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ASX/JSE Announcement: Pre-quotation disclosure
ASX / JSE Announcement
3 June 2022
Pre-quotation disclosure
The following information is provided to ASX Limited (ASX) for release to the market in connection
with the admission to the official list and official quotation of fully paid ordinary shares (Shares) in
Southern Palladium Limited ACN 646 391 899 (ASX:SPD) (Company) in connection with the Company's
initial public offering (Offer) pursuant to a prospectus lodged with the Australian Securities and
Investments Commission (ASIC) on 22 April 2022 (Prospectus).
The Offer closed on 6 May 2022 and the Company raised $19,000,000 under the Offer. The Shares
were offered at an issue price of $0.50 per share. Allotment of the Shares available under the Offer
was completed on 26 May 2022.
The Company applied for quotation of its Shares on, and admission to, the official list of ASX on 22 April
2022.
Capitalised terms used but not defined in this announcement are as defined in the Prospectus.
1. Confirmation of issue of securities
The Company confirms the issue of the following securities between the date of its application
for admission and the date of commencement of official quotation:
(a) 45,500,000 fully paid ordinary shares, being consideration for the Acquisition;
(b) 38,000,000 fully paid ordinary shares, being the Maximum Subscription under the Offer;
(c) 3,000,000 Series A options exercisable at $0.875 each on or before the date which is 4
years from their date of issue;
(d) 1,200,000 Performance Rights;
(e) 700,000 Series B options exercisable at $0.875 each on or before the date which is 4 years
from their date of issue; and
(f) 3,638,000 options exercisable at $0.875 each on or before the date which is 4 years from
their date of issue.
2. Restricted securities
The number of securities subject to ASX restrictions and the restriction period applied to those
securities is detailed below:
Type of security Number Restriction period
46,671,673 24 months from the date of
Shares official quotation
3,700,000 24 months from the date of
Options official quotation
1,200,000 24 months from the date of
Performance Rights official quotation
There are 22,750,000 Shares (being the Clawback Shares) that are subject to voluntary
restrictions under the terms of the Share Exchange Agreement for a further two year period, as
described in #3 below.
3. Clawback Shares
As described in section 3.3 of the Prospectus, 50% of the Consideration Shares (being 22,750,000
Shares in total) (Clawback Shares) may be clawed back by the Company for a nominal sum ($50)
and then cancelled in the event that certain Project Milestones are not achieved within four years
of the date of the Offer (Clawback). The holders of the Clawback Shares have agreed to this
arrangement pursuant to an agreement entered into with the Company on 23 March 2022. This
Company will treat the Share Exchange Agreement as the buy back agreement for the purposes
of Part 2J.1 of the Corporations Act 2001 (Cth) (Act).
The Clawback Shares will be subject to ASX imposed escrow for a period of 24 months from the
date of official quotation and then subject to voluntary escrow for a further 24 months or until
the clawback application date, whichever is the earlier.
The Clawback will be applied upon the last to be achieved of the First Project Milestone and the
Second Project Milestone or four years after the date of the IPO, whichever occurs first.
A worked example of the application of the Clawback under each of the four possible outcomes
(in no particular order) appears below:
Possible outcome #1:
First Project Milestone (at least 2 million oz no Clawback of any Shares
PGE (4E) in JORC classified reserves) is
achieved, and
Second Project Milestone (the acceptance by
the Regional Manager (as contemplated in the
MPRDA) of the formal application by the
Company for a Mining Right over the Project,
pursuant to the applicable provisions of the
MPRDA) is also achieved
Possible outcome #2:
The Second Project Milestone has not been all the Clawback Shares will be bought back at
achieved, then nominal value and cancelled by the Company
regardless of the outcome of the First Project
Milestone
Possible outcome #3:
The Second Project Milestone has been all the Clawback Shares will be bought back at
achieved, and nominal value and cancelled by the Company
the JORC classified reserves are any number
less than 1 million oz PGE (4E)
Possible outcome #4:
The Second Project Milestone has been number of Clawback Shares to be bought back
achieved, and at nominal value and cancelled by the
the JORC classified reserves are between 1 Company will be:
and 2 million oz PGE (4E) – for the purposes of
this example, assume they amount to 1.3 (2.0m – 1.3m) / 2.0m x 22,750,000
million oz PGE (4E) = 7,962,500.
The buy back of any Clawback Shares will constitute a capital reduction for the purposes of the
Act and the Company will need to comply with the procedures set out in the Act to implement
the Clawback. Amongst other things, the Company must obtain shareholder approval to conduct
the buy back by way of a special resolution passed by the shareholders (excluding the parties
whose shares are bought back and their associates) or by way of a unanimous resolution.
If the Company may buy back the Clawback Shares pursuant to the Share Exchange Agreement
and shareholders do not approve the buy back of the Clawback Shares, then the Company will
not be able to proceed with the buy back of the Clawback Shares.
The Company will make an announcement to the market immediately upon any decision by the
Company whether or not to apply the Clawback upon the last to be achieved of the First Project
Milestone and the Second Project Milestone or four years after the date of the Offer, whichever
occurs first.
4. Updated corporate structure
The Company incorporated two new wholly owned special purpose vehicles (SPVs), SPD (RSA
Holding) Pty Limited in Australia with ACN 659 373 823 and SPD South Africa Proprietary Limited
(SPD South Africa) in South Africa with registration number 2022/481945/07, on 12 May 2022,
and SPD South Africa directly acquired the 70% interest in MUM shares from the Vendors
pursuant to the Acquisition on 26 May 2022.
By way of update to the corporate structure diagrams in section 3.3 of the Prospectus:
(a) the corporate structure of the Company and the Project (on an undiluted basis) following
completion of the Acquisition and immediately prior to the IPO is set out in the diagram
below; and
Pre-IPO Previous MUM Bengwenyama
Shareholders Shareholders* Community
12.1% 66.6% 100%
Southern Palladium 21.3% Nurinox Investments
Limited Proprietary Limited
100% 30%
SPD (RSA Holding)
Pty Limited
100%
SPD South Africa
Propriertary Limited
70%
Miracle Upon Miracle Investments
Proprietary Limited
100%
Bengwenyama
PGM Project
(b) based on the raising of $19,000,000 under the Offer, the corporate structure of the
Company and the Project (on an undiluted basis) following completion of the Acquisition
and the IPO is set out in the diagram below.
Pre-IPO Previous MUM IPO Bengwenyama
Shareholders Shareholders* Shareholders Community
7.0% 38.4% 42.3% 100%
Southern Palladium 12.3% Nurinox Investments
Limited Proprietary Limited
100% 30%
SPD (RSA Holding)
Pty Limited
100%
SPD South Africa
Propriertary Limited
70%
Miracle Upon Miracle Investments
Proprietary Limited
100%
Bengwenyama
PGM Project
5. Completion of Acquisition of MUM
The Company confirms that the conditions precedent to the Acquisition have been satisfied, and
accordingly, the Acquisition was completed on 26 May 2022 pursuant to the Second Amended
and Restated Share Exchange Agreement. Upon completion of the Acquisition the Company
issued 45,500,000 fully paid ordinary shares to the Vendors.
6. No Impediments to Exploration
The Company confirms that there are no legal, regulatory, statutory or contractual impediments
to SPD entering LP30/5/1/1002PPR and carrying out exploration activities such that SPD will be
able to spend its cash in accordance with its commitments for the purposes of Listing Rule
1.3.2(b).
7. No Loans to Vendors
The Company confirms that no loan will be made by the Company to Nurinox Investments
Proprietary Limited (Nurinox), ZTM Brokers Closed Corporation (Maphanga) or any of their
associates, either under the loan agreements between the Company and each of Nurinox and
Maphanga or otherwise, and that no other cash will pass from the Company and its associates to
Nurinox, Maphanga or their associates in relation to the loan agreements or otherwise as
consideration for classified assets acquired by the Company in connection with its listing.
8. Updated Pro-Forma Statement of Financial Position
The pro-forma statement of financial position based on the actual amount of funds raised under
the Prospectus is set out below:
Pro Forma Financial Position After Maximum Offer
$
CURRENT ASSETS
Cash and cash equivalents 18,377,899
Trade and other receivables 25,265
TOTAL CURRENT ASSETS 18,403,164
NON-CURRENT ASSETS
Investment in joint venture 22,750,000
TOTAL NON-CURRENT ASSETS 22,750,000
TOTAL ASSETS 41,153,164
CURRENT LIABILITIES
Trade and other payables 208,746
TOTAL CURRENT LIABILITIES 208,746
TOTAL LIABILITIES 208,746
NET ASSETS 40,944,419
EQUITY
Contributed equity 40,910,726
Accumulated losses (1,964,345)
Reserves 1,998,038
TOTAL EQUITY 40,944,419
Note that both the actual cash payments made since lodgement of the Prospectus and the
currently unpaid costs of the Offer that had been estimated in the Prospectus are materially the
same as those disclosed in the Prospectus. Accordingly, no update is required to the pro forma
financial position, and the above table is the same as the pro forma financial position included in
the Prospectus.
9. Updated statement of commitments
The commitments of the Company based on the actual amounts raised under the Offer, being
the Maximum Offer, have not changed materially since the lodgement date of the Prospectus.
The cash balance shown in the Prospectus was as at 31 December 2021 and, accordingly, the
change in commitments since then is represented by cash payments made between 1 January
2022 and 31 May 2022. This is shown in the table below:
Pro Forma After Cash Movement
Source & Application of Funds Maximum Raising 1 Jan 2022 to Estimate at
per Prospectus 31 May 2022 31 May 2022
$ $ $
Source of Funds
Cash balance 1,114 (771) 343
Gross IPO equity raising 19,000 19,000
Total 20,114 (771) 19,343
Application of Funds
Geophysics 74 (74) -
Phase 1 drilling 7,800 7,800
Phase 2 drilling 3,805 3,805
Metallurgical studies, environmental,
community, other project related costs 1,583 1,583
Subtotal Technical 13,263 (74) 13,189
IPO costs and fees 1,754 (547) 1,206
MUM acquisition related costs 274 274
Corporate costs 3,635 (149) 3,486
Subtotal IPO & Corporate Costs 5,663 (697) 4,966
Working capital / contingency 1,188 - 1,188
Total 20,114 (771) 19,343
10. Capital Structure
The Company’s capital structure is comprised of fully paid ordinary shares (Shares), Options
(including Series A Options, Series B Options and Alignment Options) and Performance Rights as
detailed below.
Shares Options Performance Rights
89,750,000 7,338,000 1,200,000
The terms of the Options and Performance Rights are disclosed in the Prospectus.
The Company has a free float of at least 20%.
11. ASX Waivers
The Company sought and obtained a waiver from Listing Rule 10.14 to the extent necessary to
permit the Company to issue up to 3,000,000 securities (Plan Securities) under its long term
incentive plan (Plan) to directors and their associates without shareholder approval, on the
following conditions:
(a) The Prospectus prepared by the Company for the purposes of listing rule 1.1 condition 3
contains the information required by listing rule 10.15 in respect of the proposed issue of
Plan Securities.
(b) In each case, the date by which the Company will issue the Plan Securities under the Plan
must be no later than 3 years from the date of the Company’s admission to the official list
of ASX.
(c) Details of any Plan Securities issued to a party mentioned in listing rule 10.14 under the Plan
will be published in the annual report of the Company relating to the period in which they
were issued.
The Company has since determined not to adopt a long term incentive plan until post listing, and
accordingly, will obtain relevant approvals for any incentive plan, including under Listing Rule 7.2
and Listing Rule 10.14 at the relevant time.
This announcement has been authorised for release by the Board of Directors of the Company.
Yours sincerely
Terence Goodlace
Chairman
JSE Announcement Disclosures
Southern Palladium Limited
Incorporated in the Commonwealth of Australia
Australian Company Number 646 391 899
JSE share code: SDL
ISIN AU0000220808
(“Southern Palladium” or “the Company”)
JSE Sponsor: Merchantec Capital
Date: 06-06-2022 09:01:00
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