19 april 2017 dear - gulf industrials...the gbane project for every a$1,500,000 contributed to the...

Gulf Industrials Limited │ Level 7 99 Macquarie Street Sydney NSW 2000 │GPO Box R383 Royal Exchange 1225 Australia

t +61 2 8226 3323 f +61 2 8226 3304

ACN 115 027 033

www.gulfindustrials.com.au

19 April 2017

Dear Shareholder,

On behalf of the board of directors of Gulf Industrials Limited (the "Company"), it gives me pleasure to invite

you to the General Meeting of Shareholders.

Joint Venture of Gold Project in Ghana, West Africa

As previously announced to ASX on 25 January 2017, the Company has entered into a binding term sheet for a

project earn‐in and joint venture with Cassius Mining Limited ("Cassius") in respect of Cassius' key gold

exploration project in Bolgatanga, Gbane, Ghana (the "Gbane Project").

The Company and Cassius have now agreed to update certain terms of the agreement reached between the

parties previously documented in the term sheet, which will be set out in a joint venture agreement for the

Gbane Project (Joint Venture Agreement).

The reason for the amendment is based on the acknowledgement by both Gulf and Cassius that, assuming the

Conditions Precedents are duly satisfied, then it is critical for the advancement of the Project ‐ which would

benefit both parties ‐ that funds are readily available to Cassius to advance the Project in the period between

the date of the Term Sheet and the satisfaction of the Conditions Precedent. The funds provided by Gulf will

form part of Gulf’s the earn‐in investment and therefore will contribute to Gulf’s interest in the Project.

Accordingly, Gulf agreed to provide that continued funding on the conditions that:

in the event, that the Condition Precedent is not satisfied by the requisite vote at the shareholders

meeting, then the funds advanced by Gulf to Cassius will be classed as moneys owing, and are to be

repaid in full by Cassius to Gulf together with interest at market rates; and

Cassius agree to amend the Term Sheet to the effect that Gulf will secure a larger initial interest in the

Project of 40% for the Vendor Consideration, as opposed to the original initial 20% interest in the Project,

and agree to extend the exclusivity period under the Term sheet until 31 May, 2017.

Subject to the completion of satisfactory due diligence on the Gbane Project by the Company, the Company

has the right to acquire and earn up to a 70% interest in the Gbane Project, and it's interest may in certain

circumstances be increased to 100% over time.

Broadly, the Company will:

initially acquire a 40% interest in the Gbane Project for the Vendor Consideration by paying Cassius or its

nominees A$1,000,000 (as partial reimbursement of expenses) and issuing to Cassius or its nominees the

following equity securities:

‐ 75,000,000 fully paid ordinary shares in the Company ("Consideration Shares"); and

‐ 300,000,000 options to subscribe for fully paid ordinary shares in the Company ("Consideration

Options") each with an exercise price of A$0.015 as follows:

o 150,000,000 options issued immediately and exercisable within 2 years from the date of issue

("Tranche 1 Options"); and

o 150,000,000 options issued immediately and exercisable within 3 years from the date of issue,

subject to satisfaction of a condition of the Gbane Project having an inferred resources of 1

million ounces of gold("Tranche 2 Options").

be able to acquire up to a further 30% interest in the Gbane Project (takings its overall interest up to

70%), by contributing the Earn‐In Consideration, with the Company receiving an additional 5% interest in

the Gbane Project for every A$1,500,000 contributed to the advancement of the Gbane Project up to a

maximum of A$9 million over a two year period from the date of the Term Sheet.

Within 12 months from the date that the Company has completed its earn‐in, or earlier if agreed by the

Company and Cassius, the Company will have the first option to acquire the balance of the Project (or part

thereof). The Company will have the Gbane Project independently valued, and then make a decision on

whether it will acquire up to an additional 30% of the Gbane Project (taking the Company's overall interest up

to 100%)

Capital Raising

To fund the Company's acquisition of its initial interest in the Gbane Project and some of its potential earn‐in

contributions, the Company on 13 February 2017 completed a capital raising of A$6,700,000 issuing 837.5

million fully paid ordinary shares at $0.008 per Share ("Initial Placement"). Subsequently, on 6 March 2017 and

24 March 2017, the Company announced to ASX that as a result of the significant interest in the Initial

Placement, the Company had been able to raise an additional A$750,000 and A$50,000 respectively by issuing

in aggregate an additional 100 million fully paid ordinary shares at $0.008 per Share ("Additional Placement").

The Initial Placement and Additional Placement (collectively the "Placement") of in aggregate 937,500,000 fully

paid ordinary shares ("Placement Shares") were supported by the Company's existing cornerstone

shareholders and sophisticated and professional investors, but none of the Directors of the Company or their

associates participated in the Placement.

The A$7,500,000 in funds raised by the Placement will be used to implement the Company's acquisition of its

initial interest in the Gbane Project and some further project earn‐in contributions as well as for general

working capital purposes.

Shareholder Approvals

Both the Company's acquisition of an interest in the Gbane Project and the issue of the Consideration Shares

and Consideration Options to Cassius or its nominees (together the "Proposed Transaction") require

shareholder approval under ASX Listing Rule 10.1 and ASX Listing Rule 10.11 respectively (respectively the

"Transaction Resolution and Consideration Securities Resolutions").

Further, although the Placement Shares were issued by the Company within its existing placement capacity

under ASX Listing Rules 7.1 and 7.1A, the Company is seeking shareholder approval at the General Meeting for

the ratification of the issue of the Placement Shares under ASX Listing Rule 7.4 ("Placement Resolution"). If the

Placement Resolution is approved, the Company will have refreshed its placement capacity under ASX Listing

Rule 7.1 so as to enable it to issue up to a further 15% of its issued equity securities within the next 12 months.

Independent Expert

The Company has engaged the Independent Expert to consider the Proposed Transaction. The Independent

Expert’s Report is included in Appendix 2 and I recommend you read that report in full.

To assist the Independent Expert's consideration of the Proposed Transaction, the Independent Expert engaged

the Independent Specialist to provide a report incorporating a technical assessment and valuation of the Gbane

earn‐in and joint venture area. The Independent Specialist's Report is included in Appendix 2 and I recommend

you read that report in full.

The Independent Expert has concluded that the Proposed Transaction is fair and reasonable to Non‐Associated

Shareholders. Further, the Independent Expert has noted in paragraph 2.16 of the Independent Expert's Report

that in its opinion "the position of the Non‐Associated Shareholders of Gulf if the Proposed Transaction is

approved is more advantageous than if the Proposed Transaction is not approved".

Recommendations

Wayne Kernaghan, the Independent Director, is responsible for decisions by the Company in relation to the

Proposed Transaction.

Having regard to the conclusion of the Independent Expert, and the potential advantages and disadvantages of

the Proposed Transaction, the Independent Director recommends that the Non‐Associated Shareholders vote

at the General Meeting in favour of the Proposed Transaction by voting in favour of the Transaction Resolution

and Consideration Securities Resolution.

Further, all of the Directors recommend that Shareholders vote in favour of the Placement Resolution so as to

allow the Company to refresh its placement capacity under ASX Listing Rule 7.1.

General Meeting

The General Meeting is to be held on 26 May 2017 at 11am.

Please find enclosed the following documents in relation to the General Meeting:

Notice of General Meeting together with the Explanatory Memorandum; and

Proxy Form for the General Meeting together with instructions.

As a Shareholder you should carefully read and consider this Booklet, including the Independent Expert's

Report, before deciding how to vote in relation to the Proposed Transaction.

If you are not able to attend the General Meeting in person, you are urged to complete and lodge the enclosed

Proxy Form.

I hope that you will be able to attend the General Meeting and commend the resolutions for your support.

Yours sincerely

Wayne Kernaghan

Chairman

Shareholder Booklet This Booklet includes:

A Notice of General Meeting regarding the Proposed Transaction is included in Appendix 1 to

this Booklet.

An Independent Expert's Report and accompanying Independent Specialist Report regarding the

Proposed Transaction is included in Appendix 2 to this Booklet.

Information to assist Shareholders to decide how to vote at the General Meeting.

Proxy Form for the General Meeting.

The Independent Expert has concluded that the Proposed Transaction is fair and reasonable to all Non-Associated Shareholders.

Your vote is important in determining whether the Proposed Transaction proceeds. This is an important document and requires your urgent attention.

If you are in any doubt as to how to deal with the Proposed Transaction and matters set out in this

Booklet, please consult your legal, financial, taxation or other professional adviser immediately.

If you have recently sold all of your Shares, please disregard all enclosed documents.

Important dates and time

Date and time for lodgement of Proxy Forms 24 May 2017 at 11am

Date and time for determining eligibility to vote at the General Meeting

24 May 2017 at 7pm

Date and time of General Meeting 26 May 2017 at 11am

Date of issue of the Consideration Shares and Consideration Options

2 June 2017*

Dates marked with an asterisk (*) are indicative only and may differ from these indicative dates. Any change to these indicative dates will be announced to the ASX.

Important Notices

Purpose of this Booklet

This Booklet provides information regarding the

proposal by Gulf Industrials Limited ("Gulf" or

"Company") to implement a Proposed Transaction

which involves:

the acquisition of up to a 100% interest in a

project earn‐in and joint venture with

Cassius Mining Limited ("Cassius") in respect

of Cassius' key gold exploration project in

Bolgatanga, Gbane, Ghana (the "Gbane

Project"); and

the issue of certain equity securities to

Cassius or its nominees as consideration for

the acquisition by the Company of an initial

interest in the Gbane Project.

The purpose of this Booklet is to:

explain the terms and effect of the Proposed

Transaction to Shareholders;

provide the Notice of General Meeting of all

Shareholders; and

explain the choices that Non‐Associated

Shareholders can make in relation to

approving the Proposed Transaction. This Booklet also provides information relevant to

the Placement Resolution.

You should read this Booklet in its entirety before

making a decision on what how to vote on the

resolutions to be considered at the General

Meeting.

Defined terms Capitalised terms in this Booklet are defined either

in the Glossary in Section 5 of this Booklet or

where the relevant term is first used. References

to dollars or $ are references to the lawful

currency of Australia. Meeting of Shareholders

The notice convening the General Meeting is

contained in Appendix 1. A Proxy Form for this

meeting is enclosed. Independent Expert's Report

RSM Corporate (Australia) Pty Ltd (Independent

Expert) has prepared the Independent Expert's

Report in relation to the Proposed Transaction set

out in Appendix 2 and takes responsibility for that

Independent Expert's Report and for any other

statement summarising the conclusion of the

Independent Expert to the extent required by law.

The Independent Expert's Report includes a

technical specialist report on the Gbane Project

commissioned by the Independent Expert from

SRK Consulting (Australasia) Pty Ltd (Independent

Specialist Report).

Shareholders are urged to read the Independent

Expert's Report and the Independent Specialist's

Report carefully to understand the scope of those

reports, the methodology of the assessment, the

sources of information and the assumptions made.

Neither, the Independent Expert nor the

Independent Specialist are responsible for any

other information contained within this Booklet.

Investment decisions It is important that you read the entire Booklet

before making any decision as to how to vote in

relation to the Proposed Transaction. In particular,

it is important that Shareholders consider the

possible advantages and disadvantages of the

Proposed Transaction identified on page 3 and in

sections 2.14, 2.15, 10 and 11 of the Independent

Expert's Report.

This Booklet does not take into account the

investment objectives, financial situation, tax

position and requirements of any particular

person.

This Booklet should not be relied on as the sole

basis for any decision in relation to the Proposed

Transaction or the Placement Resolution.

Independent financial and taxation advice should

be sought before making any decision in relation

to the Proposed Transaction or the Placement

Resolution. ASX A copy of this Booklet has been lodged with ASX.

None of ASX or any of its officers takes any

responsibility for the contents of this Booklet.

Possible key advantages and reasons why you should vote in favour of the Proposed Transaction 1 The Proposed Transaction is fair and reasonable to Non‐Associated Shareholders.

2 Following the acquisition by the Company of an initial 40% interest in the Gbane Project, the

Company will have the right to acquire up to a further 30% interest in the Gbane Project at its

discretion, with the opportunity of acquiring up to 100% interest in the Gbane Project.

3 The Project will provide diversification to the Company's existing limestone assets

4 The Proposed Transaction may encourage new investors in the Company which may lead to

increased liquidity and greater trading depth than currently experienced by Shareholders.

5 The Proposed Transaction represents a strategic opportunity for the Company to participate in the

development of a potentially significant gold asset.

6 The Gbane Project is an advanced stage exploration asset and in the opinion of the Independent

Specialist the regional and local geological setting, including the structural setting, is sufficiently

well understood to warrant a moderate to high level of confidence in the regional geological

model thereby reducing the uncertainty (and associated risk) associated with the ongoing

exploration in the region.

7 The Proposed Transaction provides the Company with the opportunity to assess and possibly

participate in a pipeline of additional projects in Ghana.

Possible key disadvantages and reasons why you may not want to vote in favour of the Proposed Transaction 1 The Non‐Associated Shareholders interests in the Company will be diluted as the Company's

issued share capital will increase by up to 6% following the issue of the Consideration Securities if

all Consideration Options are issued and exercised.

2 The Proposed Transaction changes the risk profile of the Company.

3 As stated in the Independent Specialist's Report , whilst the presence of the Shaanxi mine is encouraging from a mineral prospectively perspective, it also raises an issue to be investigated pertaining to the possibility of deliberate undermining of parts of the License area, which is currently being investigated by the Ghanaian Minerals Commission following a formal request from Cassius to do so

4 The specific risks associated with the Gbane Project being an advanced stage exploration asset

without a JORC compliant mineral resource, meaning there is no guarantee that any economic

benefit will flow to Non‐Associated Shareholders.

5 The Gbane Project is a speculative opportunity and proposed exploration and development

activities may not be successful.

1 Summary of the Proposed Transaction

1.1 Overview

On 25 January 2017, the Company entered into a binding Term Sheet for a project earn‐in and joint venture

with Cassius in respect of the Gbane Project.

Subject to the completion of satisfactory due diligence on the Gbane Project by the Company, the Company

has the right to acquire and earn up to a 70% interest in the Gbane Project (which interest may in certain

circumstances be increased to 100% over time). The Company and Cassius have now agreed to update certain

terms of the agreement reached between the parties previously documented in the term sheet, which will be

set out in a joint venture agreement for the Gbane Project (Joint Venture Agreement).

Broadly, the Company will:

initially acquire a 40% interest in the Gbane Project for the Vendor Consideration by paying Cassius or its

nominees A$1,000,000 (as partial reimbursement of expenses) and issuing to Cassius or its nominees the

following equity securities:

‐ 75,000,000 fully paid ordinary shares in the Company ("Consideration Shares"); and

‐ 300,000,000 options to subscribe for fully paid ordinary shares ("Consideration Options") in the

Company each with an exercise price of A$0.015 as follows:

o 150,000,000 options issued immediately and exercisable within 2 years from the date of issue

("Tranche 1 Options"); and

o 150,000,000 options issued immediately and exercisable within 3 years from the date of issue,

subject to satisfaction of a condition of the Gbane Project having an inferred resource of 1 million

ounces of gold ("Tranche 2 Options").

be able to acquire up to a further 30% interest in the Gbane Project (taking its overall interest up to 70%),

by contributing the Earn‐In Consideration, with the Company receiving an additional 5% interest in the

Gbane Project for every A$1,500,000 contributed to the advancement of the Gbane Project up to a

maximum of A$9 million over a two year period from the date of the Term Sheet.

Within 12 months from the date that the Company has completed it’s earn‐in, or earlier if agreed by the

Company and Cassius, the Company will have first option to acquire the balance of the Project (or part

thereof). The Company will have the Gbane Project independently valued, and then make a decision on

whether it will acquire up to an additional 30% of the Gbane Project (taking the Company's overall interest up

to 100%).

1.2 Terms of the acquisition of an interest in the Gbane Project

Details of the material terms of the acquisition by the Company of an interest in the Gbane Project and the

proposed joint venture arrangements in respect of the Project are set out in section 3.7.

1.3 Terms of issue of the Consideration Shares

The terms of issue of the Consideration Shares are as follows:

Number 75,000,000

Class Fully paid ordinary shares.

Issue Date The Consideration Shares will be issued within 5

Business Days of the Company obtaining Shareholder

Approval for the Proposed Transaction.

Ranking Equally with all other existing fully paid ordinary

shares on issue (including dividends having a record

date after the date of issue).

Quotation The Company will apply for quotation of the

Consideration Shares on the ASX.

Issue Price The Consideration Shares will be issued at their fair

value as assessed by the Independent Expert, being a

total of $255,000.

1.4 Terms of issue of the Consideration Options

The terms of issue of the Consideration Options are as follows:

Number Tranche 1 Options: 150,000,000

Tranche 2 Options: 150,000,000

Issue Date The Tranche 1 Options and Tranche 2 Options will be

issued within 5 Business Days of the Company

obtaining Shareholder Approval for the Proposed

Transaction.

Expiry Date Tranche 1 Options: 2 years from the date of issue.

Tranche 2 Options: 3 years from the date of issue

Exercise Price A$0.015

Exercise Requirements The Tranche 1 Options may be exercised at any time

prior to their Expiry Date by notice in writing to the

Company and payment of the Exercise Price.

The Tranche 2 Options may, subject to satisfaction of

a condition that the Gbane Project having an inferred

resource of 1 million ounces of gold, be exercised at

any time prior to their Expiry Date by notice in writing

to the Company and payment of the Exercise Price.

Ranking Shares issued upon exercise of the Consideration

Options will rank equally with all other existing fully

paid ordinary shares on issue from the date of issue.

1.5 What consideration will the Cassius Directors receive

The Cassius Directors, James Arkoudis and Anthony Karam (or their nominees) will receive the following

portion of the consideration to be provided by the Company for the acquisition of the initial 40% interest in the

Gbane Project:

Cash Shares Tranche 1

Options

Tranche 2

Options

James Arkoudis $200,000* 6,200,000 29,450,000 30,000,000

Anthony Karam $200,000* 6,200,000 21,200,000 29,250,000

*Cash payable as partial reimbursement of expenses.

The remaining cash and Consideration Securities to be provided by the Company will be paid and issued to

nominees of Cassius ("Other Cassius Vendors") who are not related parties of the Company for the purposes of

the ASX Listing Rules.

1.6 What Shareholder Approvals are required in relation to the Proposed Transaction

The Proposed Transaction is subject to a number of conditions precedent, which include obtaining the

Shareholder Approvals in accordance with the requirements of the ASX Listing Rules.

Specifically, the Proposed Transaction will only proceed if the Transaction Resolution and Consideration

Securities Resolutions to be considered at the General Meeting are approved by Shareholders.

For a further explanation of the resolutions and the voting restrictions applying to them, please refer to the

Notice of Meeting in Appendix 1.

1.7 What is the rationale for the Proposed Transaction

The key rationale for the Proposed Transaction, as noted in paragraph 3.8 of the Independent Expert's Report,

is that by enabling the Company to participate in the development of a potentially significant gold asset and

increase its strategic and operational footprint in West Africa, completion of the Proposed Transaction may

present Shareholders will greater returns than they are currently exposed to.

1.8 What was the conclusion reached by Independent Expert's Report in respect of the Proposed Transaction?

In accordance with its obligations under ASX Listing Rule 10.10, the Company appointed RSM Corporate

Australia Pty Ltd as the Independent Expert (Independent Expert).

The Independent Expert has concluded that the Proposed Transaction is fair and reasonable to the Non‐

Associated Shareholders.

The Independent Expert's Report is set out in full in Appendix 2 to this Booklet and you should read it as part of

your assessment of the Proposed Transaction.

To assist the Independent Expert's consideration of the Proposed Transaction, the Independent Expert engaged

SRK Consulting (Australasia) Pty Ltd to provide a report incorporating a technical assessment and valuation of

the Gbane earn‐in and joint venture area. The Independent Specialist's Report is included in Appendix 2 and I

recommend you read that report in full.

1.9 What are the key advantages and disadvantages to Shareholders of the Proposed Transaction?

The advantages of (and key reasons why Shareholders should vote in favour of the resolutions to approve) the

Proposed Transaction are set out on page 3 of this Booklet and in sections 2.14 and 10 of the Independent

Expert's Report.

The disadvantages of (and key reasons why Shareholders may not want to vote in favour of the resolutions to

approve) the Proposed Transaction are set out on page 3 of this Booklet and in section 2.15 and 11 of the

Independent Expert's Report.

1.10 How will the Proposed Transaction be funded?

The Company will provide the Vendor Consideration to acquire an initial 40% interest in the Gbane Project by

paying A$1,000,000 as partial reimbursement of expenses and issuing the Consideration Securities to Cassius or

its nominees as part of the acquiring an initial 40% interest. The Proposed Transaction will be funded from the

Placement which raised A$7,500,000 and the Company's existing cash resources which will be sufficient to

allow the Company to initially acquire a 40% interest in the Gbane Project and contribute funding to earn up to

a further 30% interest.

On 13 February 2017, the Company announced that it had completed the Initial Placement, raising of

A$6,700,000 by issuing 837.5 million Shares at $0.008 per Share.

Subsequently, on 6 March 2017 and 24 March 2017, the Company announced to ASX that as a result of the

significant interest in the Initial Placement, the Company had been able to raise an additional A$750,000 and

A$50,000 respectively by issuing in aggregate an additional 100 million Shares at $0.008 per Share.

The Placement was supported by existing cornerstone shareholders and sophisticated and professional

investors but none of the Directors of Gulf or their associates participated in the Placement.

The Placement Shares were all issued within the Company's existing placement capacity under ASX Listing

Rules 7.1 and 7.1A (including by having obtained shareholder approval for the issue of 300,000,000 Shares at

the Company's AGM held on 25 November 2016).

The Placement was not underwritten. There were no fees or other costs incurred in connection with the

Placement other than fees of approximately A$20,000.

1.11 What is the impact of Proposed Transaction on the financial position of the Company

Following implementation of the Proposed Transaction, the summary pro‐forma balance sheet of the Company

as at 31 December 2016 will be as set out below.

31‐Dec‐16 Adjustments 31‐Dec‐16

A$ Ref Reviewed Pro forma

ASSETS

Cash and cash equivalents 1,2 2,675,956 6,500,000 9,175,956

Trade and other receivables 1,717 ‐ 1,717

Total Current Assets 2,677,673 6,500,000 9,177,673

Plant & equipment 97,665 ‐ 97,665

Exploration expenditure 2,3,4

917,456 1,705,000 2,622,456

Total Non‐Current Assets 1,015,121 1,205,000 2,720,121

Total Assets 3,692,794 8,205,000 11,897,794

LIABILITIES

Trade and other payables 52,892 ‐ 52,892

Total Current Liabilities 52,892 ‐ 52,892

Total Liabilities 52,892 ‐ 52,892

Net Assets 3,639,902 8,205,000 11,844,902

EQUITY

Issued capital 1,3 35,770,946 7,755,000 43,525,946

Reserves 4 920,000 450,000 1,370,000

Accumulated losses (33,051,044) ‐ (33,051,044)

Total Equity 3,639,902 8,205,000 11,844,902

1. The issue of 937,500,000 shares at $0.008 pursuant to the Placement to raise $7,500,000 2. The partial reimbursement of expenses of $1,000,000 to Cassius or its nominees as part of the Vendor

Consideration, resulting in a net cash adjustment of $6,500,000 being $7,500,000 less $1,000,000. 3. The issue of 75,000,000 Consideration Shares at a value of $255,000 as assessed by the Independent

Expert 4. The issue of 300,000,000 Consideration Options at a value of $450,000 as assessed by the

Independent Expert 5. The exploration expenditure adjustment of $1,705,000 is the value of the Vendor Consideration

calculated based on the $1,000,000 reimbursed to Cassius or its nominees, the assessed value of the Consideration Shares of $255,000 and the assessed value of the Consideration Options of $450,000.

1.12 What is the impact of the Proposed Transaction on the Company’s capital structure?

Gulf currently has 3,672,446,452 Shares and 432,500,000 Options on issue. The Proposed Transaction will result in the issue of:

75,000,000 Shares;

150,000,000 Tranche 1 Options which are exercisable within 2 years from the date of issue; and

a further 150,000,000 Tranche 2 Options which are exercisable within 3 years from the date of issue subject to satisfaction of a condition of the Gbane Project having an inferred resource of 1 million ounces of gold.

The table below sets out the effect the Proposed Transaction will have on the capital structure of the Company (assuming that Shareholder Approval is obtained and that the condition for issue of the Tranche 2 Options is satisfied). Prior to Proposed Transaction Post Proposed Transaction

Shares on issue:

Non‐Associated Shareholders 3,442,035,818 93.7% 3,442,035,818 91.9%

Cassius Directors 92,000,000 2.5% 104,400,000 2.8%

Other Cassius Vendors 138,410,634 3.8% 201,010,634 5.4%

Total undiluted Shares on issue 3,672,446,452 100% 3,747,446,452 100%

Options on issue:

Non‐Associated Shareholders 10,000,000 2.3% 10,000,000 1.4%



Total Options on issue 432,500,000 100% 732,500,000 100%

Fully diluted position:

Non‐Associated Shareholders 3,452,035,818 84.1% 3,452,035,818 77.1%



Total diluted Shares on issue 4,104,946,452 100% 4,479,946,452 100%

* The Cassius Directors have agreed to transfer 42,250,000 Options that they currently hold to one of the shareholders of Cassius.

1.13 Substantial Shareholders

The table below sets out the effect the Proposed Transaction will have on holdings of persons that have

notified they have a substantial holding in the Company and who are expected to remain substantial holders

based on those notifications (and assuming all Shareholder Approvals are obtained).

Shareholder Holding before

the Proposed

Transaction

% of Issued

Share Capital

Holding after

the Proposed

Transaction

% of Issued

Share

Capital**

% of Issue

Share

Capital ***

Sandra Brinkmann 249,835,717 8% 249,835,717 6.67% 5.58%

Axis Group 199,222,222 5.34% 199,222,222 5.32% 4.45%

WJK Investments Pty

Ltd*

185,000,000 5.04% 185,000,000 4.94% 4.13%

* WJK Investments Pty Ltd is an entity controlled by the Independent Director, Mr Wayne Kernaghan. ** This is calculated on an undiluted basis before any Options are exercised ***This is calculated on a fully diluted basis and assumes that all Options, including all the Consideration Options, are issued and exercised.

1.14 What are the implications if the Proposed Transaction is implemented?

If the Proposed Transaction is implemented, then the Company will acquire an initial 40% interest in the Gbane

Project (which interest may be increased to 100% over time) and will have a legally enforceable right to

consider (and possibly participate) any various projects land banked by Cassius.

For further details regarding the Gbane Project, see section 3 and the Independent Specialist's Report.

1.15 What are the implications if the Proposed Transaction is not implemented?

If the Proposed Transaction is not implemented, then the Company will not acquire any interest in the Gbane

Project and will not have any legally enforceable right to consider any other projects land banked by Cassius.

In this event, the Company will retain the funds raised by the Placement will continue to seek to identify other

exploration or investment opportunities (which could take considerable time). Further, the costs associated

with pursuing the Proposed Transaction will need to be expensed by the Company in the current financial year.

1.16 What is the recommendation and intentions of Independent Director in respect of the Proposed Transaction?

Mr Wayne Kernaghan is the sole independent director of the Company ("Independent Director").

Having regard to the conclusion of the Independent Expert, and the potential advantages and disadvantages of

the Proposed Transaction, the Independent Director recommends that, Shareholders vote in favour of the

Proposed Transaction at the General Meeting by voting in favour of the Transaction Resolution and

Consideration Securities Resolutions.

Shareholders also should carefully consider whether to vote in favour of the Proposed Transaction having

regard to the conclusion of the Independent Expert and matters set out in the Independent Expert's Report,

the potential advantages and disadvantages of the Proposed Transaction, their personal financial and other

circumstances and any independent advice they receive.

The Independent Director has indicated to the Board he intends to vote in favour of all resolutions to approve

the Proposed Transaction, in respect of Shares in which he has an interest, or open proxies he holds, to the

extent they are entitled to vote at the General Meeting.

1.17 What other Shareholder Approval is being sought at the General Meeting

The Company recently completed the Placement for the purposes of funding the Proposed Transaction, which

utilised a significant part of the Company's capacity to issue equity securities under ASX Listing Rule 7.1A and all

of the Company's capacity to issue equity securities under ASX Listing Rule 7.1.

Accordingly, the Company is seeking Shareholder approval at the General Meeting for the ratification of the

issue of the Placement Shares under ASX Listing Rule 7.4. If the Placement Resolution is approved, the

Company will have refreshed its placement capacity under ASX Listing Rule 7.1 so as to enable it to issue up to

a further 15% of its issued equity securities within the next 12 months.

1.18 What is the recommendation of the Directors in respect of the Placement Resolution

All of the Directors recommend that Shareholders vote in favour of the Placement Resolution.

1.19 What should Shareholders do next?

You should read and consider the remainder of this Booklet in full before making any decision on the Proposed

Transaction.

Your voting entitlement at the Meeting will depend on whether you hold Shares at 7pm on 24 May 2017.

The deadline for lodgement of proxy forms is 11am on 24 May 2017.

Voting at the Meeting is important. Please vote by voting in person, by proxy, by attorney or by corporate

representative. For further details on how to vote, please see the Notice of Meeting in Appendix 1 of this

Booklet.

2 Information about the Company

2.1 Overview

Gulf Industrials Ltd (ACN 115 027 033) (the "Company") is an Australian public company listed on the ASX (ASX:

GLF). The Company was incorporated on 30 June, 2005 and listed on the ASX on 10 August 2006.

The Company is a resource development company focused on the identification, acquisition and valorisation of

resource focused projects. The Company seeks to target niche opportunities in the industrial minerals sector in

Africa and the Indian Ocean Rim countries. As at the date of this booklet, the Company's operations are

focused in Madagascar.

The Company's strategy is to identify, acquire and develop low capital expenditure projects that can be brought

into production in the near term, providing an underpinning cash flow to grow the Company and create value

for all stakeholders.

The Company's current focus is on a large, undeveloped high quality Limestone Project on the South West

coast of Madagascar. The Soalara Calcaire Project situated adjacent to a former (colonial) port facility and is

30km south of the major regional centre of Toliara. If the Proposed Transaction is approved and proceeds, the

Gbane Project will becomes the Company`s main project.

2.2 Share price and trading history

The graph below outlines the share price movements in respect of Shares over the past 12 months.

In the 12 months prior to 20 January 2017, being the last day Shares were traded prior to the announcement of

the Proposed Transaction, the Shares experienced limited trading activity, with around 15% of volume traded.

Over this period, the Share price fluctuated at between A$0.006 per Share and A$0.012 per Share. During this

period, the volume of Shares traded on any single day did not exceed 0.5% highlighting a lack of trading in the

Shares.

Further details regarding the recent trading prices of the Company's Shares and the assessed values of the

Consideration Shares and Consideration Options as assessed by the Independent Expert are set out in the

Independent Expert's Report.

2.3 Financial position and performance

The table below sets out a summary of the financial position of the Company as at 31 December 2016, 30 June

2016 and 30 June 2015.

Table 1 Gulf Historical Financial Position

31‐Dec‐16 30‐Jun‐16 30‐Jun‐15

A$ Ref Reviewed Audited Audited

ASSETS

Cash and cash equivalents 2,675,956 3,315,757 3,509,158

Trade and other receivables 1,717 21,516 2,394

Total Current Assets 2,677,673 3,337,273 3,511,552

Plant & equipment 97,665 ‐ ‐

Exploration expenditure 917,456 917,456 917,456

Total Non‐Current Assets 1,015,121 917,456 917,456

Total Assets 3,692,794 4,254,729 4,429,008

LIABILITIES

Trade and other payables 52,892 24,414 93,404

Total Current Liabilities 52,892 24,414 93,404

Total Liabilities 52,892 24,414 93,404

Net Assets 3,639,902 4,230,315 4,335,604

EQUITY

Issued capital 35,900,946 35,755,946 35,535,721

Reserves 920,000 920,000 1,790,200

Accumulated losses (33,051,044) (32,445,631) (32,990,317)

Total Equity 3,639,902 4,230,315 4,335,604

Source: Company Financials

The table below sets out a summary of the financial performance of the Company for the 6 months ended 31

December 2016 and for the full financial years ended 30 June 2016 and 30 June 2015.

31‐Dec‐16 30‐Jun‐16 30‐Jun‐15

A$ Ref Reviewed Audited Audited

Revenue 11,803 42,871 11,689

Exploration expenditure

(446,123) (191,814) (17,485)

Depreciation (5,684) ‐ ‐

Operating expenses

(165,409) (176,571) (152,606)

Loss before income tax expense

(605,413) (325,514) (158,402)

Income tax expense

‐ ‐ ‐

Loss for the year (605,413) (325,514) (158,402)

For further financial information on the Company, please refer to the half yearly financial report of the

Company which was released to the ASX on 1 March 2017.

2.4 Outlook

The Proposed Transaction, together with the Placement, represents an evolutionary watershed for the

Company, placing it in in a strong position to:

participate in an opportunity to develop a potentially significant gold asset; and

progressively increase its strategic operational footprint in a highly‐sought after Upper East Region of

Ghana, West Africa.

3 Information about Cassius and the Gbane Project

3.1 Overview of Cassius

Cassius is a Ghanaian incorporated company, which is part owned and controlled by interests associated with two directors of the Company, namely Anthony Karam and James Arkoudis. Those Cassius Directors collectively hold a 39.5% interest in Cassius.

Cassius has been active in Ghana since 2013, working closely with the Ghanaian Minerals Commission and the Ministry of Lands and Natural Resources, as well as with the Local Traditional Chiefs and Local Licence Holders.

3.2 Gbane Project

The Gbane Project is part of a Large Scale Licence formally issued by the Government of the Republic of Ghana

("Licence"). As a condition of the Licence, the Ghanaian government is entitled to a statutory free‐carried

interest of up to 10%.

More specifically, the Licence was issued by the Ghanaian Minerals Commission, and the Ministry for Land and

Natural Resources, over an area which includes the Gbane Project area (outlined in blue in Diagram 1).

Diagram 1: The Gbane Project Area

The Gbane Project area is approximately 4.37km2 and located within this Palaeoproterozoic Nangodi Granite‐

Greenstone Belt in northeast Ghana, close to the border with Burkina Faso. The designated Gbane Project area

represents circa 35% of the total licence area.

The terms of the Licence include the grant of a Prospecting Licence for an initial period of two years.

Prior to the expiration of the initial term, the licence holder, subject to:

compliance with the standard licence terms (including minimum expenditure and reporting); and

exploration results,

can apply to either have the Prospecting Licence extended for a further period of two years, or alternatively the

licence holder can apply for a Mining Lease.

Further information on the key terms of the Licence and the proposed work programme for the Gbane Project

are set out in the Independent Specialist's Report.

3.3 Exploration Potential of the Gbane Project

There is significant gold production, from several gold mines in the wider region, as well as from numerous

small artisanal gold workings. Identified gold deposits range in size from small‐scale, high‐grade shear‐hosted

veins that occur along lithological contacts, to larger tonnage lower‐grade deposits associated with stock works

in felsic to intermediate intrusions.

The Nangodi gold belt, which remains relatively under‐explored by modern techniques and technology, is host

to proven gold potential, evidenced by the long history of regional small‐scale gold mining, artisanal workings,

in addition to more recent discoveries such as Endeavour Mining’s (TSX Symbol: EDV)” 1.56Moz Youga deposit.

The Gbane Project area is defined by an abundance of extensive artisanal mining. Workings are mostly shafts,

trenches and pits excavated along the strike of a series of quartz veins, and within alluvial material. There is

significant potential for the discovery of both large‐scale open pit and high‐grade underground economically

viable deposits.

The old workings and/or shafts (marked in Diagram 2) represent historical artisanal workings. Almost all those

basic operations were limited due to two main factors; namely the lack of access to proper machinery and

equipment; and the existence of the water table at a depth of approximately 23 metres.

The introduction of more sophisticated methods and machinery will allow the Joint Venture to unlock the

potential of this region.

Further details on the Gbane Project are set out in the Independent Specialist's Report.

Diagram 2: Gbane Project – Mineralisation, Structure and Historical Workings

3.4 Objectives of the Gbane Project

The objectives of the Gbane Project over the next 12 months include:

completion of soils and geophysics within six months, with Cassius anticipating results from the soil

sampling and geophysics program being available towards mid‐2017;

planning the Stage One Drilling Program, which program will commence during the first 3 to 6 months of

2017;

a 5,000m maiden drill programme is scheduled to commence in April 2017. Gross drilling metres are

estimated at up to 3000m (RC) and 2000m (Diamond Core), and may be increased depending on results;

and

there is an exploration program in progress with plans to commence mining operations in near future,

subject to the conversion of the Licence from a Prospecting Licence to a Mining Licence.

3.5 Management of the Gbane Project

Cassius has recruited a team of experienced mining expatriate staff to oversee the Project, which will oversee

and complement the expertise of the local mining employees.

3.6 Withdrawal Rights

The Company has the ability to withdraw at certain milestones from the Gbane Project if, in the Company's sole

discretion, it is not satisfied with the development of, or results (or lack thereof) in relation to the Gbane

Project.

3.7 Material terms of the acquisition of an interest and joint venture in respect of the Gbane Project

The material terms of the Proposed Transaction are as follows:

Conditions

Precedent

Completion of the Proposed Transaction is subject to and conditional on the

following conditions:

(a) completion of due diligence by the Company as to its reasonable satisfaction on Cassius or its nominees and its assets (including the Licence and the Gbane Project);

(b) Shareholder Approval;

(c) receipt of necessary approvals and consents from government authorities and other third parties to the transaction;

(d) ASX approval in relation to Chapter 11 and if required, relisting under Chapters 1 and 2;

(e) the preparation, negotiation and execution of formal documentation for the joint venture and the Gbane Project.

Consideration Subject to the completion of satisfactory due diligence on the Gbane Project by the

Company, the Company has the right to earn up to a 70% interest in the Gbane

Project, and it's interest may in certain circumstances be increased to 100% over

time. Broadly, the Company will:

(a) initially acquire a 40% interest in the Gbane Project for the Vendor Consideration by paying Cassius A$1,000,000 (as partial reimbursement of expenses) and issuing to Cassius the Consideration Shares and the Consideration Options; and

(b) be able to acquire up to a further 30% interest in the Gbane Project (taking its overall interest up to 70%), by contributing the Earn‐In Consideration, with the Company receiving an additional 5% interest in the Gbane Project for every A$1,500,000 contributed to the advancement of the Gbane Project up to a maximum of A$9 million over two years from the date of the Term Sheet.

Exclusivity The Company will have an exclusivity period from the date of the Term Sheet until 31

May 2017 (or such longer period as agreed by the parties) to finalise its due diligence

enquiries and negotiate definitive transaction documentation ("Exclusivity Period").

During the Exclusivity Period, neither Cassius (nor its directors, shareholders or its

advisors) will discuss, negotiate or enter into any agreement with any third party for

the disposal of all or any interest in the Licence, the Gbane Project or Cassius or

facilitate any due diligence investigations by any person other than the Company with

respect to the Licence, the Gbane Project or Cassius.

Termination The Company will have the ability to withdraw at certain milestones from the Gbane

Project if, in the Company's sole discretion, it is not satisfied with the development

of, or results (or lack thereof) in relation to the Gbane Project.

Permitted Security

Interest

The Company will also have a priority interest (first charge/security) over plant and

the Licence (to the extent legally permitted). The Company will withdraw such

security interest, within five Business Days after the date on which the Company has

received an amount equal to the Consideration.

Mining Licence Cassius has been formally granted a Large Scale Prospecting Licence ("Licence") by the Ghana Minerals Commission. Cassius has represented and warranted that:

(a) the Licence is valid and allows for the Gbane Project to be implemented; and

(b) it has been informed by the Ghanaian Minerals Commission that the joint venture will be permissible under the Licence.

Management

Committee

(a) The supervision of and all strategic decisions relating to the conduct of the Gbane Project, including the consideration and approval of any program and budget and other management plans will be decided by a committee ("Management Committee").

(b) Until such time as the Company has a 50% or more interest in the whole Large Scale Licence Area, the Management Committee is to comprise of:

two directors from Cassius (or their nominees), one of which is to be the Chair of the Management Committee; and

two representatives from the Company.

(c) At the point in time when the Company has a 50% or more interest in the whole Large Scale Licence Area, the Management committee is to comprise of:

two representatives from Cassius (or its shareholders); and

two representatives from the Company, one of which is to be the Chair of the Management Committee.

(d) Decisions of the Management Committee require the affirmative vote of representatives representing more than 50% of the aggregate Participating Interest. In the event of deadlock, the Chair will have a second and casting vote.

Both the Company and Cassius shall waive any possible conflicts of interest.

Manager (a) The Gbane Project will be managed by an individual nominated by Cassius and engaged by Cassius' shareholders or one of their nominees ("Manager").

(b) The Manager may be removed with the approval of 75% of the participants in the joint venture.

(c) The Manager will report to the Management Committee and will carry out all project activities pursuant to an approved program and budget and in accordance with decisions made by the Management Committee.

Joint Venture

Property

Any joint venture property will be owned by the parties in accordance with the terms

of the respective joint venture agreement(s).

Pre‐emption, Tag

and Drag Along

Provisions

The Joint Venture Agreement will contain customary pre‐emption, tag‐along and drag‐along provisions:

(a) the tag‐along provisions will bind all participants with an interest of more than 5% in the joint venture; and

(b) the drag‐along provision may be enforced when a shareholder has more than a 60% interest in the joint venture.

The Company and Cassius are negotiating a Joint Venture Agreement which reflects these key terms, and the

execution of the Joint Venture Agreement is a Condition Precedent to completion of the Proposed Transaction.

3.8 Option of the Company in relation to other potential projects of Cassius

Under the Term Sheet and proposed Joint Venture Agreement, the Company will be given an option to

participate in any project that Cassisus' land banks (Future Projects). The table diagram below sets out the

location of the Future Projects.

4 Additional Information

4.1 Interests of the Directors

As at the date of this Explanatory Memorandum, the Directors held the following interests (either directly or

indirectly) in Shares and Options:

Director Shares Options % Interest*

Wayne Kernaghan 185,000,000 ‐ 4.5%

James Arkoudis 46,000,000 105,625, 000 3.7%

Anthony Karam 46,000,000 105,625, 000 3.7%

*This is calculated on a fully diluted basis and assumes that all Options are exercised.

Further, Mr James Arkoudis and Mr Anthony Karam are directors of (and together hold an aggregate interest of

39.5% of Cassius.

Additionally, Mr Arkoudis and Mr Karam have each agreed to transfer 21,125,000 Options that they acquired in

September 2014 to one of the shareholders of Cassius. This represents a reduction in the respective Option

holdings of each of Mr Arkoudis and Mr Karam from 105,625, 000 Options to 84,500, 000 Options in aggregate

for no consideration to Mr Arkoudis or Mr Karam. The transfer of those Options effectively represents a

significant saving in the consideration that the Company may otherwise have been required to pay to acquire

its interest in the Gbane Project.

Following the issue of the Consideration Securities and transfers of these Options, the Directors will hold the

following interests (either directly or indirectly) in Shares and Options.

Director Shares Options % Interest*

Wayne Kernaghan 185,000,000 ‐ 4.13%

James Arkoudis 52,200,000 143,950, 000** 4.38%

Anthony Karam 52,200,000 134, 950, 000** 4.18%

*This is calculated on a fully diluted basis and assumes that all Options, including Consideration Options, are

issued and exercised.

**This includes Tranche 2 Options which may only be exercised subject to satisfaction of a condition of the

Gbane Project having an inferred resource of 1 million ounces of gold.

4.2 No payment or benefit

No payment or other benefit is proposed to be made or will be given to any Director, secretary of executive

office of the Company in respect of the Proposed Transaction other than as set out in this Booklet.

4.3 No agreements or arrangements

There is no agreement or arrangement made between any Director or any other person in connection with or

conditional upon the outcome of the Proposed Transaction other than as set out in this Booklet.

4.4 Consent

The Independent Expert has consented in writing to be named in this Booklet, and the inclusion of the

Independent Expert's Report, and statements based on its report, in the form and context in which they appear

in this Booklet and has not withdrawn its consent.

The Independent Specialist has consented in writing to be named in this Booklet, and the inclusion of the

Independent Specialist's Report, and statements based on its report, in the form and context in which they

appear in this Booklet and has not withdrawn its consent.

4.5 ASX Listing Rules

ASX Listing Rule 7.1

ASX Listing Rule 7.1 contains a prohibition against entities issuing or agreeing to issue more equity securities

than the number calculated in accordance with the formula set out in ASX Listing Rule 7.1. That formula allows

the Company to issue a maximum number of equity securities equal to 15% of its previously issued capital,

subject to various exceptions in ASX Listing Rule 7.2. For the purposes of ASX Listing Rule 7.2, "equity

securities" is defined to include an option over an issued or unissued share.


ASX Listing Rule 7.4 provides that an issue of equity securities made without approval under ASX Listing Rule

7.1 is treated as having been made with approval for the purposes of ASX Listing Rule 7.1 provided that the

issue did not breach 7.1 and the holders of the ordinary securities subsequently approve it.


ASX Listing Rule 10.1 contains a prohibition against a company acquiring a substantial asset from a related

party (or an associate of a related party) without shareholder approval. For the purposes of the ASX Listing

Rules:

a director of the Company is a related party; and

an entity controlled by a related party (eg. an entity controlled by a director of the Company) is also a

related party of the Company.

Relevantly, Mr James Arkoudis and Mr Anthony Karam (as a directors of the Company) are each a related party

of the Company. Further, both Mr James Arkoudis and Mr Anthony Karam are also directors and shareholders

holding a combined 39.5% interest in Cassius. An asset is a substantial asset if its value (or the value of the

consideration for it) is 5% of more of the equity interests of the entity as set out in the latest accounts given to

ASX. The proposed acquisition of an interest in the Gbane Project would be regarded as a substantial asset.


ASX Listing Rule 10.11 contains a prohibition against a company issuing equity securities to a related parties.

Further, the exceptions to ASX Listing Rule 7.1 include an issue of securities made with the approval of holders

of ordinary securities for the purposes of ASX Listing Rule 10.11 (see ASX Listing Rule 7.2 Exception 14).

4.6 Technical information required by the ASX Listing Rules


Under ASX Listing Rule 7.5, certain information needs to be disclosed by the Company in connection with

obtaining shareholder approval in respect of the Company seeking approval for the issue of the Placement

Shares. Accordingly, the following information is disclosed:

Number of Shares issued The aggregate number of Placement Shares issued was

937,500,000 (which includes an aggregate of 455,241,967 Shares

issued under ASX Listing Rule 7.1).

Issue Dates The Placement Shares were issued on 13 February 2017, 6 March

2017 and 24 March 2017.

Issue Price The Placement Shares were issued at a price of $0.008 per Share.

Terms of Issue The Placement Shares were issued as fully paid ordinary shares.

Persons to whom shares will be

issued.

The Shares were issued to existing cornerstone investors and

certain sophisticated, professional or institutional investors

identified by the Directors and to whom no prospectus needs to be

issued by the Company.

Use of Funds The funds raised from the Placement will be used to fund the

Proposed Transaction and for working capital purposes.


Under ASX Listing Rule 10.11, certain information needs to be disclosed by the Company in connection with

obtaining shareholder approval for the issue of the Consideration Shares and issue of the Consideration

Options. Accordingly, the following information is disclosed:

Maximum Number of Securities to be

issued

The maximum number of Consideration Shares to be issued is

75,000,000.

The maximum number of Consideration Options to be issued is

300,000,000.

Proposed Issue Date The Consideration Shares and Consideration Options will be issued

within 5 Business Days after the date of the Meeting.

Issue Price The Consideration Shares will be issued at their fair value as

assessed by the Independent Expert, being a total of $255,000.

No amount is payable by Cassius in respect of the issue of the

Consideration Options. The Options have an exercise price of

A$0.015 per Share.

Basis on which Cassius Directors and

Cassius are a Related Party

The Cassius Directors and Cassius are "related parties" of the

Company by virtue of Mr. James Arkoudis and Mr. Anthony Karam

(both of whom are Directors of the Company) being directors of,

and holders of an aggregate interest of 39.5% in Cassius.

Maximum number of Shares and

Options to be issued to Company

Directors

The number of Consideration Shares and Consideration Options to

be issued to Messrs Arkoudis and Karam are as follows:

Mr Arkoudis:

Consideration Shares 6,200,000

Consideration Options 59,450,000*

Mr Karam:

Consideration Shares 6,200,000

Consideration Options 50,450,000*

*These include the Tranche 2 Options which may only be exercised subject to satisfaction of a condition of the

Gbane Project having an inferred resource of 1 million ounces of gold.

5 Glossary

In this Notice and Explanatory Memorandum:

Additional Placement means the capital raising that was completed by the Company on 6 March 2017 and 24

March 2017 pursuant to which the Company raised A$750,000 and A$50,000 by issuing in aggregate 100

million Shares at $0.008 per Share.

Associate has the meaning given to that term in sections 10 to 17 of the Corporations Act.

ASX means the financial market operated by the Australian Securities Exchange.

ASX Listing Rules means the listing rules of the ASX.

ASIC means the Australian Securities and Investments Commission.

Booklet means this booklet, comprising the Chairman's letter, the Explanatory Memorandum the Notice of

Meeting and the accompanying documents.

Business Day means a day which is not a Saturday, Sunday or public holiday or bank holiday in Sydney

Australia.

Board means the board of Directors of the Company.

Cassius means Cassius Mining Limited, a company incorporated in Ghana West Africa.

Cassius Directors means Mr James Arkoudis and Anthony Karam and any entities controlled by them.

Cassius Vendors means Cassius and its nominees, including the Cassius Directors.

Company or Gulf means Gulf Industrials Limited (ACN 115 027 033).

Conditions Precedent means the conditions precedents to be satisfied for completion of the Proposed

Transaction, as summarised in section 3.7 of the Shareholder Booklet.

Consideration Options means together the Tranche 1 Options and Tranche 2 Options.

Consideration Securities means the Consideration Shares and Consideration Options.

Consideration Securities Resolutions means together Resolutions 2 and 3 in the Notice of General Meeting.

Consideration Shares means the issue of 75,000,000 Shares to Cassius or its nominees as part of the

consideration payable by the Company in respect of the Proposed Transaction.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company from time to time.

Earn‐In Consideration means the amount of up to A$9,000,000 which may be contributed by the Company to

the Project to earn up to a further 30% interest in the Gbane Project.

Equity Securities has the same meaning as in the ASX Listing Rules.

General Meeting means the General Meeting of Shareholders to be convened in respect of the Proposed

Transaction in accordance with the Notice of Meting.

Gbane Project or Project means the gold exploration project in Bolgatanga, Gbane currently owned by Cassius.

Independent Director means Mr Wayne Kernaghan.

Independent Expert means RSM Corporate Australia Pty Ltd.

Independent Expert's Report means the independent expert's report dated 19 April 2017 prepared by the

Independent Expert, a copy of which is included in this Booklet as Appendix 2.

Independent Specialist means SRK Consulting (Australasia) Pty Ltd.

Independent Specialist's Report means the independent specialist's report dated March 2017 prepared by the

Independent Specialist, a copy of which is included in the Independent Expert's Report included in this Booklet

in Appendix 2.

Initial Placement means the capital raising that was completed by the Company on 13 February 2017 pursuant

to which the Company raised A$6,700,000 by issuing 837.5 million Shares at $0.008 per Share.

Joint Venture Agreement means the agreement between the Company and Cassius setting out the terms and

conditions on which the Company agrees to acquire an interest in the Gbane Project and provide further

funding to increase its interest in the Gbane Project.

Licence means the licence granted to Cassius by the Government of the Republic of Ghana in respect of a

licenced area in Bolgatanga, Gbane, Ghana which includes the area of the Gbane Project, details of which are

set out in section 3.2 of this Booklet and in the Independent Specialist's Report.

Notice of Meeting means the Notice of General Meeting as set out in Appendix 1 of this Booklet.

Non‐Associated Shareholders means all Shareholders in the Company other than the Cassius Directors and

Other Cassius Vendors.

Option means an option to acquire a Share.

Other Cassius Vendors means the Cassius Vendors other than the Cassius Directors.

Placement means the Initial Placement and Additional Placement.

Placement Shares means 937,500,000 Shares issued pursuant to the Placement.

Placement Resolution means Resolution 4 in the Notice of General Meeting.

Proposed Transaction means the Company's proposed acquisition of an interest in the Gbane Project in

consideration for the issue of the Consideration Shares and Consideration Options.

Register means the register of Shareholders of the Company.

Registry means Security Transfer Registrars Pty Ltd

Share means a fully paid ordinary share in the Company.

Shareholder a registered holder of Shares.

Shareholder Approval means:

in the context of the Proposed Transaction, approval of the Transaction Resolution and Consideration

Securities Resolutions; and

in the context of the refresh of the Company's placement capacity under ASX Listing Rule 7.1, approval of

the Placement Resolution.

Term Sheet means the binding term sheet executed by the Company and Cassius dated 25 January 2017 in

respect of the Gbane Project.

Tranche 1 Options means 150,000,000 Options to be issued to Cassius or its nominees, subject to obtaining

Shareholder Approval, and which are exercisable at any time within 2 years from the date of issue at an

exercise price of A$0.015.

Tranche 2 Options means 150,000,000 Options to be issued to Cassius or its nominees, subject to obtaining

Shareholder Approval, and which are exercisable within 3 years from the date of issue at an exercise price of

A$0.015, subject to satisfaction of a condition that the Gbane Project has an inferred resource of 1 million

ounces of gold.

Transaction Resolution means Resolution 1 in the Notice of General Meeting.

Vendor Consideration means the amount of A$1,000,000 payable as a partial reimbursement of expenses and

the Consideration Securities to be provided by the Company to Cassius or its nominees for the acquisition of an

initial 40% interest in the Gbane Project.

Appendix 1

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notice is given that the Extraordinary General Meeting of Gulf Industrials Limited (“the Company”) will be held

at Level 27, AMP Centre, 50 Bridge Street, Sydney at 11am (AET) on 26 May 2017. The attached Explanatory

Memorandum should be read in conjunction with the Notice of Extraordinary General Meeting.

ORDINARY BUSINESS

Resolution 1 ‐ Approval for the acquisition of up to a 100% interest in the Gbane Project in Ghana, West

Africa

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

“That, for the purpose of Listing Rule 10.1, and for all other purposes, Gulf Industrials Limited ("the Company")

is authorised to acquire from Cassius Mining Limited ("Cassius") up to a 100% interest in Cassius' gold

exploration Gbane Project on the terms and conditions set out in the accompanying Explanatory Statement.”

Voting Exclusion Statement:

The Company will disregard any votes cast on this Resolution by Cassius Mining Limited, any party to the

proposed transaction and any associate of those persons.

However, the Company need not disregard a vote on this Resolution 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

• it is cast by the 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.

Resolution 2 ‐ Approval for the issue of Consideration Shares to Cassius Mining Limited or its nominees


“That, for the purpose of Listing Rule 10.11 and for all other purposes, approval is given for the Directors to

allot and issue 75,000,000 fully paid ordinary shares to Cassius Mining Limited or its nominees on the terms

and conditions set out in the accompanying Explanatory Statement.”

Note that if approval is given under Listing Rule 10.11 then approval is not required under Listing Rule 7.1.


The Company will disregard any votes cast on this Resolution by Cassius Mining Limited, any persons who is to

receive securities in relation to the Company and any associate of those persons.



the proxy form; or



Resolution 3 ‐ Approval for the issue of Consideration Options to Cassius Mining Limited or its

nominees


“That, for the purpose of Listing Rule 10.11 and for all other purposes, approval is given for the Directors to

allot and issue to Cassius Mining Limited or its nominees, the following options over fully paid ordinary shares

("Shares") with an exercise price of $0.015 per option:

150,000,000 options to be issued immediately and exercisable within 2 years after the date of issue

(Tranche 1 Options); and

150,000,000 options to be issued immediately and exercisable within 3 years after the date of issue ,

subject to satisfaction of a condition of the Ghana Project have an inferred resource of 1 million ounces of

gold (Tranche 2 Options),

and the issue of Shares upon exercise of the Tranche 1 Options and Tranche 2 Options on the terms and

conditions set out in the accompanying Explanatory Statement.”

Note that if approval is given under Listing Rule 10.11 then approval is not required under Listing Rule 7.1.


The Company will disregard any votes cast on this Resolution by Cassius Mining Limited, any persons who is to

receive securities in relation to the Company and any associate of those persons.



the proxy form; or



Resolution 4 ‐ Ratification of prior issue of ordinary shares as part of the Placement


“That, for the purpose of Listing Rule 7.4 and for all other purposes, approval is given for the issue of

455,241,967 fully paid ordinary shares as part of the Placement on the terms and conditions set out in

the accompanying Explanatory Statement.”


The Company will disregard any votes cast on this Resolution by any person who participated in the above

issue and any associate of those persons.



the proxy form; or



Further Business

To transact any further business that may legally be brought forward.

An Explanatory Memorandum to shareholders accompanies this Notice.

By Order of the Board

W J Kernaghan Company Secretary 19 April 2017

IMPORTANT NOTES

INSTRUCTIONS FOR COMPLETION OF PROXY FORM

Appointing a proxy

A shareholder who is entitled to attend and vote can appoint a proxy to attend and vote at the Annual General

Meeting on their behalf. A proxy need not be a shareholder of the Company.

A shareholder entitled to cast two or more votes may appoint two proxies and may specify the proportion or

number of votes each proxy is appointed to exercise. If proportions or numbers are not specified, each proxy

may exercise half the available votes.

You may complete and return the Appointment of Proxy included with this Notice. If you require a second

proxy form, please contact the Company Secretary or you may copy the Proxy Form.

If you do not provide proxy instructions electronically, proxy forms may be lodged by mail, by hand, online or

by facsimile in accordance with the instructions on the Proxy form.

For an appointment of a proxy to be effective, the Proxy form must be received:

(a) by post at Security Transfer Registrars Pty Ltd PO Box 52 Collins Street West, Victoria 8007, Australia;

(b) by facsimile on +61 8 9315 2233; or

(c) online at www.securitytransfer.com.au following the instructions on the proxy form;

by not later than 11.00am (AET) on 24 May 2017.

Corporate Shareholders

Corporate shareholders wishing to appoint a representative to attend the meeting on their behalf must provide

that person with a property executed letter confirming that they are authorised to act as the company’s

representative. The authorisation may be effective either for this meeting only or for all meetings of the

Company.

Eligibility to vote at the meeting

For the purpose of regulation 7.11.37 of the Corporations Regulations 2001, the Company has determined, for

the purposes of voting entitlements at the meeting, that Gulf shares are taken to be held by those shareholders

registered at 7:00pm (AET) on 24 May 2017. Accordingly, only those persons will be entitled to attend and

vote at the meeting.

How undirected proxies held by the Chairman of the meeting will be voted

If you appoint the Chair of the Meeting as your proxy and you do not specify in the proxy form the manner in

which you wish the Chair to vote on the resolutions to be considered at the meeting, you will be deemed to

have directed the Chair to vote in accordance with the voting intentions of the Chair to vote in favour of all

resolutions.

If you appoint the Chair of the Meeting as your proxy and wish to direct the Chair how to vote on some or all of

the resolutions to be considered at the Meeting, you must complete the directed proxy part of the proxy form

(Step 2 on the proxy form).

The Directors encourage all shareholders who submit proxies to direct their proxy how to vote on each

resolution.

Appendix 2

INDEPENDENT EXPERT'S REPORT

19 april 2017 dear - gulf industrials...the gbane project for every a$1,500,000 contributed to the...

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