Announcement PDF Notice of Annual General Meeting and Explanatory Memorandum Lithium Consolidated Mineral Exploration Ltd ACN 612 008 358 Date of Meeting: 21 November 2017 Time of Meeting: 9.00am (Brisbane time) Place of Meeting: Level 7 Waterfront Place 1 Eagle Street Brisbane QLD 4000 This is an important document and requires your attention If you are in any doubt about how to deal with this document, please consult your legal, financial or other professional advisor. Lithium Consolidated Mineral Exploration Ltd Page 1 Notice of Annual General Meeting Notice is given that the Annual General Meeting of Shareholders of Lithium Consolidated Mineral Exploration Ltd ACN 612 008 358 (Company) will be held at Level 7 Waterfront Place 1 Eagle Street Brisbane QLD 4000 on 21 November 2017 at 9.00am (Brisbane time). Terms used in this Notice of Meeting are defined in Section 10 “Interpretation” of the accompanying Explanatory Memorandum. AGENDA ORDINARY BUSINESS Financial Statements To receive and consider the financial statements of the Company and its controlled entities for the period ended 30 June 2017 and the related Directors’ Report, Directors’ Declaration and Auditor’s report. Resolution 1 – Adoption of Remuneration Report (advisory Resolution) To consider and, if thought fit, pass the following Resolution as an advisory Resolution, without amendment: “That for the purposes of section 250R(2) of the Corporations Act, and for all other purposes, the Remuneration Report for the year ended 30 June 2017 (as set out on pages 18 to 22 of the Directors' Report) is adopted.” The vote on this Resolution 1 is advisory only and does not bind the Directors or the Company. Voting restriction pursuant to section 250R(4) of the Corporations Act A vote on this Resolution 1 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; and (b) a Closely Related Party of such a member. However, the above persons may cast a vote on Resolution 1 if: (a) the person does so as a proxy; and (b) the vote is not cast on behalf of a member of the Key Management Personnel details of whose remuneration are included in the Remuneration Report or a Closely Related Party of such a member; and (c) either: (1) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the Resolution; or (2) the voter is the Chairman of the Meeting and the appointment of the Chairman as proxy: A. does not specify the way the proxy is to vote on the Resolution; and B. expressly authorises the Chairman to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company or, if the Company is part of a consolidated entity, for the entity. Lithium Consolidated Mineral Exploration Ltd Page 2 Notice of Annual General Meeting Voting Intentions of the Chairman Shareholders should be aware that any undirected proxies given to the Chairman will be cast by the Chairman and counted in favour of the Resolutions the subject of this Meeting, including Resolution 1, subject to compliance with the Corporations Act. In exceptional circumstances, the Chair of the Meeting may change his/her voting intention on any Resolution, in which case an ASX announcement will be made. Further details, in relation to the ability of the Chairman to vote on undirected proxies are set out in the accompanying proxy form. Resolution 2 – Election of Shanthar Pathmanathan as a Director of the Company To consider and, if though fit, pass the following Resolution with or without amendment, as an Ordinary Resolution: “That, for the purposes of rule 36 of the Company’s Constitution and for all other purposes, Shanthar Pathmanathan, a Director who was appointed on 13 October 2016, retires, and being eligible, offers himself for election, is elected as a Director of the Company.” Resolution 3 – Election of James McKerlie as a Director of the Company To consider and, if though fit, pass the following Resolution with or without amendment, as an Ordinary Resolution: “That, for the purposes of rule 36 of the Company’s Constitution and for all other purposes, James McKerlie, a Director who was appointed on 2 November 2016, retires, and being eligible, offers himself for election, is elected as a Director of the Company.” Resolution 4 – Election of Vincent Mascolo as a Director of the Company To consider and, if though fit, pass the following Resolution with or without amendment, as an Ordinary Resolution: “That, for the purposes of rule 36 of the Company’s Constitution and for all other purposes, Vincent Mascolo, a Director who was appointed on 19 May 2016, retires, and being eligible, offers himself for election, is elected as a Director of the Company.” Resolution 5 – Election of Brian Moller as a Director of the Company To consider and, if though fit, pass the following Resolution with or without amendment, as an Ordinary Resolution: “That, for the purposes of rule 36 of the Company’s Constitution and for all other purposes, Brian Moller, a Director who was appointed on 13 October 2016, retires, and being eligible, offers himself for election, is elected as a Director of the Company.” Resolution 6 – Appointment of Auditor To consider and, if though fit, pass the following Resolution with or without amendment, as an Ordinary Resolution: “That, for the purposes of section 327B of the Corporations Act and for all other purposes, BDO Audit Pty Ltd, having been nominated by a Shareholder and having consented in writing to act in the capacity of auditor, be appointed as auditor of the Company with effect from the close of the Meeting.” Lithium Consolidated Mineral Exploration Ltd Page 3 Notice of Annual General Meeting SPECIAL BUSINESS Resolution 7 – Approval to issue an additional 10% of the issued capital of the Company over a 12 month period pursuant to Listing Rule 7.1A To consider and, if thought fit, pass the following Resolution, as a Special Resolution, without amendment: “That, pursuant to and in accordance with Listing Rule 7.1A, and for all other purposes, the Shareholders approve the issue of Equity Securities of up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2, over a 12 month period from the date of the Meeting, at a price not less than that determined pursuant to Listing Rule 7.1A.3 and otherwise on the terms and conditions described in the Explanatory Memorandum (Placement Securities).” Voting Exclusion Statement The Company will disregard any votes cast on this Resolution 7 by: (a) a person who may participate in the issue of the Placement Securities; and (b) a person who might obtain a benefit if this Resolution 7 is passed, except a benefit solely in their capacity as a holder of Shares if the Resolution is passed.; and (c) an associate of that person (or those persons) in (a) and (b) above. However the Company need not disregard a vote if: (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or (b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides. Important Note (in relation to Resolution 7) The proposed allottees of any Placement Securities are not as yet known or identified. In these circumstances (and in accordance with the note set out in Listing Rule 14.11.1 relating to Listing Rules 7.1 and 7.1A), for a person’s vote to be excluded, it must be known that that person will participate in the proposed issue. Where it is not known who will participate in the proposed issue (as is the case in respect of the Placement Securities), Shareholders must consider the proposal on the basis that they may or may not get a benefit and that it is possible that their holding will be diluted and there is no reason to exclude their votes. GENERAL BUSINESS To consider any other business as may be lawfully put forward in accordance with the Constitution of the Company. By order of the Board DP Cornish Company Secretary 11 October 2017 Lithium Consolidated Mineral Exploration Ltd Page 4 Explanatory Memorandum 1. Introduction This Explanatory Memorandum is provided to Shareholders of Lithium Consolidated Mineral Exploration Ltd ACN 612 008 358 (Company) to explain the resolutions to be put to Shareholders at the Annual General Meeting to be held at Level 7 Waterfront Place 1 Eagle Street Brisbane QLD 4000 on 21 November 2017 commending at 9.00am (Brisbane time). The Directors recommend shareholders read the accompanying Notice of Meeting and this Explanatory Memorandum in full before making any decision in relation to the resolutions. Terms used in this Explanatory Memorandum are defined in Section 10 “Interpretation”. 2. Financial Statements The Corporations Act requires that the Company’s Annual Financial Report for the period ending 30 June 2017 (including the Directors’ Report, Financial Statements and the Audit Report) be laid before the Annual General Meeting for discussion. Although not requiring a vote of members, an opportunity will be provided for members to ask questions on the Annual Financial 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 at www.lithiumconsolidated.com. 3. Resolution 1 – Adoption of Remuneration Report 3.1 Remuneration Report The Board has submitted its Remuneration Report to Shareholders for consideration and adoption by way of a non-binding advisory Resolution in accordance with section 250R of the Corporations Act. The Remuneration Report is set out on pages 18 to 22 of the Directors’ Report section of the Annual Financial Report for the period ending 30 June 2017. The Report: (a) explains the Board’s policy for determining the nature and amount of remuneration of Key Management Personnel of the Company; (b) explains the relationship between the Board’s remuneration policy and the Company’s performance; (c) sets out remuneration details for each Key Management Personnel of the Company including details of performance related remuneration and performance rights and options granted as part of remuneration; and (d) details and explains any performance conditions applicable to the remuneration of Key Management Personnel of the Company. A reasonable opportunity will be provided for discussion of the Remuneration Report at the Meeting. 3.2 Recommendation The Directors unanimously recommend that Shareholders vote in favour of adopting the Remuneration Report. A vote on this resolution is advisory only and does not bind the Directors or the Company. Lithium Consolidated Mineral Exploration Ltd Page 5 Explanatory Memorandum 3.3 Voting restrictions on Key Management Personnel and their Closely Related Parties and their proxies As set out in the notes to Resolution 1, a voting restriction applies with respect to the voting on this Resolution by members of the Key Management Personnel and their Closely Related Parties and their proxies voting (in any capacity) (Voting Restriction). 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 Voting Restriction does not apply where: (a) the Chairman or any other member of the Key Management Personnel is appointed in writing (by a Shareholder who is not a member of the Key Management Personnel or a Closely Related Party of the Key Management Personnel) as a proxy (Management Proxy) with specific instructions on how to vote on a resolution to adopt the remuneration report of the Company; or (b) the Chairman is appointed in writing (by a Shareholder who is not a member of the Key Management Personnel or a Closely Related Party of the Key Management Personnel) as a proxy with no specific instructions on how to vote on a non-binding Shareholder vote on remuneration, where the Shareholder provides express authorisation for the Chairman to do so. Shareholders should be aware that any undirected proxies given to the Chairman will be cast by the Chairman and counted in favour of the Resolutions the subject of this Meeting, including this Resolution 1, subject to compliance with the Corporations Act. In exceptional circumstances, the Chairman of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made. 4. Resolution 2 – Election of Shanthar Pathmanathan as a Director of the Company Rule 36 of the Constitution allows the Directors to appoint at any time a person to be a Director either to fill a casual vacancy or as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution. In accordance with rule 36 of the Constitution, any Director so appointed holds office only until the next following annual general meeting and is then eligible for election by Shareholders but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at that meeting. Shanthar Pathmanathan, Managing Director of the Company, was appointed on 13 October 2016 and retires in accordance with clause 36 of the Constitution and being eligible, seeks election from Shareholders. Mr Pathmanathan has 14 years corporate finance experience. He was most recently with Deutsche Bank's investment banking division and prior to that has held corporate finance and principal investment roles with Macquarie Group's investment banking division in Australia and New York. He has a Bachelor of Laws from the University of Western Australia. Mr Pathmanathan has not held any directorships in other listed companies in the last three years. In accordance with the Company’s Corporate Governance Charter that has been drafted with consideration of the ASX Corporate Governance Council’s “Corporate Governance Principles and Recommendations, 3rd Edition”, Mr Pathmanathan is not considered independent as he holds an executive positon in the Company. The Directors (with Mr Pathmanathan abstaining) recommend that you vote in favour of this ordinary resolution. Lithium Consolidated Mineral Exploration Ltd Page 6 Explanatory Memorandum 5. Resolution 3 – Election of James McKerlie as a Director of the Company Rule 36 of the Constitution allows the Directors to appoint at any time a person to be a Director either to fill a casual vacancy or as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution. In accordance with rule 36 of the Constitution, any Director so appointed holds office only until the next following annual general meeting and is then eligible for election by Shareholders but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at that meeting. James McKerlie, Non-Executive Chairman of the Company, was appointed on 2 November 2016 and retires in accordance with clause 36 of the Constitution and being eligible, seeks election from Shareholders. Mr McKerlie is a senior director with many years’ experience on public company boards in Australia and overseas. He is a Chartered Accountant and business consultant and has been extensively involved in shareholder management, capital and equity markets, M&A activities, takeover panel reviews, high growth companies and corporate governance matters. Mr McKerlie is experienced in the role of the chair of boards and committees having been chairman of Drillsearch Energy for eight years whilst the company enjoyed significant growth before merging with Beach Energy where he continues as a director. He is also currently chairman of Manalto Limited and Elmo Software Ltd and has previously chaired the boards of inthehouse.com Ltd, Two Way TV Ltd, Circumpacific Ltd (TSXV) and several other public oil and gas ASX listed entities. In addition to working extensively in the energy sector, Mr McKerlie has extensive experience in technology companies and has worked extensively in innovative and disruptive environments. For three years he was a judge on the Ernst & Young Entrepreneur of the Year. He has worked throughout Asia Pacific, North America, UK, Europe and South Africa. He has also had 25 years of media presentation experience in radio, television and the print media, is a regular speaker and writer. During the past three years, Mr McKerlie has served as a director of the following listed companies:  Beach Energy Limited*  Manalto Limited*  Elmo Software Limited*  Drillsearch Energy Ltd (from August 2008 to February 2016) *denotes current directorship Mr McKerlie is a member of the Audit & Risk Management Committee. In accordance with the Company’s Corporate Governance Charter that has been drafted with consideration of the ASX Corporate Governance Council’s “Corporate Governance Principles and Recommendations, 3rd Edition”, Mr McKerlie is considered independent. The Directors (with Mr McKerlie abstaining) recommend that you vote in favour of this ordinary resolution. 6. Resolution 4 – Election of Vincent Mascolo as a Director of the Company Rule 36 of the Constitution allows the Directors to appoint at any time a person to be a Director either to fill a casual vacancy or as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution. In accordance with rule 36 of the Constitution, any Director so appointed holds office only until the next following annual general meeting and is then eligible for election by Shareholders but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at that meeting. Vincent Mascolo, a Non-Executive Director of the Company, was appointed on 19 May 2016 and retires in accordance with clause 36 of the Constitution and being eligible, seeks election from Shareholders. Lithium Consolidated Mineral Exploration Ltd Page 7 Explanatory Memorandum Mr Mascolo is a qualified mining engineer with extensive experience in gold and coal mining, quarrying and civilworks. He has been a director of various public and private companies over the past 25 years and is currently Chief Executive Officer and Managing Director of AIMlisted IronRidge Resources Ltd. During the past three years, Mr Mascolo has also served as a director of the following listed companies:  DGR Global Ltd*  Ironridge Resources Limited*^ *denotes current directorship ^denotes listed on the Alternative Investment Market of the London Stock Exchange Mr Mascolo is a member of the Audit & Risk Management Committee. In accordance with the Company’s Corporate Governance Charter that has been drafted with consideration of the ASX Corporate Governance Council’s “Corporate Governance Principles and Recommendations, 3rd Edition”, Mr Mascolo is considered independent. The Directors (with Mr Mascolo abstaining) recommend that you vote in favour of this ordinary resolution. 7. Resolution 5 – Election of Brian Moller as a Director of the Company Rule 36 of the Constitution allows the Directors to appoint at any time a person to be a Director either to fill a casual vacancy or as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution. In accordance with rule 36 of the Constitution, any Director so appointed holds office only until the next following annual general meeting and is then eligible for election by Shareholders but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at that meeting. Brian Moller, a Non-Executive Director of the Company, was appointed on 13 October 2016 and retires in accordance with clause 36 of the Constitution and being eligible, seeks election from Shareholders. Mr Moller specialises in capital markets, mergers and acquisitions and corporate restructuring, and has acted in numerous transactions and capital raisings in the industrial, resources and energy sectors. He has been a partner at the legal firm, HopgoodGanim for 30 years and leads the Corporate Advisory and Governance practice. Mr Moller acts for many publicly listed companies in Australia and regularly advises boards of directors on corporate governance and related issues. Mr Moller is a solicitor of the Supreme Court of Queensland and Solicitor and Barrister of the Supreme Court of Western Australia. Mr Moller is a Non-Executive Director of ASX listed Aguia Resources Ltd, DGR Global Ltd, Platina Resources Ltd, Dark Horse Resources Ltd (formerly Navaho Gold Limited) and chairman of ASX listed AusTin Limited and the dual TSX and AIM-listed SolGold plc. During the past three years, Mr Moller has also served as a director of the following listed companies:  DGR Global Ltd*  Aus Tin Mining Limited*  Dark Horse Resources Limited*  Aguia Resources Limited*  Buccaneer Energy Ltd (from July 2013 to November 2013)  Platina Resources Ltd*  Solgold PLC*^ *denotes current directorship ^denotes listed on the Toronto Stock Exchange and the Alternative Investment Market of the London Stock Exchange Mr Moller is a member of the Audit & Risk Management Committee. In accordance with the Company’s Corporate Governance Charter that has been drafted with consideration of the ASX Corporate Governance Council’s “Corporate Governance Principles and Lithium Consolidated Mineral Exploration Ltd Page 8 Explanatory Memorandum Recommendations, 3rd Edition”, Mr Moller is not considered independent as he is a principal of Hopgood Ganim Lawyers, a material professional advisor to the Company. The Directors (with Mr Moller abstaining) recommend that you vote in favour of this ordinary resolution. 8. Resolution 6 – Appointment of Auditor In accordance with section 327B(1)(a) of the Corporations Act, a public company must appoint an auditor at its first AGM. As the Company converted to a public company on 18 November 2016, this is the Company’s first AGM. In accordance with section 328B(1) of the Corporations Act, the Company has sought and obtained a nomination from a Shareholder for BDO Audit Pty Ltd to be appointed as the Company’s auditor. A copy of this nomination is attached to this Explanatory Statement as Annexure A. In accordance with section 328A(1) of the Corporations Act, BDO Audit Pty Ltd has given its written consent to act as the Company’s auditor, subject to Shareholder approval. If Resolution 6 is passed, the appointment of BDO Audit Pty Ltd as the Company’s auditors will take effect from the close of the Annual General Meeting. The Directors recommend that you vote in favour of this ordinary resolution. 9. Resolution 7 – Approval to issue an additional 10% of the issued capital of the Company over a 12 month period pursuant to Listing Rule 7.1A 9.1 Introduction Pursuant to Resolution 7, the Company is seeking Shareholder approval to issue an additional 10% of its issued capital over a 12 month period pursuant to Listing Rule 7.1A. If passed, this Resolution will allow the Company to allot and issue up to the number of new Equity Securities calculated in accordance with Listing Rule 7.1A.2 (Placement Securities) each at an issue price of at least 75% of the volume weighted average price (VWAP) for the Company’s Equity Securities in that class (calculated over the last 15 days on which trades in the Equity Securities are recorded immediately before the date on which the price at which the Placement Securities are to be issued is agreed, or if the Placement Securities are not issued within five trading days of that date, the date on which the Placement Securities are issued) (Issue Price). This approval is sought pursuant to Listing Rule 7.1A. Under Listing Rule 7.1A, small and mid-cap listed entities that meet the eligibility threshold and have obtained the approval of their ordinary shareholders by special resolution at the annual general meeting, are permitted to issue an additional 10% of issued capital over a 12 month period from the date of the annual general meeting (Additional 10% Placement). The Additional 10% Placement under Listing Rule 7.1A is in addition to the ability of the Company to issue 15% of its issued capital without shareholder approval over a 12 month period pursuant to Listing Rule 7.1. The Company may issue the Placement Securities to raise funds for the Company and as non-cash consideration (further details of which are set out below). Funds raised from the issue of Placement Securities, if undertaken, would be applied towards the continued growth of the Company’s business operations (including client growth) and general working capital. The Directors unanimously recommend that Shareholders vote in favour of Resolution 7. Lithium Consolidated Mineral Exploration Ltd Page 9 Explanatory Memorandum 9.2 Listing Rule 7.1A (a) General (1) Eligibility An entity is eligible to undertake an Additional 10% Placement if at the time of its annual general meeting it has a market capitalisation of $300 million or less and it is not included in the S&P/ASX300 Index. As required by the Listing Rules, the Company’s market capitalisation will be based on the closing price on the Trading Day before the Meeting. The calculation of market capitalisation will be based on the Closing Price of Shares on the last Trading Day on which trades in the Shares were recorded before the date of the AGM, multiplied by the number of Shares on issue (in that main class, but excluding restricted securities and securities quoted on a deferred settlement basis). For illustrative purposes only, on 10 October 2017 (being the last trading day prior the date of this AGM Notice), the Company’s market capitalisation was approximately $10.3 million based on the closing trading price on that date. The Company is not included in the S&P/ASX300 Index as at the time of issue of this Notice of Meeting and the Company does not expect that it will be included in the S&P/ASX300 Index at the date of the AGM. The Company is therefore an eligible entity and able to undertake an Additional 10% Placement under Listing Rule 7.1A. In the event that the Company is no longer an eligible entity to undertake an Additional 10% Placement after the Company has already obtained Shareholder approval, the approval obtained will not lapse and the Company will still be entitled to issue the Placement Securities. (2) Special Resolution Listing Rule 7.1A requires this Resolution 7 to be passed as a Special Resolution, which means that it must be passed by at least 75% of the votes cast by members entitled to vote on the Resolution. Pursuant to Listing Rule 7.1A, no Placement Securities will be issued until and unless this Special Resolution is passed at the Meeting. (3) Shareholder Approval The ability to issue the Placement Securities is conditional upon the Company obtaining Shareholder approval by way of a Special Resolution at the Meeting. (b) 10% Placement Period - Listing Rule 7.1A.1 Assuming Resolution 7 is passed, shareholder approval of the Additional 10% Placement under Listing Rule 7.1A is valid from the date of the AGM and expires on the earlier to occur of: (a) the date that is 12 months after the date of the AGM; or (b) the date of the approval by shareholders of a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking), or such longer period if allowed by ASX. If approval is given for the issue of the Placement Securities then the approval will expire, on 21 November 2018, unless shareholder approval is granted pursuant to Listing Rules 11.1.2 or 11.2 prior to that date. Lithium Consolidated Mineral Exploration Ltd Page 10 Explanatory Memorandum (c) Formula for calculating Additional 10% Placement Listing Rule 7.1A.2 provides that Eligible Entities that have obtained shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula: (A x D) – E Where: A is the number of ordinary securities on issue 12 months before the date of issue or agreement: (1) plus the number of fully paid ordinary securities issued in the 12 months under an exception in Listing Rule 7.2; (2) plus the number of partly paid ordinary securities that became fully paid in the 12 months; (3) plus the number of fully paid ordinary securities issued in the 12 months with approval of holders of ordinary securities under Listing Rules 7.1 or 7.4 (but note that this does not include an issue of fully paid ordinary securities under the entity’s 15% placement capacity without shareholder approval); and (4) less the number of fully paid ordinary securities cancelled in the 12 months. Note that “A” has the same meaning in Listing Rule 7.1 when calculating an entity’s 15% placement capacity. D is 10%. E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of shareholders under Listing Rules 7.1 or 7.4. (d) Listing Rule 7.1A.3 (1) Equity Securities Any Equity Securities issued under the Additional 10% Placement must be in the same