Folks, in an effort for you to understand the facts, whilst I...

Folks, in an effort for you to understand the facts, whilst I was reluctant to put this all up there, you are probably wondering why some of the letter to shareholders from the board stated what it did. Here is the support document that accompanied the 249D notice, this maybe sent out by the company in the coming weeks with a proposed EGM date.

One way or another you will get the intended documents, but for now so it makes some sense to, please see below.



15th October, 2013
Dear Fellow Shareholders,

I, Alexander Jason Elks (the Requisitioning Shareholder) have requested a general meeting (GM) of Moreton Resources Limited (MRV and the Company) shareholders be called to consider resolutions to remove the current board and appoint a skilled and competent alternative board.

With significant decrease in shareholder value and an onerous and questionable funding deal struck with Twinkle Woods Limited (the Inferior Funding Deal), which was announced on 25 September 2013 and is yet to be approved by the shareholders of MRV, your support is being sought to:

1. reject the Inferior Funding Deal; and
2. remove and replace the current board.

The Compelling Case for a Change of MRV Board
After seven months the incumbent MRV board still struggle to generate change, positive sentiment or shareholder value. Detailed below is a summary of critical issues and the board’s poor performance.

• 80% decrease in market value - Since March 2013, the MRV share price has dropped from 0.5 cents to a current offer price of 0.1 of a cent in the proposed Inferior Funding Deal. That is an 80% decrease of market value.

• 66% drop in seven weeks of share value - In August 2013, a capital raising was undertaken with existing and new shareholders at a price of 0.3 cents per share, representing a 21% discount against the 1-Month VWAP of the Company (Capital Raising). The proposed Inferior Funding Deal now effectively values shares of the Company at 0.1 of a cent. This decrease in share value is a fall of 66% in just seven weeks following the first week of the Capital Raising. Accordingly, while the long term shareholders received only a 21% discount under the Capital Raising, the directors have effectively granted the foreign investor a 66% discount under the Inferior Funding Deal.

• MRV valued at just $2.5 million - Under the proposed Inferior Funding Deal, the board has effectively valued the entire Company at $2.5 million by offering up to 1,225,000,000 new shares at 0.1 of a cent. This value does not take into account the cash value of outstanding bonds and outstanding R&D grants owed to MRV, which is understood (from representations of the Chairman) to have a value of between $4-6 million. This means that the incumbent MRV directors have effectively valued the entirety of MRV assets as NIL and the expected cash due, at a 50% discount.

• Superior funding deals were not secured - Alternate superior funding deals should have been duly considered and secured. Such alternatives were being presented to the board only weeks prior to the Inferior Funding Deal, that would not have offered 40.8% of the Company to a new foreign investor. It is understood that this investor has a close association with an incumbent board director. We have grave concerns about whether the standard of due diligence which a prudent board should have given to the Inferior Funding Deal, was given by the MRV board. When the Chairman was queried about the Inferior Funding Deal (following its execution) he expressed that he did not know certain particulars of the deal, including the identity of the actual investor, or its background or how the deal would strategically benefit the Company.

• Additional onerous provisions in the Inferior Funding Deal – Additional onerous provisions have been agreed to by the directors under the Inferior Funding Deal such as; a 25% break fee, a 12.5% coupon rate per annum and the allocation of a 100,000,000 shares. Shareholders who have seen similar foreign investment deals, will be aware of the general 1% break fees position and that the proposed deal is 25 times the market trend of 1% break fees.

• Missed opportunities could have protected MRV share price - Critical company opportunities and timelines that should have been pursued, enacted and met by the Company were not. In particular, activities such as securing alternative funding, scoping studies, coal qualities, securing of returned bonds and R&D grants, along with sale of fixed and mobile Kingaroy assets, all could have been pursued. Opportunities missed by the Company (if pursued) could have protected the share price and brought much needed critical funds into the Company well before now.

• Lack of transparency by the board – In addition to the failure to properly disclose the relevant particulars of the foreign investor, the board is unable to advise of what attempts were made to finalise other funding options. Further, the board (despite requests to do so) has failed to state if they did in fact spend the shareholders’ money on the committed items for funding in August and are unwilling to itemise expenditures. With $1.75 million already raised in the six months prior, itemising expenditures and disclosure should be pertinent at this critical time.

Shareholders (who in total hold approximately 24.5% of the issued capital of the Company) have expressed significant concerns about the Company’s decrease in market value and the above mentioned incompetent board performance, failures and lack of delivery. Several shareholders have each separately expressed a need for the removal of the current board and replacement with a new board who will seek to restore shareholder value in MRV and take the Company forward positively.

Ensure you maintain your current MRV share value by voting NO to the Inferior Funding Deal at the upcoming Annual General Meeting on 14 November 2013 (AGM).

Support Change to the Current MRV Board
Against the backdrop of the Inferior Funding Deal, the board’s effective valuation (of shares at 0.1 of a cent which values MRV at $2.5 million) is outrageous and fails to take into account the below list of current MRV assets and expected cash flow:

• McKenzie PCI JORC “compliant” inferred resource of 201MT*
• Wandoan Thermal JORC “compliant” indicated and inferred resource of 360MT*
• Kingaroy Thermal JORC “compliant” indicated and inferred resource of 73MT*
• Significant infrastructure, plant and equipment investments at the Kingaroy site which cost the company well over $10 million in set up costs
• A grant and bond return opportunity which directors have stated could total $4-6 million
• Company intellectual property, historical data and shell
(* refer to company web site for explanatory information)

A more transparent and accountable board that seeks to drive value through MRV’s considerable assets is needed.

Make Positive Change with a New MRV Board

The need for MRV change is strong and urgent. A new, competent and skilled board for MRV shareholders has been identified as a positive solution. A new MRV board (comprising Arthur Hood, Robert James Canning-Ure, John Thomas and Alexander Jason Elks) which will seek to create positive change to unlock the significant financial potential of all MRV assets (which is far greater than the current board’s nil value attributed to MRV assets). The proposed new board will seek superior alternative funding opportunities to the Inferior Funding Deal with third parties who have expressed a confidence, and a willingness to negotiate, only with the new board.

This is now critical. Should the incumbent board be allowed to remain and continue to ignore the competent alternatives, funding will be a critical issue and I consider that the board will have placed your investments at significant risk. I have addressed these concerns with the board (on several occasions previously) and it is apparent that the board is in denial as to the need for change.

Our Proposal

Shareholders (who in total hold approximately 24.5% of the issued capital of the Company) have expressed their significant concern regarding the current board dealings. Several shareholders have expressed a need for a new board who believes in the considerable value of MRV, and believes in maximizing its value and transparency for shareholders.

I welcome your review of the attached biographies and achievements of the proposed new MRV board, being Arthur Hood, Robert James Canning-Ure, John Thomas and Alexander Jason Elks, and your endorsement of the change which will enable the Company to move forward and realise positive shareholder value.

At the AGM, called by the MRV board, you can stop the potential sale of MRV to foreign investors and maintain your current shareholder value:

• Vote NO to the MRV Inferior Funding Deal and related resolutions

At the proposed General Meeting called by the MRV board, (at the request of the Requisitioning Shareholder), take action and:

• Vote YES to remove the current MRV board and appoint the above as directors of MRV

Yours Sincerely



Alexander Jason Elks
MRV Shareholder