TIDMRMP
RNS Number : 4657T
Red Emperor Resources NL
25 March 2021
25 March 2021
RED EMPEROR RESOURCES NL
Proposed Acquisition of +2Moz Panton PGM Project
HIGHLIGHTS
-- Red Emperor Resources NL ("Red Emperor" or the "Company")
intends to acquire Great Northern Palladium Pty Ltd ("GNP") which
owns 80%, and holds an option over the remaining 20%, of Panton
Sill Pty Ltd, the holder of the Panton Platinum Group Metals
("PGM") Project ("Panton PGM Project") in the Kimberley region of
Western Australia (the "Proposed Acquisition")
-- All equity consideration of A$17.5m (shares and options) to be paid to GNP's shareholders
-- Pre-existing Independent JORC (2012) Mineral Resource Estimate ("MRE") of:
o 14.3Mt @ 2.39g/t Pd, 2.19g/t Pt, 0.27% Ni for 2.06Moz Pd/Pt
(refer to Table One for more details)
-- Former Stillwater Mining Company Managing Director Mick
McMullen to be appointed as a strategic adviser and experienced
company director, Justin Tremain, to join the Board, both on
completion of the Proposed Acquisition
-- MRE outcrops at surface and remains OPEN, along strike and at depth
-- MRE covers approximately 3.5 kilometres of the circa 12
kilometres of mapped outcropping PGM-bearing chromite reefs
(remaining 8.5km relatively untested). No significant exploration
performed for almost 20 years
-- Located in 'Tier One' mining jurisdiction of Western Australia
-- Panton benefits from having a higher palladium grade relative
to platinum grade, at a time of record palladium prices
(c.US$2,400/ounce)
-- Historic studies on the Panton PGM Project undertaken when
prevailing palladium prices were much lower
-- Step-out drilling to test for extensions to the MRE to
commence upon completion of the Proposed Acquisition, along with
metallurgical and mining studies
-- Located on granted mining leases with excellent
infrastructure including nearby (c.1 kilometre away) sealed highway
and an existing exploration decline
-- A$10M equity raising to be undertaken at a price of A$0.10
per share on a post consolidated basis (14:100 consolidation) to
provide strong financial position from which to advance the Panton
PGM Project
-- Enterprise value of approximately A$26M at the fund raising
price with cash of approximately A$9M upon successful completion of
the Proposed Acquisition and associated fundraising
-- The Company will seek shareholder approval for the Proposed
Acquisition under ASX Listing Rule 11.1.2 and re-comply with
Chapters 1 and 2 of the ASX Listing Rules
-- The Proposed Acquisition constitutes a reverse takeover
transaction under the AIM Rules for Companies ("AIM Rules") thereby
also requiring, inter alia, shareholder approval pursuant to AIM
Rule 14 and publication of an AIM Admission Document. In light of
certain differences between the ASX Listing Rules and the AIM Rules
and the chronology, processes and requirements of the two
exchanges, the Company is currently evaluating structuring options
with its Nominated Adviser with respect to the enlarged group's
dual listing on AIM
Red Emperor Resources NL (ASX: RMP) ("Red Emperor" or the
"Company") is pleased to announce that it has entered into Heads of
Agreement ("HoA") with the major shareholders of Great Northern
Palladium Pty Ltd (ACN 645 861 196) ("GNP") to acquire 100% of the
issued share capital of GNP (the "Proposed Acquisition") for all
share consideration and the issue of certain options as detailed
further below.
GNP holds 80% of the issued share capital of Panton Sill Pty Ltd
(ACN 157 842 530) ("Panton Sill"). Panton Sill holds the granted
mining leases that cover the Panton PGM Project ("Panton PGM
Project" or "Panton") located approximately 60 kilometres north of
Halls Creek in the East Kimberley region of Western Australia. The
remaining 20% of Panton Sill is held by Panoramic Resources Limited
(ASX: PAN) ("Panoramic"). Panoramic has granted an option to GNP
for it to acquire the remaining 20% interest in Panton Sill
("Panton Option"), as detailed further below. Upon completion of
the Proposed Acquisition, Red Emperor intends to exercise the
Panton Option such that it would become the ultimate 100% owner of
the Panton PGM Project.
If completed, the Proposed Acquisition will result in Red
Emperor changing the nature of its activities from oil and gas
exploration to mineral exploration and development. Accordingly, in
order to effect the Proposed Acquisition, the Company will, inter
alia , be required to re-comply with the requirements of Chapters 1
and 2 of the ASX Listing Rules. This will include the Company
seeking shareholder approval for a proposed share consolidation and
capital raising pursuant to a prospectus under the ASX Listing
Rules. Due to its size and nature, the Proposed Acquisition also
constitutes a reverse takeover under the AIM Rules for Companies
("AIM Rules"), requiring, inter alia , publication of an AIM
Admission Document and shareholder approval pursuant to AIM Rule
14. In light of certain differences between the ASX Listing Rules
and the AIM Rules and the chronology, processes and requirements of
the two stock exchanges, the Company is currently evaluating
structuring options with its Nominated Adviser with respect to the
enlarged group's dual listing on AIM .
The Company also intends to seek shareholder approval for a
change of company name to reflect its new direction. Further
details of the consolidation and proposed capital raising are set
out below.
Panton PGM Project, Western Australia
Location
The Panton PGM Project is located 60 kilometres north of Halls
Creek and just 1 kilometre off the Great Northern Highway, in the
East Kimberley Region of Western Australia (refer to Figure One) .
The Great Northern Highway also provides direct access to the Port
of Wyndham.
The Panton PGM Project is held under three granted Mining Leases
(M80/103, M80/104 and M80/105) covering an area of approximately
23km(2) .
Figure One | Project Location
The image can be viewed at the following weblink:
http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf
Mineral Resource Estimate
Past exploration and drilling, predominantly undertaken by
Platinum Australia Ltd ("Platinum Australia") in the early 2000s,
resulted in the delineation of a Mineral Resource Estimate ("MRE")
for the deposit undertaken by Cube Consulting Pty Ltd ("Cube") in
April 2003. In August 2015, Cube reviewed and re-reported its 2003
MRE model to report the MRE in accordance with the Australasian
Code for Reporting of Mineral Resources and Ore Reserves 2012
("JORC 2012"). The focus of the JORC 2012 MRE was on two of the
chromite layers known as the Top (101) and Middle (201) Reefs,
domained into the A, B, C and D blocks (refer to Figure Two) :
Grade Metal (oz)
---------- ------------------------------- ----------------------
Resource Tonnage Pt Pd Au Ni Cu Pt Pd
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
(g/t) (g/t) (g/t) (%) (%) (oz 000s) (oz 000s)
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Top Reef
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Measured 4,400,000 2.46 2.83 0.42 0.28 0.08 348 400
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Indicated 4,130,000 2.73 3.21 0.38 0.31 0.09 363 426
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Inferred 1,560,000 2.10 2.35 0.38 0.36 0.13 105 118
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Middle Reef
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Measured 2,130,000 1.36 1.09 0.10 0.18 0.03 93 75
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Indicated 1,500,000 1.56 1.28 0.10 0.19 0.04 75 62
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Inferred 600,000 1.22 1.07 0.10 0.19 0.05 24 21
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Total 14,320,000 2.19 2.39 0.31 0.27 0.08 984 1,081
------------ ---------- ----- ----- ----- ---- ---- --------- ---------
Table One | JORC 2012 Mineral Resource Estimate by Cube (August
2015)
The MRE was based on previous drilling at Panton comprising
historical diamond drilling (30 holes or 9,524 metres completed
prior to 2001), reverse circulation ("RC") (29 holes for 2,366
metres) and more recent diamond drilling (166 holes for 34,410
metres) completed by Platinum Australia. The MRE also included
surface trenching and underground channel samples (1,391 metres)
conducted by Platinum Australia between 2001 and 2003 in an
exploration decline which accessed the upper chromite reef.
No significant exploration has been conducted on the Panton PGM
Project for almost 20 years.
The modelled chromite reefs have an unfolded strike length of
approximately 3.5 kilometres. Historical drilling has been focused
on the A, B, C and D chromite reefs and an approximate 8.5
kilometres of mapped PGM-bearing chromite reefs remain largely
untested by drilling.
Figure Two | Resource Wireframes showing the Panton 101 and 201
reef system
The image can be viewed at the following weblink:
http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf
The Panton mineralisation occurs within a layered,
differentiated mafic-ultramafic intrusion referred to as the Panton
intrusive. High-grade PGM mineralisation is hosted within two
stratiform chromite reefs, the Top (101) and Middle (201) reefs,
within the ultramafic sequence. The Panton deposit is analogous to
the chromite reefs in the Bushveld Complex of South Africa which
are the world's largest source of PGMs. However, a key point of
difference of Panton is the higher palladium grade relative to
platinum grade. Historically, this has been a disadvantage to the
Panton PGM Project given that palladium prices have historically
been significantly below platinum prices. Presently, the palladium
price is approximately twice the platinum price.
Project History
The Panton deposit was discovered by the Geological Survey of
Western Australia from surface mapping conducted in the mid-1960s.
Pickland Mather and Co. drilled the first hole to test the
mafic-ultramafic complex in 1970, followed by Minsaco Resources
which drilled 30 diamond holes between 1976 and 1987. In 1989,
Pancontinental Mining Limited and Degussa Exploration drilled a
further 32 drill holes and defined a non-JORC compliant resource.
Platinum Australia acquired the project in 2000 and conducted the
majority of the drilling, comprising 166 holes for 34,410 metres,
leading to the delineation of a maiden JORC Mineral Resource
Estimate. In late 2006, Sally Malay Mining Limited (now Panoramic)
entered into a joint venture arrangement with Platinum Australia
seeking to develop the Panton PGM Project.
Figure Three | Exploration Portal and Decline Access
The image can be viewed at the following weblink:
http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf
A feasibility study was completed by Platinum Australia in 2003
and reviewed in March 2012 which assumed metal prices of
A$890/ounce and A$2,000/ounce for palladium and platinum
respectively compared to today's prices of approximately
A$3,100/ounce and A$1,500/ounce respectively.
Panoramic subsequently purchased the Panton PGM Project from
Platinum Australia in May 2012 and conducted a wide range of
metallurgical test work programmes on the Panton ore.
Geology
The Panton Complex is a layered mafic-ultramafic intrusion which
is a 10km long and 2.5km wide, south-west plunging synclinal
layered intrusion situated within the Central Zone of the Halls
Creek Orogen of Western Australia (refer to Figures One and Five) .
The Panton Complex displays many geological similarities to the
Bushveld Complex in South Africa on a smaller scale.
The lower 750 metres of the Panton intrusion comprises a massive
variable olivine orthocumulate ultramafic intrusive phase,
primarily dunite, with various other phases recognised including
wehrlite, lherzolite and harzburgite. Various stratiform reefs of
PGM-bearing cumulate chromitite-magnetite occur in the lower
ultramafic phase at Panton. Horizons vary in thickness from 0.2
metres to 8 metres in thickness and multiple stacked reefs are
common. The majority of historic drilling has been focused on the
ultramafic-hosted chromite reefs of the A, B and C zones in the
northern part of the Panton Complex (refer to Figures Two and Five)
. These reefs are interpreted to be very similar to the 'Plat-reef
style' mineralisation that occurs at the ultramafic base of the
Bushveld Complex (refer to Figure Four) .
The top 900 metres of the Panton intrusion comprises mainly
layered mafic phases that vary from gabbro, gabbronorite, norite
then transitions upward to anorthosite and leucogabbro through to a
ferrogabbro or magnetite-bearing gabbro at the top of the sequence
(refer to Figure Five) . PGM-bearing stratiform reefs are known to
occur within the upper layered mafic sequences however these reefs
have received much less exploration attention. These upper
chromite-reefs are interpreted to occur in a similar geological
setting to the 'Merensky-style' chromite reefs that occur primarily
at the top of the anorthosite package known as the 'Upper Critical
Zone' in the Bushveld Complex (refer to Figure Four) . The Merensky
Reefs of the Bushveld Complex have been the principal source of
mined PGMs to date. Interestingly, more recently in the Bushveld,
much thicker zones of the Merensky Reef have been mined that are
known as 'potholes'. The formation of these extremely rich
'pot-holes' are poorly understood but are extremely important from
an economic perspective.
Figure Four | North-South Oriented Cross section of the Bushveld
Layered Mafic-Ultramafic Complex
The image can be viewed at the following weblink:
http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf
The Panton Complex has been folded into a syncline such that the
shallowest chromite reefs occur around the outer edges and become
deeper towards the centre of the complex (refer to Figure Five) .
The syncline axis is interpreted to plunge toward the southwest. In
addition to folding, the Panton Complex has been subject to several
stages of faulting, many of which offset the chromite reefs
including a major north-south oriented fault that offsets the C
zone to the south which is now known as the D zone (refer to Figure
Five) .
Figure Five | Panton PGM Project's Geology and Mapped
Outcropping PGM-bearing Chromite Reefs
The image can be viewed at the following weblink:
http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf
Sampling and Sub-sampling Techniques
Diamond drill core, Reverse Circulation (RC) chips and surface
trench channel sampling are the three primary sample types. A
relatively small number of samples were from decline, wall and face
sampling undertaken in an exploration decline. Diamond core is the
predominant sample type (HQ, HQ3, NQ and NQ2 sizes) and was
orientated, geologically logged and sampled to lithological
contacts or changes in the nature of mineralisation. Nominal sample
lengths of 1.0m with a minimum sample length of 0.25m. NQ and NQ2
core was half core sampled. HQ and HQ3 core was quarter core
sampled. RC chips sampled at 1m or 0.5m intervals. Trench channel
chip sampling was undertaken from the base or as close to the base
of the trench as possible. Each trench was sampled continuously
over the entire length. Sample lengths varied from 0.15m to 2m.
Sample boundaries were based on geological contacts and changes in
the nature of mineralisation. Decline sampling, wall and face
sampling was undertaken on geologically marked up channels
approximately 1.5m from the floor. Sampled intervals varied from
0.25 to 0.5m across the full width of mineralisation.
Resource Classification
Resource blocks have been classified as Measured, Indicated or
Inferred on the basis of a range of criteria. The key criteria
considered were geological continuity and confidence in reef
volume; data spacing and distribution; appropriateness of the
modelling technique; and estimation quality parameters such as
search strategy, number of informing composite data, average
distance from informing composites and kriging variance.
Data spacing within the most densely drilled area of the project
ranges from 25x25 to 50x100 metres.
Measured Resources are defined where geological continuity risk
is considered low, confidence in metal continuity is considered
high due to the data spacing; and where the estimation quality is
high as indicated by a low estimation block variance (within the
first 30th percentile). Generally, the Measured part of the Mineral
Resource blocks has been estimated using 10 or more composite data
at an average distance of less than 200 metres (within the modelled
range of most variograms).
Indicated Resources are defined where geological and metal
continuity risk is considered moderate to low. Generally, the
Indicated part of the Mineral Resource blocks has been estimated
using 6 or more composite data at an average distance of less than
300 metres (within the modelled range of some of the
variograms).
Inferred Resources are defined by that area of the Mineral
Resource where there is moderate confidence in the continuity of
the geological model and metal where drill spacing is wider than
200m by 200m.
Sample Analysis
The standard assaying techniques used were lead or nickel
collection fire assay with a Mass Spectrometry (MS) finish for Au,
Pd, Pt and peroxide fusion using HCl acid to dissolve the melt with
an Optical Emission Spectrometry (OES) finish for As, Co, Cr, Cu,
Ni and S. These methods are considered total digestion methods. A
fire assay nickel sulphide collection technique was preferred (for
samples containing chromite) to lead collection as it is efficient
in collecting all PGEs and gold from a sample.
Estimation Methodology
The estimation methodology used was Ordinary Kriging.
Variogram ranges and search distances were defined in the
vertical plane, with ranges for all attributes estimated
significantly exceeding the data spacing in all domains.
A search radius was optimised for each domain based on the
special statistics of the variogram model. The search orientation
and anisotropy were based on the modelled variogram for each
domain.
Estimation block size used was 50m x 50m in long section
projection.
No assumptions of specific selective mining units were made as
it was assumed that full seam width mining would be undertaken.
The mineralised domain acted as a hard boundary to control the
Mineral Resource volume and estimate.
Block model validation was undertaken using the comparison of
block model estimate to drill hole data composites of horizontal
width and density weighted mean grades.
A validation estimate was undertaken using inverse distance
squared and compared to the OK estimate.
Cut-off Grade
No low-grade cut-off was used for reporting. The mineralisation
was defined using a combination of geological information and grade
criteria and the reported estimated grades represent a total metal
content of mineralised material - all of which was expected to be
mined, without selectivity due to the thin vein nature and high
value of the mineralisation.
Mining and Other Material Modifying Factors
Mining of the deposit is envisaged to be by open pit and
underground methods. An assumption of non-selective total vein
width mining was made in the estimation, no other mining factors
were considered during the interpretation and 2D modelling of the
mineralisation however mining dilution and mining loss are likely
to be material factors in a combination of small open pit and
underground exploitation. Minimum mining widths were not considered
during the interpretation and 2D modelling of the mineralisation.
No assumptions were made regarding environmental restrictions.
Metallurgy
Platinum Australia's feasibility study was based on a proposed
processing plant incorporating standard
crushing-grinding-floatation to produce a low grade concentrate
which was then to be treated onsite though a patented
Calcine-Leach-Metals Recovery process developed by Platinum
Australia and Lonmin Plc.
Following acquisition of the project in 2012, Panoramic
conducted a variety of metallurgical test work on Panton ore in
order to establish the best processing strategies for the deposit.
The test work comprised the following work programmes:
-- Various laboratory flotation test work programmes at various grind sizes;
-- Ore sorting test work to selectively remove waste rock;
-- Magnetic separation processes; and
-- QEMScan analysis for the identification of ore minerals.
Red Emperor intends to appoint a metallurgical and processing
consultant with experience in PGMs to assess in detail the results
of the previous test work and provide recommendations for further
work in order to define the most effective technique for the
extraction of PGMs from the Panton ore.
Tenure
The Panton PGM Project is located on three granted Mining
Leases. Panton Sill is the registered holder of a 100% interest in
each of the Mining Leases:
Date of Grant Expiry Date Area
ML 80/103 17 March 1986 16 March 2028 8.6km(2)
ML 80/104 17 March 1986 16 March 2028 5.7km(2)
ML 80/105 17 March 1986 16 March 2028 8.3km(2)
=========== =============== ================= ==========
There are two historical royalty holders pursuant to agreements
entered into by former owners of the Panton PGM Project unrelated
to Red Emperor or GNP. A 0.5% net smelter return royalty is payable
to Elemental Royalties Australia Pty Ltd in respect of any future
production of chrome, cobalt, copper, gold, iridium, palladium,
platinum, nickel, rhodium and ruthenium and a 2% net smelter return
royalty is payable to Maverix Metals (Australia) Pty Ltd on any
PGMs produced from the mining licences.
The three Mining Leases were granted pre-Native Title Act in
Australia and hence are free of native title claim.
The previous owners of the Panton PGM Project have undertaken a
substantial amount of work understanding the baseline conditions
for flora, fauna, hydrology and waste characterisation. Such
historic work will require updating but studies to date have not
identified anything considered to be detrimental to obtaining
future environmental approvals.
Further Details of the Proposed Acquisition
Background
The Proposed Acquisition involves the acquisition of GNP by Red
Emperor. GNP was incorporated on 12 November 2020 for the purpose
of acquiring the Panton PGM Project from Panoramic.
GNP acquired 80% of the issued securities of Panton Sill by way
of a share sale and purchase agreement between GNP and Panoramic
dated 6 December 2020 involving cash consideration of A$12M which
settled on 17 December 2020. GNP's acquisition was funded by way of
an A$12.5M equity raising from sophisticated and professional
investors between 30 November 2020 and 7 December 2020.
Panoramic granted GNP an option until 17 June 2021 to acquire
the remaining 20% of the issued capital of Panton Sill for
additional consideration of A$3M. Subject to completing the
proposed Capital Raising and re-compliance with Chapters 1 and 2 of
the ASX Listing Rules, Red Emperor intends to procure GNP to
exercise this option such that it and the enlarged group will then
control 100% of the Panton PGM Project. It is currently intended
that the Proposed Acquisition be completed during the option period
and that exercise of the option is funded by Red Emperor.
AIM Rule Considerations
Red Emperor is also currently quoted on AIM. Due to its size and
nature, the Proposed Acquisition constitutes a reverse takeover
transaction under AIM Rule 14 thereby requiring the Company to,
inter alia, produce and publish an AIM Admission Document and
obtain shareholder approval for the Proposed Acquisition for the
purposes of re-admitting the enlarged group to trading on AIM. In
light of certain differences between the ASX Listing Rules and the
AIM Rules and the chronology, processes and requirements of the two
stock exchanges, the Company is currently evaluating structuring
options with its Nominated Adviser with respect to the enlarged
group's dual listing on AIM.
Terms of the Proposed Acquisition
Red Emperor entered into a binding HoA with the major
shareholders of GNP on or about 25 January 2021 in relation to the
proposed acquisition of the issued capital of GNP.
A summary of the material terms of the HoA is set out below:
(a) The major shareholders of GNP agreed to grant irrevocably to
Red Emperor an exclusive and binding option exercisable until 30
June 2021 to acquire their GNP shares on the terms and conditions
in the HoA. The major shareholders of GNP also agreed to procure
that the remaining shareholders of GNP enter into sale agreements
with Red Emperor in respect of their respective GNP shares.
(b) Subject to satisfaction (or waiver) of the Conditions
Precedent (below), Red Emperor agreed to purchase, and the major
shareholders of GNP agreed to sell, the GNP shares held by the
major shareholders on the terms and conditions of the HoA.
(c) The option is exercisable by Red Emperor at any time
commencing on the date of satisfaction (or waiver) of the
Conditions Precedent and ending on 30 June 2021 (or such other date
as the parties may agree in writing).
(d) Exercise of the option is subject to and conditional on the
satisfaction (or waiver) of the following conditions precedent:
(i) Completion of due diligence by Red Emperor on GNP and its
assets, including Panton Sill and the Mining Licences, to the
satisfaction of Red Emperor in its sole discretion on or before
lodgement with ASIC of the prospectus for the Capital Raising;
(ii) Red Emperor receiving valid applications for not less than
A$7.5M pursuant to the Capital Raising for the issue of Red Emperor
Shares at an issue price of 1.4 cents (pre-Consolidation) or such
other terms as agreed between Red Emperor and GNP;
(iii) Red Emperor obtaining all necessary shareholder approvals
pursuant to the ASX Listing Rules and the Corporations Act 2001 or
any other law, including approval for the Consolidation, and for
the issue of the Consideration Securities under Listing Rule 7.1
and under Listing Rule 11.1.2 to lawfully complete the matters set
out in the HoA;
(iv) the Company obtaining all necessary regulatory approvals
pursuant to the ASX Listing Rules, the Corporations Act and any
other law to complete the matters set out in the HoA, including
receipt of conditional approval for reinstatement of the Company's
securities on ASX subject to compliance with Chapters 1 and 2 of
the Listing Rules on terms and conditions reasonably acceptable to
the Company;
(v) the Company satisfying all necessary regulatory requirements
of the AIM Rules for Companies on the London Stock Exchange and its
Nominated Adviser to complete the matters set out in the HoA;
(vi) the Company making separate offers under a short form
agreement to each GNP shareholder (other than the major GNP
shareholders) and each of those other GNP shareholders agreeing
with the Company:
A. to sell their respective GNP shares to the Company pursuant to those offers;
B. to submit to any ASX-imposed escrow on the Consideration Securities; and
C. that on and from the issue of the Consideration Securities
they have no claims against GNP or the Company in relation to any
acts or omissions prior to settlement and any other release
customary;
(vii) there being no material adverse change in the
circumstances of GNP and Panton Sill and none of the warranties
given by GNP and the major GNP shareholders becoming untrue,
incorrect or misleading, each prior to the date of satisfaction (or
waiver) of all other Conditions.
(together, the "Conditions Precedent").
If the Conditions Precedent are not satisfied (or waived in
accordance with the HoA) by the End Date of 30 June 2021, any party
may terminate the HoA by giving notice.
(e) (Consideration): Subject to valid exercise of the option,
Red Emperor has agreed to issue an aggregate number of Red Emperor
Shares ("Consideration Shares") equal to A$17.5M, based on a deemed
issue price equal to the issue price under the Capital Raising,
together with 1 option to acquire a Red Emperor Share exercisable
at a price equal to the Capital Raising issue price on or before 3
years from the date of issue ("Consideration Options") for every 2
Consideration Shares issued, in consideration for the acquisition
of all GNP shares. The total consideration for the GNP shares is to
be apportioned pro rata to each GNP shareholder according to their
shareholding in GNP at Settlement.
(f) (Settlement): Following exercise of the option under the
HoA, settlement of the Acquisition will occur on that date which is
5 business days after the date that notice of exercise of the
option is given (or such other date as agreed between the parties
in writing).
The HoA otherwise contain representations, warranties and
conditions considered standard for agreements of this nature.
Proposed Corporate Structure
A group structure diagram for Red Emperor upon successful
completion of the Proposed Acquisition is set out below, assuming
that the Panton Option is also exercised:
Figure Six | Group structure diagram for Red Emperor upon
successful completion of the Proposed Acquisition
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Note: A number of dormant wholly-owned subsidiaries have been omitted .
Proposed Share Consolidation
In order to satisfy the requirements of Chapters 1 and 2 of the
ASX Listing Rules, the Company proposes to undertake a 14:100
consolidation of its issued capital (the "Consolidation " ). Unless
otherwise stated, figures in this announcement are stated on a
post-Consolidation basis.
Proposed Capital Raising
To assist the Company to re-comply with Chapters 1 and 2 of the
ASX Listing Rules and to support the proposed rapid advancement of
the Panton PGM Project post acquisition, including an aggressive
step-out drilling programme, the Company intends, subject to
shareholder approval, to conduct a capital raising of A$10M through
the issue of 100,000,000 Shares (post-Consolidation) at an issue
price of A$0.10 per share (the "Capital Raising").
The Capital Raising will be conducted pursuant to a prospectus
to be lodged by the Company with the Australian Securities and
Investments Commission ("ASIC") (the "Prospectus").
As at the date of this announcement, the Capital Raising is not
proposed to be underwritten.
The Company intends to appoint 708 Capital Pty Ltd as Lead
Manager to the Capital Raising and will pay the Lead Manager a fee
of 6% of the amount of the Capital Raising.
In addition, the Company will issue, subject to Shareholder
approval, a total of 6,000,000 options exercisable at A$0.12 on or
before the date 3 years after the date of issue to the Company's
Nominated Adviser ("NOMAD") (the "Adviser Options").
The Directors and Proposed Director of the Company intend to
invest in the Capital Raising. Their participation in the Capital
Raising will be subject to, inter alia, Shareholder approval under
ASX Listing Rule 10.11.
Proposed Use of Funds
The Company intends to apply the funds raised under the Capital
Raising, together with its existing cash reserves, over the first
two years following re-admission of the Company to the Official
List of the ASX as follows:
Proposed Capital
Raising A$10,000,000
(Minimum and Maximum
Use of funds subscription amount) %
Existing cash reserves of the Company
as at 31 December 2020(1) A$4,225,863 29.7%
Gross funds to be raised under the
Capital Raising A$10,000,000 70.3%
TOTAL A$14,225,863 100%
Costs of the Offer/Transaction - Australia/ASX A$1,067,834 7. 5 %
Potential costs of the Transaction
- UK/AIM A$1, 104,262 7. 8 %
Panton Option consideration A$3,000,000 21. 1 %
Exploration and development expenditure,
as follows:
Drilling of extensions A$2,000,000 14. 1 %
Metallurgical testwork A$500,000 3. 5 %
Updating BFS A$1,000,000 7. 0 %
Other technical studies A$500,000 3. 5 %
Assessment of complementary assets
or projects A$500,000 3. 5 %
Administration costs A$2,000,000 14. 1 %
Working Capital A$2, 553,767 17.9 %
TOTAL A$14,225,863 100%
================================================ ======================= =========
Note:
1. As reported in the Company's Half Year Report announced on 5
March 2021.
The above table is a statement of current intentions as of the
date of this announcement. As with any budget, intervening events
and new circumstances have the potential to affect the manner in
which the funds are ultimately applied. The Board reserves the
right to alter the manner in which the funds are ultimately applied
on this basis.
Unaudited Pro-forma Consolidated Statement of Financial
Position
The effect of the Proposed Acquisition on the Company's
consolidated statement of financial position is set out in Appendix
One assuming a successful Capital Raising.
The principal effects on the Company's consolidated statement of
financial position will be:
(a) current assets will increase by approximately A$7,627,904,
comprising the anticipated net proceeds of the Capital Raising
(after payment of the estimated costs of the Offer and transaction,
but before the proposed payment of the Panton Option
consideration);
(b) non-current assets will increase by approximately A$17,700,000 being the value of:
(i) the Securities to be issued to the GNP shareholders; and
(ii) the payment of GNP's corporate advisory fees;
which is intended to be accounted for as capitalised exploration
expenditure; and
(c) total equity interests will increase by an amount equal to
the aggregate of subparagraphs (a) and (b) above.
Effect of the Proposed Acquisition on the Company's Annual
Expenditure
The Company expects that its expenditure on the Panton PGM
Project following completion of the Proposed Acquisition will be as
set out in the Uses of Funds section above.
Revenue forecasts relating to mineral exploration companies are
uncertain, and accordingly the Company is unable to provide
investors with reliable revenue, profit, or cash flow projections
or forecasts. The enlarged group will not have any revenue
generating assets on completion of the Proposed Acquisition.
Pro-forma Capital Structure
The indicative share capital structure of the Company following
completion of the Proposed Acquisition, based on the current
securities on issue and including the proposed Capital Raising,
will be as follows (subject to rounding following the
Consolidation):
Shares Options Performance
Rights
Current (pre-Consolidation) 525,292,776 6,000,000(1) -
Subtotal post-Consolidation (14:100
ratio) 73,540,988 840,000(1) -
Securities to be issued under 100,000,000 Nil -
the Capital Raising(2)
Consideration Securities to be 87,500,000
issued to GNP shareholders 175,000,000 (3) -
Adviser Options to be issued to - 6,000,000 -
NOMAD (4)
Options to be issued to the Directors 22,000,000
(and Proposed Director) - - (5)
Total 348,540,988 94,340,000 22,000,000
======================================= ============ ============= ============
Notes:
1. The number of existing unlisted Options, and the effect that
the Consolidation will have on the terms of the existing unlisted
Options, is as set out in the tables below.
Pre-Consolidation
Terms Number
Unlisted Options exercisable at A$0.05
on or before 15 January 2022 6,000,000
Total 6,000,000
======================================== ==========
Post- Consolidation
Terms Number
Unlisted Options exercisable at A$0.357
on or before 15 January 2022 840,000
Total 840,000
========================================= ========
2. Assuming the issue of all available shares under the proposed
Capital Raising and an issue price per share under the Capital
Raising of A$0.10 (post-Consolidation).
3. The Options to be issued pursuant to the terms of the
Proposed Acquisition to GNP's shareholders will be exercisable at a
price of A$0.10 on or before the date 3 years after their date of
issue.
4. The Adviser Options to be issued to the NOMAD will be
exercisable at a price of A$0.12 on or before the date 3 years
after their date of issue.
5. The Performance Rights to be issued (subject to receiving,
inter alia, Shareholder approval and ASX confirmation that the
terms and conditions of the Performance Rights are appropriate and
equitable under Listing Rule 6.1) to the Directors and Proposed
Director will be in three equal tranches and expire 3 years after
their date of issue. The tranches of Performance Rights will vest
upon achievement of the following share price hurdles:
-- Tranche A: 20 day VWAP of A$0.15 per share or above.
-- Tranche B: 20 day VWAP of A$0.20 per share or above.
-- Tranche C: 20 day VWAP of A$0.25 per share or above.
Controlling Shareholder Issues
No person will acquire control of, or voting power over 20% or
more in, the Company as a result of the Proposed Acquisition and
Capital Raising.
Proposed Strategic Adviser
Mr Mick McMullen
Upon completion of the Proposed Acquisition, the Company intends
to appoint Mr McMullen as a strategic adviser to the Board.
Mr McMullen qualified as a Geologist at Newcastle University in
1992 and holds a B.Sc. in Geology from Newcastle University. He has
over 28 years' experience in the exploration, development,
financing and operation of mining projects across Australia,
Africa, Asia, Europe, North and South America. His expertise covers
both upstream and downstream areas as well as metals trading and
equity and debt capital markets in Australia, UK, South Africa,
Canada and the USA. His specific mining experience covers small and
large open pit and underground mines across many different
cultures. He also has a strong track record in mergers and
acquisitions and asset restructuring.
Most recently, Mr McMullen became an Executive Director at
Venturex Resources Limited, a copper-zinc developer in the Pilbara
region. He previously served as the CEO and President of Detour
Gold, a 600,000 oz p.a. gold producer in Canada. During his tenure
Mr McMullen and his team took the market capitalisation of Detour
Gold from C$2Bn to C$4.5Bn over a 9 month period leading to its
eventual sale. Prior to Detour, he was the CEO and President of
Stillwater Mining Company from December 2013 until June 2017.
Stillwater is a 600,000 oz p.a. PGM producer that also has its own
smelter and base metal refinery. During his tenure at Stillwater,
Mr McMullen and his team grew the auto catalyst recycling business
to be the largest in the world by a significant margin, with around
1.4Moz p.a. of PGM being recycled.
During his time at Stillwater, he also oversaw an increase in
its equity value from US$1.1Bn to US$2.2Bn against a 10 per cent.
fall in PGM prices over the same period. Stillwater was sold in an
all cash transaction valued at US$2.7Bn.
He has founded and recapitalised numerous mining and exploration
companies globally (including GT Gold, being sold to Newmont for
C$400m) and runs a family office for investment purposes. He is
also a former executive board member of the National Mining
Association of the United States, a Board Member of the World
Council, a current Member of the AusIMM and a Senior Adviser to
Black Mountain Metals, a private company that holds nickel assets
in Western Australia.
Board of Directors
The composition of the Board following the Proposed Acquisition
is currently intended to be as follows.
Existing Directors
Greg Bandy, Executive Chairman
Mr Bandy is currently Managing Director of the Company.
Aaron Bertolatti, Finance Director
Mr Bertolatti is currently a Director and Company Secretary.
Messrs Bandy and Bertolatti will continue as directors following
the Proposed Acquisition. It is intended that Mr Jason Bontempo
(Non-Executive Director) will resign and Mr Justin Tremain will be
appointed as a Non-Executive Director.
Proposed Director
Justin Tremain, Proposed Non-Executive Director
Mr Tremain is an experienced company director with extensive
expertise across the mineral resources sector. His experience
covers equity capital markets and promotion, resource project
acquisition, exploration and resource delineation, feasibility
studies and project development financing.
He is currently Managing Director of West African gold explorer
Manas Resources Ltd where he was appointed in December 2020 to
reinvigorate and grow the company. He is also Non-Executive
Director of Caspin Resources Ltd, a successful IPO that listed on
the ASX in November 2020.
Prior to becoming involved in the management of ASX listed
resource companies from early 2010, Justin had over 10 years
investment banking experience in the metals and mining sector with
NM Rothschild & Sons, Investec and Macquarie Bank.
He was previously the Managing Director of Exore Resources Ltd
("Exore"). He joined Exore in January 2018 as a 'shell company' and
identified and led the acquisition of a gold exploration portfolio
in Cote d'Ivoire, West Africa. Exore acquired the Cote d'Ivoire
portfolio for circa A$3.5 million in October 2018 and undertook an
immediate, aggressive exploration programme that resulted in the
discovery and delineation of a maiden JORC Resource. Less than 2
years from acquiring the Cote d'Ivoire projects, Exore was acquired
by Perseus Mining Ltd in September 2020 for a value of circa A$80
million by way of a Scheme of Arrangement.
Prior to Exore, Mr Tremain founded Renaissance Minerals Ltd
("Renaissance") in June 2010 and served as its Managing Director
until its takeover by Emerald Resources NL ("Emerald") in November
2016. During his tenure, Justin was responsible for growing
Renaissance from a grass roots Western Australian gold explorer
into a gold development company in the frontier jurisdiction of
Cambodia. The company delineated a JORC Resource of over 1Moz at
the Okvau Gold Deposit in Cambodia and completed feasibility
studies for the development of the project before Renaissance was
acquired by Emerald. Upon completion of the Emerald takeover,
Justin joined the Board of Emerald as Executive Director and
remained in that role until January 2018.
Justin also founded Berkut Minerals Ltd (now Carnaby Resources
Ltd) which was listed on the ASX in 2018 and he served as its
Chairman and Non-Executive Director until March 2020. He has also
previously served as Non-Executive Director of Fin Resources Ltd
and Odin Metals Ltd, both until July 2020.
The composition of the Board will be reviewed further during the
course of the transaction and additional appointments considered as
appropriate .
Indicative Timetable
An indicative timetable for the Proposed Acquisition and
associated events under the ASX Listing Rules is set out below:
Event Date
Notice of General Meeting sent to the Company's 23 April 2021
shareholders
Lodgement of the Prospectus with ASIC 28 April 2021
Opening date of the Capital Raising 28 April 2021
General Meeting to approve the Proposed Acquisition 24 May 2021
and Capital Raising
Effective Date of Consolidation of Capital 24 May 2021
Closing Date of the Capital Raising 26 May 2021
Issue of Shares under the Capital Raising 8 June 2021
Issue of Consideration Securities 8 June 2021
Settlement of the Proposed Acquisition 8 June 2021
Dispatch of holding statements 8 June 2021
Re-compliance with Chapters 1 & 2 of the ASX Listing 8 June 2021
Rules
Re-instatement to quotation of Shares (including 11 June 2021
Shares issued under the Capital Raising) on ASX
===================================================== ==============
The above timetable is indicative only and has not been endorsed
by ASX. Actual dates will be subject to the Corporations Act 2001
(Cth) and the ASX Listing Rules, and the Company reserves the right
to vary any and all of the above dates without notice.
Activities and business model on completion of the Proposed
Acquisition
The Company will be a mineral exploration company following
completion of the Proposed Acquisition. Its proposed activities
following completion will therefore be to undertake exploration and
development of the Panton PGM Project.
The Company intends to allocate net funds raised from the
proposed Capital Raising, together with the Company's existing cash
reserves as set out in the 'Use of Funds' section above.
Key Risks
The key risks of the Proposed Acquisition and following
completion of the Proposed Acquisition are as follows. The key
risks are of a customary nature for mineral exploration development
companies. Further details of key risks will be included in the
Company's Notice of Meeting and Prospectus.
(a) Risks relating to the change in nature and scale of activities
(i) Completion risk
(ii) Re-quotation of Shares on ASX and AIM
(b) Risks in respect of the Panton PGM Project
(i) Information Accuracy Risk
(ii) Minority Shareholder of Panton Sill Risk
(iii) Exploration and Operating Risk
(iv) Resources and Reserves estimation Risk
(v) Metallurgical and processing risk
(vi) Commodity Price Volatility and Exchange Rate Risk
(vii) Environmental Risks
(viii) Title Risks
(ix) Exploration Costs
(x) Mine Development
(c) General risks
(i) Additional requirements for capital
(ii) Reliance on key personnel
(iii) Economic and financial market risks
(iv) Taxation
(v) Force majeure
(vi) Trading price of Shares
(vii) Government policy changes
(viii) Litigation
(ix) Insurance
The above list of risk factors should not be taken as being
exhaustive of the risks faced by the Company or investors in the
Company. The above risk factors, and others not specifically
mentioned may in the future materially affect the financial
performance of the enlarged group and the value of securities in
the Company. Securities in the Company carry no guarantee with
respect to the payment of dividends, returns of capital or the
market value of those securities. Any investment in the Company is
highly speculative.
The key dependencies influencing the viability of the Proposed
Acquisition are the Company's capacity to:
(a) re-comply with Chapters 1 and 2 of the ASX Listing Rules and
complete the Capital Raising to enable re-admission to quotation of
the Company's securities on the ASX; and
(b) meet its objectives and implement the strategy detailed in this announcement.
Recent Issues of Securities
Red Emperor has not issued any equity securities in the last two
years.
GNP was incorporated on 12 November 2020 for the purpose of
acquiring the Panton PGM Project from Panoramic.
GNP raised a total of A$12,500,000 from sophisticated and
professional investors by an issue of new GNP shares at A$1.00
each. This fundraising took place between 30 November 2020 and 7
December 2020.
Financial Accounts
Copies of the audited accounts of the Company for its financial
year ended 30 June 2020 and auditor reviewed (but unaudited)
accounts for the half year ended 31 December 2020 are available on
the Company's website at https://redemperorresources.com .
GNP is a recently formed company (incorporated on 12 November
2020) and has not yet produced any financial statements. Such
accounts will be produced and audited in conjunction with the
preparation of the Prospectus for the Capital Raising, including
the Independent Limited Assurance Report required under the ASX
Listing Rules.
Re-compliance with ASX Listing Rules Chapters 1 and 2 and AIM
Rule Considerations
Since the Proposed Acquisition will result in a significant
change to the nature and scale of the Company's activities, the
Proposed Acquisition will require the Company's shareholders'
approval under ASX Listing Rule 11.1.2 and will also require the
Company to re-comply with Chapters 1 and 2 of the ASX Listing Rules
in accordance with ASX Listing Rule 11.1.3.
Due to its size and nature, the Proposed Acquisition also
constitutes a reverse takeover under the AIM Rules, requiring,
inter alia , publication of an AIM Admission Document and
shareholder approval pursuant to AIM Rule 14. In light of certain
differences between the ASX Listing Rules and the AIM Rules and the
chronology, processes and requirements of the two stock exchanges,
the Company is currently evaluating structuring options with its
Nominated Adviser with respect to the enlarged group's dual listing
on AIM.
Shareholder Approvals
A notice of meeting seeking shareholder approval for the
resolutions required to give effect to the Proposed Acquisition
will be sent to the Company's shareholders in due course. It is
currently expected that the Company will convene a general meeting
to be held in May 2021 to facilitate Shareholder approval for
matters in respect of the Proposed Acquisition pursuant to the ASX
Listing Rules. Such approvals will include:
(a) the change in nature and scale of the Company's activities;
(b) the Consolidation of the Company's capital;
(c) the issue of the Consideration Securities to the GNP Vendors;
(d) the issue of shares in connection with the Capital Raising;
(e) the issue of Options to the NOMAD;
(f) approval for Related Parties' participation in the Capital Raising;
(g) the issue of Performance Rights to the Directors and the Proposed Director; and
(h) election of the Proposed Director.
The Company's securities are currently suspended from quotation
on ASX and, subject to shareholder approval being obtained, will
remain suspended until the Company has re-complied with Chapters 1
and 2 of the ASX Listing Rules and the Proposed Acquisition has
been completed. The Company's ordinary shares will also remain
suspended from trading on AIM until the Proposed Acquisition has
been approved by shareholders pursuant to the AIM Rules and
successfully completed or an alternative re-admission transaction
is concluded.
Regulatory Approvals and waivers
The Company has obtained the following waivers and confirmations
from ASX:
(a) a waiver from ASX Listing Rule 2.1 (Condition 2) to enable
it to issue shares at a price of A$0.10 per share;
(b) a waiver from ASX Listing Rule 1.1 (Condition 12) to enable
it to have Options in issue with an exercise price below A$0.20 per
share.
The terms and conditions of the waivers are included in Appendix
Three to this announcement.
The Company intends to seek a waiver from ASX Listing Rule
10.13.5 to enable it to seek shareholder approval to issue any
equity securities to be issued to Related Parties in conjunction
with the Acquisition (i.e. the proposed Performance Rights, and any
participation in the Capital Raising by related parties approved by
Shareholders) later than one month after the date of the general
meeting.
The Company expects that ASX will treat the Consideration
Securities to be issued to the GNP shareholders as restricted
securities in accordance with Chapter 9 of the ASX Listing Rules.
The Company intends to make an application for cash formula relief
in respect of Shares issued to GNP shareholders who were seed
capitalists of GNP.
Fees paid or payable in connection with finding, arranging or
facilitating the Proposed Acquisition
Other than as disclosed in this announcement, there are no fees
payable to any person in connection with finding, arranging, or
facilitating the Proposed Acquisition or Capital Raising.
The Company currently expects to pay fees to the following
advisers in connection with its Capital Raising and re-admission to
ASX and AIM .
Role Name Amount
Lead Manager (Australia) 708 Capital Pty A$600,000
Ltd
Corporate Adviser (Australia) Barclay Wells Ltd A$200,000
NOMAD (UK) Strand Hanson Limited GBP200,000
6,000,000 Adviser Options
Broker(s) (UK) TBA GBP100,000
Corporate Adviser (UK) Max Capital Pty GBP 100,000
Ltd
The consideration payable to the GNP shareholders under the HoA
is set out above. The Company proposes to seek Shareholder approval
for the issue of Performance Rights to the Directors and Proposed
Director as set out above, but such proposed issues are not in
connection with finding, arranging or facilitating the Proposed
Acquisition.
Regulatory requirements generally
The Company notes that pursuant to the ASX Listing Rules:
(a) the Proposed Acquisition requires shareholder approval and
therefore may not proceed if such approval is not forthcoming;
(b) the Company is required, inter alia, to re-comply with ASX's
requirements for admission and quotation and therefore the Proposed
Acquisition may not proceed if those requirements are not met;
and
(c) ASX has an absolute discretion in deciding whether or not to
re-admit the Company to the Official List and to quote its
securities and therefore the Proposed Acquisition may not proceed
if ASX exercises that discretion.
Investors should take account of these uncertainties in deciding
whether or not to buy or sell the Company's securities.
Furthermore, the Company:
a) notes that ASX takes no responsibility for the contents of this announcement; and
b) confirms that it is in compliance with its continuous
disclosure obligations under ASX Listing Rule 3.1.
Due to its size and nature, the Proposed Acquisition also
constitutes a reverse takeover under the AIM Rules, requiring,
inter alia , publication of an AIM Admission Document and
shareholder approval pursuant to AIM Rule 14. In light of certain
differences between the ASX Listing Rules and the AIM Rules and the
chronology, processes and requirements of the two stock exchanges,
the Company is currently evaluating structuring options with its
Nominated Adviser with respect to the enlarged group's dual listing
on AIM .
Due diligence
The Company has undertaken appropriate enquiries and will
undertake further due diligence into the assets and liabilities,
financial position and performance, profits and losses, and
prospects of GNP to enable the Board to be satisfied that the
Proposed Acquisition is in the interests of the Company and its
shareholders.
For further information, please visit
www.redemperorresources.com or contact:
Red Emperor Resources NL - Greg Bandy +61 8 9212 0102
Strand Hanson Limited (Nominated Adviser)
- James Harris +44 (0) 20 7409 3494
Brandon Hill Capital (UK Broker) +44 (0) 203 463 5010
708 Capital Pty Ltd (Australian Broker) +61 (0) 2 9112 2500
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European (Withdrawal)
Act 2018.
Competent Person's Statement
The information in this announcement that relates to Mineral
Resources is based on information prepared by Patrick Adams.
Patrick Adams is a fellow of the Australian Institute of Mining and
Metallurgy. Patrick Adams is an employee of Cube Consulting Pty Ltd
and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the JORC Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves. Patrick Adams consents to the inclusion in this
announcement of the matters based on their information in the form
and context in which it appears.
Cube Consulting originally prepared the Resource Estimate in
respect of the Panton PGM Project when it was owned by Platinum
Australia Limited in 2003 and subsequently reviewed and re-reported
a Resource Estinmate when it was held by Panoramic Resources
Limited in 2015. Panoramic sold 80% of the entity holding the
Panton PGM Project to GNP in 2020, and GNP is intended to be
acquired by Red Emperor Resources NL. Cube Consulting does not have
any direct or indirect financial interest in the outcome of either
of those transactions.
Appendix One | Pro Forma Financial Information
RED EMPEROR RESOURCES NL
CONSOLIDATED HISTORICAL AND PRO FORMA STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2020
Pro forma adjustments Pro forma
Consolidated
Reviewed Acquisition Capital Unaudited
for the of Great Raising Subsequent
half-year Northern Event Adjustments
ended Palladium
31-Dec-20 31-Dec-20
-----------------------
Note A$ A$ A$ A$ A$
----------------------- -----
Current Assets
Cash and cash
equivalents 1 4,225,863 (200,000) 7,827,904 - 11,853,767
Trade and other
receivables 26,626 - - - 26,626
------------------- ------------ ----------- -------------------- --------------
Total Current Assets 4,252,489 (200,000) 7,827,904 - 11,880,393
------------------- ------------ ----------- -------------------- --------------
Non-Current Assets
Right of use assets 118,718 - - - 118,718
Deferred exploration
and evaluation
expenditure 2 - 17,700,000 - - 17,700,000
------------------- ------------ ----------- -------------------- --------------
Total Non-Current
Assets 118,718 17,700,000 - - 17,818,718
------------------- ------------ ----------- -------------------- --------------
Total Assets 4,371,207 17,500,000 7,827,904 - 29,699,111
------------------- ------------ ----------- -------------------- --------------
Current Liabilities
Trade and other
payables 39,601 - - - 39,601
Lease liabilities 70,620 - - - 70,620
------------------- ------------ ----------- -------------------- --------------
Total Current
Liabilities 110,221 - - - 110,221
------------------- ------------ ----------- -------------------- --------------
Non-Current
Liabilities
Lease liabilities 49,075 - - - 49,075
------------------- ------------ ----------- -------------------- --------------
Total Non-Current
Liabilities 49,075 - - 49,075
------------------- ------------ ----------- -------------------- --------------
Total Liabilities 159,296 - - - 159,296
------------------- ------------ ----------- -------------------- --------------
Net Assets 4,211,911 17,500,000 7,827,904 - 29,539,815
------------------- ------------ ----------- -------------------- --------------
Equity
Issued capital 3 61,811,451 17,500,000 7,657,912 - 86,969,363
Reserves 4 5,270,653 - 169,992 2,735,333 8,175,978
Accumulated losses (62,870,193) - (2,735,333) (65,605,526)
------------------- ------------ ----------- -------------------- --------------
Total Equity 4,211,911 17,500,000 7,827,904 - 29,539,815
------------------- ------------ ----------- -------------------- --------------
NOTES:
Reviewed Unaudited
Pro forma
31-Dec-20 31-Dec-20
Note A$ A$
1. Cash and cash equivalents 4,225,863 11,853,767
---------- ------------
RMP's cash and cash equivalents as at 31
December 2020 4,225,863
Adjustments arising in the preparation
of the pro forma statement of financial
position are summarised as follows:
Gross proceeds from the Offer pursuant
to the Prospectus 10,000,000
Cash costs relating to the Offer - Australia 6 (1,067,834)
Potential cash costs relating to the transaction (1, 104,262
- UK 7 )
------------
7, 827,904
------------
Acquisition of Great Northern Palladium
Corporate advisory fees (200,000)
------------
7, 627,904
------------
Pro forma cash and cash equivalents 11, 853,767
------------
2. Deferred Exploration and Evaluation Expenditure
Deferred Exploration and Evaluation Expenditure - 17,700,000
-----------
RMP deferred exploration expenditure as
at 31 December 2020 -
Adjustments arising in the preparation
of the pro forma statement of financial
position are summarised as follows:
Consideration shares issued as part of
the Proposed Acquisition 17,500,000
Acquisition of Great Northern Palladium
corporate advisory fees 200,000
-----------
Pro forma Deferred Exploration Expenditure 17,700,000
-----------
The Proposed Acquisition has been considered under AASB 3
Business Combinations and although a company is being acquired as
part of the transaction, it is determined that no business is being
acquired and accordingly the transaction has been accounted for as
an asset acquisition. The only material assets of the company are
exploration assets.
Number of Unaudited
shares Pro forma
A$
3. Issued Capital
---------------- ------------
RMP issued share capital as at 31 December
2020 525,292,776 61,811,451
---------------- ------------
Adjustments arising in the preparation
of the pro forma statement of financial
position are summarised as follows:
Fully paid ordinary shares to be issued
at $0.014 per share pursuant to the Prospectus 714,285,714 10,000,000
Consideration shares to be issued at $0.014
as part of the Proposed Acquisition 1,250,000,000 17,500,000
Completion of the share consolidation at
14:100 (2,141,037,502) -
Costs of the offer - Nominated Adviser
(UK) Consideration options - (169,992)
Cash costs of the Offer deducted from equity - (2,172,096)
---------------- ------------
Pro forma issued share capital 348,540,988 86,969,363
---------------- ------------
Reviewed Unaudited
Pro forma
31-Dec-20 31-Dec-20
Note A$ A$
4. Reserves
Reserves 5,270,653 8,175,978
---------- -----------
RMP Reserves as at 31 December 2020 5,270,653
Adjustments arising in the preparation
of the pro forma statement of financial
position are summarised as follows:
Consideration options relating to the Offer
- NOMAD (UK) 169,992
Subsequent event adjustments:
Performance rights to be issued to the
Directors [and Proposed Director] 5 2,735,333
-----------
Pro forma Reserves 8,175,978
-----------
5. Performance rights to be issued to the Directors and Proposed
Director
The performance rights intended to be issued to the Directors
and Proposed Directors have been valued using a barrier up-and-in
trinomial option pricing model with a Parisian barrier
adjustment.
Tranche
Item A. 20-day B. 20-day C. 20-day
VWAP of VWAP of VWAP of
A$0.15 A$0.20 A$0.25
or above or above or above Total
Security spot price $0.140 $0.140 $0.140
Exercise price Nil Nil Nil
Life of the Rights (years) 3.00 3.00 3.00
Share price volatility 100% 100% 100%
Risk-free rate 0.10% 0.10% 0.10%
Dividend yield Nil Nil Nil
Number of Rights 7,333,332 7,333,333 7,333,335
Valuation per Right $0.132 $0.124 $0.117
Valuation per Tranche $968,000 $909,333 $858,000 $2,735,333
6. Cash costs relating to the Proposed Acquisition and Capital
Raising - Australia
Item of Expenditure A$
ASIC fees 3,206
ASX fees 109,628
Capital Raising and Management Fee (6%) 600,000
Lead Manager Fee 200,000
Legal Fees 100,000
Independent Geologist's Fees 20,000
Investigating Accountant's Fees 20,000
Printing and Distribution 5,000
Miscellaneous 10,000
1,067,834
-----------
7 . Cash costs relating to the Proposed Acquisition and Capital
Raising - UK
Item of Expenditure GBP AUD/GDP A$
AIM fees 23,386 0.56 41,761
UK Broker/Corporate Advisory Fees 200,000 0.56 357,143
Nomad and Financial Adviser 200,000 0.56 357,143
Legal advisers to Nomad and/or Financial
Adviser & Broker 40,000 0.56 71,429
Legal advisers to Company (UK law) 75,000 0.56 133,929
Competent Person's Report 35,000 0.56 62,500
UK Reporting Accountant 30,000 0.56 53,571
Printing of admission document 5,000 0.56 8,929
Registrars / other 10,000 0.56 17,857
618,386 1, 104,262
--------- -------- -----------
Appendix Two | Table One JORC Code, 2012 Edition
Section 1 : Sampling Techniques and Data
Criteria JORC Code explanation Commentary
Sampling
techniques * Nature and quality of sampling (e.g. cut channels, * The database of sampling for the project resource
random chips, or specific specialised industry definition is comprised of a number of different
standard measurement tools appropriate to the sampling methods. It contains historic diamond
minerals under investigation, such as down hole gamma drilling (30 holes totalling 9,524.4m) undertaken
sondes, or handheld XRF instruments, etc.). These before 2001; diamond drilling (including RC
examples should not be taken as limiting the broad pre-collar holes) undertaken by Platinum Australia
meaning of sampling. (PLA) between 2001 and 2003 (166 holes totalling
34,410.2m), RC drilling undertaken by Platinum
Australia between 2001 and 2003 (29 holes totalling
* Include reference to measures taken to ensure sample 2,366.3m) and channel sampling of surface and
representivity and the appropriate calibration of any underground trenches and faces (1,391m).
measurement tools or systems used.
* Diamond Drill Core, RC chips and surface trench
* Aspects of the determination of mineralisation that channel sampling are the three primary sample types.
are Material to the Public Report. Relatively small numbers of samples are from decline,
wall and face sampling undertaken in an exploration
decline.
* In cases where 'industry standard' work has been done
this would be relatively simple (e.g. 'reverse
circulation drilling was used to obtain 1m samples * Diamond core is the predominant sample type (HQ, HQ3,
from which 3kg was pulverised to produce a 30g charge NQ and NQ2 sizes) and was orientated, geologically
for fire assay'). In other cases more explanation may logged and sampled to lithological contacts or
be required, such as where there is coarse gold that changes in the nature of mineralisation. Nominal
has inherent sampling problems. Unusual commodities samples lengths of 1.0m with a minimum sample length
or mineralisation types (e.g. submarine nodules) may of 0.25m. NQ and NQ2 core was half core sampled. For
warrant disclosure of detailed information. NQ and NQ2 core the left hand (looking down the hole)
half of the core is sampled. HQ and HQ3 core was
quarter core sampled. For HQ and HQ3 core the right
hand (looking down the hole) half of the core is cut
again to provide quarter core. The lower quarter was
sent for analysis.
* RC chips sampled at 1m or 0.5m intervals. The total
chipped material for each interval is collected off
the drill cyclone; it is riffle split on site to
produce a sample of approximately 2-3kg to be sent to
the laboratory for analysis. Wet sample was left to
dry before splitting. Remaining reject is stored at
the site facility.
* Trench channel chip sampling was undertaken from the
base or as close to the base of the trench as
possible. Each trench was sampled continuously over
the entire length. Sample lengths varied from 0.15m
to 2m. Sample boundaries were based on geological
contacts and changes in nature of mineralisation.
Where the material was soft a channel was cut with a
geological pick and in harder material chip sampling
using a geological hammer. Samples of 2-3kg were
collected for analysis.
* Decline sampling, wall and face sampling was
undertaken on geologically marked up channels
approximately 1.5m from the floor. Sampled intervals
varied from 0.25 to 0.5m across the full width of
mineralisation. Sample material was chipped out using
a geological hammer in most instances, the resulting
sample weights were consistently less than those for
drilling.
------------------------------------------------------------- --------------------------------------------------------------
Drilling
techniques * Drill type (e.g. core, reverse circulation, open-hole * RC drilling has been used predominantly to provide
hammer, rotary air blast, auger, Bangka, sonic, etc.) pre-collars for diamond drill holes and to provide
and details (e.g. core diameter, triple or standard testing of areas outside the resource, sterilisation
tube, depth of diamond tails, face-sampling bit or and metallurgical test holes. RC pre-collar depths
other type, whether core is oriented and if so, by range from 2 to 200m. Where sampled, the RC drilling
what method, etc.). used face sampling hammers.
* Diamond core drilling (NQ, NQ2, HQ and HQ3 diameters
with one BQ hole) is the predominant sample source.
Standard tube was used.
* Where possible diamond core has been oriented based
on manual orientation spearing methods. A distinction
is routinely made between oriented and non-oriented
core.
------------------------------------------------------------- --------------------------------------------------------------
Drill sample
recovery * Method of recording and assessing core and chip * Diamond drill core loss (in metres) was measured in
sample recoveries and results assessed. the core trays and core loss and recovery (%)
recorded in geotechnical records.
* Measures taken to maximise sample recovery and ensure
representative nature of the samples. * Measures taken to maximise sample recovery and ensure
representative nature of the samples are not known.
* Whether a relationship exists between sample recovery
and grade and whether sample bias may have occurred * No analysis on relationship between sample core
due to preferential loss/gain of fine/coarse recovery and grade has been undertaken.
material.
------------------------------------------------------------- --------------------------------------------------------------
Logging
* Whether core and chip samples have been geologically * Diamond core and RC chips have been geologically and
and geotechnically logged to a level of detail to geotechnically logged to a level of detail to support
support appropriate Mineral Resource estimation, appropriate Mineral Resource estimation.
mining studies and metallurgical studies.
* Underground face data logging and wall mapping have
* Whether logging is qualitative or quantitative in been used to support mineralisation interpretation
nature. Core (or costean, channel, etc.) photography. and Mineral Resource estimation.
* Total length of geologically logged data is 36,622m
* The total length and percentage of the relevant which represents 74% of the total 44,306.89m drilled
intersections logged . or channelled.
* Logging has been conducted both qualitatively and
quantitatively - full description of lithologies,
alteration and comments are noted.
* Qualitative structural measurements (9,956 individual
measurements) have been undertaken on oriented
diamond core holes.
------------------------------------------------------------- --------------------------------------------------------------
Sub-sampling
techniques * If core, whether cut or sawn and whether quarter, * Diamond Core was half core and quarter core sampled
and sample half or all core taken. depending on the core size. The core was cut so as to
preparation divide the mineralisation consistently down the
holes. A minimum sample size of 0.25m and a maximum
* If non-core, whether riffled, tube sampled, rotary size of 1.0m.
split, etc. and whether sampled wet or dry.
* RC drillholes are typically sampled on 1.0m
* For all sample types, the nature, quality and intervals. Pre-collar samples were typically sampled
appropriateness of the sample preparation technique. at either 2m or 4m intervals. The drill cuttings are
riffle or cone split to produce a final sample of
approximately 2-3 kg.
* Quality control procedures adopted for all
sub-sampling stages to maximise representivity of
samples. * Sample size of 2-3kg is appropriate for grain size of
material.
* Measures taken to ensure that the sampling is
representative of the in situ material collected, * A small number of decline, wall and face samples have
including for instance results for field been used with sample weights consistently less that
duplicate/second-half sampling. the drilling. The impact of these smaller weights has
been mitigated by the used of full interval
compositing for estimation as described below.
* Whether sample sizes are appropriate to the grain
size of the material being sampled.
* As a result for all sample types, the nature, quality
and appropriateness of the sample preparation
technique is industry standard.
------------------------------------------------------------- --------------------------------------------------------------
Quality of
assay data * The nature, quality and appropriateness of the * Genalysis Assay laboratories in Perth were the
and assaying and laboratory procedures used and whether primary facility used for assaying, with UltraTrace
laboratory the technique is considered partial or total. in Perth used for check assaying.
tests
* For geophysical tools, spectrometers, handheld XRF * For drilling prior to 2001, original laboratory
instruments, etc., the parameters used in determining identify is unknown and original laboratory records
the analysis including instrument make and model, were unavailable.
reading times, calibrations factors applied and their
derivation, etc.
* The PLA standard assaying techniques used were lead
or nickel collection fire assay with a Mass
* Nature of quality control procedures adopted (e.g. Spectrometry (MS) finish for Au, Pd, Pt and peroxide
standards, blanks, duplicates, external laboratory fusion using HCl acid to dissolve the melt with an
checks) and whether acceptable levels of accuracy Optical Emission Spectrometry (OES) finish for As, Co
(i.e. lack of bias) and precision have been ,
established. Cr, Cu, Ni, S. These methods are considered total
digestion methods. Fire assay nickel sulphide
collection technique was preferred (for samples
containing chromite) to lead collection as it is
efficient in collecting all PGEs and gold from a
sample.
* Sample preparation for the Genalysis Lab were: whole
sampled dried at 140deg, whole sample crushed
(LM2/LM5) to 90% passing 75micron, 150g collected for
pulp split and reject stored.
* Analysis - Chromite reef - Genalysis method: NiS/*MS
for Au(5ppd); Pt(2ppb); Pd(2ppb), Ru(2ppb), Os(2ppb),
Ir(2ppb) and Rh(1ppb).
* Analysis - Low grade dunite - Genalysis method:
FA/*MS for Au(1ppd); Pt(5ppb) and Pd(10ppb).
* Additional elements - Genalysis method: D/OES for
As(0.01%), Co(20ppm), Cr(50ppm), Cu(20ppm), Ni(20ppm)
and S(0.01%).
* Descriptions of quality control procedures are based
on previous resource reports and historical
documents.
* Ultra Trace, Perth was engaged to provide services
for low level detection work (RC samples only) and
check assaying on the Genalysis results; sample
preparation was analogous to that used by Genalysis.
* Analysis - Low grade dunite (northern exploration) -
ltra Trace method: FA002/FA003 for Au(1ppb), Pt(1ppb)
and Pd(1ppb).
* Analysis - Sterilisation RC - Ultra Trace methods:
AR001 for Au(1ppb), AR101 for Cr(5ppm), Cu(0.5ppm),
Ni(1ppm) and S(20ppm), AR102 for As(0.2ppm),
Co(0.2ppm), Pd(10ppb) and Pt(5ppb).
* Analysis - Chromite Reefs - Ultra Trace method NSF01
for Au(5ppb), Pt(2ppb), Pd(2ppb), Ru(2ppb), Os(2ppb),
Tr(2ppb) and Rh(1ppb).
* Additional elements - Ultra Trace method ICP104 for
As(100ppm), Co(20ppm), Cr(50ppm), Cu(20ppm),
Ni(20ppm) and S(0,01%).
* QAQC consisted of systematic submission of field
duplicates for RC samples (1 in 50); barren flushes
(all drilling and trenching samples) after samples
from top and middle reef chromite intervals;
certified local reference standards (CRM) prepared by
Gannet Holdings Pty (3 PGE+Au) at a rate of 1 in 50
in all drilling samples and two programmes of inter
lab check assays (89 checks in total).
* Review of documented reports noted analysis of
duplicates and standards assaying information showed
good correlation with original results for
duplicates; good correlation with the certified
standards expected results with incorrect sample
identification errors noted on a small number of
occasions; assaying of blanks showed acceptable
results with rare incorrect submissions of CRM for
blank material; and inter lab check assaying showed
acceptable correlation between labs for all elements
with the exception of Co in the first programme of 53
samples. The Ultra Trace assays for Co were biased
low (-14%) compared to the original Genalysis assays.
This issue was thoroughly investigated and shown to
be a lab specific issue at Ultra Trace. Programme two
(36 samples) Co assays correlated well with the
original Genalysis assays.
* Based on the reported information samples show
acceptable levels of accuracy and precision.
------------------------------------------------------------- --------------------------------------------------------------
Verification
of sampling * The verification of significant intersections by * No independent sampling was undertaken by Cube.
and assaying either independent or alternative company personnel.
* Drillhole assay data has not been checked against the
* The use of twinned holes. original hardcopy laboratory assay reports. Recent
drilling and face sampling assay records in digital
format have been checked for significant intervals
* Documentation of primary data, data entry procedures, within the resource area.
data verification, data storage (physical and
electronic) protocols.
* No twinning of holes has been identified in the
drillhole data. Underground face data has been
* Discuss any adjustment to assay data. compared against the surface diamond drilling in
close proximity and shows very good correlation with
the drillhole logging and the significant
intersections.
* Data entry and verification was completed by Platinum
Australia and its data management consultant Maxwell
Geoservices of Perth WA (Maxwell) who have maintained
the database.
* No adjustment to assay data has been undertaken.
* Pt, Pd, Au, Cu and Cr are assayed for all estimated
domain intervals (total of 180.07m); there are a
small number of un-assayed intervals (As - 98%
assayed and Co - 79% assayed).
* Samples not received or missing have had the interval
left blank in the database.
------------------------------------------------------------- --------------------------------------------------------------
Location
of data * Accuracy and quality of surveys used to locate drill * Platinum Australia Diamond and RC drillhole collars
points holes (collar and down-hole surveys), trenches, mine were routinely surveyed for collar location and RL
workings and other locations used in Mineral Resource using GPS methodology. Within the estimation database
estimation. ,
drilling prior to 2001 (29 DD holes) no information
is recorded for the methodology used. Of the 166 PLA
* Specification of the grid system used. DD holes, 45 have no recorded survey method, 111 were
surveyed by differential GPS and 10 were estimated.
Of the 29 RC holes 14 were surveyed by differential
* Quality and adequacy of topographic control. GPS and 15 have no recorded survey method.
* Work by previous resource consultants indicated that
all drill collar locations for holes used in their
estimate have been surveyed by GPS or other survey
instrument. From their available data they estimated
that the collar accuracy was within 1.5m in three
dimensions.
* Additionally validation of collar RL positions
against the digital terrain model provided by
Platinum Australia confirmed this level of accuracy
for most holes.
* The estimate has been undertaken in a local grid
co-ordinate system. Grid transformation conversion
data from Local Grid to UTM (AMG84_52) was provided
in the data set.
* Downhole surveys have been routinely undertaken for
all drilling 2001 to 2003. Historic drillholes
(pre-PS059 were surveyed using a compass for the
first survey at 0m and a single shot Eastman camera
at 30m down hole intervals. The post PS059 holes (PLA
holes) were surveyed with either with an Eastman
single shot survey tool (with a compass reading at 0m
depth) or using a Gyroscopic Deviation Tool (Surtron
Technologies) every 10m down hole.
* Surface tranches were surveyed by compass using a
surface dtm for RL. Underground trench and face
sample alignments were manually calculated.
* Of the 294 holes in the database, 39 or 13% used
Gyro; 174 or 59% used camera; 70 or 24% were trenches
or underground face sample type; and 11 or 11% have
no method listed for down hole survey method. Reports
from Platinum Australia indicate that there was good
correspondence between camera and gyro measurements
where duplicate surveys were undertaken.
Additional analysis by Platinum Australia
of magnetic susceptibility results
indicated no adverse effects on camera
measurements due to the host rock magnetic
field. A small number of historic holes
with acid etch down hole surveys have
been excluded from the database used
for this estimate.
* Topography was provided as a DTM file, converted from
DOLA, 1:25,000 scale aerial photography with ground
survey control by Whelan Survey and Mapping Pty Ltd
in Broome WA. The inferred accuracy of this DTM
surface was +-1.25m.
* This topography is adequate for resource estimation.
* Visual inspection in 3D graphics did not identify any
inaccuracies with the spatial position of the
drillholes.
------------------------------------------------------------- --------------------------------------------------------------
Data spacing
and * Data spacing for reporting of Exploration Results. * Drill intercept pierce point data spacing is variable
distribution ranging from 25m (along strike) x 25m (down dip) in
the shallower parts to 250m below surface; increasing
* Whether the data spacing and distribution is to 100m x 200m to a depth of 1,000m below surface.
sufficient to establish the degree of geological and Below 1,000m pierce point spacing is on a 500mx500m
grade continuity appropriate for the Mineral Resource grid approximately.
and Ore Reserve estimation procedure(s) and
classifications applied.
* Given the nature of the mineralisation (a chromite
reef deposit) this drill and sampling spacing is
* Whether sample compositing has been applied. adequate and appropriate to determine the geological
and grade continuity for reporting of Mineral
Resources and the classifications applied to
represent risk.
* Sample compositing was over the full length of the
drillhole intervals within the mineralised domains.
These grade composites were weighted by length and
density for estimation purposes.
------------------------------------------------------------- --------------------------------------------------------------
Orientation
of data in * Whether the orientation of sampling achieves unbiased * Both drilling and underground face sampling is
relation sampling of possible structures and the extent to orientated normal to the dip and plunge of the
to which this is known, considering the deposit type. mineralisation as far as possible.
geological
structure
* If the relationship between the drilling orientation * The orebodies are interpreted to be a series of
and the orientation of key mineralised structures is separate sheets that make up a plunging synclinal
considered to have introduced a sampling bias, this feature that is in parts faulted.
should be assessed and reported if material.
* Each drill hole has been oriented with the intention
of intersecting the mineralisation as close to
orthogonal as possible.
* Given the different orientations of drilling there is
no significant risk of an introduced sampling bias
resulting from drilling orientation.
------------------------------------------------------------- --------------------------------------------------------------
Sample
security * The measures taken to ensure sample security. * Routine sampling, submission and storage procedures
are described in Platinum Australia's drilling
reports. The procedures described indicate industry
standard practices were followed during the drilling
and sampling of all holes drilled between 2001 and
2003.
* No information was available regarding the historical
data from holes pre PS059.
* Routine data input, validation, QAQC and laboratory
follow up are described in the PLA reports. The
procedures described indicate industry standard
practices were followed during the drilling and
sampling of all holes drilled between 2001 and 2003.
------------------------------------------------------------- --------------------------------------------------------------
Audits or
reviews * The results of any audits or reviews of sampling * Several reviews have been undertaken by previous
techniques and data. Platinum Australia company staff and independent data
management consultants Maxwell, detailed in Platinum
Australia's reports. These audits have not revealed
any material issues.
* Cube conducted a data compilation review and
validation prior to resource estimation which
involved checks for duplicate surveys, downhole
surveys errors, assays and geological intervals
beyond drillhole total depths, overlapping intervals,
and gaps between intervals. No significant errors
were found.
------------------------------------------------------------- --------------------------------------------------------------
Section 2 : Reporting of Exploration Results
Criteria JORC Code explanation Commentary
Mineral
tenement * Type, reference name/number, location and ownership * The Panton Sill Project - is located in the Halls
and land including agreements or material issues with third Creek Shire of Western Australia, locality of Rose
tenure status parties such as joint ventures, partnerships, Bore on three granted Mining Leases;
overriding royalties, native title interests,
historical sites, wilderness or national park and
environmental settings. * Mining Lease M80/103, 859.4 HA and expiring
16/3/2028;
* The security of the tenure held at the time of
reporting along with any known impediments to * Mining Lease M80/104, 570.3 HA and expiring
obtaining a licence to operate in the area. 16/3/2028;.
* Mining Lease M80/105, 828.3 HA and expiring
16/3/2028;
* The three Mining Leases are held 100% by Panton Sill
Pty Ltd.
* There are no third parties or joint venture partners
involved in the Project.
* A royalty is payable to Helix (now residing with
Goldfields) of 2% NSR.
* The three Mining Leases were granted pre Native Title
Act and so are free of native title claim.
* There is according to the Company no conflict with
any other tenure in the vicinity and no known
impediment to operations.
* The previous owners have performed a substantial
amount of work understanding the baseline conditions
for flora, fauna, hydrology and waste
characterisation. This work would require updating
but it is reasonable to assume that environmental
approvals for potential future mining activity will
be obtainable.
------------------------------------------------------------- --------------------------------------------------------------
Exploration
done by other * Acknowledgment and appraisal of exploration by other * A number of exploration drill holes (59) have been
parties parties. completed by previous owners and are considered
historic data.
* A significant number of these historical holes have
been excluded from the estimation - of those used,
the impact of unknown quality is considered to be a
minor risk when they are compared to the significant
number of holes and data gathered by PLA between 2001
and 2003 for which complete QA/QC is available.
* The historical data & database has been appraised and
is considered to be of fair to good quality.
------------------------------------------------------------- --------------------------------------------------------------
Geology
* Deposit type, geological setting and style of * The Panton Sill is interpreted as a differentiated
mineralisation. layered intrusion that has been folded into a south
plunging syncline. A series of late stage shears
offsets and disrupts the layered sequence through the
model area.
* The differentiated stratigraphy comprises a series of
narrow chromite seams within dunite units. The focus
of the resource estimate has been two of the chromite
layers known as the Top (101) and Middle (201) reefs.
PGE mineralisation is associated with sulphides
within the chromite seams. Both the grade and
thickness of the reefs decrease down the
stratigraphic order.
* Platinum Australia identifies the reef mineralisation
by a 2ppm Pt+Pd+Au threshold within zones of elevated
chromite grade.
* At this cut-off most of the upper reef comprises a
seam of one to two metres thick.
------------------------------------------------------------- --------------------------------------------------------------
Drill hole
Information * A summary of all information material to the * No exploration results have been reported in this
understanding of the exploration results including a release, and thus, this section is not material to
tabulation of the following information for all our report on Mineral Resources and Ore Reserves.
Material drill holes:
* easting and northing of the drill hole collar
* elevation or RL (Reduced Level - elevation above sea
level in metres) of the drill hole collar
* dip and azimuth of the hole
* down hole length and interception depth
* hole length.
* If the exclusion of this information is justified on
the basis that the information is not Material and
this exclusion does not detract from the
understanding of the report, the Competent Person
should clearly explain why this is the case.
------------------------------------------------------------- --------------------------------------------------------------
Data
aggregation * In reporting Exploration Results, weighting averaging * No exploration results have been reported in this
methods techniques, maximum and/or minimum grade truncations release, and thus, this section is not material to
(e.g. cutting of high grades) and cut-off grades are our report on Mineral Resources and Ore Reserves.
usually Material and should be stated.
* Where aggregate intercepts incorporate short lengths
of high grade results and longer lengths of low grade
results, the procedure used for such aggregation
should be stated and some typical examples of such
aggregations should be shown in detail.
* The assumptions used for any reporting of metal
equivalent values should be clearly stated.
------------------------------------------------------------- --------------------------------------------------------------
Relationship
between * These relationships are particularly important in the * In the majority of cases the drill intercept lengths
mineralisation reporting of Exploration Results. approximate the mineralisation widths as the drilling
widths and has been deliberately targeted to test the
intercept mineralisation true width. The mineralisation is
lengths * If the geometry of the mineralisation with respect to variable in dip and azimuth across the project and as
the drill hole angle is known, its nature should be a result a constant orthogonal drill orientation to
reported. mineralisation is difficult to achieve.
* If it is not known and only the down hole lengths are
reported, there should be a clear statement to this
effect (e.g. 'down hole length, true width not
known').
------------------------------------------------------------- --------------------------------------------------------------
Diagrams
* Appropriate maps and sections (with scales) and * No exploration results have been reported in this
tabulations of intercepts should be included for any release, and thus, this section is not material to
significant discovery being reported. These should our report on Mineral Resources and Ore Reserves.
include, but not be limited to a plan view of drill
hole collar locations and appropriate sectional
views.
------------------------------------------------------------- --------------------------------------------------------------
Balanced
reporting * Where comprehensive reporting of all Exploration * No exploration results have been reported in this
Results is not practicable, representative reporting release, and thus, this section is not material to
of both low and high grades and/or widths should be our report on Mineral Resources and Ore Reserves.
practiced to avoid misleading reporting of
Exploration Results.
------------------------------------------------------------- --------------------------------------------------------------
Other
substantive * Other exploration data, if meaningful and material, * No exploration results have been reported in this
exploration should be reported including (but not limited to): release, and thus, this section is not material to
data geological observations; geophysical survey results; our report on Mineral Resources and Ore Reserves.
geochemical survey results; bulk samples - size and
method of treatment; metallurgical test results; bulk
density, groundwater, geotechnical and rock
characteristics; potential deleterious or
contaminating substances.
------------------------------------------------------------- --------------------------------------------------------------
Further work
* The nature and scale of planned further work (e.g. * Planned further work is expected to include infill
tests for lateral extensions or depth extensions or and step-out drilling, metallurgical test work and
large-scale step-out drilling). mining studies.
* Diagrams clearly highlighting the areas of possible
extensions, including the main geological
interpretations and future drilling areas, provided
this information is not commercially sensitive.
------------------------------------------------------------- --------------------------------------------------------------
Section 3 : Estimation and Reporting of Mineral Resources
Criteria JORC Code explanation Commentary
Database
integrity * Measures taken to ensure that data has not been * Database was maintained by Platinum Australia with
corrupted by, for example, transcription or keying assistance from Maxwell consultants. Maxwell
errors, between its initial collection and its use conducted validation and audit services on behalf of
for Mineral Resource estimation purposes. Platinum Australia over the period 2001 to 2003.
* Data validation procedures used. * Cube completed validation checks on the database
comparing collar points to the topography, maximum
hole depths checks between tables and the collar
data. Cube also verified the data using visual
inspection of the drillholes in 3D to identify
inconsistencies of drill hole traces.
------------------------------------------------------------- ------------------------------------------------------------------
Site visits
* Comment on any site visits undertaken by the * The Competent Person did not conduct a site visit and
Competent Person and the outcome of those visits. they relied on information from the Platinum
Australia company geologist Tony Greenaway who has
been to site on numerous occasions. At the time of
* If no site visits have been undertaken indicate why the original resource estimate (2003) undertaken
this is the case. under the JORC 2004 Code, Platinum Australia deemed a
site visit unnecessary as the geological
interpretation was undertaken by Platinum Australia
geologists. As no active drilling or sampling is
underway a site visit at this time is considered
un-productive by Cube and the current operators.
* In the advent of further drilling and a Resource
up-grade a site visit by the relevant Competent
Person is strongly recommended.
------------------------------------------------------------- ------------------------------------------------------------------
Geological
interpretation * Confidence in (or conversely, the uncertainty of) the * The confidence in the interpretation is high as a
geological interpretation of the mineral deposit. result of a predominance of core logging and
underground mapping information from surface sampling,
drilling and exploration mining activity.
* Nature of the data used and of any assumptions made.
* Underground exploration development and wall and face
* The effect, if any, of alternative interpretations on mapping of the mineralisation confirm earlier drill
Mineral Resource estimation. hole logging and surface mapping.
* The use of geology in guiding and controlling Mineral * The current geological interpretation is based on the
Resource estimation. logged and assayed chromite content within the host
dunite sequence. Significant sulphide percentage was
also used in the criteria to identify reef
* The factors affecting continuity both of grade and mineralisation defined by a 2PGE + Au cut off of
geology. 2ppm.
* Wireframe models of the mineralised volumes have been
made by independent consultants ECS using a seam
modelling approach. While alternate models of the
mineralisation may be possible Cube consider the
current interpretation to be a valid representation
of the factual drill hole and underground data
available.
* The mineralised dunite is interpreted to be a south
plunging synclinal feature, this geological
interpretation is based on geological logging of
drill hole data.
* A series of four major shears are interpreted to
cut-off or offset the mineralisation and separate the
mineralisation into a series of discrete blocks.
------------------------------------------------------------- ------------------------------------------------------------------
Dimensions
* The extent and variability of the Mineral Resource * The Mineral Resource estimate contains six major
expressed as length (along strike or otherwise), plan moderately to steep dipping mineralised domains. The
width, and depth below surface to the upper and lower orientation of each domain changes gradually with the
limits of the Mineral Resource. progression south to north around the synclinal
structure.
* The two interpreted mineralised chromite reefs have a
downhole intercept thickness of between 0.1 and 4m
(average 0.4m) and an unfolded strike extent 3,500m
with an unfolded depth extent of 1,750m.
Mineralisation extends from surface to approximately
1,800m vertical depth below surface. Mineralisation
is open at depth.
------------------------------------------------------------- ------------------------------------------------------------------
Estimation
and modelling * The nature and appropriateness of the estimation * Due to the narrow width of the mineralisation,
techniques technique(s) applied and key assumptions, including interval composites were generated for the two
treatment of extreme grade values, domaining, mineralised lodes, using an intercept table in the
interpolation parameters and maximum distance of database to control compositing.
extrapolation from data points. If a computer
assisted estimation method was chosen include a
description of computer software and parameters used. * The interval composites were then weighted by their
respective horizontal width lengths and density to
result in an 'accumulation variable'.
* The availability of check estimates, previous
estimates and/or mine production records and whether
the Mineral Resource estimate takes appropriate * The accumulation variable for all attributes
account of such data. estimated was then used for variogram analysis and 2D
interpolation of grades.
* The assumptions made regarding recovery of
by-products. * Each of six estimation domains (for each of two lodes
upper - 101 and middle -201) has been analysed and
interpolated separately.
* Estimation of deleterious elements or other non-grade
variables of economic significance (e.g. sulphur for
acid mine drainage characterisation). * The estimated 2D block values were then exported back
into 3D space.
* In the case of block model interpolation, the block
size in relation to the average sample spacing and * The use of a 2D accumulation method is considered by
the search employed. Cube to be appropriate for this style of
mineralisation.
* Any assumptions behind modelling of selective mining
units. * Grade items, Pt, Pd, Au, Ni, Cr, Cu and Co were
estimated for each domain in both lodes. At the
completion of the estimate a regression formula has
* Any assumptions about correlation between variables. been used to assign grades for the rare PGE's Os, Ir,
Rh and Ru. These assigned values are an indication of
the expected grades and should not be used in any
* Description of how the geological interpretation was economic evaluation.
used to control the resource estimates.
* The estimation methodology used was Ordinary Kriging
* Discussion of basis for using or not using grade as implemented in Surpac Mining Software (Ver 4.1H).
cutting or capping.
* Variogram ranges and search distances were defined in
* The process of validation, the checking process used, the vertical plane, ranges for all attributes
the comparison of model data to drill hole data, and estimated significantly exceeded the data spacing in
use of reconciliation data if available. all domains.
* A search radius has been optimised for each domain
based on the special statistics of the variogram
model. The initial search radius was 300m for all
domains with a second pass search of either 750m or
900m applied if required to fill un-estimated
volumes. The estimations generally used a minimum of
4 and maximum of 16 samples; in domain 101A and 201A
the maximum was set to 6; and to 8 in domains 101D
and 201D.
* The search orientation and anisotropy were based on
the modelled variogram for each domain.
* No by-product recoveries were considered.
* Estimations of any deleterious elements were not
completed for the Mineral Resource.
* Estimation block size used was 50m x 50m in long
section projection.
* No assumptions of specific selective mining units
were made as it has been assumed that full seam width
mining will be undertaken.
* The mineralised domain acted as a hard boundary to
control the Mineral Resource volume and estimate.
* To limit the effects of extreme grades three high
grade limits were applied to raw grade values prior
to the calculation of the accumulation variable; gold
in 101 A, B and C was cut to 1,200ppb and in 201 A, B
and C to 600ppb; copper in domain 201 A, B and C was
cut to 1,750ppm. A manual declustering of wedge holes
was undertaken in domain 201BC.
* Block model validation was undertaken using the
comparison of block model estimate to drill hole data
composites of horizontal width and density weighted
mean grades. These showed acceptable correspondence
for all estimated attributes in domains A, AB, B and
C. The comparison within D domains shows higher
variation due to the data clustering and wider data
spacing of this domain.
* A validation estimate was undertaken using inverse
distance squared and compared to the OK estimate.
------------------------------------------------------------- ------------------------------------------------------------------
Moisture
* Whether the tonnages are estimated on a dry basis or * Moisture was not considered in the density assignment
with natural moisture, and the method of and has been estimated as dry tonnes.
determination of the moisture content.
------------------------------------------------------------- ------------------------------------------------------------------
Cut-off
parameters * The basis of the adopted cut-off grade(s) or quality * No low grade cut-off has been used for reporting. The
parameters applied. mineralisation has been defined using a combination
of geological information and grade criteria and the
reported estimated grades represent a total metal
content of mineralised material - all of which is
expected to be mined, without selectivity due to the
thin vein nature and high value of the
mineralisation.
------------------------------------------------------------- ------------------------------------------------------------------
Mining factors
or assumptions * Assumptions made regarding possible mining methods, * Mining of the Panton Sill is envisaged to be by open
minimum mining dimensions and internal (or, if pit and underground methods. An assumption of
applicable, external) mining dilution. It is always non-selective total vein width mining has been made
necessary as part of the process of determining in the estimation, no other mining factors were
reasonable prospects for eventual economic extraction considered during the interpretation and 2D modelling
to consider potential mining methods, but the of the mineralisation however mining dilution and
assumptions made regarding mining methods and mining loss are likely to be material factors in
parameters when estimating Mineral Resources may not combination of small open pit and underground
always be rigorous. Where this is the case, this exploitation.
should be reported with an explanation of the basis
of the mining assumptions made.
* Minimum mining widths were not considered during the
interpretation and 2D modelling of the
mineralisation.
------------------------------------------------------------- ------------------------------------------------------------------
Metallurgical
factors or * The basis for assumptions or predictions regarding * No specific metallurgical factors were considered
assumptions metallurgical amenability. It is always necessary as during the interpretation and 2D modelling of the
part of the process of determining reasonable mineralisation.
prospects for eventual economic extraction to
consider potential metallurgical methods, but the
assumptions regarding metallurgical treatment * Two studies containing an assessment of the
processes and parameters made when reporting Mineral metallurgical amenability of the mineralisation have
Resources may not always be rigorous. been undertaken; the first as part of the 2003 BFS by
Lycopodium and an updated project review in March
2012 by Tetratech; a further technical review is
* Where this is the case, this should be reported with required and planned by the current owners.
an explanation of the basis of the metallurgical
assumptions made.
* The assumed extraction methodology is by floatation
to produce a concentrate which is further treated on
site by hydrometallurgical processes to produce
separate PGM and base metal concentrates.
* Alternative processing options such as Kell that
offer reductions in capital and operating costs,
and/or improvements in metal recovery may have a
material impact on economics and should be
investigated.
------------------------------------------------------------- ------------------------------------------------------------------
Environmental
factors or * Assumptions made regarding possible waste and process * No assumptions were made regarding environmental
assumptions residue disposal options. It is always necessary as restrictions.
part of the process of determining reasonable
prospects for eventual economic extraction to
consider the potential environmental impacts of the
mining and processing operation. While at this stage
the determination of potential environmental impacts,
particularly for a greenfields project, may not
always be well advanced, the status of early
consideration of these potential environmental
impacts should be reported. Where these aspects have
not been considered this should be reported with an
explanation of the environmental assumptions made.
------------------------------------------------------------- ------------------------------------------------------------------
Bulk density
* Whether assumed or determined. If assumed, the basis * A total of 117 density determinations were undertaken
for the assumptions. If determined, the method used, in the top reef (101) across all chromite domains,
whether wet or dry, the frequency of the measurements within the middle.
,
the nature, size and representativeness of the
samples. * (201) and lower reef (301) a lessor number (56) of
determinations were undertaken and within
non-chromite material 516 determinations were made.
* The bulk density for bulk material must have been
measured by methods that adequately account for void
spaces (vugs, porosity, etc.), moisture and * A database of bulk density data for every assayed
differences between rock and alteration zones within chromite reef interval was calculated based on a
the deposit. regression formula (derived from measurements by
PLA's consultants Geostokos Ltd, Budge, 2002) and
using actual bulk density measurements where they
* Discuss assumptions for bulk density estimates used were undertaken by Platinum Asutralia on HQ and NQ
in the evaluation process of the different materials. core.
* Density measurements were undertaken using a core
cylinder measurement technique, with 10% being
determined by water emersion methods. Given the
shallow weathering profile of the project area these
density measurements on competent core are considered
representative of the mineralised material.
* The dry bulk density has been estimated into blocks
by back calculation of ordinary kriged horizontal
width x density accumulation composite data.
------------------------------------------------------------- ------------------------------------------------------------------
Classification
* The basis for the classification of the Mineral * Resource blocks have been classified as Measured,
Resources into varying confidence categories. Indicated or Inferred on the basis of a range of
criteria.
* Whether appropriate account has been taken of all
relevant factors (i.e. relative confidence in * The Resource classification applies to the estimated
tonnage/grade estimations, reliability of input data, block grade items only (Pt, Pd, Au, Ni, Cr, Cu and
confidence in continuity of geology and metal values, Co). Cube considers that the regressed grades for
quality, quantity and distribution of the data). rare PGE's Os, Ir, Rh and Ru are an indication of the
grade and should not be used in definitive economic
analysis.
* Whether the result .appropriately reflects the
Competent Person's view of the deposit.
* The key criteria considered by Cube were geological
continuity and confidence in reef volume; data
spacing and distribution; appropriateness of the
modelling technique; and estimation quality
parameters such as search strategy, number of
informing composite data, average distance from
informing composites and kriging variance.
* Within the reef domains the key estimated items Pt,
Pd, and Au exhibit relatively low nugget (10 to 30%)
variogram models with ranges of 100 to 500m. With the
exception of Au the estimated items are shown to be
statistically of low variability with CV's of less
than 1. These factors combined with the geological
nature of the reef estimation domains establish a
moderate to high confidence in the metal continuity
within the reefs.
Data spacing within the most densely
drilled area of the project range from
25x25 to 50x100 metres; this area extends
from surface at approximately 1,450m
RL to approximately the 1,200m RL.
Below this zone drilling density widens
to between 50x100and 100x200m spaced
intersections to a depth of 1,000m
RL, while from 1,000 to 800mRL data
spacing is in excess of 200m and clustered.
* Cube propose that the use of the 2D accumulation
estimation method has a number of risk minimising
advantages: it simplifies the complexity of
undulating reef geometry which can yield uncertain
search outcomes; it eliminates the need for multiple
orientation defined domains which have no geological
significance and allows more informing composites to
be used; and it allows an optimised estimation block
size to be chosen independently from the volume
definition model requirements, minimising over
smoothing due to a small and inappropriate block size
choice.
* Measured Resources are defined where geological
continuity risk is considered low, confidence in
metal continuity is considered high due to the data
spacing; and where the estimation quality is high as
indicated by a low estimation block variance (within
the first 30th percentile). Generally within the
Measured part of the Mineral Resource blocks have
been estimated using 10 or more composite data at an
average distance of less than 200 metres (within the
modelled range of most variograms).
* Indicated Resources are defined where geological and
metal continuity risk is considered moderate to low.
Generally within the Indicated part of the Mineral
Resource block have been estimated using 6 or more
composite data at an average distance of less than
300 metres (within the modelled range of some of the
variograms).
* Inferred Resources are defined by that area of the
Mineral Resource with moderate confidence in the
continuity of the geological model and metal where
drill spacing is wider than 200m by 200m.
* The Mineral Resource estimate appropriately reflects
the Competent Person's view of the deposit.
------------------------------------------------------------- ------------------------------------------------------------------
Audits or
reviews * The results of any audits or reviews of Mineral * Several reviews have been undertaken for the Mineral
Resource estimates. Resource estimate. An external review was completed
by a third party consultant, and an internal peer
review by Cube, of the estimation methodology was
conducted. The external review noted that the
estimate was critically dependent on the wireframe
volume and as a result the tonnage of the Resources
may be underestimated; that the block size used was
too large and classification was probably over
optimistic; and finally the internal dilution had not
been included in the model.
* The interpreted mineralisation wireframe has been
reviewed by Platinum Australia and other qualified
professionals in Cube.
------------------------------------------------------------- ------------------------------------------------------------------
Discussion
of relative * Where appropriate a statement of the relative * Due to the wide spaced drilling in areas, local
accuracy/ accuracy and confidence level in the Mineral Resource variations can be expected within the narrow
confidence estimate using an approach or procedure deemed undulating chromite reefs. The orientation of the
appropriate by the Competent Person. For example, the chromite reefs may be affected by regular structural
application of statistical or geostatistical offsets and bifurcations.
procedures to quantify the relative accuracy of the
resource within stated confidence limits, or, if such
an approach is not deemed appropriate, a qualitative * Given the geostatistical character of the
discussion of the factors that could affect the mineralisation, the use of OK has assisted in
relative accuracy and confidence of the estimate. reducing the risk associated with the metal estimates
by smoothing. The additional benefit of OK is it
inherently assists in declustering the data during
* The statement should specify whether it relates to the estimate.
global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to
technical and economic evaluation. Documentation * No specific analysis or estimate of the relative
should include assumptions made and the procedures accuracy or to establish confidence limits has been
used. undertaken. However previous estimations by different
methodology have not resulted in significantly
different tonnages or contained metal estimates.
* These statements of relative accuracy and confidence
of the estimate should be compared with production
data, where available. * The Mineral Resources constitute a global resource
estimate.
* Underground exploration sampling data from the
decline confirms the nature and grade tenor of the
mineralisation as intersected by the drilling.
* No production data is available.
------------------------------------------------------------- ------------------------------------------------------------------
Appendix Three | ASX Listing Rules Waivers
In accordance with the procedures set out in ASX Listing Rules
Guidance Note 12, the Company announces the outcome of its
application to ASX for waivers of Listing Rules 1.1 condition 12
and 2.1 condition 2.
Waiver from Listing Rule 2.1 condition 2
1. Based solely on the information provided, ASX Limited (ASX)
grants Red Emperor Resources NL (the Company) in connection with
the acquisition of the issued capital of Great Northern Palladium
Pty Ltd (Proposed Transaction) and, pursuant to a capital raising
under a prospectus, the issue of 100,000,000 fully paid ordinary
shares in the capital of the Company (Capital Raising Shares) at an
issue price of $0.10 each (Offer Price) (Capital Raising), a waiver
from listing rule 2.1 condition 2 to the extent necessary to permit
the Company to issue the Capital Raising Shares at an issue price
of less than $0.20 per Capital Raising Share, subject to the
following conditions.
1.1 The issue price of the Capital Raising Shares is not less than $0.02 per share.
1.2 The terms of this waiver are disclosed to the market and,
along with the terms and conditions of the Capital Raising Shares,
are clearly disclosed in the notice of meeting pursuant to which
the Company will seek the approval required under Listing Rule
11.1.2 for the Proposed Transaction and in the prospectus to be
issued in respect of the Capital Raising.
1.3 The Company completes a consolidation of its capital
structure in conjunction with the Proposed Transaction such that
its securities are consolidated at a ratio that will be sufficient,
based on the lowest price at which the Company's securities traded
over the 20 trading days prior to the suspension of the Company's
securities from official quotation, to achieve a market value for
its securities of not less the Offer Price.
2. Resolution 1 only applies to 11 June 2021 and is subject to
any amendments to the Listing Rules or change in the interpretation
of the Listing Rules and policies of ASX.
3. ASX has considered Listing Rule 2.1 condition 2 only and
makes no statement as to the Company's compliance with other
listing rules.
Waiver from Listing Rule 1.1 condition 12
1. Based solely on the information provided, ASX Limited (ASX)
grants Red Emperor Resources NL (the Company) in connection with
the acquisition of the issued capital of Great Northern Palladium
Pty Ltd (GNP) (Proposed Transaction) and, pursuant to a capital
raising under a prospectus, the issue of 100,000,000 fully paid
ordinary shares in the capital of the Company (Capital Raising
Shares) at an issue price of $0.10 each (Capital Raising), a waiver
from listing rule 1.1 condition 12 to the extent necessary to
permit the Company to:
1.1. issue 87,500,000 free attaching options on a 1:2 basis to
the consideration shares to the vendors of the issued capital of
GNP, exercisable at $0.10 each on or before the date that is 3
years from the date of issue (New Options);
1.2 issue 6,000,000 options to the Company's nominated adviser
on AIM, exercisable at $0.12 each on or before the date that is 3
years from the date of issue (Adviser Options); and
1.3 have 6,000,000 options (on a pre-consolidation basis) (Existing Options) on issue
with an exercise price of less than $0.20, subject to the
following conditions:
1.4 The exercise price of the New Options, Adviser Options and
Existing Options is not less than $0.02 each;
1.5 The terms of this waiver are disclosed to the market and,
along with the terms and conditions of the New Options, Adviser
Options and Existing Options, are clearly disclosed in the notice
of meeting pursuant to which the Company will seek the approval
required under listing rule 11.1.2 for the Proposed Transaction and
in the prospectus to be issued in respect of the Capital Raising;
and
1.6 The Company's shareholders approve the exercise price of the
New Options and Adviser Options in conjunction with the approval
obtained under listing rule 11.1.2 for the Proposed
Transaction.
2. Resolution 1 only applies to 11 June 2021 and is subject to
any amendments to the Listing Rules or change in the interpretation
of the Listing Rules and policies of ASX.
3. ASX has considered Listing Rule 1.1 condition 12 only and
makes no statement as to the Company's compliance with other
Listing rules.
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