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For an offer of up to 35,000,000 Shares at an issue price of $0.20 per Share, together with one free attaching Option for every two Shares subscribed for and issued, to raise up to $7,000,000. The brokers to the Offer have given a firm commitment to the Company in respect of the full subscription. Please refer to Section 4.8 of this Prospectus for further details and Sections 12.3(b) and 12.3(c) of this Prospectus for a summary of the material terms of the mandate agreements. IMPORTANT INFORMATION This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay. The Securities offered by this Prospectus should be considered highly speculative. TRIPLE C CONSULTING ORACLE SECURITIES SHEFFIELD RESOURCES LIMITED ACN 125 811 083 For personal use only

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Page 1: For personal use only - Australian Securities  · PDF fileThe mineral tenements in which the Company has an interest are at various stages of exploration,

For an offer of up to 35,000,000 Shares at an issue price of $0.20 per Share, together with one free

attaching Option for every two Shares subscribed for and issued, to raise up to $7,000,000.

The brokers to the Offer have given a firm commitment to the Company in respect of the full

subscription. Please refer to Section 4.8 of this Prospectus for further details and Sections 12.3(b)

and 12.3(c) of this Prospectus for a summary of the material terms of the mandate agreements.

IMPORTANT INFORMATION

This is an important document that should be read in its entirety. If you do not understand it you

should consult your professional advisers without delay. The Securities offered by this Prospectus

should be considered highly speculative.

TRIPLE C CONSULTING ORACLE SECURITIES

SHEFFIELD RESOURCES LIMITED

ACN 125 811 083

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CO NTENTS

IMPORTANT NOTICE ......................................................................................................................... 1�

INVESTMENT HIGHLIGHTS ................................................................................................................ 3�

KEY RISK FACTORS ........................................................................................................................... 5�

1.� CORPORATE DIRECTORY .................................................................................................. 8�

2.� CHAIRMAN’S LETTER .......................................................................................................... 9�

3.� INVESTMENT OVERVIEW .................................................................................................. 10�

4.� DETAILS OF THE OFFER ..................................................................................................... 13�

5.� COMPANY OVERVIEW .................................................................................................... 17�

6.� MARKET OVERVIEW ......................................................................................................... 26�

7.� RISK FACTORS .................................................................................................................. 31�

8.� BOARD & MANAGEMENT ............................................................................................... 37�

9.� INDEPENDENT GEOLOGIST’S REPORT ............................................................................. 40�

10.� INVESTIGATING ACCOUNTANT’S REPORT ...................................................................115�

11.� INDEPENDENT SOLICITOR’S REPORT .............................................................................132�

12.� ADDITIONAL INFORMATION .........................................................................................158�

13.� DIRECTORS’ AUTHORISATION .......................................................................................169�

14.� GLOSSARY......................................................................................................................170�

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IMPORTANT NOTICE

This Prospectus is dated 2 November 2010 and was lodged with the ASIC on that date. The ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

The expiry date of this Prospectus is at 5.00pm (WST) on that date which is 13 months after the date this Prospectus was lodged with the ASIC (Expiry Date). No Securities may be issued on the basis of this Prospectus after the Expiry Date.

Application for Official Quotation by ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus.

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. No action has been taken to register or qualify the Securities or otherwise permit a public offering of the Securities the subject of this Prospectus in any jurisdiction outside Australia. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

Certain assets that are the subject of photographs contained in this Prospectus may not be owned by the Company. The inclusion of photographs supplied by persons or entities other than the Company does not constitute an endorsement or recommendation by those persons or entities of the Securities offered pursuant to this Prospectus.

It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. The Securities the subject of this Prospectus should be considered highly speculative.

RISK FACTORS

Potential investors should consider that an investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus. For further information in relation to the risk factors of the Company please refer to the Section titled Key Risk Factors as well as Section 7 of this Prospectus.

The risk factors set out in the Section titled Key Risk Factors as well as Section 7 of this Prospectus, and other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Securities in the future. Accordingly, an investment in the Company should be considered highly speculative.

EXPOSURE PERIOD

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in this Prospectus and, in those circumstances,

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any application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act.

Applications for Securities under this Prospectus will not be processed by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge applications prior to the expiry of the Exposure Period.

WEB SITE – ELECTRONIC PROSPECTUS

A copy of this Prospectus can be downloaded from the website of the Company at www.sheffieldresources.com.au. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian resident and must only access this Prospectus from within Australia.

The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

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INVESTMENT HIGHLIGHTS

Sheffield Resources Prospectus

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INVESTMENT HIGHLIGHTS

NEW EXPLORATION COMPANY - BULK COMMODITY FOCUS

Sheffield Resources Limited (Sheffield) is a mineral exploration company with a bulk minerals focus.

The Company’s Projects are geared towards the steel industry feed cycle (iron ore and tungsten) and the emerging fillers-ceramics-pigments cycle (talc, zircon, titanium).

PROVEN AND DEDICATED MANAGEMENT

The Company has a proven, energetic and resourceful Board, possessing the necessary skills and experience, spanning capital raising, corporate, exploration and mine development, to advance the Projects. The Board also intends to attract additional management skills as its Projects advance.

Most recently, two of the Company’s directors managed iron ore explorer Warwick Resources Limited, which merged with Atlas Iron Limited in December 2009.

SUBSTANTIAL GROUND POSITION IN WESTERN AUSTRALIA

The Company has over 6,000km2 of prospective tenure, all situated within Western Australia. Most of the Tenements are clustered to form larger consolidated projects.

ADVANCED PROJECTS WITH HISTORICAL DRILLING – IMMEDIATE DRILLING PROGRAMMES

Several of the Company’s Projects contain mineralisation that has been identified by historical drilling. These Projects represent immediate targets for drilling programmes.

PROVEN & EMERGING MINERAL PROVINCES – CLOSE TO KEY INFRASTRUCTURE

In selecting the Projects, Sheffield has chosen to strategically focus on proven and emerging mineral provinces known to contain world class mineral deposits.

EXPOSURE TO CURRENT CYCLE

Global demand for steel feed minerals, principally iron ore, continues to be fuelled by the current cycle of Chinese and Indian construction activity.

Commodities such as zircon and titanium dioxide are often referred to as “late cycle” commodities as their principal applications, ceramics and paints, are often in demand in the latter stages of a construction cycle.

This commodity diversification ensures that a number of different potential mineral development options are open to the Company depending on market demand.

A DIG AND DELIVER OPPORTUNITY – TALC

The Moora Talc Belt is host to high grade talc and has been exclusively controlled by major mining companies for the last 50 years.

The 175km long belt is located approximately 200km north of Perth and includes the Three Springs talc mine, owned by Rio Tinto Limited subsidiary Luzenac Australia Pty Ltd. The mine is approximately 150km south-west of Geraldton which is where the ore is trucked for shipment to world markets. Like hematite iron ore mines in the Pilbara, the Moora Talc Belt typically hosts significant high grade talc which is also a “dig-and-

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deliver” product. The Three Springs mine, a dig-and-deliver operation, underpins Rio Tinto’s global talc business.

Sheffield was able to recently secure a dominant ground position over the Moora Talc Belt. This has the potential to create a strategic asset which could be attractive to the world’s major talc producers.

Sheffield therefore represents an opportunity for investors to gain exposure to one of the few listed high grade talc explorers in the world.

WHY TALC?

Talc is our planet’s softest known mineral. The origin of the name derives from the Arabic word ‘talq’ which means soapstone. Talc boasts a number of important chemical and physical properties which results in a diverse range of industry uses.

Talc is non-toxic and importantly it is an environmentally friendly mineral.

Figure 1: Photo of high grade talc

The demand for talc is heavily dependent upon the construction sector, particularly new home construction (ceramics, paint and roofing), the automobile (plastics) and manufacturing (e.g. papermaking) industries.

Surging requirements of the automotive market for recyclable and lightweight materials have largely been contributing to the escalating demand for plastics, which in turn has propelled growth of talc products.

Like hematite iron ore mines in the Pilbara, high grade talc is a simple “dig and deliver” product. Rio Tinto’s Three Springs mine is an open cut operation which supplies raw talc to its operations in Europe and USA. The talc is extracted, crushed and screened then trucked to Geraldton as a lump product. Milling at its processing operations in Europe and the USA is a relatively simple micronising of the lump product to various specialised fines products.

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KEY RISK FACTORS

Potential investors should consider that an investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

The Directors have identified the following key risks associated with the Company and its operations. For further information in relation to the risk factors of the Company please refer to Section 7 of this Prospectus.

The risk factors set out in Section 7 of this Prospectus, and other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Securities in the future. Accordingly, an investment in the Company should be considered highly speculative.

Exploration success

The mineral tenements in which the Company has an interest are at various stages of exploration, and potential investors should understand that mineral exploration and development are high-risk undertakings.

There can be no assurance that exploration of these tenements, or any other tenements that may be acquired in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

Resource estimates

The Company does not presently have any JORC Code compliant resources. In the event a resource is delineated this would be an estimate only. An estimate is an expression of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company’s operations.

Title & grant

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is noted that Objections have been lodged against 8 tenement applications (in some cases multiple objections) as further detailed in Part I and Part IV of the Independent Solicitor’s Report set out in Section 11 of this Prospectus. The objections relate to

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encroachment on other licences (miscellaneous licences or general leases), potential for disruption to pastoral activities and interference with a first in time application. An application for a tenement cannot be progressed until an objection has been resolved either by mutual agreement between the interested parties or by determination of the Warden Court. As such the applications which are subject to objections may be granted with additional conditions imposed to regulate access arrangements between the Company and the objecting party where appropriate and there is also a risk that these applications may not be granted at all. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

It is also noted that a ballot will be conducted to determine priority between 4 tenement applications considered to be lodged in a ‘dead heat’ with competing applications over the same area of land as further detailed in Part I of the Independent Solicitor’s Report set out in Section 11 of this Prospectus. Where the Company does not win these ballots it is unlikely these applications will be granted without the withdrawal of the application by a competing party with higher priority. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

Native title

In relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected.

Further to this, it is possible that an Indigenous Land Use Agreement (ILUA) may be registered against one or more of the tenements in which the Company has an interest. The terms and conditions of any such ILUA may be unfavourable for, or restrictive against, the Company.

In this regard, the Company has received, from a native title group, an ILUA in relation to exploration licence application ELA69/2752. An application for a tenement cannot be progressed until negotiations have taken place with the relevant native title groups. There is no certainty that an agreement will be reached as the terms remain the subject of negotiation. This application may be granted with additional conditions imposed to regulate land use and there is also a risk that this application may not be granted at all. It is noted that no funds will be allocated towards this application until negotiations have been completed and therefore the outcome is not considered material.

It is also noted that exploration licence application ELA80/4496 lies wholly within an Aboriginal reserve. As such the application process is more stringent and this application may be granted with additional conditions imposed to regulate access arrangements by the Company and more onerous conditions to regulate activity on the tenement area. There is also a risk that this application may not be granted at all. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

Contractual

The Company is party to several agreements as summarised in Section 12.3 of this Prospectus. The ability of the Company to achieve its objectives will depend on the

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performance by the other parties to these contracts and other contracts the Company may enter into in the future. If a party defaults in the performance of its obligations it may be necessary for the Company to approach a court to seek a legal remedy. Legal action can be costly and there can be no guarantee that a legal remedy will be ultimately granted on the appropriate terms.

Investment speculative

The above factors, those referred to in Section 7 of this Prospectus, and others not specifically referred to above or elsewhere in this Prospectus, may in the future materially affect the financial performance of the Company and the value of the Securities offered under this Prospectus.

Therefore, the Securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Securities.

Potential investors should consider that the investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

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1. CORPORATE DIRECTORY

Directors

Bruce McQuitty (Managing Director) Will Burbury (Executive Chairman) David Archer (Technical Director) Company Secretary

Will Burbury

Proposed ASX Code

SFX

Registered Office

7 Daglish Street Wembley WA 6014 Website: www.sheffieldresources.com.au Share Registry

Link Market Services Limited Ground Floor 178 St Georges Terrace Perth WA 6000 Telephone: 1300 554 474 or +61 2 8280 7111 Facsimile: +61 2 9287 0303

Email: [email protected]

Broker to the Offer

Triple C Consulting Pty Ltd Corporate Authorised Representative of ANDSHEP Pty Ltd AFSL 346282 Suite 2, Level M 35-37 Havelock Street West Perth WA 6005

Telephone: +61 8 9226 3648

Broker to the Offer

Oracle Securities Corporate Authorised Representative of RM Capital Pty Ltd AFSL 221938 1175 Hay Street West Perth WA 6005 Telephone: +61 8 9385 3993

Solicitors

Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street Perth WA 6000

Independent Geologist

Malcolm Castle Consulting Geologist PO Box 473 South Perth WA 6951

Investigating Accountant

HLB Mann Judd Level 4 130 Stirling Street PERTH WA 6000

Auditor*

HLB Mann Judd Level 4 130 Stirling Street PERTH WA 6000

* This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus.

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2. CHAIRMAN’S LETTER

Dear Investor,

On behalf of the directors of Sheffield Resources Limited ACN 125 811 083 (Company or Sheffield), I am delighted to invite you to become a shareholder of the Company.

The Directors of Sheffield embarked on a strategy about twelve months ago of seeking to identify significant bulk commodity projects that are located in proven mineral provinces and which are close to usable infrastructure.

The Company has been successful in securing a strong mineral tenure position in Western Australia across a number of strategic mineral types. Most of the Projects have established mineralisation confirmed by historical drilling. Importantly, the Company’s North Perth Basin Project and the Moora Talc Project are located close to rail and ports. All of the Projects are 100% owned by the Company and comprise a ground position of approximately 6,000 km².

Sheffield is seeking to raise up to $7,000,000 through an issue of 35 million Shares at a price of $0.20 per Share. Investors subscribing under this Prospectus will also receive a free attaching $0.20 Option expiring on 30 June 2013 for every two Shares subscribed for and issued.

The Company intends to use the funds raised from this Prospectus primarily towards the exploration and development of its Projects which are located in the Moora Talc Belt (adjacent to Rio Tinto’s Three Springs Mine), the North Perth Basin (near Iluka’s Eneabba mine and the Tiwest joint venture’s projects), the Eucla Basin (near Diatreme’s Cyclone zircon discovery), the Carnarvon Basin (where Gunson has discovered the zircon rich Coburn deposit), the iron rich Pilbara region of Western Australia and the Kimberley (tungsten & iron).

The Company’s Projects are geared towards the steel industry feed cycle (eg iron and tungsten) and the emerging fillers-ceramics-pigments cycle (eg talc, zircon, titanium).

Sheffield recently secured a dominant ground position over the Moora Talc Belt which is renowned for its high quality microcrystalline talc. This ground has the potential to create a strategic asset which could be attractive to the world’s major talc producers. Sheffield therefore represents an opportunity for investors to gain exposure to one of the few listed high grade talc explorers in the world.

Before making your decision to invest, I ask that you carefully read this Prospectus and seek professional advice if required.

On behalf of the Board, I commend the Offer to you and look forward to welcoming you as a Shareholder.

Yours sincerely

Will Burbury Chairman

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3. INVESTMENT OVERVIEW

3.1 Important notice

This Section is not intended to provide full information for investors intending to apply for Securities offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety.

3.2 Indicative timetable*

Lodgement of Prospectus with the ASIC 2 November 2010

Opening Date 10 November 2010

Closing Date 30 November 2010

Despatch of holding statements 7 December 2010

Expected date for quotation on ASX 10 December 2010

* The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offer early without notice.

3.3 Objectives

The Company’s main objectives in undertaking the Offer include raising funds to be applied to:

• exploration and appraisal of the granted Tenements;

• the assessment and, if appropriate, acquisition of additional projects that are considered by the Board to add value to the Company; and

• general working capital and expenses of the Offer.

On completion of the Offer, the Board believes the Company will have sufficient working capital to achieve these objectives.

3.4 Purpose of the Offer and use of proceeds

The purpose of the Offer is to position the Company to seek to achieve the objectives set out in Section 3.3 above.

The Company intends to apply funds raised from the Offer as follows:

Item ($) Minimum

Subscription ($5,000,000)

($) Full

Subscription ($7,000,000)

Expenses of the Offer1 363,000 466,000

Exploration expenditure2 3,397,000 5,214,000

Administration costs 710,000 710,000

Working capital 530,000 610,000

Total 5,000,000 7,000,000

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1 Refer to Section 12.7 of this Prospectus for further details.

2 Refer to the Independent Geologist’s Report in Section 9 of this Prospectus for further information on the individual expenditure budgets for each Project in the two years following admission to the Official List.

In the event the Company raises more than the minimum subscription of $5,000,000, the additional funds raised will be first applied towards the increase in expenses of the Offer, followed by allocation towards further exploration expenditure, with any remaining funds used for working capital purposes.

The above table is a statement of current intentions as of the date of this Prospectus. As with any budget, intervening events (including exploration success or failure) and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

3.5 Capital structure

The capital structure of the Company following completion of the Offer (assuming full subscription) is summarised below1:

Shares2

Number

Shares currently on issue 21,900,001

Shares to be issued pursuant to the Offer 35,000,000

Total Shares on completion of the Offer3 56,900,001

Options

Number

Options currently on issue4 10,950,000

Options to be issued pursuant to the Offer4 17,500,000

Options to be issued pursuant to Broker Mandates5 3,000,000

Total Options on completion of the Offer 31,450,000

1 Refer to the Investigating Accountant’s Report set out in Section 10 of this Prospectus for further details.

2 The rights attaching to the Shares are summarised in Section 12.1 of this Prospectus.

3 An additional 500,000 Shares may be issued pursuant to the Option Agreement. However, the Company will not make a decision as to whether to exercise this option prior to being admitted to the Official List. Refer to the summary of the Option Agreement set out in Part II of the Independent Solicitor’s Report set out in Section 11 of this Prospectus.

4 Each Option is unlisted and exercisable at $0.20 on or before 30 June 2013 and otherwise on the terms and conditions set out in Section 12.2 of this Prospectus.

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5 Each Broker Option is unlisted and exercisable at $0.30 on or before 30 November 2013 and otherwise on the terms and conditions set out in Section 12.2 of this Prospectus.

3.6 Restricted securities

Subject to the Company being admitted to the Official List, certain Securities on issue prior to the Offer will be classified by ASX as restricted securities and will be required to be held in escrow.

Figure 2: Farquhar region, Western Pilbara

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4. DETAILS OF THE OFFER

4.1 The Offer

Pursuant to the Offer, the Company invites applications for up to 35,000,000 Shares at an issue price of $0.20 per Share, together with one free attaching Option for every two Shares subscribed for and issued, to raise up to $7,000,000.

The Shares offered under this Prospectus will rank equally with the existing Shares on issue.

The Options offered under this Prospectus will be exercisable at $0.20 each on or before 30 June 2013 and otherwise on the terms and conditions set out in Section 12.2 of this Prospectus. The Company does not intend to seek Official Quotation of these Options.

4.2 Minimum subscription

The minimum subscription to be raised pursuant to the Offer is $5,000,000.

If the minimum subscription has not been raised within four (4) months after the date of this Prospectus, the Company will not issue any Securities and will repay all application monies for the Securities within the time prescribed under the Corporations Act, without interest.

4.3 Applications

Applications for Securities under the Offer must be made using the Application Form.

Applications for Securities must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000 Shares and payment for the Shares must be made in full at the issue price of $0.20 per Share. An application for Shares will incorporate an application for Options and the Options will be issued free attaching on the basis of one Option for every two Shares subscribed for and issued.

Completed Application Forms and accompanying cheques, made payable to “Sheffield Resources Limited – Share Offer Account” and crossed “Not Negotiable”, must be mailed or delivered to the address set out on the Application Form by no later than the Closing Date.

The Company reserves the right to close the Offer early.

4.4 ASX listing

Application for Official Quotation by ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus. If the Shares are not admitted to Official Quotation on ASX before the expiration of 3 months after the date of issue of this Prospectus, (or such period as varied by the ASIC), the Company will not issue any Securities and will repay all application monies for the Securities within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Shares is not to be taken in any way as an indication of the merits of the Company or the Shares now offered for subscription.

4.5 Allotment

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Subject to ASX granting approval for the Company to be admitted to the Official List, allotment of Securities offered by this Prospectus will take place as soon as practicable after the Closing Date.

Pending the allotment and issue of the Securities or payment of refunds pursuant to this Prospectus, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

The Directors will determine the allottees of all the Securities in their sole discretion. The Directors reserve the right to reject any application or to allocate any applicant fewer Securities than the number applied for. Where the number of Securities issued is less than the number applied for, or where no allotment is made, surplus application monies will be refunded without any interest to the Applicant as soon as practicable after the Closing Date.

4.6 Applicants outside Australia

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the Securities or otherwise permit a public offering of the Securities the subject of this Prospectus in any jurisdiction outside Australia. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

It is the responsibility of applicants outside Australia to obtain all necessary approvals for the allotment and issue of the Securities pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by the applicant that all relevant approvals have been obtained.

4.7 Oversubscriptions

No oversubscriptions will be accepted by the Company.

4.8 Brokers to the Offer

The Company has entered into separate mandate agreements (Broker Mandates) with Triple C Consulting Pty Ltd and Oracle Securities (Brokers) to act as brokers to the Offer.

Triple C Consulting Pty Ltd has given a firm commitment for $4,000,000 and Oracle Securities has given a firm commitment for $3,000,000 (Firm Commitments) representing the full subscription of the Offer.

Each Firm Commitment is subject to standard terms and conditions.

Pursuant to the Broker Mandates, the Company has agreed to pay the Brokers a cash fee of 5% (excluding GST) of their respective amounts committed.

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In addition, the Company has agreed to issue a maximum of 3,000,000 Broker Options to the Brokers. Each Broker Option is exercisable at $0.30 on or before 30 November 2013.

Please refer to Sections 12.3(b) and 12.3(c) of this Prospectus for a summary of the material terms of the Broker Mandates.

In the event the Firm Commitments do not proceed in accordance with their terms, the Company reserves the right to pay a commission of 5% (exclusive of goods and services tax) of amounts subscribed to any licensed securities dealers or Australian financial services licensee in respect of any valid applications lodged and accepted by the Company and bearing the stamp of the licensed securities dealer or Australian financial services licensee. Payments will be subject to the receipt of a proper tax invoice from the licensed securities dealer or Australian financial services licensee.

4.9 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will apply to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company.

Electronic sub-registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with separate statements (similar to a bank account statement) that set out the number of Shares and Options allotted to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Electronic sub-registers also mean ownership of securities can be transferred without having to rely upon paper documentation. Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

4.10 Privacy statement

If you complete an Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder.

The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your securities in the context of takeovers, regulatory bodies including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the share registry.

You can access, correct and update the personal information that we hold about you. If you wish to do so, please contact the share registry at the relevant contact number set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASTC Settlement Rules. You should note that if you do not provide the information required on the application for Securities, the Company may not be able to accept or process your application.

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4.11 Queries

Any questions concerning the Offer should be directed to Triple C Consulting Pty Ltd or Oracle Securities on the numbers set out in the Corporate Directory.

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5. COMPANY OVERVIEW

5.1 Background

Sheffield was registered on 6 June 2007 for the primary purpose of identifying exploration projects in Australia and overseas.

While the Company’s primary exploration focus will be on bulk commodities such as talc, heavy mineral sands and iron, the Company will also review the potential for economic mineralisation on the Tenements for various other commodities, including tungsten and manganese.

The Company intends to use the funds raised from the Offer primarily to begin a detailed work program on the granted Tenements.

Based on historical exploration results there is evidence of mineralisation on the Tenements. Given that the Tenements have had varying degrees of prior exploration, the Company has designed appropriate detailed work programmes to define further mineralisation. The immediate focus will be on drilling advanced targets to seek to unlock value for Shareholders.

A summary of each Project is set out below. Also refer to the Independent Geologist’s Report in Section 9 of this Prospectus for more detailed information on the Projects.

5.2 Details of the Projects

The Company is the sole registered holder of all the granted Tenements and the sole applicant of all Tenements that remain applications. It is noted that some applications remain subject to ballot, objection and the Option Agreement as noted in the Independent Solicitor’s Report set out in Section 11 of this Prospectus. It is also noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

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Figure 3 – Location of Sheffield’s Projects

Set out below is a description of each of the Company’s Projects.

TALC – MOORA TALC BELT, WESTERN AUSTRALIA

Sheffield controls a large tenement position containing numerous talc occurrences within the Moora Talc Belt.

The Moora Talc Belt hosts the world class Three Springs talc mine which is owned by Luzenac Australia Pty Ltd (a 100% owned subsidiary of the Rio Tinto Group). The Three Springs mine is renowned for producing consistently high quality talc and has been continuously operating since 1948.

WMC Ltd operated the mine on a 50% JV basis from 1960 to 1987 and on a 100% ownership basis from 1987 to 2001. Rio Tinto acquired the Three Springs Operation from WMC in 2001 for A$54.5 million.

Since 1996, when WMC expanded its talc production with the acquisition of a 50% share in Finnminerals, the role of the Three Springs operation has been one of supplying premium grade talc to blend with lower grade talc produced by overseas operations located closer to existing markets.

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Figure 4: Photograph of open pit D at Three Springs Talc Mine, 1996 (Source: Talc, Pyrophyllite and Magnesite in Western Australia, Geological Survey of WA Bulletin 16)

The global significance of this operation is reflected in the fact that the current and prior operators are/were major mining houses. Similarly, exploration tenure over the Moora Talc Belt was controlled from 1971 until recently by, at various stages, Rio Tinto, WMC Ltd and Commercial Minerals Ltd (the latter was the industrial minerals arm of Normandy Ltd acquired in 2000 by private company Unimin Australia Ltd).

During the past year, Rio Tinto has progressively relinquished its exploration tenements, retaining a handful of mining leases covering the Three Springs and Battersby talc deposits. This provided the opportunity for Sheffield to secure over 1,000km² of tenure creating a dominant ground position over the Moora Talc Belt.

Prior exploration work on this ground has highlighted widespread talc mineralisation and exploration targets, providing Sheffield with an excellent opportunity for further discovery and delineation of talc mineralisation.

Sheffield’s talc prospects include near surface advanced targets. Historical exploration reports describe talc intersections from several of Sheffield’s prospects as having similar chemistry and physical properties (e.g. microcrystalline, high brightness) to that of the talc from the Three Springs deposit.

Sheffield’s Board is confident that the Company’s strategic knowledge of the exploration model and specific exploration techniques for talc will enable further mineralisation to be discovered in the Moora Talc Belt.

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Figure 5: Sheffield’s Moora Talc Belt Project

Figure 6: Cross section through Sheffield’s Fowlers talc prospect showing all intersections sampled and analysed. Refer to the Independent Geologist’s Report in Section 9 of this

Prospectus for more detailed information on the Fowlers talc prospect.

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HEAVY MINERAL SANDS

Sheffield has accumulated a strategic portfolio of heavy mineral sands (HMS) projects located in the proven North Perth Basin and the emerging Eucla and Carnarvon Basin provinces.

Since securing Sheffield’s HMS tenure position there has been a significant improvement in the zircon and rutile demand and supply market.

The Company’s strategy is, subject to exploration success, to build multiple HMS projects capable of supporting a flexible mobile mining plant.

North Perth Basin Project

Sheffield has built a large, strategic tenement holding of over 2,500km2 in the North Perth Basin – a proven world class HMS province with excellent access to infrastructure and energy sources (see Figure 7).

Sheffield’s tenement package includes five advanced exploration projects: Yandanooka, Durack, Beekeepers, and Irwin which are located near Eneabba and the large McCalls prospect – a former BHP project, located near Gingin.

The projects are located close to existing highways and to a network of railway lines connecting to the Geraldton and Fremantle/Kwinana Ports.

The HMS endowment of the North Perth Basin has enabled industry leaders such as Iluka Resources and the Tiwest joint venture to establish long life mines which have supported the development of downstream industries.

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Figure 7: Midwest WA Project Location Map

Figure 8: Cross section of Sheffield’s Yandanooka Project

Figure 9: Panned Heavy Mineral Concentrate from Sheffield’s Yandanooka Project

Carnarvon and Eucla Basins

In addition to its strong strategic position in the North Perth Basin, Sheffield has grassroots projects in two emerging zircon-rich mineral sands provinces: the Carnarvon and Eucla Basins.

The Carnarvon Basin is relatively unexplored for heavy mineral sands. Sheffield has applied for the Woodleigh Project and Tallering West Project totalling 1,653km2 in area (see Figure 7). Sheffield’s tenure is adjacent to Iluka Resources which has recently established a large tenement position in the Carnarvon Basin.

In the Eucla Basin, Sheffield’s Wanna Project covers approximately 20km of strike length of the postulated Barton shoreline. This Late Eocene shoreline hosts Diatreme Resources’ Cyclone heavy mineral sand deposit, located 40km along strike to the southeast. Discoveries along the Barton shoreline have proven to be large and rich in zircon.

IRON

Pilbara Iron Project

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The Pilbara Iron Project consists of 16 tenement applications within the Hamersley Basin and the Pilbara Craton. The tenements are at various stages of progress towards grant. Four of the tenements (E47/2343-2346) are subject to ballot with between 3 and 6 other parties and further three (E47/2254-2256) are second in time to competing applications. The number of ballots and second in time applications is evidence of the high level of competition for tenure within this world class iron province.

Sheffield’s strategy is to target hematite mineralisation adjacent to infrastructure and to build consolidated tenement holdings over time. Reconnaissance mapping by Sheffield’s geologists has so far identified significant iron enrichment on three of the Company’s tenement applications.

Figure 10: Location map of Sheffield’s Pilbara Iron Project

Figure 11: Photo of high grade hematite from Sheffield’s Four Pools Project

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Ruthieres Project – Kimberley

The Ruthieres Project in the Kimberley region of Western Australia comprises one exploration licence application of 120km2 situated along the northern coastline of the Kimberley Basin, near Cape Ruthieres. The tenement lies wholly within an Aboriginal Reserve. The project contains over 30km2 of ferruginous Tertiary laterite is sufficiently rich in iron to warrant classification as possible iron ore. Previous workers have recorded up to 45% Fe in laterite from the Drysdale area located just to the southeast of the project. The ferruginous pisolitic laterites may be amenable to beneficiation. In addition, laterite profiles in the northwest Kimberley are known to host bauxite mineralisation (e.g. Cape Bougainville Peninsular and Mount Leeming).

TUNGSTEN

Berthas Butt Project

The Berthas Butt Project near Halls Creek in WA’s Kimberley region contains over 50 tungsten occurrences. The tungsten occurs as scheelite which is hosted by an epidote altered quartzite unit within the Saunders Creek Formation. Over 20km of this prospective formation is tightly folded around the Castle Creek anticline.

The Company believes that there is potential for the discovery of W-(Cu-Ag-Au) mineralisation in untested and poorly tested portions of the target horizon.

Sheffield Project Summary

Project Advanced Drilling Projects

Projects with limited drilling

Projects with geochemical targets

Grassroots Projects

TALC Fowlers Beans Shastri

Azharuddin Battersby North Haigs Nivens Prowaka Tilleys

Hillview Carnamah

HMS Yandanooka Arrino Durack Irwin Beekeepers McCalls

Drummond Crossing Stockyard Georgina Cowella Peak Eucla Basin (Wanna)

Carnarvon Basin (Woodleigh & Tallering West)

IRON Eagle Pool 3 P’s

Panorama Millstream Kimberley

TUNGSTEN Berthas Butt

OTHER

In addition, the Company has agreed a conditional offer with Iluka Resources Limited for the acquisition of additional tenements which remains subject to formal agreement. The Company advises there is no certainty that an agreement will be reached as the terms remain the subject of negotiation. Further, the Company does not consider these tenements to be material to its operations.

5.3 Project generation

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The Company will consider and evaluate potential new projects in Australia and overseas with a view to increasing the number of projects held by the Company and diversify into additional geographical locations. The Company has not yet determined any specific criteria for identification of these projects.

5.4 Competent person’s statement

The information in this Section of this Prospectus that relates to exploration results has been compiled by Bruce McQuitty and David Archer. Each of Mr McQuitty and Mr Archer has consented to the inclusion of this information in this Section of this Prospectus in the form and context in which it is included.

Mr McQuitty and Mr Archer are each geologists with over 20 years experience. Refer to Section 8.1 for further details of their experience and qualifications. Both Mr McQuitty and Mr Archer are a Member of the Australasian Institute of Geoscientists and each has the appropriate relevant qualifications, experience, competence and independence to be considered as an “Expert” and “Competent Person” as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”)’.

Figure 12: Exploration on Sheffield’s Farquhar Iron Project

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6. MARKET OVERVIEW

Figure 13: Uses for Talc - Paints, Automotive Plastics and Paper

TALC

Paper represents the largest end-use industry for talc, followed by the ceramics industry. It is also used in the manufacture of plastics, particularly those used in the automotive industry. Talc also has many other industry uses including rubber, paints, roofing and pharmaceuticals.

Figure 14: Industry breakdown of talc usage Figure 15: Major talc producers Source: Rio Tinto Minerals Business Briefing, ASX Release15 September 2006

The demand for talc is heavily dependent upon the construction sector, particularly new home construction (ceramics, paint and roofing); the automobile (plastics) and manufacturing (e.g. papermaking) industries.

Surging requirements of the automotive market for recyclable and lightweight materials have largely been contributing to the escalating demand for plastics, which in turn is propelling growth of talc products.

Figure 16: Amount of plastics products consumed by China’s automobile industry in 2002-2010 (x100,000 tons)

(Source: China Talc Association)

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Global talc and pyrophyllite production is approximately 8 million tonnes per year.

The talc supply sector has undergone significant consolidation and now consists of just five western companies with Rio Tinto being the leading player, accounting for 25% of world talc demand. Rio Tinto is followed by Mondo Minerals (Finland, Norway) and

Specialty Minerals, part of Mineral Technologies Inc. (USA), RT Vanderbilt (USA), and IMI Fabi (Italy). These producers dominate world trade in talc grades.

Notwithstanding Rio Tinto’s dominant market share, Chinese producers dominate the world market (approximately 50%) with regard to volume production. The Chinese talc industry has been facing a number of challenges which have created insufficient supply of high-grade talc. This is due primarily to the exhaustion of high grade talc mines in China and an increase in demand both domestically and export markets. Chinese output of high grade talc is considered insufficient to meet the current needs of either Chinese domestic market or export.

There are many talc products sold into the various markets to meet a range of end uses. Talc may be sold both as a raw lump product to talc mills and also after milling as a micronised product.

During 2008 and 2009 talc prices ranged between US$259 and US$460 per tonne depending on grade.

Figure 17: Plot of talc deposit mineralogy highlighting Three Springs as a premium talc product (Source: Luzenac (Rio Tinto) web site)

HEAVY MINERAL SANDS

The valuable mineral components of heavy mineral sands (HMS) can be classified as zircon and titanium minerals (rutile, ilmentite and leucoxene).

Historically, demand for titanium minerals and zircon has displayed generally steady, GDP-related, growth characteristics. Increasing demand for mineral sand products from developing countries has become increasingly evident over recent years. Titanium minerals and zircon constitute a relatively secure input source to a range of industrial and end-consumer applications, with relatively low threats from substitutes.

Zircon

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Over 50 per cent of zircon is used in the production of ceramics, including tiles, sanitary ware and tableware. Zircon is also used in refractories and foundry applications.

Global zircon consumption in 2009 was an estimated 1.0 million tonnes of zircon product.

Current prices for zircon are approximately US$1,000 per tonne.

The leader on the supply side of the market, Iluka Resources Ltd, recently reported that it was unable to meet full customer demand - a situation that has led to zircon rationing to its customers.

Figure 18: Zircon Prices (Source: Iluka Resources Mineral Sands Briefing Paper, August 2010)

Titanium minerals

Titanium minerals - rutile, ilmenite, leucoxene and synthetic rutile - are the principal feedstock for pigment production.

In 2009, the global titanium minerals market was estimated at approximately 5.4 million tonnes of TiO2 units. Pigment is by far the largest consumer of titanium minerals with an estimated total world pigment production of approximately 4.4 million tonnes of TiO2 units.

Current rutile prices increased from US$513 per tonne in May 2010 to US$600 per tonne in July 2010.

Current prices for raw ilmenite are approximately US$100 per tonne, while leucoxene due to its variable TiO2 content is valued between US$150-US$300 per tonne. Ilmenite and leucoxene can be processed to produce synthetic rutile which sells at a slight discount to commercial rutile prices.

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Figure 19: Rutile Prices (Source: Iluka Resources Mineral Sands Briefing Paper, August 2010)

IRON ORE

Iron ore is used in the production of steel and has undergone a recent boom fuelled by an increase in Chinese and Indian construction activity. The major exporters of iron ore are located in the Pilbara region of Western Australia (BHP Billiton, Rio Tinto) and Brazil (Vale) and are currently expanding operations to satisfy increased demand.

Current prices of high grade DSO fines are between US$150-159 per tonne into China.

Figure 20: Chinese iron ore imports (Source: Ocean Equities Report published 14 October 2010)

TUNGSTEN

Tungsten is recovered from the ore minerals scheelite (CaWO4) and wolframite ((Fe,Mn)WO4). Tungsten has the highest melting point of any metal and therefore tends to be used in high temperature applications, e.g. the filaments in light bulbs.

Tungsten is also used to make tungsten carbide, for cutting and drilling applications. When added to steel, tungsten increases its strength. It is alloyed with other metals to make "superalloys" which have special physical properties of high strength and heat resistance.

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In terms of both supply and demand China dominates the global tungsten market, with western countries occupying a relatively minor position. China produces around 86% of the world’s tungsten products.

Depletion of Chinese domestic supply coupled with increasing demand, has fuelled increased Chinese interest in overseas tungsten projects.

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7. RISK FACTORS

7.1 Introduction

The Securities offered under this Prospectus are considered highly speculative. An investment in the Company is not risk free and the Directors strongly recommend potential investors to consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Securities and to consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

There are specific risks which relate directly to the Company’s business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The risks identified in this Section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Securities.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

7.2 Risks specific to the Company

(a) Exploration

The mineral tenements of the Company are at various stages of exploration, and potential investors should understand that mineral exploration and development are high-risk undertakings.

There can be no assurance that exploration of these tenements, or any other tenements that may be acquired in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

(b) Operations

The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

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No assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining of its tenement interests. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.

(c) Resource estimates

The Company does not presently have any JORC Code compliant resources. In the event a resource is delineated this would be an estimate only. An estimate is an expression of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company’s operations.

(d) Commodity price volatility and exchange rate

If the Company achieves success leading to mineral production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors.

Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company are and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

(e) Environmental

The operations and proposed activities of the Company are subject to State and Federal laws and regulation concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

In this regard, the Department of Mines and Petroleum in Western Australia from time to time reviews the environmental bonds that are placed on tenements. The Directors are not in a position to state whether a review is imminent or whether the outcome of such a review would be detrimental to the funding needs of the Company.

(f) Title & grant

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Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is noted that Objections have been lodged against 8 tenement applications (in some cases multiple objections) as further detailed in Part I and Part IV of the Independent Solicitor’s Report set out in Section 11 of this Prospectus. The objections relate to encroachment on other licences (miscellaneous licences or general leases), potential for disruption to pastoral activities and interference with a first in time application. An application for a tenement cannot be progressed until an objection has been resolved either by mutual agreement between the interested parties or by determination of the Warden Court. As such the applications which are subject to objections may be granted with additional conditions imposed to regulate access arrangements between the Company and the objecting party where appropriate and there is also a risk that these applications may not be granted at all. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

It is also noted that a ballot will be conducted to determine priority between 4 tenement applications considered to be lodged in a ‘dead heat’ with competing applications over the same area of land as further detailed in Part I of the Independent Solicitor’s Report set out in Section 11 of this Prospectus. Where the Company does not win these ballots it is unlikely these applications will be granted without the withdrawal of the application by a competing party with higher priority. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

(g) Native title

In relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected.

Further to this, it is possible that an Indigenous Land Use Agreement (ILUA) may be registered against one or more of the tenements in which the Company has an interest. The terms and conditions of any such ILUA may be unfavourable for, or restrictive against, the Company.

In this regard, the Company has received, from a native title group, an ILUA in relation to exploration licence application ELA69/2752. An application for a tenement cannot be progressed until negotiations have taken place with the relevant native title groups. There is no certainty that an agreement will be reached as the terms remain the subject of negotiation. This application may be granted with additional

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conditions imposed to regulate land use and there is also a risk that this application may not be granted at all. It is noted that no funds will be allocated towards this application until negotiations have been completed and therefore the outcome is not considered material.

It is also noted that exploration licence application ELA80/4496 lies wholly within an Aboriginal reserve. As such the application process is more stringent and this application may be granted with additional conditions imposed to regulate access arrangements by the Company and more onerous conditions to regulate activity on the tenement area. There is also a risk that this application may not be granted at all. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

(h) Contractual

The Company is party to several agreements as summarised in Section 12.3 of this Prospectus. The ability of the Company to achieve its objectives will depend on the performance by the other parties to these contracts and other contracts the Company may enter into in the future. If a party defaults in the performance of its obligations it may be necessary for the Company to approach a court to seek a legal remedy. Legal action can be costly and there can be no guarantee that a legal remedy will be ultimately granted on the appropriate terms.

7.3 General risks

(a) Economic

General economic conditions, introduction of tax reform, new legislation, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

(b) Market conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

• general economic outlook;

• introduction of tax reform or other new legislation;

• interest rates and inflation rates;

• changes in investor sentiment toward particular market sectors;

• the demand for, and supply of, capital; and

• terrorism or other hostilities.

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The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

(c) Dividends

Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend on the availability of distributable earnings and operating results and financial condition of the Company, future capital requirements and general business and other factors considered relevant by the Directors. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.

(d) Taxation

The acquisition and disposal of Securities will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Securities from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability and responsibility with respect to the taxation consequences of subscribing for Securities under this Prospectus.

(e) Additional requirements for capital

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programmes as the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company.

(f) Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

(g) Investment speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future

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materially affect the financial performance of the Company and the value of the Securities offered under this Prospectus

Therefore, the Securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Securities.

Potential investors should consider that the investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

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8. BOARD & MANAGEMENT

8.1 Directors

Will Burbury Executive Chairman

Will Burbury practised as a corporate lawyer with a leading Australian law firm prior to entering the mining and exploration industry in 2003. During this time, he has been actively involved in the identification and financing of many resources projects in Australia and on the African continent and has held senior management positions and served on the boards of several private and publicly listed companies. Mr Burbury was previously Chairman or ASX listed Warwick Resources Limited prior to its merger with Atlas Iron Limited in 2009. He was also previously a director of ASX listed Lonrho Mining Limited and an executive of ASX listed Nkwe Platinum Ltd.

Bruce McQuitty Managing Director

Bruce McQuitty has 28 years experience in the mining and civil construction industries. During this time he has held various senior positions in large mining houses and has been involved in exploration through to the development of mines. Mr McQuitty was previously Managing Director of ASX listed Warwick Resources Limited prior to its merger with Atlas Iron Limited in 2009. Prior to that he held senior positions with ASX/AIM listed Consolidated Minerals Limited, Renison Goldfields Consolidated Ltd and Gympie Gold Limited. Mr McQuitty has significant technical expertise in exploration, project generation, feasibility, underground mining and engineering geology and has managed exploration teams in Australia and overseas. Mr McQuitty holds a Masters of Economic Geology and a Bachelor of Science.

David Archer Technical Director

David Archer is a geologist with 22 years experience in exploration and mining in Australia. He has held senior positions with major Australian mining companies, including Renison Goldfields Consolidated Ltd, and has spent the last ten years as a director of Archer Geological Consulting specialising in project generation, geological mapping and project evaluation. Mr Archer was a consultant to ASX listed Atlas Iron Limited and Warwick Resources Limited and was responsible for significant iron ore discoveries for both companies in the Pilbara. He was also involved in the discovery of the Magellan lead mine and the Raleigh and Paradigm gold mines.

8.2 Management and Consultants

The Company is aware of the need to have sufficient management to properly supervise the exploration and (if successful) for the development of the projects in which the Company has an interest. As the Company’s projects become more involved, the Board will continually monitor the management roles in the Company and look to appoint additional management and/or consultants when and where appropriate to ensure proper management of the Company’s projects.

8.3 Corporate Governance

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The Company’s main corporate governance policies and practices are outlined below:

Board of directors

The Board is responsible for corporate governance of the Company. The Board develops strategies for the Company, reviews strategic objectives and monitors performance against those objectives. The goals of the corporate governance processes are to:

(a) maintain and increase Shareholder value;

(b) ensure a prudential and ethical basis for the Company’s conduct and activities; and

(c) ensure compliance with the Company’s legal and regulatory objectives.

Consistent with these goals, the Board assumes the following responsibilities:

(a) developing initiatives for profit and asset growth;

(b) reviewing the corporate, commercial and financial performance of the Company on a regular basis;

(c) acting on behalf of, and being accountable to, the Shareholders; and

(d) identifying business risks and implementing actions to manage those risks and corporate systems to assure quality.

The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate Directors’ participation in the Board discussions on a fully-informed basis.

Composition of the Board

Election of Board members is substantially the province of the Shareholders in general meeting. However, subject thereto, the Company is committed to the following principles:

(a) the Board is to comprise Directors with a blend of skills, experience and attributes appropriate for the Company and its business; and

(b) the principal criterion for the appointment of new Directors is their ability to add value to the Company and its business.

No formal nomination committee or procedures have been adopted for the identification, appointment and review of the Board membership, but an informal assessment process, facilitated by the Chairman in consultation with the Company’s professional advisors, has been committed to by the Board.

Independent professional advice

Subject to the Chairman’s approval (not to be unreasonably withheld), the Directors, at the Company’s expense, may obtain independent professional advice on issues arising in the course of their duties.

Remuneration arrangements

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The total maximum remuneration of Directors is initially set by the Constitution and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each Director. The current amount has been set at an amount not to exceed $250,000 per annum.

In addition, a Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director.

The remuneration of an Executive Director will be decided by the Board, without the affected Executive Director participating in that decision-making process.

Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

External audit

The Company in general meetings is responsible for the appointment of the external auditors of the Company, and the Board from time to time will review the scope, performance and fees of those external auditors.

Audit committee

The Company will not have a separate constituted audit committee.

Identification and management of risk

The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational risks and their management will be recurring items for deliberation at Board meetings.

Ethical standards

The Board is committed to the establishment and maintenance of appropriate ethical standards.

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9. INDEPENDENT GEOLOGIST’S REPORT

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MAD12 411804 6671929

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50/180 64.40 20.65 49.40 28.75 30.86 62.53 1.34 0.00 0.24 NA 4.91

MAD15 411832 6671850 -90/0 97.00 56.48 85.75 29.27 31.25 62.64 1.13 0.01 0.19 75.78 4.70

MAD16 411793 6671854 -90/0 84.90 11.50 41.65 30.15 30.86 62.56 1.31 0.01 0.37 73.74 4.84

MAD17 411771 6671924 -90/0 132.90 21.26 37.10 15.84 31.02 62.71 1.12 0.01 0.36 79.56 4.93

MAD17 411771 6671924 -90/0 132.90 74.45 77.70 3.25 31.21 61.91 1.40 0.01 0.26 78.88 5.01

MAD18 411813 6671925 -90/0 86.30 11.60 41.50 29.90 30.29 62.24 1.28 0.01 1.05 81.19 5.06

MAD19 411809 6671982 -90/0 44.80 20.10 25.10 5.00 31.25 62.71 1.16 -5.00 0.33 NA 4.81

MAP4 411727 6672123 -90/0 48.00 15.00 27.00 12.00 29.96 63.65 0.87 -5.00 0.51 71.75 4.98

MAP7 411793 6671925 -90/0 42.00 13.00 25.00 12.00 29.79 62.37 1.23 -5.00 1.34 71.75 5.22

MAP8 411869 6671846 -90/0 39.00 5.00 27.00 22.00 30.12 62.17 1.55 -5.00 0.94 64.50 5.00

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DDH1 410338 6670458 -90/0 26.00 16.30 18.40 2.10 NA NA 0.50 0.01 0.24 70.48 NA

DDH1 410338 6670458 -90/0 26.00 19.75 23.00 3.25 NA NA 1.03 -5.00 0.28 84.72 NA

DDH2 410296 6670459 -90/0 21.70 15.00 19.00 4.00 NA NA 0.58 0.04 0.42 79.50 NA

DDH4 410172 6670461 -90/0 46.40 30.30 32.00 1.70 NA NA 0.46 0.04 0.06 82.41 NA

DDH4 410172 6670461 -90/0 46.40 33.30 37.20 3.90 NA NA 0.73 0.01 0.06 71.47 NA

DDH6 410173 6670361 -90/0 44.40 13.00 32.00 19.00 NA NA 0.69 0.06 0.18 80.07 NA

DDH8 410174 6670261 -90/0 31.00 25.90 28.20 2.30 NA NA 0.42 0.07 0.20 82.43 NA

DDH10 410089 6670262 -90/0 39.05 35.35 37.00 1.65 NA NA 0.57 0.05 0.14 80.17 NA

DDH11 410048 6670263 -90/0 24.00 4.90 10.60 5.70 NA NA 0.71 0.06 2.35 82.04 NA

DDH13 409970 6670154 -90/0 19.10 7.30 18.50 11.20 NA NA 0.50 0.07 1.20 82.74 NA

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MP030 407200 6655900 -60/90 25.00 10.00 13.00 3.00 19.80 60.40 1.00 0.02 11.30 NA 7.56

MP030 407200 6655900 -60/90 25.00 13.00 15.00 2.00 20.20 59.20 2.10 0.01 10.90 NA 7.60

MP033 407050 6655900 -60/90 34.00 10.00 14.00 4.00 25.10 64.50 1.60 0.01 2.60 NA 5.42

MP033 407050 6655900 -60/90 34.00 25.00 28.00 3.00 28.40 61.20 1.20 -5.00 2.80 NA 5.66

MP035 406950 6655900 -60/90 34.00 20.00 29.00 9.00 30.37 62.13 0.68 0.02 0.87 NA 5.20

MP039 406750 6655900 -60/90 29.00 25.00 28.00 3.00 30.30 61.70 0.59 0.01 1.00 NA 5.44

MP049 407050 6655950 -60/90 37.00 25.00 30.00 5.00 30.96 62.26 0.74 0.02 0.56 NA 5.08

MP051 406950 6655950 -60/90 41.00 26.00 28.00 2.00 30.60 61.20 0.87 0.01 1.30 NA 5.47

MP051 406950 6655950 -60/90 41.00 31.00 39.00 8.00 29.78 63.00 0.71 0.09 0.93 NA 5.15

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CMS1745 317990 6752276 4 22 18 2.29 Broad eastern strand

CMS1744 318075 6752278 8 24 16 2.70 Broad eastern strand

CMS1743 318150 6752280 12 26 14 2.06 Broad eastern strand

CMS1742 318230 6752282 14 28 14 2.09 Broad eastern strand

CMS1741 318310 6752284 16 26 10 2.24 Broad eastern strand

CMS1794 316445 6753830 12 26 14 1.69 Western zone

CMS1795 316370 6753830 10 22 12 1.53 Western zone

CMS1798 316130 6753830 8 24 16 1.66 Western zone

CMS1759 316620 6752332 4 16 12 1.57 Western zone

CMS1757 316785 6752336 6 18 12 1.53 Western zone

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MB162 3 34.5 31.5 32 1.57

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Hole ID Easting Northing RL Intercept Comment

WH050 320829 6677964 92 6m @ 4.25% HM from 9m High oversize

WH070 322582 6686205 54 17m @ 2.66% HM from 10m Hole ended in mineralisation

WH071 322482 6686205 54 20m @ 2.34% HM from 8m

WH072 322282 6686205 54 13m @ 4.24% HM from 6m High oversize >20% from 11-14m

WH132 319777 6681670 57 4m @ 5.33% HM from 16m

WH166 322381 6686207 52.5 11m @ 5.26% HM from 8m High oversize (18.5%) from 10-14m

WH167 322222 6686205 51 17m @ 3.15% HM from 7m High oversize (19.2%) from 10-15m

WH168 322122 6686204 50.5 7m @ 8.34% HM from 11m High oversize (18.3%) from 11-15m

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WH169 322022 6686202 50 14m @ 5.16% HM from 11m

WH170 321922 6686200 52 12m @ 7.65% HM from 14m

WH172 321722 6686197 49.5 12m @ 5.60% HM from 14m

WH174 321522 6686194 49 13m @ 3.88% HM from 16m

WH210 318929 6688886 45 4m @ 6.35% HM from 29m Strongly mineralized at end of hole

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Central Zone

Hole ID Easting Northing From m To m Interval HM (%)

131274 329593.142 6711272.683 12.0 28.5 16.5 5.88

131282 329473.247 6711267.901 7.5 20.0 12.5 7.40

126A289 329407.194 6710289.575 10.5 27.0 16.5 2.89

131A250 329951.828 6711312.007 13.5 22.5 9.0 5.60

131A258 329792.084 6712306.344 9.0 28.5 19.5 3.64

136B322 328831.933 6712293.066 6.0 30.0 24.0 2.48

BKA540W 329220.887 6713154.178 4.0 30.0 26.0 1.58

BKA600W 329167.532 6713137.039 4.0 30.0 26.0 3.22

BKA720W 329060.823 6713102.762 4.0 27.0 23.0 3.63

EN1013 329443.56 6713768.488 7.5 34.5 27.0 2.36

EN1014 329563.455 6713773.27 9.0 34.5 25.5 2.58

EN1075 329483.296 6711768.656 9.0 27.0 18.0 2.71

EN1112 329403.481 6712766.181 9.0 42.0 33.0 1.50

EN1930 329228.829 6713406.673 7.5 31.5 24.0 3.26

EN1931 329169.186 6713405.696 9.0 30.0 21.0 3.01

Western Zone

EN1946 327908.517 6713391.039 0 30 30.0 1.39

EN1947 327729.402 6713389.498 3 30 27.0 1.76

EN1957 328309.394 6714597.771 7.5 25.5 18.0 1.62

EN1966 327828.504 6713389.949 6 30 24.0 1.81

High Grade Strand

EN1021 330181.711 6710315.464 27.0 36.0 9.0 9.12

EN1024 329822.028 6710301.118 27 34.5 7.5 22.42

EN1023 329941.922 6710305.9 25.5 33 7.5 17.88

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Hole ID Easting Northing From To Interval HM (%) Comment

GE182 277720 6799870 0 25 25 1.8 Georgina Rd

GE183 277890 6799990 7 28 21 4.6 Georgina Rd

GE184 277340 6799560 10 24 14 3.6 Georgina Rd

GE331 279380 6797930 3 23 20 4.3 Georgina Rd East

GE332 279630 6798180 0 18 18 2.5 Georgina Rd East

GE333 279850 6798420 0 9 9 2.0 Georgina Rd East

GE170 281770 6804260 14 25 11 2.1 Arthur Rd

GE286 283140 6803150 48 60 12 5.1 Arthur Rd

GE284 283940 6802540 39 60 21 2.9 Arthur Rd

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E45/3640 Discard Sheffield Resources Ltd Iron PENDING 15.9

E47/2254 Millstream Sheffield Resources Ltd Iron PENDING 223.5

E47/2255 Millstream Sheffield Resources Ltd Iron PENDING 223.4

E47/2256 Millstream Sheffield Resources Ltd Iron PENDING 220.2

E47/2276 Mt Farquhar Sheffield Resources Ltd Iron PENDING 3.2

E47/2277 Nelson Sheffield Resources Ltd Iron PENDING 3.2

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E47/2280 Three P's Sheffield Resources Ltd Iron PENDING 31.6

E47/2291 Eagle Pool Sheffield Resources Ltd Iron PENDING 3.2

P47/1542 Mt Farquhar Sheffield Resources Ltd Iron PENDING 0.2

P47/1543 Mt Farquhar Sheffield Resources Ltd Iron PENDING 0.2

E45/3662 Panorama Sheffield Resources Ltd Iron PENDING 3.2

E47/2343 SM4 Sheffield Resources Ltd Iron PENDING 22.3

E47/2344 SM4 Sheffield Resources Ltd Iron PENDING 31.8

E47/2345 Twenty Mile Sheffield Resources Ltd Iron PENDING 9.5

E47/2346 Gorton Sheffield Resources Ltd Iron PENDING 22.2

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115

10. INVESTIGATING ACCOUNTANT’S REPORT

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HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 WA. Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of

International, a world-wide organisation of accounting firms and business advisers 116

2 November 2010

The Directors Sheffield Resources Limited

7 Daglish Street WEMBLEY WA 6014 Dear Sirs INVESTIGATING ACCOUNTANT’S REPORT INTRODUCTION This Investigating Accountant’s Report (“Report”) has been prepared for inclusion in a prospectus to be dated on or about 2 November 2010 (“Prospectus”) for the issue by Sheffield Resources Limited (“Sheffield” or the “Company”) of up to 35,000,000 ordinary shares at an issue price of 20 cents each, together with one free attaching option exercisable at 20 cents on or before 30 June 2013 for every two shares subscribed for and issued, to raise a total of up to $7,000,000 before the expenses of the issue. The minimum subscription under the offer is $5,000,000. This Report has been included in the Prospectus to assist potential investors and their financial advisers to make an assessment of the financial position and performance of Sheffield Resources Limited. STRUCTURE OF REPORT This Report has been divided into the following sections: 1. Background information; 2. Scope of Report; 3. Financial information; 4. Subsequent events; 5. Statements; and 6. Declaration. 1. BACKGROUND INFORMATION

Sheffield was registered on 6 June 2007 as Injula Coal Pty Ltd before changing its name to Sheffield Resources Pty Ltd on 21 April 2010. The Company converted to a public company on 7 October 2010. The current directors of Sheffield are Mr W J V Burbury, Mr B M McQuitty and Mr D L Archer. HLB Mann Judd was appointed as the Company’s auditors on 28 October 2010.

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Investigating Accountant’s Report

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1. BACKGROUND INFORMATION (CONT) As at the date of this Report, the issued share capital of the Company is 21,900,001 ordinary fully paid shares. The following table summaries share capital movements since registration.

Number issued Issue price $ Formation shares 1 1 1 Promoter shares issued 30/01/10 15,000,000 0.005 75,000 Seed capital issued 20/02/10 2,000,000 0.05 100,000 Seed capital issued 06/04/10 3,935,000 0.075 295,125 Seed capital issued 25/04/10 65,000 0.075 4,875 Share issue costs to 30 June 2010 - - (9,000)

Balance as at 30 June 2010 21,000,001 466,001 Seed capital issued 30/08/10 900,000 0.10 90,000

Balance as at 30 September 2010 21,900,001 556,001

The company has 10,950,000 options exercisable at 20 cents on or before 30 June 2013 on issue at the date of this report.

We understand that the funds raised by the issue of shares under the Prospectus will be applied as follows:

� exploration and appraisal of the granted Tenements;

� the assessment and, if appropriate, acquisition of additional projects that are considered by the Board to add value to the Company; and

� general working capital and expenses of the Offer.

2. SCOPE OF REPORT

You have requested HLB Mann Judd (“HLB”) to prepare this Report presenting the following information: a) the historical financial information of Sheffield, comprising the unaudited historical

Statement of Financial Position as at 30 September 2010 and the unaudited historical Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the period ended 30 September 2010 as set out in Appendix 1 to this Report; and

b) the proforma financial information for Sheffield, comprising the proforma Statement

of Financial Position as at 30 September 2010 and the proforma Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the period then ended. This information is presented under the following two scenarios:

� $5,000,000 capital raising (minimum subscription), and

� $7,000,000 capital raising (full subscription).

The Directors have prepared and are responsible for the historical and proforma information. We disclaim any responsibility for any reliance on this Report or on the financial information to which it relates for any purposes other than that for which it was prepared. This Report should be read in conjunction with the full Prospectus.

We performed a review of the historical financial information and the proforma financial information of Sheffield as at 30 September 2010 in order to ensure consistency in the

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Investigating Accountant’s Report

118

application of applicable Accounting Standards and other mandatory professional reporting requirements. Our review has been conducted in accordance with Australian Auditing Standards applicable to review engagements. Our review of the historical financial information and the proforma information of Sheffield was carried out in accordance with Australian Auditing Standard ASRE 2410 “Review of an Interim Financial Report performed by the Independent Auditor of the Entity” and included such enquiries and procedures which we considered necessary for the purposes of this Report. The review procedures undertaken by HLB in our role as Investigating Accountants were substantially less in scope than that of an audit examination conducted in accordance with generally accepted auditing standards. Our review was limited primarily to an examination of the historical financial information and the proforma information, analytical review procedures and discussions with senior management. A review of this nature provides less assurance than an audit and, accordingly, this Report does not express an audit opinion on the historical financial information and proforma information included in this Report or elsewhere in the Prospectus. In relation to the information presented in this Report:

a) support by another person, corporation or an unrelated entity has not been assumed;

b) the amounts shown in respect of assets do not purport to be the amounts that would have been realised if the assets were sold at the date of this Report; and

c) the going concern basis of accounting has been adopted.

3. FINANCIAL INFORMATION

Set out in Appendix 1 (attached) are:

a) The unaudited Statement of Financial Position of Sheffield as at 30 September 2010, and the unaudited Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the period then ended; and

b) The proforma Statement of Financial Position of Sheffield as at 30 September 2010 and proforma Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the period then ended as they would appear after incorporating the following significant events and proposed transactions by the Company subsequent to 30 September 2010:

i) the issue by the Company pursuant to this Prospectus of 35,000,000 ordinary

shares at an issue price of 20 cents each, raising $7,000,000;

ii) the payment of Directors fees for the period 1 July 2010 to 30 September 2010, which were contingent on the Company successfully completing an initial public offering of shares and listing on the Australian Securities Exchange;

iii) the issue of 3,000,000 options exercisable at 30 cents on or before 30 November

2013 to brokers as consideration for capital raising fees valued at $34,500; and

iv) the write off to the issued capital account of the cash costs of the Prospectus being an estimated $466,000 as detailed below:

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This information is presented under the following two scenarios:

� $5,000,000 capital raising (minimum subscription) – on this basis the total cash costs of the Prospectus reduce by $103,000 to $363,000 and no broker options will be issued.

� $7,000,000 capital raising (full subscription). c) Notes to the historical financial information and proforma information.

4. SUBSEQUENT EVENTS

In our opinion, there have been no material items, transactions or events subsequent to 30 September 2010 not otherwise disclosed in the Prospectus that have come to our attention during the course of our review that would require comment in, or adjustment to, the content of this Report or which would cause such information included in this Report to be misleading.

5. STATEMENTS

Based on our review, which was not an audit, we have not become aware of any matter that causes us to believe that:

a) the historical financial information of Sheffield Resources Limited as at 30 September 2010 as set out in Appendix 1 of this Report, does not present fairly the financial position of Sheffield as at that date in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory reporting requirements in Australia and its performance as represented by its results of its operations and its cash flows for the period then ended; and

b) the proforma information of Sheffield Resources Limited as at 30 September 2010 as set out in Appendix 1 of this Report, does not present fairly the financial position of Sheffield as at that date in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory reporting requirements in Australia and its performance as represented by its results of its operations and its cash flows for the period then ended, as if the transactions referred to in Section 3 (b) of this Report had occurred during that period.

Total ($)

ASIC Fees 2,068 ASX Listing Fee 44,801 Broker Commissions 350,000 Legal Fees 30,000 Independent Geologist’s Fees 10,000 Investigating Accountant’s Fees 8,000 Printing and Distribution 15,000 Miscellaneous 6,131 466,000

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6. DECLARATION

a) HLB will be paid its usual professional fees based on time involvement, for the preparation of this Report and review of the financial information, at our normal professional rates (expected to be $8,000).

b) Apart from the aforementioned fee, neither HLB, nor any of its associates will receive any other benefits, either directly or indirectly, for or in connection with the preparation of this Report.

c) Neither HLB, nor any of its employees or associated persons has any interest in Sheffield Resources Limited or the promotion of the Company.

d) Unless specifically referred to in this Report, or elsewhere in the Prospectus, HLB was not involved in the preparation of any other part of the Prospectus and did not cause the issue of any other part of the Prospectus. Accordingly, HLB makes no representations or warranties as to the completeness or accuracy of the information contained in any other part of the Prospectus.

e) HLB has consented to the inclusion of this Report in the Prospectus in the form and context in which it appears. The inclusion of this Report should not be taken as an endorsement of the Company or a recommendation by HLB of any participation in the Company by an intending subscriber.

Yours faithfully HLB MANN JUDD

N G NEILL

Partner

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Investigating Accountant’s Report

121

- APPENDIX 1 - SHEFFIELD RESOURCES LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2010

Reviewed Proforma

$5 million raising $7 million raising Notes $ $ $

CURRENT ASSETS

Cash and cash equivalents 2 95,262 4,601,262 6,498,262 Other receivables 12,820 12,820 12,820

TOTAL CURRENT ASSETS 108,082 4,614,082 6,511,082

NON CURRENT ASSETS

Deferred exploration and evaluation 8,095 8,095 8,095

TOTAL NON-CURRENT ASSETS 8,095 8,095 8,095

TOTAL ASSETS 116,177 4,622,177 6,519,177

CURRENT LIABILITIES Trade and other creditors - - -

TOTAL CURRENT LIABILITIES - - -

TOTAL LIABILITIES - - -

NET ASSETS 116,177 4,622,177 6,519,177

EQUITY Issued capital 3 556,001 5,193,501 7,055,501 Reserves 4 - - 34,500 Accumulated losses (439,824) (570,824) (570,824)

TOTAL EQUITY 116,177 4,622,177 6,519,177

This statement should be read in conjunction with the accompanying notes.

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SHEFFIELD RESOURCES LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 SEPTEMBER 2010

Reviewed

Proforma $5 million raising $7 million raising

$ $

Income from ordinary activities 705 705 705

Equity based payments

Audit and assurance fees (1,514) (1,514) (1,514)

Consultants (34,641) (165,641) (165,641)

Travel & accommodation (3,100) (3,100) (3,100)

Other expenses (4,922) (4,922) (4,922)

Loss before income tax (43,472) (174,472) (174,472)

Income tax expense - - -

Loss after income tax expense (43,472) (174,472) (174,472)

Other comprehensive income - - -

Total comprehensive loss for the period (43,472) (174,472) (174,472)

This statement should be read in conjunction with the accompanying notes.

SHEFFIELD RESOURCES LIMITED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 SEPTEMBER 2010

Reviewed

Proforma

$5 million raising $7 million raising

$ $ $

Cash Flows From Operating Activities

Interest received 705 705 705

Payments to suppliers and employees (49,412) (180,412) (180,412)

Net Cash Used In Operating Activities (48,707) (179,707) (179,707)

Cash Flows From Investing Activities

Tenement expenditure guarantees - - -

Exploration and evaluation expenditure (7,470) (7,470) (7,470)

Net Cash Used In Investing Activities (7,470) (7,470) (7,470)

Cash Flows From Financing Activities

Proceeds from issue of shares 90,000 5,090,000 7,090,000

Share issue costs paid - (363,000) (466,000)

Net Cash Provided By Financing Activities 90,000 4,727,000 6,624,000

Net increase in Cash Held 33,823 4,539,823 6,436,823

Cash at the beginning of the financial period 61,439 61,439 61,439

Cash At The End Of The Financial Period 95,262 4,601,262 6,498,262

This statement should be read in conjunction with the accompanying notes.

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SHEFFIELD RESOURCES LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 SEPTEMBER 2010

Issued Capital Other

Reserves Accumulated

Losses Total

$ $ $ $ Balance as at 30 June 2010 466,001 - (396,352) 69,649 Shares issued during the period 90,000 - - 90,000 Transaction costs on share issue - - - - Options issued during the year - - - - Loss for the period - - (43,472) (43,472) As at 30 September 2010 556,001 - (439,824) 116,177

$5 million raising Proforma adjustments: Issue of shares pursuant to Prospectus 5,000,000 - - 5,000,000 Share issue expenses- cash (363,000) - - (363,000) Directors Fee Payable - - (131,000) (131,000)

Proforma total 5,193,001 - (570,824) 4,622,177

$7 million raising Proforma adjustments: Issue of shares pursuant to Prospectus 2,000,000 - - 2,000,000 Issue of options to Corporate advisors - 34,500 - 34,500 Share issue expenses (103,000) - - (103,000) Share issue expenses- share based payment (34,500) - - (34,500) Directors Fee Payable - - - -

Proforma total 7,055,501 34,500 (570,824) 6,519,177

This statement should be read in conjunction with the accompanying notes

SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies which have been adopted in the preparation of the historical and proforma financial information reported under Australian Equivalents to International Financial Reporting Standards (“AIFRS”) are shown below. (a) Basis of preparation

The financial statements have been prepared in accordance with the measurement requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia using the accrual basis of accounting, including the historical cost convention. Compliance with IFRS The financial information complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that the financial information, comprising the financial statements and notes thereto, comply with measurement requirements but not all of the disclosure requirements of the International Financial Reporting Standards. Historical cost convention These financial statements have been prepared under the historical cost convention.

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SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) Impairment of non financial assets other than goodwill

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets of the Company and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(c) Exploration expenditure Exploration and evaluation expenditure incurred by or on behalf of the Company is accumulated separately for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but does not include general overheads or administrative expenditure not having a specific nexus with a particular area of interest.

Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining operation.

Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided that one of the following conditions is met:

• such costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or

• exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing.

Expenditure which fails to meet the conditions outlined above is written off, furthermore, the directors regularly review the carrying value of exploration and evaluation expenditure and make write downs if the values are not expected to be recoverable.

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SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(c) Exploration expenditure (continued)

Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by the requirements of AASB 6 Exploration for and evaluation of mineral resources. Exploration assets acquired are reassessed on a regular basis and these costs are carried forward provided that at least one of the conditions referred to in AASB 6 is met. Exploration and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset acquired, is accounted for in accordance with the policy outlined above for exploration expenditure incurred by or on behalf of the entity. Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not expected to be recovered. When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off. Expenditure is not carried forward in respect of any area of interest/mineral resource unless the Company’s rights of tenure to that area of interest are current.

(d) Trade and Other Receivables

Trade receivables, which generally have 30 – 90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Company will not be able to collect all amounts due according to the original contractual terms. Factors considered by the Company in making this determination include known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual payments to the Company. The impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are short-term discounting is not applied in determining the allowance. The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income.

(e) Cash and Cash Equivalents

Cash and short term deposits in the statement of financial position include cash on hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown as current liabilities in the statement of financial position. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as described above.

(f) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

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SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (f) Provisions (continued)

Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money, and where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(g) Critical accounting estimates and judgements

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Capitalised exploration and evaluation expenditure The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Company decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors which could impact the future recoverability include the level of measured, indicated and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made. In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the period in which this determination is made.

(h) Income Tax

Deferred income tax is provided for on all temporary differences at reporting date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes. No deferred income tax will be recognised from the initial recognition of goodwill or of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. No deferred income tax will be recognised in respect of temporary differences associated with investments in subsidiaries if the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the near future.

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SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (h) Income Tax (continued)

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on tax rates (and tax laws) that have been enacted or substantially enacted at reporting date and the anticipation that the Company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. The carrying amount of deferred tax assets is reviewed at each reporting date and only recognised to the extent that sufficient future assessable income is expected to be obtained. Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive income.

(i) Contributed Equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.

(j) Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue is capable of being reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Interest income Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

(k) Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the result attributable to equity holders of the Company, excluding any costs of servicing equity other than dividends, by the weighted average number of ordinary shares, adjusted for any bonus elements.

Diluted earnings per share Diluted earnings per share is calculated as net result attributable to members of the Company, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares, divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus elements.

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SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (l) Good and services tax

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the Australian Tax Office is included as part of receivables or payables in the statement of financial position. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which is receivable from or payable to the ATO, are disclosed as operating cash flows.

(m) Trade and other payables

Liabilities for trade creditors and other amounts are measured at amortised cost, which is the fair value of the consideration to be paid in the future for goods and services received that are unpaid, whether or not billed to the Company.

(n) Share based payment transactions

The Company provides benefits to individuals acting as, and providing services similar to employees (including Directors) of the Company in the form of share based payment transactions, whereby individuals render services in exchange for shares or rights over shares (‘equity settled transactions’). The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by using the Black Scholes formula taking into account the terms and conditions upon which the instruments were granted. In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Sheffield Resources Limited (‘market conditions’). The cost of the equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’). The cumulative expense recognised for equity settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the group, will ultimately vest. This opinion is formed based on the best available information at reporting date. No adjustment is made for the likelihood of the market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised at the beginning and end of the period. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. Where the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of the modification.

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SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (n) Share based payment transactions (continued)

Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expense not yet recognised for the award is recognised immediately. However if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods and services received unless this cannot be measured reliably, in which case the cost is measured by reference to the fair value of the equity instruments granted.

(o) Proforma transactions

The proforma Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows have been derived from the historical financial information as at 30 September 2010 adjusted to give effect to the following actual or proposed significant events and transactions by the Company subsequent to 30 September 2010: i) the issue by the Company pursuant to this Prospectus of 35,000,000 ordinary shares at an

issue price of 20 cents each, raising $7,000,000;

ii) the payment of Directors fees for the period 1 July 2010 to 30 September 2010, which were contingent on the Company successfully completing an initial public offering of shares and listing on the Australian Securities Exchange;

iii) the issue of 3,000,000 options exercisable at 30 cents on or before 30 November 2013 to

brokers as consideration for capital raising fees valued at $34,500;

iv) the write off to the issued capital account of the cash costs of the Prospectus being an estimated $466,000.

This information is presented under the following two scenarios:

� $5,000,000 capital raising (minimum subscription) – on this basis the total cash costs of the Prospectus reduce by $103,000 to $363,000.

� $7,000,000 capital raising (full subscription).

Reviewed Proforma

$5 million raising $7 million raising $ $ $

2. CASH AND CASH EQUIVALENTS Balance as at 30 September 2010 95,262 95,262 95,262 Shares issued pursuant to this

Prospectus - 5,000,000 7,000,000 Share issue costs - (363,000) (466,000)

Directors fees to 30 September 2010 - (131,000) (131,000)

95,262 4,601,262 6,498,262

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SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 3. ISSUED CAPITAL

Reviewed

Proforma $5 million raising $7 million raising

$ $ $ Issued and paid up share capital

Shares issued: 21,900,000 ordinary fully paid shares 556,001 556,001 556,001 Prospectus issue - 5,000,000 7,000,000 Share issue costs- cash - (363,000) (466,000)

Share issue costs- option based payment - - (34,500)

Balance at end of period 556,001 5,193,001 7,055,501

Number $

Movements in number of fully paid ordinary shares since 30 September 2010:

Shares on issue net of share issue costs at 30 September 2010 21,900,001 556,001

$5 million raising Proforma adjustments: Prospectus issue 25,000,000 5,000,000 Share issue costs- cash - (363,000)

Proforma total 46,900,001 5,193,001

$7 million raising Proforma adjustments: Prospectus issue 10,000,000 2,000,000 Share issue costs - (103,000) Share issue costs- option based payment - (34,500)

Proforma total 56,900,001 7,055,501

Number $

4. SHARE OPTIONS RESERVES Share options

Movements in number of options since 30 September 2010:

Options on issue at 30 September 2010 1 10,950,000 -

$5 million raising Proforma adjustments: Prospectus issue 1 12,500,000 -

Proforma total 23,450,000 -

$7 million raising Proforma adjustments: Prospectus issue 1 5,000,000 - Broker options issued 2 3,000,000 34,500

Proforma total 31,450,000 34,500

1 Exercisable at 20 cents on or before 30 June 2013 2 Exercisable at 30 cents on or before 30 November 2013

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SHEFFIELD RESOURCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2010 5. CONTINGENCIES AND COMMITMENTS

Details of planned expenditure commitments are outlined in Section 3.4 of the Prospectus. The Company has agreed a conditional offer with Iluka Resources Limited for the acquisition of additional tenements which remains subject to formal agreement. The Directors are not aware of any other contingencies. 6. RELATED PARTY TRANSACTIONS

Details of Directors’ interests in the Company’s issued capital and transactions with the Company are included in Section 12.3 and 12.4 of the Prospectus.

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11. INDEPENDENT SOLICITOR’S REPORT

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2 November 2010 The Board of Directors Sheffield Resources Limited 7 Daglish Street WEMBLEY WA 6014 Dear Sirs

INDEPDENT SOLICITOR’S REPORT

This Report is prepared for inclusion in a prospectus in connection with the listing on the ASX of Sheffield Resources Limited (ACN 125 811 083) (Company) on or about 2 November 2010 for the issue of up to 35,000,000 fully paid ordinary shares in the capital of the Company (Shares) at an issue price of $0.20 per Share, together with one option to acquire a Share for every two Shares subscribed for and issued, to raise up to $7,000,000 (Prospectus).

1. SCOPE

We have been requested to report on certain mining tenements in which the Company has an interest (the Tenements).

The Tenements are located in Western Australia. Details of the Tenements are set out in Part I following this Report.

2. SEARCHES AND DOCUMENTS

For the purposes of this Report, we have conducted searches and made enquiries in respect of all of the Tenements as follows:

(a) we have obtained searches of the Tenements from the registers maintained by the Western Australian Department of Mines and Petroleum (DMP). These searches were conducted on 27 October 2010. Key details on the status of the Tenements are set out in Part I following this Report;

(b) we have obtained extracts of registered and unregistered native title claims, native title determinations and Indigenous Land Use Agreement (ILUAs) that apply to the Tenements as determined by the National Native Title Tribunal

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(NNTT). This material was obtained on 28 October 2010. Details of native title claims, native title determinations and ILUAs are set out in Section 7 of this Report and Part III following this Report; and

(c) we have reviewed all agreements relating to the Tenements provided to us as at the date of the DMP searches referred to in Section 2(a) of this Report and have summarised the material terms (details of which are set out in Part II following this Report).

3. OPINION

As a result of our searches and enquiries, but subject to the assumptions and qualifications set out in this Report, we are of the view that, as at the date of the relevant searches:

(a) (Company’s Interest): this Report provides an accurate statement as to the Company’s interest in the Tenements based on our searches and information provided to us;

(b) (Good Standing): unless otherwise specified in this Report, the Tenements are validly granted and in good standing; and

(c) (Third party interests): this Report provides accurate statements as to third party interests, including encumbrances, in relation to the Tenements apparent from our searches and the information provided to us.

4. EXECUTIVE SUMMARY

Subject to the qualifications and assumptions in this Report, we consider the following to be material issues or issues of note in relation to the Tenements:

(a) (Company’s Interest): The Company is the sole registered holder of all the granted Tenements and the sole applicant of all Tenements that remain applications.

(b) (Indigenous Land Use Agreement): The Company has advised that has received, from a native title group, an ILUA in relation to exploration licence application ELA69/2752. An application for a tenement cannot be progressed until negotiations have taken place with the relevant native title groups. The Company advises there is no certainty that an agreement will be reached as the terms remain the subject of negotiation. As a result of the ILUA, this application may be granted with additional conditions imposed to regulate land use and there is also a risk that this application may not be granted at all. It is noted that no funds will be allocated towards this application until negotiations have been completed and therefore the outcome is not considered material.

(c) (Aboriginal Reserve): The Company has advised that exploration licence application ELA80/4496 lies wholly within an Aboriginal reserve. As such the application process is more stringent and this application may be granted with additional conditions imposed to regulate access arrangements by the Company and more onerous conditions to regulate activity on the tenement area. There is also a risk that this application may not be granted at all. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

(d) (Objection): Objections have been lodged against 8 tenement applications (in some cases multiple objections) as further detailed in Part I and Part IV

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following this Report. The objections relate to encroachment on other licences (miscellaneous licences or general leases), potential for disruption to pastoral activities and interference with a first in time application. An application for a tenement cannot be progressed until an objection has been resolved either by mutual agreement between the interested parties or by determination of the Warden Court. As such the applications which are subject to objections may be granted with additional conditions imposed to regulate access arrangements between the Company and the objecting party where appropriate and there is also a risk that these applications may not be granted at all. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

(e) (Ballot): A ballot will be conducted to determine priority between 4 tenement applications considered to be lodged in a ‘dead heat’ with competing applications over the same area of land as further detailed in Part I following this Report. Where the Company does not win these ballots it is unlikely these applications will be granted without the withdrawal of the application by a competing party with higher priority. It is noted that no funds will be allocated towards these applications until a result has been determined and therefore the outcome is not considered material.

5. DESCRIPTION OF THE TENEMENTS

The Tenements comprise 9 exploration licences granted under the Mining Act 1978 (WA) (Mining Act) and 41 exploration licence applications and 2 prospecting licence applications. Part I following this Report provides a list of the Tenements. The following provides a description of the nature and key terms of this type of mining tenement as well as mining leases as set out in the Mining Act.

5.1 Exploration Licence

Application: A person may lodge an application for an exploration licence. The Minister decides whether to grant an application for an exploration licence. An application for an exploration licence (unless a reversion application) cannot be legally transferred and continues in the name of the applicant.

Rights: The holder of an exploration licence is entitled to enter the land and undertake operations for the purposes of exploration for minerals.

Term: An exploration licence has a term of 5 years from the date of grant. The Minister may extend the term of an exploration licence granted after 10 February 2006, by a further period of 5 years followed by a further period or periods of 2 years. Where an exploration licence is transferred before a renewal application has been determined, the transferee is deemed to be the applicant.

Retention Status: The holder of an exploration licence granted after 10 February 2006 may apply for approval of retention status for the exploration licence. The Minister may approve the application where there is an identified mineral resource within the exploration licence but it is impractical to mine the resource for prescribed reasons. Where retention status is granted, the minimum expenditure requirements are reduced in the year of grant and cease in future years. However, the Minister has the right to impose a programme of works or require the holder to apply for a mining lease.

Conditions: Exploration licences are granted subject to various standard conditions, including conditions relating to minimum expenditure, the payment of prescribed rent and royalties and observance of environmental protection and reporting

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requirements. A failure to comply with these conditions may lead to forfeiture of the exploration licence.

Relinquishment: The holder of an exploration licence applied for and granted after 10 February 2006 must relinquish not less than 40% of the blocks comprising the licence at the end of the fifth year.

Priority to apply for Mining Lease: The holder of an exploration licence has priority to apply for a mining lease over any of the land subject to the exploration licence. Any application for a mining lease must be made prior to the expiry of the exploration licence. The exploration licence remains in force until the application for the mining lease is determined.

Conversion to Mining Lease: An application for conversion of an exploration licence to one or more mining leases must be accompanied by a notice of intent to commence productive mining operations or a “mineralisation report” prepared by a qualified person and a statement setting out information about proposed mining operations. A mining lease accompanied by a “mineralisation report” will only be approved where the Director Geological Survey considers that there is a reasonable prospect that the mineralisation identified will result in a mining operation. Upon grant, a mining lease remains in force for a period of 21 years and may be renewed for successive periods of 21 years.

Transfer: No legal or equitable interest in an exploration licence can be transferred or otherwise dealt with during the first year of its term without the prior written consent of the Minister. Thereafter, there is no restriction on transfer or other dealing.

5.2 Prospecting Licence

Application: A person may lodge an application for a prospecting licence in accordance with the Mining Act. The mining registrar or warden decides whether to grant an application for a prospecting licence. An application for a prospecting licence (unless a reversion application) cannot be legally transferred and continues in the name of the applicant.

Rights: The holder of a prospecting licence is entitled to enter the land and undertake operations for the purposes of prospecting for minerals.

Term: A prospecting licence has a term of 4 years. Where the prospecting licence was applied for and granted after 10 February 2006, the Minister may extend the term by 4 years and if retention status is granted (as discussed below), by further term or terms of 4 years. Where a prospecting licence is transferred before a renewal application has been determined, the transferee is deemed to be the applicant.

Retention Status: The holder of a prospecting licence applied for and granted after 10 February 2006 may apply for approval of retention status for the prospecting licence. The Minister may approve the application where there is an identified mineral resource within the prospecting licence, but it is impractical to mine the resource for prescribed reasons. Where retention status is granted, the minimum expenditure requirements are reduced in the year of grant and cease in future years. However, the Minister has the right to impose a programme of works or require the holder to apply for a mining lease.

Conditions: Prospecting licences are granted subject to various standard conditions including conditions relating to minimum expenditure, the payment of rent and observance of environmental protection and reporting requirements. These standard conditions are not detailed in Part I following this Report. A failure to comply with these conditions may lead to forfeiture of the prospecting licence.

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Priority to apply for a Mining Lease: The holder of a prospecting licence has priority to apply for a mining lease over any of the land subject to the prospecting licence. An application for a mining lease must be made prior to the expiry of the prospecting licence. The prospecting licence remains in force until the application for the mining lease is determined.

Transfer: There is no restriction on transfer or other dealing in a prospecting licence.

6. ABORIGINAL HERITAGE

There may be areas or objects of Aboriginal heritage located on the Tenements.

We have not undertaken searches to ascertain if any Aboriginal sites or objects have been registered in the vicinity of the Tenements as there is no obligation under the relevant legislation to register sites or objects. Further, the exact location of Aboriginal sites can not be ascertained from these searches.

The Company must ensure that it does not breach the Commonwealth and applicable State legislation relating to Aboriginal heritage as set out below. To ensure that it does not contravene such legislation, it would be prudent for the Company (and it would accord with industry practice and Aboriginal expectations) to conduct heritage surveys to determine if any Aboriginal sites or objects exist within the area of the Tenements. Any interference with these sites or objects must be in strict conformity with the provisions of the relevant legislation. It may also be necessary for the Company to enter into separate arrangements with the traditional owners of the sites.

It is noted that Aboriginal heritage agreements have been entered into in respect of several applications for Tenements (as noted in Part III following this Report) which set out the obligations of the tenement holders in protecting Aboriginal heritage in areas where exploration takes place in a manner that is transparent, timely, certain and cost effective. This is one of the processes commonly completed as a precursor to the grant of a tenement.

6.1 Commonwealth Legislation

The Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) (Commonwealth Heritage Act) is aimed at the preservation and protection of any Aboriginal areas and objects that may be located on the Tenements.

Under the Commonwealth Heritage Act, the Minister for Aboriginal Affairs may make interim or permanent declarations of preservation in relation to significant Aboriginal areas or objects, which have the potential to halt exploration activities. Compensation is payable by the Minister for Aboriginal Affairs to a person who is, or is likely to be, affected by a permanent declaration of preservation.

It is an offence to contravene a declaration made under the Commonwealth Heritage Act.

6.2 Western Australian Legislation

Tenements are granted subject to a condition requiring observance of the Aboriginal

Heritage Act 1972 (WA) (WA Heritage Act).

The WA Heritage Act makes it an offence to alter or damage sacred ritual or ceremonial Aboriginal sites and areas of significance to Aboriginal persons.

The Minister’s consent is required where any use of land is likely to result in the excavation or other alteration of or damage to an Aboriginal site or any objects on or under that site.

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Aboriginal sites may be registered under the WA Heritage Act. However, there is no requirement for a site to be registered and the WA Heritage Act protects all registered and unregistered sites.

7. NATIVE TITLE

7.1 Introduction

This section of the Report examines the effect of native title on the Tenements.

The existence of native title rights held by indigenous Australians was first recognised in Australia in 1992 by the High Court in the case Mabo v. Queensland (no.2) (1992) 175

CLR 1 (Mabo no.2).

Mabo no. 2 held that certain land tenure existing as at the date of that case, including mining tenements, where granted or renewed without due regard to native title rights, were invalid.

As a result of Mabo no. 2, the Native Title Act 1993 (Cth) (NTA) was passed to:

(a) provide a process for indigenous people to lodge claims for native title rights over land, for those claims to be registered by the NNTT and for the Courts to assess native title claims and determine if native title rights exist. Where a Court completes the assessment of a native title claim, it will issue a native title determination that specifies whether or not native title rights exist;

(b) provide that any land tenures granted or renewed before 1 January 1994 were valid despite Mabo no. 2. This retrospective validation of land tenure was subsequently extended by the NTA to include certain land tenure granted or renewed before 23 December 1996; and

(c) provide that an act that may affect native title rights (such as the grant or renewal of a mining tenement) carried out after 23 December 1996 (a Future Act) must comply with certain requirements for the Future Act to be valid under the NTA. These requirements are called the Future Act Provisions.

7.2 Future Act Provisions

The Future Act Provisions vary depending on the Future Act to be carried out. In the case of the grant of a mining tenement, typically there are three alternatives: the Right to Negotiate, an ILUA and the Expedited Procedure. These are summarised below.

Right to Negotiate

The Right to Negotiate involves a formal negotiation between the State, the applicant for the tenement and any registered native title claimants and holders of native title rights. The aim is to agree the terms on which the tenement can be granted. The applicant for the tenement is usually liable for any compensation that the parties agree to pay to the registered native title claimants and holders of native title. The parties may also agree on conditions that will apply to activities carried out on the tenement (e.g. in relation to heritage surveys).

If agreement is not reached to enable the tenement to be granted, the matter may be referred to arbitration before the NNTT, which has 6 months to decide whether the tenement can be granted, and if so on what conditions. The NNTT usually requires the parties to have had at least 6 months of negotiations before it will accept a referral for arbitration.

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ILUA

An ILUA is a contractual arrangement governed by the NTA. Under the NTA, an ILUA must be negotiated with all registered native title claimants for a relevant area. The State and the applicant for the tenement are usually the other parties to the ILUA.

The aim of the ILUA is to agree the terms on which a tenement can be granted. An ILUA will also specify conditions on which activities may be carried out within the tenement. The applicant for a tenement is usually liable for any compensation that the parties agree to pay to the registered native title claimants and holders of native title in return for the grant of the tenement being approved. These obligations pass to a transferee of the tenement.

Once an ILUA is agreed and registered, it binds the whole native title claimant group and all holders of native title in the area (including future claimants) even though they may not be parties to it.

Expedited Procedure

The NTA establishes a simplified process for the carrying out of a Future Act that is unlikely to adversely affect native title rights (Expedited Procedure). The grant of a tenement can occur under the Expedited Procedure if:

(a) the grant will not interfere directly with the carrying on of the community or social activities of the persons who are the holders of native title in relation to the land;

(b) the grant is not likely to interfere with areas or sites of particular significance, in accordance with their traditions, to the persons who are holders of native title in relation to the land; and

(c) the grant is not likely to involve major disturbance to any land or waters concerned or create rights whose exercise is likely to involve major disturbance to any land.

If the State considers the above criteria are satisfied, it commences the Expedited Procedure by giving notice of the proposed grant of the tenement in accordance with the NTA. Persons have until 3 months after the notification date to take steps to become a registered native title claimant or native title holder in relation to the land to be subject to the tenement.

If there is no objection lodged by a registered native title claimant or a native title holder within 4 months of the notification date, the State may grant the tenement.

If one or more registered native title claimants or native title holders object within that 4 month notice period, the NNTT must determine whether the grant is an act attracting the Expedited Procedure. If the NNTT determines that the Expedited Procedure applies, the State may grant the tenement. Otherwise, the Future Act Provisions (e.g. Right to Negotiate or ILUA) must be followed before the tenement can be granted.

The State of Western Australia currently follows a policy of granting mining leases, prospecting licences and exploration licenses under the Expedited Procedure where the applicant has entered into a standard aboriginal heritage agreement with the relevant registered native title claimants and native title holders. The standard heritage agreement (and ancillary agreements) usually provide for payment of compensation by the applicant for the tenement and conditions that apply to activities carried out within the tenement.

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Exception to requirement to comply with Future Act Provisions

The grant of a Tenement does not need to comply with the Future Act Provisions if in fact native title has never existed over the land covered by the Tenement, or has been validly extinguished prior to the grant of the Tenement. We have not undertaken the extensive research needed to determine if in fact native title does not exist, or has been validly extinguished in relation to the Tenements.

Unless it is clear that native title does not exist (e.g. in relation to freehold land), the usual practice of the State is to comply with the Future Act Provisions when granting a Tenement. This ensures the grant will be valid in the event a court determines that native title rights do exist over the land subject to the Tenement and as such, the Future Act Provisions apply.

Where a Tenement has been retrospectively validated or validly granted under the NTA, the rights under the Tenement prevail over any inconsistent native title rights.

Application to the Tenements

The following sections of the Report identify:

(a) any native title claims, native title determinations and ILUAs that are registered against the Tenements (see Section 7.3);

(b) any Tenements which have been retrospectively validated under the NTA as being granted before 23 December 1996 (see Section 7.4);

(c) any Tenements which have been granted after 23 December 1996 and as such will need to have been granted following compliance with the Future Act Provisions to be valid under the NTA. This Report assumes that the Future Act Provisions have been complied with in relation to these Tenements (see Section 7.4); and

(d) any Tenements which are yet to be granted and as such may need to be granted in compliance with the Future Act Provisions in order to be valid under the NTA (see Section 7.4).

7.3 Registered Native Title Claims and Determinations and ILUAs

Our searches indicate that the Tenements are subject to registered and unregistered native title claims, native title determinations and ILUAs.

Their status is summarised in Part III following this Report.

Native title claimants, holders of native title under the determinations and native title parties subject to ILUAs are entitled to certain rights under the Future Act Provisions.

7.4 Validity of Tenements under the NTA

The sections below examine the validity of the Tenements under the NTA.

Tenements granted before 23 December 1996

Our searches indicate that none of the Tenements were granted before 23 December 1996.

Tenements granted after 23 December 1996

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Our searches indicate that the following Tenements were granted after 23 December 1996.

Tenement Date of Grant

E70/3779 7 April 2010

E70/3778 30 April 2010

E70/3780 30 April 2010

E70/3884 23 August 2010

E70/3801 15 April 2010

E70/3802 15 April 2010

E70/3803 15 April 2010

E70/3930 18 October 2010

E80/4394 30 September 2010

We have assumed that these Tenements were granted in accordance with the Future Act Provisions and as such are valid under the NTA.

Tenements renewed after 23 December 1996

Renewals of mining tenements made after 23 December 1996 must comply with the Future Act Provisions in order to be valid under the NTA.

An exception is where the renewal is the first renewal of a mining tenement that was validly granted before 23 December 1996 and the following criteria are satisfied:

• the area to which the mining tenement applies is not extended;

• the term of the renewed mining tenement is not longer than the term of the old mining tenement; and

• the rights to be created are not greater than the rights conferred by the old mining tenement.

In such cases, the mining tenement can be renewed without complying with the Future Act Provisions. It is currently uncertain whether this exemption applies to a second or subsequent renewal of such a mining tenement.

Our searches indicate that none of the Tenements were renewed after 23 December 1996.

Renewals of Tenements in the future will need to comply with the Future Act Provisions in order to be valid under the NTA. The native title claimants, holders of native title under the determinations and native title parties subject to ILUAs as referred to in Section 7.3 of this Report will need to be involved as appropriate under the Future Act Provisions.

Valid grant of Applications for Tenements

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All Tenements set out in Part I following this Report other than the granted Tenements noted above are currently applications in which the Company is the sole applicant.

The grant of these applications will need to satisfy the Future Act Provisions in order to be valid under the NTA.

The native title claimants, holders of native title under the determinations and native title parties subject to ILUAs as referred to in Section 7.3 of this Report will be involved as appropriate in accordance with the Future Act Provisions.

We note that the grant of any tenements in the future in relation to the Tenements (e.g. the grant of a mining lease from an exploration licence) will also need to comply with the Future Act Provisions.

8. QUALIFICATIONS AND ASSUMPTIONS

This Report is subject to the following qualifications and assumptions:

(a) we have assumed the accuracy and completeness of all Tenement searches, register extracts and other information or responses which were obtained from the relevant department or authority including the NNTT;

(b) this Report does not cover any third party interests, including encumbrances, in relation to the Tenements that are not apparent from our searches and the information provided to us;

(c) we have assumed that any agreements provided to us in relation to the Tenements are authentic, were within the powers and capacity of those who executed them, were duly authorised, executed and delivered and are binding on the parties to them;

(d) with respect to the granting of the Tenements, we have assumed that the State and the applicant for the Tenements complied with, or will comply with, the applicable Future Act Provisions;

(e) we have assumed the accuracy and completeness of any instructions or information which we have received from the Company or any of its officers, agents and representatives;

(f) unless apparent from our searches or the information provided to us, we have assumed compliance with the requirements necessary to maintain a Tenement in good standing;

(g) with respect to the application for the grant of a Tenement, we express no opinion as to whether such application will ultimately be granted and that reasonable conditions will be imposed upon grant, although we have no reason to believe that any application will be refused or that unreasonable conditions will be imposed;

(h) references in Part I following this Report to any area of land are taken from details shown on searches obtained from the relevant department. It is not possible to verify the accuracy of those areas without conducting a survey; and

(i) the information in Part I following this Report is accurate as at the date the relevant searches were obtained. We cannot comment on whether any changes have occurred in respect of the Tenements between the date of the searches and the date of the Report.

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9. CONSENT

This Report is given solely for the benefit of the Company and the directors of the Company in connection with the issue of the Prospectus and is not to be relied on or disclosed to any other person or used for any other purpose or quoted or referred to in any public document or filed with any government body or other person without our prior consent.

Yours faithfully STEINEPREIS PAGANIN

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PART I

TENEMENT SCHEDULE

TENEMENT HOLDER / APPLICANT SHARES HELD

GRANT DATE (APPLICATION DATE)

EXPIRY DATE AREA SIZE ANNUAL RENT NEXT RENTAL YEAR

MINIMUM ANNUAL EXPENDITURE

ENCUMBRANCES/ DEALINGS

NOTES NATIVE TITLE

Moora Talc Belt Project – Talc

E70/3779 Sheffield Resources Limited 100 07/04/2010 06/04/2015 12 Blocks $1,453.32 $20,000 - 1-2, 4-7, 11-18, 25-26

WC97/72 WC04/2

E70/3778 Sheffield Resources Limited 100 30/04/2010 29/04/2015 31 Blocks $3,754,.41 $31,000 - 1-24 WC97/71 WC97/72 WC03/6 WC04/2

E70/3780 Sheffield Resources Limited 100 30/04/2010 29/04/2015 42 Blocks $5,086.62 $42,000 - 1-2, 4-8, 27-28 WC97/71 WC03/6

E70/3884 Sheffield Resources Limited 100 23/08/2010 22/08/2015 42 Blocks $5,086.62 $42,000 - 1-2, 4-8,

10-18, 25, 29

WC97/71 WC03/6

ELA70/3776 Sheffield Resources Limited 100 (07/01/2010) N/A 113 Blocks N/A No expenditure required yet

- - WC97/71 WC03/6

ELA70/3777 Sheffield Resources Limited 100 (07/01/2010) N/A 40 Blocks N/A No expenditure required yet

- - WC96/93 WC97/72 WC04/2

ELA70/3883 Sheffield Resources Limited 100 (19/04/2010) N/A 66 Blocks N/A No expenditure required yet

Objection 347241 - WC97/71 WC97/72 WC03/6 WC04/2

North Perth Basin Project – Mineral Sands

E70/3801 Sheffield Resources Limited 100 15/04/2010 14/04/2015 1 Block $291.72 $10,000 - 1-2, 4-8, 30 WC97/71 WC03/6

E70/3802 Sheffield Resources Limited 100 15/04/2010 14/04/2015 1 Block $291.72 $10,000 - 1-2, 4-8, 31 WC97/71 WC03/6

E70/3803 Sheffield Resources Limited 100 15/04/2010 14/04/2015 1 Block $291.72 $10,000 - 2, 4-8, 32 WC97/71 WC03/6

E70/3930 Sheffield Resources Limited 100 18/10/2010 17/10/2015 11 Blocks $1,332.21 $20,000 - 1-2, 4-8,

11-18, 33

WC96/93 WC97/72 WC04/2

ELA70/3761 Sheffield Resources Limited 100 (22/12/2009) N/A 143 Blocks N/A No expenditure required yet

- - WC97/72 WC04/2

ELA70/3813 Sheffield Resources Limited 100 (02/02/2010) N/A 15 Blocks N/A No expenditure required yet

- - WC97/72 WC04/2

ELA70/3814 Sheffield Resources Limited 100 (02/02/2010) N/A 56 Blocks N/A No expenditure - - WC04/2

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TENEMENT HOLDER / APPLICANT SHARES HELD

GRANT DATE (APPLICATION DATE)

EXPIRY DATE AREA SIZE ANNUAL RENT NEXT RENTAL YEAR

MINIMUM ANNUAL EXPENDITURE

ENCUMBRANCES/ DEALINGS

NOTES NATIVE TITLE

required yet

ELA70/3812 Sheffield Resources Limited 100 (02/02/2010) N/A 48 Blocks N/A No expenditure required yet

- - WC96/93 WC97/72 WC04/2

ELA70/3762 Sheffield Resources Limited 100 (22/12/2009) N/A 171 Blocks N/A No expenditure required yet

- - WC97/72 WC04/2

ELA70/3763 Sheffield Resources Limited 100 (30/12/2009) N/A 7 Blocks N/A No expenditure required yet

- - WC97/71 WC03/6 WC04/2

HA-1

ELA70/3764 Sheffield Resources Limited 100 (30/12/2009) N/A 15 Blocks N/A No expenditure required yet

- - WC97/71 WC03/6 WC04/2

HA-1

ELA70/3846 Sheffield Resources Limited 100 (23/02/2010) N/A 21 Blocks N/A No expenditure required yet

- - WC97/72 WC04/2

ELA70/3859 Sheffield Resources Limited 100 (16/03/2010) N/A 14 Blocks N/A No expenditure required yet

- - WC04/2

ELA70/3862 Sheffield Resources Limited 100 (19/03/2010) N/A 47 Blocks N/A No expenditure required yet

- - WC04/2

ELA70/3898 Sheffield Resources Limited 100 (19/05/2010) N/A 41 Blocks N/A No expenditure required yet

- - WC97/71 WC03/6 WC04/2

ELA70/3901 Sheffield Resources Limited 100 (24/05/2010) N/A 4 Blocks N/A No expenditure required yet

- - WC97/72 WC04/2

ELA70/3929 Sheffield Resources Limited 100 (01/07/2010) N/A 16 Blocks N/A No expenditure required yet

- A WC97/71 WC03/6

ELA70/3931 Sheffield Resources Limited 100 (01/07/2010) N/A 81 Blocks N/A No expenditure required yet

- - WC97/71 WC03/6

ELA70/3947 Sheffield Resources Limited 100 (23/07/2010) N/A 64 Blocks N/A No expenditure required yet

- - WC96/93 WC97/72 WC04/2

ELA70/3967 Sheffield Resources Limited 100 (24/08/2010) N/A 63 Blocks N/A No expenditure required yet

- - WC97/71 WC03/6

ELA70/3970 Sheffield Resources Limited 100 (01/09/2010) N/A 2 Blocks N/A No expenditure required yet

- - WC97/72 WC04/2

ELA70/3971 Sheffield Resources Limited 100 (01/09/2010) N/A 6 Blocks N/A No expenditure required yet

- - WC97/72 WC04/2

Woodleigh Project – Mineral Sands

ELA09/1739 Sheffield Resources Limited 100 (14/01/2010) N/A 191 Blocks N/A No expenditure required yet

- - WC98/17

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TENEMENT HOLDER / APPLICANT SHARES HELD

GRANT DATE (APPLICATION DATE)

EXPIRY DATE AREA SIZE ANNUAL RENT NEXT RENTAL YEAR

MINIMUM ANNUAL EXPENDITURE

ENCUMBRANCES/ DEALINGS

NOTES NATIVE TITLE

ELA09/1740 Sheffield Resources Limited 100 (14/01/2010) N/A 193 Blocks N/A No expenditure required yet

- - WC98/17

ELA09/1743 Sheffield Resources Limited 100 (14/01/2010) N/A 87 Blocks N/A No expenditure required yet

- - WC97/28 WC98/17

Tallering West Project – Mineral Sands

ELA70/3804 Sheffield Resources Limited 100 (28/01/2010) N/A 66 Blocks N/A No expenditure required yet

- - WC96/93 WC97/72 WC04/2 WC04/10

Wanna Project – Mineral Sands

ELA69/2752 Sheffield Resources Limited 100 (22/12/2009) N/A 70 Blocks N/A No expenditure required yet

- - WAD6043/98

Pilbara Iron Project – Iron

ELA45/3640 Sheffield Resources Limited 100 (15/03/2010) N/A 5 Blocks N/A No expenditure required yet

- - WC99/16 HA-6

ELA47/2254 Sheffield Resources Limited 100 (12/02/2010) N/A 70 Blocks N/A No expenditure required yet

Objection KR188/090

Objection KR196/090

Objection KR198/090

- WAD6017/96

ELA47/2255 Sheffield Resources Limited 100 (12/02/2010) N/A 70 Blocks N/A No expenditure required yet

Objection KR189/090

Objection KR190/090

Objection KR199/090

Objection KR206/090

- WAD6017/96

ELA47/2256 Sheffield Resources Limited 100 (12/02/2010) N/A 69 Blocks N/A No expenditure required yet

Objection KR191/090

Objection KR192/090

Objection KR200/090

- WAD6017/96

ELA47/2276 Sheffield Resources Limited 100 (16/03/2010) N/A 1 Block N/A No expenditure required yet

- - WC99/12 WC01/5

HA-2 HA-3

ELA47/2277 Sheffield Resources Limited 100 (16/03/2010) N/A 1 Block N/A No expenditure required yet

Objection KR219/090 - WAD6017/96

ELA47/2278 Sheffield Resources Limited 100 (16/03/2010) N/A 3 Blocks N/A No expenditure required yet

Objection KR220/090 - WAD6017/96

ELA47/2280 Sheffield Resources Limited 100 (19/03/2010) N/A 10 Blocks N/A No expenditure required yet

- - WC05/6 HA-5

ELA47/2291 Sheffield Resources Limited 100 (19/03/2010) N/A 1 Block N/A No expenditure required yet

- - WC05/6 HA-5

PLA47/1542 Sheffield Resources Limited 100 (16/03/2010) N/A 24 Hectares N/A No expenditure required yet

- - WC99/12 WC01/5

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TENEMENT HOLDER / APPLICANT SHARES HELD

GRANT DATE (APPLICATION DATE)

EXPIRY DATE AREA SIZE ANNUAL RENT NEXT RENTAL YEAR

MINIMUM ANNUAL EXPENDITURE

ENCUMBRANCES/ DEALINGS

NOTES NATIVE TITLE

HA-2 HA-3

PLA47/1543 Sheffield Resources Limited 100 (16/03/2010) N/A 24 Hectares N/A No expenditure required yet

- - WC99/12 WC01/5

HA-2 HA-3

ELA45/3662 Sheffield Resources Limited 100 (12/04/2010) N/A 1 Block N/A No expenditure required yet

- - WC99/8 HA-4

ELA47/2343 Sheffield Resources Limited 100 (30/04/2010) N/A 7 Blocks N/A No expenditure required yet

- Subject to ballot

WC99/12

ELA47/2344 Sheffield Resources Limited 100 (30/04/2010) N/A 10 Blocks N/A No expenditure required yet

- Subject to ballot

WC99/12

ELA47/2345 Sheffield Resources Limited 100 (30/04/2010) N/A 3 Blocks N/A No expenditure required yet

Objection KR236/090 Subject to ballot

WAD6208/98 WI2001/001 WI2007/001

ELA47/2346 Sheffield Resources Limited 100 (30/04/2010) N/A 7 Blocks N/A No expenditure required yet

Objection KR241/090

Objection KR242/090

Objection KR243/090

Subject to ballot

WAD6208/98 WI2001/001 WI2007/001

Ruthieres Project – Iron/bauxite

ELA80/4496 Sheffield Resources Limited 100 (06/10/2010) N/A 36 Blocks N/A No expenditure required yet

- - WC99/47

Bertha Butt Project – Tungsten

E80/4394 Sheffield Resources Limited 100 30/09/2010 29/09/2015 31 Blocks $3,754.41 $31,000 - 2, 4-7, 34-45 -

Key to Tenement Schedule

E – Exploration Licence ELA – Exploration Licence Application PLA – Prospecting Licence Application References to numbers in the “Notes” column refers to the notes following this table.

References to letters in the “Notes” column refers to the relevant contract as summarised in Part II.

Unless otherwise noted, all of the native title claims and native title determinations listed in the Tenement Schedule have been accepted and entered on the Register of Native Title Claims. Please refer to Part III for the status of the native title claims and native title determinations and details of ILUAs.

References to “HA-[*]” in the “Native Title” column refers to the heritage agreements the Company has entered with the native title groups identified in Part III.

References to Objections in the “Encumbrances/Dealings” column refers to the objections noted in Part IV.

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Unless otherwise indicated, capitalised terms have the same meaning given to them in the Prospectus.

Notes: 1. The Licensee's attention is drawn to the provisions of the Aboriginal Heritage Act 1972 and any Regulations thereunder.

2. The Licensee's attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection (Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.

3. The land the subject of this Licence affects a Rare Flora site/s (including Rare Flora Site/s 29925) declared under the Wildlife Conservation Act 1950. The Licensee is advised to contact the Department of Environment and Conservation for information on the management of Declared Rare Flora (or Priority Listed Flora) present within the tenement area.

4. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately after completion.

5. All disturbances to the surface of the land made as a result of exploration, including costeans, drill pads, grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Mines and Petroleum (DMP). Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DMP

6. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.

7. Unless the written approval of the Environmental Officer, DMP is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.

8. In areas of native vegetation within the tenement, no exploration activities commencing until the licensee provides a plan of management to prevent the spread of dieback disease (Phytophthera sp) to the Director, Environment, DMP for assessment and until his written approval has been received. All exploration activities shall then comply with the commitments made in the management plan.

9. No interference with Geodetic Survey Station PERENJORI 128 and 129 and MS and mining within 15 metres thereof being confined to below a depth of 15 metres from the natural surface.

10. No interference with the transmission lines or the installations in connection therewith, and the rights to ingress to and egress from the facility being at all times preserved to the owners thereof.

11. No mining within 30 metres of either side and to a depth of 15 metres of:

• (in respect of E70/3779 and E70/3884 only) the Rail Corridor Land 84 (Three Springs to Marchagee) as shown in TENGRAPH; or

• (in respect of E70/3930 only) the Rail Corridor Land 82 Dongara - Mingenew as shown in TENGRAPH,

(Safety Zone) without the prior written approval of the Minister responsible for the Mining Act 1978.

12. No surface excavation approaching closer to the boundary of the Safety Zone than a distance equal to three times the depth of the excavation without the prior written approval of the State Mining Engineer, DMP.

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13. Mining below 15 metres from the natural surface of the land in the Safety Zone being approved by the State Mining Engineer, DMP in consultation with the operator of the railway on corridor land.

14. No interference with the drainage pattern, and no parking, storage or movement of equipment or vehicles used in the course of mining within the Safety Zone without the prior approval of the operator of the railway on corridor land.

15. The Licensee not excavating, drilling, installing, erecting, depositing or permitting to be excavated, drilled, installed, erected or deposited within the Safety Zone, any pit, wll, pavement, foundation, building, or other structure or installation, or material of any nature whatsoever without the prior written consent of the State Mining Engineer, DMP.

16. No explosives being used or stored within one hundred and fifty (150) metres of the rail corridor land without the prior written consent of the Director, Dangerous Goods and Safety Branch, DMP.

17. The rights of ingress to and egress from the rail corridor land being at all times preserved to the employees, contractors and agents of the operator of the railway on corridor land, and the Public Transport Authority of WA.

18. Such further conditions as may from time to time be imposed by the Minister responsible for the Mining Act 1978 for the purposes of protecting the rail corridor land.

In respect to the area of land designated EPA 5.24 in TENGRAPH, hereinafter referred to as the designated area, the following conditions (19-23) shall apply:

19. Prior to accessing the licence area, the licensee shall consult with the Environmental Office, DMP, ad ensure that where required all vehicles and equipment entering the designated area are washed down to remove soil and plant propagules and adhering to such conditions specified for the prevention of the spread of soil-borne diseases.

20. Prior to any activity involving disturbance to vegetation and soils including:-

• exploration access; and/or

• exploration sampling;

the licensee preparing a detailed program for each phase of proposed exploration for written approval of the Director, Environment, DMP. The Director, Environment, DMP to consult with the Regional/District Manager, Department of Environment and Conservation or other government agency (as relevant) prior to approval. This program to describe the environmental impacts and programs for their management and is to include:-

• maps and/or aerial photographs showing the proposed locations of all ground activities and disturbances;

• the purpose, specifications and extent of each activity and disturbance;

• descriptions of all vegetation types (in general terms), land forms, and unusual features likely to be distributed by such proposed disturbances;

• details on proposals that may disturb sensitive terrestrial habitats including any declared rare flora and fauna if applicable;

• procedures to protect the integrity of special ecosystems such as wetland systems, mangal communities and rainforests areas (and/or associated rainforest monitoring sites) if applicable;

• techniques, prescriptions, and timetable for rehabilitation of all proposed disturbances;

• undertaking for corrective measures for failed rehabilitation;

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• details of water requirements from within the designated area;

• details of refuse disposal;

• proposals for instruction and supervision of personnel and contractors in respect to environmental conditions.

21. Access to and from and the movement of vehicles within the licence area being restricted ground or seasonable conditions and routes approved under the program or otherwise agreed by the Environmental Officer, DMP

22. At agreed intervals, not greater than 12 monthly, the licensee providing a brief report to the Director, Environment, DMP outlining the progress of the operation and rehabilitation program and the proposed operations and rehabilitation programs for the next 12 months.

23. Prior to cessation of the exploration/prospecting activity in the designated area, the licensee notifying the Environmental Officer, DMP and arranging an inspection as required.

24. Description of Land NOT included in the grant of the Licence:

• any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land;

• any vacant Crown Land;

• Gravel Reserve 28890, Trigonometrical Station Reserve 11888 and the Coorow Townsite.

25. The land the subject of this Licence may affect a Threatened Ecological Community. The Licensee is advised to contact the Department of Environment and Conservation’s Threatened Species and Communities Unit for detailed information on management.

26. Description of Land NOT included in the grant of the Licence:

• any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land;

27. The land the subject of this Licence affects a Heritage Place No. 1593 registered pursuant to the Heritage of WA Act 1990.

28. Description of Land NOT included in the grant of the Licence:

• any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land;

• any vacant Crown Land;

• Conservation of Flora and Fauna Reserve 828 and Sports Ground Reserve 13354.

29. Description of Land NOT included in the grant of the Licence:

• any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land;

• Mining Leases 70/608 and 70/1139;

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• Conservation of Flora & Fauna Reserve 25210 and Gravel Reserve 28890;

• all vacant Crown Land.

30. Description of Land NOT included in the grant of the Licence:

• any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land;

• Mining Lease 70/436.

31. Description of Land NOT included in the grant of the Licence:

• any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land;

• Mining Leases 70/434 and 70/435.

32. Description of Land NOT included in the grant of the Licence:

• any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land;

• Mining Lease 70/435.

33. Description of Land NOT included in the grant of the Licence: The grant of this Licence does not include any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land.

34. The Licensee's attention is drawn to the provisions of the:

• Aboriginal Heritage Act 1972 and any Regulations thereunder;

• Water and Rivers Commission Act 1995 and any Regulations thereunder; and

• Rights in Water and Irrigation Act 1914 and any Regulations thereunder.

35. The licensee notifying the holder of any underlying pastoral or grazing lease by telephone or in person, or by registered post if contact cannot be made, prior to undertaking airborne geophysical surveys or any ground disturbing activities utilising equipment such as scrapers, graders, bulldozers, backhoes, drilling rights; water carting equipment or other mechanised equipment.

36. The licensee or transferee, as the case may be, shall within thity (30) days of receiving written notification of:

• the grant of the licence; or

• registration of a transfer introducing a new licensee;

advise, by registered post, the holder of any underlying pastoral or grazing lease details of the grant or transfer.

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37. The prior written consent of the Minister responsible for the Mining Act 1978 being obtained before commencing any exploration activities on Regeneration of Eroded Areas in Order River Dam Reserve 28538.

38. Written notification, where practicable, of the time frame, type and extent of proposed ground disturbing activities being forwarded to the Department of Water Kununurra seven days prior to commencement of those activities.

39. Any significant waterway (flowing or not), wetland or its fringing vegetation that may exist on site not being disturbed or removed without prior written approval from the Department of Water.

40. The rights of ingress to and egress from the licence being at all reasonable times preserved to officers of the Department of Water for inspection and investigation purposes.

41. The storage and disposal of hydrocarbons, chemicals and potentially hazardous substances being in accordance with the Department of Water’s Guidelines and Water Quality Protection Notes.

42. Activities requiring the abstraction of water from any waterway, wetland or drain is prohibited unless the Department of Water has granted an abstraction licence.

43. Activities that may disrupt the natural flow of any watercourse are prohibited unless a licence has been obtained from the Department of Water.

44. Activities on any existing or designated future irrigation area, or on any strip of land within 50 metres of an irrigation channel, drain wetland or watercourse being confined to surface geological, geophysical and or geochemical surveys and drilling unless the written approval of the Department of Water is first obtained.

45. Excavation activities are prohibited on any existing or designated future irrigation districts, or on any area of land within 50 metres of the banks of an irrigation channel, drain, wetland or watercourse, unless undertaken with the written permission from the Director, Environment, DMP and the Department of Water.

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PART I I

CONTRACT SUMMARIES

(A) Option Agreement

The Company has entered an agreement with Zetek Resources Pty Ltd and Mr Brenton Parry (Applicant) for an option to require the applicant to withdraw their application in favour of the Company’s application over the same area of land in order for the Company to become the primary first in time applicant or otherwise acquire the land the subject of the Applicant’s application (Option).

The aggregate consideration payable by the Company to the Applicant is as follows:

- $10,000 on execution;

- $30,000 as reimbursement of previous costs subject to receiving an invoice from the Applicant in relation to these costs; and

- 500,000 fully paid ordinary shares in the capital of the Company.

The Option expires on 16 January 2011.

The Company advises there is no certainty that the Option will be exercised and will not make a decision as to whether to exercise the Option prior to the Company being admitted to the official list of the Australian Securities Exchange. Further, the Company does not consider the application to which this agreement relates to be material to its operations.

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PART I I I

NATIVE TITLE CLAIMS

TRIBUNAL NUMBER

FEDERAL COURT NUMBER

APPLICATION NAME

REGISTERED IN MEDIATION STATUS

WC96/93 WAD6119/98 Mullewa Wadjari Community

Yes Yes Active

WC97/28 WAD6161/98 Gnulli Yes Yes Active

WC97/71 WAD6192/98 Yued Yes Yes Active

WC97/72 WAD6193/98 Widi Mob No Yes Active

WC98/17 WAD6236/98 The Malgana Shark Bay People’s

Association

Yes Yes Active

WC99/8 WAD6028/98 Njamal Yes N/A Active

WC99/12 WAD6090/98 Kuruma Marthudunera

Yes N/A Active

WC99/16 WAD6287/98 Palyku Yes Yes Active

WC99/47 WAD6027/98 Balanggarra (Combination)

Yes N/A Active

WC01/5 WAD6007/01 Puutu Kunti Kurrama and

Pinikura

Yes Yes Active

WC03/6 WAD6006/03 Single Noongar Claim (Area 1)

No Yes Active

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TRIBUNAL NUMBER

FEDERAL COURT NUMBER

APPLICATION NAME

REGISTERED IN MEDIATION STATUS

WC04/2 WAD6002/04 Amangu People Yes Yes Active

WC04/10 WAD6033/98 Wajarri Yamatji Yes N/A Active

WC05/6 WAD6280/98 Nyiyaparli Yes Yes Active

WC10/11 WAD216/10 Yinhawangka Yes No Active

NATIVE TITLE DETERMINATIONS

FEDERAL COURT NUMBER NATIVE TITLE PARTY DETERMINATION DATE

WAD6017/96 Ngaluma/YIndjibarndi 2 May 2005

WAD6043/98 Spinfiex People 28 November 2000

WAD6208/98 Eastern Guruma People 1 March 2007

INDIGENOUS LAND USE AGREEMENTS (ILUAs)

NATIONAL NATIVE TITLE TRIBUNAL NUMBER

NAME OF ILUA

WI2001/001 Hamersley Iron Pty Ltd – Eastern Guruma

WI2007/001 Pilbara Iron – Eastern Guruma Body Corporate ILUA

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HERITAGE AGREEMENTS

REFERENCE NATIVE TITLE GROUP

HA-1 Yued

HA-2 Puutu Kunti Kurrama and Pinikura

HA-3 Kuruma & Marthudunera

HA-4 Njamal

HA-5 Nyiyaparli (Karlka Nyiyaparli Aboriginal Corporation)

HA-6 Palyku

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PART IV

ENCUMBRANCES/DEALINGS

REFERENCE PARTY DATE

Objection KR188/090 Robe River Mining Co. Pty Ltd 24 February 2010

Objection KR196/090 Hamersley Iron Pty Ltd 11 March 2010

Objection KR198/090 Digirock Pty Ltd 16 March 2010

Objection KR189/090 Robe River Mining Co. Pty Ltd 24 February 2010

Objection KR190/090 Hamersley Iron Pty Ltd 24 February 2010

Objection KR199/090 Digirock Pty Ltd 16 March 2010

Objection KR206/090 PARSONS, Kimberley Roy 18 March 2010

Objection KR191/090 Hamersley Iron Pty Ltd 24 February 2010

Objection KR192/090 Robe River Mining Co. Pty Ltd 24 February 2010

Objection KR200/090 Digirock Pty Ltd 16 March 2010

Objection KR219/090 Coolawanyah Pastoral Co Pty Ltd 20 April 2010

Objection KR220/090 Coolawanyah Pastoral Co Pty Ltd 20 April 2010

Objection KR236/090 Robe River Mining Co. Pty Ltd 12 May 2010

Objection KR241/090 Hamersley Iron Pty Ltd

Hamersley Resources Ltd

20 May 2010

Objection KR242/090 Hamersley Iron Pty Ltd 20 May 2010

Objection KR243/090 Robe River Mining Co. Pty Ltd 20 May 2010

Objection 347241 Luzenac Australia Pty Ltd 21 May 2010

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12. ADDITIONAL INFORMATION

12.1 Rights attaching to Shares

The following is a summary of the more significant rights attaching to Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

(a) General Meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution.

(b) Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:

(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited).

(c) Dividend Rights

The Directors may from time to time declare a dividend to be paid to the Shareholders entitled to the dividend. Subject to the rights of any preference Shareholders and to the rights of the holders of any shares credited or raised under any special arrangement as to dividend, the dividend as declared shall be payable on all Shares according to the proportion that the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) in respect of such Shares in accordance with Part 2H.5 of Chapter 2H of the Corporations Act.

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The Directors may from time to time pay to the Shareholders any interim dividends as they may determine. No dividends shall be payable except out of profits. A determination by the Directors as to the profits of the Company shall be conclusive. No dividend shall carry interest as against the Company. The Directors may set aside out of the profits of the Company any amounts that they may determine as reserves, to be applied at the discretion of the Directors, for any purpose for which the profits of the Company may be properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company may, by resolution of the Directors, implement a dividend reinvestment plan on such terms and conditions as the Directors think fit and which provides for any dividend which the Directors may declare from time to time payable on Shares which are participating Shares in the dividend reinvestment plan, less any amount which the Company shall either pursuant to the Constitution or any law be entitled or obliged to retain, be applied by the Company to the payment of the subscription price of Shares.

(d) Winding-Up

If the Company is wound up, the liquidator may, with the authority of a special resolution of the Company, divide among the shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

The liquidator may, with the authority of a special resolution of the Company, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no Shareholder is compelled to accept any Shares or other securities in respect of which there is any liability.

(e) Transfer of Shares

Generally, Shares are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act or the ASX Listing Rules.

(f) Future Increase in Capital

The allotment and issue of any new shares in the Company is under the control of the Directors. Subject to restrictions on the issue or grant of securities contained in the ASX Listing Rules, the Constitution and the Corporations Act (and without affecting any special right previously conferred on the holder of an existing share or class of shares), the Directors may issue shares as they shall, in their absolute discretion, determine.

(g) Variation of Rights

Pursuant to Section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to Shares.

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If at any time the share capital is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up may be varied or abrogated with the consent in writing of the holders of three-quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

12.2 Options

As at the date of this Prospectus, the Company has 10,950,000 Options on issue. Each Option is exercisable at $0.20 on or before 30 June 2013 and otherwise on the terms and conditions set out below.

A further 3,000,000 Broker Options are to be issued pursuant to the Broker Mandates. Each Broker Option is exercisable at $0.30 on or before 30 November 2013

The Options to be issued pursuant to the Offer as free attaching to the Shares on the basis of one Option for every two Shares subscribed for and issued will have the following terms and conditions:

(a) Subject to 12.2(k), each Option gives the Optionholder the right to subscribe for one Share.

(b) The Options will expire at 5.00pm (WST) on 30 June 2013 (Expiry Date). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(c) The amount payable upon exercise of each Option will be $0.20 (Exercise Price).

(d) The Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.

(e) An Optionholder may exercise their Options by lodging with the Company, before the Expiry Date:

(i) a written notice of exercise of Options specifying the number of Options being exercised; and

(ii) a cheque or electronic funds transfer for the Exercise Price for the number of Options being exercised;

(Exercise Notice).

(f) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.

(g) Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Options specified in the Exercise Notice.

(h) The Options are transferable subject to prior Board approval.

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(i) All Shares allotted upon the exercise of Options will upon allotment rank pari passu in all respects with other Shares.

(j) The Company will not apply for quotation of the Options on ASX. However, the Company will apply for quotation of all Shares allotted pursuant to the exercise of Options on ASX within 10 Business Days after the date of allotment of those Shares.

(k) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(l) There are no participating rights or entitlements inherent in the Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

(m) An Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Option can be exercised.

12.3 Material Contracts & Other Agreements

(a) Option Agreement – McCalls Project

Although not considered by the Company to be material to its operations the Company has entered into the Option Agreement. Refer to the summary set out in Part II of the Independent Solicitor’s Report set out in Section 11 of this Prospectus.

(b) Mandate Agreement – Triple C Consulting Pty Ltd

The Company has entered into a mandate agreement with Triple C Consulting Pty Ltd (Triple C) to act as broker to the Offer.

Triple C has given a firm commitment for $4,000,000 in respect of the Offer.

Pursuant to the mandate, the Company has agreed to pay Triple C a cash fee of 5% (excluding GST) of the amounts committed, representing $200,000.

The firm commitment from Triple C is subject to termination where:

(i) a material breach or misrepresentation by the Company remains unremedied 14 days after notice;

(ii) an event of insolvency occurs with respect to the Company; or

(iii) for two consecutive days after the date of the mandate the ASX S&P Small Resources Index is 10% or more below the ASX S&P Small Resources Index immediately before the signing of the mandate (i.e. 10% below 6331.8), with the effect that in the

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reasonable opinion of Triple C it is impracticable to market the Offer or to enforce contracts to issue and allot the Securities the subject of the Offer or that the success of the Offer is likely to be adversely affected.

In addition, the Company has agreed to issue a maximum of 1,714,286 Broker Options to Triple C. Each Broker Option is exercisable at $0.30 on or before 30 November 2013.

(c) Mandate Agreement – Oracle Securities

The Company has entered into a mandate agreement with Oracle Securities (Oracle) to act as broker to the Offer.

Oracle has given a firm commitment for $3,000,000 in respect of the Offer.

Pursuant to the mandate, the Company has agreed to pay Oracle a cash fee of 5% (excluding GST) of the amounts committed, representing $150,000.

The firm commitment from Oracle is subject to termination on 14 days notice but only with cause.

In addition, the Company has agreed to issue a maximum of 1,285,714 Broker Options to Oracle. Each Broker Option is exercisable at $0.30 on or before 30 November 2013.

(d) Executive Services Agreement – Bruce McQuitty

The Company entered into a services agreement with Bruce McQuitty (McQuitty Services Agreement) effective 1 July 2010. Under the McQuitty Services Agreement, Mr McQuitty is employed by the Company to provide services to the Company in the capacity of Managing Director.

Mr McQuitty is paid an annual remuneration of $200,000 plus statutory superannuation. Mr McQuitty will also be reimbursed for reasonable expenses incurred in carrying out his duties. All remuneration will be accrued until such time as the Company has obtained ASX listing.

The McQuitty Services Agreement will continue until terminated in accordance with its terms. The McQuitty Services Agreement contains standard termination provisions under which either party must give three months notice of termination (or shorter period in the event of a material breach), or alternatively, payment in lieu of service. In addition, Mr McQuitty is entitled to all unpaid remuneration and entitlements up to the date of termination.

(e) Executive Services Agreement – Will Burbury

The Company entered into a services agreement with Will Burbury (Burbury Services Agreement) effective 1 July 2010. Under the Burbury Services Agreement, Mr Burbury is employed by the Company to provide services to the Company in the capacity of Executive Chairman.

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Mr Burbury is paid an annual remuneration of $100,000 plus statutory superannuation. Mr Burbury will also be reimbursed for reasonable expenses incurred in carrying out his duties. All remuneration will be accrued until such time as the Company has obtained ASX listing.

The Burbury Services Agreement will continue until terminated in accordance with its terms. The Burbury Services Agreement contains standard termination provisions under which either party must give three months notice of termination (or shorter period in the event of a material breach), or alternatively, payment in lieu of service. In addition, Mr Burbury is entitled to all unpaid remuneration and entitlements up to the date of termination.

(f) Executive Services Agreement – David Archer

The Company entered into a services agreement with David Archer (Archer Services Agreement) effective 1 July 2010. Under the Archer Services Agreement, Mr Archer is employed by the Company to provide services to the Company in the capacity of Technical Director.

Mr Archer is paid an annual remuneration of $180,000 plus statutory superannuation. Mr Archer will also be reimbursed for reasonable expenses incurred in carrying out his duties. All remuneration will be accrued until such time as the Company has obtained ASX listing.

The Archer Services Agreement will continue until terminated in accordance with its terms. The Archer Services Agreement contains standard termination provisions under which either party must give three months notice of termination (or shorter period in the event of a material breach), or alternatively, payment in lieu of service. In addition, Mr Archer is entitled to all unpaid remuneration and entitlements up to the date of termination.

(g) Deeds of Indemnity, Insurance and Access

The Company will enter into a deed of indemnity, insurance and access with each of its Directors.

Under these deeds, the Company agrees to indemnify each officer to the extent permitted by the Corporations Act against any liability arising as a result of the officer acting as an officer of the Company. The Company is also required to maintain insurance policies for the benefit of the relevant officer and must also allow the officers to inspect board papers in certain circumstances.

12.4 Interests of Directors

Other than as set out below or elsewhere in this Prospectus, no Director or proposed Director holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;

(b) any property acquired or proposed to be acquired by the Company in connection with:

(i) its formation or promotion; or

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(ii) the Offer; or

(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to a Director or proposed Director:

(a) as an inducement to become, or to qualify as, a Director; or

(b) for services provided in connection with:

(i) the formation or promotion of the Company; or

(ii) the Offer.

Remuneration

The Constitution provides that the remuneration of Directors will be not more than the aggregate fixed sum initially set by the Constitution and subsequently varied by ordinary resolution of Shareholders in general meeting. The current aggregate fixed sum permitted as remuneration of Directors has been set at an amount not to exceed $250,000 per annum.

In addition, a Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director.

Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

The Company paid no remuneration to its Board for the period from 6 June 2007 (the date of registration) until 30 June 2010. The proposed remuneration (exclusive of superannuation which will be paid at the applicable statutory rate) of each of the Directors for the financial year ending 30 June 2011 is set out in the table below.

Director Remuneration

Current Financial Year1

Bruce McQuitty $200,000

Will Burbury $100,000

David Archer $180,000

1 No remuneration has been paid to date for the current financial year. This remuneration will accrue until ASX grants the Company conditional approval to be admitted to the Official List.

Security holdings

Directors are not required under the Constitution to hold any Shares, however, Directors’ relevant interests in securities of the Company at the date of this Prospectus are set out in the table below.

Director Shares Options1

Bruce McQuitty 5,000,000 2,500,000

Will Burbury 5,000,001 2,500,000

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David Archer 5,000,000 2,500,000

1 All Options are exercisable at 20 cents each on or before 30 June 2013.

12.5 Interests of Experts and Advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;

(b) promoter of the Company; or

(c) underwriter (but not a sub-underwriter) to the issue or a financial services licensee named in this Prospectus as a financial services licensee involved in the issue,

holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;

(b) any property acquired or proposed to be acquired by the Company in connection with:

(i) its formation or promotion; or

(ii) the Offer; or

(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of these persons for services provided in connection with:

(a) the formation or promotion of the Company; or

(b) the Offer.

Malcolm Castle has acted as Independent Geologist and has prepared the Independent Geologist’s Report which is included in Section 9 of this Prospectus. The Company estimates it will pay Malcolm Castle a total of $10,000 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, Malcolm Castle has not received any fees from the Company.

HLB Mann Judd has acted as Investigating Accountant and has prepared the Investigating Accountant’s Report which is included in Section 10 of this Prospectus. The Company estimates it will pay HLB Mann Judd a total of $8,000 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, HLB Mann Judd has not received any fees from the Company.

Steinepreis Paganin has acted as the solicitors to the Company in relation to the Offer and has prepared the Independent Solicitor’s Report which is included in Section 11 of this Prospectus. The Company estimates it will pay Steinepreis Paganin $30,000 (excluding GST) for these services. Subsequently, fees will be

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charged in accordance with normal charge out rates. During the 24 months preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has received fees from the Company in the amount of $11,829.50 (excluding GST and disbursements).

Triple C Consulting Pty Ltd will act as broker to the Offer. The Company estimates it will pay Triple C Consulting Pty Ltd $200,000 (excluding GST) for these services (assuming full subscription). In addition a total of 1,714,286 Broker Options will be issued by the Company to Triple C Consulting Pty Ltd (assuming full subscription). During the 24 months preceding lodgement of this Prospectus with the ASIC, Triple C Consulting Pty Ltd has not received any fees from the Company.

Oracle Securities will act as broker to the Offer. The Company estimates it will pay Oracle Securities $150,000 (excluding GST) for these services. In addition a total of 1,285,714 Broker Options will be issued by the Company to Oracle Securities (assuming full subscription). During the 24 months preceding lodgement of this Prospectus with the ASIC, Oracle Securities has not received any fees from the Company.

12.6 Consents

Each of the parties referred to in this Section:

(a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this Section; and

(b) to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section.

Malcolm Castle has given his written consent to being named as Independent Geologist in this Prospectus and to the inclusion of the Independent Geologist’s Report in Section 9 of this Prospectus in the form and context in which the report is included. Malcolm Castle has not withdrawn his consent prior to lodgement of this Prospectus with the ASIC.

HLB Mann Judd has given its written consent to being named as auditor to the Company and Investigating Accountant in this Prospectus and to the inclusion of the Investigating Accountant’s Report in Section 10 of this Prospectus in the form and context in which the information and report is included. HLB Mann Judd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

Steinepreis Paganin has given its written consent to being named as the solicitors to the Company in this Prospectus and to the inclusion of the Independent Solicitor’s Report in Section 11 of this Prospectus in the form and context in which the report is included. Steinepreis Paganin has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Triple C Consulting Pty Ltd has given its written consent to being named as a broker to the Offer in this Prospectus. Triple C Consulting Pty Ltd has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Oracle Securities has given its written consent to being named as a broker to the Offer in this Prospectus. Oracle Securities has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

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Link Market Services Limited has given its written consent to being named as the share registry to the Company in this Prospectus. Link Market Services Limited has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

12.7 Expenses of the Offer

The total expenses of the Offer (excluding GST) are estimated to be approximately $363,000 for minimum subscription or $466,000 for full subscription and are expected to be applied towards the items set out in the table below:

Item of Expenditure Minimum Subscription

($)

Full Subscription

($) ASIC fees 2,068 2,068 ASX fees 42,044 44,801 Broker Commissions 250,000 350,000 Legal Fees 30,000 30,000 Independent Geologist’s Fees 10,000 10,000 Investigating Accountant’s Fees 8,000 8,000 Printing and Distribution 15,000 15,000 Miscellaneous 5,888 6,131

TOTAL 363,000 466,000

12.8 Litigation

As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.

12.9 Electronic Prospectus

Pursuant to Class Order 00/44, the ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with the ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please contact the Company and the Company will send you, for free, either a hard copy or a further electronic copy of this Prospectus or both. Alternatively, you may obtain a copy of this Prospectus from the website of the Company at www.sheffieldresources.com.au.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

12.10 Financial Forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently

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uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

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13. DIRECTORS’ AUTHORISA

This Prospectus is issued by the Company and its isresolution of the Directors.

In accordance with Sconsented to the lodgement of this Prospectus with

_______________________________Bruce McQuitty Managing Director For and on behalf of Sheffield Resources Limited

DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with Section 720 of the Corporations Act, each Director hconsented to the lodgement of this Prospectus with the ASIC.

_______________________________

Sheffield Resources Limited

sue has been authorised by a

ection 720 of the Corporations Act, each Director has

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14. GLOSSARY

Where the following terms are used in this Prospectus they have the following meanings:

$ means an Australian dollar.

Application Form means the application form attached to or accompanying this Prospectus relating to the Offer.

ASIC means Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

ASX Listing Rules means the official listing rules of ASX.

Board means the board of Directors as constituted from time to time.

Broker Mandates means the separate mandate agreements between the Company and each of Triple C Consulting Pty Ltd and Oracle Securities in relation to the roles as brokers to the Offer as further detailed in Section 4.8 of this Prospectus and summarised in Sections 12.3(b) and 12.3(c) of this Prospectus respectively.

Broker Option means an unlisted option to acquire a Share exercisable at $0.30 on or before 30 November 2013 to be issued to Triple C Consulting Pty Ltd and Oracle Securities pursuant to the Broker Mandates.

Closing Date means the closing date of the Offer as set out in Section 3.2 of this Prospectus (subject to the Closing Date being extended or the Offer being closed early).

Company or Sheffield means Sheffield Resources Limited ACN 125 811 083.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company at the date of this Prospectus.

Exposure Period means the period of 7 days after the date of lodgement of this Prospectus, which period may be extended by the ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act.

JORC Code means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Offer means the offer of Shares and Options pursuant to this Prospectus as set out in Section 4 of this Prospectus.

Official List means the official list of ASX.

Official Quotation means official quotation by ASX in accordance with the ASX Listing Rules.

Option means an option to acquire a Share on the terms and conditions set out in Section 12.2 of this Prospectus.

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Option Agreement means the option agreement entered into between the Company and Zetek Resources Pty Ltd and Brenton Parry as summarised in Part II of the Independent Solicitor’s Report set out in Section 11 of this Prospectus.

Optionholder means a holder of an Option.

Projects means the Ruthieres Project, Berthas Butt Project, Pilbara Iron Project, Woodleigh Project, Tallering West Project, Moora Talc Belt Project, North Perth Basin Project and Wanna Project and any of their sub-projects as further described in the Independent Geologist’s Report set out in Section 9 of this Prospectus or any one of them as the context requires.

Prospectus means this prospectus.

Section means a section of this Prospectus.

Securities means Shares and Options.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of Shares.

Tenements means the mining tenements in which the Company has an interest as further described in the Independent Solicitor’s Report set out in Section 11 of this Prospectus or any one of them as the context requires.

WST means Western Standard Time as observed in Perth, Western Australia.

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Application Form

*SFX IPO001*

Broker Code

SFX IPO001

Adviser Code

G ( )Telephone Number where you can be contacted during Business Hours Contact Name (PRINT)

+FCHESS HIN (if you want to add this holding to a specific CHESS holder, write the number here)

X

E

C

+

D

A(minimum 10,000, thereafter in multiples of 1,000)

For every 2 Shares issued, you will receive 1 free attaching Option. Each Option is exercisable at 20 cents on or before 30 June 2013.

Cheques or bank drafts should be made payable to “Sheffield Resources Limited Share Offer Account” in Australian currency and

crossed “Not Negotiable”.

HCheque or Bank Draft Number BSB Account Number

-

Shares applied for Price per Share Application Monies

at B A$0.20, , A$ , , .

This is an Application Form for Shares in Sheffield Resources Limited under the Offer on the terms set out in the Prospectus dated 2 November

2010. You may apply for a minimum of 10,000 Shares and multiples of 1,000 thereafter. This Application Form and your cheque or bank draft

must be received by 5:00pm (WST) on 30 November 2010.

If you are in doubt as to how to deal with this Application Form, please contact your accountant, lawyer, stockbroker or other

professional adviser. The Prospectus contains information relevant to a decision to invest in Securities and you should read the

entire Prospectus carefully before applying for Securities.

Title First Name Middle Name

PLEASE COMPLETE YOUR DETAILS BELOW (refer overleaf for correct forms of registrable names)

Applicant #1

Surname/Company Name

Designated account e.g. <Super Fund> (or Joint Applicant #3)

Title First Name Middle Name

Joint Applicant #2

Surname

PLEASE COMPLETE ADDRESS DETAILS

PO Box/RMB/Locked Bag/Care of (c/-)/Property name/Building name (if applicable)

Suburb/City or Town State Postcode

Unit Number/Level Street Number Street Name

Email address (only for purpose of electronic communication of shareholder information)

TFN/ABN type – if NOT an individual, please mark the appropriate box Company Partnership Trust Super Fund

TFN/ABN/Exemption Code

First Applicant Joint Applicant #2 Joint Applicant #3

LODGEMENT INSTRUCTIONS

You must return your application so it is received before 5:00pm (WST) on 30 November 2010.

Please note: that if you supply a CHESS HIN but the name and address details on your Application Form do not correspond exactly

with the registration details held at CHESS, your Application will be deemed to be made without the CHESS HIN and any Shares

issued as a result of the Offer will be held on the issuer sponsored sub-register.

Total Amount A$ , , .

Sheffield Resources LimitedACN 125 811 083

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Your Guide to the Application Form

CORRECT FORMS OF REGISTRABLE NAMESNote that ONLY legal entities are allowed to hold Shares. Applications must be in the name(s) of natural persons or companies. At least one full given name and the surname is required for each natural person. The name of the beneficiary or any other non-registrable name may be included by way of an account designation if completed exactly as described in the examples of correct forms below.

Put the name(s) of any joint Applicant(s) and/or account description using < > as indicated above in designated spaces at section C on the Application Form.

Please complete all relevant white sections of the Application Form in BLOCK LETTERS, using black or blue ink. These instructions are cross-referenced to each section of the form.

The Shares to which this Application Form relates are Sheffield Resources Limited (“Sheffield Resources”) Shares. Further details about the shares are contained in the Prospectus dated 2 November 2010 issued by Sheffield Resources Limited. The Prospectus will expire on 2 December 2011. While the Prospectus is current, Sheffield Resources Limited will send paper copies of the Prospectus, any supplementary document and the Application Form, free of charge on request.The Australian Securities and Investment Commission requires that a person who provides access to an electronic application form must provide access, by the same means and at the same time, to the relevant Prospectus. This Application Form is included in the Prospectus.

There is no requirement to sign the application form. By lodging the application form you are taken to have made to the Company the declarations and statements set out on the form.

The Prospectus contains important information about investing in the shares. You should read the Prospectus before applying for Shares.

Declaration and statements: By lodging this application form: • I/We declare that all details and statements made by me/us are complete and accurate; • I/We agree to be bound by the terms and conditions set out in the prospectus and by the constitution of the Company; • I/We have received personally a copy of the prospectus accompanied by or attached to this application form or a copy of the application form or a direct derivative of the

application form before applying for Shares; and • I/We acknowledge that returning the application form with the application monies will constitute my/our offer to subscribe for Shares in the Company and that no notice of

acceptance of the application will be provided.

A Insert the number of Shares you wish to apply for. The Application must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000. You may be issued all of the Shares applied for or a lesser number. For every 2 Shares issued, you will receive 1 free attaching Option. Each Option is exercisable at 20 cents on or before 30 June 2013.

B Insert the relevant amount of Application Monies. To calculate your Application Monies, multiply the number of Shares applied for by the issue price. Amounts should be in Australian dollars. Please make sure the amount of your cheque or bank draft equals this amount.

C Write the full name you wish to appear on the register of Shares. This must be either your own name or the name of a company. Up to three joint Applicants may register. You should refer to the table below for the correct registrable title.

D Enter your Tax File Number (TFN) or exemption category. Business enterprises may alternatively quote their Australian Business Number (ABN). Where applicable, please enter the TFN or ABN for each joint Applicant. Collection of TFN(s) and ABN(s) is authorised by taxation laws. Quotation of TFN(s) and ABN(s) is not compulsory and will not affect your Application. However, if these are not provided, Sheffield Resources Limited will be required to deduct tax at the highest marginal rate of tax (including the Medicare Levy) from payments.

E Please enter your postal address for all correspondence. All communications to you from Sheffield Resources Limited and the Share Registry will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.

F If you are already a CHESS participant or sponsored by a CHESS participant, write your Holder Identification Number (HIN) here. If the name or address recorded on CHESS for this HIN is different to the details given on this form, your Shares will be issued to Sheffield Resources Limited’s issuer sponsored subregister.

G Please enter your telephone number(s), area code and contact name in case we need to contact you in relation to your Application.

H Please complete the details of your cheque or bank draft in this section. The total amount of your cheque or bank draft should agree with the amount shown in section B.

Make your cheque or bank draft payable to “Sheffield Resources Limited Share Offer Account” in Australian currency and cross it “Not Negotiable”. Your cheque or bank draft must be drawn on an Australian bank. Sufficient cleared funds should be held in your account, as cheques returned unpaid are likely to result in your Application being rejected. If you receive a firm allocation of Shares from your Broker make your cheque payable to your Broker in accordance with their instructions.

LODGEMENT INSTRUCTIONSThis Application Form and your cheque or bank draft must be mailed or delivered so that it is received before 5:00pm (WST) on 30 November 2010 at:

Mailing Address Hand DeliverySheffield Resources Limited Sheffield Resources Limited or Sheffield Resources LimitedC/- Link Market Services Limited C/- Link Market Services Limited C/- Link Market Services LimitedLocked Bag A14 Level 12, 680 George Street Ground Floor, 178 St Georges TerraceSydney South NSW 1235 Sydney New South Wales Perth WA 6000 (do not use these addresses for mailing purposes)

Link Market Services Limited advises that Chapter 2C of the Corporations Act 2001 requires information about you as a shareholder (including your name, address and details of the shares you hold) to be included in the public register of the entity in which you hold shares. Information is collected to administer your shareholding and if some or all of the information is not collected then it might not be possible to administer your shareholding. Your personal information may be disclosed to the entity in which you hold shares. You can obtain access to your personal information by contacting us at the address or telephone number shown on this form. Our privacy policy is available on our website (www.linkmarketservices.com.au).

Type of Investor Correct Form of Registration Incorrect Form of Registration

IndividualUse given names in full, not initials Mrs Katherine Clare Edwards K C Edwards

CompanyUse Company’s full title, not abbreviations Liz Biz Pty Ltd Liz Biz P/L or Liz Biz Co.

Joint HoldingsUse full and complete names

Mr Peter Paul Tranche &Ms Mary Orlando Tranche

Peter Paul & Mary Tranche

TrustsUse the trustee(s) personal name(s)

Mrs Alessandra Herbert Smith<Alessandra Smith A/C>

Alessandra SmithFamily Trust

Deceased EstatesUse the executor(s) personal name(s)

Ms Sophia Garnet Post &Mr Alexander Traverse Post<Est Harold Post A/C>

Estate of late Harold PostorHarold Post Deceased

Minor (a person under the age of 18 years)Use the name of a responsible adult with an appropriate designation

Mrs Sally Hamilton<Henry Hamilton>

Master Henry Hamilton

PartnershipsUse the partners’ personal names

Mr Frederick Samuel Smith &Mr Samuel Lawrence Smith<Fred Smith & Son A/C>

Fred Smith & Son

Long Names Mr Hugh Adrian John Smith-Jones Mr Hugh A J Smith Jones

Clubs/Unincorporated Bodies/Business NamesUse office bearer(s) personal name(s)

Mr Alistair Edward Lilley<Vintage Wine Club A/C>

Vintage Wine Club

Superannuation FundsUse the name of the trustee of the fund

XYZ Pty Ltd<Super Fund A/C>

XYZ Pty LtdSuperannuation Fund

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Sheffield Resources Limited

7 Daglish Street

Wembley WA 6014

www.sheffieldresources.com.auFor

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