Carabella Resources Ltd : Notice of Extraordinary General Meeting/Proxy Form

Carabella Resources Limited ACN 143 355 471 Notice of Extraordinary General Meeting to be held on 3 February 2012 Explanatory Memorandum for the Notice of Extraordinary General Meeting THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT ABOUT THE ACTION YOU SHOULD TAKE PLEASE CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER. NOTICE OF THE EXTRAORDINARY GENERAL MEETING TO BE HELD AT LEVEL 26, 52 MARTIN PLACE, SYDNEY AT 11AM (AEDT) ON 3 FEBRUARY 2012

TO BE VALID, FORMS OF PROXY FOR USE AT THE EXTRAORDINARY GENERAL MEETING MUST BE COMPLETED AND RETURNED TO THE COMPANY NO LATER THAN 11am AUSTRALIAN EASTERN DAYLIGHT SAVING TIME ON 1 FEBRUARY 2012

Table of Contents Section A - Glossary 2 Section B - Notice of Extraordinary General Meeting 4 Section C - Explanatory Memorandum 7

2

Section A - Glossary 1. Definitions

The following definitions are used in the Notice of Meeting and the Explanatory
Memorandum:

AEDT means Australian Eastern Daylight Saving Time. AEST means Australian Eastern Standard Time. Asset Sale Agreement means the Asset Sale Agreement between the Company and Byrt

(amongst others) dated 17 May 2010.

Associate has the meaning given to that term in the Corporations Act. ASX means ASX Limited ACN 008 624 691. ASX Listing Rules means the Listing Rules of the ASX as amended from time to time. Board means the board of Directors of the Company. Business Day means a day which is not a Saturday, Sunday or public holiday in New

South Wales.

Byrt means Terence John Byrt (also known as Terence John Burt). Company means Carabella Resources Limited ACN 143 355 471. Consideration Shares means 10,540,915 Shares to be issued on transfer of the Tenement to the Company under the terms of the Asset Sale Agreement. Constitution means the constitution of the Company, as amended from time to time.

Corporations Act or Act means the Corporations Act 2001 (Cth).

Director means a director of the Company. Explanatory Memorandum means the explanatory memorandum set out in Section C of this document. JD Minerals means JD Minerals Pty Ltd ACN 148 954 483. Notice of Meeting or Notice means the notice of Extraordinary General Meeting set out in

Section B of this document.

Resolutions means Resolutions 1 and 2 collectively. Resolution 1 means the ordinary resolution set out in the Notice of Meeting to approve the issue of 18,498,343 Shares by the Company for the purposes of ASX Listing Rule 7.4. Resolution 2 means the ordinary resolution set out in the Notice of Meeting to approve the issue of the Consideration Shares by the Company to Wavenet, JD Minerals and Byrt for the purposes of ASX Listing Rule 7.1. Share means a fully paid ordinary share in the capital of the Company. Shareholder means a holder of a Share.

3

Tenement means EPC 1175 granted by Queensland Mines and Energy on 29 June 2011. VWAP means the volume weighted average price for the Company's Shares. Wavenet means Wavenet International Limited ACN 087 139 428. 2. Interpretation

For the purposes of interpreting the Explanatory Memorandum and the Notice of Meeting: (a) the singular includes the plural and vice versa;
(b) words importing any gender include the other genders;
(c) reference to any statute, ordinance, regulation, rule or other law includes all regulations and other instruments and all considerations, amendments, re- enactments or replacements for the time being in force;
(d) all headings, bold typing and italics (if any) have been inserted for convenience of reference only and do not define, limit or affect the meaning or interpretation of the Explanatory Memorandum and the Notice of Meeting;
(e) reference to persons includes bodies corporate and government authorities and in each and every case, includes a reference to the person's executors, administrators, successors and substitutes (including without limitation persons taking by novation and assignment); and
(f) reference to $, A$, Australian Dollars or dollars is a reference to the lawful tender for the time being and from time to time of the Commonwealth of Australia.
4

Section B - Notice of Extraordinary General Meeting

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Shareholders of Carabella Resources Limited ACN 143 355 471 will be held at Level 26, 52 Martin Place on 3 February 2012 at 11am (Australian Eastern Daylight Saving Time).

BUSINESS 1. Resolution 1: Ratification of the issue of 18,498,343 Shares

Shareholders are asked to consider, and if thought fit, to pass the following ordinary resolution:
"To ratify for the purposes of ASX Listing Rule 7.4 and all other purposes, the issue and allotment of 18,498,343 Shares in the Company on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting."

2. Resolution 2: Approval of the issue of the Consideration Shares

Shareholders are asked to consider, and if thought fit, to pass the following ordinary resolution:
"To approve for the purposes of ASX Listing Rule 7.1 and all other purposes, the issue and allotment of 10,540,915 Shares in the Company as follows:
(a) 7,600,000 Shares to Wavenet International Limited; (b) 2,590,915 Shares to JD Minerals Pty Ltd; and
(c) 350,000 Shares to Terence John Byrt,
on the terms and conditions set out in the Explanatory Memorandum accompanying this
Notice of Meeting."

3. Voting exclusion statements Resolution 1

In accordance with Listing Rule 14.11.1 for approval under Listing Rule 7.4, the Company will disregard any votes cast on Resolution 1 by any person who participated in the placement of 18,498,343 Shares on 13 December 2011 or any Associate of such a person.

Resolution 2

In accordance with Listing Rule 14.11.1 for approval under Listing Rule 7.1, the Company will disregard any votes cast on Resolution 2 by:
(a) Wavenet International Limited; (b) JD Minerals Pty Ltd;
(c) Terence John Byrt (also known as Terence John Burt);
(d) an Associate of any of Wavenet International Limited, JD Minerals Pty Ltd or Terence
John Byrt; and
(e) a person who might obtain a benefit, except a benefit solely in the capacity as a Shareholder of the Company, if Resolution 2 is passed, and an Associate of any such person.
5

4. Votes not to be disregarded in certain circumstances

Notwithstanding the voting exclusion statements set out in paragraph 3 above, the
Company will not disregard a vote on the Resolutions if it is cast by:
(a) a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
(b) the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

5. Determination of membership and voting entitlement

For the purpose of determining a person's entitlement to vote at the Extraordinary General Meeting, a person will be recognised as a member of the Company and the holder of Shares if that person is registered as a holder of those Shares at 7.00 pm (Australian Eastern Daylight Saving Time) on 1 February 2012, being the second Business Day prior to the date of the Extraordinary General Meeting.

6. Votes of members

On a show of hands, each member present in person or by proxy or, in the case of a body corporate, by a corporate representative at the Extraordinary General Meeting shall have one vote.
On a poll, every member present in person or by attorney or by proxy or, in the case of a body corporate, by a representative shall have one vote for each Share held by him, her or it provided that all Shares are fully paid.

7. Proxies

Please note that:
(a) a member entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint no more than two proxies;
(b) an instrument appointing a proxy must be in the form of the proxy form attached to this Notice of Meeting;
(c) where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the member's voting rights. If a member appoints two proxies, and the appointment does not specify the proportion of the member's voting rights, each proxy may exercise one-half of the voting rights;
(a) a proxy need not be a member of the Company;
(b) a proxy form may specify the manner in which the proxy is to vote in respect of a particular Resolution and, where the proxy form so provides, the proxy is not entitled to vote on the Resolution except as specified in the proxy form;
(c) a proxy has the authority to vote on the member's behalf as he or she thinks fit, on any motion to adjourn the Extraordinary General Meeting, or any other procedural motion, unless the member gives a direction to the contrary;
(d) a valid proxy form will be deemed to confer authority to demand or join in demanding a poll;
(e) to be valid, a proxy form must be signed by the member or the member's attorney or, if the member is a corporation, executed in accordance with the corporation's
6
constitution and the Corporations Act (and may be signed on behalf of the corporation by its attorney); and
(f) to be valid, a proxy form and the power of attorney or other authority (if any) under which it is signed (or an attested copy of it) must be received by no later than 11am (Australian Eastern Daylight Saving Time) on 1 February 2012:

by the Company:

- in person: Carabella Resources Limited C/- Boardroom Pty Limited Level 7
207 Kent Street
SYDNEY NSW 2000
AUSTRALIA
- by mail: Carabella Resources Limited C/- Boardroom Pty Limited GPO Box 3993
SYDNEY NSW 2001
AUSTRALIA
- by facsimile: + 61 2 9290 9655
A form of proxy accompanies this Notice of Meeting.

By order of the Board Kylie Anderson

Company Secretary

Dated: 3 January 2012

7

Section C - Explanatory Memorandum 1. Introduction

This Explanatory Memorandum has been prepared to assist Shareholders of the Company in understanding the business to be put to Shareholders for their consideration at the forthcoming Extraordinary General Meeting on 3 February 2012.
Section 2 of this Explanatory Memorandum sets out the background to the Resolutions.

2. Background to the Resolutions 2.1 Resolution 1: Ratification of issue of 18,498,343 Shares

This resolution seeks to ratify, in accordance with ASX Listing Rule 7.4, the issue of Shares in the Company by way of a placement to sophisticated and professional investors on 13
December 2011 as announced to the ASX on 6 December 2011.
The placement shares:
• raised gross proceeds of $24,000,000 which will be directed to funding the Company's development program at Grosvenor West and its broader expansion program at Mabbin Creek;
• consisted of 18,498,343 Shares in the Company;
• were issued at a price of $1.30 per Share; and
• have the same terms as the Company's existing Shares, and are quoted on the ASX. Ratification of the issue will go towards renewing the Company's 15% new issue capacity in
accordance with ASX Listing Rule 7.4.
The Board recommends that Shareholders vote in favour of Resolution 1.

2.2 Resolution 2: Approval of issue of the Consideration Shares

This resolution seeks approval, in accordance with ASX Listing Rule 7.1, for the issue of the
Consideration Shares to Wavenet, JD Minerals and Byrt.
As announced to the ASX on 12 December 2011, the Company is required under the terms of the Asset Sale Agreement to issue the Consideration Shares to Byrt on the transfer of the Tenement to the Company.
Byrt assigned his right to be issued part of the Consideration Shares to Wavenet and JD Minerals pursuant to deeds of assignment between those parties. The Shares to be issued to Wavenet and JD Minerals form the Consideration Shares assigned by Byrt under those deeds of assignment.
Wavenet is a public company listed on the ASX. Its principal business is the exploration and evaluation of mining tenements. At the date of this Notice of Meeting, Wavenet has a relevant interest in approximately 6.8% of the Shares issued by the Company.
JD Minerals is an Associate of Wavenet. Its business activities are complementary to
Wavenet's mining tenement exploration and evaluation business. At the date of the Notice
8
of Meeting, the Company is not aware of any relevant interest held by JD Minerals in its
Shares.
The Company has made an application to the ASX for a waiver of the requirement under Listing Rule 7.1 for the issue of the Consideration Shares to be approved by Shareholders. If the Company's waiver application is granted by the ASX, [Resolution 2 will be withdrawn by the Company and the meeting deferred to a later date].
However if the Company's waiver application is delayed or refused, the information required to be given to Shareholders for the purposes of approval of the proposed issue of the Consideration Shares to Wavenet, JD Minerals and Byrt under Listing Rule 7.1 is set out below.

Name of person: The Consideration Shares will be issued to

Wavenet, JD Minerals and Byrt.

Maximum number of securities to be issued:

The maximum number of securities to be issued is 10,540,915 Shares. These Shares will be issued as follows:
(a) 7,600,000 Shares will be issued to
Wavenet.
(b) 2,590,915 Shares will be issued to JD Minerals.
(c) 350,000 Shares will be issued to Byrt.

Issue Date: The relevant Consideration Shares will be issued to each of Wavenet, JD Minerals and Byrt no later than 3 months after the date of the Extraordinary General Meeting. Issue Price: The deemed issue price for the Consideration Shares will be the VWAP for the 5 days prior to their issue. Terms of Securities: The Consideration Shares will be fully paid ordinary shares in the capital of the Company and will rank equally with the existing Shares on issue. The use of the funds raised: No funds will be raised by the issue of the Consideration Shares. The consideration for the issue of the Consideration Shares is the transfer of EPC 1175 to the Company.

If Resolution 1 is approved and Resolution 2 is not approved by Shareholders, the
Company will use its refreshed 15% capacity to issue the Consideration Shares.
If none of the Resolutions are approved by Shareholders or the waiver application discussed above is refused by the ASX, the Company will be unable to issue the Consideration Shares and may be liable to pay damages for failing to comply with its obligations under the Asset Sale Agreement.
The Board recommends that Shareholders vote in favour of Resolution 2.

Carabella Resources Limited

ABN 66 143 355 471

FOR ALL ENQUIRIES CALL:

(within Australia) 1300 737 760 (outside Australia) [phone]

FACSIMILE

[phone]

ALL CORRESPONDENCE TO: Boardroom Pty Limited GPO Box 3993

Sydney NSW 2001

Australia

Your Address

This is your address as it appears on the company's share register. If this is incorrect, please mark the box with an "X" and make the correction on the form. Please note, you cannot

change ownership of your securities using this form.

YOUR VOTE IS IMPORTANT

FOR YOUR VOTE TO BE EFFECTIVE IT MUST BE RECORDED BEFORE 11AM AEDST WEDNESDAY 1st FEBRUARY 2012

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 Appointment of Proxy

Indicate here who you want to appoint as your Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If

you wish to appoint someone other than the Chairman of the Meeting as your proxy please write the full name of that individual or body corporate. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a security holder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

Proxy which is a Body Corporate

Where a body corporate is appointed as your proxy, the representative of that body corporate attending the meeting must have provided an "Appointment of Corporate Representative" prior to admission. An Appointment of Corporate Representative form can be obtained from the company's securities registry.

Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company's securities registry or you may copy this form.

To appoint a second proxy you must:

(a) complete two Proxy Forms. On each Proxy Form state the percentage

of your voting rights or the number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

(b) return both forms together in the same envelope.

STEP 2 Voting Directions to your Proxy

You can tell your Proxy how to vote

To direct your proxy how to vote, place a mark in one of the boxes opposite each

item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

STEP 3 Sign the Form

The form must be signed as follows:

Individual: This form is to be signed by the securityholder.

Joint Holding: where the holding is in more than one name, all the securityholders must sign.

Power of Attorney: to sign under a Power of Attorney, you must have already lodged it with the registry. Alternatively, attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: this form must be signed by a Director jointly with either another Director or a Company Secretary. Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. Please indicate the office held by signing in the appropriate place.

STEP 4 Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at

an address given below not later than 48 hours before the commencement of the meeting at 11am AEDST on Friday, 3rd February 2012. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxies may be lodged using the reply paid envelope or:

BY MAIL - Share Registry - Boardroom Pty Limited, GPO Box 3993, Sydney NSW 2001 Australia

BY FAX - + 61 2 9290 9655

IN PERSON - Share Registry - Boardroom Pty Limited,

Level 7, 207 Kent Street, Sydney NSW 2000 Australia

Attending the Meeting

If you wish to attend the meeting please bring this form with you to assist registration.

Carabella Resources Limited

. STEP 1 - Appointment of Proxy

I/We being a member/s of Carabella Resources Limited and entitled to attend and vote hereby appoint

the Chairman of the Meeting

(mark with an OR

'X')

If you are not appointing the Chairman of the Meeting as your proxy please write here the full name of the individual or body corporate (excluding the registered Securityholder) you are appointing as your proxy.

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy at the Extraordinary General Meeting of Carabella Resources Limited to be held at Level 26, 52 Martin Place, Sydney on Friday the 3rd of February 2012 at 11am AEDST and at any adjournment of that meeting, to act on my/our behalf and to vote in accordance with the following directions or if no directions have been given, as the proxy sees fit.

STEP 2 - Voting directions to your Proxy - please mark : to indicate your directions

Ordinary Business For Against Abstain*

Resolution 1 Ratification of the issue of 18,498,343 Shares

Resolution 2 Approval of the issue of the Consideration Shares

In addition to the intentions advised above, the Chairman of the Meeting intends to vote undirected proxies in favour of each of the items of business.

*If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

STEP 3 - PLEASE SIGN HERE This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Securityholder 1 Securityholder 2 Securityholder 3

Sole Director and Sole Company Secretary Director Director/Company Secretary

Contact Name ……………………………….…….. Contact Daytime Telephone ………………………………….. Date / / 2012