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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
JSE ISIN: AU0000TAWDA9
Share code on the Australian Securities Exchange Limited: TAW
ASX ISIN: AU000000TAW7
(“the Company” or “Tawana”)
NOTICE OF MEETING
PLEASE REFER TO TAWANA’S WEBSITE FOR THE INDEPENDENT EXPERT REPORT.
Tawana Resources NL (“Tawana” or the “Company”) announces that the Notice of
Meeting of Shareholders to approve the acquisition of Lithco No.2 Pty Ltd, which has
earn in rights to the Bald Hill Mine has been despatched.
Shareholders should carefully consider the Independent Expert’s Report prepared for the
purpose of the Shareholder approval required under ASX Listing Rule 10.1 (Refer to
Resolutions 1 and 2). The Independent Expert’s Report comments on the fairness and
reasonableness of the transactions the subject of these Resolutions to the non-associated
Shareholders. The Independent Expert has determined the Acquisition is fair and
reasonable to the non-associated Shareholders.
For and on behalf of the Board
Michael Naylor
Director and Company Secretary
23 November 2016
Sponsor PricewaterhouseCoopers Corporate Finance (Pty) Ltd
NOTICE OF GENERAL MEETING
TIME: 10.00am (WST)
DATE: 23 December 2016
PLACE: 288 Churchill Avenue, Subiaco, Western Australia
This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they
should vote, they should seek advice from their professional advisers prior to voting.
Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the
Company Secretary on +61 8 9489 2600.
CONTENTS
Business of the Meeting (setting out the proposed Resolutions) 3
Explanatory Statement (explaining the proposed Resolutions) 6
Glossary 19
Schedule 1 – Independent Expert’s Report Attached
Proxy Form Attached
IMPORTANT INFORMATIO N
Time and place of Meeting
Notice is given that the Meeting will be held at 10.00am (WST) on 23 December 2016 at 288
Churchill Avenue, Subiaco, Western Australia.
Your vote is important
The business of the Meeting affects your shareholding and your vote is important.
Voting eligibility
The Directors have determined pursuant to Regulation 7.11.37 of the Corporations
Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are
registered Shareholders at 10.00am (WST) on 21 December 2016.
Voting in person
To vote in person, attend the Meeting at the time, date and place set out above.
Voting by proxy
To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time
and in accordance with the instructions set out on the Proxy Form.
In accordance with section 249L of the Corporations Act, Shareholders are advised that:
- each Shareholder has a right to appoint a proxy;
- the proxy need not be a Shareholder of the Company; and
- a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may
specify the proportion or number of votes each proxy is appointed to exercise. If the
member appoints 2 proxies and the appointment does not specify the proportion or
number of the member’s votes, then in accordance with section 249X(3) of the
Corporations Act, each proxy may exercise one-half of the votes.
Shareholders and their proxies should be aware that changes to the Corporations Act made
in 2011 mean that:
- if proxy holders vote, they must cast all directed proxies as directed; and
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- any directed proxies which are not voted will automatically default to the Chair, who
must vote the proxies as directed.
Further details on these changes are set out below.
Proxy vote if appointment specifies way to vote
Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may
specify the way the proxy is to vote on a particular resolution and, if it does:
- the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote
that way (ie as directed); and
- if the proxy has 2 or more appointments that specify different ways to vote on the
resolution, the proxy must not vote on a show of hands; and
- if the proxy is the chair of the meeting at which the resolution is voted on, the proxy must
vote on a poll, and must vote that way (ie as directed); and
- if the proxy is not the chair, the proxy need not vote on the poll, but if the proxy does so,
the proxy must vote that way (ie as directed).
Transfer of non-chair proxy to chair in certain circumstances
Section 250BC of the Corporations Act provides that, if:
- an appointment of a proxy specifies the way the proxy is to vote on a particular resolution
at a meeting of the Company's members; and
- the appointed proxy is not the chair of the meeting; and
- at the meeting, a poll is duly demanded on the resolution; and
- either of the following applies:
- the proxy is not recorded as attending the meeting; or
- the proxy does not vote on the resolution,
the chair of the meeting is taken, before voting on the resolution closes, to have been
appointed as the proxy for the purposes of voting on the resolution at the meeting.
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BUSINESS OF THE MEETING
AGENDA
1. RESOLUTION 1 – THE ACQUISITION OF LITHCO NO. 2 PTY LTD
To consider and, if thought fit, to pass, with or without amendment, the following
resolution as an ordinary resolution:
“That, subject to the passing of Resolution 2, for the purposes of ASX Listing
Rules 7.1, 10.1 and 11.1.2 and for all other purposes, approval is given for the
Company to issue up to 39,540,000 Shares in consideration for the acquisition of
Lithco No. 2 Pty Ltd on the terms and conditions set out in the Explanatory
Statement.”
Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person
who may participate in the proposed issue and a person who might obtain a benefit, except
a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed
and a party to the transaction and any associates of those persons. However, the Company
need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to
vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing
the meeting as proxy for a person who is entitled to vote, in accordance with a direction on
the Proxy Form to vote as the proxy decides.
2. RESOLUTION 2 – THE ACQUISITION OF LITHCO NO. 2 PTY LTD – RELATED PARTY
To consider and, if thought fit, to pass, with or without amendment, the following
resolution as an ordinary resolution:
“That, subject to the passing of Resolution 1, for the purposes of ASX Listing
Rules 10.1, 10.11 and 11.1.2 and for all other purposes, approval is given for the
Company to issue up to 10,460,000 Shares in consideration for the acquisition of
Lithco No. 2 Pty Ltd on the terms and conditions set out in the Explanatory
Statement.”
Voting Exclusion: The Company will disregard any votes cast on this Resolution by a party to
the transaction, Mr Mark Calderwood (or his nominee) and any person who may participate
in the proposed issue and a person who might obtain a benefit, except a benefit solely in the
capacity of a holder of ordinary securities, if the Resolution is passed and a party to the
transaction and any associates of those persons. However, the Company need not disregard
a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance
with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy
for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote
as the proxy decides.
Resolutions 1 and 2
Independent Expert’s Report: Shareholders should carefully consider the Independent
Expert’s Report prepared for the purpose of the Shareholder approval required under ASX
Listing Rule 10.1. The Independent Expert’s Report comments on the fairness and
reasonableness of the transactions the subject of this Resolution to the non-associated
Shareholders. The Independent Expert has determined the Acquisition is fair and reasonable
to the non-associated Shareholders. A copy of the Independent Expert’s Report is available
on the Company’s website (http://www.tawana.com.au/). If requested by a Shareholder, the
Company will send to the Shareholder a hard copy of the Independent Expert’s Report at no
cost.
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3. RESOLUTION 3 – RATIFICATION OF PRIOR ISSUE OF SHARES – TRANCHE 1 OF CAPITAL
RAISING
To consider and, if thought fit, to pass, with or without amendment, the following
resolution as an ordinary resolution:
“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes,
Shareholders ratify the issue of 29,628,825 Shares on the terms and conditions
set out in the Explanatory Statement.”
Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person
who participated in the issue and any associates of those persons. However, the Company
need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to
vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing
the meeting as proxy for a person who is entitled to vote, in accordance with a direction on
the Proxy Form to vote as the proxy decides.
4. RESOLUTION 4 – ISSUE OF SHARES – TRANCHE 2 OF CAPITAL RAISING
To consider and, if thought fit, to pass, with or without amendment, the following
resolution as an ordinary resolution:
“That, for the purposes of ASX Listing Rule 7.1 and for all other purposes,
approval is given for the Company to issue up to 30,371,175 Shares on the terms
and conditions set out in the Explanatory Statement.”
Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person
who may participate in the proposed issue and a person who might obtain a benefit, except
a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed
and any associates of those persons. However, the Company need not disregard a vote if it is
cast by a person as a proxy for a person who is entitled to vote, in accordance with the
directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a
person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as
the proxy decides.
5. RESOLUTION 5 – ISSUE OF SHARES IN CONSIDERATION FOR MILESTONE PAYMENTS FOR
THE UIS TAILINGS PROJECT
To consider and, if thought fit, to pass, with or without amendment, the following
resolution as an ordinary resolution:
“That, for the purposes of ASX Listing Rule 7.1, and for all other purposes,
approval is given for the Company to issue up to 10,000,000 Shares on the
terms and conditions set out in the Explanatory Statement.”
Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person
who may participate in the proposed issue and a person who might obtain a benefit, except
a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed
and any associates of those persons. However, the Company need not disregard a vote if it is
cast by a person as a proxy for a person who is entitled to vote, in accordance with the
directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a
person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as
the proxy decides.
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6. RESOLUTION 6 – RATIFICATION OF PRIOR ISSUE OF SHARES – PURCHASE OF LITHIUM
AFRICA NO 1 PTY LTD
To consider and, if thought fit, to pass, with or without amendment, the following
resolution as an ordinary resolution:
“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes,
Shareholders ratify the issue of 5,000,000 Shares on the terms and conditions set
out in the Explanatory Statement.”
Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person
who participated in the issue and any associates of those persons. However, the Company
need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to
vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing
the meeting as proxy for a person who is entitled to vote, in accordance with a direction on
the Proxy Form to vote as the proxy decides.
Dated: 23 November 2016
By order of the Board
Michael Naylor
Company Secretary
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EXPLANATORY STATEMENT
This Explanatory Statement has been prepared to provide information which the Directors
believe to be material to Shareholders in deciding whether or not to pass the Resolutions.
1. BACKGROUND
1.1 Summary of the Resolutions
Resolutions 1 and 2 are interconditional and relate to the acquisition of 100% of the
issue share capital in Lithco No 2 Pty Ltd (Lithco) (Acquisition) including the issue of
50,000,000 Shares (Consideration Shares) as consideration. Resolution 1 seeks
Shareholder approval for the Acquisition and issue of Consideration Shares to parties
who are not related parties of the Company (Unrelated Vendor Shares). Resolution 2
seeks Shareholder approval for the Acquisition and issue of Consideration Shares to a
related party (Mark Calderwood) of the Company (Calderwood Shares).
In conjunction with the Acquisition, the Company is undertaking a capital raising to
raise $7,200,000 by the issue of 60,000,000 Shares at an issue price of $0.12 per Share,
to be completed in two tranches (Capital Raising). Resolution 3 seeks Shareholder
approval for the ratification of the issue of Shares under Tranche 1 of the Capital
Raising and Resolution 4 seeks Shareholder approval for the issue of Shares under
Tranche 2 of the Capital Raising.
Resolutions 5 and 6 relate to the Company’s acquisition of Lithium Africa No. 1 Pty
Ltd (LA1) as announced on 23 September 2016. Resolution 5 seeks Shareholder
approval for the issue of Deferred Consideration Shares agreed as part of the
consideration for the acquisition of LA1. Resolution 6 seeks Shareholder approval for
the ratification of the prior issue of Shares issued at settlement of the acquisition of
LA1 on 29 September 2016.
1.2 Summary of the Acquisition
As announced on 24 October 2016, the Company entered into an option
agreement in relation to the Acquisition (Lithco Option). The Lithco Option expires at
5:00pm (WST) on 31 December 2016 and exercise of the option is, unless waived by
the Company in its sole discretion and where permitted in compliance with
applicable laws, conditional upon the Company obtaining all necessary Shareholder
and regulatory approvals pursuant to the ASX Listing Rules, the Corporations Act and
any other relevant law.
The consideration for the Acquisition will be satisfied by the issue of the Consideration
Shares. Mark Calderwood who was the Chief Executive Officer of the Company at
the time of agreeing the terms of the Acquisition (now the Managing Director) will
receive 10,460,000 of the Consideration Shares. All other recipients of the
Consideration Shares are not related parties of the Company.
Lithco-AMAL Agreement
Lithco has entered into a binding term sheet with Singapore Exchange listed Alliance
Mineral Assets Limited (AMAL) with respect to AMAL’s Bald Hill Project in Western
Australia (Bald Hill Project) for the purpose of joint exploration and exploitation of
lithium and other minerals (Binding Term Sheet).
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The commercial terms require Lithco:
(a) to spend, by 31 December 2017 (or such later date as may be agreed
between the parties), a minimum of $7.5 million on exploration, evaluation
and feasibility (including administrative and other overhead costs in relation
thereto) (Expenditure Commitment); and
(b) to spend, $12.5 million in capital expenditure required for upgrading and
converting the plant for processing ore derived from the Bald Hill Project,
infrastructure costs, pre-stripping activities and other expenditures including
operating costs (Capital Expenditure).
Lithco may, at its sole discretion, withdraw from the Binding Term Sheet at any time
prior to completing the Expenditure Commitment, in which case, Lithco shall have
no interest in the Bald Hill Project.
Upon completion of the Expenditure Commitment, Lithco shall be entitled to 50% of
all rights to lithium minerals from the tenements comprising the Bald Hill Project
(Tenements).
After completion of the Expenditure Commitment the parties will constitute a joint
venture committee with equal representation of and voting rights for each party to
plan and manage activity on the Bald Hill Project.
If after completing the Expenditure Commitment, Lithco does not complete the
Capital Expenditure, then both parties acting reasonably shall use their best
endeavours to monetise the lithium minerals comprised in the Tenements for mutual
benefit.
Upon completion of the Expenditure Commitment and Capital Expenditure, Lithco
will be entitled to a 50% interest in the Bald Hill Project (being all minerals from the
Tenements and the processing plant and infrastructure at the Bald Hill Project).
Upon completion of the Expenditure Commitment and Capital Expenditure and
subject to entering into binding definitive farm-in and joint venture agreements, a
joint venture between Lithco and AMAL will be formed and funded 50:50 by Lithco
and AMAL.
Formal Farm-in and Joint Venture Agreements
As at the date of this Notice the binding definitive farm-in and joint venture
agreements have not been entered. Lithco and AMAL have agreed that the
definitive binding agreements shall be consistent with the terms of the Binding Term
Sheet and shall contain additional terms and conditions that are customary for
arrangements of this nature in the Western Australian mining industry and which
terms are approved by the boards of Lithco and AMAL, including, in relation to:
(a) Co-existence of rights and access;
(b) Committee – functions and voting rights;
(c) Manager of the Project – appointment, functions, powers and duties;
(d) Work programmes, budgets and funding;
(e) Accounts, audits and access;
(f) Dilution and withdrawal;
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(g) Assignment; and
(h) Dispute resolution.
Lithco and AMAL also intend to extend the area the farm-in and joint venture
arrangements will relate to include the area enclosed by the external boundaries of
any additional tenements acquired by either party (or their affiliates) within a 10 km
radius of the Tenements unless the non-acquiring party elects not to have them
included (collectively the Tenement Area).
1.3 Summary of the Bald Hill Project
The Bald Hill Project is located approximately 60km south east of Kambalda and
50km east of Widgiemooltha in the Coolgardie Mineral Field of Western Australia.
The Bald Hill Project encompasses ten exploration licences, one general purpose
licence, eight miscellaneous licences, five mining leases, one mining lease
application, eight prospecting licences and one retention licence.
The Bald Hill Project historically has been a tantalum mining and recovery operation.
Lithium minerals such as spodumene were not recovered in previous processing
operations for tin and tantalum.
Due to the focus of previous companies on tin and tantalum very little information in
terms of lithium mineral (spodumene) quantity and geochemical analyses for lithium
are available in key areas of current focus by the Company. There is sufficient
prospectivity indicated by the visual presence of spodumene either in surface
outcrops, or logged in a limited number of drill holes by previous operators, and
geochemical analytical values for lithium, to warrant further investigation by the
Company.
For further information in relation to the Bald Hill Project, refer to the Independent
Technical Assessment and Valuation Report prepared by CSA Global Pty Ltd and
included as Appendix 4 to the Independent Expert’s Report.
1.4 Pro forma balance sheet
An unaudited pro-forma balance sheet of the Company following completion of the
Acquisition and the Capital Raising and issues of all Shares contemplated by this
Notice is set out in section 10.1 of the Independent Expert’s Report.
1.5 Pro forma capital structure
The capital structure of the Company following completion of the Acquisition and
the Capital Raising and issues of all Shares contemplated by this Notice is:
Shares
Number
As at the date of this Notice 293,654,327
To be issued pursuant to the Acquisition 50,000,000
To be issued pursuant to Trance 2 of the Capital Raising 30,371,175
On completion of the Acquisition and the Capital Raising 374,025,502
Deferred Consideration Shares issued pursuant to Resolution 5 10,000,000
Total Shares on issue assuming satisfaction of the milestones 384,025,502
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relating to the Deferred Consideration Shares
Options
Number
On issue as at the date of this Notice1 9,625,000
To be issued pursuant to the Resolutions Nil
On completion of the Acquisition and Capital Raising 9,625,000
Notes:
1. 500,000 Options exercisable at $0.36 each on or before 12 December 2016.
75,000 Options exercisable at $0.30 each on or before 12 December 2016.
550,000 Options exercisable at $0.178 each on or before 26 May 2018.
2,500,000 Options exercisable at $0.035 each on or before 15 June 2018.
3,000,000 Options exercisable at $0.06 each on or before 30 June 2019 (vest after 6 months of
employment by Mark Calderwood. i.e 11 January 2017).
3,000,000 Options exercisable at $0.06 each on or before 30 June 2019.
1.6 Disclosure of interests
The recipients of the Consideration Shares have confirmed to the Company that
they are not associates (as defined in the Corporations Act) of one another.
The relevant interest in securities in the Company of the recipients of the
Consideration Shares and Deferred Consideration Shares:
Shares held Date of Notice Consideration Deferred Total (%)3
by/to be Shares Consideration
issued to: Shares2
Corporate & 12,330,000 14,540,000 5,000,000 31,870,000
Resource (8.30%)
Consultants
Pty Ltd
Chalmsbury 16,875,000 18,750,000 3,750,000 39,375,000
Nominees Pty (10.25%)
Ltd
Merriwee Pty 25,225,000 6,250,000 1,250,000 32,725,000
Ltd Merriwee (8.52%)
Superfund
A/C
Mark 11,420,000 10,460,000 Nil 21,880,000
Calderwood1 (5.70%)
Total 65,850,000 50,000,000 10,000,000 125,850,000
Notes:
1. Mark Calderwood also has a relevant interest in 3,000,000 Options each exercisable at $0.06
on or before 30 June 2019 subject to Mr Mark Calderwood being employed by the Company
until 11 January 2017.
2. The milestones required to be satisfied before the Deferred Consideration Shares will be issued
are set out in Section 5.1.
3. Assumes no Shares are issued other than as contemplated by Resolution 4, whether from the
exercise of Options or otherwise.
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1.7 Additional risk factors
The risk profile of the Bald Hill Project is similar to that of the Company’s existing assets
which has previously been disclosed to Shareholders as the Company would be
continuing with mineral exploration and the Bald Hill Project is prospective for lithium.
These risks include exploration and operational risks, environmental regulations,
native title regulations, commodity price and foreign currency volatility.
1.8 Advantages of the Acquisition
The Directors are of the view that the following non-exhaustive list of advantages
may be relevant to a Shareholder’s decision on how to vote on Resolutions 1 and 2:
(a) the Bald Hill Project is highly prospective for lithium mineralisation which
complements the Company’s existing assets;
(b) the Bald Hill Project is at a more advanced stage of exploration than the
Company’s existing assets; and
(c) the potential increase in market capitalisation of the Company following
completion of the Acquisition may lead to increased coverage from
investment analysts, access to improved equity capital market opportunities
and increased liquidity which are not currently present.
1.9 Disadvantages of the Acquisition
The Directors are of the view that the following non-exhaustive list of disadvantages
may be relevant to a Shareholder’s decision on how to vote on Resolutions 1 and 2:
(a) current Shareholders will have their voting power in the Company diluted;
(b) there is no guarantee that the Resource estimated for the Bald Hill Project
can be economically extracted; and
(c) current Shareholders will be exposed to the additional risks associated with
the Bald Hill Project as set out in Section 1.
1.10 Intentions if Acquisition is not approved
If Resolutions 1 and 2 are not passed and the Acquisition is not completed, the
Company will continue to explore on its Mt Belches Lithium Project that surrounds
and is adjacent to the Bald Hill Mine and explore the Uis Lithium Project in Namibia.
1.11 Independent Expert’s Report
ASX Listing Rule 10.10.2 requires a notice of meeting containing a resolution under
ASX Listing Rule 10.1 to include a report on the transaction from an independent
expert.
The Independent Expert's Report annexed to this Notice sets out a detailed
independent examination of the Acquisition to enable non-associated Shareholders
to assess the merits and decide whether to approve Resolutions 1 and 2. The
independent expert has concluded that the Acquisition is fair and reasonable to the
non-associated Shareholders.
Shareholders are urged to carefully read the Independent Expert’s Report to
understand its scope, the methodology of the valuation and the sources of
information and assumptions made.
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The Independent Expert’s Report is also available on the Company’s website
(http://www.tawana.com.au/). If requested by a Shareholder, the Company will
send to the Shareholder a hard copy of the Independent Expert’s Report at no cost.
1.12 Director’s recommendation
The Directors (other than Mark Calderwood who does not give a recommendation
due to his material personal interest in the Acquisition) unanimously recommend that
Shareholders vote in favour of Resolutions 1 and 2 as they consider the proposed
Acquisition and associated issue of Shares to be in the best interests of Shareholders
for the following reasons:
(a) after assessment of the advantages and disadvantages referred to in
Sections 1.8 and 1.9 the Directors are of the view that the advantages
outweigh the disadvantages; and
(b) the Independent Expert has determined the Acquisition to be fair and
reasonable to the non-associated Shareholders.
2. RESOLUTIONS 1 AND 2 – THE ACQUISITION OF LITHCO NO 1 PTY LTD
2.1 General
A summary of the Acquisition is set out in Section 1.2.
Resolution 1 seeks Shareholder approval for the Acquisition including the issue up to
39,540,000 of the Consideration Shares to parties who are not related parties of the
Company (Unrelated Vendor Shares).
Resolution 2 seeks Shareholder approval for the Acquisition including the issue of
10,460,000 Consideration Shares to a related party (Mark Calderwood) of the
Company (Calderwood Shares)
Resolutions 1 and 2 are interconditional.
2.2 ASX Listing Rule 11.1.2
ASX Listing Rule 11.1 provides that where an entity proposes to make a significant
change, either directly or indirectly, to the nature or scale of its activities, it must
provide full details to ASX as soon as practicable and comply with the following:
(a) provide to ASX information regarding the change and its effect on future
potential earnings, and any information that ASX asks for;
(b) if ASX requires, obtain the approval of holders of its shares and any
requirements of ASX in relation to the notice of meeting; and
(c) if ASX requires, meet the requirements of Chapters 1 and 2 of the ASX Listing
Rules as if the company were applying for admission to the official list of ASX.
ASX has advised the Company that, given the proposed change in the nature and
scale of the Company’s activities resulting from the Acquisition, it requires the
Company to obtain Shareholder approval for the change in nature and scale of its
activities but it will not be required meet the requirements of Chapters 1 and 2 of the
ASX Listing Rules as if the company were applying for admission to the official list of
ASX.
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2.3 ASX Listing Rule 10.1
ASX Listing Rule 10.1 provides that an entity must ensure that neither it, nor any of its
child entities, acquires a substantial asset from, or disposes of a substantial asset to,
amongst other persons, a person whose relationship to the entity is such that, in ASX’s
opinion, the transaction should be approved by security holders, without the prior
approval of holders of the entity’s ordinary shareholders.
Acquisition by the Company
Exercise of the Lithco Option will result in an acquisition by the Company.
Substantial asset
For the purposes of ASX Listing Rule 10.1, an asset is substantial if its value, or the
value of the consideration for it is, or in ASX’s opinion is, 5% or more of the equity
interests of the entity as set out in the latest accounts given to ASX under the ASX
Listing Rules.
The equity interests of the Company as set out in the latest accounts given to ASX
under the ASX Listing Rules (being for the half-year ending 30 June 2016) were
$1,090,674.
As the value of the consideration for the Acquisition is more than 5% of the equity
interests of the Company as set out in the latest accounts given to ASX under the
ASX Listing Rules, the completion of the Acquisition will result in the acquisition of a
substantial asset.
Vendors
At the time of agreement the terms of the Lithco Option none of the shareholders of
Lithco were related parties of the Company or substantial holders of the Company
for the purposes of ASX Listing Rule 10.1 (i.e. had a relevant interest in 10% or more in
the Company in the previous 6 months), however, ASX has exercised its discretion to
require shareholder approval be obtained under ASX Listing Rule 10.1.
Requirement for shareholder approval
As a result of the above conclusions, the completion of the Acquisition will result in
the acquisition of a substantial asset from persons covered by ASX Listing Rule 10.1
and the Company is therefore required to seek Shareholder approval under ASX
Listing Rule 10.1.
2.4 ASX Listing Rule 7.1
ASX Listing Rule 7.1 provides that a company must not, subject to specified
exceptions, issue or agree to issue more equity securities during any 12 month period
than that amount which represents 15% of the number of fully paid ordinary securities
on issue at the commencement of that 12 month period.
The effect of Resolution 1 will be to allow the Company to issue the Unrelated
Vendor Shares pursuant to the Acquisition during the period of 3 months after the
Meeting (or a longer period, if allowed by ASX), without using the Company’s 15%
annual placement capacity.
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2.5 Technical information required by ASX Listing Rule 7.1
Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is
provided in relation to Resolution 1:
(a) the maximum number of Unrelated Vendor Shares to be issued is 39,540,000;
(b) the Unrelated Vendor Shares will be issued no later than 3 months after the
date of the Meeting (or such later date to the extent permitted by any ASX
waiver or modification of the ASX Listing Rules) and it is intended that issue of
the Consideration Shares will occur on the same day;
(c) the deemed issue price will be $0.12 per Unrelated Vendor Share and the
Unrelated Vendor Shares will be issued for nil cash consideration in
satisfaction of part of the consideration for the Acquisition;
(d) the Unrelated Vendor Shares will be issued to the entities set out in the table
in Section 1.6;
(e) the Unrelated Vendor Shares issued will be fully paid ordinary shares in the
capital of the Company issued on the same terms and conditions as the
Company’s existing Shares other than being escrowed for 12 months from
the date of issue; and
(f) no funds will be raised from the issue of the Unrelated Vendor Shares as they
are being issued in satisfaction of part of the consideration for the
Acquisition.
2.6 ASX Listing Rule 10.11
ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an
entity issues, or agrees to issue, securities to a related party, or a person whose
relationship with the entity or a related party is, in ASX’s opinion, such that approval
should be obtained unless an exception in ASX Listing Rule 10.12 applies.
As Resolution 2 involves the issue of Shares to a related party of the Company,
Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an
exception applies. It is the view of the Directors that the exceptions set out in ASX
Listing Rule 10.12 do not apply in the current circumstances.
2.7 Technical Information required by ASX Listing Rule 10.13
Pursuant to and in accordance with ASX Listing Rule 10.13, the following information
is provided in relation to Resolution 2:
(a) the Calderwood Shares will be issued to Mark Calderwood, a Director (or his
nominee);
(b) the Calderwood Shares will be issued no later than 1 month after the date of
the Meeting (or such later date to the extent permitted by any ASX waiver
or modification of the ASX Listing Rules);
(c) the deemed issue price will be $0.12 per Calderwood Share and the
Calderwood Shares will be issued for nil cash consideration as they will be
issued in satisfaction of part of the consideration for the Acquisition;
(d) the Calderwood Shares issued will be fully paid ordinary shares in the capital
of the Company issued on the same terms and conditions as the
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Company’s existing Shares other than being escrowed for 12 months from
the date of issue; and
(e) no funds will be raised from the issue of the Calderwood Shares as they are
being issued in satisfaction of part of the consideration for the Acquisition.
Approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the
Calderwood Shares as approval is being obtained under ASX Listing Rule 10.11.
Accordingly, the issue of Calderwood Shares will not be included in the use of the
Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.
2.8 Dilution
In the event the maximum number of Shares contemplated by Resolutions 1 and 2
are issued and assuming no Options are exercised or other Shares issued, the number
of Shares on issue would increase from 293,654,327 (being the number of Shares on
issue as at the date of this Notice) to 343,654,327 and the shareholding of existing
Shareholders would be diluted by approximately 14.55%.
3. RESOLUTION 3 – RATIFICATION OF PRIOR ISSUE OF SHARES – TRANCHE 1 OF CAPITAL
RAISING
3.1 General
A summary of the Capital Raising is set out in Section 1.1.
On 1 November 2016, the Company issued 29,628,825 Shares at an issue price of
$0.12 per Share to raise $3,555,459 (before costs) under Tranche 1 of the Capital
Raising. Resolution 3 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for
the issue of those Shares (Ratification).
A summary of ASX Listing Rule 7.1 is set out in Section 2.4.
ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that
where a company in general meeting ratifies the previous issue of securities made
pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach
ASX Listing Rule 7.1) those securities will be deemed to have been made with
shareholder approval for the purpose of ASX Listing Rule 7.1.
By ratifying this issue, the Company will retain the flexibility to issue equity securities in
the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1
without the requirement to obtain prior Shareholder approval.
3.2 Technical information required by ASX Listing Rule 7.4
Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is
provided in relation to the Ratification:
(a) 29,628,825 Shares were issued;
(b) the issue price was $0.12 per Share;
(c) the Shares issued were all fully paid ordinary shares in the capital of the
Company issued on the same terms and conditions as the Company’s
existing Shares;
(d) the Shares were issued to professional and sophisticated investors. None of
these subscribers are related parties of the Company; and
14
(e) the funds raised from this issue will be used to fund the substantial drilling
program at the Cowan Lithium Project, conduct due diligence on the
adjoining Bald Hill Project and complete the drilling and metallurgy at the Uis
Lithium Project in Namibia.
4. RESOLUTION 4 – ISSUE OF SHARES – TRANCHE 2 OF CAPITAL RAISING
4.1 General
A summary of the Capital Raising is set out in Section 1.1.
Resolution 4 seeks Shareholder approval for the issue of up to 30,371,175 Shares at an
issue price of $0.12 per Share to raise up to $3,644,541 under Tranche 2 of the Capital
Raising.
A summary of ASX Listing Rule 7.1 is set out in Section 2.4.
The effect of Resolution 4 will be to allow the Company to issue the Shares pursuant
to Tranche 2 of the Capital Raising during the period of 3 months after the Meeting
(or a longer period, if allowed by ASX), without using the Company’s 15% annual
placement capacity.
4.2 Technical information required by ASX Listing Rule 7.1
Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is
provided in relation to Tranche 2 of the Capital Raising:
(a) the maximum number of Shares to be issued is 30,371,175;
(b) the Shares will be issued no later than 3 months after the date of the
Meeting (or such later date to the extent permitted by any ASX waiver or
modification of the ASX Listing Rules) and it is intended that issue of the
Shares will occur on the same date;
(c) the issue price will be $0.12 per Share;
(d) the Shares will be issued to professional and sophisticated investors
determined by the Directors. None of these subscribers will be related
parties of the Company;
(e) the Shares issued will be fully paid ordinary shares in the capital of the
Company issued on the same terms and conditions as the Company’s
existing Shares; and
(f) the Company intends to use the funds raised from Tranche 2 of the Capital
Raising to advance the Bald Hill Project and Cowan Lithium Project including
further drilling, metallurgical test work, engineering studies and potential
development scenarios.
4.3 Dilution
In the event the maximum number of Shares contemplated by Resolution 4 are
issued and assuming the maximum number of Shares are issued under Resolutions 1
and 2 and no Options are exercised or other Shares are issued, the number of Shares
on issue would increase from 343,654,327 to 374,025,502 and the shareholding of
existing Shareholders would be diluted by approximately 8.12%.
15
5. RESOLUTION 5 – ISSUE OF SHARES IN CONSIDERATION FOR THE MILESTONE PAYMENTS
FOR THE UIS TAILINGS PROJECT
5.1 General
As announced on 23 September 2016, the Company agreed to acquire 100% of the
issue share capital in Lithium Africa No 1 Pty Ltd (LA1) which has contractual rights to
the Uis pegmatite tailings stockpile (Uis Project).
The Uis Project located in Namibia comprises large coarse and fine tailings stockpiles
from the Uis tin mine which operated between 1924 and 1990. The Uis Project is
located close to the former mining town of Uis some 165km NNE of the coast city of
Swakopmund, 270km NW of the capital Windhoek.
Refer to the Independent Expert’s Report at Schedule 1 for further details on the Uis
Project.
The consideration for the acquisition of LA1 is as follows:
(a) 5,000,000 Shares and $100,000 in cash which have been issued and paid;
and
(b) Deferred consideration of:
(i) 5,000,000 Shares following successful completion of drilling,
analysing and metallurgical test work in respect of the tailings from
the Uis Project (to the Company’s satisfaction) by 30 June 2017; and
(ii) 5,000,000 Shares following the Company (in its sole discretion)
resolving to proceed to development and mining of the tailings
from the Uis Project on or before 31 December 2018,
(together the Deferred Consideration Shares).
Resolution 5 seeks Shareholder approval for the issue of the Deferred Consideration
Shares.
A summary of ASX Listing Rule 7.1 is set out in Section 2.4.
The effect of Resolution 5 will be to allow the Company to issue the Deferred
Consideration Shares pursuant to the Acquisition during the period of 3 months after
the Meeting (or a longer period, if allowed by ASX), without using the Company’s
15% annual placement capacity.
As the end dates for satisfaction of the milestones triggering the requirement to issue
the Deferred Consideration Shares are both more than 3 months after the date of
this Meeting the Company intends to apply to ASX for a waiver to permit the issue of
the Deferred Consideration Shares later than 3 months after the date of the Meeting.
Where the waiver is not granted and the milestones for the Deferred Consideration
Shares are not satisfied in time for the Company to issue the Deferred Consideration
Shares within 3 months of the date of the Meeting the Company may need to seek
further Shareholder approval at an appropriate time.
In the event Shareholder approval is not obtained (or having been obtained the
issue does not occur within 3 months from the date of the Meeting or such later
period as permitted by ASX) the Company must either agree to issue the Deferred
Consideration Shares out of its placement capacity provided by the ASX Listing Rules
16
at the relevant time or make a cash payment to the shareholders of LA1 (or their
nominees) in satisfaction of the issue of the relevant Deferred Consideration Shares
(Cash Payment). The Cash Payment will be equal to the quantity of Deferred
Consideration Shares that would otherwise have been issued multiplied by the
volume weighted average price of Shares as traded on ASX over the 10 trading days
on which the Shares were traded immediately following the date of satisfaction of
the relevant milestone.
5.2 Technical information required by ASX Listing Rule 7.1
Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is
provided in relation to the Deferred Consideration Shares:
(a) the maximum number of Deferred Consideration Shares to be issued is
10,000,000;
(b) subject to satisfaction of the applicable milestone, the Deferred
Consideration Shares will be issued no later than 3 months after the date of
the Meeting (or such later date to the extent permitted by any ASX waiver
or modification of the ASX Listing Rules) and it is intended that issue of the
Deferred Consideration Shares related to a specific milestone will occur on
the same day;
(c) the deemed issue price will be $0.12 per Share and the Deferred
Consideration Shares will be issued for nil cash consideration in satisfaction of
the relevant performance milestones being achieved;
(d) the Deferred Consideration Shares will be issued to the shareholders of LA1
(or their nominees) none of whom is a related party of the Company;
(e) the Deferred Consideration Shares issued will be fully paid ordinary shares in
the capital of the Company issued on the same terms and conditions as the
Company’s existing Shares; and
(f) no funds will be raised from the issue of the Deferred Consideration Shares as
they are being issued in part consideration for the acquisition by the
Company of the entire issued share capital of LA1.
5.3 Dilution
In the event the maximum number of Shares contemplated by Resolution 5 are
issued and assuming the maximum number of Shares are issued under Resolutions 1,
2 and 4 and no Options are exercised or other Shares are issued, the number of
Shares on issue would increase from 374,025,502 to 384,025,502 and the shareholding
of existing Shareholders would be diluted by approximately 2.60%.
6. RESOLUTION 6 – RATIFICATION OF PRIOR ISSUE OF SHARES – PURCHASE OF LITHIUM
AFRICA NO 1 PTY LTD
6.1 General
A summary of the acquisition of LA1 is set out in Section 5.1.
On 29 September 2016, the Company issued 5,000,000 Shares at settlement of the
acquisition of LA1. Resolution 6 seeks Shareholder ratification pursuant to ASX Listing
Rule 7.4 for the issue of those Shares.
17
A summary of ASX Listing Rules 7.1 and 7.4 is set out in Section 2.4 and 3.1
respectively.
By ratifying this issue, the Company will retain the flexibility to issue equity securities in
the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1
without the requirement to obtain prior Shareholder approval.
6.2 Technical information required by ASX Listing Rule 7.4
Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is
provided in relation to Resolution 6:
(a) 5,000,000 Shares were issued;
(b) the Shares were issued for nil cash consideration in satisfaction of settlement
of the acquisition of LA1;
(c) the Shares issued were all fully paid ordinary shares in the capital of the
Company issued on the same terms and conditions as the Company’s
existing Shares;
(d) the Shares were issued to shareholders of LA1 (or their nominees), none of
whom were a related party of the Company; and
(e) no funds were raised from the issue of these Shares as they were issued in
consideration for the acquisition of LA1.
18
GLOSSARY
$ means Australian dollars.
Acquisition means the acquisition by the Company of 100% of the issued capital of Lithco No.
2 Pty Ltd.
AMAL means Alliance Mineral Assets Limited.
ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited,
as the context requires.
ASX Listing Rules means the Listing Rules of ASX.
Bald Hill Project means the project of tenements located in Western Australia owned by
AMAL and which Lithco has entered into a farm-In and joint venture arrangement with
AMAL.
Board means the current board of directors of the Company.
Calderwood Shares means the Consideration Shares the subject of Resolution 2.
Capital Raising means the capital raising the subject of Resolutions 2 and 3.
Chair means the chair of the Meeting.
Company means Tawana Resources NL (ACN 085 166 721).
Consideration Shares means the Shares to be issued in consideration for the Acquisition.
Constitution means the Company’s constitution.
Corporations Act means the Corporations Act 2001 (Cth).
Deferred Consideration Shares means the Shares to be issued in relation to the acquisition of
LA1 subject to the milestones set out in Section 5.1.
Directors means the current directors of the Company.
Explanatory Statement means the explanatory statement accompanying the Notice.
General Meeting or Meeting means the meeting convened by the Notice.
Independent Expert means BDO Corporate Finance (WA) Pty Ltd.
Independent Expert’s Report means the report prepared by the Independent Expert and
annexed to this Notice at Schedule 1.
LA1 means Lithium Africa No.1 Pty Ltd.
Lithco means Lithco No. 2 Pty Ltd.
Lithco Option means the agreement the Company has with the shareholders of Lithco to
acquire 100% of the issued capital of Lithco.
Notice or Notice of Meeting means this notice of meeting including the Explanatory
Statement and the Proxy Form.
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Option means an option to acquire a Share.
Proxy Form means the proxy form accompanying the Notice.
Resolutions means the resolutions set out in the Notice, or any one of them, as the context
requires.
Section means a section of the Explanatory Statement.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means a registered holder of a Share.
Tenements means the tenements within the Bald Hill Project as further detailed in the
Independent Technical Assessment and Valuation Report prepared by CSA Global Pty Ltd
and included as Appendix 4 to the Independent Expert’s Report.
Unrelated Vendor Shares means the Consideration Shares the subject of Resolution 1.
WST means Western Standard Time as observed in Perth, Western Australia.
20
SCHEDULE 1 – INDEPENDENT EXPERTS REPOR T
21
PROXY FORM
TAWANA RESOURCES NL
ACN 085 166 721
GENERAL MEETING
I/We
of:
being a Shareholder entitled to attend and vote at the Meeting, hereby appoint:
Name:
OR: the Chair of the Meeting as my/our proxy.
or failing the person so named or, if no person is named, the Chair, or the Chair’s nominee, to vote in
accordance with the following directions, or, if no directions have been given, and subject to the relevant
laws as the proxy sees fit, at the Meeting to be held at 10.00am (WST) on 23 December 2016 at 288 Churchill
Avenue, Subiaco, Western Australia, and at any adjournment thereof.
CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES
The Chair intends to vote undirected proxies in favour of all Resolutions. In exceptional circumstances the
Chair may change his/her voting intention on any Resolution. In the event this occurs an ASX announcement
will be made immediately disclosing the reasons for the change.
Voting on business of the Meeting FOR AGAINST ABSTAIN
Resolution 1 The Acquisition of Lithco No 2 Pty Ltd
Resolution 2 The Acquisition of Lithco No 2 Pty Ltd – Related Party
Resolution 3 Ratification of Prior Issue of Shares – Tranche 1 of Capital
Raising
Resolution 4 Issue of Shares – Tranche 2 of Capital Raising
Resolution 5 Issue of Shares in Consideration for the Milestone Payments
for the Uis Lithium Project
Resolution 6 Ratification of Prior Issue of Shares – Purchase of Lithium
Africa No 1 Pty Ltd
Please note: If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that
Resolution on a show of hands or on a poll and your votes will not be counted in computing the required majority on a
poll.
If two proxies are being appointed, the proportion of voting rights this proxy represents is:
Signature of Shareholder(s):
Individual or Shareholder 1 Shareholder 2 Shareholder 3
Sole Director/Company Secretary Director Director/Company Secretary
Date:
Contact name: Contact ph (daytime):
Consent for contact by e-mail
E-mail address: in relation to this Proxy Form: YES NO
22
Instructions for completing Proxy Form
1. (Appointing a proxy): A Shareholder entitled to attend and cast a vote at the Meeting is entitled
to appoint a proxy to attend and vote on their behalf at the Meeting. If a Shareholder is entitled to
cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and
vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may
only be exercised on a poll. The appointment of a second proxy must be done on a separate
copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or
number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the
appointments do not specify the proportion or number of the Shareholder’s votes each proxy is
appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes
resulting from the application of these principles will be disregarded. A duly appointed proxy need
not be a Shareholder.
2. (Direction to vote): A Shareholder may direct a proxy how to vote by marking one of the boxes
opposite each item of business. The direction may specify the proportion or number of votes that
the proxy may exercise by writing the percentage or number of Shares next to the box marked for
the relevant item of business. Where a box is not marked the proxy may vote as they choose
subject to the relevant laws. Where more than one box is marked on an item the vote will be
invalid on that item.
3. (Signing instructions):
- (Individual): Where the holding is in one name, the Shareholder must sign.
- (Joint holding): Where the holding is in more than one name, all of the Shareholders
should sign.
- (Power of attorney): If you have not already provided the power of attorney with the
registry, please attach a certified photocopy of the power of attorney to this Proxy Form
when you return it.
- (Companies): Where the company has a sole director who is also the sole company
secretary, that person must sign. Where the company (pursuant to section 204A of the
Corporations Act) does not have a company secretary, a sole director can also sign
alone. Otherwise, a director jointly with either another director or a company secretary
must sign. Please sign in the appropriate place to indicate the office held. In addition, if
a representative of a company is appointed pursuant to section 250D of the
Corporations Act to attend the Meeting, the documentation evidencing such
appointment should be produced prior to admission to the Meeting. A form of a
certificate evidencing the appointment may be obtained from the Company.
4. (Attending the Meeting): Completion of a Proxy Form will not prevent individual Shareholders from
attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid
Proxy Form and attends the Meeting in person, then the proxy’s authority to speak and vote for
that Shareholder is suspended while the Shareholder is present at the Meeting.
5. (Return of Proxy Form): To vote by proxy, please complete and sign the enclosed Proxy Form and
return by:
(a) post to Tawana Resources NL, 288 Churchill Avenue, Subiaco, WA 6008; or
(b) facsimile to the Company on facsimile number +61 8 9287 4334; or
(c) email to the Company at michael.naylor@tawana.com.au,
so that it is received not less than 48 hours prior to commencement of the Meeting.
Proxy Forms received later than this time will be invalid.
23
Date: 23/11/2016 10:09:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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