Sierra Rutile : Notice of AGM and recommended proposal for transaction

If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other financial adviser duly authorised under the UK Financial Services and Markets Act 2000 if you are resident in the United Kingdom or, if not, another appropriately authorised financial adviser.

Copies of this Circular are being sent to Shareholders and holders of Depositary Interests. If you have sold or otherwise transferred all of your SRL Shares or Depositary Interests in SRL, please send this Circular as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. If you have sold or transferred only part of your holding of SRL Shares or Depositary Interests in SRL you should retain this Circular and consult the stockbroker, bank or other agent through whom the sale or transfer was effected.

The distribution of this Circular in or into jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons into whose possession this Circular comes should inform themselves about, and observe, any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.

This document and the accompanying documents are not intended to, and do not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, or otherwise dispose of, any securities or Depositary Interests in SRL, or the solicitation of any vote or approval pursuant to the Merger or otherwise, in any jurisdiction in which such offer, invitation or solicitation is unlawful.

NOTICE OF GENERAL MEETING AND RECOMMENDED PROPOSAL FOR A TRANSACTION INVOLVING THE MERGER OF

SIERRA RUTILE LIMITED

("SRL")

with

ILUKA INVESTMENTS (BVI) LIMITED

("Newco")

to be effected in accordance with sections 170 and 171 of the BVI Business Companies Act, as amended, and as contemplated by the Merger Implementation Agreement between Iluka Resources Limited ("Iluka"), SRL, and Newco dated 31 July 2016

(the "Merger")

Shareholders and holders of Depositary Interests should carefully read the whole of this Circular and the accompanying Form of Proxy and Form of Instruction. In particular, your attention is drawn to the Letter from the Chairman of SRL set out in Part I of this Circular which sets out the terms of the Merger and contains the unanimous recommendation by the SRL Directors to vote in favour of the resolutions to be proposed at the General Meeting of SRL to approve the Merger and the Plan of Merger (the Plan of Merger is set out in Part IV). A statement explaining the Merger in greater detail appears in Part II of this Circular.

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NOTICE OF GENERAL MEETING 2016

The notice of the General Meeting of SRL, to be held at 3.00 p.m. on 1 September 2016 at the offices of Herbert Smith Freehills LLP, Exchange House, Primrose Street, London EC2A 2EG, is set out at the end of this Circular.

The action to be taken in respect of the General Meeting is set out on page 8 of this Circular.

If you are a Shareholder, a Form of Proxy for use at the General Meeting is enclosed. To be valid, the Form of Proxy should be completed, signed and returned in accordance with the instructions printed thereon to SRL's registrar, Computershare Investor Services (Jersey) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99 6ZY, as soon as possible but in any event so as to arrive not later than 3.00 p.m. on 30 August 2016.

If you are a holder of Depositary Interests, a Form of Instruction for holders of Depositary Interests is enclosed. To be valid, the Form of Instruction should be completed, signed and returned in accordance with the instructions printed thereon to SRL's Depositary, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY as soon as possible but in any event so as to arrive not later than 3.00 p.m. on 26 August 2016. Alternatively, a holder of a Depositary Interest may give an instruction via the CREST system as detailed on page 8.

Important notices

Investec Bank plc ("Investec"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting for SRL and no-one else in connection with the Acquisition and will not be responsible to anyone other than SRL for providing the protections afforded to clients of Investec nor for providing advice in relation to the Acquisition. Neither Investec nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Investec in connection with this Circular, any statement contained herein or otherwise.

RBC Europe Limited (trading as "RBC Capital Markets"), which is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority in the United Kingdom, is acting for SRL and no one else in connection with the Acquisition and will not be responsible to anyone other than SRL for providing the protections afforded to clients of RBC Capital Markets, or for providing advice in connection with the Acquisition.

Overseas jurisdictions

The release, publication or distribution of this Circular in or into jurisdictions other than the United Kingdom may be restricted by law and, therefore, persons into whose possession this Circular comes who are not resident in the United Kingdom should inform themselves about, and observe, any applicable restrictions. Shareholders or holders of Depositary Interests who are in any doubt regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without delay. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

This document has been prepared for the purposes of complying with the AIM Rules, the BVI Business Companies Act and the relevant procedural requirements of the articles of association of SRL and the information disclosed may not be the same as that which would have been disclosed if this Circular had been prepared in accordance with the laws of jurisdictions outside the United Kingdom and the British Virgin Islands.

The statements contained in this Circular are not to be construed as legal, business, financial or tax advice.

Notes to US investors in SRL

These materials are not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia). These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States.

Shareholders and holders of Depositary Interests in the United States should note that the Acquisition relates to the shares of a BVI company and is proposed to be made by means of a merger provided for under, and governed by, BVI law. Neither the proxy solicitation nor the tender offer rules under the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), will apply to the Merger. Moreover the Merger will be subject to the disclosure requirements, rules and practices applicable in the BVI to statutory mergers, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. Financial information included in this Circular has been or will be prepared in accordance with International Financial Reporting Standards adopted for use by the European Union and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

SRL is incorporated under the laws of the BVI, Iluka is incorporated under the laws of Australia and Newco is incorporated under the laws of the BVI. The vast majority of the officers and directors of SRL and Iluka are residents of countries other than the United States. It may not be possible to sue SRL, Iluka, Newco or their respective officers or directors in a non-US court for violations of US securities laws. It may be difficult to compel SRL, Iluka or Newco or their respective affiliates to subject themselves to the jurisdiction and judgment of a US court.

The Acquisition is expected to be made in accordance with, and in reliance on, certain applicable laws of the United States, including section 14(e) of the US Exchange Act and Regulation 14E thereunder, as exempted thereunder by Rule 14d-1(c). The Acquisition is not expected to be subject to the requirements of Regulation 14D of the US Exchange Act and as such, is not expected to be submitted to, nor reviewed by, the US Securities and Exchange Commission.

3

NOTICE OF GENERAL MEETING 2016

To the extent permitted by applicable law, and to the extent permitted by normal UK practice and Rule 14e-5 under the US Exchange Act, Iluka or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, SRL Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition becomes Effective, lapses or is otherwise withdrawn. If such purchases or arrangements to purchase are made they will be made outside the United States and will comply with applicable law, including the US Exchange Act.

Forward-looking statements

This document may contain certain forward-looking statements, including statements regarding Iluka's, Newco's and SRL's plans, objectives and expected performance. Such statements relate to events and depend on circumstances that will occur in the future and are subject to risks, uncertainties and assumptions. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements, including, among others, the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the mining industry; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; and war and terrorism. These forward-looking statements speak only as at the date of this Circular.

Mineral resource Competent Person

The mineral resource information in this Circular, in relation to SRL, has been reviewed and approved for release by Mr Mark Button, NHDip, MMRM, Pr.Sci.Nat. who has 25 years' experience in mineral commodities, of which 15 years is specific to mineral resource estimation, and is currently an independent contractor providing consulting services to SRL. Mr Button has sufficient experience in relation to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Button has consented to the inclusion of this mineral resource information in the form and context in which it appears.

SRL is a company incorporated and registered in the BVI and, as such, is not subject to the jurisdiction of the UK Takeover Panel or the Code.

Shareholders are reminded that SRL's articles of association require certain offers to be made on terms that would be required by the Code, save to the extent that the SRL Board otherwise determines. The Panel on Takeovers and Mergers does not, however, have responsibility for ensuring compliance with the Code in respect of the Acquisition and is not able to answer Shareholders' queries in relation to SRL, Iluka, Newco or the Acquisition. However, the SRL Board has, and intends to continue to, take into account guidance issued by the Panel on Takeovers and Mergers in connection with the exercise of its discretion.

In particular, the SRL Board has confirmed to Iluka and Newco that it does not intend to require announcements to be made by Shareholders pursuant to Rule 8 of the Code (disclosure of dealings and positions). Shareholders are reminded that public disclosures consistent with the provision of Rule 8.3 of the Code should not be e-mailed to the Panel on Takeovers and Mergers.

The information contained in this Circular concerning Iluka and Newco is based solely on information provided to SRL by Iluka and Newco or upon publicly available information. This information has not been independently verified by SRL. Accordingly, neither SRL nor any director or officer of SRL assumes any responsibility for the accuracy or completeness of such information, nor for any failure of Iluka or Newco to disclose events which may affect the accuracy or completeness of such information.

Publication of this Circular

A copy of this Circular will be available subject to restrictions relating to persons resident in certain restricted jurisdictions on http://www.sierra-rutile.com.

The contents of SRL's website are not incorporated into and do not form part of this Circular.

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NOTICE OF GENERAL MEETING 2016

DIRECTORS, REGISTERED OFFICE AND ADVISERS OF SRL

Directors of SRL: Robert Edwards (Non-Executive Director, Chairman) Richard Lister (Senior Independent Non-Executive Director) John Sisay (Executive Director, Chief Executive Officer)

Alex Kamara (Non-Executive Director) Charles Entrekin (Non-Executive Director) Phillip Day (Non-Executive Director) Stephen Gill (Non-Executive Director)

Registered Office: Trinity Chambers

PO Box 4301

Road Town Tortola

British Virgin Islands

Nominated Adviser, Financial Adviser Investec Bank plc

and Joint Corporate Broker: 2 Gresham Street London EC2V 7QP United Kingdom

Financial Adviser and Joint Corporate Broker: RBC Capital Markets Riverbank House

2 Swan Lane London EC4R 3BF

Joint Corporate Broker: Numis Securities Limited The London Stock Exchange 10 Paternoster Square London EC4M 7LT

Legal Advisers to SRL on English Law: Herbert Smith Freehills LLP Exchange House

Primrose St London EC2A 2EG

Legal Advisers to SRL on BVI Law: Ogier

44 Esplanade St Helier

Jersey JE4 9WG