GONDWANA RESOURCES LIMITED ACN 008 915 311

NOTICE OF GENERAL MEETING Notice is given that the Meeting will be held at:

TIME: 11:30 am (WST)

DATE: Wednesday, 29 November 2017

PLACE: Moore Stephens Level 15, Exchange Tower 2 The Esplanade, Perth WA

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

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 4:00 pm (WST) on 28 November 2017.

Voting in person

To vote in person, attend the Meeting at the time, date and place set out above.

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

• each Shareholder has a right to appoint a proxy;

• the proxy need not be a Shareholder of the Company; and

• a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

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

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

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Steven Pynt (Company Secretary) on (mobile) 0411 708 591, Warren Beckwith on (mobile) 0419 838 839 or the Company by email at info@gondwanaresources.com.

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B U S I N E S S O F T H E M E E T I N G

AGENDA

1. RESOLUTION 1 – SELECTIVE SHARE BUY-BACK

To consider, and if thought fit, to pass, with or without amendment, the following resolution as a special resolution:

“That, for the purposes of Section 257D of the Corporations Act and for all other purposes, approval is given for the Company to selectively buy-back and cancel 6,616,016 Shares currently held by the Buy-Back Shareholders on the terms and conditions set out in the Explanatory Statement.”

Short Explanation: Under the Corporations Act, a company may make a selective buy-back by a special resolution passed at a general meeting. The Company has entered into an agreement for the buy-back and cancellation of 6,616,016 Shares held by the Buy-Back Shareholders. The agreement is conditional on obtaining a special resolution of Shareholders to approve the buy-back. Please refer to the Explanatory Statement for details.

Voting Exclusion Statement: The Company will disregard any votes cast in favour of this Resolution by any person whose Shares are proposed to be bought back and any of their associates. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Independent Expert’s Report: Shareholders should carefully consider the report prepared by the Independent Expert. The Independent Expert’s Report comments on the fairness and reasonableness of the Buy-Back to the non-associated Shareholders in the Company. The Independent Expert has determined that the Buy-Back is fair and reasonable to the non-associated Shareholders in the Company. A copy of the Independent Expert’s Report is included as Annexure A to this Notice and is also available on the Company’s website (http://www.gondwanaresources.com.au/). If requested by a Shareholder, the Company will send to the Shareholder a hard copy of the Independent Expert’s Report at no cost.

Dated: 26 October 2017

By order of the Board

Warren Beckwith Director

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E X P L A N A T O R Y S T A T E M E N T

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

1. RESOLUTION 1 – SELECTIVE SHARE BUY-BACK

1.1 Background

On 22 October 2015, the Company announced its agreement with Atlas Iron Limited (Atlas) (ASX:AGO) to terminate Atlas’ obligation to make a $1.13/tonne royalty payment to the Company on the first 30M tonnes produced from Atlas’ Corunna Downs Iron Project (Deed of Variation).

Following completion of Atlas’ obligations under the Deed of Variation, the Company’s remaining royalty interests in Corunna Downs and an adjacent tenement known as Panorama (Remaining Royalty Interests) will be as follows:

(a) Corunna Downs iron ore: $1.13 per tonne beyond the first 30M of production;

(b) Corunna Downs other minerals: 1.5% of gross proceeds of sale; and

(c) Panorama iron ore & other minerals: 1% of gross proceeds of sale.

On 14 November 2016 the Company announced its agreement with Ochre Industries Pty Limited (Ochre), a wholly owned subsidiary of Ochre Group Holdings Limited (OGH) (ASX:OGH) to sell the Remaining Royalty Interests to Ochre (Agreement).

The consideration payable to the Company by Ochre under the Agreement for the sale of the Remaining Royalty Interests comprises:

(a) the buy back and cancellation of all Shares held by the Buy-Back Shareholders (being OGH (5,766,016 Shares) and its associated company, Joffrey Pty Limited (850,000 Shares)) (Buy-Back Shares) (Buy-Back); and

(b) a cash deposit of $100,000 (Deposit).

The Agreement remains conditional on Shareholder approval pursuant to the requirements for a selective share buy-back under Division 2 of Part 2J.1 of the Corporations Act of the Buy-Back Shares.

Ochre has also requested and the Company has agreed that, if for any reason the royalty rights on the first 30Mt of iron ore from Corunna Downs (the subject of the Deed of Variation) should revert to the Company’s ownership (Reverted Rights), Ochre will have a first right of refusal in respect of the Reverted Rights in the event that the Company decides to dispose of them.

Resolution 1 seeks Shareholder approval to enable the Company to buy-back and cancel the Buy-Back Shares.

1.2 Section 257D of the Corporations Act

The Corporations Act provides that the rules relating to share buy-backs are designed to protect the interests of shareholders and creditors by:

(a) addressing the risk of the transaction leading to the company’s solvency;

(b) seeking to ensure fairness between the shareholders of the company; and

(c) requiring the company to disclose all material information.

In particular, Section 257A of the Corporations Act provides that a company may buy back its own shares if:

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(a) the buy-back does not materially prejudice the company’s ability to pay its creditors; and

(b) the company follows the procedures laid down in Division 2 of Part 2J.1 of the Corporations Act.

The procedures required differ for each type of buy-back. The Buy-Back is classified as a selective buy-back.

Pursuant to Section 257D(1) of the Corporations Act, a selective share buy-back must be approved by either:

(a) a special resolution passed at a general meeting of the Company, with no votes being cast in favour of the resolution by any person whose shares are to be bought back or by their associates; or

(b) a resolution agreed to, at a general meeting by all ordinary shareholders.

Pursuant to Section 257D(2) of the Corporations Act, the Company must include with the Notice a statement setting out all information known to the Company that is material to the decision on how to vote on the Resolution. However, the Company does not have to disclose information if it would be unreasonable to require the Company to do so because the Company had previously disclosed the information to Shareholders.

Section 257H(3) of the Corporations Act provides that immediately after the registration of the transfer to a company of shares bought back, the shares are cancelled.

1.3 Details of the Buy-Back

ASIC Regulatory Guide 110 sets out what ASIC expects a company to provide when disclosing such information to shareholders with a notice of meeting. This information is set out below:

(a) The Company has 29,626,667 Shares on issue at the date of this Notice;

(b) The number and percentage of Shares to be bought back are 6,616,606 Shares representing approximately 22.3% of the Shares on issue at the date of this Notice;

(c) The terms of the Buy-Back are set out in the Agreement which is summarised in Section 1.1;

(d) There is no offer price for the Buy-Back as the consideration is in a non-cash form (being the disposal of the Remaining Royalty Interests). A valuation of the Remaining Royalty Interests is set out in the Independent Expert’s Report;

(e) The reason for the Buy-Back is the Board considers it is beneficial to the Company as the Company will have a greater investment appeal to Shareholders and potential shareholders who will generally recognise the advantages of a smaller issued capital;

(f) No Directors will participate in the Buy-Back;

(g) The financial effect of the Buy-Back on the Company is to increase cash reserves by $100,000. There is no effect on the level of franking credits expended as the Company does not have any franking credits;

(h) The Directors believe the advantages and disadvantages of the Buy-Back are:

(i) (Advantages):

(A) the percentage ownership of Shareholders not subject to the Buy-Back will increase;

(B) the removal of a significant shareholder removes a barrier to a control transaction; and

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(C) the Company’s cash reserves will not be reduced by the Buy-Back as the consideration is in a non-cash form, thus preserving cash for the potential development of the Parker Range Gold Project or other purposes;

(D) the value of each remaining Share will increase by virtue of the Company’s net asset value being divided by a lesser number of Shares; and

(E) the potential dividends payable in the future to remaining Shareholders will increase per Shareholder.

(ii) (Disadvantages):

(A) The Company will no longer retain the potential benefit of the Remaining Royalty Interests;

(i) The Buy-Back is not expected to have an effect on the control of the Company. As at 23 August 2017, those Shareholders holding more than 5% in the Company and their increased interest in the Company as a result of the Buy-Back are as set out in the table below:

Substantial holder Shares % (pre Buy-

Back)

% (post Buy-

Back)

BC Capital Limited 3,525,860 11.90 15.32

Duncan Merrin 3,486,016 11.77 15.15

Bellatrix Pty Ltd 3,189,483 10.77 13.86

Dimitrios Hilaris 2,057,056 6.94 8.94

(j) The Buy-Back Shares are held by OGH (5,766,016) and its associated company, Joffrey Pty Limited (850,000);

(k) The Shares were suspended from trading on ASX on 15 September 2014 and the Company was delisted from ASX on 18 September 2017. The last recorded sale price was $0.10 on 12 September 2014; and

(l) The net effect on the Company of the disposal of the Remaining Royalty Interests is beneficial as the Board considers, despite the Company no longer retaining the potential benefit of the Remaining Royalty Interests, the Company will have a greater investment appeal to Shareholders and potential shareholders who will generally recognise the advantages of a smaller issued capital.

1.4 Independent Expert’s Report

The Independent Expert's Report annexed to this Notice sets out a detailed independent examination of the Buy-Back to enable non-associated Shareholders to assess the merits and decide whether to approve Resolution 1. The independent expert has concluded that the Buy-Back is fair and reasonable to the non-associated Shareholders.

Shareholders are urged to carefully read the Independent Expert’s Report to understand its scope, the methodology of the valuation and the sources of information and assumptions made.

The Independent Expert’s Report is also available on the Company’s website (http://www.gondwanaresources.com.au/). If requested by a Shareholder, the Company will send to the Shareholder a hard copy of the Independent Expert’s Report at no cost.

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1.5 Director’s recommendation

Based on the information available, including that contained in this Explanatory Statement and the Independent Expert’s Report, the Directors unanimously recommend that Shareholders vote in favour of Resolution 1 as they consider the proposed Buy-Back to be in the best interests of Shareholders for the following reasons:

(a) after assessment of the advantages and disadvantages referred to in Sections 1.3(h) the Directors are of the view that the advantages outweigh the disadvantages; and

(b) the Independent Expert has determined the Buy-Back to be fair and reasonable to the non-associated Shareholders.

The Directors confirm that they intend to vote in favour of Resolution 1 in relation to all votes that they control.

1.6 Other material information

There is no other information material to the making of a decision by Shareholders where or not to vote in favour of Resolution 1 being information that is known to the Directors which has not previously been disclosed to Shareholders, other than as set out in this Notice.

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G L O S S A R Y

$ means Australian dollars.

ASIC means the Australian Securities & Investments Commission.

Board means the current board of directors of the Company.

Buy-Back means the buy-back of the Buy-Back Shares by the Company from the Buy-Back Shareholders.

Buy-Back Shareholders means Ochre Group Holdings Limited and Joffrey Pty Limited.

Buy-Back Shares means the Shares held by the Buy-Back Shareholders.

Chair means the chair of the Meeting.

Company means Gondwana Resources Limited (ACN 008 915 311).

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

General Meeting or Meeting means the meeting convened by the Notice.

Independent Expert means BDO Corporate Finance (WA) Pty Ltd (ACN 124 034 045).

Independent Expert’s Report means the report prepared by the Independent Expert and annexed to this Notice.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Proxy Form means the proxy form accompanying the Notice.

Remaining Royalty Interests has the meaning set out in Section 1.1.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Section means a section of the Explanatory Statement.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a registered holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

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PROXY FORM

GONDWANA RESOURCES LIMITED ACN 008 915 311

GENERAL MEETING

I/We of:

being a Shareholder entitled to attend and vote at the Meeting, hereby appoint:

Name: OR: the Chair of the Meeting as my/our proxy.

or failing the person so named or, if no person is named, the Chair, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the Meeting to be held at 11:30 am (WST), on 29 November 2017 at Moore Stephens, Level 15, Exchange Tower, 2 The Esplanade, Perth WA, and at any adjournment thereof.

CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES The Chair intends to vote undirected proxies in favour of the Resolution. In exceptional circumstances the Chair may change his/her voting intention on any Resolution.

Voting on business of the Meeting FOR AGAINST ABSTAIN Resolution 1 Selective Share Buy-Back

Please note: If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is: %

Signature of Shareholder(s): Individual or Shareholder 1 Shareholder 2 Shareholder 3

Sole Director/Company Secretary

Director Director/Company Secretary

Date:

Contact name: Contact ph (daytime):

E-mail address: Consent for contact by e-mail in relation to this Proxy Form: YES NO

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Instructions for completing Proxy Form

1. (Appointing a proxy): A Shareholder entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on their behalf at the Meeting. If a Shareholder is entitled to cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointments do not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a Shareholder.

2. (Direction to vote): A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. The direction may specify the proportion or number of votes that the proxy may exercise by writing the percentage or number of Shares next to the box marked for the relevant item of business. Where a box is not marked the proxy may vote as they choose subject to the relevant laws. Where more than one box is marked on an item the vote will be invalid on that item.

3. (Signing instructions):

• (Individual): Where the holding is in one name, the Shareholder must sign.

• (Joint holding): Where the holding is in more than one name, all of the Shareholders should sign.

• (Power of attorney): If you have not already provided the power of attorney with the registry, please attach a certified photocopy of the power of attorney to this Proxy Form when you return it.

• (Companies): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held. In addition, if a representative of a company is appointed pursuant to Section 250D of the Corporations Act to attend the Meeting, the documentation evidencing such appointment should be produced prior to admission to the Meeting. A form of a certificate evidencing the appointment may be obtained from the Company.

4. (Attending the Meeting): Completion of a Proxy Form will not prevent individual Shareholders from attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the Meeting in person, then the proxy’s authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the Meeting.

5. (Return of Proxy Form): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

(a) post to Gondwana Resources Limited, PO Box 5010, Burnley VIC 3121; or

(b) facsimile to the Company on facsimile number +61 3 8678 3112; or

(c) email to the Company at info@gondwanaresources.com,

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy Forms received later than this time will be invalid.

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A N N E X U R E A – I N D E P E N D E N T E X P E R T ’ S R E P O R T

GONDWANA RESOURCES LIMITED Independent Expert’s Report

20 October 2017

BDO CORPORATE FINANCE (WA) PTY LTD

Financial Services Guide

20 October 2017

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 (‘we’ or ‘us’ or ‘ours’ as appropriate) has been engaged by Gondwana Resources Limited (‘Gondwana’ or ‘the Company’) to provide an independent expert’s report on the proposal for Gondwana to dispose of its remaining royalty interests in Atlas Iron Limited’s Corunna Downs Iron Project and Panorama Iron Project to Ochre Industries Pty Ltd (‘Ochre’), a wholly owned subsidiary of Ochre Groups Holdings (‘OGH’). You will be provided with a copy of our report as a retail client because you are a shareholder of Gondwana. Financial Services Guide In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (‘FSG’). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees. This FSG includes information about:

Who we are and how we can be contacted;

The services we are authorised to provide under our Australian Financial Services Licence, Licence No. 316158;

Remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;

Any relevant associations or relationships we have; and

Our internal and external complaints handling procedures and how you may access them. Information about us BDO Corporate Finance (WA) Pty Ltd is a member firm of the BDO network in Australia, a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International). The financial product advice in our report is provided by BDO Corporate Finance (WA) Pty Ltd and not by BDO or its related entities. BDO and its related entities provide services primarily in the areas of audit, tax, consulting and financial advisory services. We do not have any formal associations or relationships with any entities that are issuers of financial products. However, you should note that we and BDO (and its related entities) might from time to time provide professional services to financial product issuers in the ordinary course of business. Financial services we are licensed to provide We hold an Australian Financial Services Licence that authorises us to provide general financial product advice for securities to retail and wholesale clients. When we provide the authorised can be financial services we are engaged to provide expert reports in connection with the financial product of another person. Our reports indicate who has engaged us and the nature of the report we have been engaged to provide. When we provide the authorised services we are not acting for you. General Financial Product Advice We only provide general financial product advice, not personal financial product advice. Our report does not take into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice.

This is a draft document and must not be relied on or disclosed or referred to in any document. We accept no duty of care or liability to you or any third party for any loss suffered in connection with the use of this document.

Financial Services Guide Page 2

Fees, commissions and other benefits that we may receive We charge fees for providing reports, including this report. These fees are negotiated and agreed with the person who engages us to provide the report. Fees are agreed on an hourly basis or as a fixed amount depending on the terms of the agreement. The fee payable to BDO Corporate Finance (WA) Pty Ltd for this engagement is approximately $22,000. Except for the fees referred to above, neither BDO, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report. Remuneration or other benefits received by our employees All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report. We have received a fee from Gondwana for our professional services in providing this report. That fee is not linked in any way with our opinion as expressed in this report. Referrals We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide. Complaints resolution Internal complaints resolution process As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing addressed to The Complaints Officer, BDO Corporate Finance (WA) Pty Ltd, PO Box 700 West Perth WA 6872. When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination. Referral to External Dispute Resolution Scheme A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service (‘FOS’). FOS is an independent organisation that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial service industry. FOS will be able to advise you as to whether or not they can be of assistance in this matter. Our FOS Membership Number is 12561. Further details about FOS are available at the FOS website www.fos.org.au or by contacting them directly via the details set out below. Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001 Toll free: 1800 367 287 Facsimile: (03) 9613 6399 Email: info@fos.org.au Contact details You may contact us using the details set out on page 1 of the accompanying report.

TABLE OF CONTENTS

1. Introduction 1

2. Summary and Opinion 2

3. Scope of the Report 4

4. Outline of the Transaction 6

5. Profile of Gondwana 7

6. Remaining Royalty Interests 11

7. Economic analysis 12

8. Industry analysis 13

9. Valuation approach adopted 17

10. Valuation of Gondwana prior to the Transaction 19

11. Valuation of Gondwana following the Transaction 21

12. Is the Transaction fair? 21

13. Is the Transaction reasonable? 22

14. Conclusion 23

15. Sources of information 23

16. Independence 23

17. Qualifications 24

18. Disclaimers and consents 24

Appendix 1 – Glossary and copyright notice

Appendix 2 – Valuation Methodologies

Appendix 3 - Independent Valuation Report prepared by Agricola Mining Consultants Pty Ltd

© 2017 BDO Corporate Finance (WA) Pty Ltd

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

20 October 2017

The Directors

Gondwana Resources Limited

47 Ord Street

West Perth, WA 6005

Dear Directors

INDEPENDENT EXPERT’S REPORT

1. Introduction

On 22 October 2015, Gondwana Resources Limited (‘Gondwana’ or ‘the Company’) announced an

agreement with Atlas Iron Limited (‘Atlas’) to terminate Atlas’ obligation to make a $1.13 per tonne

royalty payment to Gondwana on the first 30 million tonnes (‘Mt’) produced from the Corunna Downs

Project (‘Deed of Variation’). Following completion of Atlas’ obligations under the Deed of Variation,

Gondwana’s remaining royalty interest in Corunna Downs and an adjacent tenement known as Panorama is

as follows:

Corunna Downs iron ore: $1.13 per tonne of iron ore sold beyond the first 30 Mt of production;

Corunna Downs other minerals: 1.50% of gross proceeds of sale; and

Panorama iron ore and other minerals: 1.00% of gross proceeds of sale,

collectively, ‘Remaining Royalty Interests’.

On 14 November 2016, Gondwana announced that it had entered into an agreement with Ochre Industries

Limited (‘Ochre’), a wholly owned subsidiary of Ochre Group Holdings Limited (‘OGH’), to sell its

Remaining Royalty Interests. The consideration payable to Gondwana by Ochre comprises:

the buy back and cancellation of all shares held by OGH and its associated company, Joffrey Pty

Ltd (‘Joffrey’), in Gondwana (being 5,766,016 shares held by OGH and 850,000 shares held by

Joffrey) (‘Selective Buy Back’); and

a cash deposit of $100,000,

collectively, ‘the Transaction’.

There is no offer price for the Selective Buy Back as the consideration is in a non-cash form, being the

disposal of the Remaining Royalty Interests.

Further details on the terms of, and conditions precedent to, the Transaction can be found in Section 4.

All currencies in this report are expressed in Australian Dollars unless otherwise specified.

2

2. Summary and Opinion

2.1 Purpose of the report

The directors of Gondwana have requested that BDO Corporate Finance (WA) Pty Ltd (‘BDO’) prepare an

independent expert’s report (‘our Report’) to express an opinion as to whether or not the Transaction is

fair and reasonable for the non associated shareholders of Gondwana (‘Shareholders’).

Our Report is prepared pursuant to section 257 of the Corporations Act 2001 Cth (‘Corporations Act’ or

‘the Act’) and is to be included in the Notice of Meeting for Gondwana in order to assist the Shareholders

in their decision whether to approve the Transaction.

2.2 Approach

Our Report has been prepared having regard to Australian Securities and Investments Commission (‘ASIC’),

Regulatory Guide 110 ‘Share buy-backs’ (‘RG 110’), Regulatory Guide 111 ‘Content of Expert’s Reports’

(‘RG 111’) and Regulatory Guide 112 ‘Independence of Experts’ (‘RG 112’).

In arriving at our opinion, we have assessed the terms of the Transaction as outlined in the body of this

report. We have considered:

How the value of a Gondwana share prior to the Transaction on a controlling basis compares to the

value of a Gondwana share following the Transaction on a controlling basis;

Other factors which we consider to be relevant to the Shareholders in their assessment of the

Transaction; and

The position of Shareholders should the Transaction not proceed.

2.3 Opinion

We have considered the terms of the Transaction as outlined in the body of this report and have

concluded that, in the absence of an alternate offer, the Transaction is fair and reasonable to

Shareholders.

2.4 Fairness

In section 12 we determined how the value of a Gondwana share prior to the Transaction compares to the

value of a Gondwana share following the Transaction, as detailed below.

Ref Low

$

Preferred

$

High

$

Value of a Gondwana share prior to the Transaction 10.1 Nil Nil Nil

Value of a Gondwana share following the Transaction 11 Nil Nil 0.005

Source: BDO analysis

The above pricing indicates that, in the absence of any other relevant information, and an alternate offer,

the Transaction is fair for Shareholders.

3

2.5 Reasonableness

We have considered the analysis in section 13 of this report, in terms of both

advantages and disadvantages of the Transaction; and

other considerations, including the position of Shareholders if the Transaction does not proceed

and the consequences of not approving the Transaction.

In our opinion, the position of Shareholders if the Transaction is approved is more advantageous than the

position if the Transaction is not approved. Accordingly, in the absence of any other relevant information

and/or an alternate proposal we believe that the Transaction is reasonable for Shareholders.

The respective advantages and disadvantages considered are summarised below:

ADVANTAGES AND DISADVANTAGES

Section Advantages Section Disadvantages

13.2 The Transaction is fair 13.3 Loss of potential benefits flowing from

Remaining Royalty Interests

13.2 Removal of a significant shareholder

which may provide an opportunity for a

future control transaction

13.2 Preserve cash balance for the

development of the Parker Range Gold

Project

13.2 Increased exposure to contingent asset

Other key matters we have considered include:

Section Description

13.1 Alternative proposal

4

3. Scope of the Report

3.1 Purpose of the Report

The rules relating to share buy-backs under the Corporations Act are designed to protect the interests of

shareholders and creditors. Pursuant to section 257A of the Corporations Act, a company may buy-back its

own shares as long as it does not materially prejudice the company’s ability to pays its creditors, while

adhering to the procedures set out in Division 2 of part 2J.1 of the Corporations Act.

RG 110 states that if a company proposes to buy back a significant percentage of shares or the holdings of

a major shareholder it should consider providing either:

a report by its independent directors about whether shareholders should vote in favour of the buy-

back, particularly regarding how much the company is paying for the shares; and

an independent expert’s report with a valuation of the shares.

There is no requirement under Australia Stock Exchange (‘ASX’) Listing Rules or Corporations Act for

Gondwana to engage an independent expert in relation to the selective share buy-back and cancellation of

the 6,616,016 shares held by Ochre and its associated company Joffrey, being 22.33% of Gondwana’s

issued capital as at the date of our Report.

Notwithstanding the above, Gondwana engaged BDO to prepare this report for provision to Shareholders to

assist them in deciding whether to accept the Transaction.

3.2 Regulatory guidance

Neither the Listing Rules nor the Corporations Act defines the meaning of ‘fair and reasonable’. In

determining whether the Transaction is fair and reasonable, we have had regard to the views expressed by

ASIC in RG 111. This regulatory guide provides guidance as to what matters an independent expert should

consider to assist security holders to make informed decisions about transactions.

This regulatory guide suggests that, where an expert assesses whether a related party transaction is ‘fair

and reasonable’, this should not be applied as a composite test—that is, there should be a separate

assessment of whether the transaction is ‘fair’ and ‘reasonable’, as in a control transaction. An expert

should not assess whether the transaction is ‘fair and reasonable’ based simply on a consideration of the

advantages and disadvantages of the proposal.

We do not consider the Transaction to be a control transaction. As such, we have used RG 111 as a guide

for our analysis but have considered the Transaction as if it were not a control transaction.

3.3 Adopted basis of evaluation

RG 111 states that a transaction is fair if the value of the offer price or consideration is equal to or

greater than the value of the securities subject of the offer. In the case of Gondwana the Remaining

Royalty Interest is the subject of the transaction. This comparison should be made assuming a

knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious,

seller acting at arm’s length. RG 111 states that when considering the value of the securities subject of

the offer in a control transaction the expert should consider this value inclusive of a control premium.

However, as stated in Section 3.2 we do not consider that the Transaction is a control transaction. As

such, we have not included a premium for control when considering the value of Gondwana’s shares.

5

Further to this, RG 111 states that a transaction is reasonable if it is fair. It might also be reasonable if

despite being ‘not fair’ the expert believes that there are sufficient reasons for security holders to accept

the offer in the absence of any alternate options.

Having regard to the above, BDO has completed this comparison in two parts:

A comparison between the value of a Gondwana share prior to the Transaction and the value of a

Gondwana share following the Transaction (fairness – see Section 12 ‘Is the Transaction Fair?’); and

An investigation into other significant factors to which Shareholders might give consideration, prior to

approving the resolution, after reference to the value derived above (reasonableness – see Section 13

‘Is the Transaction Reasonable?’).

This assignment is a Valuation Engagement as defined by Accounting Professional & Ethical Standards

Board professional standard APES 225 ‘Valuation Services’ (‘APES 225’).

A Valuation Engagement is defined by APES 225 as follows:

‘an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer

is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a

reasonable and informed third party would perform taking into consideration all the specific facts and

circumstances of the Engagement or Assignment available to the Valuer at that time.’

This Valuation Engagement has been undertaken in accordance with the requirements set out in APES 225.

6

4. Outline of the Transaction

On 22 October 2015, Gondwana announced its agreement with Atlas to terminate Atlas’ obligation to

make a $1.13/tonne royalty payment to Gondwana on the first 30 million tonnes produced from Corunna

Downs, expressed in the Deed of Variation. Following completion of Atlas’ obligations under the Deed of

Variation, Gondwana’s Remaining Royalty Interest in Corunna Downs and Panorama comprises:

Corunna Downs iron ore: $1.13 on tonnes beyond the first 30 Mt of production;

Corunna Downs other minerals: 1.50% of gross proceeds of sale; and

Panorama iron ore and other minerals: 1.00% of gross proceeds of sale.

On 14 November 2016, Gondwana announced that it had entered into an agreement with Ochre, a wholly

owned subsidiary of OGH, to sell its Remaining Royalty Interests in Atlas’ Corunna Downs and an adjacent

tenement known as Panorama to Ochre.

The consideration payable to Gondwana by Ochre under the Transaction for the sale of the Remaining

Royalty Interests comprises:

the Selective Buy Back and cancellation of all shares held by OGH and its associated company,

Joffrey, in Gondwana (being 5,766,016 shares held by OGH and 850,000 shares held by Joffrey);

and

a cash deposit of $100,000.

We note there is no offer price for the Selective Buy Back as the consideration is in a non-cash form, being

the disposal of the Remaining Royalty Interests.

The Transaction is subject to the following conditions:

Gondwana receiving the cash deposit;

approval by Shareholders by way of a special resolution; and

Atlas providing its written consent to Gondwana for the selling, transferring and assigning the

Remaining Royalty Interest to Ochre.

Ochre has also requested and Gondwana has agreed that if, for any reason, the royalty rights on the first

30 million tonnes of iron ore from Corunna Downs should revert to Gondwana ownership, Ochre will have a

first right of refusal should Gondwana decide to dispose of them.

4.1 Shareholding following the Selective Buy Back

As at the date of our Report Ochre has a relevant interest in 22.33% of Gondwana’s issued capital.

Following the Selective Buy Back of 5,766,016 shares held by OGH and 850,000 held by Joffrey, Ochre will

not hold any shares in Gondwana.

Shareholding following the Selective Buy Back Ochre Other Total

shareholders shareholders

Number of shares on issue as at the date of our Report 6,616,016 23,010,651 29,626,667

% holdings as at the date of our Report 22.33% 77.67% 100.00%

Number of shares to be cancelled under Selective Buy Back (6,616,016) - (6,616,016)

Number of shares on issue after the Selective Buy Back - 23,010,651 23,010,651

% holdings after Selective Buy Back 0.00% 100.00% 100.00%

7

5. Profile of Gondwana

5.1 Overview

Gondwana is a mineral exploration company with a focus on gold and nickel in the Parker Range, Pilbara

and Gascoyne regions of Western Australia. The Company was incorporated on 10 April 1980 and listed on

the ASX on 2 April 1987. On 18 September 2017, Gondwana was automatically removed from the official list

by ASX under Listing Rule 17.12 due to its securities being suspended from trading for a continuous period

of three years.

The Company’s current board members are listed below:

Mr Warren Beckwith - Chairman and Managing Director;

Mr Steven Pynt - Non-Executive Director; and

Mr Jolyon Sinclair, Non-Executive Director.

5.2 Recent Corporate Events

On 12 May 2014, Ochre announced a conditional and unsolicited off-market takeover offer for Gondwana.

The offer price was cash consideration of $0.082 per share. Gondwana’s directors unanimously

recommended that its shareholders reject the offer as set out in its Target Statement released to the

market on 18 July 2014.

On 18 August 2014, Ochre increased the offer price to $0.115 per share. Gondwana’s directors

unanimously recommended that its shareholders reject the offer as set out in its Target Statement

released to the market on 11 September 2014.

Gondwana incurred substantial legal and other professional costs during the takeover bid and was not able

to complete proposed underwritten rights issues during this time. Gondwana sold non-core assets in order

to pay for these legal and other professional costs. The non-core assets sold comprised:

a 90% interest in the Panorama tenement to Atlas for $200,000;

the termination of Atlas’ obligation to make a $1.13 per tonne royalty payment to Gondwana on

the first 30 Mt produced from Atlas’ Corunna Downs, pursuant to the Deed of Variation. As

consideration for the termination of Atlas’ obligation, Atlas paid Gondwana $1million and issued

the Company $1 million in Atlas shares; and

non-core tenements at Parker Range for $247,476.

During this period, Gondwana failed to lodge with the ASX its statutory financial statements, half-yearly

report and annual report. Consequently, Gondwana’s securities were suspended from trading on the ASX

on 15 September 2014.

On 18 September 2017, Gondwana was automatically removed from the official list by ASX under Listing

Rule 17.12, due to its securities being suspended from trading for a continuous period of three years.

5.3 Projects

Parker Range Gold Project

The Parker Range Gold Project is the Company’s flagship project and is located in the Southern Cross

Greenstone Belt. Gondwana holds mining and exploration licences prospective for gold and nickel,

covering an area of approximately 500 km2.

8

Gondwana’s recent focus at Parker Range has been to transform historic gold deposits into JORC

compliant gold resources and to explore nearby historic gold prospects with the aim of increasing total

resources.

The Company has also been conducting mining studies with a view to establishing production on a toll

treatment or similar basis. The Parker Range Project is deemed to be a relatively small gold deposit,

however Gondwana has indicated that the deposit has the potential to be exploited for a low capital cost

through the use of mining contractors and treatment at one of several nearby plants.

Forrestania

Gondwana holds an exploration licence application for the Forrestania project.

East Pilbara

Gondwana holds one exploration licence within the East Pilbara, with the area prospective for gold.

Further information on Gondwana’s projects may be found in Appendix 3.

5.4 Historical Financial Information

Statement of Financial Position

Reviewed as at Audited as at Audited as at

30-Jun-17 31-Dec-16 31-Dec-15

$ $ $ CURRENT ASSETS

Cash and cash equivalents 119,900 263,602 68,066

Other receivables - 64,940 574,562

Other financial assets - - 1,000,000

TOTAL CURRENT ASSETS 119,900 328,542 1,642,628

NON-CURRENT ASSETS

Exploration and evaluation expenditure 110,300 116,060 100,300

Property, plant and equipment - - 899

TOTAL NON-CURRENT ASSETS 110,300 116,060 101,199

TOTAL ASSETS 230,200 444,602 1,743,827

CURRENT LIABILITIES

Trade and other payables 1,007,753 1,035,986 1,896,622

Interest bearing liabilities 25,000 - -

TOTAL CURRENT LIABILITIES 1,032,753 1,035,986 1,896,622

TOTAL LIABILITIES 1,032,753 1,035,986 1,896,622

NET ASSETS (802,553) (591,384) (152,795)

EQUITY

Issued capital 33,211,792 33,078,154 33,078,154

Reserves 140,781 140,781 140,781

Accumulated losses (34,155,126) (33,810,319) (33,371,730)

TOTAL EQUITY (802,553) (591,384) (152,795)

Source: Audited financial statements for the years ended 31 December 2015 and 2016 and reviewed financial statements for the half

year ended 30 June 2017

9

Statement of Comprehensive Income

Reviewed for the Audited for the Audited for the half year ended

30-Jun-17 year ended 31-Dec-16

year ended 31-Dec-15

$ $ $

Revenue

Other income - 261,689 2,020,000

Expenses

Employee expenses - (1,214) (336)

Office and corporate expenses (121,264) (270,994) (236,600)

Legal and professional expenses - (61,510) (19,445)

Depreciation expenses (3,781) (899) (621)

Provision for diminution - - 64,000

Exploration expenditure (204,771) (365,315) (424,723)

Finance expenses (14,991) (346) (3,490)

Loss before income tax (344,807) (438,589) 1,398,785

Income tax expense - - -

Total comprehensive loss for the year (344,807) (438,589) 1,398,785

Source: Audited financial statements for the years ended 31 December 2015 and 2016 and reviewed financial statements for the half

year ended 30 June 2017

We note that auditor issued a Material Uncertainty Related to Going Concern paragraph for the years

ended 31 December 2015 and 31 December 2016 and for the half year ended 30 June 2017 outlining the

existence of a material uncertainty that may cast doubt about the Company’s ability to continue as a

going concern. The auditor indicated that the Company’s ability to continue as a going concern is

dependent upon one or a combination of its successful relisting on the ASX, further anticipated capital

raisings, potential gold mining income and sale of assets.

Commentary on Historical Financial Information

We note the following in relation to Gondwana’s Historical Financial Information:

On 22 October 2015, Gondwana entered into an agreement to terminate its Atlas’ obligation to

make a royalty payment on the first 30 Mt produced from Corunna Downs. The consideration

comprised $1 million in cash and $1 million in Atlas shares. The profit from the sale of Atlas shares

was brought to account in the year ended 31 December 2016.

On 11 November 2016, Gondwana entered into an agreement to sell its Remaining Royalty

Interests to Ochre. The consideration comprised a share buyback and cancellation of all shares

held by Ochre and a cash payment of $100,000.

On 11 January 2017, Gondwana entered into an agreement with Bellatrix Pty Ltd, an entity

controlled by Warren Beckwith, for an unsecured loan totalling $300,000 with a $15,000

establishment fee attached. The loan accrues interest at 7.5% per annum and as at 30 June 2017

$25,000 was drawn down.

On 12 June 2017, Gondwana raised $133,638 through the placement of 3,818,227 shares at $0.035 per share.

Trade and other payables include unpaid director fees, superannuation and expense

reimbursements, totalling $133,091 as at 31 December 2016.

10

5.5 Capital Structure

The share structure of Gondwana as at 23 August 2017 is outlined below:

Number

Total ordinary shares on issue 29,626,667

Top 20 shareholders 23,705,856

Top 20 shareholders - % of shares on issue 80.02%

Source: Gondwana share registry

The range of shares held in Gondwana as at 12 October 2017 is as follows:

Number of

Ordinary

Shareholders

Number of Ordinary Shares Percentage of

Issued Shares

(%) Range of Shares Held

1 - 1,000 2,083 257,502 0.87%

1,001 - 5,000 287 703,587 2.37%

5,001 - 10,000 96 731,510 2.47%

10,001 - 100,000 99 2,902,746 9.80%

100,001 - and over 27 25,031,322 84.49%

TOTAL 2,592 29,626,667 100.00%

Source: Gondwana share registry

The ordinary shares held by the most significant shareholders as at 23 August 2017 are detailed below:

Number of Ordinary Shares Held

Percentage of Issued Shares

(%) Name

Ochre Group Holding Limited 6,616,016 22.33%

BC Capital Limited 3,525,860 11.90%

Mr Duncan Merrin 3,486,016 11.77%

Bellatrix Pty Ltd 3,189,483 10.77%

Subtotal 16,817,375 56.76%

Others 12,809,292 43.24%

Total ordinary shares on Issue 155,825,003 100.00%

Source: Gondwana share registry

As at the date of our Report, Gondwana does not have any options on issue.

11

6. Remaining Royalty Interests

Following completion of Atlas’ obligations under the Deed of Variation, Gondwana’s Remaining Royalty

Interests in Corunna Downs and an adjacent tenement known as Panorama comprise:

Corunna Downs iron ore – $1.13 per tonne of iron ore sold beyond the first 30 Mt of production;

Corunna Downs other minerals – 1.5% of gross proceeds of sale; and

Panorama iron ore and other minerals – 1% of gross proceeds of sale.

As at the date of our Report, Gondwana attributes no value to the Remaining Royalty Interests.

6.1 Overview of Atlas, Corunna Downs and Panorama

Atlas is an Australian iron ore company, with mining operations in the Northern Pilbara region of Western

Australia. Atlas has two operating mines; the Abydos Mine and the Mt Webber Mine, and two expansion

projects; McPhee Creek and Corunna Downs.

Corunna Downs

Corunna Downs is an iron ore project located 237 kilometres from Port Hedland. On 21 December 2016,

Atlas released the results from its Definitive Feasibility Study (‘DFS’) for Corunna Downs, outlining the

potential for the project to deliver four million tonnes per annum over a mine life of five to six years.

During FY17, Atlas undertook environmental surveys and studies at Corunna Downs in anticipation of future

environment approvals and on 16 February 2017, Atlas announced Board approval for the development of

Corunna Downs. On 21 June 2017, Atlas announced that the development of Corunna Downs had been

deferred, due to the current iron ore market conditions and the government approval process taking longer

than expected. Atlas maintain that the project is important to sustain its production base, and will assess

the project again once environmental approvals are received.

As outlined in Atlas’ 2017 Annual Report to shareholders, Corunna Downs has an ore reserve of 21 Mt (21 Mt

Probable) and a mineral resource of 64 Mt (51Mt Indicated and 13Mt Inferred). In assessing the value of the

Remaining Royalty Interests we have only considered ore reserves as we do not have reasonable grounds to

assume a conversion of resources to reserves. We note that Atlas have stated publically that they anticipate

a production rate of 4Mt per annum with the project having a life of 5-6 years. Based on this we are of the

view that there are no reasonable grounds for valuation of the royalty interests post the initial 30 Mt.

Panorama

Gondwana sold its 90% interest in the Panorama tenement to Atlas Operations Pty Ltd (‘Atlas Operations’),

a subsidiary of Atlas, in 2014. The exploration license which covers the tenement was granted in June 2013

and expires in June 2018.

There is no JORC compliant mineral resource or ore reserve reported for the Panorama tenement and Atlas

is not currently undertaking any exploration activity over this tenement.

12

7. Economic analysis

Domestic growth

Growth in the Australian economy is expected to be around three per cent over the first half of 2018. The

Australian economy experienced a decline in mining investment over recent years, with mining investment

expected to fall further over the next year. However, much of the remaining decline is expected to be

contained to liquefied natural gas investments, indicating that the transition to lower levels of mining

investment is almost complete.

Labour market conditions continue to improve, with the recent growth in employment supporting growth

in household income and consumption. Underlying inflation is higher than it was late last year, and is

expected to increase as spare capacity in the labour market declines. Growth in non-mining activity is also

expected to pick up, supported by the stronger growth in household consumption.

Overall, the Australian economy is expected to strengthen, supported by the low level of interest rates

and the ongoing recovery in the global economy.

Credit growth

Conditions for obtaining funding remain favourable for banks and non-financial businesses, with spreads of

corporate bond yields to government bonds remaining at low levels. Demand for credit has varied across

sectors, with reported weakness in approvals for industries including construction, telecommunications,

transportation and utilities.

Conditions in the housing markets around the country are mixed, with prices rising in some markets and

declining in others. Growth in housing debt is outpacing growth in household income and funding costs are

starting to increase, as lenders increase mortgage rates and rates paid on interest only loans.

Overall, business credit growth has grown modestly, with the recent pick up reflective of some stability in

lending to the resource sector.

Commodity prices

Profits in the mining sector remain high, with resource export volumes rising in line with the increase in

bulk commodity prices. Iron ore prices have increased following positive activity data from China and

improvements in global economic conditions have driven increases in base metal prices. While strong

growth in China’s residential property market continues to support commodity prices, there is uncertainty

around its growth outlook and how it will address its rising debt levels.

Currency movements

The Australian dollar has appreciated since the start of 2017, reaching levels similar to that experienced

in late 2014, following a broad-based depreciation of the United States dollar. The expectation is that

further appreciation of the Australian dollar will lead to a slower pick-up in economic activity and

inflation.

Source: www.rba.gov.au Statement by Philip Lowe, Governor: Monetary Policy Decision 5 September 2017 and 3 October 2017

13

8. Industry analysis

8.1 Gold Industry

Gold is a soft malleable metal which is highly desirable due to its rarity and unique mineral properties.

Gold has been used in jewellery and as a form of currency for thousands of years, however in more recent

history there has been increasing demand for its use in the manufacture of electronics, dentistry,

medicine and aerospace technology.

In addition to its practical applications, gold also serves as an international store of monetary value. Gold

is widely regarded as a monetary asset as it is considered less volatile than world currencies and provides

a safe haven investment during periods of economic uncertainty. Once mined, gold continues to exist

indefinitely and is often melted down and recycled to produce alternative or replacement products.

Consequently, demand for gold is supported by both gold ore mining and gold recycling. A summary of the

supply of gold for the seven years through 2016 is provided in the table below:

Gold supply (tonnes) 2010 2011 2012 2013 2014 2015 2016

Mine production 2,744 2,846 2,911 3,073 3,148 3,220 3,255

Net producer hedging (109) 23 (45) (28) 105 13 33

Recycled gold 1,683 1,667 1,691 1,262 1,189 1,120 1,296

Total supply 4,318 4,536 4,557 4,307 4,442 4,353 4,584

Source: World Gold Council and Independent Market Research

The gold ore mining industry has performed steadily in recent years, with growth driven by price increases

and gold’s status as a counter cyclical commodity. However, Industry revenue is projected to stagnate as

the world economy stabilises following uncertainty surrounding the United States (‘US’) Presidential

Election and the United Kingdom’s exit from the European Union. According to IBIS World, Industry

revenue is projected to increase at an annualized 4.5% over the five years through 2017-18 to reach $16.6

billion.

Key External Drivers

Global gold prices have a significant impact on the revenue generated by Industry operators. When gold

prices are low, gold miners are less likely to commit to projects with lower gold grades and higher

production costs. Ultimately, a decline in gold prices reduces the viability of new and existing projects,

which hinders Industry growth.

The global gold price is denominated in US dollars. Therefore, the exchange rate directly affects the

returns received by local Industry operators. A weaker domestic currency benefits the local Industry by

reducing prices in export markets and providing opportunities for expansion.

Global demand for gold is also influenced by global economic performance, which is inversely related due

to the counter cyclical nature of gold. Stronger global gross domestic product growth can therefore

negatively impact gold demand and the Industry. According to IBIS World, global economic performance is

expected to improve, which may place downward pressure on demand for gold. As a result, Industry

revenue is projected to decline at an annualised 1.8% over the five years through 2022-23, to total $15.1

billion.

14

Gold Ore Mining Trends

Gold ore mining is a capital intensive and high cost process, which is becoming increasingly difficult and

more expensive as the quality of ore diminishes. The Industry also incurs many indirect costs related to

exploration, royalties, overheads, marketing and native title law. Typically, many of these costs are fixed

in the short term as a result of Industry operators’ inability to significantly alter cost structures once a

mine commences operation.

Until the late 1980s, South Africa produced approximately half of the total gold ore mined globally. More

recently however, the Industry has diversified geographically, with China and Australia dominating global

gold production. According to the United States Geological Survey for January 2017, total estimated global

gold ore mined for 2016 was approximately 3,100 metric tonnes.

Gold prices

The price of gold peaked at US$1,900 on 5 September 2011, due largely to the debt market crisis in

Europe and the Standard and Poor’s downgrade of the US credit rating. Global stock markets subsequently

went into turmoil, which saw a flood of investors towards safer havens such as gold.

The price of gold fluctuated around US$1,700 during 2012 before entering a steep decline in 2013. The

downturn represented the beginning of a correction in the price of gold, which had almost tripled in the

two-year period prior to the European crisis in 2011. Improved market sentiment and increased risk

appetite from investors saw gold prices continue to decline throughout 2014 and 2015 to US$1,051 in

December 2015. During 2016, gold prices strengthened, likely as a result of heightened uncertainty

surrounding the US Presidential election and the United Kingdom’s exit from the European Union. The

price of gold reached US$1,363 in late 2016 before stabilising around US$1,200 for the first half of 2017.

The gold spot price since 2007 and forecast prices through to 2022 are depicted in the graph below:

Source: Bloomberg, Consensus Economics and BDO analysis

According to Consensus Economics, gold prices are forecast to remain relatively stable with a long term

nominal price forecast of approximately US$1,300 per ounce.

0

400

800

1,200

1,600

2,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

US$/ounce

Gold Spot and Forecast Price

Spot Forecast

15

8.2 Iron Ore Industry

Iron ores are rocks from which metallic iron can be economically extracted. The principal iron ores are

hematite (Fe2O3) and magnetite (Fe3O4).

Hematite is a pure iron oxide mineral, with pure hematite mineral containing 69.9 % iron. Hematite ores

dominate the world production of iron ores with approximately 96% of Australia’s iron ore exports being

high grade hematite. High grade hematite ore involves a relatively simple crushing and screening process

before being exported. Australia’s hematite averages from 56% to 62% iron.

Magnetite is an iron oxide mineral containing 72.4% iron. While the iron ore content is higher than

hematite, the presences of impurities results in a lower ore grade, making it costlier to produce the

concentrates.

Iron is the world’s most used metal with approximately 98% of world iron ore production being used to

make steel. It is primarily used in structural engineering, automobiles and other general industrial

applications. Commercial development of iron ore deposits are largely constrained by the position of the

iron ore relative to its market and the cost of establishing proper transportation infrastructure such as

ports and railways.

There are three main categories of iron ore exports:

Fines: fines are the smallest size category and typically have a granular size less than 9.50mm.

They are the most heavily traded category of iron ore;

Lump Ore: lump ore consists of golf ball sized pieces, and generally has a higher iron content than

fines; and

Pellets: particle sizes range from 9.50mm to 16.00mm. Pellets are made by agglomeration of finely

ground and concentrated ore.

In 2016, an estimated 2.23 billion metric tonnes of iron ore was produced. The chart below shows the

countries in which the majority of iron ore was produced in 2016:

Source: US Geological Survey

2%

37%

18%2%

16%

7%

1%1% 4%

3% 1% 3%

5%

Global Iron Ore Production - 2016

United States

Australia

Brazil

Canada

China

India

Iran

Kazakhstan

Russia

South Africa

Sweden

16

The chart below shows the location of the world’s iron ore reserves, with Australia and Brazil accounting

for nearly half the world’s reserves.

Source: US Geological Survey

Price Trends:

Historical iron ore prices and forecasts to 2026 are illustrated in the chart below

The price of iron ore peaked at US$191.7/tonne in February 2011, this was largely driven by growing

Chinese demand for steel. Chinese demand continued to support high global iron ore prices through 2012

and 2013. A slowdown in the Chinese economy and an oversupply of iron ore lead to decline in global iron

ore prices in 2014 and 2015. The spot price of iron ore began to rise in early 2016, following a recovery in

Chinese demand for iron ore. The pick-up in demand was driven by a rebound in Chinese property

investment, and growth in infrastructure investment. This drove demand for construction and transport

related steel products. Prices declined in May 2017, as Chinese production increased. More recently prices

have increased due to disruptions to production as a result of environmental inspections at Chinese iron

ore mines. The iron price is expected to decline over the next year, as demand from China is expected to

ease and low cost global supply comes on line.

2%

30%

13%

3%12%

5%2%

1%

14%

1%

2%

4%

10%

Global Iron ore Reserves - 2016

United States

Australia

Brazil

Canada

China

India

Iran

Kazakhstan

Russia

South Africa

Sweden

Ukraine

Other countries

0.00

50.00

100.00

150.00

200.00

250.00

$U

S/to

nne

Iron Ore Spot and Forecast

Spot Forecast

17

9. Valuation approach adopted

There are a number of methodologies which can be used to value a business or the shares in a company.

The principal methodologies which can be used are as follows:

Capitalisation of future maintainable earnings (‘FME’)

Discounted cash flow (‘DCF’)

Quoted market price basis (‘QMP’)

Net asset value (‘NAV’)

Market based assessment

A summary of each of these methodologies is outlined in Appendix 2.

Different methodologies are appropriate in valuing particular companies, based on the individual

circumstances of that company and available information.

It is possible for a combination of different methodologies to be used together to determine an overall

value where separate assets and liabilities are valued using different methodologies. When such a

combination of methodologies is used, it is referred to as a ‘sum-of-parts’ (‘Sum-of-Parts’) valuation.

The approach using the Sum-of-Parts involves separately valuing each asset and liability of the company.

The value of each asset and liability may be determined using different methodologies as described above.

The component parts are then valued using the NAV methodology, which involves aggregating the

estimated fair market value of each individual company’s assets and liabilities.

The Transaction is not a control transaction, and furthermore, the Shareholders will have greater control

following the Transaction as a result of the Selective Buy Back. Our fairness assessment compares the net

asset value of Gondwana prior to and following the Transaction, both of which are reflective of a

controlling interest.

9.1 Valuation of Gondwana prior to the Transaction

In our assessment of the value of Gondwana’s shares prior to the Transaction we have chosen to employ

the Sum-of-Parts methodology having consideration to the:

value of the Remaining Royalty Interests;

value of the mineral assets held by Gondwana (reliance on the valuation carried out by the

technical expert); and

value of other assets and liabilities of Gondwana (using the NAV method).

We have chosen the Sum-of-Parts methodology for the following reasons:

as Gondwana is an exploration and pre-development company, the core value of Gondwana is in

the exploration assets it holds. We have instructed Agricola Mining Consultants Pty Ltd (‘Agricola’)

to act as independent specialist and provide an independent market valuation of the Company’s

mineral assets in accordance with the Australian Code for Public Reporting of Technical

Assessments and Valuations of Mineral Assets (‘the Valmin Code 2015’) and the Australasian Code

for Report of Exploration Results, Mineral Resources and Ore Reserves (‘JORC Code 2012’).

Agricola’s full report may be found in Appendix 3.;

18

the value of the Remaining Royalty Interests held by Gondwana comprise royalties on production

and sales. Given that Corunna Downs and Panorama are both pre-development, there are no

estimated production targets or future cash flows available to assess the value of the Remaining

Royalty Interests under a cost or income approach. Where we have reasonable grounds to

attribute a value to the Remaining Royalty Interests we have considered the market based

assessment;

the other assets and liabilities are valued using the cost approach under the NAV method;

Gondwana was automatically removed from the official list by ASX under Listing Rule 17.12, due

to its securities being suspended from trading for a continuous period of three years. This means

that the QMP valuation approach is not appropriate as a primary or secondary valuation

methodology;

Gondwana does not generate regular trading income and therefore there are no historic profits

that could be used to represent future earnings. This means that the FME valuation approach is

not appropriate as a primary or secondary valuation methodology; and

Gondwana has no foreseeable future net cash inflows and therefore the application of the DCF

valuation approach is not appropriate as a primary or secondary valuation methodology.

9.2 Valuation of Gondwana following the Transaction

In our assessment of the value of Gondwana’s shares following the Transaction we have chosen to employ

the Sum-of-Parts methodology having consideration to the:

value of Gondwana prior to the Transaction as outlined in section 9.1;

the cash deposit of $100,000; and

the number of shares on issue following the cancellation of shares under the Selective Buy Back.

19

10. Valuation of Gondwana prior to the Transaction

10.1 Sum-of-Parts

Sum-of-Parts

Low Preferred High

Note

$ $ $

Value of the Remaining Royalty Interests 10.1.1 - - -

Value of the Mineral Assets held by Gondwana 10.1.2 730,000 940,000 1,200,000

Value of other assets and liabilities 10.1.3 (1,187,853) (1,187,853) (1,187,853)

Value of Gondwana prior to the Transaction

(457,853) (247,853) 12,147

Number of shares on issue

29,626,667 29,626,667 29,626,667

Value per share ($)

Nil Nil Nil

The value of a Gondwana share prior the Transaction on a control basis is nil.

10.1.1. Remaining Royalty Interests

As set out in the financial statements as at 30 June 2017, Gondwana attributes no value to the Remaining

Royalty Interests. The Remaining Royalty Interests comprise:

$1.13 per tonne of iron ore sold beyond the first 30 Mt of production at Corunna Downs;

1.5% of gross proceeds on the sale of other minerals at Corunna Downs; and

1% of gross proceeds on the sale of all minerals recovered at Panorama.

In assessing the value of the Remaining Royalty Interests we have considered the stage of exploration and

development of both Corunna Downs and Panorama.

Corunna Downs

Corunna Downs has an ore reserve of 21 Mt, and as stated in section 6.1, we do not have reasonable

grounds to assume a conversion of the resources to reserves. The ore reserve is lower than the 30 Mt

production hurdle Atlas must meet before Gondwana is eligible to receive a $1.13 per tonne royalty on the

sale of iron ore from Corunna Down. As a result, the value attributable to a royalty of $1.13 per tonne of

iron ore sold beyond the first 30 Mt of production is nil.

The development of the project was deferred due to the current iron ore market conditions and

government approval process taking longer than expected. Atlas provided no indication as to when

construction at Corunna Downs will begin, which will move the project from the exploration to

development stage. With no funding committed to the development of Corunna Downs we do not have

reasonable grounds to attribute any value to future production at Corunna Downs. As a result, the value

attributable to 1.5% of gross proceeds of sale of other minerals at Corunna Down is nil.

Panorama

The tonnage, density, grade and mineral content at Panorama is yet to be estimated with a high enough

level of confidence to be able to release a JORC compliant mineral resource statement, and limited

exploration work has been carried out by Atlas over the exploration area. With no defined mineral

resource, we do not have reasonable grounds to attribute any value to a royalty of 1% of gross proceeds on

all minerals sold at Panorama.

20

10.1.2. Mineral Assets held by Gondwana

We instructed Agricola to provide an independent market valuation of the exploration assets held by

Gondwana. Agricola considered a number of different valuation methods when valuing the exploration

assets of Gondwana. Agricola applied the Comparable Transactions and Geo-Factor Rating methods. We

consider these methods to be appropriate given the pre-feasibility stage of development for Gondwana’s

exploration assets.

The range of values for each of Gondwana’s exploration assets as calculated by Agricola is set out below:

Gondwana Resources Limited Mineral Asset Valuation

Low Preferred High

$ $ $

Parker Range Gold Project & Exploration Area 730,000 940,000 1,200,000

Total 730,000 940,000 1,200,000

Source: Independent Technical Valuation

The table above indicates a range of values between $0.73 million and $1.20 million, with a preferred

value of $0.94 million.

10.1.3. Other assets and liabilities

The value of Gondwana’s other assets and liabilities on a going concern basis is set out below:

Statement of Financial Position

As at Low Preferred High

Note 30-Jun-17

$ $ $ $

CURRENT ASSETS

Cash and cash equivalents 119,900 119,900 119,900 119,900

TOTAL CURRENT ASSETS 119,900 119,900 119,900 119,900

NON-CURRENT ASSETS

Exploration and evaluation expenditure 1 110,300 - - -

TOTAL NON-CURRENT ASSETS 110,300 - - -

TOTAL ASSETS 230,200 119,900 119,900 119,900

CURRENT LIABILITIES

Trade and other payables 1,007,753 1,007,753 1,007,753 1,007,753

Interest bearing liabilities 2 25,000 300,000 300,000 300,000

TOTAL CURRENT LIABILITIES 1,032,753 1,307,753 1,307,753 1,307,753

TOTAL LIABILITIES 1,032,753 1,307,753 1,307,753 1,307,753

NET LIABILITIES (802,553) (1,187,853) (1,187,853) (1,187,853)

Source: BDO analysis

We have assumed that the fair market value of the other assets and liabilities as at 30 June 2017 are equal

to the current carrying values, apart from the adjustments set out below. We note that as at 30 June

2017 the Company noted a $250,000 contingent asset being a deferred payment for first production from

Corunna Downs.

21

Note 1: Exploration and evaluation expenditure

We have removed the entire balance of exploration and evaluation expenditure of $110,300 as at 30 June

2017 as it relates the Parker Range Gold Project which has been included in Agricola’s valuation of the

mineral assets held by Gondwana.

Note 2: Interest bearing liabilities

On 11 July 2017, the remainder on the unsecured loan with Bellatrix Pty Ltd was drawn down. As a result,

we have adjusted interest bearing liabilities as at 30 June 2017 to reflect the balance drawn down as at

the date of our Report. We note that no adjustment has been made to cash and cash equivalents for this

drawdown as the amount has been used for general working capital requirements.

11. Valuation of Gondwana following the Transaction

11.1 Sum-of-Parts

NAV following the Transaction

Low Preferred High

Note

$ $ $

Value of Gondwana prior to the Transaction 10.1 (457,853) (247,853) 12,147

Cash deposit 1 100,000 100,000 100,000

Total (357,853) (147,853) 112,147

Number of shares on issue 2 23,010,651 23,010,651 23,010,651

Value per share ($) Nil Nil 0.005

Based on the table above, we consider the value of a Gondwana share following the Transaction to be in

the range of nil and $0.005. The following adjustments were made to arrive at our value of Gondwana

following the Transaction:

Note 1: Cash deposit

We have adjusted the value of Gondwana prior to the Transaction for the $100,000 cash deposit that is

payable by Ochre as part of the Transaction.

Note 2: Number of shares on issue

We have adjusted the number of shares on issue following the Selective Buy Back and cancellation of

6,616,016 shares currently held by Ochre and its related party.

Number of shares

Number of shares on issue as at the date of our Report 29,626,667

Number of shares to be cancelled under Selective Buy Back (6,616,016 )

Number of shares on issue after the Selective Buy Back 23,010,651

12. Is the Transaction fair?

The value of Gondwana prior to the Transaction on a controlling basis and the value of Gondwana

following the Transaction on a controlling basis is compared below:

22

Ref Low

$

Preferred

$

High

$

Value of Gondwana prior to the Transaction on a controlling basis 10.1 Nil Nil Nil

Value of Gondwana following the Transaction on a controlling basis 11 Nil Nil 0.005

We note from the table above that the value of Gondwana following the Transaction is greater than the

value of Gondwana prior to the Transaction at the high end of the range. Therefore, we consider that the

Transaction is fair.

13. Is the Transaction reasonable?

13.1 Alternative Proposal

We are unaware of any alternative proposal that might offer the Shareholders of Gondwana a premium

over the value resulting from the Transaction.

13.2 Advantages of Approving the Transaction

We have considered the following advantages when assessing whether the Transaction is reasonable.

Advantage Description

The Transaction is fair As set out in Section 12 the Transaction is fair. RG 111 states that

an offer is reasonable if it is fair.

Removal of a significant shareholder If the Transaction is approved, Gondwana will buy back and cancel

all of the shares held OGH and Joffrey, being 22.33% of its issued

capital. Following the Transaction, existing shareholders’ relevant

interest in Gondwana will increase from 77.67% to 100%.

In addition, the removal of a significant shareholder may make

Gondwana a more attractive investment opportunity to investors,

increasing its ability to raise funds in the future.

Preserve cash balance for the development of

the Parker Range Gold Project

There is no offer price for the Selective Buy Back as the

consideration is in a non-cash form, being the disposal of the

Remaining Royalty Interests. Therefore, the Selective Buy back

will have no negative impact on the Company’s cash reserves.

In addition, Gondwana will receive a cash deposit of $100,000.

Increased exposure to contingent asset If Atlas achieves production at Corunna Downs a contingent asset

of $250,000 is payable to Gondwana, which following the

Selective Buy Back will provide greater exposure for existing

shareholders.

23

13.3 Disadvantages of Approving the Transaction

If the Transaction is approved, in our opinion, the potential disadvantages to Shareholders include those

listed in the table below:

Disadvantage Description

Loss of potential benefits flowing from

Remaining Royalty Interests

If the Transaction is approved, Gondwana will no longer have the

right to receive royalty payments from production and sales at

Corunna Downs and Panorama

14. Conclusion

We have considered the terms of the Transaction as outlined in the body of this report and have

concluded that, in the absence of an alternate offer, the Transaction is fair and reasonable to

Shareholders.

15. Sources of information

This report has been based on the following information:

Draft Notice of General Meeting and Explanatory Statement on or about the date of this report;

Audited financial statements of Gondwana for the years ended 31 December 2015 and 31 December

2016 and reviewed financial statements for the half year ended 30 June 2017;

Independent Valuation Report of Gondwana mineral assets dated 10 October 2017 performed by

Agricola Mining Consultants Pty Ltd;

Royalty Interests Sale and Purchase Agreement between Gondwana, Joffrey, Ochre and OGH;

Deed of Variation – Termination of Royalty between Atlas and Gondwana;

Share registry information;

Information available on Atlas Iron Pty Ltd.’s company website (including ASX announcements); and

Discussions with Directors and Management of Gondwana.

16. Independence

BDO Corporate Finance (WA) Pty Ltd is entitled to receive a fee of $22,000 (excluding GST and

reimbursement of out of pocket expenses). The fee is not contingent on the conclusion, content or future

use of this Report. Except for this fee, BDO Corporate Finance (WA) Pty Ltd has not received and will not

receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of

this report.

BDO Corporate Finance (WA) Pty Ltd has been indemnified by Gondwana in respect of any claim arising

from BDO Corporate Finance (WA) Pty Ltd.’s reliance on information provided by Gondwana, including the

non provision of material information, in relation to the preparation of this report.

Prior to accepting this engagement BDO Corporate Finance (WA) Pty Ltd has considered its independence

with respect to Atlas and Gondwana and any of their respective associates with reference to ASIC

Regulatory Guide 112 ‘Independence of Experts’. In BDO Corporate Finance (WA) Pty Ltd.’s opinion it is

independent of Atlas and Gondwana and their respective associates.

24

Neither the two signatories to this report nor BDO Corporate Finance (WA) Pty Ltd, have had within the

past two years any professional relationship with Gondwana, or their associates, other than in connection

with the preparation of this report.

A draft of this report was provided to Gondwana and its advisors for confirmation of the factual accuracy

of its contents. No significant changes were made to this report as a result of this review.

BDO is the brand name for the BDO International network and for each of the BDO Member firms.

BDO (Australia) Ltd, an Australian company limited by guarantee, is a member of BDO International

Limited, a UK company limited by guarantee, and forms part of the international BDO network of

Independent Member Firms. BDO in Australia, is a national association of separate entities (each of which

has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International).

17. Qualifications

BDO Corporate Finance (WA) Pty Ltd has extensive experience in the provision of corporate finance

advice, particularly in respect of takeovers, mergers and acquisitions.

BDO Corporate Finance (WA) Pty Ltd holds an Australian Financial Services Licence issued by the Australian

Securities and Investment Commission for giving expert reports pursuant to the Listing rules of the ASX

and the Corporations Act.

The persons specifically involved in preparing and reviewing this report were Sherif Andrawes and Adam

Myers of BDO Corporate Finance (WA) Pty Ltd. They have significant experience in the preparation of

independent expert reports, valuations and mergers and acquisitions advice across a wide range of

industries in Australia and were supported by other BDO staff.

Sherif Andrawes is a Fellow of the Institute of Chartered Accountants in England & Wales and a Fellow of

Chartered Accountants Australia & New Zealand. He has over 30 years’ experience working in the audit

and corporate finance fields with BDO and its predecessor firms in London and Perth. He has been

responsible for over 300 public company independent expert’s reports under the Corporations Act or ASX

Listing Rules and is a CA BV Specialist. These experts’ reports cover a wide range of industries in Australia

with a focus on companies in the natural resources sector. Sherif Andrawes is the Chairman of BDO in

Western Australia, Corporate Finance Practice Group Leader of BDO in Western Australia and the Natural

Resources Leader for BDO in Australia.

Adam Myers is a member of Chartered Accountants Australia and New Zealand. Adam’s career spans 19

years in the Audit and Assurance and Corporate Finance areas. Adam is a CA BV Specialist and has

considerable experience in the preparation of independent expert reports and valuations in general for

companies in a wide number of industry sectors.

18. Disclaimers and consents

This report has been prepared at the request of Gondwana for inclusion in the Notice of Meeting which

will be sent to all Gondwana Shareholders. Gondwana engaged BDO Corporate Finance (WA) Pty Ltd to

prepare an independent expert's report to consider the proposal for Gondwana to dispose of its remaining

royalty interests in Atlas Iron Limited’s Corunna Downs Iron Project and Panorama Iron Project to Ochre

Industries Pty Ltd, a wholly owned subsidiary of Ochre Groups Holdings.

BDO Corporate Finance (WA) Pty Ltd hereby consents to this report accompanying the above Notice of

Meeting. Apart from such use, neither the whole nor any part of this report, nor any reference thereto

25

may be included in or with, or attached to any document, circular resolution, statement or letter without

the prior written consent of BDO Corporate Finance (WA) Pty Ltd.

BDO Corporate Finance (WA) Pty Ltd takes no responsibility for the contents of Notice of Meeting other

than this report.

We have no reason to believe that any of the information or explanations supplied to us are false or that

material information has been withheld. It is not the role of BDO Corporate Finance (WA) Pty Ltd acting

as an independent expert to perform any due diligence procedures on behalf of the Company. The

Directors of the Company are responsible for conducting appropriate due diligence in relation to Atlas.

BDO Corporate Finance (WA) Pty Ltd provides no warranty as to the adequacy, effectiveness or

completeness of the due diligence process.

The opinion of BDO Corporate Finance (WA) Pty Ltd is based on the market, economic and other conditions

prevailing at the date of this report. Such conditions can change significantly over short periods of time.

With respect to taxation implications it is recommended that individual Shareholders obtain their own

taxation advice, in respect of the Transaction, tailored to their own particular circumstances.

Furthermore, the advice provided in this report does not constitute legal or taxation advice to the

Shareholders of Gondwana, or any other party.

BDO Corporate Finance (WA) Pty Ltd has also considered and relied upon independent valuations for

mineral assets held by Gondwana.

The valuer engaged for the mineral asset valuation, Agricola Mining Consultants Pty Ltd, possess the

appropriate qualifications and experience in the industry to make such assessments. The approaches

adopted and assumptions made in arriving at their valuation is appropriate for this report. We have

received consent from the valuer for the use of their valuation report in the preparation of this report and

to append a copy of their report to this report.

The statements and opinions included in this report are given in good faith and in the belief that they are

not false, misleading or incomplete.

The terms of this engagement are such that BDO Corporate Finance (WA) Pty Ltd is required to provide a

supplementary report if we become aware of a significant change affecting the information in this report

arising between the date of this report and prior to the date of the meeting or during the offer period.

Yours faithfully

BDO CORPORATE FINANCE (WA) PTY LTD

Sherif Andrawes

Director

Adam Myers

Director

26

Appendix 1 – Glossary of Terms

Reference Definition

The Act The Corporations Act 2001 Cth

Agricola Agricola Mining Consultants Pty Ltd

APES 225 Accounting Professional & Ethical Standards Board professional standard APES 225

‘Valuation Services’

ASIC Australian Securities and Investments Commission

ASX Australian Securities Exchange

Atlas Atlas Iron Limited

Atlas Operations Atlas Operations Pty Ltd

BDO BDO Corporate Finance (WA) Pty Ltd

The Company Gondwana Resources Limited

Corporations Act The Corporations Act 2001 Cth

DCF Discounted Future Cash Flows

Deed of Variation On 22 October 2015, Gondwana announced an agreement with Atlas to terminate

Atlas’ obligation to make a $1.13 per tonne royalty payment to Gondwana on the

first 30 Mt produced from the Corunna Downs

DFS Definitive Feasibility Study

EBIT Earnings before interest and tax

EBITDA Earnings before interest, tax, depreciation and amortisation

FME Future Maintainable Earnings

FOS Financial Ombudsman Service

Gondwana Gondwana Resources Limited

Joffrey Joffrey Pty Ltd

JORC Code The Australasian Code for Reporting of Exploration Results, Mineral Resources and

Ore Reserves (2012 Edition)

27

Reference Definition

Mt Million tonnes

NAV Net Asset Value

Ochre Ochre Industries Limited

OGH Ochre Group Holdings Limited

QMP Quoted market price

RBA Reserve Bank of Australia

Regulations Corporations Act Regulations 2001 (Cth)

Remaining Royalty Interests Gondwana’s remaining royalty interest in Corunna Downs and an adjacent tenement

known as Panorama is as follows:

Corunna Downs iron ore: $1.13 per tonne of iron ore sold beyond the first

30 million of production;

Corunna Downs other minerals: 1.50% of gross proceeds of sale; and

Panorama iron ore and other minerals: 1.00% of gross proceeds of sale,

Our Report This Independent Expert’s Report prepared by BDO

RG 110 Share buy-backs (July 2007)

RG 111 Content of expert reports (March 2011)

RG 112 Independence of experts (March 2011)

Section 257 Section 257 of the Corporations Act

Selective Buy Back The buy back and cancellation of all shares held by OGH and its associated

company, Joffrey, in Gondwana (being 5,766,016 shares held by OGH and 850,000

shares held by Joffrey)

Shareholders Shareholders of Gondwana not associated with Ochre

Sum-of-Parts A combination of different methodologies used together to determine an overall

value where separate assets and liabilities are valued using different methodologies

The Transaction On 14 November 2016, Gondwana announced that it had entered into an agreement

with Ochre), a wholly owned subsidiary of OGH, to sell its Remaining Royalty

Interests. The consideration payable to Gondwana by Ochre comprises:

the Selective Buy Back; and

28

Reference Definition

a cash deposit of $100,000.

US United States

Valmin Code Australasian Code for Public Reporting of Technical Assessments and Valuations of

Mineral Assets (2015 Edition)

Valuation Engagement An Engagement or Assignment to perform a Valuation and provide a Valuation

Report where the Valuer is free to employ the Valuation Approaches, Valuation

Methods, and Valuation Procedures that a reasonable and informed third party

would perform taking into consideration all the specific facts and circumstances of

the Engagement or Assignment available to the Valuer at that time.

VWAP Volume Weighted Average Price

WACC Weighted Average Cost of Capital

Copyright © 2017 BDO Corporate Finance (WA) Pty Ltd

All rights reserved. No part of this publication may be reproduced, published, distributed, displayed,

copied or stored for public or private use in any information retrieval system, or transmitted in any form

by any mechanical, photographic or electronic process, including electronically or digitally on the Internet

or World Wide Web, or over any network, or local area network, without written permission of the author.

No part of this publication may be modified, changed or exploited in any way used for derivative work or

offered for sale without the express written permission of the author.

For permission requests, write to BDO Corporate Finance (WA) Pty Ltd, at the address below:

The Directors

BDO Corporate Finance (WA) Pty Ltd

38 Station Street

SUBIACO, WA 6008

Australia

29

Appendix 2 – Valuation Methodologies

Methodologies commonly used for valuing assets and businesses are as follows:

1 Net asset value (‘NAV’)

Asset based methods estimate the market value of an entity’s securities based on the realisable value of

its identifiable net assets. Asset based methods include:

Orderly realisation of assets method

Liquidation of assets method

Net assets on a going concern method

The orderly realisation of assets method estimates fair market value by determining the amount that

would be distributed to entity holders, after payment of all liabilities including realisation costs and

taxation charges that arise, assuming the entity is wound up in an orderly manner.

The liquidation method is similar to the orderly realisation of assets method except the liquidation

method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the entity

may not be contemplated, these methods in their strictest form may not be appropriate. The net assets

on a going concern method estimates the market values of the net assets of an entity but does not take

into account any realisation costs.

Net assets on a going concern basis are usually appropriate where the majority of assets consist of cash,

passive investments or projects with a limited life. All assets and liabilities of the entity are valued at

market value under this alternative and this combined market value forms the basis for the entity’s

valuation.

Often the FME and DCF methodologies are used in valuing assets forming part of the overall Net assets on

a going concern basis. This is particularly so for exploration and mining companies where investments are

in finite life producing assets or prospective exploration areas.

These asset based methods ignore the possibility that the entity’s value could exceed the realisable value

of its assets as they do not recognise the value of intangible assets such as management, intellectual

property and goodwill. Asset based methods are appropriate when an entity is not making an adequate

return on its assets, a significant proportion of the entity’s assets are liquid or for asset holding

companies.

2 Quoted Market Price Basis (‘QMP’)

A valuation approach that can be used in conjunction with (or as a replacement for) other valuation

methods is the quoted market price of listed securities. Where there is a ready market for securities such

as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be

taken as the market value per share. Such market value includes all factors and influences that impact

upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume

trading, creating a liquid and active market in that security.

3 Capitalisation of future maintainable earnings (‘FME’)

This method places a value on the business by estimating the likely FME, capitalised at an appropriate rate

which reflects business outlook, business risk, investor expectations, future growth prospects and other

entity specific factors. This approach relies on the availability and analysis of comparable market data.

30

The FME approach is the most commonly applied valuation technique and is particularly applicable to

profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure

requirements and non-finite lives.

The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings

before interest and tax (‘EBIT’) or earnings before interest, tax, depreciation and amortisation

(‘EBITDA’). The capitalisation rate or ‘earnings multiple’ is adjusted to reflect which base is being used

for FME.

4 Discounted future cash flows (‘DCF’)

The DCF methodology is based on the generally accepted theory that the value of an asset or business

depends on its future net cash flows, discounted to their present value at an appropriate discount rate

(often called the weighted average cost of capital). This discount rate represents an opportunity cost of

capital reflecting the expected rate of return which investors can obtain from investments having

equivalent risks.

Considerable judgement is required to estimate the future cash flows which must be able to be reliably

estimated for a sufficiently long period to make this valuation methodology appropriate.

A terminal value for the asset or business is calculated at the end of the future cash flow period and this is

also discounted to its present value using the appropriate discount rate.

DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are

in a start-up phase, or experience irregular cash flows.

5 Market Based Assessment

The market based approach seeks to arrive at a value for a business by reference to comparable

transactions involving the sale of similar businesses. This is based on the premise that companies with

similar characteristics, such as operating in similar industries, command similar values. In performing this

analysis it is important to acknowledge the differences between the comparable companies being analysed

and the company that is being valued and then to reflect these differences in the valuation.

Copyright © 2017 BDO Corporate Finance (WA) Pty Ltd

All rights reserved. No part of this publication may be reproduced, published, distributed, displayed,

copied or stored for public or private use in any information retrieval system, or transmitted in any form

by any mechanical, photographic or electronic process, including electronically or digitally on the Internet

or World Wide Web, or over any network, or local area network, without written permission of the author.

No part of this publication may be modified, changed or exploited in any way used for derivative work or

offered for sale without the express written permission of the author.

31

Appendix 3 – Independent Valuation Report

Malcolm Castle

Agricola Mining Consultants Pty Ltd

P.O. Box 473, South Perth, WA 6951

Mobile: 61 (4) 1234 7511

Email: mcastle@castleconsulting.com.au

ABN: 84 274 218 871

17 October 2017

The Directors

BDO Corporate Finance (WA) Pty Ltd

38 Station Street

Subiaco, WA 6008

Dear Sirs,

Re: INDEPENDENT VALUATION OF THE MINERAL ASSETS IN WESTERN

AUSTRALIA HELD BY GONDWANA RESOURCES LIMITED

Agricola Mining Consultants Pty Ltd (“Agricola”) was commissioned by the Directors of

BDO Corporate Finance (WA) Pty Ltd to provide a Mineral Asset Valuation Report

(“Report”) of the Mineral assets held by Gondwana Resources Limited (the “Company”).

This report serves to comment on the geological setting and exploration results on the

properties and presents a technical and market valuation for the exploration assets based on

the information in this Report.

The present status of the tenements is based on information made available by the Company

and independently verified by Agricola. The Report has been prepared on the assumption that

the tenements are lawfully accessible for evaluation.

Scope of the Valuation Report

A valuation report expresses an opinion as to monetary value of a mineral asset but

specifically excludes commentary on the value of any related corporate Securities. Agricola

prepared this Report utilizing information relating to exploration methods and expectations

provided to it by various sources. Where possible, Agricola has verified this information from

independent sources. This Report has been prepared for the purpose of providing information

to the Client.

This mineral asset valuation endeavours to ascertain the unencumbered price which a willing

but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not

too anxious purchaser could reasonably expect to have to pay for the property if the vendor

and the purchaser had got together and agreed on a price in friendly negotiation.

Page | 2

This is commonly known as the Spencer Test after the Australian High Court decision upon

which these principles are based and to which the Courts have used in their determinations of

market value of a property. In attributing the price that would be paid to the hypothetical

vendor by the hypothetical purchaser it is assumed that the property will be put to its “highest

and best use”.

Applying the Spencer Test may not be confined to a technical valuation exercise but may

involve a consideration of market factors. In a highly speculative market during ‘boom’

conditions or a depressed market during ‘bust’ conditions the hypothetical purchaser may

expect to pay a premium or receive a discount commensurate with the current market for

mineral properties.

The findings of the valuation Report include an assessment of the technical value (i.e. the

value implied by a consideration of the technical attributes of the asset) and a market value

(which considers the influences of external market forces and risk). A range of values (high,

low and preferred) has been determined and stated in the Report to reflect any uncertainties in

the data and the interaction of the various assumptions made.

The main requirements of the Valuation Report are:

- Prepared in accordance with the VALMIN Code 2015

- Experience and qualifications of key personnel to be set out

- Details of valuation methodologies

- Reasoning for the selection of the valuation approach adopted

- Details of the valuation calculations

- Conclusion on value as a range with a preferred value

The Mineral Assets

- Parker Range Gold Project

- Parker Range Exploration Project

- Parker Range - Forrestania Project

- East Pilbara Project

DECLARATIONS

Relevant codes and guidelines

This Report has been prepared as a technical assessment and valuation in accordance with the

Australasian Code for Public Reporting of Technical Assessment and Valuation of Mineral

Assets (the “VALMIN Code”, 2015 Edition), which is binding upon Members of the

Australasian Institute of Mining and Metallurgy (“AusIMM”) and the Australian Institute of

Geoscientists (“AIG”), as well as the rules and guidelines issued by the Australian Securities

and Investments Commission (“ASIC”) and the ASX Limited (“ASX”) Regulatory Guides

that pertain to Content od Experts Reports (RG 111, March 2011) and Independence of

Experts ( RG 112, March 2011).

The report has been prepared in compliance with the Corporations Act and ASIC Regulatory

Guide 112 with respect to Agricola’s independence as experts. Agricola regards RG112.31 to

Page | 3

be in compliance whereby there are no business or professional relationships or interests that

would affect the expert’s ability to present an unbiased opinion within this report.

Where exploration results and mineral resources have been referred to in this report, the

information was prepared and first disclosed under the Australasian Code for Reporting of

Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”), prepared by the

Joint Ore Reserves Committee of the AusIMM, the AIG and the Minerals Council of

Australia 2012.

Sources of Information

The statements and opinion contained in this report are given in good faith and this review is

based on information provided by the title holders, along with technical reports by

consultants, previous tenements holders and other relevant published and unpublished data

for the area. Agricola has endeavoured, by making all reasonable enquiries, to confirm the

authenticity, accuracy and completeness of the technical data upon which this report is based.

A final draft of this report was provided to the Company, along with a written request to

identify any material errors or omissions in the technical information prior to lodgement.

In compiling this report, Agricola did not carry out a site visit to the project areas. Based on

its professional knowledge, experience and the availability of extensive databases and

technical reports made available by various Government Agencies and the early stage of

exploration, Agricola considers that sufficient current information was available to allow an

informed appraisal to be made without such a visit.

This Report contains statements attributable to third persons. These statements are made in,

or based on statements made in previous geological reports that are publicly available from

either a government department or the ASX. The authors of these previous reports have not

consented to the statements’ use in this Report, and these statements are included in

accordance with ASIC Corporations (Consents to Statements) Instrument 2016/72.

The independent valuation report has been compiled based on information available up to and

including the date of this report. The information has been evaluated through analysis,

enquiry and review for the purposes of forming an opinion as to value. However, Agricola

does not warrant that its enquiries have identified or verified all of the matters that an audit,

extensive examination or "due diligence" investigation might disclose.

Qualifications and Experience

The person responsible for the preparation of this report is:

Malcolm Castle, B.Sc.(Hons), GCertAppFin (Sec Inst), MAusIMM

Malcolm Castle has over 50 years’ experience in exploration geology and property

evaluation, working for major companies for 20 years as an exploration geologist. He

established a consulting company over 30 years ago and specializes in exploration

management, technical audit, due diligence and property valuation at all stages of

development. He has wide experience in a number of commodities including uranium,

gold, base metals, iron ore and mineral sands. He has been responsible for project

Page | 4

discovery through to feasibility study in Australia, Fiji, Southern Africa and Indonesia

and technical audits in many countries. He has completed numerous Independent

Geologist’s Reports and Mineral Asset Valuations over the last decade as part of his

consulting business.

Mr Castle is a qualified and competent witness in a court or tribunal capable of

supporting his valuation reports or to give evidence of his opinion of market value

issues.

Mr Castle completed studies in Applied Geology with the University of New South

Wales in 1965 and has been awarded a B.Sc.(Hons) degree. He has completed

postgraduate studies with the Securities Institute of Australia in 2001 and has been

awarded a Graduate Certificate in Applied Finance and Investment in 2004.

Mr Castle is the Principal Consultant for Agricola Mining Consultants Pty Ltd, an

independent geological consultancy established 30 years ago. He is a Member of the

Australasian Institute of Mining and Metallurgy (“MAusIMM”).

Declaration – VALMIN Code: The information in this report that relates to Technical

Assessment and Valuation of Mineral Assets reflects information compiled and

conclusions derived by Malcolm Castle, who is a Member of The Australasian

Institute of Mining and Metallurgy. Malcolm Castle is not a permanent employee of

the Company.’

Malcolm Castle has sufficient experience relevant to the Technical Assessment and

Valuation of the Mineral Assets under consideration and to the activity which he is

undertaking to qualify as a Practitioner as defined in the 2015 edition of the

‘Australasian Code for the Public Reporting of Technical Assessments and Valuations

of Mineral Assets’. Malcolm Castle consents to the inclusion in the report of the

matters based on his information in the form and context in which it appears.’

Competent Persons Statement – JORC Code: The information in this report that

relates to Exploration Results and Mineral Resources of the Company has been

reviewed by Malcolm Castle, who is a Member of the Australasian Institute of Mining

and Metallurgy. Mr Castle has sufficient experience, which is relevant to the style of

mineralisation and type of deposit under consideration and to the activity, which they

are undertaking to qualify as an Expert and Competent Person as defined under the

VALMIN Code and in the 2012 Edition of the ‘Australasian Code for Reporting of

Exploration Results, Mineral Resources and Ore Reserves’. Mr Castle consents to the

inclusion in this report of the matters based on the information in the form and context

in which they appear.

Independence

Agricola or its employees and associates are not, nor intend to be a director, officer or other

direct employee of the Company and have no material interest in the projects. The

relationship with the Company is solely one of professional association between client and

independent consultant. The review work and this report are prepared in return for

Page | 5

professional fees of $7,000 plus GST based upon agreed commercial rates and the payment

of these fees is in no way contingent on the results of this Report. And Consent

Consent has been given for the distribution of this report in full in the form and context in

which it is provided, for the purpose for which this report was commissioned. Agricola

provides its consent on the understanding that the assessment expressed in the individual

sections of this report will be considered with, and not independently of, the information set

out in full in this report.

Agricola has no reason to doubt the authenticity or substance of the information provided.

Valuation Opinion

Based on an assessment of the factors involved, the estimate of the market value for 70%

equity in the Company’s Spring Hill and Buffalo gold deposits and 100% equity in the

Centenary deposit, Forrestania and East Pilbara projects is in the range of A$0.73 million to

A$1.20 million with a preferred value of A$0.94 million.

This valuation is effective on 17 October 2017.

This mineral asset valuation endeavours to ascertain the unencumbered price which a willing

but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not

too anxious purchaser could reasonably expect to have to pay for the property if the vendor

and the purchaser had got together and agreed on a price in friendly negotiation (the Spencer

Test).

Agricola’s opinion should be considered as a whole as the various elements of its analysis are

often interdependent. Agricola cautions against examination of individual elements of its

analysis as this may create a misleading impression of the overall opinion.

Yours faithfully

Malcolm Castle

B.Sc.(Hons) MAusIMM,

GCertAppFin (Sec Inst)

Agricola Mining Consultants Pty Ltd

Page | 6

TENEMENT SCHEDULE

Western Australian Tenements

Tenement Status Project Holders Interest

Parker Range Gold Project Tenements

L77/0264 Granted Centenary Group Gondwana Resources Limited 100%

M77/0089 Granted Centenary Group Gondwana Resources Limited 100%

M77/0562 Granted Buffalo/Spring Hill Barclay Holdings 70%2

M77/0657-I Granted Centenary Group Gondwana Resources Limited 100%

M77/0762-I Granted Centenary Group Gondwana Resources Limited 100%

M77/0893 Granted Buffalo/Spring Hill Gondwana Resources Limited 70%1

Parker Range Exploration Tenements

M77/0052 Granted Buffalo/Spring Hill Gondwana Resources Limited 70%1

M77/0561 Granted Buffalo/Spring Hill Barclay Holdings 70%2

M77/0567-I Granted Buffalo/Spring Hill Gondwana Resources Limited 100%

E77/2425 Granted Rokeby Emu Fence Exploration Pty Ltd Note3

P77/4375 Granted Centenary Emu Fence Exploration Pty Ltd Note3

P77/4376 Granted Centenary Emu Fence Exploration Pty Ltd Note3

P77/4377 Granted Mopoke Emu Fence Exploration Pty Ltd Note3

P77/4378 Granted Langley (Dulcie Group) Emu Fence Exploration Pty Ltd Note3

P77/4379 Application Cheritons (Dulcie Group) Emu Fence Exploration Pty Ltd Note3

P77/4380 Application Cheritons (Dulcie Group) Emu Fence Exploration Pty Ltd Note3

P77/4418 Application Rokeby Emu Fence Exploration Pty Ltd Note3

P77/4419 Application Rokeby Emu Fence Exploration Pty Ltd Note3

P77/4420 Granted Rokeby Emu Fence Exploration Pty Ltd Note3

P77/4421 Granted Rokeby Emu Fence Exploration Pty Ltd Note3

P77/4422 Granted Rokeby Emu Fence Exploration Pty Ltd Note3

Forrestania Exploration Tenements

E77/2143 Application Blue Turtle Gondwana Resources Limited 100%

East Pilbara Exploration Tenements

E77/1026 Granted Nullagine Gondwana Resources Limited 90%4

Notes 1 Cerro Resources NL 30% free carried to feasibility 2 Barclay Holdings Pty Ltd 30% 3 Gondwana nil, earning 51% interest over 3 years 4 Gondwana 90%; LMTD 10%.(LMTD earning a further 70% over 3 years, with

Gondwana’s remaining 20% carried to feasibility study)

Page | 7

The status of the tenements has been verified based on a recent independent inquiry of the

Department of Mines and Petroleum, WA, Mineral Titles OnLine database (source:

www.dmp.wa.gov.au) by Agricola, pursuant to section 7.2 of the Valmin Code, 2015. The

tenements are believed to be in good standing.

PROJECT REVIEW

Parker Range Gold Project – Mineral Resources

Note on Mineral Resource Estimate

The information in this report that relates to Mineral Resources is based on information

compiled by Mr David Hollingsworth, a consultant of the company. Mr Hollingsworth has

sufficient experience, which is relevant to the style of mineralization and type of deposits

under consideration and to the activity to undertake the resource estimates. Mr Hollingsworth

consents to the inclusion in the report of the matters based on his information in the form and

context in which it appears.

The Mineral Resource estimation was released in the following document: Gondwana

Resources Ltd, Activities Report - December Quarter 2015, ASX Release 26 January 2016

Malcolm Castle has reviewed this information in his capacity of Independent Geologist and

has satisfied himself that the estimates quoted are reasonable and accurately reflect the

geological controls and distribution of the mineralisation.

Agricola confirms that:

(a) the form and context in which Mr Hollingsworth’s findings are presented have not been

materially modified; and

Page | 8

(b) it is not aware of any new information or data that materially affects the information

included in the Company’s Resource Estimate and that all the material assumptions and

technical parameters underpinning the estimate in the Information Memorandum continue to

apply and have not materially changed;

Parker Range Exploration

A recent historic soil data compilation identified multiple gold in soil anomalies. During the

second half of 2016, anomalous gold areas were infill soil sampled at Buffalo East, Mopoke

North/South, Gordon Highlander, White Horseshoe, Star of the Range and Black Cat

prospects.

Location of the Parker Range Project1

During 2016, extensive infill soil surveying programs have been completed in the Company’s

Parker Range tenements, with gold-in-soil samples taken from a depth between 0.2m and

0.3m. Some graphitic sulphidic sediment outcrops were sampled for carbon content and

multiple pegmatite outcrops were rock chipped for lithium content. A recent review of the

Star of the Range area shows that the historic 1990 mining and exploration did not cover the

1 Source: Gondwana Half yearly Report, July 2017, Competent Person: Grant Donnes

Page | 9

area immediately south of the Star of the Range mine and north of the Black Cat underground

mine.

Black Cat is located at an inflection in the magnetics and mapped in earlier Mines

Department bulletins as 3 x BIF units bending at that location. A steeply plunging quartz vein

similar to Centenary may exist in-between the iron rich amphibolites, A depleted sulphide

zone will be leached near the surface along the eastern BIF as it has enriched the remnant

relict laterite.

The Star of the Range (SOTR) and Black Cat gold mine laterite pits show extensive

oxidization of an altered amphibolite, which developed after intense shearing of the mafic

host. Gold in soil mineralisation is likely continuous between the 2 pits, and under the cross

cutting alluvial drainage channel (through the centre of the soil survey) which drains into the

salt lake. Remnant exposures of laterite are all that remains of the relict soil terrain, some of

which was mined prior to 1982 and the rest in 1992. Multiple quartz lodes were injected

along shear zones between the stacked BIF units and although small in tonnage, some do

have bonanza +80g/t gold grades.

An airborne EM survey is still to be conducted for sulphide detection down dip prior to

finalising the planned RC drill hole program design.

Drilling of three other gold mines along the same BIF hosted geology (at Centenary, Buffalo

and Spring Hill) showed up to 4 stacked BIF units with them all carrying varying amounts of

gold. Gold mineralisation is often enriched in the central and eastern BIF units, closest to the

granite dome upwelling. At Centenary quartz rich shoots plunge down the main asymmetric

fold void created during folding of the BIF, from horizontal N-S movements along the shear

zone around the dome. Many Parker Range gold deposits have higher grade mineralisation

below the depletion zone where fresh pyrrhotite sulphide mineralisation is located. The gold

sulphide ore is formed within a proximal shear zone parallel to the granite dome. The gold

rich sulphide mineralisation is usually at the centre of a major shearing system and often

adjoins a distal shear zone on sheared margins, creating amphibolite magnetite alteration

along the belt’s entire strike length.

Forrestania Project

The Forrestania prospect (exploration licence application) contains a gold-bearing laterite, at

the Blue Turtle prospect. Shallow drilling on 100m spaced lines either side failed to delineate

any continuity. In this area, depletion zones combined with near vertical gold shoots in the

unweathered basement are often beneath near-surface oxide mineralization, and it appears no

deep RC drilling has been undertaken at this prospect. Multiple E-W trending dykes at this

location have disturbed the N-S stratigraphy and mineralization may be locally folded or

remobilized, so could be trending oblique to the E-W drill lines. Gold mineralization could

potentially be around 150m in strike and may be related to a vertical or sub- vertical plunging

shoot.

The application area lies immediately west of a recent lithium discovery at Mt Holland. The

neighbouring tenement holder has drilled a lithium-rich pegmatite to the south and under the

Page | 10

old Earl Grey gold mine. There is little drilling south-south west for pegmatite and a review

with the regional aeromagnetic data shows the greenstone belt appears to trend south-south

west towards the Blue Turtle prospect.

East Pilbara tenements

The Nullagine gold project is considered prospective for mineralisation similar to that found

at Millennium Minerals’ Nullagine Gold Project. Gold has also been mined from along the

Blue Spec Fault, east of Gondwana’s project. Historical drilling on the Blue Spec Fault

indicates gold mineralisation extends over a 5km strike length, with gold being hosted in or

adjacent to near vertical quartz veins.

The company has completed a data review and an initial field exploration program. ASTER

imagery and an interpretation report was acquired from Geoimage Pty Ltd. Fieldwork

included mapping of accessible areas and collection of 105 rock chip samples. Interpretation

of the geology, the 2017 rock samples and the 2017 geochemical assays, coupled with a

review of the complex mineralising mechanism of the Blue Spec Fault, has resulted in

definition of two previously unknown and untested areas of interest.

The information in this Report that relates to Exploration Results is based on information

compiled by the Company by Mr Grant Donnes, a competent person who is a Member of

the Australian Institute of Geoscientists. Mr Donnes has sufficient experience that is

relevant to the style of mineralisation and type of deposits under consideration and to the

activity being undertaken to qualify as a Competent Person as defined in the 2012

edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources

and Ore Reserves” (“JORC Code”). Mr Donnes consents to the inclusion in this Report of

the matters based on his information in the form and context in which it appears.

Page | 11

VALUATION ASSESSMENT

Mineral Assets Classification

Pre-

development

projects

Mineral assets with Feasibility Studies - Tenure holdings where

Mineral Resources have been identified and their extent estimated

(possibly incompletely), but where a decision to proceed with

development has not been made. Properties at the early assessment

stage, properties for which a decision has been made not to proceed

with development, properties on care and maintenance and properties

held on retention titles are included in this category if Mineral

Resources have been identified, even if no further work is being

undertaken;

Projects: none

Valuation Methods: Comparable Transactions, Discounted Cash

Flow (if Ore Reserves have been estimated)

Advanced

exploration

projects

Mineral assets with Mineral Resources - Tenure holdings where

considerable exploration has been undertaken and specific targets

identified that warrant further detailed evaluation, usually by drill

testing, trenching or some other form of detailed geological sampling.

A Mineral Resource estimate may or may not have been made, but

sufficient work will have been undertaken on at least one prospect to

provide both a good understanding of the type of mineralisation

present and encouragement that further work will elevate one or more

of the prospects to the Mineral Resources category;

Projects: Parker Range Gold Project

Valuation Methods: Comparable Transactions. Yardstick (Rule of

Thumb)

Early stage

exploration

projects

Mineral assets in the exploration stage - Tenure holdings where

mineralisation may or may not have been identified, but where Mineral

Resources have not been identified;

Projects: Parker Range Exploration

Forrestania Project

East Pilbara Project

Valuation Methods: Geo Rating, Prospectivity Enhancement

Multiplier, Yardstick (Rule of Thumb).

Agricola’s preferred valuation method is in bold print

Page | 12

MINERAL RESOURCES - COMPARABLE TRANSACTIONS METHOD

Technical Value – Mineral Resource

Details of the estimate and the parameters are included in the Company’s ASX release

“Activities Report for the December Quarter 2015”.

GONDWANA RESOURCES LTD

Parker Range Project

Estimated Mineral Resources, JORC 2004

Spring Hill Buffalo Centenary Total Indicated

Tonnes, Mt 0.23 0.35 0.39 0.96

Grade, Au g/t 2.00 2.70 2.40 2.41

Inferred

Tonnes, Mt 0.18 0.08 0.17 0.43

Grade, Au g/t 2.00 2.20 1.80 1.96

Total Ounces (million) 0.026 0.036 0.040 0.102

Equity 70% 70% 100% Ounces (million) 0.018 0.025 0.040 0.083

The Company has estimated a Mineral Resource in accordance with the JORC Code 2004 for

the Buffalo, Spring Hill on M77/893 (70% Equity) and Centenary M77/657 (100% Equity)

Deposits.

Equity position

The Company holds 70% equity in the Buffalo and Spring Hill deposits on M77/893 and

100% equity in the Centenary deposit on M77/657.

Commodity Price

Consensus Forecasts have been used in the current assessment combines with the current

AUD:USD exchange rate of 0.778. The gold price has been set at US$1,261 per ounce.2

2 Source: Consensus Economics Inc, 2017, “Energy & Metals Consensus Forecasts, February 2017”,

Page | 13

Consensus Commodity Price Forecasts

The Australian Gold Price used in this valuation assessment is A$1,620 per ounce.

Contained Value

Contained value is estimated by multiplying tonnes x grade x metal price. The publication of

in situ or ‘in ground’ financial valuations breaches the principles of the JORC Code (as set

out in Clause 4) as the use of these terms is not transparent and lacks material information. It

is also contrary to the intent of Clause 28 of the Code. Such in situ or in ground financial

valuations must not be reported by companies in relation to Exploration Results, Mineral

Resources or deposit size. (JORC Code 2012, Clause 51)

Allowances for modifying multiplying factors are included in the Technical Value

assessment to differentiate between different styles and complexity of mineral resources.

Merger and Acquisition Activity

Mergers and acquisitions (M&A) is a general term that refers to the consolidation of

companies or assets. M&A can include a number of different transactions, such as mergers,

acquisitions, consolidations, tender offers, purchase of assets and management acquisitions.

A long-term database has been compiled of M&A activity in the Gold Industry for the period

1990 to 2017 covering an extensive period of Gold Industry boom and bust situations.

Estimated yearly average $/oz values have been compared to the then current gold price to

produce the ‘percentage of spot gold price’. The M&A activity database included projects in

from advance exploration with initial mineral resource estimates to development projects

with preliminary feasibility studies.

Page | 14

Annual Average M&A Cost Estimate - Percent of Gold Price (USD)

Year %

Avg Gold

Price

Median

$/Oz Year %

Avg Gold

Price

Median

$/Oz

1990 7.4% $350 $26 2004 4.4% $410 $18

1991 4.4% $340 $15 2005 4.9% $470 $23

1992 3.3% $330 $11 2006 7.7% $620 $48

1993 4.8% $330 $16 2007 3.6% $720 $26

1994 3.5% $370 $13 2008 3.4% $860 $29

1995 4.2% $380 $16 2009 2.5% $1,010 $25

1996 2.8% $390 $11 2010 5.6% $1,240 $69

1997 2.7% $330 $9 2011 5.7% $1,610 $91

1998 2.1% $290 $6 2012 2.8% $1,670 $47

1999 2.8% $290 $8 2013 1.6% $1,440 $22

2000 3.4% $290 $10 2014 1.3% $1,300 $17

2001 4.4% $270 $12 2015 1.2% $1,390 $16

2002 3.5% $310 $11 2016 0.9% $1,100 $10

2003 4.1% $370 $15 2017 1.1% $1,223 $14

Source: 1990 to 2005 - Historic Database, 2006 to 2015 - www.ibkcapital.com

2016 to 2017 - PCF Capital Group

The data set does not differentiate between resource categories and other modifying factors,

and this has been taken into account with risk related discounts applied to the Technical

Value. For the purpose of this valuation the M&A percent of spot price for the lower,

preferred and higher value is selected at the 25th, 50th and 75th percentiles.

Page | 15

M&A Percentiles

Percentile 10% 25% 50% 75% 90%

Three decades of Bust - Boom - Bust

1990-2017 1.3% 2.7% 3.5% 4.4% 5.6%

Exploration and Development assets M&A statistics

JORC Mineral Resource Category Discount Factors

A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic interest

in or on the Earth’s crust in such form, grade (or quality), and quantity that there are

reasonable prospects for eventual economic extraction. Mineral Resources are sub-divided, in

order of increasing geological confidence, into Inferred, Indicated and Measured categories.

(JORC Code 2012).

A modifying factor is applied to the mineral resource to recognize the geological confidence

in the JORC category and allow for resource estimate risk. If the Resource estimates are

historical (not in accordance with the JORC Code 2012) then a further discount is applied.

Information Category & Multiplying Factor

Reconciliation 95%

Ore Reserves 90%

ASX: Production Targets on Measured + Indicated Resources

90%

Measured Resource 90%

Indicated Resource 50%

ASX: Production Targets on Inferred Resources

50%

Inferred Resource 30%

Exploration Target 20%

ASX: Foreign/Historical Resource Estimates

Further 10%

Exploration Results -

Early Exploration -

JORC Category Risk Factors

Modifying Factors

The term ‘reasonable prospects for eventual economic extraction’ implies an assessment

(albeit preliminary) by the Competent Person in respect of all matters likely to influence the

prospect of economic extraction including the approximate mining parameters.

Page | 16

‘Modifying Factors’ are considerations used to assess Mineral Resources. These include, but

are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing,

legal, environmental, social and governmental factors. There are uncertainties associated with

the Modifying Factors which are taken into account.

GONDWANA RESOURCES LTD

Parker Range Gold Project Technical Value - A$/Oz

Low High Preferred

$/oz $9.20 $15.00 $11.90

Technical Value per ounce for the mineral resources

[$1620*2.7% (low); 3.5% (Preferred); 4.4% (High)*40%*90%*80%*90%*90%*90%*100%]

Modifying Multiplying Factors – Parker Range Deposits

Metal Price The Australian Gold Price used in this valuation is based on

consensus forecasts produced by PCF Capital Group A$1,620

M&A %

The M&A percentage of spot price has been estimated as a starting

point for the valuation.

Low, 25th Percentile

High, 75th Percentile

Preferred, 50th Percentile

2.7%

4.4% 3.5%

JORC Category

The deposits are classified as Indicated and Inferred Resources

under the JORC Code 2004. The modifying factor for JORC category reflects the uncertainty if the various elements (such as

geological continuity) for Indicated and Inferred Resources

Weighted Average discount:

74% Indicated @ 50%, 26% Inferred @ 30%

An additional 5% discount is applied due to the age of the estimate

(JORC 2004)

40%

Mining factors or assumptions

Mining is assumed to be by open cut methods, methods that are

well understood in the Western Australian mining industry 90%

Metallurgical factors

or assumptions

The gold mineralisation is non-refractory and no deleterious

elements are present in the mineralised zone. It is anticipated that

the material will be toll treated This is considered a significant risk

area.

80%

Environmental factors

or assumptions

No native title determinations or applications exist at the time of

reporting. The Company has identified no significant environmental

impacts. 90%

Infrastructure The deposits are well placed close to significant infrastructure road,

rail and water. 90%

Costs

Costs are expected to be within industry norms based on knowledge

of similar mining operations in the Parker Range area. There are no

current feasibility studies available for the deposit but prior studies

and independent due diligence have been reviewed.

90%

Market assessment Gold would be sold to the Perth Mint or other refining groups at

spot prices which may change from time to time. 100%

Page | 17

Technical Value

The Technical Value is assessed by estimated the contained value of the resource (tonnes x

grade x metal price) and applying the discounts for JORC Category, Modifying Factors and

Average Acquisition Cost.

Technical Value = [contained value]x[Average Acquisition Cost $/Oz]

Technical Value = [83,000oz] x [$9.20 to $15.00]

GONDWANA RESOURCES LTD

Parker Range Gold Project Technical Value, A$M

Low High Preferred

Equity Ounces (million) 0.083

$/oz $9.20 $15.00 $11.90

Mineral Resource, A$M 0.76 1.25 0.99

The Technical Value is estimated for 70% equity in the Spring hill and Buffalo projects and

100% equity in the Centenary Project

EXPLORATION PROJECTS - GEO-FACTOR RATING METHOD

Technical Value – Exploration Properties

Base Value

The base value represents the exploration cost for the current period of the tenement. The

current Base Acquisition Cost (BAC) for exploration projects or tenements at a similar stage

is considered to be the average expenditure for the first year of the licence tenure. This is

considered to be a BAC of AU$400 to AU$450 per square kilometre. The tenements are

granted and Grant Factor and Equity are set at 100%.

The Parker Range Gold Project is assessed based on Comparative Transactions earlier in this

Report.

Page | 18

GONDWANA RESOURCES LIMITED Tenement Factors

Tenement Equity Km2 Granted Expiry Status Grant

Parker Range Gold Project - MINERAL RESOURCES

M77/657-I 100% 0.10 3/2/95 2/2/37 Granted 100%

M77/893 70% 4.27 3/1/01 2/1/22 Granted 100%

M77/762-I 100% 8.67 25/1/07 24/1/28 Granted 100%

M77/562 70% 0.78 23/1/92 22/10/34 Granted 100%

M77/89 100% 0.09 23/3/86 2/1/22 Granted 100%

L77/264 100%

Parker Range Exploration

M77/52 70% 0.50 27/6/84 30/10/26 Granted 100%

M77/561 70% 2.24 23/10/92 22/10/34 Granted 100%

M77/567-I 100% 0.05 5/1/93 4/1/35 Granted 100%

E77/2425 0% Gondwana nil, earning 51% interest over 3 years

P774375 0% Gondwana nil, earning 51% interest over 3 years

P77/4376 0% Gondwana nil, earning 51% interest over 3 years

P77/4377 0% Gondwana nil, earning 51% interest over 3 years

P77/4378 0% Gondwana nil, earning 51% interest over 3 years

P774379 0% Gondwana nil, earning 51% interest over 3 years

P77/4380 0% Gondwana nil, earning 51% interest over 3 years

P77/4416 0% Gondwana nil, earning 51% interest over 3 years

P77/4419 0% Gondwana nil, earning 51% interest over 3 years

P77/4420 0% Gondwana nil, earning 51% interest over 3 years

P77/4421 0% Gondwana nil, earning 51% interest over 3 years

P77/4422 0% Gondwana nil, earning 51% interest over 3 years

Parker Range - Forrestania

E77/2143 100% 73.20 Pending 60%

East Pilbara Project, WA

E46/1026 90% 210.45 10/5/16 9/5/21 Granted 100%

GONDWANA RESOURCES LIMITED

Base Value, A$

Tenement Area Grant Equity Low High

Parker Range Exploration

M77/52 0.50 100% 70% 2,500 5,000

M77/561 2.24 100% 100% 2,500 5,000

M77/567-I 0.05 100% 100% 2,500 5,000

Parker Range - Forrestania

- -

E77/2143 73.20 60% 100% 17,570 19,760

East Pilbara Project, WA

- -

E46/1026 210.45 100% 90% 75,760 85,230

Minimum Base values are ascribed to small Mining Leases

Page | 19

Prospectivity Assessment Factors

An assessment of the prospectivity of tenements was compiled.

Geological Assessment

Off Site Physical indications of favourable evidence for mineralisation, such as

workings and mining on the nearby properties, which may or may not be

owned by the company being valued. Such indications are mineralised

outcrops, old workings through to world-class mines. No other mines past

or present are known to be in the proximity of Parker Range outside the

tenement block. A rating of 1.10 to 1.20 has been ascribed to the Parker

Range Projects and 1.25 to 1.35 for the East Pilbara Project.

On Site Local mineralisation within the tenements and the application of

conceptual models within the tenements. Location and nature of any

mineralisation, geochemical, geological or geophysical anomaly within the

property and the tenor (grade) of any mineralisation known to exist on the

property being valued; The Spring Hill, Buffalo and Centanary deposits

have been valued separately. Some minor workings are present within the

tenements. A rating of 1.20 to 1.30 has been ascribed to the Parker Range

Projects and 1.10 to 1.20 for the East Pilbara Project.

Anomalies Identified anomalies warranting follow up within the tenements.

Geophysical and/or geochemical targets and the number and relative

position of anomalies on the property being valued; A number of targets

have been identified within the tenement that warrant followup drilling

and assessment. A rating of 1.10 to 1.20 has been ascribed to the Parker

Range Projects and 1.10 to 1.10 for the East Pilbara Project.

Geology The proportion of structural and lithological settings within the tenements

and difficulty encountered by cover rocks and other factors. Geological

patterns and models appropriate to the property being valued. The

tenement block overlies a series of basaltic rocks adjacen to granite

intrusions which are known host rocks for gold mineralisation elsewhere

in the Yilgarn Shield. A rating of 1.25 to 1.35 has been ascribed to the

Parker Range Projects and 1.10 to 1.10 for the East Pilbara Project.

Prospectivity Index = [Off Site Factor]x[On Site Factor]x[Anomaly Factor]x[Geology Factor]

Prospectivity

Index

Parker Range Projects – 1.82 (Low) to 2.53 (High)

East Pilbara Project – 1.38 (Low) to (1.96 (High)

Assessments in each category are based on a set scale and are multiplied together to arrive at

a “prospectivity index”.

Page | 20

Brief summary of Geo Factor values

Technical Value

An estimate of technical value has been compiled for the tenements based on the base

acquisition cost, area, grant status, equity and ratings for prospectivity. For the purpose of this

valuation the preferred value is selected at 40% of the difference between Low and High

estimates.

Technical Value = [Base Value]*[Prospectivity Index]

GONDWANA RESOURCES LIMITED

Base Value Prospectivity Technical Value

Low High Low High Low High Preferred

Parker Range

Exploration

M77/52 2,500 5,000 1.82 2.53 4,500 12,600 8,000

M77/561 2,500 5,000 1.82 2.53 4,500 12,600 8,000

M77/567-I 2,500 5,000 1.82 2.53 4,500 12,600 8,000

Parker Range - Forrestania

E77/2143 17,570 19,760 1.82 2.53 31,900 49,900 39,000

East Pilbara Project, WA -

E46/1026 75,760 85,230 1.38 1.96 104,200 167,100 129,000

Total 100,830 119,990 149,600 254,800 192,000

Total, A$M 0.15 0.25 0.19

Page | 21

MARKET VALUE

Summary of Technical Value

GONDWANA RESOURCES LTD Summary Technical Value, A$M

Low High Preferred

Mineral Resource 0.76 1.25 0.99

Exploration Potential 0.15 0.25 0.19

Total 0.91 1.50 1.18

Market Premium or Discount

The market in Australia may pay a premium over the technical value for high quality mineral

assets (i.e. assets that hold defined resources that are likely to be mined profitably in the

short-term or projects that are believed to have the potential to develop into mining

operations in the short term even though no resources have been defined). On the other hand

exploration tenements that have no defined attributes apart from interesting geology or a

good address may well trade at a discount to technical value. Deciding upon the level of

discount or premium is entirely a matter of the technical expert’s professional judgement.

This judgement must of course take account of the commodity potential of the tenement, the

proximity of an asset to an established processing facility and the size of the land holding.

In arriving at a market value for the properties, Agricola has taken into consideration the

Company’s equity position if the tenements are subject to a farm-in, joint venture or option to

purchase arrangement.

In the light of the study results, elements of low country risk, changing economics and future

market outlook a market discount of 20% has been applied to the technical value of the

Parker Range Gold Resources and the exploration projects.

Summary of Market Value

Market Value = [Technical Value]*[Adjusted Market Factor]

GONDWANA RESOURCES LTD Market Value, A$M

Market

factor Low High Preferred

Mineral Resource 80% 0.61 1.00 0.79

Exploration Potential 80% 0.12 0.20 0.15

Total 0.73 1.20 0.94

Equity Ounces (million) 0.083

Market Value per ounce 8.80 14.45 11.40

Comparable Transactions (Recent Market Transactions) Crosscheck

Page | 22

As a crosscheck, a review of relatively recent transactions was undertaken. The transactions

comprise a selection of Australia gold asset sales whereby all assets had reported Mineral

Resource Estimates, and the sales occurred within the last 4 years. The selection comprises

12 transactions, with assets varying from exploration, operations through to care &

maintenance. The peer transactions show significant variance in valuations from $2.29/oz to

more than $100/oz. The dataset is shown below:

The transactions cover a period of volatility in the gold sector and the gold price and outlook

that exists at the time of sale would have had an influence on the asset market value.

When transactions that sit only within the exploration category are considered, the range of

sales contracts is 2.30 to $27.10 (although still with significant variance), with an average of

$10.00/oz.

Recent Sales - Exploration Projects

Date A$/oz Gold Price % of Spot

23.02.17 2.97 1,610 0.18%

14.02.17 19.72 1,610 1.22%

22.07.16 4.54 1,776 0.26%

31.07.15 27.09 1,522 1.78%

08.04.14 3.62 1,394 0.26%

03.04.14 2.29 1,394 0.16%

Average 10.04

The Market valuation of the Gondwana Projects, including mineral Resources and

Exploration Ground is estimated to be in the range $8.80 to $14.45 with a preferred value of

$11.40 per ounce.

The significant range of the Recent Transactions assessment is strongly influenced by the

limited number of samples, the gold price at the time and the timing of the transactions. The

far more extensive nature of the M&A database over a period of three decades is considered

to be statistically more reliable. Nonetheless, there is reasonable correlation between the

preferred values of the Comparable Transactions assessments and the Recent Transactions.

Page | 23

VALUATION OPINION

Based on an assessment of the factors involved, the estimate of the market value for 70%

equity in the Company’s Spring Hill and Buffalo gold deposits and 100% equity in the

Centenary deposit, Forrestania and East Pilbara projects is in the range of A$0.73 million

to A$1.20 million with a preferred value of A$0.94 million.

This valuation is effective on 17 October 2017.

This mineral asset valuation endeavours to ascertain the unencumbered price which a willing

but not anxious vendor could reasonably expect to obtain and a hypothetical willing but not

too anxious purchaser could reasonably expect to have to pay for the property if the vendor

and the purchaser had got together and agreed on a price in friendly negotiation (the Spencer

Test). It applies to the direct sale of existing equity in the projects at the time of the time of

this Report.