Axiom Mining 2015 Annual Report

GROUP FINANCIAL REPORT

Directors’ report continued

30

Remuneration report (continued)

c. Performance rights plan (continued) The Company may cancel the Rights in the following circumstances:

a. In their entirety, in the event that, as a result of the Court’s findings in the Appeal of the Proceedings, the Company is prevented from continuing exploration and subsequent mining activities in connection with the Isabel Nickel Project within 12 months after the Appeal decision is handed down; or b. Pro-rata, in the event that Mr Mount ceases to be employed by the Company before the end of the five year term (other than termination by the Company without cause or where a change of control event (as defined under the Director and Executive Performance Rights Plan) occurs. Each tranche of Rights will be issued at a nil exercise price. The rights are subject to the satisfaction of the relevant Performance Conditions, vesting and exercise, each Right entitles Mr Mount to one Share. The maximum number of Rights and hence the maximum number of Shares that may be issued to Mr Mount, and in the case of the LTI Rights, subject to the satisfaction of the relevant Performance Conditions, vesting and exercise is 12,000,000 Shares. The Rights will lapse if not exercised or forfeited before the date which is 12 months from: a. the date of issue of the STI Rights; or b. the satisfaction of the Performance Condition, in the case of the LTI Rights. Once the Rights become exercisable, the Rights may be exercised at any time prior to either their lapsing or being forfeited but subject to the following restrictions on their transfer: a. 20% may be sold immediately

b. 15% restricted from transfer for three months c. 15% restricted from transfer for six months and

d. the balance restricted from transfer whilst Mr Mount remains the Chief Executive Officer of the Company. At the Extraordinary General Meeting held on 15 October 2015, the shareholders approved the issue of the 150,000 Performance Rights at an exercise price of $0.50. The Rights may not be exercised before 31 December 2015 and will expire on 30 June 2017.

AXIOM MINING LIMITED ANNUAL REPORT 2015

Fair value per share at approval date Exercise price

Number of

Number vested

rights Expiry date

Jeremy Gray

150,000 30 June 2017 0.067 cents 0.50 cents

–

Once the Rights become exercisable, the Rights may be exercised at any time prior to either their lapsing or being forfeited but subject to the following restrictions on their transfer: a. 20% may be sold immediately

b. 15% restricted from transfer for three months c. 15% restricted from transfer for six months and d. the balance restricted from transfer whilst Mr Gray remains the Director of the Company.

The Rights are subject to such other terms and conditions in relation to participation in share issues and bonus issues, takeover of the Company and other matters in accordance with the Director and Executive Performance Rights Plan and the invitation provided in connection with the Rights. The fair value at grant date is independently determined using a Black-Scholes pricing model that takes into account the exercise price, the term of the rights, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the rights.