-May-08	David English	125,000	$2.03
20-May-08	Martin Reed	500,000	$2.32
20-May-08	Mathew Lilly	125,000	$2.60

Iain Scott and Garry Korte’s options referred to above were granted pursuant to their original contracts of employment. While both now have the right to be granted these options, as at the date of this Notice no option certificates for these options have been issued. The options referred to above do not form part of the options the subject of Resolutions 5 and 6 of this Notice.

• All employees and directors are eligible to participate in the Plan;

• The Company will not be providing any loan to Phillip Laskaris in connection with the issue of options or their subsequent exercise; and

• The Company will grant the options to Phillip Laskaris within 12 months of the date of this meeting.

Section 208 of the Corporations Act

Subject to certain exceptions, Chapter 2E of the Corporations Act (which contains section 208) provides that a public company must not give a financial benefit to a related party of that company. Phillip Laskaris is a director of the Company and therefore a related party. The grant of options to Phillip Laskaris constitutes the giving of a financial benefit by the Company.

For the purposes of Chapter 2E, the following information is provided where it is not provided above:

The related party to whom the proposed resolutions would permit the financial benefit to be given - the options will be granted to the Phillip Laskaris, or his nominated party.

The nature of the financial benefit - the proposed financial benefit is the grant to Phillip Laskaris of 500,000 options, for no consideration.

Directors’ recommendation - for the reasons noted above, all Directors other than Phillip Laskaris, who have no interest in the outcome of resolution 9, recommend that Shareholders vote in favour of the resolution. Phillip Laskaris declines to make a recommendation

42

regarding resolution 9 as he has a material personal interest in the outcome of the resolution as it relates to the proposed grant of options to him individually.

Any other information that is reasonably required by Shareholders to make a decision and that is known to the Company or any of its officers

The Company’s accounting advisers have suggested than an appropriate valuation of the options sought to be issued may be made using an enhanced trinomial approach option pricing method outlined below.

Valuation of the options

The options to be granted to Phillip Laskaris after approval by Shareholders are not traded on the ASX and as such have no market value. Each option grants the holder the right to obtain one Share in the Company upon exercise of the option and payment of the exercise price of the option. Accordingly, the options may have a present value at the date of their grant. The options may acquire future value depending upon the extent to which the Share prices(s) exceed the exercise price during the term of the options.

Various factors will affect the value of the options including:

• the period outstanding before the expiry date of the options;

• the exercise price of the options relative to the underlying price or value of the Shares into which they may be converted;

• the proportion of the issued capital as expanded upon exercise of the options;

• the value of the Shares into which the options may be converted; and

• whether or not the options are listed (and therefore capable of being sold).

The Board has estimated the value of the options using an enhanced trinomial approach. The model incorporates a Monte Carlo simulation, which simulates the return of Windimurra shares and the return of the ASX 300 Resources Index in order to determine the likelihood of the vesting condition being met. The enhanced trinomial approach then calculates an option value adjusted for early exercise and the vesting condition.

To calculate the option value, it is necessary to assume certain inputs. The data relied upon in applying the enhanced trinomial approach to the options valuation was as follows:

• an exercise price of $2.12, $2.22 and $2.32 cents per option. These prices have been determined by the Board by applying a 10%, 15% and 20% premium respectively to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, 8 May 2008 being the date when the Board of Windimurra Vanadium Limited resolved to adopt its remuneration committee’s recommendation regarding Directors and Executives remuneration;

• the period of time for conversion being:

• Tranche 1 (166,667 options) – between the date of this meeting and 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008;

43

• Tranche 2 (166,667 options) – between 1 May 2009 and 1 May 2012 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009; and

• Tranche 3 (166,667 options) – between 1 May 2010 and 1 May 2013 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010.

• the Company has not forecast any future dividend payments. For the purpose of the analysis, it was assumed that the Company’s share price is “ex-dividend”;

• a volatility measure of 70%. This volatility factor was based on the variations in the share price of the Company’s Shares from 9 August 2005, being the date the agreement with Xstrata was finalised, to 7 May 2008. Management believe this period of time is the most appropriate given the change in the activities of the business, which are now focussed on the re-development of the Windimurra mine.

• the risk free rate used for the purposes of the analysis was the rate on current Treasury Bond yields with a maturity date approximating the expiry date of the options being 6.54%, 6.28% and 6.28% for each tranche respectively.

• the value of the Company’s share price at 7 May 2008 which was $2.29 cents per share. The Board notes that this share price is now historical and that the price of the Company’s shares necessarily fluctuates, affecting the value of the options. Shareholders should have regard to the price of the Company’s shares at the date of the meeting and in the future when considering the value of the options and this resolution.

Using the enhanced trinomial approach and the assumed data outlined above, the Board has valued the options to be granted to Iain Scott as at 8 May 2008 as follows:

Tranche 1 2 3 Total	Quantity of options 166,667 166,667 166,667 500,001	$ per option $1.0563 $0.8113 $0.9694	Total option value
			$176,050 $135,217 $161,567 $472,834

The Board draws Shareholders attention to the fact that the stated valuation relies on assumed data, and does not constitute and should not be taken as audited financial information.

The Company’s Remuneration Committee, with the assistance of remuneration expert, Steve McDonald of McDonald & Company (Australasia) Pty Ltd, has reviewed the option packages of all directors and senior executives.

The responsibilities and obligations of directors and senior executives are continually increasing as a result of the growing emphasis in today’s corporate environment on corporate governance.

The number of options proposed to be provided to Phillip Laskaris, (i.e. 500,000 options), has been decided upon by the Directors having had regard to these increasing responsibilities, Mr McDonald’s advice as to current market competitive option levels for directors and senior

44

executives in companies of a similar size and as an appropriate incentive to improve the Company’s performance.

Phillip Laskaris’s total current remuneration is $35,000 consisting of the following components:

• annual base salary of $32,110; and

• annual superannuation contributions of $2,890.

If the options granted to Phillip Laskaris are exercised, the effect would be to dilute the shareholdings of the existing Shareholders.

As at the date of this Notice, the total issued capital of the Company comprised 153,678,674 Shares and 11,704,846 options. On a fully diluted basis assuming all options (including those proposed to be issued to other directors of the Company under resolutions 5, 6, 7, 8 and 10) are exercised, the grant of 500,000 options to Phillip Laskaris represents approximately 0.3% of the Company’s total issued capital.

As at the date of this Notice, Phillip Laskaris has the following interest in securities of the Company:

Shares: Nil Options: Nil

The market price of the Shares during the term of the options will normally determine whether or not the option holder exercises the options. At the time any options are exercised and shares issued pursuant to the exercise of the options, shares may be trading on the ASX at a price which is higher than the exercise price of the options.

The following table gives details of the highest, lowest, average and latest price of the Company’s Shares trading on the ASX over the past 12 months ending on 8 May 2008:

Highest price	Date of highest price	Lowest price	Date of lowest price	Latest price on 8 May 2008	Volume Weighted Average Price
$2.54	20 June 2007	$1.50	23 January 2008	$2.35	$1.90

The options are capable of being converted to Shares by payment of the exercise price.

Under the Company’s current circumstances, the Directors consider that the incentive to Phillip Laskaris which would be represented by the grant of the options would be a costeffective and efficient incentive for the Company to provide, as opposed to alternative forms of incentives.

The Directors do not consider that from an economic and commercial point of view, there are any costs or detriments, including opportunity costs or taxation consequences for the Company or benefits foregone by the Company in issuing the options to Phillip Laskaris pursuant to resolution 9.

In order to earn the right to the options, the percentage increase in the share price of the Company’s ordinary shares must exceed any percentage increase of the benchmark index

45

selected (S&P ASX 300 RESOURCES INDEX) for the period 1 January 2008 to 1 May 2008 for Tranche 1 options, 1 May 2009 for Tranche 2 options, and the period 1 January 2008 to 1 May 2010 for Tranche 3 options.

In this way the benefit will only be provided in circumstances where shareholders benefit from a share price performance that exceeds the peer group performance. Not only will this promote performance by key senior management to drive outcomes that will improve share price performance to the benefit of shareholders, but this benefit will only be provided where this out-performance is achieved.

In order to ensure that the share price and index at the start and end points of the appropriate measurement period accurately reflect the same price, the share price and index will be calculated based on the 30 day volume weighted average price prior to the measurement point.

Neither the Directors nor the Company are aware of any other information that would be reasonably required by Shareholders to make a decision in relation to the financial benefits contemplated by resolution 9.

The Directors consider it reasonable and appropriate to issue options to Phillip Laskaris as part of his remuneration and to act as an incentive linked to the enhancement of Shareholder value. The Directors (other than Phillip Laskaris) therefore recommend that Shareholders vote in favour of resolution 9.

RESOLUTION 10: ISSUE OF OPTIONS TO NICHOLAS CHARLES MORLAND (NON-EXECUTIVE DIRECTOR)

Shareholders are asked to approve the issue of 500,000 options to Nicholas Morland, who is a Non-Executive Director of the Company. The issue of options to Nicholas Morland is part of his remuneration and is to act as an incentive to further improve the Company’s performance.

The options will either be issued in accordance with the Company’s Executive and Employee Share Option Plan ( Plan ) or other mechanisms permitted by the Corporations Act and Listing Rule 10.11. If the latter the issue will be made subject to rules equivalent to the Plan. The options shall be issued on the terms set out below and in Annexure A to this Explanatory Memorandum (which forms part of this Explanatory Memorandum).

The Board would prefer to issue all options under resolutions 5 to 10 under the Plan (and therefore Listing Rule 10.14), however this may not be possible due to the operation of Rule 4.2 of the Plan (refer to Annexure A). Rule 4.2 provides that, with some exceptions, the Company must not issue options under the Plan where to do so would mean that, upon exercise of those options and all other outstanding options issued under the Plan and other employee schemes, such shares (once exercised) would make up more than 5% of the issued capital of the Company.

Rule 4.2 is derived from ASIC Class Order [03/184] which provides the Company with relief from the requirement to provide a prospectus for the options under Chapter 6D of the Corporations Act.

If each of resolutions 5 to 10 are passed, not all of the options proposed to be issued to the Directors could be issued under the Plan as the total amount of options issued by the Company under the Plan would exceed 5% of its issued capital. Some of the options would

46

therefore need to be issued under Listing Rule 10.11. If some, but not all, of resolutions 5 to 10 are passed, some options may need to be issued under Listing Rule 10.11, but this is dependent upon which resolutions are passed.

As a result, it will not be known until the conclusion of the meeting whether all the options can be issued under the Plan (and therefore with approval under Listing Rule 10.14) or whether some will need to be issued under Listing Rule 10.11. The Board is therefore seeking shareholder approval to the issue of the options under both Listing Rule 10.11 and 10.14 in order to give it the flexibility to issue options under the Plan or otherwise, depending on the outcome of the meeting. All disclosures required to be made in respect of both Listing Rule 10.11 and Listing Rule 10.14 are set out in this Explanatory Memorandum.

Each option entitles the holder to subscribe for and be issued with one fully paid ordinary share in the Company. Shares issued upon the exercise of the options will rank equally in all respects with the existing Shares on issue.

The Board of Windimurra Vanadium Limited resolved to issue options to Nicholas Morland at the Board meeting of 8 May 2008, after a thorough and detailed review of non-executive remuneration which commenced in October 2007.

Further to this resolution, shareholder approval for the grant of the options to Nicholas Morland is required for the purposes of Listing Rules 10.11 and 10.14 and section 208 of the Corporations Act.

Listing Rule 10.11

Listing Rule 10.11 provides that a company must not issue or agree to issue equity securities to a related party (which includes a director) without the approval of shareholders.

In compliance with the information requirements of Listing Rule 10.13 the following information is provided with respect to those options, if any, that are issued to Nicholas Morland outside the operation of the Plan:

• The options will be issued to Nicholas Morland, who is a Director of the Company, or his nominated party.

• A total of 500,000 options will be issued to Nicholas Morland.

• The options will be issued to Nicholas Morland within 1 month of the date of this meeting.

• The options will be issued for no consideration.

• The options will be issued on terms equivalent to those under the Plan.

• There will be no funds raised from the issue of the options.

If approval is given for the issue of the options under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

47

Listing Rule 10.14

Listing Rule 10.14 provides that a company must not permit Directors or their associates to acquire securities under an employment incentive scheme (such as the Plan) without the approval of shareholders. Approval under Listing Rule 10.14 is an exception to the prohibition on a company issuing securities to related parties under Listing Rule 10.11.

In compliance with the information requirements of Listing Rule 10.15 the following information is provided with respect to those options, if any, to be issued to Nicholas Morland under the Plan:

• The options will be issued to Nicholas Morland, who is a Non-Executive Director of the Company, or his nominated party;

• A total of 500,000 options will be issued to Nicholas Morland;

• The options will be issued for no consideration. This does not reflect the market price of Shares;

• Details of those persons that have received options since the last shareholder approval on 27 September 2006 are as follows:

Date	Issued to	Qty	Exercise price	Exercise price
27-Sep-06	Michael Kiernan	250,000	$2.20	cancelled
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Anthony Grey	162,500	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.50	exercised
27-Sep-06	Shaun Bunn	125,000	$1.70	exercised
01-Dec-06	Anthony Grey	162,500	$1.50	exercised
01-Dec-06	Shaun Bunn	125,000	$1.95	exercised
04-Dec-06	Michael Tamlin	125,000	$2.80
11-Apr-07	Michael Tamlin	125,000	$3.00
11-Apr-07	Michael Kiernan	250,000	$2.20	cancelled
11-Apr-07	Les Ford	100,000	$2.80
11-Apr-07	Shaun Bunn	125,000	$2.20	cancelled
19-Apr-07	Anthony Grey	162,500	$1.50	exercised
24-May-07	Les Ford	100,000	$3.00
13-Jul-07	Michael Tamlin	125,000	$3.30
15-Oct-07	Les Ford	100,000	$3.30
15-May-08	Iain Scott	250,000	$2.00	see below
22-Feb-08	Garry Korte	125,000	$2.60	see below
20-May-08	David English	125,000	$2.03
20-May-08	Martin Reed	500,000	$2.32
20-May-08	Mathew Lilly	125,000	$2.60

Iain Scott and Garry Korte’s options referred to above were granted pursuant to their original contracts of employment. While both now have the right to be granted these options, as at the date of this Notice no option certificates for these options have been issued. The options referred to above do not form part of the options the subject of Resolutions 5 and 6 this Notice.

• All employees and directors are eligible to participate in the Plan;

• The Company will not be providing any loan to Nicholas Morland in connection with the issue of options or their subsequent exercise; and

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• The Company will grant the options to Nicholas Morland within 12 months of the date of this meeting.

Section 208 of the Corporations Act

Subject to certain exceptions, Chapter 2E of the Corporations Act (which contains section 208) provides that a public company must not give a financial benefit to a related party of that company. Nicholas Morland is a director of the Company and therefore a related party. The grant of options to Nicholas Morland constitutes the giving of a financial benefit by the Company.

For the purposes of Chapter 2E, the following information is provided where it is not provided above:

The related party to whom the proposed resolutions would permit the financial benefit to be given - the options will be granted to the Nicholas Morland, or his nominated party.

The nature of the financial benefit - the proposed financial benefit is the grant to Nicholas Morland of 500,000 options, for no consideration.

Directors’ recommendation - for the reasons noted above, all Directors other than Nicholas Morland, who have no interest in the outcome of resolution 11, recommend that Shareholders vote in favour of the resolution. Nicholas Morland declines to make a recommendation regarding resolution 11 as he has a material personal interest in the outcome of the resolution as it relates to the proposed grant of options to him individually.

Any other information that is reasonably required by Shareholders to make a decision and that is known to the Company or any of its officers

The Company’s accounting advisers have suggested than an appropriate valuation of the options sought to be issued may be made using an enhanced trinomial approach option pricing method outlined below.

Valuation of the options

The options to be granted to Nicholas Morland after approval by Shareholders are not traded on the ASX and as such have no market value. Each option grants the holder the right to obtain one Share in the Company upon exercise of the option and payment of the exercise price of the option. Accordingly, the options may have a present value at the date of their grant. The options may acquire future value depending upon the extent to which the Share prices(s) exceed the exercise price during the term of the options.

Various factors will affect the value of the options including:

• the period outstanding before the expiry date of the options;

• the exercise price of the options relative to the underlying price or value of the Shares into which they may be converted;

• the proportion of the issued capital as expanded upon exercise of the options;

• the value of the Shares into which the options may be converted; and

• whether or not the options are listed (and therefore capable of being sold).

49

The Board has estimated the value of the options using an enhanced trinomial approach. The model incorporates a Monte Carlo simulation, which simulates the return of Windimurra shares and the return of the ASX 300 Resources Index in order to determine the likelihood of the vesting condition being met. The enhanced trinomial approach then calculates an option value adjusted for early exercise and the vesting condition.

To calculate the option value, it is necessary to assume certain inputs. The data relied upon in applying the enhanced trinomial approach to the options valuation was as follows:

• an exercise price of $2.12, $2.22 and $2.32 cents per option. These prices have been determined by the Board by applying a 10%, 15% and 20% premium respectively to the volume weighted average price of the Company’s shares for the 90 day period prior to 1 May 2008, 8 May 2008 being the date when the Board of Windimurra Vanadium Limited resolved to adopt its remuneration committee’s recommendation regarding Directors and Executives remuneration;

• the period of time for conversion being:

• Tranche 1 (166,667 options) – between the date of this meeting and 30 July 2011, provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2008;

• Tranche 2 (166,667 options) – between 1 May 2009 and 1 May 2012 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2009; and

• Tranche 3 (166,667 options) – between 1 May 2010 and 1 May 2013 provided that the percentage increase in the share price of the Company’s ordinary shares exceeds any percentage increase of the S&P ASX 300 RESOURCES INDEX for the period from 1 January 2008 to 1 May 2010.

• the Company has not forecast any future dividend payments. For the purpose of the analysis, it was assumed that the Company’s share price is “ex-dividend”;

• a volatility measure of 70%. This volatility factor was based on the variations in the share price of the Company’s Shares from 9 August 2005, being the date the agreement with Xstrata was finalised, to 7 May 2008. Management believe this period of time is the most appropriate given the change in the activities of the business, which are now focussed on the re-development of the Windimurra mine.

• the risk free rate used for the purposes of the analysis was the rate on current Treasury Bond yields with a maturity date approximating the expiry date of the options being 6.54%, 6.28% and 6.28% for each tranche respectively.

• the value of the Company’s share price at 7 May 2008 which was $2.29 cents per share. The Board notes that this share price is now historical and that the price of the Company’s shares necessarily fluctuates, affecting the value of the options. Shareholders should have regard to the price of the Company’s shares at the date of the meeting and in the future when considering the value of the options and this resolution.

Using the enhanced trinomial approach and the assumed data outlined above, the Board has valued the options to be granted to Iain Scott as at 8 May 2008 as follows:

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Tranche 1 2 3 Total	Quantity of options 166,667 166,667 166,667 500,001	$ per option $1.0563 $0.8113 $0.9694	Total option value
			$176,050 $135,217 $161,567 $472,834

The Board draws Shareholders attention to the fact that the stated valuation relies on assumed data, and does not constitute and should not be taken as audited financial information.

The Company’s Remuneration Committee, with the assistance of remuneration expert, Steve McDonald of McDonald & Company (Australasia) Pty Ltd, has reviewed the option packages of all directors and senior executives.

The responsibilities and obligations of directors and senior executives are continually increasing as a result of the growing emphasis in today’s corporate environment on corporate governance.

The number of options proposed to be provided to Nicholas Morland, (i.e. 500,000 options), has been decided upon by the Directors having had regard to these increasing responsibilities, Mr McDonald’s advice as to current market competitive option levels for directors and senior executives in companies of a similar size and as an appropriate incentive to improve the Company’s performance.

Nicholas Morland’s total current remuneration is $35,000 consisting of the following components:

• annual base salary of $32,110; and

• annual superannuation contributions of $2,890.

If the options granted to Nicholas Morland are exercised, the effect would be to dilute the shareholdings of the existing Shareholders.

As at the date of this Notice, the total issued capital of the Company comprised 153,678,674 Shares and 11,704,846 options. On a fully diluted basis assuming all options (including those proposed to be issued to other directors of the Company under resolutions 5, 6, 7, 8 and 9) are exercised, the grant of 500,000 options to Nicholas Morland represents approximately 0.3% of the Company’s total issued capital.

As at the date of this Notice, Nicholas Morland has the following interest in securities of the Company:

Shares: Nil Options: Nil

The market price of the Shares during the term of the options will normally determine whether or not the option holder exercises the options. At the time any options are exercised and shares issued pursuant to the exercise of the options, shares may be trading on the ASX at a price which is higher than the exercise price of the options.

The following table gives details of the highest, lowest, average and latest price of the Company’s Shares trading on the ASX over the past 12 months ending on 8 May 2008:

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Highest price	Date of highest price	Lowest price	Date of lowest price	Latest price on 8 May 2008	Volume Weighted Average Price
$2.54	20 June 2007	$1.50	23 January 2008	$2.35	$1.90

The options are capable of being converted to Shares by payment of the exercise price.

Under the Company’s current circumstances, the Directors consider that the incentive to Nicholas Morland which would be represented by the grant of the options would be a costeffective and efficient incentive for the Company to provide, as opposed to alternative forms of incentives.

The Directors do not consider that from an economic and commercial point of view, there are any costs or detriments, including opportunity costs or taxation consequences for the Company or benefits foregone by the Company in issuing the options to Nicholas Morland pursuant to resolution 11.

In order to earn the right to the options, the percentage increase in the share price of the Company’s ordinary shares must exceed any percentage increase of the benchmark index selected (S&P ASX 300 RESOURCES INDEX) for the period 1 January 2008 to 1 May 2008 for Tranche 1 options, 1 May 2009 for Tranche 2 options, and the period 1 January 2008 to 1 May 2010 for Tranche 3 options.

In this way the benefit will only be provided in circumstances where shareholders benefit from a share price performance that exceeds the peer group performance. Not only will this promote performance by key senior management to drive outcomes that will improve share price performance to the benefit of shareholders, but this benefit will only be provided where this out-performance is achieved.

In order to ensure that the share price and index at the start and end points of the appropriate measurement period accurately reflect the same price, the share price and index will be calculated based on the 30 day volume weighted average price prior to the measurement point.

Neither the Directors nor the Company are aware of any other information that would be reasonably required by Shareholders to make a decision in relation to the financial benefits contemplated by resolution 11.

The Directors consider it reasonable and appropriate to issue options to Nicholas Morland as part of his remuneration and to act as an incentive linked to the enhancement of Shareholder value. The Directors (other than Nicholas Morland) therefore recommend that Shareholders vote in favour of resolution 11.

RESOLUTION 11: RATIFICATION OF PREVIOUS ISSUE OF SHARES TO CLIENTS OF EUROZ SECURITIES LIMITED

Listing Rule 7.1 prohibits a listed company from issuing, or agreeing to issue, equity securities (which include shares) that exceed 15% of the total number of ordinary securities on issue in any 12 month period, unless approval is obtained from the holders of the company’s ordinary securities.

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Listing Rule 7.4 provides that the approval of holders of the company’s ordinary shares may be obtained after the issue of equity securities. The effect of such ratification is to restore the company’s discretionary power to issue further equity securities up to 15% of the nominal value of the company’s issued shares at the beginning of the relevant 12 month period without obtaining shareholder approval.

Along with the approval of resolution 12, the approval of this resolution will enable the Company at any time in the next 12 months to issue equity securities up to the 15% threshold set out in Listing Rule 7.1:

• (a) without the requirement to obtain approval from the holders of the Company’s ordinary securities; and

• (b) without the shares described below counting toward the 15% threshold set out in Listing Rule 7.1.

The shares were issued as set out below. For the purpose of Listing Rule 7.5, the following information is provided to shareholders:

• (a) The total number of shares granted was 12,600,000.

• (b) The shares were issued for $2.00 per share consideration.

• (c) The shares were placed on 28 March 2008.

• (d) The shares are ordinary fully paid shares in the capital of the Company and rank pari passu with all other ordinary shares in the Company on issue.

• (e) The allottees of the shares are various sophisticated and institutional clients of Euroz Securities Limited.

• (f) The funds raised by the issue of the shares will be used to:

• reschedule mining at the Windimurra Project to ensure that optimal ore blend is available for the start of process commissioning,

• compensate for the strengthening of the A$ since the beginning of the year when Windimurra raised debt in US$, which resulted in a small amount of additional funds being required to ensure that the company’s A$ construction cost budget remained fully funded, and

• replenish the contingencies included in the construction budget.

The Directors believe the ratification is beneficial to the Company. The Directors recommend shareholders vote in favour of this resolution as it allows the Company to ratify the above grant of shares and retain the flexibility to issue further equity securities representing up to 15% of the Company’s share capital during the next 12 months, should the circumstances arise where the Directors believe this is necessary.

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RESOLUTION 12: RATIFICATION OF PREVIOUS ISSUE OF OPTIONS TO CITICORP INTERNATIONAL LIMITED AS AGENT FOR CERTAIN FINANCIERS

Listing Rule 7.1 prohibits a listed company from issuing, or agreeing to issue, equity securities (which include options) that exceed 15% of the total number of ordinary securities on issue in any 12 month period, unless approval is obtained from the holders of the company’s ordinary securities.

Listing Rule 7.4 provides that the approval of holders of the company’s ordinary shares may be obtained after the issue of equity securities. The effect of such ratification is to restore the company’s discretionary power to issue further shares up to 15% of the nominal value of the company’s issued shares at the beginning of the relevant 12 month period without obtaining shareholder approval.

Along with the approval of resolution 11, the approval of this resolution will enable the Company at any time in the next 12 months to issue equity securities up to the 15% threshold set out in Listing Rule 7.1:

• (a) without the requirement to obtain approval from the holders of the Company’s ordinary securities; and

• (b) without the shares described below counting toward the 15% threshold set out in Listing Rule 7.1.

The options were issued as set out below. For the purpose of Listing Rule 7.5, the following information is provided to shareholders:

• (a) The total number of options granted was 8,653,846.

• (b) The options were issued for no consideration.

• (c) The terms and conditions of the options granted are set out in Annexure B.

• (d) The allottee of the options was Citicorp International Limited as agent for Merrill Lynch Capital Services Inc., Merrill Lynch Credit Products LLC, Noble Resources Limited, PMA Credit Opportunities Fund, Diversified Asian Strategies Fund, PMA Temple Fund and Asian Diversified Total Return Limited Duration Company.

• (e) The issue of the options formed part of the debt funding package to be used for the development of the Windimurra Vanadium project.

The Directors believe the ratification is beneficial to the Company. The Directors recommend shareholders vote in favour of this resolution as it allows the Company to ratify the above grant of shares and retain the flexibility to issue further equity securities representing up to 15% of the Company’s share capital during the next 12 months, should the circumstances arise where the Directors believe this is necessary.

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GLOSSARY

" ASX " means Australian Stock Exchange Limited (ACN 008 624 691);

" Board " means the board of directors of the Company;

" Company " means Windimurra Vanadium Limited ABN 65 009 131 533;

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

" Directors " means the directors of the Company;

" Explanatory Memorandum " means the explanatory memorandum accompanying the Notice;

“Listing Rules” means the Official Listing Rules of the ASX.

" Notice " means the Notice of Extraordinary Meeting of shareholders which accompanies this Explanatory Memorandum, dated 27 June 2008;

" Shareholders " means holders of Shares in the Company; and

" Shares " means fully paid ordinary shares in the Company.

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ANNEXURE A:

PRECIOUS METALS AUSTRALIA LIMITED ACN 009 131 533

RULES OF EXECUTIVE AND EMPLOYEE SHARE OPTION PLAN

1. NAME OF PLAN

• 1.2 This Plan shall be called the PMA Executive and Employee Share Option Plan.

2. ESTABLISHMENT AND TERMINATION OF THE PLAN

• 2.1 The Board may establish and administer the Plan in accordance with the terms and conditions set out in these Rules and otherwise as it determines from time to time in its absolute discretion.

• 2.2 The Board may terminate the Plan, or suspend its operation for any period it considers desirable, at any time that it considers appropriate.

• 2.3 The Board may not issue any further Options after the Plan has been terminated. However, these Rules will continue to apply to Options on issue at the date of such termination until the last of those Options lapses or is exercised.

3. PURPOSE OF PLAN

• 3.1 The purpose of this Plan is to:

• (a) recognise the ongoing ability of the employees of the Company and their expected efforts and contribution in the long term to the performance and success of the Company;

• (b) provide an incentive to the employees of the Company to remain in their employment in the long term;

• (c) attract persons of experience and ability to employment with the Company and foster and promote loyalty between the Company and its employees; and

• (d) provide employees of the Company with the opportunity to acquire Options, and ultimately Shares, in the Company, in accordance with these Rules.

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4. OPERATION OF THE PLAN

• 4.1 The Plan operates according to these Rules which bind the Company and each Participant.

• 4.2 The number of Shares to be received on exercise of the Options the subject of an offer under the Plan when aggregated with:

• (a) the number of Shares which would be issued were each outstanding offer or Option, being an offer made or Option acquired pursuant to the Plan or any other employee share scheme extended only to employees or Directors of the Company, exercised; and

• (b) the number of Shares issued during the previous 5 years pursuant to the Plan or any other employee share scheme extended only to employees or Directors of the Company;

but disregarding any offer made, or Option acquired or Share issued by way of or as a result of:

• (c) an offer under the Plan to a person situated at the time of receipt of the Offer outside Australia; or

• (d) an offer under the Plan that did not need disclosure to investors because of section 708 of the Corporations Act; or

• (e) an offer made under a disclosure document,

must not exceed 5% of the total number of issued Shares as at the time of the offer under the Plan.

5. ELIGIBILITY

• 5.1 Subject to these Rules, the Board may from time to time determine that any Eligible Person is entitled to participate in the Plan and the extent of that participation. Prior to making that determination, the Board must consider:

• (a) the seniority of the relevant Eligible Person and the position the Eligible Person occupies within the Company;

• (b) the length of service of the Eligible Person with the Company;

• (c) the record of employment of the Eligible Person with the Company;

• (d) the potential contribution of the Eligible Person to the growth of the Company;

• (e) the extent (if any) of the existing participation of the Eligible Person (or any Permitted Nominee in relation to that Eligible Person) in the Plan; and

• (f) any other matters which the Board considers relevant.

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• 5.2 The Board may exercise its powers in relation to the participation of any Eligible Person on any number of occasions.

6. OFFER OF OPTIONS

• 6.1 Subject to these Rules and to the Listing Rules, the Company (acting through the Board) may offer Options to any Eligible Person at such times and on such terms as the Board considers appropriate. Each offer must state:

• (a) the name and address of the Eligible Person to whom the offer is made;

• (b) that the Eligible Person to whom the offer is addressed may accept the whole or any lesser number of Options offered;

• (c) the minimum number of Options and any multiple of such minimum or any other number which may be accepted;

• (d) the period within which the offer may be accepted, and the period or periods during which the Options or any of them may be exercised and the Expiry Date;

• (e) the method of calculation of the Exercise Price; and

• (f) any other matters which the Board may determine.

7. ACCEPTING OFFERS

• 7.1 Upon receipt of an offer of Options, an Eligible Person may, within the period specified in the offer:

• (a) accept the whole or any lesser number of Options offered by giving to the Company an Application Form; or

• (b) nominate a nominee in whose favour the Eligible Person wishes to renounce the offer by notice in writing to the Board. The Board may, in its absolute discretion, resolve not to allow such renunciation of an offer in favour of a nominee without giving any reason for such decision.

7.2 Upon:

• (a) receipt of the Application Form referred to in paragraph 7.1(a); or

• (b) the Board resolving to allow a renunciation of an offer in favour of a nominee (" Permitted Nominee ") and the Permitted Nominee accepting the whole or any lesser number of Options offered by giving the Company an Application Form,

then the Eligible Person or the Permitted Nominee, as the case may be, will be taken to have agreed to be bound by these Rules and will be granted Options subject to these Rules.

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• 7.3 If Options are issued to a Permitted Nominee or an Eligible Person, the Eligible Person must, without limiting any provision in these Rules, ensure that the Permitted Nominee complies with these Rules .

• 7.4 On the issue of Options following receipt by the Company of an Application Form, an Eligible Person or the Permitted Nominee, as the case may be, becomes a Participant .

8. NO CONSIDERATION

• 8.1 No consideration is payable by an Eligible Person for a grant of an Option, unless the Board decides otherwise.

9. CERTIFICATES

• 9.1 The Company must give a Participant one or more Certificates stating:

• (a) the number of Options issued to the Participant;

• (b) the Exercise Price of those Options; and

• (c) the Issue Date of those Options.

• 9.2 The Certificates for the Options will be dispatched within 10 Business Days after the Issue Date.

10. QUOTATION

• 10.1 The Company will not apply for Official Quotation of any Options.

• 10.2 If shares of the same class as those allotted pursuant to the exercise of Options granted under the Plan are listed on the ASX, the Company must apply for Official Quotation of those Shares allotted pursuant to the exercise of Options within the time required by the Listing Rules after the date of allotment.

11. NOT TRANSFERABLE

• 11.1 Subject to clause 14.5, Options are not transferable

12. EXERCISE OF OPTIONS

• 12.1 Subject to these Rules and the terms of the Options, Options may be exercised at any time during the period commencing on the Issue Date and ending on the Expiry Date.

• 12.2 Notwithstanding paragraph 12.1, all Options may be exercised :

• (a) during a Bid Period; or

• (b) at any time after a Change of Control Event has occurred; or

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• (c) on an application under section 411 of the Corporations Act, if a court orders a meeting to be held concerning a proposed compromise or arrangement for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company.

• 12.3 Options may only be exercised by the Participant giving notice in writing to the Board delivered to the registered office of the Company. The notice must specify the number of Options being exercised and the Exercise Price for the Options specified in the notice and must be accompanied by :

• (a) the Certificate for those Options, for cancellation by the Company; and

• (b) a cheque payable to the Company (or another form of payment acceptable to the Board) in the amount of the product of the number of Options then being exercised by the Participant and the Exercise Price.

The notice is only effective (and only becomes effective) when the Company has received value for the full amount referred to in paragraph (b).

• 12.4 Subject to paragraph 14.1, within 10 Business Days after the notice referred to in clause 12.3 becoming effective, the Board must :

• (a) allot and issue the number of Shares to be issued in respect of the Options being exercised;

• (b) cancel the Certificate for the Options being exercised; and

• (c) if applicable, issue a new Certificate for any remaining Options covered by the Certificate accompanying the notice.

• 12.5 The Board may, at its discretion, by notice to the Participant reduce, waive or vary (provided such variation is not adverse to the Participant) the Exercise Conditions attaching to Options in whole or in part at any time and in any particular case.

13. SHARES ALLOTTED ON EXERCISE OF OPTIONS

• 13.1 All Shares allotted upon exercise of the Options rank pari passu in all respects with Shares previously issued and, in particular, entitle the holders of Shares to participate fully in:

• (a) dividends declared by the Company after the date of allotment; and

• (b) all issues of securities made or offered pro rata to holders of Shares.

14. LAPSE OF OPTIONS

• 14.1 Options not validly exercised on or before the Expiry Date will automatically lapse.

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• 14.2 Unless otherwise determined by the Board, if any Options are granted subject to Exercise Conditions and, prior to satisfaction of the Exercise Conditions (such that the Options are not exercisable), an Eligible Person ceases to be an Eligible Person then:

• (a) if the Eligible Person ceases to be an Eligible Person for any reason other than a Specified Reason, any such Options held by such Eligible Person, or if appropriate, his or her Permitted Nominee, will automatically lapse; and

• (b) if the Eligible Person ceases to be an Eligible Person for a Specified Reason, such Eligible Person, or if appropriate, his or her Permitted Nominee, may exercise any such Options held by him or her within:

  • (i) 3 months of the date of (as the case may be) Retirement, Redundancy, death or Total and Permanent Disablement; or

  • (ii) such longer period as the Board determines,

subject to the Board, in its absolute discretion, reducing, waiving or varying the Exercise Conditions applying to those Options in accordance with clause 12.5 so that those Options may be exercised. Options the subject of clause 14.2(b) not exercised within 3 months or the longer period determined by the Board, will automatically lapse.

• 14.3 Unless otherwise determined by the Board, if an Eligible Person ceases to be an Eligible Person at any time after an Option is or has become exercisable, then:

• (a) if the Eligible Person ceases to be an Eligible Person for any reason other than a Specified Reason, such Eligible Person, or if appropriate, his or her Permitted Nominee, may exercise any such Options held by him or her within :

  • (i) 1 month of ceasing to be an Eligible Person; or

  • (ii) such longer period as the Board determines,

and any Options the subject of this clause not exercised within 1 month or the longer period determined by the Board, will automatically lapse; and

• (b) if an Eligible Person ceases to be an Eligible Person for a Specified Reason, such Eligible Person, or if appropriate, his or her Permitted Nominee is entitled to exercise any such Option at any time prior to its Expiry Date.

• 14.4 A certificate signed by the company secretary of the Company stating that a person ceased for any reason to be an Eligible Person shall (in the absence of manifest error) be conclusive for the purposes of the Plan, both as to such occurrence and the reason for such occurrence and the date of such occurrence.

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• 14.5 Subject to clause 14.2, if at any time prior to the Expiry Date of any Options a Holder dies, the deceased Holder's Legal Personal Representative may:

• (a) elect to be registered as the new Holder of the deceased Holder's Options;

• (b) whether or not he or she becomes so registered, exercise those Options in accordance with and subject to these Rules as if he were the Holder of them; and

• (c) if the deceased Holder had already given the Company a notice of exercise of his or her Options, pay the Exercise Price in respect of those Options.

15. PARTICIPATION RIGHTS, BONUS ISSUES, RIGHTS ISSUES, REORGANISATIONS OF CAPITAL AND WINDING UP

15.1 New Issues

• (a) Participants are not entitled to participate in any new issue of securities to existing holders of Shares in the Company unless:

• (i) they have become entitled to exercise their Options under the Plan; and

• (ii) they do so before the record date for the determination of entitlements to the new issue of securities and participate as a result of being holders of Shares.

• (b) The Company must give Participants, in accordance with the Listing Rules, notice of any new issue of securities before the record date for determining entitlements to the new issue.

15.2 Bonus Issues

If there is a bonus share issue (" Bonus Issue ") to the holders of Shares, the number of Shares over which an Option is exercisable will be increased by the number of Shares which the Holder would have received if the Option had been exercised before the record date for the Bonus Issue (" Bonus Shares "). The Bonus Shares must be paid up by the Company out of the profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue and upon issue rank pari passu in all respects with the other shares of that class on issue at the date of issue of the Bonus Shares.

15.3 Pro Rata Issues

If there is a pro rata issue (other than a Bonus Issue) to the holders of Shares during the currency of, and prior to the exercise of any Options, the Exercise Price of an Option will be adjusted in the manner provided for in the Listing Rules.

• 15.4 Reorganisation of Capital

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If, prior to the expiry of any Options, there is a reorganisation of the issued capital of the Company, then the rights of a Participant (including the number of Options to which each Participant is entitled and the Exercise Price) is changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

15.5 Winding Up

If, prior to the expiry of any Options, a resolution for a members' voluntary winding up of the Company is proposed (other than the purpose of a reconstruction or amalgamation) the Board may, in its absolute discretion, give written notice to Participants of the proposed resolution. Subject to the Exercise Conditions, the Participants may, during the period referred to in the notice, exercise their Options.

15.6 Fractions of Shares

For the purpose of this clause 15, if Options are exercised simultaneously, then the Participant may aggregate the number of Shares or fractions of Shares for which the Participant is entitled to subscribe. Fractions in the aggregate number only will be disregarded in determining the total entitlement of a Participant.

15.7 Calculations and Adjustments

Any calculations or adjustments which are required to be made under this clause 15 will be made by the Board and, in the absence of manifest error, are final and conclusive and binding on the Company and the Participant.

15.8 Notice of Change

The Company must within a reasonable period give to each Participant notice of any change under clause 15 to the Exercise Price of any Options held by the Participant or to the number of Shares which the Participant is entitled to subscribe for on exercise of an Option.

16. EXERCISE PRICE OF OPTIONS

• 16.1 The method of calculation of the Exercise Price of each Option will be determined by the Board with regard to the Market Value of the Shares when it resolves to offer the Option .

17. AMENDMENTS TO THE RULES

17.1 Board May Alter Rules

The Board may subject to the Listing Rules alter, delete or add to these Rules at any time (save for the provisions of clause 4).

17.2 Consent of Participants

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If any amendment to be made under clause 17.1 would adversely affect the rights of Participants in respect of any Options then held by them, the Board must obtain the consent of Participants who between them hold not less than 75% of the total number of those Options held by all those Participants before making the amendment.

• 17.3 Eligible Persons Outside Australia

The Board may make any additions, variations or modifications to the Rules, in relation to the implementation of the Plan and the specific application of the Rules to Eligible Persons residing outside Australia.

18. POWERS OF THE BOARD

• 18.1 The Plan shall be administered by the Board who shall have the power to :

• (a) determine appropriate procedures and make regulations for the administration of the Plan which are consistent with these Rules;

• (b) resolve conclusively all questions of fact or interpretation arising in connection with the Plan;

• (c) terminate or suspend the operation of the Plan at any time, provided that the termination or suspension does not adversely affect or prejudice the rights of Participants holding Options at that time;

• (d) delegate those functions and powers it considers appropriate, for the efficient administration of the Plan, to any one or more persons whom the Board reasonably believes to be capable of performing those functions and exercising those powers, for such period and on such conditions as the Board may determine;

• (e) take and rely upon independent professional or expert advice in or in relation to the exercise of any of their powers or discretions under these Rules;

• (f) administer the Plan in accordance with these Rules as and to the extent provided in these Rules; and

• (g) make regulations for the operation of the Plan consistent with these Rules.

19. NOTICES

• 19.1 Notices may be given by the Company to any Holder either personally or by sending by post to his or her address as noted in the Company's records or to the address (if any) within the Commonwealth of Australia supplied by him to the Company for the giving of notices. Notices for any overseas Holders shall be forwarded and posted by air. Where a notice is sent by post the notice shall be deemed to be served on the day after posting. The signature of any notice may be given by any Director or secretary of the Company. A notice of

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exercise given under clause 12.3 shall not be deemed to be served on the Company until actually received .

20. NO COMPENSATION OR DAMAGES

• 20.1 The rights and obligations of any Holder under the terms of his or her employment with the Company are not affected by his or her participation in the Plan.

• 20.2 These Rules do not form part of, and will not be incorporated into, any contract of engagement or employment between a Holder and the Company.

• 20.3 No Holder has any rights to compensation or damages as a result of the termination of his or her employment, so far as those rights arise or may arise from the Holder ceasing to have rights under the Plan as a result of the termination.

• 20.4 Participants do not, as Participants, have any right to attend or vote at general meetings of holders of Shares.

21. GOVERNING LAW

• 21.1 The Plan and any Options issued under it are governed by the laws of Western Australia and the Commonwealth of Australia.

• 21.2 Each Participant irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Western Australia, the Commonwealth of Australia and courts entitled to hear appeals from those courts.

22. ADVICE

• 22.1 Eligible Persons should obtain their own independent advice at their own expense on the financial, taxation and other consequences to them of or relating to participation in the Plan.

23. DEFINITIONS AND INTERPRETATION

• 23.1 In these Rules, unless the context otherwise requires, the following words and expressions shall have the following meanings:

" Application Form " means a duly completed and executed application for the issue of Options made by an Eligible Person or Permitted Nominee in respect of an Offer, in the form approved by the Board from time to time;

" ASX " means Australian Stock Exchange Limited;

" Bid Period ", in relation to a takeover bid in respect of shares in the Company, means the period referred to in the definition of that expression in section 9 of the Corporations Law provided that where a takeover bid is publicly announced prior to the service of a bidder's statement on the Company in

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relation to that takeover bid, the Bid Period shall be deemed to have commenced at the time of that announcement;

" Board " means the directors acting as the board of directors of the Company or a committee appointed by such board of directors;

" Business Day " means Monday to Friday inclusive, except New Years Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day;

" Certificate " means the certificate issued in accordance with clause 9 by the Company to a Holder in respect of an Option;

" Change of Control Event " means a shareholder, or a group of associated shareholders, becoming entitled to sufficient shares in the Company to give it or them the ability, and that ability is successfully exercised, in general meeting, to replace all or a majority of the Board;

" Company " means Precious Metals Australia Limited ACN 009 131 533;

" Corporations Act " means Corporations Act 2001 (Cth) ;

" Director " means a director of the Company from time to time but does not include a person who is only a director by virtue of being an alternate director;

" Eligible Person " means at any time a person who then is a Director or an employee (whether full-time or part-time) of the Company or of an associated body corporate of the Company;

" Exercise Condition " means the performance, vesting or other conditions (if any) determined by the Board and specified in an Offer which are, subject to these Rules, required to be satisfied, reached or met before an Option can be exercised;

" Exercise Price " means, in respect of an Option, the subscription price per Share, determined in accordance with clause 16, payable by a Holder on exercise of the Option;

" Expiry Date " means, in relation to an Option, the date determined by the Board prior to the offer of the relevant Options, subject to any restriction in the Corporations Act from time to time but in any event no longer than 5 years from the Issue Date;

" Holder " means, in relation to an Option, the person (whether an Eligible Person or a Permitted Nominee) entered in the Company's register of options as the holder of that Option;

" Issue Date " means, in relation to an Option, the date on which the Company grants that Option;

" Legal Personal Representative " means the executor of the will or an administrator of the estate of a deceased person, the trustee of the estate of a

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person under a legal disability or a person who holds an enduring power of attorney granted by another person;

" Listing Rules " means the Official Listing Rules of ASX as they apply to the Company from time to time;

" Market Value " means, if the Company is admitted to the official list of ASX:

• (a) the weighted average closing sale price of the Shares recorded on the stock market of ASX over the five trading days immediately preceding the day on which the Board resolves to offer an Option; or

• (b) in circumstances where there has been no trading in the Shares during the five trading days immediately preceding the day on which the Board resolves to offer an Option, the last sale price recorded on the stock market of ASX;

" Offer " means an invitation to an Eligible Person made by the Company under clause 6.1 to apply for an issue of Options;

" Official Quotation " has the meaning ascribed to it in the Listing Rules;

" Option " means an option issued under the Plan to subscribe for a Share;

" Participant " means a person who holds Options issued under the Plan and includes, if a Participant dies or becomes subject to a legal disability, the Legal Personal Representative of the Participant;

" Permitted Nominee " has the meaning given to it by clause 7.2;

" Plan " means the PMA Executive and Employee Share Option Plan established in accordance with these Rules;

" Redundancy " means, in relation to an Eligible Person, a determination by the Board that the Company's need to employ a person for the particular kind of work carried out by that Eligible Person has ceased (but, for the avoidance of any doubt, does not include the dismissal of an Eligible Person for personal or disciplinary reasons or where the Eligible Person leaves the employ of the Company of his or her own accord);

" Retirement " means, in relation to an Eligible Person, retirement by that Eligible Person from the Company at age 60 or over or such earlier age as considered appropriate by the Board;

" Rules " means these rules, as amended from time to time;

" Series " means, in relation to Options, Options with a common Issue Date;

" Shares " means fully paid ordinary shares in the capital of the Company;

" Specified Reason " means Retirement, Total and Permanent Disablement, Redundancy or death;

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" Tax " means any tax, levy, impost, GST, deduction, charge, rate, contribution, duty or withholding which is assessed (or deemed to be assessed), levied, imposed or made by any government or any governmental, semi-governmental or judicial entity or authority together with any interest, penalty, fine, charge, fee or other amount assessed (or deemed to be assessed), levied, imposed or made on or in respect of any or all of the foregoing; and

" Total and Permanent Disablement " means, in relation to an Eligible Person, that the Eligible Person has, in the opinion of the Board and with effect on a date determined by the Board, after considering such medical and other evidence as it sees fit, become incapacitated to such an extent as to render the Eligible Person unlikely ever to engage in any occupation for which he is reasonably qualified by education, training or experience.

23.2 In these Rules, unless a contrary intention appears:

• (a) where an expression is defined, another part of speech or grammatical form of that expression has a corresponding meaning;

• (b) the singular includes the plural and vice versa;

• (c)

• a reference to a gender includes all genders; and

• (d) an expression defined in, or given a meaning for the purposes of, the Corporations Act has the same meaning where used in these Rules.

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ANNEXURE B:

SUMMARY OF TERMS OF OPTIONS ISSUED TO CITICORP INTERNATIONAL LIMITED AS AGENT FOR CERTAIN FINANCIERS

GRANT OF OPTIONS

On 28 March 2008, the Company granted 8,653,846 options over ordinary fully paid unissued shares ( Shares ) in the Company to Citicorp International Limited ( Citicorp ) as agent of certain financiers ( Financiers ) in consideration of a loan provided by the Financiers to the Company under an option deed between the Company and Citicorp ( Option Deed ). The options were issued for no consideration. Each option entitles the option holder to subscribe for and be allotted one Share. The Shares once issued will rank pari passu with all other ordinary shares in the Company on issue.

CONDITIONS PRECEDENT

The grant of the options was conditional upon the completion of the entitlement issue conducted by the Company in January 2008. This condition has been met.

NOMINEES OF CITICORP

Citicorp has nominated certain financiers to receive any or all of the options on its behalf. Such nominees must not be related parties of the Company for the purposes of the Corporations Act and must be persons to whom the options can be issued without a disclosure document under Chapter 6D of the Corporations Act. As at the date of the Option Deed, these financiers were Merrill Lynch Capital Services Inc., Merrill Lynch Credit Products LLC, Noble Resources Limited, PMA Credit Opportunities Fund, Diversified Asian Strategies Fund, PMA Temple Fund and Asian Diversified Total Return Limited Duration Company.

TERM

The options will expire at 5.00pm Perth time on 28 February 2015 ( Expiry Date ). Options that remain unexercised at the Expiry Date will lapse.

VESTING AND EXERCISE

The options will vest on the day they are issued ( Issue Date ) and can be exercised at any time from the Issue Date to the Expiry Date. The exercise of only some of the options does not affect the option holder’s right to exercise other options at a later time.

Within 3 business days of the Company receiving the exercise price, the Company must issue the relevant number of Shares to the option holder and ensure that the option holder is registered as a member in respect of those Shares.

Within a business day of the Shares being issued, the Company must apply to the ASX to have the Shares quoted and issue a cleansing notice under section 708A(5)(e) of the Corporations Act.

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EXERCISE PRICE

The exercise price of the options is calculated as follows:

• (a) if the relevant option is exercised within 18 months of its Issue Date, the exercise price will be 115% of the volume weighed average price ( VWAP ) of the Shares for the month prior to the Issue Date; or

• (b) if the relevant option is exercised after 18 months from its Issue Date, the lower of:

• i. 115% of the VWAP of the Shares for the month prior to the Issue Date; and

• ii. 115% of the VWAP of the Shares for the month prior to the date which is 18 months after the Issue Date.

The Company must publish on its website from time to time the then current exercise price.

TRANSFER OF OPTIONS

The options may be transferred to any person provided they are not related parties of the Company for the purposes of the Corporations Act and are be persons to whom the options can be issued without a disclosure document under Chapter 6D of the Corporations Act.

FUTURE ISSUES AND ADJUSTMENTS

PARTICIPATION

An option holder may only participate in new issues of securities by the Company to holders of Shares if an option has been exercised and Shares have been allotted in respect of those options before the record date for determining entitlements to the issue.

FUTURE ISSUES

Under the Option Deed, the Company agreed, among other things, not to agree to issue any Shares at less than 90% of their current market price without the prior written approval of Citicorp.

BONUS ISSUES

If the Company makes a bonus issue of securities pro rata to the holders of Shares (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) and no Shares have been allotted in respect of an option before the record date for determining entitlements to the bonus issue, then that option, if exercised, will entitle the holder to receive the bonus issue in respect of the Shares resulting from exercise of the option as if the option had been exercised and the Shares allotted before the record date.

RIGHTS ISSUES

If the Company makes a pro rata issue of securities to existing shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) for a subscription price that is less than 90% of the current VWAP for the Shares during the previous 10 trading days ( Market Price ) and an option has not been exercised before the record date for that issue, then the terms of that option will be altered in accordance with the Listing Rules.

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RECONSTRUCTION

In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, the number of options and their exercise price will be reconstructed in the same proportion as the issued capital of the Company is reconstructed and in a manner which will not result in any additional benefits being conferred on option holders which are not conferred on shareholders. Provisions with respect to rounding of entitlements decided upon by the Company in general meeting when approving the capital reconstruction will also apply to the options. Subject to the Listing Rules, the terms for the exercise of the options will remain unchanged in all other respects. The rights of option holders may be changed only to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

OTHER ACTIONS

If the Company takes any action of a materially similar nature to a rights issue of Shares at greater than a 10% discount to the Market Price of the Shares or a bonus issue of Shares, which would otherwise affect the rights of an option holder to acquire Shares through the exercise of options, the number of Shares to which the options relate and/or the exercise price will be adjusted in a manner and at a time determined by the Company (acting reasonably and in good faith), provided that:

• (a) any adjustment to the rights of the option holder to receive Shares by exercising their options and/or any adjustment to the exercise price will be consistent with the principles governing the basis on which similar adjustments are made under the Option Deed; and

• (b) any adjustment is in compliance with the Listing Rules.

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WINDIMURRA VANADIUM LIMITED ABN 65 009 131 533

Instructions on Voting

1. How to Vote

Shareholders may vote by attending the Meeting in person, by proxy or authorised representative.

2. Voting in Person

To vote in person, attend the Meeting on the date and at the time and place specified in this Notice.

3. Voting by Proxy

A Shareholder entitled to attend and vote has a right to appoint a proxy to attend and vote instead of the Shareholder. Shareholders entitled to attend and cast two or more votes are entitled to appoint up to two individuals to act as proxies to attend the Meeting and vote on their behalf. Where more than one proxy is appointed each proxy may be appointed to represent a specific proportion of the Shareholder’s voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes.

If you do not wish to appoint the Chairman of the Meeting as your proxy, write the name of the person you do wish to appoint as your proxy in the first box. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy.

The Proxy Form must be signed by the Shareholder or his/her attorney duly authorised in writing or, if the Shareholder is a corporation, in a manner permitted by the Corporations Act. In the case of shares jointly held by 2 or more persons, all joint holders must sign the Proxy Form.

Completion of a Proxy Form will not prevent individual Shareholders from attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the Meeting in person, then the proxy’s authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the Meeting.

The proxy may, but need not, be a Shareholder of the Company.

4.

Voting Entitlements

For the purposes of regulation 7.11.37 of the Corporations Regulations, the Company determines that members holding ordinary shares as at 5.00pm WST on Monday 28 July 2008 will be entitled to attend and vote at the Extraordinary General Meeting.

004126760

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WINDIMURRA VANADIUM LIMITED ABN 65 009 131 533

WINDIMURRA VANADIUM LIMITED

ABN 65 009 131 533

TO LODGE A PROXY FORM:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia Facsimile 61 8 9323 2033

000001 000 WVL MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

FOR ALL ENQUIRIES CALL:

(within Australia) 1300 557 010 (outside Australia) 61 3 9415 4000

FOR YOUR VOTE TO BE EFFECTIVE IT MUST BE RECEIVED BY 10.00AM (WST) MONDAY 28 JULY 2008

YOUR SECURITYHOLDER INFORMATION IS AVAILABLE ONLINE, SIMPLY VISIT: www.investorcentre.com\au

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LODGEMENT OF A PROXY FORM.This Form (and any Power of Attorney under which it is signed) must be received at an address given above no later than 48 hours before the commencement of the meeting at 10.00am (WST), Wednesday, 30 July 2008. Any Proxy Form received after that time will not be valid for the scheduled meeting.

WVL_PROXY_144425/000001/000001/i

I/We being a member/s of WINDIMURRA VANADIUM LIMITED

hereby appoint

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Extraordinary General Meeting of WINDIMURRA VANADIUM LIMITED to be held at The Celtic Club, 48 Ord Street, West Perth WA 6005 on Wednesday, 30 July 2008 at 10.00am (WST) and at any adjournment of that meeting.

IMPORTANT: FOR ITEMS 4 TO 12 BELOW If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, and you have not directed your proxy how to vote on Items 4 to 12 below, please place a mark in this box. By marking this box you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of those items and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on Items 4 to 12 and your votes will not be counted in computing the required majority if a poll is called on these items. The Chairman of the Meeting intends to vote undirected proxies in favour of each of these items.

Resolution 8 Issue of Options to the Earl of Warwick

Resolution 1 Re-Election of Garry Korte Resolution 8 Issue of Options to the Earl of Warwick Resolution 2 Re-Election of Phillip George Resolution 9 Issue of Options to Phillip Laskaris George Laskaris Resolution 3 Re-Election of Nicholas Resolution 10 Issue of Options to Nicholas Charles Morland Charles Morland Resolution 4 Increase in the Maximum Resolution 11 Ratification of Previous Issue Aggregate Remuneration of of Shares Non-Executive Directors Resolution 5 Issue of Options to Dr Iain Resolution 12 Ratification of Previous Issue Alexander Scott of Options Resolution 6 Issue of Options to Garry Korte Resolution 7 Issue of Options to Dr Wolf Gerhard Martinick

In addition to the intention advised above, the Chairman of the Meeting intends to vote undirected proxies in favour of each of the other items of business.

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000001 000 WVL MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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