To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution:
'That, for the purpose of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totalling up to 10% of the issued capital (at the time of the issue), calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement.'
This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions which are the subject of the business of the Meeting.
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FINANCIAL STATEMENTS AND REPORTS
In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2015 together with the declaration of the directors, the Directors' Report, the Remuneration Report and the auditor's report.
The Company will not provide a hard copy of the Company's annual financial report to Shareholders unless specifically requested to do so. The Company's annual financial report is available on its website at aurochminerals.com or by contacting the Company on +61 (8) 9486 4036.
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RESOLUTION 1 - ADOPTION OF REMUNERATION REPORT
-
General
The Corporations Act requires that at a listed company's annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the company or the directors of the company.
The Remuneration Report sets out the Company's remuneration arrangements for the directors and senior management of the Company. The Remuneration Report is part of the Directors' Report contained in the annual financial report of the Company for the financial year ended 30 June 2015.
The Chair of the meeting will allow a reasonable opportunity for Shareholders to ask questions about or make comments on the Remuneration Report at the Meeting.
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Voting consequences
Under changes to the Corporations Act which came into effect on 1 July 2011, a company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company (other than the managing director) who were in office at the date of approval of the applicable directors' report (Spill Resolution) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.
If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting (Spill Meeting) within 90 days of the second annual general meeting.
All of the directors of the company who were in office when the directors' report (as included in the company's annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting.
Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company.
-
Previous voting results
At the Company's previous annual general meeting the votes cast against the Remuneration Report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.
-
Chair voting undirected proxies
The Chair intends to exercise all undirected proxies in favour of Resolution 1. If the Chair of the Meeting is appointed as your proxy and you have not specified the way the Chair is to vote on Resolution 1, by signing and returning the Proxy Form, you are considered to have provided the Chair with an express authorisation for the Chair to vote the proxy in accordance with the Chair's intention.
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RESOLUTION 2 - RE-ELECTION OF DIRECTOR - MR GLENN WHIDDON
Clause 13.2 of the Constitution provides that:
-
at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election;
-
The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots;
-
A Director who retires by rotation under clause 13.2 of the Constitution is eligible for re-election; and
-
In determining the number of Directors to retire, no account is to be taken of:
-
a Director who only holds office until the next annual general meeting pursuant to clause 13.4 of the Constitution; and/ or
-
a Managing Director,
each of whom are exempt from retirement by rotation. However, if more than one Managing Director has been appointed by the Directors, only one of them (nominated by the Directors) is entitled to be excluded from any determination of the number of Directors to retire and/or retirement by rotation.
Mr Glenn Whiddon, the Director longest in office since his last election, retires by rotation at this Meeting and, being eligible seeks re-election.
Details of Mr Whiddon's background and experience are set out in the Annual Report.
The Board (other than Mr Whiddon) unanimously supports the re-election of Mr Whiddon.
-
RESOLUTION 3 - RE-ELECTION OF DIRECTOR - MR MATTHEW FOY
Clause 13.4 of the Constitution allows the Directors to appoint at any time a person to be a Director either to fill a casual vacancy or as an addition to the existing Directors, but so that the total number of Directors does not at any time exceed the maximum number specified by the Constitution.
Any Director so appointed holds office only until the next following annual general meeting and is then eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at that meeting.
Mr Foy, who was appointed to the Board on 3 December 2014 retires at this Annual General Meeting in accordance with clause 13.4 of the Constitution, and being eligible, seeks re-election at the Meeting.
Details of Mr Foy's background and experience are set out in the Annual Report. The Board (other than Mr Foy) unanimously supports the re-election of Mr Foy.
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RESOLUTION 4 - APPROVAL OF 10% PLACEMENT CAPACITY- SHARES
-
General
ASX Listing Rule 7.1A provides that an Eligible Entity may seek Shareholder approval at its annual general meeting to allow it to issue Equity Securities up to 10% of its issued capital over a period of up to 12 months after the annual general meeting (10% Placement Capacity).
The Company is an Eligible Entity.
If Shareholders approve Resolution 4, the number of Equity Securities the Eligible Entity may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out in Section 5.2 below).
The effect of passing Resolution 4 will be to allow the Company to issue Equity Securities up to 10% of the Company's fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Meeting, without subsequent Shareholder approval and without using the Company's 15% annual placement capacity granted under Listing Rule 7.1.
Resolution 4 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 4 for it to be passed.
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ASX Listing Rule 7.1A
ASX Listing Rule 7.1A came into effect on 1 August 2012 and enables an Eligible Entity to seek shareholder approval at its annual general meeting to issue Equity Securities in addition to those under the Eligible Entity's 15% annual placement capacity.
An Eligible Entity is one that, as at the date of the relevant annual general meeting:
-
is not included in the S&P/ASX 300 Index; and
-
has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.
The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation of less than $300,000,000.
Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has one class of quoted Equity Securities on issue, being the Shares (ASX Code: AOU).
The exact number of Equity Securities that the Company may issue under an approval under Listing Rule 7.1A will be calculated as at the date of issue of the Equity Securities according to the following formula:
(A x D) - E
Where:
A is the number of Shares on issue 12 months before the date of issue or agreement:
-
plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2;
-
plus the number of partly paid shares that became fully paid in the previous 12 months;
-
plus the number of Shares issued in the previous 12 months with approval of holders of Shares under Listing Rule 7.1 and 7.4. This does not include an issue of fully paid shares under the entity's 15% placement capacity without shareholder approval; and
-
less the number of Shares cancelled in the previous 12 months.
Note that 'A' has the same meaning in Listing Rule 7.1 when calculating an entity's 15% placement capacity.
-
is 10%.
-
is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of holders of Ordinary Securities under ASX Listing Rule 7.1 or 7.4.
-
Technical information required by ASX Listing Rule 7.1A
Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 4:
-
Minimum Price
The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before:
-
the date on which the price at which the Equity Securities are to be issued is agreed; or
-
if the Equity Securities are not issued within 5 ASX trading days of the date in Section 5.3(a)(i), the date on which the Equity Securities are issued.
-
Date of Issue
The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following:
-
12 months after the date of this Meeting; and
-
the date of approval by Shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company's activities) or 11.2 (disposal of the Company's main undertaking) (after which date, an approval under Listing Rule 7.1A cease to be valid),
(10% Placement Capacity Period).
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Risk of voting dilution
Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue.
If Resolution 4 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below.
The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1A(2), on the basis of the current market price of Shares and the current number of Equity Securities on issue as at the date of this Notice.
The table also shows the voting dilution impact where the number of Shares on issue (variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity.
|
Number of Shares on Issue
|
|
Dilution
|
|
Issue Price (per Share)
|
$0.040
|
$0.080
|
$0.160
|
|
50%
decrease in Issue Price
|
Current Issue Price
|
100%
increase in Issue Price
|
|
58,693,961
|
10% voting dilution
|
5,869,396
|
5,869,396
|
5,869,396
|
|
(Current)
|
Shares
|
Shares
|
Shares
|
|
Funds raised
|
$234,775.84
|
$469,551.68
|
$939,103.36
|
|
88,040,941
|
10% voting dilution
|
8,804,094
|
8,804,094
|
8,804,094
|
|
(50% increase)
|
Shares
|
Shares
|
Shares
|
|
Funds raised
|
$352,163.76
|
$704,327.52
|
$1,408,655.04
|
|
117,387,922
|
10% voting dilution
|
11,738,792
|
11,738,792
|
11,738,792
|
|
(100% increase)
|
Shares
|
Shares
|
Shares
|
|
Funds raised
|
$469,551.68
|
$939,103.36
|
$1,878,206.72
|
*The number of Shares on issue (variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a pro-
rata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.
The table above uses the following assumptions:
-
The current shares on issue are the Shares on issue as at 13 October 2015.
-
The issue price set out above is the closing price of the Shares on the ASX on 13 October 2015 .
-
The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity.
-
The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1 or 7.1A.
-
The issue of Equity Securities under the 10% Placement Capacity consists only of Shares.
-
This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.
-
The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.
-
The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Capacity, based on that Shareholder's holding at the date of the Meeting. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.
Shareholders should note that there is a risk that:
-
the market price for the Company's Shares may be significantly lower on the issue date than on the date of the Meeting; and
-
the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.
-
Purpose of Issue under 10% Placement Capacity
The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes:
-
as cash consideration in which case the Company intends to use funds raised towards the ongoing costs associated with either the exploration of its existing projects, pursuing other acquisitions that have a strategic fit or otherwise add value to Shareholders (including expenses associated with such acquisitions) and for general working capital; or
-
as non-cash consideration for the acquisition of new projects or otherwise as consideration for services rendered by non-related third parties to the Company, where it is considered appropriate by the board to do so. In such circumstances the Company will provide a valuation of the non-cash consideration as required by listing Rule 7.1A.3.
The Company will comply with the disclosure obligations under Listing Rules 7.1A(4) and 3.10.5A upon issue of any Equity Securities.
-
Allocation under the 10% Placement Capacity
The Company's allocation policy for the issue of Equity Securities under the 10% Placement Capacity will be dependent on the prevailing market conditions at the time of the proposed placement(s).
The recipients of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined. However, the
recipients of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.
The Company will determine the recipients at the time of the issue under the 10% Placement Capacity, having regard to the following factors:
-
the purpose of the issue;
-
alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;
-
the effect of the issue of the Equity Securities on the control of the Company;
-
the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;
-
prevailing market conditions; and
-
advice from corporate, financial and broking advisers (if applicable).
Further, if the Company is successful in acquiring new resources, assets or investments, it is likely that the recipients under the 10% Placement Capacity will be vendors of the new resources, assets or investments.
-
Previous Approval under ASX Listing Rule 7.1A
The Company previously obtained approval from its Shareholders pursuant to Listing Rule 7.1A at its 2014 Annual General Meeting. The Company has not issued any Equity Securities pursuant to that Listing Rule 7.1A approval.
During the 12 month period preceding 28 November 2015, being the date of the Meeting, the Company otherwise issued a total of 25,383,946 Equity Securities Shares which represents 23.15% of the total number of Equity Securities on issue at 28 November 2014.
Information relating to issues of Equity Securities by the Company in the 12 months prior to 17 November 2015 is as follows:
|
Date of Appendix 3B
|
Number of Equity Securities
|
Class of Equity Securities and summary of terms
|
Names of recipients or basis on which recipients determined
|
Issue price of Equity Securities and discount to Market Price1 on the trading day prior to the issue
|
If issued for cash - the total consideration, what it was spent on and the intended use of any remaining funds
If issued for non-cash consideration - a description of the consideration and the current value of the consideration
|
|
15 December 2014
|
1,015,766
|
Note 1
|
Shares issued in settlement of employee entitlements
|
$0.0985 (317%
premium)
|
No fund raised. Shares issued in settlement of deferred employment entitlements pursuant to shareholder approval on 28 November 214.
Deemed value of
$103,095, current value
$81,261.
|