Cavalier Resources : Securities Trading Policy

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C A V A L I E R R E S O UR C E S L I MI TE D - TR A D I N G P O L I C Y

1. Introduction
   These guidelines set out the policy on the sale and purchase of securities in the Company by its Key Management Personnel (as defined in the ASX Listing Rules).
   Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any Director (whether executive or otherwise) of that entity.
   The Company has determined that its Key Management Personnel are its Directors, executives and those employees directly reporting to the Managing Director.
   Key Management Personnel are encouraged to be long-term holders of the Company's securities. However, it is important that care is taken in the timing of any purchase or sale of such securities.
   The purpose of these guidelines is to assist Key Management Personnel to avoid conduct known as 'insider trading'. In some respects, the Company's policy extends beyond the strict requirements of the Corporations Act 2001 (Cth).
2. What types of transactions are covered by this policy?
   This policy applies to both the sale and purchase of any securities of the Company and its subsidiaries on issue from time to time.
3. What is insider trading?

3.1 Prohibition

Insider trading is a criminal offence. It may also result in civil liability. In broad terms, a person will be guilty of insider trading if:

1. that person possesses information, which is not generally available to the market and if it were generally available to the market, would be likely to have a material effect on the price or value of the Company's securities (ie information that is 'price sensitive'); and
2. that person:
3. 1. buys or sells securities in the Company; or
   2. procures someone else to buy or sell securities in the Company; or
   3. passes on that information to a third party where that person knows, or ought reasonably to know, that the third party would be likely to buy or sell the securities or procure someone else to buy or sell the securities of the Company.

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1. Examples
   To illustrate the prohibition described above, the following are possible examples of price sensitive information which, if made available to the market, may be likely to materially affect the price of the Company's securities:
2. 1. the Company considering a major acquisition;
   2. the threat of major litigation against the Company;
   3. the Company's revenue and profit or loss results materially exceeding (or falling short of) the market's expectations;
   4. a material change in debt, liquidity or cash flow;
   5. a significant new development proposal (e.g. new product or technology);
   6. the grant or loss of a major contract;
   7. a management or business restructuring proposal;
   8. a share issue proposal;
   9. an agreement or option to acquire an interest in a mining tenement, or to enter into a joint venture or farm-in or farm-out arrangement in relation to a mining tenement; and
   10. significant discoveries, exploration results, or changes in reserve/resource estimates from mining tenements in which the Company has an interest.
3. Dealing through third parties
   The insider trading prohibition extends to dealings by individuals through nominees, agents or other associates, such as family members, family trusts and family companies (referred to as "Associates" in these guidelines).
4. Information however obtained
   It does not matter how or where the person obtains the information - it does not have to be obtained from the Company to constitute inside information.
5. Employee share schemes
   The prohibition does not apply to acquisitions of shares or options by employees made under employee share or option schemes, nor does it apply to the acquisition of shares as a result of the exercise of options under an employee option scheme. However, the prohibition does apply to the sale of shares acquired under an employee share scheme and also to the sale of shares acquired following the exercise of an option granted under an employee option scheme.

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4. Guidelines for trading in the Company's securities

4.1 General rule

Key Management Personnel must not, except in exceptional circumstances, deal in securities of the Company during the following periods:

1. two weeks prior to, and 48 hours after the release of the Company's
   Annual Report;
2. two weeks prior to, and 48 hours after the release of the Half Year Report of the Company; and
3. two weeks prior to, and 48 hours after the release of the Company's quarterly reports (if applicable),

(together the Closed Periods).

The Company may at its discretion vary this rule in relation to a particular Closed Period by general announcement to all Key Management Personnel either before or during the Closed Periods. However, if a Key Management Personnel is in possession of price sensitive information which is not generally available to the market, then he or she must not deal in the Company's securities at any time it is in possession of such information.

1. No short-term trading in the Company's securities
   Key Management Personnel should never engage in short-term trading of the
   Company's securities except for the exercise of options where the shares will be sold shortly thereafter.
2. Securities in other companies
   Buying and selling securities of other companies with which the Company may be dealing is prohibited where an individual possesses information which is not generally available to the market and is 'price sensitive'. For example, where an individual is aware that the Company is about to sign a major agreement with another company, they should not buy securities in either the Company or the other company.
3. Exceptions
4. 1. Key Management Personnel may at any time:
   2. 1. acquire ordinary shares in the Company by conversion of securities giving a right of conversion to ordinary shares;
      2. acquire Company securities under a bonus issue made to all holders of securities of the same class;
      3. acquire Company securities under a dividend reinvestment, or top-up plan that is available to all holders or securities of the same class;

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1. acquire, or agree to acquire or exercise options under an employee incentive scheme (as that term is defined in the ASX Listing Rules);
2. withdraw ordinary shares in the Company held on behalf of the Key Management Personnel in an employee incentive scheme (as that term is defined in the ASX Listing Rules) where the withdrawal is permitted by the rules of that scheme;
3. acquire ordinary shares in the Company as a result of the exercise of options held under an employee option scheme;
4. transfer securities of the Company already held into a superannuation fund or other saving scheme in which the restricted person is a beneficiary;
5. make an investment in, or trade in units of, a fund or other scheme (other than a scheme only investing in the securities of the Company) where the assets of the fund or other scheme are invested at the discretion of a third party;
6. where a restricted person is a trustee, trade in the securities of the Company by that trust, provided the restricted person is not a beneficiary of the trust and any decision to trade during a prohibited period is taken by the other trustees or by the investment managers independently of the restricted person;
7. undertake to accept, or accept, a takeover offer;
8. trade under an offer or invitation made to all or most of the security holders, such as a rights issue, a security purchase plan, a dividend or distribution reinvestment plan and an equal access buy-back, where the plan that determines the timing and structure of the offer has been approved by the Board. This includes decisions relating to whether or not to take up the entitlements and the sale of entitlements required to provide for the take up of the balance of entitlements under a renounceable pro rata issue;
9. dispose of securities of the Company resulting from a secured lender exercising their rights, for example, under a margin lending arrangement;
10. exercise (but not sell securities following exercise) an option or a right under an employee incentive scheme, or convert a convertible security, where the final date for the exercise of the option or right, or the conversion of the security, falls during a prohibited period or the Company has had a number of consecutive prohibited periods and the restricted person could not reasonably have been expected to exercise it at a time when free to do so; or

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1. 1. trade under a non-discretionary trading plan for which prior written clearance has been provided in accordance with procedures set out in this Policy.
2. In respect of any share or option plans adopted by the Company, it should be noted that it is not permissible to provide the exercise price of options by selling the shares acquired on the exercise of these options unless the sale of those shares occurs outside the periods specified in paragraph 4.1.

Were this is to occur at a time when the person possessed inside information, then the sale of Company securities would be a breach of insider trading laws, even though the person's decision to sell was not influenced by the inside information that the person possessed and the person may not have made a profit on the sale. Where Company securities are provided to a lender as security by way of mortgage or charge, a sale that occurs under that mortgage or charge as a consequence of default would not breach insider trading laws.

4.5 Notification of periods when Key Management Personnel are not permitted to trade

The Company Secretary will endeavour to notify all Key Management Personnel of the times when they are not permitted to buy or sell the Company's securities as set out in paragraph 4.1.

5. Approval and Notification Requirements

1. Approval requirements
2. 1. Any Key Management Personnel (other than the Chairman of the Board) wishing to buy, sell or exercise rights in relation to the Company's securities must obtain the prior written approval of the Chairman of the Board or the Board before doing so.
   2. If the Chairman of the Board wishes to buy, sell or exercise rights in relation to the Company's securities, the Chairman of the Board must obtain the prior approval of the Board before doing so.
3. Approvals to buy or sell securities
4. 1. All requests to buy or sell securities as referred to in paragraph 5.1 must include the intended volume of securities to be purchased or sold and an estimated time frame for the sale or purchase.
   2. Copies of written approvals must be forwarded to the Company Secretary prior to the approved purchase or sale transaction.
5. Notification
   Subsequent to approval obtained in accordance with paragraphs 5.1 and 5.2, any Key Management Personnel who (or through his or her Associates) buys, sells, or exercises rights in relation to Company securities must notify the Company Secretary in writing of the details of the transaction within two (2) business days of the transaction occurring. This notification obligation operates at all times and includes applications for acquisitions of shares or options by employees made