ASX ANNOUNCEMENT

COMPANY SNAPSHOT

LODESTAR MINERALS LIMITED ABN: 32 127 026 528

CONTACT DETAILS

Bill Clayton, Managing Director

+61 8 9423 3200

Registered and Principal OfficeLevel 2, 55 Carrington Street Nedlands, WA 6009

PO Box 985

Nedlands, WA, 6909 info@lodestarminerals.com.au www.lodestarminerals.com.au

CAPITAL STRUCTURE

Shares on Issue:

334,579,909 (LSR)

Options on Issue:

20,750,000 (unlisted) 36,044,068 (listed ‐ 31 Mar 2016)

ASX: LSR

PROJECTS

Peak Hill - Doolgunna: Camel Hills - gold Neds Creek - gold Marymia - gold

Imbin - gold and base metals

20 October 2015 Electronic lodgement

DISPATCH OF 2015 ANNUAL REPORT AND NOTICE OF AGM

Attached is copy of the 2015 Annual Report together with the Notice of Annual General Meeting, Proxy Form and Explanatory Memorandum which have been dispatched to shareholders.

A copy of the Annual Report and Notice of Annual General Meeting is also available on our website www.lodestarminerals.com.au

For and on behalf of the Board

LODESTAR MINERALS LIMITED

ABN 32 127 026 528

NOTICE OF ANNUAL GENERAL MEETING PROXY FORM

AND EXPLANATORY MEMORANDUM

Date of Meeting

Wednesday 25 November 2015

Time of Meeting

11:00 am (WST)

Place of Meeting

Level 2, 55 Carrington Street Nedlands, Western Australia

LODESTAR MINERALS LIMITED

ABN 32 127 026 528

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of shareholders of Lodestar Minerals Limited ('Company') will be held at 11:00 am (WST) on Wednesday, 25 November 2015, at Level 2, 55 Carrington Street, Nedlands, Western Australia.

In order to determine voting entitlements, the register of Shareholders will be closed at 4:00 pm (WST) on Monday, 23 November 2015.

An Explanatory Statement containing information in relation to each of the Resolutions to be put to the meeting accompanies this Notice.

AGENDA

To consider and, if thought fit, to pass the following Resolutions.

ORDINARY BUSINESS

Financial Statements and Reports

To receive and consider the annual financial report for the Company for the financial year ended 30 June 2015 together which the declaration of the directors, the director's report, the Remuneration Report and the auditor's report.

Resolution 1: Adoption of the Remuneration Report

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

'That, for the purposes of section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report contained within the Company's annual financial report for the financial year ended 30 June 2015.'

Note 1: The vote on this resolution is advisory only and does not bind the Directors of the Company.

Note 2: If 25% or more of votes that are cast are voted against the adoption of the Remuneration Report at two consecutive annual general meetings, Shareholders will be required to vote at the second of those annual general meetings on a resolution (a 'spill resolution') that another meeting be held within 90 days at which all of the Company's Directors (other than the Managing Director and CEO) must stand for re-election. Less than 25% of shareholder voted against the remuneration report at the 2014 Annual General Meeting.

Voting Prohibition Statement:

A vote on this Resolution 1 must not be cast (in any capacity) by or on behalf of any of the following persons:

1. a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

2. a Closely Related Party of such a member, (collectively, a 'Prohibited Voter').

However, a Prohibited Voter may cast a vote on this Resolution 1 as a proxy if the vote is not cast on behalf of a person described above and either:

1. the Prohibited Voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the Resolution; or

   
   

2. the Prohibited Voter is the Chair and the appointment of the Chair as proxy:

   
   

3. does not specify the way the proxy is to vote on this Resolution; and

4. expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company, or if the Company is part of a consolidated entity, for the entity.




Resolution 2: Re-election of Director - Mr Ross Taylor

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

'That Mr Ross Taylor, a Director, retires by rotation in accordance with clause 7.3 of the Company's constitution, ASX Listing Rule 14.4 and for all other purposes, and being eligible is re-elected as a Director.'




Resolution 3: Approval of 10% Placement Capacity

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

'That, for the purpose of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totalling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement.'




Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the issue of Equity Securities under this Resolution and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company will not disregard a vote if it is cast by a person as a 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.




Important note: The proposed recipients of any Equity Securities under the 10% Placement Capacity are not as yet known or identified. In these circumstances (and in accordance with the note set out in ASX Listing Rule 14.11.1 relating to ASX Listing Rules 7.1 and 7.1A), for a person's vote to be excluded, it must be known that that person will participate in the proposed issue. Where it is not known who will participate in the proposed issue (as is the case in respect of any Equity Securities issued under the 10% Placement Capacity), Shareholders must consider the proposal on the basis that they may or may not get a benefit and that it is possible that their holding will be diluted, and there is no reason to exclude their votes.




Resolution 4: Ratification of Prior Issue of Shares

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

'That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Company ratifies the allotment and issue of 10,000,000 fully paid ordinary shares on the terms set out in the Explanatory Statement accompanying this Notice of Meeting.'

Voting Exclusion Statement: The Company will disregard any votes cast on this Resolution by any persons who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of the proxy form or 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 5: Issue of Options to Related Party - Mr Bill Clayton

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

'That, for the purpose of ASX Listing Rule 10.11, sections 195(4) and 208 of the Corporations Act and for all other purposes, approval is given for the Directors to allot and issue 5,000,000 Director Options to Mr Bill Clayton (or his nominee) on the terms and conditions set out in the Explanatory Statement.'




Voting Exclusion Statement: The Company will disregard any votes cast on this Resolution by Mr Bill Clayton, his nominee or any of their associates. However, the Company need not disregard a vote if it is cast by a person as a 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.




Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

1. the proxy is either:

   
   

2. a member of the Key Management Personnel; or

3. a Closely Related Party of such a member; and

4. the appointment does not specify the way the proxy is to vote on this Resolution.

   
   

   However, the above prohibition does not apply if:

5. the proxy

6. is the Chair of the Meeting; and

7. the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.




Resolution 6: Issue of Options to Related Party - Mr Ross Taylor

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

'That, for the purpose of ASX Listing Rule 10.11, sections 195(4) and 208 of the Corporations Act and for all other purposes, approval is given for the Directors to allot and issue 5,000,000 Director Options to Mr Ross Taylor (or his nominee) on the terms and conditions set out in the Explanatory Statement.'




Voting Exclusion Statement: The Company will disregard any votes cast on this Resolution by Mr Ross Taylor, his nominee or any of their associates. However, the Company need not disregard a vote if it is cast by a person as a 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.

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

1. the proxy is either:

2. a member of the Key Management Personnel; or

3. a Closely Related Party of such a member; and

4. the appointment does not specify the way the proxy is to vote on this Resolution.

   
   

   However, the above prohibition does not apply if:

5. the proxy is the Chair of the Meeting; and

6. the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.




Resolution 7: Issue of Options to Related Party - Mr David McArthur

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

'That, for the purpose of ASX Listing Rule 10.11, sections 195(4) and 208 of the Corporations Act and for all other purposes, approval is given for the Directors to allot and issue 5,000,000 Director Options to Mr David McArthur (or his nominee) on the terms and conditions set out in the Explanatory Statement.'




Voting Exclusion Statement: The Company will disregard any votes cast on this Resolution by Mr David McArthur, his nominee or any of their associates. However, the Company need not disregard a vote if it is cast by a person as a 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.




Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

1. the proxy is either:

2. a member of the Key Management Personnel; or

3. a Closely Related Party of such a member; and

4. the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if:

5. the proxy is the Chair of the Meeting; and

6. the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.




By Order of the Board




D M McARTHUR

Company Secretary

Dated: 13 October 2015




ENTI TLE MENT T O ATT E N D AND V O TE







The Company may specify a time, not more than 48 hours before the Meeting, at which a 'snap-shot' of Shareholders will be taken for the purposes of determining Shareholder entitlements to vote at the Annual General Meeting.




The Company's Directors have determined that all Shares of the Company that are quoted on ASX at 4:00pm (WST) on Monday, 23 November 2015 shall, for the purposes of determining voting entitlements at the Annual General Meeting, be taken to be held by the persons registered as holding the Shares at that time.




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:




1. each Shareholder has a right to appoint a proxy;

   
   

2. the proxy need not be a member of the Company; and

   
   

3. a Shareholder who is 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 the member appoints two 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.




The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.




CORPORATE REPRESENTATIVE

A Shareholder that is a corporation may appoint an individual to act as its corporate representative to vote at the Meeting in accordance with section 250D of the Corporations Act. Any corporation wishing to appoint an individual to act as its representative at the Meeting should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company's representative. The authority may be sent to the Company and/or Share Registry in advance of the Meeting or handed in at the Meeting when registering as a corporate representative. A 'Certificate of Appointment of Corporate Representative' is enclosed if required.




ENQUIRIES

Shareholders are invited to contact the Company Secretary, Mr David McArthur on +61 8 9423 3200 if they have any queries in respect of the matters set out in this document.

LODESTAR MINERALS LIMITED

ABN 32 127 026 528




EXPLANATORY STATEMENT




This Explanatory Statement is intended to provide Shareholders with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of Annual General Meeting ('Notice') of the Company.




The Directors of the Company ('Directors') recommend Shareholders read this Explanatory Statement in full before making any decision in relation to the Resolutions.




The following information should be noted in respect of the various matters contained in the accompanying Notice.




FINANCIAL STATEMENTS AND REPORTS

The business of the Annual General Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2015, together with the declaration of the Directors, the Directors' report, the Remuneration Report and the auditor's report.




A copy of the Company's 2015 Annual Report is available on the Company's ASX platform (ASX: LSR) and on the website www.lodestarminerals.com.au. Alternatively, a hard copy will be made available upon request.




The Company's auditor, KPMG, will be present at the Annual General Meeting and Shareholders will have the opportunity to ask the auditor questions in relation to the conduct of the audit, the auditor's report, the Company's accounting policies, and the independence of the auditor.




In addition to taking questions at the Meeting, written questions to the Chair about the management of the Company, or to the Company's auditor about:

1. the preparation and content of the auditor's report;

2. the conduct of the audit;

3. accounting policies adopted by the Company in relation to the preparation of the Annual Financial Statements; and

4. the independence of the auditor in relation to the conduct of the audit,

may be submitted no later than 5 business days before the meeting date to the Company Secretary.







RESOLUTION 1: Adoption of the Remuneration Report General

The Corporations Act requires that at a listed company's annual general meeting, a resolution that the Remuneration Report be adopted must be put to the Shareholders. However, such a resolution is advisory only and does not bind the Directors or the Company.




The Remuneration Report sets out the Company's remuneration arrangements for the Directors and senior management of the Company. The Remuneration Report is part of the Directors' report contained in the annual financial report of the Company for a financial year.




The chair of the meeting must allow a reasonable opportunity for its shareholders to ask questions about or make comments on the Remuneration Report at the Annual General Meeting.

Voting consequences

Under changes to the Corporations Act which came into effect on 1 July 2011, a company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company (Spill Resolution) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.




If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting (Spill Meeting) within 90 days of the second annual general meeting.




All of the directors of the company who were in office when the directors' report (as included in the company's annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re- election at the Spill Meeting.




Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company.




Previous voting results

At the Company's previous annual general meeting, the votes cast against the remuneration report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.




Proxy restrictions

Shareholders appointing a proxy for Resolution 1 should note the following:

1. If you appoint a member of the Key Management Personnel (other than the Chair) as your proxy

   If you elect to appoint a member of the Key Management Personnel (other than the Chair) whose remuneration details are included in the Remuneration Report, or a Closely Related Party of that member, you must direct the proxy how they are to vote. Undirected proxies granted to these persons will not be voted and will not be counted in calculating the required majority if a poll is called on this Resolution.

2. If you appoint the Chair as your proxy

   If you elect to appoint the Chair where he/ she is also a member of the Key Management Personnel whose remunerations details are included in the Remuneration Report, or a Closely Related Party of such a member, you must direct the Chair how they are to vote. Undirected proxies granted to these persons will be voted in favour of all Resolutions.

3. If you appoint any other person as your proxy

You do not need to direct your proxy how to vote, and you do not need to tick any further acknowledgement on the Proxy Form. Undirected proxies granted to these persons will be voted at their discretion.







RESOLUTION 2: Re-election of Director - Mr Ross Taylor

ASX Listing Rule 14.4 provides that a director of an entity must not hold office (without re-election) past the third annual general meeting following the director's appointment or 3 years, whichever is longer.




Clause 7.3 of the Company's Constitution requires that at every Annual General Meeting of the Company one- third of the Directors (rounded up to the nearest whole number) shall retire from office. The Directors to retire are those who have been longest in office since their last election. A Director who retires by rotation under clause 7.3(a) is eligible for re-election.

The Company currently has 3 Directors and accordingly 1 must retire.




Mr Ross Taylor, the Director longest in office since his last election, retires by rotation and seeks re-election as a Director.




Information about Mr Ross Taylor is set out in the Company's 2015 Annual Report. The Board unanimously supports the re-election of Mr Ross Taylor.







RESOLUTION 3: Approval of 10% Placement Capacity - Shares General

ASX Listing Rule 7.1A provides that an Eligible Entity may seek Shareholder approval at its annual general meeting to allow it to issue Equity Securities up to 10% of its issued capital over a period up to 12 months after the annual general meeting (10% Placement Capacity).




The Company is an Eligible Entity.




If Shareholders approve Resolution 3, the number of Equity Securities the Eligible Entity may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out below).




The effect of Resolution 3 will be to allow the Directors to issue Equity Securities up to 10% of the Company's fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Meeting, without subsequent Shareholder approval and without using the Company's 15% annual placement capacity granted under Listing Rule 7.1.




Resolution 3 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 3 for it to be passed.




ASX Listing Rule 7.1A

ASX Listing Rule 7.1A came into effect on 1 August 2012 and enables an Eligible Entity to seek shareholder approval at its annual general meeting to issue Equity Securities in addition to those under the Eligible Entity's 15% annual placement capacity.




An Eligible Entity is one that, as at the date of the relevant annual general meeting:

1. is not included in the S&P/ASX 300 Index; and

2. has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

   The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation of approximately $7.36 million.

   Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has two classes of quoted Equity Securities on issue, being the Shares (ASX Code LSR) and the Options (ASX: LSRO)

   
   

   The exact number of Equity Securities that the Company may issue under an approval under Listing Rule 7.1A will be calculated according to the following formula:

   
   

   (A x B) - C

   Where:

3. is the number of Shares on issue 12 months before the date of issue or agreement:

4. plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2;

5. plus the number of partly paid shares that became fully paid in the previous 12 months;

6. plus the number of Shares issued in the previous 12 months with approval of holders of Shares under Listing Rules 7.1 and 7.4.; and

7. less the number of Shares cancelled in the previous 12 months.

8. is 10%.

9. is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of holders of Ordinary Securities under ASX Listing Rule 7.1 or 7.4.




Technical information required by ASX Listing Rule 7.1A

Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 3:




1. Minimum Price

   The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before:

2. the date on which the price at which the Equity Securities are to be issued is agreed; or

3. if the Equity Securities are not issued within 5 ASX trading days of the date above, the date on which the Equity Securities are issued.

   
   

4. Date of Issue

   The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following:

5. 12 months after the date of this Meeting; and

6. the date of approval by Shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company's activities) or 11.2 (disposal of the Company's main undertaking).

   
   

7. Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 3 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated on the basis of the current market price of Shares and the current number of Equity Securities on issue as at the date of this Notice.

The table also shows the voting dilution impact where the number of Shares on issue (variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity.







DILUTION




Variable 'A'

$0.011

50% decrease in Issue Price

$0.022

Issue price

$0.044

100% Increase in Issue Price




Current Variable A




334,579,909 Shares

10%

Voting

Dilution 33,457,991 Shares 33,457,991 Shares 33,457,991 Shares




Funds

Raised

$368,038

$ 736,076

$ 1,472,152




50% Increase In

Current Variable A




501,869,864 Shares

10%

Voting

Dilution 50,186,986 Shares 50,186,986 Shares 50,186,986 Shares




Funds

Raised

$ 552,057

$ 1,104,114

$ 2,208,227




100% Increase In

Current Variable A




669,159,818 Shares

10%

Voting

Dilution 66,915,982 Shares 66,915,982 Shares 66,915,982 Shares




Funds

Raised

$ 736,076

$ 1,472,152

$ 2,944,303




* The number of Shares on issue (variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a pro-rata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.




The table above uses the following assumptions:




1. The current shares on issue are the Shares on issue as at 2 October 2015.

2. No options are exercised into Shares before the date of issue of the Equity Securities.

3. The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. That is why the voting dilution is shown in each example as 10%.

4. The issue price set out above is the closing price of the Shares on the ASX on 2 October 2015.

5. The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity.

6. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.

7. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

8. This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.