ACN 009 150 083 DEMERGER SCHEME BOOKLET - …

1 sirius Resources NL ACN 009 150 083 DEMERGER of S2 Resources Ltd ACN 606 128 090 DEMERGER SCHEME BOOKLETA RECOMMENDED SCHEME OF ARRANGEMENT IN RELATION TO THE PROPOSED DEMERGER OF S2 RESOURCES LTDYour sirius Directors unanimously recommend that you VOTE IN FAVOUR of the DEMERGER SCHEME , in the absence of a Superior sirius Directors intend to VOTE IN FAVOUR of the DEMERGER SCHEME in respect of the sirius Shares over which they have voting control, in the absence of a Superior is an important document and requires your immediate attention. You should read it in its entirety before deciding whether or not to vote in favour of the DEMERGER SCHEME . If you are in any doubt as to how to deal with this DEMERGER SCHEME BOOKLET , you should consult your broker or your financial adviser, legal or other professional adviser you have any questions in relation to this DEMERGER SCHEME BOOKLET or the DEMERGER SCHEME , you should call the sirius Shareholder Information Line on 1800 992 793 (within Australia) or +61 1800 992 793 (from outside Australia) on week days between and (Perth time).

2 Corporate adviser to SiriusLegal adviser to SiriusS2 RESOURCES LTDC ontents Important Notices 2 Important Dates and Expected Timetable for the DEMERGER SCHEME 4 Letter from Chairman of sirius 5 Section 1. Considerations Relevant to Your Vote on the DEMERGER SCHEME 7 2. S2 Resources Investment Highlights 15 3. Frequently Asked Questions 17 4. Profile of S2 Resources if the DEMERGER is Implemented 31 5. Investigating Accountant s Report 58 6. Summary of the DEMERGER SCHEME 76 7. How to Vote at the DEMERGER SCHEME Meeting and the General Meeting? 81 8. Risk Factors 85 9. Profile of sirius 91 10. What if the DEMERGER SCHEME is Not Implemented? 93 11. Taxation Implications for sirius Shareholders 95 12. Implementation of the DEMERGER SCHEME 102 13. Additional Information 110 14. Glossary and Interpretation 124 Annexure A.

3 Summary of Terms of DEMERGER Implementation Deed 138 B. Summary of Terms of DEMERGER Transition Deed 142 C. DEMERGER Deed Poll 147 D. DEMERGER SCHEME 156 E. Notice of DEMERGER SCHEME Meeting 169 F. Notice of General Meeting 174 G. Independent Expert s Report 178 H. Independent Geological Report 229 I. List of Tenements Held by S2 Resources 260 Corporate Directory 265 DEMERGER SCHEME BOOKLET 2015 DEMERGER SCHEME BOOKLETPAG E 1 IMPORTANT NOTICESN ature of this documentThis DEMERGER SCHEME BOOKLET is important. sirius Shareholders should carefully read this DEMERGER SCHEME BOOKLET in its entirety before deciding how to vote on the DEMERGER SCHEME Resolution and the Capital Reduction DEMERGER SCHEME BOOKLET provides sirius Shareholders with information about the proposed DEMERGER of S2 Resources from sirius , by way of a SCHEME of arrangement between sirius and sirius Shareholders under Part of the Corporations DEMERGER SCHEME BOOKLET constitutes an explanatory statement pursuant to section 412(1) of the Corporations Act and contains certain information which is material to the decision of sirius Shareholders to vote in favour of, or against, the DEMERGER SCHEME Resolution at the DEMERGER SCHEME Meeting.

4 It also provides all the information known to the sirius Board that is material to sirius Shareholders in deciding how to vote on the Capital Reduction Resolution at the General Meeting. The Notice of DEMERGER SCHEME Meeting is contained in Annexure E of this DEMERGER SCHEME BOOKLET . The Pink Proxy Form accompanying this DEMERGER SCHEME BOOKLET should be used in respect of voting on the DEMERGER SCHEME Resolution at the DEMERGER SCHEME Meeting. The Notice of General Meeting is contained in Annexure F of this DEMERGER SCHEME BOOKLET . The Green Proxy Form accompanying this DEMERGER SCHEME BOOKLET should be used in respect of voting on the Capital Reduction Resolution at the General Meeting. If you require further information or have questions regarding the DEMERGER SCHEME , please call the sirius Shareholder Information Line on 1800 992 793 (within Australia) or +61 1800 992 793 (from outside Australia) on week days between and (Perth time).

5 If you are in doubt about anything in this DEMERGER SCHEME BOOKLET , please contact your legal, financial or other professional adviser. If you no longer hold any sirius Shares, please disregard this DEMERGER SCHEME of this DEMERGER SCHEME BookletThis DEMERGER SCHEME BOOKLET is the explanatory memorandum issued by sirius in connection with the proposed DEMERGER of S2 Resources from sirius , pursuant to which each SCHEME Participant will receive the DEMERGER SCHEME Consideration. This DEMERGER SCHEME BOOKLET is not a prospectus under Chapter 6D of the Corporations Act in respect of S2 Shares. Section 708(17) of the Corporations Act provides that an offer of securities does not need disclosure under Chapter 6D of the Corporations Act if it is made pursuant to a compromise or arrangement under Part of the Corporations Act, approved at a meeting held as a result of an order made by the Court under section 411(1) or 411(1A) of the Corporations for informationExcept as provided below, the information in this DEMERGER SCHEME BOOKLET has been prepared by sirius and is the sole responsibility of sirius .

6 The Independent Expert, with assistance from the Independent Geologist, has prepared the Independent Expert s Report in relation to the DEMERGER SCHEME and takes responsibility for that Report. sirius does not assume any responsibility for the accuracy or completeness of the information contained in the Independent Expert s Report. The Independent Expert s Report is set out in Annexure has prepared the taxation implications section of this DEMERGER SCHEME BOOKLET , set out in Section 11 and takes responsibility for that Section only. The Investigating Accountant has prepared the Investigating Accountant s Report set out in Section 5 of this DEMERGER SCHEME BOOKLET and takes responsibility for that Investigating Accountant s Report information and role of ASIC and ASXA copy of the proposed DEMERGER SCHEME is included in this DEMERGER SCHEME BOOKLET as Annexure copy of this DEMERGER SCHEME BOOKLET has been provided to ASIC in accordance with section 411(2)(b) of the Corporations Act.

7 This DEMERGER SCHEME BOOKLET was then registered by ASIC under section 412(6) of the Corporations Act before being sent to sirius Shareholders. ASIC has examined a copy of this DEMERGER SCHEME BOOKLET . ASIC has been requested to provide a statement, in accordance with section 411(17)(b) of the Corporations Act, that it has no objection to the DEMERGER SCHEME . ASIC s policy in relation to statements under section 411(17)(b) of the Corporations Act is that it will not provide such a statement until the Second Court Date because it is only at this time that ASIC will have been able to observe the entire DEMERGER SCHEME process. If ASIC provides that statement, it will be produced to the Court at the time of the Second Court Date. Neither ASIC nor any of its officers take any responsibility for the contents of this DEMERGER SCHEME copy of this DEMERGER SCHEME BOOKLET has been lodged with ASX.

8 Neither ASX nor any of its officers take any responsibility for the contents of this DEMERGER SCHEME orderThe fact that, under section 411(1) of the Corporations Act, the Court has ordered that the DEMERGER SCHEME Meeting be convened and has approved the DEMERGER SCHEME BOOKLET required to accompany the Notice of DEMERGER SCHEME Meeting does not mean that the Court: has formed any view as to the merits of the proposed DEMERGER SCHEME or as to how sirius Shareholders should vote (on this matter sirius Shareholders must reach their own decision); or has prepared, or is responsible for the content of, this DEMERGER SCHEME looking statements and intentionsCertain statements in this DEMERGER SCHEME BOOKLET are about the future. Such statements and information are not based solely on historical facts, but rather reflect the current expectations of sirius concerning future results, events or other Shareholders should be aware that there are risks (both known and unknown)

9 , uncertainties, assumptions and other important factors that could cause the actual conduct, results, performance or achievements of sirius or S2 Resources to be materially different from the future conduct, results, performance or achievements expressed or implied by such statements or that could PAG E 2 S2 RESOURCES LTD DEMERGER SCHEME BOOKLET 2015cause the future conduct, results, performance or achievements to be materially different from historical conduct, results, performance or risks, uncertainties, assumptions and other important factors include, among other things, the risks set out in Section 8 of this DEMERGER SCHEME sirius , nor any of its directors, officers or advisers, or any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this DEMERGER SCHEME BOOKLET will actually Shareholders are cautioned about relying on any such forward looking statements.

10 The forward looking statements in this DEMERGER SCHEME BOOKLET reflect views held only as at the date of this DEMERGER SCHEME to the Corporations Act and any other applicable laws, sirius disclaims any duty to update any forward looking statements other than with respect to information that they become aware of prior to the DEMERGER SCHEME Meeting and which the sirius Directors consider is material to the making of a decision regarding whether or not to vote in favour of the DEMERGER document is not investment adviceThis DEMERGER SCHEME BOOKLET does not take into account the investment objectives, financial situation and particular needs of each individual sirius Shareholder or any other person. Before making any investment decision in relation to the DEMERGER SCHEME , you should consider, with or without the assistance of an independent securities adviser, whether that decision is appropriate in light of your particular investment needs, objectives and financial Shareholders outside AustraliaThis DEMERGER SCHEME BOOKLET and the DEMERGER SCHEME itself are subject to Australian disclosure requirements, which may differ from the applicable requirements in other jurisdictions.