TURNSTONE RESOURCES LTD — Proxy Solicitation & Information Statement 2022

Jan 12, 2022

12 January 2022

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FEBRUARY 2022 GENERAL MEETING

Dear Shareholder

Notice is hereby given that a General Meeting ( Meeting ) of South Harz Potash Ltd (ASX:SHP) will be held as a physical meeting at:

Hubbard House

Unit 13

6 – 10 Douro Place, West Perth, WA 6005

on Friday 11 February 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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