CIRCULAR DATED 15 OCTOBER 2018 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. PLEASE READ IT CAREFULLY. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. If you have sold or transferred all your ordinary shares in the capital of ISR Capital Limited, you should immediately forward this Circular, the enclosed Notice of Extraordinary General Meeting and the accompanying Proxy Form to the purchaser or the transferee, or to the bank, stockbroker or agent through whom the sale or the transfer was effected for onward transmission to the purchaser or the transferee. If you have sold or transferred all your shares represented by physical share certificate(s), you should immediately hand this Circular together with the accompanying Proxy Form to the purchaser or transferee or to the bank, stockbroker or agent through whom you effected the sale or transfer, for onward transmission to the purchaser or transferee. Approval in-principle has been obtained from the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for the listing of and quotation for the Consideration Shares (as defined herein) on the Main Board of the SGX-ST, subject to certain conditions. The Consideration Shares will be admitted to the Official List of the SGX-ST and official quotation is expected to commence after all conditions imposed by the SGX-ST are satisfied, all certificates relating thereto having been issued and the notification letters from The Central Depository (Pte) Ltd (“CDP”) having been despatched. Approval in-principle granted by the SGX-ST for the listing of and quotation for the Consideration Shares on the Main Board of the SGX-ST is not to be taken as an indication of the merits of the Proposed Acquisition (as defined herein), the Shares (as defined herein), the Consideration Shares, the Company and/or its subsidiaries. The SGX-ST assumes no responsibility for the accuracy of any of the statements made, reports contained or opinions expressed in this Circular. ISR CAPITAL LIMITED (Incorporated in the Republic of Singapore) (Company Registration No. 200104762G) CIRCULAR TO SHAREHOLDERS IN RELATION TO (1) THE PROPOSED ACQUISITION OF 60% SHAREHOLDING INTEREST HELD BY REO MAGNETIC PTE. LTD. IN TANTALUM HOLDING (MAURITIUS) LTD FOR A CONSIDERATION OF S$2,989,029 (THE “PROPOSED ACQUISITION”) TO BE SATISFIED THROUGH THE ISSUANCE OF SHARES REPRESENTING 29% OF THE TOTAL ISSUED SHARE CAPITAL OF THE COMPANY AS AT ALA LPD (AS DEFINED BELOW); (2) THE PROPOSED ISSUE AND ALLOTMENT OF 747,257,307 NEW ORDINARY SHARES AT AN ISSUE PRICE EACH OF S$0.004 IN PAYMENT OF THE CONSIDERATION; (3) THE PROPOSED TRANSFER OF CONTROLLING INTEREST TO REO MAGNETIC PTE. LTD. ARISING FROM THE SHARE ISSUE; AND (4) THE PROPOSED DIVERSIFICATION OF THE BUSINESS SCOPE OF THE GROUP TO INCLUDE (I) THE OWNERSHIP, OPERATION, MANAGEMENT AND PRODUCTION OF A RARE EARTH OXIDES MINE IN MADAGASCAR; (II) THE SALE AND DISTRIBUTION OF THE RARE EARTH OXIDES; AND (III) PROVISION OF TECHNICAL SUPPORT AND SERVICES RELATING TO RARE EARTH OXIDES MINING. IMPORTANT DATES AND TIMES Last date and time for lodgement of Proxy Form : 28 October 2018 at 10:00 a.m. Date and time of Extraordinary General Meeting : 30 October 2018 at 10:00 a.m. PlaceofExtraordinaryGeneralMeeting : TKPConferenceCenter 137 Cecil Street #04-01 (Shibuya) Singapore 069537 CONTENTS Page DEFINITIONS........................................ ................... 2 LETTERTO SHAREHOLDERS ............................... .............. 11 1. INTRODUCTION ..................................... ............... 11 2. THE PROPOSED ACQUISITION AS A MAJOR TRANSACTION. 12 3. INFORMATION ON THE PROPOSED ACQUISITION .............. .......... 13 4. INFORMATION ON THE PROJECT, THE TARGET COMPANY AND THE OPERATINGCOMPANY ................................... ........... 31 5. INFORMATIONONTHEVENDOR ........................... ........... 38 6. LISTINGANDQUOTATION.............................. .............. 39 7. RATIONALE FOR AND BENEFIT OF THE PROPOSED ACQUISITION . 40 8. FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION. .......... 41 9. THE PROPOSED DIVERSIFICATION OF THE BUSINESS SCOPE OF THE GROUP TO INCLUDE THE OWNERSHIP, OPERATION, MANAGEMENT AND PRODUCTION OFARARE EARTH OXIDES MINE IN MADAGASCAR ................. 43 10. SERVICECONTRACTS................................ ............... 52 11. MINIMUM TRADING PRICE (“MTP”) ENTRY CRITERION . ............ 52 12. DIRECTORS’ RECOMMENDATIONS....................... .............. 52 13. EXTRAORDINARY GENERAL MEETING ..................... ............ 52 14. ACTIONS TO BE TAKEN BY SHAREHOLDERS.................. .......... 52 15. DOCUMENTS AVAILABLE FOR INSPECTION ................. ............ 53 16. INTEREST OF DIRECTORS AND CONTROLLING SHAREHOLDERS . 53 17. CONSENT ......................................... ................ 53 18. RESPONSIBILITY STATEMENT......................... ................ 53 APPENDIXA .......................................... ................. 55 APPENDIXB.......................................... ................. 125 1 DEFINITIONS In this Circular, the following definitions apply throughout unless the context otherwise requires or otherwise stated: “2016 Placement” : Theplacementof141,176,470SharesintheCompanyto raise approximately S$12,000,000 pursuant to subscription agreements dated 2 September 2016. “Acquisition” : Theacquisitionof19.9%oftheissuedandpaid-upshare capital of the Target Company pursuant to the First Sale and Purchase Agreement. “Addendum” : Theaddendumdated28November2016. “Additional Acquisition” : The acquisition of the remaining 40.1% of Vendor’s total shareholding in the Target Company pursuant to the Second Sale and Purchase Agreement. “Adjusted Issue Price or : The adjusted Issue Price in the event that the total number Adjustment” of issued ordinary shares in the capital of the Company (excluding treasury Singapore) increases during the period from the date of the First Supplemental Agreement up to the ALA LPD. “AERP” : Authorisation for reservation of mining perimeters for exclusive use issued by the Bureau du Cadastre Minier de Madagascar. “ALA LPD” : 18 December 2017, the date preceding the date of submission by the Company of the additional listing application to the SGX-ST on 19 December 2017. “Al Maynard” : AlMaynardandAssociatesPtyLtd. “Al Maynard Report” : TheindependentvaluationreportissuedbyAlMaynardon 30 September 2016. “Announcements” : The announcements on the Proposed Acquisition dated 20 May 2016, 10 June 2016, 1 July 2016, 1 August 2017, 22 September 2017, 28 September 2017, 16 November 2017, 21 December 2017, 1 January 2018, 1 March 2018, 28 June 2018 and 16 September 2018. 2 “Approvals” : All approvals, consents, licences, permits, waivers and exemptions for the sale and purchase of the shares representing the 60% interest in the Target Company, and the transactions contemplated under the Sale and Purchase Agreements having being granted by third parties including all legislative, executive, regulatory, judicial or other authorities in Singapore or any other jurisdiction to the Vendor, the Target Company or the Operating Company (as the case may be) and, where any such Approval is subject to conditions, such conditions being reasonably acceptable to the Company, and, if such conditions are required to be fulfilled before the completion date of the Proposed Acquisition, they are so fulfilled, and such Approvals remaining in full force and effect. “Behre Dolbear” : BehreDolbearAustraliaPtyLimited. “Board” or “Directors” : TheboardofDirectorsoftheCompanyasatthedateof this Circular as at the Latest Practicable Date. “Bureau du Cadastre : The note issued by the Bureau du Cadastre Minier de Minier de Madagascar Madagascar explaining that it had suspended the filing Suspension Notice” demands for (i) authorisation for reservation of mining perimeters for exclusive use and (ii) mining licences until further notice. “CDP” : TheCentralDepository(Pte)Limited. “Circular” : Thisexplanatoryletter,togetherwithallattachmentsand the Notice of Meeting addressed to Shareholders. “Companies Act” : TheCompaniesAct,Chapter50ofSingapore,asamended from time to time. “Company” : ISR Capital Limited (Company Registration No. 200104762G), incorporated in the Republic of Singapore, with the registered address at 83 Clemenceau Avenue, #10-03 UE Square, Singapore 239920. “Completion” : The completion of the sale and purchase of the Sale Shares under the SPAs. “Completion Date” : ThedateonwhichCompletionoccurs. “Conditions Precedent” : The conditions precedent of the ProposedAcquisition. “Consideration” : S$2,989,029. 3 “Consideration Shares” : The 747,257,307 new Shares in the Company, representing the Consideration Shares for First Sale and Purchase Agreement and the Consideration Shares for Second Sale and Purchase Agreement, totalling approximately 29% of the total issued share capital of the Company as atALALPD, and 23% of the total issued share capital of the Company on an enlarged basis as atALALPD and 19% of the total issued share capital of the Company as at the Latest Practicable Date, to be issued by the Company to the Vendor in satisfaction of the Consideration for the Proposed Acquisition. “Consideration Shares for : The 247,840,340 new Shares in the Company, First Sale and Purchase representing approximately 9.6% of the total issued share Agreement” capital of the Company as at ALA LPD, and 7.5% of the total issued