PO Box 9028 Subiaco WA 6008 Suite 1, First Floor 14 - 16 Rowland Street Subiaco WA 6008 Tel: 08-9380 6063 Fax: 08-9381 4056 ABN: 86 125 049 550

25 February 2014

Ms Fiona Murphy Australian Securities Exchange Level 3 Exchange Plaza 2 The Esplanade PERTH WA 6000

Dear Ms Murphy,

BUXTON RESOURCES LIMITED ("Buxton") RESPONSE TO ASX AWARE QUERY 25 FEBRUARY 2014

We refer to your letter of 25 February 2014 and respond as follows:

• $1.$ Yes.
• 1. Not applicable.
• Buxton first become aware of the information in the Announcement on Wednesday, 3. 19 February 2014 at 9:59 am (WST) when the Buxton received a draft resource report from the independent consulting geologists. Buxton was not in a position to release the exploration results until they were satisfied that the results were accurate and complete.
• Buxton considered that the information contained in the draft resource report was $\overline{4}$ exempt from disclosure under ASX Listing Rule 3.1A.1 which states "The information ... is insufficiently definite to warrant disclosure" until such time as Buxton was satisfied that the information contained in the report was accurate and complete..

Buxton did not receive the final resource report from the independent consulting geologists until 4:04pm (WST) (7:04pm EDST) Monday 24 February 2014.

The Buxton Announcement was released at the earliest available opportunity the following morning (25 February 2014) following a final review of the information contained in the final report.

Buxton's announcement entitled "Highest Grade Graphite Resource in Australia -Yalbra" was lodged with the ASX Market Announcements Platform and released at 8:26 am EDST Tuesday 25 February 2014.

Buxton is not aware of any explanation for the trading activity which occurred on Monday, 24 February 2014.

The Company can confirm it is in compliance with the listing rules, and in particular, 5. listing rule 3.1.

Yours sincerely

Sam Wright Company Secretary

Buxton Resources Ltd Suite 1, First Floor, 14 – 16 Rowland St Subiaco WA 6008
Ph: 08 9380 6063 Fax: 08 9381 4056

ASX Compliance Pty Limited ABN 26 087 780 489 Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

GPO Box D187 Perth WA 6840

Telephone 61 8 9224 0000 Facsimile 61 8 9221 2020 www.asx.com.au

25 February 2014

Sam Wright Company Secretary Buxton Resources Limited Suite 1. First Floor 14-16 Rowland Street SUBIACO WA 6008

By email: [email protected]

Dear Sam.

Buxton Resources Limited (the "Entity"): ASX aware query

ASX Limited ("ASX") refers to the following:

• The Entity's announcement entitled "Highest Grade Graphite Resource In Australia Yalbra" lodged with 1. ASX Market Announcements Platform and released at 8:26 am EDST on Tuesday, 25 February 2014 (the "Announcement"), disclosing a maiden mineral resource estimate at its Yalbra Graphite Project located east of Gascovne Junction in Western Australia.
• The trading in the securities of the Entity on Monday, 24 February 2014 which included a change in the $\overline{2}$ . price of the Entity's securities from a closing price of \$0.23 on Friday, 21 February 2014 to a closing price of high of \$0.28 on Monday, 24 February 2014 (the "Trading Activity").
• Listing Rule 3.1, which requires a listed entity to give ASX immediately any information concerning it that a 3. reasonable person would expect to have a material effect on the price or value of the entity's securities.
• The definition of "aware" in Chapter 19 of the Listing Rules. This definition states that: $\overline{4}$ .

"an entity becomes aware of information if, and as soon as, an officer of the entity (or, in the case of a trust, an officer of the responsible entity) has, or ought reasonably to have, come into possession of the information in the course of the performance of their duties as an officer of that entity."

Additionally, you should refer to section 4.4 in Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 -3.1B "When does an entity become aware of information".

• Listing Rule 3.1A, which sets out exceptions from the requirement to make immediate disclosure, provided 5. that each of the following are satisfied.

• "3.1A Listing rule 3.1 does not apply to particular information while each of the following requirements is satisfied in relation to the information:

  • One or more of the following applies: $3.1A.1$
  • It would be a breach of a law to disclose the information:

• The information concerns an incomplete proposal or negotiation; $\bullet$

• The information comprises matters of supposition or is insufficiently definite to $\sim$ warrant disclosure;
• The information is generated for the internal management purposes of the entity;
• The information is a trade secret; and
• $3.1A.2$ The information is confidential and ASX has not formed the view that the information has ceased to be confidential; and
• $3.1A.3$ A reasonable person would not expect the information to be disclosed."
• 1. ASX's policy position on the concept of "confidentiality" which is detailed in section 5.8 of Guidance Note 8 Continuous Disclosure: Listing Rules $3.1 - 3.1B$ "Listing Rule 3.1A.2 - the requirement for information to be confidential". In particular, the Guidance Note states that:

"Whether information has the quality of being confidential is a question of fact, not one of the intention or desire of the listed entity. Accordingly, even though an entity may consider information to be confidential and its disclosure to be a breach of confidence, if it is in fact disclosed by those who know it, then it ceases to be confidential information for the purposes of this rule."

Having regard to the above, we ask that you answer the following questions in a format suitable for release to the market in accordance with Listing Rule 18.7A:

• 1. Does the Entity consider the information in the Announcement to be information that a reasonable person would expect to have a material effect on the price or value of its securities?
• $2.$ If the answer to question 1 is "no", please advise the basis for that view.
• 1. If the answer to question 1 is "yes", when did the Entity first become aware of the information in the Announcement.
• $\overline{4}$ If the answer to question 1 is "yes" and the Entity first became aware of the information in the Announcement before the relevant date, did the Entity make any announcement prior to the relevant date which disclosed the information? If so, please provide details. If not, please explain why this information was not released to the market at an earlier time, commenting in particular on when you believe the entity was obliged to release the information under Listing Rules 3.1 and 3.1A and what steps the Entity took to ensure that the information was released promptly and without delay. In responding to the matters raised in this paragraph please comment specifically on the Trading Activity.
• 1. Please confirm that the Entity is in compliance with the Listing Rules and, in particular, Listing Rule 3.1

When and where to send your response

This request is made under, and in accordance with, Listing Rule 18.7. Your response is required as soon as reasonably possible and, in any event, by not later than half an hour before the start of trading (i.e. before 6:30 am (WST) on Thursday, 27 February 2014). If we do not have your response by then, ASX will have no choice but to consider suspending trading in the Entity's securities under Listing Rule 17.3.

You should note that if the information requested by this letter is information required to be given to ASX under Listing Rule 3.1 and it does not fall within the exceptions mentioned in Listing Rule 3.1A, the Entity's obligation is to disclose the information "immediately". This may require the information to be disclosed before the deadline set out in the previous paragraph.

ASX reserves the right to release a copy of this letter and your response on the ASX Market Announcements Platform under Listing Rule 18.7A. Accordingly, your response should be in a form suitable for release to the market.

Your response should be sent to me by e-mail at [email protected] or by facsimile to 61 8 9221 2020. It should not be sent directly to the ASX Market Announcements Office. This is to allow me to review your response to confirm that it is in a form appropriate for release to the market, before it is published on the ASX Market Announcements Platform.

Listing Rule 3.1

Listing Rule 3.1 requires a listed entity to give ASX immediately any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity's securities. Exceptions to this requirement are set out in Listing Rule 3.1A.

The obligation of the Entity to disclose information under Listing Rules 3.1 and 3.1A is not confined to, nor is it necessarily satisfied by, answering the questions set out in this letter.

In responding to this letter, you should have regard to the Entity's obligations under Listing Rules 3.1 and 3.1A and also to Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 - 3.1B.

Trading halt

If you are unable to respond to this letter by the time specified above, you should discuss with us whether it is appropriate to request a trading halt in the Entity's securities under Listing Rule 17.1.

If you wish a trading halt, you must tell us:

• the reasons for the trading halt; $\bullet$
• how long you want the trading halt to last: $\bullet$
• the event you expect to happen that will end the trading halt;
• that you are not aware of any reason why the trading halt should not be granted; and
• any other information necessary to inform the market about the trading halt, or that we ask for.

We may require the request for a trading halt to be in writing. The trading halt cannot extend past the commencement of normal trading on the second day after the day on which it is granted.

You can find further information about trading halts in Guidance Note 16 Trading Halts & Voluntary Suspensions.

If you have any queries or concerns about any of the above, please contact me immediately.

Yours sincerely

[Sent electronically without signature]

Fiona Murphy Senior Adviser, Listings Compliance (Perth)