XSTATE RESOURCES LIMITED — Capital/Financing Update 2020

Jul 8, 2020

Proposed issue of securities

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Announcement Summary

Entity name

XSTATE RESOURCES LIMITED

Announcement Type

New announcement

Date of this announcement

Thursday July 9, 2020

The Proposed issue is:

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A placement or other type of issue

Total number of +securities proposed to be issued for a placement or other type of issue

Maximum Number of ASX +Security Code +Security Description +securities to be issued n/a Convertible Notes 562

Proposed +issue date

Friday July 10, 2020

Refer to next page for full details of the announcement

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Part 1 - Entity and announcement details

1.1 Name of +Entity

XSTATE RESOURCES LIMITED

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

ABN

Registration Number

96009217154

1.3 ASX issuer code

XST

1.4 The announcement is

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New announcement

1.5 Date of this announcement

Thursday July 9, 2020

1.6 The Proposed issue is:

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A placement or other type of issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity

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No

Part 7B - Issue details

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional No securities in a class that is already quoted or recorded by ASX)? New class

Details of +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from Will the entity be seeking quotation ASX that the terms of the proposed of the 'new' class of +securities on +securities are appropriate and ASX? equitable under listing rule 6.1? No No ASX +Security Code +Security Description New class-code to be confirmed Convertible Notes

+Security Type

Convertible Debt Securities

Maximum Number of +securities proposed to be issued

562

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Proposed issue of securities

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Purpose of the issue

Raising funds to be utilised in existing Californian exploration & production porfolio, for assessment of additional production acquisitions and for working capital purposes.

Offer price details for retail security holders

In what currency is the cash What is the issue price per consideration being paid? +security? AUD - Australian Dollar AUD 1,000.00000

Will all the +securities issued in this class rank equally in all respects from their issue date? Yes

Oversubscription & Scale back details

May a scale back be applied to this event? No

Convertible Debt +Securities details

These securities are:	Type of security
Convertible	Capital Note
+Security Currency	Face Value
AUD - Australian Dollar	AUD 1,000.0000
Interest Rate Type
Fixed rate
Frequency of Coupon/Interest	First Payment Date
Payments Per Year
Quarterly
	Saturday October 10, 2020
Interest Rate (p.a.)	Is Interest Rate (p.a) estimated at this
10.00000 %	time? No
s128F of the Income Tax Assessment
Act status applicable to the security
s128F exemption status unknown
Is the security Perpetual (ie. No	Maturity Date
maturity)? No	Saturday July 10, 2021
Is the Security Subordinated?
No
Is the Security Secured?
No

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Select other features applicable to the security None of the above

Is a First Trigger Date on which conversion, redemption, call or put can occur (whichever is first) applicable? No Details of the existing class of +security that will be issued upon exercise or conversion of this new class of +security

XST : ORDINARY FULLY PAID

Please provide any further information relating to the principal terms of the +securities

Interest convertible into ordinary fully paid shares at election of noteholder, subject to shareholder approval.

Part 7C - Timetable 7C.1 Proposed +issue date Friday July 10, 2020 Part 7D - Listing Rule requirements 7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the issue under listing rule 7.1? No 7D.1b Are any of the +securities proposed to be issued without +security holder approval using the entity's 15% placement capacity under listing rule 7.1? No 7D.1c Are any of the +securities proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A (if applicable)? No 7D.2 Is a party referred to in listing rule 10.11.1 participating in the proposed issue? No 7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No 7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

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7E.1 Will there be a lead manager or broker to the proposed issue? No

7E.2 Is the proposed issue to be underwritten? No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue

Part 7F - Further Information

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue

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