TIVAN LIMITED — Proxy Solicitation & Information Statement 2003

May 21, 2003

23 May 2003

Dear Shareholder

Attached to this letter you will find a Notice of General Meeting, Explanatory Memorandum and Proxy Form. The purpose of the shareholders meeting is to consider a resolution in respect to the distribution to Hallmark shareholders of shares in Menzies Gold Limited (to be renamed Batavia Mining Limited) on a one-for-one basis.

Shareholders will not be required to contribute any funds for the distribution.

The Board urges you to participate in the meeting either by attending personally or by lodging a proxy.

Should you have any queries please do not hesitate to contact the Director's at the Company's office in Perth.

Yours sincerely HALLMARK CONSOLIDATED LIMITED

JOHN W BARR Chairman

ACN 000 817 023

NOTICE OF GENERAL MEETING

A General Meeting of the Company will be held at the Duxton Hotel, 1 St George's Terrace, Perth, Western Australia on 24 June 2003 at 10.30am.

ACN 000 817 023

Corporate Directory

Directors	John W Barr (Chairman) Neil Biddle Adrian Corp
Secretary	Christopher Bath
Registered Office	Level 3, 30 Richardson Street WEST PERTH WA 6005 Telephone: +618 9327 0900 Facsimile: + 618 9327 0901 Email: corporate@hallmarkconsolidated.com Website: www.hallmarkconsolidated.com
Auditor	KPMG
Share Registry	Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St George's Terrace Perth, Western Australia 6000 Telephone: +618 9323 2000 Facsimile: +618 9323 2033
ASX Code	HLM

ACN 000 817 023

NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of shareholders of Hallmark Consolidated Limited ("Company") will be held at the Duxton Hotel, 1 St George's Terrace, Perth, Western Australia on 24 June 2003 at 10.30am ("General Meeting").

The Explanatory Memorandum provides additional information on matters to be considered at the General Meeting and forms part of this Notice.

Terms and abbreviations used in this Notice are defined in Schedule 1.

AGENDA

$\mathbf{1}$ Resolution 1

Return of Capital

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

"That, pursuant to sections 256B and 256C of the Corporations Act, the Company's Constitution, the Listing Rules and all other purposes:

• $(a)$ the paid up share capital of the Company be reduced:
• $(b)$ such reduction be effected and satisfied by the Company distributing in specie up to 60,000,000 Menzies Shares to the shareholders who are registered as members of the Company on the Entitlement Date on the basis of one Menzies Share, each valued at \$0.055, for every Hallmark Share; and
• $(c)$ such reduction be effected otherwise on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice"

Resolution 2 $2.$

Section 195 Approval

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

"That, for the purposes of section 195(4) of the Corporations Act and for all other purposes, shareholders approve and authorise the Directors to complete the transactions as contemplated in this Notice."

BY ORDER OF THE BOARD

Christopher Bath Company Secretary Dated: 23 May 2003

ACN 000 817 023

EXPLANATORY MEMORANDUM

$\mathbf{1}$ . Introduction

This Explanatory Memorandum has been prepared for the information of shareholders of the Company in connection with the business to be conducted at the General Meeting to be held at the Duxton Hotel, 1 St George's Terrace, Perth, Western Australia on 24 June 2003 at 10.30am.

The purpose of this Explanatory Memorandum is to provide information the Board of Directors believes is material to shareholders in relation to the resolutions set out in the Notice of General Meeting. The Explanatory Memorandum explains the resolutions and identifies the Director's decisions for putting them to shareholders.

$2.$ Background to the Resolution

In 2002 SMM, a wholly owned subsidiary of the Company provided a secured loan facility to the Menzies Group ("Menzies Debt"). Menzies is admitted to the official list of the ASX but is currently suspended as it was placed into voluntary administration in January 2003. On 11 April 2003, at a meeting of Menzies' creditors, the creditors approved the adoption of a Deed of Company Arrangement. The DOCA was executed on 2 May 2003.

The aim of the DOCA is to restructure Menzies.

Issues arising from the DOCA requiring Menzies shareholder approval will be considered by Menzies shareholders at a General Meeting to be held prior to the meeting called by this Notice.

Menzies needs to raise initial capital of \$500,000. The Company will fund up to \$300,000 of that capital raising. As consideration, Menzies will issue 30,000,000 Menzies Shares to the Company ("First issue"). Menzies intends to consolidate its share capital on a one for one hundred basis. All Menzies Shares referred to in this Notice are on a post-consolidation basis.

The DOCA provides that Menzies will purchase SMM and the Paynes Find assets owned by Hallmark Mining Limited, also a wholly owned subsidiary of the Company.

Consideration for the purchase of the SMM shares and the Paynes Find Assets will be provided by the issue and allotment of 30,000,000 Menzies Shares ("Second Issue").

It is proposed that a majority of the First Issue and all of the Second Issue shares, totalling up to 60 million shares, will be distributed to shareholders of Hallmark on a one for one basis as an in specie distribution.

The Company will release Menzies from the Menzies Debt in consideration for Menzies issuing Convertible Notes to the Company. The Company will take a charge over Menzies. Although the issue of the Convertible Notes does not impact on Resolution 1, details are provided as it is an important element of the transaction.

Menzies will issue 10,600,000 Convertible Notes each at an issue price of ten (10) cents ("Third Issue"). The terms of the Convertible Notes will be documented in a Convertible Note Deed and the charge. The significant terms are as follows:

• $(a)$ The Convertible Notes are interest free.
• $(b)$ The Convertible Notes may be converted to Menzies Shares on or before 31 July 2004 at the Company's option.
• $(c)$ The conversion price is 80% of the average weighted price of the Menzies Shares traded on the ASX on the five business days prior to the conversion date.
• $(d)$ Failing conversion, the face value of the Convertible Notes is repayable on 30 September 2004.
• $(e)$ The Convertible Notes are assignable.
• $(f)$ The Convertible Notes are secured by a charge over the fixed and floating assets of Menzies.

At a general meeting of Menzies' shareholders to be held before the meeting called by this Notice, the shareholders of Menzies will be asked to approve the allotment and issue of Menzies Shares to satisfy the consideration for the purchase of the SMM shares and Paynes Find assets and the conversion of the Convertible Notes.

As part of the restructure of Menzies, its shareholders will be asked to approve a change of name to Batavia Mining Limited and the adoption of a new constitution. It is anticipated that Menzies will be relisted sometime in July 2003.

The purpose of this General Meeting is to seek your approval for the Company to return capital to you on the terms set out in this Notice.

$3_l$ Resolution 1

Return of Capital

As noted above, it is proposed that the Company make an in specie distribution of Menzies Shares to its shareholders recorded on the member register on the Entitlement Date. The distribution is on a pro rata basis pursuant to an equal capital reduction under section 256B of the Corporations Act. Under the reduction of capital, shareholders will be entitled to 1 Menzies Share for every 1 Hallmark Consolidated Share held on the Entitlement Date.

Shareholders will not be required to pay any additional consideration for Menzies Shares, as the Company will make an appropriate capital reduction of \$3,300,000 in its accounts to reflect the distribution. This proposal to reduce the capital in the Company and distribute up to 60,000,000 Menzies Shares in specie is subject to the approval of the Company's shareholders which is being sought by Resolution 1 of this Notice.

There will be 60,000,000 Menzies Shares available for distribution but there is currently only 53,478,270 Hallmark Shares issued. If the Directors determine that more Menzies Shares are to be distributed in specie than Hallmark Shares currently on issue they will allot and issue additional Hallmark Shares.

The terms of the return of capital are the same for each holder of Hallmark Shares. If Resolution 1 is approved, each shareholder will still own the same number of Hallmark Shares therefore the proportion of ownership interests of each shareholder in the Company remains the same before and after the return of capital. The shareholders will also own the equivalent number of Menzies Shares.

The Directors consider the proposed return of capital has no material adverse effect on the interests of shareholders or the Company's ability to pay its creditors.

Although the capital of the Company will be reduced, the Directors do not consider that the extent of the return of capital will materially prejudice the interests of the Company's creditors. Net assets of the Company will remain positive.

Legal Requirements

Section 256B(1) of the Corporations Act provides that a company may reduce its share capital if the reduction:

• $(a)$ is fair and reasonable to the company's shareholders as a whole;
• $(b)$ does not materially prejudice the company's ability to pay its creditors; and
• $(c)$ is approved by shareholders under section 256C of the Corporations Act.

The proposed capital reduction is an equal reduction as it relates only to ordinary shares, it applies to each holder of ordinary shares in proportion to the number of ordinary shares they hold and the terms of the reduction are the same for each holder of ordinary shares.

Accordingly, as the reduction is an equal reduction, section 256C of the Corporations Act requires approval of the proposed reduction by way of an ordinary resolution.

The Directors consider that the proposed reduction of capital by distribution in specie of up to 60,000,000 Menzies Shares on a pro-rata basis to the existing shareholders of the Company does not materially prejudice the Company's ability to pay its creditors. Further, the Directors advise that the reduction of capital will not result in the Company being insolvent at the time of the capital reduction or become insolvent as a result of the capital reduction. Further, the Directors consider that the proposed in specie distribution is fair and reasonable to the Company's shareholders as a whole because they are all treated in the same manner, as the distribution of Menzies Shares is on a pro rata basis.

The Company has a number of options on issue. The option holders will be given notice of the prop osed reduction of capital and share issue. They will be informed that if they exercise any options before the date specified in the notice to them, they will be entitled to participate in the in specie distribution. Such notice will be given in accordance with the terms and conditions attaching to the options and the Listing Rules

If the option holders do not exercise the options before the date specified in the notice to them, the exercise price for each option will be reduced by \$0.055, in accordance with Listing Rule 7.22.3.

Taxation Implications

The following comments are based on the application of Australian taxation laws in force at the date of this Explanatory Memorandum.

It should be emphasised that these comments are general in nature, and shareholders should seek and rely on their own taxation advice in relation to the taxation consequences of the return of capital. Neither the Company nor any of its officers accept liability or responsibility with respect to such consequences.

The Company has received independent taxation advice that indicates that the in specie distribution of Menzies shares will not result in an assessable gain to shareholders under the demerger rollover rules.

Broadly, the implications of demerger rollover relief being available are as follows:

• Shareholders who choose to apply the rollover rules must disregard any CGT gain or loss arising on the demerger.
• ٠ The CGT cost base of the shareholder's shares in the Company is spread across the shareholder's shares in the Company and Menzies on a reasonable basis.
• Any dividend component of the distribution to the shareholder is exempt from tax. ٠

Oversees Shareholders

Distribution of the Menzies Shares to shareholders under the return of capital will be subject to legal and regulatory requirements in their relevant jurisdiction. If the requirements of any jurisdiction where a shareholder is resident are held to restrict or procure the distribution of shares as proposed or would impose on the Company an obligation to prepare a prospectus or other similar disclosure document or otherwise impose on the Company an undue burden, the Menzies Shares to which the relevant shareholder is entitled will be sold by the Company on their behalf as soon as practicable after the Entitlement Date and the Company will then account to those shareholders for the net proceeds of sale after deducting the costs and expenses of the sale. As the return of capital is being represented and satisfied by the distribution to shareholders of Menzies Shares and share prices may vary from time to time (assuming a liquid market is available), the net proceeds of sale to such shareholders may be more or less than the notional dollar value of the return of capital as set out in this Explanatory Memorandum.

Resolution 2 $\overline{\mathbf{4}}$ .

Section 195 Approval

Section 195 of the Corporations Act essentially provides that a director of a public company may not vote or be present during meetings of directors when matters in which that director holds a "material personal interest" are being considered.

Approval of Resolution 1 will result in all of the Directors having a "material personal interest" in the capital reduction by way of distribution in specie. In the absence of this Resolution 2, the Directors would not be able to form a quorum at any meetings necessary to carry out the terms of Resolution 1.

The Directors have accordingly exercised their right under section 195(4) of the Corporations Act to put the issue to shareholders to resolve upon.

Conclusion 5.

Your Directors believe the proposals described above are in the best interests of the Company and as such unanimously recommend that you vote in favour of the resolutions to give effect to those proposals.

6. Action to be taken by Shareholders

A Proxy Form is attached to the Notice. This is to be used by shareholders if you wish to appoint a representative (a "proxy") to vote in your place. All shareholders are invited and encouraged to attend the General Meeting or, if you are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a shareholder from attending and voting at the General Meeting in person.

Shareholders are invited to contact Mr Chris Bath, Company Secretary, Hallmark Consolidated Limited on (08) 9327 0900 if you have any queries in respect of the matters set out in these documents.

Schedule 1

Definitions

In this Explanatory Memorandum, Notice of General Meeting and Proxy Form:

"ASIC" means Australian Securities and Investments Commission.

"ASX" means Australian Stock Exchange Limited ACN 008 624 691.

"Listing Rules" means the official listing rules of ASX.

"Company" means Hallmark Consolidated Limited ACN 000 817 023.

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

"Menzies" means Menzies Gold Limited (Subject to Deed of Company Arrangement) ACN 009 075 861.

"Menzies Share" means a fully paid ordinary post-consolidation share in the capital of Menzies.

"Constitution" means the Constitution of the Company.

"Convertible Note" means the convertible note to be issued by Menzies to the Company.

"DOCA" means the Deed of Company Arrangement dated 2 May 2003 in respect of Menzies.

"Deed Administrators" means Martin Bruce Jones and Garry John Trevor c/- Ferrier Hodgson, Level 14, 26 St George's Terrace, Perth, Western Australia.

"Directors" means the directors of the Company.

"Entitlement Date" means the Record Date as defined in the Listing Rules.

"General Meeting" means the General Meeting of the shareholders of the Company to be held by the Company on 24 June 2003 at 10.30am at the Duxton Hotel, 1 St George's Terrace, Perth, Western Australia.

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

"KSM" means King Solomon Mines Limited (in liquidation) ACN 094 006 069.

"Notice" means this Notice of General Meeting.

"SMM" means South Murchison Mines Pty Ltd ACN 103 103 626.

In this Notice, words importing the singular include the plural and vice versa.

ACN 000 817 023

PROXYFORM

Please refer to the "Proxy Instructions" on the following page prior to completion of this Proxy Form.

I/We	$\overline{\phantom{a}}$
οf	____	being a mem ıber

of Hallmark Consolidated Limited hereby appoint²

or failing him the Chairman of the meeting as my proxy to vote for me on my behalf at the General Meeting of the Company to be held at the Duxton Hotel, 1 St George's Terrace Perth on 24 June 2003 at 10.30 am and at any adjournment of the meeting.

If more than one proxy is being appointed, the proportion of voting rights that this proxy is authorised to exercise is [ 1%. The Company will supply an additional proxy form on request.

VOTING INSTRUCTIONS

If you wish to instruct your proxy on how to vote on any resolution place a tick in the appropriate box. Otherwise your proxy may vote as they think fit or abstain from voting. The Chair will be voting for the resolutions.

By marking these boxes, you acknowledge that the Chair may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest.

				For	Against	Abstain	Chair
	Resolution 1	To approve the reduction of capital
	Resolution 2	To provide section 195 approval
Signed 0R	Individual Shareholder Joint Shareholder
	Secretary	Director/Sole Director And Sole Director/Secretary
Affix Common Seal if executing under Common Seal
		1 Insert name and address of Shareholder

² Insert name and address of Proxy

Proxy Instructions

• $1¹$ The purpose of these instructions is to give you an understanding of the proxy system to enable you to complete the Proxy Form.
• $\overline{2}$ . A proxy is the term used to describe the person who attends the shareholders meeting to vote in place of the shareholder. A proxy is also the term used to describe the form by which the representative is appointed.
• $3₁$ In accordance with section 249 of the Corporations Act 2001 (Cth) and the Constitution members are advised that:
• $(a)$ a member entitled to vote may appoint a proxy to exercise their vote:
• $(b)$ the proxy does not need to be a member of the Company;
• the appointment may specify the proportion or number of votes that the $(c)$ proxy may exercise:
• $(d)$ a member who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion is specified, then each proxy may exercise one half of the votes:
• $(e)$ an appointment may specify how the proxy is to vote on a particular resolution.
• 1. In the case of joint holders of a Share the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders and, for the purpose, seniority is determined by the order in which the names stand in the Register.
• 1. The Proxy Form may be signed personally or by the member or his/her attorney duly authorized in writing. If the appointed proxy is a corporation the Proxy Form may be executed pursuant to section 127 of the Corporations Law 2001 (Cth).
• 1. The power of attorney (if any) under which the Proxy Form is signed or an office copy of notarially certified copy thereof shall be deposited at the registered office of the Company not less than 48 hours before the time appointed for the holding of the meeting.
• $7₁$ For an appointment of a proxy to be effective, the proxy's appointment must be received 48 hours before the meeting.
• 1. Proxy Forms must be delivered or received by facsimile no later than 10.30 am on 22 June 2003 at the Company's registered office.
• 1. Proxy Forms are to be delivered as follows:

Delivery:	Post:	Facsimile:
The Company Secretary Hallmark Consolidated Limited Level 3. Richardson Street,	The Company Secretary Hallmark Consolidated Limited PO Box 1176 West Perth 6872	$(08)$ 9327 0901
West Perth 6005 WA