Fitzroy River : RCO Target's Statement - 28 October 2016

28th October 2016‌‌‌‌‌‌‌‌‌‌‌

The Manager

ASX Company Announcements Melbourne

Attached is a copy of the Target's Statement of Royalco Resources Limited in response to the on-market takeover bid by Fitzroy River Corporation Limited for all the ordinary shares in Royalco, as announced to ASX on 19 October 2016.‌‌

The Directors unanimously recommend that shareholders REJECT the Offer by doing nothing until such time as it becomes clear whether or not the Offer Price is final and the Offer Period is final. At that time, an assessment can be made regarding whether or not to accept the Offer by selling your Shares on- market having regard to a variety of factors, including whether or not you are seeking a liquidity event and whether or not control of Royalco is likely to pass to Fitzroy.‌‌‌

The Offer Price of 18 cents per Share is at a discount to the current and recent market price of Royalco Shares and provides no premium for control.

The supporting reasons for the Directors' recommendations are set out in full in the Target's Statement.

For any queries please contact: Peter Topham‌‌‌

Ph: 61 3 9602 3626

Fax: 61 3 9670 4479

PJ Topham‌‌‌‌

Executive Chairman and Managing Director

This Target's Statement has been issued in response to the on-market cash takeover bid made by Fitzroy River Corporation Limited (ABN 75 075 760 655) (Fitzroy) to acquire all of the fully paid ordinary shares which it does not already own in Royalco Resources Limited (ABN 53 096 321 532) (Royalco or the Company) for 18 cents cash per Royalco fully paid ordinary share.

Legal Adviser to Royalco

IMPORTANT INFORMATION

This is an important document that should be read in its entirety. If you are in any doubt how to deal with this document, you should contact your broker, financial, taxation or legal adviser immediately.

1. DIRECTORS' RECOMMENDATION AND REASONS 5

2. FREQUENTLY ASKED QUESTIONS 8

3. IMPORTANT MATTERS FOR SHAREHOLDERS TO CONSIDER 11

4. KEY FEATURES OF THE OFFER 15

5. INFORMATION REGARDING ROYALCO 17

6. INFORMATION RELATING TO THE DIRECTORS 19

7. ADDITIONAL INFORMATION 20

8. GLOSSARY AND INTERPRETATION 23

9. AUTHORISATION 25

K EY D AT ES

E N Q U IR IE S

You may call Royalco on +61 3 9602 3626 if you have any queries in relation to the Offer.

Further information relating to the Offer can be obtained from the ASX website (ASX Code: RCO) at www.asx.com.au or from Royalco's website at www.royalco.com.au

IM P O R T AN T N O T IC E S

Nature of this document

This is a Target's Statement issued by Royalco under Part 6.5 Division 3 of the Corporations Act in response to the on- market takeover offer made by Fitzroy for all of the fully paid ordinary shares which it does not already own in Royalco.

ASIC lodgement

This Target's Statement is dated 28 October 2016 and was lodged with the ASIC and given to ASX on that date. Neither ASIC, nor ASX, nor any of their respective officers take any responsibility for the contents of this Target's Statement.

Defined terms

A number of defined terms are used in this Target's Statement. These terms are explained in section 8 of this Target's Statement. In addition, unless the contrary intention appears or the context requires otherwise, words and phrases used in this Target's Statement and defined in the Corporations Act have the same meaning and interpretation as in the Corporations Act.

No account of personal circumstances

This Target's Statement does not take into account your individual objectives, financial situation or, particular needs. It does not contain personal advice. Your Directors encourage you to seek independent financial and taxation advice before making a decision as to whether or not to accept the Offer.

Disclaimer as to forward looking statements

Some of the statements appearing in this Target's Statement may be in the nature of forward looking statements. You should be aware that such statements are only predictions and are subject to inherent risks and uncertainties. Those risks and uncertainties include, without limitation, factors and risks specific to the industry in which Royalco operates as well as general economic conditions. Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement.

None of Royalco, Royalco's officers, employees and advisers, any persons named in this Target's Statement with their consent, or any person involved in the preparation of this Target's Statement, makes any representation or warranty (express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement, except to the extent required by law. You are cautioned not to place undue reliance on any forward looking statement. The forward looking statements in this Target's Statement reflect views held only as at the date of this Target's Statement. Royalco does not undertake to update any forward- looking information or statements, except in accordance with applicable securities laws.

Disclaimer as to information

The information on Fitzroy contained in this Target's Statement has been prepared by Royalco using publicly available information. The information in this Target's Statement concerning Fitzroy, has not been independently verified by Royalco. Accordingly, Royalco does not, subject to the Corporations Act, make any representation or warranty (express or implied) as to the accuracy or completeness of such information.

Foreign jurisdictions

The release, publication or distribution of this Target's Statement in jurisdictions other than Australia may be restricted by law or regulation in such other jurisdictions and persons who come into possession of it should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable laws or regulations.

This Target's Statement has been prepared in accordance with Australian law and the information contained in this Target's Statement may not be the same as that which would have been disclosed if this Target's Statement had been prepared in accordance with the laws and regulations outside of Australia.

Maps and diagrams

Any diagrams, charts, maps, graphs and tables appearing in this Target's Statement are illustrative only and may not be drawn to scale. Unless stated otherwise, all data contained in diagrams, charts, maps, graphs and tables is based on information available at the date of this Target's Statement.

Privacy

Royalco has collected your information from its register of members for the purpose of providing you with this Target's Statement. The type of information Royalco has collected about you includes your name, contact details and information on your shareholding in Royalco. Without this information, Royalco would be hindered in its ability to issue this Target's Statement. The Corporations Act requires the name and address of Shareholders to be held in a public register. Your information may be disclosed on a confidential basis to Royalco's Related Bodies Corporate and external service providers (such as the share registry of Royalco and print and mail service providers) and may be required to be disclosed to regulators such as ASIC and the ASX. If you would like details of information about you held by Royalco, please contact Royalco.