De Grey Mining : AGM Notice of Meeting and Proxy

DE GREY MINING LIMITED ABN 65 094 206 292

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME:	2.30pm WST
DATE:	Wednesday, 28 November 2018
PLACE:	Function Room
Room 1 - Level 2
QV1 Conference Centre
250 St George's Terrace
Perth WA 6000

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

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

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 5pm WST on 26 November 2018.

BUSINESS OF THE MEETING

AGENDA

• 1. FINANCIAL STATEMENTS AND REPORTS

  To receive and consider the annual financial report of the Company for the financial year ended 30 June 2018 together with the declaration of the directors, the director's report, the Remuneration Report and the auditor's report.

• 2. RESOLUTION 1 - ADOPTION OF 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 as contained in the Company's annual financial report for the financial year ended 30 June 2018."

  Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

  Voting Prohibition Statement:

  A vote on this Resolution must not be cast (in any capacity) by or on behalf of either 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.

  However, a person (the voter) 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) (b)the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or the voter is the Chair and the appointment of the Chair as proxy:

  (i) (ii)does not specify the way the proxy is to vote on this Resolution; and expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

• 3. RESOLUTION 2 - RE-ELECTION OF DIRECTOR - STEVEN MORRIS

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

  "That, for the purpose of clause 63.5 of the Constitution and for all other purposes, Mr. Steven Morris, a Director, retires by rotation, and being eligible, is re-elected as a Director."

• 4. RESOLUTION 3 - RATIFICATION OF PRIOR ISSUE OF SHARES

  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 1,100,498 Shares on the terms and conditions set out in the Explanatory Statement."

  Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

• 5. RESOLUTION 4 - APPROVAL OF 10% PLACEMENT CAPACITY

  To consider and, if thought fit, to pass the following resolution as a special resolution:

"That, for the purposes of Listing Rule 7.1A and for all other purposes, approval is given for the Company to issue up to that number of Equity Securities equal to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the issue of Equity Securities under this Resolution 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 associates of those persons. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

6.

RESOLUTION 5 - RENEWAL OF THE EMPLOYEE OPTION PLAN

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 7.2, Exception 9 and all other purposes, the directors be and are hereby authorised to maintain the employee option plan, called "The Employee Option Plan of De Grey Mining Limited", upon and subject to the terms and conditions specified in the document entitled "Plan Rules of the Employees Option Plan of De Grey Mining Limited", a summary of which is included in the Explanatory Statement."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any Director except one who is ineligible to participate in any employee incentive scheme in relation to the Company, and any associates of those Directors. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of either 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.

However, a person (the voter) 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) (b)the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or the voter is the Chair and the appointment of the Chair as proxy:

(i) (ii)does not specify the way the proxy is to vote on this Resolution; and expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

Dated: 25 October 2018

By order of the Board

Craig Nelmes Company Secretary

Voting in person

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

Voting by proxy

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

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

•

each Shareholder has a right to appoint a proxy;

•

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

•

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

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

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

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

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on [phone].

EXPLANATORY STATEMENT

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

• 1. FINANCIAL STATEMENTS AND REPORTS

  In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2018 together with the declaration of the directors, the directors' report, the Remuneration Report and the auditor's report.

  The Company will not provide a hard copy of the Company's annual financial report to Shareholders unless specifically requested to do so. The Company's annual financial report is available on its website atwww.degreymining.com.au.

• 2. RESOLUTION 1 - ADOPTION OF REMUNERATION REPORT

• 2.1 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 company or the directors of 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.

• 2.2 Voting consequences

  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 re-election 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.

• 2.3 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.

• 3. RESOLUTION 2 - RE-ELECTION OF DIRECTOR - STEVEN MORRIS

• 3.1 General

  The Constitution sets out the requirements for determining which Directors are to retire by rotation at an annual general meeting.

  Steven Morris, who has served as a director since 29 October 2014 and was last re-elected at the Company's 2015 Annual General Meeting, retires by rotation and seeks re-election.

• 3.2 Qualifications and other material directorships

  Mr. Morris was appointed to the board in October 2014 as a Non-executive director. He has some 25 years of experience at the most senior executive level in a range of industries including the last 20 years in Financial Markets.

During that time, he has held positions such as Head of Private Clients Australia for Patersons Securities Ltd and Managing Director of Intersuisse Ltd. He is the Founder and remains a significant shareholder of Peloton Shareholder Services offering management of shareholder based capital raising and investor relations advice to numerous ASX listed companies. He currently holds an executive position within the Little Group, which holds assets across a range of industries including Property Management, Software Solutions, Aviation and Ferries. He is a Non-Executive Director of Purifloh Limited and also serves as a Director of the Melbourne Football Club. During the past three years Mr Lill has also served as a Director of ASX listed Purifloh Limited (since 2 September 2013).

• 3.3 Independence

  The board considers Mr Morris to be an independent director.

• 3.4 Board recommendation

  The Board, other than Mr Morris, supports the re-election of Steven Morris and recommends that Shareholders vote in favour of Resolution 2.

• 4. RESOLUTION 3 - RATIFICATION OF PRIOR ISSUE OF SHARES

• 4.1 General

  On 22 May 2018, the Company announced that it had executed an agreement with drilling company Top Drill Pty Ltd for ongoing drilling programs at the Pilbara Gold Project with a combination of RC and diamond drilling.

  The Company has reached agreement with Top Drill whereby DEG will issue up to $1M of equity to Top Drill or its nominee on ongoing invoicing, commencing 1 June 2018.

  This will be achieved through the conversion of 30% of its invoiced drilling costs into equity, with the issue price to be determined by a 10% discount to the 5-day VWAP immediately preceding each invoice.

  The shares are to be voluntarily escrowed for 6 months from the deemed date of issue, which is the invoice date.

  The Company issued 607,548 Shares (on 18 September 2018) and issued 492,950 Shares (on 17 October 2018) to Top Drill Pty Ltd as part settlement of supplier invoices. Resolution 3 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares totalling 1,100,498. Resolution 3 seeks Shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of those shares.

• 4.2 ASX Listing Rule 7.1 and 7.4

  ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

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

  By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

• 4.3 ASX Listing Rule 7.5

  The following information is provided to Shareholders for the purposes of obtaining Shareholder approval of the share issue, the subject of Resolution 3 in accordance with ASX Listing Rule 7.5:

  • (a) 1,100,498 Shares were issued to Top Drill Pty Ltd;

  • (b) The Shares were issued and allotted on 18 September 2018 (607,548 Shares) and 17 October 2018 (492,950 Shares);

  • (c) the Shares were issued at $0.1784 per Share and $0.1378 per Share respectively;

  • (d) the Shares are fully paid ordinary shares in the capital of the Company, ranking equally in all respects with the Company's existing Shares on issue;