Important Letter to Shareholders

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LETTER TOSHAREHOLDERS OF ANGLO AUSTRALIAN RESOURCES NL

A PLAN FOR THEFUTURE

Dearfellow Anglo Australian Shareholders

Iam writing to you to set out our plan for the future of Anglo.

Asyou are likely aware, the Board of Anglo currently comprises Mr John Jones as ExecutiveChairman and Acting Managing Director, Mr Graeme Smith as Non-ExecutiveDirector (as well as Company Secretary), myself as Non-Executive Director and,of course, Mr David Varcoe who was last week appointed as a Non-ExecutiveDirector.

MrJones was appointed as a Director of Anglo in 1990, some 29 years ago, and has essentiallybeen Chairman of the Board ever since.

Morethan two years ago, I approached Mr Jones to discuss what I saw as much neededchanges to Anglo, amongst them, a strengthening of the Board, including theappointment of a Managing Director (if not a Chief Executive Officer) and amuch-increased effort around corporate governance and shareholder relationsmatters, areas where I considered we were deficient at that time.

Afurther key reason for seeking change was that I considered that such was the prospectivityof Anglo’s projects that, if shareholder wealth was to be maximised, the levelof exploration activity should be substantially increased.

However,Mr Jones was not willing to discuss any of the matters raised with me.

Separately,since March 2017, Anglo has undertaken six capital raisings. For each capitalraising, Anglo engaged Bloom Financial Pty Ltd (“Bloom”), the principal of whomis Mr David Willis, to assist. It is fair to say that the success of each ofthese capital raisings was due in no small part to the efforts of Mr Willis,whose substantial network, with Anglo’s blessing, acquired the majority –typically around 60% – of the new capital issued. Mr Willis’ network has alsoacquired shares in Anglo on-market between capital raisings.

Without goinginto all the various matters that took place in the interim, on 31 October 2019,Braham Investments Pty Ltd (“Braham”), atthat time, Anglo’s largest shareholder, requisitioned the Company to call ameeting to consider resolutions that Messrs Jones and Smith be removed from theBoard, and that Mr Willis be elected to the Board.

Themeeting of shareholders to consider the proposed resolutions is to be held on20 December 2019.

Ifeach of the proposed resolutions are passed by shareholders, this would see thenew Board of Anglo comprise Mr Varcoe, myself and Mr Willis.

Itis important to note that Mr Willis does not now, nor previously held, anyintention of remaining on the Anglo Board. Rather, he saw his role as assistingthe Company transition to a new Board. Mr Willis will resign as soon as anotherperson is appointed to the Board such that, upon his resignation, the Companywill still meet the statutory minimum requirement of three Directors.

On28 November 2019, Anglo held its Annual General Meeting.

Amongstthe resolutions considered were three that related to the freshening up of theCompany’s capital.

Notwithstandingthat Anglo shareholders were not generally informed of Mr Willis’ and my viewthat the resolutions would enable Anglo to undertake a highly dilutiveplacement (as there was no convenient way of communicating it to them at thetime), the resolutions were overwhelmingly voted down by shareholders.

Atthe Annual General Meeting, Anglo announced the appointment of Mr David Varcoeas a Non-Executive Director of the Company, effective from the end of theMeeting. Mr Varcoe, a Mining Engineer, was appointed following the conduct of asearch process that commenced after the meeting requisition referred toabove was called.

Theprocess of vetting Mr Varcoe as a candidate was presumably conducted by MessrsJones and Smith. I was not involved. Mr Varcoe was not known to me until I methim at the Annual General Meeting.

On28 November 2019, the day of the Annual General Meeting, Anglo launched legalaction against 32 shareholders in Anglo, including myself, Bloom and Braham,alleging “contraventions of the takeover and substantial shareholder provisionsof the Corporations Act”. If proven, this would potentially result in the votesof some or all of the shareholders subject to the legal action not being takeninto consideration in respect of the resolutions to be considered at themeeting of shareholders on 20 December 2019.

Whilstall this kerfuffle was taking place, the major activity of Mr Willis and I wasin fact formulating our plan for Anglo going forward, including identifyingsuitable candidates for the roles of both Managing Director and Non-ExecutiveDirector.

Followinga recommendation as to a suitable candidate as Managing Director from a senior resourcesanalyst and, subsequently, the conduct of due diligence, an initial approachwas made by me to the gentleman concerned. After an exchange of information,several discussions on the phone, a meeting between he and someone close toAnglo whom Mr Willis and I trust and, finally, a meeting that took placeimmediately after the Annual General Meeting, I offered this gentleman the roleas Managing Director of Anglo if the resolutions set down for consideration on20 December were determined in our favour and we were thus in a position tonominate a new director to the board to replace Mr Willis (assuming he isappointed). He duly accepted.

Withhis permission, I am delighted to announce that Mr Willis and my proposed candidatefor Managing Director is Mr Marc Ducler.

Perth-based,Mr Ducler, a metallurgist by formal training, has more than 20 years’experience in the mining industry. Until last week, he was Managing Director atEgan Street Resources Limited (“Egan Street”), an ASX-listed company, a role heheld for more than three years (with an additional one year as a non-executivedirector in the lead up to the Company’s Initial Public Offering in September2016).

EganStreet’s major asset is the Rothsay Gold Project in WA for which a DefinitiveFeasibility Study was announced in July 2018 and subsequently updated inFebruary 2019. During his tenure, Mr Ducler oversaw all aspects of theadvancement of Rothsay including a doubling of the mineral resource estimate,completion of all required technical studies and acquiring all necessary governmentapprovals to commence mine development. Bearing in mind that, in Mandilla andFeysville, Anglo has two projects which are at a similar stage to Rothsay on MrDucler’s appointment to Egan Street, his experience is highly relevant andlikely to be of significant value.

Thecessation of Mr Ducler’s employment with Egan Street came about as a result ofa successful takeover offer by Silver Lake Resources Limited (“Silver Lake”),which was recommended by the Egan Street Board. The Silver Lake offer resultedin shareholders receiving a premium of approximately 60% to the pre-offer shareprice, an outstanding outcome for shareholders.

MrDucler’s resume is set out in Appendix 1.

MrDucler’s proposed appointment is conditional on the outcome of the meeting ofshareholders to be held on 20 December 2019, completing due diligence on Angloand the agreement and execution of an appropriate employment or consultancyagreement with the company.

Withhis permission, I am also delighted to announce the proposed appointment of MrDonald Garner as a Non-Executive Director.

Mr Garner, who is currently an ExecutiveDirector of ASX-listed base metals mining company, Red River Resources Limited,has more than 25 years’ experience in the resource industry.

With a range of formal credentials (includingin geology, mineral processing and project appraisal) and other accreditation,and experience across multiple commodities, including gold, in multiplejurisdictions, Mr Garner has an in depth understanding of the mining industry(exploration, development, financing and production).

Mr Garner has sourced, evaluated, negotiatedand executed many value-creative transactions – for example, the recent acquisition of the Hillgrove Gold Project,New South Wales.

Mr Garner’s resume is also set out in Appendix 1.

On29 November 2019, I had a first proper conversation with Mr Varcoe.

Ifound him to be of excellent character and his interests and role as anindependent director very much aligned with that of shareholders. Mr Ducler, inhis own subsequent conversation with Mr Varcoe, came to the same conclusion.

MrVarcoe’s credentials, as Principal Mining Engineer with AMC Consultants, arenot only exemplary and suitable for Anglo but represent an excellent fit withthose of Mr Ducler (metallurgist), Mr Garner (geologist) and myself(experienced company director and corporate advisor).

Accordingly,should the three resolutions be passed at the meeting on 20 December, I proposethat the Board of Anglo will, after Mr Willis’ resignation, comprise MessrsVarcoe, Ducler, Garner and myself.

Isincerely believe this will be a great Board for leading Anglo into the future.

Inote that the position of Chairman is a matter for the new Board.

Angloshareholders will likely be aware that, for the last four or so years, Mr EdBaltis, Principal of geological consultancy, Gold Vector, has been workingclosely with Anglo in its exploration activities. Mr Baltis, who is a targetinggeologist of the highest order has, in my opinion, been the key reason for theexploration success Anglo has enjoyed at both the Mandilla and FeysvilleProjects.

MrBaltis has confirmed to me that he will remain available as a consultant toAnglo in the event that Board change occurs. Mr Ducler has in turn advised thathe would be delighted to continue with the services of Mr Baltis movingforward.

Inote that Mr Baltis has also met with Mr Varcoe and he too agrees that he is anappropriate person for the Anglo Board going forward.

Abrief statement provided by Mr Baltis is set out in Appendix 2.

Witha significant ramp-up in exploration activity proposed, Anglo will have needfor a geology manager in a full-time role.

Tothis end, Mr Ducler has advised that Ms Julie Reid, who was until recently GeologyManager at Egan Street, would be ideally suited to, and is interested in, therole.

Kalgoorlie-based,Ms Reid has more than 30 years’ experience in exploration and mining geology,including considerable experience operating within the Kalgoorlie region, aswell as outstanding contacts.

Onthis basis, Mr Ducler will seek to secure Ms Reid’s appointment whenappropriate.

Withthe plan being to terminate Mr Smith’s role as Company Secretary following abrief handover, a new person for this role, as well as the role of ChiefFinancial Officer, will also be required.

MrDucler has also advised that Mr Brendon Morton, who was until recently ChiefFinancial Officer and Company Secretary at Egan Street, would be ideally suitedto, and is interested in, the role.

MrMorton is a Chartered Accountant and Chartered Secretary with more than 20years’ experience across multiple sectors, including mining, resourcesexploration, project development and construction.

Onthis basis, Mr Ducler will seek to secure Mr Morton’s appointment, initially ona part-time basis, when appropriate.

Aswith Mr Ducler’s appointment, the appointments of both Ms Reid and Mr Morton areconditional on the outcome of the meeting of shareholders to be held on 20December 2019, completing due diligence on Anglo and the agreement andexecution of an appropriate employment or consultancy agreement with the company.

Onthe basis of the above, the proposed new Anglo team can be depicteddiagrammatically as follows:

Asillustrated, strong candidates for all key positions required by Anglo for theforeseeable future have been identified and those candidates have expressedtheir interest in those positions.

Itis noted that each of the proposed Directors have stated that excellence inboth corporate governance and shareholder communications will be a priority.

If you share ourvision of Anglo becoming a great company, please VOTE FOR the three resolutions at theGeneral Meeting on 20 December 2019.

I note that, ifbefore receiving this letter, you decided to vote against the three resolutionsand have now changed your mind, please take the time to vote again as only thelast vote counts.

Remember, everysingle vote counts, no matter how big or small your shareholding.

If you still havethe blank proxy form previously sent to you, please complete it in the mannerillustrated in Appendix 3 and send it to the Company’s share registry, SecurityTransfer Australia. Their email address is [email protected]

If you no longerhave your proxy form, the easiest way to vote is to contact Security TransferAustralia, and request a new one, by either:

• Phone on 1300 992 916

• Email to [email protected] (note that an email response can take a bit of time so a phone call is better)

Unless you attendin person or by proxy, votes must be received by Security Transfer Australia by10:00 am WST on Wednesday 18 December 2019.

I greatly appreciate your support.

Ifyou have any queries, please don't hesitate to send me an email on [email protected] or call on the mobile on 0419 426 646.

Yourssincerely

PeterStern

Non-ExecutiveDirector

APPENDIX 1- RESUMES

MARC DUCLER

Qualifications –BSc (Metallurgy) WA School of Mines, MAusIMM

Mr Ducler has morethan 20 years’ experience in the mining industry.

For the past 17 years,he has been in senior management roles. His operational experience has beengained through senior roles with; GoldFields Australia (St Ives & Agnew),BHP Billiton (Mt Whaleback), Fortescue Metals Group Limited (Cloudbreak),Mineral Resources Limited (Carina Iron Ore Mine) and Roy Hill.

He was mostrecently Managing Director of Egan Street Resources for a period of more thanthree years.

Mr Ducler has morethan 11 years’ operational experience in the gold processing industry withexposure to conventional CIL/CIP circuits and heap leaching.

Mr Ducler bringsa process orientated operational understanding of the gold mining industry aswell as an up to date understanding of what is required to get a greenfieldmining operation from concept to production.

DONALD GARNER

Qualifications –BSc (Hons) (Geology), MSc, FGS, MSEG, MAusIMM

Mr Garner is ageologist with more than 20 years’ experience in the resources industry,corporate finance and corporate development roles.

He has a strongtrack record in the identification and acquisition of resource projects, mostrecently the Hillgrove Gold Project.

He is current anExecutive Director of Red River Resources.

He previouslyworked in a corporate development role at Zinifex and, prior to that, in metalsand mining corporate finance in the United Kingdom.

He has alsoworked as a geologist in Western Australia in a number of roles, both as anexploration geologist and a mine geologist.

APPENDIX 2 - STATEMENT

ED BALTIS

“As I consultant,I think it is right and proper that I keep out of Board disputes such as thatpresently before Anglo.

“Indeed, at theAnnual General Meeting, I abstained from voting.

“Mr Stern hasrequested that I continue to provide consulting services to the company shouldany board changes eventuate. I have confirmed with him my wish and intention tocontinue working to advance Anglo’s projects irrespective of the board’scomposition.”