Atlantic Limited ACN PROSPECTUS

Transcription

1 Atlantic Limited ACN PROSPECTUS For a non-renounceable entitlement issue of up to 112,039,263 New Shares on the basis of 1 New Share and 1 free attaching New Option for every 3 Shares held by Shareholders as at 5.00pm (WDST) on 4 February 2009 at an issue price of 0.5 cents per New Share to raise up to $560,196. Important Information This Prospectus is a short form prospectus issued in accordance with Section 712 of the Corporations Act. This Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type but refers to another document the information of which is deemed to be incorporated in this Prospectus. The securities offered by this Prospectus should be considered as speculative.

2 Atlantic Limited TABLE OF CONTENTS SECTION 1 CORPORATE DIRECTORY...2 SECTION 2 LETTER FROM THE BOARD OF DIRECTORS...3 SECTION 3 TIMETABLE AND IMPORTANT DATES...4 SECTION 4 DETAILS OF THE OFFER...5 SECTION 5 INFORMATION DEEMED TO BE INCORPORATED IN THIS PROSPECTUS SECTION 6 BACKGROUND AND COMPANY OVERVIEW SECTION 7 SECTION 8 EFFECT OF THE ENTITLEMENT ISSUE ON THE COMPANY TERMS AND CONDITION OF NEW SHARES AND RIGHTS ATTACHING TO SHARES AND NEW OPTIONS SECTION 9 ADDITIONAL INFORMATION SECTION 10 MATERIAL CONTRACTS SECTION 11 CONSENTS AND INTERESTS OF PARTIES SECTION 12 AUTHORITY OF DIRECTORS SECTION 13 DEFINITIONS... 37

3 Important Notice This Prospectus is dated 23 January A copy of this Prospectus was lodged with ASIC on 23 January ASIC and ASX takes no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. No New Shares will be issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus. No person is authorised to give information or make any representations in connection with this Prospectus which is not contained in this Prospectus. Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisors before deciding whether to apply for New Shares. There are risks associated with an investment in Atlantic and the New Shares offered under this Prospectus must be regarded as a speculative investment. The New Shares offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the New Shares. Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in Section 13 of this Prospectus. Short Form Prospectus This Prospectus is a short form prospectus issued in accordance with Section 712 of the Corporations Act. This means that this Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type. Rather, the Prospectus incorporates by reference information contained in a document that has previously been lodged with the ASIC. Please refer to the July 2007 Prospectus. In referring to the July 2007 Prospectus, the Company: (a) (b) (c) (d) identifies the July 2007 Prospectus as being relevant to the offer of New Shares and New Options under this Prospectus and containing information that will provide investors and their professional advisers information to assist them in making an informed assessment of: (i) the rights and liabilities attaching to; (a) the New Shares and New Options; and (b) the underlying securities; (ii) the capacity of the Company to issue the New Shares and New Options and underlying securities; and (iii) the assets and liabilities, financial position and performance, profits and losses and prospects of Atlantic; refers investors and their professional advisers to Section 5 of this Prospectus which summarises the information in the July 2007 Prospectus deemed to be incorporated in this Prospectus; informs investors and their professional advisers that they are able to obtain, free of charge, a copy of the July 2007 Prospectus by either ing or writing to the Company at its registered office during normal business hours during the Offer Period, or by visiting the Company s website at and advises that the information in the July 2007 Prospectus will be primarily of interest to investors and their professional advisers or analysts. 1

4 SECTION 1 CORPORATE DIRECTORY Board of Directors Company Secretary : John Hannaford (Executive Chairman) : James Malone (Non - Executive Director) : Anthony Veitch (Non - Executive Director) : Morgan Barron Registered Office : Level 2 16 Altona Street West Perth WA 6005 Lead Manager* Legal Advisers to the Company Share Registry* Auditors* Stock Exchange* : Azure Capital Pty Ltd Level 33, Exchange Plaza 2 The Esplanade Perth WA 6000 : Middletons (Perth) Pty Ltd Level 2, 6 Kings Park Road Perth WA 6005 : Security Transfer Registrars Pty Ltd PO Box 535 Applecross WA 6953 : HLB Mann Judd 2nd Floor 15 Rheola Street West Perth WA 6005 : Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: ATI *These parties have been included for information purposes only. They have not been involved in the preparation of this Prospectus. 2

5 SECTION 2 LETTER FROM THE BOARD OF DIRECTORS 23 January 2009 Dear Shareholder, On 13 November 2008 the Company announced that it had entered into an agreement to acquire Azure Mining International Ltd ( AMI ), a company which has applied for a bauxite exploration licence located at Bao Loc in Vietnam. In connection with the acquisition Atlantic is conducting a non renounceable entitlement issue on the basis of 1 New Share and one free attaching New Option for every 3 existing Shares being up to 112,039,263 New Shares at 0.5 cents each to raise up to $560,196 ( Entitlements Issue ). The Board is pleased to offer Shareholders the opportunity to participate in the Offer. The funds raised by the issue along with proceeds of a proposed Placement to raise up to $1,100,000 will be used to fund the initial exploration program at the Bao Loc Project (subject to shareholder approval for the acquisition) including reconnaissance drilling, resource drilling and a scoping study, to be completed within the coming six months. More detail of the use of funds raised from the Offer is included in Section 7. All Shareholders registered as at 5.00pm WDST on 4 February 2009 will be entitled to participate in the Offer. The Closing Date for acceptances is 5.00pm WDST on 23 February The Board commends the offer to all Shareholders and advises that the Directors intend to take up their full entitlement. Yours faithfully, John Hannaford Executive Chairman 3

6 SECTION 3 TIMETABLE AND IMPORTANT DATES SUMMARY OF IMPORTANT DATES Lodgement of Prospectus with ASIC/ASX 23 January 2009 Opening Date 27 January 2009 Letter to shareholders dispatched 27 January 2009 Shares quoted on an ex basis 29 January 2009 Record Date for determining Entitlement 4 February 2009 Prospectus Dispatched to Shareholders 9 February 2009 Expected Closing Date * 23 February 2009 Despatch holding statements 3 March 2009 Quotation of Shares 4 March 2009 The dates set out above are indicative only and may be subject to change. * The Directors may extend the Closing Date by giving at least 6 Business Days notice to ASX prior to the Closing Date. As such, the date the New Shares are expected to commence trading on ASX may vary. 4

7 SECTION 4 DETAILS OF THE OFFER 4.1 Purpose of the Offer The funds raised by the Offer of up to $560,196 will be applied to initial exploration at the Bao Loc Project in Vietnam (assuming shareholders approve the acquisition of AMI, the holder of the Permit) and for working capital purposes and to meet the expenses of the Offer of approximately $20, The Offer The Company is making a pro-rata non-renounceable entitlement offer to Shareholders who are registered at 5.00pm WDST on 4 February 2009 of up to 112,039,263 New Shares at an issue price of 0.5 cents each, with one free attaching New Option to raise approximately $560,196 (before costs of the Offer). The New Shares and New Options will be offered on the basis of one (1) New Share and New Option for every three (3) Shares then held. The terms and conditions of the Shares and New Options are set out in Section 8 of this Prospectus. In the calculation of any Entitlement, fractions will be rounded down to the nearest whole number. 4.3 Entitlement The number of New Shares and New Options to which each Shareholder is entitled ( Entitlement ) is shown on the enclosed Acceptance Form. Your acceptance must not exceed your Entitlement as shown on that form. If it does, your acceptance will be deemed to be the maximum Entitlement. Shareholders may accept their Entitlement in full or part by returning a completed Acceptance Form to the Company s share registry by 5.00 pm WDST on the Closing Date. 4.4 Minimum Subscription There is no minimum subscription. 4.5 Oversubscriptions Oversubscriptions will not be accepted. 4.6 Issue Price The issue price is 0.5 cents for each New Share and free attaching New Option, payable in full in Australian currency on the acceptance of the Offer as follows: Cheque drawn on and payable at any Australian bank; Money Order; or Bank draft drawn on and payable at any Australian bank. 5

8 4.7 Acceptance This Offer may be accepted in whole or in part. Acceptance and payment in full of 0.5 cents per New Share must be received before 5.00pm WDST on the Closing Date. Instructions for completion and lodgement of acceptances are set out on the back of the enclosed Acceptance Form. 4.8 Action Required If you wish to take up all of your Entitlement, complete the enclosed Acceptance Form in accordance with the instructions set out and lodge the form together with your cheque for the amount shown on the form so that it reaches the Company s share registry by no later than 5.00pm WDST on the Closing Date: Security Transfer Registrars Pty Ltd PO Box 535 APPLECROSS WA 6953 Cheques and drafts should be made payable to Atlantic Ltd Share Issue Account and crossed Not Negotiable. If you wish to take up part of your Entitlement, complete the enclosed Acceptance Form in respect of the New Shares you wish to take up in accordance with the instructions set out in the form and lodge the form together with your cheque for the relevant amount (being the number of New Shares you wish to take up multiplied by 0.5 cents per New Share) so that it reaches the Company s share registry by no later than 5.00pm WDST on the Closing Date. If you do not wish to take up any of your Entitlement, you do not need to take any action and your Entitlement to the New Shares will lapse. The Offer is non-renounceable so that a holder of Shares may not sell or transfer all or part of their Entitlement. 4.9 Underwriting This Offer is not underwritten Shortfall If any Shortfall remains after the Closing Date, the Directors reserve the right pursuant to Listing Rule 7.2 (exception 3) to place any Shortfall with parties selected by them. The Shortfall will be placed by Azure Capital as Lead Manager on a best endeavours basis. Azure Capital will receive a fee of 2% for all funds raised under the offer. In addition, Azure Capital will receive a fee of 4% of the funds raised through placement of the Shortfall. Further details of the agreement with, and payment to Azure Capital, are set out in Section 10: Material Contracts. The Offer of any Shortfall is a separate offer made pursuant to this Prospectus and will remain open for up to 3 months following the Closing Date. The issue price of any Shortfall shall be 0.5 cents per New Share being the price at which the Entitlement has been offered to Shareholders pursuant to this Prospectus. If you are instructed by the Directors or Azure Capital that you are eligible to participate in the Shortfall you will need to complete the Shortfall Application Form. 6

9 Any Shortfall not taken up by Shareholders will not be placed to the Directors or any associates of the Directors Allotment The New Shares and New Options will be allotted and issued as soon as practicable after the Closing Date. Where the number of New Shares and New Options 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. Holding statements for the New Shares and New Options will be mailed as soon as possible after the Closing Date. Pending the allotment and issue of the New 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. 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. No New Shares or New Options will be allotted and issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus Stock Exchange Quotation Application for Official Quotation of the New Shares by the ASX will be made by the Company within seven (7) days of the date of this Prospectus. If approval is not obtained from ASX before the expiration of 3 months after the date of issue of the Prospectus, (or such period as varied by the ASIC), the Company will not issue any New Shares or New Options and will repay all application monies for the New Shares and New Options within the time prescribed under the Corporations Act, without interest. The fact that ASX may grant Official Quotation to the New Shares is not to be taken in any way as an indication of the merits of the Company or the New Shares now offered for subscription. Atlantic does not intend to apply for Official Quotation of the New Options to be issued pursuant to this Prospectus Overseas Shareholders This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. No action has been taken to lodge this Prospectus in any jurisdiction outside of Australia or to otherwise permit a public offering of Shares in any jurisdiction outside Australia. Accordingly, the Offer is not being extended and Shares will not be issued to Shareholders with a registered address which is outside Australia or New Zealand. The Shares offered under this Prospectus have not been or will not be registered under the US Securities Act of 1933 and may only be offered, sold or resold in, or to 7

10 persons in, the United States in accordance with an available exemption from registration. Shareholders resident in New Zealand should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to exercise their Entitlements under the Offer. It is the responsibility of any Applicant to ensure compliance with any laws of a country relevant to their Application. Return of a duly completed Application Form will be taken by the Company as a representation that there has been no breach of such laws and that the Applicant is physically present in Australia or New Zealand Clearing House Electronic Sub-Register System ( CHESS ) and Issuer Sponsorship The Company will not be issuing share certificates. The Company will apply to ASX to participate in CHESS, for those Shareholders 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. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation Privacy If you complete an application for New Shares and New Options, you will be providing personal information to the Company (directly or by the Company s share registry). The Company collects, holds and will use that information to assess your application, service your needs as a shareholder, facilitate distribution payments and corporate communications to you as a shareholder and carry out administration. The information may also be used from time to time and disclosed to: (a) (b) (c) (d) (e) (f) (g) persons inspecting the register; bidders for your securities in the context of takeovers; regulatory bodies, including the Australian Taxation Office; authorised securities brokers; print service providers and mail houses for the purpose of preparation and distribution of statements and handling mail; investor relations and market research consultants or firms for the purpose of analysing the Company s Shareholder base and for project development and planning; and legal and accounting firms, auditors, contractors, consultants and other advisers for the purpose of administering, and advising, on the Shares and for associated actions. You can access, correct and update the personal information that we hold about you. Please contact the Company or its registry if you wish to do so at the relevant contact numbers 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 ASTC Settlement Rules. You should note that if you do not provide the information required on the application for New Shares and New Options, the Company may not be able to accept or process your application. 8

11 4.16 Enquiries If you have any questions concerning your Entitlement, please contact the Company Secretary, Morgan Barron on telephone (08) , facsimile (08) or contact your professional adviser. 9

12 SECTION 5 INFORMATION DEEMED TO BE INCORPORATED IN THIS PROSPECTUS 5.1 Short Form Prospectus This Prospectus is a short form prospectus issued in accordance with Section 712 of the Corporations Act. This means that this Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type, however it incorporates by reference information contained in a document that has previously been lodged with the ASIC. The information to be incorporated by reference into this Prospectus is summarised below and will primarily be of interest to investors and their professional advisers or analysts. The Company informs investors and their professional advisers that they are able to obtain, free of charge, a copy of the July 2007 Prospectus by contacting the Company at its registered office during normal business hours during the Offer Period. The July 2007 Prospectus will also be available by searching ASIC s records in relation to Atlantic, or by visiting the Company s website at and clicking on the link through to the ASX announcements portal. Summary of Information Deemed to be Incorporated Set out below is a summary of the information contained in the July 2007 Prospectus that is deemed to be incorporated in this Prospectus to assist investors and their professional advisers to determine whether, for the purposes of making an informed investment decision in relation to the New Shares, they should obtain a copy of the July 2007 Prospectus. The sections referred to below are a reference to sections in the July 2007 Prospectus. Section 4 Background and Company Overview This section contains a summary of the history of the Company including the recapitalisation of the Company in 2007 and its current pearl marketing operations. Section 6 Legal Title and Material Contracts Section 6 contains information relating to Atlantic s legal right to market and sell the Pearl Product (as defined in the July 2007 Prospectus) pursuant to an Exclusive Sales and Marketing Agreement. Section 6 also outlines the material contracts to which the Company is a party that may be material in terms of the Offer. Section 7 - Risk Factors Section 7 notes that an investment in Atlantic has risks reasonably expected of an investment in a business of its type. It details a number of factors that may impact on the success and future profitability of Atlantic. The factors referred to are specific sector risks such as competition, pearl price fluctuations, weather conditions affecting pearl farming operations, marketing risks, country specific risks as well as general economic risks, market conditions, risks of share market investments 10

13 generally, the Company s future capital requirements, the Company s unprofitable trading history and the fact that an investment in the Company is speculative. Further to the risk factors set out in the July 2007 Prospectus, the Company would also like to outline the following non-exhaustive additional risk factors that Atlantic is exposed to as a result of the agreement to acquire and, subject to shareholder approval, acquisition of Azure Mining International Limited (also refer to Section 6 of this Prospectus). Shareholder Approval Risk The acquisition of AMI is subject to Shareholder approval at a General Meeting to be held on 25 February No assurances can be given that Shareholder s will approve the resolutions required to complete the acquisition, in which case, the conditions precedent to the Share Sale Agreement will not be satisfied, and the acquisition will not be completed. Completion of the Company s acquisition of AMI is governed by a Share Sale Agreement as further described in Section 10. The acquisition is subject to a number of conditions, as further described in Section 10. The Offer is not subject to Shareholder approval at the General Meeting to be held on 25 February The Offer will proceed irrespective of the outcome of the Shareholders meeting. Exploration Success The Permit as described in this Prospectus is an exploration permit, and potential investors should understand that mineral exploration and development are highrisk undertakings. There can be no assurance that exploration of the 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. Country Risk The Bao Loc Project is located approximately 15km north of the Bao Loc township in southern Vietnam. Should there be any material change to the political, legal, social or economic environment in Vietnam, the Company and the Bao Loc Project may be affected and the Company may have to reassess its investment decisions and commitments in relation to Vietnam. Title Risks The Permit as described in this Prospectus is at the application stage only. There can be no assurance that the application will be validly granted. There can be no assurance that when a tenement is granted, that it will be granted in its entirety. Some of the tenement area applied for may be excluded. Interests in tenements in Vietnam are governed by Vietnamese legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments. In addition, the introduction of new legislation or amendments to existing legislation could impact adversely on the assets and operations of the Company. 11

14 Operating Risks 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 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. The Company does not have any operating history. No assurances can be given that the Company will achieve commercial viability through the 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. Resource Estimates Resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company s operations. Commodity Price Volatility and Exchange Rate Risks If the Company commences mineral production, the revenue it will derive through the sale of commodities exposes any 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, technological advancements, forward selling activities and other macroeconomic factors. Furthermore, international prices of various commodities are often denominated in United States dollars, whereas the income and expenditure of the Company are and will be taken into account in Australian dollars and the majority of the Company s expenditure will be in Australian Dollars and in Vietnamese Dong. This exposes the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar and Vietnamese Dong as determined in international markets. Environmental Risks The operations and proposed activities of the Company are subject to Vietnamese laws and regulations concerning the environment. As with most exploration projects and mining operations, the Company s activities in Vietnam 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. Contractual Risk The Company is reliant to a certain extent on the cooperation and compliance of parties to the agreements to which it is a party. See Section 10 for a summary of the material contracts to which the Company is a party. 12

15 Reliance on Key Management The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on the Board, senior management and its key personnel. There can be no assurance that there will be no detrimental impact on the Company if one or more of these employees cease their employment with the Company. Taxation Risk Variations in the taxation laws of Australia or Vietnam could impact the Company s financial performance and interpretation of taxation law could change, leading to a change in taxation treatment of investments or activities. 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 securities offered under this Prospectus. Therefore, the New 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 securities. Potential investors should consider that an investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for securities pursuant to this Prospectus. Section 8 - Additional Information Section 8 of the July 2007 Prospectus set out additional information required to be disclosed in the Prospectus including: Rights Attaching to Shares; Terms of Options as at the date of this Prospectus; Interests of Directors. 13

16 SECTION 6 BACKGROUND AND COMPANY OVERVIEW 6.1 Overview and Reference to July 2007 Prospectus A comprehensive overview of the Company is set out in the July 2007 Prospectus. Persons considering subscribing for New Shares under this Prospectus should refer to Section 5 of this Prospectus for a summary of the information contained in the July 2007 Prospectus deemed to be incorporated in this Prospectus. As detailed in Section 4 of the July 2007 Prospectus, Atlantic proposed to continue the marketing and sale of the Pearl Product (as defined in the July 2007 Prospectus) pursuant to the Exclusive Sale and Marketing Agreement (summarised in Section 6 of the July 2007 Prospectus). The Company also proposed to use funds raised from the issue under the July 2007 Prospectus to consider new projects by way of acquisition or investment. The expenditure budget for each of pearl marketing and the evaluation of new projects was $250,000 per annum. On 7 August 2007, the Company resolved to issue and allot all Shares offered under the July 2007 Prospectus and consolidated its share capital following approval at a general meeting of Shareholders. Following effectuation of a Deed of Company Arrangement (as defined in the July 2007 Prospectus) on 9 August 2007, Atlantic was reinstated to the Official List of ASX on 10 August 2007 with Official Quotation of its Shares re-commencing on 14 August The Company now has 336,117,790 Shares on issue and 70,000,000 unlisted Options exercisable at 1 cent each on or before 31 December No Shares or Options are subject to escrow restrictions, with the total issued Share capital being quoted on the Official List. 6.2 Other Circumstances or Matters subsequent to July 2007 Prospectus As announced on 13 November 2008, Atlantic has entered into an agreement to acquire 100% of Azure Mining International Limited ( AMI ). AMI is the applicant for an exploration permit in an area prospective for bauxite in Bao Loc, Lam Dong province of Vietnam. The permit covers approximately 100 km 2. Project Description AMI has submitted an application to the peoples committee of Mal Dong Province for an exploration permit in Bao Loc, Lam Dong province of southern Vietnam. The Bao Loc Project is located approximately 15km north of the Bao Loc township. Bao Loc is a small town approximately 185km by road north of Ho Chi Minh City in southern Vietnam. As at the date of this Prospectus, the Directors believe AMI has received what it believed to be approval of the Permit but was awaiting clarification from its independent advisers in Vietnam. Previous drilling has been carried out on the project area by local mining companies. 14

17 AMI s consulting geologist visited the site recently and observed numerous bauxite outcrops of indurated (hard) ferrugenous laterites. These showed a high degree of weathering and lateritisation which is compatible with the formation of economic bauxite. The Bao Loc Project site has good infrastructure in terms of roads, power and water due to the proximity to local plantations of tea, pine forests and coffee. Bao Loc Strategy The Directors believe that the acquisition of AMI represents a good opportunity to develop a bauxite export operation targeting the growing East Asian markets, assuming positive exploration results. Once AMI has secured the grant of the Bao Loc exploration permit and the acquisition of AMI has been completed, Atlantic intends to immediately commence an initial exploration and development programme that is budgeted at approximately US$600,000 ( Development Budget ). It is proposed that this programme is to completed within 6 months of the grant of the Permit, to reassess historic borehole data on the project, complete further drilling, delineate a JORCcompliant resource estimate and complete a scoping study into a washed bauxite export operation. On 13 January 2009, the Company announced that AMI had received what it believes to be the approval for the bauxite exploration permit located at Bao Loc in Vietnam. At the date of this Prospectus, Atlantic and its consultants are currently confirming the substance and details of the approval. Transaction Details On 9 January 2009, Atlantic executed a Share Sale Agreement with the AMI shareholders to acquire 100% of AMI for the following consideration: (a) (b) (c) (d) 100 million Shares in the Company. 1,500 Class A Performance Shares which may be converted to 150 million Shares within 7 days after Atlantic has expended the Development Budget. 1,500 Class B Performance Shares which may be converted to 150 million Shares within 7 days of receipt of an independent JORC-compliant inferred mineral resource of at least 30 million tonnes of bauxite of not less than 35% Al 2 O 3. A non refundable cash payment of A$253,292 being reimbursement of previous expenditure in relation to the Bao Loc Project. A detailed summary of the Share Sale Agreement is located in Section 10: Material Contracts. Atlantic has committed to the Development Budget over a maximum period of 6 months from the grant date of the Permit to delineate a JORC-code compliant resource and complete a scoping study into a washed bauxite export operation. An introduction fee of 20 million New Options to subscribe for Shares exercisable at $0.008 on or before 31 December 2011 is payable to Trident Capital Pty Ltd in connection with the transaction, issuable upon completion. The ASX has confirmed that the completion of the acquisition of AMI does not constitute a change of nature and scale pursuant to the ASX Listing Rules however the issue of further Shares upon conversion of the Class A Performance Shares and/or the Class B Performance Shares may require Atlantic to re-comply with 15

18 Chapters 1 and 2 of the Listing Rules. Shareholder approval may also be required under ASX Listing Rule 11.1 for the change in nature and scale of activities of the Company prior to the issue of Shares upon conversion of the Class A Performance Shares and/or the conversion of Class B Performance Shares. The Share Sale Agreement is conditional on the commencement of the Offer the subject of this Prospectus. Atlantic announced on 22 January 2009 that Shareholders had been sent a Notice of Extraordinary General Meeting regarding resolutions relating to the acquisition of AMI and other matters related to the acquisition. The acquisition of AMI is conditional upon the resolutions contained in the Notice of Meeting being passed. A copy of the Notice is available on the Company s website. Atlantic proposes to also carry out a private placement of 220 million Shares at $0.005 each to Sophisticated Investors and Professional Investors identified by Azure Capital together with 220 million free attaching New Options exercisable at $0.008 on or before 31 December 2011 to raise $1.1 million before costs ( the Placement ). Azure Capital has been engaged to manage the Placement on a best endeavours basis. Other than as stated above or otherwise in this Prospectus, the Company is not aware of any material matter or circumstance that would impact on the contents of the July 2007 Prospectus or the activities and prospects of the Company which would be relevant to assist investors or their professional advisers making an informed assessment of the merits of the Offer. Pearl Marketing Update Some of the pearl marketing activities of the Company have been delayed to date due to deferral of the pearl harvest in Myanmar and the stockpiling of pearls. The Company continues to examine opportunities to expand its pearl marketing activities and evaluate new business opportunities with the principle objective of increasing shareholder value. 16

19 SECTION 7 EFFECT OF THE ENTITLEMENT ISSUE ON THE COMPANY 7.1 Purpose of the Offer and Use of the Funds Raised Under the Offer, up to 112,039,263 New Shares are available with one free attaching New Option for each New Share subscribed (either by Shareholders accepting the Offer under this Prospectus or pursuant to the Directors discretion to place any Shortfall referred to in Section 4 of this Prospectus). After expenses of the Offer, the proceeds from the issue of New Shares and New Options will be approximately $540,196 (assuming that the Offer is fully subscribed). The proceeds of the Offer will be used as follows, assuming completion of the acquisition of AMI: Use of Funds Proceeds Raised through the Offer Estimated Cash on hand at Closing Date Total funds available before Placement Initial exploration and development programme Additional working capital and development of pearl marketing activities Full Subscription $A No Entitlements taken up, Shortfall placed with broker $A $560,196 $560,196 $650,000 $650,000 $1,210,196 $1,210,196 ($850,000) ($850,000) ($340,196) ($306,584) Costs of the Offer ($20,000) ($53,612) The proceeds of the Offer will be used as follows, assuming the acquisition of AMI and the Placement do not proceed: Use of Funds Full Subscription No Entitlements taken up, Shortfall placed with broker $A $A Proceeds Raised through the $560,196 $560,196 Offer Estimated Cash on hand at $650,000 $650,000 Closing Date Total funds available $1,210,196 $1,210,196 Additional working capital and ($1,190,196) ($1,156,584) development of pearl marketing activities Costs of the Offer ($20,000) ($53,612) If less than the full subscription is received, the funds will be applied firstly to the costs of the Offer and then to the Company s working capital and development of the Company s pearl marketing activities, as outlined above. 17

20 7.2 Pro-forma Balance Sheet Below is an extract from the 30 June 2008 Financial Report illustrating the proforma financial position of the Company subsequent to the Offer (assuming that the Offer is fully subscribed). The 30 June 2008 balance sheet was audited by HLB Mann Judd in accordance with the requirements of the Corporations Act. Audited as at 30 June 2008 $ Unaudited as at 30 Nov 2008 $ Pro-forma as at 28 Feb 2009 $ ASSETS Current assets Cash and cash equivalents (a) 984, ,728 1,859,542 Trade and other receivables 7,574 10,825 10,825 Total current assets 992, ,553 1,870,367 Non-current assets Bao Loc Exploration Permit (b) - - 1,470,734 Total non-current assets - - 1,470,734 TOTAL ASSETS 992, ,553 3,341,101 LIABILITIES Current liabilities Trade and other payables 40,331 29,472 29,472 Total current liabilities 40,331 29,472 29,472 TOTAL LIABILITIES 40,331 29,472 29,472 NET ASSETS 951, ,081 3,311,629 EQUITY Issued capital (c) 15,048,895 15,048,895 17,709,091 Capital Raising Costs (d) (166,781) (166,781) (257,621) Options Reserve (e) ,000 Accumulated losses (f) (13,930,273) (14,075,033) (14,339,841) TOTAL EQUITY 951, ,081 3,311,629 The effects of the Offer illustrated in the pro-forma balance sheet above are explained as follows: (a) the cash raised from the Offer is to be utilised in the Bao Loc Project. Set out below is a reconciliation of cash used during the period (assuming full subscription); Cash at Bank 30 Nov ,728 Estimated General Expenditure from 1 Dec 08 to 28 Feb 2009 (64,808) Reimbursement of past costs for Bao Loc Project (253,292) Outflows relating to Bao Loc Development Budget (217,442) Funds to be raised from the Offer 560,196 Estimated costs of the Offer (20,000) Funds to be raised from the Placement 1,100,000 Estimated costs of the Placement (70,840) Proforma Cash on Hand at 28 Feb ,859,542 (b) consideration paid for the acquisition of AMI and expenditure on the Bao Loc Project will be capitalised as an exploration asset; 18

21 (c) an increase in the issued capital account of $560,196 from the Offer, $1,100,000 from the Placement and $1,000,000 from the issue of 100,000,000 Shares for the acquisition of Azure Mining International Pty Ltd valued at the Company s current share price of $0.01; (d) Capital raising costs associated with the Offer of $20,000 and capital raising costs of $70,840 associated with the Placement offer have been capitalised and are offset against issued capital; (e) The New Options issued to Trident for the introduction fee have been valued using a Black & Scholes methodology and have been recognised in the options reserve and expensed through accumulated losses. Details of the valuations are set out below: Model Inputs Trident Options 1. Options granted for no consideration: 20,000, Exercise price (cents): Issue date: 25 February Expiry date: 31 December Underlying security spot price at grant date (cents): Expected price volatility of the company s shares: 75% 7. Expected dividend yield: 0% 8. Risk-free interest rate 5.25% Black & Scholes Valuation per Option 0.01 (f) General expenditure during the period between 1 December 2008 and 28 February 2009 has been taken to accumulated losses along with the valuation of the New Options noted in (e) above. 19

22 7.3 Effect of the Offer The principal effect of the Offer will be to: (a) (b) (c) increase cash reserves by $540,196 after deducting estimated expenses of the Offer and assuming all New Shares offered under this Prospectus are issued; increase the number of Shares on issue from 336,117,790 at the date of this Prospectus to up to 448,157,053 Shares; and increase the number of Options on issue from 70,000,000 at the date of this Prospectus to up to 182,039,263 Options. Upon completion of the Offer, the issued capital of the Company will comprise 448,157,053 Shares and 182,039,263 unlisted Options (assuming the Offer is fully subscribed), as set out below. The table below shows the effect of the acquisition of AMI and Placement on the capital structure of the Company: (a) assuming that neither the acquisition of AMI or the Placement are completed: Acquisition and Placement (including Performance Shares) $0.008 $0.01 ATI Total Shares Price Options Options Shares on issue 336,117,790 70,000,000 Entitlements Issue (1:3) and one free option 112,039,263 $ ,039, ,157, ,039,263 70,000,000 (b) assuming the acquisition of AMI and Placement are both completed: Acquisition and Placement (including Performance Shares) $0.008 $0.01 ATI Total Shares Price Options Options Shares on issue 336,117,790 70,000,000 Acquire AMI - issue of Permit 100,000,000 Introduction Fee 20,000,000 Entitlements Issue (1:3) and one free option 112,039,263 $ ,039,263 Private Placement 220,000,000 $ ,000,000 A Performance shares (1,500 converting to 150M) Completion of Development Budget 150,000,000 B Performance shares (1,500 converting to 150M) Existence of 30MT JORC Resource 150,000,000 1,068,157, ,039,263 70,000,000 If the acquisition and Placement do not proceed and the Offer is fully subscribed the pro-forma cash position of the Company would be $1,047,

23 SECTION 8 TERMS AND CONDITION OF NEW SHARES AND RIGHTS ATTACHING TO SHARES AND NEW OPTIONS 8.1 New Shares Investors are advised as follows: 1. the maximum number of New Shares to be issued under the Offer is 112,039,263; 2. the New Shares will be issued no later than 3 months after the date of this Prospectus (or such later date to the extent permitted by any ASIC waiver) and it is intended that allotment will occur on the same date; 3. the issue price will be 0.5 cents per New Share; 4. the New Shares and New Options will be offered to current shareholders of the Company at 5pm (WDST) on the Record Date; and 5. the New Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company s existing Shares. 8.2 Rights attaching to Shares Full details of the rights attaching to Shares (including New Shares) are set out in the Company s Constitution, a copy of which can be inspected, free of charge, at the Company's registered office during normal business hours. The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. Ranking of Shares All New Shares will, from the time they are issued, rank pari passu with all the Company s existing Shares. General Meetings Each Shareholder is entitled to receive notice of, and to attend and vote at, general meetings of the Company and to receive all notices, accounts and other documents required to be furnished to Shareholders under the Company s Constitution, the Corporations Act and the Listing Rules. 21

24 Voting Rights Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present there are none), at meetings of shareholders of Atlantic: a) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative; b) 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 c) 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 which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited). Rights on Winding Up Subject to the rights of holders of Shares with special rights in a winding up (at present there are none), on a winding up of the Company all assets that may be legally distributed among members will be distributed in proportion to the number of fully paid Shares held by them (and a partly paid share is counted as a fraction of a fully paid share equal to the amount paid on it, divided by the total issue price of the share). Rights on Winding Up If the Company is wound up, the liquidator may, with the sanction of a special resolution: divide among the Shareholders the whole or any part of the Company s property; and decide how the division is to be carried out between the Shareholders. Subject to any special rights (at present there are none), any surplus assets on a winding up are to be distributed to Shareholders in proportion to the number of Shares held by them irrespective of the amounts paid or credited as paid. Transfer of Shares Shareholders may transfer Shares by market transfer in accordance with a computerised or electronic system established or recognised by the Listing Rules or the Corporations Act for the purpose of facilitating dealings in Shares including a transfer that may be effected pursuant to the ASX Market Rules or by an instrument in writing in a form approved by the ASX, or in any other usual form or in any form approved by the Directors and as otherwise permitted by the Corporations Act. The Directors may refuse to register any transfer of Shares other than a market transfer where permitted or required by the Listing Rules or ASX Market Rules. The Company must not prevent, delay or interfere with a proper market transfer or the 22

25 registration of a paper based transfer in registrable form in a manner contrary to the Listing Rules or ASX Market Rules. Future Increases in Capital The allotment and issue of any Shares is under the control of the Directors. Subject to any restrictions on the allotment of Shares to Directors or their associates under the ASX Listing Rules, the Constitution of the Company and the Corporations Act, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit. Variation of Rights Under 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 the 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. Dividend Rights Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there are none), the profits of the Company which the Directors determine to distribute by way of dividend are divisible among the Shareholders in proportion to the number of Shares held by them. Unmarketable Parcels The Company s Constitution provides for the sale of unmarketable parcels subject to any applicable law and provided a notice is given to the minority Shareholders stating that the Company intends to sell their relevant Shares unless an exemption notice is received by a specified date. 8.3 Terms and Conditions of New Options The terms and conditions of the New Options are as follows: 1. Each New Option entitles the holder to acquire one fully paid ordinary Share in the Company. 2. The New Options may be exercised at any time until 31 December Each New Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the sum of 0.8 cents per Option exercised. 3. The New Options shall not be transferable. 4. There are no participating rights or entitlements inherent in the New Options and Option holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the New Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 10 Business Days after the issue is announced. This will give Option holders the opportunity to exercise their New Options prior to the date for determining entitlements to participate in any such issue. 23