Tasmania Mines : Proposed Selectvie Reduction of Capital

TASMANIA M-INES LIMITED‌‌‌‌‌‌‌‌

ABN 45 009 491 990

Level 33,Aurora Place 88 Phillip Street

Sydney NSW 2000

Telephone [phone]

Facsimile [phone]

Australia Inreply please refer:

12 January 2017

Manager Announcements Australia Stock Exchange Limited 20 Bridge Street‌‌‌

Sydney NSW

RE: Proposed Selective Reduction of Capital

Tasmania Mines Limited refers to the announcement made on Monday 7 November 2016 that the company proposes to seek shareholder approval for a selective capital reduction of the 20.78% of issued shares held by minority shareholders at $1.80 per share.‌‌‌

Attached to this notice is an Explanatory Memorandum relating to the proposed selective capital reduction‌‌

The Explanatory Memorandum includes an Independent Expert's Report by Grant Thornton Corporate Finance Pty Ltd.

It also includes Notices for the Meetings at which the shareholder approvals required under the Corporations Act will be sought, being approvals by a special resolution at a general meeting and by a special resolution of shareholders whose shares are to be cancelled if the selective capital reduction proceeds.‌

The first meeting is to be heldat the Company's registered office at 1O:OOam on Tuesday 21 February 2017 with the second meeting following immediatelythereafter .

The Explanatory Memorandum, Independent Expert'sReport and Notices of Meetings are also being lodgedtoday with the Australian Securities and Investments Commission, and are being dispatched to shareholders next week.

Yours faithfully ,

K.J.Broadfoot Director

TASMANIA MINES LIMITED ABN 45 009 491 990 11 January 2017 Explanatory Memorandum Notice of General Meeting of Shareholders AND Notice of Special Meeting of Minority Shareholders Relating to a Proposal for the Company to undertake a Selective Reduction of Capital

This is an important document and requires your immediate attention. If in doubt you should contact your accountant, financial, taxation or other advisers

Tasmania Mines Ltd Level 33, Aurora Place 88 Phillip Street Sydney NSW 2000 Australia

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TABLE OF CONTENTS

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Important Information and Notices1

1. Importance of this Explanatory Memorandum1

2. Information about this Explanatory Memorandum1

1. Glossary of Terms3

2. Key Dates5

3. The Proposal6

4. Company's business and activities6

5. Company's current shareholding position6

6. Reasons for the Proposal6

7. The Proposal7

8. Corporations Act requirements for the Proposal7

9. The Resolutions and voting8

10. Resolutions to be put to Shareholders8

11. Voting on the Resolutions8

12. Proposal requires Both Resolutions to be passed8

13. Further details of the Proposal9

14. How will the Selective Capital Reduction Work?9

15. What are the tax consequences?9

16. No Shareholder transaction costs or duties11

17. Further Information12

18. Company financial information12

19. Updating Company financial information12

20. Source of funds for the Cancellation Payment12

21. Impact on the Company's financial position and accounts13

22. Major Shareholder's intentions if the Proposal proceeds15

23. No alternate proposal15

24. Implications for Minority Shareholders if the Proposal is approved15

25. Implications for Minority Shareholders if the Proposal is not approved15

26. The "fair and reasonable" requirement16

27. Independent Expert's Conclusions16

28. Directors' details, disclosures & recommendations17

29. Directors details and disclosures17

30. Directors' recommendations on voting17

31. Major Shareholder's voting intentions17

32. Independent Expert's Report18

33. Notice of General Meeting

34. Notice of Special Meeting of Minority Shareholders