RNS Number:0176T
Gippsland Limited
21 October 2005
GIPPSLAND LIMITED
NOTICE OF ANNUAL GENERAL MEETING
The Company hearby gives notice that the Annual General Meeting of shareholders
of Gippsland Limited ("Gippsland" or "the Company") will be held at 18 Stirling
Highway, Nedlands WA 6009, Australia, at 10.00am (Perth Time) on Friday 18th
November 2005.
AGENDA
BUSINESS
The Explanatory Statement which accompanies and forms part of this Notice
describes the matters to be considered as ordinary business and special
business. Certain abbreviations and other defined terms are used throughout this
Notice. Defined terms are generally identifiable by the use of an upper case
first letter. Details of the definitions and abbreviations used are set out in
the Glossary contained in the Explanatory Statement.
ORDINARY BUSINESS
Annual Accounts
To receive, consider and adopt the financial report of the Company and the
consolidated financial report of the consolidated entity for the year ended 30
June 2005 and the reports by the Directors and Independent Auditor.
Resolution 1: Re-election of a Director (By Rotation)
To consider and, if thought fit, to pass, with or without amendment, the
following resolution as an ordinary resolution:
"That Dr John Chisholm, being a director of the Company retires by rotation in
accordance with the Constitution and, being eligible, is hereby re-elected as a
director of the Company."
Short Explanation: The Constitution requires that at the Annual General Meeting,
one-third of the Directors for the time being shall retire from office. A
retiring Director is eligible for re-election
Resolution 2: Re-election of a Director (New Appointment)
To consider and, if thought fit, to pass, with or without amendment, the
following resolution as an ordinary resolution:
"That Mr John Stuart Ferguson Dunlop, is hereby re-elected as a director of the
Company."
Resolution 3: Ratify Previous Issue of 15,000,000 Shares
To consider and, if thought fit, to pass, with or without amendment, the
following resolution as an ordinary resolution:
"That, pursuant to Listing Rule 7.4 of the Listing Rules of the ASX, and for all
other purposes, the Company approves and ratifies the allotment and issue of
15,000,000 Shares in the Company at an issue price of 4 UK Pence (approx 9.3
Australian cents) per Share (to raise #600,000 (approximately A$1.4 million)
before expenses) made on 6 October 2005 to various clients of the United Kingdom
stockbroking firm HB-corporate, as set out in the Explanatory Statement
accompanying this Notice of Meeting".
The Company will disregard any votes cast on Resolution 3 by any person who
participated in the issue and any person associated with those persons. However,
the Company need not disregard a vote if it is cast by a person as 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.
Resolution 4 Issue of Options to New Director - Mr John Dunlop (or his nominee)
To consider and, if thought fit, to pass, with or without amendment, the
following resolution as an ordinary resolution:
"That, in accordance with Listing Rule 10.11 of the Official Listing Rules of
the Australian Stock Exchange Limited and Section 208 of the Corporations Act
2001, and for all other purposes, shareholders approve the issue of 2,250,000
unlisted options for no consideration exercisable on or before 31 December 2007
at an exercise price of 15 cents each to Mr John Dunlop (or his nominee) on the
terms and conditions as set out in the Explanatory Statement accompanying this
Notice of Meeting.
The Company will, in accordance with section 224 of the Corporations Act,
disregard any votes cast on this Resolution 4 by John Dunlop or any associates
of John Dunlop. However, the Company need not disregard a vote if it is cast by
a person as 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.
Resolution 5 Adoption of Remuneration Report
To consider and, if thought fit, to pass, with or without amendment, the
following resolution as an ordinary resolution:
"That the Remuneration Report for the year ended 30 June 2005 be adopted".
Note - the vote on this resolution is advisory only and does not bind the
Directors or the Company.
DATED THIS 14th DAY OF OCTOBER 2005
BY ORDER OF THE BOARD
Mr RJ (Jack) Telford
Director
EXPLANATORY STATEMENT
This Explanatory Statement and all attachments are important documents. They
should be read carefully.
If you have any questions regarding the matters set out in this Explanatory
Statement or the preceding Notice, please contact the Company, your stockbroker
or other professional adviser.
Certain abbreviations and other defined terms are used throughout this
Explanatory Statement. Defined terms are generally identifiable by the use of an
upper case first letter. Details of the definitions and abbreviations used are
set out in the Glossary contained in this Explanatory Statement.
1. GENERAL INFORMATION
This Explanatory Statement has been prepared for the shareholders of Gippsland
Limited (Gippsland or the Company) in connection with the Annual General Meeting
of the Company to be held on Friday 18th November 2005.
2. RESOLUTION 1 - RE-ELECTION OF A DIRECTOR (BY ROTATION)
Resolution 1 seeks approval for the re-election of Dr John Chisholm as a
Director.
The Constitution requires that at an Annual General Meeting of the Company one
third of the Directors for the time being shall retire from office. A retiring
Director is eligible for re-election.
Dr John Chisholm retires by rotation in accordance with this requirement, is
eligible for re-election and puts himself forward for re-election at this Annual
General Meeting.
3. RESOLUTION 2 - RE-ELECTION OF A DIRECTOR (NEW APPOINTMENT)
Resolution 2 seeks approval for the re-election of Mr John Dunlop as a Director.
The Constitution requires that any new director appointed by the Board must be
approved at the next General Meeting of shareholders. Mr Dunlop was appointed on
1 July 2005.
Accordingly Mr John Dunlop retires from the board in accordance with this
requirement, and being eligible, puts himself forward for re-election at this
Annual General Meeting.
John Stuart Ferguson Dunlop holds Bachelors and Masters Degrees in Mining
Engineering from the University of Melbourne. He is a certified Mine Manager
having approximately 35 years of international surface and underground mining
experience in a variety of base metal, industrial and precious metal production
and management situations.
He is a Director of the Australasian Institute of Mining and Metallurgy (AusIMM)
and Chairman of its affiliate, the Mineral Industry Consultants Association
(MICA).
Mr Dunlop is a highly experienced mining professional having been involved in
the design, construction and on-going operation of a number of major resource
projects throughout the world. He has a detailed knowledge of the Company's 40Mt
Abu Dabbab tantalum project in Egypt having been involved in the preparation of
the project's Bankable Feasibility Study.
He has operated his own mining consulting firm based in Perth since 1992 and was
previously a senior executive with BHP's (now BHP Billiton) Minerals Division,
before becoming General Manager Operations for Aztec Mining Co Ltd until this
company's takeover by Normandy Mining Ltd. Mr Dunlop currently serves as
Chairman of the Australian Listed explorer Alliance Resources Limited, a
position he has held since 9 May 1994, and since 27 December 1995 was a Non
executive Director of Australian Gold Fields NL. He is also a non executive
director of Encore Metals NL since 22 December 1999.
4. RESOLUTION 3 - RATIFY PREVIOUS ISSUE OF 15,000,000 SHARES
Listing Rule 7.4 permits the ratification of previous issues of securities made
without prior shareholder approval, provided the issue did not breach the 15%
threshold set by Listing Rule 7.1. The effect of such ratification is to restore
a company's maximum discretionary power to issue further shares up to 15% of the
issued capital of the company without requiring shareholder approval.
Resolution 3 has been included so that shareholders may ratify pursuant to
Listing Rule 7.4 the previous issue, made on 6 October 2005, of 15,000,000
Shares at an issue price of 4 UK Pence (approx 9.3 Australian cents) per Share
(to raise UK#600,000 (approx A$1.4 million) before expenses) to various clients
of the United Kingdom stockbroking firm HB-corporate. This previous issue did
not breach the 15% threshold set by Listing Rule 7.1.
The funds raised will be applied towards development of the Company's Egyptian
projects, in particular the Wadi Allaqi gold projects, new project initiatives
and working capital.
The Company wishes to ratify this issue pursuant to Listing Rule 7.4, in order
to allow the Company to have the right to place up to a further 15% of its
issued capital at any time during the next 12 months. The information required
to be given to shareholders pursuant to Listing Rule 7.5 is contained in both
this Explanatory Statement and the notes to Resolution 3 as set out in the
Notice of Annual General Meeting. All Shares issued pursuant to Resolution 3
rank equally with the existing fully paid ordinary shares on issue.
5. RESOLUTION 4 - ISSUE OF OPTIONS TO NEW DIRECTOR - MR JOHN Dunlop (OR HIS
NOMINEE)
5.1 Requirement under the Corporations Act and Listing Rules
Resolution 4 seeks shareholders' approval to allow the Company to issue a total
of 2,250,000 unlisted options to Mr John Dunlop, a Non-Executive Director of the
Company, or his nominee.
In order for the options to be issued to the Director, the requirements of
Chapter 2E of the Corporations Act and Listing Rule 10.11 of the Listing Rules
need to be observed. The information required for the purposes of Listing Rule
10.13 is set out in Section 5.8 below.
If approval is given under Listing Rule 10.11, approval is not required under
Listing Rule 7.1 pursuant to the terms of Listing Rule 7.2 (exception 14).
5.2 Chapter 2E of the Corporations Act 2001
Chapter 2E of the Corporations Act 2001 prohibits a public company from giving a
"financial benefit" to a "related party" (which includes Directors and
associates) of the public company unless either:
(a) the giving of the financial benefits falls within one of the
nominated exceptions to the provisions; or
(b) shareholder approval is obtained prior to the giving of the financial
benefit and the benefit is given within 15 months after obtaining such
approval.
The granting of options to Mr Dunlop constitutes the provision of a financial
benefit to a related party of the Company within the meaning of Chapter 2E.
In accordance with Section 219 of the Corporations Act 2001, the following
information is provided to shareholders to allow them to assess the proposed
resolutions.
5.3 The Related Party to Whom the Resolution Would Permit the Financial Benefit
to be Given
Mr John Dunlop.
5.4 The Nature of the Financial Benefit
The proposed financial benefit to be given is the granting by the Company of an
aggregate 2,250,000 unlisted options, each exercisable at 15 cents on or before
31 December 2007, for nil consideration as part of the Director's remuneration
and pursuant to the terms and conditions of the options set out in Annexure A to
this Explanatory Statement.
Resolution 4 seeks approval for the issue of 2,250,000 options. The independent
Board members have recommended the issue as an incentive for Mr Dunlop to join
the board of the Company, and have resolved to issue Mr Dunlop with 2,250,000
options (subject to shareholder approval).
The number of options to be granted to Mr Dunlop has been determined based upon
the Directors' wish to ensure that the remuneration offered is competitive with
market standards and where appropriate, based upon performance hurdles. The
Directors have generally reviewed a selection of comparable companies to
determine market conditions generally and consider the proposed number of
options to be issued will ensure that Mr Dunlop's overall remuneration is in
line with market standards.
5.5 Directors' Recommendation
All Directors were available to consider Resolution 4.
RJ Telford, John Chisholm and John Kenny are not beneficiaries in the proposed
issue of options and recommend that shareholders vote in favour of the proposed
resolution for the following reasons:
(a) The issue of options to Mr Dunlop is a cost effective and efficient way of
remunerating his contribution to the Company to date and as well as
providing incentives for the future growth of the Company with the aim to
enhance shareholder value.
(b) Options issued to Directors will be taken into account in determining the
overall remuneration of the Director on a total package basis.
Mr Dunlop declined to make a recommendation on the proposed resolution because
he has a material personal interest in the outcome of the resolution on the
basis that he is to be granted options in the Company should the resolution be
passed. Therefore, he is not in a position to recommend either for or against
the proposed resolution.
5.6 Directors' Interest
With the exception of Mr Dunlop, no other Director has a material personal
interest in the outcome of the resolution.
5.7 Other Information Reasonably Required by Members and That is Known to the
Company or any of its Directors
There is a potential benefit that accrues to Mr Dunlop in the event that the
market trading price exceeds the exercise price of the options. This benefit
would accrue on the exercise of the options by the payment of the amount
specified in the Notice and the sale of the Shares for an amount in excess of
those amounts.
Accordingly, the grant of the options may create an opportunity cost or benefit
foregone by the Company depending on the Company's exploration results and
development of the Company's projects and fluctuations in the market value of
its Shares during the exercise period of the options.
The options, if exercised, will have a dilution effect of approximately 1.3% on
a shareholder's percentage holding in the Company based upon the current issued
capital and assuming no other options are exercised. The Company current has
177,818,926 Shares on issue, 43,771,931 Listed Options and 10,000,000 Unlisted
Options.
There is no fringe benefits tax liability attached to the issue of the options.
No loan has or will be made in relation to the issue of the options.
The following table gives details of the highest, lowest and latest price of the
Company's Shares trading on the Australian Stock Exchange Limited over the past
12 months ending on 13 October 2005:
Security Highest Date of highest price Lowest Date of Latest Price
Price Price lowest price On 13 October '05
Ordinary Shares 17 cents 28 January 2005 7.5 cents 26 October 2005 12 cents
Stanton Partners Corporate Pty Ltd has provided the Company with the following
Black Scholes valuation according to their methodologies:
Number of Options Value per Option Total Theoretical Value
2,250,000 2.735 cents per option $61,538
Assumptions:
(a) the valuation was based upon the underlying value of each Share in the
Company based upon the Share price of 11.5 cents per Share on 11 October 2005.
(b) Risk free rate of return - 5.31% (based on the 10 year bond rate as at 11
October 2005).
(c) Volatility of the Share price of 70% (based on the closing Share price for
the last 3 and 6 months).
(d) the options are unlisted with no vesting period.
A discount factor of 30% has been applied to the option valuation as the options
are not being quoted and are not tradeable.
The theoretical value derived by Stanton Partners Corporate Pty Ltd has been
derived utilising current price data and judgments and assumptions relating to
previous market circumstances which may be different at the time the options are
issued, if approval under this resolution is obtained.
Mr Dunlop currently has no interest in any Shares or options in the Company.
The exercise price of the options was set at 15 cents being a substantial
premium to the current market price to provide incentive to the Director to
contribute to the growth and performance of the Company.
Mr Dunlop's' total annual remuneration package, including the theoretical value
of the options, is set out in the table below:
Director Directors Fees Other Total Fixed Value of Options Total Target Reward
Items Remuneration if Granted
John Dunlop $36,000 - $36,000 $61,538 $97,538
It should be noted that Mr Dunlop also provides Mining Engineering Services for
the Company through his private Company Dunlop John S & Associates Pty Ltd on an
as required basis, at normal arms length commercial rates.
Other than the information specified above, the Company believes there is no
other information that would be reasonably required by shareholders in order to
decide whether it is in the best interests of the Company to pass the
resolution.
5.8 Listing Rule 10.11
Listing Rule 10.11 requires shareholders approval by ordinary resolution to any
issue by a listed company of securities to a related party. Accordingly, Listing
Rule 10.11 requires shareholders to approve the issue of options to Mr Dunlop.
For the purposes of Listing Rule 10.13, the following information is provided to
shareholders:
(a) the options will be issued to Mr John Dunlop, a director of the
Company, or his nominee;
(b) the maximum number of options to be issued is 2,250,000;
(c) the options will be issued on a date that will be no later than
one month after the date of the General Meeting (or such later date as approved
by ASX waiver);
(d) the options will be issued for no consideration;
(e) no funds will be raised from the issue of the options; and
(f) the terms and conditions of the options are set out in Annexure
A to this Explanatory Statement.
6. RESOLUTION 5 - ADOPTION OF REMUNERATION REPORT
The Remuneration Report is required to be considered for adoption in accordance
with section 250R of the Corporations Act 2001 (Cth).
The Remuneration Report which details the company's policy on the remuneration
of non-executive directors, executive directors and senior executives is set out
on page 31 of the Company's 2005 Annual Report. It is also available on the
Gippsland internet site at www.gippslandltd.com.
The vote on the resolution is advisory only and does not bind the directors of
the company.
7. ENQUIRIES
Shareholders are invited to contact the Company Secretary, Sam Middlemas on (08)
9389 8611 if they have any queries in respect of the matters set out in these
documents.
GLOSSARY
"AIM" means the Alternative Investment Market of the London Stock Exchange;
"ASX" means Australian Stock Exchange Limited;
"Board" means the board of Directors;
"Company" or "Gippsland" means Gippsland Limited ABN 31 004 766 376;
"Corporations Act" means the Corporations Act 2001 (Cth);
"Directors" means the directors of the Company;
"Listed Option" means an option to acquire one Share exercisable at 9 cents and
expiring on 31 December 2007;
"Listing Rules" means the Listing Rules of ASX;
"Notice", "Notice of Meeting" or "Notice of Annual General Meeting" means the
notice of meeting which accompanies this Explanatory Statement (including
Annexure A);
"Shares" means fully paid ordinary shares in the Company; and
"Unlisted Option" means an option to acquire one Share exercisable at 4.0 UK
pence per Share and expiring on 31 December 2007.
ANNEXURE A
TERMS OF OPTIONS THE SUBJECT OF RESOLUTION 4
The following are the terms and conditions of the 2,250,000 options the subject
of Resolution 4 being put before shareholders.
* The options will be issued for nil consideration;
* An option certificate will be issued for the 2,250,000 options;
* The options will expire at 5.00pm Perth time on 31 December 2007
("Expiry Date");
* The option is a right in favour of the option holder to subscribe for
one share;
* The option holder may exercise options any time prior to the Expiry
Date;
* Shares allotted to option holders on exercise of options will be issued
at 15 cents each ("Exercise Price");
* The Exercise Price of shares the subject of the options will be payable
in full on exercise of the options;
* Options will be exercisable by the delivery to the registered office of
the Company of a notice in writing stating the intention of the option
holder to:
(a) exercise all or a specified number of options (but in multiples of
250,000); and
(b) pay the subscription monies in full for the exercise of each option
("Notice").
* The Notice must be accompanied by the option certificate and a cheque
made payable to the Company for the subscription monies for the shares. An
exercise of only some options will not affect the rights of the option
holder to the balance of the options held by the option holder. The Notice
must be received by the Company prior to the Expiry Date.
* The Company will allot the resultant shares and deliver the holding
statement within ten (10) business days of the exercise of the options;
* The Company will not apply for official quotation on ASX and AIM of any
of the options;
* The options will not be transferable;
* Shares allotted pursuant to an exercise of the options shall rank, from
the date of allotment, equally with existing ordinary fully paid shares of
the Company in all respects;
* The Company will in accordance with the Listing Rules make application
to have shares allotted pursuant to an exercise of options listed for
official quotation on ASX and AIM;
* In the event of any reconstruction (including consolidation,
subdivision, reduction or return) of the authorised or issued capital of the
Company, the number of the options or the exercise price of the options or
both will be reconstructed (as appropriate) in accordance with the Listing
Rules of ASX; and
* The options will not give any right to participate in dividends, bonus
issues or new issues until shares are allotted pursuant to the exercise of
the relevant options. There is no right to change the exercise price of
options if the Company completes a bonus or new issue.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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