TURNSTONE RESOURCES LTD — AGM Information 2018

Oct 14, 2018

DAVENPORT RESOURCES LIMITED [ABN 64 153 414 852]

NOTICE OF ANNUAL GENERAL MEETING

EXPLANATORY MEMORANDUM

PROXY FORM

TIME : 10:30am (AEDT) DATE : 14 November 2018

PLACE : Level 27 Rialto South Tower 525 Collins Street Melbourne VIC 3000

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DAVENPORT RESOURCES LIMITED

ABN 64 153 414 852

NOTICE OF 2017 ANNUAL GENERAL MEETING

Notice is given that the 2018 Annual General Meeting (the Meeting ) of Davenport Resources Limited (the Company or Davenport ) will be held at Level 27, Rialto South Tower, 525 Collins Street, Melbourne, VIC, 3000 on Wednesday, 14 November 2018 at 10:30am (AEDT).

Further details in respect of each of the Resolutions proposed in this Notice of Annual General Meeting ( Notice ) are set out in the Explanatory Memorandum (the Memorandum ) accompanying this Notice. The details of the resolutions contained in the Memorandum should be read together with, and form part of, this Notice.

GENERAL BUSINESS

2018 Annual Financial Statements

To lay before the meeting and consider the 2018 Annual Financial Report of the Company in respect of the year ended 30 June 2018 together with the Directors’ Report and the Auditor’s Report.

RESOLUTION 1: NON-BINDING RESOLUTION TO ADOPT REMUNERATION REPORT

To consider and, if thought fit, pass the following Resolution as a non-binding ordinary resolution:

"That the Company approve the adoption of the Remuneration Report, included in the Directors ’ Report, for the year ended 30 June 2018."

Note: the vote on this resolution is advisory only and does not bind the Directors or the Company.

Voting Exclusion Statement:

A vote on Resolution 1 must not be cast (in any capacity) by or on behalf of either of the following persons:

• (a) a member of the key management personnel, details of whose remuneration are included in the Remuneration Report; or

• (b) a closely related party of such a member (referred to herein as “ Restricted Voters ”) .

However, a person (“ voter ”) may cast a vote on Resolution 1 as a proxy if the vote is not cast on behalf of a Restricted Voter and the voter is appointed as a proxy in writing that specifies the way the proxy is to vote on Resolution 1. The Chair may also exercise undirected proxies if the vote is cast on behalf of a person entitled to vote and the proxy appointment expressly authorises the Chair to exercise the proxy even if Resolution 1 is connected directly or indirectly with the remuneration of members of the key management personnel of the Company.

Voting Notes:

Directors of the Company who are key management personnel whose remuneration details are included in the 2018 Remuneration Report, any other key management personnel whose remuneration details are included in the 2018 Remuneration Report, or any of their closely related parties, will not be able to vote on Resolution 1 or to vote undirected proxies held by them on Resolution 1.

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RESOLUTION 2: RE-ELECTION OF MR CHISTOPHER BAIN AS A DIRECTOR

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

"That Christopher Bain, who retired as Managing Director and now retires as a Director by rotation in accordance with Article 59 of the Company's Constitution and, being eligible, offers himself for reelection, be re-elected as a Director of the Company."

RESOLUTION 3: RATIFICATION OF PRIOR ISSUE OF OPTIONS

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

“That for the purpose of ASX Listing Rule 7.4, shareholders ratify the prior issue of 3,000,000 options as part consideration for the provision of corporate advisory services to the Company on the terms and conditions as described in the Explanatory Memorandum which accompanied and formed part of this Notice .”

Voting Exclusion Statement:

The Company will disregard any votes cast in favour of this resolution by or on behalf of:

• persons who participated in the issue; or

• any associates of those persons.

However, the Company need not disregard a vote on this Resolution if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

RESOLUTION 4: APPROVAL OF PLACEMENT FACILITY

To consider, and if thought fit, pass with or without amendment the following resolution as a special resolution

“That for the purposes of ASX Listing Rule 7.1A, shareholders approve the Company having the capacity to issue fully paid ordinary shares in the capital of the Company up to the maximum number permitted under ASX Listing Rule 7.1A.2 at an issue price which is not less than 75% of the volume weighted average market (closing) price of the Company’s ordinary shares calculated over the last fifteen (15) days on which trades of the Company’s ordinary shares were recorded on ASX immediately before the date on which the issue price is agreed or the date the issue is made as described in the Explanatory Memorandum which accompanied and formed part of th is Notice.”

Voting Note:

If as at the time of the Meeting, the Company:

• is included in the S&P/ASX 300 Index; and/or

• has a market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of greater than AU$300 million,

then this Resolution will be withdrawn.

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Voting Exclusion Statement:

The Company will disregard any votes cast in favour of this resolution by or on behalf of:

• persons who may participate in the proposed issue and persons who might obtain a benefit except a benefit solely in the capacity of a holder of ordinary shares, if the resolution is passed; and

• an associate of those persons.

However, the Company need not disregard a vote on this Resolution if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Dated: 12 October 2018

By the order of the Board

==> picture [75 x 53] intentionally omitted <==

Christopher Bain Director

The accompanying Memorandum and the Proxy and Voting Instructions form part of this Notice.

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PROXY AND VOTING INSTRUCTIONS

Proxy Instructions

Voting Entitlement

A member who is entitled to vote at a meeting may appoint:

• one proxy if the member is only entitled to one vote; and

• one or two proxies if the member is entitled to more than one vote.

Where more than one proxy is appointed each proxy may be appointed to r epresent a specific proportion of the member’s voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes in which case any fraction of votes will be disregarded.

The proxy form (and the power of attorney or other authority, if any, under which the proxy form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the proxy form (and the power of attorney or other authority) must be lodged with the Company’s share registry not less than 48 hours before the time for holding the Meeting, or adjourned meeting as the case may be, at which the individual named in the proxy form proposes to vote.

The proxy form must be signed by the member or his/her attorney duly authorised in writing or, if the member is a corporation, in a manner permitted by the Corporations Act. A proxy given by a foreign corporation must be executed in accordance with the laws of that corporation’s place of incorporation .

The proxy may, but need not, be a member of the Company.

For the purposes of the Corporations Act and Corporations Regulations shareholders entered on the Company’s Register of Members as at 5:00pm AEDT on 12 November 2018 (Melbourne time) are entitled to attend and vote at the Meeting.

On a poll, members have one vote for every fully paid ordinary share held. Holders of options are not entitled to vote.

How the Chair Will Vote Undirected Proxies

Subject to the restrictions set out below, the Chair of the meeting will vote undirected proxies in favour of all of the proposed resolutions.

Voting Restrictions on Resolution 1 (Remuneration Report)

The Remuneration Report identifies key management personnel for the year ended 30 June 2018. Their closely related parties are defined in the Corporations Act 2001 (Cth) and include specified family members, dependents and companies they control.

Directors of the Company who are key management personnel whose remuneration details are included in the 2018 Remuneration Report, any other key management personnel whose remuneration details are included in the 2018 Remuneration Report, or any of their closely related parties, will not be able to vote on Resolution 1 or to vote undirected proxies held by them on Resolution 1, provided however that the Chair may vote undirected proxies on behalf of persons eligible to vote where expressly authorised to do so on the proxy form.

A proxy form is attached to this Notice.

Special Resolution

If you sign the proxy form and do not appoint a proxy, you will have appointed the Chair of the meeting as your proxy.

Corporate Representatives

Resolution 4 is proposed as a special resolution. For a special resolution to be passed, at least 75% of the votes validly cast on the resolution by shareholders (by number of shares) must be in favour of the resolution.

Any corporation which is a member of the Company may authorise (by certificate under common seal or other form of execution authorised by the laws of that corporation’s place of incorporation, or in any other manner satisfactory to the chairperson of the Meeting) a natural person to act as its representative at any general meeting.

DAVENPORT RESOURCES LIMITED ABN 64 153 414 852

( the Company or Davenport )

2018 ANNUAL GENERAL MEETING EXPLANATORY MEMORANDUM

PURPOSE OF INFORMATION

This Explanatory Memorandum ( Memorandum ) accompanies and forms part of the Company’s Notice of Annual General Meeting ( Notice ) for the Annual General Meeting ( Meeting ) to be held at Level 27, Rialto South Tower, 525 Collins Street, Melbourne, VIC, 3000 on Wednesday, 14 November 2018 at 10:30am (AEDT). The Notice incorporates, and should be read together, with this Memorandum.

BUSINESS

2018 Annual Financial Statements

The 2018 Annual Financial Statements, comprising the Financial Report, Directors' Report and Auditor's Report for the year ended 30 June 2018 will be laid before the Meeting.

There is no requirement for Shareholders to approve the Annual Financial Statements. However, Shareholders will have the opportunity to ask questions about, or make comments on, the 2018 Annual Financial Statements and the management of the Company. A representative of the auditor will be invited to attend to answer questions about the audit of the Company’s 201 8 Annual Financial Statements.

The Company’s 201 8 Annual Financial Statements are set out in the Company’s 201 8 Annual Report which can be obtained from the Company’s website, www.davenportresources.com.au or upon request to the Company Secretary at the office of the Company, Level 28, 303 Collins Street, Melbourne VIC 3000 (telephone (03 9678 9104).

Resolution 1: Non-binding Resolution - Remuneration Report

As a listed entity, the Company is required pursuant to the Corporations Act 2001 (Cth) (the Corporations Act ), to propose a non-binding resolution regarding the 2018 Remuneration Report, which forms part of the Director’s Report in the 2018 Annual Financial Statements. The vote is advisory only and does not bind the Directors or the Company.

Shareholders attending the 2018 Annual General Meeting of the Company will have an opportunity to discuss and put questions in respect of the Remuneration Report.

The Board will consider the outcome of the vote and comments made by shareholders on the Remuneration Report at the meeting when reviewing the Company's remuneration policies. Under the Corporations Act, if 25% or more of votes that are cast are voted against the adoption of the Remuneration Report at two consecutive annual general meetings ( AGM ) (treating this AGM as the first such meeting), shareholders will be required to vote at the second of those AGM's on a resolution (a spill resolution ) that another meeting be held within 90 days at which all of the Company's Directors (other than the Managing Director and CEO) must be put up for re-election.

In the event that 25% or more of votes that are cast on Resolution 1 are against the adoption of the 2018 Remuneration Report, shareholders should be aware that if there is a ‘no’ vote of 25% or more for the same resolution at the 2019 AGM the consequences are that it may result in the re-election of the Board.

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Note that a voting exclusion applies to Resolution 1 in the terms set out in the Notice. In particular, Directors and other members of the key management personnel details of whose remuneration are included in the Remuneration Report or a closely related party of those persons must not vote on Resolution 1 and must not cast a vote as proxy, unless the proxy appointment gives a direction on how to vote provided however that the Chair may vote undirected proxies on behalf of persons eligible to vote where expressly authorised to do so on the proxy form.

Resolution 2: Re-Election of Mr Christopher Bain as a Director

Resolution 2 is a resolution for the re-election of Mr Christopher Bain as a Director of the Company.

Pursuant to the Constitution of the Company, one-third of the Directors or, if their number is not a multiple of three, the number nearest to but not more than one-third, but disregarding the Managing Director and Directors appointed to fill casual vacancies, are required to retire by rotation at each AGM. The Company has four Directors, one of whom is the CEO/Managing Director. Accordingly, one Director (other than the Managing Director) is required to retire by rotation at the Meeting.

Mr Bain was appointed Managing Director when the Company became a listed entity in January 2017 and retired from that position on 01 March 2018. During the period that Mr Bain held the position of Managing Director, Mr Bain was not included in determining the rotation of Directors required to retire at an AGM. Mr Bain now retires by rotation and, being eligible, offers himself for re-election. Information on Mr Bain is available in the Directors’ Report included in the Company’s 201 8 Annual Report.

The Board (with Mr Bain abstaining) unanimously support the re-election of Mr Bain as a Director of the Company.

Resolution 3: Ratification of prior issue of options

Resolution 3 seeks shareholder ratification pursuant to ASX Listing Rule 7.4 for the prior issue of 3,000,000 options as part consideration for the provision of corporate advisory services to the Company, as announced to ASX on 01 October 2018.

The options the subject of Resolution 3 were issued without shareholder approval under ASX Listing Rule 7.1. ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any twelve (12) month period any equity securities, or other securities with rights to conversion to equity (such as options), if the number of those securities exceeds 15% of the share capital of the Company at the commencement of that twelve (12) month period.

ASX Listing Rule 7.4 provides that where a company’s shareho lders ratify the prior issue of securities made pursuant to ASX Listing Rule 7.1 (provided that the previous issue of securities did not breach ASX Listing Rule 7.1) those securities will be deemed to have been issued with shareholder approval for the purposes of ASX Listing Rule 7.1. The Company seeks approval under Listing Rule 7.4 to refresh its capacity to make further issues without shareholder approval under Listing Rule 7.1.

The following information is provided in accordance with the requirements of ASX Listing Rule 7.5:

• The number of securities issued was 3,000,000 options exercisable at $0.081 (8.1 cents) each, expiring 05 September 2021;

• The options were issued for no cash consideration;

• The options issued are unlisted and are non-transferable. However, shares issued upon exercise of the options will have the same terms and rights as, and ranking equally with, the

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Company’s existing li sted fully paid ordinary shares. The options will be issued on the terms and conditions as set out in the Schedule attached to this Memorandum;

• The options were issued to Bacchus Capital Advisers (“BCA”) , a firm located in the United Kingdom;

• No funds were raised through the issue. The options were issued as part consideration for the provision of corporate advisory services to the Company; and

• A voting exclusion statement as set out in the Notice applies to this Resolution 3.

Resolution 4: Approval of placement facility

ASX has introduced fund raising rules to provide more flexibility for smaller companies to raise additional capital in an easier and potentially less costly manner. ASX Listing Rule 7.1A enables eligible entities to issue equity securities (as that term is defined in the ASX Listing Rules) up to 10% of their issued share capital through placements over a 12-month period after an annual general meeting ( 10% Placement Facility ). The 10% Placement Facility is in addition to a company’s 15% placement capacity under ASX Listing Rule 7.1. An eligible entity for the purposes of ASX Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is, at the date of the Notice, an eligible entity.

The Company is seeking shareholder approval by way of a special resolution to have the ability to issue equity securities under the 10% Placement Facility. The exact number of equity securities (if any) to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (refer below). The Company may use funds raised from any 10% Placement Facility for funding of existing projects or new projects and/or general working capital. It may also use the 10% Placement Facility for non-cash consideration purposes such as in connection with joint venture agreements or arrangements, as payments to consultants or contractors or in connection with the acquisition of new projects (although the Company presently has no current proposal to do so).

At the annual general meeting held on 23 November 2017, the Company obtained shareholder approval to make issues under ASX Listing Rule 7.1A. On 05 July 2018, the Company did a placement issuing 10,191,483 shares utilising the capacity available under Listing Rule 7.1A. At a general meeting held on 30 August 2018, shareholders ratified the issue of shares on 05 July 2018 and thereby allowing the Company to retain the placement capacity available under ASX Listing Rule 7.1A. Since then there has been no shares issued under ASX Listing Rules 7.1A.

Resolution 4 is put to shareholders again to obtain approval for a 10% Placement Facility for a further 12-month period from the passage of this resolution at this annual general meeting. The Directors of the Company believe that Resolution 4 is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of this Resolution.

DESCRIPTION OF LISTING RULE 7.1A

• Shareholder approval

The ability to issue equity securities under the 10% Placement Facility is subject to shareholder approval by way of a special resolution at an Annual General Meeting.

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• Equity securities

Any equity securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of equity securities of the Company. The Company, as at the date of the Notice, has one class of quoted fully paid ordinary shares ( DAV ) and one class of quoted options ( DAVO ).

• Formula for calculating 10% Placement Facility

ASX Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an Annual General Meeting may, during the 10% Placement Period (defined below), issue a number of equity securities calculated in accordance with the following formula:

(A x D) – E

where:

• A is the number of shares on issue 12 months before the date of the issue or agreement to issue:

  • (i) plus the number of fully paid shares issued in the 12 months under an exception in ASX Listing Rule 7.2;

  • (ii) plus the number of partly paid shares that became fully paid in the 12 months;

  • (iii) plus the number of fully paid shares issued in the 12 months with approval of holders of shares under ASX Listing Rules 7.1 and 7.4;

  • (iv) less the number of fully paid shares cancelled in the 12 months.

  • Note: “A” is has the same meaning in ASX Listing Rule 7.1 when calculating an entity’s 15% placement capacity.

• D is 10%

• E is the number of equity securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of shareholders under ASX Listing Rules 7.1 or 7.4.

• ASX Listing Rule 7.1 and ASX Listing Rule 7.1A

The ability of an entity to issue equity securities under ASX Listing Rule 7.1A is in addition to the entity’s 15% placement capacity under ASX Listing Rule 7.1.

As at the date of this Memorandum, the Company has on issue 143,137,413 fully paid ordinary shares and therefore would have capacity to issue:

• (i) subject to shareholders approving this Resolution 4, 21,470,612 equity securities under Listing Rule 7.1 (15% capacity); and

• (ii) 14,313,741 equity securities under Listing Rule 7.1A (10% capacity).

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The actual number of equity securities that the Company will have capacity to issue under ASX Listing Rule 7.1A will be calculated at the date of issue of the equity securities in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (refer above).

• Minimum Issue Price

The issue price of equity securities issued under ASX Listing Rule 7.1A must be not less than 75% of the VWAP of equity securities in the same class calculated over the 15 trading days immediately before:

• (i) the date on which the price at which the equity securities are to be issued is agreed; or

• (ii) if the equity securities are not issued within 5 trading days of the date in paragraph (i) above, the date on which the equity securities are issued.

• 10% Placement Period

Shareholder approval of the 10% Placement Facility under ASX Listing Rule 7.1A is valid from the date of the AGM at which the approval is obtained and expires (and ceases to be valid) on the earlier to occur of:

• (i) the date that is 12 months after the date of the AGM at which the approval is obtained; or

• (ii) the date of the approval by Shareholders of a transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking) ( 10% Placement Period) .

• ASX Listing Rule 7.1A

The effect of Resolution 4 will be to allow the Directors of the Company to issue the equity securities under ASX Listing Rule 7.1A during the 10% Placement Period separate to the Company’s 15% placement capacity under AS X Listing Rule 7.1. Resolution 4 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate shareholder, by a corporate representative).

SPECIFIC INFORMATION REQUIRED BY ASX LISTING RULE 7.3A

Pursuant to and in accordance with ASX Listing Rule 7.3A, information is provided in relation to the approval of the 10% Placement Facility as follows:

• Any equity security issued will be issued at an issue price of not less than 75% of the VWAP for the Company’s equity securities over the 15 trading days immediately before:

• (i) The date on which the price at which the equity securities are to be issued is agreed; or

• (ii) If the equity securities are not issued within 5 trading days of the date in paragraph (i) above, the date on which the equity securities are issued.

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• If Resolution 4 is approved by the Shareholders and the Company issues equity securities under the 10% Placement Facility, the existing Shareholders’ voti ng power in the Company would be diluted as shown in the below table (in the case of options, only if the options are exercised). There is a risk that:

• (i) the market price for the Company’s equity securities may be significantly lower on the date of the issue of the equity securities than on the date of the Meeting; and

• (ii) the equity securities may be issued at a price that is at a discount to the market price for the Company’s equity securities on the issue date,

which may have an effect on the quantum of funds raised by the issue of the equity securities.

The table below shows the dilution of existing shareholders on the basis of the current market price of the Company’s ordinary shares and the current number of ordinary securities for variable “A” calculat ed in accordance with the formula in ASX Listing Rule 7.1A(2) as at the date of the Notice. The table also shows:

• Two examples where variable “A” has increased by 50% and 100%. Variable “A” is based on the number of ordinary shares the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require shareholder approval (for example, a pro-rata entitlements issue or scrip issued under a takeover offer) or future specific placements under ASX Listing Rule 7.1 that are approved at a future shareholders’ meeting.

• Two examples of where the price of ordinary securities has decreased by 50% and increased by 50% as against the closing price of the Company’s shares on 01 October 2017.

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			Dilution
Variable “A” in ASX Listing Rule 7.1A.2		$0.03 50% decrease in Deemed Price	$0.06 Deemed Price	$0.09 50% Increase in Deemed Price
Current Variable A	10% Voting Dilution	14,313,741	14,313,741	14,313,741
143,137,413 shares	Funds raised	$429,412	$858,824	$1,288,237
50% increase in current Variable A	10% Voting Dilution	21,470,612	21,470,612	21,470,612
214,706,120 shares	Funds raised	$644,118	$1,288,237	$1,932,355
100% increase in current Variable A	10% Voting Dilution	28,627,483	28,627,483	28,627,483
286,274,826 shares	Funds raised	$858,824	$1,717,649	$2,576,473

The table above has been prepared on the following assumptions:

• The Company issues the maximum securities available under the ASX Listing Rule 7.1A being 10% of the Company’s shares on issue at the date of the Meeting .

• No options are exercised into fully paid ordinary securities before the date of the issue of securities under ASX Listing Rule 7.1A.

• The table does not demonstrate an example of dilution that may be caused to a particular Shareholder by reason of placements under ASX Listing Rule 7.1A, based on that shareholder’s holding at the date of the Meeting.

• The table only demonstrates the effect of issues of securities under ASX Listing Rule 7.1A. It does not consider placements made under ASX Listing Rule 7.1, the “15% rule”.

• The price of ordinary securities is deemed for the purposes of the table above to be $0.06, being the closing price of the Company’s listed securities on ASX on 01 October 2018 ( Deemed Price ). The Deemed Price is indicative only and does not consider the 25% discount to market that the securities may be placed at.

• The table does not take into account the issue of any securities for which shareholder approval is being sought at the Meeting.

• The table does not demonstrate the effect of listed options being issued under ASX Listing Rule 7.1A, it only considers the issue of the fully paid ordinary securities.

The Company may seek to issue the equity securities for the following purposes:

• Non-cash consideration – including in connection with joint venture arrangements or agreements, payment of contractors or consultants or in connection with the acquisition of

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new projects (although the Company presently has no proposal to do so). In such circumstances, the Company will provide a valuation of the non-cash consideration as required by ASX Listing Rule 7.1A.3.

• Cash consideration – in such circumstances, the Company intends to use the funds raised towards advancing existing Company projects, the acquisition of new projects and/or general working capital.

The Company will comply with the disclosure obligations under ASX Listing Rules 7.1A(4) and 3.10.5A upon issue of any equity securities.

The Company’s allocation policy is dependent on the prevailing market condition s at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of equity securities will be determined on a case-by-case basis having regard to factors including but not limited to the following:

• the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate;

• the effect of the issue of the equity securities on the control of the Company;

• the financial situation and solvency of the Company; and

• advice from corporate, financial and broking advisers (if applicable).

The allottees under the 10% Placement Facility have not been determined as at the date of the Notice but may include existing substantial shareholders and/or new shareholders who are not related parties or associates of a related party of the Company. Further, if the Company were to pursue an acquisition and were it to be successful in acquiring new assets or investments, it is possible that the allottees under the 10% Placement Facility will be the vendors of the new assets or investments.

A voting exclusion statement is included in the Notice to which this Memorandum relates. At the date of that Notice, the Company has not approached any particular existing shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the equity securities. No existing shareholder’s votes will therefore be excluded under the voting exclusion in the Notice.

The Directors of the Company unanimously recommend shareholders vote in favour of Resolution 4.

Note: unless otherwise specified, all monetary amounts are in Australian dollars.

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Schedule

Terms and conditions of the BCA Options

1. Each BCA Option entitles the holder to subscribe for one ordinary fully paid Share in the Company ("Share") at an exercise price of A$0.081 (8.1 cents) each.

2. The date of grant of the BCA Options shall be on or around the day that an agreement is executed by each of BCA and the Company.

3. The BCA Options expire at 5pm Eastern Standard Time on the 5 September 2021 ("Expiry Date").

4. Any BCA Options not exercised on or before the Expiry Date will automatically lapse.

5. The BCA Options may be exercised at any time prior to the Expiry Date wholly or in part by delivering a duly completed form of notice of exercise together with payment of the exercise price per BCA Option exercised to the Company.

6. All Shares allotted on the exercise of the BCA Options will rank equally in all respects with the Company's then existing ordinary fully paid common Shares.

7. The BCA Options will not be listed for official quotation on the ASX or any other stock exchange.

8. If the Company's ordinary Shares are quoted by ASX or any other stock exchange, the Company must:

• a. on the date that the Shares are allotted pursuant to the exercise of the BCA Options, apply for quotation of all Shares allotted;

• b. on the date that the Shares are allotted pursuant to the exercise of the BCA Options and in relation to the allotted Shares, give to the ASX a written notice in accordance with section 708A(S)(e) of the Corporations Act and which complies with the requirements of section 708A(6) of the Corporations Act, or complete any other such notice as required by the stock exchange upon which the Company's ordinary Shares are quoted; and

• c. perform such other acts or take such other actions to ensure the Shares that are allotted pursuant to the exercise of the BCA Options are quoted by the ASX or other exchange and freely tradeable.

9. The holders of a BCA Option may only participate in new issues of securities to holders of ordinary shares in the Company if the BCA Option has been exercised and Shares allotted in respect of the BCA Option before the record date for determining entitlements to the issue.

10. There will be no change to the exercise price of the BCA Options or the number of Shares over which a BCA Option is exercisable in the event of the Company making a pro rata issue of shares or other securities to the holders of ordinary shares in the Company (other than a bonus issue).

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

12. If prior to the Expiry Date there is a reorganisation of the issued capital of the Company, the rights of a holder of BCA Options will be changed to the extent necessary to comply with the applicable ASX Listing Rules in force at the time of the reorganisation.

13. The BCA Options are not transferable.

DAVENPORT RESOURCES LIMITED

REGISTERED OFFICE:

LEVEL 28, 303 COLLINS STREET MELBOURNE VIC 3000

ACN: 153 414 852

SHARE REGISTRY:

«Company_code» «Sequence_number» «Holder_name» «Address_line_1» «Address_line_2» «Address_line_3» «Address_line_4» «Address_line_5»

PROXY FORM

Security Transfer Australia Pty Ltd All Correspondence to: PO BOX 52 Collins Street West VIC 8007 Suite 913, Exchange Tower 530 Little Collins Street Melbourne VIC 3000 T: 1300 992 916 F: +61 8 9315 2233 E: registrar@securitytransfer.com.au W: www.securitytransfer.com.au

Code: DAV

Holder Number: «HOLDER_NUM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

VOTE Lodge your proxy vote securely at www.securitytransfer.com.au

«ONLINE 1. Log into the Investor Centre using your holding details.

ONLINE 2. Click on "Proxy Voting" and provide your Online Proxy ID to access the voting area.

SECTION A: Appointment of Proxy

I/We, the above named, being registered holders of the Company and entitled to attend and vote hereby appoint:

The meeting chairperson OR

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or failing the person named, or if no person is named, the Chairperson of the meeting, as my/our Proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the Proxy sees fit) at the Annual General Meeting of the Company to be held at 10:30am AEDT on Wednesday 14 November 2018 at Level 27, Rialto South Tower, 525 Collins Street, Melbourne VIC 3000 and at any adjournment of that meeting.

Exercise of proxies by the Chairman for item 1.

Where I/we have appointed the Chairman of the meeting as my/our proxy (or the Chairman of the meeting becomes my/our proxy by default), I/we expressly authorise the Chairman of the meeting to exercise my/our proxy in respect of item 1 (except where I/we have indicated a different voting intention below) and acknowledge that the Chairman of the meeting may exercise my/our proxy even though item 1 is connected directly or indirectly with the remuneration of a member of Key Management Personnel.

SECTION B: Voting Directions

Please mark "X" in the box to indicate your voting directions to your Proxy. The Chairperson of the Meeting intends to vote undirected proxies in FAVOUR of all the resolutions.

In exceptional circumstances, the Chairperson of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

RESOLUTION	For	Against	Abstain*
1. Non-binding resolution to adopt Remuneration Report

1. Re-election of Mr Christopher Bain as a Director

2. Ratification of prior issue of Options

3. Approval of Placement Facility

If no directions are given my proxy may vote as the proxy thinks fit or may abstain. * If you mark the Abstain box for a particular item, you are directing your Proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

SECTION C: Signature of Security Holder(s)

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Security Holder Security Holder 2 Security Holder 3 Sole Director & Sole Company Secretary Director Director/Company Secretary

Proxies must be received by Security Transfer Australia Pty Ltd no later than 10:30am AEDT on Monday 12 November 2018.

DAVPX2141118

2

DAVPX2141118

1

DAV

My/Our contact details in case of enquiries are:

Name:

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1. NAME AND ADDRESS

This is the name and address on the Share Register of the Company. If this information is incorrect, please make corrections on this form. Shareholders sponsored by a broker should advise their broker of any changes. Please note that you cannot change ownership of your shares using this form.

2. APPOINTMENT OF A PROXY

If the person you wish to appoint as your Proxy is someone other than the Chairperson of the Meeting please write the name of that person in Section A. If you leave this section blank, or your named Proxy does not attend the meeting, the Chairperson of the Meeting will be your Proxy. A Proxy need not be a shareholder of the Company.

3. DIRECTING YOUR PROXY HOW TO VOTE

To direct the Proxy how to vote place an "X" in the appropriate box against each item in Section B. Where more than one Proxy is to be appointed and the proxies are to vote differently, then two separate forms must be used to indicate voting intentions.

4. APPOINTMENT OF A SECOND PROXY

You are entitled to appoint up to two (2) persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second Proxy, an additional Proxy form may be obtained by contacting the Company's share registry or you may photocopy this form.

Number:

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5. SIGNING INSTRUCTIONS

Individual: where the holding is in one name, the Shareholder must sign. Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.

Power of Attorney: to sign under Power of Attorney you must have already lodged this document with the Company's share registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

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 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be lodged with the Company before the meeting or at the registration desk on the day of the meeting. A form of the certificate may be obtained from the Company's share registry.

6. LODGEMENT OF PROXY

Proxy forms (and any Power of Attorney under which it is signed) must be received by Security Transfer Australia Pty Ltd no later than the date and time stated on the form overleaf. Any Proxy form received after that time will not be valid for the scheduled meeting.

To appoint a second Proxy you must:

• a) On each of the Proxy forms, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each Proxy may exercise, each Proxy may exercise half of your votes; and

• b) Return both forms in the same envelope.

The proxy form does not need to be returned to the share registry if the votes have been lodged online.

Security Transfer Australia Pty Ltd Online www.securitytransfer.com.au Postal Address PO BOX 52 Collins Street West VIC 8007 Street Address Suite 913, Exchange Tower 530 Little Collins Street Melbourne VIC 3000 Telephone 1300 992 916 Facsimile +61 8 9315 2233 Email registrar@securitytransfer.com.au

PRIVACY STATEMENT

Personal information is collected on this form by Security Transfer Australia Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of security holders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Australia Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.