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ALICANTO MINERALS LIMITED
ACN 149 126 858
PROSPECTUS
An initial public offer of 12,000,000 Shares at an issue price of $0.20 each to raise
$2,400,000.
Lead Manager
Max Capital Pty Ltd
AFSL: 411 136
IMPORTANT INFORMATION
This is an important document that should be read in its entirety. If you do not understand
it you should consult your professional advisers without delay. The Shares offered by this
Prospectus should be considered highly speculative.
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ALICANTO MINERALS PROSPECTUS | 1
CONTENTS
CORPORATE DIRECTORY ............................................................................................................ 2
IMPORTANT NOTICE ................................................................................................................... 3
CHAIRMAN’S LETTER ................................................................................................................... 4
INVESTMENT OVERVIEW ............................................................................................................. 5
1. DETAILS OF THE OFFER ................................................................................................ 17
2. COMPANY AND PROJECT OVERVIEW ....................................................................... 19
3. RISK FACTORS ............................................................................................................ 26
4. INDEPENDENT GEOLOGIST’S REPORT ......................................................................... 29
5. INVESTIGATING ACCOUNTANT’S REPORT ................................................................. 71
6. SOLICITOR’S REPORT ON TENEMENTS ........................................................................ 81
7. CORPORATE GOVERNANCE .................................................................................... 101
8. ADDITIONAL INFORMATION .................................................................................... 113
9. DIRECTORS’ AUTHORISATION .................................................................................. 128
10. GLOSSARY ................................................................................................................ 129
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ALICANTO MINERALS PROSPECTUS | 2
COR PORATE D IRECTO RY
Directors
Didier Murcia
Non Executive Chairman
Matthew Bowles
Non Executive Director
Tony Cooper
Non Executive Director
Key Personnel
Brett Dunnachie
CFO & Company Secretary
Marcus Harden
Chief Geologist
Registered Office
181 Roberts Road
Subiaco WA 6008
Telephone: + 61 8 6489 0700
Facsimile: +61 8 6489 0710
Email:
Website:
www.alicantominerals.com.au
Proposed ASX Code: AQI
Independent Geologist
Bishop Exploration Pty Ltd
73 Bellview Crescent
Dianella WA 6059
Solicitors
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Auditor*
Stanton’s International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth WA 6005
Share Registry*
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
Telephone: +61 8 9315 2333
Facsimile: +61 8 9315 2233
Investigating Accountant
Stanton’s International Securities
Level 2, 1 Walker Avenue
West Perth WA 6005
Lead Manager
Max Capital Pty Ltd
946 Wellington Street
WEST PERTH WA 6005
AFSL: 411 136
* These entities are included for information purposes only. It has not been involved in
the preparation of this Prospectus. For
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ALICANTO MINERALS PROSPECTUS | 3
IM PORTA NT NOT ICE
This Prospectus is dated 19 June 2012 and was lodged with the ASIC on that date. The
ASIC and its officers take no responsibility for the contents of this Prospectus or the merits
of the investment to which this Prospectus relates.
No Shares may be issued on the basis of this Prospectus later than 13 months after the
date of this Prospectus. No person is authorised to give information or to make any
representation in connection with this Prospectus, which is not contained in the
Prospectus. Any information or representation not so contained may not be relied on as
having been authorised by the Company in connection with this Prospectus.
It is important that investors read this Prospectus in its entirety and seek professional
advice where necessary. The Shares the subject of this Prospectus should be considered
highly speculative.
RISK FACTORS
Potential investors should be aware that subscribing for Shares in the Company involves a
number of risks. The key risk factors of which investors should be aware are set out in the
Investment Overview and Section 3 of this Prospectus. These risks together with other
general risks applicable to all investments in listed securities not specifically referred to,
may affect the value of the Shares in the future. Accordingly, an investment in the
Company should be considered highly speculative. Investors should consider consulting
their professional advisers before deciding whether to apply for Shares pursuant to this
Prospectus.
EXPOSURE PERIOD
This Prospectus will be circulated during the Exposure Period. The purpose of the
Exposure Period is to enable this Prospectus to be examined by market participants prior
to the raising of funds. Potential investors should be aware that this examination may
result in the identification of deficiencies in this Prospectus and, in those circumstances,
any application that has been received may need to be dealt with in accordance with
Section 724 of the Corporations Act. Applications for Shares under this Prospectus will not
be processed by the Company until after the expiry of the Exposure Period. No
preference will be conferred on persons who lodge applications prior to the expiry of the
Exposure Period.
WEB SITE - ELECTRONIC PROSPECTUS
A copy of this Prospectus can be downloaded from the website of the Company at
www.alicantominerals.com.au. Any person accessing the electronic version of this
Prospectus for the purpose of making an investment in the Company must be an
Australian resident and must only access this Prospectus from within Australia.
The Corporations Act prohibits any person passing onto another person an Application
Form unless it is attached to a hard copy of this Prospectus or it accompanies the
complete and unaltered version of this Prospectus. Any person may obtain a hard copy
of this Prospectus free of charge by contacting the Company.
The Company reserves the right not to accept an Application Form from a person if it
has reason to believe that when that person was given access to the electronic
Application Form, it was not provided together with the electronic Prospectus and any
relevant supplementary or replacement prospectus or any of those documents were
incomplete or altered.
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CHAIRM AN’S LE T TER
Dear Investor,
On behalf of the directors of Alicanto Minerals Limited (Company), I am delighted to
invite you to become a shareholder of the Company.
Alicanto is an emerging mineral exploration company focused on the exploration and
development of a portfolio of precious and base metal prospects in recognised
geological provinces in Western Australia.
The Company has entered into agreements to acquire a number highly prospective
mineral exploration tenements, combined to form the Yerilla Project in the Eastern
Goldfields, Western Australia; and the Meekatharra and Doolgunna Projects in the
Murchison Goldfields, Western Australia (together, the Projects). While the Projects are
primarily gold exploration projects they are also prospective for base metals as outlined
in the Independent Geologists Report.
The priority for the Company will be completing exploration activity on the Projects. An
appropriate exploration budget has been formulated for this purpose.
In addition to the exploration on its West Australian Projects, the Company intends to
evaluate additional project opportunities if and when they arise.
The Company is seeking to raise $2,400,000 through an issue of 12,000,000 Shares, at a
price of $0.20 per Share.
The Board and management of the Company have demonstrable technical,
operational and corporate experience in mineral exploration, project acquisition and
development.
This Offer presents investors with the opportunity to share in the future of the Company.
However, all investors should be aware of the speculative nature of mineral exploration
and mining and the associated risks, these and additional risks are highlighted in the
Investment Overview and Section 3. Please study this document carefully and seek
professional advice, if necessary, to make an informed decision.
On behalf of the Board, I commend this investment opportunity to you and look forward
to welcoming you as a shareholder in Alicanto Minerals Limited.
Yours sincerely
Didier Murcia
Chairman For
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INV ESTM ENT OVERV IEW
This section is a summary only and not intended to provide full information for investors
intending to apply for Shares offered pursuant to this Prospectus. This Prospectus should
be read and considered in its entirety.
THE COMPANY
The Company was incorporated on 3 February 2011 for the primary purpose of
identifying exploration projects in Australia and overseas with the aim of discovering
commercially significant minerals deposits.
While the Company’s primary exploration focus will be on gold and base metals on its
Western Australian projects, the Company will also review the potential for the
exploration of other minerals and precious metals on the Projects.
The Board and management of Alicanto have a broad range of expertise with proven
technical, operational, financial and commercial skills and experience in mining
exploration, strategy, venture capital, acquisitions and corporate finance.
BUSINESS MODEL - EXPLORATION COMPANY
Alicanto is an exploration company which has entered into a\Option Agreements for
the exclusive right to acquire a majority equity interest in a portfolio of prospective
mineral exploration projects in Western Australia.
Yerilla Project - Right to Acquire 70% interest
The Yerilla Project is located within the Archean Norseman-Wiluna Greenstone Belt
proximal to the highly prospective Keith Kilkenny Fault Zone in the Eastern Goldfields
of Western Australia.
Located 160km to the north east of Kalgoorlie, the Yerilla Project consists of
exploration licences E31/619 and E31/961, for a total surface area of
41.44 km2, adjacent to the historic Yerilla Mining Centre.
The E31/619 tenement area contains the historic Mammon, Fenton, Fitzroy, North
Barclay, Barclay and South Barclay gold workings localised along 3.2 km of the
north-northwest trending Mammon-Barclay Zone fault.
The historic gold workings of the Mammon-Barclay Zone and its possible extensions to the
north remain to be explored by modern geochemical, geophysical and drilling methods
along most of its strike length and at depth. The Yerilla Project contains a largely untested
gold anomaly, in the north of the E31/619 tenement, approximately 2kms long and 700m
wide.
Meekatharra Project - Right to Acquire 70% interest
Lying within the world class Murchison Goldfields and located east of Meekatharra,
Western Australia, the Meekatharra Project is comprised of exploration licences
E51/1442 and E51/1443, totalling an area of 211.08 km2.
Limited exploration has left the western half of the E51/1442 tenement unexplored,
and in need of effective exploration for gold and base metals.
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In addition, previous reconnaissance RAB and aircore drilling on the E51/1443
tenement has defined several gold and gold-arsenic anomalies along the length of
the belt that encourage additional reconnaissance drilling.
Doolgunna Project - Right to Acquire 70% interest
The Doolgunna Project is comprised of exploration licence E51/1365, and covers a
total area of 64.65 km2. The Project is located 70km to the north east of
Meekatharra.
The Doolgunna Project area covers a portion of the Yerrida Basin of the Proterozoic
Nabberu Province that hosts the Peak Hill, Fortnum and Labouchere gold mines, as
well as the Horseshoe lights and Degrussa copper-gold deposits.
The Project area covers the geologically prospective transition zone between
Palaeoproterozoic Johnson Cairn Formation (shales, siltstones, carbonates) and
Juderina Formation (red bed sandstones) which is recognised as a prospective
horizon for sedimentary hosted copper-gold deposits. It is also located in a
structurally favourable position on the southeast margin of the Doolgunna Graben
near the intersection of two major tectonic trends.
The highest priority target within the Doolgunna Project is an 8.5 km long magnetic
zone and coincident magnetic lag soil copper anomaly tested only by a limited
number of very widely spaced reconnaissance aircore holes.
Previous exploration over each of the Projects has resulted in targets which have been
subjected to limited follow up exploration. The Company proposes to complete
geological mapping and surface sampling, followed by a mix of geophysical surveys
and aircore/RC drilling to test known targets, as well as anomalies defined through the
geophysical surveys.
A summary of the Option Agreements is contained in the Summary of Material Contracts
section set out in Section 8.1 of this Prospectus.
A summary of the Projects is set out in Section 2.2 of this Prospectus and more detailed
information is included in the Independent Geologist’s Report in Section 4 of this
Prospectus.
Project Generation
The Company will consider and evaluate potential new projects in both Australia and
overseas with a view to increasing the number of projects held by the Company and
diversification into other commodities. The Company has not yet determined any
specific criteria for identification of these projects.
The Objectives
The Company’s main objectives on completion of the Offer and the acquisition of its
interest in the Projects are the:
exploration and appraisal of the Projects; and
evaluation and assessment of additional exploration projects, joint venture and
acquisition opportunities that are considered by the Board to add value to the
Company, in both Australia and overseas.
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KEY RISKS
The business, assets and operations of the Company are subject to certain risk factors
that have the potential to influence the operating and financial performance of the
Company in the future. These risks can impact on the value of an investment in the
securities of the Company.
The Board aims to manage these risks by carefully planning its activities and
implementing risk control measures. Some of the risks are, however, highly unpredictable
and the extent to which they can effectively manage them is limited.
Set out below are specific risks that the Company is exposed to. Further risks associated
with an investment in the Company are outlined in Section 3.
Title - equitable interest only
The Company does not presently have a registered interest in any of the
Tenements. It only has an equitable interest pursuant to the Option Agreements (as
summarised in Section 8.1 of this Prospectus) to acquire a 70% interest in the
Tenements.
The only right available to the Company to protect its interest in the Tenements,
prior to settlement under the Option Agreements, is lodgement of a caveat over
the Tenements pursuant to the Mining Act 1978 (WA). A caveat prevents the
registration of any transfer or mortgage over the Tenements without first giving
notice to the Company. The Company has lodged caveats with the Department
of Mines and Petroleum, Western Australia over the Tenements to protect its interest
in the Tenements.
Contractual risk
In order for the Company to be able to achieve its objectives the Company is
reliant on the registered holder of the Tenements to comply with its contractual
obligations under the Option Agreements with respect to maintaining the
Tenements in full force and effect, free from any liability to forfeiture or non-
renewal.
Where the registered holder of the Tenements fails to comply with conditions of the
Tenements which results in loss of title to the Tenements the Company would lose its
interest in the minerals rights being acquired pursuant to the Option Agreements. It
may then be necessary for the Company to approach a court to seek a legal
remedy. Legal action can be costly and there can be no guarantee that a legal
remedy will be ultimately granted on the appropriate terms. The Company has no
current reason to believe that the registered holder of the Tenement that it has
contracted with will not meet and satisfy its obligations under the Option
Agreements.
Status of Tenements
The Company’s main assets comprise interests in five granted Exploration Licences
granted pursuant to the Option Agreements (outlined in the material contract
summary set out in Section 8.1 of this Prospectus). The Company cannot guarantee
that the Exploration Licences will be renewed beyond their current expiry date and
there is a material risk that, in the event the Company is unable to renew the
granted Tenements beyond their current expiry date, the Company’s proposed
interests in the Projects will be reduced.
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Funding
At the date of this Prospectus, the Company has no income producing assets and
will generate losses for the foreseeable future. Until it is able to develop a project
and generate appropriate cash flow, it is dependent upon being able to obtain
future equity and/or debt funding to support long term exploration, after the
expenditure of the net proceeds raised under the Offer. Neither the Company nor
any of the Directors or any other party can provide any guarantee or assurance
that if further funding is required, such funding can be raised on terms favourable to
the Company.
Any additional equity funding will dilute existing Shareholders. Also, no guarantee or
assurance can be given as to when a project can be developed to the stage
where it will generate cash flow. As such, a project would be dependent on many
factors, for example exploration success, subsequent mine development,
commissioning and operational performance.
Lack of Executive Director
The Company does not currently have an executive director.
The Board is aware of the need to have sufficient management to properly
supervise the exploration and (if successful) for the development of the projects in
which the Company has, or will in the future have, an interest and the Board will
continually monitor the management roles in the Company. To this end, the
Company currently has a full time Chief Geologist, and has also retained Black
Peak Holdings Pty Ltd, to provide technical consulting services on an ongoing basis.
As the Company’s projects require an increased level of involvement the Board will
look to appoint additional management and/or consultants when and where
appropriate to ensure proper management of the Company’s projects. However,
there is a risk that the Company may not be able to secure personnel with the
relevant experience at the appropriate time which may impact on the Company’s
ability to complete all of its preferred exploration programmes in its preferred
timetable.
Limited history
The Company was only recently incorporated (3 February 2011) and has no
operating history and limited historical financial performance. Exploration has
previously been conducted on the area of land the subject of the Tenements,
however, the Company is yet to conduct its own exploration activities and under
the terms of the Option Agreements will not commence these activities until the
Company has been admitted to the Official List. No assurance can be given that
the Company will achieve commercial viability through the successful exploration
and/or mining of the Projects. Until the Company is able to realise value from its
projects, it is likely to incur ongoing operating losses.
No existing mineral resource estimates or ore reserve
The Company does not presently have any JORC Code compliant mineral
resources estimates or ore reserves on the Tenements in which it is earning an
interest. Potential investors should understand that mineral exploration and
development are high-risk undertakings. There can be no assurance that
exploration of these Tenements, or any other tenements that may be acquired in
the future, will result in the discovery of an economic ore deposit. Even if an
apparently viable deposit is identified, there is no guarantee that it can be
economically exploited.
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The above list of risk factors ought not to be taken as exhaustive of the risks faced by the
Company and prospective applicants should refer to the additional risk factors in Section
3 of this Prospectus before deciding whether to apply for Shares pursuant to this
Prospectus.
THE OFFER
The Company invites applications for 12,000,000 Shares at an issue price of $0.20 per
Share to raise $2,400,000. The key information relating to the Offer and references to
further details are set out below.
Indicative timetable*
Lodgement of Prospectus with the ASIC 19 June 2012
Opening Date 27 June 2012
Closing Date 24 July 2012
Despatch of holding statements 30 July 2012
Expected date for quotation on ASX 2 August 2012
* The above dates are indicative only and may change without notice. The Company
reserves the right to extend the Closing Date or close the Offer early without notice.
KEY INFORMATION FURTHER DETAILS
Type of security being offered and its rights and liabilities
Fully paid ordinary shares in the capital of the Company ranking
equally with the existing Shares on issue.
Section 8.3
Minimum subscription of the Offer
$2,400,000.
Section 1.2
How to apply for Shares
Complete and return the Application Form together with payment
in full for the quantity of Shares being applied for.
Applications must also be for a minimum of 10,000 Shares and
thereafter in multiples of 1,000 Shares.
Section 1.3
and
Application Form
Will the securities be listed?
Application for Official Quotation by ASX of the Shares offered
pursuant to this Prospectus will be made within 7 days after the
date of this Prospectus.
Section 1.4
How will Shares be allocated? Section 1.5
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KEY INFORMATION FURTHER DETAILS
The Directors will determine the allottees in their sole discretion.
Where will the Offer be made?
No action has been taken to register or qualify the Shares, or,
otherwise permit a public offering of the Shares the subject of this
Prospectus, in any jurisdiction outside Australia. Applicants who are
resident in countries other than Australia should consult their
professional advisers as to whether any governmental or other
consents are required or whether any other formalities need to be
considered and followed.
Section 1.6
Broker commissions
The Company reserves the right to pay a commission of 4%
(exclusive of goods and services tax) of amounts subscribed
through any licensed securities dealers or Australian financial
services licensee and accepted by the Company.
Section 1.8
CHESS & Issuer Sponsorship
The Company will apply to participate in CHESS, for those investors
who have, or wish to have, a sponsoring stockbroker. Investors who
do not wish to participate through CHESS will be issuer sponsored
by the Company.
Section 8.13
Who should I contact with queries?
Any questions concerning the Offer should be directed to Mr Brett Dunnachie,
Company Secretary, on +61 8 6489 0700.
PURPOSE OF THE OFFER
The purpose of the Offer is to facilitate an application by the Company for admission of
the Company to the official list of ASX and position the Company to seek to achieve the
objectives set out above.
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USE OF FUNDS
The Company intends to apply funds raised from the Offer, together with existing cash
reserves, over the first two years following admission of the Company to the official list of
ASX as follows:
Funds available
Existing cash reserves1 271,663
Funds raised from the Offer 2,400,000
Total 2,671,663
Allocation of funds Year 1
$
Year 2
$
Total
Expenses of the Offer2 258,500 - 258,500
Acquisition costs (including stamp duty) 95,000 - 95,000
Exploration expenditure3 457,000 1,067,000 1,524,000
Administration costs 163,100 163,100 326,200
Project generation 50,000 225,00 275,000
General working capital 96,482 96,481 192,963
Total 1,120,082 1,551,581 2,671,663
1 Refer to the Investigating Accountant’s Report set out in Section 5 of this Prospectus for further details. 2 Refer to Section 8.9 of this Prospectus for further details. 3 Refer to the Independent Geologist’s Report in Section 4 of this Prospectus for further information on
the planned exploration activities and expenditure budget for the Project. 4 Budgeted cash reserves at the end of Year 1 including general working capital is approximately
$1.65 million
On completion of the Offer, the Board believes the Company will have sufficient working
capital to achieve the objectives set out above.
The above table is a statement of current intentions as of the date of this Prospectus. As
with any budget, intervening events (including exploration success or failure) 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 way funds are applied on this basis.
CAPITAL STRUCTURE
The capital structure of the Company following completion of the Offer is summarised
below1:
Shares2 Number
Shares currently on issue3 13,850,001
Shares to be issued to vendors on completion 150,000
Shares to be issued pursuant to the Offer 12,000,000
Total Shares on completion of the Offer 26,000,001
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Options4 Number
Options exercisable at 20 cents on or before 31 July 2015 5,850,000
Options exercisable at 30 cents on or before 31 July 2015 500,000
Options exercisable at 20 cents on or before 31 May 2016 3,650,000
Options to be issued pursuant to the Offer Nil
Total Options on completion of the Offer 10,000,000
1 Refer to the Investigating Accountant’s Report set out in Section 5 of this Prospectus for further details.
2 The rights attaching to the Shares are summarised in Section 8.3 of this Prospectus.
3 The Shares currently on issue were issued to seed capital investors to fund acquisition costs, listing costs
and initial working capital requirements of the Company. These Shares were issued at a discount to the
issue price of the Shares offered pursuant to the Offer to reflect the increased risk associated with an
investment in the Company at the time of issue of the seed capital. The seed capital was issued in three
tranches as follows;
(a) 1 Share was issued on incorporation of the Company;
(b) on 5 August 2011 10,350,000 Shares were issued at an issue price of $0.001 per Share to
raise $10,350 on the basis that the Company had been recently formed to enter the
mining exploration industry and that the Company had no assets, no income and no
track record; and
(c) on 12 August 2011 3,000,000 Shares were issued at an issue price of $0.10 per Share to
raise $300,000 on the basis that the Company had identified potential assets and was in
the process of negotiating the terms for the options to acquire the West Australian
tenements. These agreements were executed on 19 August 2011. Further details of the
Option Agreements are set out in the summary of material contracts in Section 8.1 of this
Prospectus.
On 30 May 2012, 500,000 Shares were issued to Mr Didier Murcia following the acceptance of his
consent and agreement to become Non Executive Chairman of the Company and assist in the
development and management of the Company’s exploration business. The Shares have been issued
to Mr Murcia to ensure continuity of service and to provide Mr Murcia with an appropriate incentive
linked to the future performance of the Company.
4 All Options will be unquoted. Further details in respect to the Option terms are outlined in Section 8.4
of this Prospectus.
SUBSTANTIAL SHAREHOLDERS
Those Shareholders holding 5% or more of the Shares on issue both as at the date of this
Prospectus and on completion of the Offer are set out in the respective tables below.
As at the date of the Prospectus
Shareholder Shares Options %
(undiluted)
%
(fully diluted)
Atlantic Capital Pty Ltd 1 2,375,001 2,000,000 17.15% 18.34%
Symorgh Investments Pty Ltd 2,360,000 2,000,000 17.04% 18.28%
McTavish Industries Pty Ltd 2,350,000 2,000,000 16.97% 18.24%
1 Matthew Bowles, a Director, is the sole director and shareholder of this entity.
On completion of the Offer (assuming no existing substantial Shareholder subscribes and
receives additional Shares pursuant to the Offer)
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Shareholder Shares Options %
(undiluted)
%
(fully diluted)
Atlantic Capital Pty Ltd 1 2,375,001 2,000,000 9.13% 12.15%
Symorgh Investments Pty Ltd 2,360,000 2,000,000 9.08% 12.11%
McTavish Industries Pty Ltd 2,350,000 2,000,000 9.04% 12.08%
1 Matthew Bowles, a Director, is the sole director and shareholder of this entity.
Given the potential voting power of the substantial shareholders in the Company, the
Company advises to the best of its knowledge and belief, none of the substantial holders
are associated, or are acting in concert in relation to their holdings in the Company.
The Company will announce to the ASX details of its top-20 Shareholders (following
completion of the Offer) prior to the Shares commencing trading on ASX.
RESTRICTED SECURITIES
Subject to the Company being admitted to the Official List, certain Shares and Options
on issue prior to the Offer will be classified by ASX as restricted securities and will be
required to be held in escrow for up to 24 months from the date of Official Quotation.
During the period in which these securities are prohibited from being transferred, trading
in Shares may be less liquid which may impact on the ability of a Shareholder to dispose
of his or her Shares in a timely manner.
The Company will announce to the ASX full details (quantity and duration) of the Shares
and Options required to be held in escrow prior to the Shares commencing trading on
ASX.
FINANCIAL INFORMATION
The Company was only recently incorporated (3 February 2011) and has no operating
history and limited historical financial performance. The Company is yet to conduct its
own exploration activities on the area of land the subject of the Tenements and under
the terms of the Option Agreements will not commence these activities until the
Company has been admitted to the Official List.
As a result, the Company is not in a position to disclose any key financial ratios other than
its balance sheet which is included in the Investigating Accountant’s Report set out in
Section 5 of this Prospectus.
TAXATION
The acquisition and disposal of Shares will have tax consequences, which will differ
depending on the individual financial affairs of each investor. All potential investors in
the Company are urged to obtain independent financial advice about the
consequences of acquiring Shares from a taxation viewpoint and generally.
To the maximum extent permitted by law, the Company, its officers and each of their
respective advisors accept no liability and responsibility with respect to the taxation
consequences of subscribing for Shares under this Prospectus.
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DIVIDEND POLICY
The Company anticipates that significant expenditure will be incurred in the evaluation
and development of the Company’s projects. These activities, together with the possible
acquisition of interests in other projects, are expected to dominate the two year period
following the date of this Prospectus. Accordingly, the Company does not expect to
declare any dividends during that period.
Any future determination as to the payment of dividends by the Company will be at the
discretion of the Directors and will depend on the availability of distributable earnings
and operating results and financial condition of the Company, future capital
requirements and general business and other factors considered relevant by the
Directors. No assurance in relation to the payment of dividends or franking credits
attaching to dividends can be given by the Company.
DIRECTORS & KEY PERSONNEL
Directors
Didier Murcia - LLB, BJuris
Non Executive Chairman
Mr Murcia holds a Bachelor of Jurisprudence and Bachelor of Laws from the University of
Western Australia, and has over twenty years experience in corporate, commercial and
resource law. Mr Murica is a Director of Gryphon Minerals Limited, listed on the Australian
Securities Exchange and Chairman of Centaurus Metals Limited and Rift Valley Resources
listed on the Australian Securities Exchange. He is also Chairman of Perth law firm Murcia
Pestell Hillard and the Honorary Consul for the United Republic of Tanzania.
Mr Murcia does not expect that his directorships with other companies or other business
activities will interfere with his ability to act as Non-Executive Chairman to the Company.
Matthew Bowles-– BCom, CPA, ASA
Non Executive Director
Mr Bowles has extensive commercial, corporate finance and capital markets experience
within the resource sector particularly in strategy development, domestic and cross
border corporate M&A transactions and capital raising initiatives. He was previously an
Executive Director, Mergers and Acquisitions with global advisory firm Ernst & Young and
prior to joining in 2004, spent eight years with Rio Tinto Limited and four years in
investment banking in London.
Mr Bowles is a Member of the Australian Society of Certified Practising Accountants and
the Financial Services Institute of Australia and is currently the Head of Corporate
Development for Gryphon Minerals Limited and a Non Executive Director of Tawana
Resources NL.
Mr Bowles does not expect that his directorships with other companies or other business
activities will interfere with his ability to act as Non-Executive Director to the Company.
Tony Cooper - BSc (Geology), MAusIMM
Non Executive Director, Technical
Mr Cooper graduated from the Curtin University with a degree in Geology and has over
25 years experience in mining and mineral exploration in both Australia and overseas,
with particular expertise on gold and base metals. From 1996 to 2001 Mr Cooper was
responsible for the geological management of the Ravensthorpe Nickel Project.
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Mr Cooper is currently a Director of Comet Resources Ltd.
Mr Cooper does not expect that his directorships with other companies or other business
activities will interfere with his ability to act as Non-Executive Director to the Company.
Management
Marcus Harden - BSc (Hon) Geology
Chief Geologist
Mr Harden graduated from the University of Edinburgh with a first class honours degree in
Geology. He has extensive mineral exploration experience throughout Australia, West
Africa and elsewhere overseas with both junior explorers and major mining companies
exploring for a variety of commodities including gold, base metals, platinum group
elements and rare earth elements. Mr Harden has been involved in taking two projects
from exploration through to mine construction stage. He was previously the Principal
Geologist for First Quantum Minerals in West Africa and prior to this was with Gryphon
Minerals working on the Banfora project located in Burkina Faso, West Africa.
Brett Dunnachie
CFO & Company Secretary
Mr Dunnachie is a Chartered Accountant and holds a Bachelor of Commerce degree.
Mr Dunnachie has over 10 years experience in the financial management and
governances of ASX public listed companies and was previously an audit manager at a
major chartered accounting practice.
Mr Dunnachie is currently the CFO and Company Secretary of Renaissance Minerals
Limited and Avonlea Minerals Limited, and the Company Secretary for Venture Minerals
Limited.
Consultants
Black Peak Holdings Pty Ltd
The Company has retained the services of Black Peak to provide management and
technical consulting services on standard commercial terms. Black Peak has extensive
experience in exploration and development throughout Australia and overseas, in a
variety of commodities including gold, base metals and PGE’s. Black Peak is an
unrelated party to the Company.
CORPORATE GOVERNANCE
To the extent applicable, in light of the Company’s size and nature, the Company has
adopted The Corporate Governance Principles and Recommendations (2nd Edition) as
published by ASX Corporate Governance Council (Recommendations).
The Company’s main corporate governance policies and practices as at the date of this
Prospectus are outlined in Section 7.1 of this Prospectus and the Company’s compliance
and departures from the Recommendations are set out in Section 7.2 of this Prospectus.
In addition, the Company’s full Corporate Governance Plan is available from the
Company’s website (www.alicantominerals.com.au).
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DISCLOSURE OF INTERESTS
The Company has paid no remuneration to its Board since incorporation to the date
of this Prospectus and no remuneration will be paid or accrue until such time as the
Company is admitted to the Official List.
For each of the Directors, the proposed annual remuneration for the financial year
following the Company being admitted to the Official List together with the relevant
interest of each of the Directors in the securities of the Company as at the date of this
Prospectus is set out in the table below.
1 Exclusive of Superannuation .
2 Exercisable at 20 cents on or before 31 May 2016.
3 1.5m exercisable at 20 cents on or before 31 July 2015 and 0.5m exercisable at 20 cents on or before
31 May 2016.
4 Exercisable at 20 cents on or before 31 July 2015.
5 These securities are held by Atlantic Capital Pty Ltd. Matthew Bowles is the sole director and
shareholder of Atlantic Capital Pty Ltd.
6 These securities are held by Digreveni Investments Pty Ltd. Didier Murcia is a director and shareholder
of Digreveni Investments Pty Ltd.
AGREEMENTS WITH DIRECTORS OR RELATED PARTIES
The Company’s policy in respect of related party arrangements is:
(a) a Director with a material personal interest in a matter is required to give notice to
the other Directors before such a matter is considered by the Board; and
(b) for the Board to consider such a matter, the Director who has a material personal
interest is not present while the matter is being considered at the meeting and does
not vote on the matter.
Deeds of indemnity, insurance and access
The Company has entered into a deed of indemnity, insurance and access with each of
its Directors. Under these deeds, the Company agrees to indemnify each officer to the
extent permitted by the Corporations Act against any liability arising as a result of the
officer acting as an officer of the Company. The Company is also required to maintain
insurance policies for the benefit of the relevant officer and must also allow the officers
to inspect board papers in certain circumstances.
Director Remuneration1 Shares Options
Mr Didier Murcia $30,000 500,0006 500,0002,6
Mr Matthew Bowles $30,000 2,375,0015 2,000,0003,5
Mr Tony Cooper $30,000 100,000 100,0004
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1. DETAILS OF THE OFFER
1.1 The Offer
Pursuant to this Prospectus, the Company invites applications for 12,000,000
Shares at an issue price of $0.20 per Share to raise $2,400,000.
The Shares offered under this Prospectus will rank equally with the existing Shares
on issue.
1.2 Minimum subscription
If the minimum subscription to the Offer of $2,400,000 has not been raised within
4 months after the date of this Prospectus, the Company will not issue any Shares
and will repay all application monies for the Shares within the time prescribed
under the Corporations Act, without interest.
1.3 Applications
Applications for Shares under the Offer must be made using the Application
Form.
Applications for Shares must be for a minimum of 10,000 Shares and thereafter in
multiples of 1,000 Shares and payment for the Shares must be made in full at the
issue price of $0.20 per Share.
Completed Application Forms and accompanying cheques, made payable to
“Alicanto Minerals Limited – Share Placement Account” and crossed “Not
Negotiable”, must be mailed or delivered to the address set out on the
Application Form by no later than the Closing Date.
The Company reserves the right to close the Offer early.
1.4 ASX listing
Application for Official Quotation by ASX of the Shares offered pursuant to this
Prospectus will be made within 7 days after the date of this Prospectus.
If the Shares are not admitted to Official Quotation by ASX before the expiration
of 3 months after the date of issue of this Prospectus, or such period as varied by
the ASIC, the Company will not issue any Shares and will repay all application
monies for the Shares within the time prescribed under the Corporations Act,
without interest.
The fact that ASX may grant Official Quotation to the Shares is not to be taken in
any way as an indication of the merits of the Company or the Shares now
offered for subscription.
1.5 Allotment
Subject to the minimum subscription to the Offer being reached and ASX
granting conditional approval for the Company to be admitted to the Official
List, allotment of Shares offered by this Prospectus will take place as soon as
practicable after the Closing Date.
Pending the allotment and issue of the Shares or payment of refunds pursuant to
this Prospectus, all application monies will be held by the Company in trust for
the Applicants in a separate bank account as required by the Corporations Act.
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The Company, however, will be entitled to retain all interest that accrues on the
bank account and each Applicant waives the right to claim interest.
The Directors will determine the allottees of all the Shares in their sole discretion.
The Directors reserve the right to reject any application or to allocate any
applicant fewer Shares than the number applied for. Where the number of
Shares issued is less than the number applied for, or where no allotment is made,
surplus application monies will be refunded without any interest to the Applicant
as soon as practicable after the Closing Date.
1.6 Applicants outside Australia
This Prospectus does not, and is not intended to, constitute an offer in any place
or jurisdiction, or to any person to whom, it would not be lawful to make such an
offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions
outside Australia may be restricted by law and persons who come into
possession of this Prospectus should seek advice on and observe any of these
restrictions. Any failure to comply with such restrictions may constitute a
violation of applicable securities laws.
No action has been taken to register or qualify the Shares or otherwise permit a
public offering of the Shares the subject of this Prospectus in any jurisdiction
outside Australia. Applicants who are resident in countries other than Australia
should consult their professional advisers as to whether any governmental or
other consents are required or whether any other formalities need to be
considered and followed.
It is the responsibility of applicants outside Australia to obtain all necessary
approvals for the allotment and issue of the Shares pursuant to this Prospectus.
The return of a completed Application Form will be taken by the Company to
constitute a representation and warranty by the applicant that all relevant
approvals have been obtained.
1.7 Not underwritten
The Offer is not underwritten.
1.8 Commissions payable
The Company reserves the right to pay a commission of 4% (exclusive of goods
and services tax) of amounts subscribed through any licensed securities dealers
or Australian financial services licensee in respect of any valid applications
lodged and accepted by the Company and bearing the stamp of the licensed
securities dealer or Australian financial services licensee. Payments will be
subject to the receipt of a proper tax invoice from the licensed securities dealer
or Australian financial services licensee.
The Company has signed a mandate letter with Max Capital engaging Max
Capital to act as lead manager to the Offer. See Section 8.1 of this Prospectus
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2. COMPANY AND PROJECT OVERVIEW
2.1 Background
Alicanto Minerals Limited was incorporated on 3 February 2011 for the primary
purpose of identifying exploration projects in Australia and overseas with the aim
of discovering commercially significant mineral deposits.
While the Company’s primary exploration focus will be for gold and base metals,
the Company will also review the potential for the exploration of other minerals
and precious metals on the Projects.
On 19 August 2011 the Company entered into agreements with MPF Exploration
Pty Ltd to acquire a 70% interest in both the Yerilla South mineral tenement
(Yerilla South) and the Doolgunna mineral tenement (Doolgunna Project)
located in Western Australia. The Company will acquire these interests for a
cash payment of $35,000 and the issue of 60,000 Shares.
The Company has also entered into agreements with Maka Minerals Pty Ltd to
acquire a 70% interest in the Yerilla North (Yerilla North) mineral tenement and
two granted Meekatharra mineral tenements (Meekatharra Project). The
Company will acquire these interests for a cash payment of $55,000 and the
issue of 90,000 Shares.
Following its acquisition of the 70% interest in the Projects the Company will sole
fund exploration expenditure until completion of a feasibility study. Settlement of
the acquisitions is subject to the Company receiving conditional approval for
admission to quotation on the Official List of the ASX.
Further information relating to the Company’s acquisition of its 70% interest in the
Projects, and the intended joint venture governing exploration of the Projects, is
set out in the material contract summary contained in Section 8.1 of this
Prospectus.
2.2 Project Overviews
The Company has assembled a portfolio of three gold and base metal
exploration projects in two Archaean and one Proterozoic gold and base metal
provinces in Western Australia. The three project areas, which total 317.17 km2,
are in the Norseman-Wiluna Belt and Murchison Provinces of the Archaean
Yilgarn Craton and the Proterozoic Nabberu Basin in Western Australia. The three
projects are:
Yerilla Project (Yerilla North and Yerilla South), Norseman-Wiluna Belt of
Western Australia (gold and copper-zinc)
Meekatharra Project, Murchison Goldfields (gold, copper-gold and copper-
zinc)
Doolgunna Project, Nabberu Basin (gold and copper-gold)
A summary of the Projects is set out below. Also refer to the Independent
Geologist’s Report in Section 4 of this Prospectus for more detailed information on
the Projects
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Location of the Company’s Projects
2.2.1 Yerilla Project – Right to Acquire 70% Interest
The Yerilla Project consists of two contiguous granted exploration licences
E31/619 and E31/961, for a total surface area totalling 41.44 km2, adjacent to the
historic Yerilla Mining Centre, 160 km north-northeast of Kalgoorlie. The project
lies within the Archean Norseman-Wiluna Greenstone Belt proximal to the Keith
Kilkenny Fault Zone which has major associated gold, nickel and copper-zinc-
silver deposits/mines. Historic gold mines at Yerilla, Mt Catherine and Mt
Remarkable are all hosted by subordinate faults between the regional Keith
Kilkenny and Yerilla Faults. Major gold mines spatially associated with the Keith
Kilkenny fault zone include Wiluna, Tarmoola, Thunder Box, Yilgangi, Porphyry
and Carosue Dam.
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Yerilla Project Area
The E31/619 tenement area contains, from north to south, the historic Mammon,
Fenton, Fitzroy, North Barclay, Barclay and South Barclay gold workings. The gold
workings are localised along 3.2 km of the north-northwest trending Mammon-
Barclay Zone fault which can be mapped through the tenement for 7km until it
disappears under shallow alluvial cover in the north. Both the historical gold
workings of the Mammon-Barclay Zone and its possible extensions to the north
remain to be explored along most of its strike length and at depth by, modern
geochemical, geophysical and drilling methods. In addition to the Mammon-
Barclay Zone much of the western half of the tenement, has not been
systematically tested by either surface geochemical sampling or
reconnaissance RAB/aircore drilling to define gold targets.
Previous systematic shallow reconnaissance RAB and aircore drilling of the
eastern half of the E31/619 defined a 2000m long and 700m wide gold anomaly
in the north of the tenement associated with an interpreted major fault. Both this
and aditional anomalies encourage additional follow-up drilling. Small portions
of E31/961 have been tested previously for gold and base metals but most of the
tenement has not been explored using systematic geochemical exploration
methods.
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2.2.2 Meekatharra Project – Right to Acquire 70% Interest
The Meekatharra Project consists of two granted exploration licences, E51/1442
and E51/1443, totalling 211.08 km2, east of the town of Meekatharra, Western
Australia. E51/1442 and E51/1443 cover portions of the highly prospective
Archaean Mount Magnet-Meekatharra and Gnaweeda greenstone belts of the
Murchison Province, respectively.
Meekatharra Project Area
The two tenement areas are prospective for gold, zinc, copper and silver. Most
of E51/1442 is covered by alluvium, colluvium and laterite soil profiles that overlie
folded greenstones traversed by several major faults that are prospective for
gold. The Paddy’s Flat and Side Well gold deposits are located near to the
western and eastern boundaries of the tenement, respectively. Limited previous
reconnaissance drilling has defined several gold anomalies associated with
faults that encourage additional follow up drilling. Several untested magnetic
units and linear structures interpreted to be faults have also been identified as
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prospective exploration targets worthy of reconnaissance drilling for gold.
Despite its proximity to the Paddy’s Flat open cut gold mining operations to the
west limited effective modern exploration has left the western half of the
E51/1442 tenement virtually unexplored and much of the remainder in need of
effective exploration for gold and base metals.
Meekatharra Project E51/1442 Project Area
E51/1443 overlies 35 km of strike length of the southern Gnaweeda Greenstone
belt 20km east of Meekatharra. The 500km long Evanston-Edale Fault defines the
eastern margin of the greenstone belt. There are numerous gold and base metal
prospects in the northern Gnaweeda Belt. Much of the project area is covered
by Quaternary-Cenozoic alluvium, colluvium and laterite soil profiles. However,
previous very widely spaced reconnaissance RAB and aircore drilling has
defined several gold and gold-arsenic anomalies along the length of the belt
that encourage additional reconnaissance drilling.
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2.2.3 Doolgunna Project (70% interest)
The Doolgunna Project is comprised of granted exploration licence E51/1365,
totalling 64.65 km2. The project area covers a portion of the Yerrida Basin of the
Proterozoic Nabberu Province that hosts the Peak Hill, Fortnum and Labouchere
gold mines as well as the Horseshoe lights and Degrussa copper-gold deposits.
The project area is located 70 km northeast of Meekatharra and is considered
prospective for mesothermal quartz stockwork gold deposits, volcanic-hosted
massive sulphide copper-gold deposits and stratabound sedimentary copper
deposits. The geology consists of transported Quaternary-Cenozoic alluvium-
colluvium overlying the prospective transition zone between Palaeoproterozoic
Johnson Cairn Formation (shales, siltstones, carbonates) and Juderina Formation
(red bed sandstones) which is recognised as a prospective horizon for
sedimentary hosted copper-gold deposits. It is also located in a structurally
favourable position on the southeast margin of the Doolgunna Grabennear the
intersection of two major tectonic trends.
There has been little effective exploration of the Doolgunna Project area
previously but two significant gold-copper geochemical anomalies coincident
with magnetic anomalies and major northeast trending structural corridors have
been identified and encourage additional geochemical sampling and drilling.
Doolgunna Project Area
The highest priority target
is an 8.5 km long
magnetic zone tested by
only a limited number of
very widely spaced
(>1km) reconnaissance
aircore holes that
intersected siltstones with
copper, gold and arsenic;
and have yet to be
followed up.
Providing further
encouragement a low
amplitude magnetic lag
soil copper anomaly was
defined along a portion
of the same magnetic
trend.
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2.3 Project generation
The Company will consider and evaluate potential new exploration projects in
Australia and overseas with a view to increasing the number of projects held by
the Company and diversify into additional geographical locations. The
Company has not yet determined any specific criteria for identification of these
projects.
2.4 Competent Person Statement
The information in this Prospectus that relates to exploration results is based on
information compiled by Mr Scott Bishop. Mr Bishop is the principal of Bishop
Exploration Pty Ltd. Mr Bishop is a member of The Australasian Institute of Mining
and Metallurgy and the Australian Institute of Geoscientists and has sufficient
experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Bishop
consents to the inclusion in the Prospectus of the matters based on his
information in the form and context in which it appears.
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3. RISK FACTORS
3.1 Introduction
INVESTORS SHOULD NOTE THAT THE RISK FACTORS INCLUDED IN THE INVESTMENT
OVERVIEW AT THE FRONT OF THIS DOCUMENT HAVE NOT BEEN REPEATED IN THIS
SECTION.
THE RISKS CONTAINED BOTH IN THE INVESTMENT OVERVIEW SECTION AND THIS
SECTION 3 SHOULD BE CONSIDERED CAREFULLY BY POTENTIAL INVESTORS.
The Shares offered under this Prospectus are considered highly speculative. An
investment in the Company is not risk free and the Directors strongly recommend
potential investors to consider the risk factors described below, together with
information contained elsewhere in this Prospectus and to consult their
professional advisers before deciding whether to apply for Shares pursuant to
this Prospectus.
There are specific risks which relate directly to the Company’s business. In
addition, there are other general risks, many of which are largely beyond the
control of the Company and the Directors. The risks identified in this section, or
other risk factors, may have a material impact on the financial performance of
the Company and the market price of the Shares.
The following is not intended to be an exhaustive list of the risk factors to which
the Company is exposed.
3.2 Industry specific
(a) Exploration
The mineral tenements of the Company are at the early stages of
exploration, and potential investors should understand that mineral
exploration and development are high-risk undertakings.
There can be no assurance that exploration of these tenements, or any
other tenements that may be acquired in the future, will result in the
discovery of an economic ore deposit. Even if an apparently viable
deposit is identified, there is no guarantee that it can be economically
exploited.
The exploration costs of the Company are based on certain
assumptions with respect to the method and timing of exploration. By
their nature, these estimates and assumptions are subject to significant
uncertainties and, accordingly, the actual costs may materially differ
from these estimates and assumptions. Accordingly, no assurance can
be given that the cost estimates and the underlying assumptions will be
realised in practice, which may materially and adversely affect the
Company’s viability.
(b) Operations
The operations of the Company may be affected by various factors,
including failure to locate or identify mineral deposits, failure to achieve
predicted grades in exploration and mining, operational and technical
difficulties encountered in mining, difficulties in commissioning and
operating plant and equipment, mechanical failure or plant
breakdown, unanticipated metallurgical problems which may affect
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extraction costs, adverse weather conditions, industrial and
environmental accidents, industrial disputes and unexpected shortages
or increases in the costs of consumables, spare parts, plant and
equipment.
No assurances can be given that the Company will achieve
commercial viability through the successful exploration and/or mining of
its tenement interests. Until the Company is able to realise value from its
projects, it is likely to incur ongoing operating losses.
(c) Commodity price volatility and exchange rate
If the Company achieves success leading to mineral production, the
revenue it will derive through the sale of commodities exposes the
potential income of the Company to commodity price and exchange
rate risks. Commodity prices fluctuate and are affected by many factors
beyond the control of the Company. Such factors include supply and
demand fluctuations for precious and base metals, technological
advancements, forward selling activities and other macro-economic
factors.
Furthermore, international prices of various commodities are
denominated in United States dollars, whereas the income and
expenditure of the Company are and will be taken into account in
Australian currency, exposing the Company to the fluctuations and
volatility of the rate of exchange between the United States dollar and
the Australian dollar as determined in international markets.
(d) Environmental
The operations and proposed activities of the Company are subject to
State and Federal laws and regulation concerning the environment. As
with most exploration projects and mining operations, the Company’s
activities are expected to have an impact on the environment,
particularly if advanced exploration or mine development proceeds. It
is the Company’s intention to conduct its activities to the highest
standard of environmental obligation, including compliance with all
environmental laws.
In this regard, the Department of Mines and Petroleum in Western
Australia from time to time reviews the environmental bonds that are
placed on tenements. The Directors are not in a position to state
whether a review is imminent or whether the outcome of such a review
would be detrimental to the funding needs of the Company.
(e) Native title
In relation to tenements which the Company has an interest in or will in
the future acquire such an interest, there may be areas over which
legitimate common law native title rights of Aboriginal Australians exist. If
native title rights do exist, the ability of the Company to gain access to
tenements (through obtaining consent of any relevant landowner), or to
progress from the exploration phase to the development and mining
phases of operations may be adversely affected.
The Directors will closely monitor the potential effect of native title claims
involving tenements in which the Company has or may have an interest.
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3.3 General risks
(a) Economic
General economic conditions, introduction of tax reform, new
legislation, movements in interest and inflation rates and currency
exchange rates may have an adverse effect on the Company’s
exploration, development and production activities, as well as on its
ability to fund those activities.
(b) Market conditions
Share market conditions may affect the value of the Company’s
quoted securities regardless of the Company’s operating performance.
Share market conditions are affected by many factors such as:
general economic outlook;
introduction of tax reform or other new legislation;
interest rates and inflation rates;
changes in investor sentiment toward particular market sectors;
the demand for, and supply of, capital; and
terrorism or other hostilities.
The market price of securities can fall as well as rise and may be subject
to varied and unpredictable influences on the market for equities in
general and resource exploration stocks in particular. Neither the
Company nor the Directors warrant the future performance of the
Company or any return on an investment in the Company.
(c) Investment speculative
The above list of risk factors ought not to be taken as exhaustive of the
risks faced by the Company or by investors in the Company. The above
factors, and others not specifically referred to above, may in the future
materially affect the financial performance of the Company and the
value of the Shares offered under this Prospectus
Therefore, the Shares to be issued pursuant to this Prospectus carry no
guarantee with respect to the payment of dividends, returns of capital
or the market value of those Shares.
Potential investors should consider that the investment in the Company
is highly speculative and should consult their professional advisers before
deciding whether to apply for Shares pursuant to this Prospectus.
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Independent Geologist’s Report
18 June 2012
The Directors
Alicanto Minerals Ltd
181 Roberts Road
Subiaco WA 6008
BISHOP EXPLORATION PTY LTD
73 Belleview Crescent
Dianella WA 6059
Mobile: 0427 776 293 Fax: 9276 5956
ABN: 79 113 818 938
Dear Sirs,
Bishop Exploration Pty Ltd (“Bishop Exploration”) has been commissioned by Alicanto Minerals Limited, previously
Cerberus Minerals Limited (“Alicanto Minerals”) to provide an Independent Geologist’s Report on three mineral
exploration properties in Western Australia (i.e., Yerilla project in the Eastern Goldfields and the Doolgunna and
Meekatharra projects in the Murchison Goldfields) in which Alicanto Minerals is acquiring a 70% interest. The project
areas in Western Australia include an aggregate 317.17 km2.
This report is to be included in a Prospectus to be lodged by Alicanto Minerals with the Australian Securities and
Investments Commission (“ASIC”) for the offer of 12 million fully paid ordinary shares in the capital of Alicanto
(“Share”), at an issue price of $0.20 per Share to raise up to $2.4million, (before costs associated with the issue).
Bishop Exploration has based its review of the projects on information provided by Alicanto Minerals, along with technical
reports from Government agencies and previous tenement holders, as well as other relevant published and unpublished data.
A final draft of the report was provided to Alicanto Minerals, along with a written request to identify any material errors or
omissions prior to lodgement. Where appropriate, and in accordance with ASIC regulatory guide 55, consent has been
obtained to quote data and opinions expressed in unpublished reports prepared by other professionals on the properties
concerned.
The list of tenements comprising the three Alicanto Minerals mineral exploration properties and their legal status is the
subject of a Solicitor’s Report on Tenements prepared by Steinepreis Paganin, which appears in Section 6 of this
Prospectus. The status of these tenements has not been verified in this Independent Geologist’s Report. This report has been
compiled on the assumption that; a) the granted exploration and prospecting licences and claims are lawfully accessible for
mineral exploration activities; and b) exploration and prospecting licence applications of the Yerilla and Meekatharra.
This report has been prepared in accordance with the Code and Guidelines for Assessment and Valuation of Mineral Assets
and Mineral Securities for Independent Expert Reports (“The Valmin Code”), which is binding upon Members of the
Australian Institute of Mining and Metallurgy (AusIMM), the Australian Institute of Geoscientists (AIG), and the rules and
guidelines issued by such bodies as the ASIC and Australian Securities Exchange (ASX), which pertain to Independent
Expert Reports. Where Mineral Resources have been referred to in this report, the classifications are consistent with the
Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code), prepared by the Joint Ore Reserves
Committee (JORC) of the AusIMM, the Australian Institute of Geoscientists (AIG) and the Minerals Council of Australia
(MCA), effective September 1999.
The mineral properties, which Alicanto Minerals is acquiring, are “exploration projects” which are inherently speculative in
nature. Bishop Exploration considers that the projects are being acquired on the basis of sound geotechnical merit, and, that
they are prospective, subject to varying degrees of exploration risk, to warrant further exploration and assessment of the
economic potential, consistent with the proposed exploration programs set out in this report.
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Alicanto Minerals has prepared staged exploration and evaluation programs, specific to the potential of the projects, which
are consistent with the budget allocations set out in this report. The proposed exploration and development budgets exceed
the minimum annual statutory expenditure requirements on the projects.
The Independent Geologists Report has been prepared on information available up to and including 18 June 2012. Bishop
Exploration has provided consent for the inclusion of the Independent Geologist’s Report in Section 6 of the Prospectus,
and to the inclusion of statements made by Bishop Exploration, or based on statements made by Bishop Exploration, in
Section 2 of the Prospectus, in the form and context in which the report and those statements appear, and has not withdrawn
that consent before lodgement of the Prospectus with ASIC.
Bishop Exploration is a mineral exploration consulting company which has been providing services and advice to the
international mining industry since 2005. This report has been compiled by Scott Bishop, who is a professional geologist
with 25 years’ experience in the exploration and evaluation of mineral properties in Australia and India. Mr Bishop is a
Member of the AusIMM and the AIG. Mr Bishop has the appropriate relevant qualifications, experience, competence and
independence to be considered an “Expert” under the definitions provided in the Valmin Code.
Scott Bishop has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
Neither, Bishop Exploration or the author of this report have, or have previously had, any material interest in Alicanto
Minerals or the mineral properties in which Alicanto Minerals is acquiring an interest. Bishop Exploration’s relationship
with Alicanto Minerals is solely one of professional association between client and independent consultant. This report is
prepared in return for professional fees based on agreed commercial rates and the payment of these fees is in no way
contingent on the results of this report.
Yours faithfully,
Scott Bishop B.Sc., AIG, AusIMM
Geology Consultant and
Principal Bishop Exploration Pty Ltd
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Table of Contents
1. INTRODUCTION ............................................................................................................................................ 4
2. YERILLA PROJECT ...................................................................................................................................... 4
2.1 Introduction............................................................................................................................................. 4
2.2 Tenure and Title ...................................................................................................................................... 4
2.3 Regional Geology and Mineralisation .................................................................................................... 5
2.4 Local Geology and Mineralisation .......................................................................................................... 8
2.5 Previous Exploration............................................................................................................................. 11
2.6 Discussion ............................................................................................................................................. 14
2.7 Proposed Exploration ............................................................................................................................ 14
3. DOOLGUNNA PROJECT ............................................................................................................................ 14
3.1 Introduction........................................................................................................................................... 14
3.2 Tenure and Title .................................................................................................................................... 16
3.3 Regional Geology and Mineralisation .................................................................................................. 16
3.4 Project Geology and Mineralisation ..................................................................................................... 18
3.5 Previous Exploration............................................................................................................................. 20
3.6 Discussion ............................................................................................................................................. 20
3.7 Proposed Exploration ............................................................................................................................ 21
4. MEEKATHARRA PROJECT ...................................................................................................................... 21
4.1 Introduction........................................................................................................................................... 21
4.2 Tenure and Title .................................................................................................................................... 23
4.3 Regional Geology and Mineralisation .................................................................................................. 23
4.4 Project Geology and Mineralisation ..................................................................................................... 24
4.5 Previous Exploration............................................................................................................................. 27
4.6 Discussion ............................................................................................................................................. 28
4.7 Proposed Exploration ............................................................................................................................ 28
5. REFERENCES ............................................................................................................................................... 30
6. GLOSSARY OF TERMS .............................................................................................................................. 34
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Executive Summary
Alicanto Minerals has assembled a portfolio of three gold and base metal exploration projects in two Archaean and one
Proterozoic gold and base metal provinces in Western Australia. The three project areas, which total 317.17 km2, are in the
Norseman-Wiluna Belt and Murchison Provinces of the Archaean Yilgarn Craton and the Proterozoic Nabberu Basin in Western
Australia. The three projects are:
Yerilla Project, Norseman-Wiluna Belt of Western Australia (gold and copper-zinc)
Doolgunna Project, Nabberu Basin (gold and copper-gold)
Meekatharra Project, Murchison Goldfields (gold, copper-gold and copper-zinc)
Figure 1: Location of Alicanto Minerals gold projects in Western Australia
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Yerilla Project
Yerilla Project consists of granted exploration licences E31/619 and E31/961, totalling 41.44 km2. The two tenements are
adjacent to the historic Yerilla Mining Centre, 160 km north-northeast of Kalgoorlie.
The project is in the Norseman-Wiluna Belt proximal to the Keith Kilkenny Fault Zone. It contains Archaean greenstone rocks
that are prospective for gold, copper, zinc and silver. E31/619 contains, from north to south, the historic Mammon, Fenton,
Fitzroy, North Barclay, Barclay and South Barclay gold workings.
The gold workings are localised along 3.2 km of the north-northwest trending Mammon-Barclay Zone fault. The Mammon-
Barclay Zone and its historic gold workings remain to be tested along much of its length and at depth with geochemical and
geophysical surveys and drilling.
The western side of the tenement, including the Mammon-Barclay Zone, has not been systematically tested with either surface
geochemical sampling or reconnaissance RAB/aircore drilling to define gold targets.
Previous systematic shallow reconnaissance RAB and aircore drilling of the eastern half of the E31/619 defined a 2,000m long
and up to 700m wide gold anomaly in the north of the tenement associated with an interpreted major fault. This gold anomaly
remains to be followed up with more detailed drilling. There are several other smaller gold anomalies worthy of additional infill
drilling. Small portions of E31/961 have been tested previously for gold and base metals but most of the tenement has not been
explored using systematic geochemical exploration methods.
Doolgunna Project
Doolgunna Project is comprised of granted exploration licence E51/1365, totalling 64.65 km2, covering a portion of the Yerrida
Basin of the Proterozoic Nabberu Province, 70 km northeast of Meekatharra. The Project area is prospective for mesothermal
quartz stockwork gold deposits, volcanic-hosted massive sulphide copper-gold deposits and stratabound sedimentary copper
deposits.
The geology consists of transported Quaternary-Cenozoic alluvium-colluvium overlying Palaeoproterozoic Johnson Cairn
Formation (shales, siltstones, carbonates) and Juderina Formation (red bed sandstones) on the southeast margin of the
Doolgunna Graben and near the intersection of two major tectonic trends.
There has been little effective exploration of the Doolgunna Project area previously but two gold-copper geochemical anomalies
associated with magnetic anomalies and major northeast trending faults or linear structures have been identified that are worthy
of additional geochemical sampling and drilling.
The highest priority target is an 8.5 km long magnetic zone tested by a limited number of very widely spaced reconnaissance
holes that intersected siltstones with copper, gold, molybdenum, arsenic and zinc mineralisation. A low amplitude magnetic lag
soil copper anomaly was defined along a portion of the same magnetic trend.
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Meekatharra Project
Meekatharra Project consists of two granted exploration licences, E51/1442 and E51/1443, totalling 211.08 km2, east of
Meekatharra, Western Australia. E51/1442 and E51/1443 cover portions of the Archaean Mount Magnet-Meekatharra and
Gnaweeda greenstone belts of the Murchison Province, respectively.
The two tenements are prospective for gold, zinc, copper and silver. Most of E51/1442 is covered by alluvium, colluvium and
laterite soil profiles that overlie folded greenstones traversed by several major faults that are prospective for gold. The Paddy’s
Flat (Meekatharra) and Side Well gold deposits are located near to the western and eastern boundaries of the tenement,
respectively. Limited previous reconnaissance drilling has defined several gold anomalies associated with faults that are worthy
of additional follow up drilling. Several untested magnetic units and linear structures interpreted to be faults have also been
identified as exploration targets worthy of reconnaissance drilling for gold.
E51/1443 overlies 35 km of strike length of the southern Gnaweeda Greenstone belt 20 km east of Meekatharra. The 500 km
long Evanston-Edale Fault defines the eastern margin of the greenstone belt. There are numerous gold and base metal prospects
in the northern Gnaweeda Belt. Much of the project area is covered by Quaternary-Cenozoic alluvium, colluvium and laterite
soil profiles. Previous very widely spaced reconnaissance RAB and aircore drilling has defined several gold and gold-arsenic
anomalies along the length of the belt worthy of additional reconnaissance drilling.
Exploration Budget
Alicanto Minerals has developed a detailed exploration programme for its projects pursuant to which it intends to spend
approximately $1.5 million over the first two years of exploration as outlined below. The key focus of the exploration
programme will be to discover commercially significant mineral deposits.
Activity Yerilla
Project
Doolgunna
Project
Meekatharra
Project
Total
Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 Year 1 Year 2
Data review and compilation 23,000 26,000 10,000 17,000 45,000 31,000 78,000 74,000
Geological studies, sampling &
interpretation
31,000 66,000 10,000 37,000 40,000 23,000 81,000 126,000
Drilling: RAB, AC, RC 55,000 222,000 5,000 157,000 109,000 291,000 169,000 670,000
Tenement costs/land access and
administration
36,000 36,000 18,000 49,000 75,000 112,000 129,000 197,000
Total 145,000 350,000 43,000 260,000 269,000 457,000 457,000 1,067,000
Total Two Year Expenditure 495,000 303,000 726,000 1,524,000
Further details in respect to the exploration proposed on each of the projects are outlined in Sections 2.7, 3.7 and 4.7.
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1. Introduction
Bishop Exploration Pty Ltd has been commissioned by Alicanto Minerals to provide an Independent Geologist’s Report on three
mineral exploration properties in Western Australia known as Yerilla, Doolgunna and Meekatharra Projects that total 317.17
km2 (Figure 1). They are all located in highly prospective Archaean or Proterozoic gold and base metal provinces in Western
Australia. Alicanto Minerals is acquiring a 70% interest of the three projects. This report is to be included in a Prospectus to be
lodged by Alicanto Minerals with the ASIC.
Information, conclusions and recommendations contained herein are based on a study of relevant geoscientific publications and
data acquired from a variety of public domain sources as well as statutory mineral exploration reports and data acquired from the
Western Australian Department of Mines and Petroleum.
2. Yerilla Project
2.1 Introduction
Yerilla Project consists of exploration licences E31/619 and E31/961, totalling 41.44 km2, 35 km southeast of Kookynie and 160
km north-northeast of Kalgoorlie (Figure 2). The tenement package covers an Archaean greenstone sequence prospective for
gold and base metals within the Norseman-Wiluna Belt of Western Australia. It is proximal to the large Keith Kilkenny Fault
Zone that has major gold, nickel and copper-zinc-silver deposits/mines associated with it.
E31/619 contains historic gold workings (shafts and small pits) 1-3 km to the north and north-northeast of the centre of the
historic Yerilla Mining Centre. E31/961 extends northwards from E31/619 up into the area between the historic Mt Remarkable
Mining Centre and the regional Keith Kilkenny Fault Zone. The Yerilla and Mt Remarkable historic gold mining centres are
characterised by small, high grade gold deposits that were mined between 1887 and 1915. Felsic volcanic rocks in the north of
E31/961 are also considered prospective for volcanic-hosted massive sulphide copper-zinc-silver deposits.
2.2 Tenure and Title
The status of the tenements comprising the Yerilla Project is provided in Table 1.
Table 1: Yerilla Project, Tenement Details
Tenement
Number
Registered
Holder Status
Date
Granted
Expenditure
Commitment
E 31/619 MPF* Granted 2/07/2010 $ 15,000
E31/961 Maka** Granted 24/08/2011 $ 20,000
*MPF: MPF Exploration Pty Ltd ** Maka: Maka Minerals Pty Ltd
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Figure 2: Location and tenements of the Yerilla Project
2.3 Regional Geology and Mineralisation
The Yerilla Project overlies a portion of the north-northwest trending Yerilla Greenstone Belt (or Yerilla Terrane), within the
Kurnalpi Terrane of the Norseman-Wiluna Belt (Figure 3). The Kurnalpi Terrane is comprised of 2,715-2,698 million year old
tholeiitic and komatiitic basalt lavas, intermediate calc-alkaline volcanic complexes, feldspathic sedimentary rocks and mafic to
ultramafic intrusive rocks. Granitoids intruded the belt 2,700, 2,680-2,660 and 2,650-2,630 million years ago while deformation
and metamorphism is dated at 2,670-2,630 million years ago (Barley et. al., 2004; Cassidy et. al., 2006; Groenwald et. al., 2006).
Four deformation phases (D1-D4) have been recognised in the Kurnalpi Terrane. Gold mineralisation is mainly hosted by D3–
D4 structures. D3 produced sinistral strike-slip movement within ductile shear zones and brittle faults and associated en echelon
folds with steep plunges. D4 produced crenulation cleavage, kink folds, and reverse faults (Passchier, 1994; Swager, 1995; Chen,
1999; Groves et. al., 2000).
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Figure 3: Regional geological setting of the Yerilla Project
The stratigraphy of the Yerilla Greenstone Belt consists of Moreland Formation (mafic volcanics with lesser ultramafics, cherty
BIF, pyritic black shales and dolerite-gabbro intrusions) overlain by the Gindalbie Formation (felsic and intermediate volcanics
and volcaniclastics). The sequence has been metamorphosed up to upper greenschist to lower amphibolite facies (Muhling,
1984; Australian Ores and Minerals Ltd, 1989). The Moreland Formation has been folded by the kilometric-scale Bulyairdie and
Yerilla synclines with plunges to the south-southeast and north, respectively (Chen, 1999).
The Yerilla Greenstone Belt is located between the north-northwest trending Keith Kilkenny Fault Zone in the east and the
Yerilla Fault in the west. The Keith Kilkenny Fault Zone is a regional, 3-8 km wide, sinistral strike-slip shear-fault zone that
includes the Glenorn, Kilkenny and Yilgangi Faults. About 13 km to the west the Yerilla Fault is developed along the western
contact of the greenstone belt with granite. The fault dips steeply towards the east-northeast (Chen, 1999). Geology mapping by
Chen (1999) shows a series of north-northwest trending shears faults spaced at 4.5-5.5 km, traversing the Yerilla Greenstone
Belt. Between these shears faults there are less conspicuous north to north-northwest trending faults that host gold
mineralisation. North-northeast to northeast trending magnetic lineaments, interpreted to be faults, cross cut the sequence.
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Late stage ovoid granitoids have intruded the Yerilla Greenstone Belt at Yerilla, north of Mt Remarkable and at Mt McAuliffe
next to the Keith Kilkenny Fault Zone. Many gold deposits in the Kurnalpi Terrane have a spatial or direct association with the
ovoid granitoid intrusions (Roberts et. al., 2004). Quartz-feldspar porphyry, aplite and felsite dyke-like bodies as well as
numerous quartz veins (some gold-bearing) traverse the Yerilla Greenstone Belt (Jutson, 1915). Several east-west trending
Proterozoic dolerite dykes of the 2400 million year old Widgiemooltha Dyke Suite also traverse the belt.
Most of the Yerilla Greenstone Belt is overlain by transported alluvium, sheetwash, colluvium and lake sediments associated
with the broad Lake Raeside valley. There are occasional low rolling hills with minor outcrop, residual soils and ferruginous
duricrust (laterite). Most of the known historical gold workings at Yerilla, Mt Catherine and Mt Remarkable are in areas of
outcrop and residual soils.
Historic gold mines at Yerilla, Mt Catherine and Mt Remarkable are hosted by subordinate faults between the regional Keith
Kilkenny Fault Zone and Yerilla Fault. Major gold mines that are spatially associated with the Keith Kilkenny Fault Zone
include Wiluna, Tarmoola, Thunder Box, Yilgangi, Porphyry and Carosue Dam. Nickel sulphide mines (eg, Leinster, Cosmos,
Yakabindie, Mt Keith, Honeymoon Well) and the Teutonic Bore-Jaguar-Bentley copper-zinc-lead-silver-gold mines are also
spatially associated with the Fault Zone between Wiluna and Leonora. Near Leonora the Raeside gold mine is adjacent to the
northern extension of the Yerilla Fault.
The historic gold workings at Yerilla, Mt Catherine and Mt Remarkable have been described by Montgomery (1906), Jutson
(1915), Honman (1917) and Roberts et. al. (2004). Moreland Formation hosts the gold deposits at Yerilla and Mt Catherine
while the Gindalbie Formation felsic-intermediate volcanics host the gold deposits in the Mt Remarkable area.
The cluster of small underground gold mines at Yerilla produced 16,717 ounces of gold at an average grade of 23.47 g/t Au
between 1897 and 1915 (Honman, 1917) Yerilla Mining Centre is centred on a late stage, small, ovoid granite. Gold-bearing
quartz veins are hosted by sheared mafic volcanics proximal to, or along the margin of, the granite as well as within the granite.
The gold mineralisation is generally within 1-7m wide shear zones containing narrow quartz veins developed along, or proximal
to contacts between; i) metabasalt and metadolerite; ii) metabasalt and sulphidic BIF-black shale; and iii) greenstone and
granitoid. The shears zones hosting the quartz veins are represented by chlorite-carbonate and quartz-sericite altered schists with
minor pyrite. High grade gold was produced from 0.3-1.0m wide, boudinaged, white quartz veins up to 300m long containing
fine, free milling gold. The veins vary in strike and dip, however, the majority strike north to north-northwest with steep dips
towards the west or east. The quartz veins are generally parallel to the ductile shear foliation but there are also transverse veins
that crosscut the shears (Jutson, 1915; Roberts et. al., 2004).
At Mount Catherine, just south of Yerilla, the main gold workings are associated with a large, north-northwest trending quartz
vein traversing metabasalt. The gold mineralisation is hosted by a shear several metres wide on the margin of the quartz vein and
within the quartz vein (Roberts et. al., 2004).
At Mt Remarkable about 500 oz. of gold was produced from the historic mines (Honman, 1917). Mine development was focused
on narrow quartz veins within shear zones represented by quartz-sericite schists containing disseminated and vein pyrite. The
veins strike north-south and dip gently towards the east (Australian Ores and Minerals Ltd, 1989). Gold workings further north at
La Tosca were developed on a 1m wide, north trending shear zone dipping 80o towards the east that hosted shear parallel
auriferous quartz veins 10-30cm wide (Roberts et. al., 2004).
The 2,650 million year old McAuliffe Well Syenite, 10km east of the Yerilla, is located adjacent to the Glenorn Fault of the
Keith Kilkenny Fault Zone. The syenite hosts the Bull Terrier and Dingo gold deposits the gold mineralisation is associated with
a narrow faults and haematised breccia (Roberts et. al., 2004). For
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There is a nickel laterite deposit within the Yerilla Greenstone Belt associated with weathered ultramafics. The largest is Heron
Resources Yerilla Nickel Project, 9 km east-southeast of Yerilla. The Gindalbie Formation felsic-intermediate volcanic-
volcaniclastic sequences of the Yerilla Greenstone Belt are similar to, and along tectonic strike, of the felsic volcanic-
volcaniclastic sequences that host the Teutonic Bore-Jaguar-Bentley copper-zinc-lead-silver-gold deposit 130 km to the north-
northwest.
Figure 4: Airborne magnetics and gold occurrences of the Yerilla Project
2.4 Local Geology and Mineralisation
The surface geology of the Yerilla Project area is dominated by transported Quaternary-Cenozoic regolith (alluvium, sheetwash,
colluvium and lake sediments) of varying depth (Figure 4). Ferruginous duricrust is present in narrow zones between the low-
lying transported sediments and the residual soils and outcrop on low lying hills. Given the widespread transported regolith
cover, the Archaean bedrock geology of the project area remains little known and is dependent on geology maps of the sparse
outcrop, drill hole data and interpretation of regional geophysical data.
The bedrock geology of the Yerilla Project broadly consists of Moreland Formation mafic volcanics in the south overlain by
Gindalbie Formation felsic volcanic-volcaniclastics in the north. Within E31/619 outcrop is dominated by Moreland Formation
metabasalts and dolerite-gabbro intrusive sills that also characterise the Yerilla gold mining centre. Proximal to gold workings
within E31/619 the metabasalt grades into sheared, highly fissile, slaty mafic schist.
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E31/619 contains the following historical gold workings that form part of the larger Yerilla gold mining centre:
Mammon
Fenton (includes Fenton South)
Fitzroy
North Barclay
Barclay (or Barclay Hill)
South Barclay
The six gold workings are localised along a north-northwest trending structure known as the “Mammon-Barclay Zone” that is at
least 3.2 km long within the Yerilla Project area. The Mammon-Barclay Zone is a north-northwest striking brittle-ductile shear at
least 4.5 km long. (Figure 4). The shear is along, and proximal to, the contact between metabasalt and a metadolerite-gabbro sill.
It is typically in the order of 10-15m wide but can be up to 50m wide at North Barclay. At structural dilatant sites the shear
contains one to three gold-bearing quartz veins that dip between 65-80o towards the west. Surrounding the gold mineralisation
the shears are intensely altered to pyritic sericite schist. There is a gold-arsenic association.
Bruce’s Find prospect is 500m northeast of Barclay North in an area of shallow alluvial cover. At this prospect narrow BIF’s at
the contact with basaltic schists contain gold. At surface the mineralised zone strikes north-northwest dips towards the east at 65-
75o. There is also a 3-6m wide shear zone of intense alteration containing barren quartz veins.
In the far north of the Yerilla Project area previous RAB drilling intersected Gindalbie Formation felsic volcaniclastic that are
locally altered. From west to east the sequence consists of; 1) fine-grained, felsic feldspar-quartz-sericite schist with scattered
quartz eyes and fragments of feldspar; overlain by 2) a finer grained chlorite-sericite-quartz schist with ferruginous chart, minor
quartz-sericite schist and disseminated and vein pyrite; overlain by 3) a carbonate-altered basalt. The rocks dip shallowly to
moderately while the axial planar foliation dips steeply towards the east.
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Figure 5: Geology and drill hole gold anomalies of the Yerilla Project
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2.5 Previous Exploration
Historical production from Yerilla Mining Centre during the period 1895-1940 was 469 kg of gold mainly from shallow
underground workings (Honman, 1917; Jutson, 1915). In 1966-1971 Australian Selection Pty Ltd explored the region for nickel
sulphides but did not assay samples for gold.
Great Central Mines and Mt Kersey Mining explored for gold within and around the Yerilla Project area from 1986 to 1994.
Great Central Mines concentrated its effort on the historic gold workings (K.H. Morgan and Associates, 1986 and 1987). Mt
Kersey Mines expanded the search to areas surrounding the gold workings (Lewis, 1996; Bader, 1997; Howland, 1998). Within
the area covered by E31/619, Great Central Mines completed geological mapping, aeromagnetic data interpretation, rock chip
sampling, sampling of eleven costeans, RAB and aircore drilling, and RC drilling (K.H. Morgan and Associates, 1986 and
1987).
Great Central Mines carried out limited rock chip sampling of the old workings and dumps contained within E31/619. Nine
costeans developed across the Mammon-Fenton South and North Barclay gold workings were sampled. The costean sampling
results are listed in Table 2.
Table 2: Yerilla Project, Great Central Mines costean sampling gold results
Costean Mine Sample
numbers
Sample width
(m)
Au
g/t
539 Mammon 37185-6 3 0.46
538 Mammon 37287 1.5 53.6
537 Fenton South 37180-2 4.3 0.69
536 Fenton South 38100-2 6 1.2
536 Fenton South 40326 2 7.91
532 North Barclay 37189 1 0.42
Great Central Mines tested the Mammon-Fenton, Barclay North and Bruce’s Find with shallow RAB and RC drill holes. In
Figure 4 the drill holes are represented by clusters of black dots along the Mammon-Barclay Zone. Most holes were drilled to
less than 45m down hole depth. The Barclay Central target was also tested with a RAB hole traverse. The drilling undertaken
and the results are outlined in Table 3 and summarised as follows:
At Mammon-Fenton 37 shallow vertical RAB holes were drilled at 50m by 10m intervals to test the possible northern and
southern strike extensions of the 250m long zone of historic gold workings. Sampling of each hole was confined to a
single 1m interval sample at the bottom of each hole. . An additional three RAB holes and two RC holes were then drilled
to test beneath the Mammon-Fenton workings. Some of the holes intersected narrow zones of low grade gold (Table 3).
At Barclay Central prospect 13 shallow RAB holes (3 to 40m deep) were drilled along a single traverse. Very little
sampling of holes was undertaken. One hole intersected a narrow zone of low grade gold.
At Barclay North 13 RAB holes and three RC holes were targeted at the 300m long group of workings (and their possible
extensions) on the Western BIF Zone and the Eastern Shear Zone. Several holes intersected narrow to broad zones of low
grade gold mineralisation (Table 3).
At Barclay five shallow angled RAB holes were drilled to test the 120m long zone of workings. Two holes intersected
low grade gold mineralisation (Table 3).
Bruce’s Find was tested with one RC hole beneath the closely spaced costeans. The hole intersected low grade gold
mineralisation (Table 3).
During 1997-1999 Mt Kersey Mining NL explored within, and around, the area covered by E31/619 for gold with RAB, aircore
and lesser amounts of RC drilling (Lewis, 1996; Bader, 1997; Howland, 1998). The eastern and central portions of E31/619 and
the southeast corner of E31/961 were tested with systematic east-west traverses of vertical RAB and aircore holes as shown on
Figure 5. The drilling results are outlined in Table 4. The drilling delineated a cohesive gold anomaly about 2,000m long and up
to 700m wide in the north of E31/619.
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Table 3: Yerilla Project, Great Central Mines drill hole gold intersections
Prospect Hole Type
Hole Name
Grid East
Grid North
Dip Azi Hole
Depth (m)
Sample Depth
Interval (m)
Assay g/t Au
Mammon RAB Y44 3845 14600 90 18 17-18 1 0.13
Mammon RAB Y41 3860 14550 90 12 11-12 1 0.11
Mammon RAB Y34 3850 14500 90 6 5-6 1 0.13
Mammon RAB Y36 3855 14500 90 9 8-9 1 0.12
Mammon RAB Y28 3850 14450 90 9 8-9 1 0.13
Mammon RAB Y30 3855 14450 90 6 5-6 1 0.12
Mammon RC YRC7 3838 14334 60 77 42 19-20 1 0.20
Fenton RAB YP76 3860 14099 60 77 28 11-13 2 0.26
Fenton RC YRC6 3848 14156.5 60 77 42 23-25 2 0.43
Fenton South RAB Y61 3875 14050 90 9 8-9 1 0.18
Barclay North RAB YP62 3767.5 13010 60 77 17 10-13 3 0.35
Barclay North RAB YP65 3764 13049 60 77 30 11-18 7 0.45
Barclay North RAB YP65 23-26 3 0.19
Barclay North RAB YP68 3756 13124 60 77 25 18-23 5 0.76
Barclay North RAB YP68 60 77 18-19 1 1.75
Barclay North RAB YP69 3763.5 13124 60 77 24 3-4 1 0.17
Barclay North RAB YP69 8-12 4 0.18
Barclay North RAB YP70 3785 13124 60 77 24 12-16 4 0.23
Barclay North RAB YP71 3750 13164 60 77 36 22-27 5 0.21
Barclay North RAB YP71 33-34 1 0.15
Barclay North RAB YP74 3780 12925 60 77 30 17-23 6 0.20
Barclay North RAB YP74 25-26 1 0.20
Barclay North RC YRC9 3780 13085 60 77 40 18-20 2 0.60
Barclay North RC YRC10 3760 13085 60 77 49 10-24 14 0.40
Barclay North RC YRC10 13-16 3 1.00
Barclay RAB YP60 3860 12510 60 77 30 1-5 4 0.20
Barclay RAB YP60 6-8 2 0.19
Barclay RAB YP60 12-13 1 0.20
Barclay RAB YP60 16-17 1 0.26
Barclay RAB YP61 3850 12550 60 77 34 5-6 1 0.27
Barclay RAB YP61 15-18 3 0.20
Barclay RAB YP61 21-22 1 0.14
Barclay RAB YP61 24-25 1 0.18
Bruce's Find RC YRC11 4270 13400 60 230 48 12-19 7 0.63
Bruce's Find RC YRC11 16-18 2 1.95
Bruce's Find RC YRC11 24-25 1 1.65
Vertical RAB holes prefixed by Y only have only one 1m sample per hole, generally at the bottom of the hole (BOH).
60o dipping RAB holes prefixed by YP were selectively sampled down hole.
RC holes were selectively sampled down hole.
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Table 4: Yerilla Project, Mt Kersey Mining drill hole gold intersections
Hole East
(AMG84) North
(AMG84) Hole Dip
Hole Depth
(m)
From (m)
To (m)
Interval (m)
Au g/t Comment
YRB170 386300 6742000 90 38 20 36 16 1.628
YRB170 includes 28 32 4 5.7
YRB156 386080 6741800 90 81 52 68 16 0.445
YRB156 includes 52 56 4 1.43
YRB222 386360 6741000 90 36 32 36 4 1.85 Bottom of hole
YERA068 386240 6741800 90 30 28 30 2 1.05 Bottom of hole
YERA084 386640 6741600 90 29 12 16 4 0.85
YERA042 387520 6739000 90 90 48 52 4 0.52
YRB197 386720 6739000 90 77 28 32 4 0.41
YRB020 386066 6742171 90 77 36 40 4 0.4
YRB020 56 60 4 0.131
YERA086 386480 6741600 90 34 28 32 4 0.38
YRB021 386279 6742247 90 56 32 36 4 0.36
YRB172 386540 6742000 90 50 32 40 8 0.24
YERA089 386240 6741600 90 85 80 85 5 0.306 Bottom of hole
YERA087 386400 6741600 90 40 36 40 4 0.18 Bottom of hole
YERA090 386160 6741600 90 64 56 60 4 0.17
YRB191 387240 6739625 90 93 72 80 8 0.165
YRB157 386440 6741000 90 45 16 20 4 0.16
YRB157 36 40 4 0.1
YERA060 386260 6738400 90 72 36 40 4 0.15
YRB156 64 68 4 0.14
YRB156 80 81 1 0.11 Bottom of hole
YRB176 386020 6740500 90 35 20 24 4 0.12
YRB161 386760 6741000 90 49 40 44 8 0.11
YRB220 386200 6741000 90 51 12 16 4 0.1
YRB198 387080 6739625 90 93 36 40 4 0.1
YRB177 386180 6740500 90 45 44 45 1 0.1 Bottom of hole
During the early 1980’s BHP completed geology mapping, rock chip sampling and limited RAB drilling in the north of E31/961
exploring for volcanic-hosted massive sulphide copper-zinc deposits (Muhling, 1984a, Muhling 1984b, Muhling and Thornett,
1984). Ridges of gossanous and sulphidic chert associated with a regional linear airborne magnetic anomaly were interpreted to
be the top of a felsic volcanic pile prospective for copper-zinc deposits. The RAB drilling was designed to test the prospective
bedrock contact between Gindalbie Formation felsic volcanics in the west and Mulgabbie Formation carbonate-altered mafic
volcanics in the east. Samples were analysed for Cu, Pb, Zn and As only. The drilling intersected felsic volcaniclastics that
included chlorite-sericite-quartz schist with sulphidic chert. The chloritic felsic schist and adjacent chert, interpreted to be at the
top of the felsic pile, were weakly anomalous in Cu, Zn and As.
In 1994 Selmac Minerals and Monarch Resources drilled a single traverse of RC drill holes in the south of E31/961. No
anomalous gold results were returned (Selmac Minerals Pty Ltd, 2005). In 1998-1999 Gutnick Resources completed regional
mapping via interpretation of aerial photography and aeromagnetic data that identified palaeochannel and structural targets for
gold deposits. Nine reverse circulation holes were drilled to test three targets in the area covered by E31/961. No significant gold
assay results were returned (Howland, 1999).
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2.6 Discussion
Most previous exploration within the Yerilla Project area has been within E31/619 which has historical gold workings along a
3.2 km portion of the Mammon-Barclay Zone shear. A limited number of shallow drill holes have tested the historical gold
workings and their immediate strike extensions. Some holes have intersected encouraging broad intersections of low grade gold
at shallow depths that remain to be followed up at depth. Much of the Mammon-Barclay Zone has not been tested with drilling
including the central portions of the Mammon-Fenton prospect and South Barclay prospect. Also the Mammon-Barclay Zone
might extend for an additional 1.2 km of strike to the north beneath shallow alluvium which remains to be tested. The western
side of E31/619, including the Mammon-Barclay Zone, has not been tested with systematic geochemical sampling or
reconnaissance RAB drilling that might identify and help prioritise regional gold targets. The Mammon-Barclay Zone and its
possible strike extensions to the north remains to be effectively explored using modern geochemical, geophysical and drilling
methods.
Previous shallow reconnaissance RAB and air core drilling has identified a 2,000m by 700m gold anomaly within E31/619. This
gold anomaly remains to be tested with infill drilling and deeper RC drilling. Several other smaller gold anomalies to the south
defined by the drilling programme require infill drilling.
The encouraging shallow gold mineralisation intersected in a single drill hole at a Bruce’s Find remains to be further tested along
strike and at depth. This might represent a southern extension of the 2,000m by 700m RAB/air core drill hole gold anomaly to
the north.
2.7 Proposed Exploration
The following exploration programme is proposed for the first two years of exploration within the E31/619. The estimated cost
is $495,000.
Year 1
Geoscientific exploration data acquisition, database compilation and Geographical Information System (GIS) project
development.
Exploration data review and interpretation, geological model development and target generation.
Geological reconnaissance, geology mapping and surface geochemical sampling.
Ground geophysical surveying.
Reconnaissance and infill RAB drilling.
RC drill drilling to test highest priority gold targets.
Year 2
Ground geophysical surveying.
Infill RAB or aircore drill holes.
RC drill holes to test highest priority gold targets.
3. Doolgunna Project
3.1 Introduction
The Doolgunna Project consists of granted exploration licence E51/1365, covering 64.65 km2, 70 km northeast of Meekatharra,
Western Australia (Figure 6). The project covers a portion of the Proterozoic Yerrida Basin within the Nabberu Province.
There are economic gold and copper-gold deposits in the Nabberu Province. Economic gold deposits in the Province include the
Peak Hill, Fortnum and Labouchere mines. Economic copper-gold deposits include the Horseshoe Lights mine and the more
recently discovered Degrussa mine.
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The Doolgunna Project area is prospective for mesothermal quartz stockwork gold, volcanic-hosted massive sulphide copper-
gold and stratabound sedimentary copper deposits. There has been limited previous exploration that has effectively tested the
project area. Previous exploration has identified two zones of soil or drill hole copper-gold anomalism associated with magnetic
anomalies that warrant additional exploration.
Figure 6: Location of the Doolgunna Project
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3.2 Tenure and Title
The status of the tenement comprising the Doolgunna Project is provided in Table 4.
Table 4: Doolgunna Project, Tenement Details
Tenement
Number
Registered
Holder Status
Date
Granted
Expenditure
Commitment
E51/1365 MPF* Granted 23/07/2010 $20,000
*MPF: MPF Exploration Pty Ltd
3.3 Regional Geology and Mineralisation
The Doolgunna Project covers a portion of the Yerrida Basin filled with sedimentary and volcanic rocks of the Yerrida Group
(Figure 7). The stratigraphy of the Yerrida Basin (Yerrida Group) modified from Ferguson (1999) is as follows:
Subgroup Formation Rock Type
Tooloo (basal Eraheedy
Group)
Yelma formation Arenite, shale, minor carbonate, chert and conglomerate
Unconformity
Mooloogool Maralou Sulphidic and graphitic black shale, siltstone, carbonate rift
basin succession
Killara Aphyric tholeiitic mafic lavas and intrusives
Intercalated Doolgunna Arkosic sandstone, siltstone, shale, quartz, wacke, trurbidites
Thaduna Lithic wacke, siltstone, shale, minor arkose, turbidites
Windplain Johnson Cairn Siltstone, shale, carbonate, minor lithic wacke
Juderina (Bubble
Well and
Finlayson
Members
Arenite (red bed), conglomerate, minor carbonate, silicified
carbonate, evaporite
Unconformity
Yilgarn Craton granitoid-greenstones (includes Goodin and Marymia Inliers)
The Yerrida Basin, along with Bryah and Padbury basins, comprise the western Palaeoproterozoic Nabberu Province overlying
the northern margin of the Yilgarn Craton. The Earaheedy Basin forms the eastern portion of the Province. The Yerrida, Bryah
and Padbury basins (formerly collectively known as the Glengarry Basin) have been dated at around 2,260, 1,920 and 2,000-
1,900 million years old, respectively. The Yerrida Basin formed around the time of the Ophthalmian Orogeny 2,220-2,140
million years ago. The whole Nabberu Province was deformed and metamorphosed during the Capricorn Orogen 1,820-1,770
million years ago. The Yerrida and Byrah Basins display both volcanic-arc and back-arc basin affinities that include continental
margin rift-bounded troughs (Pirajno and Adamides, 2000; Pirajno et. al., 2000).
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Figure 7: Regional geological setting of the Doolgunna Project
Strata of the Yerrida Group are gently deformed, i.e., horizontal to gently dipping, except in areas proximal to major faults. The
dominant regional tectonic (fault and fold) trends of the Yerrida Basin are; 1) northeast-southwest; and 2) east southeast-west
northwest. These dominant tectonic trends reflect reactivated Archaean basement structure and Palaeoproterozoic orogenic
structural trends, respectively. The regional northeast trending Goodin Fault is the contact between the Yerrida Basin in the east
and the Byrah and Padbury basins to the west. The Byrah Basin has been thrust over the Yerrida Basin along the northeast
trending Goodin Fault. Immediately to the east and parallel to the fault is the Doolgunna Graben that contains more intensely
deformed strata (Pirajno and Adamides, 2000; Pirajno et. al., 2000). The eastern side of the Doolgunna Graben is marked by the
South Boundary Fault.
The Marymia and Goodin Inliers are ovoid-shaped Archaean granitoid horst blocks surrounded by Proterozoic basin sediments
of the Nabberu Province. The uplifted granitoid inliers are elongate parallel to regional north-northeast to northeast trending
thrusts, including the Goodin Fault.
The Nabberu Province contains a variety of mineralisation styles that includes mesothermal gold and copper-gold, shear zone
copper, epigenetic zinc-lead and lead, volcanogenic massive sulphide copper-gold, manganese, iron ore and talc deposits
(Ferguson, 1999; Pirajno and Adamides, 2000; Pirajno et. al., 2000).
About 2.4 million ounces of gold have been discovered within the Province, mainly within the Byrah Basin and underlying Peak
Hill Schist. The biggest gold deposits are the Peak Hill mine and mining centre, Fortnum mine and Labouchere mine. At
Horseshoe Lights volcanic-hosted massive copper-gold-silver-mercury sulphides have produced 54,800 tonnes of copper,
300,000 oz. of gold, 2,928,000 oz. of silver and 52,800 kg of mercury (Pirajno et. al., 2000).
The Degrussa copper-gold-silver mine is the most recent economic discovery in the Nabberu Province. It was discovered via RC
drilling of a 20ppb gold anomaly defined by shallow, wide-spaced, reconnaissance RAB holes (Sandfire Resources NL, 2010).
The deposit is hosted by sediments adjacent to Narracoota Volcanics. The Jenkin Fault is a northeast trending regional thrust
fault along the margin of the Marymia Inlier that passes through the deposit area. It merges with the Goodin Fault further to the
northeast. Yerrida Basin sediments, i.e., Juderina, Johnson Cairn and Thaduna Formation, extend into the area and are within a
few kilometres of the mine.
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Within the Yerrida Basin gold and copper-gold mineralisation is hosted by the Doolgunna and Johnson Cairn Formations. The
historic Goodin’s South (Goodin Find) and Revere Reef-Dazzle Flats gold deposits are hosted by Doolgunna Formation. They
are within subsidiary faults (quartz vein stockworks) to the east of the 100 km long northeast trending Goodin Fault. Structural
controls appear to be regional northeast trending faults and smaller cross cutting west-northwest trending faults/veins (Findlay,
1996). Similar gold mineralisation is hosted within the Byrah Basin to the west of, and adjacent to, the Goodin Fault. The gold
deposits centred on the Goodin fault cluster in an area 50 km long and 10 km wide. In recent years a number of soil gold
anomalies have been identified associated with the South Boundary Fault that parallels the Goodin Fault (Revere Mining, 2007).
At Johnson Cairn prospect there is a large copper and gold (lead, bismuth, arsenic, and molybdenum) anomaly associated with
Johnson Cairn Formation pyritic carbonaceous shales adjacent to the northeast trending Jenkins Fault. Samples assay up to 0.3%
copper with associated anomalous gold, lead, bismuth, arsenic and molybdenum. Early reconnaissance drill holes intersected
broad zones of 200-500ppm copper and 10-20ppb. Later infill drilling intersected low to medium grade gold mineralised zones.
Johnson Cairn prospect is along structural strike, i.e., the Jenkin Fault, of the Degrussa copper deposit (Sipa Resources website).
The Thaduna copper deposits (i.e., old Thaduna mines, Lee, North prospect, Rooney’s mine and Green Dragon) consist of
supergene-enriched copper oxide mineralisation associated with shears and faults of various orientations hosted by Thaduna
Formation greywacke and slates within the Doolgunna Graben. The mineralisation displays some similarities to the mesothermal
gold and copper-gold deposits of the Byrah Basin (Ferguson, 1999; Pirajno and Adamides, 2000).
A large copper anomaly is associated with black shales at the contact between the Johnson Cairn and Juderina Formation at the
McDonald Well copper prospect (Lodestar Minerals website). Sulphidic Juderina Formation near the Goodin Inlier granitoid
dome is anomalous in copper, vanadium, platinum and palladium (Pirajno and Adamides, 2000).
In other parts of the basin sulphide-bearing black shales within the Maralou and Johnson Cairn Formations along the contact
with Killara Formation mafic intrusions (dolerite, gabbro) contain anomalous copper, zinc, barium, gold, platinum and palladium
(Pirajno and Adamides, 2000).
3.4 Project Geology and Mineralisation
The surface geology of Doolgunna Project (E51/1365) is dominated by a transported regolith of Quaternary-Cenozoic alluvium-
colluvium related to the Yalgar River drainage system (Figure 7). The transported regolith is typically 10-20m deep but up to
36m deep. Outcropping Palaeoproterozoic bedrock is rare. Pirajno and Adamides (2000) interpret the Proterozoic bedrock
beneath the alluvium-colluvium to be Juderina Formation in the south and Johnson Cairn Formation in the north. Aircore drill
holes in the southern half of the tenement intersected mainly siltstone, clayey siltstone and siltstone with minor sandstone
interbeds (Figure 8). This suggests that the Johnson Cairn Formation is more widespread within the tenement than has been
mapped by Pirajno and Adamides (2000).
E51/1365 is proximal to the intersection of regional west-northwest and northeast tectonic lineament trends identifiable in
regional geological mapping and airborne magnetics data. There are at least three, major east-northeast to northeast trending
airborne magnetic linears, generally defined by magnetic lows, traversing the Doolgunna Project area. The linears parallel the
Goodin Fault and are interpreted to be related sympathetic thrusts that extend into Archaean basement. One linear in the north of
E51/1365 is the Southern Boundary Fault that defines the southeast margin of the Doolgunna Graben. Its northeast extensions
are interpreted to pass by the Thaduna Copper Mines and Lodestar Minerals McDonald Well copper prospect. Several east and
west-northwest trending magnetic linears, interpreted to be faults, also traverse the project area.
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Figure 8: Doolgunna Project surface geology and copper and gold anomalies
Figure 9: Doolgunna Project, interpreted bedrock geology and copper and gold anomalies
A broad zone containing a number of east-northeast trending, curvilinear, low amplitude airborne magnetic anomalies traverse
the central and southern Doolgunna Project area. The magnetic stratigraphic units are located beneath, and strike parallel to, the
Quaternary alluvial channel central to E51/1365. The cause of the magnetic anomalies is unknown but they are interpreted to be
disseminated magnetite alteration within the lower Johnson Cairn Formation siltstones overlying Juderina Formation (Figure 8).
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The nearest known gold mineralisation to the project area is the historic Goodin’s South (Goodin Find) and Revere Reef-Dazzle
Flats gold mines, located 8 km and 10 km to the north and north-northeast, respectively. These form part of a cluster of small
gold deposits within an area 50 km long and 10 km wide broadly centred on the Goodin Fault.
In the south of E51/1365 two adjacent aircore drill holes (RVAC023 and RVAC024) 1.4 km apart intersected low grade copper
mineralisation. The intersections of 4m at 1132ppm Cu and 5m at 964ppm Cu, respectively, are hosted by siltstones associated
with an east-northeast trending magnetic anomaly. There is associated anomalous gold , molybdenum, arsenic and zinc in the
same holes or in neighbouring holes along the same magnetic trend over a strike length of 8.5 km. A coincident weak magnetic
lag soil copper anomaly was defined along the same magnetic trend. This zone of geochemical and magnetic anomalism is
interpreted to be along, or close to, the contact between Johnson Cairn Formation and Juderina Formation.
In the north of E51/1365 there is a 3 km long northeast trending magnetic anomaly with associated low amplitude soil (magnetic
lag) copper, gold and silver anomalism. This geochemical anomaly is associated with a magnetic anomaly adjacent to the South
Boundary Fault of the Doolgunna Graben and is the southwest strike extension of a larger gold anomaly defined to the northeast
identified by previous explorers (Revere Mining, 2007).
3.5 Previous Exploration
In 1992-1993 BHP Minerals held a large tenement package in the region that incorporated the area covered by E51/1365,
however, no work was undertaken within the area covered by E51/1365 (Barrett, 1993).
During the period 2004-2007 Murchison Exploration Pty Ltd (MEPL) held a large tenement package that incorporated the area
covered by E51/1365. Exploration targeted gold and copper-gold-silver (Morete, 2005, 2006 and 2007). Marjoribanks (2002), a
consultant structural geologist, considered a 10 km wide structural corridor associated with two regional parallel bounding
reverse faults, i.e., the Goodin and Southern Boundary Faults. to be prospective for gold. In 2004-2005 MEPL completed a
regional magnetic lag sampling survey using a 1 km sample grid, of which, 63 samples were collected within the area covered by
E51/1365 and assayed for gold (Morete, 2005). In 2007 an airborne magnetic-radiometric survey was completed that
incorporated the area covered by E51/1365. A magnetic anomaly in the north of E51/1365 was considered highly prospective
(Morete, 2007). No further work was undertaken.
In 2008-09 Enterprise Metals explored the area covered by E51/1365 and surrounds for gold and copper-gold deposits. Airborne
magnetic data were used to identify magnetic targets and interpret structural targets at 1:100,000 scale. Regolith interpretation
mapping was completed at 1:50,000 scale. Sample pulps of the 63 magnetic lag soil samples collected by MEPL were re-assayed
for an expanded suite of elements. Two geochemical anomalies were identified in the northwest and southwest of the area
covered by E51/1365. It was concluded that the magnetic lag sample geochemical survey might not have effectively tested the
Proterozoic bedrock geology if the transported Quaternary-Cenozoic alluvium-colluvium cover was too thick. Sixteen wide-
spaced reconnaissance aircore drill holes were drilled along existing tracks and fence lines to test the bedrock geology and
geochemistry (Figure 8). Some intersections containing anomalous copper and gold assays were not followed up (Williams,
2009).
3.6 Discussion
The Doolgunna Project contains a combination of prospective stratigraphy, regional structures, magnetic anomalies and gold and
copper anomalies that represent exploration targets for gold and copper-gold deposits. Some of the features are:
The contact or transition zone between the Juderina Formation red beds and Johnson Cairn Formation shales, siltstones
and carbonates is a prospective stratigraphic interval for sedimentary-hosted copper-gold deposits.
It is evident that east-northeast to northeast trending thrust faults, particularly those associated with the Doolgunna
Graben, are prospective for gold and copper-gold deposits. The South Boundary Fault is interpreted to pass through the
northwest corner of the Doolgunna Project area and there is an associated soil copper and gold anomaly in this area. In
the south of the project area anomalous copper and gold has been intersected in shallow aircore drill holes proximal to
another prominent east-northeast trending magnetic linear interpreted to be a fault. The 25ppb and 21ppb gold anomalism
in two adjacent aircore holes in this area attracts comparisons to the 20ppb RAB hole gold anomaly that contributed to the
discovery of the Degrussa copper-gold-silver deposit.
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There is a spatial association between gold and copper-gold deposits and magnetic anomalies within the Byrah and
Yerrida Basins. East-northeast trending airborne magnetic anomalies traversing the Doolgunna Project area are targets for
gold and copper-gold deposits. The copper-gold anomalies in the north and south of the Doolgunna Project area
associated with magnetic anomalies. Most of the magnetic stratigraphic units within the project area underlie the main
alluvial drainage tract and remain largely untested.
There has been little effective field-based exploration in the area but what has been done has been able to highlight two copper-
gold targets worthy of additional follow up as follows:
1. In the south there is an 8.5 km long magnetic anomaly with associated anomalous copper, gold, molybdenum, arsenic and
zinc in wide-spaced drill holes. The anomalism is interpreted to be associated with the prospective contact between
Juderina Formation red beds and Johnson Cairn Formation siltstones.
2. In the north of the project area there is a 3 km long magnetic anomaly with an associated soil copper and gold anomaly. It
is adjacent to the Southern Boundary Fault to the Doolgunna Graben.
3.7 Proposed Exploration
The following exploration programme is proposed for the first two years of exploration within the E51/1365. The estimated cost
is $303,000.
Year 1
Geoscientific exploration data acquisition, database compilation and Geographical Information System (GIS) project
development.
Exploration data review and interpretation, geological model development and target generation.
Geological reconnaissance, geology mapping and surface geochemical sampling.
Ground geophysical surveying.
Reconnaissance and infill aircore drilling.
Year 2
Ground geophysical surveying.
RC drilling to test highest priority gold and copper targets.
4. Meekatharra Project
4.1 Introduction
The Meekatharra Project consists of two exploration licences E51/1442 and E51/1443, totalling 211.08 km2, located near
Meekatharra, Western Australia (Figure 9). E51/1442 and E51/1443 cover portions of the Archaean Meekatharra and Gnaweeda
greenstone belts of the Murchison Province, respectively (Figure 10).
The Murchison Province is one of Australia’s major gold producing provinces. Major gold mining centres in the province
include Mt Magnet, Meekatharra, Cue and Big Bell. The Province also contains the large volcanic-hosted massive sulphide
Golden Grove zinc-copper-lead-gold-silver mine.
E51/1442 and E51/1443 are both prospective for mesothermal gold and volcanic-hosted massive sulphide zinc-copper-lead-
silver-gold deposits. Most of the previous exploration within the Project area has targeted gold and there has been very little base
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Figure 10: Location of the Meekatharra Project
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4.2 Tenure and Title
The status of the Meekatharra Project tenements is provided in Table 6.
Table 6: Meekatharra Project, Tenement Details
Tenement
Number
Registered
Holder Status
Date
Granted
Expenditure
Commitment
E51/1442 Maka ** Granted 5/07/2011 $28,000
E51/1443 Maka ** Granted 5/07/2011 $53,000
** Maka: Maka Minerals Pty Ltd
4.3 Regional Geology and Mineralisation
E51/1442 and E51/1443 are located in the north of the Murchison Province of the western Yilgarn Craton, Western Australia
(Figure 10). The Murchison Province is an Archaean granite-greenstone terrane containing north to northeast trending Archaean
greenstone belts comprised of 3,000-2,800 million year old, metamorphosed volcano-sedimentary sequences of the Murchison
Supergroup. The Supergroup has been metamorphosed from green schist to amphibolite facies. Early and late stage granitoids
have intruded the greenstone belts. East-west trending dolerite dykes of the 2,400 million year old Widgiemooltha dyke swarm
intrude all older rocks of the Yilgarn Craton. The Murchison Province was eroded and deeply weathered during the Cenozoic
and Quaternary resulting in a regolith dominated by laterite soil profiles overlain by transported alluvial-colluvial sediments
(Watkins and Hickman, 1990).
Types of mineral deposits in the Murchison Province include hydrothermal epigenetic gold, epigenetic copper and copper-gold,
laterite-hosted gold, volcanic-hosted zinc-copper-silver-gold, magmatic platinum-palladium, magmatic vanadium magnetite and
iron ore. Epigenetic gold deposits have been by far the most economically important and the focus of most of the historical
exploration.
The largest gold mining centres in the Murchison Province are Mt Magnet, Meekatharra, Cue, Big Bell, Bluebird-Yaloginda, Mt
Gibson laterite, Reedy’s and Tuckabianna Most of the gold deposits in the Murchison Province are; a) hosted by Golconda,
Gabanintha and Windaning Formations; b) hosted by sheared mafic rocks, ultramafic rocks or BIF; c) within 1 km of major
shear-fault zones; and d) within 2-3 km of granite-greenstone contacts. The deposits are hosted by second- or third-order
subsidiary shears and faults that splay from major craton-scale shear zones or within dilation zones within the major shear zones.
The gold-bearing shears and faults are characterised by quartz-carbonate veins or stockworks with associated disseminated
sulphides (pyrite, pyrrhotite, arsenopyrite, chalcopyrite) and hydrothermal alteration haloes comprised of quartz, sericite, biotite
and feldspar. The timing of epigenetic gold mineralisation 2,650-2,600 million years ago is broadly synchronous or slightly post-
dates regional shear zone development and late stage granitoid emplacement (Watkins and Hickman, 1990).
The Scuddles and Gossan Hill volcanic-hosted massive sulphide zinc-copper-lead-silver-gold deposits are large mines in the
south of the Murchison Province They are 4 km along strike from one another and hosted within a thick pile of felsic
volcaniclastics and volcanics of the Gabanintha Formation. Other VHMS deposits and prospects in the Murchison Province
associated with felsic volcanic centres are Quinns, Austin, Eelya, Mt Gibson, Tuckabianna, Wattagee, Cuddingwarra and
Bunarra (Watkins and Hickman, 1990; Ferguson, 1990).
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Figure 11: Regional geological setting of the Meekatharra Project
4.4 Project Geology and Mineralisation
E51/1442 overlies the hinge of the Pollel Syncline in the northern Mt Magnet-Meekatharra Greenstone Belt to the east of the
Paddy’s Flat gold mine at Meekatharra. Most of E51/1442 overlies a topographic low area associated with the Gully Creek
drainage system where the Archaean bedrock is obscured by a regolith of Quaternary and Cenozoic colluvium, alluvium, buried
lake clays and deeply weathered laterite profile. The regolith is generally around 20-40m in depth but increases in depth over
palaeochannels (Figure 12).
Figure 12: Meekatharra Project; E51/1442 geology and drill hole geochemistry
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The Archaean bedrock within E51/1442 is not well known but is interpreted to include a lower sequence of Gabanintha and
Windanning Formations that are broadly represented by a lower mafic sequence overlain by a felsic volcanic-volcaniclastic and
metasediment sequence. Rocks belonging to these two formations include metabasalts, metasediments and felsic volcanics as
well as minor BIF, chert and jaspilite. In the southwest corner of E51/1442 the younger Porlell Subgroup is present in the axial
core of the Pollel Syncline. In this corner the Lordy Basalt (high Mg basalt and serpentinised peridotite) and Stockyard Basalt
(tholeiitic basalt with minor interlayered high magnesian basalt) outcrop as low hills in the axial core of the Pollel Syncline. The
Porlell Subgroup overlies felsic volcanic-volcaniclastic rock and BIF of the Windaning Formation that are locally exposed
around the base of the hills. There is a peridotite-pyroxenite sill intruding the hinge of the syncline that might be the source of
reported platinum group metals anomalism in neighbouring creeks. Gold-bearing BIF’s and sulphide-facies BIF’s in the
Windanning Formation have been reported in the area but the exact location remains uncertain.
The Gabanintha Shear Zone, which is interpreted by Watkins and Hickman (1990) to be folded around the hinge of the Pollel
Syncline, traverses the northwest corner and southeast corner of E51/1442. The Paddy’s Flat and Gabanintha gold mines and
several smaller gold deposits, such as the Side Well deposit, are spatially associated with the Gabanintha Shear Zone. There is a
gold-arsenic soil anomaly with associated dry blowing area just outside the northwest corner of E51/1442 that is associated with
the Gabanintha Shear Zone. In recent months Doray Minerals has reported high grade gold drill hole intercepts just north of
E51/1442 (Doray Minerals website). This is associated with a linear magnetic anomaly that traverses the northwest corner of
E51/1442 and extends southwest towards the Paddy’s Flat gold mining area. In addition to the Gabanintha Shear Zone there are
several parallel north-south trending airborne magnetic linears and interpreted fault zones associated with the core of the Pollel
Syncline that traverse E51/1442. Some of these are spatially associated with gold or gold-arsenic anomalies defined by previous
explorers. One of the larger faults has been interpreted to splay from the regional Burnakura Shear Zone.
E51/1443 covers the southernmost portion of the Gnaweeda Greenstone Belt 20 km to the east of the Meekatharra Greenstone
Belt and several mapped greenstone enclaves extending for 30 km to the south along the Evanston-Edale Fault. The Evanston-
Edale Fault is a 500 km long shear zone that extends along the eastern margin of the Gnaweeda belt and the Barrambie and
Sandstone greenstone belts further south. The Gnaweeda Greenstone Belt is comprised mainly of amphibolite grade mafic
volcanics with lesser ultramafics along its eastern and western margins. There is a central zone of felsic volcanics and
volcaniclastics that includes some pyritic graphitic shale units. Archaean dolerite-gabbro sills and small felsic granitoid dykes
have intruded the belt.
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Figure 13: Meekatharra Project, E51/1443 geology and drill hole geochemistry
Distributed along the 30 km strike length of the northern Gnaweeda Greenstone Belt, that is, to the north of E31/1443, are
historic gold workings (e.g., Bunarra, Mistletoe) and gold prospects (e.g., Gnaweeda, St Annes, Turnberry, Far East) associated
with kilometre-scale RAB drill hole gold-arsenic anomalies. The gold mineralisation is associated with quartz-carbonate-pyrite
veining hosted by sheared mafic rocks with carbonate-sericite-quartz-silica-albite-pyrite (± arsenopyrite, tourmaline) alteration.
Quartz porphyry is present at some prospects.
Much of E51/1443, particularly the northern half of the tenement, is covered by a regolith of colluvium and lesser alluvium
associated with a drainage tributary in the headwaters of the Murchison River system. The regolith, which in places includes a
deeply weathered residual laterite profile, is 20-50m thick over much of the tenement and up to 95m thick over the main
palaeochannel (Ray and Teakle, 2010). Small greenstone enclaves, variably comprised of amphibolite, ultramafic and felsic
volcanics, outcrop along the 30km length of the tenement. These are contained within localised outcrops of foliated granite
gneiss and biotite adamellite. Outcrops of granitoid are more prevalent in the southern half of the tenement. Interpretation of
regional geophysics data as well as drill hole geological data by previous explorers suggests that the greenstones in the north of
the tenement are larger and more continuous beneath the regolith cover. Previous limited wide-spaced reconnaissance drilling
has identified several zones of low level gold and gold-arsenic anomalism along the length of the belt. For
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4.5 Previous Exploration
E51/1442 Previous Exploration
In 1985 Swan Resources/Pancontinental Mining carried out limited rock chip and stream sediment sampling in the south of the
area covered by E51/1442. Four samples were within the area covered by E51/1442 and none returned significant results
(Wilson, 1985).
From 1985-1991 Julia Mines, Esso Exploration and Production Australia (Esso) and City Resources, at different times, reported
on gold exploration within a large tenement package, the “Sherwood Project”, that overlapped with E51/1442. Exploration
included a regional airborne magnetics survey and interpretation, 1:25,000 scale geology mapping, ground magnetic surveying,
soil sampling and RAB drilling. The exploration was aimed at identifying gold mineralisation along stratigraphic-structural
strike of the Paddy’s Flat gold mine (Byrne, 1985; Dudfield, 1986a; Dudfield, 1986b; Dudfield, 1986c; Dudfield, 1986d;
Dudfield, 1987; Cook, 1987a; Cook, 1987b; Cook, 1987c; Cook, 1988a; Cook, 1988b; Cook, 1988c; Cook, 1988d; Cook, 1988e;
Jones, 1989). Most of the work was concentrated on areas immediately outside of the existing E51/1442. Shallow
reconnaissance RAB holes drilled along three east-west traverses about 5 km apart within the area of E51/1442. Most of the
holes were ineffective. Most were either abandoned in transported Quaternary sediments or not assayed for gold. Only seven
holes had a single bottom of hole sample assayed for gold.
In 1987 Dominion collected 341 soil samples of mainly transported Quaternary sediments over a 6 km long by 2.5 km wide area
of the southern half of E51/1442 (Palmer 1988). Several gold anomalies of greater than 1000ppt (i.e., 10ppb) gold are evident in
the soil geochemical data. The samples cannot be accurately located using the information provided by Palmer (1988).
In 1993-1995 Dominion explored the eastern half of the area covered by E51/1442 with wide-spaced reconnaissance RAB
drilling and minor infill RAB drilling. Only one sample was collected from the bottom of each reconnaissance RAB hole and
assayed for Au and As, as well as a few other elements. This work included testing the area immediately east of E51/1442 which
resulted in the discovery of the Side Well gold deposit which then subsequently attracted the bulk of the exploration attention by
Dominion (Till, 1994a; Anderson, 1995a). Within the area of E51/1442 Dominion drilled 139 reconnaissance RAB drill holes,
totalling 4,947m, which defined the following gold anomalies:
In the south to the tenement there is a 1 km long gold-arsenic anomaly, open to the north and closed off to the south by
the tenement boundary, beneath 20m of transported Quaternary sediment. Some vertical reconnaissance and angled infill
drill holes tested this anomaly. Two holes returned anomalous gold results.
In the central eastern side of the tenement some very low amplitude gold anomalism was defined along a single traverse
of holes drilled in this area. WMC later named this area Daniel prospect.
In the northeast of the tenement there is a zone of low amplitude gold anomalism, defined by a few widely spaced
reconnaissance holes.
In 1995-1998 Western Mining Corporation (WMC) explored Daniel prospect in the central east of the area covered of E51/1442
(Doan, 1996; Doan, 1997; Begg, 1998). This work formed a small part of a much larger gold exploration project seeking greater
than 6 million ounce gold deposits in the Meekatharra area. Most of WMC’s exploration effort in the Meekatharra region was
concentrated on other gold prospects such as Andy’s Well currently held by Doray Minerals. WMC completed a regional
airborne magnetic survey of the Meekatharra area that was interpreted. Shallow aircore drilling tested the Daniel prospect in the
central east of E51/1442. Eighteen wide-spaced reconnaissance aircore holes were drilled along two traverses 800m apart to test
Daniel prospect. The drilling intersected broad, low amplitude gold anomalism over 800m strike that is open to north and south.
The gold anomalism is centred on an S-shaped folded magnetic unit extending between two north-south trending magnetic
linears interpreted to be faults.
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E51/1443 Previous Exploration
In 1990 Homestake Australia Ltd (Homestake) identified a group of shallow prospecting pits developed on ferruginous vughy
quartz veins 3 km southwest of Babel Bore within the E51/1443 application. Homestake explored the outcropping greenstones
within E51/1443 with eight rock chip samples, five channel samples, 173 stream sediment (BLEG) samples and 16 soil (BLEG)
samples. The stream sediment sampling highlighted one drainage catchment with a maximum of 43.7ppb gold but the
anomalism could not be replicated with follow up stream sediment sampling (Murphy, 1991).
From 1995-1999 Mines and Resources Australia Pty Ltd drilled 99 reconnaissance RAB holes along wide-spaced traverses in
the E51/1443 area (Figure 13). (Watsham, 1996a; Watsham, 1997; Watsham 1998; Watsham 1999; Ackerly, 1999). Several
holes intersected low grade gold mineralisation.
In 2005-2008 Teck Cominco explored tenement that covered the E51/1443 area. Teck Cominco completed a geological
interpretation of airborne magnetics data and drilled 49 wide-spaced, vertical, reconnaissance RAB and aircore holes (Figure 13)
that returned some low level gold anomalism. (Taylor, 2006a; Taylor, 2006b; Tillock, 2007a; Tillock, 2007b; Tillock, 2007c;
Tillock 2008
4.6 Discussion
The area covered by E51/1442 received a limited amount of exploration between 1985 and 1998 but not much since. The
western half of the tenement remains virtually unexplored for gold and base metals with systematic geochemical sampling
despite its proximity to the Paddy’s Flat open cut gold mining operations to the west. Only Dominion and WMC carried out
effective exploration activities within the eastern half of the tenement area, however, the reconnaissance RAB drilling by
Dominion was restricted in its effectiveness with only one sample from each hole being assayed for gold. WMC’s exploration
methods were able to achieve significantly better results at Daniel prospect than Dominion’s methods. Much of the tenement
remains to be effectively tested for gold and base metals.
The limited amount of previous gold exploration has highlighted three areas of gold and gold-arsenic anomalism within the
tenement area. These gold anomalies are aligned along a north-south trend associated with north-south trending airborne
magnetic linears traversing the tenement area. The areas between the three zones of gold anomalism on the eastern half of the
tenement remain to be tested with systematic RAB/aircore drilling. The unconformity contact between the Windaning Formation
and the overlying Pollel Subgroup in the core of the Pollel Syncline is prospective for volcanic-hosted massive sulphide copper-
zinc-silver-gold deposits. The geology attracts comparisons with the areas hosting the Austin and Quinns volcanic-hosted
polymetallic deposits. There is potential for the Burnakura Shear to have been a conduit for “black smoker” hydrothermal vent
fluids that formed volcanic-hosted polymetallic sulphide deposits at, or near, the top of the Windaning Formation around the
Pollel Syncline. Sulphide-facies BIF would be a target for base metals and gold mineralisation.
4.7 Proposed Exploration
The following exploration programme is proposed for the first two years of exploration within the E51/1442. The estimated cost
is $351,000.
Year 1
Geoscientific exploration data acquisition, compilation and review including GIS development.
Geological reconnaissance and mapping of project area.
Airborne and geological data interpretation, geological model development and target generation.
Reconnaissance RAB or aircore drilling.
Year 2
Infill RAB or aircore drilling.
RC drilling to test identified gold or base metal targets.
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The following exploration programme is proposed for the first two years of exploration within the E51/1443. The estimated cost
is $375,000.
Year 1
Geoscientific exploration data acquisition, compilation and review including GIS development.
Geological reconnaissance and mapping of project area.
Airborne and geological data interpretation, geological model development and target generation.
Reconnaissance RAB or aircore drilling.
Year 2
Infill RAB or aircore drilling.
RC drilling to test identified gold or base metal targets.
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Partington, G.A. and Williams, P.J., 2000. Proterozoic lode gold and (iron)-copper-gold deposits: A comparison of Australian and global examples: Reviews of
Society of Economic Geologists, v. 13, p. 69-101.
Passchier C.W., 1994. Structural geology across a proposed Archaean terrane boundary in the eastern Yilgarn craton, Western Australia. Precambrian Research
68, pp 43-64.
Pellegrini, A. 1985. Annual Report on Exploration Licence E51/60 Bunarra WA. Greenex.
Pirajno, F. and Adamides, N.G., 2000. Geology and mineralisation of the Palaeoproterozoic Yerrida Basin, Western Australia. Western Australia. Geological
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Pirajno, F. and Burlow, R.A., 2009. The Magellan non-sulfide lead deposit, Yerrida and Earaheedy Basins, Western Australia. Geological Survey of Western
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Pirajno, F., Occhipinti, S.A. and Swager, C.P., 2000. Geology and mineralisation of the Palaeoproterozoic Bryah and Padbury Basins, Western Australia.
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Geological Survey, Report 90, 263p
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Selmac Minerals Pty Ltd, 2004. Annual report year ending 30/09/04, P31/1642 - 1651, Yerilla Project, C131/2004. (Kookynie) Selmac Minerals Pty Ltd.
Smith, R.E. 2005. Gossan Hill Cu-Zn-Au deposit, Golden Grove, Western Australia. In Butt, C.R.M. et. al. (eds.) "Regolith expression of Australia ore systems:
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6. Glossary of Terms
Air Core Drilling
An air drilling technique suitable for drilling poorly consolidated rocks, it is generally more efficient and accurate than RAB drilling.
Airborne Magnetic Survey
A type of geophysical survey flown by helicopter or fixed wing aircraft to measure the magnetic susceptibility of rocks at or near the earth’s surface.
Amphibolite
Regional metamorphic mafic rock comprised of amphibole and plagioclase.
Amphibolite facies
A grade of regional metamorphism defined by various mineral assemblages where the rock has undergone moderate to high pressures and temperatures.
Anomaly
Any statistical departure from the norm in numerical geoscience data, like geochemical or geophysical data, which may indicate the presence of mineralisation in
the underlying or nearby bedrock.
Archaean
The oldest rocks of the Precambrian era, older than about 2,500 million years.
Assay
To determine element content of a sample of a material usually carried out by a geochemical laboratory.
Auger
A method of shallow drilling, usually to 1-2 metres depth, using a rotary drill that uses a screw device to penetrate, break, and then transport the drilled material
to surface. Commonly used in soil geochemical sampling surveys in Western Australia.
Azimuth or Azi
Azi is short for azimuth. A surveying term that references the angle measured clockwise from either true or magnetic north. In this report it refers to the direction
of drilling measured clockwise from either true or magnetic north.
Basalt
A dark, fine-grained extrusive mafic igneous rock, composed essentially of plagioclase and pyroxene. Commonly prefixed by meta, eg, metabasalt, in metamorphosed geological terranes.
Basement
The oldest rocks recognized in a given area. A complex of metamorphic and igneous rocks that underlies all the sedimentary formations. Usually Precambrian or Paleozoic in age.
Basin
In tectonics, a circular, syncline-like depression of rock strata. In sedimentology, the site of accumulation of a large thickness of sediments.
Bedrock
Solid rock at the surface of the earth or at some depth beneath the regolith which has not been affected by weathering. Synonymous with basement rock.
BIF or banded iron formation. A compositionally banded iron-rich rock, comprised of bands of quartz and iron-rich minerals. It is generally considered to be a chemical precipitate formed in
seawater.
Black shale
A very dark, fine-grained, clastic sedimentary rock composed essentially of flakey clay minerals and carbonaceous matter that also commonly contains
sulphides.
BLEG
Bulk Leach Extractable Gold. A geochemical sampling and analytical method used in gold exploration. It involves the collection of large samples of fine-grained
regolith material. Gold values in BLEG are lower than total assays such as those of fire assays, as it analyzes only the fine-grained gold fraction and largely
ignores coarser and nuggety gold.
Boudinage
A structure formed by extension, whereby a rigid, competent tabular body, stretched and deformed amidst less competent surroundings, begins to break up and
form sausage-shaped boudins. Boudins are typical features of sheared veins and shear zones where, due to stretching along the shear foliation and shortening perpendicular to this, rigid bodies break up. Ductile deformation conditions also encourage boudinage.
Breccia
Rock composed of coarse angular fragments of rocks or minerals contained in a fine matrix (cementing material) that may be similar to or different from the composition of the larger fragments.
Caprock
A hard weathered regolith type on the top of a hill or upper slope protecting it from erosion. Examples include silcrete derived from weathering of ultramafic rocks and indurated ferruginous saprolite derived from weathering of disseminated sulphides.
Chert
A sedimentary form of amorphous or extremely fine-grained silica, partially hydrous, found in concretions and beds. In this report it is a quartz-rich variety of BIF that is commonly associated with more iron-rich varieties of BIF.
Cleavage
The tendency for some rocks or minerals to break along preferred planes of weakness, caused by the development of a planar fabric as a result of deformation.
Colluvium
Heterogeneous materials of any particle size, generally composed of soil and/or rock fragments, accumulated on the lower parts of slopes, transported there by
gravity, soil creep, sheet flow, rainwash, mudflows and solifluxion (ie, slow flow of water-logged soil down slope associated with alternating freezing and thawing).
Concordant
A lithology that is aligned parallel to the dominant regional litho-structural trend that might include foliation, bedding or metamorphic layering/banding.
Conductor
Any material which allows an electric current to pass through it. Examples include sulphides, graphitic sediments and salty water.
Conglomerate
A sedimentary rock consisting of rounded coarse rock clasts within a finer-grained sediment matrix that have become cemented together. Often deposited in
stream or river environments.
Costean
A trench generally cut perpendicular to the strike of a known ore zone or interpreted ore zone to expose the full width of the zone usually for geology mapping
and geochemical sampling purposes.
Craton
A large area of stable continental crust, composed of Precambrian crystalline basement rock, largely unaffected by plate margin activity since the end of the
Proterozoic.
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Crenulation
The angular intersection of two metamorphic foliations which may involve folding of the earlier mica foliations by the later foliation creating a distinctive
crenulated folding texture.
Cretaceous
The Cretaceous era was from 135 to 63 million years ago.
Cumulate
A textural term relating to igneous rocks with distinctive accumulations of crystals precipitated during the cooling and solidification of a magma. Cumulates are
typically found in ultramafic intrusions, in the base of large ultramafic lava tubes in komatiite and magnesium rich basalt flows and also in some granitic
intrusions.
Dacite
An intermediate, porphyritic, extrusive igneous rock comprised essentially of plagioclase with lesser quartz, biotite and hornblende.
Diamond drilling Method of obtaining cylindrical core of rock by drilling with a diamond set or diamond impregnated bit.
Diapir
A type of intrusion in which a more mobile and ductily-deformable material is forced into brittle overlying rocks. Diapirs can form anticlines, antiforms and domes.
Dilational Jog
A structural geology term to describe the zone of dilation associated with a bend (ie, jog) in a shear or fault zone.
Dip
The angle by which a rock unit or other planar feature deviates from the horizontal. The angle is measured in a plane perpendicular to the strike.
Discordant
A lithology that cross cuts at an angle to the dominant regional litho-structural trend that might include foliation, bedding or metamorphic layering/ banding.
Disseminated
Widely dispersed minerals in a rock body.
Diorite
An intermediate intrusive igneous rock comprised essentially of medium- to coarse-grained plagioclase and hornblende.
Dolerite
A mafic intrusive rock comprised essentially of medium-grained plagioclase and pyroxene and characterised by ophitic texture. Usually found in dykes or sills.
Dome
A round or elliptical convex upwarp of strata resembling a short anticline.
Dyke
A tabular body of intrusive igneous rock, crosscutting the host strata at an oblique angle.
Electromagnetic survey
A geophysical survey method that uses an induced electric current to measure variations in the local electromagnetic field of the earth below. Transmitted
electromagnetic fields are used to energise and detect conductive material, eg, massive sulphides, beneath the earth’s surface.
En echelon
Sub-parallel but offset pattern associated with a cluster or group of subsidiary structures generally at an angle, commonly 45o, to the overall strike trend of
larger host structure.
Enclave
A small zone or domain of one rock type contained within a much larger zone or domain of another rock type.
Epithermal
A term applied to deposits formed at shallow depths from ascending solutions of moderate temperatures.
Fault
A brittle shear or fracture in a rock along which there has been relative movement either vertically or horizontally.
Felsic
A descriptive term for light coloured rocks or minerals with high silica (plus or minus aluminium, sodium, potassium and calcium) content and low iron and
magnesium content.
Felsic volcanic
A volcanic rock essentially comprised of feldspar, quartz and feldspathoids and poor in iron and magnesium content.
Fold hinge
Portion of fold intersected by the fold axial surface and where the radius of curvature is smallest.
Foliation
Any planar set of minerals or banding of mineral concentrations including cleavage, found in a metamorphic rock.
Foliated
A rock texture used to describe a metamorphic rock with a foliation.
Foot Wall
The underlying side of a fault, orebody or stope.
g/t
grams per tonne
Gabbro
A black, coarse-grained, mafic intrusive igneous rock, composed of calcic feldspars and pyroxene. The intrusive equivalent of basalt.
Geochemical
Samples of soil, rock, stream sediments or subsurface material analysed for the metal commodity being sought and/or associated path finder elements.
Geophysical
Use of electrical techniques or the measure of natural phenomena e.g., magnetism and gravity, to assist in determining sub-surface geology.
Geotechnical
Incorporates eological, geophysical or geochemical data. Rock quality and structural investigations of rock masses.
Gossan
The weathered, generally ferruginous, expression of rocks that contain substantial sulphide mineralisation.
Granite
A coarse-grained, intrusive igneous rock composed of quartz, orthoclase feldspar, sodic plagioclase feldspar, and micas. Also sometimes a metamorphic product.
Granite Gneiss
A coarse-grained, regional metamorphosed granitoid rock that shows compositional banding and parallel alignment of felsic and mafic minerals.
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Granitoid
A term for a coarse grained felsic to intermediate igneous rock, resembling granite.
Graphitic
Containing graphite.
Gravity anomaly
The value of gravity left after subtracting from a gravity measurement the reference value based on latitude, and possibly the free-air and Bouguer corrections.
Greenschist Facies
Greenschist facies results from low temperature, moderate pressure metamorphism resulting in the diagnostic formation of chlorite and biotite at temperatures of
400 to 500° Celsius and depths of about 8 to 50 kilometers.
Greenstone
A general name for rocks, generally mafic or ultramafic, that comprise, or a derived from, a greenstone belt.
Greenstone belt
A belt containing variably metamorphosed ultramafic to mafic to felsic volcanic rock sequences and associated sedimentary rocks hosted within granitoids and
granitoid gneisses of stable Precambrian cratons. The rocks in the belt are commonly green.
Greisen
Greisen
A highly potassic granitic rock or pegmatite, intruded at less than 5 km depth, comprised of quartz, muscovite and topaz and lesser fluorite and tourmaline.
Sulphides are commonly present. Greisens are formed by skarn alteration of granite during the cooling stages of emplacement. A favourable host rock to gold and tin deposits.
Greywacke
A variety of dark, hard sandstone containing poorly-sorted, angular grains of quartz, feldspar, and small rock fragments or lithic fragments set in a compact, fine clay matrix.
Hanging Wall
The overlying side of a fault, orebody or stope.
High Magnesian Basalt
A basalt with a higher proportion of magnesium than thoeleiitic basalts, but less than that usually attributed to komatiites.
Hornfels
A descriptive term for the process whereby a rock has been thermally metamorphosed by high-temperature and low-pressure to a metamorphic rock of uniform
grain size showing no foliation. Usually formed by contact metamorphism close to an intrusive igneous rock body.
Igneous
A rock formed by congealing rapidly or slowly from a molten state.
Intermediate
A descriptive term for a rock or mineral with a moderate magnesium, iron content and silica content that is intermediate between felsic and mafic. Intrusion An
igneous rock body that has forced its way in a molten state into its surrounding country rock.
Komatiite
Magnesium-rich mafic to ultramafic extrusive rock.
Laterite
A term with the general connotation of an iron-rich weathered rock product, generally with an emphasis on tropical weathering conditions.
Laterite Profile
A vertical sequence of regolith facies that includes, from the bottom up, bedrock, saprock, saprolite, plasmic zone, mottled zone or ferruginous saprolite and
lateritic residuum (lateritic duricrust, lateritic gravel).
Lineation
Any linear arrangement of features found in a rock.
Lithology
A classified rock type based on a description of its mineral composition, grain size, structure, color as well as component parts.
Litho-stratigraphy
The systematic description of rocks that define a given stratigraphic rock package or setting.
Lode
A mineral deposit consisting of a zone of veins, veinlets, disseminations or planar breccias.
Mafic
A descriptive term for a rock or mineral with a moderate to high magnesium and iron content and corresponding low silica content.
Magnetic
A mineral, rock, object, area or locale possessing the properties of a magnet.
Magnetic anomaly
The value of the local magnetic field remaining after the subtraction of the dipole portion of the Earth’s field. In this report it refers to a distinctive magnetic
feature identified in airborne magnetic data.
Massive sulphide
A rock comprised of 50-100% sulphides.
Mesothermal
An environment of mineral formation at considerable depth within the Earth’s crust where temperature lies in the range of 200 to 3000C.
Metabasalt
Metamorphosed basalt.
Metagabbro
Metamorphosed gabbro.
Metamorphic
The mineralogical, structural and chemical changes
induced within solid rock through the actions of heat, pressure or the introduction of new chemicals.
Metasediment
Metamorphosed sediment.
Metavolcanics
Metamorphosed volcanic rock.
Metallogenic
Of or pertaining to metallogeny. A group of metallic ores peculiar to, or characteristic of, a defined geological domain.
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Mobile Metal Ion Survey
A method of sampling and geochemical assaying of soils. Unsieved soil samples are collected from a defined soil depth. Assaying involves sample attack using
extremely weak solutions of organic and inorganic compounds. The mobile metal ions held in solution in very low concentrations are then measured using ICP-MS analytical instrumentation. The method can provide a more focused geochemical expression of buried ore deposits, even in many types of transported
overburden at low detection levels.
Monzodiorite
A coarse-grained, intermediate igneous rock comprised of sodic-calcic plagioclase, orthoclase and mafic minerals that is intermediate in composition between
monzonite and diorite.
Oblique Reverse Fault
A fault that combines some strike slip motion with some reverse-slip motion.
Outcrop
A segment of bedrock exposed to the atmosphere.
Overburden
The loose soil, silt, sand, gravel, or other unconsolidated material overlying bedrock, either transported or formed in place.
oz
Ounce
Palaeocene
A geological epoch extending from 65.5 to 55.8 million years ago.
Peridotite
A general term for intrusive ultramafic igneous rocks dominantly consisting of olivine and lacking feldspar.
Porphyry
A variety of intrusive igneous rock consisting of large-grained crystals, such as feldspar or quartz, dispersed in a fine-grained feldspathic matrix or groundmass.
The larger crystals are called phenocrysts. The rocks are generally indicative of emplacement at shallow levels within the earth’s crust.
ppb
parts per billion
ppm
parts per million
Proterozoic
An era of geological time spanning the period from 2,500 million years to 570 million years before present.
RAB Drilling
Rotary Air Blast. A relatively inexpensive and inaccurate drilling technique suitable for testing poorly consolidated or weathered rocks. The sample is brought to
the surface by compressed air from outside the drill rods.
Reef
A mineralised rock unit or structure containing economic concentrations of metal.
Regolith
Any in situ deeply weathered rock or transported sedimentary material lying on top of bedrock. It includes aeolian deposits, lake sediments, soil, alluvium,
colluvium, cap rocks, laterite profiles and rock fragments weathered from the bedrock.
Reverse Circulation Drilling
A drilling method in which the fragmented sample is brought to the surface inside the drill rods, thereby reducing contamination.
Reverse Fault
A fault with reverse-slip motion. Synonymous with thrust fault.
Rheology
The study of the deformation (change in form) and the flow of matter, embracing elasticity, viscosity, and plasticity.
Rheological contrast
The contrasting ability of different rock types to deform and flow relative to one another when subjected to pressure and temperature.
Rock chip sampling
The collection of representative samples of rock fragments within a limited area.
Sandstone
A detrital sedimentary rock composed of grains from 1/16 to 2 millimeters in diameter, dominated in most sandstones by quartz, feldspar, and rock fragments,
bound together by a cement of silica, carbonate, or other minerals or a matrix of clay minerals.
Saprock
Compact, slightly weathered rock with low porosity; defined as having less than 20% of its minerals weathered.
Saprolite
Weathered bedrock in which 20-100% of the minerals are weathered, generally mostly to clays and iron oxides, and the fabric of the parent rock is retained.
Schist
A metamorphic rock characterised by strong foliation or schistosity. Schistose rock type usually named along with major mineral components, eg, tremolite-chlorite schist.
Scree
Broken rock fragments on the slope of a hill or mountain.
Sediment
A rock formed by the accumulation and cementation of mineral grains transported by wind, water, or ice to the site of deposition or chemically precipitated at the
depositional site.
Shale
A fine grained, laminated sedimentary rock formed from clay, mud and silt.
Shear
The deformation and dislocation of rocks, primarily by ductile plastic means, in response to applied stresses during high heat and pressure conditions.
Skarn
A rock of complex mineralogical composition, formed by contact metamorphism and metasomatism of carbonate rocks.
Silcrete
Silica-rich indurated regolith. Commonly forms a caprock.
Sill
A sheet of igneous rock which is flat-lying or has intruded parallel to strata.
Siltstone
A sediment comprised of silt-sized clastic particles.
Sinistral
Lateral movement on a fault whereby the far side block moves to the left, relative to the near side.
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Soil sampling
The determination of relative or absolute abundances of elements in soil
Spinifex Texture
An unusual volcanic texture consisting of very coarse needle-like olivine or pyroxene crystals forming a distinctive criss-crossing pattern. A texture common to,
and often diagnostic of, Archaean komatiite volcanic sequences.
Stope
Underground excavations where the ore body is extracted on the plane of the reef.
Stoping
The process of mining the ore body on the plane of the reef.
Stockwork
A network of closely spaced small veins and/or fractures in a rock body, commonly filled by quartz and calcite and sometimes economic minerals.
Stratigraphy
The science of the description, correlation, and classification of strata in sedimentary rocks, including the interpretation of the depositional environments of
those strata.
Strike
The horizontal line contained in any planar feature (inclined bed, dike, fault plane, etc.); also the geographic direction of this horizontal line. Measured as the
angle between True North and the horizontal line.
Strike Length
The horizontal distance along the long axis of a structural surface, rock unit, mineral deposit or geochemical anomaly.
Structure
The three dimensional arrangement and geometry of geological contacts, discontinuities and deformation features, such as bedding, stratification, joints, faults, shear zones, dykes, plutons, folds, foliation and lineation.
Sub Audio Magnetics Survey
A geophysical method that channels electrical current into conductive sub-surface features, generating an electromagnetic field that is detected at the surface. It
produces high-resolution images of conductivity structure in the regolith and bedrock that are useful to mineral exploration.
Subcrop
Bedrock fragments on the surface in an area of thin overburden
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PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
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www.stantons.com.au
Liability limited by a scheme approved
under Professional Standards Legislation
14 June 2012 The Directors Alicanto Minerals Limited 181 Roberts Road SUBIACO WA 6008 Dear Sirs RE: INVESTIGATING ACCOUNTANT'S REPORT 1. Introduction This report has been prepared at the request of the Directors of Alicanto Minerals Limited (“Alicanto” or “the Company”) for inclusion in a Prospectus to be dated on or around 19 June 2012 (“the Prospectus”) relating to the proposed issue by Alicanto of 12,000,000 shares to be issued at a price of 20 cents per share to raise a gross $2,400,000.
2. Basis of Preparation This report has been prepared to provide investors with information on the unaudited historical results, the unaudited condensed statement of financial position (balance sheet) of Alicanto and the unaudited pro-forma statement of financial position of Alicanto as noted in Appendix 2. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial reports in accordance with the Corporation Act 2001. This report does not address the rights attaching to the securities to be issued in accordance with the Prospectus, nor the risks associated with the investment. Stantons International Securities has not been requested to consider the prospects for Alicanto, the securities on offer and related pricing issues, nor the merits and risks associated with becoming a shareholder and accordingly, has not done so, nor purports to do so. Stantons International Securities accordingly takes no responsibility for those matters or for any matter or omission in the Prospectus, other than responsibility for this report. Risk factors are set out in Sections 1 and 3 of the Prospectus.
3. Background Alicanto was incorporated as Cerberus Minerals Limited (“Cerberus”) on 3 February 2011 with an initial issued capital of 1 share. In August 2011, the Company issued 10,350,000 ordinary shares to the founders and promoters at an issue price of 0.001 cent each to raise a gross $10,350. To 31 August 2011 a further 3,000,000 shares were issued to seed investors at 10 cents each to raise a gross $300,000. Thus the total gross amount received to 31 August 2011 was $310,350. To 31 August 2011, the Company had issued 6,200,000 share options exercisable at 20 cents each on or before 31 July 2015 with a deemed fair value of $248,258 and issued 500,000 share options exercisable at 30 cents each on or before 31 July 2015 with a deemed fair value of $16,636. Following shareholder approval in May 2012, the Company changed its name to Alicanto Minerals Limited. In May 2012, the Company issued 500,000 shares at 10 cents each to raise a gross $50,000. In May 2012, the Company issued 3,650,000 share options exercisable at 20 cents each on or before 31 May 2016 and the deemed fair value of such share options was calculated at $148,269. In May 2012, the Company cancelled 350,000 share options exercisable at 20 cents each on or before 31 July 2015. On or about 19 August 2011, the Company entered into an option agreement at a cost of $3,500 with Maka Minerals Pty Ltd (“Maka”) pursuant to which Alicanto (then called Cerberus) had the option to acquire a 70% interest in exploration permits E51/1442 and E51/1443 in Western Australia. The exercise price is the issue of 60,000 shares in Alicanto and the payment of $40,000 to Maka. The original option period was to 31
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December 2011 but this was extended to 30 June 2012. An extension of option payment totalling $3,500 was made on 28 December 2011. The option expiry period has been extended to 30 September 2012 at no additional cost. On or about 19 August 2011, the Company entered into an option agreement at a cost of $1,500 with Maka pursuant to which Alicanto (then called Cerberus) had the option to acquire a 70% interest in exploration permits E31/961 in Western Australia. The exercise price is the issue of 30,000 shares in Alicanto and the payment of $15,000 to Maka. The original option period was to 31 December 2011 but this was extended to 30 June 2012. An extension of option payment totalling $1,500 was made on 28 December 2011. The option expiry period has been extended to 30 September 2012 at no additional cost. On or about 19 August 2011, the Company entered into an option agreement at a cost of $3,000 with MPF Exploration Pty Ltd (“MPF”) pursuant to which Alicanto (then called Cerberus) had the option to acquire a 70% interest in exploration permits E31/619 in Western Australia. The exercise price is the issue of 40,000 shares in Alicanto and the payment of $20,000 to MPF. The original option period was to 31 December 2011 but this was extended to 30 June 2012. An extension of option payment totalling $3,000 was made on 28 December 2011. An extension of option payment totalling $1,500 was made on 28 December 2011. The option expiry period has been extended to 30 September 2012 at no additional cost. On or about 19 August 2011, the Company entered into an option agreement at a cost of $2,000 with MPF pursuant to which Alicanto (then called Cerberus) had the option to acquire a 70% interest in exploration permits E51/1365 in Western Australia. The exercise price is the issue of 20,000 shares to MPF and the payment of $15,000 to MPF. The original option period was to 31 December 2011 but this was extended to 30 June 2012. An extension of option payment totalling $2,000 was made on 28 December 2011. The option expiry period has been extended to 30 September 2012 at no additional cost. To exercise the above options Alicanto is to be given conditional approval for Alicanto to be admitted to the Official List of the ASX and where applicable the quotation of the various consideration shares and the conditions to such admission are being reasonably capable of satisfaction. It is expected that the options will be exercised on the Company being granted conditional listing.
In June 2012, the Company and Marcus Harden entered into an employment agreement whereby Marcus Harden was engaged as Chief Geologist of the Company and commences on the date the Company is admitted to the ASX. The annual salary will be $200,000, inclusive of statutory superannuation and is to be reviewed annually. Three months written notice is required to terminate the agreement.
In May 2012, the Company entered into a consultancy agreement with Black Peak Holdings Pty Ltd for the provision of management and consultancy services using inter-alia the services of Stephen Parsons and Hamish Halliday. The agreement is for a two year period and commences on the date which the Company is admitted to the ASX. Market rates are to be paid. 28 days notice is required to be given by the Company to terminate the agreement. Potential investors should read the Prospectus in full that includes an Independent Geologist’s Report and a Solicitor’s Report on Mining Tenements. We make no comments as to ownership or values of the proposed mineral tenement interests of Alicanto. Further details on all significant contracts entered into by the Company since incorporation are referred to in the Material Contracts Section 8 included in the Prospectus.
4. Scope of Examination You have requested Stantons International Securities to prepare an Investigating Accountant’s Report on:
a) The consolidated results (statement of comprehensive income) of Alicanto for the period from
incorporation to 30 April 2012; b) The statement of financial position of Alicanto as at 30 April 2012; and c) The pro-forma statement of financial position of Alicanto at 30 April 2012 adjusted to include funds to be
raised by the Prospectus and the completion of transactions referred to in note 2 of Appendix 3. All of the financial information referred to above has not been audited however has been subject to audit review. The directors of Alicanto are responsible for the preparation and presentation of the historical and pro-forma financial information, including the determination of the pro-forma transactions. We have however examined the financial statements and other relevant information and made such enquiries, as we considered
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necessary for the purposes of this report. The scope of our examination was substantially less than an audit examination conducted in accordance with Australian Auditing Standards and accordingly, we do not express such an opinion. Our examination included:
a) discussions with directors and other key management of Alicanto; b) review of contractual arrangements; c) a review of publicly available information; and d) a review of work papers, accounting records and other documents.
5. Opinion In our opinion, the pro-forma consolidated statement of financial position as set out in Appendix 2 presents fairly, the pro-forma consolidated statement of financial position of Alicanto as at 30 April 2012 in accordance with the accounting methodologies required by Australian Accounting Standards on the basis of assumptions and transactions set out in Appendix 3. No opinion is expressed on the historical results and statements of financial position, as shown in Appendix 1, except to state that nothing has come to our attention which would require any further modification to the financial information in order for it to present fairly, the statements of financial position as at 30 April 2012 and the results of the period identified. To the best of our knowledge and belief, there have been no other material items, transactions or events subsequent to 31 May 2012 that have come to our attention during the course of our review which would cause the information included in this report to be misleading.
6. Other Matters At the date of this report, Stantons International Securities or Stantons International Audit and Consulting Pty Ltd (“Stantons International”) does not have any material interest in Alicanto either directly or indirectly, or in the outcome of the offer. Stantons International was appointed as auditors of Alicanto in May 2011. Stantons International Securities and Stantons International were not involved in the preparation of any other part of the Prospectus, and accordingly, make no representations or warranties as to the completeness and accuracy of any information contained in any other part of the Prospectus. Stantons International Securities consents to the inclusion of this report (including Appendices 1 to 3) in the Prospectus in the form and content in which it is included. At the date of this report, this consent has not been withdrawn. Yours faithfully
STANTONS INTERNATIONAL SECURITIES
J P Van Dieren - FCA Director
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INVESTIGATING ACCOUNTANT’S REPORT
APPENDIX 1 – UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Alicanto from incorporation to
30 April 2012 $
Interest income - Share based payments 264,894 General, legal and administration costs Exploration costs expensed
44,246 54,441
Net (loss) before tax 363,581 Income tax expense attributable to net loss -
Net (loss) after tax 363,581 Other Comprehensive Income -
Total Comprehensive (Loss) for the period 363,581
APPENDIX 2 – UNAUDITED CONDENSED STATEMENTS OF FINANCIAL POSITION
Note Alicanto
30 April 2012 $
Pro-forma Alicanto
30 April 2012 $
Current Assets Cash assets 3 221,663 2,313,163
Total Current Assets 221,663 2,313,163
Non Current Assets Capitalised acquisition costs 4 - 125,000
Total Non Current Assets - 125,000
Total Assets 221,663 2,438,163
Current Liabilities Trade and other payables 5 10,000 -
Total Current Liabilities 10,000 -
Total Liabilities 10,000 -
Net Assets 211,663 2,438,163
Equity Issued capital 6 310,350 2,536,850 Option reserve 7 264,894 413,163 Accumulated losses 8 (363,581) (511,850)
Total Equity 211,663 2,438,163
Notes to and forming part of the above unaudited condensed statement of financial position are attached.
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INVESTIGATING ACCOUNTANT’S REPORT
APPENDIX 3
CONDENSED NOTES TO THE UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME AND CONDENSED STATEMENTS OF FINANCIAL POSITION
1. Statement of Significant Accounting Policies (a) Basis of Accounting The unaudited condensed Statement of Comprehensive Income and unaudited condensed
Statements of Financial Position have been prepared in accordance with applicable accounting standards, the Corporations Act 2001 and mandatory professional reporting requirements in Australia (including the Australian equivalents of International Financial Reporting Standards) and we have made such disclosures as considered necessary. They have also been prepared on the basis of historical cost and do not take into account changing money values. The accounting policies have been consistently applied, unless otherwise stated. The financial statements have been prepared on a going concern basis that is dependent on the IPO being successful and/or the Company raising additional seed capital to continue in business.
(b) Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any non assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantially enacted as at balance date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxation profit or loss. Deferred income tax assets are recognised to the extent that it is probable that the future tax profits will be available against which deductible temporary differences will be utilised. The amount of the benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in the income taxation legislation and the anticipation that the economic unit will derive sufficient future assessable income to enable the benefits to be realised and comply with the conditions of deductibility imposed by law.
(c) Exploration, Evaluation and Development Expenditure
Exploration and evaluation expenditure and acquisition costs on areas of interest are normally be expensed but will be assessed on a case by case basis and may be capitalised to areas of interest and carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future. Where projects have advanced to the stage that directors have made a decision to mine, they are classified as development properties. When further development expenditure is incurred in respect of a development property, such expenditure is carried forward as part of the cost of that development property only when substantial future economic benefits are established. Otherwise such expenditure is classified as part of the cost of production or written off where production has not commenced.
(d) Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value, less where applicable, any accumulated depreciation and impairment losses. The carrying amount of the plant and equipment is reviewed annually by the Directors to ensure it is not in excess of the recoverable amount of these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employed and their subsequent disposal. The expected net cash flows have been discounted to their present value in determining recoverable amounts.
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Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight line basis over their useful lives to the Company commencing from the time the asset is held ready for use. The asset’s residual value and useful lives are reviewed and adjusted if appropriate, at each balance sheet date. An assets’ carrying value is written down immediately to its recoverable amount if the asset’s carrying value is greater than the estimated recoverable amount. Gains and losses on disposal are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement.
(e) Trade and other accounts payable Trade and other accounts payable represent the principal amounts outstanding at balance date,
plus, where applicable, any accrued interest. (f) Recoverable Amount of Non Current Assets The carrying amounts of non-current assets are reviewed annually by directors to ensure they
are not in excess of the recoverable amounts from those assets. The recoverable amount is assessed on the basis of the expected net cash flows, which will be received from the assets employed and subsequent disposal. The expected net cash flows have been or will be discounted to present values in determining recoverable amounts.
(g) Operating Revenue Revenue represents interest received and reimbursements of exploration expenditures.
(h) Issued Capital Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity
as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.
(i) Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave, and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee
benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used.
(j) Share Based Payments
The Group provides benefits to employees (including directors) of the Company in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled transactions”). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an internal valuation using Black-Scholes or Binomial option pricing models.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“vesting date”). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors of the Company, will ultimately vest. This opinion is
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formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where
vesting is conditional upon a market condition. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award.
(k) Critical accounting estimates and judgements
In preparing Financial Reports, the Company has been required to make certain estimates and assumptions concerning future occurrences. There is an inherent risk that the resulting accounting estimates will not equate exactly with actual events and results.
Significant accounting judgements In the process of applying the Company’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements: Capitalisation of exploration and evaluation expenditure The Company has capitalised significant exploration, evaluation and acquisition expenditure on the basis either that this is expected to be recouped through future successful development (or alternatively sale) of the Areas of Interest concerned or on the basis that it is not yet possible to assess whether it will be recouped. Significant accounting estimates and assumptions The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:
Impairment of capitalised exploration and evaluation expenditure The future recoverability of capitalised exploration, evaluation and acquisition expenditure is dependent on an number of factors, including whether the Company decides to exploit the related lease itself, or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, costs of drilling and production, production rates, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.
(l) Asset retirement obligations
The Company’s mineral exploration and development activities are subject to various Australian laws and regulations regarding the protection of the environment. As a result of these, the Company is expected to incur expenses from time to time to discharge its obligations under these laws and regulations.
Reclamation and closure costs are estimated based on the Company’s interpretation of current regulatory and operating licence requirements and measured at fair value. Fair value is determined based on the net present value of future cash expenditures expected upon reclamation and closure and subsequent annual recognition of an accretion amount on the discounted liability. Reclamation and closure costs are capitalised as mine development costs and amortised over the life of the mine on a unit-of-production basis.
2 Actual and Proposed Transactions to Arrive at Pro-forma Unaudited Statement of Financial Position
Actual and proposed transactions adjusting the 30 April 2012 unaudited condensed Statement of
Financial Position of Alicanto in the pro-forma Statement of Financial Position of Alicanto are as follows:
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(a) The Company issuing 500,000 shares at 10 cents each to raise a gross $50,000 and the issue of
3,650,000 share options at a deemed fair value of $148,269; (b) The issue of 12,000,000 shares at 20 cents each to raise a gross $2,400,000 pursuant to the
Prospectus; (c) The Company paying $90,000 and issuing 150,000 shares at 20 cents each ($30,000) to relating
to the exercise of various options to acquire a 70% interest in various tenements at a deemed cost of $120,000;
(d) The payment of 30 April 2012 accounts payable ($10,000); (e) The payment of cash expenses of the Prospectus issue totalling an estimated $253,500 and the
expensing of such costs against share equity and incurring stamp duty costs not expected to exceed $5,000.
Note 2 Unaudited
Alicanto 30 April 2012
$
Unaudited Alicanto
Pro-forma 30 April 2012
$ 3. Cash Assets
The movements in cash assets are as follows: Unaudited 30 April 2012 221,663 221,663 Issue of seed shares (a) - 50,000 Issue of shares pursuant to the Prospectus (b) - 2,400,000 Payment to vendors (c) - (90,000) Payment of payables (d) - (10,000) Prospectus and other costs (e) - (258,500)
221,663 2,313,163
4. Capitalised Acquisition costs
Balance as at 30 April 2012 - - Further acquisition costs (cash and shares) (c)(e) - 125,000
- 125,000
5. Trade and other payables Trade and other payables 10,000 10,000 Less: Payment of payables (d) - (10,000)
10,000 -
6. Issued Capital
10,350,001 ordinary shares as at 30 April 2012 310,350 310,350 500,000 shares at 10 cents each (a) - 50,000 12,000,000 shares pursuant to the Prospectus (b) - 2,400,000 150,000 shares to vendors (c) - 30,000
310,350 2,790,350 Less: estimated share issue costs (e) - (253,500)
Pro-forma (23,000,001 ordinary fully paid shares) 310,350 2,536,850
7. Option Reserve Balance as at 30 April 2012 264,894 264,894 Issue of 3,650,000 share options (a) - 148,269
264,894 413,163
In total there are 5,850,000 share options exercisable at 20 cents, on or before 31 July 2015, 500,000 share options exercisable at 30 cents each on or before 31 July 2015 and 3,650,000 share options exercisable at 20 cents, on or before 31 May 2016.
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Note 2 Unaudited Alicanto
30 April 2012
$
Unaudited Alicanto
Pro-forma 30 April 2012
$
8. Accumulated Losses Balance as at 30 April 2012 363,581 363,581 Issue of share options (a) - 148,269
363,581 511,850
9. Contingent Liabilities and Commitments
Based on discussions with the Directors, to our knowledge, the Company has no other material commitment or contingent liabilities not otherwise disclosed in this Investigating Accountant’s Report (refer Background section 3) and in the Prospectus. Investors should read the Independent Geologist’s Report, the Solicitor’s Report on Mining Tenements and the Material Contracts section 8 for further possible contingencies and commitments. A number of tenements may be subject to possible native title claims. For details on proposed exploration commitments on mineral tenements, refer to the Independent Geologist’s Report in the Prospectus and the Investment Overview (Use of Funds) section of the Prospectus.
10. Employment and Consultancy Contacts Refer Background Section 3 of this report for the details on fees payable for geological, management, and consultancy services. In addition Director Fees are payable. The Company is also committed to pay for the provision of administration, bookkeeping and corporate services at a monthly fee of $3,000 plus GST commencing on the date which the Company is admitted to the ASX.
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18 June 2012 The Board of Directors Alicanto Minerals Limited 181 Roberts Road SUBIACO WA 6008 Dear Sirs
SOLICITOR’S REPORT ON TENEMENTS
This Report is prepared for inclusion in a prospectus for the issue of 12,000,000 fully paid ordinary shares (Shares) in the capital of Alicanto Minerals Limited (Company) at an issue price of $0.20 cents per share to raise $2,400,000 (Prospectus).
1. SCOPE
We have been requested to report on certain mining tenements in which the Company has an interest (the Tenements). The Tenements are located in Western Australia.
A schedule of the Tenements is attached to and forms part of this report (Schedule). Part I of the Schedule contains a list of the Tenements. Part II of the Schedule contains a summary of the status of the native title claims existing over the Tenements.
2. SEARCHES
For the purposes of this Report, we have conducted searches and made enquiries in respect of all of the Tenements as follows.
(a) We have obtained searches of the Tenements from the registers maintained by the Western Australian Department of Mines and Petroleum (DMP). These searches were conducted on 18 June 2012. Key details on the status of the Tenements are set out in Part I of the Schedule.
(b) We have obtained extracts of registered native title claims, native title determinations and Indigenous Land Use Agreements (ILUAs) that apply to the Tenements, as determined by the National Native Title Tribunal (NNTT). This material was obtained on 21 May 2012. Details of native title
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claims, native title determinations and ILUAs are set out in Section 7 of this Report and Part II of the Schedule.
(c) We have obtained searches from the online Aboriginal Heritage Enquiry System (AHE) maintained by the Western Australian Department of Indigenous Affairs (DIA) for Aboriginal sites recorded in the Register of Aboriginal sites that overlap the Tenements. This material was obtained on 21 May 2012. Key details of Aboriginal sites identified as a result of our searches are set out in Part I of the Schedule.
(d) We have obtained from the DMP Tengraph Quick Appraisals of the Tenements. This material was obtained on 21 May 2012.
(e) We have reviewed all material agreements relating to the Tenements provided to us or registered as dealings against the Tenements as at the date of the DMP searches and have summarised the material terms (details of which are set out in Section 8.1 of the Prospectus).
3. OPINION
As a result of our searches and enquiries, but subject to the assumptions and qualifications set out in this Report, we are of the view that, as at the date of the relevant searches:
(a) (Company’s Interest): this Report provides an accurate statement as to the Company’s interest in the Tenements;
(b) (Title and Good Standing): all of the Tenements have been granted and are in good standing as far as the payment of rent or incurring of expenditure is concerned; and
(c) (Third party interests): this Report provides an accurate statement as to third party interests, including encumbrances, in relation to the Tenements.
4. EXECUTIVE SUMMARY
Subject to the qualifications and assumptions in this Report, we consider the following to be material issues in relation to the Tenements:
(a) Company’s Interest: The Company does not have a registered interest in the Tenements. However, the Company holds an equitable interest in these Tenements pursuant to four binding terms sheets pursuant to which the Company acquired an option to acquire each of the Tenements from their holders (Terms Sheets). The material terms of the option agreements are set out in Section 8.1 of the Prospectus.
(b) (Caveats): Pursuant to the Terms Sheet, the Company is entitled to lodge caveats over the Tenements in order to protect its interests in the Tenements under those agreements. On 14 June 2012 the Company lodged caveats at the DMP to protect its interests in the Tenements.
(c) Third party interests: There are no third party dealings registered against the Tenements as at the date of our search of the DMP Register.
(d) Material contracts: The Company’s interest in the Tenements arises pursuant to option agreements entered into by the Company on 19 August 2011. The option agreements are summarised in Section 8.1 of
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the Prospectus. We have not reviewed any other agreements relating to the Tenements.
(e) Native title: There are native title claims is registered against some of the Tenements. Further details are provided in Parts I and II of the Schedule.
(f) Aboriginal heritage sites: There are areas and objects of Aboriginal heritage registered on some of the Tenements. Further details are provided in Part I of the Schedule.
(g) (Pastoral Lease): all of the Tenements overlap with pastoral leases as follows:
(i) E51/1365 - pastoral lease 3114/1088 (Killara);
(ii) E31/619 and E31/961 - pastoral lease 3114/707 (Yerilla);
(iii) E51/1442 – pastoral lease 3114/598 (Sherwood); and
(iv) E51/1443 – pastoral lease 3114/598 (Sherwood) and pastoral lease 3114/820 (Murchison Downs).
We are not aware of any agreements nor have we been provided with any agreements in relation to the Pastoral Leases overlapping with the above Tenements. Further details are set out in Section 8 of this Report and Part I of the attached Schedule.
5. DESCRIPTION OF THE TENEMENTS
The Tenements comprise five (5) granted exploration licences granted under the Mining Act 1978 (WA) (Mining Act). Schedule I provides a list of the Tenements. The following provides a description of the nature and key terms of exploration licences as set out in the Mining Act.
5.1 Exploration Licence
Application: A person may lodge an application for an exploration licence and the Minister decides whether to grant the application. An application for an exploration licence (unless a reversion application) cannot be legally transferred and continues in the name of the applicant.
Rights: The holder of an exploration licence is entitled to enter the land and undertake operations for the purposes of exploration for minerals.
Term: An exploration licence has a term of 5 years from the date of grant. The Minister may extend the term by a further period of 5 years followed by a further period or periods of 2 years.
Where an exploration licence is transferred before a renewal application has been determined, the transferee is deemed to be the applicant.
Rent: The holder of an exploration licence is required to pay an annual rent to the DMP. A tenement is liable to forfeiture where rent is not paid when due.
Retention Status: The holder of an exploration licence granted after 10 February 2006 may apply for approval of retention status for the exploration licence. The Minister may approve the application where there is an identified mineral resource within the exploration licence but it is impractical to mine the resource for prescribed reasons. Where retention status is granted, the minimum
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expenditure requirements are reduced in the year of grant and cease in future years. However, the Minister has the right to impose a programme of works or require the holder to apply for a mining lease.
Conditions: Exploration licences are granted subject to various standard conditions, including conditions relating to minimum expenditure, the payment of prescribed rent and royalties and observance of environmental protection and reporting requirements. A failure to comply with these conditions may lead to forfeiture of the exploration licence.
Relinquishment: The holder of an exploration licence granted or applied for before 10 February 2006 must relinquish not less than half of the blocks comprising the licence at the end of the third year. A further relinquishment of not less than half of the remaining blocks is required at the end of the fourth year. The holder of an exploration licence applied for and granted after 10 February 2006 must relinquish not less than 40% of the blocks comprising the licence at the end of the fifth year. A failure to lodge the required partial surrender could render the tenement liable for forfeiture.
Priority to apply for Mining Lease: The holder of an exploration licence has priority to apply for a mining lease over any of the land subject to the exploration licence. Any application for a mining lease must be made prior to the expiry of the exploration licence. The exploration licence remains in force until the application for the mining lease is determined.
Conversion to mining lease: An application for conversion of an exploration licence to one or more mining leases must be accompanied by a notice of intent to commence productive mining operations or a “mineralisation report” prepared by a qualified person and a statement setting out information about proposed mining operations. A mining lease accompanied by a “mineralisation report” will only be approved where the Director Geological Survey considers that there is a reasonable prospect that the mineralisation identified will result in a mining operation. Upon grant, a mining lease remains in force for a period of 21 years and may be renewed for successive periods of 21 years.
(Under Expenditure and Forfeiture): The holder of an exploration licence must comply with the prescribed minimum expenditure conditions unless the holder has been granted an exemption (in whole or part) from those conditions by the Minister. To obtain an exemption, the holder of an exploration licence must apply to the Minister for the exemption before the end of the tenement year to which the minimum expenditure relates, or within 60 days after the end of that tenement year (unless an extension has been granted).
There are prescribed grounds upon which the Minister may grant an exemption, set out in the Mining Act. If the exemption is granted, the Minister will issue a Certificate of Exemption and the holder will be deemed to be relieved to the extent, and subject to the conditions, specified in the certificate.
If the exemption is refused, the DMP will commence forfeiture proceedings and the Minister may declare the tenement to be forfeited or may impose a fine in lieu of forfeiture or decide to take no further action. Where the Minister has imposed a fine, if the fine is not paid by the date specified by the Minister, or within 30 days of written notice of the fine being imposed, the licence is forfeited.
Transfer: No legal or equitable interest in an exploration licence can be transferred or otherwise dealt with during the first year of its term without the prior written consent of the Minister. Thereafter, there is no restriction on transfer or other dealing.
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6. ABORIGINAL HERITAGE
There are areas or objects of Aboriginal heritage located on the Tenements.
We have obtained searches from the online Aboriginal Heritage Enquiry System maintained by the department for Indigenous Affairs (DIA) for the Aboriginal sites registered on the Western Australian Register of Aboriginal sites over the Tenements. Aboriginal sites were identified from our searches on some of the Tenements. Further details are set out in Part I of the attached Schedule. However, there is no obligation under the relevant legislation to register sites or objects and the exact location of Aboriginal sites within the area of a known site cannot be ascertained from these searches.
We have not obtained information from the Commonwealth in connection with any places, areas and objects, which are the registered or recognised in the National Heritage List, the Commonwealth Heritage List or other heritage lists or registers maintained by the Commonwealth.
The Company must ensure that it does not breach the Commonwealth and applicable State legislation relating to Aboriginal heritage as set out below. To ensure that it does not contravene such legislation, it would be prudent for the Company (and it would accord with industry practice and Aboriginal expectations) to conduct heritage surveys to determine if any Aboriginal sites or objects exist within the area of the Tenements. Any interference with these sites or objects must be in strict conformity with the provisions of the relevant legislation. It may also be necessary for the Company to enter into separate arrangements with the traditional owners of the sites.
6.1 Commonwealth Legislation
The Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) (Commonwealth Heritage Act) is aimed at the preservation and protection of any Aboriginal areas and objects that may be located on the Tenements.
Under the Commonwealth Heritage Act, the Minister for Aboriginal Affairs may make interim or permanent declarations of preservation in relation to significant Aboriginal areas or objects, which have the potential to halt exploration activities. Compensation is payable by the Minister for Aboriginal Affairs to a person who is, or is likely to be, affected by a permanent declaration of preservation.
It is an offence to contravene a declaration made under the Commonwealth Heritage Act.
6.2 Western Australian Legislation
Tenements are granted subject to a condition requiring observance of the Aboriginal Heritage Act 1972 (WA) (WA Heritage Act).
The WA Heritage Act makes it an offence to alter or damage sacred ritual or ceremonial Aboriginal sites and areas of significance to Aboriginal persons.
The Minister’s consent is required where any use of land is likely to result in the excavation, alteration or damage to an Aboriginal site or any objects on or under that site.
Aboriginal sites may be registered under the WA Heritage Act. However, there is no requirement for a site to be registered and the WA Heritage Act protects all registered and unregistered sites.
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7. NATIVE TITLE
7.1 Introduction
This section of the Report examines the effect of native title on the Tenements.
The existence of native title rights held by indigenous Australians was first recognised in Australia in 1992 by the High Court in the case Mabo v.
Queensland (No.2) (1992) 175 CLR 1 (Mabo No.2).
Mabo no. 2 held that certain land tenure existing as at the date of that case, including mining tenements, where granted or renewed without due regard to native title rights, were invalid.
As a result of Mabo No. 2, the Native Title Act 1993 (Cth) (NTA) was passed to:
(a) provide a process for indigenous people to lodge claims for native title rights over land, for those claims to be registered by the National Native Title Tribunal (NNTT) and for the Courts to assess native title claims and determine if native title rights exist. Where a Court completes the assessment of a native title claim, it will issue a native title determination that specifies whether or not native title rights exist;
(b) provide (together with associated State legislation) that any land tenures granted or renewed before 1 January 1994 were valid despite Mabo no. 2. This retrospective validation of land tenure was subsequently extended by the NTA to include freehold and certain leasehold (including pastoral leases) granted or renewed before 23 December 1996; and
(c) provide that an act that may affect native title rights (such as the grant or renewal of a mining tenement) carried out after 23 December 1996 (a Future Act) must comply with certain requirements for the Future Act to be valid under the NTA. These requirements are called the Future Act
Provisions.
The Future Act Provisions are summarised in Section 7.2 below, following which the Report identifies:
(a) native title claims and determinations that are registered against the Tenements (see Section 7.3);
(b) Tenements which have been retrospectively validated under the NTA as being granted before 23 December 1996 (see Section 7.4);
(c) Tenements which have been granted after 23 December 1996 and as such will need to have been granted following compliance with the Future Act Provisions to be valid under the NTA. This Report assumes that the Future Act Provisions have been complied with in relation to these Tenements (see Section 7.4); and
(d) Tenements which are yet to be granted and which may need to comply with the Future Act Provisions in order to be valid under the NTA (see Section 7.4).
Note that the grant of a Tenement does not need to comply with the Future Act Provisions if in fact native title has never existed over the land covered by the Tenement, or has been validly extinguished prior to the grant of the Tenement. We have not undertaken the extensive research needed to determine if in fact
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native title does not exist, or has been validly extinguished in relation to the Tenements.
Unless it is clear that native title does not exist (e.g. in relation to freehold land), the usual practice of the State is to comply with the Future Act Provisions when granting a Tenement. This ensures the grant will be valid in the event a court determines that native title rights do exist over the land subject to the Tenement and as such, the Future Act Provisions apply.
Where a Tenement has been retrospectively validated or validly granted under the NTA, the rights under the Tenement prevail over any inconsistent native title rights.
Compensation
The Mining Act provides that holders of mining tenements are liable for compensation in relation to native title. As a result, if it is determined that native title exists over any of the land the subject of the Tenements and the holders of the native title apply to the Federal Court for compensation, the holder of the mining tenements may be liable and directed to pay any compensation determined. To date, the Federal Court has not awarded compensation in relation to native title (please note that few compensation claims have been lodged).
7.2 Future Act Provisions
The Future Act Provisions vary depending on the Future Act to be carried out. In the case of the grant of a mining tenement, typically there are three alternatives: the Right to Negotiate, an Indigenous Land Use Agreement (ILUA) and the Expedited Procedure. These are summarised below.
Right to Negotiate
The Right to Negotiate involves a formal negotiation between the State, the applicant for the Tenement and any registered native title claimants and holders of native title rights. The aim is to agree the terms on which the Tenement can be granted. The applicant for the Tenement is usually liable for any compensation that the parties agree to pay to the registered native title claimants and holders of native title. The parties may also agree on conditions that will apply to activities carried out on the Tenement (e.g. in relation to heritage surveys).
If agreement is not reached to enable the Tenement to be granted, the matter may be referred to arbitration before the NNTT, which has six (6) months to decide whether the Tenement can be granted and if so, on what conditions. The NNTT usually requires the parties to have had at least 6 months of negotiations before it will accept a referral for arbitration.
ILUA
An ILUA is a contractual arrangement governed by the NTA. Under the NTA, an ILUA must be negotiated with all registered native title claimants for a relevant area. The State and the applicant for the Tenement are usually the other parties to the ILUA.
An ILUA must set out the terms on which a tenement can be granted. An ILUA will also specify conditions on which activities may be carried out within the tenement. The applicant for a tenement is usually liable for any compensation that the parties agree to pay to the registered native title claimants and holders
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of native title in return for the grant of the Tenement being approved. These obligations pass to a transferee of the tenement.
Once an ILUA is agreed and registered, it binds the whole native title claimant group and all holders of native title in the area (including future claimants), even though they may not be parties to it.
Expedited Procedure
The NTA establishes a simplified process for the carrying out of a Future Act that is unlikely to adversely affect native title rights (Expedited Procedure). The grant of a tenement can occur under the Expedited Procedure if:
(a) the grant will not interfere directly with the carrying on of the community or social activities of the persons who are the holders of native title in relation to the land;
(b) the grant is not likely to interfere with areas or sites of particular significance, in accordance with their traditions, to the persons who are holders of native title in relation to the land; and
(c) the grant is not likely to involve major disturbance to any land or waters concerned or create rights whose exercise is likely to involve major disturbance to any land.
If the State considers the above criteria are satisfied, it commences the Expedited Procedure by giving notice of the proposed grant of the Tenement in accordance with the NTA. Persons have until three (3) months after the notification date to take steps to become a registered native title claimant or native title holder in relation to the land to be subject to the Tenement.
If there is no objection lodged by a registered native title claimant or a native title holder within four (4) months of the notification date, the State may grant the Tenement.
If one or more registered native title claimants or native title holders object within that four (4) month notice period, the NNTT must determine whether the grant is an act attracting the Expedited Procedure. If the NNTT determines that the Expedited Procedure applies, the State may grant the Tenement. Otherwise, the Future Act Provisions (eg Right to Negotiate or ILUA) must be followed before the Tenement can be granted.
The State of Western Australia currently follows a policy of granting prospecting and exploration licenses under the Expedited Procedure where the applicant has entered into a standard aboriginal heritage agreement with the relevant registered native title claimants and native title holders. The standard heritage agreement (and ancillary agreements) usually provide for payment of compensation by the applicant for the tenement and conditions that apply to activities carried out within the tenement.
Exception to requirement to comply with Future Act Provisions
The grant of a Tenement does not need to comply with the Future Act Provisions if in fact native title has never existed over the land covered by the Tenement, or has been validly extinguished prior to the grant of the Tenement. We have not undertaken the extensive research needed to determine if in fact native title does not exist, or has been validly extinguished in relation to the Tenements.
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Unless it is clear that native title does not exist (eg in relation to freehold land), the usual practice of the State is to comply with the Future Act Provisions when granting a Tenement. This ensures the grant will be valid in the event a court determines that native title rights do exist over the land subject to the Tenement and as such, the Future Act Provisions apply.
Where a Tenement has been retrospectively validated or validly granted under the NTA, the rights under the Tenement prevail over any inconsistent native title rights.
Application to the Tenements
The following sections of the Report identify:
(a) any native title claims, native title determinations and ILUAs that are registered against the Tenements (see Section 7.3);
(b) any Tenements which have been retrospectively validated under the NTA as being granted before 23 December 1996 (see Section 7.4);
(c) any Tenements which have been granted after 23 December 1996 and as such will need to have been granted following compliance with the Future Act Provisions to be valid under the NTA. This Report assumes that the Future Act Provisions have been complied with in relation to these Tenements (see Section 7.4); and
(d) any Tenements which are yet to be granted and as such may need to be granted in compliance with the Future Act Provisions in order to be valid under the NTA (see Section 7.4).
7.3 Registered Native Title Claims and Determinations
Our searches indicate that the Tenements are subject to the following registered native title claims.
Tenement Native Title Claim Native Title
Determination
ILUA
E51/1365 WC99/46 - WI2012/001
E51/1442 WC99/46 - WI2012/001
E51/1443 WC99/46 - WI2012/001
The status of the native title claim and the ILUA are summarised in Part II of the Schedule.
The native title claimants and holders of native title under any determination are entitled to certain rights under the Future Act Provisions.
7.4 Validity of Tenements under the NTA
The sections below examine the validity of the Tenements under the NTA.
Tenements granted before 23 December 1996
Our searches indicate that none of the Tenements were granted before 23 December 1996.
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Tenements granted after 23 December 1996
Our searches indicate that all of the Tenements were granted after 23 December 1996.
Tenement Date of Grant
E51/1365 23/07/2010
E31/619 02/07/2010
E31/961 24/08/2011
E51/1442 05/07/2011
E51/1443 05/07/2011
We have assumed that these Tenements were granted in accordance with the Future Act Provisions and as such are valid under the NTA.
Tenements renewed after 23 December 1996
Renewals of mining tenements made after 23 December 1996 must comply with the Future Act Provisions in order to be valid under the NTA.
An exception is where the renewal is the first renewal of a mining tenement that was validly granted before 23 December 1996 and the following criteria are satisfied:
(a) the area to which the mining tenement applies is not extended;
(b) the term of the renewed mining tenement is not longer than the term of the old mining tenement; and
(c) the rights to be created are not greater than the rights conferred by the old mining tenement.
In such cases, the mining tenement can be renewed without complying with the Future Act Provisions. It is currently uncertain whether this exemption applies to a second or subsequent renewal of such a mining tenement.
Our searches indicate that none of the Tenements were renewed after 23 December 1996.
Renewals of Tenements in the future will need to comply with the Future Act Provisions in order to be valid under the NTA. The registered native title claimants and holders of native title identified in Section 7.3 of this Report will need to be involved as appropriate under the Future Act Provisions.
Valid grant of Applications for Tenements
The Future Act Provisions must be complied with when granting any of the Tenements that are currently applications. This will ensure that the newly granted Tenements are valid under the NTA.
None of the Tenements are currently applications and as such will need to satisfy the Future Act Provisions.
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The registered native title claimants and holders of native title identified in Section 7.3 of this Report will need to be involved as appropriate under the Future Act Provisions.
8. PASTORAL LEASES
As set out in Part I of the attached Schedule of this Report all of the exploration licences overlap with pastoral leases as follows:
(a) E51/1365 – pastoral lease 3114/1088 (Killara);
(b) E31/619 and E31/961 – pastoral lease 3114/707 (Yerilla);
(c) E51/1442 - pastoral lease 3114/598 (Sherwood); and
(d) E51/1443 – pastoral lease 3114/598 (Sherwood) and pastoral lease 3114/820 (Murchison Downs).
The Mining Act:
(a) prohibits the carrying out of mining activities on or near certain improvements and other features (such as livestock and crops) on Crown land (which includes a pastoral lease) without the consent of the lessee;
(b) imposes certain restrictions on a mining tenement holder passing through Crown land, including requiring that all necessary steps are taken to notify the occupier of any intention to pass over the Crown land and that all necessary steps are taken to prevent damage to improvements and livestock; and
(c) provides that the holder of a mining tenement must pay compensation to an occupier of Crown land (i.e. the pastoral lessee) in certain circumstances, in particular to make good any damage to improvements, and for any loss suffered by the occupier from that damage or for any substantial loss of earnings suffered by the occupier as a result of, or arising from, any exploration or mining activities, including the passing and re-passing over any land.
We have been advised by the Company and the Company has confirmed that to the best of its knowledge it is not aware of any improvements and other features on the land the subject of the pastoral leases which overlaps the Tenements which would require the Company to obtain the consent of the occupier or lease holder or prevent the Company from undertaking its proposed mining activities on the Tenements.
Before commencing mining operations on any of the Tenements, the Company should consider entering into a compensation and access agreement with the pastoral lease holders to ensure the requirements of the Mining Act are satisfied and to avoid any disputes arising. In the absence of agreement, the Warden’s Court determines compensation payable.
The DMP imposes standard conditions on mining tenements that overlay pastoral leases. It appears the Tenements incorporate the standard conditions.
9. QUALIFICATIONS AND ASSUMPTIONS
This Report is subject to the following qualifications and assumptions:
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(a) we have assumed the accuracy and completeness of all Tenement searches, register extracts and other information or responses which were obtained from the relevant department or authority including the NNTT;
(b) we assume that the registered holder of a Tenement has valid legal title to the Tenement;
(c) this Report does not cover any third party interests, including encumbrances, in relation to the Tenements that are not apparent from our searches and the information provided to us;
(d) we have assumed that any agreements provided to us in relation to the Tenements are authentic, were within the powers and capacity of those who executed them, were duly authorised, executed and delivered and are binding on the parties to them;
(e) with respect to the granting of the Tenements, we have assumed that the State and the applicant for the Tenements complied with the applicable Future Act Provisions;
(f) Aboriginal heritage sites or objects (as defined in the WA Heritage Act or under the Commonwealth Heritage Act) may exist in the areas covered by the Tenements regardless of whether or not that site has been entered on the Register of Aboriginal Sites established by the WA Heritage Act or is the subject of a declaration under the Commonwealth Heritage Act. We have not conducted any legal, historical, anthropological or ethnographic research regarding the existence or likely existence of any such Aboriginal heritage sites or objects within the area of the Tenements;
(g) we have assumed the accuracy and completeness of any instructions or information which we have received from the Company or any of its officers, agents and representatives;
(h) unless apparent from our searches or the information provided to us, we have assumed compliance with the requirements necessary to maintain a Tenement in good standing;
(i) with respect to the application for the grant of a Tenement, we express no opinion as to whether such application will ultimately be granted and that reasonable conditions will be imposed upon grant, although we have no reason to believe that any application will be refused or that unreasonable conditions will be imposed;
(j) references in the Schedule to any area of land are taken from details shown on searches obtained from the relevant department. It is not possible to verify the accuracy of those areas without conducting a survey; and
(k) the information in the Schedule is accurate as at the date the relevant searches were obtained. We cannot comment on whether any changes have occurred in respect of the Tenements between the date of the searches and the date of the Prospectus.
10. CONSENT
This report is given solely for the benefit of the Company and the directors of the Company in connection with the issue of the Prospectus and is not to be relied
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on or disclosed to any other person or used for any other purpose or quoted or referred to in any public document or filed with any government body or other person without our prior consent.
Yours faithfully
STEINEPREIS PAGANIN
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PART I
TENEMENT SCHEDULE
TENEMENT REGISTERED HOLDER /
APPLICANT
SHARES HELD
GRANT DATE EXPIRY DATE AREA SIZE (Blocks)
ANNUAL RENT (NEXT RENTAL
YEAR)
MINIMUM ANNUAL
EXPENDITURE
ENCUMBRANCES/ DEALINGS
BONDS NATIVE TITLE CLAIMS /
DETERMINATIONS / ILUAs
AHE ABORIGINAL HERITAGE SITE
SEARCH on
DIA
NOTES
E31/619 MPF Exploration
Pty Ltd
100 02/07/2010 01/07/2015 4 BL $454 $15,000 Extension of Time 161668 –
lodged 19 December
2002
Application to Amend 320964
– lodged 14 May 2009
Amalgamation 370 320 –
lodged 27 April 2011
Application to Amend 388714
– lodged 6 January 2012
Caveat 399667 – lodged 14 June 2012
Nil Nil Nil 1 and 2, 4 – 9, 11 and 12 and 14 below
E51/1365 MPF Exploration
Pty Ltd
100 23/07/2010 01/07/2015 21 BL $2,383.50 $21,000 Application to Amend 388716
– lodged 6 January 2012
Caveat 399668 – lodged 14 June 2012
Nil WC99/46 – Yugunga-Nya (Registered)
Nil 1 and 2,4 - 10 and13 below
E31/961 Maka Minerals Pty Ltd
100 24/08/2011 23/08/2016 12 BL $1,362 $20,000 Application to Amend 388715
– lodged 6 January 2012
Nil Nil Lake Reyside
(Raeside) 2708
1 and 2, 4 - 9, 12 and 14 below
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TENEMENT REGISTERED HOLDER /
APPLICANT
SHARES HELD
GRANT DATE EXPIRY DATE AREA SIZE (Blocks)
ANNUAL RENT (NEXT RENTAL
YEAR)
MINIMUM ANNUAL
EXPENDITURE
ENCUMBRANCES/ DEALINGS
BONDS NATIVE TITLE CLAIMS /
DETERMINATIONS / ILUAs
AHE ABORIGINAL HERITAGE SITE
SEARCH on
DIA
NOTES
Caveat 399669 – lodged 14 June 2012
(Closed, Mythologic
al)
E51/1442 Maka Minerals Pty Ltd
100 05/07/2011 04/07/2016 17 BL $1,929.50 $20,000 Application to Amend 388717
– lodged 6 January 2012
Caveat 399670 – lodged 14 June 2012
Nil WC99/46 – Yugunga-Nya (Registered)
3 – 9, 12, 15, 17 - 22 below
E51/1443 Maka Minerals Pty Ltd
100 05/07/2011 04/07/2016 53 BL $6,015.50 $53,000 Application to Amend 388716
– lodged 6 January 2012
Caveat 399671 – lodged 14 June 2012
Nil WC99/46 – Yugunga-Nya (Registered)
Goldfields Highway
Ceremonial Area 20013
(Open, Ceremonial, Mythologic
al)
1 and 2, 4 – 9, 15 and 16, 18 and
23 below
Key to Tenement Schedule
AHE – Aboriginal Heritage Enquiry
BL - Block
E – Exploration Licence
All of the native title claims listed in the Schedule have been accepted and entered on the Register of Native Title Claims. Please refer to Part II of this Report for the status of the native title claims.
Unless otherwise indicated, capitalised terms have the same meaning given to them in the Prospectus.
References to numbers in the “Notes” column refers to the notes following this table. Notes: Endorsements
1. The Licensee’s attention is drawn to the provisions of the Aboriginal Heritage Act 1972 and any Regulations thereunder.
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2. The Licensee’s attention is drawn to the Environmental Protection Act and the Environmental Protection (Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
3. The Licensee’s attention is drawn to the provisions of:
• Aboriginal heritage Act 1972 and any Regulations there under;
• Environmental Protection Act 1986 and the Environmental Protection (Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
• Water and Reserves Commission Act 1995 and any Regulations thereunder;
• Country Areas Water Supply Act 1947 and any Regulations thereunder; and
• Metropolitan Water Supply Sewerage and Drainage Act 1909 and any Regulations thereunder.
Conditions
4. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe after completion.
5. All disturbances to the surface of the land made as a result of exploration, including costeans, drill pads, grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Mines and Petroleum (DMP). Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DMP.
6. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
7. Unless the written approval of the Environmental Officer, DMP is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
8. The Licensee notifying the holder of any underlying pastoral or grazing lease by telephone or in person, or by registered post if contact cannot be made, prior to undertaking airborne geophysical surveys or any ground disturbing activities utilising equipment such as scrapers, graders, bulldozers, backhoes, drilling rigs; water carting equipment or other mechanised equipment. .
9. The Licensee or transferee, as the case may be, shall within thirty (30) days of receiving written notification of: the grant of the Licence or registration of a transfer introducing a new Licensee advise, by registered post, the holder of any underlying pastoral or grazing lease details of the grant or transfer.
10. Consent to Mine on Peak Hill Stock Route CR 9699 granted subject to the following condition: No exploration activities being carried out on Peak Hill Stock Route Reserve 9699 which restrict the use of the reserve.
11. No exploration activities on Historic Cemetery Site Reserve 4587 and such activities within a distance of 140 metres laterally from the Reserve being confined to below a depth of 50 metres from the lowest part of the surface of the land with rights to ingress and egress from the said Reserve being at all times preserved to the public.
12. No interference with the use of the Aerial Landing Ground and mining thereon being confined to below a depth of 15 metre from the natural surface.
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13. The Tengraph searches indicate this tenement overlaps Pastoral Lease 3114/1088 (Killara).
14. The Tengraph searches indicate that these tenements overlap Pastoral Lease 3114/707 (Yerilla).
15. The Tengraph searches indicate that these tenements overlap Pastoral Lease 3114/598 (Sherwood).
16. The Tengraph searches indicate that these tenements overlap Pastoral Lease 3114/820 (Murchison Downs).
17. The prior written consent of the Minister responsible for the Mining Act 1978 being obtained before commencing any exploration activities on Radio Transmitter Site Reserve 41291, Water Reserve 13931 and Recreation Golf Links Reserve 23195.
18. No excavation, except shafts, approaching closer to the Goldfields Highway, Highway verge or the road reserve than a distance equal to twice the depth of the excavation and mining on the Goldfields Highway or Highway verge being confined to below a depth of 30 metres from the natural surface, and on any other road or verge, to below a depth of 15 metres from the natural surface.
19. No interference with Geodetic Survey Stations GGY 2, GGY 1T, GGY 1T.GGY2T and GGY 2T 1 and mining within 15 metres thereof being confirmed to below a depth of 15 metres from the natural surface.
20. No interference with the High Tension line or installations in connection therewith, and the rights of ingress to an egress from the facility being at all times preserved to the owners thereof.
21. Miming on a strip of land 20 metres wide with any pipeline as the centreline being confirmed to below a depth of 31 metres from the natural surface and no mining material being deposited upon such strip and the rights of ingress to and egress from the facility being at all times preserved to the owners thereof.
22. Consent to conduct exploration activities on the Meekatharra Water Reserve granted, subject to:
• Written notification, where practicable, of the time frame, type and extent of proposed ground disturbing activities being forwarded to the Department of Water Geraldton seven days prior to commencement of those activities.
• Any significant waterway (flowing or not), wetland or its fringing vegetation that may exist on site not being disturbed or removed without prior written approval from the Department of Water.
• The rights of ingress to and egress from the Licence being at all reasonable times preserved to officers of the Department of Water for inspection and investigation purposes.
• The storage and disposal of hydrocarbons, chemicals and potentially hazardous substances being in accordance with the Department of Water’s Guidelines and Water Quality Protection Notes.
• All Mining Act tenement activities within Public Drinking Water Source Areas being prohibited unless prior written approval has been obtained from the Department of Water.
• All Mining Act tenement activities are prohibited within 2 kilometres of the maximum storage level of a reservoir including the reservoir itself, unless the prior written approval of the Department of Water is first obtained.
• Storage and use of hydrocarbons and potentially hazardous substances requiring the prior written approval or appropriate permits from the Department of Water.
• All hydrocarbon pr other pollutant spillage being reported to the Department of Water. Remediation being carried out to the satisfaction of the Department of Water.
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• All Mining Act tenement activities are prohibited within a 300-metre radius of any observation well in a Public Drinking Water Source P1, P2 & P3 Areas unless the written approval of the Department of Water is first obtained.
• All Mining Act tenement activities within a 500-metre radius in a P1 area or a 300-metre radius in a P2 or P3 area of any Public Drinking Water Source production well or dam, unless the written approval of the Department of Water is first obtained.
23. No interference with Geodetic Survey Station GGY51, GGY51T 1, GGY52, GGy52A, GGY52AT, GGY53T, GGY53T1 and ZY56 and mining within 15 metres thereof being confined to below a depth of 15 metres from the natural surface.
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PART I I
STATUS OF NATIVE TITLE CLAIMS
TRIBUNAL NUMBER
FEDERAL COURT NUMBER
APPLICATION NAME
REGISTERED IN MEDIATION
STATUS
WC99/46 WAD6132/98 Yugunga-Nya People
12/06/2000 Yes Active
ILUAs
TRIBUNAL
NUMBER
NAME APPROXIMATE
AREA (sq km)
STATUS
WI2012/001 Yugunga-Nya People & Sandfire ILUA
22,367 Lodged
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ALICANTO MINERALS PROSPECTUS | 101
7. CORPORATE GOVERNANCE
7.1 ASX Corporate Governance Council Principles and Recommendations
The Company has adopted comprehensive systems of control and
accountability as the basis for the administration of corporate governance. The
Board is committed to administering the policies and procedures with openness
and integrity, pursuing the true spirit of corporate governance commensurate
with the Company's needs.
To the extent applicable, the Company has adopted The Corporate
Governance Principles and Recommendations (2nd Edition) as published by ASX
Corporate Governance Council (Recommendations).
In light of the Company’s size and nature, the Board considers that the current
board is a cost effective and practical method of directing and managing the
Company. As the Company’s activities develop in size, nature and scope, the
size of the Board and the implementation of additional corporate governance
policies and structures will be reviewed.
The Company’s main corporate governance policies and practices as at the
date of this Prospectus are outlined below and the Company’s full Corporate
Governance Plan is available in a dedicated corporate governance information
section of the Company’s website (www.alicantominerals.com.au).
Board of directors
The Board is responsible for corporate governance of the Company. The Board
develops strategies for the Company, reviews strategic objectives and monitors
performance against those objectives. The goals of the corporate governance
processes are to:
(a) maintain and increase Shareholder value;
(b) ensure a prudential and ethical basis for the Company’s conduct and
activities; and
(c) ensure compliance with the Company’s legal and regulatory
objectives.
Consistent with these goals, the Board assumes the following responsibilities:
(a) developing initiatives for profit and asset growth;
(b) reviewing the corporate, commercial and financial performance of the
Company on a regular basis;
(c) acting on behalf of, and being accountable to, the Shareholders; and
(d) identifying business risks and implementing actions to manage those risks
and corporate systems to assure quality.
The Company is committed to the circulation of relevant materials to Directors in
a timely manner to facilitate Directors’ participation in the Board discussions on a
fully-informed basis.
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ALICANTO MINERALS PROSPECTUS | 102
Composition of the Board
Election of Board members is substantially the province of the Shareholders in
general meeting. However, subject thereto, the Company is committed to the
following principles:
(a) the Board is to comprise persons with a blend of skills, experience and
attributes appropriate for the Company and its business; and
(b) the principal criterion for the appointment of new directors is their ability
to add value to the Company and its business.
No formal nomination committee or procedures have been adopted for the
identification, appointment and review of the Board membership, but an
informal assessment process, facilitated by the Chairman in consultation with the
Company’s professional advisors, has been committed to by the Board.
Identification and management of risk
The Board’s collective experience will enable accurate identification of the
principal risks that may affect the Company’s business. Key operational risks and
their management will be recurring items for deliberation at Board meetings.
Ethical standards
The Board is committed to the establishment and maintenance of appropriate
ethical standards.
Performance evaluation
In the absence of a nomination committee, the Board will conduct a
performance evaluation of its individual Directors on an annual basis and
examine ways of assisting the Board in performing its duties more effectively. To
assist in this process an independent advisor may be used.
Where applicable, the review will include:
(a) comparing the performance of the Board with the requirements of its
Charter;
(b) examination of the Board’s interaction with management;
(c) the nature of information provided to the Board by management; and
(d) management’s performance in assisting the Board to meet its
objectives.
Independent professional advice
Subject to the Chairman’s approval (not to be unreasonably withheld), the
Directors, at the Company’s expense, may obtain independent professional
advice on issues arising in the course of their duties.
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Remuneration arrangements
The remuneration of an executive Director will be decided by the Board, without
the affected executive Director participating in that decision-making process.
The total maximum remuneration of non-executive Directors is initially set by the
Constitution and subsequent variation is by ordinary resolution of Shareholders in
general meeting in accordance with the Constitution, the Corporations Act and
the ASX Listing Rules, as applicable. The determination of non-executive
Directors’ remuneration within that maximum will be made by the Board having
regard to the inputs and value to the Company of the respective contributions
by each non-executive Director. The current amount has been set at an
amount not to exceed $500,000 per annum.
In addition, a Director may be paid fees or other amounts (i.e. subject to any
necessary Shareholder approval, non-cash performance incentives such as
Options) as the Directors determine where a Director performs special duties or
otherwise performs services outside the scope of the ordinary duties of a
Director.
Directors are also entitled to be paid reasonable travelling, hotel and other
expenses incurred by them respectively in or about the performance of their
duties as Directors.
The Board has not established a remuneration committee at this point in the
Company’s development. It is considered that the size of the Board along with
the level of activity of the Company renders this impractical and the Board,
acting without the affected Director participating in the decision making
process, currently serves as a remuneration committee.
The Board reviews and approves the remuneration policy to enable the
Company to attract and retain executives and Directors who will create value
for Shareholders having consideration to the amount considered to be
commensurate for a company of its size and level of activity as well as the
relevant Directors’ time, commitment and responsibility. The Board is also
responsible for reviewing any employee incentive and equity-based plans
including the appropriateness of performance hurdles and total payments
proposed.
Trading policy
The Board has adopted a policy that sets out the guidelines on the sale and
purchase of securities in the Company by its key management personnel (i.e.
Directors and, if applicable, any employees reporting directly to the managing
director). The policy generally provides that approval must be obtained from
either the Chairman or Managing Director prior to trading.
External audit
The Company in general meetings is responsible for the appointment of the
external auditors of the Company, and the Board from time to time will review
the scope, performance and fees of those external auditors.
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Audit committee
The Company will not have a separate audit committee until such time as the
Board is of a sufficient size and structure, and the Company’s operations are of a
sufficient magnitude for a separate committee to be of benefit to the
Company. In the meantime, the full Board will carry out the duties that would
ordinarily be assigned to that committee under the written terms of reference for
that committee, including but not limited to, monitoring and reviewing any
matters of significance affecting financial reporting and compliance, the
integrity of the financial reporting of the Company, the Company’s internal
financial control system and risk management systems and the external audit
function.
Diversity policy
The Board has adopted a diversity policy which provides a framework for the
Company to achieve, amongst other things, a diverse and skilled workforce, a
workplace culture characterised by inclusive practices and behaviours for the
benefit of all staff, improved employment and career development
opportunities for women and a work environment that values and utilises the
contributions of employees with diverse backgrounds, experiences and
perspectives.
7.2 Departures from Recommendations
Following admission to the Official List of ASX, the Company will be required to
report any departures from the Recommendations in its annual financial report.
The Company’s compliance and departures from the Recommendations as at
the date of this Prospectus are set out on the following pages.
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PRINCIPLES AND RECOMMENDATIONS COMMENT
1. Lay solid foundations for management and oversight
1.1 Companies should establish the functions reserved to
the board and those delegated to senior executives
and disclose those functions.
The Company’s Corporate Governance Plan includes a Board Charter, which
discloses the specific responsibilities of the Board.
The Board and the Chief Geologist are currently responsible for the day-to-day
operations of the Company and intend to employ and delegate responsibility of
this to a Managing Director following listing on ASX.
1.2 Companies should disclose the process for evaluating
the performance of senior executives.
The Company’s Corporate Governance Plan includes a section on performance
evaluation practices adopted by the Company.
The chair will monitor the Board and the Board will monitor the performance of any
senior executives who are not directors, including measuring actual performance
against planned performance.
1.3 Companies should provide the information indicated
in the Guide to reporting on Principle 1.
Explanation of departures from Principles and Recommendations 1.1 and 1.2 (if any)
are set out above. The Company will also explain any departures from Principles
and Recommendations 1.1 and 1.2 (if any) in its future annual reports.
No performance evaluation of senior executives has taken place to date as this
process is conducted annually and no senior executives have currently completed
a year of service. Future annual reports will disclose whether such a performance
evaluation has taken place in the relevant reporting period and whether it was in
accordance with the process disclosed.
The Corporate Governance Plan, which includes the Board Charter, is posted on
the Company’s website.
2. Structure the board to add value
2.1 A majority of the board should be independent
directors.
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2.2 The chair should be an independent director. The chair is an independent director.
2.3 The roles of chair and chief executive officer should
not be exercised by the same individual.
The Company intends to employ a Managing Director (considered to be the Chief
Executive Officer) who will be separate from the chair.
2.4 The board should establish a nomination committee. No formal nomination committee has been established by the Company as yet.
The Board, as a whole, currently serves as the nomination committee.
The Company’s Corporate Governance Plan includes a Nomination Committee
Charter, which discloses the specific responsibilities of the committee.
Where necessary, the Board seeks advice of external advisers in connection with
the suitability of applicants for Board membership.
2.5 Companies should disclose the process for evaluating
the performance of the board, its committees and
individual directors.
The Company’s Corporate Governance Plan includes a section on performance
evaluation practices adopted by the Company.
The chair will review the performance of the Board, its committees (if any) and
individual directors to ensure that the Company continues to have a mix of skills and
experience necessary for the conduct of its activities.
2.6 Companies should provide the information indicated
in the Guide to reporting on Principle 2.
The Company has provided details of each director, such as their skills, experience
and expertise relevant to their position in this Prospectus and will also provide these
details on its website and in future annual reports.
Explanation of departures from Principles and Recommendations 2.1, 2.2, 2.3, 2.4
and 2.5 (if any) are set out above. The Company will also explain any departures
from Principles and Recommendations 2.1, 2.2, 2.3, 2.4 and 2.5 (if any) in its future
annual reports.
No performance evaluation of the Board, its committees and individual directors
has taken place to date as this process is conducted annually and the first year has
not been completed. Future annual reports will disclose whether such a
performance evaluation has taken place in the relevant reporting period and
whether it was in accordance with the process disclosed.
The Corporate Governance Plan, which includes the Nomination Committee
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Charter, is posted on the Company’s website.
3. Promote ethical and responsible decision-making
3.1 Companies should establish a code of conduct and
disclose the code or a summary of the code as to:
the practices necessary to maintain confidence
in the company’s integrity
the practices necessary to take into account their
legal obligations and the reasonable
expectations of their stakeholders
the responsibility and accountability of individuals
for reporting and investigating reports of unethical
practices.
The Company’s Corporate Governance Plan includes a ‘Corporate Code of
Conduct’, which provides a framework for decisions and actions in relation to
ethical conduct in employment.
3.2 Companies should establish a policy concerning
diversity and disclose the policy or a summary of that
policy. The policy should include requirements for the
board to establish measureable objectives for
achieving gender diversity and for the board to assess
annually both the objectives and progress in
achieving them.
The Company’s Corporate Governance Plan includes a ‘Diversity Policy’, which
provides a framework for establishing measureable objectives for achieving gender
diversity and for the Board to assess annually both the objectives and progress in
achieving them.
3.3 Companies should disclose in each annual report the
measureable objectives for achieving gender
diversity set by the board in accordance with the
diversity policy and progress in achieving them.
This disclosure has not yet been made as the first year has not been completed.
Future annual reports will disclose the measureable objectives for achieving gender
diversity set by the board in accordance with the diversity policy and progress in
achieving them.
3.4 Companies should disclose in each annual report the
proportion of women employees in the whole
organisation, women in senior executive positions and
women on the board.
This disclosure has not yet been made as the first year has not been completed.
Future annual reports will disclose the proportion of women employees in the whole
organisation, women in senior executive positions and women on the board. For
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3.5 Companies should provide the information indicated
in the Guide to reporting on Principle 3.
Explanation of departures from Principles and Recommendations 3.1, 3.2, 3.3 and
3.4 (if any) are set out above. The Company will also explain any departures from
Principles and Recommendations 3.1, 3.2, 3.3 and 3.4 (if any) in its future annual
reports.
The Corporate Governance Plan, which includes the Corporate Code of Conduct
and Diversity Policy, is posted on the Company’s website.
4. Safeguard integrity in financial reporting
4.1 The board should establish an audit committee. No formal audit committee has been established by the Company as yet. The
Board, as a whole, currently serves as the audit committee.
4.2 The audit committee should be structured so that it:
consists only of non-executive directors
consists of a majority of independent directors
is chaired by an independent chair, who is not
chair of the board
has at least three members.
Although no formal audit committee has been established, the Board currently
serves as the audit committee. The Board currently comprises three non-executive
directors and is chaired by an independent director and has at least three
members.
Whilst the audit committee is not structured in the manner set out in the Principles
and Recommendations, the Board is of the view that the experience and
professionalism of the persons on the Board is sufficient to ensure that all significant
matters are appropriately addressed and actioned. Further, the Board does not
consider that the Company is of sufficient size to justify the appointment of
additional directors for the sole purpose of satisfying this recommendation as it
would be cost prohibitive and counterproductive.
As the operations of the Company develop the Board will reassess the formation of
the audit committee.
4.3 The audit committee should have a formal charter. The Company’s Corporate Governance Plan includes an Audit and Risk Committee
Charter, which discloses its specific responsibilities.
4.4 Companies should provide the information indicated
in the Guide to reporting on Principle 4.
Explanation of departures from Principles and Recommendations 4.1, 4.2 and 4.3 (if
any) are set out above. The Company will also explain any departures from
Principles and Recommendations 4.1, 4.2 and 4.3 (if any) in its future annual reports.
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The Corporate Governance Plan, which includes the Audit & Risk Committee
Charter, is posted on the Company’s website.
5. Make timely and balanced disclosure
5.1 Companies should establish written policies designed
to ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a senior
executive level for that compliance and disclose
those policies or a summary of those policies.
The Company has a continuous disclosure program in place designed to ensure the
compliance with ASX Listing Rule disclosure and to ensure accountability at a senior
executive level for compliance and factual presentation of the Company’s
financial position.
5.2 Companies should provide the information indicated
in Guide to Reporting on Principle 5.
The Company has not currently departed from Principle and Recommendation 5.1.
The Company will provide an explanation of any departures from Principle and
Recommendation 5.1 (if any) in its future annual reports.
The Corporate Governance Plan, which includes a continuous disclosure program,
is posted on the Company’s website.
6. Respect the rights of shareholders
6.1 Companies should design a communications policy
for promoting effective communication with
shareholders and encouraging their participation at
general meetings and disclose their policy or a
summary of that policy.
The Company’s Corporate Governance Plan includes a shareholders
communication strategy, which aims to ensure that the shareholders are informed
of all major developments affecting the Company’s state of affairs.
6.2 Companies should provide the information indicated
in the Guide to reporting on Principle 6.
The Company has not currently departed from Principle and Recommendation 6.1.
The Company will provide an explanation of any departures from Principle and
Recommendation 6.1 (if any) in its future annual reports.
The Corporate Governance Plan, which includes a shareholders communication
strategy, will be posted on the Company’s website.
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7.1 Companies should establish policies for the oversight
and management of material business risks and
disclose a summary of those policies.
The Company’s Corporate Governance Plan includes a risk management policy.
The Board determines the Company’s “risk profile” and is responsible for overseeing
and approving risk management strategy and policies, internal compliance and
internal control.
7.2 The board should require management to design and
implement the risk management and internal control
system to manage the company’s material business
risks and report to it on whether those risks are being
managed effectively. The board should disclose that
management has reported to it as to the
effectiveness of the company’s management of its
material business risks.
The Company’s Corporate Governance Plan includes a risk management policy.
The Board will require either the Managing Director or the Chief Financial Officer to
provide a report at the relevant time.
7.3 The board should disclose whether it has received
assurance from the chief executive officer (or
equivalent) and the chief financial officer (or
equivalent) that the declaration provided in
accordance with section 295A of the Corporations
Act is founded on a sound system of risk
management and internal control and that the
system is operating effectively in all material respects
in relation to financial reporting risks.
The Board will seek this relevant assurance from the Managing Director or Chief
Financial Officer at the relevant time.
7.4 Companies should provide the information indicated
in Guide to Reporting on Principle 7.
The Company has not currently departed from Principles and Recommendations
7.1, 7.2 and 7.3. The Company will provide an explanation of any departures from
Principles and Recommendations 7.1, 7.2 and 7.3 (if any) in its future annual reports.
The Corporate Governance Plan, which includes a risk management policy, is
posted on the Company’s website.
8. Remunerate fairly and responsibly
8.1 The board should establish a remuneration The Board has not established a formal remuneration committee at this point in the
Company’s development. It is considered that the size of the Board along with the
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committee. level of activity of the Company renders this impractical and the Board, acting
without the affected director participating in the decision making process, currently
serves as a remuneration committee.
The Company’s Corporate Governance Plan includes a Remuneration Committee
Charter, which discloses its specific responsibilities.
Remuneration to any executive directors will be by way of salary and to non-
executive directors by way of director fees, with the level of such salary or fees as
the context requires, having been set by the Board to an amount it considers to be
commensurate for a company of its size and level of activity. Any equity based
remuneration will be required to be approved by shareholders.
There is currently no link between performance and remuneration, however, it is the
intention of the Board to re-assess this once the Company commences operations.
Further there are no schemes for retirement benefits in existence.
8.2 The remuneration committee should be structured so
that it:
consists of a majority of independent directors
is chaired by an independent director
has at least three members
Although no formal remuneration committee has been established, the Board
currently serves as the remuneration committee.
The Board is comprised of a majority of independent directors, is chaired by an
independent director and has at least three members.
8.3 Companies should clearly distinguish the structure of
non-executive directors’ remuneration from that of
executive directors and senior executives.
The Board has distinguished the structure of non executive director’s remuneration
from that of executive directors and senior executives.
The Company’s constitution provides that the remuneration of non-executive
Directors will be not be more than the aggregate fixed sum set by the constitution
and subsequently varied by resolution at a general meeting of shareholders.
The Board is responsible for determining the remuneration of executive directors
and senior executives (without the participation of the affected director). It is the
Board’s objective to provide maximum stakeholder benefit from the retention of a
high quality Board and executive team by remunerating executive directors and
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senior executives fairly and appropriately with reference to relevant employment
market conditions and by linking the nature and amount of executive directors’
and senior executives emoluments to the Company’s financial and operational
performance.
8.4 Companies should provide the information indicated
in the Guide to reporting on Principle 8.
Explanation of departures from Principles and Recommendations 8.1, 8.2 and 8.3 (if
any) are set out above. The Company will also provide an explanation of any
departures from Principles and Recommendations 8.1, 8.2 and 8.3 (if any) in its
future annual reports.
The Corporate Governance Plan, which includes the Remuneration Committee
Charter, is posted on the Company’s website.
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8. ADDITIONAL INFORMATION
8.1 Summary of Material Contracts
Set out below is a brief summary of the certain contracts to which the Company
is a party and which the Directors have identified as material to the Company or
are of such a nature that an investor may wish to have details of particulars of
them when making an assessment of whether to apply for Shares.
Option to Acquire Tenements from MPF Exploration Pty Ltd
On 19 August 2011 the Company entered into option agreements with MPF
Exploration Pty Ltd (ACN 098 495 455) (MPF) pursuant to which MPF granted the
Company options to acquire the right, title and interests in 70% of tenements
E31/619 and E51/1365 (MPF Tenements).
Consideration - The consideration payable on exercise of each option is as
follows:
(a) 40,000 Shares and a cash payment of $20,000 for E31/619; and
(b) 20,000 Shares and a cash payment of $15,000 for E51/1365.
Conditions Precedent - The exercise of each option (and therefore, acquisition
of the underlying interest in the MPF Tenements) is conditional upon the
satisfaction of the following conditions precedent:
(a) the parties obtaining consent of the relevant governmental authorities
under the Mining Act to transfer of the interest in the MPF Tenements to
the Company; and
(b) the Company receiving conditional approval for admission to quotation
on the ASX,
on or before 30 September 2012.
Subject to satisfaction of the conditions precedent, the Company may give MPF
an exercise notice stating that it is exercising the option, and notice of the date
for settlement. The date for settlement shall not be more than 7 days from the
date the exercise notice is given to MPF.
Joint Venture - Following settlement, the Company and MPF shall form an
unincorporated joint venture for the purpose of exploring, developing and, if
warranted, mining the area the subject of the MPF Tenements (Joint Venture).
The Joint Venture will be on the following commercial terms:
(i) the Joint Venture interests of MPF and the Company in the Joint
Venture are:
(A) MPF - 30%; and
(B) the Company - 70%.
(ii) The Company will be the sole manager of the Joint Venture.
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(iii) The Company shall solely fund all exploration (and other
approved) expenditure in respect of the MPF Tenements until
the completion of a feasibility study.
(iv) Upon completion of the feasibility study, each party must
contribute to Joint Venture expenditure in proportion to their
Joint Venture interest.
(v) If a party fails to duly make a contribution to Joint Venture
expenditure that it is obliged to make then the Joint Venture
interest of that party shall dilute in accordance with the
following formula (and the Joint Venture interest of the other
party shall increase accordingly):
Joint Venture Interest of
Diluting Party = DPE x 100
TE
Where:
DPE = the total expenditure incurred or deemed to have
been incurred by the diluting party as at the date
of calculation;
TE = the total expenditure incurred or deemed to have
been incurred by the parties as at the date of
calculation.
However, if the non diluting party contributes the non diluting
party’s share of Joint Venture expenditure, the diluting party
shall be diluted at a rate of 150% of the rate calculated in
accordance with the above formula (that is, (DPE x 150)/TE).
For the purpose calculating the deemed expenditure, the
parties shall have incurred or be deemed to have incurred Joint
Venture expenditure in accordance with their initial Joint
Venture interests up until completion of the feasibility study.
(vi) In relation to the full form joint venture agreement, the
Company and MPF agreed that they will negotiate in good
faith and use best endeavours to execute a detailed joint
venture agreement on normal terms (including a dispute
resolution clause, first right of refusal clause, dilution clause,
force majeure rights and clauses that are usually contained in
such joint venture agreements) embodying the terms,
conditions and warranties contained in the option agreements.
The option agreements otherwise contains representations and warranties
standard for an agreement of its kind, including representations by MPF as to the
status and good standing of the MPF Tenements.
Option to Acquire Tenements from Maka Minerals Pty Ltd
On 19 August 2011 the Company entered into option agreements with Maka
Exploration Pty Ltd (ACN 098 495 455) (Maka) pursuant to which Maka granted
the Company options to acquire the right, title and interests in 70% of tenements
E51/1442, E51/1443 and E31/961 (Maka Tenements).
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Consideration - The consideration payable on exercise of each option is as
follows:
(a) 60,000 Shares and a cash payment of $40,000 for E51/1442 and
E51/1443; and
(b) 30,000 Shares and a cash payment of $15,000 for E31/961.
Conditions Precedent - The exercise of each option (and therefore, acquisition
of the underlying interest in the Maka Tenements) is conditional upon the
satisfaction of the following conditions precedent:
(a) the parties obtaining consent of the relevant governmental authorities
under the Mining Act to transfer of the interest in the Maka Tenements to
the Company; and
(b) the Company receiving conditional approval for admission to quotation
on the ASX,
on or before 30 September 2012.
Subject to satisfaction of the conditions precedent, the Company may give
Maka an exercise notice stating that it is exercising the option, and notice of the
date for settlement. The date for settlement shall not be more than 7 days from
the date the exercise notice is given to Maka.
Joint Venture - Following settlement, the Company and Maka shall form an
unincorporated joint venture for the purpose of exploring, developing and, if
warranted, mining the area the subject of the Maka Tenements (Joint Venture).
The Joint Venture will be on the following commercial terms:
(a) the Joint Venture interests of Maka and the Company in the
Joint Venture are:
(A) Maka – 30%; and
(B) the Company – 70%.
(a) The Company will be the sole manager of the Joint Venture.
(b) The Company shall solely fund all exploration (and other
approved) expenditure in respect of the Maka Tenements until
the completion of a feasibility study.
(c) Upon completion of the feasibility study, each party must
contribute to Joint Venture expenditure in proportion to their
Joint Venture interest.
(d) If a party fails to duly make a contribution to Joint Venture
expenditure that it is obliged to make then the Joint Venture
interest of that party shall dilute in accordance with the
following formula (and the Joint Venture interest of the other
party shall increase accordingly):
Joint Venture Interest of
Diluting Party = DPE x 100
TE
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Where:
DPE = the total expenditure incurred or deemed to have
been incurred by the diluting party as at the date
of calculation;
TE = the total expenditure incurred or deemed to have
been incurred by the parties as at the date of
calculation.
However, if the non diluting party contributes the non diluting
party’s share of Joint Venture expenditure, the diluting party
shall be diluted at a rate of 150% of the rate calculated in
accordance with the above formula (that is, (DPE x 150)/TE).
For the purpose calculating the deemed expenditure, the
parties shall have incurred or be deemed to have incurred Joint
Venture expenditure in accordance with their initial Joint
Venture interests up until completion of the feasibility study.
(e) In relation to the full form joint venture agreement, the
Company and Maka agreed that they will negotiate in good
faith and use best endeavours to execute a detailed joint
venture agreement on normal terms (including a dispute
resolution clause, first right of refusal clause, dilution clause,
force majeure rights and clauses that are usually contained in
such joint venture agreements) embodying the terms,
conditions and warranties contained in the option agreements.
The option agreements otherwise contains representations and warranties
standard for an agreement of its kind, including representations by Maka as to
the status and good standing of the Maka Tenements.
Employment Agreement - Mr Marcus Harden
The Company has entered into an employment agreement with Mr Marcus
Harden to provide the services of Chief Geologist for the Company on the
following terms and conditions
(a) the contract commences on the date on which the Company is
admitted to the ASX;
(b) the Company will pay Mr Harden a salary of $200,000 per annum to be
reviewed annually by the Company. In addition, the Company will
reimburse Mr Harden for all reasonable expenses incurred in the
performance of his duties;
(c) either party may, at its sole discretion, terminate the agreement by
giving the other party 12 weeks written notice
Consultancy Agreement - Black Peak Holdings
The Company has entered into a consultancy agreement with Black Peak
Holdings for the provision of management and consultancy services on the
following terms:
(a) the contract term is for 2 years commencing on the date on which the
Company is admitted to the ASX. This term may be extended by
agreement between the parties;
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(b) any services to be provided by Black Peak Holdings, including an
estimate of total fees, shall be agreed to by the Company prior to
commencement;
(c) Black Peak Holdings will be paid normal market rates of remuneration as
mutually agreed between both parties and will be reimbursed for costs
reasonably incurred with the prior approval of the Company;
(d) Black Peak Holdings cannot subcontract out any part of the services
without the written consent of the Company;
(e) The Company may terminate the agreement at any time:
(i) by giving 28 days written notice and settling all outstanding
invoicing;
(ii) without prior notice in the event of a breach or insolvency
event by, or in relation to, Black Peak Holdings.
The agreement also contains provisions including confidentiality and non-
competition that are customary in agreements of this type.
Lead Manager Agreement - Max Capital
The Company has signed a mandate letter with Max Capital dated 17 August
2011 engaging Max Capital to act as lead manager to the Offer. Under the
terms of this engagement the Company will pay Max Capital:
(a) a management fee of 2% of total funds raised under the Prospectus plus
GST; and
(b) a 4% capital raising fee on funds raised under the Prospectus. Max
Capital will be responsible for paying all capital raising fees that Max
Capital and the Company agree with any other financial services
licensees and sub-underwriters.
8.2 Litigation
As at the date of this Prospectus, the Company is not involved in any legal
proceedings and the Directors are not aware of any legal proceedings pending
or threatened against the Company.
8.3 Rights attaching to Shares
The following is a summary of the more significant rights attaching to Shares. This
summary is not exhaustive and does not constitute a definitive statement of the
rights and liabilities of Shareholders. To obtain such a statement, persons should
seek independent legal advice.
Full details of the rights attaching to Shares are set out in the Constitution, a
copy of which is available for inspection at the Company’s registered office
during normal business hours.
(a) General meetings
Shareholders are entitled to be present in person, or by proxy, attorney
or representative to attend and vote at general meetings of the
Company.
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Shareholders may requisition meetings in accordance with Section 249D
of the Corporations Act and the Constitution.
(b) Voting rights
Subject to any rights or restrictions for the time being attached to any
class or classes of Shares, at general meetings of Shareholders or classes
of Shareholders:
(i) each Shareholder entitled to vote may vote in person or by
proxy, attorney or representative;
(ii) on a show of hands, every person present who is a Shareholder
or a proxy, attorney or representative of a Shareholder has one
vote; and
(iii) on a poll, every person present who is a Shareholder or a proxy,
attorney or representative of a Shareholder shall, in respect of
each fully paid Share held by him, or in respect of which he is
appointed a proxy, attorney or representative, have one vote
for the Share, but in respect of partly paid Shares shall have
such number of votes as bears the same proportion to the total
of such Shares registered in the Shareholder’s name as the
amount paid (not credited) bears to the total amounts paid
and payable (excluding amounts credited).
(c) Dividend rights
Subject to and in accordance with the Corporations Act, the ASX Listing
Rules, the rights of any preference Shareholders and to the rights of the
holders of any shares created or raised under any special arrangement
as to dividend, the Directors may from time to time declare a dividend
to be paid to the Shareholders entitled to the dividend which shall be
payable on all Shares according to the proportion that the amount paid
(not credited) is of the total amounts paid and payable (excluding
amounts credited) in respect of such Shares.
The Directors may from time to time pay to the Shareholders any interim
dividends as they may determine. No dividend shall carry interest as
against the Company. The Directors may set aside out of the profits of
the Company any amounts that they may determine as reserves, to be
applied at the discretion of the Directors, for any purpose for which the
profits of the Company may be properly applied.
Subject to the ASX Listing Rules and the Corporations Act, the Company
may, by resolution of the Directors, implement a dividend reinvestment
plan on such terms and conditions as the Directors think fit and which
provides for any dividend which the Directors may declare from time to
time payable on Shares which are participating Shares in the dividend
reinvestment plan, less any amount which the Company shall either
pursuant to the Constitution or any law be entitled or obliged to retain,
be applied by the Company to the payment of the subscription price of
Shares.
(d) Winding-up
If the Company is wound up, the liquidator may, with the authority of a
special resolution of the Company, divide among the shareholders in
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kind the whole or any part of the property of the Company, and may for
that purpose set such value as he considers fair upon any property to be
so divided, and may determine how the division is to be carried out as
between the Shareholders or different classes of Shareholders.
The liquidator may, with the authority of a special resolution of the
Company, vest the whole or any part of any such property in trustees
upon such trusts for the benefit of the contributories as the liquidator
thinks fit, but so that no Shareholder is compelled to accept any Shares
or other securities in respect of which there is any liability.
(e) Shareholder liability
As the Shares under the Prospectus are fully paid shares, they are not
subject to any calls for money by the Directors and will therefore not
become liable for forfeiture.
(f) Transfer of Shares
Generally, Shares are freely transferable, subject to formal requirements,
the registration of the transfer not resulting in a contravention of or
failure to observe the provisions of a law of Australia and the transfer not
being in breach of the Corporations Act or the ASX Listing Rules.
(g) Variation of rights
Pursuant to Section 246B of the Corporations Act, the Company may,
with the sanction of a special resolution passed at a meeting of
Shareholders vary or abrogate the rights attaching to Shares.
If at any time the share capital is divided into different classes of Shares,
the rights attached to any class (unless otherwise provided by the terms
of issue of the shares of that class), whether or not the Company is being
wound up, may be varied or abrogated with the consent in writing of
the holders of three-quarters of the issued shares of that class, or if
authorised by a special resolution passed at a separate meeting of the
holders of the shares of that class.
(h) Alteration of Constitution
In accordance with the Corporations Act, the Constitution can only be
amended by a special resolution passed by at least three quarters of
Shareholders present and voting at the general meeting. In addition, at
least 28 days written notice specifying the intention to propose the
resolution as a special resolution must be given.
8.4 Options
The specific terms and conditions of the Options are as follows:
Tranche Number Exercise Price Expiry Date
A 5,585,000 $0.20 31 July 2015
B 500,000 $0.30 31 July 2015
C 3,650,000 $0.20 31 May 2016
Total 10,000,000
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The general terms and conditions of the Options are as follows
(a) Each Option gives the Optionholder the right to subscribe for one Share.
(b) the Options are exercisable at any time on or prior to 5:00pm (WST) on
Expiry Date by completing an option exercise form and delivering it
together with the payment for the number of Shares in respect of which
the Options are exercised to the registered office of the Company;
(c) Each Option is subject to an escrow period of 24 months from the date
of the Company’s quotation on the ASX
(d) The Options held by each Optionholder may be exercised in whole or in
part, and if exercised in part, multiples of 1,000 must be exercised on
each occasion.
(e) An Optionholder may exercise their Options by lodging with the
Company, before the Expiry Date:
(i) a written notice of exercise of Options specifying the number of
Options being exercised; and
(ii) a cheque or electronic funds transfer for the Exercise Price for
the number of Options being exercised,
(Exercise Notice).
(f) An Exercise Notice is only effective when the Company has received
the full amount of the Exercise Price in cleared funds.
(g) Within 10 Business Days of receipt of the Exercise Notice accompanied
by the Exercise Price, the Company will allot the number of Shares
required under these terms and conditions in respect of the number of
Options specified in the Exercise Notice.
(h) The Options are not transferable unless otherwise authorised by the
Company’s board of directors.
(i) All Shares allotted upon the exercise of Options will upon allotment rank
pari passu in all respects with other Shares.
(j) The Company will not apply for quotation of the Options on ASX.
However, the Company will apply for quotation of all Shares allotted
pursuant to the exercise of Options on ASX within 10 Business Days after
the date of allotment of those Shares.
(k) If at any time the issued capital of the Company is reconstructed, all
rights of an Optionholder are to be changed in a manner consistent
with the Corporations Act and the ASX Listing Rules at the time of the
reconstruction.
(l) There are no participating rights or entitlements inherent in the Options
and Optionholders will not be entitled to participate in new issues of
capital offered to Shareholders during the currency of the Options.
However, the Company will ensure that for the purposes of determining
entitlements to any such issue, the record date will be at least 7 Business
Days after the issue is announced. This will give Optionholders the
opportunity to exercise their Options prior to the date for determining
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entitlements to participate in any such issue.
(m) An Option does not confer the right to a change in exercise price or a
change in the number of underlying securities over which the Option
can be exercised.
8.5 Employee Share Option Plan
The Company has established an employee incentive option plan (Option Plan).
The full terms of the Option Plan may be inspected at the registered office of the
Company during normal business hours.
A summary of the terms of the Option Plan is set out below.
The key terms of the Plan are as follows:
(i) Eligibility and Grant of Options: The Board may grant options (Plan
Options) to any full or part time employee or Director of the Company
or an associated body corporate. Plan Options may be granted by the
Board at any time.
(ii) Consideration: Each Incentive Plan Option issued under the Plan will be
issued for nil cash consideration.
(iii) Conversion: Each Incentive Plan Option is exercisable into one Share in
the Company ranking equally in all respect with the existing issued
Shares in the Company.
(iv) Exercise Price and Expiry Date: The exercise price and expiry date for
Plan Options granted under the Plan will be determined by the Board
prior to the grant of the Plan Options.
(v) Exercise Restrictions: The Plan Options granted under the Plan may be
subject to conditions on exercise as may be fixed by the Directors prior
to grant of the Plan Options (Exercise Conditions). Any restrictions
imposed by the Directors must be set out in the offer for the Plan
Options.
(vi) Lapsing of Plan Options: Subject to the terms of the Offer made to a
Participant, an unexercised Incentive Plan Option will lapse:
(vii) on its Expiry Date;
(viii) if any Exercise Condition is unable to be met; and
(ix) subject to certain exceptions, on the eligible participant
ceasing employment with the Company.
(x) Share Restriction Period: Shares issued on the exercise of Plan Options
may be subject to a restriction that they may not be transferred or
otherwise dealt with until a Restriction Period has expired, as specified in
the offer for the Plan Options.
(xi) Disposal of Plan Options: Plan Options will not be transferable and will
not be quoted on the ASX, unless the offer provides otherwise or the
Board in its absolute discretion approves.
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(xii) Trigger Events: The Company may permit Plan Options to be exercised
in certain circumstances where there is a change in control of the
Company (including by takeover) or entry into a scheme of
arrangement.
(xiii) Participation in Rights Issues and Bonus Issues:
(xiv) There are no participating rights or entitlements inherent in the
Plan Options and holders will not be entitled to participate in
new issues of capital offered to Shareholders during the
currency of the Plan Options.
(xv) The Company will ensure that for the purposes of determining
entitlements to any such issue, the record date will be at least
six (6) Business Days after the issue is announced. This will give
Plan Option holders the opportunity to exercise their Plan
Options prior to the date for determining entitlements to
participate in any such issue.
(xvi) A Plan Option does not confer the right to a change in exercise
price or a change in the number of underlying securities over
which the Plan Option can be exercised.
(xvii) Reorganisation: The terms upon which Plan Options will be granted will
not prevent the Plan Options being re-organised as required by the
Listing Rules on the re-organisation of the capital of the Company.
(xviii) Limitations on Offers: The Company must take reasonable steps to
ensure that the number of Shares to be received on exercise of Plan
Options offered under an offer when aggregated with:
(xix) the number of Shares that would be issued if each outstanding
offer for Shares, units of Shares or options to acquire Shares
under the Plan or any other employee share scheme of the
Company were to be exercised or accepted; and
(xx) the number of Shares issued during the previous 5 years from
the exercise of Plan Options issued under the Plan (or any other
employee share plan of the Company extended only to Eligible
Participants),
does not exceed 5% of the total number of Shares on issue at the time
of an offer (but disregarding any offer of Shares or option to acquire
Shares that can be disregarded in accordance with ASIC Class Order
03/184).
8.6 Interests of Directors
Other than as set out in this Prospectus, no Director or proposed Director holds,
or has held within the 2 years preceding lodgement of this Prospectus with the
ASIC, any interest in:
(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in
connection with:
(i) its formation or promotion; or
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(ii) the Offer; or
(c) the Offer,
and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to a Director or proposed Director:
(a) as an inducement to become, or to qualify as, a Director; or
(b) for services provided in connection with:
(i) the formation or promotion of the Company; or
(ii) the Offer.
8.7 Interests of Experts and Advisers
Other than as set out below or elsewhere in this Prospectus, no:
(a) person named in this Prospectus as performing a function in a
professional, advisory or other capacity in connection with the
preparation or distribution of this Prospectus;
(b) promoter of the Company; or
(c) underwriter (but not a sub-underwriter) to the issue or a financial services
licensee named in this Prospectus as a financial services licensee
involved in the issue,
holds, or has held within the 2 years preceding lodgement of this Prospectus with
the ASIC, any interest in:
(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in
connection with:
(i) its formation or promotion; or
(ii) the Offer; or
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(c) the Offer,
and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to any of these persons for services provided
in connection with:
(a) the formation or promotion of the Company; or
(b) the Offer.
Bishop Exploration Pty Ltd has acted as Independent Geologist and has
prepared the Independent Geologist’s Report which is included in Section 4 of
this Prospectus. The Company estimates it will pay Bishop Exploration Pty Ltd a
total of $15,000 (excluding GST) for these services. During the 24 months
preceding lodgement of this Prospectus with the ASIC, Bishop Exploration Pty Ltd
has not received fees from the Company for any other services.
Stanton’s International Securities has acted as Investigating Accountant and has
prepared the Investigating Accountant’s Report which is included in Section 5 of
this Prospectus. The Company estimates it will pay Stanton’s International a total
of $7,000 (excluding GST) for these services. During the 24 months preceding
lodgement of this Prospectus with the ASIC, Stanton’s International has not
received any fees from the Company for any other services.
Steinepreis Paganin has acted as the solicitors to the Company in relation to the
Offer and has prepared the Solicitor’s Report on Tenements which is included in
Section 6 of this Prospectus. The Company estimates it will pay Steinepreis
Paganin $40,000 (excluding GST) for these services. Subsequently, fees will be
charged in accordance with normal charge out rates. During the 24 months
preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has
not received fees from the Company for any other services.
Max Capital has acted as lead manager to the Offer will receive a fee of 6% of
the total amount raised under the Prospectus (plus GST) following successful
completion of the Offer for its services. Max Capital will be responsible for
paying all capital raising fees that Max Capital and the Company agree with
any other financial services licensees and sub-underwriters.
8.8 Consents
Each of the parties referred to in this Section:
(a) does not make, or purport to make, any statement in this Prospectus
other than those referred to in this Section; and
(b) to the maximum extent permitted by law, expressly disclaim and take
no responsibility for any part of this Prospectus other than a reference to
its name and a statement included in this Prospectus with the consent of
that party as specified in this Section.
Bishop Exploration Pty Ltd has given its written consent to being named as
Independent Geologist in this Prospectus, the inclusion of the Independent
Geologist’s Report in Section 4 of this Prospectus in the form and context in
which the report is included and the inclusion of statements contained in the
Chairman’s Letter, Investment Overview and Section 2.2 of this Prospectus in the
form and context in which those statements are included. Bishop Exploration Pty
Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the
ASIC.
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Stanton’s International Securities has given its written consent to being named
as Investigating Accountant in this Prospectus and to the inclusion of the
Investigating Accountant’s Report in Section 5 of this Prospectus in the form and
context in which the information and report is included. Stanton’s International
Securities has not withdrawn its consent prior to lodgement of this Prospectus
with the ASIC.
Stanton’s International Audit and Consulting Pty Ltd has given its written consent
to being named as auditors in this Prospectus. Stanton’s International Audit and
Consulting Pty Ltd makes no representation regarding, and to the extent
permitted by the law excludes responsibility for, any statements in or omissions
from any part of this Prospectus. Stanton’s International Audit and Consulting Pty
Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the
ASIC.
Steinepreis Paganin has given its written consent to being named as the solicitors
to the Company in this Prospectus and to the inclusion of the Solicitor’s Report
on Tenements in Section 6 of this Prospectus in the form and context in which the
report is included. Steinepreis Paganin has not withdrawn its consent prior to the
lodgement of this Prospectus with the ASIC.
Max Capital Pty Ltd has given its written consent to being named as the lead
manager to the Company in this Prospectus. Max Capital Pty Ltd makes no
representation regarding, and to the extent permitted by the law excludes
responsibility for, any statements in or omissions from any part of this Prospectus.
Max Capital Pty Ltd has not withdrawn its consent prior to the lodgement of this
Prospectus with the ASIC.
Security Transfer Registrars Pty Ltd has given its written consent to being named
as the share registry to the Company in this Prospectus. Security Transfer
Registrars Pty Ltd has not withdrawn its consent prior to the lodgement of this
Prospectus with the ASIC.
8.9 Expenses of the Offer
The total expenses of the Offer (excluding GST) are estimated to be
approximately $258,500 and are expected to be applied towards the items set
out in the table below:
Item of Expenditure ($)
ASIC fees 2,137
ASX fees 35,120
Broker and Management Fees* 144,000
Legal Fees 40,000
Independent Geologist’s Fees 15,000
Investigating Accountant’s Fees 7,000
Printing and Distribution 10,000
Miscellaneous 5,243
TOTAL 258,500
* Broker commissions will only be paid on applications made through a licensed securities
dealers or Australian financial services licensee and accepted by the Company (refer to
Section 1.8 of this Prospectus for further information). The amount calculated is based on
100% of applications being made in this manner. For those applications made directly to and
accepted by the Company no broker commissions will be payable and the expenses of the
Offer will be reduced and the additional funds will be put towards working capital.
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8.10 Continuous disclosure obligations
Following admission of the Company to the Official List, the Company will be a
“disclosing entity” (as defined in Section 111AC of the Corporations Act) and, as
such, will be subject to regular reporting and disclosure obligations. Specifically,
like all listed companies, the Company will be required to continuously disclose
any information it has to the market which a reasonable person would expect to
have a material effect on the price or the value of the Company’s securities.
Price sensitive information will be publicly released through ASX before it is
disclosed to shareholders and market participants. Distribution of other
information to shareholders and market participants will also be managed
through disclosure to the ASX. In addition, the Company will post this information
on its website after the ASX confirms an announcement has been made, with
the aim of making the information readily accessible to the widest audience.
8.11 Electronic Prospectus
Pursuant to Class Order 00/44, the ASIC has exempted compliance with certain
provisions of the Corporations Act to allow distribution of an electronic
prospectus and electronic application form on the basis of a paper prospectus
lodged with the ASIC, and the publication of notices referring to an electronic
prospectus or electronic application form, subject to compliance with certain
conditions.
If you have received this Prospectus as an electronic Prospectus, please ensure
that you have received the entire Prospectus accompanied by the Application
Form. If you have not, please contact the Company and the Company will
send you, for free, either a hard copy or a further electronic copy of this
Prospectus or both. Alternatively, you may obtain a copy of this Prospectus from
the website of the Company at www.alicantominerals.com.au.
The Company reserves the right not to accept an Application Form from a
person if it has reason to believe that when that person was given access to the
electronic Application Form, it was not provided together with the electronic
Prospectus and any relevant supplementary or replacement prospectus or any
of those documents were incomplete or altered.
8.12 Financial Forecasts
The Directors have considered the matters set out in ASIC Regulatory Guide 170
and believe that they do not have a reasonable basis to forecast future
earnings on the basis that the operations of the Company are inherently
uncertain. Accordingly, any forecast or projection information would contain
such a broad range of potential outcomes and possibilities that it is not possible
to prepare a reliable best estimate forecast or projection.
8.13 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship
The Company will apply to participate in CHESS, for those investors who have, or
wish to have, a sponsoring stockbroker. Investors who do not wish to participate
through CHESS will be issuer sponsored by the Company.
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Electronic sub-registers mean that the Company will not be issuing certificates to
investors. Instead, investors will be provided with statements (similar to a bank
account statement) that set out the number of Shares allotted to them under
this Prospectus. The notice will also advise holders of their Holder Identification
Number or Security Holder Reference Number and explain, for future reference,
the sale and purchase procedures under CHESS and issuer sponsorship.
Electronic sub-registers also mean ownership of securities can be transferred
without having to rely upon paper documentation. Further monthly statements
will be provided to holders if there have been any changes in their security
holding in the Company during the preceding month.
8.14 Privacy statement
If you complete an Application Form, you will be providing personal information
to the Company. The Company collects, holds and will use that information to
assess your application, service your needs as a Shareholder and to facilitate
distribution payments and corporate communications to you as a Shareholder.
The information may also be used from time to time and disclosed to persons
inspecting the register, including bidders for your securities in the context of
takeovers, regulatory bodies including the Australian Taxation Office, authorised
securities brokers, print service providers, mail houses and the share registry.
You can access, correct and update the personal information that we hold
about you. If you wish to do so, please contact the share registry at the relevant
contact number set out in this Prospectus.
Collection, maintenance and disclosure of certain personal information is
governed by legislation including the Privacy Act 1988 (as amended), the
Corporations Act and certain rules such as the ASX Settlement Operating Rules.
You should note that if you do not provide the information required on the
application for Shares, the Company may not be able to accept or process your
application.
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9. DIRECTORS’ AUTHORISATION
This Prospectus is issued by the Company and its issue has been authorised by a
resolution of the Directors.
In accordance with Section 720 of the Corporations Act, each Director has
consented to the lodgement of this Prospectus with the ASIC.
_______________________________
Matthew Bowles
Director
For and on behalf of
Alicanto Minerals Limited
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10. GLOSSARY
Where the following terms are used in this Prospectus they have the following
meanings:
$ means an Australian dollar.
Application Form means the application form attached to or accompanying this
Prospectus relating to the Offer.
ASIC means Australian Securities & Investments Commission.
ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it
as the context requires.
ASX Listing Rules means the official listing rules of ASX.
Board means the board of Directors as constituted from time to time.
Closing Date means the closing date of the Offer as set out in the indicative
timetable in the Investment Overview of this Prospectus (subject to the
Company reserving the right to extend the Closing Date or close the Offer early).
Company means Alicanto Minerals Limited (ACN 149 126 858).
Constitution means the constitution of the Company.
Corporations Act means the Corporations Act 2001 (Cth).
Directors means the directors of the Company at the date of this Prospectus.
Doolgunna Project means the Doolgunna Project as described in the
Independent Geologist’s Report set out in Section 4 of this Prospectus.
Exposure Period means the period of 7 days after the date of lodgement of this
Prospectus, which period may be extended by the ASIC by not more than 7
days pursuant to Section 727(3) of the Corporations Act.
Maka Option Agreements means the option agreements entered into between
the Company and Maka Minerals Pty Ltd, on the terms contained in the
Summary of Material Contracts section set out in Section 8.1 of this Prospectus.
Meekatharra Project means the means the Meekatharra Project as described in
the Independent Geologist’s Report set out in Section 4 of this Prospectus.
MPF Option Agreements means the option agreements entered into between
the Company and MPF Exploration Pty Ltd, on the contained in the Summary of
Material Contracts section set out in Section 8.1 of this Prospectus.
Option Agreements means the MPF Option Agreements and the Maka Option
Agreements, and includes both or either one of them as the context requires.
JORC Code means the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.
Offer means the offer of Shares pursuant to this Prospectus as set out in Section 1
of this Prospectus.
Official List means the official list of ASX.
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Official Quotation means official quotation by ASX in accordance with the ASX
Listing Rules.
Option means an option to acquire a Share.
Optionholder means a holder of an Option.
Projects means any one of the Doolgunna Project, the Meekatharra Project and
the Yerilla Project or any one of them as the context requires.
Prospectus means this prospectus.
Section means a section of this Prospectus.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means a holder of Shares.
Tenements means the mining tenements in which the Company has an
equitable interest as further described in the Solicitor’s Report on Tenements set
out in Section 6 of this Prospectus or any one of them as the context requires.
WST means Western Standard Time as observed in Perth, Western Australia.
Yerilla Project means the Yerilla Project as described in the Independent
Geologist’s Report set out in Section 4 of this Prospectus.
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SHARE REGISTRY:Security Transfer Registrars Pty LtdAll Correspondence to:PO BOX 535, APPLECROSS WA 6953770 Canning Highway, APPLECROSS WA 6153T: +61 8 9315 2333 F: +61 8 9315 2233E: [email protected]: www.securitytransfer.com.au
ALICANTO MINERALS LIMITED ACN 149 126 858
APPLICATION FORMTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.
E & O.E.
5
REGISTRY DATE STAMP
Declaration and Statements:(1) I/We declare that all details and statements made by me/us are complete and accurate.(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.(3) I/We authorise the Company to complete and execute any documentation necessary to effect the issue of Securities to me/us.(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the Application Form or a direct derivative of the Application Form before applying for the Securities.(5) I/We acknowledge that the Company will send me/us a paper copy of the Prospectus and any Supplementary Prospectus (if applicable) free of charge if I/we request so during the currency of the Prospectus.(6) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the Company and that no notice of acceptance of the application will be provided.
BROKER STAMP
Broker Code
Advisor Code
Shares at AUD $0.20 per share Aor such lesser number of Shares which may be allocated to me/us by their Directors.
Title (e.g.: Dr, Mrs) Given Name(s) or Company Name
Title (e.g.: Dr, Mrs) Given Name(s) or Company NameJoint Applicant #2
Full Name of Applicant / Company
Title (e.g.: Dr, Mrs) Given Name(s) or Company NameJoint Applicant #3
(e.g.: THE SMITH SUPER FUND A/C)Account Designation
< >
Postal Address
/
Unit Street Number Street Name or PO BOX
PostcodeStateSuburb/Town/City
Country Name (if not Australia)
(where applicable)CHESS HIN
XIf an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do notmatch those registered) any securities issued will be held on the Issuer Sponsored subregister.
Contact Number
( )
Contact Name
Email Address
@
Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only)
I/We apply for:
, ,
I/We lodge full application of monies of:
$ , , .
PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORMNo shares will be issued pursuant to the Prospectus later than 13 months after the date of the Prospectus.Before completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.
1111444411111111333355551111555555556666
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APPLICATION FORMSPlease complete all parts of the Application Form using BLOCK LETTERS. Use correct forms of registrable name (see below). Applications using the wrong form of name may berejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.
Insert the number of Shares you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000 Shares. The applicant(s) agree(s)upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to theapplicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.
No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of theapplication.
Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is aquery in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign the Application Form. TheCompany's decision as to whether to treat your application as valid, and how to construe, amend or complete it shall be final.
PAYMENTAll cheques should be made payable to Alicanto Minerals Limited Share Placement Account and drawn on an Australian bank and expressed in Australian currency and crossed "NotNegotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency will NOT be accepted. Any such cheques will be returned and the acceptancedeemed to be invalid.
Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.
LODGING OF APPLICATIONSCompleted Application Forms and cheques must be:
Posted to: OR Delivered to:ALICANTO MINERALS LIMITED ALICANTO MINERALS LIMITEDC/- Security Transfer Registrars Pty Ltd C/- Security Transfer Registrars Pty LtdPO Box 535 770 Canning HighwayAPPLECROSS WA 6953 APPLECROSS WA 6153
Applications must be received by no later than 5.00PM (WST) on the Closing Date 24 July 2012 which may be changed immediately after the Opening Date at any timeand at the discretion of the Company.
CHESS HIN/BROKER SPONSORED APPLICANTSThe Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If youare a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESSHIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.
TAX FILE NUMBERSThe collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the lawnot to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfrankeddividend distribution at the maximum tax rate.If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from theAustralian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contactyour taxation adviser or any Taxation Office.
CORRECT FORM OF REGISTRABLE TITLENote that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to AlicantoMinerals. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable name may be included by wayof an account designation if completed exactly as described in the example of the correct forms of registrable names below:
TYPE OF INVESTOR CORRECT INCORRECTIndividual Mr John Alfred Smith J A SmithUse given names in full, not initials.
Company ABC Pty Ltd ABC P/L or ABC CoUse the company's full title, not abbreviations.
Joint Holdings Mr Peter Robert Williams & Peter Robert &Use full and complete names. Ms Louise Susan Williams Louise S Williams
Trusts Mrs Susan Jane Smith Sue Smith Family TrustUse trustee(s) personal name(s), Do not use the name of the trust. <Sue Smith Family A/C>
Deceased Estates Ms Jane Mary Smith & Estate of Late John SmithUse the executor(s) personal name(s). Mr Frank William Smith or
<Estate John Smith A/C> John Smith Deceased
Minor (a person under the age of 18) Mr John Alfred Smith Master Peter SmithUse the name of a responsible adult with an appropriate designation. <Peter Smith A/C>
Partnerships Mr John Robert Smith & John Smith and SonUse the partners' personal names. Do not use the name of the partnership. Mr Michael John Smith
<John Smith and Son A/C>Superannuation FundsUse the name of the trustee(s) of the super fund. Jane Smith Pty Ltd Jane Smith Pty Ltd Superannuation Fund
<JSuper Fund A/C>
TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSONUNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 19 JUNE 2012 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.
This Application Form relates to the Offer of Fully Paid Shares in Alicanto Minerals pursuant to the Prospectus dated 19 June 2012.
PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments andother corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details ofyour personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.
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