Trading Policy Mawson West Ltd Level 1, 1 Walker Avenue West Perth, WA 6005 Telephone: (61 8) 9321 9669 Facsimile: (61 8) 9481 2394 www.mawsonwest.com. 1
Summary of the Trading Policy The Trading Policy (the Policy ) exists to advise all directors, officers, employees and contractors (collectively the Representatives ) of Mawson West Ltd and its controlled subsidiaries (collectively the Company ), of their responsibilities regarding price sensitive information and insider trading. The law regulates the use and disclosure of information concerning the Company s business and activities that could affect the price of the Company s securities ( price sensitive information, also known as material information under Canadian securities laws). If Representatives or others have access to price sensitive information which has not been disclosed to the market and misuse it by trading or passing it on to unauthorised people, serious penalties may apply. A person or entity who becomes an insider (as defined in the Policy) of the Company must file an insider report on the System for Electronic Disclosure by Insiders in Canada within 10 days of the date of becoming an insider and 5 days of any change of the insider s status. In addition, Directors, officers and employees and those people who are deemed to have a special relationship with the Company are at all times prohibited from dealing in the Company s securities during the prescribed blackout periods. The blackout period timeframes are outlined in the Policy. From time-to-time, the Company Secretary will notify relevant individuals of the commencement and conclusion of unscheduled blackout periods. Additional Restrictions are placed on Restricted Employees being, directors, officers, senior executives and other persons as determined by the Chairman and the Company Secretary from time to time. Restricted Employees must apply for written acknowledgement to gain authority to subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any securities (ie. shares or options) in the Company. Further Information Representatives may not, disclose information to anyone outside the Company, including family members and friends, other than in accordance with Company procedure. Before engaging in any transaction, it should be carefully considered how enforcement authorities and others might view the transaction in hindsight. As a general rule, information should not be considered fully absorbed by the marketplace until the next trading day after the information is released. The Policy also applies to anyone who lives in the household of the Representative and any family members whose transactions in Company securities are directed/influenced by the Representative. Restricted Employees may not engage in any of the following transactions: o Short Term Trading; and o Short Sales. Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the Company Secretary. Ultimately, responsibility for adhering to this Policy and avoiding unlawful transactions rests with the individual. Please be aware this summary does not replace the requirement for Representatives to read the Policy in its entirety. 2
Contents Summary of the Trading Policy... 2 Contents... 3 Section 1 Statement of Purpose... 4 Section 2 Overview... 4 Price Sensitive Information... 5 Relevant Legislation... 5 Section 3 Application of the Policy... 7 Insider Reporting Obligations... 7 Protocol for Dealing in Company Securities... 7 Section 4 Further Information... 8 3
Section 1 Statement of Purpose This Trading Policy (the Policy ) exists to advise all Directors, officers, employees and contractors (collectively the Representatives ) of Mawson West Ltd and its controlled subsidiaries (collectively the Company ), of their responsibilities regarding continuous disclosure, price sensitive information, and insider trading. The Company takes insider trading very seriously and it expects its Representatives to do the same. This document outlines the Company s policy and procedures for compliance with the laws concerning insider trading, and is intended to protect Representatives from inadvertently breaching those rules. All Representatives of the Company are subject to this Policy relating to trading in the Company s securities and where relevant, securities of other public issuers. Compliance with insider trading laws and this Policy is an individual s responsibility and any breach will be regarded by the Company as serious misconduct which may lead to disciplinary action and/or dismissal. Section 2 Overview Mawson West Ltd is an Australian company with shares that are publicly traded and presently listed on the Toronto Stock Exchange ( TSX ). As such, the law regulates the use and disclosure of information concerning the Company s business and activities that could affect the price of the Company s securities ( price sensitive information, also known as material information under Canadian securities laws). The laws on insider trading exist to prevent people who have price sensitive information that is not known to the market (insiders) from taking advantage of it. If Representatives or others have access to price sensitive information which has not been disclosed to the market and misuse it by trading or passing it on to unauthorised people, serious penalties may apply. Compliance with this Policy does not necessarily equate to compliance with applicable legislation. If you have any questions or if you are unsure whether any particular information is material or price sensitive or whether it has been disclosed to the public as required, you are encouraged to contact the Company Secretary at: Caroline Keats Company Secretary Mawson West Ltd Level 1, 1 Walker Avenue West Perth, Western Australia 6005 Phone: +61 8 9321 9669 Fax: +61 8 9481 2394 4
Price Sensitive Information Price sensitive information is, generally described as, non-public information that would reasonably be expected to have a material (or significant) effect on the price or value of the Company s securities. Hereafter are only a few examples of price sensitive information include: A material change in the Company s financial forecast, expectation or position; A material change in the Company s ore resources or reserves forecast or expectation; Projections of future earnings, losses, cash flows or other key financial performance measure; Significant mineral discoveries or exploration results; The existence of key projects to acquire additional interests; The existence of key projects to dispose of the Company s businesses or assets; Intended debt or equity financings by the Company; The impending appointment or departure of a key senior executive or Director; An impending changes in share ownership that may affect control of the Company; The intention to declare a dividend or change dividend policy; and The gain or loss of a significant customer or supplier. As a starting point you should regard all information about the Company and its business and activities as confidential and price sensitive, unless you are certain that the information is in the public domain or is not otherwise sensitive or restricted. Should you have any doubt regarding the nature of such information, you are encouraged to contact the Company Secretary. Relevant Legislation As a Representative of the Company, you may from time to time obtain or have access to price sensitive information that is not generally available to others outside of the Company. That information is inside information and as a recipient of that information you will be restricted in your ability to use and disclose that information until it has been made generally available to the public. In particular, securities legislation prohibits any person who is an insider, or who is in a special relationship with the Company, from either: Purchasing or selling the Company s shares with the knowledge of price sensitive information concerning the Company that has not been generally disclosed; or 5
Informing (or tipping ), other than when necessary in the course of business, another person or company of price sensitive information concerning the Company before the sensitive information has been generally disclosed. The definition of an insider varies from statute to statute but in any case will include directors and senior officers of the Company. Generally, securities legislation defines insiders as: Every director or senior officer of a public issuer; Every director or senior officer of an issuer that is itself an insider of a public issuer; Any person or entity that: o Exercises control or direction over voting securities of a public issuer, or o Beneficially owns, directly or indirectly, certain voting securities of a public issuer and exercises control or direction over certain other voting securities of a public issuer, carrying more than 10% of the voting rights attached to all voting securities of the public issuer for the time being outstanding other than voting securities held by the person or Company as underwriter in the course of distribution. A senior officer includes, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, senior executives, the Secretary, the Treasurer, the Financial Controller or any other individual who performs functions for an issuer similar to those normally performed by an individual occupying any such office. Those people deemed to have a special relationship with the Company are as follows: Any person or entity that is an insider, affiliate or associate of the Company; Any person employed or retained by the Company; Any person having privileged information in the course of his or her relations with the Company; Any person having privileged information that was disclosed by an insider or by any of the foregoing persons; or Any person who has acquired privileged information that he or she knows to be such. The penalties for a breach of prohibitions are onerous. In both Canada and Australia, a breach may render an offender personally liable to prosecution and, upon conviction, to a fine, a jail sentence, or both. In addition, an offender may be subject to civil actions initiated by certain security holders, the companies whose securities were traded, and various securities commissions. If you are unsure whether or not you may trade in a given circumstance, you should contact the Company Secretary to determine whether or not the particular information is material. 6
Section 3 Application of the Policy The application of this Policy is directed to ensuring that Representatives meet their insider reporting and trading obligations. Central to fulfilling these obligations is adherence to the protocol for dealing in the Company s securities. Insider Reporting Obligations A person or entity who becomes an insider of the Company must file an insider report on the System for Electronic Disclosure by Insiders ( SEDI ) in Canada within ten days of the date of becoming an insider, reporting their status as an insider and the securities of the Company over which they have direct or indirect beneficial ownership or control or direction. With prior arrangement, assistance in filing the insider report can be provided by the Company Secretary. However, the obligation to report still falls on the insider. An insider whose direct or indirect beneficial ownership of or control or direction over securities of the Company subsequently changes, (including a grant, exercise or expiry of stock options) must file on SEDI, an insider report of the change within five days of the date of the change. Insiders may choose to delegate their SEDI reporting obligations to the Company Secretary or undertake such reporting independently. Those individuals that delegate regulatory reporting to the Company Secretary must provide to the Company Secretary, all details of any transaction to which the SEDI reporting obligations apply, within 72 hours of the transaction taking place. Protocol for Dealing in Company Securities Prescribed Blackout Periods In addition to the overriding prohibition against dealing in the Company s securities when a person is in possession of price sensisitve information, Directors, officers and employees are at all times prohibited from dealing in the Company s securities during the prescribed blackout periods. For the first, second and third quarters, the blackout period is the ten days immediately preceding the results announcements and terminating the next trading day after the release date of the quarter s results, unless otherwise advised by the Company. For the December 31 year-end financial statements, the blackout period extends from February 1 and terminates the next trading day following the release of year end results, unless otherwise advised by the Company. Notice of commencement and cessation of black out periods will be circulated once determined. The blackout periods may be varied by the Board of Directors and circulated, with appropriate notice, to all Directors, officers and employees. 7
Unscheduled Developments In addition to the prescribed blackout periods noted above and the overriding prohibition against dealing in the Company s securities when a person is in possession of price sensitive information, blackout periods may arise as a result of unscheduled developments. Unscheduled developments include significant corporate acquisitions, divestitures, contract negotiations, material new information regarding the Company s resources or reserves, asset write downs, or similar transactions that will generally result in a material change in the affairs of the Company. From time-to-time, the Company Secretary will notify relevant individuals of the commencement and conclusion of blackout periods resulting from such unscheduled developments. Restricted Employees Additional restrictions are placed on trading by directors, officers, senior executives and other persons as determined by the Chairman and Company Secretary from time to time. These will be known as Restricted Employees. The Company Secretary maintains a list of Restricted Employees. Written Acknowledgement All Restricted Employees must apply for written acknowledgement (see application form at Annexure A which also states those authorised to give written acknowledgement), to gain authority to, whether in their own capacity or as an agent for another, subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any securities (ie. shares or options) in the Company. Section 4 Further Information The following notes are provided as additional information to help clarify certain aspects related to insider trading. a) Disclosure of Information to Others. The Company has established procedures for releasing material information in a manner that is designed to achieve broad public dissemination of the information immediately upon its release. You may not, therefore, disclose such information to anyone outside the Company, including family members and friends. You also may not discuss the Company or its business in an internet chat room or similar internet-based forum. The requirements of this Policy are in addition to existing policies and agreements with respect to the non-disclosure of confidential information and the general rule that the Company s business is not to be discussed with anyone outside the Company except as necessary in connection with the conduct of the Company s business. As a director, officer, employee or contractor of a company whose shares are actively traded on the TSX, you should be aware that many people, including stock brokers, market analysts, journalists and stockholders have an interest in information about the Company and may seek to obtain it from you. If you receive any inquiry of this kind, you should decline to respond and refer the inquiry to the Company Secretary. 8
b) Twenty-Twenty Hindsight Anyone scrutinizing transactions will be doing so after the fact, with the benefit of hindsight. As a practical matter, before engaging in any transaction, carefully consider how enforcement authorities and others might view the transaction in hindsight. c) When Information is Public If you are aware of material non-public information, you may not trade until the information has been disclosed broadly to the marketplace (such as by press release or a SEDAR filing) and the investing public has had time to absorb the information fully. To avoid the appearance of impropriety, as a general rule, information should not be considered fully absorbed by the marketplace until the next trading day after the information is released. If, for example, the Company was to make an announcement on a Monday, you should not trade in the Company s securities until Tuesday. If an announcement was made on a Friday, Monday generally would be the first eligible trading day. Holidays in which securities markets are closed are not business days and therefore extend the applicable period. d) Transactions by Family Members and Other Related Parties The Policy also applies to your family members who reside with you, anyone else who lives in your household, and any family members who do not live in your household but whose transactions in the Company securities are directed by you or are subject to your influence or control (such as parents or children who consult with you before they trade in the Company stock). The Policy also applies to partnerships of which you are a partner, trusts of which you are a trustee or in which you have a substantial beneficial interest, estates of which you are an executor and investment funds or similar vehicles with which you are affiliated. You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in the Company s stock. e) Stock Option Exercises The Policy does not apply to the exercise of an employee stock option unless otherwise directed by the Company Secretary. The Policy does apply, however, to any sale of the Company s securities acquired on exercise of stock options, including sales as part of a broker assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option. f) Additional Prohibited Transactions. The Company considers it improper and inappropriate for any Restricted Employee of the Company to engage in short-term or speculative transactions in the Company s securities. It therefore is the Company s policy that Restricted Employees may not engage in any of the following transactions: 9
Short-term Trading Short-term trading of the Company s securities may be distracting to the employee and may unduly focus the employee on the Company s short-term stock market performance instead of the Company s long-term business objectives. For these reasons, any Restricted Employee of the Company who purchases the Company s securities in the open market may not sell any Company securities of the same class during the six months following the purchase. A Restricted Employee, other than a director or officer, may apply for a hardship exemption from this prohibition, but in the absence of a significant and unforeseen problem, such a request will be ordinarily denied. Short Sales Short sales of the Company s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller s incentive to improve the Company s performance. For these reasons, this Policy prohibits short sales of the Company s securities. Exercising employee options and then selling the shares does not constitute a short sale. g) Post-Termination Transactions This Policy continues to apply to your transactions in the Company securities even after you have terminated employment. If you are in possession of material non-public information when your employment terminates, you may not trade in Company securities until that information has become public or is no longer material. You are reminded that the prohibition under securities laws on trading while in possession of material non-public information applies to anyone and is not limited to employees of the issuer. Accordingly, the risk of a violation and the imposition of penalties as outlined above does not end when you terminate your employment with the Company. Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the Company Secretary. Ultimately, however, the responsibility for adhering to this Policy and avoiding unlawful transactions rests with the individual. 10
ANNEXURE A APPLICATION FOR WRITTEN ACKNOWLEDGEMENT PRIOR TO DEALING IN THE SECURITIES OF MAWSON WEST LTD Name:.. (BLOCK CAPITALS PLEASE) Securities as indicated below: NUMBER AND CLASS OF SECURITIES (eg: ordinary shares) REGISTERED IN THE NAME OF (see Note 1) NATURE OF INTEREST (see Note 2) NATURE OF TRANSACTION (see Note 3) As far as I am aware, I am not in possession of any unpublished price-sensitive information in relation to Mawson West Ltd, its subsidiaries and related companies. If this should change before the deal is transacted I undertake not to proceed. Please provide acknowledgement by counter-signing and returning a duplicate of this form. Signed:. Date:. Name:.. Title: Permission given on the basis that the transaction is completed by no later than 7 business days of clearance being received. Signed: Date:.. (Please see overleaf for signing authorities) Notes: (1) REGISTERED IN THE NAME OF Give full name and if not yourself state the connection to yourself (2) NATURE OF INTEREST Specify precisely, ie: personally, joint holding or as trustee (3) NATURE OF TRANSACTION Specify precisely, eg: sale of shares 11
Authorisation levels In the case of an employee or his or her associate, the Company Secretary, CEO or Chairman In the case of an officer or his or her associate, the Company Secretary, CEO or Chairman In the case of a director or his or her associate, the Chairman In the case of the Chairman or his or her associate, the Chairman of the Audit Committe 12