603 GUIDE page 1/1 13 March 2000

Form 603Corporations Act 2001

Section 671B

Notice of initial substantial holder

To Company Name/Scheme

AC N/ARS N

Kasbah Resources Limited (KAS)

116931 705

1. Details of substantial holder (1)

Name

ACNIARSN (if applicable)

Pala Investments Limited (Pala Investments) and its associates noted below

N/A

The holder became a substantial holder on 23/12/2016

2. Details of voting power

The total number of votes attached to all the voting shares in the company or voting interests in the scheme that the substantial holder or an associate (2)had a relevant interest (3) in on the date the substantial holder became a substantial holder are as follows:

Class of securities (4) Number of securities Person’s votes (5) Voting power (6)

Fully paid ordinary shares 138,133,684 138,1 33,684 1 9.9 % (based on 694,1 39,119 fullypaid ordinary shares on issue)

3. Details of relevant interests

The nature of the relevant interest the substantial holder or an associate had in the following voting securities on the date the substantial holder became a

substantial holder are as follows:

Holder of relevantinterest

Nature of relevant interest (7) Class and number of securities

Pala Investments has a “relevant interest” in 138,133,684 of the fully paidordinary shares in KAS (for the purposes of section 671 B of the CorporationsAct 2001 (Cth) (Act) and the definition of”substantial holding” in section 9 of the

Pala Investments Act only) under section 608(1 )(a) of the Act arising from the subscription in the 1 38,1 33,684 fully paid ordinary sharesshares of KAS under a Placement Agreement dated 18 December 2016.

A copy of the Placement Agreement is attached at Annexure A.

Pala Group has a “relevant interest” in 138,133,684 of the fully paid ordinaryshares in KAS (for the purposes of section 6718 of the Act and the definition of

Pala Grou Holdin“substantial holding” in section 9 of the Act only) under sections 608(1 )(b) and

Limited ‘Pala Grou 608(1 )fc) of the Act arising from Pala Group having power to exercise, or control 138,133,684 fully paid ordinary sharesPi the exercise of, a right to vote attached to, and the power to dispose of, or

control the exercise of a power to dispose of, the shares of KAS by PalaInvestments.

VFI has a “relevant interest” in 138,133,684 of the fully paid ordinary shares inKAS (for the purposes of section 671 B of the Act and the definition of

VEt Holdings AG (VFI) “substantial holding” in section 9 of the Act only) under sections 608(1)(b) and138,133,684 fully paid ordinary shares

608(1 )(c) of the Act arising from VFI having power to exercise, or control theexercise of, a right to vote attached to, and the power to dispose of, or controlthe exercise of a power to dispose of, the shares of KAS by Pala Investments.

Vladimir lorich has a “relevant interest” in 138,133,684 of the fully paid ordinaryshares in KAS (for the purposes of section 671 B of the Act and the definition of“substantial holding” in section 9 of the Act only) under sections 608(1 )(b) and

Vladimir lorich 608(1 )(c) of the Act arising from Vladimir lorich having power to exercise, or 138,133,684 fully paid ordinary sharescontrol the exercise of, a right to vote attached to, and the power to dispose of,or control the exercise of a power to dispose of, the shares of KAS by PalaInvestments.

4. Details of present registered holders

The persons registered as holders of the securities referred to in paragraph 3 above are as follows:

relevantRegistered holder of securities :tit1ed to be registered as

Class and number of securities

Pala Investments Citicorp Nominees Pty Limited Citicorp Nominees Pty Limited 1 38,1 33,684 fully paid ordinary shares

Pala Group Citicorp Nominees Pty Limited Citicorp Nominees Pty Limited 1 38,1 33,684 fully paid ordinary shares

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VFI Citicorp Nominees Pty Limited Citicorp Nominees Pty Limited 1 38,1 33,684 fully paid ordinary shares

Vladimir orich Citicorp Nominees Pty Limited Citicorp Nominees Pty Limited 138,133,684 fully paid ordinary shares

5. Consideration

The consideration paid for each relevant interest referred to in paragraph 3 above, and acquired in the four months prior to the day that the substantial holderbecame a substantial holder is as follows:

Holder of relevant Date of acquisition Consideration (9) Class and number

Pala Investments 23 December2016 $3,729,609 138,1 33,684 fully paid ordinary shares

Pala Group 23 December 2016 N/A 138,133,664 fully paid ordinary shares

Vladimir lorich 23 December 2016 N/A 138,133,684 fully paid ordinary shares

VFI 23 December 2016 N/A 138,133,684 fully paid ordinary shares

6. Associates

The reasons the persons named in paragraph 3 above are associates of the substantial holder are as follows:

Name and ACNIARSN (if applicable) Nature of association

Pala Group Pala Group owns or controls 94.64% of the shares of Pala Investments

Vladimir lorich Vladimir lorich owns or controls 99.89% of the shares of Pala Group and 100% of VFI

VFI VFI owns or controls 0.11% of Pala Group

7. Addresses

The addresses of persons named in this form are as follows:

Name Address

Citicorp Nominees Pty Limited Level 15, 120 Collins Street, Melbourne VIC 3000

Pala Group 12 Castle Street, Jersey, JE2 3RT, Channel Islands

Pala Investments 12 Castle Street, Jersey, JE2 3RT, Channel Islands

Vladimir lorich Gotthardstrasse 26, 6300 Zug, Switzerland

VFI Gotthardstrasse 26, 6300 Zug, Switzerland

Signature

print name John Nagulendran

signhere

capacity Director

date 23 December2016

DIRECTIONS

(1) If there are a number of substantial holders with similar or related relevant interests (eg. a corporation and its related corporations, or the manager andtrustee of an equity trust), the names could be included in an annexure to the form. If the relevant interests of a group of persons are essentially similar,they may be referred to throughout the form as a specifically named group if the membership of each group, with the names and addresses of members isclearly set out in paragraph 7 of the form.

(2) See the definition of “associate” in section 9 of the Corporations Act 2001.

(3) See the definition of “relevant interest” in sections 608 and 671 B(7) of the Corporations Act 2001.

(4) The voting shares of a company constitute one class unless divided into separate classes.

(5) The total number of votes attached to all the voting shares in the company or voting interests in the scheme (if any) that the person or an associate has arelevant interest in.

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(6) The person’s votes divided by the total votes in the body corporate or scheme multiplied by 100.

(7) Include details of:

(a) any relevant agreement or other circumstances by which the relevant interest was acquired. If subsection 671 Bf4) applies, a copy of anydocument setting out the terms of any relevant agreement, and a statement by the person giving full and accurate details of any contract, schemeor arrangement, must accompany this form, together with a written statement certifying this contract, scheme or arrangement; and

(b) any qualification of the power of a person to exercise, control the exercise of, or influence the exercise of, the voting powers or disposal of thesecurities to which the relevant interest relates (indicating clearly the particular securities to which the qualification applies).

See the definition of “relevant agreement” in section 9 of the Corporations Act 2001.

(8) If the substantial holder is unable to determine the identity of the person (eg. if the relevant interest arises because of an option) write “unknown.”

(9) Details of the consideration must include any and all benefits, moneys and other, that any person from whom a relevant interest was acquired has, or may,become entitled to receive in relation to that acquisition. Details must be included even if the benefit is conditional on the happening or not of acontingency. Details must be included of any benefit paid on behalf of the substantial holder or its associate in relation to the acquisitions, even if they arenot paid directly to the person from whom the relevant interest was acquired.

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Pala Investments Limited

Annexure “A”

This is Annexure A of 31 pages referred to in Form 603 Notice of Initial Substantial Holder

Signed

John NagulendranDirector

Date: 23 December 2016

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auPlacement Agreement

Pala Investments Limited

and

Kasbah Resources LimitedACN 116 931 705

Subscription of shares in Kasbah ResourcesLimited by Pala Investments LimitedF

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CONTENTS

CLAUSE PAGE

1. INTERPRETATION 1Li Definitions 11.2 Rules for interpreting this document 41.3 Business Days 52, SUBSCRIPTION FOR SUBSCRIPTION SHARES 52.1 Issue and subscription 52.2 Application of Proceeds s3. CONDITIONS PRECEDENT 53.1 Conditions Precedent 53.2 Waiver of Conditions Precedent 63.3 Obligations to satisfy Conditions Precedent 63.4 Result of non-satisfaction of Conditions Precedent 64. COMPLETION 64.1 Time and place of Completion 64.2 SubscrIber’s obligations at Completion 74.3 Company’s obligations at Completion 74.4 Company’s obligations following Completion 74.5 Completion simultaneous 74.6 Share moratorium 75. VOLUNTARY LOCK UP 76. NOMINEE DIRECTOR 86.1 AppoIntment of Nominee Director 86.2 Replacement of Nominee Director 96.3 Appointment by 5oard in interim 97. CHANGES TO THE BOARD 98. ANTI-DILUTION RIGHTS 98.1 ConditIonality 98.2 Duration of tights 98.3 Benefit of tights 108.4 Notice of issue 108.5 Right to participate 108.6 Number of Equity Securities 109. WARRANTIES ii9.1 By each party generally 119.2 Bythe Company 119.3 Matters disclosed 119.4 Update of disclosures 119.5 Indemnity 119.6 No extinguishment ii9.7 Reliance on Warranties 129.8 Reciprocal Warranty cap 1210. CONFIDENTIALITY 1210.1 Confidential Information 1210.2 Disclosure of Confidential Information 1210.3 Use of Confidential Information 1310.4 Excluded Information 1310.5 Return or destruction of Confidential Information 1310.6 SurvIval of confidentiality obligations 1311. ANNOUNCEMENTS 1311.1 Public announcements 1311.2 Public announcements required by law 1412. NOTICES 1412.1 How to give a notice 1412.2 When a notice Is given 14

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12.3 Addresses fornotices1513. AMENDMENTANDASSIGNMENT 1513.1 Amendment 1513.2 Assignment 1514. GENERAL 1514.1 Governing law 1514.2 Liability for expenses 1514.3 Giving effect to this document 1514.4 Variation of rights 1614.5 OperatIon of this document 1614.6 No merger 1614.7 Entire agreement 1614.8 Counterparts 16

SCHEDULE 1 17SCHEDULE 2 18SCHEDULE 3 19

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THIS AGREEMENT is made on 18 December 2016

BETWEEN:

(1) PALA INVESTMENTS LIMITED whose registered office is 12 Castle Street, 3ersey ]E23RT (the Subscriber); and

(2) KASBAH RESOURCES LIMITED ACN 116 931 705 whose registered office is at 11Moreau Mews, Applecross, Western Australia 6153, Australia (the Company).

RECITALS:

(A) The Subscriber proposes to make a strategic investment in the Company, with theobjective of the Subscriber supporting the Company through the following:

(1) facilitating team strength at the Board and management level of the Company;

(2) providing experience in the construction of projects undertaken by the Companyand project management;

(3) facilitating project financing and engaging with optimal financing partners;

(4) assisting in strategic growth and acquisition or disposal opportunities; and

(5) supporting stakeholder and community relations with the Company.

(B) The Company has agreed to issue the Subscription Shares to the Subscriber and theSubscriber has agreed to subscribe for the Subscription Shares and pay the SubscriptionPrice to the Company, on the terms of this document.

OPERATIVE PROVISIONS

1. INTERPRETATION

1.1 Definitions

The following definitions apply in this document.

ASX means ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange, asappropriate.

Authorisation means the following and Includes any renewal or amendment of them:

(a) an authorisation, consent, declaration, exemption, notarisation or waiver, howeverit is described; and

(b) in relation to anything that could be prohibited or restricted by law if a GovernmentAgency acts in any way within a specified period, the expiry of that period withoutthat action being taken.

Board means the board of directors of the Company.

Business Day means:

(a) for determining when a notice, consent or other communication is given, a day thatIs not a Saturday, Sunday or public holiday in the place to which the notice,consent or other communication is sent; and

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(b) for any other purpose, a day (other than a Saturday, Sunday or public holiday) onwhich banks are open for general banking business in Perth, Australia and Zug,Switzerland.

Claim means any claim, action, proceeding or demand made against the personconcerned, however it arises and whether it Is present or future, fixed or unascertained,actual or contingent.

Completion means the completion of the subscription for and allotment and Issue of theSubscription Shares in accordance with this document, and Complete has acorresponding meaning.

Completion Date means the latest of:

(a) 21 December 2016;

(b) any other date agreed by the Company and the Subscriber.

Conditions Precedent means the conditions precedent set out in clause 3.1.

Constitution means the constitution of the Company.

Controller has the same meaning as in the Corporations Act.

Corporations Act means the Corporations Act 2001 (Cth).

Encumbrance means:

(a) a security interest that is subject to the Personal Property Securities Act 2009;

(b) any other mortgage, charge, pledge or lien; or

Cc) any other interest or arrangement of any kind that In substance secures thepayment of money or the performance of an obligation or which gives a creditorpriority over unsecured creditors in relation to any property.

End Date means 31 December 2016, or any later date agreed in writing by the Companyand the Subscriber.

Equity Security has the meaning given to that term in the Listing Rules.

Fully Diluted Capital means the total number of Shares plus the number of Shares thatwould be issued on exercise or conversion of any Equity Securities (other than Shares)which are on issue (or which the Company has agreed or proposes to agree to issue).

Government Agency means:

(a) a government or government department or other body;

(b) a governmental, semi-governmental or judicial person Including a statutorycorporation; or

(c) a person (whether autonomous or not) who Is charged with the administration of alaw.

Holding means, In respect of a Subscriber Shareholder, the number of Shares beneficiallyheld by that Subscriber Shareholder plus the number of Shares that would be issued onexercise or conversion of any Equity Security which Is not a Share beneficially held by thatSubscriber Shareholder.

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Insolvency Event means, in respect of a person:

(a) an administrator being appointed to the person;

(b) (I) a Controller or analogous person being appointed to the person or any of theperson’s property;

(ii) an application being made to a court for an order to appoint a Controller,provisional liquidator, trustee for creditors or In bankruptcy or analogousperson to the person or any of the person’s property; or

(lii) an appointment of the kind referred to in subparagraph (ii) being made(whether or not following a resolution or application);

(c) the person who has the benefit of an Encumbrance or any agent on its behalf,appointing a Controller or taking possession of any of the person’s property(including seizing the person’s property within the meaning of section 123 of thePPSA) or otherwise enforcing or exercising any rights under the Encumbrance orChapter 4 of the PPSA;

(d) the person being taken under section 459F(1) of the Corporations Act to havefailed to comply with a statutory demand;

(e) an application being made to a court for an order for Its winding up;

( an order being made, or the person passing a resolution, for its winding up;

(g) the person:

fi) suspending payment of its debts, ceasing (or threatening to cease) to carryon all or a material part of Its business, stating that it is unable to pay itsdebts or being or becoming otherwise Insolvent; or

(ii) being unable to pay its debts or otherwise insolvent;

(h) the person taking any step toward entering into a compromise or arrangementwith, or assignment for the benefit of, any of Its members or creditors;

(i) a court or other authority enforcing any judgment or order against the person forthe payment of money or the recovery of any property; or

(j) any analogous event under the laws of any applicable jurisdiction,

unless this takes place as part of a solvent reconstruction, amalgamation, merger orconsolidation that has been approved by the Subscriber.

Listing Rules means the listing rules of the ASX.

Loss means any loss, damage, cost, expense or liability incurred by the personconcerned, however it arises and whether it Is present or future, fixed or unascertained,actual or contingent.

Nominee Director has the meaning given to that term in clause 6.1.

Participation Exception means:

(a) an issue of Shares as a result of the exercise of options or other Equity Securitiesin the Company;

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(b) an Issue of Shares or other Equity Securities in the Company to employees,officers, consultants or directors of the Company pursuant to a compensation orIncentive scheme established before the date of this document for the benefit ofemployees, officers, directors or consultants of the Company; or

Cc) an Issue of Shares under a dividend reinvestment plan or bonus share plan of theCompany which does not exclude participation by the Subscriber.

Proposed Equity Offer has the meaning given to it in clause 8.4.

Proceeds means the total Subscription Price received by the Company for theSubscription Shares, less any costs incurred by the Company in connection with theSubscription (including the costs of the Subscriber in accordance with clause 14.2(b)).

Prospectus means a prospectus issued pursuant to section 708Af 11) of the CorporationsAct or as otherwise required under Chapter 6D of the Corporations Act.

Pro-Rata Offer means an offer made to all holders of Shares on a pro rata basis.

Relevant Period means each period referred to In clauses 6.1(a) and 6.1(b).

Representatives means any of a persons directors, officers, employees, financialadvisers, attorneys, legal advisers, accountants, consultants or agents.

Share means an issued ordinary share In the capital of the Company.

Subscriber Group means the Subscriber and each of its wholly owned subsidiaries.

Suspension Notice has the meaning given to that term in clause 8.2(b)(i).

Subscription Price means, for each Subscription Share, $O.027.

Subscription Shares means 138,133,684 fully paid Shares.

Subscriber Shareholders means:

(a) the Subscriber, if it beneficially holds Shares; and

(b) any member of the Subscriber Group who beneficially holds Shares.

Warranties means the warranties, undertakings and representations set out in Schedule3 and Warranty has a corresponding meaning.

1.2 Rules for interpreting this document

Headings are for convenience only, and do not affect interpretation. The following rulesalso apply In Interpreting this document, except where the context makes It clear that arule is not Intended to apply.

(a) A reference to:

fi) legislation (including subordinate legislation) is to that legislation asamended, re-enacted or replaced, and includes any subordinate legislationissued under It;

(ii) a document (including this document) or agreement, or a provision of adocument (including this document) or agreement, is to that document,agreement or provision as amended, supplemented, replaced or novated;

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(iii) a party to this document or to any other document or agreement includes apermitted substitute or a permitted assign of that party;

(iv) a person includes any type of entity or body of persons, whether or not It isincorporated or has a separate legal identity, and any executor,administrator or successor in law of the person; and

(v) anything (including a right, obligation or concept) Includes each part of it.

(b) A singular word includes the plural, and vice versa.

(C) A word which suggests one gender includes the other genders.

(d) If a word or phrase is detined, any other grammatical form of that word or phrasehas a corresponding meaning.

fe) Jf an example Is given of anything (including a right, obligation or concept), suchas by saying it Includes something else, the example does not limit the scope ofthat thing.

(f) A reference to $ or dollars Is a reference to Australian dollars.

fg) The word agreement includes an undertaking or other binding arrangement orunderstanding, whether or not in writing.

(h) The expression this document includes the agreement, arrangement,understanding or transaction recorded in this document.

(i) The expressions subsidiary, holding company and related body corporateeach have the same meaning as in the Corporations Act.

1.3 Business Days

If the day on or by which a person must do something under this document is not aBusiness Day:

(a) if the act involves a payment that is due on demand, the person must do it on orby the next Business Day; and

fb) in any other case, the person must do it on or by the previous Business Day.

2. SUBSCRIPTION FOR SUBSCRIPTION SHARES

2.1 Issue and subscription

The Subscriber agrees to subscribe for and pay the Subscription Price for the SubscriptionShares, and the Company agrees to allot and issue the Subscription Shares to theSubscriber on the terms of this document.

2.2 Application of Proceeds

The Company agrees to apply the Proceeds for working capital purposes and othercorporate purposes in accordance with a budget that is to be agreed by the parties.

3. CONDITIONS PRECEDENT

3.1 Conditions Precedent

Completion is conditional on:

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(a) if the Subscriber has provided the Company with a written nomination of its initialNominee Director to be appointed to the Board at Completion pursuant toclause 6.1 together with a written consent to act as a director of the Company fromthe person so nominated by the Subscriber, the Company convening a meeting ofthe Board for the purpose of appointing the initial Nominee Director as a casual oradditional director of the Board conditional on and with effect on and fromCompletion;

(b) if the Subscriber has provided the Company with a written nomination of an interimchief executive officer on terms and conditions satisfactory to the Company and theSubscriber (both acting reasonably), the Company convening a meeting of theBoard for the purpose of appointing the nominated Interim chief executive officerconditional on and with effect on and from Completion;

(c) Ian McCubbing, Rod Marston and Giles Robins resign as directors of the Companywith effect on or before Completion;

(d) Gabrielle Moeller be appointed as chairperson of the Board, with effect on or beforeCompletion;

fe) as at 8:00am (AWST) on the Completion Date, the Company not being affected byan Insolvency Event; and

(f) as at 8:00am (AWST) on the Completion Date, there being no Warranty is notcorrect In a material respect, or is misleading In a material respect.

3.2 Waiver of Conditions Precedent

A Condition Precedent in clause 3.1 may only be waived by the Subscriber giving writtennotice to the Company.

3.3 Obligations to satisfy Conditions Precedent

The parties must use reasonable endeavours to ensure that the Conditions Precedent inclause 3.1 are satisfied promptly on or before the End Date. The parties must keep eachother Informed of any circumstances which may result in any Condition Precedent notbeing satisfied In accordance with its terms.

3.4 Result of non-satisfaction of Conditions Precedent

lithe Conditions Precedent in clause 3.1 are not satisfied or waived under clause 3.2 onor before the End Date, then all rights and obligations under this document terminate onthat date other than:

(a) under clauses 1 (Interpretation), 10 (Confidentiality), 11 (Announcements),12 (Notices), 13 (Amendment and Assignment) and 14 (General); and

(b) rights that accrue before that date.

4. COMPLETION

4.1 Time and place of Completion

Completion will take place at 11:30am on the Completion Date at the Perth office of DLAPiper or at any other date, time or place agreed by the Company and the Subscriber.

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4.2 Subscriber’s obligations at Completion

At Completion, the Subscriber will:

(a) deliver to the Company an application for the Subscription Shares duly completedand executed by the Subscriber, in the form set out in Schedule 1 or in any otherform the Company agrees to accept;

(b) pay the Subscription Price to the Company in immediately available funds by banktransfer to the bank account nominated by the Company (such transfer to beconfirmed by evidence of the Subscriber’s bank of transfer), or in any other formthat the Company may agree to accept as payment; and

(c) give to the Company a signed consent by the Nominee Director to ad as a directorof the Company.

4.3 Company’s obligations at Completion

At Completion, the Company will:

(a) allot and issue the Subscription Shares to the Subscriber or its custodian;

(b) register the Subscriber or Its custodian as the holder of the Subscription Shares;and

fc) where the Subscriber has duly exercised its right under clause 6.1 to nominate theInitial Nominee Director In accordance with clause 3.1(a), the Company mustprovide the Nominee Director with a deed of access, indemnity and insurance onterms satisfactory between the Company and the Nominee Director.

4.4 Company’s obligations following Completion

On or as soon as practicable after Completion, the Company must:

(a) apply to ASX and use its best endeavours to obtain official quotation of theSubscription Shares by ASX; and

(b) deliver to the Subscriber a holding statement showing the Subscriber as the holderof the Subscription Shares.

4.5 Completion simultaneous

In respect of Completion:

(a) the obligations of the parties under this document are interdependent; and

(b) all actions required to be performed will be taken to have occurred simultaneouslyon Completion.

4.6 Share moratorium

The Company agrees that it will not issue new Shares between the date of this agreementand immediately prior to Completion.

5. VOLUNTARY LOCK UP

(a) The Company must issue a Prospectus on or before 31 March 2017 so as to allowthe Subscription Shares to be traded by the Subscriber without restriction ordisclosure under Chapter 6D.2 of the Corporations Act.

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fb) The Subscriber must not dispose of or transfer effective ownership or control of theSubscription Shares at any time before the Company Issues Prospectus inaccordance with clause 5(a), unless the disposal or transfer is made pursuant to atakeover bid or scheme of arrangement.

(c) The parties will do or procure to be done all such things and sign or procure to besigned all such documents as may be required to give effect to the voluntary lockup pursuant to clause 5(b).

(d) The parties agree that the Company may request the Company’s share registryplace a holding lock on alt the Subscription Shares until the earlier of:

(I) the Company issues Prospectus in accordance with clause 5f a); or

(ii) to enable the Subscriber to accept a takeover bid or scheme ofarrangement.

6. NOMINEE DIRECTOR

6.1 Appointment of Nominee Director

(a) For so long as the Subscriber Group holds in aggregate such number of Shares,options or other Equity Securities convertible into Shares in the Company which isnot less than 10% of the Fully Diluted Share Capital of the Company, then theSubscriber may nominate two persons to be appointed as a director of the Board(each a Nominee Director).

(b) If the Subscriber Group holds in aggregate such number of Shares, options or otherEquity Securities convertible into Shares in the Company which is not less than 5%of the Fully Diluted Share Capital of the Company, then the Subscriber may onlynominate one Nominee Director.

(c) For the purposes of clauses 6.1(a) and 6.1(b), any Shares issued by the Companypursuant to a Participation Exception are excluded.

(U) Each Nominee Director shall have the right to appoint an alternate director inaccordance with the Constitution.

(e) After the appointment of the Nominee Directors, the Board must:

(I) ensure that the Nominee Directors are proposed for election as a director atthe next annual general meeting of the Companys shareholders convenedafter the appointment;

(ii) recommend the election of the Nominee Directors to the Company’sshareholders at the annual general meeting referred to in clause 6.1fe)f I)and do all things as may be reasonably necessary or expedient on its part toensure that such resolution Is passed by the requisite majority.

(f) The Subscriber’s right to make the election under clause 6.1(a) and 6.1(b):

(i) may be made at any time during the Relevant Period;

(ii) does not merge on Completion;

(iii) does not cease after either the first nomination to appoint the NomineeDirector or if any resolution to elect any Nominee Director Is not approvedby shareholders at any general meeting of the Company; and

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Civ) Is subject to:

CA) compliance with all relevant regulations and laws, including ASXCorporate Governance Principles and Recommendations relating toappropriate background checks being conducted on the NomineeDirector to ensure the Nominee Director has the requisite skills andexperience for the position, is a person of good standing, has notbeen bankrupt or committed an offence which the Board determinesis a reason why the Nominee Director should not be appointed to theBoard; and

(B) receipt by the Company of a consent from the Nominee Director.

6.2 Replacement of Nominee Director

if a Nominee Director resigns, is not re-elected as a director or Is no longer eligible to be adirector of the Company, the Subscriber’s rights under clause 6.1 are not affected and theSubscriber may nominate another person to be appointed as a replacement NomineeDirector.

6.3 Appointment by Board in interim

The Board will promptly appoint the Nominee Directors as a casual or additional directorof the Board until the next annual general meeting of the Company, at which time theNominee Directors will be subject to election by shareholders of the Company inaccordance with the Listing Rules.

7. CHANGES TO THE BOARD

The Company will exercise best endeavours to appoint a new independent director by thedate that is three months following Completion.

8. ANTI-DILUTION RIGHTS

8.1 Conditionality

(a) The obligations of the Company under this clause 8 are subject to the ASX grantinga waiver from the requirements under ASX Listing Rule 6.18 in relation to therights the Company grants to the Subscriber under this clause 8.

Cb) The Company must apply to the ASX for the waiver as soon as reasonably practicalafter the date of this agreement and use its reasonable endeavours to obtain theASX waiver.

Cc) The Company must include all reasonable comments the Subscriber may have onall communications with the ASX concerning the aforementioned waiver. TheCompany must keep the Subscriber informed of any circumstances which mayprevent the waiver being granted on the terms applied for, If the ASX grants thewaiver other than on the terms applied for, the parties will co-operate to allow theSubscriber as many of the rights referred to in this clause 8 which do not conflictwith the ASX ruling (and allow the rights to the extent that they do not conflict). Ifthe ASX does not grant the waiver, the Company and the Subscriber must cooperate to implement alternative measures to achieve the same or similar outcomeand re-apply to the ASX to the extent that such alternative measures require ASXapproval.

8.2 Duration of rights

(a) The rights contained in this clause 8 will apply on and from Completion.

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(b) The rights contained In this clause 8 ate automatically suspended (but notterminated) If following Completion:

Ci) the Subscriber Shareholders beneficially own C in aggregate) less than 5% ofthe Fully Diluted Share Capital of the Company for a continuous period of30 days after the Company gives notice to each Subscriber Shareholder ofthat fact (Suspension Notice);

(ii) the Subscriber Shareholders beneficially own (in aggregate) more than 30%of the Fully Diluted Share Capital of the Company for a continuous period of30 days after the Company gives a Suspension Notice to each SubscriberShareholder; or

(iii) the strategic relationship between the Company and the Subscriber cease ofchanges in such a way that it effectively ceases,

and the reason the Subscriber Shareholders beneficially own less than 5% or motethan 30% of the Fully Diluted Share Capital of the Company is not because of:

(iv) any issue of Shares pursuant to a Participation Exception;

(v) the Issue of Shares pursuant to the exercise or conversion of any EquitySecurity on issue prior to the date of this document; or

(vi) the exercise or conversion of any Equity Security issued pursuant to aParticipation Exception.

8.3 Benefit of rights

Each of the Subscriber Shareholders, whether a party to this document or not, is entitledto the benefits of this clause 8 and this clause 8 may be enforced on behalf of eachSubscriber Shareholder by the Subscriber.

8.4 Notice of issue

The Company must give the Subscriber 15 Business Days’ notice of any proposed offer ofEquity Securities by it (other than a Participation Exception) (the Proposed EquityOffer).

8.5 Right to participate

Subject to clauses 8.6(a)(ii) and 8.6(b), the Company must ensure that each SubscriberShareholder may participate in the Proposed Equity Offer by making an offer for issue toeach Subscriber Shareholder the number of Equity Securities determined in accordancewith clause 8.6 and otherwise on the same terms and conditions as offers of EquitySecurities are made to other investors or shareholders pursuant to the Proposed EquityOffer.

8.6 Number of Equity Securities

(a) Where, in respect of a Proposed Equity Offer, the Company is requited underclause 8.5 to offer to issue Equity Securities to each Subscriber Shareholder, thenumber of Equity Securities to be offered to each Subscriber Shareholder will be:

(I) where the Proposed Equity Offer Is a Pro-Rata Offer, the pro-rataentitlement of that Subscriber Shareholder; or

(Ii) otherwise, subject to clauses 8.6(b) and 8.6(c), the number of EquitySecurities which would need to be issued to that Subscriber Shareholder so

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that after the issue of Equity Securities under the Proposed Equity Offer, theHolding of that Subscriber Shareholder bears the same proportion to theFully Diluted Capital as the Holding of that Subscriber Shareholder bore tothe Fully Diluted Capital before the issue of Equity Securities pursuant to theProposed Equity Offer.

(b) The maximum number of Equity Securities which the Company must offer to eachof the Subscriber Shareholders pursuant to clause 8.6(a)f ii) is that number ofEquity Securities which will enable the Subscriber Group as a whole to subscribe forsufficient additional Equity Securities to enable the Subscriber Shareholders tomaintain In aggregate no more than Its pro-rata of the Fully Diluted Share Capitalof the Company following completion of the Proposed Equity Offer.

(c) To the extent a Subscriber Shareholder does not accept the maximum number ofEquity Securities offered under this clause 8, any other Subscriber Shareholdermay accept the offer in relation to those Equity Securities by notice to theCompany.

9. WARRANTIES

9.1 By each party generally

Each party represents and warrants to the other party that each of the Warranties set outin Part 1 of Schedule 3 is true and correct at the date of this document and will be so atall times before and including the Completion Date.

9.2 By the Company

The Company warrants to the Subscriber that each of the Warranties set out in Part 2 ofSchedule 3 is true and correct at the date of this document and will be so at all timesbefore and including the Completion Date.

9.3 Matters disclosed

Each Warranty is to be read down and qualified by any information fully and fairlydisclosed by each party prior to the date of this agreement, or as disclosed by theCompany in announcements on the ASX announcements platform on or after 1 July 2015but before the date of this agreement.

9.4 Update of disclosures

If, after the date of this document, the Company becomes aware of any circumstancewhich would cause a Warranty to be not true and accurate, or to be misleading in amaterial respect it will promptly give a notice to the Subscriber detailing the nature andeffect of the change of circumstance.

9.5 Indemnity

The Company Indemnifies the Subscriber against alt Loss arising directly or indirectly fromor incurred in connection with any breach of clauses 9.1 and 9.2.

9.6 No extinguishment

The Warranties are not extinguished or affected by any event or matter unless;

(a) the Subscriber has given a specific written waiver or release;

(b) the Claim relates to a matter which was fully disclosed to the Subscriber before thedate of this document; or

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fc) the Claim relates to a thing done or not done after the date of this document at therequest or with the approval of the Subscriber.

9.7 Reliance on Warranties

The Company acknowledges that the Subscriber has entered this document and hasagreed to subscribe for the Subscription Shares in reliance on the Warranties provided bythe Company in Schedule 3.

9.8 Reciprocal Warranty cap

The total liability of the Company and the Subscriber for loss or damage of any kindhowever caused, In contract, tort (including negligence), under any statute or otherwisearising from or relating to any and all Claims arising from or relating In any way to a Claimby the Company or the Subscriber for a breach of Warranty is limited to, in aggregate, theSubscription Price.

10. CONFIDENTIALITY

10.1 Confidential Information

The following definitions apply in this clause 10.

Confidential Information means Information in any form or medium that:

(a) relates to the business, assets or affairs of each of the parties and their relatedbodies corporate;

(b) is made available by or on behalf of the disclosing party to the receiving party, or isotherwise obtained by or on behalf of the receiving party; and

(c) is, by its nature, confidential or the receiving party knows, or ought to know, isconfidential.

Confidential Information includes the existence and terms of this document.

Confidential Information may be made available or obtained directly or indirectly andbefore, on or after the date of this document.

Excluded Information means information the receiving party can establish (bydocumentary evidence):

(a) is in or enters the public domain through no fault of the receiving party; or

(b) is already known to the receiving party on a non-confidential basis or is disclosedto the receiving party from another source otherwise than In breach of thisdocument.

disclosing party means a party to this document who makes Information available.

receiving party means a party to this document who receives information.

10.2 Disclosure of Confidential Information

All Confidential Information exchanged between the parties under this document or duringthe negotiations preceding this document is confidential to them and may not be disclosedto any person except:

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(a) employees, officers, legal advisers, auditors and other consultants of the party orits related bodies corporate requiring the information for the purposes of thisdocument or any transaction contemplated by it;

(b) with the written consent of the party who supplied the information which consentmay be given or withheld In Its absolute discretion;

Cc) if a party Is required to do so by law, a stock exchange or any Government Agency;or

(U) if a party is requited to do so in connection with legal proceedings relating to thisag tee ment.

10.3 Use of Confidential Information

A party must not use any Confidential Information, except for the purpose of performingits obligations under the document or as otherwise required by operation of law.

10.4 Excluded Information

Clauses 10.2 and 10.3 do not apply to the Excluded Information.

10.5 Return or destruction of Confidential Information

A party must immediately upon the written request of the other party:

(a) deliver to the other party all documents and other materials containing, recordingor referring to Confidential Information which are in its possession, power orcontrol;

(b) ensure that any person who receives the Confidential Information by Its authorityreturns the Confidential Information (In any form in which It Is held) to the otherparty; and

(c) erase or destroy all electronic and other intangible records containing, recording orreferring to Confidential Information.

10.6 Survival of confidentiality obligations

Clause 10 will survive termination of this agreement irrespective of whether Completionhas taken place or not.

11. ANNOUNCEMENTS

11.1 Public announcements

( a) The Company and the Subscriber will consult with each other in relation to materialpublic releases in relation to the subscription for the Subscription Shares by theSubscriber and subject to clause 11.2 neither party may, before or afterCompletion, make or send any material public statement, announcement orcommunication concerning the subscription for Subscription Shares unless it hasfirst obtained the consent of the other party, which consent must not beunreasonably withheld or delayed.

(b) The agreed form announcement to be issued to the ASX announcements platformimmediately after execution of this document is set out in the Annexure.

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11,2 Public announcements required by law

Clause 11.1 does not apply to a public announcement or communication required by lawor a regulation of a stock exchange, if the party required to make or send it has:

(a) provided the other party with as much notice a reasonably possible to enable it toseek a protective order or other remedy;

(b) provided all assistance and cooperation that the other party considers necessary tominimise that disclosure; and

(c) consulted to the extent possible in the circumstances with the other party and itslegal advisers.

12. NOTICES

12.1 How to give a notice

A notice, consent or other communication under this document Is only effective if it is:

(a) in writing, signed by or on behalf of the person giving it or any person acting as anofficer or agent of that person;

(b) addressed to the person to whom it is to be given; and

fc) either:

(i) delivered or sent by pre-paid mail (by airmail, if the addressee is overseas)to that person’s address; or

(ii) sent by fax to that person’s fax number and the machine from which it issent produces a report that states that it was sent in full; or

(iii) sent by email to that persons email address.

12.2 When a notice is given

A notice, consent or other communication that complies with this clause 12 is regarded asgiven and received:

(a) If It is delivered or sent by fax, if received:

(I) by 5.00 pm (local time in the place of receipt) on a Business Day - on thatday; or

(ii) after 5.00 pm (local time in the place of receipt) on a Business Day, or on aday that is not a Business Day - on the next Business Day;

(b) if it is sent by mail:

(I) within Australia — three Business Days after posting; or

(Ii) to or from a place outside Australia — seven Business Days after posting;and

(c) if It is sent by email, at the earlier of:

(i) when the sender receives an automated message confirming delivery; and

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(Ii) four hours after the time sent (as recorded on the device from which thesender sent the email) unless the sender receives an automated messagethat the email has not been delivered.

12.3 Addresses for notices

For the purpose of this clause 12 the address of a person is the address set out below oranother address of which that person may give notice to each other person:

Subscriber:Attention: General CounselAddress: Gotthardstrasse 26, 6300 Zug, SwitzerlandFacsimile: +41 41 560 9071Email: jnagulendran@pala.com

Company:Attention: Company SecretaryAddress: 11 Moreau Mews, Applecross, Western Australia 6153, AustraliaFacsimile: +61 8 9463 6652Email: toconnor@kasbahresources.com

13. AMENDMENT AND ASSIGNMENT

13.1 Amendment

This document can only be amended or replaced by another document executed by theparties.

13.2 Assignment

A party may only assign, encumber, dectare a trust over or otherwise deal with its rightsunder this document with the written consent of the other party.

14. GENERAL

14.1 Governing law

(a) This document is governed by the laws of the state of Western Australia.

(b) Each party submits to the jurisdiction of the courts of that state and of any courtthat may hear appeals from any of those courts, for any proceedings in connectionwith this document.

14.2 Liability for expenses

(a) The Company must pay its own costs and expenses incurred in negotiating,preparing, executing and registering this document.

(b) The Company must indemnify the Subscriber against, and must pay the Subscriberon demand the amount of, the Subscribers reasonable costs in negotiating,preparing, executing and registering this document.

14.3 Giving effect to this document

Each party must do anything (including execute any document), and must ensure that itsemployees and agents do anything (including execute any document), that any otherparty may reasonably require to give full effect to this document.

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14.4 Variation of tights

The exercise of a right partially or on one occasion does not prevent any further exerciseof that right in accordance with the terms of this document. Neither a forbearance toexercise a right nor a delay in the exercise of a tight operates as an election betweenrights or a variation of the terms of this document.

14.5 Operation of this document

(a) This document contains the entire agreement between the parties about its subjectmatter. Any previous understanding, agreement, representation or warrantyrelating to that subject matter is replaced by this document and has no furthereffect.

(b) Any right that a person may have under this document is in addition to, and doesnot replace or limit, any other right that the person may have.

(c) Any provision of this document which is unenforceable or partly unenforceable is,where possible, to be severed to the extent necessary to make this documentenforceable, unless this would materially change the intended effect of thisdocument.

14.6 No merger

No provision of this document merges on or by virtue of Completion.

14.7 Entire agreement

This document constitutes the entire agreement of the parties about its subject matterand supersedes all negotiations on that subject matter.

14.8 Counterparts

This document may be executed in counterparts.

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SCHEDULE 1

Application for subscription shares

To: Kasbah Resources Limited (the Company)11 Moreau Mews, Applecross, Western Australia 6153, Australia

Attention: Company Secretary

[date]

Dear Sirs

Application for shares pursuant to the Subscription Agreement dated [.] December 2016

Capitalised terms which are used but not defined in this application have the meaning given tothem (if any) in the Placement Agreement.

Pala Investments Limited (the Subscriber):

1. applies, and agrees to subscribe, for 138,133,684 ordinary shares in the capital of theCompany (the Subscription Shares);

2. agrees to pay the Subscription Price upon Completion; and

3. agrees to be bound by the terms of the constitution of the Company.

The Subscriber requests that the Company issue the Subscription Shares to its custodian asfollows:

Citicorp Nominees Pty LimitedCHESS PID: 20018GPO Box 764GMelbourne VIC 3001For the benefit of: Pala Investments Limited (Account Number: 15100030)

For DvP settlement:

Yours faithfully

SIGNED for PALA INVESTMENTSliMITED by Its duly authorised officer, inthe presence of:

Signature of officer

Signature of witness Name

Name

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SCHEDULE 2

Capital structure

Shares on issue = 556,005,435

Unlisted options = 500,000

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SCHEDULE 3

Warranties

Part 1. — By each party generally

1. (status) It is a body corporate validly existing under the laws of its jurisdiction ofincorporation.

2. (power) It has full legal capacity and power to:

(a) own its property and to carry on its business; and

(b) enter into this document and to carry out the transactions that it contemplates.

3. (corporate authority) It has taken all corporate action that Is necessary or desirable toauthorise its entry into this document and to carry out the transactions contemplated.

4. (Authorisations) It holds each Authorisation (and is complying with any conditions towhich any Authorlsation is subject) that is necessary or desirable to:

C a) enable It to properly execute this document and to carry out the transactions that itcontemplates;

(b) ensure that this document is legal, valid, binding and admissible In evidence; or

(c) enable it to properly carry on its business as it is now being conducted.

5. (documents effective) This document constitutes Its legal, valid and binding obligations,enforceable against It In accordance with Its terms (except to the extent limited byequitable principles and laws affecting creditors’ rights generally), subject to anynecessary stamping or registration.

6. (no contravention) Neither its execution of this document nor the carrying out by it ofthe transactions that this document contemplates, does or will:

(a) contravene any law to which It or any of its property is subject or any order of anyGovernment Agency that is binding on it or any of its property;

(b) contravene any Authorisation;

(c) contravene any agreement binding on it or any of its property;

(d) if the party Is a corporation, contravene its constitution; or

Ce) require it to make any payment or delivery In respect of any financialaccommodation before it would otherwise be obliged to do so.

7. (no trust) It Is not entering Into this document as trustee of any trust or settlement.

8. (not insolvent, no receiver) It Is not affected by an Insolvency Event.

9. (not unenforceable) There is no circumstance which could make this document or anytransaction contemplated by it void, voidable or unenforceable under any applicable lawabout insolvency.

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Part 2 — By the Company

(Subscription Shares) The Company represents and warrants to the Subscriber that:

(a) (capital structure) the capital structure of the Company set out in Schedule 2contains a true, complete and accurate description of all the Issued shares, optionsand other securities in the capital of the Company as at the date of this documentand there has been no change to the capital structure since;

(b) frights of Subscription Shares) on their allotment and issue at Completion, theSubscription Shares will rank on an equal footing in all respects with the thenexisting Issued shares of the same class in the capital of the Company; and

(c) (no Encumbrance) on allotment and Issue of the Subscription Shares onCompletion, the Subscriber will be the holder of the Subscription Shares free fromany Encumbrance or third party interest.

2. (share issues) Other than as disclosed in Schedule 2, there are no agreements,arrangements or understandings in force or securities issued which call for the present orfuture issue of, or grant to any person the right to require the issue of, any shares orother securities in the Company.

3. (compliance with Listing Rules) The Issue of the Subscription Shares will not breachListing Rule 7.1, or any other Listing Rule.

4. (disclosure obligations) The Company has complied with Its obligations under ListingRule 3.1 and there Is no information to which Listing Rules 3.A.1, 3.A.2 or 3.1A.3 apply,other than information to be disclosed in the announcement made by the Company to beissued to the ASX announcements platform immediately after execution of this documentas set out In the Annexure.

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EXECUTED as an Agreement.

Each person who executes this document on behalf of a party under a power of attorney declaresthat he or she is not aware of any fact or circumstance that might affect his or her authority to doso under that power of attorney.

SIGNED for PALA INVESTMENTSLIMITED by its duty authorised officer, inthe presence of:

e of officer

_________________

1L4ISgnaturé’ of witness Name

Name

EXECUTED by KASBAH RESOURCESLIMITED:

Signature of director Signature of director/secretary

Name Name

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EXECUTED as an Agreement.

Each person who executes this document on behalf of a party under a power of attorney declaresthat he or she is not aware of any fact or circumstance that might affect his or her authority to doso under that power of attorney.

SIGNED for PALA INVESTMENTSLIMITED by its duly authorised officer, inthe presence of:

Signature of officer

Signature of witness

Name

Na me

EXECUTED by KASBAH RESOURCESLIMITED:

Signature of directo

JAIName Name

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ANNEXURE

Agreed form announcement

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ASX RELEASE

NEW STRATEGIC INVESTOR

AND CAPITAL RAISING

Kasbah Resources Limited (Kasbah or the Company) is pleased to

announce a placement to Pala Investments Limited (Pala) of

138,133,684 new shares at $0.027 per share to raise $3,729,609

before costs.

Pala is an experienced investor in the mining sector with a strong

track record of success and value creation. Along with its financial

capacity, Pala’s team has extensive experience in project

development, financing, construction, expansion, and turnaround

situations, and seeks to assist companies in which it has long-term

shareholdings by providing strategic support in these areas.

The placing price is based upon a 15 day VWAP and represents a

12.5% premium to the last closing price of $0.024 on 6 December

2016 and the funds raised will be utilised to recommence pre

project activities, progress project financing options, working

capital and to advance the Achmmach Tin Project. On closing of

the placement, Pala will become a 19.9% shareholder in the

Company.

In addition to this placement, Kasbah is pleased to announce that

it intends to offer a 1 for 6 renounceable rights issue to all

shareholders to raise up to an additional $2,660,867 at an issue

price of $0023 per share. The proposed rights issue price

represents a discount of 4.2% to the last closing price of $0024 on

6 December 2016.

The rights issue is expected to be launched in early 2017 and

closed before mid-March 2017. Pala has offered to support the

rights issue by taking up its pro-rata share to maintain its 19.9%

shareholding of the expanded capital of the Company. Kasbah will

seek underwriters for the rights issue. Pala has also offered to

underwrite all or part of the rights issue to ensure maximum funds

are raised.

Furthermore, Kasbah is pleased to announce:

• a restructuring and streamlining of the Kasbah board of

directors to reduce costs and reflect the entry of a strategic

investor onto the register. The restructure will reorientate the

Board capabilities with respect to project financing and

development to position the company to quickly advance the

Achmmach Tin Project towards first production.

• extension of the maturity of the Pala Loan of $1 million

(currently repayable on 10 August 2017) to 31 December

2017. Additionally, Kasbah may, at its election, upon payment

of an extension fee extend the maturity for a further 6

months until 30 June 2018.

• the company has entered into a deed of termination with Asian

Mineral Resources (AMR) in respect of the scheme

implementation agreement between the parties. The

discussions with AMR with respect to the proposed merger by

way of scheme of arrangement are now concluded.

JkS BAH• RE SD U R ES

19 December 2016

ASX CODE: KAS

OUR PRIME COMMODITY IS

TIN

LME TIN PRICE (16/12/16)

US$21,345 / t

(CASH BUYER)

ABOUT KASBAH

KASBAH IS AN AUSTRALIAN LISTED

MINERAL EXPLORATION AND

DEVELOPMENT COMPANY.

THE COMPANY (75%) AND IT’S

JOINT VENTURE PARTNERS TOYOTA

TSUSHO CORP (20%) AND NIHETSU

MINING CO. (5%) ARE ADVANCING

THE ACHMMACH TIN PROJECT IN

THE KINGDOM OF MOROCCO

TOWARDS PRODUCTION.

PROJ ECTS

ACHMMACH TIN PROJECT

BOU ELJAJ TIN PROJECT

CAPITAL

STRUCTU RE

SHARES ON ISSUE: 556M

UNLISTED OPTIONS: 0.5M

CASH @ 30/09/16: $0.9M

MAJORSHAREHOLDERS(P RE-P LACE M E NT)

WORLD BANK (IFC) 17.7%

AFRICAN LION GROUP 15.7%

THAISARCO 5.6%

TRAXYS 5.3%

CONTACT US

: +61894636651

: info@kasbahtesoutces.com

: www.kasbahresources.com

L1 @kasbahresources

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‘‘ ASX RELEASE

OVERVIEW

Kasbah is pleased to provide the following update regarding a number of corporate initiatives that will

position Kasbah to proceed with the advancement of its Achmmach Tin Project (75% Kasbah, 20% Toyota

Tsusho Corp, 5% Nittetsu Mining Co. Ltd):

1. New Strategic Partner

Pala, an experienced mining investor with a strong track-record of success, has agreed to make a strategicinvestment into Kasbah. Pala will work with Kasbah to provide strategic support in:

1. Team strengthening - Facilitating strengthening of board and management;

2. Project financing - Strong financial capacity, and experience of providing support in project

financing;

3. Project execution - Experience of project management and operations;

4. M&A - Assistance in strategic M&A and growth opportunities; and

5. Stakeholder relations - Strong focus on stakeholder and community relations.

Ms Gabrielle Moeller, Non-Executive Chairperson of Kasbah, commented:

“We are excited to welcome Pala as a strategic investor. With the support of the existing shareholders,

combined with Pa/a’s financial capabilities and their extensive project financing and development skills,

we believe that the company can transition the Achmmach Tin Project to a decision to mine in 2017.

Kasbah looks forward to working closing with Pala to continue advancement of the Achmmach Tin

Project towards production.”

Stephen Gill, Portfolio Manager at Pala Investments, commented:

‘We are excited by the opportunity to partner with Kasbah and look forward to supporting the

Company in advancing its Achmmach Tin Project. We recognise Achmmach as one of the only scalable

near-term sources of new tin supply, which makes it a strategic asset in an attractive market. I believe

the rapid advancement of the project to first production will underpin the development of Kasbah into a

larger-scale, multi-asset tin company.”

2. Capital Raising

• Placement

Pala has agreed to subscribe for 138,133,684 new shares in Kasbah to raise an aggregate amount of

$3,729,609 (Placement). Following closing of the Placement, the enlarged issued share capital of

Kasbah will be 694,139,119 shares and, accordingly, Pala will hold 19.9% of the enlarged issued share

capital of Kasbah. The Placement price of $0.027 per share is based upon a 15 day VWAP and

represents a 12.5% premium to the last closing price of $0024 on 6 December 2016.

The funds raised will be utilised to recommence pre-project activities, progress project financing

options, continue advancement of the Achmmach Tin Project towards production and for working

capital purposes.

Under the terms of the Placement:

• Pala is entitled to appoint two representatives to the Kasbah Board for so long as Pala holds a

10% interest in Kasbah on a fully diluted basis, and one nominee for so long as it holds a 5%

interest on a fully diluted basis.

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J KAS BAH+ RESOURCE S

• Subject to ASX providing Kasbah with a waiver from the relevant Listing Rule, if Kasbah issues

ordinary shares to any person or entity, Pala will have the right to subscribe for additional

ordinary shares to maintain its percentage shareholding in the Company on a fully diluted

basis immediately prior to the issue of such ordinary shares. This right is suspended if Pala

holds less than 5% or more than 30% of Kasbah shares on a fully diluted basis, or if the

strategic relationship between Kasbah and Pala ceases.

• Pala has also agreed to a voluntary escrow of the Placement shares until the Company issues

a prospectus (which must occur on or before 31 March 2017) enabling the on-sale of those

shares.

Renounceable Rights Issue

Following the Placement, Kasbah intends to offer a 1 for 6 renounceable rights issue to all

shareholders to raise up to an additional $2,660,867 at $0.023 per share, representing a 4.2%

discount to the last closing price of $0024 on 6 December 2016. Pala intends to take up its pro-rata

share in the rights issue to maintain its 19.9% shareholding of the expanded capital of the Company.

Kasbah will seek underwriters for the rights issue. Pala has also offered to underwrite all or part of

the rights issue to ensure maximum funds are raised. A further announcement in relation to the

terms of the rights issue and any agreement with underwriters will be made in due course.

3. Extension of Loan Maturity

As previously announced, Kasbah has fully drawn a $1 million loan provided by Pala. To assist with

Kasbah’s working capital requirements during 2017, Pala has agreed to extend the maturity of the loan, at

no penalty, from 10 August 2017 to 31 December 2017. Additionally Kasbah may at its election, extend

the maturity for a further 6 months until 30 June 2018 with the payment of a fee equalling 3% of the

outstanding Total Commitment at the time of the election.

4. Board and Management Restructure

. Board

With the addition of Pala as a new, significant shareholder, Kasbah will streamline its board of directors

to reduce costs. The restructure will reorientate the Board capabilities with respect to project financing anddevelopment to position the company to quickly advance the Achmmach Tin Project towards first production.Effective from release of this announcement, Kasbah’s non-executive Chairperson Mr Rod Marston

retires from the Board and Ms Gabrielle Moeller, an existing non-executive director with extensive

banking and financing skills, will step in as non-executive Chairperson.

Mr lan McCubbing and Mr Giles Robbins have also retired from the board of directors.

Ms Gabrielle Moeller, Non-Executive Chairperson of Kasbah stated:

“1 thank Rod Marston, Ian McCubbing and Giles Robbins for their dedicated service to Kasbah

through the evolution of the company from an exploration project to where we are today. I look

forward to working with the new board and am excited to be able to assist in guiding the company,

with the support of its shareholders, through the project financing and development of the

Achmmach project.”

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ASX RELEASE

Effective on closing of the Placement, Pala will have the right to appoint two nominees to the Kasbah

Board with Stephen Gill, a representative of Pala, joining immediately. Mr Gill, Portfolio Manager at

Pala, has been involved in many of Pala’s principal investments covering a range of commodities, as

well as the mining services and consumables sectors. Stephen has also supported many of Pala’s

investee companies in defining and implementing strategic initiatives, including business turnaround,

organic expansion and strategic M&A.

On closing of the Placement, the Kasbah Board will comprise:

Non-executive Chairperson, Ms Gabrielle Moeller

Non-executive director, Mr Wayne Bramwell

Non-executive director, Mr Mike Brook

Non-executive director, Mr Stephen Gill

The Board will also seek to appoint an additional new independent Director within 3 months from

closing of the share Placement.

• Management

Mr Wayne Bramwell will be stepping down as Managing Director and will be paid his entitlements

under his contract at Kasbah. Mr Bramwell will remain a non-executive director of Kasbah. Mr Richard

Hedstrom will join Kasbah as Interim Chief Executive Officer on terms still to be agreed. Richard was

most recently Head of Corporate Development for OZ Minerals and has a long involvement in the

resources industry.

Ms Gabrielle Moeller, Non-Executive Chairperson of Kasbah commented:

“We would like to thank Wayne for his dedication and the significant contributions he has made in

building Kasbah into a near-term tin producer. His continued input will be invaluable as we continue to

bring Kasbah to the next stage in its development.

I would also like to welcome Richard to the team and look forward to working closely with Palo”.

5. Deed of termination with Asian Mineral Resources Limited

Kasbah is pleased to announce it has entered into a deed of termination with Asian Mineral Resources

(AMR) in respect of the scheme implementation agreement between the parties. The discussions with AMR

with respect to the proposed merger by way of scheme of arrangement are now concluded.

LOOKING FORWARD

The company will provide further updates regarding the Rights issue shortly.

For and on behalf of the Board,

Wayne Bramwell

Managing Director

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For further information please go to: www.kasbahresources.com

Or email: info@kasbahresources.com

Follow us on twitter @kasbahresources

ABOUT KASBAH RESOURCES

Kasbah Resources Limited (Kasbah) is on Australian listed mineral exploration and development Company.

Our commodity is tin.

Kasbah has two tin projects (the Achmmach Tin Project and the Bau El iaj Tin Project) located in the Kingdom of

Morocco:

• Achmmach Tin Project JV in Morocco (75% Kasbah, 20% Toyota Tsusho and 5% Nittetsu Mining)

Kasboh is the manager and operator of the Achmmach Tin Project JV. Toyota Tsusho Corporation (TYC) and

Nittetsu Mining Co. Ltd (NMC) of Japan are Kasbah’s strategic development partners in this iv. In response to a

25% fall in LME tin during 2015, the JV redesigned the project to reduce the scale, operating complexity and

capital requirements. A positive definitive feasibility study (DFS) into a Small Start Option (550) for the

development of a 2 staged, lower throughput, lower capitol cost underground mine, concentrator and associated

infrastructure at Achmmach was completed in August 2016.

Bou El Jaj Tin Project in Morocco (100% Kasbah)

Kasbah retains a 100% interest in the prospective Boy Eliaj Tin Project. This project is 10km from the Achmmach

Tin Project and is an early stage exploration opportunity that could become a satellite ore source for Achmmach.

It is currently pre-resource and additional drilling is required on multiple targets within the Bou El Jaj permits.

ABOUT PALA INVESTMENTS

Palo is an investment company focused on the metals and mining value chain with a strong track record of successful

investments and value creation. Palo’s team has extensive experience within the sector and seeks to assist companies

in which it has long-term shareholdings by providing strategic advice and innovative solutions in business growth,

project development and operations, turnaround and advanced exploration situations. Palo invests in mining and

processing projects across all geographies and commodities, as well as businesses engaged in mining services,

consumables and trading and logistics. Far more information, visit www.pala.com.

FORWARD LOOKING STATEMENTS

This announcement contains forward-looking statements which involve a number of risks and uncertainties. These

forward looking statements are expressed in goad faith and believed to have a reasonable basis. These statements

reflect current expectations, intentions or strategies regarding the future and assumptions based on currently available

information. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove

incorrect, actual results may vary from the expectations, intentions and strategies described in this announcement. No

obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or

to reflect otherfuture developments.

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