TITANIUM SANDS LIMITED — Proxy Solicitation & Information Statement 2013

Jul 10, 2013

Windimurra Vanadium Limited ACN 009 131 533 (Subject to Deed of Company Arrangement)

Notice of General Meeting

General Meeting of Shareholders to be held at the offices of Price Sierakowski Corporate of Level 24, 44 St Georges Terrace, Perth, Western Australia at 10.00am (WST) on Wednesday, 14 August 2013.

Important

The Administrators (including in their capacity as Deed Administrators) have not independently verified any of the information contained in this Notice. The Administrators and their servants, agents and employees do not make any representation or warranty (express or implied) as to the accuracy, reasonableness or completeness of the information contained in this Notice. To the extent permissible by law, all such parties and entities expressly disclaim any and all liability for, or based on or relating to, any such information contained in, or errors in or omissions from this Notice. Notwithstanding this, the Administrators consent to convene the General Meeting and the issue and dispatch of this Notice.

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

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General information

This Notice provides information and seeks approval for the recapitalisation of the Company in accordance with the Recapitalisation Proposal.

Completion of the Recapitalisation Proposal will result in:

• (a) the restructure of the Company’s capital base;

• (b) the raising of funds for the working capital of the Company;

• (c) termination of the DOCA and retirement of the Deed Administrators;

• (d) forgiveness of the Claims of the Creditors; and

• (e) application for reinstatement of the Company’s securities to the ASX.

Further details of the Recapitalisation Proposal are provided in Section 2 of the Explanatory Statement. A short explanation of each Resolution to be considered at the General Meeting is set out in Section 3 of the Explanatory Statement. Meanings of capitalised terms used in this Notice are set out in the Definitions.

In considering the Resolutions, Shareholders must bear in mind the current financial circumstances of the Company. If the Resolutions are passed and the Recapitalisation Proposal is completed, the Company will be in a position to seek re-instatement of its securities on the ASX. This reinstatement will be subject to compliance with the regulatory requirements of the Listing Rules and the Corporations Act.

If Shareholders reject the Recapitalisation Proposal, it is probable that the Company will proceed into liquidation. In those circumstances, it is unlikely that there will be any return to Shareholders. The Resolutions are therefore important and affect the future of your Company. You are urged to give careful consideration to the Notice and the contents of the Explanatory Statement.

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Notice of General Meeting

Notice is given that a General Meeting of Shareholders of Windimurra Vanadium Limited ACN 009 131 533 (Subject to Deed of Company Arrangement) ( Company ) will be held at the offices of Price Sierakowski Corporate of Level 24, 44 St Georges Terrace, Perth, Western Australia, at 10.00am (WST) on Wednesday, 14 August 2013.

The business to be transacted at the General Meeting is the proposal of Resolutions 1 to 5 (inclusive) as set out below.

Resolution 1 – Issue of Shares on the conversion of Convertible Notes to non-Related Parties

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

“ That, subject to Resolutions 2 to 5 (inclusive) being passed, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the issue of:

• (a) 20,000,000 Shares to Avonglade Enterprises Pty Ltd (and/or its nominee) (as an Exempt Investor);

• (b) 20,000,000 Shares to Foster West Securities Pty Ltd (and/or its nominee) (as an Exempt Investor);

• (c) 20,000,000 Shares to Jason Peterson and Lisa Peterson (and/or their nominee) (as Exempt Investors); and

• (d) 20,000,000 Shares to Briant Nominees Pty Ltd (and/or its nominee) (as an Exempt Investor),

on the conversion of Convertible Notes in whole or in part, in the manner, in the amount and on the terms and conditions set out in the Explanatory Statement.”

Resolution 2 – Issue of Shares on the conversion of Convertible Notes to a Related Party

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

“ That, subject to Resolutions 1 and 3 to 5 (inclusive) being passed, for the purposes of section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval is given for the issue of 20,000,000 Shares to Trident Capital Pty Ltd (and/or its nominee) (as an Exempt Investor) on the conversion of Convertible Notes in whole or in part, in the manner, in the amount and on the terms and conditions set out in the Explanatory Statement.”

Resolution 3 – Issue of Shares under the Prospectus

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

“ That, subject to Resolutions 1 to 2 (inclusive) and 4 to 5 (inclusive) being passed, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the

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issue of up to 250,000,000 Shares under the Prospectus at an issue price of $0.01 each to raise up to $2,500,000. ”

Resolution 4 – Right for Existing Directors to apply for Shares under the Prospectus

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

“That, subject to Resolutions 1 to 3 (inclusive) and 5 being passed, for the purposes of section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval is given to allow the Company to issue up to:

• (a) 2,000,000 Shares to Paula Cowan (and/or her nominee);

• (b) 2,000,000 Shares to KC Ong (and/or his nominee); and

• (c) 2,000,000 Shares to Paul Price (and/or his nominee),

at an issue price of $0.01 each under the Prospectus.”

Resolution 5 – Issue of Shares to Strategic Investors

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

“ That, subject to Resolutions 1 to 4 (inclusive) being passed, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the issue of:

• (a) 6,000,000 Shares to Gersec Trust Reg (and/or its nominee) (as an Exempt Investor);

• (b) 6,000,000 Shares to WF Asian Smaller Companies Fund Limited (and/or its nominee) (as an Exempt Investor);

• (c) 6,000,000 Shares to Hillbrow Investments Limited (and/or its nominee) (as an Exempt Investor);

• (d) 6,000,000 Shares to George Robinson (and/or his nominee) (as an Exempt Investor); and

• (e) 6,000,000 Shares to Paul Bate (and/or his nominee) (as an Exempt Investor),

for nil consideration on the terms and conditions set out in the Explanatory Statement.”

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Voting exclusion statement

In accordance with the Listing Rules, a voting exclusion statement applies to the Resolutions in relation to certain persons ( Excluded Persons ). The Company will disregard any votes on the following Resolutions cast by the following Excluded Persons:

Resolution	Description	Excluded Persons
1	Issue of Shares on the conversion of Convertible Notes to non-Related Parties	• The Noteholders referred to in Resolution 1 and any of their Associates. • A person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 1 is passed, and any of their Associates.
2	Issue of Shares on the conversion of Convertible Notes to a Related Party	• Trident Capital Pty Ltd and any of its Associates. • A person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 2 is passed, and any of their Associates.
3	Issue of Shares under the Prospectus	• Any person who may participate in the proposed issue of Shares under the Prospectus, and any of their Associates. • A person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 3 is passed, and any of their Associates.
4	Right for Existing Directors to apply for Shares under the Prospectus	• The Existing Directors or their nominees and any of their Associates.
5	Issue of Shares to Strategic Investors	• The Strategic Investors and any of their Associates. • A person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 5 is passed, and any of their Associates.

However the Company need not disregard a vote if it is cast by:

• (a) a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

• (b) 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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Explanatory Statement

The accompanying Explanatory Statement forms part of this Notice and should be read in conjunction with it. All Resolutions are subject to and conditional upon each other Resolution being passed. Accordingly, the Resolutions should be considered collectively as well as individually.

Proxies

Please note that:

• (a) a Shareholder entitled to attend and vote at the General Meeting is entitled to appoint a proxy;

• (b) a proxy need not be a member of the Company;

• (c) a Shareholder may appoint a body corporate or individual as its proxy;

• (d) a body corporate appointed as a Shareholder’s proxy may appoint an individual as its representative to exercise any of the powers that the body may exercise as the Shareholder’s proxy; and

• (e) Shareholders entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms. If a Shareholder appoints a body corporate as its proxy and the body corporate wishes to appoint an individual as its representative, the body corporate should provide that person with a “Certificate of Appointment of a Corporate Representative” or letter executed in accordance with the Corporations Act authorising him or her to act as that body corporate’s representative. The authority may be sent to the Company or its share registry in advance of the General Meeting or handed in at the General Meeting when registering as a corporate representative.

Voting entitlements

In accordance with Regulations 7.11.37 and 7.11.38 of the Corporations Regulations 2001 (Cth), the Company has determined that a person’s entitlement to vote at the General Meeting will be the entitlement of that person set out in the register of Shareholders as at 5.00pm (WST) on Monday, 12 August 2013. Accordingly, transactions registered after that time will be disregarded in determining Shareholders’ entitlement to attend and vote at the General Meeting.

By order of the Board

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Paul Price Chairman Windimurra Vanadium Limited ACN 009 131 533 (Subject to Deed of Company Arrangement)

11 July 2013

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Explanatory Statement

1. Introduction

This Explanatory Statement has been prepared for the information of Shareholders in relation to the business to be conducted at the General Meeting. The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the Resolutions in the Notice. This Explanatory Statement should be read in conjunction with the Notice. Meanings of capitalised terms in this Explanatory Statement are set out in the Definitions.

This Explanatory Statement includes information and statements that are both historical and forward-looking. To the extent that any statements relate to future matters, Shareholders should consider that they are subject to risks and uncertainties. Those risks and uncertainties include factors and risks specific to the Company as well as matters such as general economic conditions. Actual events or results may differ materially. The Company, the Directors and their advisors cannot assure Shareholders that any forecast or implied results will be achieved.

2. The Recapitalisation Proposal

2.1

Background

On 11 February 2009, the securities of the Company were suspended from official quotation on the Official List of the ASX at the request of the Company.

On 18 February 2009, by resolution of the directors of the Company pursuant to section 436A of the Corporations Act, Darren Gordon Weaver, Andrew John Saker and Martin Bruce Jones were appointed as administrators of the Company ( Administrators ).

Pursuant to the resolution at a meeting of Creditors on 9 December 2009 held under section 439A of the Corporations Act, the Creditors resolved pursuant to section 439C of the Corporations Act that the Company enter into a Deed of Company Arrangement. On 31 December 2009 the Company and the Administrators executed the Original DOCA and the Administrators became the deed administrators of the Original DOCA.

In or about March 2010, Trident Capital Pty Ltd made a proposal to reconstruct and recapitalise the Company substantially on the terms of the Recapitalisation Proposal.

Pursuant to a resolution at a meeting of Creditors on 6 May 2010 held under section 445F of the Corporations Act to consider the variation or termination of the Original DOCA in light of Trident Capital Pty Ltd’s proposal, the Creditors resolved pursuant to section 445A of the Corporations Act that the Company vary the Original DOCA. On 27 May 2010, the Company and the Administrators executed the DOCA to vary and supersede the Original DOCA and the Administrators became the administrators of the DOCA.

The Company held a general meeting of Shareholders on 26 February 2013 ( Previous General Meeting ) seeking approval for a modified version of the Recapitalisation Proposal which contemplated a capital raising of $2,000,000 under the Prospectus. All resolutions proposed at the Previous General Meeting were

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passed (please see the Company’s announcement to ASX on 26 February 2013 for further details). Due to unforeseen costs and circumstances, the Company has determined that it is necessary to increase the amount to be raised under the Prospectus to $2,500,000 to ensure that it has sufficient cash reserves to satisfy ASX’s conditions to reinstatement. Accordingly, this Notice seeks the approval of Shareholders to:

• (a) the issue of up to 250,000,000 Shares under the Prospectus at an issue price of $0.01 each to raise up to $2,500,000; and

• (b) all other resolutions of the Recapitalisation Proposal that relate to the issue of securities due to the expiry of the corresponding approvals obtained at the Previous General Meeting.

2.2 Principal features of the Recapitalisation Proposal

The principal features of the Recapitalisation Proposal are as follows:

• (a) Capital consolidation : Consolidation of the issued capital of the Company on a 1 for 8 basis. This consolidation was approved by Shareholders on 26 February 2013 and effected on 12 March 2013. Please see Section 4.12 for more information.

• (b) Reduction of capital : A reduction of the capital of the Company by applying an amount of up to $220,399,903 (being a proportion of the accumulated losses of the Company) against the share capital of the Company which is considered permanently lost. This reduction was approved by Shareholders on 26 February 2013 and took effect on that date. Please see Section 4.13 for more information.

• (c) Issue of Shares on the conversion of Convertible Notes to non-Related Parties : The issue of 80,000,000 Shares to the following non-Related Parties on the conversion of Convertible Notes:

• (i) 20,000,000 Shares to Avonglade Enterprises Pty Ltd (and/or its nominee) (as an Exempt Investor);

• (ii) 20,000,000 Shares to Foster West Securities Pty Ltd (and/or its nominee) (as an Exempt Investor);

• (iii) 20,000,000 Shares to Jason Peterson and Lisa Peterson (and/or their nominee) (as Exempt Investors); and

• (iv) 20,000,000 Shares to Briant Nominees Pty Ltd (and/or its nominee) (as an Exempt Investor).

Please see Resolution 1 and Section 3.3 for more information.

• (d) Issue of Shares on the conversion of Convertible Notes to a Related Party : The issue of 20,000,000 Shares to Trident Capital Pty Ltd (and/or its nominee) (as an Exempt Investor) on the conversion of Convertible Notes. Please see Resolution 2 and Section 3.4 for more information.

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• (e) Issue of Shares under the Prospectus : The issue of 250,000,000 Shares to the public under the Prospectus at an issue price of $0.01 each to raise $2,500,000. Please see Resolution 3 and Section 3.5 for more information.

• (f) Appointment of Existing Directors: The resignation of the previous directors and secretary of the Company and the appointment of at least 3 new directors (being the Existing Directors) and one new secretary. The Existing Directors were appointed on 30 July 2012 and the new secretary, Nicki Farley, was appointed on 7 November 2012. Please see Section 4.15 for more information.

• (g) Right for Existing Directors to apply for Shares under the Prospectus: The right for the Existing Directors to apply for, and the Company to issue, new Shares under the Prospectus as follows:

• (i) up to 2,000,000 Shares to Paula Cowan (and/or her nominee);

• (ii) up to 2,000,000 Shares to KC Ong (and/or his nominee); and

• (iii) up to 2,000,000 Shares to Paul Price (and/or his nominee).

Please see Resolution 4 and Section 3.6 for more information.

• (h) Issue of Shares to Strategic Investors: The issue of Shares to the Strategic Investors for nil consideration as follows:

• (i) 6,000,000 Shares to Gersec Trust Reg (and/or its nominee);

• (ii) 6,000,000 Shares to WF Asian Smaller Companies Fund Limited (and/or its nominee);

• (iii) 6,000,000 Shares to Hillbrow Investments Limited (and/or its nominee);

• (iv) 6,000,000 Shares to George Robinson (and/or his nominee); and

• (v) 6,000,000 Shares to Paul Bate (and/or his nominee).

Please see Resolution 5 and Section 3.7 for more information.

• (i) Payment to the Claimant Group: The payment of $300,000 to the Claimant Group in exchange for the documentation required to obtain the grant of the Tenement. Please see Section 4.5 for more information.

• (j) Payments to the Deed Administrator: Transfer of the proceeds from liquidation of the Company’s assets and the amount of $480,000 from the capital raisings to the Deed Administrators to be applied to the Trust Fund. Please see Section 4.2 for more information.

• (k) Forgiveness of Claims: The release of all existing Claims against the Company with Creditors’ Claims to be satisfied from the Trust Fund. Please see Sections 4.2 and 4.3 for more information.

2.3 Purpose of the Recapitalisation Proposal

The purpose of the Recapitalisation Proposal is to:

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• (a) restructure the Company’s issued capital and net asset base;

• (b) provide working capital to finalise and complete the Recapitalisation and terminate the DOCA;

• (c) allow the Company to continue its existing activities and pursue new projects by way of acquisition or investment; and

• (d) facilitate the reinstatement of the Company’s securities on the ASX.

The operational and expenditure plans of the Company are summarised in Section 2.5.

2.4 Indicative timetable

Set out in the table below is the expected timing for completion of the Recapitalisation Proposal. These dates are indicative only and may be varied without prior notice (subject to any regulatory requirements).

Event	Date
Dispatch of Notice of Meeting to Shareholders	11 July 2013
General Meeting of Shareholders	14 August 2013
Lodgement of Prospectus with ASIC	14 August 2013
Prospectus offer opens	22 August 2013
Prospectus offer closes	18 September 2013
Issue of all new Shares	23 September 2013
Payments to Deed Administrators, DOCA effectuated and Deed Administrators retire	25 September 2013
Commencement of trading of Shares on ASX	30 September 2013

2.5 Operational and expenditure plans of the Company

The Company proposes to raise sufficient working capital to complete the Recapitalisation Proposal and to continue to expand the activities of the Company. As part of the working capital budget, the Company may pursue new projects by way of acquisition or investment.

(a) Capital raising

The capital raising of $3,000,000 (before costs) contemplated by the Resolutions will enable the recapitalisation of the Company to be completed and enable the Company to meet its initial operational and expenditure plans. On successful completion of the capital raising, the Company will make an application to ASX for its securities to be reinstated to trading on the Official List.

The purpose of the capital raising is to:

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• (i) meet the administration costs of the Company and the expenses of the Recapitalisation Proposal including payments for the benefit of Creditors under the DOCA;

• (ii) fund the Company’s ongoing operations; and

• (iii) provide funds for the identification, examination and possible acquisition and development of new investments, as identified by the Company (please note that a new acquisition may require the Company to re-comply with Chapters 1 and 2 of the Listing Rules if the acquisition would result in a significant change to the nature or scale of the Company’s activities).

(b) Expenditure plans

It is proposed that the funds raised under the capital raising will be applied as follows (exclusive of any GST payable):

Expenditure plans	Year 1	Year 2
Total funds raised	$3,000,000
Utilised as follows:
Payments to the Claimant Group in accordance with the Deferred Mining Agreement	$300,000	$50,000
Payments to the Deed Administrators in accordance with the DOCA	$480,000	-
Review and evaluation of the Tenement	$200,000	$200,000
Review and evaluation of new assets and projects	$200,000	$200,000
Working capital including expenses associated with the Recapitalisation Proposal	$850,000	$200,000
Total funds utilised	$2,030,000	$650,000
End of year cash at bank	$970,000	$320,000

The Company’s expenditure plans are the best estimates available to the Company at this time. It is important to recognise that although certain parts of the budget allocations are committed expenditures, work programs are subject to changes in line with emerging results, circumstances and opportunities. Please see Section 4.7 for more information regarding the future investment opportunities available to the Company.

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2.6 Pro forma capital structure

The pro forma capital structure of the Company on completion of the Recapitalisation Proposal is as follows:

Description	Resolution	Number of Shares	% Share interest
Existing Shares		19,284,366	4.83%
Issue to non-Related Party Noteholders (Note 1)	1	80,000,000	20.04%
Issue to Related Party Noteholders (Note 2)	2	20,000,000	5.01%
Issue of Shares to public under the Prospectus (Notes 3 and 4)	3 4	250,000,000 (6,000,000 to Existing Directors)	62.61% (1.50% to Existing Directors)
Issue to Strategic Investors (Note 5)	5	30,000,000	7.51%
TOTALS		399,284,366	100%

Notes

1. Please refer to the commentary in Section 3.3.

2. Please refer to the commentary in Section 3.4.

4. Please refer to the commentary in Section 3.5.

5. Each Existing Director may subscribe for up to 2,000,000 Shares out of the 250,000,000 Shares to be issued under the Prospectus as follows (please see Section 3.6 for more information):

Existing Director	Resolution	Maximum number of Shares entitled to under Prospectus	Maximum % of Shares entitled to under Prospectus
Paula Cowan	4	2,000,000	0.8%
KC Ong	4	2,000,000	0.8%
Paul Price	4	2,000,000	0.8%

1. Please refer to the commentary in Section 3.7.

2.7 Quotation of Shares on ASX

The Company is already admitted to the Official List. However, trading in the Company’s Shares was suspended on 11 February 2009. Following completion of

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the Recapitalisation Proposal, the Company will apply to ASX for reinstatement of its securities to the Official List.

Reinstatement to the Official List is at the discretion of ASX and will be subject to compliance with the Listing Rules and the Corporations Act. At the date of this Notice, ASX has indicated to the Company that on the basis of the information provided to ASX, the Recapitalisation Proposal will not adversely affect the Company’s ability of being reinstated to the Official List.

2.8 Pro forma statement of financial position

Included below is the pro forma Statement of Financial Position for the Company, assuming completion of the Recapitalisation Proposal. The pro forma Statement of Financial Position has been prepared based on the book value of the Company’s net assets at 31 December 2012 and adjusted for the Recapitalisation Proposal.

	Note	Unaudited as at 31 December 2012 ($)	Unaudited pro forma if Recapitalisation Proposal completed ($)
Current Assets Cash and Cash Equivalents Other Current Assets Total Current Assets 1 285,703 39,805 325,508 1,343,908 78,587 1,422,495 Non-Current Assets Non-Current Assets Exploration and Evaluation Asset Total Fixed Assets - - - - 308,109 - Total Assets 325,508 1,730,604 Current Liabilities Trade and Other Payables Borrowings Total Current Liabilities (510,875) (500,000) (1,010,875) (30,875) - (30,875) Non-Current Liabilities Non Currents Liabilities Total Non-Current Liabilities - - - -

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	Note	Unaudited as at 31 December 2012 ($)	Unaudited pro forma if Recapitalisation Proposal completed ($)
Total Liabilities (1,010,875) (30,875) Net Assets (685,367) 1,699,729 Shares on issue 2 19,284,366 399,284,366 Value of a Share ($0.0355) $0.0043

Notes

1. Cash and cash equivalents

Cash and cash equivalents have been adjusted for the expected changes that will result from the recapitalisation of the Company. These adjustments are set out below:

Description	Amount
Cash at 31 December 2012 (includes cash received from the issue of Convertible Notes)	$285,703
Cash received from the issue of Shares under the Prospectus	$2,500,000
Payment to Claimant Group	($300,000)
Payments to Deed Administrators under the DOCA	($480,000)
Expenses associated with Recapitalisation Proposal (incl. GST)	($661,795)
Cash post Recapitalisation Proposal	$1,343,908

2. Shares on issue

Description	Number
Existing Shares on issue	19,284,366
Shares issued to the Noteholders	100,000,000
Shares issued to the public under the Prospectus	250,000,000
Shares issued to the Strategic Investors	30,000,000
Total Shares on issue	399,284,366

2.9 Forgiveness of Creditors’ Claims

If the Recapitalisation Proposal is approved, the Deed Administrators’ fees and Creditors’ Claims will be satisfied in full by the payment of the Deed Administrators’

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Sum and the Creditors’ Sums to the Deed Administrators (please see Section 4.2 for more information). The Deed Administrators will transfer these amounts to the Trust Fund in accordance with the terms of the DOCA and the Claims of the Creditors against the Company will be extinguished, discharged and released.

3. General Meeting

3.1 Action to be taken by Shareholders

In order to proceed with the Recapitalisation Proposal, the Company must convene a general meeting of its Shareholders for the purpose of passing the Resolutions in compliance with the requirements of the Corporations Act and the Listing Rules.

The Notice convening the General Meeting is included at the front of this booklet. Shareholders are encouraged to attend and vote in favour of each of the Resolutions to be put to the General Meeting.

If a Shareholder is not able to attend and vote at the General Meeting, the Shareholder is encouraged to complete the Proxy Form at the back of this booklet and return it to the Company at the address stated on the Proxy Form by no later than 10.00am (WST) on Monday, 12 August 2013.

3.2 Resolutions

There are 5 Resolutions to be put to the General Meeting, all of which are ordinary resolutions. Each Resolution relates to the implementation of the Recapitalisation Proposal and is conditional on the passing of each of the other Resolutions, so that the Resolutions will not have any effect unless all of the Resolutions are passed. Accordingly, Shareholders should consider each Resolution collectively as well as individually.

Certain voting restrictions are imposed in relation to the Resolutions as detailed in the Notice under the “Voting exclusion statement” section.

This Section 3 sets out a brief explanation of each Resolution.

3.3 Resolution 1 – Issue of Shares on the conversion of Convertible Notes to nonRelated Parties

Resolution 1 is an ordinary resolution and seeks Shareholder approval under Listing Rule 7.1 for the issue of:

• (a) 20,000,000 Shares to Avonglade Enterprises Pty Ltd (and/or its nominee) (as an Exempt Investor);

• (b) 20,000,000 Shares to Foster West Securities Pty Ltd (and/or its nominee) (as an Exempt Investor);

• (c) 20,000,000 Shares to Jason Peterson and Lisa Peterson (and/or their nominee) (as Exempt Investors); and

• (d) 20,000,000 Shares to Briant Nominees Pty Ltd (and/or its nominee) (as an Exempt Investor),

on the conversion of Convertible Notes.

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Resolution 1 must be approved by Shareholders under Listing Rule 7.1. Please see Section 5.1 for more information in this regard.

The funds raised from the issue of the Convertible Notes will be applied to:

• (a) payment of the amount of $300,000 to the Claimant Group in accordance with the Deferred Mining Agreement (please see Section 4.5 for more information);

• (b) satisfying the costs associated with the implementation of the Recapitalisation Proposal; and

• (c) otherwise implementing the Company’s operational and expenditure plans outlined in Section 2.5.

Upon conversion of the Convertible Notes, the Shares referred to in Resolution 1 will rank equally in all respects with existing Shares. If Resolution 1 is not passed, the Convertible Notes will be redeemed by way of cash payment from the Company to the Noteholders in accordance with the Convertible Note Agreements (please see Section 4.4 for more information).

The issue of the Shares pursuant to the Convertible Notes held by non-Related Parties of the Company is to occur within 3 months of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules).

3.4 Resolution 2 – Issue of Shares on the conversion of Convertible Notes to a Related Party

Resolution 2 is an ordinary resolution and seeks Shareholder approval under section 208 of the Corporations Act and Listing Rule 10.11 for the issue of 20,000,000 Shares to Trident Capital Pty Ltd (and/or its nominee) (as an Exempt Investor) on the conversion of Convertible Notes.

Resolution 2 must be approved by Shareholders under section 208 of the Corporations Act and Listing Rule 10.11. Please see Sections 5.2 and 5.3 for more information in this regard.

The funds raised from the issue of the Convertible Notes will be used to satisfy costs associated with the implementation of the Recapitalisation Proposal and to otherwise implement the Company’s operational and expenditure plans outlined in Section 2.5.

Upon conversion of the Convertible Notes, the Shares referred to in Resolution 2 will rank equally in all respects with existing Shares and, therefore, will be issued on the same terms as the Shares to be issued to non-Related Parties under the Prospectus. If Resolution 2 is not passed, the Convertible Notes will be redeemed by way of cash payment from the Company to the Noteholder in accordance with the Convertible Note Agreement (please see Section 4.4 for more information).

The issue of the Shares pursuant to the Convertible Notes held by Trident Capital Pty Ltd is to occur within 3 months of the General Meeting in accordance with the ASX Waiver (or such later time to the extent permitted by ASX under any additional waiver of the Listing Rules).

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3.5 Resolution 3 – Issue of Shares under the Prospectus

Resolution 3 is an ordinary resolution and seeks Shareholder approval for the issue of 250,000,000 Shares in the Company under the Prospectus at $0.01 each to raise $2,500,000. Resolution 3 must be approved by Shareholders under Listing Rule 7.1. Please see Section 5.1 for more information in this regard.

The issue of Shares under the Prospectus is subject to Shareholders passing all Resolutions contained in the Notice, compliance with ASX and ASIC regulatory requirements, and the prevailing market factors at the time. The funds raised from the issue of Shares under the Prospectus (after associated costs) will be applied to:

• (a) payment of the amount of $480,000 to the Deed Administrators in accordance with the DOCA (please see Section 4.2 for more information);

• (b) satisfying the costs associated with the implementation of the Recapitalisation Proposal; and

• (c) otherwise implementing the Company’s operational and expenditure plans outlined in Section 2.5.

All of the Shares referred to in Resolution 3 will, upon being issued, rank equally in all respects with existing Shares.

The Prospectus is expected to be issued on or about 14 August 2013 and it is intended that the Prospectus will close on or about 18 September 2013. However, these dates are indicative only and subject to change without further notice.

The issue of the Shares under the Prospectus must occur no later than 3 months (or such later date as permitted by the Listing Rules) from the date of the General Meeting.

3.6 Resolution 4 – Right for Existing Directors to apply for Shares under the Prospectus

Resolution 4 is an ordinary resolution and seeks Shareholder approval for the issue of up to 6,000,000 Shares to the Existing Directors as follows:

• (a) up to 2,000,000 Shares to Paula Cowan (and/or her nominee);

• (b) up to 2,000,000 Shares to KC Ong (and/or his nominee); and

• (c) up to 2,000,000 Shares to Paul Price (and/or his nominee),

at a price of $0.01 each under the Prospectus.

As the Existing Directors are Related Parties of the Company, Resolution 4 must be approved by Shareholders under section 208 of the Corporations Act and Listing Rule 10.11. Please see Sections 5.2 and 5.3 for more information in this regard.

The issue of any Shares to the Existing Directors under the Prospectus is to occur within 3 months of the General Meeting in accordance with the ASX Waiver (or such later time to the extent permitted by ASX under any additional waiver of the Listing Rules) and such Shares will be issued on the same terms as the Shares to be issued to non-Related Parties under the Prospectus.

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3.7 Resolution 5 – Issue of Shares to Strategic Investors

Resolution 5 is an ordinary resolution and seeks Shareholder approval under Listing Rule 7.1 for the issue of 30,000,000 Shares for nil consideration to the Strategic Investors as follows:

• (a) 6,000,000 Shares to Gersec Trust Reg (and/or its nominee) (as an Exempt Investor);

• (b) 6,000,000 Shares to WF Asian Smaller Companies Fund Limited (and/or its nominee) (as an Exempt Investor);

• (c) 6,000,000 Shares to Hillbrow Investments Limited (and/or its nominee) (as an Exempt Investor);

• (d) 6,000,000 Shares to George Robinson (and/or his nominee) (as an Exempt Investor); and

• (e) 6,000,000 Shares to Paul Bate (and/or his nominee) (as an Exempt Investor).

Resolution 5 must be approved by Shareholders under Listing Rule 7.1. Please see Section 5.1 for more information in this regard.

Pursuant to the Deed Administrators’ Report issued to Creditors on 27 April 2010, Trident Capital Pty Ltd reserves the right to issue up to 30,000,000 Shares to the Strategic Investors for the purpose of facilitating completion of the Recapitalisation Proposal.

No funds will be raised from the issue of Shares to Strategic Investors under Resolution 5 as these Shares will be issued for nil consideration. The Shares referred to in Resolution 5 will rank equally in all respects with existing Shares.

The issue of the Shares under Resolution 5 must occur no later than 3 months (or such later date as permitted by the Listing Rules) from the date of the General Meeting.

4. Other Information

4.1

Scope of disclosure

The Corporations Act requires that this Explanatory Statement set out all information which is known to the Company that is reasonably required by Shareholders to decide whether or not it is in the Company’s interests to pass the Resolutions.

The Company is not aware of any relevant information that is material to the decision of how to vote on the Resolutions other than as is disclosed in this Explanatory Statement or previously disclosed to Shareholders by the Deed Administrators or the Company by notification to ASX.

4.2

Deed of Company Arrangement

Pursuant to the resolution at a meeting of Creditors on 9 December 2009 held under section 439A of the Corporations Act, the Company and the Administrators entered into the Original DOCA on 31 December 2009. Pursuant to section 445A of the Corporations Act, the Original DOCA was varied and superseded by the DOCA

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executed on 27 May 2010 and the Administrators became the administrators of the DOCA ( Deed Administrators ).

The material terms of the DOCA are as follows:

• (a) Upon the Deed Administrators receiving:

• (i) $30,000 ( Deed Administrators’ Sum ) from the Company;

• (ii) $450,000 ( Creditors’ Sum ) from the Company; and

• (iii) transfer of all of the assets of the Company except for the Tenement ( Trust Fund Assets ),

the Deed Administrators will establish the Trust Fund into which it will transfer the Deed Administrators’ Sum, the Creditors’ Sum and the Trust Fund Assets.

• (b) Upon the Deed Administrators establishing the Trust Fund and notifying ASIC that the DOCA has been wholly effectuated, the DOCA will terminate and:

• (i) the Creditors’ Claims against the Company are replaced with rights under the Creditors’ Trust Deed;

• (ii) the Creditors accept their rights under the Creditors’ Trust Deed and will participate in the Trust Fund in full satisfaction of their Claims against the Company; and

• (iii) the Company is released from the Claims of the Creditors.

• (c) Upon the satisfaction of the DOCA, the Deed Administrators will:

• (i) return control of the Company to the directors then in office; and

• (ii) retire.

4.3 Creditors’ Trust Deed

Upon the satisfaction of the DOCA, the Company and the Administrators as trustees of the Trust Fund ( Trustees ) will enter into the Creditors’ Trust Deed (the terms of which are annexed to the DOCA).

The material terms of the Creditors’ Trust Deed are as follows:

• (a) The Trustees will hold the Deed Administrators’ Sum, the Creditors’ Sum, the Trust Fund Assets and any income accruing on the assets of the Trust Fund on trust for the Creditors on the terms of the Creditors’ Trust Deed.

• (b) The Creditors’ Claims against the Company under the DOCA are converted to Claims to the Trust Fund under the Creditors’ Trust Deed.

• (c) The Trustees will distribute the Trust Fund:

• (i) firstly, to the Deed Administrators and the Trustees in satisfaction of their fees in administering the DOCA and the Creditors’ Trust Deed; and

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• (ii) secondly, to the Creditors’ nominee in his capacity as joint and several receiver of the Company.

• (d) The Creditors must accept their entitlements under the Creditors’ Trust Deed in full satisfaction and discharge of their Claims against the Trustees or the Trust Fund.

• (e) Upon payment of the final dividend to a Creditor:

• (i) the Creditors’ Trust Deed will terminate; and

• (ii) the Trustees will resign.

4.4 Convertible Note Agreements

The Company has entered into Convertible Note Agreements with each of the Noteholders to procure the advance of $500,000.

The material terms of the Convertible Note Agreements are as follows:

• (a) Subject to the Company:

• (i) obtaining all necessary Shareholder approvals under the Corporations Act and the Listing Rules; and

• (ii) being satisfied that it has complied with, or will be able to comply with, ASX’s conditions to reinstatement of the Company’s securities to the Official List,

the Convertible Notes will be redeemed by conversion into Shares.

• (b) The Shares will be issued to the Noteholders at the same time as Shares are issued under the Prospectus.

• (c) The Convertible Notes will convert into Shares at the rate of 1 new Share for each $0.005 advanced.

• (d) The Shares issued on conversion will rank equally in all respects with the Shares on issue at that time.

• (e) No interest is payable on the Convertible Notes.

• (f) If the conditions precedent are not satisfied, the Convertible Notes will be repayable within 6 months of the date of the General Meeting by paying to each Noteholder the amount advanced less the total costs incurred by the Company in respect of the Recapitalisation Proposal on a pro rata basis.

• (g) The amounts advanced by the Noteholders are unsecured.

The Convertible Note Agreements are otherwise on standard terms.

4.5 Deferred Mining Agreement

On 17 January 2013, the Company entered into the Deferred Mining Agreement with the Badimia Native Title Claimant Group ( Claimant Group ) in relation to:

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• (a) the compensation payable to the Claimant Group for any loss of native title rights as a result of the grant of the Tenement;

• (b) the Company’s obligations and permissible conduct on the Tenement in light of Aboriginal heritage and the environment; and

• (c) the negotiation of a comprehensive mining agreement with the Claimant Group prior to the commencement of productive mining on the Tenement.

• The material terms of the Deferred Mining Agreement are as follows:

• (d) The Deferred Mining Agreement is conditional upon the Company:

• (i) obtaining any necessary Shareholder approvals to the transactions contemplated by the Deferred Mining Agreement;

• (ii) receiving conditional approval from ASX for the reinstatement of its securities to the Official List and being reasonably satisfied of its ability to satisfy such conditions; and

• (iii) the Company raising a minimum of $300,000 through equity and/or debt financing for the purpose of paying the amount referred to in Section 4.5(f).

• (e) The Claimant Group agrees to:

• (i) the grant of the Tenement; and

• (ii) the grant of any approval required by the Company in relation to exploration activities on the Tenement.

• (f) Within 14 days of the conditions being satisfied or waived, the Company will pay the amount of $300,000 to the Claimant Group in exchange for the executed State Deed.

• (g) Subject to the Company’s securities being reinstated to the Official List, the Company will also pay the following amounts to the Claimant Group:

• (i) $50,000 on the first, second and third anniversary dates of the date that the Company’s securities recommence trading on the Official List ( Reinstatement Date ) (totalling the 3 Years Payment ); and

• (ii) $25,000 (adjusted in accordance with the Consumer Price Index) on the fourth anniversary date of the Reinstatement Date and each anniversary of that date thereafter until the Tenement lapses or the Deferred Mining Agreement comes to an end.

• (h) If the Tenement lapses or the Deferred Mining Agreement comes to an end within 3 years of the Reinstatement Date then the Company must still pay to the Claimant Group the portion of the 3 Years Payment that has not been paid.

• (i) The Company must not commence productive mining on the Tenement until it enters into a comprehensive mining agreement with the Claimant Group,

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which will set out, among other things, the compensation payable to the Claimant Group from profits made from the Tenement.

(j) The Deferred Mining Agreement may be terminated by the mutual agreement of the parties.

4.6 Retained asset

The Company has retained the application for mining lease M58/272 ( Tenement ) as its core asset. Although the application has already been recommended for grant by the registrar, the application is subject to a Native Title claim by the Claimant Group. In order for the Department of Mining and Petroleum ( DMP ) to grant the Tenement, the Company requires the Claimant Group to execute the State Deed to confirm that the Company and the Claimant Group have negotiated, in good faith, the terms upon which the Tenement may be granted. The Claimant Group has agreed to execute the State Deed in accordance with the Deferred Mining Agreement (see Section 4.5).

ASX has notified the Company that the Tenement must be granted before the Company’s securities can be reinstated to trading on the Official List. Therefore, subject to satisfaction of the conditions precedent in the Deferred Mining Agreement, the Company will pay the Claimant Group an amount of $300,000 and, in return, the Claimant Group will provide the Company with the executed State Deed. The Company will then lodge the State Deed with the DMP and the application for the Tenement can proceed to being granted.

4.7 Future investments

Upon being reinstated to trading on the ASX, the Company will seek to attract a suitable management team to explore and, potentially, develop the Tenement. The management team will also investigate the value of the Tenement, particularly in light of Atlantic Limited commissioning a vanadium mine adjacent to the Tenement in late 2011 ( Atlantic Mine ).

The geological features upon which the Atlantic Mine is located extend into the Tenement. As a result of its strategic location, the Existing Directors believe that it is in the interests of Shareholders to conduct exploration activities on the Tenement with a view to determining whether or not there is an economic resource. In the event that an economic resource is defined on the Tenement, the Company will consider the possibilities of processing the ore at the Atlantic Mine and selling the ore to the owners of the Atlantic Mine on a mine gate sale basis.

In addition to exploring and evaluating the potential of the Tenement, once reinstated the Company will actively pursue new projects in line with its operational history by way of acquisition and investment.

4.8 Interests of the Existing Directors

As at the date of this Notice, the Existing Directors hold interests in the Shares of the Company as detailed in the table below:

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Existing Director	Shares currently held directly and indirectly	Shares proposed to be issued
Paula Cowan	0	2,000,000 (Resolution 4)
KC Ong	0	2,000,000 (Resolution 4)
Paul Price	0	22,000,000 (Resolutions 2 and 4)
Total	0	26,000,000

Notes

1. No Existing Director is an Associate of any other Existing Director.

2. The Company does not currently have any options to acquire a Share on issue.

3. The Existing Directors do not have any material personal interests in the outcome of the Resolutions except for Resolution 2 in the case of Paul Price and Resolution 4 in the case of Paula Cowan, KC Ong and Paul Price.

4.9

Recommendations by Existing Directors

The Existing Directors (except Paul Price in respect of Resolution 2 in which he has material personal interest) recommend that, in the context of the Company's current circumstances, and given the Creditors’ approval of the Recapitalisation Proposal, Shareholders accept the Recapitalisation Proposal and approve Resolutions 1, 2, 3 and 5 to be put to the General Meeting. However, Shareholders must decide for themselves how to vote based on the matters set out in the Explanatory Statement.

Each Existing Director expresses no opinion and makes no recommendation in respect of Resolution 4 (the right of each Existing Director to apply for, and the Company to issue, up to 2,000,000 Shares under the Prospectus). This is due to each of the Existing Directors having a material personal interest in the outcome of Resolution 4.

4.10

Taxation

The Recapitalisation Proposal may give rise to income tax implications for the Company. Shareholders are advised to seek their own taxation advice on the effect of the Resolutions on their personal position. The Company, the Existing Directors, the Administrators and each of their respective advisers do not accept any responsibility for any individual Shareholder's taxation consequences on any aspect of the Recapitalisation Proposal.

4.11 Effect of the Recapitalisation Proposal

The Company’s shares were last traded on the ASX on 6 February 2009 and the Administrators were appointed as administrators of the Company on 18 February 2009. Accordingly, historic ASX share trading prices for the Company are not considered a reliable basis to assess the value of the Shares.

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Due to the Company’s current state of affairs, the lack of profit history and the immediate lack of a reliable future cash flow from remaining assets, maintainable earnings are not considered a reliable basis to assess the value of the Company’s Shares.

The Deed Administrators estimate that, on a liquidation basis, there is a deficiency of funds and the Creditors may receive a nil return if the Recapitalisation Proposal does not proceed. Therefore, on a liquidation basis, the Shareholders’ return from the Company is most likely to be nil. Accordingly, the current implicit value of the Shares at the date of this Explanatory Statement is nil.

The advantages of passing the Resolutions and subsequent completion of the Recapitalisation Proposal include the following:

• (a) a cash injection of $3,000,000;

• (b) forgiveness of the provable debts of the Company to the Creditors. This will leave the Company with negligible liabilities, compared with the current position under which the Company is in a net liability position; and

• (c) the Company being able to seek reinstatement of its Shares to trading on ASX. Reinstatement will offer Shareholders liquidity to sell their Shares on the ASX.

The principal disadvantage of the Recapitalisation Proposal to Shareholders is that their holdings in the Company will be diluted following:

• (a) the capital consolidation on a 1 for 8 basis (previously approved by Shareholders and effected on 12 March 2013); and

• (b) the issue of Shares pursuant to Resolutions 1, 2, 3 and 5.

However, this must be balanced with the fact that existing Shares currently have nil value and, should the Recapitalisation Proposal not proceed, the Company is most likely to be placed into liquidation. Following completion of the Recapitalisation Proposal, the existing Shareholders’ reduced holdings will have value based on the cash injection to the Company and the return to liquidity through reinstatement on the ASX.

4.12 Capital consolidation

On 26 February 2013, the Company obtained Shareholder approval to alter the issued capital of the Company by consolidating its Shares on a 1 for 8 basis. All fractional entitlements as a result of holdings not being evenly divisible by 8 were rounded down to the nearest whole number.

The capital consolidation did not result in any change to the substantive rights and obligations of Shareholders. The purpose of the consolidation was to reduce the number of Shares on issue from 154,278,674 to 19,284,366.

4.13

Reduction of capital

On 26 February 2013, the Company obtained Shareholder approval to reduce the capital of the Company by applying an amount of up to $220,399,903 (being a

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proportion of the accumulated losses of the Company) against the share capital of the Company which is considered permanently lost.

The purpose of the reduction of capital was to reduce the amount of capital on issue where the value had been permanently lost or was not represented by available assets. The accumulated losses relate to the Company’s assets that have either been sold or had their value impaired, and the trading losses accumulated by the Company.

The Company effected the reduction of capital by debiting its capital account by the amount of the Company’s accumulated losses, being up to approximately $220,399,903. The Company did not return any capital to Shareholders or cancel any Shares under this reduction.

4.14 Indicative value of new Shares

The quantum of benefit to be received by the holders of the Shares proposed to be issued pursuant to the Resolutions will depend in part on the price at which the underlying Shares may trade on the ASX.

As the Company is currently suspended from the ASX, there is no readily available market price for the Shares. The “net assets on a going concern” basis is usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the Company are valued at market value under this alternative and this combined market value forms the basis for the Company’s valuation.

Accordingly, as the Company is likely to be in a position to continue trading following the Recapitalisation Proposal, the Company considers the net assets on a going concern basis to be the most appropriate methodology for valuing Shares in the Company following the Recapitalisation Proposal.

Based on the pro forma statement of financial position set out in Section 2.8 (which assumes the completion of the Recapitalisation Proposal) the estimated value of the net assets of the Company after the Recapitalisation Proposal is equivalent to approximately $0.0043 per Share.

4.15 Appointment of Existing Directors

Pursuant to the terms of the Reconstruction Deed, the Deed Administrators have procured the resignations of the previous directors and secretary of the Company and Trident Capital Pty Ltd has procured the appointment of the following 3 new directors and company secretary:

Name	Position	Appointment date
Paula Cowan	Non-executive Director	30 July 2012
KC Ong	Non-executive Director	30 July 2012
Paul Price	Non-executive Chairman	30 July 2012
Nicki Farley	Company Secretary	7 November 2012

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5. Regulatory Requirements

The General Meeting has been called to approve certain general and specific aspects of the Recapitalisation Proposal in accordance with the Corporations Act and the Listing Rules, as summarised in this Section 5.

5.1 Listing Rule 7.1

Listing Rule 7.1 provides that a company must not, without shareholder approval and subject to certain exceptions, issue any equity security (including options and convertible notes) during any 12 month period if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

The maximum number of securities that may be issued under Resolutions 1, 2, 3 and 5 is 380,000,000 Shares.

As the proposed issue of Shares under Resolutions 1, 2, 3 and 5 will result in an issue of more than 15% of the Company's share capital in a 12 month period, Shareholder approval is required pursuant to Listing Rule 7.1 to issue the Shares under those Resolutions.

All of the new Shares will, upon being issued, rank equally in all respects with the existing Shares in the Company.

Listing Rule 7.3 requires the following information to be provided to Shareholders:

(a) Resolution 1 – Issue of Shares on the conversion of Convertible Notes to non-Related Parties

• (i) The maximum number of securities to be issued to non-Related Parties under Resolution 1 is 80,000,000 Shares.

• (ii) The Shares will be issued under Resolution 1 within 3 months of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules). The issues of all Shares will occur on the same date as the persons to whom the Shares will be issued have already been identified.

• (iii) The issue price for the Shares under Resolution 1 is effectively $0.005 per Share as each Noteholder advanced $100,000 for the issue of Convertible Notes which are convertible into 20,000,000 Shares.

• (iv) The persons to whom Shares are to be issued under Resolution 1 are:

• (A) 20,000,000 Shares to Avonglade Enterprises Pty Ltd (and/or its nominee);

• (B) 20,000,000 Shares to Foster West Securities Pty Ltd (and/or its nominee);

• (C) 20,000,000 Shares to Jason Peterson and Lisa Peterson (and/or their nominee); and

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• (D) 20,000,000 Shares to Briant Nominees Pty Ltd (and/or its nominee).

None of the persons to whom Shares are to be issued under Resolution 1 are Related Parties of the Company.

• (v) The Shares to be issued under Resolution 1 are ordinary fully paid shares which, upon being issued, will rank equally with the existing Shares in the Company.

• (vi) The issue of Shares under Resolution 1 will note raise any further funds however the issue of the relevant Convertible Notes has raised $400,000 which will be used for the purposes specified in Section 3.3.

(b) Resolution 3 – Issue of Shares under the Prospectus

• (i) The maximum number of securities to be issued under Resolution 3 is 250,000,000 Shares.

• (ii) The Shares will be issued under Resolution 3 within 3 months of the General Meeting. The issue of Shares will occur either at once on the same date or progressively as and when the persons to whom the Shares are to be issued are identified but in any event will be issued no later than 3 months after the date of the General Meeting (or such later date to the extent permitted by an ASX waiver or modification of the Listing Rules).

• (iii) The issue price of the securities to be issued under Resolution 3 is $0.01 per new Share.

• (iv) The persons to whom Shares are to be issued under Resolution 3 have not yet been identified but will be determined at the sole discretion of the Company from the applications under the Prospectus. Some persons to whom Shares are issued may be Related Parties or Associates of the Company. The issue of Shares will occur progressively as and when persons to whom Shares are to be issued are identified.

• (v) The Shares to be issued under Resolution 3 are ordinary fully paid shares which, upon being issued, will rank equally with the existing Shares in the Company.

• (vi) The issue of Shares under Resolution 3 will raise $2,500,000 which will be used for the purposes specified in Section 3.5.

(c) Resolution 5 – Issue of Shares to Strategic Investors

• (i) The maximum number of securities to be issued to the Strategic Investors under Resolution 5 is 30,000,000 Shares.

• (ii) The Shares will be issued under Resolution 5 within 3 months of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules). The issue of Shares will occur on the same date as the persons to whom Shares are to be issued have already been identified.

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• (iii) The issue price payable for the Shares under Resolution 5 is $0.00 per Share.

• (iv) The persons to whom Shares are to be issued under Resolution 5 are:

• (A) 6,000,000 Shares to Gersec Trust Reg (and/or its nominee);

• (B) 6,000,000 Shares to WF Asian Smaller Companies Fund Limited (and/or its nominee);

• (C) 6,000,000 Shares to Hillbrow Investments Limited (and/or its nominee);

• (D) 6,000,000 Shares to George Robinson (and/or his nominee); and

• (E) 6,000,000 Shares to Paul Bate (and/or his nominee).

None of the persons to whom Shares are to be issued under Resolution 5 are Related Parties of the Company.

• (v) The Shares to be issued under Resolution 5 are ordinary fully paid shares which, upon being issued, will rank equally with the existing Shares in the Company.

• (vi) As the Shares under Resolution 5 will be issued for nil consideration, no funds will be raised from the issue.

5.2 Section 208 of the Corporations Act

Under Chapter 2E of the Corporations Act, a public company cannot give a financial benefit (including an issue of shares) to a Related Party of the company without shareholder approval (unless one of the exceptions set out in sections 210 to 216 of the Corporations Act applies).

Under section 228 of the Corporations Act, a director of a public company is a Related Party of the company.

The Company is seeking Shareholder approval under section 208 of the Corporations Act to permit:

• (a) the issue of Shares on the terms set out in Resolution 2 to Trident Capital Pty Ltd; and

• (b) the issue of Shares under the Prospectus to the Existing Directors pursuant to Resolution 4,

as Related Parties of the Company.

Section 219 of the Corporations Act requires that the following information be provided to Shareholders for approval to be granted under section 208 of the Corporations Act:

(a) Resolution 2 – Issue of Shares on the conversion of Convertible Notes to a Related Party

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• (i) The Related Party to whom Resolution 2 would permit financial benefits is Trident Capital Pty Ltd.

• (ii) The financial benefit that the Related Party will receive if Resolution 2 is passed is the issue of Shares on conversion of the Convertible Notes in accordance with the terms set out in Section 3.4.

• (iii) Paula Cowan and KC Ong recommend that Shareholders vote in favour of Resolution 2 in order to give effect to the Recapitalisation Proposal. Paul Price declines to make a recommendation in respect of Resolution 2 as he has a material personal interest in the outcome of Resolution 2.

• (iv) Paula Cowan and KC Ong do not have any material personal interests in the outcome of Resolution 2. Paul Price has a material personal interest in the outcome of Resolution 2 as he is a director of Trident Capital Pty Ltd.

• (v) The Shares will be issued under Resolution 2 within 3 months of the General Meeting in accordance with the ASX Waiver (or such later date to the extent permitted by any additional ASX waiver or modification of the Listing Rules).

• (vi) The Shares to be issued under Resolution 2 are ordinary fully paid shares which, upon being issued, will rank equally with the existing Shares in the Company.

• (vii) No further funds will be raised from the issue of Shares under Resolution 2 however the issue of the relevant Convertible Notes has raised $100,000 which will be used for the purposes specified in Section 3.4.

• (viii) Please refer to Section 4.12 for a description of the indicative value of the Shares.

• (ix) As at the date of this Notice, Trident Capital Pty Ltd does not hold any Shares.

• (x) Trident Capital Pty Ltd has acted as the proponent of the Recapitalisation Proposal.

• (xi) Other than as set out in this Explanatory Statement, there is no further information which Shareholders would reasonably require in order to decide whether or not it is in the Company’s best interests to pass Resolution 2.

(b) Resolution 4 – Right for Existing Directors to apply for Shares under the Prospectus

• (i) The Related Parties to whom Resolution 4 would permit financial benefits are the Existing Directors, being:

• (A) Paula Cowan;

• (B) KC Ong; and

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• (C) Paul Price.

• (ii) The financial benefit that the Existing Directors will receive if Resolution 4 is passed is the issue of up to 2,000,000 Shares each under the Prospectus at an issue price of $0.01 each in accordance with the terms set out in Section 3.6.

• (iii) Paula Cowan, KC Ong and Paul Price decline to make a recommendation in respect of Resolution 4, as they have a material personal interest in the outcome of Resolution 4.

• (iv) Paula Cowan, KC Ong and Paul Price each have a material personal interest in the outcome of Resolution 4 as they will have the right to apply for Shares under the Prospectus if Resolution 4 is passed.

• (v) The Existing Directors will be paid directors’ fees by the Company as follows:

• (A) $48,000 per year to Paula Cowan;

• (B) $48,000 per year to KC Ong; and

• (C) $60,000 per year to Paul Price (Chairman).

• (vi) Based on the issue price of the Shares under the Prospectus being $0.01 each, the maximum value of the 6,000,000 Shares which may be issued to the Existing Directors is approximately $60,000 ($20,000 each). Each Existing Director must pay $20,000 to the Company if it decides to apply for the full 2,000,000 Shares available to it under the Prospectus.

• (vii) Assuming that all Resolutions are approved, the dilutionary effect that the issue of the Shares to the Existing Directors will have on Shareholders is outlined in the table at Section 2.6.

• (viii) Other than as set out in this Explanatory Statement, there is no further information which Shareholders would reasonably require in order to decide whether or not it is in the Company’s best interests to pass Resolution 4.

5.3 Listing Rule 10.11

Chapter 10 of the Listing Rules contains certain provisions in relation to transactions between a company and “persons in a position of influence”. Listing Rule 10.11 provides that a company must not issue equity securities to a Related Party without the approval of Shareholders by ordinary resolution.

The term Related Party is defined for these purposes to include a Related Party within the meaning of section 228 of the Corporations Act and a person whose relationship with the entity or a Related Party is, in ASX’s opinion, such that approval should be obtained.

Pursuant to Listing Rule 7.2, if Shareholder approval is being sought pursuant to Listing Rule 10.11, approval under Listing Rule 7.1 is not required.

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Accordingly, the Company is seeking Shareholder approval under Listing Rule 10.11 to permit the issue of Shares to Related Parties under Resolutions 2 and 4.

The following information is provided to Shareholders for the purposes of Listing Rule 10.11:

(a) Resolution 2 – Issue of Shares on the conversion of Convertible Notes to a Related Party

Paul Price is a Related Party of the Company for the purposes of Listing Rule 10.11 by virtue of being a director of the Company and Trident Capital Pty Ltd. Accordingly, Shareholder approval is being sought under Listing Rule 10.11 for the issue of Shares to Trident Capital Pty Ltd under Resolution 2.

Following the approval of the issue of 20,000,000 Shares to Trident Capital Pty Ltd under Resolution 2, the Company will still have the capacity to issue 15% of its Share capital over the next 12 months as those Shares, once issued, will be excluded from the calculation under Listing Rule 7.1.

Listing Rule 10.13 requires the following information to be provided to Shareholders for the purposes of Listing Rule 10.11 in respect of Resolution 2:

• (i) The Related Party to whom Shares are to be issued under Resolution 2 is Trident Capital Pty Ltd, of which Paul Price is a director.

• (ii) The maximum number of securities to be issued under Resolution 2 is 20,000,000 Shares.

• (iii) The Shares to be issued under Resolution 2 will be issued within 3 months of the General Meeting in accordance with the ASX Waiver (or such later time to the extent permitted by ASX under any additional waiver of the Listing Rules).

• (iv) The issue price for the Shares under Resolution 2 is effectively $0.005 per new Share as Trident Capital Pty Ltd advanced $100,000 for the issue of the Convertible Notes which are convertible into 20,000,000 Shares and the issue will otherwise be in accordance with the Convertible Note Agreement (please see Section 4.4 for more information).

• (v) The Shares to be issued under Resolution 2 are ordinary fully paid shares which, upon being issued, will rank equally with the existing Shares in the Company and, therefore, will be on the same terms as the Shares to be issued to non-Related Parties under the Prospectus.

• (vi) No further funds will be raised from the issue of Shares under Resolution 2 however the issue of the relevant Convertible Notes has raised $100,000 which will be used for the purposes specified in Section 3.4.

(b) Resolution 4 – Right for Existing Directors to apply for Shares under the Prospectus

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Paula Cowan, KC Ong and Paul Price are all directors of the Company and are therefore Related Parties of the Company for the purposes of Listing Rule 10.11. Accordingly, Shareholder approval is being sought under Listing Rule 10.11 for the issue of Shares to Paula Cowan, KC Ong and Paul Price under Resolution 4.

Following the approval of the issue of up to 2,000,000 Shares to each of Paula Cowan, KC Ong and Paul Price (and/or their nominees) under Resolution 4, the Company will still have the capacity to issue 15% of its Share capital over the next 12 months as those Shares, once issued, will be excluded from the calculation under Listing Rule 7.1.

Listing Rule 10.13 requires the following information to be provided to Shareholders for the purposes of Listing Rule 10.11 in respect of Resolution 4:

• (i) The Related Parties to whom Shares are to be issued under Resolution 4 are Paula Cowan, KC Ong and Paul Price (and/or their nominees).

• (ii) The maximum number of securities to be issued under Resolution 4 is 6,000,000 Shares.

• (iii) The Shares to be issued under Resolution 4 will be issued within 3 months of the General Meeting in accordance with the ASX Waiver (or such later time to the extent permitted by ASX under any additional waiver of the Listing Rules).

• (iv) The Shares will be issued to the Existing Directors (and/or their nominees) under the Prospectus at a price of $0.01 per Share and otherwise on the terms set out in Section 3.6.

• (v) The Shares to be issued under the Prospectus are ordinary fully paid shares which, upon being issued, will rank equally with the existing Shares in the Company and, therefore, will be on the same terms as the Shares to be issued to non-Related Parties under the Prospectus.

• (vi) Up to $60,000 (as part of the $2,500,000 to be raised from the public under the Prospectus) will be raised by the issue of Shares under Resolution 4 and the Company intends to use the funds for the purposes specified in Section 3.5.

5.4 ASIC and ASX’s role

Under section 218(1) of the Corporations Act, the Company must lodge the Notice with ASIC at least 14 days before the notice convening a general meeting is given.

The fact that the Notice is received by ASIC and ASX is not to be taken as an indication of the merits of the Recapitalisation Proposal or the Company. ASIC, ASX and their respective officers do not take any responsibility for any decision a Shareholder may make in reliance on the Notice.

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Definitions

In this Notice and Explanatory Statement, the following terms have the following meanings:

Administrators means Darren Gordon Weaver, Andrew John Saker and Martin Bruce Jones of Ferrier Hodgson of Level 26, 108 St Georges Terrace, Perth, Western Australia 6000 in their capacity as administrators of the Company.

ASIC means the Australian Securities and Investments Commission.

Associate has the meaning given in sections 11 to 17 of the Corporations Act.

ASX means ASX Limited ACN 008 624 691 or the Australian Securities Exchange, as the context requires.

ASX Waiver means the waiver in respect of Listing Rule 10.13.3 granted by the ASX in favour of the Company extending the time within which the Company may issue Shares to Trident Capital Pty Ltd and the Existing Directors (as Related Parties) from 1 month from the date of the General Meeting to 3 months from the date of the General Meeting, the terms of which were published on the ASX platform on 11 July 2013.

Business Day means a day on which banks are open for business in Perth, Western Australia excluding a Saturday, Sunday or public holiday.

Claim means a debt payable by, or a claim against, the Company (present or future, certain or contingent, ascertained or sounding only in damages) being debts or claims the circumstances giving rise to which occurred on or before 18 February 2009 that would be admissible to proof against the Company in accordance with Division 6 of Part 5.6 of the Corporations Act, if the Company had been wound up and the winding up is taken to have commenced on 18 February 2009.

Claimant Group means the Badimia Native Title Claimant Group of care of Yamatji Marlpa Aboriginal Corporation, PO Box 3072, Adelaide Terrace, Perth, Western Australia 6832.

Company means Windimurra Vanadium Limited ACN 009 133 533 (Subject to Deed of Company Arrangement).

Constitution means the constitution of the Company.

Convertible Note Agreements means the convertible note agreements between the Company and each of the Noteholders separately as summarised in Section 4.4.

Convertible Notes means the convertible notes issued to the Noteholders for the advance of $500,000 which are convertible into 100,000,000 Shares as described in Sections 3.3 and 3.4.

Corporations Act means the Corporations Act 2001 (Cth).

Creditor means any person having a Claim against the Company that has been accepted by the Administrators.

Creditors’ Sum means the amount of $450,000.

Creditors’ Trust Deed means the Creditors’ trust deed to be entered into by the Trustees and the Company as summarised in Section 4.3.

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Deed Administrators means Darren Gordon Weaver, Andrew John Saker and Martin Bruce Jones of Ferrier Hodgson of Level 26, 108 St Georges Terrace, Perth, Western Australia 6000 in their capacity as administrators of the DOCA.

Deed Administrators’ Report means the Deed Administrators’ report dated 27 April 2010 which was issued by the Deed Administrators pursuant to section 445F of the Corporations Act.

Deed Administrators’ Sum means the amount of $30,000.

Deferred Mining Agreement means the deferred mining agreement dated 17 January 2013 between the Company and the Claimant Group as summarised in Section 4.5.

DMP means the Department of Mines and Petroleum.

DOCA means the deed of company arrangement dated 27 May 2010 between the Deed Administrators and the Company as summarised in Section 4.2.

Exempt Investor means an investor to whom securities may be offered by the Company without disclosure under section 708 of the Corporations Act (excluding section 708(1)).

Existing Directors means the directors of the Company as at the date of this Notice, being:

• (a) Paula Cowan;

• (b) KC Ong; and

• (c) Paul Price.

Explanatory Statement means the Explanatory Statement incorporated in the Notice.

General Meeting means the general meeting of Shareholders convened by this Notice.

Listing Rules means the ASX Listing Rules published and distributed by the ASX.

Noteholder means a holder of Convertible Notes, being:

• (a) Avonglade Enterprises Pty Ltd (and/or its nominee);

• (b) Foster West Securities Pty Ltd (and/or its nominee);

• (c) Jason Peterson and Lisa Peterson (and/or their nominee);

• (d) Briant Nominees Pty Ltd (and/or its nominee); and

• (e) Trident Capital Pty Ltd (and/or its nominee).

Notice means the notice convening the General Meeting incorporating the Explanatory Statement.

Official List means the official list of the ASX.

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Original DOCA means the deed of company arrangement dated 31 December 2009 between the Deed Administrators and the Company which was varied and superseded by the DOCA.

Prospectus means the prospectus to be issued by the Company to raise $2,500,000 by the issue of 250,000,000 Shares at an issue price of $0.01 each.

Proxy Form means the proxy form attached to the Notice.

Recapitalisation Proposal means the proposal for the recapitalisation of the Company as described in Section 2.

Reconstruction Deed means the reconstruction deed dated 27 May 2010 between the Administrators, the Company and Trident Capital Pty Ltd in relation to the Recapitalisation Proposal.

Related Party has the meaning given in section 228 of the Corporations Act.

Resolution means a resolution contained in the Notice.

Section means a section contained in the Explanatory Statement.

Share means a fully paid ordinary share in the Company.

Shareholder means a shareholder of the Company.

State Deed means the pro forma state deed prepared by the DMP to be entered into by the Company and the Claimant Group in relation to the grant of the Tenement.

Strategic Investors means the following parties:

• (a) Gersec Trust Reg (and/or its nominee);

• (b) WF Asian Smaller Companies Fund Limited (and/or its nominee);

• (c) Hillbrow Investments Limited (and/or its nominee);

• (d) George Robinson (and/or his nominee); and

• (e) Paul Bate (and/or his nominee).

Tenement means Western Australian mining lease M58/272.

Trust Fund means the trust fund established by the Trustees in accordance with the Creditors’ Trust Deed, which will contain the Deed Administrators’ Sum, the Creditors’ Sum, the Assets and any income accruing on the assets of the Trust Fund.

Trust Fund Assets means all of the assets of the Company except for the Tenement.

Trustees means Darren Gordon Weaver, Andrew John Saker and Martin Bruce Jones of Ferrier Hodgson of Level 26, 108 St Georges Terrace, Perth, Western Australia 6000 in their capacity as trustees of the Trust Fund.

WST means Western Standard Time in Australia.

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Windimurra Vanadium Limited ACN 009 131 533 (Subject to Deed of Company Arrangement)

Proxy Form

I/We of appoint OR
	being a member of Windimurra Vanadium Limited ACN 009 131 533 (Subject to Deed of Company Arrangement) entitled to attend and vote at the General Meeting, hereby
	Name of proxy the Chairman of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chairman of the General Meeting, or the Chairman’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the General Meeting to be held at 10.00am (WST) on Wednesday, 14 August 2013 at the offices of Price Sierakowski Corporate of Level 24, 44 St Georges Terrace, Perth, Western Australia, and at any adjournment thereof.

If no directions are given, the Chairman will vote in favour of all Resolutions in which the Chairman is entitled to vote undirected proxies.

OR

Voting on business of the General Meeting	Voting on business of the General Meeting	For	Against	Against	Against	Abstain	Abstain	Abstain
Resolution 1	Issue of Shares on the conversion of Convertible Notes to non-Related Parties
Resolution 2	Issue of Shares on the conversion of Convertible Notes to a Related Party
Resolution 3	Issue of Shares under the Prospectus
Resolution 4	Right for Existing Directors to apply for Shares
	under the Prospectus
Resolution 5	Issue of Shares to Strategic Investors

Note: If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority.

If two proxies are being appointed, the proportion of voting rights this proxy represents is ___%

Signature of Member(s):

Signature of Member(s): Individual or Member 1 Sole Director/Company Secretary	Member 2 Director	Date:_____ Member 3
		Director/Company Secretary

Contact Name: ______ Contact Ph (daytime): ________

Instructions for Proxy Form

1. Your name and address

Please print your name and address as it appears on your holding statement and the Company’s share register. If Shares are jointly held, please ensure the name and address of each joint shareholder is indicated. Shareholders should advise the Company of any changes. Shareholders sponsored by a broker should advise their broker of any changes. Please note you cannot change ownership of your securities using this form.

2. Appointment of a proxy

You are entitled to appoint no more than two proxies to attend and vote on a poll on your behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of your voting rights. If you appoint two proxies and the appointment does not specify this proportion, each proxy may exercise half of your votes.

If you wish to appoint the Chairman of the General Meeting as your proxy, please mark the box. If you leave this section blank or your named proxy does not attend the General Meeting, the Chairman will be your proxy. A proxy need not be a Shareholder.

3. Voting on Resolutions

You may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item your vote will be invalid on that item.

4.

Signing instructions

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

• (a) ( Individual ) Where the holding is in one name, the holder must sign.

• (b) ( Joint holding ) Where the holding is in more than one name, all of the shareholders should sign.

• (c) ( Power of Attorney ) If you have not already lodged the Power of Attorney with the Company’s share registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

• (d) ( Companies ) Where the company has a sole director who is also the sole company secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act) does not have a company secretary, as sole director can also sign alone. Otherwise this form must be signed by a director jointly with either another director or a company secretary. Please indicate the office held by signing in the appropriate place.

If a representative of the corporation is to attend the meeting a “Certificate of Appointment of Corporate Representative” should be produced prior to admission.

5.

Return of a Proxy Form

To vote by proxy, please complete and sign the enclosed Proxy Form (and any Power of Attorney and/or second Proxy Form) and return by:

• (a) mail to Trident Capital at PO Box Z5183, St Georges Terrace, Perth, Western Australia 6831; or

• (b) facsimile to the Company on facsimile number +61 8 9218 8875; or

so that it is received by no later than 10.00am (WST) on Monday, 12 August 2013.

Proxy Forms received later than this time will be invalid.