ALTURA MINING LIMITED ABN PROSPECTUS

Transcription

1 ALTURA MINING LIMITED ABN PROSPECTUS For a non-renounceable pro rata offer to Eligible Shareholders of approximately 130,234,525 New Shares at an issue price of 13 cents each and 130,234,525 free attaching New Options on the basis of 2 New Shares and 2 New Options for every 3 Existing Shares held, to raise up to approximately $16.9 million before issue costs UNDERWRITER Patersons Securities Limited ACN Important Notice This document is important and should be read in its entirety. If after reading this Prospectus you have any questions about the Shares being offered under this Prospectus or any other matter, then you should consult your stockbroker, accountant or other professional adviser. The Securities offered by this Prospectus should be considered speculative.

2 INVESTMENT HIGHLIGHTS Iron Ore Mt Webber Pilbara WA (Altura 30%, Atlas Iron 70%) Exploration and development expenditure, target production Garnet Balline Project central WA coast mineral sands deposit. Finalisation of activities to enable decision to mine subject to receipt of statutory approvals. Exploration activities Altura holds an extensive exploration portfolio in the Northern Territory and Western Australia. Planned exploration to delineate resources at Mt Shoobridge (NT), Finniss Range (NT) and Pilbara (WA) for base and precious metals, uranium and lithium. Coal and mineral exploration Altura has a key objective of locating and evaluating suitable coal and mineral prospects predominantly in South East Asia. Expenditure is planned to cover a combination of option to purchase, on ground exploration and equity participation. An investment in the Company is not risk free and investors should consider the risk factors described below in section 5, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Securities. Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Securities. IMPORTANT NOTES This Prospectus is dated 20 July 2010 and a copy of this Prospectus was lodged with the ASIC on that date. The ASIC and ASX take no responsibility for the content of this Prospectus. No Securities will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. The Company will apply to ASX for the Securities to be granted quotation on ASX. This Prospectus does not constitute an offer in any place in which or to any person to whom it would not be lawful to make such an offer. Refer to section 1.9 for treatment of overseas shareholders. Applications for Securities offered pursuant to this Prospectus can only be submitted on an original Application Form which accompanies this Prospectus. No person is authorised to give information or to make any representation in connection with this Prospectus which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult. This Prospectus including each of the documents attached to it and which form part of this Prospectus is important and should be read in its entirety prior to making an investment decision. If you do not fully understand this Prospectus or are in any doubt as to how to deal with it, you should consult your professional adviser. In particular, it is important that you consider the risk factors (see section 5 of this Prospectus) that could affect the performance of the Company before making an investment decision. Some words and expressions used in this Prospectus have defined meanings which are explained in section 8. 1

3 ELECTRONIC PROSPECTUS A copy of the Prospectus can be downloaded from the website of the Company at or the website of ASX at Any person accessing the electronic version of the Prospectus for the purposes of making an investment in the Company must be an Australian resident and must only access the Prospectus from within Australia. The Corporations Act prohibits any person passing onto another person the Application Form unless it is attached to a hard copy of the Prospectus or it accompanies the complete and unaltered version of the Prospectus. Any person may obtain a hard copy of the Prospectus free of charge by contacting the Company. 2

4 CONTENTS 1 DETAILS OF THE OFFER PURPOSE AND EFFECT OF THE ISSUE ACTIONS REQUIRED BY ELIGIBLE SHAREHOLDERS RIGHTS AND LIABILITIES ATTACHING TO NEW SHARES AND NEW OPTIONS RISK FACTORS ADDITIONAL INFORMATION CORPORATE DIRECTORY GLOSSARY SUMMARY OF IMPORTANT DATES Lodgement Date 20 July 2010 Ex date 27 July 2010 Record date to determine Entitlement 3 August 2010 Prospectus with Application Form dispatched 6 August 2010 Closing date for acceptances 20 August 2010 Notify ASX of under subscriptions 25 August 2010 Allotment and issue of New Shares and New Options 30 August 2010 Dispatch of shareholding statements 30 August 2010 Trading of New Shares and New Options expected to commence 31 August 2010 This timetable is indicative only and subject to change. The Company reserves the right to vary the above dates. 3

5 LETTTER FROM THE EXECUTIVE DIRECTOR 20 July 2010 Dear Shareholder On behalf of the Board of Altura Mining Limited ( Altura or the Company ), I am pleased to invite you to participate in a non-renounceable rights issue of approximately 130,234,525 New Shares and free attaching New Options at an issue price of 13 cents per New Share to raise up to approximately $16.9 million. This Prospectus outlines the details of the Offer. The funds to be raised by the Company via the Rights Issue will be used to: (a) (b) (c) (d) fund the Company s contribution to the Mt Webber Iron Ore DSO project; fund the Company s exploration and evaluation programme in Western Australia and the Northern Territory for the next twelve months; enable the Company to advance its Balline Garnet project with funding for further resource drilling and assaying, mine development and design studies, continued land access and processing of the final mining approvals; and for general working capital purposes, including to enable the Company to pursue coal and mineral opportunities predominately in South East Asia as and when they arise. The Mt Webber DSO project in Western Australia s Pilbara region offers Altura the ability to participate in the rapidly developing iron ore market. Further resource development initiatives to be carried out by the joint venture with Atlas Iron Limited aims to have this prospect in production in Altura s exploration tenements include over 2,300 square kilometres in Northern Territory and over 700 square kilometres in Western Australia. The Company will strategically explore these tenements with a primary view of delineating resources that have the potential to be mined. Areas that do not meet this criteria or contain mineral commodities that are not a primary focus of Altura will be reduced via farm out or relinquishment. Balline garnet remains a primary focus and extensive work is underway to finalise assessment and approvals for this development. The Company expects to successfully conclude offtake agreements for Balline garnet in the upcoming months. This Offer opens from 6 August 2010 and is due to close on 20 August Please read this Prospectus carefully before deciding whether or not to invest. An investment in Altura contains specific risks which you should consider before making that decision. If there is any matter on which you require further information, you should consult your stockbroker, accountant or other professional advisor. The offer is partially underwritten by Patersons Securities Limited. Several Directors and major shareholders have also committed to apply for their entitlements under the Offer and to subunderwrite a portion of any Shortfall Securities not otherwise applied for by eligible shareholders. On behalf of the Directors, I commend this investment to you. Yours sincerely Paul Mantell Executive Director 4

6 1 DETAILS OF THE OFFER 1.1 The Issue Altura Mining Limited ( Altura or the Company ) is making a non-renounceable pro rata entitlements issue to Eligible Shareholders of approximately 130,234,525 New Shares and 130,234,525 free attaching New Options on the basis of 2 New Shares and 2 free attaching New Options for every 3 Existing Shares held as at the Record Date at an issue price of 13 cents per New Share to raise up to $16.9 million before issue costs. 1.2 Underwriting The Issue is partially underwritten to $10.7 million by Patersons Securities Limited. A summary of the underwriting agreement is set out in section 6.2 of the Prospectus. 1.3 Entitlement to Rights Issue Eligible Shareholders who are on the Company's Share Register at the close of business on the Record Date are eligible to participate in the Offer. Fractional Entitlements will be rounded up to the nearest whole number of New Shares and New Options. For this purpose, holdings in the same name are aggregated for calculation of Entitlements. If the Company considers that holdings have been split to take advantage of rounding, the Company reserves the right to aggregate holdings held by associated Shareholders for the purpose of calculating Entitlements. An Application Form setting out your Entitlement to New Shares and New Options accompanies this Prospectus. 1.4 Acceptances This Offer may be accepted in whole or in part prior to the Closing Date subject to the rights of the Company to extend the Offer period or close the Offer early. Instructions for accepting your Entitlement are set out in section 3 and on the Application Form which accompanies this Prospectus. 1.5 Rights Trading The Offer is non-renounceable. This means that the Rights of Eligible Shareholders to subscribe for New Shares and New Options under this Prospectus are not transferable and there will be no trading of Rights on ASX. Eligible Shareholders who choose not to take up their Rights will receive no benefit and their shareholding in the Company will be diluted as a result. 1.6 Shortfall The Directors reserve the right, subject to the requirements of the Listing Rules and the Corporations Act, to place any Shortfall Securities within 3 months after the Closing Date. Shortfall Securities will be issued at a price not less than the issue price of New Shares under the Rights Issue. 1.7 Allotment and Application Money New Shares and New Options will be issued only after all Application Money has been received and ASX has granted permission for the New Shares and New Options to be quoted. It is expected that New Shares and New Options will be issued on 30 August 2010 and normal trading of the New Shares and New Options on ASX is expected to commence on 31 August

7 All Application Money received before New Shares and New Options are issued will be held in a special purpose account. After Application Money is refunded (if required) and New Shares and New Options are issued to Applicants, the balance of funds in the account plus accrued interest will be received by the Company. Application will be made within seven days of the date of issue of this Prospectus for the New Shares and New Options to be granted Official Quotation by ASX. If such an application is not made within these seven days, or Official Quotation of the New Shares and New Options is not granted by ASX within three months of the date of this Prospectus, then the Company will not allot or issue any New Shares and New Options and all Application Money received pursuant to this Prospectus will be repaid as soon as practicable, without interest. If the New Shares and New Options are not quoted by ASX within three months after the date of this Prospectus, the Company will refund all Application Money in full. The fact that ASX may agree to grant Official Quotation of the New Shares and New Options is not to be taken in any way as an indication of the merits of the Company or the New Shares and New Options. ASX takes no responsibility for the contents of this Prospectus. 1.8 Issue Outside Australia and New Zealand This Prospectus does not constitute an offer of Securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the Offer. No action has been taken to register or qualify the New Shares and New Options or the Issue or otherwise to permit an offering of Securities in any jurisdiction outside Australia and New Zealand, although Shareholders in Hong Kong and Singapore may be eligible to participate in the Issue and should refer to section 1.10 for further information. This document is not for publication or distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the US and the District of Columbia). This document is not an offer of securities for sale into the United States or to, or for the account or benefit of, US Persons. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, US Persons. No public offering of securities is being made in the United States. 1.9 Treatment of Overseas Shareholders The Offer in this Prospectus is not being extended to any Shareholder, as at the Record Date, whose registered address is not situated in Australia, New Zealand, Singapore or Hong Kong because of the small number of such Shareholders, the number and value of New Shares that would be offered to such Shareholders and the cost of complying with applicable regulations in jurisdictions outside Australia, New Zealand, Singapore or Hong Kong. The Prospectus is sent to those Shareholders for information only. Recipients may not send or otherwise distribute this Prospectus or the Application Form to any person outside Australia (other than to Eligible Shareholders) Important information for Eligible Shareholders in foreign jurisdictions New Zealand The Offer contained in this Prospectus to Eligible Shareholders with registered addresses in New Zealand is made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). Members of the public in New Zealand who are not existing Shareholders on the Record Date are not entitled to apply for any Securities. 6

8 Singapore This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Prospectus, and any other document or material in connection with the offer or sale, or invitation for subscription or purchase of Securities may not be circulated or distributed, nor may Securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than those Securities offered to an existing Shareholder of the Company whose shares are quoted on ASX (refer to section 273(1)(ce) of the Securities and Futures Act, Chapter 289, Singapore). Hong Kong This Prospectus has not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to this Offer. If you are in any doubt about any of the contents of this Prospectus, you should obtain independent advice Market Prices of Existing Shares on ASX The highest and lowest market sale price of the Existing Shares, which are on the same terms and conditions as the New Shares being offered under this Prospectus, during the three months immediately preceding the lodgement of this Prospectus with the ASIC, and the last market sale price on the date before the lodgement date of this Prospectus, are set out below. 3 months high 3 months low Last Market Sale Price Existing Shares $0.305 on $0.135 on and $0.155 on Opening and Closing Dates 1.13 CHESS The Offer will open for receipt of acceptances on 6 August 2010 and will close on 20 August 2010, subject to the right of the Company to vary these dates. The Company participates in the Clearing House Electronic Sub-register System ( CHESS ). ASTC, a wholly owned subsidiary of ASX, operates CHESS in accordance with the ASX Listing Rules and the ASTC Settlement Rules. Under CHESS, applicants will not receive a certificate but will receive a statement of their holding of New Shares and New Options. If you are broker sponsored, ASTC will send you a CHESS statement. The CHESS statement will set out the number of New Shares and New Options issued under this Prospectus, provide details of your holder identification number and give the participation identification number of the sponsor. If you are registered on the issuer sponsored sub register, your statement will be dispatched by the Company s share registrar and will contain the number of New Shares and New Options issued to you under this Prospectus and your security holder reference number. A CHESS statement or issuer sponsored statement will routinely be sent to Shareholders at the end of any calendar month during which the balance of their shareholding changes. Shareholders may request a statement at any other time, however, a charge may be made for additional statements. 7

9 1.14 Rights and Liabilities attaching to the New Shares The New Shares will rank equally in respect of dividends and in all other respects (e.g. voting, bonus issues) as Existing Shares. A summary of the rights and liabilities attaching to the New Shares and New Options is set out in section Taxation Implications The Directors do not consider that it is appropriate to give Shareholders advice regarding the taxation consequences of the Company conducting the Rights Issue or Shareholders applying for New Shares and New Options under this Prospectus, as it is not possible to provide a comprehensive summary of the possible taxation positions of Shareholders. The Company, its advisers and officers, do not accept any responsibility or liability for any taxation consequences to Shareholders in the Issue. Shareholders should, therefore, consult their own professional tax adviser in connection with the taxation implications of the Issue Notice to nominees and custodians Nominees and custodians that hold Shares should note that the Offer is available only to Eligible Shareholders. The Company is not required to determine whether or not any registered holder is acting as a nominee or the identity or residence of any beneficial owners of securities. If any nominee or custodian is acting on behalf of a foreign person, that holder, in dealing with its beneficiary, will need to assess whether indirect participation by the beneficiary in the Offer is compatible with applicable foreign laws Enquiries Any questions concerning the Issue should be directed to Mr Damon Cox (Company Secretary) in Perth on , or Mr Noel Young (Financial Controller & Company Secretary) in Brisbane on

10 2 PURPOSE AND EFFECT OF THE ISSUE 2.1 Purpose of the Issue The purpose of the Issue is to raise up to approximately $16.9 million before Issue costs. The Directors intend to apply the proceeds from the Offer in accordance with the table set out below. The table assumes that no Options are exercised and has been prepared on the basis of both the Underwritten Amount and Full Subscription. Proceeds of the Issue Underwritten Amount ($m) Full Subscription ($m) Mt Webber DSO Project $4.5 $4.5 Exploration activities in Northern Territory and Western Australia $1.6 $2.4 Coal exploration activities $0.2 $2.3 Balline Garnet Project $1.6 $4.3 General working capital $2.4 $2.7 Expenses of the Offer $0.4 $0.7 ESTIMATED TOTAL $10.7 $16.9 If the Company achieves more than the Underwritten Amount but not Full Subscription, the funds allocated to exploration activities, the Balline Project and general working capital will be scaled back on a pro-rata basis. Further information about the proposed use of funds is set out below. In the event that circumstances change or other opportunities arise the Directors reserve the right to vary the proposed use of funds to maximise benefits to Shareholders. Mt Webber DSO Project Exploration and development expenditure will be incurred at the Mt Webber DSO Project, an unincorporated joint venture with Atlas Iron Limited, in the Pilbara WA. The planned expenditure covers committed expenditure to date and planned expenditure to a decision to proceed to mine (or not). The Company has a 30% interest in the joint venture. Exploration activities in the Northern Territory and Western Australia The Company holds an extensive exploration portfolio covering over 2,300 square kilometres in the Northern Territory (NT) and over 700 square kilometres in Western Australia (WA). Planned exploration expenditure covers drilling and assaying at Mt Shoobridge (NT), Finniss Range (NT) and Pilbara (WA) for base and precious metals, uranium and lithium. The Company will utilize the in-house Maxdrill 2000 drill rig wherever possible. The table below sets out the planned expenditure for each portfolio in further detail. 9

11 Portfolio Underwritten Amount ($ 000) Full Subscription ($ 000) Mt Shoobridge (NT) $530 $815 Finniss Range (NT) $284 $348 Tanami (NT) $115 $244 Pilbara (WA) $621 $983 Smithfield (WA) $54 $54 Total $1604 $2444 Coal exploration activities The Company has a key objective in locating and evaluating suitable coal prospects predominantly in South East Asia. Expenditure is planned to cover a combination of option to purchase, on ground exploration and equity participation. Further funds will also be applied to the Tabalong Coal Project in order to finalise development options including processing and transport options. Balline Garnet The Balline Garnet mineral sands project in WA is considered a key development project for the Company. Considerable on ground works have taken place with an ultimate view to bring the project into production in the second half of Balline will require firm off take agreements in order to underpin any funding of the project. Until these agreements are concluded there will be a requirement for continued funding of land access, further drilling and assaying and the final mining approvals process. General working capital and Expenses of the Offer Required for overall operations of the Company and covers all corporate expenditure including leases, rental, employment costs and fees. Expenses of the Offer relate to underwriting fees, marketing and legal works directly associated with the Offer. 2.2 Effect of the Issue and Pro Forma Statement of Financial Position The effect of the Issue will be (assuming no Options are exercised) that: (a) (b) (c) cash reserves will initially increase by approximately $16.9 million (before costs) assuming Full Subscription or approximately $10.7 million (before costs) assuming the Underwritten Amount; the number of Shares on issue will increase from 195,351,787 to approximately 325,586,312 assuming Full Subscription or 277,743,109 assuming the Underwritten Amount; and the number of Options on issue will increase from 1,550,000 to approximately 131,784,525 assuming Full Subscription or 83,941,322 assuming the Underwritten Amount. 10

12 2.3 Statement of Financial Position Set out below is the Consolidated Statement of Financial Position of the Company as at 31 May 2010 (unaudited), and the Consolidated Pro-Forma Statement of Financial Position as at 31 May 2010 (unaudited) incorporating the effect of the Issue assuming both the Underwritten Amount and Full Subscription. The significant accounting policies upon which the Statement of Financial Position and the Pro-Forma Statement of Financial Position are based are contained in the audit reviewed financial report of the Company for six months ended 31 December The Pro-Forma Statement of Financial Position includes the following adjustments: (a) (b) issue of 130,234,525 New Shares and New Options at 13 cents per New Share pursuant to the Issue to raise $16.9 million (before costs), assuming Full Subscription. Issue of 82,391,322 New Shares and 82,391,322 New Options at 13 cents per New Share pursuant to the Issue to raise $10.7 million (before costs) assuming the Underwritten Amount; estimated costs of the Issue of $700,000 for Full Subscription or $400,000 for the Underwritten Amount; and (c) the proceeds of the sale of the Bald Hill asset (as announced to the ASX on 28 June 2010). 11

13 Altura Mining Limited and Controlled Entities Pro-forma Consolidated Statement of Financial Position Actual 31 May 2010 (Unaudited) Proforma 31 May 2010 Underwritten Amount (Unaudited) Proforma 31 May 2010 Full Subscription (Unaudited) $ $ $ Current assets Cash and cash equivalents 1,007,596 12,732,596 18,632,596 Trade and other receivables 2,296,058 2,296,058 2,296,058 Other current assets 326, , ,190 3,629,844 15,354,844 21,254,844 Assets of disposal group classified as held for sale 379, Total current assets 4,008,985 15,354,844 21,254,844 Non-current assets Receivables 359, , ,673 Property, plant and equipment 4,267,027 4,267,027 4,267,027 Exploration and evaluation 16,398,664 16,398,664 16,398,664 Intangible assets 4,529,130 4,529,130 4,529,130 Deferred tax asset 4,654,973 4,654,973 4,654,973 Total non-current assets 30,209,467 30,209,467 30,209,467 Total assets 34,218,452 45,564,311 51,464,311 Current liabilities Trade and other payables 1,212, , ,817 Interest bearing liabilities 193, , ,736 Short term provisions 549, , ,913 1,956,466 1,631,466 1,631,466 Liabilities directly associated with the assets classified as held for sale 146, Total current liabilities 2,102,709 1,631,466 1,631,466 Non-current liabilities Interest bearing loans 2,183,476 2,183,476 2,183,476 Deferred tax liability 4,493,445 4,493,445 4,493,445 Total non-current liabilities 6,676,921 6,676,921 6,676,921 Total liabilities 8,779,630 8,308,387 8,308,387 Net assets 25,438,822 37,255,924 43,155,924 Equity Contributed equity 38,781,095 49,081,095 54,981,095 Reserves 530, , ,299 Accumulated losses (14,436,544) (12,919,442) (12,919,442) Parent interest 24,874,850 36,691,952 42,591,952 Minority equity interest 563, , ,972 Total equity 25,438,822 37,255,924 43,155,924 12

14 2.4 Effect on Capital Structure A comparative table of changes in the capital structure of the Company as a consequence of the Issue and the placement is set out below, assuming that the Issue is fully subscribed and no Options are exercised. Capital Structure after Completion of Issue Security Underwritten Amount Full Subscription SHARES Shares quoted on ASX as at the date of this Prospectus 195,351, ,351,787 New Shares issued pursuant to this Prospectus 82,391, ,234,525 Total issued Shares 277,743, ,586,312 OPTIONS Unlisted Options exercisable at $0.60 on or before 30 November 2010 Unlisted Options exercisable at $0.50 on or before 31 July 2011 Unlisted Options exercisable at $0.40 on or before 31 December 2011 New Options issued pursuant to this Prospectus (to be quoted on ASX) 250, , , , , ,000 82,391, ,234,525 Total issued Options 83,941, ,784,525 There is no certainty to when or to what extent any New Options will be exercised. Depending on the amount raised (if any) from the exercise of any New Options, the Directors current intention is to apply the funds towards: (a) (b) (c) (d) if suitable, progressing the Balline Garnet Project towards mine development; if a suitable coal opportunity is found, pursuing that opportunity; if suitable provide capital contribution for Altura s share in the Mt Webber DSO project; and further exploration on the Company s existing extensive exploration portfolio. 13

15 3 ACTIONS REQUIRED BY ELIGIBLE SHAREHOLDERS 3.1 What you may do As an Eligible Shareholder, you may: subscribe for all of your Entitlement (refer section 3.2); or allow all or part of your Entitlement to lapse (refer section 3.3). 3.2 To subscribe for all of your Entitlement If you wish to subscribe for all of your Entitlement, complete the accompanying Application Form in accordance with the instructions set out in that form. The Application Form sets out the number of New Shares and New Options you are entitled to subscribe for. The completed Application Form must be accompanied by a cheque or bank draft made payable to Altura Mining Limited and crossed Not Negotiable for the appropriate Application Money in Australian dollars calculated at 13 cents per New Share and New Option accepted, and received by the Company at either of the following addresses by no later than 5.00 pm (EST) on 20 August The Company will present the cheque or bank draft on or around the day of receipt of the Application Form. If a cheque is not honoured upon its first presentation, the Directors reserve the right to reject the relevant Application Form. If the amount of your cheque(s) or bank draft(s) for Application Money (or the amount for which those cheque(s) or bank draft(s) clear in time for allocation) is insufficient to pay for the number of New Shares and New Options you have applied for in your Application Form, you may be taken to have applied for such lower number of New Shares and New Options as your cleared Application Money will pay for (and to have specified that number of New Shares and New Options in your Application Form) or your Application may be rejected. By hand delivery: Altura Mining Limited c/- Link Market Services Limited Level 12, 680 George Street SYDNEY NSW 2000 By post: Altura Mining Limited c/- Link Market Services Limited Locked Bag A14 SYDNEY SOUTH NSW 1235 Alternatively, if you are paying by Bpay, refer to your personalised instructions on your Application Form. Eligible Shareholders who wish to pay by Bpay must ensure that payment is received by the Company no later than 5.00 pm (EST) on the Closing Date. Eligible Shareholders should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment. It is the responsibility of each Eligible Shareholder who applies for New Shares and New Options to ensure that Application Money is submitted through Bpay with sufficient time for it to be processed by their financial institution and received by the Company no later than 5.00 pm (EST) on the Closing Date. The Company will be under no obligation to issue New Shares and New Options to any Eligible Shareholder whose Application Money is not received before 5.00pm (EST) on the Closing Date, regardless of the date and time on which payment was submitted for processing with their financial institution. 3.3 Entitlements not taken up If you are a Shareholder and do not wish to accept all (or part) of your Entitlement, you are not obliged to do anything. You will receive no benefit or New Shares and New Options and your Entitlement will first become Underwritten Securities and possibly Shortfall Securities. If you wish to receive a benefit, you must take action to accept your Entitlement in accordance with the instructions above and on the back of the accompanying Application Form. 14

16 The number of Existing Shares you hold as at the Record Date and the rights attached to those Existing Shares will not be affected if you choose not to accept any of your Entitlement. The Company, in conjunction with the Underwriter will deal with any Underwritten Securities not accepted in accordance with the Underwriting Agreement. The Directors reserve the right, subject to the requirements of the Listing Rules and the Corporations Act, to place any Shortfall Securities within 3 months after the Closing Date. Shortfall Securities will be issued at a price not less than the issue price of New Shares under the Rights Issue. 3.4 Application Form is binding A completed and lodged Application Form constitutes a binding offer to acquire New Shares and New Options on the terms and conditions set out in this Prospectus and, once lodged, cannot be withdrawn. If the Application Form is not completed correctly, it may still be treated as a valid application for New Shares and New Options. The Directors decision whether to treat an acceptance as valid and how to construe, amend or complete the Application Form is final. By completing and returning your Application Form with the requisite Application Monies, you will be deemed to have represented that you are an Eligible Shareholder. In addition, you will be deemed to have represented and warranted on behalf of yourself or each person on whose account you are acting that the law in your place of residence and/or where you have been given the Prospectus, does not prohibit you from being given the Prospectus. If you have any queries concerning your Entitlement, please contact the Company s Share Registry using the details below: Link Market Services Limited Level 12, 680 George Street SYDNEY NSW 2000 Tel: (from within Australia) or (from outside Australia) or contact your stockbroker or professional adviser 15

17 4 RIGHTS AND LIABILITIES ATTACHING TO NEW SHARES AND NEW OPTIONS The following is a summary of the more significant rights and liabilities attaching to New Shares and New Options to be issued pursuant to this Prospectus. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders and Optionholders. To obtain such a statement, persons should seek independent legal advice. 4.1 Rights Attaching to New Shares The rights attaching to the New Shares arise from a combination of the Company s Constitution, the Corporations Act, the ASX Listing Rules and general law. A copy of the Company s Constitution is available for inspection free of charge during business hours at its registered office or can be downloaded from the website of the Company at or the website of ASX at Shareholders can also request that the Company send them a copy of the Constitution by giving written notice to the Company. The New Shares to be issued pursuant to this Prospectus are ordinary shares and will as from their allotment rank equally in all respects with all Existing Shares. A summary of the rights attaching to the New Shares is set out below. (a) (b) (c) (d) (e) (f) (g) Subject to the Constitution of the Company and any rights or restrictions at the time being attached to a class of shares, at a general meeting of the Company every Shareholder present in person, or by proxy, attorney or representative has one vote on a show of hands, and upon a poll, one vote for each Share held by the Shareholder. In the case of an equality of votes, the chairman has a casting vote. Subject to the Corporations Act, the ASX Listing Rules and any rights or restrictions attached to a class of shares, the Company may pay dividends as the Directors resolve but only out of profits of the Company. The Directors may determine the method and time for payment of the dividend. Subject to the Corporations Act, the ASX Listing Rules and any rights or restrictions attached to a class of shares, on a winding up of the Company any surplus must be divided among the shareholders of the Company. Generally, shares are freely transferable, subject to satisfying the requirements of the ASX Listing Rules, ASTC Settlement Rules and the Corporations Act. The Directors may decline to register any transfer of Shares but only where permitted to do so by the Corporations Act, the ASX Listing Rules, the ASTC Settlement Rules, or under the Company s Constitution. Subject to the Corporations Act, the ASX Listing Rules, the ASTC Settlement Rules and any rights attached to a class of shares, the Company (under the control of the Directors) may allot and issue shares and grant options over shares, on any terms, at any time and for any consideration, as the Directors resolve. Subject to the Corporations Act, the ASX Listing Rules, the ASTC Settlement Rules and the terms of issue of shares in a particular class, the Company may vary or cancel rights attached to shares in that class by either special resolution passed at a general meeting of the holders of the shares in that class, or with the written consent of the holders of at least 75% of the votes in that class. Each Shareholder will be entitled to receive notice of, and to attend and vote at, general meetings of the Company and to receive notices, accounts and other documents required to be furnished to Shareholders under the Company s Constitution, the Corporations Act and the ASX Listing Rules. 16

18 4.2 Rights attaching to New Options The New Options issued pursuant to this Prospectus will be issued on the following terms and conditions: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Each New Option shall entitle the Optionholder, when exercised, to one Share. The New Options are exercisable wholly or in part at any time prior to 5.00 pm (WST) on 31 August 2011 ( Expiry Date ). New Options not exercised by that date shall lapse. Each New Option may be exercised by notice in writing to the Company, together with the payment for the number of Shares in respect of which the New Options are exercised, at any time before the Expiry Date. Any notice of exercise of a New Option received by the Company will be deemed to be a notice of the exercise of that New Option as at the date of receipt. The New Option exercise price is 15 cents per New Option. A New Option does not confer the right to a change in exercise price or a change in the number of the underlying Shares over which the New Option can be exercised. Shares issued upon exercise of the New Options will be issued following receipt of all the relevant documents and payments and will rank equally in all respect with the then issued Shares. The Company will apply for quotation on ASX of the New Options and all Shares issued upon exercise of the New Options. Subject to the Corporations Act, the Constitution and the Listing Rules, the New Options are freely transferable. There are no participating rights or entitlements inherent in the New Options and New Option holders will not be entitled to participate in new issues of securities offered to Shareholders during the currency of the New Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days after the issue is announced so as to give New Option holders the opportunity to exercise their New Options before the date for determining entitlements to participate in any issue. If at any time the issued capital of the Company is reorganised, the rights of a New Option holder are to be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation. 17

19 5 RISK FACTORS An investment in the Company is not risk free and investors should consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for New Shares and New Options. Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for New Shares and New Options. The following is not intended to be an exhaustive list of the general risk factors relating to an investment in the Company. 5.1 Company specific risks Future Capital Requirements The Company's activities will require significant expenditures. There can be no assurances that the funds raised through the Offer will be sufficient to successfully achieve all the objectives of the Company's overall business strategy. If the Company is unable to use debt or equity to fund expansion after the substantial exhaustion of the net proceeds of the Offer there can be no assurances that the Company will have sufficient capital resources for that purpose, or other purposes, or that it will be able to obtain additional resources on terms acceptable to the Company or at all. Any additional equity financing may be dilutive to Shareholders and any debt financing if available may involve restrictive covenants, which may limit the Company's operations and business strategy. The Company's failure to raise capital if and when needed could delay or suspend the Company's business strategy and could have a material adverse effect on the Company's activities. Reliance on Key Personnel The Company s success depends largely on the core competencies of its Directors and management, and their familiarisation with, and ability to operate, in the mining industry as well as the Company s ability to retain its key executives. Competition The Company competes with other companies. Some of these companies have greater financial and other resources than the Company and, as a result, may be in a better position to compete for future business opportunities. There can be no assurance that the Company can compete effectively with these companies. Country risk The Company has projects located in Indonesia (held through Minvest International Corporation, which is incorporated in Mauritius) which is a less developed country than Australia with associated political, economic, legal and social risks. There can be no assurance that the systems of government and political systems in overseas countries will remain stable. There can be no assurance that government regulations relating to foreign investment, repatriation of foreign currency, taxation, and the mining industry in these countries will not be amended or replaced in the future to the detriment of the Company s business and/or projects. Uranium exploration and mining restrictions The Federal Government is responsible for uranium mining within the Northern Territory and currently permits the mining of uranium under a strict legislative framework. Investors should note that even if the Company finds deposits of uranium, it may not be able to obtain necessary governmental approvals or meet the additional costs of complying with 18

20 strict regulations or conditions. In such circumstances, deposits of uranium that might otherwise have been economic to mine may prove to be uneconomic. The sale and export of uranium is regulated by the Federal Government. These regulations are designed to prevent nuclear proliferation and are tightly controlled through the use of licensing processes. Australian uranium can only be sold and exported to those countries who, amongst other things, undertake to use it for peaceful purposes. At present there are limited countries to which uranium may be sold and exported. 5.2 Mining industry risks Exploration and Evaluation Risks The success of the Company depends on the delineation of economically mineable reserves and resources, access to required development capital, movement in the price of commodities, securing and maintaining title to the Company's exploration and mining tenements and obtaining all consents and approvals necessary for the conduct of its exploration activities. Exploration on the Company's existing exploration and mining tenements may be unsuccessful, resulting in a reduction of the value of those tenements, diminution in the cash reserves of the Company and possible relinquishment of the exploration and mining tenements. Ability to exploit successful discoveries It may not always be possible for the Company to exploit successful discoveries which may be made in areas in which the Company has an interest. Such exploration would involve obtaining the necessary licences or clearances from the relevant authorities that may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible for such conditions to be satisfied. Further, the decision to proceed to further exploration may require participation of other companies whose interests and objectives may not be the same as the Company s. Mining and development risk Mineral exploration and mining are speculative operations that may be hampered by circumstances beyond the control of the Company. Profitability depends on successful exploration and/or acquisition of reserves, design and construction of efficient processing facilities, competent operation and management and proficient financial management. Exploration in itself is a speculative endeavour, while mining operations can be hampered by force majeure circumstances and cost overruns for unforseen events. Resource Estimations Resource estimates are expressions of judgment based on knowledge, experience and resource modelling. As such, resource estimates are inherently imprecise and rely to some extent on interpretations made. Despite employing qualified professionals to prepare resource estimates, such estimates may nevertheless prove to be inaccurate. Furthermore, resource estimates may change over time as new information becomes available. Should the Company encounter mineralisation or geological formations different from those predicted by past drilling, sampling and interpretations, resource estimates may need to be altered in a way that could adversely affect the Company s operations. Commodity Price and Exchange Rate Risks To the extent the Company is involved in mineral production the revenue derived through the sale of commodities may expose the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many 19

21 factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors. In addition to adversely affecting the reserve estimates of the Company and its financial condition, declining commodity prices can impact operations by requiring a reassessment of the feasibility of a particular project. Such a reassessment may be the result of a management decision or may be required under financing arrangements related to a particular project. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed. Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company in its Australian operations are and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets. Environmental Risks The operations and proposed activities of the Company in Australia are subject to State and Federal laws and regulation concerning the environment. The Company also has operations and activities in Indonesia which are subject to Indonesian environmental laws and regulations. As with most exploration projects and mining operations, the Company's activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. The Company attempts to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws. Native Title and Title Risks It is also possible that, in relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be affected. The Directors closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest. Tenements Interests in tenements in Australia and Indonesia are governed by legislation in their respective jurisdictions and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments. Joint Venture Parties, Agents and Contractors The Directors are unable to predict the risk of financial failure or default by a participant in any joint venture to which the Company is or may become a party or the insolvency or managerial failure by any of the contractors used by the Company in any of its activities or the insolvency or other managerial failure by any of the other service providers used by the Company for any activity. 20

22 Potential Acquisitions As part of its business strategy, the Company may make acquisitions of or significant investments in companies, products, technologies or resource projects. Any such future transactions would be accompanied by the risks commonly encountered in making acquisitions of companies, products, technologies or resource projects. Insurance and Uninsured Risks The business of the Company is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to properties of the Company or others, delays in mining, monetary losses and possible legal liability. Although the Company maintains insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance will not cover all the potential risks associated with its operations and insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. It is not always possible to obtain insurance against all such risks and the Company may decide not to insure against certain risks because of high premiums or other reasons. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to the Company or to other companies in the mining industry on acceptable terms. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations. Government Regulation The mining, processing, development and mineral exploration activities of the Company are subject to various laws governing prospecting, development, production, taxes, labour standards and occupational health, mine safety, toxic substances, land use, water use, land claims of local people, and other matters. Although the exploration and development activities of the Company are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail production or development. Amendments to current laws and regulations governing operations and activities of mining and milling or more stringent implementation thereof could have a substantial adverse impact on the Company. The Federal Government has announced its intention to introduce a Mineral Resource Rent Tax (MRRT) which will apply to iron ore and coal (bulk commodity) projects in Australia from 1 July Full details of the MRRT are yet to be announced and the Company is therefore unable to advise the impact it may have on the Company s operations should it be enacted with effect from July General investment risks Economic risk General economic conditions in Australia and internationally, movements in interest, inflation and currency exchange rates, variations in commodity prices, the global security situation and the possibility of terrorist disturbances, changes to government regulation, policy or legislation, changes which may occur to the taxation of companies as a result of changes in Australian and foreign taxation laws and changes to dividend imputation in 21