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Notice of General Meeting
Tawana Resources NL
Incorporated in Australia)
Registration number ACN 085 166 721)
Share code on the JSE Limited: TAW
ISIN: AU000000TAW7
Share code on the Australian Stock Exchange Limited: TAW
ISIN: AU000000TAW7
(“Tawana” or “the Company”)
Tawana Resources NL
ACN 085 166 721
Notice of General Meeting
General Meeting of Shareholders to be held at
Freemasons Hall, 181 Roberts Road, Subiaco, Western
Australia at 9:00am (WST) on 12 December 2013.
Important
This Notice of General Meeting should be read in its entirety. If Shareholders are in doubt as to
how to vote, they should seek advice from their professional adviser prior to voting.
Notice of General Meeting
Notice is given that the General Meeting of Shareholders of Tawana Resources NL ACN 085 166
721 (Company) will be held at Freemasons Hall, 181 Roberts Road, Subiaco, Western Australia
commencing at 9:00am (WST) on 12 December 2013.
Business
1. Resolution 1 – Issue of Performance Options to Wayne Richards
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That for the purposes of section 208 of the Corporations Act and Listing Rule 10.11,
and for all other purposes, approval be given for the issue of 10,000,000 Class A
Performance Options, 10,000,000 Class B Performance Options and 10,000,000 Class
C Performance Options to Wayne Richards or his nominee in accordance with his
employment agreement with the Company, as set out in the Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 1 by Wayne Richards and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
2. Resolution 2 – Issue of Class A Incentive Options to Wayne Richards
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That for the purposes of section 208 of the Corporations Act and Listing Rule 10.11,
and for all other purposes, approval be given for the issue of 25,000,000 Class A
Incentive Options to Wayne Richards (and/or his nominee) in accordance his
employment agreement with the Company, as set out in the Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 2 by Wayne Richards and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
3. Resolution 3 – Issue of Class B Incentive Options to Lennard Kolff van Oosterwijk
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That, for the purposes of section 208 of the Corporations Act and Listing Rule 10.11,
and for all other purposes, approval be given for the issue of 10,000,000 Class B
Incentive Options to Lennard Kolff van Oosterwijk (and/or his nominee), as set out in
the Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 3 by Lennard Kolff van Oosterwijk and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
4. Resolution 4 – Issue of Class A Incentive Options to Matthew Bowles
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That, for the purposes of section 208 of the Corporations Act and Listing Rule 10.11,
and for all other purposes, approval be given for the issue of 3,500,000 Class A
Incentive Options to Matthew Bowles (and/or his nominee), as set out in the
Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 4 by Matthew Bowles and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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. Resolution 5 – Issue of Class A Incentive Options to Aaron Finlay
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That, for the purposes of Listing Rule 7.1, and for all other purposes, approval be
given for the issue of 750,000 Class A Incentive Options to Aaron Finlay (and/or his
nominee), as set out in the Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 5 by Aaron Finlay and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
6. Resolution 6 – Issue of Class A Incentive Options to Winton Willesee
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That, for the purposes of Listing Rule 7.1, and for all other purposes, approval be
given for the issue of 750,000 Class A Incentive Options to Winton Willesee (and/or his
nominee), as set out in the Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 6 by Winton Willesee and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
7. Resolution 7 – Issue of Class A Incentive Options to Rockson Coffie
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That, for the purposes of Listing Rule 7.1, and for all other purposes, approval be
given for the issue of 1,500,000 Class A Incentive Options to Rockson Coffie (and/or
his nominee), as set out in the Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 7 by Rockson Coffie and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
8. Resolution 8 – Ratification of prior issue of Shares under the Placement
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That, for the purpose of Listing Rule 7.4 and for all other purposes, the issue of
244,000,000 Shares to Exempt Investors under the Placement as set out in the
Explanatory Statement is hereby approved and ratified.”
Voting exclusion
The Company will disregard any votes cast on Resolution 8 by a person who participated in the Placement and any of its associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
9. Resolution 9 – Issue of Shares to Wayne Richards
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That, for the purposes of section 208 of the Corporations Act and Listing Rule 10.11,
and for all other purposes, approval be given for the issue of 5,000,000 Shares to
Wayne Richards (and/or his nominee) at an issue price of $0.012 each, as set out in
the Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 9 by Wayne Richards and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
4
10. Resolution 10 – Issue of Placement Options to Canaccord Genuity (Australia) Limited
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
“That, for the purposes of Listing Rule 7.1, and for all other purposes, approval be
given for the issue of 10,000,000 Placement Options to Canaccord Genuity (Australia)
Limited (and/or its nominee) in accordance with the Lead Manager Mandate, as set out
in the Explanatory Statement.”
Voting exclusion
The Company will disregard any votes cast on Resolution 10 by Canaccord Genuity (Australia) Limited and any of his associates.
However, the Company will not disregard a vote if:
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form;
or
(b) it is cast by the Chairman 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.
By order of the Board
__________________________
Winton Willesee
Joint Company Secretary
Tawana Resources NL
4 November 2013
Explanatory Statement
This Explanatory Statement has been prepared for the information of Shareholders in relation to the
business to be conducted at the Company’s General Meeting.
The purpose of this Explanatory Statement is to provide Shareholders with all information known to
the Company which is material to a decision on how to vote on the Resolutions in the accompanying
Notice.
This Explanatory Statement should be read in conjunction with the Notice. Capitalised terms used
in the Notice and Explanatory Statement are defined in the Glossary.
1. Proxies
Please note that:
(a) a Shareholder entitled to attend and vote at the General Meeting is entitled to appoint
a proxy;
(b) a proxy need not be a member of the Company;
(c) a Shareholder may appoint a body corporate or an individual as its proxy;
(d) a body corporate appointed as a Shareholder’s proxy may appoint an individual as its
representative to exercise any of the powers that the body may exercise as the
Shareholder’s proxy; and
(e) Shareholders entitled to cast two or more votes may appoint two proxies and may
specify the proportion or number of votes each proxy is appointed to exercise, but
where the proportion or number is not specified, each proxy may exercise half of the
votes.
The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy
Forms. If a Shareholder appoints a body corporate as its proxy and the body corporate
wishes to appoint an individual as its representative, the body corporate should provide that
person with a certificate or letter executed in accordance with the Corporations Act
authorising him or her to act as that company’s representative. The authority may be sent to
the Company or its share registry in advance of the General Meeting or handed in at the
General Meeting when registering as a corporate representative.
Members of Key Management Personnel and their Closely Related Parties will not be able to
vote as proxy on Resolutions 1 to 4, 7 and 9 unless the Shareholder directs them how to
vote or, in the case of the Chairman, unless the Shareholder expressly authorises him to do
so. If a Shareholder intends to appoint a member of Key Management Personnel or their
Closely Related Parties (other than the Chairman) as its proxy, the Shareholder should
ensure that it directs the proxy how to vote on Resolutions 1 to 4, 7 and 9.
If a Shareholder intends to appoint the Chairman as its proxy on Resolutions 1 to 4, 7 and 9
the Shareholder can direct the Chairman how to vote by marking one of the boxes for those
Resolutions (for example, if the Shareholder wishes to vote ‘for’, ‘against’ or to ‘abstain’ from
voting). If a Shareholder does not direct the Chairman how to vote, the Shareholder can
expressly authorise the Chairman to vote as the Chairman thinks fit on Resolutions 1 to 4, 7
and 9 by marking the appropriate box on the Proxy Form even though those Resolutions are
connected to the remuneration of members of Key Management Personnel and even if the
Chairman has an interest in the outcome of those Resolutions.
To vote by proxy, please complete and sign the enclosed Proxy Form and send by:
(a) post to the Company’s registered office at Suite 25, 145 Stirling Highway, Nedlands,
Western Australia 6009;
(b) post to the Company at PO Box 3144, Nedlands, Western Australia 6009;
(c) facsimile to the Company on (08) 9389 3199; or
(d) email to the Company Secretary at winton@azc.com.au,
so that it is received by no later than 9:00am (WST) on 10 December 2013. Proxy Forms
received later than this time will be invalid.
2. Voting entitlements
In accordance with Regulations 7.11.37 and 7.11.38 of the Corporations Regulations 2001
(Cth), the Board has determined that a person’s entitlement to vote at the General Meeting
will be the entitlement of that person set out in the register of Shareholders as at 7:00pm
(WST) on 10 December 2013. Accordingly, transactions registered after that time will be
disregarded in determining Shareholder’s entitlement to attend and vote at the General
Meeting.
3. Resolutions 1 and 2 – Issue of Performance Options and Class A Incentive Options to
Wayne Richards
3.1 Background
As announced on 15 August 2013, the Company has appointed Wayne Richards as its
Executive Chairman. Mr Richards commenced his role on 15 August 2013.
The Company has entered into an employment agreement with Mr Richards in relation to his
new role. Under the employment agreement, Mr Richards is entitled to a base salary of
$250,000 per annum (inclusive of superannuation) and directors fees of $60,000 (inclusive of
superannuation). In addition, the Company has agreed, subject to Shareholder approval, to
issue the following securities to Mr Richards as part of his remuneration package:
Security Number Vesting Expiry date Exercise price
Class A Performance 10,000,000 Upon 31 August $0.0001 each
Options satisfaction of 2014
the performance
criteria set out in
Annexure A
Class B Performance 10,000,000 Upon 31 August $0.0001 each
Options satisfaction of 2015
the performance
criteria set out in
Annexure A
Class C Performance 10,000,000 Upon 31 August $0.0001 each
Options satisfaction of 2016
the performance
criteria set out in
Annexure A
Class A Incentive 25,000,000 Upon issue 12 December $0.015 each
Options 2016
The Company believes that these securities provide a means by which the Company can
reward Mr Richards for signing on to his new position and also provide a cost effective
performance-based incentive to Mr Richards in his new role. The Directors consider it
prudent to remunerate by way of securities so as to preserve the cash reserves of the
Company.
The benefit from the Performance Options will only be received if the Company satisfies
certain performance targets and Mr Richards pays the relevant exercise price. Similarly, the
benefit from the Class A Incentive Options will only be received if the Company’s Share price
exceeds the exercise price of the Options at the time of exercise.
The Company is seeking Shareholder approval to the issue of the Performance Options and
the Class A Incentive Options in accordance with section 208 of the Corporations Act and
Listing Rule 10.11.
3.2 Section 208 of the Corporations Act
Section 208 of the Corporations Act states that a public company cannot give a “financial
benefit” (including an issue of shares and options) to a “related party” of the Company unless
one of the exceptions set out in section 210 to 216 of the Corporations Act apply, or the
holders of ordinary securities have approved the giving of the financial benefit to the related
party in a general meeting.
As a Director, Mr Richards is a related party of the Company within the meaning specified
under section 228 of the Corporations Act. Further, the provision of the Performance
Options and Incentive Options constitutes a financial benefit within the meaning of section
229 of the Corporations Act. Accordingly, Shareholder approval is sought under section 208
of the Corporations Act to permit the issue of the Performance Options and Class A
Incentive Options under Resolutions 1 and 2 to Mr Richards as a related party of the
Company.
As required by section 219 of the Corporations Act, the following information is provided in
relation to Resolutions 1 and 2:
(a) Related party to whom the financial benefits are to be given
Wayne Richards (and/or his nominee).
(a) Nature of the financial benefits
The issue of 10,000,000 Class A Performance Options, 10,000,000 Class B
Performance Options, 10,000,000 Class C Performance Options and 25,000,000
Class A Incentive Options to Mr Richards. The Performance Options will be issued
on the terms set out in Annexure A and the Class A Incentive Options will be issued
on the terms set out in Annexure B.
(b) Valuation of the financial benefits
The Company has engaged Stantons International to prepare independent valuations
of the Performance Options and the Incentive Options.
Performance Options
The Black-Scholes option pricing model has been applied in providing valuation
information in respect to the Performance Options to be issued to Mr Richards.
Stantons International has determined that each Performance Option has an implied
value of $0.022902 for the Class A Performance Options, $0.022910 for the Class B
Performance Options and $0.022928 for the Class C Performance Options.
Accordingly, the aggregate implied value of the Incentive Options to be issued to Mr
Richards is $687,400.
The following variables and assumptions were used in the valuation:
(i) A Share price of $0.023 (assumed closing price on the day of the General
Meeting being the market price on ASX on 18 October 2013).
(ii) A risk free interest rate of 2.99% (assumed on the day of the General
Meeting).
(iii) Respective expiry dates of 31 August 2014, 31 August 2015 and 31 August
2016.
(iv) An exercise price of $0.0001 each.
(v) Volatility of 175%.
(vi) No discount for non-transferability.
(vii) The underlying Shares do not currently pay a dividend.
(viii) In accordance with the relevant accounting standards no discount has been
applied to reflect the requirements to meet the vesting conditions before the
Performance Options vest.
Incentive Options
The Black-Scholes option pricing model has been applied in providing valuation
information in respect to the Incentive Options to be issued to Mr Richards. Stantons
International has determined that each Incentive Option has an implied value of
$0.020723 each. Accordingly, the aggregate implied value of the Incentive Options
to be issued to Mr Richards is $518,075.
The following variables and assumptions were used in the valuation:
(i) A Share price of $0.023 (assumed closing price on the day of the General
Meeting being the market price on ASX on 18 October 2013).
(ii) A risk free interest rate of 2.99% (assumed on the day of the General
Meeting).
(iii) An expiry date of 12 December 2016.
(iv) An exercise price of $0.015 each.
(v) Volatility of 175%.
(vi) No discount for non-transferability.
(vii) The underlying Shares do not currently pay a dividend.
(c) Current remuneration and security interests
Details of Mr Richards’ current annualised pro-rata remuneration, as well as his
security interests (both direct and indirect) in the Company as at the date of the
Notice, are outlined below:
Director Salary/fees Security interests
Wayne Richards $310,000 per annum Nil
(including superannuation)
Notes:
1. If Resolution 9 is passed, the Company will be entitled to issue 5,000,000
Shares to Mr Richards at an issue price of $0.012 each.
(d) Dilution
Performance Options
If all of the Performance Options issued under Resolution 1 were converted into
Shares, and no other Shares were issued by the Company (including Shares
pursuant to Resolution 9 or the exercise of existing Options or the Incentive Options
under Resolutions 2 to 7), the shareholding of existing Shareholders would, based on
the current issued capital of the Company, be diluted by approximately 2.46%.
Incentive Options
If all of the Incentive Options issued under Resolution 2 were converted into Shares,
and no other Shares were issued by the Company (including Shares pursuant to
Resolution 9 or the exercise of existing Options, the Incentive Options under
Resolutions 3 to 7 or the Performance Options under Resolution 1), the shareholding
of existing Shareholders would, based on the current issued capital of the Company,
be diluted by approximately 2.05%.
(e) Accounting
The Company’s adoption of Australian equivalents to International Financial
Reporting Standards for reporting periods means that, under AASB2 Share-based
Payment, equity-based compensation (such as the Performance Options and the
Class A Incentive Options under Resolutions 1 and 2) will be recognised as an
expense in respect of the services received.
(f) Trading history
As at the date of the Notice, the Company had 1,220,629,043 Shares on issue. The
highest and lowest market sale price of the Shares in the Company during the twelve
months immediately preceding the date of the Notice was $0.033 on 22 October
2013 and $0.006 on 8 May 2013. The closing market sale price of the Company’s
Shares on the ASX on 24 October 2013 was $0.028.
As at the date of the Notice, the Company had the following unlisted Options on
issue:
Grant date Expiry date Exercise price Number
10 Nov 2011 10 Nov 2013 $0.03 1,250,000
17 Jan 2009 17 Jan 2014 $0.10 6,750,000
8 Mar 2011 8 Mar 2014 $0.01 25,000,000
9 Sep 2010 9 Sep 2014 $0.05 5,000,000
28 May and 30 April 2015 $0.036 28,500,000
27 June 2012
10 Nov 2011 10 Nov 2015 $0.05 1,250,000
67,750,000
(g) Terms of securities
The terms of the Performance Options are set out in Annexure A and the terms of the
Class A Incentive Options are set out in Annexure B.
(h) Opportunity costs to the Company
The Directors do not consider that there are any opportunity costs to the Company or
benefits foregone by the Company in issuing the Performance Options or the
Incentive Shares.
(i) Intended use of funds raised
There will be no funds raised in connection with the issue of the Performance Options
or the Class A Incentive Options under Resolutions 1 and 2 as they are to be issued
as part of Mr Richards’ remuneration package under his employment contract. The
proceeds from a future exercise of the Performance Options or the Class A Incentive
Options, however, are intended to be applied towards meeting working capital
requirements of the Company relevant at, or about, the time of the exercise of the
Class A Incentive Options at the discretion of the Board.
(j) Directors’ interests
Mr Richards has a material personal interest in the outcome of Resolutions 1 and 2
as the recipient of the Performance Options and Class A Incentive Options. No other
Director has a material personal interest in the outcome of Resolutions 1 and 2.
(k) Directors’ recommendations
Mr Richards expresses no opinion and makes no recommendation in respect of the
issue of the Performance Options and Class A Incentive Options to him as he has a
material personal interest in the outcome of Resolutions 1 and 2.
Each of the other Directors recommends that Shareholders vote in favour of the issue
of the Performance Options and Class A Incentive Options to Mr Richards for the
reasons set out in the Explanatory Statement and on the basis that, in their opinion,
the proposed issue of Performance Options and Class A Incentive Options:
(i) provides a long-term incentive to Mr Richards linked to the future success of
the Company;
(ii) is a fair and reasonable alternative to additional cash remuneration; and
(iii) is necessary to reflect remuneration benefits payable to directors of other
companies operating in the Company’s industry and in an international
business environment.
(l) Other information
Other than as set out in this Explanatory Statement, there is no further information
that is known to the Company or any of the Directors which Shareholders would
reasonably require in order to decide whether or not it is in the Company’s best
interests to pass Resolutions 1 and 2.
3.3 Listing Rule 10.11
Listing Rule 10.11 provides that a company must not issue equity securities to a “related
party” without the approval of holders of ordinary securities, or to a person whose
relationship with the company or a related party of the company is, in ASX’s opinion, such
that approval should be obtained. Further, Listing Rule 7.2 (Exception 14) states that
approval pursuant to Listing Rule 7.1 is not required if shareholder approval is obtained
under Listing Rule 10.11.
As a Director, Mr Richards is a related party of the Company within the definition specified in
Listing Rule 19.12. Accordingly, Shareholder approval is sought under Listing Rule 10.11 to
permit the issue of the Performance Options and the Class A Incentive Options under
Resolutions 1 and 2 to Mr Richards as a related party of the Company.
The issue of the Performance Options and Class A Incentive Options under Resolutions 1
and 2 will not affect the capacity of the Company to issue securities in the next 12 months
under Listing Rule 7.1, as those securities (once issued) will be excluded from the
calculations under Listing Rule 7.1.
As required by Listing Rule 10.13, the following information is provided in relation to
Resolutions 1 and 2:
(a) Name of the person
Wayne Richards (and/or his nominee).
(b) Maximum number of securities to be issued
10,000,000 Class A Performance Options, 10,000,000 Class B Performance Options,
10,000,000 Class C Performance Options and 25,000,000 Class A Incentive Options.
(c) Date by which the entity will issue the securities
The Performance Options and Class A Incentive Options will be issued as soon as
practicable after the General Meeting and, in any event, no later than 1 month after
the General Meeting (or such later date to the extent permitted by any waiver of the
Listing Rules).
(d) Relationship that requires Shareholder approval
Mr Richards is a related party of the Company by virtue of being a Director of the
Company.
(e) Issue price of the securities
The Performance Options and the Class A Incentive Options will be issued without
payment of cash consideration as they are being issued as part of Mr Richards’
remuneration package under his employment contract.
(f) Terms of the issue
The terms of the Performance Options are set out in Annexure A and the terms of the
Class A Incentive Options are set out in Annexure B.
(g) Intended use of the funds raised
There will be no funds raised in connection with the issue of the Performance Options
or the Class A Incentive Options under Resolutions 1 and 2 as they are to be issued
as part of Mr Richards’ remuneration package under his employment contract. The
proceeds from a future exercise of the Performance Options or the Class A Incentive
Options, however, are intended to be applied towards meeting working capital
requirements of the Company relevant at, or about, the time of the exercise of the
Class A Incentive Options at the discretion of the Board.
4. Resolutions 3 and 4 – Issue of Incentive Options to Directors
4.1 Background
The Company is seeking Shareholder approval to the issue of a total of 13,500,000 Incentive
Options to Lennard Kolff van Oosterwijk and Matthew Bowles in accordance with section 208
of the Corporations Act and Listing Rule 10.11. The Company proposes to issue the
Incentive Options to Mr Kolff and Mr Bowles as follows:
Recipient Number and Class Expiry date Exercise price
Lennard Kolff van 10,000,000 Class B 12 December Exercisable at 135% of the
Oosterwijk Incentive Options 2016 30 day VWAP on 12
December 2013
Matthew Bowles 3,500,000 Class A 12 December $0.015 each
Incentive Options 2016
The Company believes that the Incentive Options provide a means by which the Company
can reward Mr Kolff and Mr Bowles for their continued contribution to the Company’s
progress to date and to further incentivise their ongoing performance and commitment to the
Company. The Directors consider it prudent to remunerate by way of securities so as to
preserve the cash reserves of the Company.
The benefit from the Incentive Options will only be received if the Company’s Share price
exceeds the exercise price of the Options at the time of exercise.
The Company is seeking Shareholder approval to the issue of the Incentive Options in
accordance with section 208 of the Corporations Act and Listing Rule 10.11.
4.2 Section 208 of the Corporations Act
Section 208 of the Corporations Act states that a public company cannot give a “financial
benefit” (including an issue of shares and options) to a “related party” of the Company unless
one of the exceptions set out in section 210 to 216 of the Corporations Act apply, or the
holders of ordinary securities have approved the giving of the financial benefit to the related
party in a general meeting.
As Directors, Mr Kolff and Mr Bowles are related parties of the Company within the meaning
specified under section 228 of the Corporations Act. Further, the provision of the Incentive
Options constitutes a financial benefit within the meaning of section 229 of the Corporations
Act. Accordingly, Shareholder approval is sought under section 208 of the Corporations Act
to permit the issue of the Incentive Options under Resolutions 3 and 4 to Mr Kolff and Mr
Bowles, respectively, as related parties of the Company.
As required by section 219 of the Corporations Act, the following information is provided in
relation to Resolutions 3 and 4:
(a) Related parties to whom the financial benefits are to be given
Lennard Kolff van Oosterwijk (and/or his nominee) and Matthew Bowles (and/or his
nominee).
(b) Nature of the financial benefits
The issue of a total of 13,500,000 Incentive Options to Mr Kolff and Mr Bowles as
follows:
Recipient Number and Class
Lennard Kolff van Oosterwijk 10,000,000 Class B Incentive Options
Matthew Bowles 3,500,000 Class A Incentive Options
Total 13,500,000 Incentive Options
The Incentive Options will be issued on the terms set out in Annexure B
(c) Valuation of the financial benefits
The Company has engaged Stantons International to prepare an independent
valuation of the Incentive Options.
The Black-Scholes option pricing model has been applied in providing valuation
information in respect to the Incentive Options to be issued to Mr Kolff and Mr
Bowles. Stantons International has determined that each Class B Incentive Option
has an implied value of $0.019698 whilst each Class A Incentive Option has an
implied value of $0.020723. Accordingly, the aggregate implied value of the
Incentive Options to be issued to Mr Kolff and Mr Bowles is as follows:
Recipient Implied value each Number Value
Lennard Kolff van $0.019698 10,000,000 $196,980
Oosterwijk
Matthew Bowles $0.020723 3,500,000 $72,530
Total 13,500,000 $269,510
The following variables and assumptions were used in the valuation:
(i) A Share price of $0.023 (assumed closing price on the day of the General
Meeting being the market price on ASX on 18 October 2013).
(ii) A risk free interest rate of 2.99% (assumed on the day of the General
Meeting).
(iii) An expiry date of 12 December 2016.
(iv) An exercise price of $0.015 for the Class A Incentive Options and $0.03105
for the Class B Incentive Options (being 135% of the assumed 30 day VWAP
as at 12 December 2013).
(v) Volatility of 175%.
(vi) No discount for non-transferability.
(vii) The underlying Shares do not currently pay a dividend.
(d) Current remuneration and security interests
Details of Mr Kolff and Mr Bowles’ current annualised pro-rata remuneration, as well
as their security interests (both direct and indirect) in the Company as at the date of
the Notice, are outlined below:
Director Salary/fees Security interests
? Nil Shares
1
Lennard Kolff van $269,425 per annum
Oosterwijk (including superannuation) ? 15,000,000 Options2
Matthew Bowles $40,000 per annum ? 6,000,000 Shares
(including superannuation) ? 5,000,000 Options3
Notes:
1. On 9 September 2013, the Company renewed the employment contract of
Lennard Kolff van Oosterwijk, a summary of which is provided in Annexure C
of this Notice in satisfaction of the relevant ASX guidelines requiring listed
entities to disclose the relevant terms of the Managing Director’s
remuneration.
2. Lennard Kolff van Oosterwijk holds an interest in 5,000,000 unlisted Options
exercisable at $0.05 each and expiring on 9 September 2014 and 10,000,000
unlisted Options exercisable at $0.036 each and expiring on 30 April 2015.
3. Matthew Bowles holds an interest in 5,000,000 unlisted Options exercisable at
$0.036 each and expiring on 30 April 2015.
(e) Dilution
If all of the Incentive Options issued under Resolutions 3 and 4 were converted into
Shares, and no other Shares were issued by the Company (including Shares
pursuant to Resolution 9 or the exercise of existing Options, the Performance
Options under Resolution 1 or the Incentive Options under Resolutions 2, 5, 6 and 7),
the shareholding of existing Shareholders would, based on the current issued capital
of the Company, be diluted by approximately 1.11%.
(f) Accounting
The Company’s adoption of Australian equivalents to International Financial
Reporting Standards for reporting periods means that, under AASB2 Share-based
Payment, equity-based compensation (such as the Incentive Options under
Resolutions 3 and 4) will be recognised as an expense in respect of the services
received.
(g) Trading history
As at the date of the Notice, the Company had 1,220,629,043 Shares on issue. The
highest and lowest market sale price of the Shares in the Company during the twelve
months immediately preceding the date of the Notice was $0.033 on 22 October
2013 and $0.006 on 8 May 2013. The closing market sale price of the Company’s
Shares on the ASX on 24 October 2013 was $0.028.
As at the date of the Notice, the Company had the following unlisted Options on
issue:
Grant date Expiry date Exercise price Number
10 Nov 2011 10 Nov 2013 $0.03 1,250,000
17 Jan 2009 17 Jan 2014 $0.10 6,750,000
8 Mar 2011 8 Mar 2014 $0.01 25,000,000
9 Sep 2010 9 Sep 2014 $0.05 5,000,000
28 May and 30 April 2015 $0.036 28,500,000
27 June 2012
10 Nov 2011 10 Nov 2015 $0.05 1,250,000
67,750,000
(h) Terms of securities
The terms of the Incentive Options are set out in Annexure B.
(i) Opportunity costs to the Company
The Directors do not consider that there are any opportunity costs to the Company or
benefits foregone by the Company in issuing the Incentive Options.
(j) Intended use of funds raised
There will be no funds raised in connection with the issue of the Incentive Options
under Resolutions 3 and 4 as the Incentive Options are to be issued without payment
of cash consideration. The proceeds from a future exercise of the Incentive Options,
however, are intended to be applied towards meeting working capital requirements of
the Company relevant at, or about, the time of the exercise of the Incentive Options
at the discretion of the Board.
(k) Directors’ interests
Mr Kolff has a material personal interest in the outcome of Resolution 3 as the
recipient of the Class B Incentive Options. No other Director has a material personal
interest in the outcome of Resolution 3.
Mr Bowles has a material personal interest in the outcome of Resolution 4 as the
recipient of the Class A Incentive Options. No other Director has a material personal
interest in the outcome of Resolution 4.
(l) Directors’ recommendations
Each Director has a conflict of interest in relation to the Resolution which, if passed,
will authorise the issue of Incentive Options to that Director. Accordingly, no Director
expresses an opinion or makes a recommendation in respect of the Resolution which
involves the issue of Incentive Options to himself and from which he is abstained
from voting.
The recommendation of the Directors and the reasons for that recommendation are
as follows:
(i) each Director (other than the relevant abstaining Director) recommends that
Shareholders vote in favour of Resolutions 3 and 4; and
(ii) each of the Directors making the recommendation to vote in favour of
Resolutions 3 and 4 considers that those Resolutions are in the best interests
of the Company as recognition of the relevant Director’s continued
contribution to the Company's progress to date and to further incentivise their
ongoing performance and commitment to the Company.
(m) Other information
Other than as set out in this Explanatory Statement, there is no further information
that is known to the Company or any of the Directors which Shareholders would
reasonably require in order to decide whether or not it is in the Company’s best
interests to pass Resolutions 3 and 4.
4.3 Listing Rule 10.11
Listing Rule 10.11 provides that a company must not issue equity securities to a “related
party” without the approval of holders of ordinary securities, or to a person whose
relationship with the company or a related party of the company is, in ASX’s opinion, such
that approval should be obtained. Further, Listing Rule 7.2 (Exception 14) states that
approval pursuant to Listing Rule 7.1 is not required if shareholder approval is obtained
under Listing Rule 10.11.
As Directors, Mr Kolff and Mr Bowles are related parties of the Company within the definition
specified in Listing Rule 19.12. Accordingly, Shareholder approval is sought under Listing
Rule 10.11 to permit the issue of the Incentive Options under Resolutions 3 and 4 to Mr
Kolff and Mr Bowles as related parties of the Company.
The issue of the Incentive Options under Resolutions 3 and 4 will not affect the capacity of
the Company to issue securities in the next 12 months under Listing Rule 7.1, as those
Incentive Options (once issued) will be excluded from the calculations under Listing Rule
7.1.
As required by Listing Rule 10.13, the following information is provided in relation to
Resolutions 3 and 4:
(a) Name of the persons
Lennard Kolff van Oosterwijk (and/or his nominee) and Matthew Bowles (and/or his
nominee).
(b) Maximum number of securities to be issued
A total of 13,500,000 Incentive Options as follows:
Recipient Number and Class
Lennard Kolff van Oosterwijk 10,000,000 Class B Incentive Options
Matthew Bowles 3,500,000 Class A Incentive Options
Total 13,500,000 Incentive Options
(c) Date by which the entity will issue the securities
The Incentive Options will be issued as soon as practicable after the General Meeting
and, in any event, no later than 1 month after the General Meeting (or such later date
to the extent permitted by any waiver of the Listing Rules).
(d) Relationship that requires Shareholder approval
Mr Kolff and Mr Bowles are related parties of the Company by virtue of being
directors of the Company.
(e) Issue price of the securities
The Incentive Options will be issued without payment of cash consideration.
(f) Terms of the issue
The terms of the Incentive Options are set out in Annexure B.
(g) Intended use of the funds raised
There will be no funds raised in connection with the issue of the Incentive Options
under Resolutions 3 and 4 as the Incentive Options are to be issued without payment
of cash consideration. The proceeds from a future exercise of the Incentive Options,
however, are intended to be applied towards meeting working capital requirements of
the Company relevant at, or about, the time of the exercise of the Incentive Options
at the discretion of the Board.
5. Resolutions 5 and 6 – Issue of Class A Incentive Options to Company Secretaries
5.1 Background
The Company is seeking Shareholder approval to the issue of a total of 1,500,000 Class A
Incentive Options to Aaron Finlay and Winton Willesee (the joint Company Secretaries) in
accordance with Listing Rule 7.1. The Company proposes to issue the Class A Incentive
Options to Mr Finlay and Mr Willesee as follows:
Recipient Number Expiry date Exercise price
Aaron Finlay 750,000 12 December 2016 $0.015
Winton Willesee 750,000 12 December 2016 $0.015
The Class A Incentive Options under Resolutions 5 and 6 will be issued to the Company
Secretaries in recognition of their continued contribution to the Company’s progress to date
and to further incentivise their ongoing performance and commitment to the Company. The
Directors consider it prudent to remunerate by way of securities so as to preserve the cash
reserves of the Company.
The benefit from the Class A Incentive Options will only be received if the Company’s Share
price exceeds the exercise price of the Options at the time of exercise.
The Company is seeking Shareholder approval to the issue of the Class A Incentive Options
in accordance with Listing Rule 7.1.
5.2 Listing Rule 7.1
Listing Rule 7.1 provides that, subject to certain exceptions, prior approval of shareholders is
required for an issue of securities by a company if those securities, when aggregated with
the securities issued by the company during the previous 12 months (without approval and
which were not subject to an exception), exceed 15% of the number of shares on issue at
the commencement of that 12 month period.
Listing Rule 7.1 provides that where a company approves an issue of securities, the
company’s 15% capacity will be replenished and the company will be able to issue further
securities up to that limit.
Resolutions 5 and 6 seek the approval of the issue of 1,500,000 Class A Incentive Options
for the purpose of satisfying the requirements of Listing Rule 7.1. If Resolutions 5 and 6 are
approved, the Class A Incentive Options will not be included in the Company’s 15%
calculation for the purposes of Listing Rule 7.1.
As required by Listing Rule 7.3, the following information is provided in relation to
Resolutions 5 and 6:
(a) Name of the persons to whom the entity will issue the securities
Aaron Finlay (and/or his nominee) and Winton Willesee (and/or his nominee).
(b) Maximum number of securities the entity is to issue
A total of 1,500,000 Class A Incentive Options as follows:
Recipient Number
Aaron Finlay 750,000
Winton Willesee 750,000
Total 1,500,000
(c) Date by which the entity will issue the securities
The Class A Incentive Options will be issued as soon as practicable after the General
Meeting and, in any event, no later than 3 months after the General Meeting (or such
later date to the extent permitted by any waiver of the Listing Rules).
(d) Issue price of the securities
The Class A Incentive Options will be issued without payment of cash consideration.
(e) Terms of the securities
The terms of the Class A Incentive Options are set out in Annexure B.
(f) Intended use of the funds
There will be no funds raised in connection with the issue of the Class A Incentive
Options under Resolutions 5 and 6 as the Class A Incentive Options are to be issued
without payment of cash consideration. The proceeds from a future exercise of the
Incentive Options, however, are intended to be applied towards meeting working
capital requirements of the Company relevant at, or about, the time of the exercise of
the Incentive Options at the discretion of the Board.
6. Resolution 7 – Issue of Class A Incentive Options to Rockson Coffie
6.1 Background
The Company is seeking Shareholder approval to the issue of 1,500,000 Class A Incentive
Options to Rockson Coffie in accordance with Listing Rule 7.1.
The Class A Incentive Options under Resolution 7 will be issued to Mr Coffie in
consideration of geological consulting services provided by Mr Coffie to the Company to date
and to further incentivise his ongoing performance and commitment to the Company. The
Directors consider it prudent to remunerate by way of securities so as to preserve the cash
reserves of the Company.
The benefit from the Class A Incentive Options will only be received if the Company’s Share
price exceeds the exercise price of the Options at the time of exercise.
The Company is seeking Shareholder approval to the issue of the Class A Incentive Options
in accordance with Listing Rule 7.1.
6.2 Listing Rule 7.1
Listing Rule 7.1 provides that, subject to certain exceptions, prior approval of shareholders is
required for an issue of securities by a company if those securities, when aggregated with
the securities issued by the company during the previous 12 months (without approval and
which were not subject to an exception), exceed 15% of the number of shares on issue at
the commencement of that 12 month period.
Listing Rule 7.1 provides that where a company approves an issue of securities, the
company’s 15% capacity will be replenished and the company will be able to issue further
securities up to that limit.
Resolution 7 seeks the approval of the issue of 1,500,000 Class A Incentive Options for the
purpose of satisfying the requirements of Listing Rule 7.1. If Resolution 7 is approved, the
Class A Incentive Options will not be included in the Company’s 15% calculation for the
purposes of Listing Rule 7.1.
As required by Listing Rule 7.3, the following information is provided in relation to Resolution
7:
(a) Name of the persons to whom the entity will issue the securities
Rockson Coffie (and/or his nominee).
(b) Maximum number of securities the entity is to issue
1,500,000 Class A Incentive Options.
(c) Date by which the entity will issue the securities
The Class A Incentive Options will be issued as soon as practicable after the General
Meeting and, in any event, no later than 3 months after the General Meeting (or such
later date to the extent permitted by any waiver of the Listing Rules).
(d) Issue price of the securities
The Class A Incentive Options will be issued without payment of cash consideration.
(e) Terms of the securities
The terms of the Class A Incentive Options are set out in Annexure B.
(f) Intended use of the funds
There will be no funds raised in connection with the issue of the Class A Incentive
Options under Resolution 7 as the Class A Incentive Options are to be issued without
payment of cash consideration. The proceeds from a future exercise of the Class A
Incentive Options, however, are intended to be applied towards meeting working
capital requirements of the Company relevant at, or about, the time of the exercise of
the Class A Incentive Options at the discretion of the Board.
7. Resolution 8 – Ratification of prior issues of Shares under the Placement
7.1 Background
On 11 October 2013, the Company announced that it had agreed to issue 244,000,000
Shares to existing and new Shareholders under a placement at an issue price of $0.012
each to raise approximately $2.9m (Placement). The Company issued the Shares on 18
October 2013 under its placement capacities in Listing Rules 7.1 and 7.1A.
The Company is seeking Shareholder approval to the ratify the prior issue of Shares under
the Placement in accordance with Listing Rule 7.1.
7.2 Listing Rule 7.4
Listing Rule 7.1 provides that, subject to certain exceptions, prior approval of shareholders is
required for an issue of securities by a company if those securities, when aggregated with
the securities issued by the company during the previous 12 months (without approval and
which were not subject to an exception), exceed 15% of the number of shares on issue at
the commencement of that 12 month period.
Shareholders passed a special resolution under Listing Rule 7.1A at the Company’s annual
general meeting on 31 March 2013 which provides the Company with additional placement
capacity equal to 10% of its issued capital.
Listing Rule 7.4 provides that where a company ratifies a prior issue of securities, the issue
will be treated as having been made with approval for the purpose of Listing Rule 7.1,
thereby replenishing the company’s 15% capacity and enabling it to issue further securities
up to that limit. In addition, prior issues of securities under Listing Rule 7.1A can be ratified
under Listing Rule 7.4 to replenish a company’s additional 10% placement capacity and
enable it to issue further securities up to that limit.
Resolution 8 proposes the ratification of the issue of 244,000,000 Shares under the
Placement for the purpose of satisfying the requirements of Listing Rule 7.4. If Resolution 8
is approved, the Shares will not be included in the Company’s 15% calculation for the
purposes of Listing Rule 7.1 or its 10% calculation for the purposes of Listing Rule 7.1A.
As required by Listing Rule 7.5, the following information is provided in relation to Resolution
8:
(a) Number of securities issued
244,000,000 Shares.
(a) Price at which the securities were issued
$0.012 each.
(b) Terms of the securities
The Shares issued under the Placement rank equally in all respects with other
Shares on issue.
(c) Name of the persons to whom the entity will issue the securities or the basis
on which those persons were determined
The Shares were issued to Exempt Investors who were clients of Canaccord Genuity
(Australia) Limited.
(d) Intended use of the funds raised
The Company intends to use the funds raised under the Placement to advance its
Mofe Creek iron ore project through continued drilling, metallurgical testwork and the
initiation of a scoping study.
8. Resolution 9 – Issue of Shares to Wayne Richards
8.1 Background
In conjunction with its announcement of the Placement on 11 October 2013, the Company
advised that its Executive Chairman, Wayne Richards, wishes to subscribe for 5,000,000
Shares at an issue price of $0.012 each to raise a further $60,000 for the Company. The
issue of Shares to Mr Richards would be on the same terms as the issue of Shares to
participants under the Placement.
In addition to raising additional funds, the Company believes that the issue of Shares to Mr
Richards will benefit the Company by further aligning the interests of Mr Richards with those
of Shareholders.
The Company is seeking Shareholder approval to the issue of the Shares in accordance with
section 208 of the Corporations Act and Listing Rule 10.11.
8.2 Section 208 of the Corporations Act
Section 208 of the Corporations Act states that a public company cannot give a “financial
benefit” (including an issue of shares and options) to a “related party” of the Company unless
one of the exceptions set out in section 210 to 216 of the Corporations Act apply, or the
holders of ordinary securities have approved the giving of the financial benefit to the related
party in a general meeting.
As a Director, Mr Richards is a related party of the Company within the meaning specified
under section 228 of the Corporations Act. Further, the issue of the Shares constitutes a
financial benefit within the meaning of section 229 of the Corporations Act.
The Directors consider that the issue of the Shares to Mr Richards under Resolution 9 falls
within the exception to the requirement for Shareholder approval in section 210 of the
Corporations Act as they consider that, given the issue is on the same terms as the
Placement to non-related parties, the issue of the Shares is reasonable due to the parties
dealing at arm’s length. However, the Company has nevertheless decided, out of an
abundance of caution, to seek Shareholder approval under section 208 of the Corporations
Act to permit the issue of the Shares under Resolution 9 to Mr Richards as a related party of
the Company.
As required by section 219 of the Corporations Act, the following information is provided in
relation to Resolution 9:
(a) Related party to whom the financial benefit is to be given
Wayne Richards (and/or his nominee).
(b) Nature of the financial benefit
The issue of 5,000,000 Shares to Mr Richards at an issue price of $0.012 each.
(c) Valuation of the financial benefits
The Shares will have a value of $60,000 based on the issue price of the Shares
(being $0.012 each) and the amount to be paid by Mr Richards. However, the
Shares will have a value of $140,000 based on the market price of Shares on the
ASX at the close of trading on 24 October 2013 (being $0.028 each).
(d) Current remuneration and security interests
Details of Mr Richards’ current annualised pro-rata remuneration, as well as his
security interests (both direct and indirect) in the Company as at the date of the
Notice, are outlined below:
23
Director Salary/fees Security interests
Wayne Richards $310,000 per anunum Nil1
(including superannuation)
Notes:
1. If Resolutions 1 and 2 are passed then Mr Richards will be issued 10,000,000
Class A Performance Options, 10,000,000 Class B Performance Options,
10,000,000 Class C Performance Options and 25,000,000 Class A Incentive
Options.
(e) Dilution
If Shares are issued to Mr Richards then the shareholding of existing Shareholders
would, based on the current issued capital of the Company, be diluted by
approximately 0.41%.
(f) Trading history
As at the date of the Notice, the Company has 1,220,629,043 Shares on issue. The
highest and lowest market sale price of the Shares in the Company during the twelve
months immediately preceding the date of the Notice was $0.033 on 22 October
2013 and $0.006 on 8 May 2013. The closing market sale price of the Company’s
Shares on the ASX on 24 October 2013 was $0.028
(g) Terms of the securities
The Shares to be issued to Mr Richards will rank equally in all respects with other
Shares on issue.
(h) Opportunity costs to the Company
The Directors do not consider that there are any opportunity costs to the Company or
benefits foregone by the Company in issuing the Shares to Mr Richards.
(i) Intended use of funds raised
The Company intends to use the funds raised from the issue of Shares to Mr
Richards to advance its Mofe Creek iron ore project through continued drilling,
metallurgical testwork and the initiation of a scoping study.
(j) Directors’ interests
Mr Richards has a material personal interest in the outcome of Resolution 9 as the
recipient of the Shares. No other Director has a material personal interest in the
outcome of Resolution 9.
(k) Directors’ recommendations
Mr Richards expresses no opinion and makes no recommendation in respect of the
issue of the Shares to him as he has a material personal interest in the outcome of
Resolution 9.
Each of the other Directors recommends that Shareholders vote in favour of the issue
of the Shares to Mr Richards for the reasons set out in the Explanatory Statement
and on the basis that, in their opinion, the proposed issue of Shares:
24
(i) will raise an additional $60,000 for the Company which can be used to
advance its Mofe Creek iron ore project;
(ii) is fair and reasonable in the circumstances as it is on the same terms as the
issue of Shares to non-related parties under the Placement; and
(iii) will further align the interests of Mr Richards with those of Shareholders.
(l) Other information
Other than as set out in this Explanatory Statement, there is no further information
that is known to the Company or any of the Directors which Shareholders would
reasonably require in order to decide whether or not it is in the Company’s best
interests to pass Resolution 9.
8.3 Listing Rule 10.11
Listing Rule 10.11 provides that a company must not issue equity securities to a “related
party” without the approval of holders of ordinary securities, or to a person whose
relationship with the company or a related party of the company is, in ASX’s opinion, such
that approval should be obtained. Further, Listing Rule 7.2 (Exception 14) states that
approval pursuant to Listing Rule 7.1 is not required if shareholder approval is obtained
under Listing Rule 10.11.
As a Director, Mr Richards is a related party of the Company within the definition specified in
Listing Rule 19.12. Accordingly, Shareholder approval is sought under Listing Rule 10.11 to
permit the issue of the Shares under Resolution 9 to Mr Richards as a related party of the
Company.
The issue of the Shares under Resolution 9 will not affect the capacity of the Company to
issue securities in the next 12 months under Listing Rule 7.1, as those securities (once
issued) will be excluded from the calculations under Listing Rule 7.1.
As required by Listing Rule 10.13, the following information is provided in relation to
Resolution 9:
(a) Name of the person
Wayne Richards (and/or his nominee).
(b) Maximum number of securities to be issued
5,000,000 Shares.
(c) Date by which the entity will issue the securities
The Shares will be issued upon receipt of the subscription amount of $60,000 from
Mr Richards and, in any event, no later than 1 month after the General Meeting (or
such later date to the extent permitted by any waiver of the Listing Rules).
(d) Relationship that requires Shareholder approval
Mr Richards is a related party of the Company by virtue of being a Director of the
Company.
25
(e) Issue price of the securities
The issue price of the Shares will be $0.012 each.
(f) Terms of the issue
The Shares will be issued to Mr Richards upon receipt of the subscription amount of
$60,000. The Shares to be issued to Mr Richards will rank equally in all respects
with other Shares on issue.
(g) Intended use of the funds raised
The Company intends to use the funds raised from the issue of Shares to Mr
Richards to advance its Mofe Creek iron ore project through continued drilling,
metallurgical testwork and the initiation of a scoping study.
9. Resolution 10 – Issue of Placement Options to Canaccord Genuity (Australia) Limited
9.1 Background
As announced on 11 October 2013, Canaccord Genuity (Australia) Limited (Canaccord)
acted as lead manager to the Placement. Canaccord’s role as lead manager was governed
by a lead manager mandate (Lead Manager Mandate) under which the Company agreed to
pay to Canaccord upon completion of the Placement:
? a cash fee of 6% (plus GST) of the amount raised under the Placement; and
? an Option fee of 10,000,000 Options with an exercise price at a 50% premium to the
issue price under the Placement and an expiry date of 3 years from issue.
Accordingly, the Company is seeking Shareholder approval to the issue of the Placement
Options in accordance with Listing Rule 7.1.
9.2 Listing Rule 7.1
Listing Rule 7.1 provides that, subject to certain exceptions, prior approval of shareholders is
required for an issue of securities by a company if those securities, when aggregated with
the securities issued by the company during the previous 12 months (without approval and
which were not subject to an exception), exceed 15% of the number of shares on issue at
the commencement of that 12 month period.
Listing Rule 7.1 provides that where a company approves an issue of securities, the
company’s 15% capacity will be replenished and the company will be able to issue further
securities up to that limit.
Resolutions 10 seeks the approval of the issue of 10,000,000 Placement Options for the
purpose of satisfying the requirements of Listing Rule 7.1. If Resolution 10 is approved, the
Placement Options will not be included in the Company’s 15% calculation for the purposes
of Listing Rule 7.1.
As required by Listing Rule 7.3, the following information is provided in relation to Resolution
10:
(a) Name of the person to whom the entity will issue the securities
Canaccord Genuity (Australia) Limited (and/or its nominee).
(b) Maximum number of securities the entity is to issue
10,000,000 Placement Options.
(c) Date by which the entity will issue the securities
The Placement Options will be issued as soon as practicable after the General
Meeting and, in any event, no later than 3 months after the General Meeting (or such
later date to the extent permitted by any waiver of the Listing Rules).
(d) Issue price of the securities
The Placement Options will be issued without payment of cash consideration as they
are being issued as part of the fee payable to Canaccord under the Lead Manager
Mandate.
(e) Terms of the securities
The terms of the Placement Options are set out in Annexure D.
(f) Intended use of the funds
There will be no funds raised in connection with the issue of the Placement Options
under Resolution 10 as the Placement Options are to be issued without payment of
cash consideration in accordance with the Lead Manager Mandate. The proceeds
from a future exercise of the Placement Options, however, are intended to be applied
towards meeting working capital requirements of the Company relevant at, or about,
the time of the exercise of the Placement Options at the discretion of the Board.
Glossary
In this Notice and Explanatory Statement, the following terms have the following meanings:
Annexure an annexure to the Explanatory Statement.
ASIC the Australian Securities and Investments Commission.
ASX ASX Limited ACN 008 624 691 or the Australian Securities
Exchange, as the context requires.
Board the board of Directors.
Chairman the chair of the General Meeting.
Class A Performance Option an Option on the terms set out in Annexure A.
Class B Performance Option an Option on the terms set out in Annexure A.
Class C Performance Option an Option on the terms set out in Annexure A.
Class A Incentive Option an Option on the terms set out in Annexure B.
Class B Incentive Option an Option on the terms set out in Annexure B
Closely Related Party a closely related party of a member of Key Management
Personnel as defined in the Corporations Act, being:
(a) a spouse or child of the member;
(b) a child of that member’s spouse;
(c) a dependant of that member or of that member’s
spouse;
(d) anyone else who is one of that member’s family and
may be expected to influence that member, or be
influenced by that member, in that member’s
dealings with the Company;
(e) a company that is controlled by that member; or
(f) any other person prescribed by the regulations.
Company Secretary a company secretary of the Company.
Constitution the constitution of the Company.
Company Tawana Resources NL ACN 085 166 721.
Corporations Act Corporations Act 2001 (Cth).
Director a director of the Company.
Exempt Investor an investor to whom securities may be offered by the
Company without disclosure in accordance with section
708 of the Corporations Act (excluding section 708(1)).
Explanatory Statement the explanatory statement incorporated in the Notice.
General Meeting the general meeting convened by the Notice.
Incentive Option an Option on the terms set out in Annexure B.
Key Management Personnel the key management personnel of the Company as defined
in the Corporations Act and Australian Accounting
Standards Board accounting standard 124, being those
persons having authority and responsibility for planning,
directing and controlling the activities of the Company,
directly or indirectly, including any Director (whether
executive or otherwise).
Listing Rules the ASX Listing Rules published and distributed by ASX.
Notice the notice of general meeting incorporating the Explanatory
Statement.
Performance Option an Option on the terms set out in Annexure A.
Placement has the meaning given in Section 7.1.
Placement Option an Option on the terms set out in Annexure D.
Proxy Form the proxy form attached to the Notice.
Option an option to acquire a Share.
Optionholder a holder of an Option.
Resolution a resolution contained in the Notice.
Section a section contained in the Explanatory Statement.
Share a fully paid ordinary share in the capital of the Company.
Shareholder a holder of a Share.
VWAP the volume weighted average price of Shares.
WST Western Standard Time, being the time in Perth, Western
Australia.
Annexure A – Performance Options
(a) (Performance Options) Each Performance Option is an option to acquire an ordinary share
in the capital of Tawana Resources NL (Company).
(b) (Exercise Price) The exercise price of each Performance Option is $0.0001 however the
Performance Options are not exercisable until they have vested.
(c) (General meetings) The Performance Options shall not confer on the holder (Holder) the
right to receive notices of general meetings and financial reports and accounts of the
Company that are circulated to holders of fully paid ordinary shares in the capital of the
Company (Shareholders). Holders have the right to attend general meetings of
Shareholders.
(d) (No voting rights) The Performance Options do not entitle the Holder to vote on any
resolutions proposed at a general meeting of Shareholders.
(e) (No dividend rights) The Performance Options do not entitle the Holder to any dividends.
(f) (Rights on winding up) The Performance Options will not participate in the surplus profits
or assets of the Company upon winding up of the Company.
(g) (Not transferable) The Performance Options are not transferable.
(h) (Reorganisation of capital) If at any time the issued capital of the Company is
reconstructed, all rights of a Holder will be changed to the extent necessary to comply with
the applicable Listing Rules at the time of reorganisation.
(i) (Application to ASX) The Performance Options will not be quoted on ASX. However, upon
conversion of the Performance Options into fully paid ordinary shares (Shares), the
Company must within 10 Business Days after the conversion, apply for the official quotation
of the Shares arising from the conversion on ASX.
(j) (Participation in entitlements and bonus issues) Holders of Performance Options will not
be entitled to participate in new issues of capital offered to Shareholders such as bonus
issues and entitlement issues.
(k) (No other rights) The Performance Options give the Holders no rights other than those
expressly provided by these terms and those provided at law where such rights at law
cannot be excluded by these terms.
(l) (Vesting on achievement of milestones)
Vesting of the following types of Performance Options is subject to the following milestones:
(i) Class A Performance Options
The Class A Performance Options will vest upon achievement of all of the following
milestones (the Class A Performance Options Milestone) on or before 30 August
2014:
(A) Completion of a drilling and metallurgy program to develop a JORC compliant
resource (inferred and indicated) for Mofe Creek, complete with bulk samples
for metallurgical testing and flowsheet/plant design criteria.
(B) Completion of a capital raising of sufficient funds via equity placements and/or
strategic investment/JV partnering arrangements to conclude the funding of
the Mofe Creek scoping study and ensure sufficient funds are available for
the continuance of the Project into a pre-feasibility study mode.
(C) Completion of a scoping study for the Mofe Creek Project.
(D) Commencement of necessary mining, logistics and environmental/community
applications/agreements, to assist in the future development of the Mofe
Creek Project.
(E) Structuring of the Board and relevant committees to ensure ASX compliance
and project execution capability.
(ii) Class B Performance Options
The Class B Performance Options will vest upon achievement of all of the following
milestones (the Class B Performance Options Milestone) on or before 30 August
2015:
(A) Completion of a pre-feasibility study for Mofe Creek.
(B) Finalisation of the preferred Mofe Creek logistics business solution, including,
but not limited to, ore trucking solutions and/or rail studies, port storage and
loading facilities, trans-shipment or direct shipping solutions, and marketing.
(C) Commencement of the mining lease application process and Environmental
Protection Authority (EPA) approvals for Mofe Creek Project development.
(D) Finalisation of the processing plant design criteria, including flowsheet, PFD's
and equipment design and selection.
(E) Completion of a strategic business plan outlining the plant throughput
capacity, Project ramp-up, LOM plans and duration, along with Project
financials (NPV, IRR, DCF, CAPEX, OPEX etc).
(F) Development of a financial model reflective of the preferred Project funding
methodologies to be deployed for the feasibility and definitive feasibility
studies.
(G) Undertake a strategic review and/or development plan on the development of
a potential start-up Project for any DSO ore present (i.e. found) at Mofe
Creek.
(H) Completion of the environmental studies required to support the PFS and
EPA applications.
(I) Development of an indicated mine plan, mining schedule and mining
methodology strategy with an upgrade in resource categorisation to indicated
and measured.
(J) Determine, target and/or secure funding for the PFS and FS depending upon
the status of the Mofe Creek Project and the potential early start-up of a DSO
operation.
(iii) Class C Performance Options
The Class C Performance Options will vest upon achievement of all of the following
milestones (the Class C Performance Options Milestone) on or before 30 August
2016:
(A) Selection and management of relevant engineering firms and logistics groups
to design and structure the appropriate contractual and operational
agreements to support the development of a definitive feasibility study.
(B) Completion of a feasibility study and commencement of a DFS and/or BFS
(as defined by the Board).
(C) Completion of all metallurgical testwork, finalisation of a start-up mine
plan/schedule and acknowledgement of all relevant mining approvals.
(D) Receipt of all licences required to mine, build and operate the mine and plant.
(E) Approval of necessary licences, land tenure and road access/operating
agreements to transport ore from the mine to the nominated port/coastal
location.
(F) Development of the contractual arrangements (commercial, financial, legal
and operational) for the trans-shipment of ore via the preferred coastal
destination.
(G) Approval of the Mofe Creek Mining Lease, EPA approval and relevant
stakeholder (local village/local and state government) agreements to support
the development of a DFS/BFS.
(H) Securement of adequate and optimal funding to progress the FS and the
refinement of the financial model to support BFS/Project
Development financing discussions.
(I) Structure, recruit and manage the required Project personnel.
(m) (Lapse) If the relevant Milestone is not achieved by the required date or, subject to clause
(p), if the Holder ceases to be engaged by the Company before the relevant Milestone is
achieved, the relevant Performance Options will lapse.
(n) (Exercise procedure) Subject to the Performance Options having vested, the Holder may
exercise the Performance Options at any time on or before the expiry date (being the date
that is 1 day after the date that the relevant Milestone must be achieved) by providing to the
Company an exercise notice with the relevant exercise monies. The Company will issue the
Holder with a new holding statement for the Shares within 10 Business Days following
exercise.
(o) (Ranking upon exercise) The Shares into which the Performance Options may convert will
rank pari passu in all respects with existing Shares.
(p) (Vesting on Change of Control) All unvested Performance Options will immediately vest
and be exercisable if any of the following change of control events occur prior to the required
date for achievement of the relevant Milestone and prior to the cessation of the Holder’s
engagement with the Company:
(i) a party acquires a relevant interest in more than 50% of the Shares in the Company
under a scheme of arrangement between the Company and its creditors or members
or any class thereof pursuant to section 411 of the Corporations Act;
(ii) a party acquires a relevant interest in more than 50% of the Company’s ordinary
Shares pursuant to a takeover bid; or
(iii) a person or a group of associated persons becomes entitled to sufficient Shares to
give it or them the ability, in general meeting, to replace all or a majority of the Board
and such changes to the Board are implemented.
All Performance Options vesting under this clause will lapse unless that are exercised within
7 days of vestment.
Annexure B – Incentive Options
1. General
1.1 No monies will be payable for the issue of the Incentive Options.
1.2 The Incentive Options will expire on 12 December 2016 (Expiry Date).
1.3 Each Incentive Option shall carry the right, subject to any Shareholder approval
required under the Corporations Act or the Listing Rules, to subscribe for one fully
paid ordinary share in the capital of the Company (Share).
1.4 Incentive Options may be exercised in whole or in part in parcels. An exercise of only
some Incentive Options shall not affect the rights of the party holding the Option
(Incentive Optionholder) to the balance of the Incentive Options held by the
Incentive Optionholder.
1.5 The exercise price of each CIass A Incentive Option is $0.015 and the exercise price
of each Class B Incentive Option is 135% of the 30 day VWAP of Shares traded on
the ASX as at the date of the Shareholders meeting at which the grant of Incentive
Options is approved (Exercise Price).
1.6 The Exercise Price for the Incentive Options shall be payable in full on exercise of
those Incentive Options.
1.7 Incentive Options are only exercisable by the delivery to the registered office of the
Company of a notice in writing. The notice must specify the number of Incentive
Options being exercised and must be accompanied by:
(a) the option certificate for those Incentive Options for cancellation by the
Company; and
(b) payment of the Exercise Price for each Share to be issued on exercise of the
Incentive Options specified in the notice.
The notice is only effective (and only becomes effective) when the Company has
received value for the full amount of the Exercise Price (for example, if the Exercise
Price is paid by cheque, by clearance of that cheque) by the Expiry Date.
1.8 The Company shall allot the resultant Shares and deliver the holding statements
within 10 Business Days of the exercise of the Incentive Options.
1.9 Incentive Options may be exercised into Shares to be held in the name of the
Incentive Optionholder's nominee.
1.10 The Incentive Options are transferable with Board approval. It is not intended that an
application will be made to ASX for the quotation of the Incentive Options.
1.11 Shares allotted pursuant to an exercise of Incentive Options shall rank, from the date
of allotment, equally with existing Shares of the Company in all respects.
1.12 The Company shall, in accordance with the Listing Rules, make application to have
Shares allotted pursuant to an exercise of Incentive Options listed for official
quotation on the ASX, if the Company is listed on the ASX at the time.
1.13 The Incentive Optionholder is not entitled to participate in any new issue of securities
to existing holders of Shares in the Company unless the Incentive Optionholder
exercises the Incentive Options before the record date for the determination of
entitlements to the new issue of securities and participates as a result of being a
holder of Shares. The Company must give the Incentive Optionholder, in accordance
with the Listing Rules, notice of any new issue of securities before the record date for
determining entitlements to the new issue.
1.14 If there is a bonus share issue (Bonus Issue) to the holders of Shares, the number of
Shares over which an Incentive Option is exercisable will be increased by the number
of Shares which the Incentive Optionholder would have received if the Incentive
Option had been exercised before the record date for the Bonus Issue (Bonus
Shares). The Bonus Shares must be paid up by the Company out of the profits or
reserves (as the case may be) in the same manner as was applied in the Bonus
Issue and upon issue rank pari passu in all respects with the other shares of that
class on issue at the date of issue of the Bonus Shares.
1.15 If there is a pro rata issue (other than a Bonus Issue) to the holders of Shares during
the currency, and prior to the exercise, of any Incentive Options, the Exercise Price of
an Incentive Option and the number of Shares over which the Incentive Options are
exercisable will not be adjusted.
1.16 If, prior to the expiry of any Incentive Options, there is a reorganisation of the issued
capital of the Company, then the rights of the Incentive Optionholder (including the
number of Incentive Options to which each Incentive Optionholder is entitled and the
Exercise Price) is changed to the extent necessary to comply with the Listing Rules
applying to a reorganisation of capital at the time of the reorganisation.
1.17 The Incentive Options will not give any right to participate in dividends until Shares
are allotted pursuant to the exercise of the relevant Incentive Options.
2. Lapse of Incentive Options
2.1 Incentive Options not validly exercised on or before the Expiry Date will automatically
lapse.
2.2 If at any time prior to the Expiry Date an Incentive Optionholder dies, the deceased
Incentive Optionholder's legal personal representative may:
(a) elect to be registered as the new holder of the deceased Incentive
Optionholder's Incentive Options;
(b) whether or not he or she becomes so registered, exercise those Incentive
Options in accordance with and subject to these terms as if he were the
Incentive Optionholder of them; and
(c) if the deceased Incentive Optionholder had already given the Company a
notice of exercise of his or her Incentive Options, pay the Exercise Price in
respect of those Incentive Options.
2.3 Subject to clause 2.4, and notwithstanding that the Board has discretion to waive this
accelerated lapsing provision, in the event that the Incentive Optionholder resigns as
a director of the Company, or is removed from the Board of the Company for any
reason, the Incentive Options shall lapse 28 days following the resignation or
removal.
2.4 Clause 2.3 does not apply if any of the following change of control events occur
subsequent to the grant of the Options but prior to the cessation of the Incentive
Optionholder’s engagement with the Company:
(a) a party acquires a relevant interest in more than 50% of the Shares in the
Company under a scheme of arrangement between the Company and its
creditors or members or any class thereof pursuant to section 411 of the
Corporations Act;
(b) a party acquires a relevant interest in more than 50% of the Company’s
ordinary Shares pursuant to a takeover bid; or
(c) a person or a group of associated persons becomes entitled to sufficient
Shares to give it or them the ability, in general meeting, to replace all or a
majority of the Board and such changes to the Board are implemented.
Should any of the above change of control events occur subsequent to the grant of
the Options but prior to the cessation of the Incentive Optionholder’s engagement
with the Company, the Options will not lapse within 28 days of the date of cessation
of the Incentive Optionholder’s engagement with the Company and the respective
Expiry Date referred to in clause 1.3 will apply.
Annexure C – Details of Managing Director’s remuneration
In accordance with ASX guidelines requiring listed entities to disclose the relevant terms of the
Managing Director’s remuneration, Tawana reports the following relevant terms of its
employment agreement with Lennard Kolff van Oosterwijk.
Duration of Contract Ongoing until terminated by either party.
Services Those services usually required of a Managing Director of a
company the size and nature of Tawana.
Remuneration 1. Executive salary of $229,425 per annum inclusive of
superannuation; and
2. Director’s fee of $40,000 per annum inclusive of
superannuation.
Performance Related 1. A$25,000 pre-tax cash bonus (inclusive of
superannuation) following the completion of a successful
capital raising during which the Company raises a
minimum of $2.5 million;
2. A$25,000 pre-tax cash bonus (inclusive of superannuation)
upon the announcement of a JORC compliant resource at
the Mofe Creek Iron Ore Project; and
3. Upon the completion of a Scoping Study on the Mofe Creek
Iron Ore Project, a performance bonus of 10,000,000
options to acquire ordinary fully paid shares in the
Company (or other agreed instruments subject to taxation
advice), with an exercise price equal to 135% of the 30 Day
VWAP of shares traded on ASX on the date of the
shareholders meeting at which the grant is approved, with
an expiry date no less than three years from the date of
issue.
Termination The agreement provides that the Company may terminate
the employment of Lennard Kolff van Oosterwijk by giving 6
months’ notice or payment in lieu of such notice.
Similarly, in the event that Tawana is the subject of a
successful takeover and where Len Kolff is not offered
ongoing employment on terms and conditions no worse than
his existing employment agreement, Len Kolff will be
entitled to 6 months’ notice or payment in lieu of such
notice.
Len Kolff may terminate his employment with the Company
by giving 3 months’ notice.
Annexure D – Placement Options
The terms and conditions of the Placement Options are as follows:
(a) The Placement Options will be issued for nil consideration.
(b) Each Placement Option entitles the holder (Optionholder) to subscribe for and be issued 1
fully paid ordinary share in the capital of the Company.
(c) The Placement Options are exercisable at $0.018 each (Exercise Price).
(d) The Placement Options will expire on 12 December 2016 (Expiry Date).
(e) Subject to clause (f), the Placement Options are exercisable at any time on or prior to the
Expiry Date by notice in writing to the Company accompanied by payment of the Exercise
Price multiplied by the number of Placement Options being exercised.
(f) The issue of Shares upon the conversion of Placement Options will be subject to the
Company obtaining any necessary shareholder approval for the purposes of item 7 of
section 611 of the Corporations Act.
(g) The Options may only be transferred with the prior written consent of the Board.
(h) No application to ASX will be made for quotation of the Options.
(i) All Shares issued upon exercise of the Options will rank equally in all respects with the
Company’s then existing fully paid ordinary shares. The Company will apply to ASX for
quotation of all Shares issued upon exercise of the Options.
(j) There are no participating rights or entitlements inherent in the Options and Optionholders
will not be entitled to participate in new issues of capital offered to Shareholders during the
term of the Options. However, if from time to time during the term of the Options the
Company proposes to make an issue of new Shares to Shareholders, the Company will
notify each Optionholder at least 6 Business Days before the record date for the proposed
issue of Shares (or by any other time provided that the Company complies with the ASX
Listing Rules). This will give Optionholders the opportunity to exercise their Options prior to
the date for determining entitlements to participate in the proposed issue of Shares to
Shareholders.
(k) If from time to time during the term of the Options the Company makes an issue of Shares to
Shareholders by way of capitalisation of profits or reserves (Bonus Issue) then, upon
exercise of their Options, Optionholders will be entitled to have issued to them (in addition to
the Shares which would otherwise be issued to them upon such exercise) the number of
Shares which would have been issued to them under that Bonus Issue (Bonus Shares) if,
on the record date for the Bonus Issue, they had been registered as the holder of the
number of Shares of which they would have been registered as holder if, immediately prior to
that date, they had exercised their Options and the Shares the subject of such exercise had
been issued to them. The Bonus Shares will be paid up by the Company out of profits or
reserves (as the case may be) in the same manner as was applied in relation to the Bonus
Issue and upon issue will rank equally in all respects with the Company’s then existing fully
paid ordinary shares.
(l) There is no right to a change in the Exercise Price or to the number of Shares over which the
Options are exercisable in the event of a new issue of capital (other than for a Bonus Issue
referred to in clause (k)) during the term of the Options.
(m) In the event of any reorganisation of the issued capital of the company during the term of the
Options, the rights of an Optionholder will be changed to the extent necessary to comply with
the Listing Rules.
7 November 2013
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
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