Taruga Minerals : Share Purchase Plan Offer Booklet

For personal use only

21 February 2022

Dear Shareholder,

Invitation to Participate in Share Purchase Plan

On 14 February 2022, Taruga Minerals Limited (ACN 153 868 789) (Taruga or the Company) announced that it had successfully completed and received firm commitments for a placement of up to 58,823,530 fully paid ordinary shares (Shares) at a price of $0.034 per Share to sophisticated, institutional and professional investors, raising up to $2,000,000 (Placement).

The Shares to be issued under the Placement will be issued under the Company's placement capacity pursuant to ASX Listing Rules 7.1 & 7.1A with $120,000 being subject to shareholder approval.

Share Purchase Plan Offer

In order to provide Eligible Shareholders (defined below) with the ability to participate in the Company's capital raising activities, the Company is pleased to provide details of a Share Purchase Plan (Plan).

Under the Plan, Eligible Shareholders will have the opportunity to purchase up to $30,000 worth of Shares at the same price as the Placement, irrespective of the size of their shareholding, without incurring brokerage or transaction costs.

The offer under the Plan (Offer) is intending to raise a maximum of $500,000 on the terms and conditions (Terms and Conditions) contained in this letter.

Shareholders Eligible to Participate in the Plan

Participation under the Plan is optional and is available exclusively to shareholders of the Company who are registered as holders of Shares at 7pm AEDT, 11 February 2022 (Record Date) and whose registered address is in Australia or New Zealand (Eligible Shareholders).

The Plan entitles Eligible Shareholders, irrespective of the size of their shareholding, to purchase up to $30,000 worth of Shares at an issue price of $0.034 (Price) being the same price as the Shares offered to sophisticated and professional investors under the Placement. The Price represents a 12.8% discount to last closing price of Taruga shares on 9 February 2022, being the last trading date before the Placement announcement and a 12.8% discount to the 5-day VWAP (VWAP) prior to that date.

Depending on applications received, the Company may, in its absolute discretion, undertake a scale back so that not more than $500,000 is raised under the Plan, with the scale back decided on a pro-rata basis. Scale back decisions are made by the Board and are final.

The Plan will not be underwritten.

The directors of the Company who are Eligible Shareholders may participate under the Plan. An application form for the Plan (Application Form) is included in this package.

	CAPITAL STRUCTURE	BOARD & MANAGEMENT		CONTACT US
	512,060,006	Thomas Line	Eric De Mori	Level 8, 99 St Georges Terrace
ASX:TAR	Shares on Issue	CEO	Non-Executive Director
Perth WA 6000
		David Chapman
tarugaminerals.com.au	44,250,000	Paul Cronin	T [phone]
	Options on issue	Non-Executive Director	Non-Executive Director
	F [phone]
	(various ex. prices
	Gary Steinepreis	Dan Smith
	and dates)	[e-mail]
	Non-Executive Director	Company Secretary

For personal use only

Current Activities

Details of the Company's current activities are set out in the announcements made by the Company to the ASX and are available from the ASX platform (ASX:TAR) or the Company's website at www.tarugaminerals.com.au

Use of Funds

The proceeds raised under the Plan and the Placement will be used to fund:

1. RC/Diamond drilling at Morgan's Creek & Wyacca; o Preliminary metallurgical testwork on REE's;
   o Airborne and ground-based geophysical surveys; and o General working capital

How much can you invest?

Eligible Shareholders may each apply for a maximum of $30,000 worth of Shares and a minimum of $2,550 worth of Shares under the Plan.

How to accept this Offer

To apply for Shares under the Plan, please follow the instructions on the enclosed personalised Application Form.

Eligible Shareholders may participate by selecting only one of the following offers to purchase Shares under the Plan:

		Total amount payable			Number of Shares which may be
				purchased
Offer A	$30,000		882,352
Offer B	$25,500		750,000
Offer C	$20,400		600,000
Offer D	$15,300		450,000
Offer E	$10,200		300,000
Offer F	$5,100		150,000
Offer G	$2,550		75,000

The number of Shares to which you are entitled will be calculated by dividing the subscription amount you have selected by the Price, rounded down.

All payments in accordance with the options set out in your Application Form (Application) must be received by the Closing Date of 7 March 2022. As previously noted, the Company reserves the right to close the SPP earlyshould it receive $500,000 prior to the closing date with applications being processed on a pro-rata scale-backbasis. If the exact amount of money is not tendered with your Application, the Company reserves the right to either:

1. return your application monies and not issue any Shares to you; or
2. issue to you the number of Shares that would have been issued had you applied for the highest designated amount that is less than the amount of your payment and refund the excess application money to you by cheque as soon as possible, without interest.

ASX:TAR tarugaminerals.com.au

For personal use only

ASX:TAR

The Company confirms that if the amount to be refunded is less than the issue price of one Share, being $0.034, it will not be refunded and will be retained by the Company.

Once an Application has been made it cannot be revoked.

Multiple Holdings

The maximum investment any Eligible Shareholder may apply for will remain $30,000 even if an Eligible Shareholder receives more than one Offer (whether in respect of a joint holding or because the Eligible Shareholder has more than one holding under a separate account). It is the responsibility of the applicant to ensure that the aggregate of the application amount paid for the Shares the subject of the Application and any other shares and interests in the class applied for by you under the Plan or any similar arrangement in the 12 months prior to the date of submission does not exceed $30,000.

Custodians and Nominees

Eligible Shareholders who hold Shares as Custodian or Nominee (Custodian) for one or more persons on the Record Date (Beneficiary) may apply for up to a maximum amount of $30,000 worth of Shares in respect of each Beneficiary who is resident in Australia or New Zealand, subject to providing a Custodian Certificate to the Company, as described in the Terms and Conditions enclosed with this letter. Please refer to the Terms and Conditions for more details.

Relationship of Issue Price with Market Price

On the last trading day immediately prior to the announcement date of the Offer, the closing price of the Shares traded on ASX was $0.039. The market price of Shares in the Company may rise and fall between the date of the Offer and the date that any Shares are issued to you as a result of your Application under this Offer.

By making an Application under this Offer and applying for Shares under the Plan, each Eligible Shareholder will be acknowledging that although the Price is at a discount, Shares are a speculative investment and the price of Shares on ASX may change between the date of the Company announcing its intention to make an Offer and the date of issue of Shares under that Offer and that the value of the Shares received under the Plan may rise or fall accordingly.

The Board recommends that you obtain your own financial and taxation advice in relation to the Offer and consider price movements of Shares in the Company prior to making an Application under this Offer.

Additional Information and Important Dates

The offer of Shares under the Plan is made in accordance with ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 and therefore does not require a prospectus for the purposes of Chapter 6D of the Corporations Act 2001 (Cth) (Corporations Act).

The Offer cannot be transferred, and the Directors of the Company reserve the right in their absolute discretion to reject, or scale back, on an equitable basis, any Application. Shares issued under the Plan will be issued no more than five business days after the Closing Date of the Offer. Application for quotation on ASX of the new Shares will be made immediately following the issue of those Shares.

Applications will be processed on a pro-rata basis, if applications under the SPP exceed $500,000, the Company reserves the right to close the SPP early.

Depending on applications received, the Company may, in its absolute discretion, undertake a scale back so that not more than $500,000 is raised under the Plan, with the scale back decided on a pro-rata basis.

tarugaminerals.com.au

For personal use only

If the Company rejects or scales-back an Application or purported application, the Company will promptly return to the shareholder the relevant Application monies, without interest.

Foreign offer restrictions

This document may not be released or distributed in any country other than Australia and New Zealand. This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in any other country. In particular, any securities described in this document have not been, and will not be, registered under the US Securities Act of 1933 (as amended) and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws.

New Zealand Shareholders

The Shares offered under the Plan are not being offered or sold to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand and to whom the Offer is being made in reliance on the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016 (as amended) (New Zealand).

This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (New Zealand). This document is not an investment statement or prospectus under New Zealand law and is not required to, and may not, contain all the information that an investment statement or prospectus under New Zealand law is required to contain.

Shortfall Placement

In the event that less than $500,000 is applied for under the Plan, the full amount of the Plan shortfall may be placed at the discretion of the Board subject to compliance with all necessary legal requirements. The Company confirms that any issue of shortfall will be placed subject to the Company's compliance with ASX Listing Rule 7.1 at the time of issue. As at the date of this document, assuming that all Shares subscribed for under the Placement are issued, the Company will have the capacity to issue the SPP 14,705,882 Shares under its ASX Listing Rule

7.1 capacity. Where the shortfall exceeds the Company's available placement capacity, the shortfall will only be placed if shareholder approval is obtained.

Indicative Timetable

Record Date for Share Purchase Plan	11 February 2022
Announce Share Purchase Plan and placement and Lodge Appendix 3B	14 February 2022
Issue of Shares under Placement, and lodge Appendix 2A and Cleansing	22 February 2022
Notice with ASX
Dispatch Share Purchase Plan booklet to shareholders and release Offer	21 February 2022
Letter on the ASX platform
Opening date for Share Purchase Plan	21 February 2022
Closing date for Share Purchase Plan	7 March 2022
Announcement of result of Share Purchase Plan	9 March 2022
Issue of new Shares under the Share Purchase Plan and lodge Appendix 2A	14 March 2022

These dates are indicative only. The Company may vary the dates and times of the Offer without notice. Accordingly, shareholders are encouraged to submit their Applications as early as possible.

ASX:TAR tarugaminerals.com.au

For personal use only

Should you wish to discuss any information contained in this letter further, do not hesitate to contact Taruga's share registry, Automic Registry Services 1300 288 664 (within Australia), [phone] (outside Australia) between the hours of 8:30am and 5:00pm (AWST) Monday to Friday.

Yours faithfully

Dan Smith

Company Secretary

Taruga Minerals Limited

ASX:TAR tarugaminerals.com.au