Notice of General Meeting‌‌‌‌‌‌‌‌‌

to be held at 11.00am (Perth time) on Friday, 29 April 2016

at Level 2, 389 Oxford Street, Mount Hawthorn, Western Australia 6016

to consider the SAU Transaction

The Independent Expert has concluded that the SAU Transaction is fair and reasonable to Shareholders not associated with the Bayan Group

The Independent Directors recommend you vote in favour of the Resolutions

This Notice should be read in its entirety

If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser without delay prior to voting

Notice of General Meeting

A general meeting of shareholders of Kangaroo Resources Limited (Company) will be held at 11.00am (Perth time) on Friday, 29 April 2016 at Level 2, 389 Oxford Street, Mount Hawthorn, Western Australia 6016.

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

You will be eligible to vote at the Meeting if you are registered as a Shareholder at 5pm Perth time on Wednesday, 27 April 2016.

Terms used in this Notice are defined in section 15.

AGENDA

Resolution 1 - Approval for SAU Transaction

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

ordinary resolution:

"That, for the purposes of Chapter 2E of the Corporations Act and ASX Listing Rule 10.1 and for all other purposes, Shareholders approve the Company's entry into and performance of the SAU Transaction, on the terms and conditions and in the manner set out in the Explanatory Statement, including:

• giving financial benefits to related parties of the Company, Bayan Group, as explained in the Explanatory Statement; and

  
  

• disposing and acquiring substantial assets to and from related parties of the Company, Bayan Group, as explained in the Explanatory Statement."

Voting Exclusion

The Company will disregard any votes cast (in any capacity) by the parties to the SAU Transaction (and their associates) and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, and any associates of those persons.

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, if 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 - Re-election of director - Mr Susmit Shah

To consider and if thought fit approve the following resolution as an ordinary resolution:

"That Mr Susmit Shah is re-elected as a director of the Company in accordance with rule 13.4 of the Constitution."

BY ORDER OF THE BOARD

Paul Jurman Company Secretary Dated 9 March 2016

Entitlement to vote and how to vote

Entitlement to attend and vote

You will be entitled to attend and vote at the Meeting if you are registered as a Shareholder of the Company as at 5pm (Perth time) on Wednesday, 27 April 2016. The Board has determined that the Shares on issue at that time are taken, for the purposes of the Meeting, to be held by the persons who held them at that time (under Regulation 7.11.37 of the Corporations Regulations 2001 (Cth)). Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

Voting in person

Shareholders who plan to attend the meeting are asked to arrive at the venue 15 minutes prior to the time designated for the meeting if possible, so that their holding may be checked against the Company's register of members and attendances recorded.

Corporate representatives

A body corporate, which is a Shareholder or which has been appointed as a proxy, may appoint an individual to act as its corporate representative at the Meeting in accordance with section 250D of the Corporations Act. The appropriate appointment document must be produced prior to admission. A form of the certificate can be obtained from the Company's registered office.

Voting by proxy

A Shareholder who is entitled to attend and cast a vote at the Meeting may appoint a proxy. A proxy need not be a Shareholder and may be an individual or body corporate. If a body corporate is appointed as a proxy it must appoint a corporate representative in accordance with section 250D of the Corporations Act to exercise its powers as proxy at the Meeting (see above).

A Shareholder who is entitled to cast two or more votes may appoint two proxies to attend the Meeting and vote on their behalf and may specify the proportion or a number of votes each proxy is appointed to exercise. If a Shareholder appoints two proxies and the appointment does not specify the proportion or number of the Shareholder's votes each proxy may exercise, each proxy may exercise half of the votes (disregarding fractions). If you wish to appoint a second proxy, you may copy the enclosed proxy form or obtain a form from the Company's registered office.

To be effective for the scheduled Meeting a proxy appointment (and any power of attorney or other authority under which it is signed or otherwise authenticated, or a certified copy of that authority) must be received at an address or fax number below no later than 11.00am (Perth time) 27 April 2016, being 48 hours before the time of the Meeting. Any proxy appointment received after that time will not be valid for the scheduled Meeting.

In person

Level 2, 389 Oxford Street

Mount Hawthorn, Western Australia 6016

By mail

PO Box 131

Subiaco, Western Australia 6904

By fax

+61 (08) 9380 6761

By Email: [email protected].com

For further information concerning the appointment of proxies and the ways in which proxy appointments may be submitted, please refer to the enclosed proxy form.

Voting by attorney

A Shareholder may appoint an attorney to attend and vote on their behalf. For an appointment to be effective for the Meeting, the instrument effecting the appointment (or a certified copy of it) must be received by the Company at one of the addresses listed above for the receipt of proxy appointments at least 48 hours prior to the commencement of the Meeting.

Explanatory Statement

1. The SAU Transaction in a nutshell

   Resolution 1 seeks Shareholder approval for the Company's entry into the agreements comprising the SAU Transaction and the performance of the Company's obligations under those agreements.

   
   

   The SAU Transaction involves:

   
   

   • The Company's subsidiary, SAU, selling the Infrastructure Assets to the Company's 56% Shareholder, Bayan Group, for US$12 million;

   • Bayan Group using the Infrastructure Assets, in part, to construct a new haul road between Tabang and the Senyiur Port and to upgrade and expand the Senyiur Port by completing an up to US$125 million capital expenditure program;

     
     

   • Bayan Group undertaking to provide access to the new haul road (on the basis the new haul road passes through all but 2 of the Company's Pakar coal mining concessions) and access to, and port services at, the upgraded Senyiur Port, all at commercially reasonable prices; and

     
     

   • a Strategic Agreement between the Company and Bayan Group to provide a formalised framework for cooperation and support, including, to the extent the Company requires, Bayan Group providing diverse and comprehensive services to the Company, to enable the Company's Pakar coal project and Bayan Group's Tabang coal project to be co-developed.

   The Independent Expert's Report states that the expert considers that the SAU Transaction is fair and reasonable to Shareholders not associated with the Bayan Group.

   
   

   The Independent Expert's Report accompanies the Notice and this Explanatory Statement and is available on the Company's website at www.kangarooresources.com and can be downloaded from that site or viewed online.

   The Independent Directors recommend you vote in favour of the Resolution.

2. Signposts to further information

   Background about the connection between the Company's and Bayan Group's respective projects and Bayan Group's relationship to the Company is set out in sections 3 and 4.

   
   

   The SAU Transaction agreements are explained in sections 5 to 7.

   
   

   Sections 8 and 9 set out some potential advantages and disadvantages of the SAU Transaction.

   
   

   Sections 10 to 12 set out the legal requirements for seeking Shareholder approval and section 13 contains the Independent Directors' recommendation in relation to the SAU Transaction.

   
   

   Section 14 sets out Mr Susmit Shah's background and the directors' recommendation in relation to his re-election.

   
   

   Terms used in this Notice are defined in section 15.

3. About the Company's Pakar project and Bayan Group's Tabang project

The Pakar project and Tabang project are adjacent

Bayan Group's Tabang project consists of 2 operational coal mines located in the Kutai Kartanegara Regency of East Kalimantan, Indonesia. These are known as the FSP and BT concessions and are labelled on the map below.

The Company's Pakar project is located immediately south of Tabang. The coal deposits at Tabang and Pakar are contiguous and part of the same geological structure.