TURNSTONE RESOURCES LTD — AGM Information 2022

Feb 22, 2022

22 February 2022

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MARCH 2022 GENERAL MEETING

Dear Shareholder

South Harz Potash Limited (ACN 153 414 852) ( Company ) gives notice to Shareholders that in relation to the Notice of General Meeting dated 12 January 2022 ( Notice ) in respect of the Company’s general meeting of members to be held at 3:00pm (WST) on 11 February 2022 ( Meeting ), the Directors have resolved to:

• (a) postpone the Meeting until 3:00pm (WST) on 24 March 2022 ; and

• (b) include new Resolutions 11 to 16 on the terms set out in this Addendum ( Additional Resolution ).

The purpose of the Addendum is to re-approve the terms and conditions of the Incentive Options as set out in the Company’s notice of meeting dated 9 November 2021 for the meeting held on 16 December 2021 ( Previous Meeting ).

The Meeting will be held as a physical meeting at:

Hubbard House, Unit 13 6 – 10 Douro Place, West Perth, WA 6005 on 24 March 2022 at 3:00pm (AWST)

Amendments were made to the Corporations Act 2001 by Parliament in Treasury Laws Amendment (2021 Measures No. 1) Act 2021 . These amendments came into effect on 14 August 2021 and allow meetings to be convened electronically and held using virtual meeting technology, and for notices of meeting to be sent to recipients by means of an electronic communication or access the document electronically.

As a result, South Harz Potash is not sending hard copies of the general meeting materials to shareholders. Instead, a copy of the notice of meeting is available on the Company’s website at:

https://southharzpotash.com/

If you have elected to receive notices by email, you will be notified by email. If you have not elected to receive notices by email, a copy of your proxy form will be posted to you, together with this letter.

South Harz Potash will hold a physical meeting with the appropriate social gathering and physical distancing measures in place to comply with the Federal Government’s and State Government’s current restrictions on physical gatherings. However, in order to minimise the risk to shareholders and to South Harz Potash and its ongoing operations, we strongly encourage Shareholders to vote by proxy instead of attending the meeting.

The situation regarding COVID-19 is evolving rapidly and South Harz Potash is following the guidance of the Australian Government. Shareholders are encouraged to monitor South Harz Potash’s ASX announcements for any further updates in relation to the Meeting.

The notice of meeting and other documents are important and should be read in their entirety. If you do not understand them, you should consult your professional advisers without delay.

Yours sincerely

Dr Chris Gilchrist Managing Director

CONTACT DETAILS W: southharzpotash.com E: info@southharzpotash.com P: +61 408 447 493

ABN: 64 153 414 852 ASX Code: SHP ASX Code (Options): SHPO Frankfurt Code: A2DWXX

Unit 13, 6-10 Douro Place West Perth WA 6005

SOUTH HARZ POTASH LIMITED

ACN 153 414 852

NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 3:00 pm AWST DATE : Friday 11 February 2022 PLACE : Unit 13, 6-10 Douro Place WEST PERTH WA 6005

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

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

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 4:00pm AWST on 9 February 2022.

BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE OF SHARES UNDER TRANCHE 1 (LR 7.1)

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

“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 41,666,669 Shares on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE OF BROKER SHARES – (LR 7.1

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

“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 438,417 Shares on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

3. RESOLUTION 3 – RATIFICATION OF PRIOR ISSUE OF BROKER OPTIONS – (LR 7.1

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

• “That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 2,192,084 Options on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

4. RESOLUTION 4 – RATIFICATION OF PRIOR ISSUE OF BROKER OPTIONS – (LR 7.1

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

• “That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 2,192,084 Options on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

5. RESOLUTION 5 – ISSUE OF SHARES TO RELATED PARTY - DR CHRIS GILCHRIST

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

• “That, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 175,000 Shares, to Chris Gilchrist

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(or his nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below

6. RESOLUTION 6 – ISSUE OF SHARES TO RELATED PARTY – MR RORY LUFF

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

“That, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 833,333 Shares, to Rory Luff (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below

7. RESOLUTION 7 – ISSUE OF SHARES TO RELATED PARTY – MR HANSJOERG PLAGGEMARS

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

“That, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 166,667 Shares, to Hansjoerg Plaggemars (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below

8. RESOLUTION 8 – ISSUE OF SHARES TO RELATED PARTY – MR IAN FARMER

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

“That, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 166,667 Shares, to Ian Farmer (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below

9. RESOLUTION 9 – ISSUE OF SHARES TO RELATED PARTY - MR LEN JUBBER

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

“That, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 416,667 Shares, to Len Jubber (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

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10. RESOLUTION 10 – ISSUE OF SHARES TO RELATED PARTY - DR REINOUT KOOPMANS

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

“That, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 416,667 Shares, to Reinout Koopmans (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

Dated 12 January 2022

By order of the Board

Graeme Smith Company Secretary South Harz Potash Limited

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Voting Prohibition Statements

Resolutions 5 -10 – Issue of Shares under Director Placement Participation

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

Voting Exclusion Statements

In accordance with Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution set out below by or on behalf of the following persons:

Resolution 1 – Ratification of prior issue of Placement Shares – Tranche 1 (LR7.1)	A person who participated in the issue or is a counterparty to the agreement being approved (namely the Unrelated Placement Participants) or an associate of that person or those persons.
Resolution 2– Ratification of prior issue of Broker Shares (LR7.1)	A person who participated in the issue or is a counterparty to the agreement being approved (namely Berne No 132 Nominees Pty Ltd) or an associate of that person or those persons.
Resolution 3 – Ratification of prior issue of Broker Options	A person who participated in the issue or is a counterparty to the agreement being approved (namely Berne No 132 Nominees Pty Ltd) or an associate of that person or those persons.
Resolution 4 – Ratification of prior issue of Broker Options	A person who participated in the issue or is a counterparty to the agreement being approved (namely Berne No 132 Nominees Pty Ltd) or an associate of that person or those persons.
Resolution 5 – Issue of Shares to Related Party to Dr Chris Gilchrist	Dr Chris Gilchrist (or their nominee) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 6 – Issue of Shares to Related Party to Mr Rory Luff	Mr Rory Luff (or their nominee) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 7 – Issue of Shares to Related Party to Mr Hansjoerg Plaggemars	Mr Hansjoerg Plaggemars (or their nominee) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 8 – Issue of Shares to Related Party to Mr Ian Farmer	Mr Ian Farmer (or their nominee) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.

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Resolution 9 – Issue of Shares to Related Party to Mr Len Jubber	Mr Len Jubber (or their nominee) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 10 – Issue of Shares to Related Party to Dr Reinout Koopmans	Dr Reinout Koopmans (or their nominee) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.

However, this does not apply to a vote cast in favour of the Resolution by:

• (a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and

• (ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Voting by proxy

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

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

• each Shareholder has a right to appoint a proxy;

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

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

Shareholders and their proxies should be aware that:

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

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

Voting in person

To vote in person, attend the Meeting at the time, date and place set out above. Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 408 447 493.

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EXPLANATORY STATEMENT

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

1. BACKGROUND TO RESOLUTIONS 1 – 3

1.1 Background

On 13 December 2021, the Company announced it has received commitments to raise up to a total of $5,261,000 (before costs) through a placement of approximately 43,841,669 Shares to sophisticated and professional investors at an issue price of $0.12 per Share ( Placement ). The Placement will settle in two tranches.

On 20 December 2021, the Company issued the first tranche of 41,666,669 Shares to unrelated professional and institutional investors ( Unrelated Placement Participants ) who participated in the Placement. Resolution 1 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of these Shares.

In addition, the Company is seeking Shareholder approval for the Directors (or their nominees) to participate in the second tranche of the Placement by subscribing for up to 2,175,000 Shares ( Director Placement Participants ). The issue of these Shares are the subject of Resolutions 5 to 10.

1.2 Joint Lead Managers

(a) Morgans Corporate Limited

The Company has engaged the services of Morgans Corporate Limited (ACN 010 539 607) ( Morgans ) by way of a mandate letter ( Morgans Placement Mandate Letter ) to act as joint lead manager and corporate adviser in relation to the capital. A summary of the material terms of the Morgans Placement Mandate Letter is set out in Schedule 1.

(b) Cenkos Securities PLC

The Company has engaged the services of Cenkos Securities PL ( Cenkos ) by way of a mandate letter ( Cenkos Placement Mandate Letter ) to act as joint lead manager and corporate adviser in relation to the capital raising under the Placement. A summary of the material terms of the Cenkos Placement Mandate Letter is set out in Schedule 1.

1.3

Director Participation

The following Directors intend to participate in the Placement as set out in Section 1.1 (above) on the same terms as the unrelated placement participants as follows:

• (a) Dr Chris Gilchrist will be issued up to 175,000 Shares under the Placement to raise approximately $21,000 (subject to Shareholder approval sought pursuant to Resolution 5);

• (b) Mr Rory Luff will be issued up to 833,333 Shares under the Placement to raise approximately $100,000 (subject to Shareholder approval sought pursuant to Resolution 6);

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• (c) Mr Hansjoerg Plaggemars will be issued up to 166,667 Shares under the Placement to raise approximately $20,000 (subject to Shareholder approval sought pursuant to Resolution 7);

• (d) Mr Ian Farmer will be issued up to 166,667 Shares under the Placement to raise approximately $20,000 (subject to Shareholder approval sought pursuant to Resolution 8); and

• (e) Mr Len Jubber will be issued up to 416,667 Shares under the Placement to raise approximately $50,000 (subject to Shareholder approval sought pursuant to Resolution 9); and

• (f) Dr Reinout Koopmans will be issued up to 416,667 Shares under the Placement to raise approximately $50,000 (subject to Shareholder approval sought pursuant to Resolution 10).

2. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE OF PLACEMENT SHARES – TRANCHE 1 (LISTING RULE 7.1)

2.1 General

On 20 December 2021, the Company issued 41,666,669 Shares ( Unrelated Placement Shares ) to the Unrelated Placement Participants.

2.2 Listing Rule 7.1

Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary securities it had on issue at the start of that 12 month period.

The issue of the Unrelated Placement Shares does not fit within any of the exceptions set out in Listing Rule 7.2 and, as it has not yet been approved by Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval under Listing Rule 7.1 for the 12 month period following the date of issue of the Unrelated Placement Shares.

2.3 Listing Rule 7.4

Listing Rule 7.4 allows the shareholders of a listed company to approve an issue of equity securities after it has been made or agreed to be made. If they do, the issue is taken to have been approved under Listing Rule 7.1 and so does not reduce the company’s capacity to issue further equity securities without shareholder approval under that rule.

The Company wishes to retain as much flexibility as possible to issue additional equity securities in the future without having to obtain Shareholder approval for such issues under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Unrelated Placement Shares.

This Resolution seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Unrelated Placement Shares.

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2.4 Technical information required by Listing Rule 14.1A

If this Resolution is passed, the Unrelated Placement Shares will be excluded in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, effectively increasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Unrelated Placement Shares.

If Resolutions 1 and 2 are not passed, the Unrelated Placement Shares will be included in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, effectively decreasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Unrelated Placement Shares.

2.5 Technical information required by Listing Rule 7.5

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to Resolutions 1 and 2:

• (a) the Unrelated Placement Shares were issued to investors identified by Morgans, Cenkos and Directors ( T1 Placement Participants ) and 41,666,669 Shares issued pursuant to Listing Rule 7.1 (ratification of which is sought under Resolution 1);

• (b) the Unrelated Placement Shares issued to participants in the Placement were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (c) the Unrelated Placement Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;;

• (d) the Unrelated Placement Shares were issued on 20 December 2021;

• (e) the issue price per Share was $0.12 per T1 Placement Share. The Company has not and will not receive any other consideration for the issue of the Unrelated Placement Shares;

• (f) the purpose of the issue of the Unrelated Placement Shares was to raise $5,000,000, which will be applied towards drilling and assaying two confirmatory drillholes, transition into planned Feasibility Study workstreams on Ohmgebirge, driving organisational capacity and bolstering general working capital; and

• (g) the Unrelated Placement Shares were issued to the Unrelated Placement Participants under the Morgans Placement Mandate Letter and Cenkos Placement Mandate Letter. A summary of the material terms of each is set out in Schedule 1.

3. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE OF BROKER SHARES (LISTING RULE 7.1)

3.1 General

On 20 December 2021, the Company issued 438,417 Shares to Berne No 132 Nominees Pty Ltd ( Berne ) (Morgans nominee) in partial consideration for the lead manager services provided by Morgans ( Berne Shares ).

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Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary securities it had on issue at the start of that 12 month period.

The Company obtained approval to increase its limit to 25% at the annual general meeting held on 16 December 2021 ( Meeting ).

The issue of the Berne Shares does not fit within any of the exceptions set out in Listing Rule 7.2 and, as it has not yet been approved by Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval under Listing Rule 7.1 for the 12 month period following the date of issue of the Berne Shares.

Listing Rule 7.4 allows the shareholders of a listed company to approve an issue of equity securities after it has been made or agreed to be made. If they do, the issue is taken to have been approved under Listing Rule 7.1 and so does not reduce the company’s capacity to issue further equity securities without shareholder approval under that rule.

The Company wishes to retain as much flexibility as possible to issue additional equity securities in the future without having to obtain Shareholder approval for such issues under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Berne Shares.

This Resolution seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Berne Shares.

3.2 Technical information required by Listing Rule 14.1A

If this Resolution is passed, the Berne Shares will be excluded in calculating the Company’s 15% limit in Listing Rule 7.1, effectively increasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Berne Shares.

If this Resolution is not passed, the Berne Shares will be included in calculating the Company’s 15% limit in Listing Rule 7.1, effectively decreasing the number of equity securities that the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Berne Shares.

3.3 Technical information required by Listing Rule 7.5

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to this Resolution:

• (a) 438,417 Shares were issued to Berne No 132 Nominees Pty Ltd (Morgans nominee);

• (b) in accordance with paragraph 7.4 of ASX Guidance Note 21, the Company confirms that none of the recipients were:

• (i) related parties of the Company, members of the Company’s Key Management Personnel, substantial holders of the Company, advisers of the Company or an associate of any of these parties; and

• (ii) issued more than 1% of the issued capital of the Company;

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• (c) 438,417 Berne Shares were issued and the Berne Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (d) the Berne Shares were issued on 20 December 2021;

• (e) the Berne Shares were issued at a nil issue price, as part consideration for corporate advisory services provided by Morgans. The Company has not and will not receive any other consideration for the issue of the Berne Shares;

• (f) the purpose of the issue of the Berne Shares was to satisfy the Company’s obligations under the Mandate; and

• (g) the Berne Shares were issued to Berne No 132 Nominees Pty Ltd under the Mandate. A summary of the material terms of the Mandate is set out in Schedule 1.

4. RESOLUTIONS 3 TO 4 – RATIFICATION OF PRIOR ISSUE OF BROKER OPTIONS (LISTING RULE 7.1)

4.1 General

On 20 December 2021, the Company issued a total of 4,384,168 Options to Berne No 132 Nominees Pty Ltd in partial consideration for the lead manager services provided by Morgans ( Broker Options ) comprising of the issues as set out in the table below.

Resolution Number	Number	Broker Options
3	2,192,084	Exercisable at $0.18 each on or before 17 December 2024
4	2,192,084	Exercisable at $0.24 each on or before 17 December 2024

The full terms and conditions of the Broker Options as set out in the Schedule 1.

A summary of ASX Listing Rule 7.1 is set out in Section 2.2 above.

The issue of the Broker Options does not fit within any of the exceptions set out in Listing Rule 7.2 and, as it has not yet been approved by Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval under Listing Rule 7.1 for the 12 month period following the date of issue of the Broker Options.

Listing Rule 7.4 allows the shareholders of a listed company to approve an issue of equity securities after it has been made or agreed to be made. If they do, the issue is taken to have been approved under Listing Rule 7.1 and so does not reduce the company’s capacity to issue further equity securities without shareholder approval under that rule.

The Company wishes to retain as much flexibility as possible to issue additional equity securities in the future without having to obtain Shareholder approval for such issues under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Broker Options.

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Resolutions 3 and 4 seek Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Broker Options.

4.2

Technical information required by Listing Rule 14.1A

If Resolutions 3 and 4 are passed, the Broker Options will be excluded in calculating the Company’s 15% limit in Listing Rule 7.1 effectively increasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Broker Options.

If these Resolutions are not passed, the Broker Options will be included in calculating the Company’s 15% limit in Listing Rule 7.1, effectively decreasing the number of equity securities that the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Broker Options.

4.3 Technical information required by Listing Rule 7.5

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to these Resolutions:

• (a) the Broker Options were issued to Berne No 132 Nominees Pty Ltd (Morgans nominee);

• (b) in accordance with paragraph 7.4 of ASX Guidance Note 21, the Company confirms that none of the recipients were:

• (i) related parties of the Company, members of the Company’s Key Management Personnel, substantial holders of the Company, advisers of the Company or an associate of any of these parties; and

• (ii) issued more than 1% of the issued capital of the Company;

• (c) the 4,384,168 Broker Options were issued as follows:

Resolution Number	Number of Broker Options	Broker Options
3	2,192,084	Exercisable at $0.18 each on or before 17 December 2024
4	2,192,084	Exercisable at $0.24 each on or before 17 December 2024

• (d) on the terms and conditions set out in Schedule 2;

• (e)

• the Broker Options were issued on 20 December 2021;

• (f) the Broker Options were issued at a nil issue price, in consideration for the services provided by Morgans. The Company has not and will not receive any other consideration for the issue of the Broker Options (other than in respect of funds received on exercise of the Broker Options);

• (g) the purpose of the issue of the Broker Options was to satisfy the Company’s obligations under the Mandate; and

• (h) the Broker Options were issued to under the Mandate. A summary of the material terms of the Mandate is set out in Schedule 1.

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5. RESOLUTIONS 5 TO 10 – DIRECTOR PARTICIPATION IN PLACEMENT

5.1 General

As set out in Section 1.3 above, the Company seeks to issue Shares on the same terms as the Unrelated Placement Participants to the Directors under the Director Placement Participants ( Director Placement Shares ).

Resolutions 5 to 10 seeks Shareholder approval for the issue of:

• (a) 175,000 Shares to Dr Chris Gilchrist (or his nominee);

• (b) 833,333 Shares to Mr Rory Luff (or his nominee);

• (c) 166,667 Shares to Mr Hansjoerg Plaggemars (or his nominee);

• (d) 166,667 Shares to Mr Ian Farmer (or his nominee);

• (e) 416,667 Shares to Mr Len Jubber (or his nominee); and

• (f) 416,667 Shares to Dr Reinout Koopmans (or his nominee).

5.2 Chapter 2E of the Corporations Act

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

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

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

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

The Director Placement Participants will result in the issue of securities which constitutes giving a financial benefit and Messrs Gilchrist, Luff, Koopmans, Plaggemars, Farmer and Jubber are related parties of the Company by virtue of being Directors.

In respect of Resolutions 5 to 10, the Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the Director Placement Participants because the Shares will be issued to Messrs Gilchrist, Luff, Koopmans, Plaggemars, Farmer, and Jubber (or their nominees) on the same terms as Shares issued to non-related party participants in the Placement and as such the giving of the financial benefit is on arm’s length terms.

5.3 Listing Rule 10.11

Listing Rule 10.11 provides that unless one of the exceptions in Listing Rule 10.12 applies, a listed company must not issue or agree to issue equity securities to:

• 10.11.1 a related party;

• 10.11.2 a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder in the company;

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• 10.11.3 a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder in the company and who has nominated a director to the board of the company pursuant to a relevant agreement which gives them a right or expectation to do so;

• 10.11.4 an associate of a person referred to in Listing Rules 10.11.1 to 10.11.3; or

• 10.11.5 a person whose relationship with the company or a person referred to in Listing Rules 10.11.1 to 10.11.4 is such that, in ASX’s opinion, the issue or agreement should be approved by its shareholders,

unless it obtains the approval of its shareholders.

The Director Placement Participants falls within Listing Rule 10.11.1 and does not fall within any of the exceptions in Listing Rule 10.12. It therefore requires the approval of Shareholders under Listing Rule 10.11.

Resolutions 5 to 10 seek Shareholder approval for the Director Placement Participants under and for the purposes of Listing Rule 10.11.

5.4 Technical information required by Listing Rule 14.1A

If Resolutions 5 to 10 are passed, the Company will be able to proceed with the issue of the shares under the Director Placement Participants within one month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the Listing Rules) and will raise additional funds which will be used in the manner set out in Section 5.5(c) below. As approval pursuant to Listing Rule 7.1 is not required for the issue of the shares in respect of the Director Placement Participants (because approval is being obtained under Listing Rule 10.11), the issue of the relevant securities will not use up any of the Company’s 15% annual placement capacity.

If Resolutions 5 to 10 are not passed, the Company will not be able to proceed with the issue of the securities under the Director Placement Participants and no further funds will be raised in respect of the Placement.

5.5 Technical Information required by Listing Rule 10.13

Pursuant to and in accordance with Listing Rule 10.13, the following information is provided in relation to Resolutions 5 to 10:

• (a) the Director Placement Shares will be issued to Messrs Gilchrist, Luff, Koopmans, Plaggemars, Farmer and Jubber (or their nominee), who falls within the category set out in Listing Rule 10.11.1, as Messrs Gilchrist, Luff, Koopmans, Plaggemars, Farmer and Jubber are each a related party of the Company by virtue of being a Director;

• (b) the maximum number of securities to be issued to the Directors (or their nominees) under the Director Placement Participants is as follows:

• (i) 175,000 Shares - Dr Chris Gilchrist (or his nominee);

• (ii) 833,333 Shares - Mr Rory Luff (or his nominee);

• (iii) 166,667 Shares - Mr Hansjoerg Plaggemars (or his nominee);

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• (iv) 166,667 Shares - Mr Ian Farmer (or his nominee);

• (v) 416,667 Shares - Mr Len Jubber (or his nominee); and

• (vi) 416,667 Shares – Dr Reinout Koopmans (or his nominee);

• (c) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; the Director Placement Shares will be issued no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is anticipated the Participation Shares will be issued on the same date;

• (d) the issue price will be $0.12 per Share being the same issue price as Shares issued to other participants in the Placement. The Company will not receive any other consideration for the issue of the Shares;

• (e) the purpose of the issue of Shares under the Participation is to raise capital, which the Company intends to apply the towards drilling and assaying two confirmatory drillholes, transition into planned Feasibility Study workstreams on Ohmgebirge, driving organisational capacity and bolstering general working capital;

• (f) the Shares to be issued under the Director Placement Participation are not intended to remunerate or incentivise the Directors;

• (g) the Shares are not being issued under an agreement; and

• (h) a voting exclusion statements is included in Resolutions 5 to 10 of the Notice.

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GLOSSARY

$ means Australian dollars.

ASIC means the Australian Securities & Investments Commission.

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

Board means the current board of directors of the Company.

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

Chair means the chair of the Meeting.

Company means South Harz Potash Limited (ACN 153 414 852).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

Listing Rules means the Listing Rules of ASX.

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

Option means an option to acquire a Share.

Proxy Form means the proxy form accompanying the Notice.

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

Section means a section of the Explanatory Statement.

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

Shareholder means a registered holder of a Share.

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

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SCHEDULE 1 – MATERIAL TERMS OF MANDATE LETTERS

1. Morgans Placement Mandate Letter – Placement

The Company also engaged Morgans by way of a mandate letter ( Morgans Placement Mandate Letter ) to act as joint lead manager and corporate advisor in relation to a capital raising to raise a minimum of $5,261,000 ( Initial Placement ) to be conducted in two tranches with the second tranche being subject to the Company obtaining Shareholder approval for the tranche. The material terms of the Morgans Placement Mandate Letter are set out below:

(a) Fees

The Company agrees to pay the following fees to Morgans:

• (i) Fee

On completion of the Initial Placement, the Company will pay:

• (A) Management Fee : a management fee of 2% of the Initial Placement (with up to 50% being payable in Shares);

• (B) Selling Fee : a selling fee of 4% of the Initial Placement; and

• (C) Option Fee : the issue of 4,384,168 Options to Morgans (or its nominees),

(together, the Fee ).

(b) Expenses

The Company agrees to reimburse Morgans for all reasonable costs and expenses incurred in connection with performing its services under this Morgans Placement Mandate Letter, Morgans is required to seek approval from the Company prior to incurring expenses in excess of $2,000.

(c) Term

The term of Morgans’ appointment is for a period of 6 months. In the event that a capital raising occurs (or is expected to occur) with the period that is two months prior to the expiry of the term (or after the expiry of the term), the term will automatically be extended by an additional 6 months.

(d)

First Right of Refusal

Morgans will be offered a first right of refusal to act as adviser/in such capacity as Morgans elects on any subsequent transaction (being any corporate activity including (but not limited to) a capital raising from Australian-based investors.

The Morgans Placement Mandate Letter also contains such other terms as are considered standard for an agreement of this nature (including representations and warranties, indemnities, and confidentiality provisions).

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2. Cenkos Placement Mandate Letter – Placement

The Company engaged Cenkos by way of a mandate letter ( Cenkos Placement Mandate Letter ) to act as joint lead manager in relation to the capital raising under the Placement. The Company agrees to pay a transaction fee of approximately $7,200 being 6% of the gross proceeds subscribed from Cenkos introduced investors.

The Cenkos Placement Mandate Letter also contains such other terms as are considered standard for an agreement of this nature (including representations and warranties, indemnities, and confidentiality provisions).

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SCHEDULE 2 – TERMS AND CONDITIONS OF BROKER OPTIONS

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (i), the amounts payable for the Broker Options is as follows:

• (i) 2,192,084 exercisable at $0.18 or before 17 December 2024; and

• (ii) 2,192,084 exercisable at $0.24 or before 17 December 2024,

( Exercise Price )

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) on 17 December 2024 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f) Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g) Timing of issue of Shares on exercise

Within five Business Days after the Exercise Date, the Company will:

• (i) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

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• (iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(i) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Option holder are to be changed in a manner consistent with the Corporations Act and the Listing Rules at the time of the reconstruction.

(j) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(k) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(l) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

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SOUTH HARZ POTASH LIMITED

ACN 153 414 852

ADDENDUM TO NOTICE OF GENERAL MEETING

South Harz Potash Limited (ACN 153 414 852) ( Company ) gives notice to Shareholders that in relation to the Notice of General Meeting dated 12 January 2022 ( Notice ) in respect of the Company’s general meeting of members to be held at 3:00pm (WST) on 11 February 2022 ( Meeting ), the Directors have resolved to:

• (a) postpone the Meeting until 3:00pm (WST) on Thursday 24 March 2022; and

• (b) include new Resolutions 11 to 16 on the terms set out in this Addendum ( Additional Resolution ).

The purpose of the Addendum is to re-approve the terms and conditions of the Incentive Options as set out in the Company’s notice of meeting dated 9 November 2021 for the meeting held on 16 December 2021 ( Previous Meeting ).

Due to an administrative error, the Executive and Non-Executive Incentive Options were incorrect, and the exercise of the options was set as being for no consideration, when the exercise price in the terms as resolved by the Board was to have been $0.1606 per option.

The Company confirms that the Incentive Options as approved at the Previous Meeting have not been and will not be issued and accordingly seeks a fresh approval for the issue of the Incentive Options to the Executive and Non-Executive Directors on the terms and conditions as set out in the Addendum.

This Addendum is supplemental to the original Notice and should be read in conjunction with the original Notice. Save for the amendments set out below, all other Resolutions proposed in the original Notice remain unchanged ( Unchanged Resolutions ).

Replacement Proxy Form

Annexed to this Addendum to Notice of General Meeting is a replacement Proxy Form ( Replacement Proxy Form ).

To ensure clarity of voting instructions by Shareholders on the Resolutions to be considered at the Meeting, Shareholders are advised that:

• (a) If you have already completed and returned the Proxy Form annexed with the Notice ( Original Proxy Form ) and you wish to change your original vote for the Unchanged Resolutions or cast votes for the Additional Resolution, you must complete and return the Replacement Proxy Form .

• (b) If you have already completed and returned the Original Proxy Form and you do not wish to change your original vote for the Unchanged Resolutions or vote on the Additional Resolution, you do not need to take any action as the earlier submitted Original Proxy Form will be accepted by the Company for the Unchanged Resolutions unless you submit a Replacement Proxy Form. For the sake of clarity, the Company notes that if you do not lodge a Replacement Proxy Form, you will not have cast votes for the Additional Resolution .

• (c) If you have not yet cast any votes and wish to vote on the Resolutions in the Notice as amended by the Addendum, please complete and return the Replacement Proxy Form.

To ensure clarity of voting instructions by Shareholders on the Resolutions to be considered at the Meeting, completed Proxy Forms annexed to the Notice will not be accepted by the Company in relation to the Resolutions to be voted on by Shareholders at the Meeting.

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BUSINESS OF THE MEETING

New Resolutions 11 to 16 are inserted into the Notice, immediately following Resolution 10, as follows:

1. RESOLUTION 11 – ISSUE OF EXECUTIVE INCENTIVE OPTIONS TO DR CHRIS GILCHRIST

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.14 and for all other purposes, approval is given for the Company to issue 934,000 Executive Incentive Options to Dr Chris Gilchrist (or their nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

2. RESOLUTION 12 – ISSUE OF INCENTIVE OPTIONS TO IAN FARMER

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.14 and for all other purposes, approval is given for the Company to issue 523,000 Incentive Options to Ian Farmer (or their nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

3. RESOLUTION 13 – ISSUE OF INCENTIVE OPTIONS TO DR REINOUT KOOPMANS

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.14 and for all other purposes, approval is given for the Company to issue 311,000 Incentive Options to Dr Reinout Koopmans (or their nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

4. RESOLUTION 14 – ISSUE OF INCENTIVE OPTIONS TO RORY LUFF

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.14 and for all other purposes, approval is given for the Company to issue 311,000 Incentive Options to Rory Luff (or their nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

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5. RESOLUTION 15 – ISSUE OF INCENTIVE OPTIONS TO HANSJORG PLAGGEMARS

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.14 and for all other purposes, approval is given for the Company to issue 311,000 Incentive Options to Hansjorg Plaggemars (or their nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

6. RESOLUTION 16 – ISSUE OF INCENTIVE OPTIONS TO LEONARD JUBBER

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

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.14 and for all other purposes, approval is given for the Company to issue 311,000 Incentive Options to Leonard Jubber (or their nominee) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

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Voting Prohibition Statements

Resolution 11 – Issue of Executive Incentive Options to Dr Chris Gilchrist

In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 11 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 11 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 11 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Resolution 12 – Issue of Incentive Options to Ian Farmer

In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 12 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 12 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 12 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

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Resolution 13 – Issue of Incentive Options to Dr Reinout Koopmans

In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 13 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 15 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 3 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Resolution 14 – Issue of Incentive Options to Rory Luff

In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 14 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 14 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 14 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

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Resolution 15 – Issue of Incentive Options to Hansjorg Plaggemaars

In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 15 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 15 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 15 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Resolution 16 – Issue of Incentive Options to Leonard Jubber

In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 16 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 16 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 16 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

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Voting Exclusion Statements

In accordance with Listing Rule 14.11, the Company will disregard any votes cast in favour of the resolution set out below by or on behalf of the following persons:

Resolution 11 – Issue of Executive Incentive Options to Dr Chris Gilchrist	Any person referred to in Listing Rule 10.14.1, 10.14.2 or 10.14.3 who is eligible to participate in the employee incentive scheme in question (including Dr Chris Gilchrist under resolution 11) or an associate of that person or those persons.
Resolution 12 – Issue of Incentive Options to Ian Farmer	Any person referred to in Listing Rule 10.14.1, 10.14.2 or 10.14.3 who is eligible to participate in the employee incentive scheme in question (including Ian Farmer under resolution 12) or an associate of that person or those persons.
Resolution 13 – Issue of Incentive Options to Dr Reinout Koopmans	Any person referred to in Listing Rule 10.14.1, 10.14.2 or 10.14.3 who is eligible to participate in the employee incentive scheme in question (including Dr Reinout Koopmans under resolution 13) or an associate of that person or those persons.
Resolution 14 – Issue of Incentive Options to Rory Luff	Any person referred to in Listing Rule 10.14.1, 10.14.2 or 10.14.3 who is eligible to participate in the employee incentive scheme in question (including Rory Luff under resolution 14) or an associate of that person or those persons.
Resolution 15 – Issue of Incentive Options to Hansjorg Plaggemaars	Any person referred to in Listing Rule 10.14.1, 10.14.2 or 10.14.3 who is eligible to participate in the employee incentive scheme in question (including Hansjorg Plaggemaars under resolution 15) or an associate of that person or those persons.
Resolution 16 – Issue of Incentive Options to Leonard Jubber	Any person referred to in Listing Rule 10.14.1, 10.14.2 or 10.14.3 who is eligible to participate in the employee incentive scheme in question (including Leonard Jubber under resolution 16) or an associate of that person or those persons.

However, this does not apply to a vote cast in favour of the Resolution by:

• (a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and

• (ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Voting in person

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

Voting by proxy

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

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

• each Shareholder has a right to appoint a proxy;

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

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

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

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

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

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 408 447 493.

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EXPLANATORY STATEMENT

The Explanatory Statement outlined in the Notice is supplemented by adding an additional Section 6 and Schedules 2 to 6 in respect of the Additional Resolutions (as set out below).

1. RESOLUTIONS 11 TO 16 – ISSUE OF RELATED PARTY EXECUTIVE INCENTIVE OPTIONS AND INCENTIVE OPTIONS

1.1 Background

The Company received Shareholder approval for the adoption of the Option Plan on 4 May 2021 and has agreed to issue incentive Options to Messrs Gilchrist, Farmer, Koopmans, Luff, Plaggemars and Jubber (or their nominees) ( Related Parties ) pursuant to the Option Plan and on the terms and conditions set out below.

This Resolution seeks Shareholder approval for the issue of Options to both executive and non-executive directors, comprising of:

• (a) 934,000 Options to Dr. Gilchrist ( Executive Incentive Options ); and

• (b) 1,767,000 Options to Messrs Farmer, Koopmans, Luff, Plaggemars and Jubber ( Non-Executive Incentive Options ),

(together, the Incentive Options ).

1.2 Chapter 2E of the Corporations Act

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

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

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

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

The issue of the Incentive Options to the Related Parties constitutes giving a financial benefit and each of the Related Parties is a related party of the Company by virtue of being a Director.

As the Incentive Options are proposed to be issued to all of the Directors, the Directors are unable to form a quorum to consider whether one of the exceptions set out in sections 210 to 216 of the Corporations Act applies to the issue of the Incentive Options. Accordingly, Shareholder approval for the issue of Incentive Options to the Related Parties is sought in accordance with Chapter 2E of the Corporations Act.

1.3 Listing Rule 10.14

Listing Rule 10.14 provides that an entity must not permit any of the following persons to acquire equity securities under an employee incentive scheme without the approval of the holders of its ordinary securities:

10.14.1 a director of the entity;

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10.14.2

an associate of a director of the entity; or

• 10.14.3 a person whose relationship with the entity or a person referred to in Listing Rules 10.14.1 to 10.14.2 is such that, in ASX’s opinion, the acquisition should be approved by security holders.

The issue of Incentive Options to the Related Parties falls within Listing Rule 10.14.1 and therefore requires the approval of Shareholders under Listing Rule 10.14.

Resolutions 11 to 16 seek the required Shareholder approval for the issue of the Incentive Options under and for the purposes of Chapter 2E of the Corporations Act and Listing Rule 10.14.

1.4 Technical information required by Listing Rule 14.1A

If Resolutions 11 to 16 are passed, the Company will be able to proceed with the issue of the Incentive Options to the Related Parties under the Option Plan within three years after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the Listing Rules). As approval pursuant to Listing Rule 7.1 is not required for the issue of the Incentive Options (because approval is being obtained under Listing Rule 10.14), the issue of the Incentive Options will not use up any of the Company’s 15% annual placement capacity.

If Resolutions 11 to 16 are not passed, the Company will not be able to proceed with the issue of the Inventive Options to the Related Parties under the Option Plan and may need to seek to remunerate the Related Parties by another means.

1.5 Technical Information required by Listing Rule 10.13 and section 219 of the Corporations Act

Pursuant to and in accordance with the requirements of Listing Rule 10.15 and section 219 of the Corporations Act, the following information is provided in relation to Resolutions 11 to 16:

(a) the Incentive Options will be issued to the following persons:

• (i) Dr Chris Gilchrist (or their nominee) pursuant to Resolution 11; (ii) Mr Ian Farmer (or their nominee) pursuant to Resolution 12; (iii) Dr Reinout Koopmans (or their nominee) pursuant to Resolution 13;

• (iv) Mr Rory Luff (or their nominee) pursuant to Resolution 14;

• (v) Mr Hansjorg Plaggemars (or their nominee) pursuant to Resolution 15; and

• (vi) Mr Leonard Jubber (or their nominee) pursuant to Resolution 16,

each of whom falls within the category set out in Listing Rule 10.14.1 by virtue of being a Director;

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• (b) the maximum number of Incentive Options to be issued to the Related Parties (being the nature of the financial benefit proposed to be given) is set out in the table below:

Resolution	Related Party	Executive Incentive Options	Non-Executive Incentive Options	Total
11	Dr Chris Gilchrist (or his nominee)	934,000	Nil	934,000
12	Mr Ian Farmer (or his nominee)	Nil	523,000	523,000
13	Dr Reinout Koopmans (or his nominee)	Nil	311,000	311,000
14	Mr Rory Luff (or his nominee)	Nil	311,000	311,000
15	Mr Hansjorg Plaggemars (or his nominee)	Nil	311,000	311,000
16	Mr Leonard Jubber (or his nominee)	Nil	311,000	311,000

• (c) the following Options have been previously issued under the Option Plan to;

• (i) 1,250,000 Options have previously been issued to Ian Farmer for nil cash consideration under the Option Plan;

• (ii) 1,477,741 Options have previously been issued to Dr Chris Gilchrist for nil cash consideration under the Option Plan;

• (iii) 750,000 Options have previously been issued to Dr Reinout Koopmans for nil cash consideration under the Option Plan;

• (iv) 750,000 Options have previously been issued to Rory Luff for nil cash consideration under the Option Plan;

• (v) 750,000 Options have previously been issued to Hansjoerg Plaggemars for nil cash consideration under the Option Plan; and

• (vi) 750,000 Options have previously been issued to Len Jubber for nil cash consideration under the Option Plan.

• (d) a summary of the material terms and conditions of the Executive Incentive Options is set out in Schedule 3;

• (e) a summary of the material terms and conditions of the Non-Executive Incentive Options is set out in Schedule 4;

• (f) the Company has agreed to issue the Incentive Options to the Related Parties subject to Shareholder approval for the following reasons:

• (i) the deferred taxation benefit which is available to the Related Parties in respect of an issue of Incentive Options is also beneficial to the Company as it means the Related Parties are not required to immediately sell the Incentive Options to fund a tax liability (as would be the case in an issue of Shares where the tax liability

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arises upon issue of the Shares) and will instead, continue to hold an interest in the Company; and

• (ii) it is not considered that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Incentive Options on the terms proposed;

• (g) the number of Incentive Options to be issued to each of the Related Parties has been determined based upon a consideration of:

• (i) current market standards and/or practices of other ASX listed companies of a similar size and stage of development to the Company;

• (ii) the remuneration of the Related Parties; and

• (iii) incentives to attract and ensure continuity of service/retain the service of the Related Parties who have appropriate knowledge and expertise, while maintaining the Company’s cash reserves.

The Company does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Incentive Options upon the terms proposed;

• (h) the total remuneration package for each of the Related Parties for the previous financial year and the proposed total remuneration package for the current financial year are set out below:

Related Party	Current Financial Year	Previous Financial Year
Ian Farmer	$150,1351	$171,139
Chris Gilchrist	$418,0732	$343,366
Reinout Koopmans	$84,6793	$57,681
Rory Luff	$89,6794	$34,598
Hansjorg Plaggemars	$89,6795	$37,628
Leonard Jubber	$84,6796	$19,807

Notes:

1. Comprising Directors’ fees of $75,000, and share-based payments of $75,1357 (being the value of the Non-Executive Incentive Options as at the date of this Notice).

2. Comprising Directors’ fees/salary of $303,000, a bonus of $18,000 and sharebased payments of $134,180 (being the value of the Executive Incentive Options as at the date of this Notice).

3. Comprising Directors’ fees of $40,000, and share-based payments of $44,679 (being the value of the Non-Executive Incentive Options as at the date of this Notice).

4. Comprising Directors’ fees of $39,000 and share-based payments of $6,000 (comprising Sacrifice Shares spanning the prior year and current year,) and $44,679, being the value of the Non-Executive Incentive Options as at the date of this Notice).

5. Comprising Directors’ fees of $39,000 and share-based payments of $6,000 (comprising Sacrifice Shares spanning the prior year and current year) and $44,679, being the value of the Non-Executive Incentive Options as at the date of this Notice).

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1. Comprising Directors’ fees of $40,000, and share-based payments of $44,679 (being the value of the Non-Executive Incentive Options as at the date of this Notice).

2. (i)

The value of the Incentive Options is as follows:

Related Party	Value ($)
Chris Gilchrist	134,180
Ian Farmer	75,135
Reinout Koopmans	44,679
Rory Luff	44,679
Hansjorg Plaggemars	44,679
Leonard Jubber	44,679
Total	$388,031

The pricing methodology is set out in Schedule 6;

• (j) the Incentive Options will be issued to the Related Parties no later than 3 years after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the Listing Rules) and it is anticipated the Incentive Options will be issued on one date;

• (k) the issue price of the Incentive Options will be nil, as such no funds will be raised from the issue of the Incentive Options (other than in respect of funds received on exercise of the Incentive Options);

• (l) the purpose of the issue of the Incentive Options is to provide a performance linked incentive component in the remuneration package for the Related Parties to align the interests of the Related Parties with those of Shareholders, to motivate and reward the performance of the Related Parties in their roles as Directors and to provide a cost effective way from the Company to remunerate the Related Parties, which will allow the Company to spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were given to the Related Parties;

• (m) the purpose of the Executive Incentive Options is, in addition to the performance linked compensation purpose as set out in 1.5(l), to retain key staff employed by the Company;

• (n) the Incentive Options will be issued in consideration of the Company’s remuneration policy for the second half of the Company’s financial year (from 01 January 2022 until 30 June 2022), as the period covered by a previous issue of Incentive Options had lapsed on 31 December 2021;

• (o) a summary of the material terms and conditions of the Option Plan is set out in Schedule 5;

• (p) no loans are being made to the Related Parties in connection with the acquisition of the Incentive Options;

• (q) details of any Incentive Options issued under the Option Plan will be published in the annual report of the Company relating to the period in which they were issued, along with a statement that approval for the issue was obtained under Listing Rule 10.14;

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(r) any additional persons covered by Listing Rule 10.14 who become entitled to participate in an issue of Incentive Options under the Option Plan who were not named in this Notice will not participate until approval is obtained under Listing Rule 10.14;

• (s) the relevant interests of the Related Parties in securities of the Company as at the date of this Notice are set out below:

Related Party	Shares1	Options	Performance Rights
Ian Farmer	444,444	8,472,222	Nil
Chris Gilchrist	3,804,256	2,184,090	1,980,000
Reinout Koopmans	3,416,431	750,000	693,000
Rory Luff	26,299,502	8,356,746	693,000
Hansjorg Plaggemars	997,930	972,222	693,000
Leonard Jubber	100,000	1,750,000	Nil

Notes:

1. Fully paid ordinary shares in the capital of the Company (ASX: SHP).

(t) if the Incentive Options issued to the Related Parties are exercised, a total of approximately 2,701,000 Shares would be issued. This will increase the number of Shares on issue from 480,985,868 (being the total number of Shares on issue as at the date of this Notice) to 483,686,868(assuming that no Shares are issued and no convertible securities vest or are exercised) with the effect that the shareholding of existing Shareholders would be diluted by an aggregate of 0.56%, comprising 0.11% by Ian Farmer, 0.19% by Chris Gilchrist, 0.06% by Reinout Koopmans, 0.06% by Rory Luff, 0.06% by Hansjorg Plaggemars and 0.06% by Leonard Jubber.

The market price for Shares during the term of the Incentive Options would normally determine whether the Incentive Options are exercised. If, at any time any of the Incentive Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Incentive Options, there may be a perceived cost to the Company.

As at the date of this Meeting the Shares may or may not be trading on ASX at a price greater than the exercise price of the Incentive Options. The Board resolved to issue the Incentive Options, subject to Shareholder approval, on the terms and conditions set out in this Notice at a time when the Remuneration Committee had set the exercise price which was 100% above a set reference price which was the VWAP on the day that the Remuneration Committee meeting took place.

• (u) but Shareholder approval has not been able to be obtained until this Meeting. the trading history of the Shares on ASX in the 12 months before the date of this Notice is set out below:

	Price	Date
Highest	$0.22	27 Oct 2021
Lowest	$0.059	4 Feb 2021
Last	$0.16	17 Feb 2022

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• (v) the Company acknowledges that the issue of the Incentive Options to the non-executive Directors of the Company, Messrs Farmer Koopmans, Luff, Plaggemars and ( Non-Executive Directors ), is contrary to Recommendation 8.2 of the 4[th] edition of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations. However, considers the issue of Options to the NonExecutive Directors to be reasonable in the circumstances for the reasons set out in Section 5.3 (g) above;

• (w) each Director has a material personal interest in the outcome of Resolutions 11 to 16 on the basis that all of the Directors (or their nominees) are to be issued Incentive Options should Resolutions 11 to 16 be passed. For this reason, the Directors do not believe that it is appropriate to make a recommendation on Resolutions 11 to 16 of this Notice; and

• (x) the Board is not aware of any other information that is reasonably required by Shareholders to allow them to decide whether it is in the best interests of the Company to pass Resolutions 11 to 16.

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SCHEDULE 3 –TERMS AND CONDITIONSOF EXECUTIVE INCENTIVE OPTIONS

A summary of the terms and conditions of the Incentive Options is set out below:

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (k), the amount payable upon exercise of each Option will be $0.1606 ( Exercise Price )

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) five (5) years from the date of issue ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period and Vesting Conditions

The Options will vest and become exercisable into Shares subject to the following vesting conditions:

Vesting Condition (a) The Company’s Share price being $0.1606 based on the volume weighted average price over 20 consecutive trading days prior ( 20-Day VWAP ). (b) The employee or director remaining employed or appointed by the Company for a period of 3 years of continued service) after the date of issue of the Executive Incentive Options.

The Options are exercisable into Shares at any time after vesting on or prior to the Expiry Date ( Exercise Period ) after which the Options will lapse.

(e) Cessation of Employment

Should the holder cease employment or engagement by the Company:

• (i) any unexercised Executive Incentive Options that have vested as at the date of cessation of employment or engagement with the Company ( Cessation Date ) shall lapse if the holder does not exercise the Executive Incentive Option within a period of 1 month after the Cessation Date; and

• (ii) any unexercised Executive Incentive Options that have not vested as at the Cessation Date shall immediately lapse upon the Cessation Date.

(f) Automatic Vesting

Subject to the Company complying with the rules of the ASX and the Corporations Act, each Option will automatically vest and become exercisable into Shares in the event of:

• (i) a takeover bid under Chapter 6 of the Corporations Act having been made in respect of the Company having received acceptances for more than 50% of the Company’s Shares on issue and being declared unconditional by the bidder; or

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• (ii) a Court granting orders approving a compromise or arrangement for the purposes of or in connection with a scheme of arrangement for the reconstruction of the Company or its amalgamation with any other company or companies; or

• (iii) a person acquiring voting power (as defined in section 610 of the Corporations Act) in over 50% of the Company’s Shares, in circumstances where such person’s voting power was lower than the 50% threshold prior to the date on which the Options were issued; or

• (iv) the Company enters into agreements to sell businesses or assets which are owned by the Company at the date of issue of the Options (whether or not in the form of shares in a subsidiary company) the consideration for which businesses or assets represents more than 50% of the value of all of the businesses and assets owned by the Company at the date of issue of the Options (with reference to the Company’s most recent audited financial statements) to a person, or a number of persons, none of which are in the Company’s group; and

such a determination shall be notified to the holder in writing.

(g) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ).

(h) Exercise Date

A Notice of Exercise is only effective on and from the date of receipt of the Notice of Exercise ( Exercise Date ).

(i) Timing of issue of Shares on exercise

Within 5 Business Days after the Exercise Date, the Company will:

• (i) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise;

• (ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (i)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

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(j) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(k) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(l) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(m) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(n) Transferability

The Options are not transferable.

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SCHEDULE 4 - TERMS AND CONDITIONS OF NON-EXECUTIVE INCENTIVE OPTIONS

A summary of the terms and conditions of the Non-Executive Incentive Options is set out below:

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (k), the amount payable upon exercise of each Option will be $0.1606 ( Exercise Price )

(c)

Expiry Date

Each Option will expire at 5:00 pm (WST) five (5) years from the date of issue ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period and Vesting Conditions

The Options will vest and become exercisable into Shares subject to the following vesting conditions:

Vesting Condition

The Company’s Share price being $0.1606 based on the volume weighted average price over 20 consecutive trading days prior ( 20-Day VWAP ).

The Options are exercisable into Shares at any time after vesting on or prior to the Expiry Date ( Exercise Period ) after which the Options will lapse.

(e) Cessation of Employment

Should the holder cease employment or engagement by the Company:

• (i) any unexercised Non-Executive Incentive Options that have vested as at the date of cessation of employment or engagement with the Company ( Cessation Date ) shall lapse if the holder does not exercise the NonExecutive Incentive Options within a period of 1 month after the Cessation Date; and

• (ii) any unexercised Non-Executive Incentive Options that have not vested as at the Cessation Date shall immediately lapse upon the Cessation Date.]

(f)

Automatic Vesting

Subject to the Company complying with the rules of the ASX and the Corporations Act, each Option will automatically vest and become exercisable into Shares in the event of:

• (i) a takeover bid under Chapter 6 of the Corporations Act having been made in respect of the Company having received acceptances for more than 50% of the Company’s Shares on issue and being declared unconditional by the bidder; or

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• (ii) a Court granting orders approving a compromise or arrangement for the purposes of or in connection with a scheme of arrangement for the reconstruction of the Company or its amalgamation with any other company or companies; or

• (iii) a person acquiring voting power (as defined in section 610 of the Corporations Act) in over 50% of the Company’s Shares, in circumstances where such person’s voting power was lower than the 50% threshold prior to the date on which the Options were issued; or

• (iv) the Company enters into agreements to sell businesses or assets which are owned by the Company at the date of issue of the Options (whether or not in the form of shares in a subsidiary company) the consideration for which businesses or assets represents more than 50% of the value of all of the businesses and assets owned by the Company at the date of issue of the Options (with reference to the Company’s most recent audited financial statements) to a person, or a number of persons, none of which are in the Company’s group,

such a determination shall be notified to the holder in writing.

(g) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ).

(h) Exercise Date

A Notice of Exercise is only effective on and from the date of receipt of the Notice of Exercise ( Exercise Date ).

(i) Timing of issue of Shares on exercise

Within 5 Business Days after the Exercise Date, the Company will:

• (i) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise;

• (ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (i)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

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(j) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(k) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(l) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(m) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(n) Transferability

The Options are not transferable.

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SCHEDULE 5 - TERMS AND CONDITIONS OF INCENTIVE OPTION PLAN

1. Definitions and interpretations

1.1 Definitions

For the purposes of below:

• (a) Class Order means ASIC Legislative Instrument 14/1000 as amended or replaced from time to time.

• (b) Eligible Participant means any Director (whether executive or nonexecutive), full or part time employee, or casual employee or contractor (to the extent the casual employee or contractor falls within the Class Order), of the Company or an associated body corporate who is declared by the Board to be eligible to be granted Options. The Board may also offer Options to a prospective participant provided the Offer can only be accepted once they meet the eligibility criteria described above.

• (c) Market Value in respect of a Share means the volume weighted average market price for Shares traded on the ASX over the 20 most recent trading days on which the Shares were traded prior to the day on which the market value is to be determined.

• (d) Nominee means a nominee of an Eligible Participant that is one of the following:

• (i) an immediate family member of the Eligible Participant or (subject to Board approval) a trustee of an Eligible Participant’s family trust whose beneficiaries are limited to the Eligible Participant and/or the Eligible Participant’s immediate family members; or

• (ii) a company whose members comprise no persons other than the Eligible Participant or immediate family members of the Eligible Participant.

• (e) Offer means an invitation to treat made to an Eligible Participant to be granted one or more Options in accordance with the Long-Term Incentive Plan.

• (f) Option means an option to be issued or transferred a Share to be granted pursuant to the Long-Term Incentive Plan.

• (g) Option Exercise Price means the exercise price of an Option as determined by the Board.

• (h) Participant means an Eligible Participant, or a nominee of an Eligible Participant, to whom Options will be granted under the Long-Term Incentive Plan.

1.2 The material terms of the Incentive Option Plan (Option Plan) are summarised below:

(a) Eligibility

The Board may, from time to time, in its discretion, make a written invitation to any Eligible Participant to apply for Options, upon the terms

23

set out in the Long-Term Incentive Plan and upon such additional terms and conditions as the Board determines.

(b) Offers

An offer of Options must be made using an offer document containing the matters prescribed in the Long-Term Incentive Plan. The number of Options or offered to an Eligible Participant will be determined by the Board in its discretion and in accordance with applicable law and the ASX Listing Rules.

(c) Consideration and Conversion

Each Option granted under the Long-Term Incentive Plan will be granted for nil cash consideration. Each Option is exercisable into one Share.

(d) Option Exercise Price

The Option Exercise Price will be determined by the Board prior to the grant of the Options.

(e) Expiry Date

The expiry date for Options granted under the Long-Term Incentive Plan will be determined by the Board prior to the grant of the Options.

(f) Vesting Conditions

The Options granted under the Long-Term Incentive Plan may be subject to vesting conditions that must be satisfied or waived before an Option or Performance Right can be exercised (Vesting Conditions). The Vesting Conditions will be determined by the Board in its discretion prior to grant of the Options and must be set out in the Offer.

(g) Exercise

A Participant may, subject to the terms of the Long-Term Incentive Plan and the Offer, exercise any vested Options at any time after vesting but prior to expiry.

(h) Cashless Exercise of Options

If a Participant wishes to exercise some or all of their vested Options they may elect to satisfy the Option Exercise Price by using the cashless exercise facility. Where the cashless exercise facility is used the Participant will be issued or transferred that number of Shares (rounded up to the nearest whole number) equal to:

• (i) the aggregate total Market Value of Shares as at the date the vested Option is exercised that would otherwise be issued or transferred on exercise of the vested Options, less the aggregate

• (ii) total Option Exercise Price otherwise payable in respect of all vested Options exercised;

• (iii) (ii) divided by the Market Value of a Share as at the date the vested Option is exercised.

(i) Lapsing of Options

Options will lapse:

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• (i) if any vesting condition in relation to the Option is not satisfied by the due date, or becomes incapable of satisfaction and is not waived, as determined by the Board;

• (ii) in respect of an unvested Option, when the person to whom the Option or Performance Right was offered ceases to be an Eligible Participant (unless resolved otherwise by the Board in its absolute discretion);

• (iii) in respect of a vested Option, six months after the person to whom the Option or Performance Right was offered ceases to be an Eligible Participant (or such later date agreed by the Board);

• (iv) in the event of unauthorised dealings or hedging of Options, or fraud, dishonesty or other improper behaviour;

• (v) in respect of unvested Options, upon a winding up resolution or order being made (unless otherwise determined by the Board); and

• (vi) on the expiry date.

(j) Disposal

Options will not be transferable except to the extent the Long-Term Incentive Plan or any Offer provides otherwise.

(k) Quotation

Options will not be quoted on the ASX, except to the extent provided for by the Plan or unless an Offer provides otherwise.

(l)

Trigger Events

The Board may permit Options to vest in certain circumstances (including adverse health or financial condition of a Participant or in the event of winding up). Options will automatically vest where there is a change in control of the Company (including by takeover or entry into a scheme of arrangement).

(m)

Participation generally

There are no participating rights or entitlements inherent in the Options and Participants will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(n) Change in exercise price

An Option does not confer the right to a change in Option Exercise Price, and Options do not confer a right to a change in the number of underlying securities over which the Option or Performance Right can be exercised.

(o)

Reorganisation

If at any time the capital of the Company is reorganised, the rights of a Participant will be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reorganisation.

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(p) Limitations on Offers

Where the Company has relied or intends to rely on the Class Order to make an Offer, the Company must have reasonable grounds to believe, when making an Offer, that the number of Shares to be received on exercise of Options offered under an Offer, when aggregated with the number of Shares issued or that may be issued as a result of offers made in reliance on the Class Order at any time during the previous 3 year period under an employee incentive scheme covered by the Class Order or an ASIC exempt arrangement of a similar kind to an employee incentive scheme, will not exceed 5% of the total number of Shares on issue at the date of the Offer.

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SCHEDULE 6 – VALUATION OF OPTIONS

Using a Binomial option model and based on the assumptions set out below, the Executive & Non-Executive Incentive Options were ascribed the following value:

Assumptions:
Valuation date	7 February 2022
Market price of Shares	$0.185
Exercise price	$0.1606
Expiry date (length of time from issue)	5 years
Risk free interest rate	1.54%
Volatility (discount)	100%
Indicative value per Option	$0.1437
Total Value of all Options	$388,031

Note :

The valuation noted above is not necessarily the market price that the Options could be traded at and is not automatically the market price for taxation purposes.

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