WEEBIT NANO LTD - AGM Information 2014

Notice of Annual General Meeting

The Annual General Meeting of Radar Iron Limited (ACN 146 455 576) will be held at the Company’s offices in Suite 7, Level 1, 55 Hampden Rd, Nedlands Western Australia on 19 November 2014 at 10:00am (WST).

This Notice of Annual General Meeting should be read in its entirety. If Shareholders are in any doubt as to how they should vote, they should seek advice from their professional advisor prior to voting. Shareholders should carefully consider the Independent Expert’s Report prepared by BDO for the purposes of the Shareholder approval required under section 611 (item 7) of the Corporations Act (Resolution 4). BDO has concluded that the acquisition of the relevant interest is not fair but reasonable to the non-associated Shareholders of the Company. Please contact the Company Secretary on +61 8 9389 9919 or [email protected] if you wish to discuss any matter concerning the Meeting.

Radar Iron Limited

ACN 146 455 576

Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of the Shareholders of Radar Iron Limited will be held at the Company’s offices in Suite 7, Level 1, 55 Hampden Rd, Nedlands Western Australia on 19 November 2014 at 10:00am (Western Standard Time) ( Meeting ).

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

Shareholders are urged to vote by attending the Meeting in person or by returning a completed Proxy Form. Instructions on how to complete a Proxy Form are set out in the Explanatory Memorandum.

Proxy Forms must be received by no later than 10:00am (WST) on 17 November 2014.

Terms and abbreviations used in this Notice and Explanatory Memorandum are defined in Schedule 1 of the Explanatory Memorandum.

Agenda

1 ANNUAL REPORT

To receive and consider the financial statements of the Company and the reports of the Directors and Auditors for the financial year ended 30 June 2014.

2 RESOLUTION 1 – REMUNERATION REPORT (NON-BINDING)

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

“That for the purposes of section 250R(2) of the Corporations Act and for all other purposes, Shareholders adopt the Remuneration Report set out in the Directors’ Report for the year ending 30 June 2014.”

A voting exclusion statement is set out below.

3 RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR ALAN TOUGH

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

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“That Mr Alan Tough, who retires in accordance with section 13.2 of the Company’s Constitution and, offers himself for re-election, be re-elected as a Director.”

4 RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MR DAVID SOURBUTTS

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

“That Mr David Sourbutts, who retires in accordance with section 13.4 of the Company’s Constitution and, offers himself for re-election, be re-elected as a Director.”

5 RESOLUTION 4 – APPROVAL OF 10% PLACEMENT CAPACITY

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

“That, for the purpose of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totaling up to 10% of the issued capital of the Company (at the time of the issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement is set out below.

6 RESOLUTION 5 – ACQUISITION OF RELEVANT INTEREST BY VICTORY MINING

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

“That, for the purpose of section 611 (item 7) of the Corporations Act and for all other purposes, Shareholders approve the acquisition by Victory Mining and its associates of a relevant interest in up to 132,248,630 Shortfall Shares issued pursuant to the Term Sheet under which Victory Mining’s maximum voting power of the Company may become 59.87% and otherwise on the terms set out in the Explanatory Memorandum.”

Shareholders should carefully consider the Independent Expert’s Report prepared by BDO. BDO comments on the fairness and reasonableness of the Victory Mining Underwriting to the non-associated Shareholders. BDO has concluded that the Victory Mining Underwriting is not fair but reasonable to the non-associated Shareholders of the Company.

A voting exclusion statement is set out below.

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7 VOTING PROHIBITION AND EXCLUSION STATEMENTS

Corporations Act

The Corporations Act prohibits votes being cast (in any capacity) on the following resolutions by any of the following persons:

Resolution Persons Excluded from Voting
Resolution 1 – Remuneration A vote on this Resolution must not be cast (in any Report (Non-Binding) capacity) by or on behalf of the following persons:
(a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
(b) a Closely Related Party of such member.

However, a person described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either:

(a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or
(b) the voter is the chair of the meeting and the appointment of the chair as proxy:
(i) does not specify the way the proxy is to vote on this Resolution; and
(ii) expressly authorises the chair to exercise the proxy even if this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company.

Resolution 5 – Acquisition of relevant interest by Victory Mining

The person proposing to make the acquisition (Victory Mining) and its associates and the persons (if any) from whom the acquisition is to be made and their associates.

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with

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the direction on the Proxy Form; or (b) it is cast by the person chairing the Meeting as proxy for the person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Listing Rule 14.11

Under Listing Rule 14.11, the Company will disregard any votes cast on the following Resolutions by the following persons:

Resolution 4 – Approval of A person who may participate in the proposed 10% Placement Capacity issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities if the Resolution is passed and any associate of that person.

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the direction on the Proxy Form; or (b) it is cast by the person chairing the Meeting as proxy for the person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

By order of the Board of Directors

Jonathan Lea Radar Iron Limited 17 October 2014

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Radar Iron Limited ACN 146 455 576

Explanatory Memorandum

1 INTRODUCTION

This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Meeting to be held at the Company’s offices in Suite 7, Level 1, 55 Hampden Rd, Nedlands Western Australia on 19 November 2014 at 10:00am (WST). The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding how to vote on the Resolutions set out in the Notice.

This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice, and includes the following:

1 INTRODUCTION .......................................................................... 5
2 ACTION TO BE TAKEN BY SHAREHOLDERS ........................................... 5 3 ANNUAL REPORT ........................................................................ 6
4 RESOLUTION 1 – REMUNERATION REPORT ........................................... 7 5 RESOLUTIONS 2 AND 3 – RE-ELECTION OF DIRECTORS ............................. 8 6 RESOLUTION 4 – APPROVAL OF 10% PLACEMENT FACILITY ........................ 8
7 RESOLUTION 5 – ACQUISITION OF RELEVANT INTEREST BY VICTORY MINING .. 13 A Proxy Form is located at the end of Explanatory Memorandum.

Please contact the Company Secretary on +61 8 9389 9919 or [email protected] if you wish to discuss any matter concerning the Meeting.

2 ACTION TO BE TAKEN BY SHAREHOLDERS

Shareholders should read the Notice and this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

2.1 Proxies

All Shareholders are invited and encouraged to attend the Meeting. If a Shareholder is unable to attend in person, they can appoint a proxy to attend on their behalf by signing and returning the Proxy Form (attached to the Notice) to the Company in accordance with the instructions on the Proxy Form. The Company encourages Shareholders completing a Proxy Form to direct the proxy how to vote on each Resolution.

The Proxy Form must be received no later than 48 hours before the commencement of the Meeting, i.e. by no later than 10:00am (WST) on 17

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November 2014. Any Proxy Form received after that time will not be valid for the Meeting.

A Proxy Form may be lodged in the following ways:

By Mail Radar Iron Ltd, PO Box 994, Subiaco, WA 6904 By Facsimile +61 8 6389 0576 By Hand Suite 7, Level 1, 55 Hampden Rd, Nedlands Western Australia 6009 By Email [email protected]

Shareholders lodging a Proxy Form are not precluded from attending and voting in person at the Meeting.

2.2 Corporate representatives

Shareholders who are body corporates may appoint a person to act as their corporate representative at the Meeting by providing that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as the body corporate’s representative. The authority may be sent to the Company and/or registry in advance of the Meeting or handed in at the Meeting when registering as a corporate representative.

An appointment of corporate representative form is available from the website of the Company’s share registry (www.securitytransfer.com.au).

2.3 Eligibility to vote

The Directors have determined that, for the purposes of voting at the Meeting, Shareholders are those persons who are the registered holders of Shares at 5:00pm (WST) on 17 November 2014.

3 ANNUAL REPORT

There is no requirement for Shareholders to approve the Annual Report.

Shareholders will be offered the opportunity to:

(a) discuss the Annual Report for the financial year ended 30 June 2014 which is available on the ASX platform at www.asx.com.au; and
(b) ask questions about or make comment on the management of the Company.

The chair of the Meeting will allow reasonable opportunity for the Shareholders as a whole at the Meeting to ask the auditor or the auditor’s representative questions relevant to:

(a) the conduct of the audit;

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(b) the preparation and content of the auditor’s report;
(c) accounting policies adopted by the Company in relation to the preparation of the financial statements; and
(d) the independence of the auditor in relation to the conduct of the audit.

In addition to taking questions at the Meeting, written questions to the Company’s auditor about:

(e) the content of the auditor’s report to be considered at the Meeting; and
(f) the conduct of the audit of the annual financial report to be considered at the Meeting,

may be submitted no later than 5 business days before the Meeting to the Company Secretary at the Company’s registered office.

4 RESOLUTION 1 – REMUNERATION REPORT

The Remuneration Report is in the Directors’ Report section of the Company's Annual Report.

By way of summary, the Remuneration Report:

(a) explains the Company's remuneration policy and the process for determining the remuneration of its Directors and executive officers;
(b) addresses the relationship between the Company's remuneration policy and the Company's performance; and
(c) sets out remuneration details for each Director and each of the Company's executives and group executives named in the Remuneration Report for the financial year ended 30 June 2014.

Section 250R(2) of the Corporations Act requires companies to put a resolution to their members that the Remuneration Report be adopted. The vote on this resolution is advisory only, however, and does not bind the Board or the Company. The Board will consider the outcome of the vote and comments made by Shareholders on the Remuneration Report at the Meeting when reviewing the Company's remuneration policies.

The Chairman will give Shareholders a reasonable opportunity to ask questions about or to make comments on the Remuneration Report.

Under the Corporations Act, if 25% or more of votes that are cast are voted against the adoption of the Remuneration Report at two consecutive annual general meetings, Shareholders will be required to vote at the second of those annual general meetings on a resolution that a further meeting is held at which all of the Company’s Directors (other than the Managing Director) must go up for re-election. Voting on Resolution 1 will be determined by a poll at the Meeting rather than a show of hands.

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5 RESOLUTIONS 2 AND 3 – RE-ELECTION OF DIRECTORS

5.1 Introduction

The Company’s Constitution requires that one-third of the Directors retire by rotation at each annual general meeting and that Directors appointed by the Board hold office until the next annual general meeting.

Mr Alan Tough retires by rotation from office at this Meeting. Mr David Sourbutts was appointed by the Board as an additional Director on 14 May 2014 and holds office until this Meeting. Messrs Tough and Sourbutts offer themselves for reelection.

Details of Messrs Tough’s and Sourbutts’ qualifications and experiences are set out in the Company's 2014 Annual Report.

5.2 Directors’ recommendation

The Board (excluding Messrs Tough and Sourbutts) recommends that Shareholders vote in favour of Resolutions 2 and 3.

6 RESOLUTION 4 – APPROVAL OF 10% PLACEMENT FACILITY

6.1 General

The Company seeks Shareholder approval to issue Equity Securities up to 10% of its issued share capital through placements over a 12 month period following shareholder approval ( 10% Placement Facility ).

The exact number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to section 6.3(a) below).

6.2 Directors’ recommendation

The Board unanimously recommends that Shareholders vote in favour of Resolution 4. This will allow the Company to issue securities and raise funds whilst preserving the Company’s 15% annual limit permitted by Listing Rule 7.1.

6.3 Listing Rule 7.1A

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital through placements over a 12 month period following shareholder approval by way of a special resolution. The 10% Placement Facility is in addition to the Company’s 15% placement capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1.A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalization of $300 million or less. The Company is an eligible entity.

(a) Maximum number of Equity Securities which may be issued

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The number of Equity Securities which may be issued, or agreed to be issued, under the 10% Placement Facility is prescribed in Listing Rule 7.1A.2 and is calculated as follows:

Number of Equity Securities = (A x D) - E

“A” the number of shares on issue 12 months before the date of issue or agreement:
(A) plus the number of fully paid shares issued in the 12 months under an exception in Listing Rule 7.2;
(B) plus the number of partly paid shares that become fully paid in the 12 months;
(C) plus the number of fully paid shares issued in the 12 months with approval of holders of shares under Listing Rule 7.1 and 7.4. This does not include an issue of fully paid shares under the entity’s 15% placement capacity without shareholder approval;
(D) less the number of fully paid shares cancelled in the 12 months.
“D” is 10%
“E” is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of shareholders under Listing Rule 7.1 or 7.4.

The actual number of Equity Securities that may be issued under Listing Rule 7.1A is calculated at the date of issue of the Equity Securities in accordance with the above formula.

The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity’s 15% placement capacity under Listing Rule 7.1

As the date of this Notice, the Company has on issue only one class of quoted securities, being 106,148,630 Shares (with approval to issue a further 26,100,000 Shares being sought at a Shareholder meeting to be held on 23 October 2014).

As a result and assuming Shareholders approve the issue of 26,100,000 Shares and the ratification of prior issue of securities at the general meeting to be held on 23 October 2014, the Company has a capacity to issue:

(i) 19,837,294 Equity Securities under Listing Rule 7.1; and
(ii) subject to Shareholders approving Resolution 4, 13,224,863 Equity Securities under Listing Rule 7.1A.

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(b) Minimum Issue Price

The issue price of Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the VWAP of Equity Securities in the same class calculated over the 15 Trading Days immediately before:

(i) the date on which the price at which the Equity Securities are to be issued is agreed; or
(ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

6.4 Specific information by Listing Rule 7.3A

For the purposes of Listing Rule 7.3A, the following information is provided about the proposed issue:

(a) The Equity Securities will be issued at an issue price of not less than 75% of the VWAP for the Company’s Equity Securities over the 15 Trading Days immediately before:
(i) the date on which the price at which the Equity Securities are to be issued is agreed; or
(ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.
(b) There is a risk of economic and voting dilution to existing Shareholders in approving the 10% Placement Facility, including the risks that:
(i) the market price for the Company’s Equity Securities may be significantly lower of the date of the issue of the Equity Securities than when Shareholders approval the 10% Placement Facility; and
(ii) the Equity Securities may be issued at a price that is at a discount to the market price for the Company’s Equity Securities on the issue date, or issued for non-cash consideration for the acquisition of a new asset.

Following is a table that sets out the potential dilution of existing Shareholders if Equity Securities are issued under the 10% Placement Facility:

Variable “A” in Listing Rule 7.1A.2	Variable “A” in Listing Rule 7.1A.2		Dilution
		$0.014 50% decrease in Issue Price	$0.028 Issue Price	$0.056 100% increase in Issue Price
Current Variable A	10% Voting Dilution	13,224,863	13,224,863	13,224,863

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132,248,630	Funds Raised	$185,148	$370,296	$740,592

50% increase in current Variable A 198,372,945	10% Voting Dilution	19,837,295	19,837,295	19,837,295
	Funds Raised	$277,722	$555,444	$1,110,888
100% increase in current Variable A 264,497,260	10% Voting Dilution	26,449,726	26,449,726	26,449,726
	Funds Raised	$370,296	$740,592	$1,481,185

The table has been prepared on the following assumptions:

(i) Shareholders approve all resolutions at the Shareholder meeting to be held on 23 October 2014, 26.1 million Shares are issued to Victory Mining under the Placement;
(ii) The Company issues, or agrees to issue, the maximum number of Equity Securities available under the 10% Placement Facility.
(iii) No Options (including any Options issued under the 10% Placement Facility) are exercised into Shares before the date of the issue of the Equity Securities;
(iv) The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.
(v) The issue of Equity Securities under the 10% Placement Facility consists only of Shares. If the issue of Equity Securities includes listed Options, it is assumed that those listed Options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders.
(vi) The issue price is $0.028 being the closing price of the Shares on ASX on 7 October 2014.

The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Facility, based on that Shareholder’s holding at the date of the Meeting.

The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.

(c) The latest date by which Equity Securities may be issued is 12 months after the Meeting. Approval for the issue of Equity Securities under the 10% Placement Facility will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities or Listing Rule 11.2 (disposal of main undertaking).
(d) The Equity Securities may be issued for the following purposes:

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(i) to raise funds, in which case the Company intends to use the funds raised towards an acquisition of new assets or investments (including expense associated with such acquisition), continued exploration and feasibility study expenditure on the Company’s current assets and/or general working capital; or
(ii) in consideration of the acquisition of new resources assets and investments, in which case the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3.

The Company will comply with the disclosure obligations under Listing Rules 7.1A.4 and 3.10.5A upon issue of any Equity Securities.

(e) The Company is yet to identify the persons to whom Equity Securities will be issued to under the 10% Placement Facility. The Company’s policy for allocating Equity Securities issued under the 10% Placement Facility will be determined on a case-by-case basis depending upon the purpose, and prevailing market conditions at the time, of any issue and having regard to factors including but not limited to the following:
(i) The fundraising methods available to the Company, including but not limited to, rights issue or other issue which may minimise dilution to Shareholders.
(ii) In the case of an asset or investment acquisition, the nature and circumstances of the acquisition.
(iii) The effect of the issue of the Equity Securities on the control of the Company.
(iv) The financial situation and solvency of the Company.
(v) Advice from corporate, financial and broking advisers (if applicable).

The subscribers may include vendors (in the case of any issue for non-cash consideration), existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.

(f) The total number of Equity Securities issued in the 12 months preceding the date of the Meeting is 24,808,560, representing approximately 23% of the total number of Equity Securities on issue at the commencement of that 12 month period (being 81,340,071 Shares and 28,050,000 Options).

The details of all issues of Equity Securities by the Company during the 12 months preceding the date of the Meeting is set out in schedule 2 to this Explanatory Memorandum.

(g)
A voting exclusion statement is included in the Notice.

At the date of the Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities, and no

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existing Shareholder’s votes will be excluded under the voting exclusion in the Notice.

7 RESOLUTION 5 – ACQUISITION OF RELEVANT INTEREST BY VICTORY MINING

7.1 Introduction

On 22 September 2014 the Company announced a transaction with Victory Mining Pty Limited ( Victory Mining ), a Sydney-based private investment company, with a focus on mineral investments in Australia and abroad, under which Victory Mining would:

(a) subscribe for 26.1m Shares at an issue price of $0.035 per Share to raise approximately $913,500 ( Placement ); and
(b) fully underwrite a non-renounceable entitlement offer at a minimum issue price of $0.035 per New Share to raise approximately $4.6m ( Entitlement Offer ).

The issue price is 82.94% to the volume weighted average price for the Company’s Shares for the 30 days upon which Shares were traded prior to the capital raising being announced (on 22 September 2014).

The Placement and Entitlement Offer will allow the Company to pay the outstanding purchase price for the Yerecoin Magnetite Project (refer to ASX announcement 1 May 2014) and provide sufficient working capital to advance project studies for production at Yerecoin.

7.2 Victory Mining

Victory Mining is a Sydney-based private investment company, with a focus on mineral investments in Australia and abroad. The proposed investment in Radar Iron is the company's first investment in Australia.

Victory Mining has advised the Company that it has no associates within the meaning of the Corporations Act.

Victory Mining has further advised the Company that it currently has no intention to change the Company’s current or future business operations should Shareholders approve the acquisition.

7.3 Material terms of the Placement and Entitlement Offer

On 19 September 2014 the Company and Victory Mining signed a binding term sheet ( Term Sheet) , under which:

(a) Victory Mining will subscribe for and the Company agrees to issue 26.1m fully paid ordinary shares at an issue price of $0.035 per share to raise $913,500, subject to the satisfaction of the following conditions by no later than the Placement End Date:

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(iii) the Company obtaining all necessary ASX approvals;
(iv) there being no material adverse change to the Company or its assets;
(v) there being no material breach of any warranty given by the Company; and
(vi) if required, Victory Mining obtaining FIRB approval.
(b) Victory Mining will fully underwrite the Entitlement Offer to raise $4.6m (or such other amount as the parties agree) subject to the satisfaction of the following conditions by no later than the Entitlement Offer End Date:
(i) the Company lodging a prospectus for the Entitlement Offer;
(ii) the Company obtaining all necessary approvals under the Corporations Act;
(iii) there being no material adverse change to the Company or its assets;
(iv) there being no material breach of any warranty given by the Company;
(v) if required, Victory Mining obtaining FIRB approval;
(vi) the All Ordinaries Index remains at all times at least 90% or more than at the close of business on the business day prior to the date of the term sheet; and
(vii) the Platts daily Iron Ore 62% Fe, North China price assessment remains at all times at least 90% or more than at the business day prior to the date of the term sheet.

The issue price under the Entitlement Offer will be the greater of 80% of the volume weighted average closing price for Shares over the last 20 days on which sales took place before the Rights Issue prospectus is lodged and $0.035.

The Term Sheet contains usual representations and warranties for a transaction of this nature.

The Company has agreed to pay corporate advisory fees of $15,000 and $30,000, and procurement fees equal to 4.5% and 6.0% of the amount raised under the Placement and Entitlement Offer respectively.

7.4 Timetable

The proposed timetable for the Placement and Entitlement Offer is as follows:

Event	Date
Issue of Placement Shares (Placement End Date)		23 October 2014

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Meeting	19 November 2014
Lodge Rights Issue prospectus
Ex date	24 November 2014
Record Date for Rights Issue	26 November 2014
Closing date of Rights Issue	10 December 2014
Issue of Shares and Shortfall Shares under the Rights Issue	17 December 2014
(Entitlement Offer End Date)

The above timetable is indicative, and may change, subject to the Corporations Act and Listing Rules.

7.5 Advantages and disadvantages of the Victory Mining Underwriting

The advantages of the underwriting are as following:

(a) The Company is required to pay $2.88 million for its purchase of its Yerecoin project, through two equal payments due in December 2014 and April 2015. The Company currently does not have the funds to meet these payments when they fall due. By fully underwriting the Entitlement Offer, Victory Mining has ensured that the Company will raise a minimum of $4.629 million (before costs). This will allow the Company to both pay the balance of the purchase price and also provide working capital to further studies on small scale production from the Yerecoin project.
(b) By raising funds through an entitlement issue, Shareholders can participate and minimise dilution. The Directors consider the issue price of $0.035, which is 82.94% to the volume weighted average price for the Company’s Shares for the 30 days upon which Shares were traded prior to the capital raising being announced (on 22 September 2014), to be fair.
(c) Any shortfall will be issued to Eligible Shareholders with unmarketable parcels first and then by consultation with the underwriter.
(d) The underwriting is on favour terms for the Company, with limited termination rights, and provides certainty for the Company.
(e) BDO consider the underwriting to be not fair but reasonable.

The disadvantages of the underwriting are as following:

(f) Depending upon the extent to which Shareholders take up their Entitlement, there is a risk that Victory Mining may acquire more than 50% of the Company’s issued Shares. This will allow Victory Mining to control the composition of the Company’s Board and its operations. However the underwriting is not conditional upon Board representation and Victory Mining has not sought to appoint any Directors.

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(g) Shareholders who do not participate in the Entitlement Offer will have their holding in the Company diluted.

The Board considers the advantages of the underwriting to outweigh the disadvantages.

7.6 Directors’ recommendation

For the reasons set out in section 7.5, the Directors recommend that Shareholders approve the Victory Mining Underwriting, and they intend to vote the Shares they control in favour of Resolution 5.

7.7 Requirement for Shareholder approval

Section 606 of the Corporations Act prohibits a person acquiring a relevant interest in the issued voting shares of a company if, because of the acquisition, that person’s or another person’s voting power in the company increases to more than 20%, unless an exception applies.

Through the Placement and the Victory Mining Underwriting, Victory Mining’s voting power in the Company will increase from nil to a maximum of approximately 59.87%, assuming no further Shares (other than under the Placement) are issued prior to the Record Date (including through the exercise of Options) and in the unlikely event no Shareholders accept their Entitlement or Shortfall Shares issued only to Victory Mining.

Section 611 of the Corporations Act sets out certain exceptions to the general prohibition and permits an increase in voting power over 20%, including if a company’s shareholders approve the acquisition of shares which results in the increased voting power.

Section 611 of the Corporations Act and ASIC Regulatory Guide 74: Acquisitions Approved by Members set out the information to be given to shareholders in seeking approval under section 611 of the Corporations Act.

7.8 Information required by Item 7 of Section 611 of the Corporations Act

(a) The identity of the person proposing to make the acquisition and their associates Information on Victory Mining and its associates is set out in section 7.2.
(b) The maximum extent of the increase in that person’s voting power in the entity that would result from the acquisition

Victory Mining currently has no voting power in the Company. Its voting power will increase to 19.74% following the Placement and a maximum of 59.87%, assuming no Shareholders take up their entitlement under the Entitlement Offer and all Shortfall Shares are issued to Victory Mining.

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(d) The maximum extent of the increase in the voting power of each of that person’s associates that would result from the acquisition
Victory Mining has advised the Company that it currently has no associates within the meaning of the Corporations Act.
(e) The voting power that each of that person’s associates would have as a result of the acquisition

See section 7.8(d).

7.9 Additional information required by ASIC Regulatory Guide 74: Acquisitions approved by members

(a) An explanation of the reasons for the proposed acquisition
The reason for the proposed acquisition is set out in section 6 of the Explanatory Memorandum.
(b) When the proposed acquisition is to occur

The timetable for the proposed acquisition is set out in section 7.4.

The material terms of the proposed acquisition are set out in section 7.3.

(d) Details of the terms of any other relevant agreement between Victory Mining and the Company (or any of their associates) that are conditional on (or directly or indirectly depends on) members’ approval of the proposed acquisition

There are no other relevant agreements between Victory Mining and the Company that are conditional on (or directly or indirectly depends on) members’ approval of the proposed Victory Mining Underwriting.

(e) A statement of Victory Mining’s and its associate’s intentions regarding the future of the Company if Shareholders approve the acquisition See section 7.2.
(f) Any intention of Victory Mining to change the financial or dividend distribution policies of the Company

See section 7.2.

(g) The interests that any director has in the acquisition or any relevant agreement disclosed in 7.9(d).
None of the current Directors of the Company have any interest in Victory Mining.
(h) The identity, associations (with the subscriber, purchaser or vendor and with any of their associates) and qualifications of any person who it is intended will become a director if the shareholders approve the acquisition

Radar Iron Limited

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No person will become a Director as a result of Shareholders approving the Victory Mining Underwriting.

7.10 Independent Experts Report

Under ASIC Regulatory Guide 74: Acquisitions Approved by Members , an independent expert’s report is required for Resolution 5. The report must analyse whether the transaction is fair and reasonable and state the expert’s opinion.

The Company has retained BDO to prepare this report and BDO has concluded that the Victory Mining Underwriting is not fair but reasonable to the Company’s nonassociated Shareholders. The report is schedule 2 to this Explanatory Memorandum.

7.11 Victory Mining’s existing voting power in the Company

Victory Mining currently has no relevant interest in the Company’s Shares. Following the Placement (which is subject to Shareholder approval and which is expected to complete on 23 October 2014), Victory Mining will have a relevant interest in 26,100,000 Shares, and a voting power of 19.74%.

The extent to which Victory Mining’s voting power will increase as a result of the Victory Mining Underwriting will depend upon extent to which Shareholders take up their Entitlement and Shortfall Shares placed with persons other than Victory Mining.

Following is a table that sets out Victory Mining’s relevant interest and voting power, based upon various levels of take up by Eligible Shareholders.

	Following the	Entitlement Offer
Take up1	Shares	%
Assume nil take up by Eligible Shareholders	158,348,630	59.87
Assume 20% take up by Eligible Shareholders	131,898,904	49.87
Assume 40% take up by Eligible Shareholders	105,449,178	39.87
Assume 60% take up by Eligible Shareholders	78,999,452	29.87
Assume 80% take up by Eligible Shareholders	52,549,726	19.87
Assume 100% take up by Eligible Shareholders	52,200,000	19.74

1 This includes any Shortfall Shares issued to Eligible Shareholders or others. As set out in section 7.5(c), any Shortfall Shares will be issued to Eligible Shareholders with unmarketable parcels first and then by consultation with the underwriter.

Radar Iron Limited

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7.12 Impact of the Victory Mining Underwriting on the Company’s financial position and pro forma balance sheet

The impact of the acquisition on the Company’s financial position is as follows:

(a) The Company will raise approximately $4,628,700 before costs of the Entitlement Offer.
(b) Funds raised will be used to pay the outstanding purchase price for the Company’s Yerecoin project and leave the Company debt free and with sufficient working capital to advance its Yerecoin project and other assets

See the Independent Expert’s Report for more information.

7.13 Reasons why Shareholders should approve the Victory Mining Underwriting

The reasons why the acquisition should be approved are set out in section 7.5.

7.14 Reasons why Shareholders should not approve the Victory Mining Underwriting The reasons why the acquisition should not be approved are set out in section 7.5.

Radar Iron Limited

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1 DEFINITIONS

In this Notice and Explanatory Memorandum:

10% Placement has the meaning given in section 6.1 of the Explanatory Capacity Memorandum. ASX means ASX Limited or the Australian Securities Exchange operated by ASX Limited, as the context requires. ASIC means the Australian Securities & Investments Commission. Board means the board of Directors. Closely Related means a spouse or child of the member, a child of the Party of a member member’s spouse, a dependent of the member or the of the Key member’s spouse, anyone else who is one of the member’s Management family and may be expected to influence the member, or be Personnel influenced by the member, in the member’s dealing with the entity; company the member controls; or a person prescribed by the Corporations Regulations 2001 (Cth). BDO means BDO Corporate Finance Pty Limited. Company means Radar Iron Limited (ACN 146 455 576). Constitution means the constitution of the Company as amended. Corporations Act means the Corporations Act 2001 (Cth) as amended. Director means a director of the Company. Eligible means Shareholders on the Record Date with an address in Shareholders Australia or New Zealand. Entitlement means the number of New Shares each Eligible Shareholder is entitled to under the Entitlement Offer. Entitlement Offer has the meaning given in section 7.1 of the Explanatory Memorandum. Equity Securities has the same meaning given in the Listing Rules. Explanatory means this explanatory memorandum. Memorandum Independent means the independent expert’s report prepared by BDO for Expert’s Report the purposes of Resolution 5. Key Management has the same meaning as in the accounting standards and

Radar Iron Limited

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Personnel broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the Company.

Listing Rules means the listing rules of the ASX. Meeting or Annual means the meeting convened by this Notice (as adjourned General Meeting from time to time). New Share means a new Share offered under the Entitlement Offer. Notice means this notice of meeting. Option means an option to be issued a Share. Placement has the meaning given in section 7.1 of the Explanatory Memorandum. Prospectus means the prospectus lodged with ASIC for the Entitlement Offer. Proxy Form means the proxy form attached to this Notice. Record Date means the record date for the Entitlement Offer as set out in the timetable in section 7.4. Remuneration means the remuneration report of the Company included in Report the Directors’ Report section of the Company's Annual Report. Resolution means a resolution set out in the Notice. Share means a fully paid ordinary share in the capital of the Company. Shareholder means a holder of a Share. Shortfall Shares means New Shares for which valid applications have not been received by the closing date of the Entitlement Offer. Term Sheet has the meaning given in section 7.3 of the Explanatory Memorandum. Trading Day means a day determined by ASX to be a trading day in accordance with the Listing Rules. Victory Mining means the underwriting by Victory Mining of the Entitlement Underwriting Offer, and which may result in Victory Mining acquiring a

Radar Iron Limited

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	relevant interest in up to 132,248,630 Shortfall Shares.
Victory Mining	means Victory Mining Pty Limited (ACN: 601 774 887).
VWAP	means volume weighted average price.
WST	means Western Standard Time.

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2 INFORMATION REQUIRED BY LISTING RULE 7.3A.6

Date of Appendix 3B	Number of Equity Securities	Class of Equity Securities and summary of terms	Names of recipients or basis on which recipients determined	Issue price of Equity Securities and discount to Market Price1 on the trading day prior to the issue	If issued for cash– the total consideration, what it was spent on and the intended use of any remaining funds If issued for non-cash consideration– a description of the consideration and the current value of the consideration




18/09/2014	(a) 5,028,560 (b) 280,000	(a) Note 2 (b) Note 2	(a) Shareholders who participated under the share purchase plan announced on 20/08/2014 (b) Mr Bradley George	(a) $0.035 (no discount) (b) deemed issue price of $0.05 (no discount)	(a) $176,000 – funds raised were used to expedite project development of the Yerecoin Project and to commit funds to the drilling of the Uruara DSO Iron Project in Brazil. (b) non-cash consideration – the Shares were issued in consideration for consulting services. The current value of the consideration is: $7,8403
25/07/2014	2,300,000	Note 2	sophisticated and professional investors	$0.05 (no discount)	$115,000 – funds raised were used for: • feasibility studies for Project Gunnel assets; and • initial drilling testing at Radar’s Uruara Project in Para State Brazil.
7/05/2014	17,200,000	Note 2	Lightshare Investments Pty Ltd	$0.05 (no discount)	$860,000 – funds raised were used to pay the first tranche of the purchase price for the Yerecoin acquisition.

1 Market Price means the closing price on ASX (excluding special crossings, overnight sales and exchange traded option exercises).

2 Fully paid ordinary shares in the capital of the Company (ASX Code: RAD), terms of which are set out in the Constitution.
3 Based on a closing price of $0.028 per Share as at 7 October 2014.

Radar Iron Limited

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Schedule 3

RADAR IRON LIMITED Independent Expert’s Report

10 October 2014

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Financial Services Guide

10 October 2014

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 (‘ we ’ or ‘ us ’ or ‘ ours ’ as appropriate) has been engaged by Radar Iron Ltd (‘ Radar’ ) to provide an independent expert’s report on the proposal for Radar to issue shares to Victory Mining Pty Ltd (‘ Victory ’). You will be provided with a copy of our report as a retail client because you are a shareholder of Radar.

Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (‘ FSG ’). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

Who we are and how we can be contacted;
The services we are authorised to provide under our Australian Financial Services Licence, Licence No. 316158;
Remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
Any relevant associations or relationships we have; and
Our internal and external complaints handling procedures and how you may access them.

Information about us

BDO Corporate Finance (WA) Pty Ltd is a member firm of the BDO network in Australia, a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International). The financial product advice in our report is provided by BDO Corporate Finance (WA) Pty Ltd and not by BDO or its related entities. BDO and its related entities provide services primarily in the areas of audit, tax, consulting and financial advisory services.

We do not have any formal associations or relationships with any entities that are issuers of financial products. However, you should note that we and BDO (and its related entities) might from time to time provide professional services to financial product issuers in the ordinary course of business.

Financial services we are licensed to provide

We hold an Australian Financial Services Licence that authorises us to provide general financial product advice for securities to retail and wholesale clients.

When we provide the authorised financial services we are engaged to provide expert reports in connection with the financial product of another person. Our reports indicate who has engaged us and the nature of the report we have been engaged to provide. When we provide the authorised services we are not acting for you.

General Financial Product Advice

We only provide general financial product advice, not personal financial product advice. Our report does not take into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice.

BDO CORPORATE FINANCE (WA) PTY LTD

Financial Services Guide

Page 2

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Fees, commissions and other benefits that we may receive

We charge fees for providing reports, including this report. These fees are negotiated and agreed with the person who engages us to provide the report. Fees are agreed on an hourly basis or as a fixed amount depending on the terms of the agreement. The fee payable to BDO Corporate Finance (WA) Pty Ltd for this engagement is approximately $24,000.

Except for the fees referred to above, neither BDO, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

Remuneration or other benefits received by our employees

All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report. We have received a fee from Radar for our professional services in providing this report. That fee is not linked in any way with our opinion as expressed in this report.

Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

Complaints resolution

Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing addressed to The Complaints Officer, BDO Corporate Finance (WA) Pty Ltd, PO Box 700 West Perth WA 6872.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service (‘ FOS ’). FOS is an independent organisation that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial service industry. FOS will be able to advise you as to whether or not they can be of assistance in this matter. Our FOS Membership Number is 12561.

Further details about FOS are available at the FOS website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001 Toll free: 1300 78 08 08 Facsimile: (03) 9613 6399 Email: [email protected]

Contact details

You may contact us using the details set out on page 1 of the accompanying report.

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1.	Introduction	1
2.	Summary and Opinion	1
3.	Scope of the Report	4
4.	Outline of the Transaction	5
5.	Profile of Radar Iron Limited	8
6.	Profile of Victory Mining Pty Ltd	13
7.	Economic analysis	13
8.	Industry analysis	14
9.	Valuation approach adopted	18
10.	Valuation of Radar prior to the Transaction	19
11.	Valuation of Radar following the Transaction	27
12.	Is the Transaction fair?	28
13.	Is the Transaction reasonable?	28
14.	Conclusion	31
15.	Sources of information	31
16.	Independence	31
17.	Qualifications	32
18.	Disclaimers and consents	32

Appendix 1 – Glossary

Appendix 2 – Valuation Methodologies

Appendix 3 - Independent Valuation Report prepared by Agricola Mining Consultants Pty Ltd

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10 October 2014

The Directors Radar Iron Limited Suite 7, 55 Hampton Road Nedlands WA 6009

Dear Directors

INDEPENDENT EXPERT’S REPORT

1. Introduction

On 22 September 2014, Radar Iron Limited ( ‘Radar’ or ‘ the Company ’) announced that it would be undertaking a capital raising to raise a total of approximately $5.5 million as follows:

1) A placement to Victory Mining Pty Ltd ( ‘Victory’ ) of 26.1 million fully paid ordinary shares at an issue price of $0.035 per share to raise $913,500 before costs ( ‘Placement’ ); and
2) A one for one non-renounceable rights issue at a minimum issue price of $0.035 per share to raise approximately $4.63 million before costs, which is to be fully underwritten by Victory ( ‘Entitlement Offer’ ).

The Placement and Entitlement Offer will allow the Company to pay the outstanding purchase price for the Yerecoin Project and provide sufficient working capital to advance project studies for production at Yerecoin.

Following the Placement, Victory’s interest in the issued share capital of Radar will increase to 19.74%. As Victory is fully underwriting the Entitlement Offer, in the event no shareholders accept their entitlement, Victory would take up the shortfall and could therefore increase its interest in the issued share capital of Radar to a maximum of 59.87%.

As a result of this, Victory’s ability to take up any shortfall from the Entitlement Offer must fall within an exception to the prohibition against acquiring a voting power of 20% or more of in a company without making a takeover bid. As a matter of good corporate governance, Victory and the Company have elected to seek shareholder approval pursuant to Section 611 Item 7 of the Corporations Act 2001 (Cth) (the ‘Act’ ) rather than rely upon the underwriting exception.

2. Summary and Opinion

2.1 Purpose of the report

The directors of Radar have requested that BDO Corporate Finance (WA) Pty Ltd (‘ BDO ’) prepare an independent expert’s report (‘ our Report ’) to express an opinion as to whether or not the proposal for

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Radar to issue shares to Victory as a result of Victory underwriting the Entitlement Offer ( ‘the Transaction’ ) is fair and reasonable to the non associated shareholders of Radar (‘ Shareholders ’).

Our Report is prepared pursuant to Section 611 Item 7 of the Act and is to be included in the Explanatory Memorandum for Radar in order to assist the Shareholders in their decision whether to approve the Transaction.

2.2 Approach

Our Report has been prepared having regard to Australian Securities and Investments Commission (‘ ASIC ’) Regulatory Guide 74 ‘Acquisitions Approved by Members’ ( ‘RG 74’ ), Regulatory Guide 111 ‘Content of Expert’s Reports’ (‘ RG 111 ’) and Regulatory Guide 112 ‘Independence of Experts’ (‘ RG 112 ’).

In arriving at our opinion, we have assessed the terms of the Transaction as outlined in the body of this report. We have considered:

How the value of a Radar share prior to the Transaction on a controlling basis compares to the value of a Radar share following the Transaction on a minority basis;
Whether a premium for control is being offered in relation to the issue of Radar shares and whether this is appropriate;
Other factors which we consider to be relevant to the Shareholders in their assessment of the Transaction; and
The position of Shareholders should the Transaction not proceed.

2.3 Opinion

We have considered the terms of the Transaction as outlined in the body of this report and have concluded that, in the absence of any other relevant information, the Transaction is not fair but reasonable to Shareholders .

We have determined that the Transaction is not fair as the preferred value of a Radar share following the Transaction on a minority basis is less than the preferred value of Radar share prior to the Transaction on a control basis. However, we consider the Transaction to be reasonable due to the advantages that the Transaction will bring to the Company.

2.4 Fairness

In section 12, we determined how the value of a Radar share prior to the Transaction, on a control basis, compares to the value of a Radar share following the Transaction on a minority basis, as detailed below.

		Low	Preferred	High
	Ref
		$	$	$
Value of a Radar share prior to the Transaction on a	10	0.035	0.050	0.089
control basis
Value of a Radar share following the Transaction on a	11	0.024	0.032	0.050
minority basis

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The above valuation ranges are graphically presented below:

Valuation Summary

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----- Start of picture text -----

Value of a Radar share prior to the Transaction on
a control basis
Value of a Radar share following the Transaction
on a minority basis
0.000 0.015 0.030 0.045 0.060 0.075 0.090
Value ($)
----- End of picture text -----

The above pricing indicates that, in the absence of any other relevant information, the Transaction is not fair for Shareholders as the preferred value of a Radar share following the Transaction, on a minority basis, is less than the preferred value of a Radar share prior to the Transaction, on a control basis.

2.5 Reasonableness

We have considered the analysis in section 13 of this report, in terms of both

advantages and disadvantages of the Transaction; and
other considerations, including the position of Shareholders if the Transaction does not proceed and the consequences of not approving the Transaction.

In our opinion, the position of Shareholders if the Transaction is approved is more advantageous than the position if the Transaction is not approved. Accordingly, in the absence of any other relevant information we believe that the Transaction is reasonable for Shareholders.

The respective advantages and disadvantages considered are summarised below:

ADVANTAGES AND DISADVANTAGES	ADVANTAGES AND DISADVANTAGES
Section	Advantages	Section	Disadvantages
13.4	The Transaction provides security to the Company in meeting the remaining acquisition costs of the Yerecoin Project and fund further development of the project	13.5	Dilution of existing Shareholders’ interests
13.4	Shareholders have the opportunity to participate in the Entitlement Offer and minimise dilution	13.5	Decreases the likelihood of a takeover offer
13.4	On a minority basis pre and post there is a significant overlap in the value ranges of a Radar share
13.4	Major shareholder support

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Other key matters we have considered include:

Section	Description
13.1	Alternative proposals
13.2	Practical level of control
13.3	Movements in Radar’s share price following the announcement of the Transaction

3. Scope of the Report

3.1 Purpose of the Report

Following the completion of the Placement, Victory will own 19.74% of the issued capital in Radar. If Shareholders approve the Transaction, Victory has the potential to increase their holding to a maximum of 59.87%, assuming no further shares are issued and in the event no shareholders accept their entitlement under the Entitlement Offer or any shortfall shares placed with third parties. Section 606 of the Corporations Act expressly prohibits the acquisition of shares by a party if that acquisition will result in that person (or someone else) holding an interest in 20% or more of the issued shares of a public company, unless a full takeover offer is made to all shareholders.

Section 611 permits such an acquisition if, amongst other things, the shareholders of that entity have agreed to the issue of such shares. This agreement must be by resolution passed at a general meeting at which no votes are cast in favour of the resolution by the party acquiring the shares or their associates. Section 611 states that shareholders of the company must be given all information that is material to the decision on how to vote at the meeting.

RG 74 states that the obligation to supply shareholders with all information that is material can be satisfied by the non-associated directors of Radar, by either:

undertaking a detailed examination of the Transaction themselves, if they consider that they have sufficient expertise; or
by commissioning an Independent Expert's Report.

The directors of Radar have commissioned this Independent Expert's Report to satisfy this obligation.

3.2 Regulatory guidance

Neither the Listing Rules nor the Corporations Act defines the meaning of ‘fair and reasonable’. In determining whether the Transaction is fair and reasonable, we have had regard to the views expressed by ASIC in RG 111. This regulatory guide provides guidance as to what matters an independent expert should consider to assist security holders to make informed decisions about transactions.

This regulatory guide suggests that where the transaction is a control transaction, the expert should focus on the substance of the control transaction rather than the legal mechanism to affect it. RG 111 suggests that where a transaction is a control transaction, it should be analysed on a basis consistent with a takeover bid.

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In our opinion, the Transaction is a control transaction as defined by RG 111 and we have therefore assessed the Transaction as a control transaction to consider whether, in our opinion, it is fair and reasonable to Shareholders.

3.3 Adopted basis of evaluation

RG 111 states that a transaction is fair if the value of the offer price or consideration is greater than the value of the securities subject of the offer. This comparison should be made assuming a knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at arm’s length. When considering the value of the securities subject of the offer in a control transaction the expert should consider this value inclusive of a control premium. Further to this, RG 111 states that a transaction is reasonable if it is fair. It might also be reasonable if despite being ‘not fair’ the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher bid.

Having regard to the above, BDO has completed this comparison in two parts:

A comparison between value of a Radar share prior to the Transaction on a control basis and the value of a Radar share following the Transaction on a minority basis (fairness – see section 12 ‘Is the Transaction Fair?’); and
An investigation into other significant factors to which Shareholders might give consideration, prior to approving the Transaction, after reference to the value derived above (reasonableness – see section 13 ‘Is the Transaction Reasonable?’).

This assignment is a Valuation Engagement as defined by Accounting Professional & Ethical Standards Board professional standard APES 225 ‘Valuation Services’ (‘ APES 225 ’).

A Valuation Engagement is defined by APES 225 as follows:

‘an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Valuer at that time.’

This Valuation Engagement has been undertaken in accordance with the requirements set out in APES 225.

4. Outline of the Transaction

On 22 September 2014, Radar announced that it would be undertaking a capital raising to raise a total of approximately $5.5 million as follows:

a) Victory will subscribe for and the Company agrees to issue 26.1 million fully paid ordinary shares at an issue price of $0.035 per share to raise $913,500 before costs, subject to the satisfaction of the following conditions:
The Company obtaining all necessary Australian Securities Exchange ( ‘ASX’ ) approvals;
There being no material or adverse change to the Company or its assets;
There being no material breach of any warranty given by the Company; and
If required, Victory obtaining Foreign Investment Review Board ( ‘FIRB’ ) approval.

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b) Victory will fully underwrite the Entitlement Offer to raise $4.6 million (or such other amount as the parties agree) before costs, subject to the satisfaction of the following conditions:
The Company lodging a prospectus for the Entitlement Offer;
The Company obtaining all necessary approvals under the Act;
There being no material or adverse change to the Company or its assets;
There being no material breach of any warranty given by the Company;
If required, Victory obtaining FIRB approval;
The All Ordinaries Index remains at all times at least 90% or more than the close of business on the business day prior to the date of the term sheet (19 September 2014); and
The Platts daily iron ore 62% Fe, North China price assessment remains at all times at least 90% or more than at the business day prior to the date of the term sheet.

The issue price of the Entitlement Offer will be the greater of:

a) 80% of the volume weighted average closing price for shares over the last 20 days on which sales took place before the prospectus is lodged; or
b) $0.035; or
c) Such other price as the parties agree.

Victory is a Sydney-based private investment company, with a focus on mineral investments in Australia and abroad. The proposed investment in Radar is Victory's first investment in Australia. Victory has advised Radar that it has no associates (as defined in the Corporations Act). The Company intends to utilise the fund raised to pay the outstanding purchase price for the Yerecoin Project and provide sufficient working capital to advance project studies for production at Yerecoin.

Prior to the issue of the Placement shares, Victory did not hold any shares in Radar. Following the Placement, Victory’s interest in the issued share capital of Radar will increase to 19.74%. If Shareholders approve the Transaction and assuming no further shares are issued other than under the Placement and Entitlement Offer, the potential changes in shareholding are summarised in the tables below.

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Scenario One: All shareholders take up their entitlement to the Entitlement Offer

All Shareholders take up their entitlement	Other Victory Shareholders Total
Issued Shares as at date of this Report	- 106,148,630 106,148,630
% holdings as at date of this Report	0.00% 100.00% 100.00%
Shares to be issued under Placement	26,100,000 - 26,100,000
Issued Shares after Placement Shares issued	26,100,000 106,148,630 132,248,630
% holdings after Placement Shares issued	19.74% 80.26% 100.00%
Shares to be issued under Entitlement Offer	26,100,000 106,148,630 132,248,630
Issued Shares after Entitlement Offer Shares issued	52,200,000 212,297,260 264,497,260
% holdings after Entitlement Offer Shares issued	19.74% 80.26% 100.00%

Scenario Two: 50% of shareholders take up their entitlement to the Entitlement Offer and Victory underwrite the remaining 50% shortfall

50% of Shareholders take up their entitlement	Other Victory Shareholders Total
Issued Shares as at date of this Report	- 106,148,630 106,148,630
% holdings as at date of this Report	0.00% 100.00% 100.00%
Shares to be issued under Placement	26,100,000 - 26,100,000
Issued Shares after Placement Shares issued	26,100,000 106,148,630 132,248,630
% holdings after Placement Shares issued	19.74% 80.26% 100.00%
Shares to be issued under Entitlement Offer	79,174,315 53,074,315 132,248,630
Issued Shares after Entitlement Offer Shares issued	105,274,315 159,222,945 264,497,260
% holdings after Entitlement Offer Shares issued	39.80% 60.20% 100.00%

Scenario Three: No shareholders take up their entitlement to the Entitlement Offer and Victory underwrite 100% of the shortfall

No Shareholders take up their entitlement	Other Victory Shareholders Total
Issued Shares as at date of this Report	- 106,148,630 106,148,630
% holdings as at date of this Report	0.00% 100.00% 100.00%
Shares to be issued under Placement	26,100,000 - 26,100,000
Issued Shares after Placement Shares issued	26,100,000 106,148,630 132,248,630
% holdings after Placement Shares issued	19.74% 80.26% 100.00%
Shares to be issued under Entitlement Offer	132,248,630 - 132,248,630
Issued Shares after Entitlement Offer Shares issued	158,348,630 106,148,630 264,497,260
% holdings after Entitlement Offer Shares issued	59.87% 40.13% 100.00%

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5. Profile of Radar Iron Limited

Radar was incorporated on 21 September 2010 and officially listed on the Australian Securities Exchange ( ‘ASX’ ) on 21 December 2010. The Company is focused on the exploration for and development of iron ore deposits in the Yilgarn Province of Western Australia and the Para State of Brazil. The current board members of Radar comprise of:

Mr Alan Tough, Non-executive Chairman;
Mr Jonathan Lea, Managing Director;
Mr Ananda Kathiravelu; Non-executive Director; and
Mr David Sourbutts; Non-executive Director.

On 7 May 2014, the Company announced the completion of the acquisition of a large iron ore tenement holding in the south west region of Western Australia from Cliffs Magnetite Holdings Pty Ltd and its joint venture partners, Sojitz Mineral Development Pty Ltd and NS Iron Ore Development Pty Ltd. The acquisition involved two 100% owned project areas:

Yerecoin Project; and
Northam Tenements

Consideration for the Yerecoin project includes an initial payment of $0.86 million to the vendors, a further payment of $2.88 million (in two instalments) and a production royalty.

The Company’s most recent capital raising was completed on 20 August 2014, in which Radar offered shareholders up to 5,028,560 ordinary shares at $0.035 per share via a Share Purchase Plan. The plan raised $176,000.

Set out below is a brief description of the Company’s projects.

Yerecoin Project

The Yerecoin Project is located in the south west Western Australia, approximately 140 km north of Perth. The project area comprises of five tenements covering a total area of 320 km[2] and consists of three main deposits, Yerecoin Main, Yerecoin South and Yerecoin North. The project area lies adjacent to a Western Australian Government owned rail line to the Port of Kwinana with high voltage power available within some 80 km of the project area.

On 8 September 2014, the Company updated the Resource estimate at the Yerecoin project to 388.3 million tonnes at 67.9% Concentrate Fe. Estimates for the Yerecoin South and North deposits remain unchanged, while 25% of the Yerecoin Main resource was upgraded to the Indicated category. The updated Resource estimate included the use of an additional 95 pre-existing reverse circulation drill holes that were not previously used.

The Company has also completed a scoping study, with results from the study supporting Radar’s objective of having a low capital development cost with production targeted for 2016. The Company plans to complete sufficient studies in 2014/15 to demonstrate Stage 1 development viability.

Northam Project

The Northam project is an early stage exploration evaluation and comprise of five tenements, covering approximately 181 km[2] . The project area lies adjacent to the standard gauge Trans-Australia rail line.

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Regional exploration has indicated the potential for magnetite mineralisation. Further evaluation of the project is required.

Central Yilgarn Project

The Central Yilgarn project is located within the Yilgarn province, Western Australia and comprise of 1,200 km[2] of tenements. The Company has conducted 7 drill programmes with the aim of identifying areas with potential to host hematite and magnetite mineralisation. Radar has since identified two deposits. The Muldoon deposit is a direct shipping hematite deposit in the Johnston Range project area. The Johnston Range hosts multiple hematite targets. The Die Hardy deposit is a magnetite resource in the Die Hardy Range and was identified in 2010 through reconnaissance mapping. The prospect is approximately 3.4 km long and in 2010, two reverse circulation drill holes were completed to provide initial samples.

The Company is currently seeking a partner to progress the Yilgarn Project, with the next stage of work expected to involve further resource drilling and metallurgical test work. Development of the Yilgarn Project is contingent on the expansion of the Port of Esperance. Development of the port is expected to be completed in 2016, at which time Radar will re-focus on developing the Yilgarn project.

Uruara Project

On 13 November 2013, Radar announced that it had entered into a farm in agreement to acquire a 50% interest in the Uruara Project in the Para State of Brazil from private Brazilian company, Sullis Mineracao SL.

The project is located approximately 600km inland and comprise of 1 exploration license of approximately 10,000 hectares with a binding right to acquire 6 adjacent applications of 58,000 hectares. The tenement lies in the Amazon Basin geological terrain, with the project area being covered by a combination of heavily grassed open farm land and forest with sparse outcrop.

The project area is within close proximity to a number of accessible ports where Panamax (60,000 tonnes) size vessels can be loaded.

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5.1 Historical Financial Statements

Historical Statement of Financial Position	Audited as at Audited as at Audited as at 30-Jun-14 30-Jun-13 30-Jun-12 $ $ $
CURRENT ASSETS Cash and cash equivalents Other receivables TOTAL CURRENT ASSETS NON CURRENT ASSETS Exploration and evaluation expenditure Plant and equipment TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITES TOTAL LIABILITIES NET ASSETS EQUITY Share capital Reserves Accumulated losses TOTAL EQUITY	15,064 1,075,965 3,903,225 460,872 81,376 375,930
	475,936 1,157,341 4,279,155
	13,311,475 9,861,184 8,400,286 54,380 177,189 168,388
	13,365,855 10,038,373 8,568,674
	13,841,791 11,195,714 12,847,829
	3,606,100 190,879 843,336
	3,606,100 190,879 843,336
	3,606,100 190,879 843,336
	10,235,691 11,004,835 12,004,493
	13,220,638 12,377,907 12,364,032 77,094 1,017,130 1,017,130 (3,062,041) (2,390,202) (1,376,669)
	10,235,691 11,004,835 12,004,493

Source: Audited financial statements for the years ended 30 June 2014, 30 June 2013 and 30 June 2012

Commentary on Historical Statement of Financial Position

We note that Radar’s auditor issued an Emphasis of Matter paragraph in the audited financial report for the year ended 30 June 2014. The auditor outlined the existence of material uncertainty in relation to the Company’s ability to continue as a going concern given the level of further funding required to fund its exploration activities.

We note the following in relation to Radar’s Historical Statement of Financial Position:

Cash and cash equivalents decreased from $3.90 million at 30 June 2012 to $1.08 million at 30 June 2013. The decrease is primarily attributable to further exploration work conducted for iron ore in the central Yilgarn Iron Ore province of Western Australia. Cash and cash equivalents further decreased to $0.02 million as at 30 June 2014. The decrease is a result of the Company acquiring the Yerecoin Project from Cliffs Magnetite Holdings Pty Ltd and its joint venture partners, Sojitz Mineral Development Pty Ltd and NS Iron Ore Development Pty Ltd. Consideration for the Yerecoin Project included an initial payment of $0.86 million to the vendors.

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Exploration and evaluation expenditure increased from $9.86 million as at 30 June 2013 to $13.31 million at 30 June 2014. The increase is attributable to the Company conducting exploration work across the Yilgarn Province along with satisfying minimum exploration work and expenditure at its 50% interest Uruara Project.
Plant and equipment decreased from $0.18 million at 30 June 2013 to $ 0.05 million at 30 June 2014. The decrease is primarily due to the Company disposing of plant and equipment during the year.
Trade and other payables increased from $0.19 million as at 30 June 2013 to $3.61 million as at 30 June 2014. The majority of this increase is as a result of the remaining two instalment payments, totalling $2.88 million, in relation to the acquisition of the Yerecoin Project.
Share capital increased from $12.38 million as at 30 June 2013 to $13.22 million as at 30 June 2014. The increase in share capital is due to the Company issuing 17.2 million shares at $0.05 per share to Lightshare Investments Pty Ltd during the period. Funds raised from the placement were used for the initial payment of the Yerecoin Project.

5.2 Historical Statement of Profit or Loss and Other Comprehensive Income

Historical Statement of Profit or Loss and Other Comprehensive Income	Audited for the Audited for the Audited for the year ended year ended year ended 30-Jun-14 30-Jun-13 30-Jun-12 $ $ $
Finance income Other income Financial administration, insurance and compliance costs Consultants and contractors Depreciation Employee benefits expense Project evaluation expense Rent Write off of exploration expenditure Other expenses Loss before income tax expense Income tax benefit Loss for the year	15,130 80,508 90,136 139,156 221,688 261,153 (129,770) (108,841) (305,216) (216,630) (237,693) (289,207) (17,615) (49,527) (34,115) (103,682) (366,869) (435,929) (17,387) (339,413) - - (96,000) (96,000) (1,210,137) (1,741) (93,429) (88,880) (115,645) (8,332)
	(1,629,815) (1,013,533) (910,939) - - -
	(1,629,815) (1,013,533) (910,939)

Source: Audited financial statements for the years ended 30 June 2014, 30 June 2013 and 30 June 2012

Commentary on Profit or Loss and Other Comprehensive Income

We note the following in relation to Radar’s Historical Statement of Profit or Loss and Other Comprehensive Income:

Finance income comprise of interest income, with the decrease in this balance over the three reporting periods arising from a reduction in cash held.

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Other income of $0.14 million for the year ended 30 June 2014 comprise of research and development tax offset and rental income.
Project evaluation expense of $0.34 million for the year ended 30 June 2013 relates to the Company’s evaluation of the Mt Ruby magnetite project in Queensland. On 8 February 2013, the Company announced an agreement to acquire a 51% interest in the Mt Ruby Project from Developed Iron Ore Pty Ltd, with the acquisition contingent on Radar completing due diligence. Following the Company’s due diligence, Radar withdrew from its agreement.
Write off of exploration expenditure of $1.21 million for the year ended 30 June 2014 relates to the Yilgarn project.

5.3 Capital Structure

The share structure of Radar as at 24 September 2014 is outlined below:

	Number
Total ordinary shares on issue	106,148,630
Top 20 shareholders	72,639,448
Top 20 shareholders - % of shares on issue	68.43%

Source: Audited financial statements for the year ended 30 June 2014

The range of shares held in Radar as at 24 September 2014 is as follows:

Range of Shares Held	Percentage of Issued Shares (%) Number of Ordinary Shareholders Number of Ordinary Shares
1 - 1,000	19 3,837 0.00%
1,001 - 5,000	100 328,174 0.31%
5,001 - 10,000	65 557,624 0.53%
10,001 - 100,000	238 9,323,595 8.78%
100,001 - and over	110 95,935,400 90.38%
TOTAL	532 106,148,630 100.00%

Source: Audited financial statements for the year ended 30 June 2014

The ordinary shares held by the most significant shareholders as at 24 September 2014 are detailed below:

Name	Number of Ordinary Shares Held Percentage of Issued Shares (%)
Potash Minerals Ltd	22,690,612 21.38%
Lightshare Inv PL	17,200,000 16.20%
Shinewarm Res HK Grp Ltd	10,000,000 9.42%
Bond Street Custs Ltd	4,382,539 4.13%
Subtotal	54,273,151 51.13%
Others	51,875,479 48.87%
Total ordinary shares on Issue	106,148,630 100.00%

Source: Audited financial statements for the year ended 30 June 2014

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Radar has the following options on issue:

					Number
Unlisted options exercisable on or before	2	September	2018	at $0.05	5,000,000

Source: Appendix 3B dated 22 September 2014

6. Profile of Victory Mining Pty Ltd

7. Economic analysis

Growth in the global economy is continuing at a moderate pace. China's growth has generally been in line with policymakers' objectives, though some data suggest a slowing in recent months. Weakening property markets in China present a challenge in the near term. Commodity prices in historical terms remain high, but some of those important to Australia have declined further in recent months.

Volatility in some financial markets has picked up in recent weeks. Overall however, financial conditions remain very accommodative. Long-term interest rates and risk spreads remain very low. Markets still appear to be attaching a low probability to any rise in global interest rates or other adverse event over the period ahead.

In Australia, most data are consistent with moderate growth in the economy. Resources sector investment spending is starting to decline significantly, while some other areas of private demand are seeing expansion, at varying rates. Public spending is scheduled to be subdued. Overall, the Reserve Bank of Australia (’ RBA ’) still expects growth to be a little below trend for the next several quarters.

Labour market data have been unusually volatile of late. The RBA’s assessment remains that although some forward indicators of employment have been firming this year, the labour market has a degree of spare capacity and it will probably be some time yet before unemployment declines consistently. Growth in wages has declined noticeably and is expected to remain relatively modest over the period ahead, which should keep inflation consistent with the target even with lower levels of the exchange rate.

Monetary policy remains accommodative. Interest rates are very low and have continued to edge lower over recent months as competition to lend has increased. Investors continue to look for higher returns in response to low rates on safe instruments. Credit growth is moderate overall, but with a further pick-up in recent months in lending to investors in housing assets. Dwelling prices have continued to rise over recent months.

The exchange rate has declined recently, in large part reflecting the strengthening US dollar, but remains high by historical standards, particularly given the further declines in key commodity prices in recent months. It is offering less assistance than would normally be expected in achieving balanced growth in the economy.

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Looking ahead continued accommodative monetary policy should provide support to demand and help growth to strengthen over time. Inflation is expected to be consistent with the 2–3% target over the next two years.

Source: www.rba.gov.au Statement by Glenn Stevens, Governor: Monetary Policy Decision 7 October 2014

8. Industry analysis

8.1 Overview of Iron Ore

Iron ores are rocks from which metallic iron can be economically extracted. The principal iron ores are hematite (Fe2O3) and magnetite (Fe3O4).

Hematite is a pure iron oxide mineral, with pure hematite mineral containing 69.9 % iron. Hematite ores dominate the world production of iron ores with approximately 96% of Australia’s iron ore exports being high grade hematite. High grade hematite ore involves a relatively simple crushing and screening process before being exported. Australia’s hematite averages from 56% to 62% iron.

Magnetite is an iron oxide mineral containing 72.4% iron. While the iron ore content is higher than hematite, the presences of impurities results in a lower ore grade, making it more costly to produce the concentrates.

Iron is the world’s most used metal with approximately 98% of world iron ore production being used to make steel. It is primarily used in structural engineering, automobiles and other general industrial applications. Commercial development of iron ore deposits are largely constrained by the position of the iron ore relative to its market and the cost of establishing proper transportation infrastructure such as ports and railways.

There are three main categories of iron ore exports:

Fines : fines are the smallest size category and typically have a granular size less than 9.50mm. They are the most heavily traded category of iron ore;
Lump Ore : lump ore consists of golf ball sized pieces, and generally has a higher iron content than fines; and
Pellets : particle sizes range from 9.50mm to 16.00mm. Pellets are made by agglomeration of finely ground and concentrated ore.

In 2013, an estimated 3 billion metric tonnes of iron ore was produced. The chart below shows the countries in which the majority of iron ore was produced in 2013:

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Global Iron Ore Production - 2013

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----- Start of picture text -----

15%
3% China
Australia
5% 45%
Brazil
India
14%
Russia
Other
18%
Global Iron Ore Reserves - 2013
16% Australia
21%
Brazil
4% Russia
China
4%
India
4%
United States
18%
5%
Ukraine
Canada
13%
Other
15%
----- End of picture text -----

Source: Bloomberg

The chart below shows the location of the world’s iron ore reserves, the majority of which are located in Australia:

Source: US Geological Survey

8.2 Global Market

Recent trends show a majority of the demand for iron ore being sourced from China, which has led some analysts to believe that Chinese steel demand has peaked after reaching and exceeding levels experienced by some of the largest OECD countries. There is however, still considerable scope for an expansion in steel consumption in China’s interior and more distant provinces albeit at a slower rate compared to the larger Chinese cities such as Beijing and Tianjin. The central government is focusing its attention on developing these outer parts of China, and with the expansion of business to these areas to take advantage of low

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cost labour, it is inevitable that Chinese demand for iron ore will continue to expand. Other countries such as Brazil, India and Indonesia are likely to follow on China’s development path, albeit on a smaller scale.

8.3 Price Trends

Historical iron ore prices and forecasts to 2018 are illustrated in the chart below.

Iron Ore Spot and Forecast

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----- Start of picture text -----

250
200
150
100
50
0
Spot Forecast
$US/tonne
----- End of picture text -----

Source: Bloomberg, BDO Analysis and Consensus Economics

Historical prices

The sharp increase in iron ore price movements from May 2009 was marked by a surge in Chinese, Japanese and Korean steel mill demand. During that period, annual iron ore price contracts increased by 65% to 97% compared to the previous year. Iron ore prices subsequently fell during the global financial crisis with a reduction in world market sentiment and hence demand for iron ore. April 2010 saw an increase in price as miners moved to quarterly pricing and global economies began to recover.

Additionally, iron ore experienced a sharp rise in price in mid-2010 when Indian state Karnataka banned all iron ore exports. India is currently the world’s third largest iron ore supplier with approximately a quarter of its 100+ million tonnes of exports originating from Karnataka. The iron ore price increased in mid 2011 on the back of anticipated ore shortages which prompted restocking by the world’s larger steel mills. The above observed decline in the iron ore price in late 2011 can be attributable to the slow in Chinese ore demand. Chinese imports decreased at the end 2011 which is reflective of falling steel prices over the same period.

Iron ore prices fluctuated between US$110.4 and US$158.9 in May 2013 and February 2013 respectively. After the decrease in prices in May, iron ore prices recovered in July 2013.The increase in the price of iron ore was driven by heavy steel re-stocking in China following improvements in the Chinese property sector and miscalculations from Chinese steel makers. Steel makers often run down their stockpiles in the hope that the price of steel will fall and they can buy at a cheaper rate, however when the price did not fall the steel makers were caught out and had to purchase significant amounts of steel. This increased demand caused the price to rise during July 2013. Adding to this increase in demand was a decrease in supply as bad weather in Brazil slowed production.

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In October 2013 through to December 2013, global iron ore prices stabilised with a monthly average range of US$133-US$137. Weaker iron ore prices compared to those recorded in July 2013 and August 2013 was driven by a slowdown in steel production and consumption in China. According to the World Steel Organisation, pig iron production in China fell by 6 million tonnes in November to 53 million tonnes, representing the lowest level since November 2012.

At the beginning of 2014, global iron ore prices fell to US$110, and in May 2014, iron ore prices dropped below US$100 for the first time in almost two years. Factors behind the decrease were predominantly due to the slowdown in steel production in China along with a large oversupply of iron ore. Inventories at ports in China were at record levels, increasing from 84 million tomes to a two year high of 106 million tonnes.

In early October 2014, the price of iron dropped below US$80, representing a five year low. The slowdown in steel consumption in China was influenced by a number of drivers including a fall in GDP growth, tightening of credit policy which resulted in increased borrowing costs for iron ore buyers and a drop in China’s Purchasing Managers’ Index.

Forecast prices

The iron ore price closed at US$80 on 1 October 2014. Iron ore prices are forecast to trend downwards over the coming years and are expected to remain around US$90 per metric tonne in 2018. Despite the fact Indian iron ore production is expected to decrease due to restrictions on mining, the largest producers have all proceeded with a number of expansions. While Chinese steel smelting companies will continue to require high iron ore volumes to meet demand, higher production and output from Australian mines along with increases in output from Brazil and West Africa are expected to lead to oversupply and weakened prices.

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9. Valuation approach adopted

There are a number of methodologies which can be used to value a business or the shares in a company. The principal methodologies which can be used are as follows:

Capitalisation of future maintainable earnings (‘ FME ’)
Discounted cash flow (‘ DCF ’)
Quoted market price basis (‘ QMP ’)
Net asset value (‘ NAV ’)
Market based assessment

A summary of each of these methodologies is outlined in Appendix 2. Different methodologies are appropriate in valuing particular companies, based on the individual circumstances of that company and available information.

In our assessment of the value of Radar shares prior to the Transaction we have chosen to employ the following methodologies:

NAV on a going concern basis as our primary valuation methodology; and
QMP as our secondary valuation methodology.

We have chosen these methodologies for the following reasons:

Being an exploration and pre-development company, the core value of Radar is in the exploration assets it holds. We have instructed Agricola Mining Consultants Pty Ltd (‘ Agricola ’) to act as independent specialist and to provide an independent market valuation of the Company’s exploration assets in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports 2005 ( ‘the Valmin Code’ ). Agricola’s full report may be found in Appendix 3. We have considered this in the context of Radar’s other assets and liabilities on a NAV basis;
The QMP basis is a relevant methodology to consider because Radar’s shares are listed on the ASX. This means there is a regulated and observable market where Radar’s shares can be traded. However, in order for the QMP methodology to be considered appropriate, the Company’s shares should be liquid and the market should be fully informed as to its activities. We have considered these factors in section 10.2 of our Report;
Radar does not generate regular trading income. Therefore there are no historic profits that could be used to represent future earnings. This means that the FME valuation approach is not appropriate; and
Radar has no foreseeable future net cash inflows and therefore the application of the DCF valuation approach is not appropriate.

In our assessment of the value of Radar shares following to the Transaction we have chosen to employ the following methodology:

NAV as our primary valuation methodology.

The net asset value of Radar shares following the Transaction will involve the following items:

The value of Radar prior to the Transaction;

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Incorporate the effects of the Transaction in the context of Radar’s other assets and liabilities on a NAV basis; and
The number of shares on issue will incorporate the shares to be issued in accordance with the Entitlement Offer.

10. Valuation of Radar prior to the Transaction

10.1 Net Asset Valuation of Radar prior to the Transaction

The value of Radar’s assets on a going concern basis is reflected in our valuation below:

Notes	30-Jun-14 Low value Preferred value High value $ $ $ $
CURRENT ASSETS
Cash and cash equivalents 1 Other receivables TOTAL CURRENT ASSETS NON CURRENT ASSETS Exploration and evaluation expenditure 2 Plant and equipment TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITES TOTAL LIABILITIES	15,064 887,457 887,457 887,457 460,872 460,872 460,872 460,872
	475,936 1,348,329 1,348,329 1,348,329
	13,311,475 6,770,000 8,760,000 13,930,000 54,380 54,380 54,380 54,380
	13,365,855 6,824,380 8,814,380 13,984,380
	13,841,791 8,172,709 10,162,709 15,332,709
	3,606,100 3,606,100 3,606,100 3,606,100
	3,606,100 3,606,100 3,606,100 3,606,100
	3,606,100 3,606,100 3,606,100 3,606,100
NET ASSETS Shares on issue (number) 3 Value per share ($)	10,235,691 4,566,609 6,556,609 11,726,609
	132,248,630 132,248,630 132,248,630 $0.035 $0.050 $0.089

We have been advised by management that there were not any material changes in the statement of financial position since 30 June 2014 apart from those discussed below. We have assumed that the fair market value of the assets and liabilities as at 30 June 2014 are equal to the carrying values as set out in the above statement of financial position. The table above indicates the net asset value of a Radar share prior to the Transaction is between $0.035 and $0.089, with a preferred value of $0.050.

The following adjustments were made to the net assets of Radar as at 30 June 2014 in arriving at our valuation.

Note 1: Cash and cash equivalents

We have adjusted cash and cash equivalents for the receipt of funds from the Placement to Victory. Victory subscribed for and the Company will issue 26.1 million fully paid ordinary shares at an issue price of $0.035 per share to raise $913,500 before costs. The Company has also agreed to pay corporate

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advisory and management fees of 4.5% of the amounts raised. Therefore we have increased cash and cash equivalents to approximately $0.89 million.

Note 2: Valuation of Radar’s exploration assets

We instructed Agricola to provide an independent market valuation of the exploration assets held by Radar in accordance with the Valmin Code and the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ( ‘JORC Code’ ).

Agricola considered a number of different valuation methods when valuing the exploration assets of Radar. The DCF method is not considered to be appropriate given there is no pre-feasibility or feasibility study available and no associated JORC compliant ore reserves. Agricola applied the comparable transaction method, specifically the Average Acquisition Cost method. The method requires allocating a dollar value to the mineral resource in the ground and applying appropriate discounts for JORC category, operating factors and average acquisition cost for mineral projects. This may also apply to wellestablished zones of mineralisation that have not formally been categorised under the JORC code in certain cases. An additional risk weighting may be appropriate in these circumstances.

The Geoscientific Rating Method is generally used for exploration ground that is not advanced enough to estimate mineral resources and has been used to value Radar’s exploration assets where a mineral resource has not yet been estimated in accordance with the JORC Code.

The range of values for Radar’s exploration asset as calculated by Agricola is set out below:

Radar Iron Limited Projects Valuation - Agricola	Low value Preferred value High value $m $m $m
Yerecoin (mineral resources) Die Hardy (mineral resources) Muldoon (mineral resources) Uruara Brazil (mineral resource) Yerecoin (exploration potential) Central Yilgarn (exploration potential) Uruaco Brazil (exploration potential) Total	2.84 3.68 5.89 2.57 3.33 5.32 0.09 0.11 0.18 1.13 1.46 2.33 0.04 0.05 0.06 0.05 0.06 0.07 0.06 0.06 0.07
	6.77 8.76 13.93

The table above indicates a range of values for the Company’s exploration assets of between $6.77 million and $13.93 million, with a preferred value of $8.76 million. The full version of Agricola’s Independent Valuation Report is attached in Appendix 3.

Note 3: Shares on issue

We have adjusted the number of shares on issue as a result of the Placement of 26.1 million fully paid ordinary shares to Victory. Therefore the number of shares on issue has increased from 106,148,630 to 132,248,630.

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10.2 Quoted Market Prices for Radar securities

To provide a comparison to the valuation of Radar in section 10.1, we have also assessed the quoted market price for a Radar share.

The quoted market value of a company’s shares is reflective of a minority interest. A minority interest is an interest in a company that is not significant enough for the holder to have an individual influence in the operations and value of that company.

RG 111.11 suggests that when considering the value of a company’s shares for the purposes of approval under item 7 of section 611 of the Act the expert should consider a premium for control. An acquirer could be expected to pay a premium for control due to the advantages they will receive should they obtain 100% control of another company. These advantages include the following:

control over decision making and strategic direction;
access to underlying cash flows;
control over dividend policies; and
access to potential tax losses.

Whilst Victory will not be obtaining 100% of Radar, RG 111 states that the expert should calculate the value of a target’s shares as if 100% control were being obtained. RG 111.13 states that the expert can then consider an acquirer’s practical level of control when considering reasonableness. Reasonableness has been considered in section 13.

Therefore, our calculation of the quoted market price of a Radar share including a premium for control has been prepared in two parts. The first part is to calculate the quoted market price on a minority interest basis. The second part is to add a premium for control to the minority interest value to arrive at a quoted market price value that includes a premium for control.

Minority interest value

Our analysis of the quoted market price of a Radar share is based on the pricing prior to the announcement of the Transaction. This is because the value of a Radar share after the announcement may include the affects of any change in value as a result of the Transaction. However, we have considered the value of a Radar share following the announcement when we have considered reasonableness in section 13.

Information on the Transaction was announced to the market on 22 September 2014. Prior to this date the Company had been in a trading halt since 11 September 2014. Therefore, the following chart provides a summary of the share price movement over the 12 months to 10 September 2014 which was the last full trading day prior to the announcement of the Transaction.

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RAD share price and trading volume history

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----- Start of picture text -----

0.07 1.00
0.06
0.80
0.05
0.60
0.04
0.03
0.40
0.02
0.20
0.01
0.00 0.00
Volume Closing share price
Share Price ($)
Volume (millions)
----- End of picture text -----

Source: Bloomberg and BDO analysis

The daily price of Radar shares from 10 September 2013 to 10 September 2014 has ranged from a low of $0.02 on 14 November 2013 to a high of $0.061 on 12 May 2014. From March 2014 to June 2014, Radar’s share price displayed an upward trend peaking during June 2014. It has since trended downwards and has traded between $0.03 and $0.04 since July 2014. The highest single day of trading was on 15 November 2013 where a total of 943,320 shares were traded.

During this period a number of announcements were made to the market. The key announcements are set out below:

Date	Announcement	Closing Share Price Following Announcement	Closing Share Price Three Days After Announcement	Closing Share Price Three Days After Announcement	Closing Share Price Three Days After Announcement
		$ (movement)	$ (movement)
08/09/2014	Yerecoin Resource Upgrade	0.030 � 0.0%	0.026	�	13.3%

04/09/2014	Share Purchase Plan Offer Extended	0.035 � 0.0%	0.030	�	14.3%

03/09/2014	Yerecoin Transport Optimisation Study	0.035 � 0.0%	0.030	�	14.3%

28/08/2014	Yerecoin Update	0.030 � 0.0%	0.035	�	16.7%

20/08/2014	Share Purchase Plan	0.030 � 0.0%	0.030	�	0.0%

31/07/2014	Quarterly Activities Report	0.040 � 0.0%	0.040	�	0.0%

31/07/2014	Quarterly Cashflow Report	0.040 � 0.0%	0.040	�	0.0%

10/06/2014	Yerecoin Scoping Study	0.060 � 0.0%	0.060	�	0.0%

22/05/2014	Additional Placement Details	0.050 � 0.0%	0.050	�	0.0%

07/05/2014	Completion of Major Acquisition	0.055 � 14.6%	0.060	�	9.1%

07/05/2014	New Cornerstone Investor	0.055 � 14.6%	0.060	�	9.1%

02/05/2014	Replacement Announcement - Major Project Acquisition	0.044 � 0%	0.055	�	25%

01/05/2014	Quarterly Activities Report	0.044 � 0%	0.048	�	9%

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01/05/2014	Quarterly Cashflow Report	0.044 � 0%	0.044 � 0%	0.048	�	9%

24/04/2014	Major Project Acquisition	0.035 � 17%		0.035	�	0%

02/04/2014	Brazil Update 6	0.028 � 0%		0.035	�	25%

14/03/2014	Half Yearly Accounts	0.025 � 0%		0.025	�	0%

20/02/2014	Brazil Update	0.034 � 0%		0.026	�	24%

31/01/2014	Dec13 Quarterly Cashflow Report	0.040 � 0%		0.024	�	40%

31/01/2014	Dec13 Quarterly Activities Report	0.040 � 0%		0.024	�	40%

30/01/2014	Brazil Update 4	0.040 � 0%		0.040	�	0%

21/01/2014	Brazil Update - Uruara Project Option Exercised	0.040 � 0%		0.040	�	0%

15/01/2014	Brazil Update 2	0.040 � 14%		0.040	�	0%

18/11/2013	Brazil Update	0.030 � 0%		0.045	�	50%

13/11/2013	Brazilian Iron Ore Project Acquired	0.025 �	17%	0.030	�	20%

Source: Bloomberg and BDO analysis

On 13 November 2013, the Company announced that it had entered into a farm-in agreement to acquire a 50% interest in the Uruara Project from private Brazilian company, Sullis Mineracao SL. On the day of the announcement, the Company’s share price fell by 17% to $0.025; however in the following three days, the share price increased by 20% to $0.030.

On 18 November 2013, Radar released an update on the exploration work conducted at its recently acquired Uruara Project. Results from the rock chip assays indicated high grade iron ore with low levels of impurities. On the day of the release, Radar’s share price remained unchanged at $0.030 however, increased by 50% to $0.045 in the three days subsequent.

On 31 January 2014, the Company released its December Quarterly Activities and Cashflow Report. In the report, Radar outlined the Company’s objective to maintain a cash expenditure minimisation policy for active exploration in the Yilgarn Province. On the day of the release, the Company’s share price remained unchanged at $0.040; however fell by 40% to $0.024 in the following three days.

On 7 May 2014, the Company announced the completion of the acquisition of the Yerecoin Project along with the issue of 17.2 million shares at $0.05 per share to Lightshare Investments Pty Ltd. Funds from the placement will go towards the initial payment of the Yerecoin Project. On the day of the announcement, Radar’s share price increased by 14.6% to $0.055 and continued to increase by 9.1% to $0.060 in the following three days.

On 28 August 2014, the Company released an update on the progress of its project studies at its Yerecoin Project. The Company outlined its aim to bring the project into production in 2016. On the day of the update, Radar’s share price remained unchanged at $0.030; however increased by 16.7% to $0.035 in the following three days.

To provide further analysis of the market prices for a Radar share, we have also considered the weighted average market price for 10, 30, 60 and 90 day periods to 10 September 2014.

Share Price per unit	10-Sep-14	10 Days	30 Days	60 Days	90 Days
Closing price	$0.030
Weighted average		$0.033	$0.032	$0.037	$0.042
Source:Bloomberg and BDO analysis

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The above weighted average prices are prior to the date of the announcement of the Transaction, to avoid the influence of any increase in price of Radar shares that has occurred since the Transaction was announced.

An analysis of the volume of trading in Radar shares for the twelve months to 10 September 2014 is set out below:

Trading days	Share price	Share price	Cumulative volume	As a % of
	low	high	traded	Issued capital
1 Day	$0.030	$0.030	194,552	0.18%
10 Days	$0.030	$0.035	868,975	0.82%
30 Days	$0.030	$0.040	1,111,975	1.05%
60 Days	$0.030	$0.058	1,733,409	1.63%
90 Days	$0.030	$0.061	2,232,865	2.10%
180 Days	$0.022	$0.061	3,549,913	3.34%
1 Year	$0.020	$0.061	6,810,186	6.42%

Source: Bloomberg and BDO analysis

This table indicates that Radar’s shares display a low level of liquidity, with 6.42% of the Company’s current issued capital being traded in a twelve month period. For the quoted market price methodology to be reliable there needs to be a ‘deep’ market in the shares. RG 111.69 indicates that a ‘deep’ market should reflect a liquid and active market. We consider the following characteristics to be representative of a deep market:

Regular trading in a company’s securities;
Approximately 1% of a company’s securities are traded on a weekly basis;
The spread of a company’s shares must not be so great that a single minority trade can significantly affect the market capitalisation of a company; and
There are no significant but unexplained movements in share price.

A company’s shares should meet all of the above criteria to be considered ‘deep’, however, failure of a company’s securities to exhibit all of the above characteristics does not necessarily mean that the value of its shares cannot be considered relevant.

In the case of Radar, we do not consider there to be a deep market for the Company’s shares as a result of only 6.42% of the Company’s current issued capital being traded over the twelve months prior to the announcement of the Transaction.

Our assessment is that a range of values for Radar shares based on market pricing, after disregarding post announcement pricing, is between $0.030 and $0.035.

Control Premium

We have reviewed the control premiums paid by acquirers of mining companies listed on the ASX. We have summarised our findings below:

Year	Number of Transactions	Average Deal Value (AU$m)	Average Control Premium (%)
2014	6	113.29	14.51
2013	16	49.12	57.80
2012	19	135.78	42.67

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2011	20		634.68	31.40
2010	24		748.05	40.76
2009	29		86.80	39.23
2008	8		553.76	38.87
		Median	135.78	39.23
		Mean	331.64	37.89

Source: Bloomberg and BDO analysis

In arriving at an appropriate control premium to apply we note that observed control premiums can vary due to the:

Nature and magnitude of non-operating assets;
Nature and magnitude of discretionary expenses;
Perceived quality of existing management;
Nature and magnitude of business opportunities not currently being exploited;
Ability to integrate the acquiree into the acquirer’s business;
Level of pre-announcement speculation of the transaction;
Level of liquidity in the trade of the acquiree’s securities.

The table above indicates that there has been an increasing trend of control premia paid by acquirers of mining companies since 2008, in particular in 2013 which there were four control transactions with announced premiums in excess of 85%.

If the Transaction is approved, Victory has the potential to increase their holding to a maximum of 59.87%, assuming no further shares are issued and in the event no shareholders accept their entitlement under the Entitlement Offer. As a result, Victory should be expected to pay a control premium. In determining the premium for control to be paid by Victory we have taken into account the above analysis and the Company’s current going concern issues as highlighted in the most recent audited financial report. Based on the analysis above we believe that an appropriate control premium is between 20% and 40%.

Quoted market price including control premium

Applying a control premium to Radar’s quoted market share price results in the following quoted market price value including a premium for control:

	Low	Midpoint	High
	$	$	$
Quoted market price value	$0.030	$0.033	$0.035
Control premium	20%	30%	40%
Quoted market price valuation including a premium for control	$0.036	$0.043	$0.049

Therefore, our valuation of a Radar share based on the quoted market price method and including a premium for control is between $0.036 and $0.049, with a midpoint value of $0.043.

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10.3 Assessment of a Radar share prior to the Transaction

The results of the valuations performed are summarised in the table below:

		Low	Preferred	High
		$	$	$
NAV methodology (section	10.1)	0.035	0.050	0.089
QMP methodology (section	10.2)	0.036	0.043	0.049

Our low and preferred valuation of a Radar share under the QMP methodology (including a premium for control) is similar to our low and preferred valuation determined under the NAV methodology. However, our high valuation under the NAV methodology is significantly higher than our high valuation determined under the QMP methodology (including a premium for control). The difference between the valuations obtained under the NAV and QMP approaches can be explained by the following:

Our NAV methodology includes an independent market valuation of Radar’s exploration assets performed by Agricola. The valuation methodologies applied by Agricola have taken into account the current market, locality, technical and strategic factors which all have an impact on the development of the exploration assets and therefore value; and
Under RG111.69 (d), the QMP methodology is considered appropriate when a liquid and active market exists for the securities. From our analysis of the QMP of a Radar share we note that only 3.34% of the Company’s current issued capital had been traded in the 180 trading days up until the date of announcement of the Transaction, which represents a low level of liquidity over the period. We also note that over the 180 day trading period Radar shares have traded between a low of $0.022 and a high of $0.061.

Based on the above points and the lack of a ‘deep’ market for the trading of Radar shares, we consider the net asset value to be the most appropriate methodology and consider the value of a Radar share prior to the Transaction to be between $0.035 and $0.089, with a preferred value of $0.050.

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11. Valuation of Radar following the Transaction

The value of Radar assets on a going concern basis following the Transaction is reflected in our valuation below:

Notes	Low value Preferred value High value $ $ $
Net Assets of Radar prior to the Transaction	4,562,041 6,552,041 11,722,041
Cash received from issue of Entitlement Offer shares* 1 Capital raising costs (5% of funds raised) 1	4,628,702 4,628,702 4,628,702 (277,722) (277,722) (277,722)
Net Assets of Radar following the Transaction Discount for minority interest 2	8,913,021 10,903,021 16,073,021 29% 23% 17%
Net Assets of Radar following the Transaction (minority interest basis) Shares on issue (number) 3 Value per share ($)	6,328,245 8,395,326 13,340,607 264,497,260 264,497,260 264,497,260
	$0.024 $0.032 $0.050
*Based on a minimum issue price of $0.035 per share

The table above indicates the net asset value of a Radar share following the Transaction is between $0.024 and $0.050, with a preferred value of $0.032. The following adjustments were made to the net assets of Radar following to the Transaction.

Note 1: Cash and cash equivalents

We have adjusted cash and cash equivalents for the expected receipt of funds from the Entitlement Offer. Under the Entitlement Offer a total of 132,248,630 shares will be issued at a minimum issue price of $0.035 per share to raise approximately $4.63 million. The Company has also agreed to pay corporate advisory and management fees of 6% of the amounts raised, which totals approximately $0.28 million.

Note 2: Minority discount

The net asset value of a Radar share following the Transaction is reflective of a controlling interest. This suggests that the acquirer obtains an interest in the company which allows them to have an individual influence in the operations and value of that company. Therefore, if the Transaction is approved Shareholders may become minority interest shareholders in Radar as Victory could hold a controlling interest, meaning that their individual holding will not be considered significant enough to have an individual influence in the operations and value of the Company.

Therefore, we have adjusted our valuation of a Radar share following the Transaction, to reflect a minority interest holding. A minority interest discount is the inverse of a premium for control. As discussed in section 10.2, we consider an appropriate control premium for Radar to be in the range of 20% to 40%, giving rise to a minority interest discount in the range of 17% to 29%.

Note 3: Number of shares on issue

We have adjusted the number of shares on issue for the 132,248,630 shares to be issued under the Entitlement Offer. Therefore the number of shares on issue has increased to 264,497,260.

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12. Is the Transaction fair?

The value of a Radar share prior to the Transaction on a control basis compares to the value of a Radar share following the Transaction on a minority basis, as detailed below.

		Low	Preferred	High
	Ref
		$	$	$
Value of a Radar share prior to the Transaction on a	10	0.035	0.050	0.089
control basis
Value of a Radar share following the Transaction on a	11	0.024	0.032	0.050
minority basis

The above valuation ranges are graphically presented below:

Valuation Summary

Value of a Radar share following the Transaction on a minority basis Value of a Radar share prior to the Transaction on a control basis
0.000 0.015 0.030 0.045 0.060 0.075 0.090

Value ($)

13. Is the Transaction reasonable?

13.1 Alternative Proposal

We are unaware of any alternative proposal that might offer the Shareholders of Radar a premium over the value ascribed to, resulting from the Transaction.

13.2 Practical Level of Control

Following the completion of the Placement, Victory will own 19.74% of the shares in Radar. If Shareholders approve the Transaction, Victory could increase their holding to a maximum of 59.87%, assuming no further shares are issued and in the event no shareholders accept their entitlement under the Entitlement Offer.

Depending upon the extent to which Shareholders take up their Entitlement, there is a risk that Victory may acquire more than 50% of the Company’s issued Shares. This will allow Victory Mining to control the composition of the Company’s Board and its operations. However the underwriting is not conditional upon Board representation and Victory has not sought to appoint any Directors.

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When shareholders are required to approve an issue that relates to a company there are two types of approval levels. These are general resolutions and special resolutions. A general resolution requires 50% of shares to be voted in favour to approve a matter and a special resolution requires 75% of shares to be voted in favour to approve a matter. If the Transaction is approved then Victory has the potential to pass and block general resolutions and block special resolutions.

13.3 Movement in Radar’s share price following announcement of the Transaction

We have analysed movements in Radar’s share price since the Transaction was announced. A graph of Radar’s share price since the announcement is set out below.

RAD share price and trading volume history

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----- Start of picture text -----

0.05 0.25
Announcement of Transaction
0.04 0.20
0.03 0.15
0.02 0.10
0.01 0.05
0.00 0.00
Volume Closing share price
Share Price ($)
Volume (millions)
----- End of picture text -----

Source: Bloomberg and BDO analysis

The announcement of the Transaction was made to the market on 22 September 2014. On that day no shares were traded and Radar’s share price closed at $0.03, the same closing price on the last full trading day prior to announcement of the Transaction.

13.4 Advantages of Approving the Transaction

We have considered the following advantages when assessing whether the Transaction is reasonable.

Advantage	Description
The Transaction provides security	As at the date of this Report, the Company is still required to pay the two
to the Company in meeting the	remaining instalments to complete the acquisition of the Yerecoin Project. A total
remaining acquisition costs of	amount of $2.88 million is still payable by the Company with $1.44 million
the Yerecoin Project	payable by 30 November 2014 and the remaining $1.44 million payable by 17 April
	2015. The Company currently does not have sufficient funds to meet these
	payments when they fall due.
	As a result of the Transaction, Victory has ensured that the Company will raise

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	sufficient funds in order to meet these instalments when they fall due. The
	Company will also have funds to utilise for working capital purposes and further
	studies in regard to the Yerecoin Project.
Shareholders have the	All Shareholders have the ability to participate in the Entitlement Offer and
opportunity to participate in the	therefore maintain their current ownership in the Company. Victory will only be
Entitlement Offer and minimise	able to increase their ownership in the Company if Shareholder’s decide not to
dilution	participate.
	Therefore, Shareholders are not disadvantaged under the Transaction and are
	able to take up their entitlement at the same price under the Entitlement Offer.
On a minority basis pre and post	Applying a minority discount to the value of a Radar share prior to the Transaction
there is a significant overlap in	results in a range of $0.025 to $0.074 with a preferred value of $0.038. Although
the value ranges of a Radar share	the preferred value on a minority basis prior to the Transaction is still higher than
	the preferred value of a Radar share following the Transaction, there is significant
	overlap of the ranges.
	However, under RG 111 we must consider a controlling interest prior to the
	Transaction and a minority interest following the Transaction.
Major shareholder support	Following completion of the Placement, Victory holds 19.74% of the issued capital
	of Radar. The Transaction may result in Victory increasing its shareholding up to a
	maximum of 59.87%, which accordingly, is likely to increase its support of Radar
	in the future.

13.5 Disadvantages of Approving the Transaction

If the Transaction is approved, in our opinion, the potential disadvantages to Shareholders include those listed in the table below:

Disadvantage	Description
Dilution of existing Shareholders’	If the Transaction is approved and no Shareholders accept their entitlement under
interests	the Entitlement Offer, Shareholders’ interest could potentially be diluted from
	approximately 80.26% of the issued capital of Radar to a minimum of 40.13%. This
	will dilute Shareholders’ interests and their level of collective influence on the
	operations of the Company.
	As Victory will acquire more than 50% of the Company’s issued capital, Victory
	may obtain control of the composition of the Company’s Board and its operations.
	However, the underwriting is not conditional on Board representation and Victory
	has not sought to appoint any Directors.
Decreases the likelihood of a	If the Transaction is approved and no Shareholders accept their entitlement under
takeover offer	the Entitlement Offer, Victory will hold up to 59.87% of the issued capital of
	Radar. This may discourage any other potential bidder from making a takeover bid

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in the future as Victory will have control over the Company. This may have an adverse effect on the share price of Radar and may reduce the opportunity for Shareholders to receive a takeover premium in the future.

14. Conclusion

We have considered the terms of the Transaction as outlined in the body of this report and have concluded that the Transaction is not fair but reasonable to the Shareholders of Radar .

15. Sources of information

This report has been based on the following information:
Draft Notice of General Meeting and Explanatory Statement on or about the date of this report;
Audited financial statements of Radar for the years ended 30 June 2014, 30 June 2013 and 30 June 2012;
Signed binding Term Sheet between Radar and Victory dated 19 September 2014;
Independent Valuation Report of Radar’s exploration assets dated 10 October 2014 performed by Agricola Mining Consultants Pty Ltd;
Share registry information;
Information in the public domain; and
Discussions with Directors and Management of Radar.

16. Independence

BDO Corporate Finance (WA) Pty Ltd is entitled to receive a fee of $24,000 (excluding GST and reimbursement of out of pocket expenses). The fee is not contingent on the conclusion, content or future use of this Report. Except for this fee, BDO Corporate Finance (WA) Pty Ltd has not received and will not receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of this report.

BDO Corporate Finance (WA) Pty Ltd has been indemnified by Radar in respect of any claim arising from BDO Corporate Finance (WA) Pty Ltd's reliance on information provided by the Radar, including the non provision of material information, in relation to the preparation of this report.

Prior to accepting this engagement BDO Corporate Finance (WA) Pty Ltd has considered its independence with respect to Radar and any of their respective associates with reference to ASIC Regulatory Guide 112 ‘Independence of Experts’. In BDO Corporate Finance (WA) Pty Ltd’s opinion it is independent of Radar and their respective associates.

Neither the two signatories to this report nor BDO Corporate Finance (WA) Pty Ltd, have had within the past two years any professional relationship with Radar, or their associates, other than in connection with the preparation of this report.

A draft of this report was provided to Radar and its advisors for confirmation of the factual accuracy of its contents. No significant changes were made to this report as a result of this review.

BDO is the brand name for the BDO International network and for each of the BDO Member firms.

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BDO (Australia) Ltd, an Australian company limited by guarantee, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of Independent Member Firms. BDO in Australia, is a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International).

17. Qualifications

BDO Corporate Finance (WA) Pty Ltd has extensive experience in the provision of corporate finance advice, particularly in respect of takeovers, mergers and acquisitions.

BDO Corporate Finance (WA) Pty Ltd holds an Australian Financial Services Licence issued by the Australian Securities and Investment Commission for giving expert reports pursuant to the Listing rules of the ASX and the Corporations Act.

The persons specifically involved in preparing and reviewing this report were Adam Myers and Sherif Andrawes of BDO Corporate Finance (WA) Pty Ltd. They have significant experience in the preparation of independent expert reports, valuations and mergers and acquisitions advice across a wide range of industries in Australia and were supported by other BDO staff.

Adam Myers is a member of the Australian Institute of Chartered Accountants. Adam’s career spans 16 years in the Audit and Assurance and Corporate Finance areas. Adam has considerable experience in the preparation of independent expert reports and valuations in general for companies in a wide number of industry sectors.

Sherif Andrawes is a Fellow of the Institute of Chartered Accountants in England & Wales and a Member of the Institute of Chartered Accountants in Australia. He has over twenty five years experience working in the audit and corporate finance fields with BDO and its predecessor firms in London and Perth. He has been responsible for over 250 public company independent expert’s reports under the Corporations Act or ASX Listing Rules. These experts’ reports cover a wide range of industries in Australia with a focus on companies in the natural resources sector. Sherif Andrawes is the Chairman of BDO in Western Australia, Corporate Finance Practice Group Leader of BDO in Western Australia and the Natural Resources Leader for BDO in Australia.

18. Disclaimers and consents

This report has been prepared at the request of Radar for inclusion in the Explanatory Memorandum which will be sent to all Radar Shareholders. Radar engaged BDO Corporate Finance (WA) Pty Ltd to prepare an independent expert's report to consider the proposal for Radar to issue shares to Victory Mining Pty Ltd.

BDO Corporate Finance (WA) Pty Ltd hereby consents to this report accompanying the above Explanatory Memorandum. Apart from such use, neither the whole nor any part of this report, nor any reference thereto may be included in or with, or attached to any document, circular resolution, statement or letter without the prior written consent of BDO Corporate Finance (WA) Pty Ltd.

BDO Corporate Finance (WA) Pty Ltd takes no responsibility for the contents of the Explanatory Memorandum other than this report.

We have no reason to believe that any of the information or explanations supplied to us are false or that material information has been withheld. It is not the role of BDO Corporate Finance (WA) Pty Ltd acting as an independent expert to perform any due diligence procedures on behalf of the Company. The Directors of the Company are responsible for conducting appropriate due diligence in relation to Victory.

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BDO Corporate Finance (WA) Pty Ltd provides no warranty as to the adequacy, effectiveness or completeness of the due diligence process.

The opinion of BDO Corporate Finance (WA) Pty Ltd is based on the market, economic and other conditions prevailing at the date of this report. Such conditions can change significantly over short periods of time.

With respect to taxation implications it is recommended that individual Shareholders obtain their own taxation advice, in respect of the Transaction, tailored to their own particular circumstances. Furthermore, the advice provided in this report does not constitute legal or taxation advice to the Shareholders of Radar, or any other party.

BDO Corporate Finance (WA) Pty Ltd has also considered and relied upon independent valuations for mineral assets held by Radar.

The valuer engaged for the mineral asset valuation, Agricola Mining Consultants Pty Ltd, possess the appropriate qualifications and experience in the industry to make such assessments. The approaches adopted and assumptions made in arriving at their valuation are considered appropriate for this report. We have received consent from the valuer for the use of their valuation report in the preparation of this report and to append a copy of their report to this report.

The statements and opinions included in this report are given in good faith and in the belief that they are not false, misleading or incomplete.

The terms of this engagement are such that BDO Corporate Finance (WA) Pty Ltd has no obligation to update this report for events occurring subsequent to the date of this report.

Yours faithfully

BDO CORPORATE FINANCE (WA) PTY LTD

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Adam Myers Director

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Sherif Andrawes

Director

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A endix 1 – Glossar of Terms pp y

Reference	Definition
The Act	The Corporations Act 2001 (Cth)
Agricola	Agricola Mining Consultants Pty Ltd
APES 225	Accounting Professional & Ethical Standards Board professional standard APES 225
	‘Valuation Services’
ASIC	Australian Securities and Investments Commission
ASX	Australian Securities Exchange
BDO	BDO Corporate Finance (WA) Pty Ltd
The Company	Radar Iron Limited
DCF	Discounted Future Cash Flows
EBIT	Earnings before interest and tax
EBITDA	Earnings before interest, tax, depreciation and amortisation
Entitlement Offer	A one for one non-renounceable rights issue at a minimum issue price of $0.035 per
	share to raise approximately $4.63 million before costs, which is to be fully
	underwritten by Victory
FIRB	Foreign Investment Review Board
FME	Future Maintainable Earnings
JORC Code	The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
	Reserves
NAV	Net Asset Value
Our Report	This Independent Expert’s Report prepared by BDO
Placement	The placement to Victory of 26.1 million fully paid ordinary shares at an issue price of
	$0.035 per share to raise $913,500 before costs
QMP	Quoted Market price
Radar	Radar Iron Limited

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RBA	Reserve Bank of Australia
RG 74	Acquisitions approved by Members (December 2011)
RG 111	Content of expert reports (March 2011)
RG 112	Independence of experts (March 2011)
The Transaction	The proposal to issue share to Victory as a result of Victory underwriting the
	Entitlement Offer
Shareholders	Shareholders of Radar not associated with Victory
Valmin Code	The Code of Technical Assessment and Valuation of Mineral and Petroleum Assets and
	Securities for Independent Expert Reports
Valuation Engagement	An Engagement or Assignment to perform a Valuation and provide a Valuation Report
	where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and
	Valuation Procedures that a reasonable and informed third party would perform taking
	into consideration all the specific facts and circumstances of the Engagement or
	Assignment available to the Valuer at that time.
Victory	Victory Mining Pty Ltd
VWAP	Volume Weighted Average Price

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A endix 2 – Valuation Methodolo ies pp g

Methodologies commonly used for valuing assets and businesses are as follows:

1 Net asset value (‘NAV’) Asset based methods estimate the market value of an entity’s securities based on the realisable value of its identifiable net assets. Asset based methods include:

Orderly realisation of assets method
Liquidation of assets method
Net assets on a going concern method

The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to entity holders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the entity is wound up in an orderly manner.

The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the entity may not be contemplated, these methods in their strictest form may not be appropriate. The net assets on a going concern method estimates the market values of the net assets of an entity but does not take into account any realisation costs.

Net assets on a going concern basis are usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this alternative and this combined market value forms the basis for the entity’s valuation.

Often the FME and DCF methodologies are used in valuing assets forming part of the overall Net assets on a going concern basis. This is particularly so for exploration and mining companies where investments are in finite life producing assets or prospective exploration areas.

These asset based methods ignore the possibility that the entity’s value could exceed the realisable value of its assets as they do not recognise the value of intangible assets such as management, intellectual property and goodwill. Asset based methods are appropriate when an entity is not making an adequate return on its assets, a significant proportion of the entity’s assets are liquid or for asset holding companies.

2 Quoted Market Price Basis (‘QMP’) A valuation approach that can be used in conjunction with (or as a replacement for) other valuation methods is the quoted market price of listed securities. Where there is a ready market for securities such as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a ‘deep’ market in that security.

3 Capitalisation of future maintainable earnings (‘FME’)

This method places a value on the business by estimating the likely FME, capitalised at an appropriate rate which reflects business outlook, business risk, investor expectations, future growth prospects and other entity specific factors. This approach relies on the availability and analysis of comparable market data.

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The FME approach is the most commonly applied valuation technique and is particularly applicable to profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure requirements and non-finite lives.

The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings before interest and tax (‘ EBIT ’) or earnings before interest, tax, depreciation and amortisation (‘ EBITDA ’). The capitalisation rate or ‘earnings multiple’ is adjusted to reflect which base is being used for FME.

4 Discounted future cash flows (‘DCF’)

The DCF methodology is based on the generally accepted theory that the value of an asset or business depends on its future net cash flows, discounted to their present value at an appropriate discount rate (often called the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks.

Considerable judgement is required to estimate the future cash flows which must be able to be reliably estimated for a sufficiently long period to make this valuation methodology appropriate.

A terminal value for the asset or business is calculated at the end of the future cash flow period and this is also discounted to its present value using the appropriate discount rate.

DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are in a start up phase, or experience irregular cash flows.

5 Market Based Assessment

The market based approach seeks to arrive at a value for a business by reference to comparable transactions involving the sale of similar businesses. This is based on the premise that companies with similar characteristics, such as operating in similar industries, command similar values. In performing this analysis it is important to acknowledge the differences between the comparable companies being analysed and the company that is being valued and then to reflect these differences in the valuation.

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A endix 3 – Inde endent Valuation Re ort pp p p

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Malcolm Castle Agricola Mining Consultants Pty Ltd P.O. Box 473, South Perth, WA 6951 Mobile: 61 (4) 1234 7511 Email: [email protected] ABN: 84 274 218 871

10 October 2014

BDO Corporate Finance (WA) Pty Ltd 38 Station Street Subiaco, WA, 6008

Dear Sirs,

Re: INDEPENDENT VALUATION OF THE MINERAL ASSETS in WESTERN AUSTRALIA and BRAZIL

HELD BY RADAR IRON LIMITED

We have been requested by BDO Corporate Finance (WA) Pty Ltd (“BDO”) to provide a Mineral Asset Valuation Report (“Report”) of the Mineral Assets in Western Australia and Brazil held by Radar Iron Limited (the “Company”). This report serves to comment on the geological setting and exploration results on the properties and presents a technical and market valuation for the exploration assets based on the information in this Report.

The present status of the tenements in Western Australia and Brazil is based on information made available by the Company and verified by us by reference to the Department of Mines and Petroleum, Western Australia and the DNPM, Brazil. The Report has been prepared on the assumption that the tenements are lawfully accessible for evaluation.

Scope of the Valuation Report

This Report was prepared by Agricola Mining Consultants Pty Ltd (“Agricola”). In the preparation of the Report, Agricola utilised information relating to operational methods and expectations provided to them by various sources. Where possible, Agricola has verified this information from independent sources. Agricola and its directors accept no liability for any losses arising from reliance upon the information presented in this Report.

This mineral asset valuation endeavours to ascertain the unencumbered price which a willing but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not too anxious purchaser could reasonably expect to have to pay for the property if the vendor and the purchaser had got together and agreed on a price in friendly negotiation.

This is commonly known as the Spencer test after the High Court decision upon which these principles are based and to which the Courts have used in their determinations of market value of a

property. In attributing the price that would be paid to the hypothetical vendor by the hypothetical purchaser it is assumed that the property will be put to its “highest and best use”.

The findings of the valuation report include an assessment of the technical value (i.e. the value implied by a consideration of the technical attributes of the asset) and a market value (which considers the influences of external market forces and risk).

Applying the Spencer test may not be confined to a technical valuation exercise but may involve a consideration of market factors. In a highly speculative market during ‘boom’ conditions or a depressed market during ‘bust’ conditions the hypothetical purchaser may expect to pay a premium or receive a discount commensurate with the current market for mineral properties.

The main requirements of the Valuation Report are:

Prepared in accordance with the VALMIN code.
Experience and qualifications of key personnel to be set out
Details of valuation methodologies
Reasoning for the selection of the valuation approach adopted
Details of the valuation calculations
Conclusion on value

Projects

The Yerecoin Project is located approximately 140km north of Perth in farming land with three zones of mineralisation and Mineral Resources defined through drilling. There is significant potential to increase the resource size at Yerecoin

The potential for a major body of magnetite mineralisation at the Die Hardy Range was indentified in 2010 through reconnaissance mapping. The prospect, approximately 3.4km long, was given the initial name of ‘Lara’. Further drilling was completed and a mineral resource estimate compiled for the project.

Detailed recent RC drilling focused on the Muldoon hematite prospect at Johnston Range that had been identified by previous exploration. The target was for near-to-surface hematite mineralisation, extractable through shallow open pit mining operations. Along strike from Muldoon, at least three significant new mineralised zones have been identified and a mineral resource estimate has been compiled for the project.

The Uruara Project contains excellent exploration potential for iron ore and previous reconnaissance mapping and rock chip sampling indicated the presence of substantial surface occurrences of high grade hematite and magnetite mineralisation from which an exploration target has been estimated.

DECLARATIONS

Relevant codes and guidelines and competent persons’ statements

This report has been prepared as a technical assessment and valuation in accordance with the Code for Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the “VALMIN Code”, 2005) , which is binding upon Members of the Australasian Institute of Mining and Metallurgy (“AusIMM”) and the Australian Institute of

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Geoscientists (“AIG”), as well as the rules and guidelines issued by the Australian Securities and Investments Commission (“ASIC”) and the ASX Limited (“ASX”) which pertain to Independent Expert Reports ( Regulatory Guides RG111 and RG112, March 2011 ).

Where mineral resources have been referred to in this report, the information was prepared and first disclosed under the ”Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”), prepared by the Joint Ore Reserves Committee of the AusIMM, the AIG and the Minerals Council of Australia, effective 2004 and 2012 as appropriate.

An announcement for the Yerecoin North and South resources was made to ASX on 24 April 2014, and an announcement for the Yerecoin Main resource was made to ASX on 8 September 2014. Radar has confirmed that it is not aware of any new information or data that materially affects the information included in these announcement, that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed, and that the form and context in which the competent person’s findings has been presented has not materially modified.

As required by the JORC Code 2004, competent persons’ statements for exploration results and resources announced under the 2004 Code for the Die Hardy and Muldoon prospects are set out in this report with the relevant exploration results and resources.

Information disclosed under the JORC Code 2004 has not been updated since the estimation date to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

Under the definition provided by the VALMIN Code, two of the properties are classified as ‘advanced exploration areas’ with identified mineral resources, which is inherently speculative in nature. The properties are considered to be sufficiently prospective, subject to varying degrees of risk, to warrant further exploration and development of its economic potential.

Sources of Information

The statements and opinion contained in this report are given in good faith and this review is based on information provided by the title holders, along with technical reports by consultants, previous tenements holders and other relevant published and unpublished data for the area. I have endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this report is based. A final draft of this report was provided to BDO, along with a written request to identify any material errors or omissions prior to lodgement.

In compiling this report, I did not carry out a site visit to any of the Company’s Project areas. Based on my professional knowledge, experience, previous visits to the general area and the availability of extensive databases and technical reports made available by various Government Agencies, I consider that sufficient current information was available to allow an informed appraisal to be made without such a visit.

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The independent valuation report has been compiled based on information available up to and including the date of this report. Consent has been given for the distribution of this report in the form and context in which it appears. I have no reason to doubt the authenticity or substance of the information provided.

Qualifications and Experience

The person responsible for the preparation of this report is:

Malcolm Castle, B.Sc.(Hons), GCertAppFin (Sec Inst), MAusIMM

Malcolm Castle has over 45 years’ experience in exploration geology and property evaluation, working for major companies for 20 years as an exploration geologist. He established a consulting company over 25 years ago and specialises in exploration management, technical Audit, due diligence and property valuation at all stages of development. He has wide experience in a number of commodities including uranium, gold, base metals, iron ore and mineral sands. He has been responsible for project discovery through to feasibility study in Australia, Fiji, Southern Africa and Indonesia and technical Audits in many countries. He has completed numerous Independent Geologist’s Reports and mineral asset valuations over the last decade as part of his consulting business.

Mr Castle is a qualified and competent witness in a court or tribunal capable of supporting his valuation reports or to give evidence of his opinion of market value issues.

Mr Castle completed studies in Applied Geology with the University of New South Wales in 1965 and has been awarded a B.Sc.(Hons) degree. He has completed postgraduate studies with the Securities Institute of Australia in 2001 and has been awarded a Graduate Certificate in Applied Finance and Investment in 2004.

Competent Persons Statement

The information in this report that relates to Exploration Results and Mineral Resources of the Company has been reviewed by Malcolm Castle who is a member of the Australasian Institute of Mining and Metallurgy. Mr Castle has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as an Expert and Competent Person as defined under the VALMIN Code and in the 2004 and 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Castle consents to the inclusion in this report of the matters based on the information in the form and context in which they appear.

Independence

Agricola or its employees and associates do not, nor intend to be a director, officer or other direct employee of the Company and have no material interest in the Projects or the Company. The relationship with the Company is solely one of professional association between client and independent consultant. The review work and this report are prepared in return for professional

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fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report.

VALUATION OPINION

Based on an assessment of the factors involved the estimate of market value of 100% of the Company’s Projects is in the range of A$6.8 million to A$13.9 million with a preferred value of A$8.8 million.

This valuation is effective on 8 October 2014.

Valuation of mineral resources is estimated at a specific date as stated in the report and metal prices are estimated from current information available at that time. Metal markets may be quite volatile from time to time and it is appropriate to consider the effect of variations in metal price (which may change on a daily basis).

Yours faithfully

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Malcolm Castle

B.Sc.(Hons) MAusIMM, GCertAppFin (Sec Inst) Agricola Mining Consultants Pty Ltd

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TENEMENT SCHEDULE

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Radar has entered a farm-in agreement to acquire 50% of the Uruara iron ore project in Para State Brazil, from a private Brazilian company. The Uruara Project covers about 68,000Ha.

The status of the tenements has been verified based on a recent independent inquiry of the Department of Mines and Petroleum, WA, database by me, pursuant to paragraph 67 of the Valmin Code. The tenements are believed to be in good standing at the date of this valuation as represented by the Company’s ltenement managers except as noted earlier. Some future events such as the grant (or otherwise) of expenditure exemptions and plaint action may impact of the valuation and may give grounds for a reassessment.

PROJECT REVIEW

YERECOIN PROJECT

Yerecoin is located approximately 140km north of Perth in farming land with three zones of mineralisation and mineral resource estimates having been defined through drilling. The Main deposit is clearly the focus for immediate development with its coarser grind and higher Davis tube recovery (DTR). There is significant potential to increase the resource size at Yerecoin.

The Yerecoin project passed through several owners who have undertaken drilling and a number of substantial studies to advance the projects. The previous owners completed a scoping study for the project with the results indicating that, using a conventional development strategy, the overall outcomes were inconsistent with their production criteria (5-10Mtpa concentrate) and their current strategic objectives. As a consequence a decision was made to divest the project and Radar acquired the Project in April 2014.

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Mineral Resource Estimates – Yerecoin Project

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The information contained in this Mineral Resource summary replicates information contained in the Company’s ASX Announcement, “Resource Update for Yerecoin Project” (“Yerecoin Update”) dated 8 September 2014.

The author of this Report is not aware of any new information or data that materially affects the information included in the Yerecoin Update and, in the case of mineral resources that all the material assumptions and technical parameters underpinning the estimates in the Yerecoin Update continue to apply and have not materially changed. The form and context in which the findings of Mr Pollard are presented have not been materially modified.

Competent Persons Statement

The information in the Yerecoin Update that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by the Company and reviewed by Malcolm Castle, a competent person who is a Member of the Australasian Institute of Mining and Metallurgy (“AusIMM”). Malcolm Castle is a consultant geologist employed by Agricola Mining Consultants Pty Ltd. Mr Castle has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 and 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“JORC Code”). Malcolm Castle consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

CENTRAL YILGARN PROJECT

Die Hardy Prospect

The potential for a major body of magnetite mineralisation at the Die Hardy Range was indentified in 2010 through reconnaissance mapping. The prospect, approximately 3.4km long, was given the

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initial name of ‘Lara’. Two RC drill holes were completed in late 2010 to provide initial samples of the mineralisation for metallurgical testing. Both assay results and the preliminary metallurgical test work were highly encouraging. Further drilling was planned and a number of botanical surveys completed earlier in 2011 to facilitate drill approvals.

Resource drilling at the Die Hardy Range magnetite project was completed in September 2011. Total drilling for the project comprised 25 holes for 7214m. The drilling was aimed at providing sufficient drill data to enable an Inferred Mineral Resource to be estimated for the prospect. Two kilometres of the 3.4km strike length was targeted in the stage 1 drill campaign. Drilling to date has tested 1.8km of strike of the main banded iron formation (BIF) unit representing approximately 50% of the total length. All drill fences intersected a thick (100m – 300m) magnetite bearing BIF unit dipping steeply to the south.

Mineral Resource Estimates – Die Hardy Project

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Details of the estimate and the parameters are included in the Company’s ASX Announcement “Maiden 353 Mt Magnetite JORC Resource for Die Hardy” (“Die Hardy Resource’) dated 16 November 2011.

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The information contained in this Mineral Resource summary replicates information contained in the Company’s ASX Announcement, Die Hardy Resource.

The author of this Report is not aware of any new information or data that materially affects the information included in the Die Hardy Resource and, in the case of mineral resources that all the material assumptions and technical parameters underpinning the estimates in the Die Hardy Resource continue to apply and have not materially changed. The form and context in which the findings of Mr Voortman are presented have not been materially modified.

Muldoon Prospect

Recent exploration has focussed on defining additional hematite mineralisation. Following the definition of a significant magnetite resource at the Die Hardy project, feasibility studies are ongoing

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to better assess its economic potential. Target generation for hematite targets continues over the all Radar's tenements.

Radar has generated multiple hematite targets in the project areas through a combination of detailed geological mapping and aero-magnetic and gravity geophysical interpretation. Zones of surface hematite enrichment up to approximately 800m in length have been defined by mapping.

The prospects tested lie around the Horse Well Anticline that defines the 40km long belt of banded iron formation on the Johnston Range tenements and also an adjoining banded iron formation (BIF) ridge on the Evanston project. The Johnston Range is comprised of multiple bands of BIF exhibiting complex folding patterns which represents a target of several hundred linear kilometres of BIF with potential for hematite enrichment.

Detailed recent RC drilling focussed on the Muldoon hematite prospect at Johnston Range that had been identified by previous exploration. The target was for near-to-surface hematite mineralisation, extractable through shallow open pit mining operations. Best drill results included 32m at 60.4% Fe and 34m at 59.4% Fe. Along strike from Muldoon, at least three significant new mineralised zones have been identified that require further drill testing and a number of encouraging isolated intercepts provide further possible targets.

Inferred Mineral Resource Estimates – Muldoon Project

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Details of the estimate and the parameters are included in the Company’s ASX Announcement “Maiden Hematite JORC Resource for Muldoon Prospect – 2.1 Mt at 57.6% Fe” (“Muldoon Resource’) dated 8 May 2012.

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The information contained in this Mineral Resource summary replicates information contained in the Muldoon Resource. This information was prepared and first disclosed under the JORC Code 2004, and Radar has informed the author that the information has not been updated since to comply with the JORC Code 2012 on the basis that it has not materially changed since it was last reported.

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The author of this Report is not aware of any new information or data that materially affects the information included in the Muldoon Resource and, in the case of mineral resources that all the material assumptions and technical parameters underpinning the estimates in the Muldoon Resource continue to apply and have not materially changed. The form and context in which the findings of Mr Zharnikov are presented have not been materially modified.

Competent Persons Statement

The information in the Die Hardy Resource and Muldoon Resource that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by the Company and reviewed by Malcolm Castle, a competent person who is a Member of the Australasian Institute of Mining and Metallurgy (“AusIMM”). Malcolm Castle is a consultant geologist employed by Agricola Mining Consultants Pty Ltd. Mr Castle has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“JORC Code”). Malcolm Castle consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

URUARA PROJECT, BRAZIL

Radar has entered a farm-in agreement to acquire 50% of the Uruara high grade iron ore project in Para State Brazil, from a private Brazilian company. The Uruara Project covers about 68,000Ha of tenements with excellent exploration potential for iron ore. Previous reconnaissance mapping and rock chip sampling indicated the presence of substantial surface occurrences of high grade hematite and magnetite mineralisation. Rock chip assay values are commonly above 60% Fe with low levels of contaminants. Key aspects of the project/acquisition are as follows:

The Uruara Project is located in Para State, Brazil, approximately 600km inland and approximately 7km from the major Trans Amazonian Highway with ready access to the Amazon River at several locations. The project comprises 1 exploration license of approximately 10,000Ha hectares with a binding right to acquire 6 adjacent applications of 58,000Ha.

Exploration Target Estimate – Uruara, Brazil

Surface Sampling and mapping were used to define an Exploration Target in accordance with the JORC Code for high grade mineralisation. A tonnage range of 20Mt to 40Mt at a grade range of 58%Fe to 65% Fe were estimated. The potential quantity and grade is conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource.

Details of the surface sampling results on which the exploration target estimate was based are included in the Company’s ASX Release “Brazilian Iron Ore Project – Update 4”, dated 30 January 2014.

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The author of this Report is not aware of any new information or data that materially affects the information included in the Uruara exploration Target and that all the material assumptions and technical parameters underpinning the estimates in the Uruara exploration target continue to apply and have not materially changed. The form and context in which the findings of the Company are presented have not been materially modified.

Competent Persons Statement

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Malcolm Castle consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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VALUATION ASSESSMENT

The Yerecoin, and Central Yilgarn Iron Projects have estimated Mineral Resources in the Indicated and Inferred categories for magnetite and haematite iron. The Uruara Project in Brazil has an estimated Exploration Target. When a resource or defined body of mineralisation has been outlined and its economic viability has still to be established (i.e. there is no ore reserve and full feasibility study) then a Comparable Transactions approach is usually applied, often stated as a percentage of metal value. This can be applied to Mineral Resource estimates and Exploration Targets compiled in accordance with the JORC code with appropriate discounts for risk in the different categories.

Agricola Mining Consultants prefers the comparable transactions approach where mineral resources have been estimated. The DCF method is not appropriate because there is no Pre Feasibility or Feasibility Study available and no Ore Reserves have been (or can be) estimated under the JORC Code, 2012. The contemporaneous transactions over adjacent ground may be appropriate and usually related to a specific time frame and the existing market conditions. In the absence of such information the only viable method (in Agricola’s opinion) is to compare the sale of other deposits on a 'dollar per unit' basis for the mineral resource estimated in accordance with the JORC Code. Agricola is not aware of a method to cross check the valuation for the technical value (as apposed to the Market value) under these circumstances except by comparison with earlier valuation. The Geoscientific Rating method (potential for further discoveries) and Past Expenditure methods are appropriate for exploration ground that is not advanced enough to estimate mineral resources. These methods may be supported by reference to Yardstick (Rule of Thumb) methods as a reality check

The Comparable Transactions method requires allocating a dollar value to the mineral resource in the ground and applying appropriate discounts for JORC Category, operating factors and average acquisition cost for mineral projects. This may also apply to well-established zones of mineralisation that have not formally been categorised under the JORC code in certain cases. An additional risk weighting may be appropriate in these circumstances.

The Mineral Resources are assumed to encapsulate all the value for the surrounding ground and prospect area and a separate value for exploration potential for these tenements is not considered warranted.

The remainder of the Western Australian and Brazil Projects, including the potential for further iron ore discoveries, Exploration Licences and Prospecting Licences, are exploration projects. Several methods of valuation are available for such projects where a Mineral Resource has not yet been estimated in accordance with the JORC code. These include the use of valuations based on past exploration expenditure and valuations based on perceived prospectivity.

Exploration projects can be extremely variable and the use of comparable transactions is unlikely to produce a statistical spread of values for “similar” projects. This method can be used with any certainty where a Mineral Resource has been estimated. The Prospectivity Exploration Multiplier (PEM) is based on past expenditure while the Kilburn Geoscience Rating (Geo-factor Rating) is based

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on opinions of the prospectivity hence tenements can have marked variation in value between the methods.

The ‘Geo-factor Rating’ method of valuation for exploration tenements is the preferred valuation method for the Company’s current tenements as it focuses on the future prospectivity of the area.

The Geo-factor Rating method systematically assesses four key technical attributes of a tenement to arrive at a series of factors that are multiplied together to produce a prospectivity rating. The Basic Acquisition Cost (BAC) is the important input to the method and it is calculated by summing the application fees, annual rent, work required to facilitate granting (e.g. native title, environment etc) and statutory expenditure for a period of 12 months. This is usually expressed as average expenditure per square kilometre. Equity and grant status are also taken into account. Each factor is then multiplied serially to the BAC. The ‘Base Value’ is multiplied by the prospectivity rating to establish the overall technical value of each mineral property.

COMPARABLE TRANSACTIONS – Mineral Resources

YERECOIN PROJECT

Resource Estimates in accordance with the JORC Code have been compiled for the Yerecoin Deposit by independent consultants and are accepted here for the purpose of the valuation.

Mineral Resource Estimates – Yerecoin Project

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Valuation Methodology

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The average price for China import Iron Ore Fines 62% FE spot (CFR Tianjin port), US Dollars per Dry Metric Ton (tonne) is set out below.

Last Value: 82.38
Latest Period: Sep 2014
Updated: Oct 3, 2014, 3:07 PM EDT
Frequency: Monthly
Unit: USD per Dry Metric Ton
Notes: 62% Fe beginning December 2008

Iron Ore 62% Fe, CFR China (TSI) Swap Futures have been estimated at $79.17 for October 2014, $78.96 for November 2014 and $79.04 for December 2014.

Sources: https://ycharts.com/indicators/iron_ore_spot_price_any_origin, http://www.barchart.com/futures/commodities/ITI

Iron ore prices have shown extreme volatility and some commentators predict a rebound to higher prices. Iron ore prices have weakened recently and for this valuation a current price of US$80.00 per tonne of 62% Fe ore is selected.

Iron Ore Value	Yerecoin
Current Iron Ore Price (3 Month Ave.)	$80.00
Base Units for Current Price	62.00
Unit Price US$/dmtu	1.29
Units in Total Resource	28.55
AUD:USD Exchange Rate	1.1528
Long Term Average, AUD/dmt	$42.46

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Base Value

A discount factor is applied to the contained value to recognise the JORC category and allow for resource estimate risk.

Resource Category Discounts
Measured Resource	80%
Indicated Resource	70%
Inferred Resource	60%
Exploration Target	50%

Allowances for operating factors are also included in the assessment:

Operations Factors	Yerecoin
Estimated Mass Recovery	75.00% Magnetite/Haematite bodies
Mining	80.00% Multiple pits and blending
Processing	50.00% Magnetite - high power costs
Rail/Road	50.00% Road to existing/proposed Rail
Port	50.00% Use of Oakajee/public Port
Capex	70.00% Normal
Marketing	50.00% Off-take agreement to be settled
Total Operating Discount	3%

The base value for the project is estimated by multiplying the contained value by the discount factors.

Base Value = [Contained Value][Resource Discount][Operating Discounts]

Yerecoin Base Value, A$M
Measured	-
Indicated	24
Inferred	239
Exploration Target	-

Total	263

Average Acquisition Cost

A range of average acquisition cost (“AAC”) percentages are estimated based on a database of Merger and Acquisitions activity for the period 2006 to 2013. The percentage represents the amount paid for deposits compared to the contained value at the current metal price.

The AAC for projects lies in the range of 2.5% to 6.6%. The data set does not differentiate between resource categories and operational factors and this has been taken into account with risk related discounts applied to the Base Value. Information on sales internationally has shown a pattern for the AAC as shown in the percentile table.

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		AAC Percentiles	AAC Percentiles
Percentile	10th	25th	50th	75th	90th
AAC	2.2%	2.7%	3.5%	5.6%	6.2%

For the purpose of this valuation the Average Acquisition Cost for the lower, preferred and higher value is selected at the 25th, 50th and 75th percentiles. The Base Value is multiplied by AAC values at those percentiles to arrive at the estimated project technical value.

The AAC method percentiles are derived from Canadian Merger and Acquisitions activity in the gold industry. The original database provided $/ounce values for producing and non-producing asset sales for a period of years and Agricola has recalculated this as a percentage of current metal value so the information can be related to current metal prices in other metals. This, of course, is a subjective decision and AAC percentiles are used in conjunction with the operational factors to "normalise' the rates for gold acquisitions to other metals. In the absence of a useful database of project sales for other metals this is considered to be a reasonable proxy for sales in most metal projects (i.e. the combination of AAC and Operational Factors). Mineral asset sales are related to the current mineral price (or contained value) which is provided by the M & A database over the period 2006 - 2013 and the valuation method is considered to be realistic when adjusted by factors that relate specifically to the metal involved and more specifically to the individual deposits.

Technical Value

Technical Value = [Base Value]*[Average Acquisition Cost%]

Yerecoin Technical Value,
A$M
Low	7.11
High	14.74

Preferred	9.21
A$ per tonne	0.024

CENTRAL YILGARN PROJECT

Resource Estimates in accordance with the JORC Code have been compiled for the Yerecoin Deposit by independent consultants and are accepted here for the purpose of the valuation.

Mineral Resource Estimates – Die Hardy Project

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Inferred Mineral Resource Estimates – Muldoon Project

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Valuation Methodology

Contained metal is calculated from the deposit tonnes and grade in the categories of the JORC code. The estimated contained value for the Indicated and Inferred Resource is estimated based on current metal prices. Iron ore prices have shown extreme volatility and some commentators predict a rebound to higher prices. Iron ore prices have weakened recently and for this valuation a current price of US$80.00 per tonne of 62% Fe ore is selected.

Iron Ore Value	Die Hardy Muldoon
Current Iron Ore Price(3 Month Ave.)	$80.00 $80.00
Base Units for Current Price	62.00 62.00
Unit Price US$/dmtu	1.29 1.29
Units in Total Resource	26.11 57.60
AUD:USD Exchange Rate	1.1528 1.1528
LongTerm Average,AUD/dmt	$38.84 $85.68

Base Value

A discount factor is applied to the contained value to recognise the JORC category and allow for resource estimate risk.

Resource Category Discounts
Measured Resource	80%
Indicated Resource	70%
Inferred Resource	60%
Exploration Target	50%

Allowances for operating factors are also included in the assessment:

Operations Factors	Die Hardy Muldoon
Estimated Mass Recovery	75.00% 90.00%	Magnetite /Haematite bodies
Mining	80.00% 75.00%	Multiple pits and blending
Processing	50.00% 85.00%	Magnetite and Haematite
Rail	50.00% 50.00%	Road to existing/proposedRail
Port	50.00% 50.00%	Use of Esperance Port
Capex	70.00% 70.00%	Normal
Marketing	50.00% 75.00%	Offtake agreement to be settled
Total Operating Discount	3% 8%

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The base value for the project is estimated by multiplying the contained value by the discount factors.

Base Value = [Contained Value][Resource Discount][Operating Discounts]

Central Yilgarn Base Value, A$M	Die Hardy	Muldoon
Measured	-	-
Indicated	153	-
Inferred	84	8.0
Exploration Target	-	-
Total	238	8.0

Average Acquisition Cost

Technical Value

Technical Value = [Base Value]*[Average Acquisition Cost%]

Central Yilgarn Technical Value, A$M	Die Hardy	Muldoon
Low	6.41	0.22
High	13.30	0.45
Preferred	8.32	0.28
A$ per tonne	0.024	0.135

Sensitivity to Metal Price

The Steel Index (TSI) 62% fines price dropped to $US84.30 per tonne, CFR Tianjin, a level not seen since September 25, 2009. Iron ore prices are down 37.5% since the start of the year and 11.4% down since the start of August.

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==> picture [452 x 296] intentionally omitted <==

Price Changes over the last 12 months are shown below and an estimate of technical value for the mineral resources at Yerecoin and Central Yilgarn have been estimated to provide an idea of sensitivity to metal price.

The combined technical value of the Yerecoin and Central Yilgarn deposits at different iron Spot prices is as follows:

	Sensitivity to Metal Price, A$M Fe Price Low High Preferred 120.00 20.6 42.7 26.7 100.00 17.2 35.6 22.3 85.00 13.7 28.5 17.8 80.00 20.6 42.7 26.7

URUARA PROJECT, BRAZIL

An Exploration Target in accordance with the JORC Code has been compiled for the Uruara Deposit and are accepted here for the purpose of the valuation.

Exploration Target Estimate – Uruara Project

A tonnage range of 20Mt to 40Mt at a grade range of 58%Fe to 65% Fe were estimated. A median

Page | 21

Value of 30Mt at 62% Fe is accepted for the valuation. The potential quantity and grade is conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource.

Valuation Methodology

Iron Ore Value - Uruara
Current Iron Ore Price(3 Month Ave.)	$80.00
Base Units for Current Price	62.00
Unit Price US$/dmtu	1.29
Units in Total Resource	62.00
AUD:USD Exchange Rate	1.1528

LongTerm Average,AUD/dmt	$92.22

Base Value

A discount factor is applied to the contained value to recognise the JORC category and allow for resource estimate risk.

Resource Category Discounts
Measured Resource	80%
Indicated Resource	70%
Inferred Resource	60%
Exploration Target	50%

Allowances for operating factors are also included in the assessment:


	Uruara
Operations Factors

Estimated Mass Recovery	90.00%
Mining	75.00%
Processing	85.00%
Rail	50.00%
Port	50.00%
Capex	70.00%
Marketing	75.00%
Total Operating Discount	8%

The base value for the project is estimated by multiplying the contained value by the discount factors.

Page | 22

Base Value = [Contained Value][Resource Discount][Operating Discounts]

Base Value - Uruara, A$M
Measured	-
Indicated	-
Inferred	-
Exploration Target	104.2

Total	104.2

Average Acquisition Cost

Technical Value

Technical Value = [Base Value]*[Average Acquisition Cost%]

Uruara Deposit Technical Value	USD M
Low	2.81
High	5.83

Preferred	3.65
% of contained value	0.13%
A$ per tonne	0.122

GEO-FACTOR RATING METHOD – EXPLORATION POTENTIAL

BASE VALUE

This represents the exploration cost for the current period of the tenements. The current Base Acquisition Cost (BAC) for exploration projects or tenements at a similar stage is considered to be the average expenditure for the first year of the licence tenure. This is considered to be a BAC of $400 to $450 per square kilometre .

The assessment of value is based on equity in the various projects is shown in the following table.

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A detailed list of all tenements is provided separately in the Tenement Schedule

Base Value = [Area][Grant Factor][Equity]*[Base Acquisition Cost]

Radar Iron Limited
		BAC
Project Tenement	Km2 Status	Grant Equity Low High
Yerecoin E70/2733	33.00 Granted	100% 100% 400 450
Yerecoin E70/2783	90.00 Granted	100% 100% 400 450
Yerecoin E70/2784	75.00 Granted	100% 100% 400 450
Yerecoin E70/3937	60.00 Granted	100% 100% 400 450
Yerecoin E70/3938	3.00 Granted	100% 100% 400 450
Yerecoin E70/3939	3.00 Granted	100% 100% 400 450
Yerecoin E70/3940	30.00 Granted	100% 100% 400 450
Yerecoin E70/3990	210.00 Granted	100% 100% 400 450
Yerecoin E70/4388	3.00 Granted	100% 100% 400 450
Yerecoin E70/4391	6.00 Granted	100% 100% 400 450
Central Yilgarn E77/1164	9.00 Granted	100% 100% 400 450
Central Yilgarn E771280	96.00 Granted	100% 100% 400 450
Central Yilgarn E77/1281	105.00 Granted	100% 100% 400 450
Central Yilgarn E77/1423	90.00 Granted	100% 100% 400 450
Central Yilgarn E77/1474	63.00 Granted	100% 100% 400 450
Central Yilgarn E77/1477	9.00 Granted	100% 100% 400 450
Central Yilgarn E77/1650	9.00 Granted	100% 100% 400 450
Central Yilgarn E77/1766	3.00 Granted	100% 100% 400 450
Central Yilgarn E77/1807	9.00 Granted	100% 100% 400 450
Central Yilgarn E77/1817	6.00 Granted	100% 100% 400 450
Central Yilgarn E77/1899	6.00 Granted	100% 100% 400 450
Central Yilgarn E77/1900	30.00 Granted	100% 100% 400 450
Central Yilgarn E77/1921	27.00 Granted	100% 100% 400 450
Central Yilgarn E77/1926	3.00 Granted	100% 100% 400 450
Central Yilgarn E77/1961	9.00 Granted	100% 100% 400 450
Central Yilgarn E77/1976	9.00 Granted	100% 100% 400 450
Central Yilgarn E77/1997	6.00 Granted	100% 100% 400 450
Central Yilgarn E77/2024	24.00 Granted	100% 100% 400 450
Central Yilgarn E77/2025	6.00 Granted	100% 100% 400 450
Central Yilgarn E77/2124	75.00 Granted	100% 100% 400 450
Central Yilgarn E77/2165	66.00 Granted	100% 100% 400 450
Central Yilgarn E772172	9.00 Granted	100% 100% 400 450
Central Yilgarn E77/2186	6.00 Granted	100% 100% 400 450
Central Yilgarn E77/2202	3.00 Pending	60% 100% 400 450
Central Yilgarn E77/2231	54.00 Pending	60% 100% 400 450
Central Yilgarn E77/2240	39.00 Pending	60% 100% 400 450
Central Yilgarn G77/35	0.04 Granted	100% 100% 400 450
Central Yilgarn M77/1264	11.88 Pending	60% 100% 400 450
Central Yilgarn M77/394	9.88 Granted	100% 100% 400 450
Central Yilgarn M77/646	1.22 Granted	100% 100% 400 450
Central Yilgarn M77/931	8.07 Granted	100% 100% 400 450
Central Yilgarn M77/962	5.93 Granted	100% 100% 400 450

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Central Yilgarn P77/3412	2.00 Granted	100% 100% 400 450
Central Yilgarn P77/3460	1.99 Granted	100% 100% 400 450
Central Yilgarn P77/3461	1.99 Granted	100% 100% 400 450
Central Yilgarn P77/3462	1.35 Granted	100% 100% 400 450
Central Yilgarn P77/3801	0.01 Granted	100% 100% 400 450
Central Yilgarn P77/3816	1.03 Granted	100% 100% 400 450
Central Yilgarn P77/3817	1.27 Granted	100% 100% 400 450
Central Yilgarn P77/3896	1.66 Granted	100% 100% 400 450
Central Yilgarn P77/3899	0.24 Granted	100% 100% 400 450
Central Yilgarn P77/3903	0.21 Granted	100% 100% 400 450
Central Yilgarn P77/3936	0.24 Granted	100% 100% 400 450
Central Yilgarn P77/3967	0.97 Granted	100% 100% 400 450
Central Yilgarn P77/3978	0.10 Granted	100% 100% 400 450
Central Yilgarn P77/3979	0.42 Granted	100% 100% 400 450
Central Yilgarn P77/3994	1.58 Granted	100% 100% 400 450
Central Yilgarn P77/4028	1.31 Granted	100% 100% 400 450
Central Yilgarn P77/4029	1.31 Granted	100% 100% 400 450
Central Yilgarn P77/4077	1.52 Granted	100% 100% 400 450
Central Yilgarn P77/4076	1.87 Granted	100% 100% 400 450
Central Yilgarn P77/4204	0.69 Granted	100% 100% 400 450
Central Yilgarn P77/4229	1.41 Granted	100% 100% 400 450
Central Yilgarn P77/4230	0.68 Granted	100% 100% 400 450
Central Yilgarn P77/4231	1.16 Granted	100% 100% 400 450
Uruara Brazil Farm in	190.00 Granted	100% 50% 400 450
Uruara Brazil New Appln	200.00 Pending	60% 50% 400 450

Prospectivity Assessment Factors

An assessment of the prospectivity of tenements was carried out. This includes a consideration of

Regional mineralization, old and current workings and the validity of conceptual models.
Local mineralization within the tenements and the application of conceptual models within the tenements.
Identified anomalies warranting follow up within the tenements.
The proportion of structural and lithological settings within the tenements and difficulty encountered by cover rocks and other factors.

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	Rating	Address - Off Property	Mineralisation - On Property	Anomalies	Geology

Low	0.5	Very little chance of mineralisation, Concept unsuitable to environment	Very little chance of mineralisation, Concept unsuitable to environment	Extensive previous exploration with poor results - no encouragement	Unfavourable lithology over >75% of the tenement
Average	1	Indications of Prospectivity, Concept validated	Indications of Prospectivity, Concept validated	Extensive previous exploration with encouraging results - regional targets	Deep alluvium Covered favourable geology (40-50%)
	2	Significant RC drilling leading to advance project status	RAB &/or RC Drilling with encouraging intercepts reported	Several well defined surface targets with some RAB drilling	Exposed favourable lithology (60-70%)
High	3	Resource areas identified	Advanced Resource definition drilling - early stage	Several significant subeconomic targets - no indication of volume	Highly prospective geology (80 - 100%)

Assessments in each category are based on a set scale (see above and Appendix 1) and are multiplied together to arrive at a “prospectivity index.

Prospectivity Index = [Off Site Factor][On Site Factor][Anomaly Factor]*[Geology Factor]

Radar Iron Limited Prospectivity Factors	Radar Iron Limited Prospectivity Factors
	Off Site On Site Anomaly Geology
Project
	Low High Low High Low High Low High
Yerecoin E70/2733	Contains Resource
Yerecoin E70/2783	1.00 1.05 1.00 1.05 1.00 1.05 0.75 0.80
Yerecoin E70/2784	Contains Resource
Yerecoin E70/3937	1.00 1.05 1.00 1.05 1.00 1.05 0.75 0.80
Yerecoin E70/3938	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Yerecoin E70/3939	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Yerecoin E70/3940	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Yerecoin E70/3990	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Yerecoin E70/4388	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Yerecoin E70/4391	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1164	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E771280	Contains Resource
Central Yilgarn E77/1281	Contains Resource
Central Yilgarn E77/1423	1.00 1.05 1.00 1.05 1.00 1.05 0.75 0.80
Central Yilgarn E77/1474	1.00 1.05 1.00 1.05 1.00 1.05 0.75 0.80
Central Yilgarn E77/1477	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1650	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1766	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1807	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1817	Contains Resource
Central Yilgarn E77/1899	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1900	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1921	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05

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Central Yilgarn E77/1926	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1961	Contains Resource
Central Yilgarn E77/1976	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/1997	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/2024	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/2025	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/2124	1.00 1.05 1.00 1.05 1.00 1.05 0.80 0.85
Central Yilgarn E77/2165	1.00 1.05 1.00 1.05 1.00 1.05 0.80 0.85
Central Yilgarn E772172	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/2186	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/2202	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn E77/2231	1.00 1.05 1.00 1.05 1.00 1.05 0.80 0.85
Central Yilgarn E77/2240	1.00 1.05 1.00 1.05 1.00 1.05 0.80 0.85
Central Yilgarn G77/35	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn M77/1264	Contains Resource
Central Yilgarn M77/394	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn M77/646	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn M77/931	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn M77/962	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3412	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3460	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3461	Contains Resource
Central Yilgarn P77/3462	Contains Resource
Central Yilgarn P77/3801	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3816	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3817	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3896	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3899	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3903	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3936	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3967	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3978	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3979	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/3994	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/4028	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/4029	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/4077	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/4076	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/4204	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/4229	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/4230	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Central Yilgarn P77/4231	1.00 1.05 1.00 1.05 1.00 1.05 1.00 1.05
Uruara Brazil Farm in*	1.00 1.05 1.00 1.05 1.50 1.55 1.00 1.05
Uruara Brazil New Appln	1.00 1.05 1.00 1.05 1.50 1.55 1.50 1.55

* Includes an Exploration Target valued separately. A reduced geology factor is included to

compensate for the area of the target.

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TECHNICAL VALUE

An estimate of technical value has been compiled for the tenements based on the base acquisition cost, area, grant status, equity and ratings for prospectivity.

Technical Value = [Base Value][Prospectivity Index]*

Radar Iron Limited
Project	Tenement	Technical Value
		Low	High	Preferred
Yerecoin	E70/2733	-	-	-
Yerecoin	E70/2783	27,000	37,510	32,255
Yerecoin	E70/2784	-	-	-
Yerecoin	E70/3937	18,000	25,000	21,500
Yerecoin	E70/3938	1,200	1,640	1,420
Yerecoin		1,200	1,640	1,420
Yerecoin	E70/3940	12,000	16,410	14,205
Yerecoin	E70/3990	84,000	114,870	99,435
Yerecoin	E70/4388	1,200	1,640	1,420
Yerecoin	E70/4391	2,400	3,280	2,840
Sub Total		147,000	201,990	174,495
Central Yilgarn	E77/1164	3,600	4,920	4,260
Central Yilgarn	E771280	-	-	-
Central Yilgarn	E77/1281	-	-	-
Central Yilgarn	E77/1423	27,000	37,510	32,255
Central Yilgarn	E77/1474	18,900	26,250	22,575
Central Yilgarn	E77/1477	3,600	4,920	4,260
Central Yilgarn	E77/1650	3,600	4,920	4,260
Central Yilgarn	E77/1766	1,200	1,640	1,420
Central Yilgarn	E77/1807	3,600	4,920	4,260
Central Yilgarn	E77/1817	-	-	-
Central Yilgarn	E77/1899	2,400	3,280	2,840
Central Yilgarn	E77/1900	12,000	16,410	14,205
Central Yilgarn	E77/1921	10,800	14,770	12,785
Central Yilgarn	E77/1926	1,200	1,640	1,420
Central Yilgarn	E77/1961	-	-	-
Central Yilgarn	E77/1976	3,600	4,920	4,260
Central Yilgarn	E77/1997	2,400	3,280	2,840
Central Yilgarn	E77/2024	9,600	13,130	11,365
Central Yilgarn	E77/2025	2,400	3,280	2,840
Central Yilgarn	E77/2124	24,000	33,210	28,605
Central Yilgarn	E77/2165	21,120	29,220	25,170
Central Yilgarn	E772172	3,600	4,920	4,260
Central Yilgarn	E77/2186	2,400	3,280	2,840
Central Yilgarn	E77/2202	720	980	850
Central Yilgarn	E77/2231	10,370	14,350	12,360
Central Yilgarn	E77/2240	7,490	10,360	8,925
Central Yilgarn	G77/35	20	20	20
Central Yilgarn	M77/1264	-	-	-
Central Yilgarn	M77/394	3,950	5,400	4,675
Central Yilgarn	M77/646	490	670	580
Central Yilgarn	M77/931	3,230	4,420	3,825
Central Yilgarn	M77/962	2,370	3,240	2,805
Central Yilgarn	P77/3412	800	1,090	945

Page | 28

Central Yilgarn	P77/3460	800	1,090	945
Central Yilgarn	P77/3461	-	-	-
Central Yilgarn	P77/3462	-	-	-
Central Yilgarn	P77/3801	-	10	5
Central Yilgarn	P77/3816	410	560	485
Central Yilgarn	P77/3817	510	690	600
Central Yilgarn	P77/3896	660	910	785
Central Yilgarn	P77/3899	100	130	115
Central Yilgarn	P77/3903	80	110	95
Central Yilgarn	P77/3936	100	130	115
Central Yilgarn	P77/3967	390	530	460
Central Yilgarn	P77/3978	40	50	45
Central Yilgarn	P77/3979	170	230	200
Central Yilgarn	P77/3994	630	870	750
Central Yilgarn	P77/4028	520	720	620
Central Yilgarn	P77/4029	520	720	620
Central Yilgarn	P77/4077	610	830	720
Central Yilgarn	P77/4076	750	1,020	885
Central Yilgarn	P77/4204	280	380	330
Central Yilgarn	P77/4229	570	770	670
Central Yilgarn	P77/4230	270	370	320
Central Yilgarn	P77/4231	460	630	545
Sub Total		194,330	267,700	231,015
Uruara Brazil	Farm in	57,000	76,710	66,855
Uruara Brazil	Appln	54,000	71,520	62,760
Sub Total		111,000	148,230	129,615

Comparison with Yardstick (Rule of Thumb) Method

A review of technical value (which is not influenced by market conditions) of exploration areas carried out by Agricola over the last few years suggests that ground without resources can be categorized as a matter of convenience into two groups:

Exploration area in known mineral fields relatively close to published mineral resources. Such areas attract values in the range of $700 to $1300 per square kilometer.
Exploration areas in green fields or early exploration domains remote from mineral resources. Such areas attract values in the range of $400 to $800 per square kilometer

Based on the values estimated in this report, the exploration ground at Yerecoin and Central Yilgarn fall in the range $350 to $550 per square kilometer; Uruara, Brazil falls in the range $500 to $600 per square kilometer.

Page | 29

Summary of Technical Value

Technical Value Summary, A$M
Project	Low	High	Preferred
Mineral Resources
Yerecoin	7.11	14.74	9.21
Die Hardy	6.41	13.30	8.32
Muldoon	0.22	0.45	0.28
Uruara	2.81	5.83	3.65
Exploration Potential
Yerecoin	0.15	0.20	0.17
Central Yilgarn	0.19	0.27	0.23
Uruara Brazil	0.11	0.15	0.13
Total	17.00	34.94	21.99

MARKET VALUE

Assessment of country risk and an assessment of the Business Climate has been provided by a specialist firm (source: www.coface.com). The rating for Australia is ‘A1’ for country risk and ‘A1’ for business climate, which are considered to be low risk.

The rating for Brazil is ‘A4’ for country risk and ‘A4’ for business climate, which are considered to be low risk. Brazil is the World’s 6th largest economy with a growing workforce and varied mineral and agricultural resources. It has a cutting edge manufacturing industry: aeronautics. chemicals, pharmaceuticals, oil engineering with resistance to external shocks: primary budget surplus, net external creditor position, considerable reserves

These rating will affect the market factor in assessing market value.

In arriving at a fair market value for a particular exploration tenement, the current market for exploration properties in Australia and overseas has been considered.

The Steel Index (TSI) 62% fines price dropped to an average of $US82.38 per tonne, CFR Tianjin in September 2014, a level not seen since September 25, 2009. Iron ore prices are down 37.5% since the start of the year and 11.4% down since the start of August. It comes as iron ore exports from Port Hedland last month reached a record 37.3 million tonnes last month, while Dampier port exported 16.2Mt. Fortescue Metals Group shipped a record 15.16Mt in August. TSI said the market was in oversupply and the additional tonnes had come at a bad time.

Many of the country’s steelmakers are now struggling to sell their finished goods into an oversupplied market, as demand from construction and other steel-intensive sectors tapers off – a problem only made worse during the typically slow summer season when Chinese construction winds down, Iron ore prices have come under renewed pressure at the start of this month after a steady decline through August, as worries over the financial health of a number of mills in China gathered pace. (Source: Miningnews.net, 5 September 2014

The current market value for mineral projects in Australia is considered to be depressed and it is

Page | 30

considered appropriate to apply a significant discount to the technical value of the exploration potential of the tenements. Yerecoin has significant exploration potential surrounding the deposit. The Grosskopf property lies to the south of the Western Limb at the Yerecoin Main Prospect No drillholes have been drilled into the area at this time due to inability to gain land access, however aeromagnetic 3D modelling, cross referenced with existing drilling on the Yerecoin Main western limb estimation data has indicated two drilling targets.

A market discount factor of 60% has been applied to the technical value of the iron mineral resources, 75% to the exploration ground at Central Yilgarn and 70% to the exploration ground at Yerecoin. 50 % has been applied to the technical value for the exploration projects at Uruara, Brazil.

Market Value = [Technical Value]*[Adjusted Market Factor]

Market Value Summary, A$M	Market Value Summary, A$M
	Market
Project	Factor		Low	High	Preferred
Mineral Resources
Yerecoin		40%	2.84	5.89	3.68
Die Hardy		40%	2.57	5.32	3.33
Muldoon		40%	0.09	0.18	0.11
Uruara		40%	1.13	2.33	1.46
Exploration Potential			-	-	-
Yerecoin		30%	0.04	0.06	0.05
Central Yilgarn		25%	0.05	0.07	0.06
Uruara Brazil		50%	0.06	0.07	0.06
Total			6.77	13.93	8.76

Differences between the values for Technical and Market Value stated above and the detail of the report are due to rounding of the values in this table.

COMPARISON WITH PEER GROUP COMPANIES

A short review of peer group non-producing companies was compiled based on the Market Capitalization at 5 September 2014. While this is not considered to be directly comparable with this valuation it does provide an indication of the market value of exploration companies with low grade assets.

The companies selected have significant resource tonnages and similar grade to the Yerecoin and Central Yilgarn Deposits and are considered comparable on that basis.

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	Radar Iron Limited Mindax Limited Legacy Iron Ore Australasian Resources Iron Ore Holdings Iron Road Padbury Mining
Company - Non Producers

ASX Code	RAD MDX LCY ARH IOH IRD PDY
No Shares(M)	106 253 588 489 10,894 582 1,660
Price 5 Sept 14	0.03 0.075 0.012 0.022 0.015 0.255 0.010
Market Capitalisation(M)
	3.18 18.98 7.05 10.76 163.41 148.39 16.60

Project Ownership	100% 100% 100% 100% 100% 100% 100%
Resources(Mt)
Total	743 1,725 2,260 859 1,665 3,691 938
Grade	27.5% 31.9% 27.6% 31.2% 39.5% 15.9% 27.6%
Market Cap/resource
	0.004 0.011 0.003 0.013 0.098 0.040 0.018

Percentile distribution of the Market Capitalisation per tonne of resource is shown below.

Percentiles - Market Capitalisationper Resource tonne	Percentiles - Market Capitalisationper Resource tonne	Percentiles - Market Capitalisationper Resource tonne	Percentiles - Market Capitalisationper Resource tonne	Percentiles - Market Capitalisationper Resource tonne
10%	25%	50%	75%	90%
0.003	0.007	0.013	0.029	0.063

The Radar Iron mineral assets are valued at a preferred value of $8.8 million. This is the mineral asset value and not directly comparable with market capitalization which is estimated at $3.18 million. The asset value translates to $0.012 per resource tonne compared to $0.004 based on the Market Capitalization. This places it at the middle of the peer group.

VALUATION OPINION

Based on an assessment of the factors involved the estimate of market value of 100% of the Company’s Projects is in the range of A$6.8 million to A$13.9 million with a preferred value of A$8.8 million.

This valuation is effective on 10 October 2014.

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MINERAL ASSETS VALUATION FOR EXPLORATION TENEMENTS

M. Castle – Updated 5 October 2014

Agricola Mining Consultants Pty Ltd (“Agricola”) has prepared these notes as background to the Independent Valuation Report. The appendix is general in nature and references to Western Australia are an example of exploration expenditures. They are appropriate for other states and other countries based on Agricola’s experience in many areas of Australia and elsewhere.

TENEMENT SCHEDULE .................................................................................................................. 6 PROJECT REVIEW ......................................................................................................................... 7 VALUATION ASSESSMENT .......................................................................................................... 14 COMPARABLE TRANSACTIONS – Mineral Resources ......................................................................... 15 Sensitivity to Metal Price ............................................................................................................... 20 GEO-FACTOR RATING METHOD – EXPLORATION POTENTIAL ........................................................... 23 Summary of Technical Value ............................................................................................................. 30 MARKET VALUE ................................................................................................................................. 30 COMPARISON WITH PEER GROUP COMPANIES ................................................................................ 31 VALUATION OPINION ........................................................................................................................ 32 MINERAL ASSETS VALUATION FOR EXPLORATION TENEMENTS ................................................... 33 The Meaning of Value – Scope of the Report .................................................................................... 34 Judicial interpretation .................................................................................................................... 35 Regulatory Authorities ...................................................................................................................... 36 The VALMIN Code, 2005 ................................................................................................................ 36 Regulatory Guides RG111 and RG112, March 2011 ...................................................................... 38 The JORC Code, 2012 ..................................................................................................................... 39 VALUATION METHODOLOGY FOR EXPLORATION TENEMENTS..................................................... 40

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Fair Market Value of Mineral Assets ................................................................................................. 40 Contemporaneous transactions in the asset ................................................................................. 42 DCF value ....................................................................................................................................... 43 Contemporaneous transactions in comparable assets ................................................................. 43 Potential for Further Discoveries ................................................................................................... 43 Past Expenditure ............................................................................................................................ 44 Yardstick (Rule of Thumb) Method ................................................................................................ 44 Share market trading in companies holding comparable exploration interests ........................... 44 Valuation of Development Projects by Discounted Cash Flow Methods ........................................... 45 Valuation of Resources by Comparable Transactions ....................................................................... 47 Mergers and Acquisitions Activity ................................................................................................. 48 Sensitivity to Metal Price ............................................................................................................... 49 Geoscience Factor Method ................................................................................................................ 49 Area ................................................................................................................................................ 50 Basic Acquisition Cost .................................................................................................................... 51 Tenement Status ............................................................................................................................ 52 Equity ............................................................................................................................................. 52 Geoscience Factors ........................................................................................................................ 52 Prospectivity Enhancement Multiplier (“PEM”) ................................................................................ 54 Yardstick (Rule of Thumb) Method .................................................................................................... 55 Adjustments to the Technical Value – Market Value ........................................................................ 55 GLOSSARY OF TERMS ................................................................................................................. 56 VALUATION REFERENCES ........................................................................................................... 60

The Meaning of Value – Scope of the Report

A Mineral asset valuation should endeavour to ascertain the price that a willing but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not too anxious purchaser

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could reasonably expect to have to pay for the property if the vendor and the purchaser had got together and agreed on a price in friendly negotiation.

The test for determining the market value is based on the consideration of a hypothetical negotiation, namely, what is the price that a willing but not anxious purchaser would have to offer to induce a willing but not anxious vendor to sell the property rather than the price which an anxious vendor would obtain upon a forced sale. This is the price that a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which the property was adapted.

This test contemplates a prudent purchaser who has informed himself or herself of all of the relevant attributes and advantages that the property enjoyed which means not just being conversant with the property in its existing state but also any profitable uses to which it might be put. This embodies the concept of the highest and best use of the property.

Judicial interpretation

The High Court cast light on the ordinary meaning of 'market value' in 1907 in Spencer v. The Commonwealth of Australia. In this case, the Commonwealth had compulsorily acquired land for a fort at North Fremantle in Western Australia.

In discussing the concept of market value, Griffith CJ commented (page 432) that:

… the test of value of land is to be determined, not by inquiring what price a man desiring to sell could have obtained for it on a given day, i.e. whether there was, in fact, on that day a willing buyer, but by inquiring: What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?

Isaacs J subsequently expanded on the concept (page 441):

… to arrive at the value of the land at that date, we have … to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood as then appearing to persons best capable of forming an opinion, of a rise or fall for what reasons so ever in the amount which one would otherwise be willing to fix as to the value of the property.

In this case, the High Court recognised the principles of:

the willing but not anxious vendor and purchaser
a hypothetical market
the parties being fully informed of the advantages and disadvantages associated with the asset being valued (in the specific case, land)
both parties being aware of current market conditions.

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This is commonly known as the Spencer test after the High Court decision upon which these principles are based and to which the Courts have used in their determinations of market value or property. ( Spencer v Commonwealth (1907) 5 CLR 418 at 432 per Griffiths CJ and 441 per Isaacs J.).

Although the Spencer test is based on both a hypothetical vendor and a hypothetical purchaser and therefore the market value from either hypothetical party’s point of view should be the same, in some cases emphasis has been placed on what would be the best price which the vendor could hope to obtain.

The question as of “special value” of particular property has often been raised in cases. However in reality this is only part of the Spencer test that in attributing the price that would be paid to the hypothetical vendor by the hypothetical purchaser it is to be assumed that the property will be put to its “highest and best use”.

The Spencer test has been applied in stamp duty cases in determining the value of the dutiable property.

These principles apply equally to mineral assets

Regulatory Authorities

Mineral asset valuations are prepared in accordance with the Code for Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the “VALMIN Code”, 2005) , which is binding upon Members of the Australasian Institute of Mining and Metallurgy (“AusIMM”) and the Australian Institute of Geoscientists (“AIG”), as well as the rules and guidelines issued by the Australian Securities and Investments Commission (“ASIC”) and the ASX Limited (“ASX”) which pertain to Independent Expert Reports ( Regulatory Guides RG111, 2011 and RG112, 2011 ).

Where mineral resources have been referred to in this report, the classifications are consistent with the ”Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”), prepared by the Joint Ore Reserves Committee of the AusIMM, the AIG and the Minerals Council of Australia, effective 2012.

The VALMIN Code, 2005

The main requirements of the Valuation Report are

Prepared in accordance with the VALMIN code.
Details of valuation methodologies

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Reasoning for the selection of the valuation approach adopted
Details of the valuation calculations
Conclusion on value
Experience and qualifications of key personnel to be set out

Transparency - The report needs to explain how the valuation was done and the assumptions used in calculating the value. The objective is to provide sufficient information that other people can come up with the same answer. Transparency and Transparent means that the Material data and information used in (or excluded from) the Valuation of a Mineral Property, the assumptions, the Valuation approaches and methods, and the Valuation itself must be set out clearly in the Valuation Report, along with the rationale for the choices and conclusions of the Qualified Valuer.

Materiality - This means the valuer has to ensure that all important data that could have a significant impact on the valuation is included in the report. Materiality and Material refer to data or information which contribute to the determination of the Mineral Property value, such that the inclusion or omission of such data or information might result in the reader of a Valuation Report coming to a substantially different conclusion as to the value of the Mineral Property. Material data and information are those, which would reasonably be required to make an informed assessment of the value of the subject Mineral Property.

Competence - The valuer must be competent at doing valuations. The person needs to be an expert in the particular exploration target being evaluated. Typically the person needs at least 5 years’ experience in that commodity. For Example :

Competent Persons Statement

Independence - The valuer must act in a professional manner and not favour the buyer or the seller. In other words the price must be set at a “fair market value”. To achieve independence, the valuer must not receive any special benefit from doing the study. This subject is addressed fully in RG112 (112.42). Independence or Independent means that, other than professional fees and disbursements received or to be received in connection with the Valuation concerned, the Qualified Valuer or Qualified Person (as the case requires) has no pecuniary or beneficial (present or contingent) interest in any of the Mineral Properties being valued, nor has any association with the Commissioning Entity or any holder(s) of any rights in Mineral Properties which are the subject of

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the Valuation, which is likely to create an apprehension of bias. The concepts of “Independence” and “Independent” are questions of fact. For example, where a Qualified Valuer’s fees depend in whole or in part on an understanding or arrangement that an incentive will be paid based on a certain value being obtained, such Qualified Valuer is not Independent.

Reasonablenes - in reference to the Valuation of a Mineral Property, while not specifically mentioned in VALMIN, 2005, is a requirement in other jurisdictions. It means that other appropriately qualified and experienced valuers with access to the same information would value the property at approximately the same range. A Reasonableness test serves to identify Valuations, which may be out of step with industry standards and industry norms. It is not sufficient for a Qualified Valuer to determine that he or she personally believes the value determined is appropriate without satisfying an objective standard of proof

Methodology - The decisions as to the valuation methodology or methodologies to be used and the content of the Report are solely the responsibility of the Expert or Specialist whose decisions must not be influenced by the Commissioning Entity. The Expert or Specialist must state the reasons for selecting each methodology used in the Report. Methods chosen must be rational and logical and be based upon reasonable grounds.

The Expert or Specialist should make use of valuation methods suitable to the Mineral or Petroleum Assets under consideration. Selection of the appropriate valuation method will depend on, inter alia:

(a) the purpose of the Valuation;
(b) the development status of the Mineral or Petroleum Assets;
(c) the amount and reliability of relevant information;
(d) the risks involved in the venture; and
(e) the relevant market conditions for commodities.

The Expert or Specialist should choose, discuss and disclose the selected valuation method(s) appropriate to the Mineral Assets under consideration in the Report, stating the reasons why the particular valuation methods have been selected in relation to those factors and to the adequacy of available data. It may also be desirable to discuss why a particular valuation method has not been used. The disclosure should give a sufficient account of the valuation methods used so that another Expert could understand the procedure used and assess the Valuation. Should more than one valuation method be used and different valuations result, the Expert or Specialist should comment on the reasons for selecting the Value adopted.

Regulatory Guides RG111 and RG112, March 2011

It is not the Australian Securities and Investment Commission – ASIC’s role or intention to limit the expert’s exercise of skill and judgment in selecting the most appropriate method or methods of valuation. However, it is appropriate for the expert to consider:

(a) the discounted cash flow method;

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(b) the amount which an alternative acquirer might be willing to offer if all the securities in the target company were available for purchase;

ASIC does not suggest that this list is exhaustive or that the expert should use all of the methods of valuation listed above. The expert should justify the choices of valuation method and give a sufficient account of the method used to enable another expert to replicate the procedure and assess the valuation. It may be appropriate for the expert to compare the values derived by more than one method and to comment on any differences.

The complex valuations in an expert’s report necessarily contain significant uncertainties. Because of this an expert who gives a single point value will usually be implying spurious accuracy to his or her valuation. An expert should, however, give as narrow a range of values as possible. An expert report becomes meaningless if the range of values is too wide. An expert should indicate the most probable point within the range of values if it is feasible to do so.

The expert should carry out sufficient enquiries or examinations to establish reasonable grounds for believing that any profit forecasts, cash flow forecasts and unaudited profit figures that are used in the expert’s report, and have been prepared on a reasonable basis. If there are material variations in method or presentation the expert should adjust for or comment on them in the report.

The expert should discuss the implications to his or her valuation if:

(a) the current market value of the subject of the report is likely to change because of market volatility (for example, boom or depression); or
(b) the current market value differs materially from that derived by the chosen method.

The JORC Code, 2012

The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (‘the JORC Code’) is a professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves.

The JORC Code provides a mandatory system for the classification of minerals Exploration Results, Mineral Resources and Ore Reserves according to the levels of confidence in geological knowledge and technical and economic considerations in Public Reports.

The JORC Code was first published in 1989, with the most recent revision being published late in 2012. Since 1989 and 1992 respectively, it has been incorporated in the Listing Rules of the Australian and New Zealand Stock Exchanges, making compliance mandatory for listing public companies in Australia and New Zealand.

The current edition of the JORC Code was published in 2012 and after a transition period the 2012 Edition came into mandatory operation from 1 December 2013.

Changes to the JORC Code 2012

Table 1 reporting on an ‘if not, why not?’ basis – Clauses 2, 5, 19, 27, 35 and the introduction of Table 1.

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Competent Person Attributions – Clause 9
Exploration Targets – Clause 17
Pre-Feasibility required for Ore Reserves – Clause 29
Technical Studies definitions – Clause 37-40
Annual Reporting – Clause 15
Metal Equivalents – Clause 50
In situ values – Clause 51
Additional guidance on reporting in Table 1

VALUATION METHODOLOGY FOR EXPLORATION TENEMENTS

Fair Market Value of Mineral Assets

Mineral assets include, but are not limited to, mining and exploration tenements held or acquired in connection with the exploration, the development of, and the production from those tenements together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of minerals in connection with those tenements.

Mineral assets classification	Mineral assets classification
Exploration areas	Mineralisation may or may not have been identified, but where a mineral resource has not been defined. Available information includes exploration results such as outcrop sampling, assays of drill hole intersections, geochemical results and geophysical survey results. Valuation Methods: *Geoscience* *Factor, Prospectivity* Enhancement Multiplier, Yardstick(Rule of Thumb).
Advanced exploration areas	Mineral resources have been identified and their extent estimated (possibly incompletely). This includes properties at the early stage of assessment. Available information includes estimates of Exploration Targets, Inferred Resources, Indicated Resources, Measured Resources in accordance with the JORC Code 2012 and the exploration results from the surrounding area or prospect used to compile the estimates. Additional value for exploration potential in the immediate area is not considered to be warranted. Valuation Methods:*Comparable Transactions*. Yardstick (Rule of Thumb)
Pre-development projects	A positive development decision has not yet been made. This includes properties where a development decision has been negative, properties on care and maintenance and properties held on retention titles. Available information includes Mineral Resource estimates in accordance with the JORC Code and a scoping study. If a recent and valid Pre Feasibility Study has been prepared an Ore Reserve may have been estimated with due regard to modifying factors. Valuation Methods: Comparable Transactions, *Discounted Cash*

	*Flow*(if Ore Reserves have been estimated)
Development projects	Committed to production, but which, are not yet commissioned or not initially operating at design levels. Available information includes a Feasibility Study with supporting technical studies. Valuation Methods:*Discounted Cash Flow*.
Operating Mines	Mineral properties, particularly mines and processing plants, which have been fully commissioned and are in production. Valuation Methods:*Discounted Cash Flow*.

Agricola’s preferred valuation method is shown in bold type.

The value of a mineral asset usually consists of two components,

The underlying or Technical Value (or stand alone value) which is an assessment of a mineral asset’s future net economic benefit under a set of appropriate assumptions, excluding any premium or discount for market, strategic or other considerations.
The Market Component, which is a premium relating to market, strategic or other considerations which, depending on circumstances at the time, can be either positive, negative or zero.

When the technical and market components of value are combined the resulting value is referred to as the market value. A consideration of country risk should also be taken into account for overseas projects.

The value of mineral assets is time and circumstance specific. The asset value and the market premium (or discount) changes, sometimes significantly, as overall market conditions, commodity prices, exchange rates, political and country risk change.

Valuation is based on a calculation in which the geological prospectivity, commodity markets, financial markets, stock markets and mineral property markets are assessed independently.

Valuation of exploration properties is exceptionally subjective. If an economic resource is subsequently identified then a new valuation will be dramatically higher, or possibly lower. Alternatively if expenditure of further exploration dollars is unsuccessful then it is likely to decrease the value of the tenements. There are a number of generally accepted procedures for establishing the value of exploration properties and, where relevant, the use of more than one such method to enable a balanced analysis and a check on the result has been undertaken. The value will always be presented as a range with the preferred value identified. The preferred value need not be the median value, and will be determined by the Independent Valuer based on his experience.

The Independent Valuer, when determining a value for a mineral asset, must assess a range of technical issues prior to selection of a valuation methodology. Often this will require seeking advice from a specialist in specific areas. The key issues are:

geological setting and style of mineralisation
level of knowledge of the geometry of mineralisation in the district
results of exploration including geological mapping, costeaning and drilling of interpretation of geochemical anomalies

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parameters used to identify geophysical and remote sensing data anomalies
location and style of mineralisation identified on adjacent properties
appropriate geological models
mining history, including mining methods
location and accessibility of infrastructure
milling and metallurgical characteristics of the mineralisation

In addition to these technical issues the Independent Expert needs to make a judgement about the market demand for the type of property, commodity markets, financial markets and stock markets. The technical value of a property should not be adjusted by a “market factor” unless there is a marked discrepancy between the technical value and the market value. When this is done the factor should be clearly identified.

Where there are identified Ore Reserves it is appropriate to use financial analysis methods to estimate the net present value (“NPV”) of the properties. This technique (the DCF Method) has deficiencies, which include assessment of only a very narrow area of risk, namely the time value of money given the real discount rate, and the underlying assumption that a static approach is applicable to investment decision making, which is clearly not the case.

When assessing value of exploration properties with no identified Ore Reserves it is inappropriate to prepare any form of financial analysis to determine the net present value. The valuation of exploration tenements or licences, particularly those without identified resources, is highly subjective and a number of methods are appropriate to give a guide as discussed below.

All of these valuation methods are relatively independent of the location of the mineral property. Consequently the valuer will make allowance for access to infrastructure etc when choosing a preferred value. It is observed that the Prospectivity Exploration Multiplier (“PEM”) is heavily based on the expenditure; while the Geoscience Factor is more heavily based on opinions of the prospectivity hence tenements can have marked variation in value between the methods. If the Geoscience Factor assessment is high and the PEM is low it indicates effective well focused exploration, if the Geoscience Factor is low and the PEM high it suggests that the tenement is considered to have lower prospectivity.

Truly Comparable Transactions are rare for early stage properties without defined drill targets. This is natural in a recession, as companies focus on brownfields exploration. Inflated prices paid for property in fashionable areas should not be discounted because they reflect the true market value of a property at the transaction date. If however, the market sentiment is not so buoyant then adjustments must be made.

Methodologies commonly used for the valuation of early stage or exploration assets in order of the evidentiary value provided by each include:

Contemporaneous transactions in the asset

Where a transaction has taken place around the valuation date in the mineral asset in question, this provides the best evidence of value. This may occur when a body of mineralisation or confined geological domain is split by a tenement boundary and one part is sold.

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If a property in the recent past was the subject of an arms-length transaction, for either cash or shares (i.e. from a company whose principal asset was the mineral property) then this forms the most realistic starting point, provided that the deal is still relevant in today’s market. Complicating matters is the knowledge that properties rarely change hands for cash, except for liquidation purposes, estate sales, or as raw exploration property when sold by an individual prospector, or entrepreneur.

Any underlying royalty or net profits interests or rights held by the original vendor of the claims should be deducted from the resultant property value before determination of the company’s interest. Also, reductions in value should be made where environmental, legal or political sensitivities could seriously retard the development of exploration properties.

It should be noted again that exploration is cyclical, and in periods of low metal prices there is often no market, or a market at very low prices, for ordinary exploration acreage (inventory property) unless it is combined with a significant mineral deposit, or with other incentives.

DCF value

Where a financial model has been prepared which considers the exploration results to date, the costs involved in taking the project to production and the probability-weighted returns expected from the project, in the absence of a contemporaneous transaction in the actual exploration interest, this provides the best evidence as to the value of the exploration interest. This method requires that a reasonable estimate can be made of expected cash flows. In accordance with the JORC Code 2012, the estimation of an Ore Reserve must be based on a Pre Feasibility Study or a Feasibility Study. The DCF Method, therefore, is only possible then these studies are available and an Ore Reserve has been estimated. (DCF Method – see below)

Contemporaneous transactions in comparable assets

Where a transaction has taken place recently in an Asset of similar prospectivity in a similar or comparable mineral market, this provides evidence of value in the absence of an actual transaction or a financial model for the exploration interest. The comparison is typically made on the basis of a value per unit of contained resource. (Comparable Transactions Method – see below)

Potential for Further Discoveries

The Geoscience Factor method provides the most appropriate approach to utilise in the technical valuation of the exploration potential of mineral properties on which there are no defined resources. Kilburn, a Canadian mining engineer was concerned about the haphazard way in which exploration tenements were valued. He proposed an approach that essentially requires the valuer to justify the key aspects of the valuation process in a systematic and defendable manner. The valuer must specify the key aspects of the valuation process and must specify and rank aspects that enhance or downgrade the intrinsic value of each property. The intrinsic value is the base acquisition cost (“BAC”), which is the average cost incurred to acquire a base unit area of mineral tenement and to meet all statutory expenditure commitments for a period of 12 months. Different practitioners use slightly differing approaches to calculate the BAC and its use with respect to different tenement types.

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The Geoscience Factor method systematically assesses and grades four key technical attributes of a tenement to arrive at a series of multiplier factors. The multipliers are then applied serially to the BAC of each tenement with the values being multiplied together to establish the overall technical value of each mineral property. A fifth factor, the market factor, is then multiplied by the technical value to arrive at the fair market value.

Past Expenditure

Where the other methods cannot be used, a valuer could also consider previous exploration expenditure , and apply a multiple to this based on its effectiveness and the valuer’s judgment as to the prospectivity of the project based on the results as at the valuation date. The application of this method is very subjective, and is best used for very early stage exploration interests without resources or significant drilling results. (Prospectivity Enhancement Method – see below)

Yardstick (Rule of Thumb) Method

Share market trading in companies holding comparable exploration interests

Where information on the exploration tenements is not directly observable, valuers sometimes consider the recent share market trading in companies holding comparable exploration interests. This method may require the valuer to apportion the value of the company between its various assets, to determine the proportion of the enterprise value of the company that should be attributed to the comparable exploration interest. Once the valuer has estimated the proportion of the market capitalization or enterprise value of the company that should be attributed to the comparable exploration interest, the value per unit of contained resource or the value per km[2] of tenement approaches can be applied. This typically provides weak evidence of the value of specific exploration interests due to the difficulty in apportioning the enterprise value of a listed company to specific exploration interests, and the likelihood that the share price may include other ‘noise’ unrelated to the exploration interest.

Market Capitalisation (MCap) and Enterprise Value (EV: Mcap + Debt – Cash) are often used in comparable transaction valuations, often quoted as EV per unit of Resource or reserve. These measures say nothing about the technical value of individual mineral assets and are usually influenced by many commercial and emotional factors both within and external to the Company.

It is fair to assume that a company’s share price is a reflection of the market value of the company and this is strongly influenced by the market value of mineral assets in the light of current market conditions. If a ‘willing but not anxious buyer’ were to make an offer for the company based on share price, appropriate due diligence has been completed and the offer may also include a premium for control.

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MCap per unit and EV per unit for peer group companies may be a satisfactory measure of ‘reasonableness’ of the market value of the bundle of assets and should be viewed in that light and not as a direct measure of technical value.

Valuation of Development Projects by Discounted Cash Flow Methods

Agricola believes that the Discounted Cash Flow/Net Present Value method should never be applied to the valuation of a Mineral Property that is only at an exploration stage, based on the hypothetical cash flows from a postulated exploitation scenario. Valuers tend to consider before or after tax values only in the context of the DCF/NPV Method, with a general preference for determinations of after-tax value.

Of course, some owners can use tax losses and structure their affairs to minimise the impact of corporate taxes, but others cannot do so. Hence, it should be clearly stated on what taxation basis the fair market value is determined. This is another reason why care must be taken when using project sales data as a comparable basis for assessing value. The ‘comparable’ projects may be in different places subject to different taxation regimes, in any event.

Discounted cash flow analysis

A discounted cash flow (“DCF”) analysis determines the Technical Value of a project by approximating the value if it were developed under the prevailing economic conditions.

Once a Mineral Resource has been assessed for mining by considering revenues and operating costs, the economically viable component of the resource becomes the Ore Reserve. When this is scheduled for mining, and the capital costs and tax regime are considered, the net present value (“NPV”) of the project is established by discounting future annual cash flows using an appropriate discount rate.

The resulting ’classical’ NPV has several recognised deficiencies linked to the fact that the approach assumes a static approach to investment decision making, however the NPV represents a fundamental approach to valuing a proposed or on-going mining operation and is widely used within the mining industry.

In terms of cash flow analysis, the DCF valuation technique is the most commonly used valuation tool. The technique has specific strengths over the methods considered in the market and cost approaches. These include its ability to consider the effects of royalties, leases, taxation and financial gearing on the resulting cash flow. In addition, the beneficial impact of unredeemed capital balances, assessed losses, depreciation and amortization on free cash flows can also be modelled.

Compiling cash flows on resources categorized as inferred, or those with even less geoscientific confidence (which in some cases are referred to as inventory), is prohibited by some international codes. It is only under exceptional circumstances that many securities exchanges will accept such cash flows and the effect of cash flow contributions from inferred resources on project performance should be demonstrated separately from those derived from other resource and reserve categories.

The DCF method is used to produce numerous quantitative results. On its own and as an investment

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tool, it is based on the principle that for any initial investment, the investor will look to the future cash flows of that entity to provide a minimum return. This return will be at least a predetermined return over the investor’s hurdle rate for that investment. The hurdle rate represents the minimum return of a project, below which the decision to invest or develop a new project will be negative, and above which the project will be developed. The hurdle rate should always be greater than the cost of capital for the investor.

For a mining project, in a macroeconomic environment that is sufficiently favourable and stable for this method to be applied, the critical input data will generally be incorporated in a life of mine (LoM) plan. The LoM plan, such as that accompanying a pre-feasibility, feasibility or a bankable feasibility study, will include:

➤ reserve and resource estimates in accordance with the JORC Code

➤ forecast mining schedules of tonnage on a daily, monthly or annual basis

➤ forecast grade profiles and associated recoveries from a processing facility. This, together with the tonnage profile, allows the valuer to calculate the volume of saleable product

➤ estimated working costs, preferably unitized to either an amount per tonne mined or milled or an amount per unit of metal or product sold

➤ forecast capital expenditure profiles over the life of the operation, including ongoing or sustainable capital expenditure amounts and

➤ rehabilitation liabilities or trust fund contributions, retrenchment costs, plant metal lock-up and any other specific factor that will impact on costs or revenue.

Changes in working capital balances are generally calculated based on historical balance ratios, applied to forecast revenues and working costs. They impact on short term cash flows and therefore must be modelled into the cash flows. Naturally, any working capital locked up during the life of the operation will be released at the end of this life.

Once the economic inputs have been assumed, the DCF can be determined. This is often stated as EBITDA (Earnings before Interest, Taxation, Depreciation and Amortisation) and is frequently taken as the technical value of the project, subject to a consideration of sensitivity to the assumptions.

The resultant cash flow is then used to derive the net present value (NPV) of the operation at a predetermined discount rate or a range of discount rates. The derived NPV, on which the return on investment can be calculated, is used as a proxy for the operation’s implicit value. This is often compared with the value or returns the market attributes to the operation, if it is a listed entity, or compared with other investment opportunities in order to optimize investment or development schedules.

In any cash flow determination, the impact of inflation on the final result cannot be overstated. One only has to consider the effect of taxation as applied to real taxable income as opposed to being levied against nominal taxable income. Converting the final cash flows to real money terms, the values derived from two similar cash flows will be quite different. The unredeemed capital balance

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will last longer in the real terms case, incorrectly enhancing the value of the same project. The real cash flow lines in Table X must be compared to recognize the impact of taxation on real and nominal cash flows.

As a result of the difficulty in obtaining agreement on appropriate inflation forecasts to use in the specific valuation of a project, valuers often exclude a forecast on inflation rates. This in itself may be construed as an inflation assumption, in that inflation is taken to be zero per cent per year. However, this reflects an ideal world, which is unrealistic.

Valuation of Resources by Comparable Transactions

When only a resource or defined body of mineralisation has been outlined and its economic viability has still to be established (i.e. there is no ore reserve) then a Comparable Transactions approach is usually applied, often stated as a percentage of metal value. This can be applied to Mineral Resource estimates and Exploration Targets in accordance with the JORC code with appropriate discounts for risk in the different Mineral Resource categories and operational factors to differentiate between deposits.

Agricola Mining Consultants prefers the comparable transactions approach where mineral resources have been estimated. The DCF method is inappropriate because there is no Pre Feasiblity or Feasibility Study available and no Ore Reserves has been (or can be) estimated under the JORC Code. The Geoscientific Factor method (potential for further discoveries) and Past Expenditure methods are appropriate for exploration ground that is not advanced enough to estimate mineral resources. The contemporaneous transactions over adjacent ground may be appropriate but the absence of such information the only viable method (in Agricola’s opinion) is to compare the sale of other deposits on a 'dollar per unit' basis for the mineral resource estimated in accordance with the JORC Code. Agricola is not aware of a method to cross check the valuation for the technical value (as apposed to the Market value) under these circumstances except by comparison with earlier valuations.

With metal projects the Comparable Transactions method requires allocating a dollar value to resource tonnes or ounces in the ground. The dollar value must take into account a number of aspects of the resources including:

The confidence in the resource estimation (the JORC Category)
The quality of the resource (grade and recovery characteristics)
Possible extensions of the resource in adjacent areas
Exploration potential for other mineralisation within the tenements
Presence and condition of a treatment plant within the project
Proximity of infrastructure, development and capital expenditure aspects

This approach can be taken with metals or bulk commodities sold on the spot market and where current price can be estimated with appropriate adjustments for impurities if required. Value is estimated as a percentage of contained value once appropriate discounts for uncertainty relating to resource categorisation are taken into account.

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Resource Category Discounts
Measured Resource	80%
Indicated Resource	70%
Inferred Resource	60%
Exploration Target	50%

An example of appropriate discounts for operational factors is included below but these must be considered on a case-by-case basis.

	Operations Factors Base Metals Iron Ore Coal Gold Rare Earths Recovery 75% 75% 70% 95% 60% Mining 75% 90% 75% 90% 100% Processing 80% 70% 70% 95% 50% Rail 80% 90% 70% 95% 75% Port 80% 90% 50% 100% 90% Capex 80% 70% 75% 90% 50% Marketing 75% 80% 75% 100% 75% Total Operating Discount 17% 21% 7% 69% 7%

Mergers and Acquisitions Activity

A recent review of Mergers and Acquisitions over the last eight years covering the mining boom, the GFC and the recovery phase of the Mining Market indicates the price paid for gold assets.

		Merger and Acquisitions Activity (CAD)	Merger and Acquisitions Activity (CAD)	Merger and Acquisitions Activity (CAD)	Merger and Acquisitions Activity (CAD)
	2006	2007	2008	2009	2010	2011	2012	2013
Gold Price	$709	$778	$920	$1,154	$1,277	$1,590	$1,665	$1,488
Producing Assets*	$74	$94	$115	$89	$207	$202	$200	$121
Percent of Price	10.40%	12.10%	12.50%	7.70%	16.20%	12.70%	12.00%	8.10%
Exploration Assets*	$54	$28	$31	$29	$71	$90	$47	$23
Percent of Price	7.60%	3.60%	3.40%	2.50%	5.60%	5.70%	2.80%	1.50%
*Estimated price	paid per ounce of gold in the ground,			updated	December	31, 2013
Source: http://www.ibkcapital.com/capital-market-highlights/merger-acquisition-activity/

The information is based on Canadian experience and closely replicates values reported in Australia and similar metal markets elsewhere. The ‘Apparent Acquisition Cost’ (“AAC”) for gold projects lies in the range of 1.5% to 7.6% of the gold price at the time. The data set does not differentiate between resource categories or variations in deposits type and individual assessment. It is implicit that this has been taken into account with risk related discounts. Information on sales internationally has shown a pattern for AAC. For the purpose of valuation the Average Acquisition Cost for the lower, preferred and higher value is selected at the 25[th] , 50[th] and 75[th] percentiles of the spread of values.

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	AAC Percentiles 2006 - 2013	AAC Percentiles 2006 - 2013	AAC Percentiles 2006 - 2013
Percentile	10%	25%	50%	75%	90%
AAC	2.2%	2.7%	3.5%	5.6%	6.2%

The AAC method percentiles are derived from Canadian Merger and Acquisitions activity in the gold industry. The original database provided $/ounce values for producing and non-producing asset sales for a period of years and Agricola has recalculated this as a percentage of metal value so it can be related to current metal prices in other metals. The quoted prices are based on enterprise value (EV - Market Capitalisation plus debt minus cash) so they cannot be directly compared to technical value. A “top-down” approach is often taken to determine technical vale (for example for stamp duty assessment) where company specific elements such as cash, debt, goodwill, database value etc ate deducted from the EV. Agricola prefers a “bottom-up” approach in this Report where discount factors for resource category and operating factors are assessed for each deposit.

This, of course, is a subjective decision and AAC percentiles are used in conjunction with the resource category discounts and operational factors to "normalise' the rates for gold acquisitions to other metals. In the absence of a useful database of project sales for other metals this is considered to be a reasonable proxy for sales in most metal projects (the combination of AAC, discounts and Operational factors). Mineral asset sales are related to the current mineral price (or contained value) which is provided by the M & A database over the period 2006 - 2013 through a period of boom and bust and the valuation method is realistic when adjusted by factors that relate specifically to the metal involved and more specifically to the individual deposits.

Sensitivity to Metal Price

Geoscience Factor Method

The Geoscience Factor method attempts to convert a series of scientific opinions about a subject property into a numeric evaluation system. The success of this method relies on the selection of multiplying factors that reflect the tenement's prospectivity.

Agricola Mining Consultants prefers the Geoscientific Factor method (potential for further discoveries) for exploration ground that is not advanced enough to estimate mineral resources. The contemporaneous transactions over adjacent ground may be appropriate but the absence of such information the only viable method (in Agricola’s opinion) is to compare the sale of other deposits on a 'dollar per unit' basis for the mineral resource estimated in accordance with the JORC Code. Agricola uses Past Expenditure and yardstick (Rule of Thumb) methods as an appropriate way of cross checking the reasonableness of the valuation.

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The Geoscience Factor method is essentially a technique to define a value based on geological prospectivity. The method appraises a variety of mineral property characteristics:

location with respect to any off-property mineral occurrence of value, or favourable geological, geochemical or geophysical anomalies;
location and nature of any mineralisation, geochemical, geological or geophysical anomaly within the property and the tenor (grade) of any mineralisation known to exist on the property being valued;
geophysical and/or geochemical targets and the number and relative position of anomalies on the property being valued;
geological patterns and models appropriate to the property being valued.

It is recognised that application of this method can be highly subjective, and that it relies almost exclusively on the geoscience ratings adopted by the valuer. As such, it is good practice for valuers using this method to provide sufficient discussion supporting their selection of the various multiplying factors to allow another suitably qualified geoscientist to assess the appropriateness of the factors selected.

The successful application of this method depends on the selection of appropriate multipliers that reflect the tenement prospectivity. Furthermore, there is the expectation that the outcome reflects the market’s perception of value, hence the application of the market factor. Agricola Mining Consultants prefers the Geoscience Factor approach because it endeavours to implement a system that is systematic and defendable. It also takes account of the key factors that can be reasonably considered to impact on the exploration potential. The keystone of the method is the BAC, which provides a standard base from which to commence a valuation. The acquisition and holding costs of a tenement for one year provides a reasonable, and importantly, consistent starting point. Presumably when a tenement is pegged for the first time by an explorer the tenement has been judged to be worth at least the acquisition and holding cost.

It may be argued that on occasions an EL may be converted to a ML expediently for strategic reasons rather than based on exploration success, and hence it is unreasonable to value such a ML starting at a relatively high BAC compared to that of an EL.

It has also been argued that the method is a valuation-by-numbers approach. In Agricola’s opinion, the strength of the method is that it reveals to the public, in the most open way possible, just how a tenement’s value was systematically determined. It is an approach that lays out the subjective judgements made by the valuer.

Area

The area of a tenement is usually stated in terms of square kilometres as a matter of convenience and cosistency. A graticular boundary (or block) system was introduced for exploration licences in mid 1991 in W.A. and a block is defined as one minute of latitude by one minute of longitude. The square kilometres contained within a block varies from place to place. For instance, at Kunnanurra (Latitude 15 deg. S) one block equals 3.31 square kilometres, at Mt Isa (Latitude 20 deg. S) one block

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equals 3.22 square kilometres. at Carnarvon or Bundaberg (Latitude 25 deg. S) one block equals 3.11 square kilometres and at Albany or Adelaide (Latitude 35 deg. S) one block equals 2.81 square kilometres.

Prospecting Licences and Mining Leases are granted in Hectares (100 hectares equals one square kilometre.

Basic Acquisition Cost

The Basic Acquisition Cost (“BAC”) is the important input to the Geoscience Factor Method and it is estimated by summing the annual rent, statutory expenditure for a period of 12 months and administration fees for a first stage exploration tenement such as an Exploration Licence(the first year holding cost).

The notes are general in nature and references to Western Australia are an example of exploration expenditures. they are appropriate for other states and other countries based on Agricola’s experience in many areas of Australia and elsewhere.

The current holding cost for exploration projects is considered to be the average expenditure for the first year of the licence tenure. Exploration Licences in Western Australia, for example, attract a minimum annual expenditure for the first three years of $300 per square kilometre per year with a minimum of $20,000 and annual rent of $46.80. A 15% administration fee is taken into account to imply a holding cost of $400 per square kilometre. A similar approach based on expenditure commitments could be taken for Prospecting Licences and Mining Leases (effective 1 July 2014). The Benchmark minimum expenditure for Exploration Licences in the Northern Territory is $10,000 plus $150 per block.

In Western Australia (from February 2006), an application for a Mining Lease required either a mining proposal or a statement describing when mining is likely to commence; the most likely method of mining; and the location, and the area, of land that is likely to be required for the operation of plant, machinery and equipment and for other activities associated with those mining operations. A mineralisation report is also required that has been prepared by a qualified person.

The mineralisation report must be completed by a qualified person and shall contain information of sufficient standard and detail to substantiate, to the satisfaction of the Director Geological Survey, that significant mineralisation exists within the ground applied for. A ‘qualified person’ means a person who is a member of the Australasian Institute of Mining and Metallurgy (AusIMM) or the Australian Institute of Geoscientists (AIG). Significant mineralisation means a deposit of minerals located during exploration activities and that there is a reasonable expectation that those minerals will be extracted by mining operations.

The implication of the mineralisation report suggests that Mining leases should be valued on the body of significant mineralisation (usually a Mineral Resource estimated in accordance with the JORC Code) and not on the basis of prospectivity. The preferred method for valuing resources is by comparable transactions (Market Based).

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The Mineral Resources are assumed to encapsulate all the value for the tenements or prospects on which they occur and the exploration results considered for the estimate. A separate value for exploration potential for this tenement is not considered warranted.

It is recognised that further exploration potential may exist within the tenement boundaries but when a mineral resource has already been estimated in accordance with the JORC Code a hypothetical willing but not too anxious purchaser would be unlikely to consider additional value for surrounding untested ground. The possibility of undrilled extensions to mineral resources may be considered in the market factor assessment.

Mining Leases granted prior to 2006 and Prospecting Licences may not have a mineralisation report available and may cover old workings or simply an expedient or strategic method of securing ground at the expiry of an Exploration Licence rather than based on exploration success. While these Licences carry all the obligations set out in the Mining Act, from a valuation point of view they are equivalent to Exploration Licences and it is unreasonable to value such these MLs (or PLs) starting at a relatively high holding cost compared to that of an EL where only exploration results are available. These tenements should be considered on the basis of a BAC of $400 to $450 . To value these areas at the higher levels may not be considered to be reasonable under the VALMIN Code.

Tenement Status

Uncertainty may exist where a tenement is in the application stage. Competing applications may be present where a ballot is required to determine the successful applicant or Native Title issues and negotiations may add to the risk of timely grant. Other issues may also be present such as state parks or forestry and wildlife reserves, competing land use and compensation agreements. There is an inherent risk that the tenement may not be granted and this needs to be recognised in the base value assessment. A ‘grant factor’ of zero may be applied where there is no realistic chance of approval (e.g. sacred sites) and where no significant impediments are known the factor may increase to about 60% to reflect delays and compliance with regulations.

Equity

The equity a Company may hold in a tenement through joint venture arrangements or royalty commitments may be addressed in assessing base Value but it is often considered at the end of a valuations report.

Geoscience Factors

The multipliers or ratings and the criteria for rating selection across these four factors are summarised in the following table.

GEO-FACTOR RATING CRITERIA -GUIDELINES	GEO-FACTOR RATING CRITERIA -GUIDELINES	GEO-FACTOR RATING CRITERIA -GUIDELINES

	Rating	Address - Off Property	Mineralisation - On Property	Anomalies	Geology
Low	0.5	Very little chance of mineralisation, Concept unsuitable to environment	Very little chance of mineralisation, Concept unsuitable to environment	Extensive previous exploration with poor results - no encouragement	Unfavourable lithology over >75% of the tenement
	0.75				Unfavourable lithology over >50% of the

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					tenement
Average	1	Indications of Prospectivity, Concept validated	Indications of Prospectivity, Concept validated	Extensive previous exploration with encouraging results - regional targets	Deep alluvium Covered favourable geology (40-50%)
	1.5	RAB Drilling with some scattered results	Exploratory sampling with encouragement, Concept validated	Several early stage targets outlined from geochemistry and geophysics	Shallow alluvium Covered favourable geology (50-60%)
	2	Significant RC drilling leading to advance project status	RAB &/or RC Drilling with encouraging intercepts reported	Several well defined surface targets with some RAB drilling	Exposed favourable lithology (60-70%)
	2.5	Grid drilling with encouraging results on adjacent sections	Diamond Drilling after RC with encouragement	Several well defined surface targets with encouraging drilling results	Strongly favourable lithology (70-80%)
High	3	Resource areas identified	Advanced Resource definition drilling - early stage	Several significant subeconomic targets - no indication of volume	Highly prospective geology (80 - 100%)
	3.5	Along strike or adjacent to known mineralisation at Pre- FeasibilityStage	Resource areas identified	Subeconomic targets of possible significant volume - early stage drilling
	4	Along strike or adjacent to Resources at Definitive Feasibility Stage	Along strike or adjacent to known mineralisation at Pre-Feasibility Stage	Marginal economic targets of significant volume - advanced drilling
	4.5	Along strike or adjacent to Development Stage Project	Along strike or adjacent to Resources at Definitive Feasibility Stage	Marginal economic targets of significant volume - well drilled at Inferred Resource stage
Very High	5	Along strike or adjacent to Operating Mine	Along strike or adjacent to Development Stage Project	Several significant ore grade correlatable intersections with estimated resources

The selection of factors from the table must be tempered with an eye to the reasonableness of the outcome and an awareness of the inherent exploration risks in achieving progress to the next level. Some exploration licences are overly large and may cover several domains of prospective (or entirely unprospective) ground and this should be recognised in the Geology Factor. A conservative approach is considered mandatory.

Estimate of project value is carried out on a tenement-by-tenement basis and uses four calculations as shown below. The value estimate is shown as a range with a preferred value.

Base Value = [Area][Grant Factor][Equity]*[Base Acquisition Cost]

Prospectivity Index = [Off Site Factor][On Site Factor][Anomaly Factor]*[Geology Factor]

Technical Value = [Base Value]*[Prospectivity Index]

Market Value = [Technical Value]*[Market Premium/Discount Factor]

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Prospectivity Enhancement Multiplier (“PEM”)

Various valuation methods exist which make reference to historical exploration expenditure. One such method is based on a 'multiple of historical exploration expenditure'. Successful application of this method relies on the valuer assessing the extent to which past exploration expenditure is likely to lead to a target resource being discovered, as well as working out the appropriate multiple to apply to such expenditure.

Another such method is the 'appraised value method'. When adopting this approach, the valuer should only account for meaningful past exploration expenditure plus warranted future expenditures. Warranted future expenditures reflect a reasonable and justifiable exploration budget to test the identified potential of the target.

PEM Factors Used in this valuation method

	*PEM Factors Used in this valuation method*
PEM Range	Criteria
0.2 – 0.5	Exploration (past and present) has downgraded the tenement prospectivity, no mineralisation identified
0.5 – 1.0	Exploration potential has been maintained (rather than enhanced) by past and present activity from regional mapping
1.0 – 1.3	Exploration has maintained, or slightly enhanced (but not downgraded) the prospectivity
1.3 – 1.5	Exploration has considerably increased the prospectivity (geological mapping, geochemical or geophysical)
1.5 – 2.0	Scout Drilling has identified interesting intersections of mineralisation
2.0 – 2.5	Detailed Drilling has defined targets with potential economic interest.
2.5 – 3.0	A resource has been defined at Inferred Resource Status, no feasibility study has been completed
3.0 – 4.0	Indicated Resources have been identified that are likely to form the basis of a prefeasibility study
4.0 – 5.0	Indicated and Measured Resources have been identified and economic parameters are available for assessment.

When historical expenditure approaches are adopted, it is good practice for valuers to provide full transparency in relation to all historical exploration expenditure on the subject property, details of those expenditures selected for use in the method (including details in relation to warranted future expenditures), and justification for any multiples applied.

Past expenditure on a tenement and/or future committed exploration expenditure can establish a base value from which the effectiveness of exploration can be assessed. Where exploration has produced documented results, a PEM can be derived which takes into account the valuer’s judgment of the prospectivity of the tenement and the value of the database.

Future committed exploration expenditure is discounted to 60% by some valuers to reflect the uncertainty of results and the possible variations in exploration programmes caused by future undefined events. Expenditure estimates for tenements under application are often discounted to

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60% of the estimated value by some valuers to reflect uncertainty in the future granting of the tenement. The PEM Factors are defined in the table.

Yardstick (Rule of Thumb) Method

A Rule-of-Thumb method sometimes used for valuing Mineral Assets without identified Resources is based upon conversion of comparable sales data to a unit area (per km[2] or per ha). It is probably the most difficult comparative tool to justify. This Method has found greater acceptance in North America, where tenement sizes appear to be smaller and where there are many more transactions forming a deep and liquid market than elsewhere. In addition, dealing in tenements is not discouraged by the mining legislation, especially in the US with its historic focus on property rights. It is used in Canada and Australia, though to a much lesser extent.

In Australia, many State jurisdictions grant large exploration tenements (say 300km2 maximum) on a graticular block system. This means a tenement is usually larger than geometrically necessary to cover the specific geologically prospective terrane. Also, most jurisdictions here require periodic significant reductions in the tenement’s size, so it is common to apply for more area than is actually needed to provide for this obligatory reduction. The sale of exploration tenements to third parties is discouraged (although sales, particularly if interests, certainly occur) because the basis of grant is that the applicants will carry out the granted tenement’s exploration obligations themselves. The State sees itself as the centralised, timely distributor of exploration rights, not the free market.

That said, some valuers still attempt to use this Rule-of-Thumb (based upon area) in Australia with an emphasis on market value. A review of technical value (which is not influenced by market conditions) of exploration areas carried out by Agricola over the last few years suggests that ground without resources can be categorized as a matter of convenience into two groups:

Exploration area in known mineral fields relatively close to published mineral resources. Such areas attract values in the range of $700 to $1300 per square kilometer.
Exploration areas in green fields or early exploration domains remote from mineral resources. Such areas attract values in the range of $400 to $800 per square kilometer

Adjustments to the Technical Value – Market Value

Mineral Assets are often bought and sold at a price that is different than their technical value or stand-alone value. To the extent that it exists, the amount of the transacted value differs from the technical value is often described as the 'acquisition premium or discount'.

The concept of market value implies the construction of a hypothetical transaction between willing, knowledgeable, but not anxious buyers and sellers. Therefore, when assessing the market value of resource projects, it is likely that valuers will consider whether it is appropriate to make an adjustment to the technical value of the project to reflect any observed 'acquisition premium or discount', or other adjustments. Such adjustments can either be implicit or explicit in the valuation method chosen. However, care should be taken not to treat as acquisition premium or discount something that is properly part of technical value, such as where assumed forward values for commodity prices are reflected in the technical value.

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Particularly when valuing early stage exploration and development projects the technical value may be assessed for a project with reference to parameters that may be above or below those present in the financial markets as at the valuation date. Consequently, when applying these exploration valuation methods, it may be appropriate to reflect a series of high level adjustments to the technical value to account for differences in market conditions relative to those embedded within the method itself.

However, other valuation methods (particularly the DCF valuation method) are able to explicitly reflect a series of parameters that may apply to future financial market expectations. This is particularly the case if valuers adopt commodity price, exchange rate, inflation rate, and discount rate parameters which are forecast with reasonable confidence, and resource to reserve conversion, cost structure and capital expenditure parameters which are consistent with the expectations in the market. Doing so will limit the need to make further adjustments to the resulting stand alone value to account for such factors as 'market considerations'.

To the extent that valuers choose to apply further adjustments to their assessed stand alone value, it is good practice to clearly identify how they have applied the adjustments are applied, and the rationale for doing so.

GLOSSARY OF TERMS

‘Real Property’ – A non-physical, legal concept and it includes all the rights, interests and benefits related to the ownership of ‘Real Estate’ and normally recorded in a formal document (eg, deed or lease). The rights are to sell, lease, enter, bequeath, gift, etc. There may be absolute single or partial ownership (subject to limitations imposed by Government, like taxation, planning powers, appropriation, etc). These rights may be affected by restrictive covenants or easements affecting title; or by security or financial interests, say conveyed by mortgages.
‘Real Estate’ – A physical concept, including land and all things that are a natural part of the land (eg, trees and Minerals). In addition it includes all things effectively permanently attached by people (eg, buildings, site improvements, and permanent physical attachments, like cooling systems and lifts) on, above or below the ground.
Personal Property – Covers all items other than ‘Real Estate’ and may be tangible (like a chattel or goods) or intangible (like a patent or debt). It has a moveable character.
‘Mineral(s)’ – Any naturally occurring material found in or on the Earth’s crust, that is useful to and/or has a value placed on it by mankind. The term specifically includes coal, shale and materials used in building and construction, but excludes crude oil and natural gas ( VALMIN Code ).
‘Minerals Industry’ (also Extractive Industry) – Defined as encompassing those engaged in exploring for, extracting, processing and marketing ‘Minerals’ .
‘Mineral Asset(s) ’ (Resource Assets or Mineral Properties) - All property including, but not limited to ‘Real Property’, intellectual property, mining and exploration tenements held or acquired in connection with the exploration, the development of and the production from those tenements; together with all plant, equipment and infrastructure owned or acquired for the development, extraction and processing of Minerals in connection with those tenements. Most can be classified as ‘Exploration Areas’, ‘Advanced Exploration Areas’, ‘Pre-Development Projects’, ‘Development Projects’ or ‘Operating Mines’ (VALMIN Code).
‘ Operating Mines’ – Mineral Properties, particularly mines and processing plants, which have been fully commissioned and are in production (VALMIN Code).
‘ Development Projects’ – Mineral Properties which have been committed to production, but which are not yet commissioned or not operating at design levels (VALMIN Code).
‘Advanced Exploration Areas’ and ‘Pre-development Projects’ – Mineral Properties where Mineral Resources have been identified and their extent estimated (possibly incompletely) but where a positive development decision has not been made. Mineral Properties at the early assessment stage, those for which a development decision has been negative, those on care and maintenance and those held on retention titles are all included in this category if Mineral Resources have been identified. This is even if no further valuation or technical assessment work, delineation or advanced exploration is being undertaken (VALMIN Code).

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‘ Exploration Areas’ – Mineral Properties where mineralisation may or may not have been identified, but where a Mineral Resource has not been identified (VALMIN Code).
‘Price’ – The amount paid for a good or service and it is a historical fact. It has no real relationship with ‘Value’, because of the financial motives, capabilities or special interests of the purchaser; and the state of the market at the time.
‘Value’ (also Valuation which is the result of determining ‘Value’) - The estimated likely future ‘Price’ of a good or service at a specific time, but it depends upon the particular qualified type of value (eg ‘Market Value’, ‘Salvage Value’, ‘Scrap Value’, ‘Special Value’, etc). There is also a particular value for tax and rating, or insurance purposes.
‘ Fair Market Value’ (Market Value or Value) – The object and result of the Valuation. It is the estimated amount of money (or the cash equivalent of some other consideration) for which the ‘Mineral Asset’ should change hands on the ‘Valuation Date’. It must be between a willing buyer and a willing seller in an ‘arm’s length’ transaction in which each party has acted knowledgeably, prudently and without compulsion. It is usually comprised of two components, the underlying or ‘Technical Value’ and a premium or discount, relating to market, strategic or other considerations (VALMIN Code,).
‘Market Value’ (IVS Definition) – The result of an objective Valuation of specific identified ownership rights to a specific asset as at a given date. It is the value in exchange not ‘Value-in-Use’ set by the market place. It is the “estimated amount for which a property should exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had acted knowledgeably, prudently, and without compulsion” .
‘Fair Value’ (IVS definition) – An accountancy term used for values envisaged to be derived under any and all conditions, not just those prevailing in an open market for the normal orderly disposal of assets. Being a transaction price it reflects both existing and alternative uses, too. It is also a legal term for values involved in dispute settlements which may not also meet the strict ‘Market Value’ definition. Commonly, it reflects the service potential of an asset ie, value derived by DCF/NPV analysis, not merely the result of comparable sales analysis. It is still the “amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm’s length transaction” .
‘Technical Value’ – An assessment of a ‘Mineral Asset’s’ future net economic benefit at the ‘Valuation Date’ under a set of assumptions deemed most appropriate by the ‘Valuer’ , excluding any premium or discount to account for market, strategic or other considerations ( VALMIN Code ,).
‘Highest-and-Best-Use’ – for physical property, it is the reasonably probable and legal use of property, which is physically possible, appropriately supported and financially feasible, that results in the highest value. In the case of personal property, it is the same with the additional qualification that the highest value must be in the appropriate market place, consistent with the purpose of the appraisal. It may be, in volatile markets, the holding for a future use.
‘Value-in-Use’ – in contrast to ‘ Highest-and-Best-Use ’, it is the specific value of a specific tangible asset that has a specific use to a specific user. It is not market-related. The focus is on the value that a specific property contributes to the enterprise of which it is a part (being part of a ‘Going Concern Valuation’ ). It measures the contributory value of a specified asset(s) used within that specific enterprise, although it is not the ‘Market Value' for that individual asset. It is the Value-to-the-Owner/Entity/Business in accountancy terms and may be the lower of net current replacement cost and its recoverable amount. It is also the net present value of the expected future net cash flows from the continued use of that asset, plus its disposal value at the end of its useful life ( ‘Scrap Value’ ). At the ‘Valuation Date’ , there must be recognition of its existing use by a particular user. This is in contrast to the alternative reasonable use to which an asset might be put by unspecified owner(s).
‘Going Concern Value’ – A business valuation concept rather than one relating to individual property valuation. It is the value of an operating business/enterprise (ie one that is expected to continue operating) as a whole and it includes goodwill, special rights, unique patents or licences, special reserves, etc. Apportionment of this total value may be made to constituent parts, but none of these components constitute a basis for ‘Market Value’ .
'Market Capitalization' - The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures. Frequently referred to as "market Cap" or MCap
'Enterprise Value - EV' - A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. In the event of a buyout, an acquirer would have to take on the company's debt, but would pocket its cash. EV differs significantly from simple market capitalization in several ways, and many consider it to be a more accurate representation of a firm's value.
‘Market Premium’ - A control premium is an amount that a buyer is usually willing to pay over the current market price of a publicly traded company in order to acquire a controlling share in that company. The reason the buyer of a controlling interest is willing to offer a premium over the price currently established by other market participants is the additional prerogatives of control, including electing the company directors, firing and hiring key employees, declaring and distributing dividends, divesting or acquiring additional business assets, and entering into merger and acquisition

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transactions. The opposite of control premium is the minority discount.

‘ Investment Value’ (Worth) – this is the value of a specific asset to a specific investor(s) for identified investment objectives or criteria. It may be higher or lower than ‘Market Value’ and is associated with ‘Special Value’.
‘ Property-with-Trading-Potential‘ – refers to the valuation of specialised property (eg, hotel, petrol station, restaurant, etc) that is sold on an operating or going concern basis. It recognises that assets other than land and buildings are to be included in the ‘Market Value’ and it is often difficult to separate the component values for land and property.
‘Special Value’ – An extraordinary premium over and above the ‘Market Value’, related to the specific circumstances that a particular prospective owner or user of the property attributes to the asset. It may be a physical, functional or economic aspect or interest that attracts this premium. It is associated with elements of ‘Going Concern Value’ or ‘Investment Value’ since it also represents synergistic benefits. In a strict sense it could apply to very specialised or special purpose assets which are rarely sold on the open market, except as part of a business, because their utility is restricted to particular users. In some circumstances, it may be the lower value given by ‘Value –in–Use’.
‘Salvage Value’ – The expected value of an asset at the end of its economic life (ie, being valued for salvage disposal purposes rather than for its originally intended purpose). Hence, it is the value of property, excluding land, as if disposed of for the materials it contains, rather than for its continued use, without special repairs or adaptation.
‘Scrap Value’ (Residual Value) – The remaining value (usually a net value after disposal costs) of a wasting asset at the end of a prescribed or predictable period of time (usually the end of its effective life) that was ascertained upon acquisition.
‘Forced Sale Value’ (Liquidated Value) – The amount reasonably expected to be received from the sale of an asset within a short time frame for completion that is too short to meet the ‘Market Value’ definition. This definition requires a reasonable marketing time, having taken into account the asset’s nature, location and the state of the market). Usually it also involves an unwilling seller and buyers who have knowledge to the disadvantage of the seller.
‘Valuation Date’ - Means the reference date to which a Valuation applies. Depending on the circumstances, it could be different to the date of completion or signing of the Valuation Report or the cut-off date of the available data (VALMIN Code,).
‘Valuer’ (also Valuer [Canada] or Appraiser [USA]) – Either the ‘Expert’ or ‘Specialist’ (Qualified Person in Canada) who is the natural person responsible for the Valuation to determine the ‘Fair Market Value’ after consideration of the technical assessment of the ‘Mineral Asset’ and other relevant issues. They must have demonstrable ‘Competence’ (and ‘Independence’, when required).
‘Expert’ – Means a ‘Competent’ ( and ‘Independent’, where relevant) natural person who prepares and has overall responsibility for the Valuation Report. He/she must have at least 10 years of relevant ‘ Minerals Industry’ experience, using a relevant ‘Specialist’ for specific tasks in which he/she is not ‘Competent’ . An ‘Expert’ must be a corporate member of an appropriate, recognised professional association having an enforceable Code of Ethics, or explain why not ( VALMIN Code ).
‘Specialist’ – Means a ‘Competent’ ( and ‘Independent’, where relevant) natural person who is retained by the ‘Expert’ to provide subsidiary reports (or sections of the Valuation Report) on matters on which the ‘Expert’ is not personally expert. He/she must have at least 5 years of suitable and preferably recent ‘ Minerals Industry’ experience relevant to the subject matter on which he/she contributes. A ‘Specialist’ must be corporate member of appropriate, recognised professional association having an enforceable Code of Ethics, or explain why not ( VALMIN Code ).
‘Material/Materiality’ - with respect to the contents and conclusions of a relevant Report, it means data and information of such importance that the inclusion or omission of the data or information concerned might result in a reader of the Report reaching a different conclusion than might otherwise be the case. ‘Material’ data (or information) is that which would reasonably be required in order to make an informed assessment of the subject of the Report. The Australian Society of Accountants’ Standard AAS5 indicates that ‘Material’ data (or information) is such that the omission or inclusion of it could lead to changes in total value of greater than 10% (between 5% and 10% it is discretionary). Also the Supreme Court of New South Wales has stated that something is ‘Material’ if it is significant in formulating a decision about whether or not to make an investment or accept an offer ( VALMIN Code ).
‘Transparent/Transparency’ - as applied to a valuation it means, as in the Concise Oxford Dictionary, “ easily seen through, of motive, quality, etc”. It applies to the factual information used, the assumptions made and the methodologies applied, all of which must be made plain in the Report ( VALMIN Code ).
‘Competence’ – it means having relevant expertise, qualifications and experience (technical or commercial), as well as, by implication, the professional reputation so as to give authority to statements made in relation to particular matters. ( VALMIN Code ).
‘Competent Person - A ‘Competent Person’ is a minerals industry professional who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy, or of the Australian Institute of Geoscientists, or of a ‘Recognised Professional Organisation’ (RPO), as included in a list available on the JORC and ASX websites. These organisations have enforceable disciplinary processes including the powers to suspend or expel a member. A Competent Person must have

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a minimum of five years relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking. If the Competent Person is preparing documentation on Exploration Results, the relevant experience must be in exploration. If the Competent Person is estimating, or supervising the estimation of Mineral Resources, the relevant experience must be in the estimation, assessment and evaluation of Mineral Resources. If the Competent Person is estimating, or supervising the estimation of Ore Reserves, the relevant experience must be in the estimation, assessment, evaluation and economic extraction of Ore Reserves. ( JORC 2012 )

‘Independent/Independence’ – Means that the person(s) making the Valuation have no ‘ Material’ pecuniary or beneficial (present or contingent) interest in any of the ‘Mineral Assets’ being assessed or valued, other than professional fees and reimbursement of disbursements paid in connection with the assessment or Valuation concerned; or any association with the commissioning entity, or with the owners or promoters (or parties associated with them) likely to create an apprehension of bias. Hence, they must have no beneficial interest in the outcome of the transaction or purpose of the technical assessment/Valuation of the ‘Mineral Asset’ (VALMIN Code). ASIC RG112, which deals with the Independence of Expert Reports, provides more detail on this concept. ( JORC 2012 )
‘Exploration results’ - Exploration Results include data and information generated by mineral exploration programmes that might be of use to investors but which do not form part of a declaration of Mineral Resources or Ore Reserves. The reporting of such information is common in the early stages of exploration when the quantity of data available is generally not sufficient to allow any reasonable estimates of Mineral Resources. Examples of Exploration Results include results of outcrop sampling, assays of drill hole intersections, geochemical results and geophysical survey results.
‘Exploration Target’ - An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality), relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource. Any such information relating to an Exploration Target must be expressed so that it cannot be misrepresented or misconstrued as an estimate of a Mineral Resource or Ore Reserve. The terms Resource or Reserve must not be used in this context. ( JORC 2012 )
‘Inferred Mineral Resource’ - An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to an Ore Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration . ( JORC 2012 )
‘Indicated Mineral Resource’ - An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to assume geological and grade (or quality) continuity between points of observation where data and samples are gathered. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Ore Reserve. ( JORC 2012 )
‘Measured Mineral Resource’ - A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to confirm geological and grade (or quality) continuity between points of observation where data and samples are gathered. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve. ( JORC 2012 )
‘Modifying Factors’ - are considerations used to convert Mineral Resources to Ore Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors . ( JORC 2012 )
‘Scoping Study’ - A Scoping Study is an order of magnitude technical and economic study of the potential viability of Mineral Resources. It includes appropriate assessments of realistically assumed Modifying Factors together with any other relevant operational factors that are necessary to demonstrate at the time of reporting that progress to a PreFeasibility Study can be reasonably justified. A Scoping Study must not be used as the basis for estimation of Ore Reserves. ( JORC 2012 )
‘Pre Feasibility Study’ - A Preliminary Feasibility Study (Pre-Feasibility Study) is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established

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and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on the Modifying Factors and the evaluation of any other relevant factors which are sufficient for a Competent Person, acting reasonably, to determine if all or part of the Mineral Resources may be converted to an Ore Reserve at the time of reporting. A Pre- Feasibility Study is at a lower confidence level than a Feasibility Study. ( JORC 2012 )

‘Feasibility Study’ - A Feasibility Study is a comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of applicable Modifying Factors together with any other relevant operational factors and detailed financial analysis that are necessary to demonstrate at the time of reporting that extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The confidence level of the study will be higher than that of a Pre- Feasibility Study. ( JORC 2012 )

VALUATION REFERENCES

ASIC, 2011, “Regulatory Guideline 111 – Content of Expert’s Reports”, March 2011

ASIC, 2011, “Regulatory Guideline 112 – Independence of Experts”, March 2011

AusIMM, (2012), “Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code), prepared by the Joint Ore Reserves Committee (JORC) of the AusIMM, the Australian Institute of Geoscientists (AIG) and the Minerals Council of Australia (MCA)”, (The JORC Code) effective December 2013.

AusIMM. (2005), “Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code)” 2005 Edition.

AusIMM, (1998), “Valmin 94 – Mineral Valuation Methodologies”.

Australian Taxation Office, 2014, “MRRT Starting Base – Valuations”

Barnett, D W and Sorentino, C, 1994. Discounted cash flow methods and the capital asset pricing model, in Proceedings Mineral Valuation Methodologies 1994 (VALMIN ‘94) pp 17-35 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Baurens, S., 2010, “Valuation of Metals and Mining Companies” Basinvest, 7 Nov 2010

CANADIAN INSTITUTE OF MINING, METALLURGY AND PETROLEUM, (2014), “CIM Standards on Mineral Resources and Reserves-Definitions and Guidelines”. Prepared by the CIM Standing Committee On Reserve Definitions. Adopted by CIM Council August 20, 2000.

CIM, (2003) – “Standards and Guidelines for Valuation of Mineral Properties. Final Version, February 2003” Special Committee of the Canadian Institute of Mining, Metallurgy and Petroleum on Valuation of Mineral Properties (CIMVAL).

Edmonds, J, 2013, “Resource Capital Fund III LP v Commissioner of Taxation [2013] FCA 363, Federal Court of Australia, 26 April 2013

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Goulevitch J and Eupene G S; 1994; Geoscience rating for valuation of exploration properties – applicability of the Kilburn Method in Australia and examples of its use; Proceedings of VALMIN 94; pages 175 to 189; The Australasian Institute of Mining and Metallurgy, Carlton, Australia.

Kilburn, LC, 1990, “Valuation of Mineral Properties which do not contain Exploitable Reserves” CIM Bulletin, August 1990.

Jessup, A. 2013, “Application of Stamp Duty to Mineral and Petroleum Transactions” AMPLA Limited Thirty-Seventh National Conference, Piper Alderman, October 2013

Lilford, E & Minnitt, R, 2002, “Methodologies in the Valuation of Mineral Rights” Journal SAIMM October 2002

Lilford, E & Minnitt, R, 2005, “A Comparative Study of Valuation Methodologies for Mineral Developments” Journal SAIMM January 2005

Lord, D. 2014, “How Right is your Valuation?”, SRK Consulting, AusIMM June 2014

Rudenno, V., (1998), “The Mining Valuation Handbook”.

Rudenno, V., (2009), “The Mining Valuation Handbook” 3[rd] Edition.

Rudenno, V., (2012), “The Mining Valuation Handbook” 4[th] Edition.

Sorentino, C, 2000, “Valuation Methodology for VALMIN”, MICA, The Codes Forum

Spencer v. Commonwealth 5 CLR 418, 1907

Wellmer, F., 1989, “Economic Evaluations in Exploration”, Springer.

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RADAR IRON LIMITED

ABN: 15 146 455 576

«HOLDER_NAME» «ADDRESS_LINE_1» «ADDRESS_LINE_2» «ADDRESS_LINE_3» «ADDRESS_LINE_4» «ADDRESS_LINE_5»

PROXY FORM

REGISTERED OFFICE: SUITE 7 55 HAMPDEN ROAD NEDLANDS WA 6009

SHARE REGISTRY:

Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: [email protected] W: www.securitytransfer.com.au

Code: RAD

Holder Number: «HOLDER_No.»

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

VOTE Lodge your proxy vote securely at www.securitytransfer.com.au 1. Log into the Investor Centre using your holding details. Online Proxy ID: «ONLINE PRX ID» ONLINE 2. Click on "Proxy Voting" and provide your Online Proxy ID to access the voting area.

SECTION A: Appointment of Proxy

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

The meeting chairperson OR

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or failing the person named, or if no person is named, the Chairperson of the meeting, as my/our Proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the Proxy sees fit) at the Annual General Meeting of the Company to be held at 10.00am (WST) on Wednesday 19 November 2014 at Suite 7, Level 1, 55 Hampden Road, Nedlands Western Australia and at any adjournment of that meeting.

SECTION B: Voting Directions

Please mark "X" in the box to indicate your voting directions to your Proxy. The Chairperson of the Meeting intends to vote undirected proxies in FAVOUR of all the resolutions. In exceptional circumstances, the Chairperson of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

RESOLUTIONS

FOR AGAINST ABSTAIN*

Remuneration Report (Non-Binding) 2. Re-election of Director – Mr Alan Tough 3. Re-election of Director – Mr David Sourbutts
Approval of 10% Placement Capacity
Acquisition of Relevant Interest by Victory Mining

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

SECTION C: Signature of Security Holder(s)

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

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

Director/Company Secretary

Proxies must be received by no later than 10.00am (WST) on Monday 17 November 2014.

RADPX1191114 1 1 RAD

RADPX1191114

My/Our contact details in case of enquiries are:

Name:

Number:

( )

1. NAME AND ADDRESS

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

2. APPOINTMENT OF A PROXY

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

3. DIRECTING YOUR PROXY HOW TO VOTE

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

4. APPOINTMENT OF A SECOND PROXY

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

5. SIGNING INSTRUCTIONS

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

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

Companies: where the Company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the Company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.

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

6. LODGEMENT OF PROXY

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

To appoint a second Proxy you must:

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

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

Security Transfer Registrars Pty Ltd Online www.securitytransfer.com.au

Postal Address PO BOX 535 Applecross WA 6953 AUSTRALIA Street Address Alexandrea House Suite 1, 770 Canning Highway Applecross WA 6153 AUSTRALIA Telephone +61 8 9315 2333 Facsimile +61 8 9315 2233 Email [email protected] The Company Suite 7 Level 1, 55 Hampden Road Nedlands WA 6009 AUSTRALIA

PRIVACY STATEMENT

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

AI assistant

WEEBIT NANO LTD — AGM Information 2014

66042_rns_2014-10-21_1aa321c2-e3a2-4116-a481-aa00470f64c5.pdf

Notice of Annual General Meeting

Radar Iron Limited

ACN 146 455 576

Notice of Annual General Meeting

Agenda

1 ANNUAL REPORT

2 RESOLUTION 1 – REMUNERATION REPORT (NON-BINDING)

3 RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR ALAN TOUGH

4 RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MR DAVID SOURBUTTS

5 RESOLUTION 4 – APPROVAL OF 10% PLACEMENT CAPACITY

6 RESOLUTION 5 – ACQUISITION OF RELEVANT INTEREST BY VICTORY MINING

7 VOTING PROHIBITION AND EXCLUSION STATEMENTS

Corporations Act

Listing Rule 14.11

Radar Iron Limited ACN 146 455 576

Explanatory Memorandum

1 INTRODUCTION

2 ACTION TO BE TAKEN BY SHAREHOLDERS

2.1 Proxies

2.2 Corporate representatives

2.3 Eligibility to vote

3 ANNUAL REPORT

4 RESOLUTION 1 – REMUNERATION REPORT

5 RESOLUTIONS 2 AND 3 – RE-ELECTION OF DIRECTORS

5.1 Introduction

5.2 Directors’ recommendation

6 RESOLUTION 4 – APPROVAL OF 10% PLACEMENT FACILITY

6.1 General

6.2 Directors’ recommendation

6.3

Listing Rule 7.1A

6.4 Specific information by Listing Rule 7.3A

7 RESOLUTION 5 – ACQUISITION OF RELEVANT INTEREST BY VICTORY MINING

7.1 Introduction

7.2

Victory Mining

7.3 Material terms of the Placement and Entitlement Offer

7.4 Timetable

7.5 Advantages and disadvantages of the Victory Mining Underwriting

7.6 Directors’ recommendation

7.7 Requirement for Shareholder approval

7.8 Information required by Item 7 of Section 611 of the Corporations Act

7.9 Additional information required by ASIC Regulatory Guide 74: Acquisitions approved by members

7.10 Independent Experts Report

7.11 Victory Mining’s existing voting power in the Company

7.12 Impact of the Victory Mining Underwriting on the Company’s financial position and pro forma balance sheet

1 DEFINITIONS

2 INFORMATION REQUIRED BY LISTING RULE 7.3A.6

Financial Services Guide

10 October 2014

Financial Services Guide

Information about us

Financial services we are licensed to provide

General Financial Product Advice

Fees, commissions and other benefits that we may receive

Remuneration or other benefits received by our employees

Referrals

Complaints resolution

Referral to External Dispute Resolution Scheme

Contact details

TABLE OF CONTENTS

INDEPENDENT EXPERT’S REPORT

1. Introduction

2. Summary and Opinion

2.1 Purpose of the report

2.2 Approach

2.3 Opinion

2.4 Fairness

Valuation Summary

2.5 Reasonableness

3. Scope of the Report

3.1 Purpose of the Report

3.2 Regulatory guidance

3.3 Adopted basis of evaluation

4. Outline of the Transaction

Scenario One: All shareholders take up their entitlement to the Entitlement Offer

5. Profile of Radar Iron Limited

WEEBIT NANO LTD AGM Information 2014