XSTATE RESOURCES LIMITED — AGM Information 2020

Jun 18, 2020

ABN 96 009 217 154

19 June 2020

Electronic lodgement

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ASX Limited

Notice of Hybrid Annual General Meeting

Attached is a copy of the Notice of Annual General Meeting ( AGM ), Explanatory Statement and Proxy Form which have today been released to Shareholders.

In accordance with subsection 5(f) of the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 , the Company will not be dispatching physical copies of the Notice of Meeting ( NoM ) unless specifically requested to do so. Instead, a copy of the NoM can be viewed and downloaded online at the following link:

• www.xstate.com.au/investor centre/announcements/

Should you wish to receive a physical copy of the NoM, please contact the Company Secretary on companysecretary@xstate.com.au.

A copy of the proxy form is enclosed in the NoM attached to this notice. Proxy votes may be lodged by any of the following methods:

• In person to Level 1, 31 Cliff Street, Fremantle, WA 6160;

• By mail to PO Box 584, Fremantle, WA 6959; or

• By scan and email to the Company Secretary.

Due to the spread of COVID-19, the Directors of Xstate Resources Limited advise that the physical location will be open to the general public but encourage shareholders to instead utilise online facilities that are being made available, and to submit proxy forms and any questions in the requisite timeframe ahead of the meeting. Due to the size of the venue, physical limits will be in place for attending the AGM in person, according to the WA State Government COVID Safety Guidelines. As such, if you wish to attend in person, or have a proxy attend in person on your behalf, please register your interest by emailing the Company Secretary. Any shareholders that attend without registering will not be permitted entrance if guideline limits have been reached.

If you wish to attend the AGM via the online facilities being made available, please register your interest by emailing the Company Secretary.

All resolutions included in the meeting will be voted upon by poll. Shareholders who intend to participate and vote via poll at the meeting must contact the Company Secretary via email. After providing notice and following the Proxy cut-off time, the Company Secretary will email you a personalised poll form. The personalised poll form must be completed and emailed to the Company Secretary after the poll has been called and prior to the close of polling. During the meeting, the Chair will notify when and how you are able to complete and return the personalised poll form.

Shareholders who do not wish to vote during the meeting are encouraged to appoint the Chair as proxy ahead of the Meeting. Shareholders can complete the proxy form attached to the NoM to provide specific instructions on how their vote is to be exercised on each resolution. The Chair is legally bound to follow your instructions. Instructions on how to complete the proxy form are set out in the NoM attached.

Level 1, 31 Cliff Street, Fremantle WA 6160 | Tel + 61 8 9435 3200 | Fax +61 8 6444 7408 | www.xstate.com.au

19 June 2020

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As the situation is constantly evolving and guidelines from the State Government are temporary, and subject to amendment, the Company will keep Shareholders informed of any amendments to the current format of the AGM via announcement on the ASX.

This announcement was authorised for issue by the Managing Director of Xstate Resources Limited

Jordan McArthur

Company Secretary

Xstate Resources Limited Tel Office: +61 8 9435 3200

Email: companysecretary@xstate.com.au

About Xstate Resources Limited

Xstate Resources ( ASX Code: XST ) is an ASX listed company focused on the oil and gas sector. The Company has existing gas exploration assets located in the Sacramento Basin, California and associated gas production. Xstate is presently pursuing new opportunities in the oil and gas sector onshore North America.

Level 1, 31 Cliff Street, Fremantle WA 6160 | Tel + 61 8 9435 3200 | Fax +61 8 6444 7408 | www.xstate.com.au

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XSTATE RESOURCES LIMITED

ABN 96 009 217 154

NOTICE OF ANNUAL GENERAL MEETING

PROXY FORM

AND

EXPLANATORY STATEMENT

PLEASE NOTE

Due to the spread of COVID-19, the Directors of Xstate Resources Limited advise that the physical location will be open to the general public, but encourage shareholders to instead utilise online facilities that are being made available and to submit proxy forms and any questions in the requisite timeframe ahead of the meeting.

Date of Meeting

21 July 2020

Time of Meeting

2:00 pm (AWST)

Place of Meeting

Level 1, 31 Cliff Street Fremantle, Western Australia

XSTATE RESOURCES LIMITED

ABN 96 009 217 154

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of shareholders of Xstate Resources Limited (" Company ") will be held at 2:00 pm (AWST) on Tuesday, 21 July 2020, at Level 1, 31 Cliff Street, Fremantle, Western Australia.

In order to determine voting entitlements, the register of Shareholders will be closed at 4:00 pm (AWST) on 19 July 2020.

An Explanatory Statement containing information in relation to each of the Resolutions to be put to the meeting accompanies this Notice.

IMPORTANT NOTICE

Given the current impact of COVID-19, the Directors wish to inform shareholders that a hybrid meeting will be held for the 2020 Annual General Meeting. A quorum of members will be present in person, comprising members of the management team, at the designated meeting location to ensure compliance with requirements of the Corporations Act 2001, the ASX Listing Rules and the constitution of Xstate Resources Limited. Limited numbers of shareholders are permitted to attend the meeting in person should they wish, however will be required to follow the social distancing guidelines set out by the Western Australia State Government. If you wish to attend the AGM in person, please register your interest by contacting companysecretary@xstate.com.au.

All shareholders are encouraged to submit their proxy forms, either via post or via e-mail as designated on the proxy form attached to this notice, along with any questions for the Board within the requisite time period detailed in this notice and to view the AGM remotely via the online facility provided.

The Company will be facilitating the AGM in an online capacity, giving shareholders the opportunity to log-in remotely to view the AGM proceedings rather than attend in person. If you wish to view the AGM online, please register your interest by emailing the Company Secretary.

AGENDA

To consider and, if thought fit, to pass the following Resolutions.

ORDINARY BUSINESS

Financial Statements and Reports

To receive and consider the annual financial report for the Company for the financial year ended 31 December 2019 together which the declaration of the Directors, the Director’s report, the Remuneration Report and the auditor's report.

Ordinary Resolution 1: Adoption of the Remuneration Report

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

“ That, for the purposes of section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report contained within the Company’s annual financial report for the financial year ended 31 December 2019 .”

Note 1: T he vote on this resolution is advisory only and does not bind the Directors of the Company.

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Voting Prohibition Statement:

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

• (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

• (b) a Closely Related Party of such a member,

(collectively, a " Prohibited Voter ").

However, a Prohibited Voter may cast a vote on this Resolution 1 as a proxy if the vote is not cast on behalf of a person described above and either:

• (a) the Prohibited Voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the Resolution; or

• (b) the Prohibited Voter is the Chair 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 the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company, or if the Company is part of a consolidated entity, for the entity.

Note 2: 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 (a "spill resolution") that another meeting be held within 90 days at which all of the Company's Directors (other than the Managing Director and CEO) must stand for re-election. Less than 25% of shareholder voted against the remuneration report at the 2019 Annual General Meeting.

Ordinary Resolution 2: Election of Director – Mr Andrew Childs

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

“That Mr Andrew Childs, a Director, who having been appointed a Director since the last AGM, retires in accordance with Clause 13.4 of the Company’s constitution, ASX Listing Rule 14.4 and for all other purposes, and being eligible is re-elected as a Director ”

Ordinary Resolution 3: Re-election of Director – Mr Chris Hodge

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

“That Mr Chris Hodge, a Director, retires by rotation in accordance with Clause 13.2 of the Company’s constitution, ASX Listing Rule 14.4 and for all other purposes, and being eligible is re-elected as a Director.”

Ordinary Resolution 4: Ratification of Prior Issue of Shares – LR 7.1

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 171,000,000 fully paid ordinary shares on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting ”

Voting Exclusion Statement:

The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved or an associate of that person or those persons.

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

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

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

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

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

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

Ordinary Resolution 5: Ratification of Prior Issue of Shares – LR 7.1A

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 114,000,000 fully paid ordinary shares on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting ”

Voting Exclusion Statement:

The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved or an associate of that person or those persons.

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

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

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

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

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

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

– Ordinary Resolution 6: Approval of Issue of Director Shares Mr Chris Hodge

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

“That, for the purpose of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 14,750,000 fully paid ordinary shares to Mr Chris Hodge (or his nominee) on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting.”

Voting Exclusion Statement :

The Company will disregard any votes cast in favour of this Resolution by or on behalf of the person who is to receive the securities in question and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company), or any associates of that person or those persons. ( Resolution 4 Excluded Party ).

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

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

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

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

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

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

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• (a) the proxy is either:

• (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member; and

• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

Provided the Chair is not a Resolution 4 Excluded Party, the above prohibition does not apply if:

• (a) the proxy is the Chair; and

• (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Ordinary Resolution 7: Approval of Issue of Shares – Mr Ian Tchacos

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

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue 9,000,000 fully paid ordinary shares to Mr Ian Tchacos (or his nominee) on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting.”

Voting Exclusion Statement :

The Company will disregard any votes cast in favour of this Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or those persons).

However, this does not apply to a vote if it is cast by:

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

• (b) it is cast by the chair of the meeting as proxy for a person who is entitled to vote on this Resolution, in accordance with a direction to the chair to vote on this Resolution as the chair decides; or

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

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

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

Special Resolution 8: 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 totalling up to 10% of the issued capital of the Company at the time of 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.”

Voting Exclusion Statement :

The Company will disregard any votes cast in favour of this Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person (or those persons).

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However, this does not apply to a vote if it is cast by:

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

• (b) it is cast by the chair of the meeting as proxy for a person who is entitled to vote on this Resolution, in accordance with a direction to the chair to vote on this Resolution as the chair decides; or

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

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

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

Important note: The proposed recipients of any Equity Securities under the 10% Placement Capacity are not as yet known or identified. In these circumstances (and in accordance with the note set out in ASX Listing Rule 14.11.1 relating to ASX Listing Rules 7.1 and 7.1A), for a person’s vote to be excluded, it must be known that that person will participate in the proposed issue. Where it is not known who will participate in the proposed issue (as is the case in respect of any Equity Securities issued under the 10% Placement Capacity), Shareholders must consider the proposal on the basis that they may or may not get a benefit and that it is possible that their holding will be diluted, and there is no reason to exclude their votes.

By Order of the Board

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Jordan McArthur Company Secretary

Dated: 5 June 2020

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ENTITLEMENT TO ATTEND AND VOTE

The Company may specify a time, not more than 48 hours before the Meeting, at which a “snap-shot” of Shareholders will be taken for the purposes of determining Shareholder entitlements to vote at the Annual General Meeting.

The Company’s Directors have determined that all Shares of the Company that are quoted on ASX at 4:00pm (AWST) on 19 July 2020 shall, for the purposes of determining voting entitlements at the Annual General Meeting, be taken to be held by the persons registered as holding the Shares at that time.

VOTING IN PERSON

To vote in person, attend the Meeting at the time, date and place set out above. Due to the spread of COVID19, the Directors of Xstate Resources Limited encourage shareholders to utilise online facilities that are being made available for shareholders and to submit proxy forms and any questions within the requisite timeframe ahead of the meeting. Should shareholders wish to attend the meeting, they are required to register their interest with the Company Secretary via email or telephone.

VOTING BY PROXY

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

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

• (a) each Shareholder has a right to appoint a proxy;

• (b) the proxy need not be a member of the Company; and

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

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

CORPORATE REPRESENTATIVE

A Shareholder that is a corporation may appoint an individual to act as its corporate representative to vote at the Meeting in accordance with section 250D of the Corporations Act. Any corporation wishing to appoint an individual to act as its representative at the Meeting should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company’s representative. The authority may be sent to the Company and/or Share Registry in advance of the Meeting or handed in at the Meeting when registering as a corporate representative. A ‘Certificate of Appointment of Corporate Representative’ is enclosed if required. As noted above, shareholders are encouraged to submit their proxy form and view the AGM online rather than attend in person or with a corporate representative attending in person due to COVID-19 social distancing guidelines.

ENQUIRIES

Shareholders are invited to contact the Company Secretary, Mr Jordan McArthur, on +61 8 9435 3200 if they have any queries in respect of the matters set out in this document.

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XSTATE RESOURCES LIMITED

ABN 96 009 217 154

EXPLANATORY STATEMENT

This Explanatory Statement is intended to provide Shareholders with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of Annual General Meeting (“ Notice ”) of the Company.

The Directors of the Company (“ Directors ”) recommend Shareholders read this Explanatory Statement in full before making any decision in relation to the Resolutions.

The following information should be noted in respect of the various matters contained in the accompanying Notice.

ORDINARY RESOLUTION 1: Adoption of Remuneration Report

General

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the Remuneration Report be adopted must be put to the Shareholders. However, such a resolution is advisory only and does not bind the Directors or the Company.

The Remuneration Report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company. The Remuneration Report is part of the Directors’ report contained in the annual financial report of the Company for a financial year.

The chair of the meeting must allow a reasonable opportunity for its Shareholders to ask questions about or make comments on the Remuneration Report at the Annual General Meeting.

Voting consequences

Under changes to the Corporations Act which came into effect on 1 July 2011, a company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company (Spill Resolution) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting (Spill Meeting) within 90 days of the second annual general meeting.

All of the Directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for reelection at the Spill Meeting.

Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company.

Previous voting results

At the Company’s previous Annual General Meeting, the votes cast against the remuneration report considered at that Annual General Meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.

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Proxy restrictions

Shareholders appointing a proxy for Resolution 1 should note the following:

(a) If you appoint a member of the Key Management Personnel (other than the Chair) as your proxy

If you elect to appoint a member of the Key Management Personnel (other than the Chair) whose remuneration details are included in the Remuneration Report, or a Closely Related Party of that member, you must direct the proxy how they are to vote . Undirected proxies granted to these persons will not be voted and will not be counted in calculating the required majority if a poll is called on this Resolution.

(b) If you appoint the Chair as your proxy

If you elect to appoint the Chair where he/ she is also a member of the Key Management Personnel whose remunerations details are included in the Remuneration Report, or a Closely Related Party of such a member, you must direct the Chair how they are to vote. Undirected proxies granted to these persons will be voted in favour of all Resolutions.

(c) If you appoint any other person as your proxy

You do not need to direct your proxy how to vote, and you do not need to tick any further acknowledgement on the Proxy Form. Undirected proxies granted to these persons will be voted at their discretion.

ORDINARY RESOLUTION 2: Re-election of Director – Andrew Childs

ASX Listing Rule 14.4 provides that a Director of an entity must not hold office (without re-election) past the third Annual General Meeting following the Director’s appointment or 3 years, whichever is longer.

Clause 13.4 of the Company’s Constitution requires that a Director appointed by the Board will hold office only until the next annual general meeting and is then eligible for re-electiong. As Mr Childs was appointed since the previous annual general meeting, under clause 13.4 he is eligible for re-election.

Information about Mr Childs is set out in the Company’s announcement of Board Changes dated 24 April 2020.

The Board unanimously supports the re-election of Mr Childs.

ORDINARY RESOLUTION 3: Re-election of Director – Chris Hodge

ASX Listing Rule 14.4 provides that a Director of an entity must not hold office (without re-election) past the third Annual General Meeting following the Director’s appointment or 3 years, whichever is longer.

Clause 13.2 of the Company’s Constitution requires that at every Annual General Meeting of the Company one-third of the Directors excluding the Managing Director (rounded up to the nearest whole number) shall retire from office. The Directors to retire are those who have been longest in office since their last election. A Director who retires by rotation under clause 13.2 is eligible for re-election.

The Company currently has 3 Directors (excluding the Managing Director) and accordingly 1 must retire.

Mr Chris Hodge, the Director longest in office since his last re-election, retires by rotation and seeks re-election as a Director.

Information about Mr Hodge is set out in the Company’s 2019 Annual Report.

The Board unanimously supports the re-election of Mr Hodge.

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ORDINARY RESOLUTIONS 4 and 5: Ratification of Prior Issue of Shares

On 3 December 2019, the Company announced the issue of 285,000,000 fully paid ordinary shares at a price of $0.002 per Share to sophisticated investors ( Capital Raising ).

The issue was made pursuant to the Company’s discretionary placement capacity under ASX Listing Rule 7.1 and ASX Listing Rule 7.1A. Resolutions 2 and 3 of this Notice seeks Shareholder approval to ratify this issue of Shares.

Regulatory Requirements

ASX Listing Rule 7.1 provides that the Company must not issue or agree to issue, subject to specified exceptions, more equity securities during any 12-month period than an amount which, when aggregated with the number of other securities issued within that 12-month period, represents 15% of the number of ordinary shares on issue at the commencement of that 12-month period, unless the issue falls within one of the nominated exceptions, or the prior approval of members of the Company at a general meeting is obtained.

ASX Listing Rule 7.1A provides that the Company can issue a further 10% of the number of ordinary shares at the beginning of the 12-month period under Listing Rule 7.1.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in a general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 and 7.1A (and provided that the previous issue did not breach ASX Listing Rule 7.1 or 7.1A) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1 and 7.1A.

While the Shares described in these Resolutions 4 and 5 have been issued within the 15% limit and 10% limit, the Company seeks Shareholder ratification of the issue of these Shares for the purpose of Listing Rule 7.4 so that the Company may retain the flexibility to issue equity securities in the future, up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 and the 10% additional placement capacity set out in ASX Listing Rule 7.1A, without the requirement to obtain prior Shareholder approval, should the need or opportunity arise.

If Resolution 4 is passed, the Issue will be excluded in calculating Xstate’s 15% limit in Listing Rule 7.1, effectively increasing the number of equity securities it can issue without shareholder approval over the 12 month period following the Issue Date.

If Resolution 4 is not passed, the Issue will be included in calculating Xstate’s 15% limit in Listing Rule 7.1, effectively decreasing the number of equity securities it can issue without shareholder approval over the 12 month period following the Issue Date.

If Resolution 5 is passed, the Issue will be excluded in calculating Xstate’s 10% limit in Listing Rule 7.1A, effectively increasing the number of equity securities it can issue without shareholder approval over the 12 month period following the Issue Date.

If Resolution 5 is not passed, the Issue will be included in calculating Xstate’s 10% limit in Listing Rule 7.1A, effectively decreasing the number of equity securities it can issue without shareholder approval over the 12 month period following the Issue Date.

Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to these Resolutions 4 and 5:

• (a) the total number of Shares issued by the Company (on 3 December 2019) was 171,000,000 under Listing Rule 7.1 and 114,000,000 under Listing Rule 7.1A;

• (b) the issue price was $0.002 per Share;

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

• (d) the Shares were issued to approximately 33 sophisticated investors, none of whom are related parties of the Company; and

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• (e) as set out in the announcement on 3 December 2019, the funds raised under the Capital Raising were used to fund working capital requirements of the Company and for exploration costs incurred by the operator of joint venture assets in the Sacramento Basin.

ORDINARY RESOLUTION 6: Approval of Issue of Director Shares

As at 3 December 2019, the Non-Executive Directors of Xstate Resources Limited (“ Directors ”) had accumulated debts totalling $270,000 for collective deferral of Director’s Fees and Salaries to ensure continuity of operations for the Company.

The Company has agreed, subject to shareholder approval, to issue 14.75 million fully paid ordinary shares at a price of $0.002 per share (consistent with capital raising the subject of Resolutions 4 and 5) as partial extinguishment of the liability owed to the Director (the Related Party ) as set out below:

• (a) Chris Hodge (Non-Exec. Director) – 14,750,000 fully paid ordinary shares ($29,500)

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

• (a) obtain the approval of the public company’s members in the manner set out in Section 217 to 227 of the Corporations Act 2001 (Cth); and

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

• unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act 2001 (Cth).

Notwithstanding that Mr Hodge is a related party, by virtue of being a Director, the other Directors consider that the issuance of Director Shares, on the sames terms as the Placement Shares noted in Resolutions 4 and 5, as partial extinguishment of an existing liability constitutes an arm’s length transaction under Section 210 of the Corporations Act 2001 (Cth).

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a Related Party (or a person who has been a Related Party in the last 6 months), or a person whose relationship with the entity or a Related Party is, in the ASX’s opinion, such that approval should be obtained unless an exception in Listing Rule 10.12 applies. Accordingly, Shareholder approval is sought for the issuance of Director Shares to the Related Party as partial extinguishment of existing liability.

Shareholder Approval - ASX Listing Rule 10.11

Pursuant to, and in accordance with, the requirements of ASX Listing Rule 10.13, the following information is provided in relation to the proposed issuance of Director Shares:

• (a) the Related Party is Mr Chris Hodge by virtue of being a Director of the Company;

• (b) Mr Hodge receives directors fees totalling $36,000 per annum (total remuneration);

• (c) the maximum number of Director Shares to be issued to the Related Party is 14.75 million Director Shares;

• (d) the Director Shares will be issued no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);

• (e) the Director Shares will be issued for $0.002 per Share;

• (f) the Director Shares will rank parri passu with the Company’s existing shares;

• (g) the Director Shares will be granted as partial extinguishment of existing liability owed to the Director for accrued salary balances and accordingly no funds will be raised.

Approval pursuant to Listing Rule 7.1 is not required in order to issue the Director Shares to the Related Party as approval is being obtained under Listing Rule 10.11. Accordingly, the issue of Director Shares to the Related

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Party will not be included in the 15% calculation of the Company’s annual placement capacity pursuant ot Listing Rule 7.1.

Xstate is proposing to issue shares to the Director in satisfaction of fees owing (the “Issue”).

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

10.11.1 a related party;

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

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

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

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

unless it obtains the approval of its shareholders.

The Issue falls within Listing Rule 10.11.1 and does not fall within any of the exceptions in Listing Rule 10.12. It therefore requires the approval of Xstate’s shareholders under Listing Rule 10.11.

Resolution 6 seeks the required shareholder approval to the Issue under and for the purposes of Listing Rule 10.11.

If Resolution 6 is passed, Xstate will be able to proceed with the Issue and reduce the fees owing to the Directors by $29,500.

If Resolution 6 is not passed, Xstate will not be able to proceed with the Issue and the debt of $29,500 owing to the Directors will remain for settlement via cash as and when the entity is capable of settling.

ORDINARY RESOLUTION 7: Approval of Issue of Shares – Mr Ian Tchacos

Resolution 7 seeks Shareholder approval for the issue of 9 million fully paid ordinary shares at a price of $0.002 per share (consistent with capital raising the subject of Resolutions 5 and 6) as partial extinguishment of the liability that was owing to the former Director at the date of his resignation (26 November 2019).

As Mr Tchacos resigned in November 2019, he is not considered to be a related party under section 228 of the Corporations Act 2001 (Cth) and as the approval for issuing shares to extinguish the debt owed to Mr Tchacos is not determined as governed by ASX Listing Rule 10.11.

Shareholder approval for the issue of up to 9,000,000 Shares is being sought in accordance with ASX Listing Rule 7.1. A summary of ASX Listing Rule 7.1 is provided in resolutions 2 and 3 above.

The effect of Resolution 7 will be to allow the Company to issue up to 9,000,000 Shares to Mr Tchacos during a period of 3 months following the Meeting (or a longer period, if allowed by ASX), without utilising the Company’s 15% (Listing Rule 7.1) annual placement capacity.

Should shareholders approve Resolution 7 the company will be able to issue shares without utilising the discretionary placement capacity afforded by Listing Rules 7.1 and 7.1A.

Should shareholders not approve Resolution 7 any placement made by the Company will be limited to the maximum number of shares that can be issued under Listing Rules 7.1 and 7.1A, which could result in the Company not being in a position to raise the desired level of funds.

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Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the proposed issue:

• (a) the maximum number of Shares to be issued is 9,000,000;

• (b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);

• (c) the Shares will be issued for $0.002 per Share;

• (d) the Shares issued will be fully paid ordinary shares in the capital of the Company, issued on the same terms and conditions as the Company’s existing Shares; and

• (e) the Shares will be issued as extinguishment of the existing liability owed to Mr Tchacos for accrued Director Fees at the time of his resignation and accordingly no funds will be raised.

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SPECIAL RESOLUTION 8: Approval of 10% Placement Capacity – Shares

General

ASX Listing Rule 7.1A provides that an Eligible Entity may seek Shareholder approval at its annual general meeting to allow it to issue Equity Securities up to 10% of its issued capital over a period up to 12 months after the annual general meeting ( 10% Placement Capacity ).

The Company is an Eligible Entity.

If Shareholders approve Resolution 8, the number of Equity Securities the Eligible Entity may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out below).

The effect of Resolution 8 will be to allow the Directors to issue Equity Securities up to 10% of the Company’s fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Meeting, without subsequent Shareholder approval and without using the Company’s 15% annual placement capacity granted under Listing Rule 7.1.

Resolution 8 is a Special Resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 8 for it to be passed.

If Resolution 8 is passed, the Directors will be able to issue up to 10% of the Company’s fully paid ordinary share securities on issue under the 10% placement capacity during the period of up to 12 months after the approval.

If Resolution 8 is not passed, the Directors will not be able to issue up to 10% of the Company’s fully paid ordinary share securities on issue under the 10% placement capacity during the period of up to 12 months after the approval.

ASX Listing Rule 7.1A

ASX Listing Rule 7.1A came into effect on 1 August 2012 and enables an Eligible Entity to seek shareholder approval at its annual general meeting to issue Equity Securities in addition to those under the Eligible Entity’s 15% annual placement capacity.

An Eligible Entity is one that, as at the date of the relevant annual general meeting:

• (a) is not included in the S&P/ASX 300 Index; and

• (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

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The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation of approximately $2.85 million.

Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has one class of quoted Equity Securities on issue, being the Shares ( ASX Code: XST )

The exact number of Equity Securities that the Company may issue under an approval under Listing Rule 7.1A will be calculated according to the following formula:

(A x B) – C

Where:

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

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

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

• (iii) plus the number of Shares issued in the previous 12 months with approval of holders of Shares under Listing Rules 7.1 and 7.4.; and

• (iv) less the number of Shares cancelled in the previous 12 months.

• B is 10%.

• C is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of holders of Ordinary Securities under ASX Listing Rule 7.1 or 7.4.

Technical information required by ASX Listing Rule 7.1A

Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 8:

(a) Minimum Price

The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded 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 ASX trading days of the date above, the date on which the Equity Securities are issued.

(b) Date of Issue

The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following:

• (i) 12 months after the date of this Meeting;

• (ii) the time and date of the entity’s next annual general meeting; and

• (iii) the time and date of approval by Shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company’s activities) or 11.2 (disposal of the Company’s main undertaking).

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(c) Allocation policy

The Company has not yet determined who the Shares will be issued to. At the time of any placement pursuant to this resolution, the Directors would place the Company into a trading halt whilst it discussed the proposed placement by the company with existing shareholders and interested brokers;

(d)

Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 8 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated on the basis of the current market price of Shares and the current number of Equity Securities on issue as at the date of this Notice.

The table also shows the voting dilution impact where the number of Shares on issue (variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity.

Shares on issue Variable A* in Listing Rule 7.1A.2		Dilution	Dilution
	Issue price per Share	$0.001 50% decrease in Issue Price	$0.002 Issue Price	$0.004 100% increase in Issue Price
1,140,490,898 Shares Current Variable A	10% Voting Dilution	114,049,090 Shares	114,049,090 Shares	114,049,090 Shares
	Funds raised	$114,049	$228,098	$456,196
1,710,736,347 Shares 50% increase in Current Variable A	10% Voting Dilution	171,073,635 Shares	171,073,635 Shares	171,073,635 Shares
	Funds raised	$171,074	$342,147	$684,295
2,280,981,796 Shares 100% increase in	10% Voting Dilution	228,098,180 Shares	228,098,180 Shares	228,098,180 Shares
Current Variable A	Funds raised	$228,098	$456,196	$912,392

• The number of Shares on issue (variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a pro-rata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

The table above uses the following assumptions:

• 1) The current shares on issue are the Shares on issue as at 1 June 2019;

• 2) No options are exercised into Shares before the date of issue of the Equity Securities;

• 3) The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. That is why the voting dilution is shown in each example as 10%;

• 4) The issue price set out above is the closing price of the Shares on the ASX on 1 June 2019;

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• 5) The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity;

• 6) The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1;

• 7) The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances; and

• 8) This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.

Shareholders should note that there is a risk that:

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

• (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

(e) Purpose of Issue under 10% Placement Capacity

The Company may issue Equity Securities under the 10% Placement Capacity for cash consideration only. The funds raised may be used for the acquisition of new resources, assets and investments (including expenses associated with such an acquisition), continued exploration expenditure on the Company’s current assets and general working capital.

The Company will comply with the disclosure obligations under Listing Rule 7.1A(4) upon issue of any Equity Securities.

(f) Allocation under the 10% Placement Capacity

The Company’s allocation policy for the issue of Equity Securities under the 10% Placement Capacity will be dependent on the prevailing market conditions at the time of the proposed placement(s).

The recipients of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined. However, the recipients of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

The Company will determine the recipients at the time of the issue under the 10% Placement Capacity, having regard to the following factors:

• (i) the purpose of the issue;

• (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;

• (iii) the effect of the issue of the Equity Securities on the control of the Company;

• (i) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

• (v) prevailing market conditions; and

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

Further, if the Company is successful in acquiring new resources, assets or investments, it is likely that the recipients under the 10% Placement Capacity will be vendors of the new resources, assets or investments.

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(g) Previous Approval under ASX Listing Rule 7.1A

The Company obtained approval under Listing Rule 7.1A on 30 May 2019. The Company has issued 114,000,000 Equity Securities pursuant to Listing Rule 7.1A in the 12 months preceding the date of the Annual General Meeting.

As the Company has previously sought shareholder approval for the additional placement capacity under Listing Rule 7.1A, the following information is provided in relation to all issues of equity securities in the 12 months prior to the date of the Annual General Meeting, pursuant to the requirements of Listing Rule 7.3A6(a) and 7.3A6(b):

A total of 285,000,000 ordinary shares and nil options have been issued representing 24% of the equity securities on issue at the commencement of the 12 month period preceding the date of the Annual General Meeting (being 1,187,490,898 equity securities), as detailed in the table below.

Date	Quantity	Class	Recipients	Issue price and discount to Market Price (if applicable)1	Form of consideration
Issue – 3/12/2019 Appendix 3B – 3/12/2019	285,000,000	Shares2	Sophisticated investors3	$0.002 per Share (at Market Price)	Cash Amount raised = $570,000 Amount spent = $507,050 Amount remaining = $62,950 Use of funds: Exploration activities in the Sacramento Basin, and for working capital purposes.

Notes:

1. Market Price means the closing price on ASX (excluding special crossings, overnight sales and exchange traded option exercises). For the purposes of this table the discount is calculated on the Market Price on the last trading day on which a sale was recorded prior to the date of issue of the relevant Equity Securities.

2. Fully paid ordinary shares in the capital of the Company, ASX Code: XST (terms are set out in the Constitution).

3. Sophisticated investor clients of Alto Capital Pty Ltd and Blueprint Advisor Group Pty Ltd.

Voting Exclusion

A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing Shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing Shareholders will be excluded from voting on Resolution 8.

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G LO S S A R Y

10% Placement Capacity has the meaning given in Resolution 8 of the Explanatory Statement.

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

ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act.

Company means Xstate Resources Limited - ABN 96 009 217 154

Directors means the current directors of the Company.

Equity Securities includes a Share, a right to a Share or Option, an Option, a convertible security and any security that ASX decides to classify as an Equity Security.

Explanatory Statement means the explanatory statement accompanying the Notice.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

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

Ordinary Securities has the meaning set out in the ASX Listing Rules.

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

Shareholder means a holder of a Share.

AWST means Australian Western Standard Time (Perth, Western Australia).

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CERTIFICATE OF APPOINTMENT OF CORPORATE REPRESENTATIVE

Shareholder Details

This is to certify that by a resolution of the directors of:

………………………………………………………………………….…….….………....................... ( Company ), Insert name of Shareholder Company

the Company has appointed:

………………….…………………………………………………………………….………………….., Insert name of corporate representative

in accordance with the provisions of section 250D of the Corporations Act 2001, to act as the body corporate representative of that Company at a general meeting of the members of Xstate Resources Limited to be held on 21 July 2020 commencing at 2.00 pm (AWST) and at any adjournments of that general meeting.

DATED ……………………………………………………….

Please sign here

Executed by the Company ) in accordance with its constituent documents ) )

............................................….………….….…… .................................................…………………….... Signed by authorised representative Signed by authorised representative ............................................................……...….. .................................................………………….…... Name of authorised representative (print) Name of authorised representative (print) .....................................................…….…..….. ............................................….………………..…….. Position of authorised representative (print) Position of authorised representative (print)

Instructions for Completion

• Insert name of appointing Shareholder Company and the name or position of the appointee corporate representative (eg “John Smith” or “each director of the Company”).

• Execute the Certificate following the procedure required by your Constitution or other constituent documents.

• Print the name and position (eg director) of each authorised company officer who signs this Certificate on behalf of the Company.

• Insert the date of execution where indicated.

• Prior to the Meeting, send or deliver the Certificate to the registered office of Xstate Resources Limited at Level 1, 31 Cliff Street, Fremantle WA or email the Certificate to the Company Secretary – companysecretary@xstate.com.au

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PROXY FORM

XSTATE RESOURCES LIMITED

ABN 96 009 217 154

GENERAL MEETING

I/We

of (Address):

==> picture [399 x 59] intentionally omitted <==

being a Member of Xstate Resources Limited entitled to attend and vote at the General Meeting, hereby appoint:

Name:

Name of proxy ( Please note : Leave blank if you have selected the Chair of the General Meeting as your proxy.)

OR the Chair of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the General Meeting, or the Chair’s nominee, to vote in accordance with the following directions or if no directions have been as the proxy sees fit, at the General Meeting to be held at 2.00 pm (AWST) on 21 July 2020 at Level 1, 31 Cliff Street, Fremantle, Western Australia, and at any adjournment of that meeting.

The Chair intends to vote undirected proxies in favour of all Resolutions in which the Chair is entitled to vote.

Voting on Business of the General Meeting Ordinary Resolution 1 - Adoption of Remuneration Report Ordinary Resolution 2 - Re-election of Director – Andrew Childs Ordinary Resolution 3 - Re-election of Director – Chris Hodge Ordinary Resolution 4 - Ratification of Prior Issue of Shares - LR 7.1 Ordinary Resolution 5 - Ratification of Prior Issue of Shares - LR 7.1A Ordinary Resolution 6 - Issue of Director Shares – Chris Hodge Ordinary Resolution 7 - Issue of Shares – Ian Tchacos Special Resolution 8 - Approval of 10% Placement Capacity

FOR AGAINST ABSTAIN

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is ____%.

Signature of Member(s) ___ Individual or Member 1 Sole Director / Company Secretary	____ Member 2 Director	___ Date: _____ Member 3
		Director / Company Secretary

Contact Name: _______ Contact Ph (daytime): ________

Date: _______

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Instructions for completing Proxy Form

1.

( Appointing a proxy ): A Shareholder entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on their behalf at the Meeting. If a Shareholder is entitled to cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointments do not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a Shareholder.

2.

( Direction to vote ): A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. The direction may specify the proportion or number of votes that the proxy may exercise by writing the percentage or number of Shares next to the box marked for the relevant item of business. Where a box is not marked the proxy may vote as they choose subject to the relevant laws. Where more than one box is marked on an item the vote will be invalid on that item.

3.

( 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 should sign.

• ( Power of attorney ): If you have not already provided the power of attorney with the registry, please attach a certified photocopy of the power of attorney to this Proxy Form when you return it.

• ( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held. In addition, if a representative of a company is appointed pursuant to Section 250D of the Corporations Act to attend the Meeting, the documentation evidencing such appointment should be produced prior to admission to the Meeting. A form of a certificate evidencing the appointment may be obtained from the Company.

• ( Attending the Meeting ): Completion of a Proxy Form will not prevent individual Shareholders from attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the Meeting in person, then the proxy’s authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the Meeting.

5.

• ( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

• In person to Level 1, 31 Cliff Street, Fremantle, WA 6160;

• By mail to PO Box 584, Fremantle, WA, 6959; or

• By scan and email to companysecretary@xstate.com.au,

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy Forms received later than this time will be invalid.

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