BAU:MVT Increases Proportional Off-Market T/over Bid for BAU

Mercantile OFM Pty Limited

ABN 30 120 221 623

Level 5, 139 Macquarie Street

Sydney NSW 2000

Tel [phone]

Fax [phone]

19 January 2018

BY ELECTRONIC LODGEMENT

Company Announcements

ASX Limited

Exchange Centre 20 Bridge Street Sydney NSW 2000

INCREASE IN BID CONSIDERATION AND EXTENSION OF OFFER PERIOD

Off Market Takeover Bid for 50% of the issued ordinary shares (Offer) in Bauxite Resources Limited (ACN 119 699 982) (BAU)

Mercantile OFM Pty Ltd (ACN 120 221 623) (Mercantile OFM), attaches a copy of a notice of variation (Notice of Variation).

BAU Shareholders are encouraged to read the Notice of Variation in its full as it provides that:

• 1. the Offer is increased from 9.0 cents cash to 11.0 cents cash for one of every two BAU Shares;

• 2. Mercantile OFM has extended the Offer Period to 7:00pm (Sydney time) 28 February 2018 (Extension of the Offer Period); and

• 3. as a result of the Extension of the Offer Period, the new date for giving of the notice of the status of the conditions to Mercantile OFM's takeover offer is now 21 February 2018.

A copy of the Notice of Variation is dated 19 January 2018 and was lodged with ASIC on that date.

BAU Shareholders should note that, if the proposed capital return announced by BAU on 15 December 2017 is implemented and BAU Shareholders accept Mercantile OFM's Offer, the consideration BAU Shareholders will receive from Mercantile OFM for their BAU Shares will be reduced by the value of the capital return actually paid by BAU to BAU Shareholders in relation to their BAU Shares.

Yours sincerely,

Gabriel Radzyminski Director