Leaf Resources : Entiltlement booklet non-renounceable rights issue

Leaf Resources Limited

ABN 18 074 969 056

Entitlement Offer Booklet

Non-renounceable Entitlement Offer

One New Share for every ten Shares held at an issue price of

$0.090 per New Share to raise up to approximately $1,582,985

An investment in the Company should be considered speculative

This Entitlement Offer Booklet is important and should be read in its entirety. If you do not understand any part of this document or are in doubt as to what you should do, you should contact your professional adviser immediately. This document is provided for information purposes and is not a prospectus or other disclosure document under the Corporations Act.

Contents

1. Details of the Entitlement Offer 5
2. How to participate 11
3. Risk factors 14
4. Definitions 17

Chairman's letter

21 July 2017

Dear Shareholder,

On behalf of your Directors, I am pleased to invite you to participate in the Entitlement Offer announced by the Company on 13 July 2017.

The Entitlement Offer provides you with the opportunity to subscribe for one New Share for every ten Shares held at 7.00 pm (Sydney time) on 18 July 2017 at an issue price of

$0.09 per New Share, which represents a discount of approximately 15.3% to the VWAP of Shares traded on ASX in the three months to 12 July 2017.

Eligible Shareholders may also apply for New Shares in excess of their Entitlement, although any application for Additional New Shares may be scaled back at the Company's discretion.

The Directors will support the Offer by each applying for their full entitlement to New Additional Shares under the Entitlement Offer.

The Entitlement Offer is not underwritten and is not subject to a minimum amount being raised. If fully subscribed, the Entitlement Offer will raise up to approximately

$1,582,985 (before the costs of the Entitlement Offer).

The net proceeds will be used to progress the Company's strategy in commercialising the GlycellTM process, as well as advancing a potential project in Malaysia and the USA and providing the Company with working capital.

Leaf Resources continues to make significant progress in the commercialisation of its technology and is advancing toward the development of its first commercial facility which has now reached the point of high-level government negotiation and agreements in Malaysia.

These agreements envisage the construction of an initial 100,000 bone dry tonnes (100kbdt) facility, with an early 300kbdt expansion.

Further detail on the proposed use of funds is set out in section 1.9.

If the Entitlement Offer is not fully subscribed, the Directors reserve the right to place the shortfall within three months of the Closing Date (currently scheduled for 5.00 pm (Brisbane time) on 3 August 2017).

It is important that you carefully read this booklet and the other publicly available information about the Company on our website (www.leafresources.com.au) and consider in particular the risk factors set out in section 3 before making any investment decision.

This booklet contains a number of important parts, including:

• details of the Entitlement Offer;

• instructions on how to participate in the Entitlement Offer; and

• risk factors relevant to an investment in the Company.

With this booklet you will also find your Entitlement and Acceptance Form which details your Entitlement and provides instructions on how to participate in the Entitlement Offer.

The Entitlement Offer closes at 5.00 pm (Brisbane time) on 3 August 2017. To participate, you need to ensure that either your completed Entitlement and Acceptance Form and Application Money or your Application Money submitted by BPAY®1 are received before this time in accordance with the instructions set out on the form and in section 2 of this booklet.

Entitlements are non-renounceable and will not be tradeable on ASX or otherwise transferable. Shareholders who do not take up their Entitlements in full will not receive any value in respect of the Entitlements they do not take up, and their percentage shareholding in Leaf Resources will be reduced following the issue of New Shares.

If you have any questions about the Entitlement Offer please contact Leaf Resources on

+61 7 3188 9040 or your professional adviser.

On behalf of the Directors, I thank you for your continued support and I commend the Entitlement Offer to you.

Yours sincerely

Chairman

This booklet may contain forward-looking statements, opinions and estimates. Forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this letter and the attached materials. You should not place undue reliance on these forward-looking statements. These forward-looking statements are based on information available to Leaf Resources as of the date of this letter. Except as required by law or regulation (including the ASX Listing Rules) Leaf Resources undertakes no obligation to update these forward-looking statements.

This booklet does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any "US person" (as defined in Regulation S under the US Securities Act of 1933, as amended (US Person)). Shares may not be offered or sold in the United States or to, or for the account or benefit of, any US Person absent registration or an exemption from registration. This booklet has been prepared for publication only in Australia and New Zealand, and may not be released elsewhere.

1 Registered to BPAY Pty Ltd.