ACN 095 047 920

NOTICE OF ANNUAL GENERAL MEETING

TIME: 9:00am (WST)

DATE: 26 November 2015

PLACE: 32 Harrogate Street

West Leederville WA 6007

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

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (+61 8) 9380 9555.

CONTENTS PAGE

Notice of Annual General Meeting (setting out the proposed resolutions) 4

Explanatory Statement (explaining the proposed resolutions) 6

Glossary 13

Proxy Form

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The annual general meeting of the Shareholders to which this Notice of Meeting relates will be held at 9:00am (WST) on Thursday, 26 November 2015 at:

32 Harrogate Street

West Leederville WA 6007

YOUR VOTE IS IMPORTANT

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

VOTING IN PERSON

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

VOTING BY PROXY

To vote by proxy please:

vote on line at www.investorvote.com.au by following the procedures as set out in the attached Proxy Form; or

complete and sign the enclosed Proxy Form and return it:

1. by post to Computershare Investor Services Pty Ltd, PO Box 242 Melbourne, Victoria 3001 in the self-addressed envelope provided; or

   
   

2. by facsimile to Computershare Investor Services Pty Ltd on facsimile number 1800 783 447 (inside Australia), +61 3 9473 2555 (outside Australia)

so that it is received not later than 9:00am (WST) on 24 November 2015.

Proxy Forms received later than this time will be invalid.

Changes to Proxy Voting

Shareholders and their proxies should be aware that pursuant to sections 250BB and 250BC of the Corporations Act:

1. if the proxy votes, they must cast all directed proxies as directed; and

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

Further details on these changes is set out below.

Proxy vote if appointment specifies way to vote

Section 250BB (1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does:

1. the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

   
   

2. if the proxy has 2 or more appointments that specify different ways to vote on the resolution - the proxy must not vote on a show of hands; and

   
   

3. if the proxy is the chair of the meeting at which the resolution is voted on - the proxy must vote on a poll, and must vote that way (i.e. as directed); and

   
   

4. if the proxy is not the chair - the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

1. an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

   
   

2. the appointed proxy is not the chair of the meeting; and

   
   

3. at the meeting, a poll is duly demanded on the resolution; and

   
   

4. either of the following applies:

   
   

5. the proxy is not recorded as attending the meeting; or

   
   

6. the proxy does not vote on the resolution,




the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the annual general meeting of Shareholders will be held at 9:00am (WST) on Thursday, 26 November 2015 at 32 Harrogate Street, West Leederville, Western Australia.




The Explanatory Statement provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Statement and the Proxy Form are part of this Notice of Meeting.




The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders at 5:00pm (Perth time) on 25 November 2015.




Terms and abbreviations used in this Notice of Meeting are defined in the Glossary.




AGENDA




ORDINARY BUSINESS




Financial Statements and Reports




To receive and consider 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.




RESOLUTION 1 - ADOPTION OF 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 purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the remuneration report as contained in the Company's annual financial report for the financial year ended 30 June 2015.'




Note: The vote on this Resolution is advisory only and does not bind the Directors or the Company.




Voting Prohibition Statement: A vote on this Resolution 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.

However, a person (voter) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either:

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

2. the 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 - ROSS LEVIN

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

ordinary resolution:




'That, for the purpose of clause 13.2 of the Constitution and for all other purposes, Mr Ross Levin, a Director, retires by rotation, and being eligible, is re-elected as a Director.'




RESOLUTION 3 - APPROVAL OF 10% PLACEMENT CAPACITY- SHARES

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 Shares on 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.




DATED: 12 OCTOBER 2015




BY ORDER OF THE BOARD







MELISSA CHAPMAN COMPANY SECRETARY

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the Annual General Meeting to be held at 9:00am (WST) on Thursday, 26 November 2015 at 32 Harrogate Street, West Leederville, Western Australia.




This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.




1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, 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.




The Company will not provide a hard copy of the Company's annual financial report to Shareholders unless specifically requested to do so. The Company's annual financial report is available on the Company's website at www.capelam.com.au.




RESOLUTION 1 - ADOPTION OF REMUNERATION REPORT

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.




Under the Corporations Act, if at least 25% of the votes cast on Resolution 1 are voted against adoption of the Remuneration Report at two consecutive annual general meetings, the Company will be required to put to Shareholders a resolution proposing the calling of a general meeting to consider the appointment of directors of the Company (Spill Resolution) at the second annual general meeting.




If more than 50% of Shareholders vote in favour of the Spill Resolution, the Company must convene a general meeting (Spill Meeting) within 90 days of the second annual general meeting.




All of the Directors who were in office when the directors' report (as included in the Company's annual financial report for the year ended immediately before the second annual general meeting) 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 is approved will be the Directors of the Company.




At the Company's 2014 Annual General Meeting, the votes cast against the remuneration report considered at the Annual General Meeting was less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.




The remuneration report sets out the Company's remuneration arrangements for the Directors and senior management of the Company including service agreements and details of any share based compensation. The remuneration report is part of the Directors' report contained in the annual financial report of the Company for the financial year ending 30 June 2015.

A reasonable opportunity will be provided for discussion of the remuneration report at the Annual General Meeting.




RESOLUTION 2 - RE-ELECTION OF DIRECTOR - ROSS LEVIN

Clause 13.2 of the Constitution requires that at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election.




The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots.




A Director who retires by rotation under clause 13.2 of the Constitution is eligible for re- election.




The Company currently has 4 Directors and accordingly, 1 must retire.




Mr Ross Levin, the Director longest in office since his last election, retires by rotation and seeks re-election. A summary of Mr Ross Levin is set out in the 2015 Annual Report of the Company.




RESOLUTION 3 - APPROVAL OF 10% PLACEMENT CAPACITY - SHARES

1. 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 (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 in section 3.2 below).

   
   

   The effect of Resolution 3 will be to allow the Company 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.

2. 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:

   
   

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

   
   

4. 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 $10.654 million.

   
   

   Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has one class of Equity Securities on issue, being the Shares (ASX Code: CFE).

   
   

   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 D) - E

   
   

   Where:

   
   

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

   
   

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

   
   

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

   
   

7. 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. This does not include an issue of fully paid ordinary shares under the entity's 15% placement capacity without shareholder approval; and

   
   

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




1. is 10%.

   
   

2. 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.

9. 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:

   
   

10. 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:

    
    

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

    
    

12. if the Equity Securities are not issued within 5 ASX trading days of the date in section 1.3.3(b), the date on which the Equity Securities are issued.

    
    

13. 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:

    
    

14. 12 months after the date of this Meeting; and

    
    

15. 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) (after which date, an approval under Listing Rule 7.1A ceases to be valid),

    
    

    (10% Placement Capacity Period).

    
    

16. 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 in accordance with the formula outlined in ASX Listing Rule 7.1A(2), 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.




Number of Shares on Issue (Variable 'A' in ASX Listing Rule 7.1A2)	Dilution
	Issue Price (per Share)	$0.0085	$0.017	$0.034
		50% decrease in Issue Price	Issue Price	100% increase in Issue Price
626,686,586	Shares issued - 10% voting dilution	62,668,659	62,668,659	62,668,659
(Current Variable A)	Funds raised	$532,684	$1,065,367	$2,130,734
940,029,879	Shares issued - 10% voting dilution	94,002,988	94,002,988	94,002,988
(50% increase in Variable A)	Funds raised	$799,025	$1,598,051	$3,196,102
1,253,373,172	Shares issued - 10% voting dilution	125,337,317	125,337,317	125,337,317
(100% increase in Variable A)	Funds raised	$1,065,367	$2,130,734	$4,261,469




*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. There are currently 626,686,586 existing Shares as at the date of this Notice of Meeting.

2. The issue price set out above is the closing price of the Shares on the ASX on 9 October 2015

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

4. 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.

5. The issue of Equity Securities under the 10% Placement Capacity consists only of Shares. It is assumed that no Options are exercised into Shares before the date of issue of the Equity Securities.

6. 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.

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

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

9. The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Capacity, based on that Shareholder's holding at the date of the Meeting.




Shareholders should note that there is a risk that




1. the market price for the Company's Shares may be significantly lower on the issue date than on the date of the Meeting; and

   
   

2. the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.




1. Purpose of Issue under 10% Placement Capacity

   
   

   The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes:

   
   

2. as cash consideration in which case the Company intends to use funds raised for the acquisition of new resources, assets and investments (including expenses associated with such an acquisition), continued exploration expenditure on the Company's projects and general working capital; or

   
   

3. as non-cash consideration for the acquisition of new resources, assets and investments, in such circumstances the Company will provide a valuation of the non-cash consideration as required by listing Rule 7.1A.3.




The Company will comply with the disclosure obligations under Listing Rules 7.1A(4) and 3.10.5A upon issue of any Equity Securities.




1. Allocation policy under the 10% Placement Capacity

   
   

   The Company's allocation policy for the issue of Equity Securities under the 10% Placement Capacity will be dependent on the prevailing market conditions at the time of the proposed placement(s).

   
   

   The recipients of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined. However, the recipients of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

   
   

   The Company will determine the recipients at the time of the issue under the 10% Placement Capacity, having regard to the following factors:

   
   

2. the purpose of the issue;

3. alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;

   
   

4. the effect of the issue of the Equity Securities on the control of the Company;

   
   

5. the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

   
   

6. prevailing market conditions; and

   
   

7. advice from corporate, financial and broking advisers (if applicable).

   
   

   Further, if the Company is successful in acquiring new resources, assets or investments, it is likely that the recipients under the 10% Placement Capacity will be vendors of the new resources, assets or investments.

   
   

8. Previous approval under ASX Listing Rule 7.1A

   
   

   The Company has not previously obtained approval from its Shareholders pursuant to ASX Listing Rule 7.1A.

   
   

9. Compliance with ASX Listing Rules 7.1A.4 and 3.10.5A

   
   

   When the Company issues Equity Securities pursuant to the 10% Placement Capacity, it must give to ASX:

   
   

10. a list of the recipients of the Equity Securities and the number of Equity Securities issued to each (not for release to the market), in accordance with Listing Rule 7.1A.4; and

    
    

11. the information required by Listing Rule 3.10.5A for release to the market.




12. Voting Exclusion

A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing Shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing Shareholders will be excluded from voting on Resolution 3.




ENQUIRIES

Shareholders are requested to contact Melissa Chapman on (+ 61 8) 9380 9555 if they have any queries in respect of the matters set out in these documents.