Prosperity Resources : Notice of AGM / Proxy Form

PROSPERITY RESOURCES LIMITED ACN 103 280 235 NOTICE OF ANNUAL GENERAL MEETING EXPLANATORY STATEMENT PROXY FORM

TIME: 10.30am (WST)

DATE: 24 May 2017

PLACE: State Tennis Centre Victoria Park Drive Burswood

Western Australia

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. Should you wish to discuss the matters in this Notice of Meeting please contact the Company Secretary, Garry Taylor, on [phone] or e-mail [e-mail] T I M E A N D P L A C E O F M E E T I N G A N D H O W T O V O T E VENUE

The Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 10:30am (WST) on 24 May 2017 at:

State Tennis Centre, Victoria Park Drive, Burswood, Western Australia.

YOUR VOTE IS IMPORTANT

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

VOTING ELIGIBILITY

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 5:00pm (WST) on 22 May 2017.

VOTING IN PERSON

To vote in person, please attend the Annual General Meeting on the date and at the 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:

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

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

  Proxy vote if the appointment specifies way to vote

  Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does:

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (ie as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on, the proxy must vote on a poll, and must vote that way (ie as directed); and

• if the proxy is not the chair, the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (ie as directed).

  Transfer of non-chair proxy to chair in certain circumstances

  Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies:

  • the proxy is not recorded as attending the meeting; or

  • the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

Terms and abbreviations used in this Notice and Explanatory Statement are defined in the Glossary.

Important Information with Respect to Resolutions 5 to 7 (inclusive):

Shareholders appointing a proxy for Resolutions 5 to 7 (inclusive) should note the following:

If you appoint a member of the Key Management Personnel as your proxy

If you elect to appoint a member of Key Management Personnel 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 those persons will not be included in any vote on this Resolution (subject to the comments below with respect to appointing the Chair as your proxy).

If you appoint the Chair as your proxy

If you elect to appoint the Chair as your proxy, you do not need to direct the Chair how you wish them to exercise your vote on Resolutions 5 to 7 (inclusive). If the appointment expressly authorises the Chair to exercise their discretion in exercising your proxy even though Resolutions 5 to 7 (inclusive) are connected directly or indirectly with the remuneration of Key Management Personnel. The proxy form accompanying this Notice of Meeting contains such an express authorisation.

The Chair of the Annual General Meeting intends to vote all available proxies in favour of all items of business (including Resolutions 5 to 7 (inclusive)).

N O T I C E O F A N N U A L G E N E R A L M E E T I N G

Notice is given that the Annual General Meeting of Shareholders will be held at 10:30am (WST) on 24 May 2017 at the State Tennis Centre, Victoria Park Drive, Burswood, Western Australia.

AGENDA ORDINARY BUSINESS FINANCIAL STATEMENTS AND REPORTS

To receive and consider the annual financial reports of the Company for the financial year ended 30 June 2016 together with the declaration of the directors, the directors' report, the remuneration report and the auditor's report.

RESOLUTION 1 ADOPTION OF REMUNERATION REPORT

To consider and, if thought fit, to pass 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 2016."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by:

1. a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

2. a Closely Related Party of such a member. However, the Company will not disregard a vote if:

1. it is cast by a person as proxy as proxy and the proxy form specifies how the proxy is to vote on the Resolution, and the vote is not cast on behalf of a person who is otherwise excluded from voting on this Resolution as described above; or

2. it is cast by the person chairing the meeting voting an undirected proxy and their appointment expressly authorises the person chairing the meeting to exercise the proxy even though the Resolution is connected directly or indirectly with the remuneration of a member of the KMP of the Company.

RESOLUTION 2 RE-ELECTION OF MR SEBASTIAN HEMPEL

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

"That Mr Sebastian Hempel, a Director who retires by rotation in accordance with clause 11.3 of the Constitution, and being eligible, is re-elected as a Director."

There are no voting exclusions in relation to this Resolution.

RESOLUTION 3 ISSUE OF SHARES

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

"That, for the purposes of Listing Rule 7.1 and for all other purposes, Shareholders approve the proposed issue of 245,900,000 Shares to sophisticated investors, or their nominees, on the terms and conditions set out in the Explanatory Statement."

Voting exclusions apply to this Resolution. See below.