ALKANE EXPLORATION LTD ABN

Transcription

1 ALKANE EXPLORATION LTD ABN CORPORATE OFFICE: 129 Edward Street, Perth WA 6000 (PO Box 8178, Perth Business Centre, Perth WA 6849) Telephone Fax: mail@alkane.com.au 14 February 2003 Dear Shareholder, OFFER OF NEW ALKANE SHARES UNDER A SHARE PURCHASE PLAN The Directors are pleased to extend an invitation to each Alkane shareholder (an "Eligible Shareholder") as at 5.00pm Western Standard Time on 18 February 2003 (the "Record Date") to subscribe for additional fully paid ordinary shares in Alkane ("New Alkane Shares") under the terms and the conditions of Alkane's Share Purchase Plan ("Share Purchase Plan") (a copy of which is attached to this letter as Annexure "A"). The Share Purchase Plan has been designed to allow Eligible Shareholders to subscribe for New Alkane Shares at a price which, subject to market fluctuations, is at a discount to the market price. It also allows Eligible Shareholders to subscribe for New Alkane Shares without the brokerage costs that would otherwise apply. If you currently hold an unmarketable parcel of shares (being less than $500 worth of shares), this is a good means by which you can top up your shareholding and accordingly trade your shares on the ASX. Participation in this offer is optional. The offer under the Share Purchase Plan is non-renounceable. This means that you cannot transfer your right to subscribe for New Alkane Shares under this offer to anyone else. You are eligible to participate in the Share Purchase Plan as you were a registered holder of fully paid ordinary shares in Alkane on the Record Date with a registered address in either Australia or New Zealand. How Much Can You Invest? As an Eligible Shareholder, you are entitled to subscribe for New Alkane Shares up to a maximum value of $5,000. You may select only 1 of the following alternatives to subscribe for New Alkane Shares under the Share Purchase Plan: Dollar Value of New Alkane Shares Offer A $1000 Offer B $2000 Offer C $3000 Offer D $4000 Offer E $5000 REGISTERED OFFICE: 129 Edward Street, Perth WA 6000 (PO Box 8178, Perth Business Centre, Perth WA 6849) Telephone: (08) Fax: (08) Web: http// mail@alkane.com.au

2 Offer Price and Closing Date The subscription price will be 95% of the average market price (as defined in the Listing Rules of Australian Stock Exchange Limited ("ASX")) of existing fully paid ordinary shares in Alkane quoted on the ASX during the 5 trading days up to and including the closing date of 19 March 2003 ("Closing Date"). Fractions of a cent will be rounded down to the nearest whole tenth of a cent. The Directors have determined that, in a fluctuating market, this method of calculating the issue price of the New Alkane Shares is the best way to ensure that Eligible Shareholders receive a discount to the market price. This method means that applicants will not know exactly how many New Alkane Shares they will receive until the offer is closed. Applications are therefore based on a dollar value as opposed to a number of New Alkane Shares. The market price of fully paid ordinary shares in Alkane may rise or fall between now and the date when New Alkane Shares are issued in accordance with the Share Purchase Plan. As the final subscription price will not be known until the Closing Date, Eligible Shareholders should be aware that if the market price rises in the period between the date of your application and the Closing Date, you will receive less New Alkane Shares than you would be able to purchase on market today for the same dollar subscription amount. If the market price falls, you will receive more New Alkane Shares than you would if you purchased your Alkane Shares on market today. For example, based on an application at the current market price of 37 cents (which would be discounted to 95% in accordance with the Share Purchase Plan), the issue price would be 35.1 cents. A subscription of $5,000 would result in the issue of 14,245. If the market price changes between the date of such an application and the Closing Date, the number of New Alkane Shares issued would be: Example of Average Market Price 5 days up to and including Closing Date Subscription Price (95 %) Subscription Amount New Alkane Shares to be Issued 40 cents 38 cents $5,000 13, cents 28.5 cents $5,000 17,543 The number of New Alkane Shares will be rounded to the whole number nearest to the subscription amount. Excess Subscriptions The Directors have determined that the maximum number of New Alkane Shares to be issued will be limited to 10% of the total issued capital of Alkane (ie 11,971,897 fully paid ordinary shares). In the event that applications for more than 11,971,897 New Alkane Shares are received, the Directors will scale back the applications on a pro rata basis. Certification You must provide Alkane with a certification that the aggregate price for the New Alkane Shares the subject of your application under the Share Purchase Plan, together with any other Alkane shares applied for by you in the 12 months prior to the date of your application under the Share Purchase Plan or any similar arrangement, does not exceed $5,000. By completing and returning the attached Share Purchase Plan Entitlement and Acceptance Form (see below), you will have provided Alkane with the necessary certification. How do you apply for New Alkane Shares under this offer? To subscribe for New Alkane Shares under this offer, you must: Carefully read the terms and conditions of the Share Purchase Plan contained in Annexure "A". Complete the attached Entitlement and Acceptance Form specifying the dollar value of New Alkane Shares you wish to subscribe for (being either $1,000, $2,000, $3,000, $4,000 or $5,000). Enclose a cheque made payable to and crossed Not Negotiable for the total subscription price for the New Alkane Shares specified in the Entitlement and Acceptance Form

3 (being either $1,000, $2,000, $3,000, $4,000 or $5,000). Return the Entitlement and Acceptance Form together with payment to: By Post: In Person: c/- Advanced Share Registry Services c/-advanced Share Registry Services PO Box th Level, 200 Adelaide Terrace EAST PERTH WA 6892 PERTH WA 6000 by 5.00pm WST on 19 March If you are unsure about any aspect of this offer, you should seek professional advice. Please contact Lindsay Colless on or by to lcolless@alkane.com.au, if you have any queries in relation to this offer or how to accept it. Yours faithfully, for ALKANE EXPLORATION LTD L A Colless Director/Secretary

4 "A" Terms and Conditions of the Share Purchase Plan of Purpose The purpose of the Share Purchase Plan (the "Plan") is to offer shareholders of Alkane Exploration Ltd ("Alkane") the opportunity to acquire additional fully paid ordinary shares in Alkane ("New Alkane Shares") up to a maximum of A$5,000 in any 12 month period at a discount to the market price of fully paid ordinary shares in Alkane on the financial market operated by Australian Stock Exchange Limited ("ASX") without the need to pay brokerage costs and without the need for Alkane to issue a prospectus or other disclosure document. Shareholders eligible to participate All persons registered as holders of existing fully paid ordinary shares in Alkane at the relevant record date may participate in the Plan except those shareholders whose address in Alkane's register of members is a country whose laws or regulations (in the reasonable opinion of the directors of Alkane) make it unlawful or impracticable for Alkane to offer and issue New Alkane Shares to that person under the Plan. Participation in the Plan is optional and is subject to these terms and conditions. Offers made under the Plan are nonrenounceable (ie eligible shareholders may not transfer their rights to any New Alkane Shares offered under the Plan). Offers will, at the discretion of the directors of Alkane, be made under the Plan once a year. The maximum amount which any shareholder may subscribe for in any consecutive 12 month period is A$5,000. The directors of Alkane may also determine in their discretion the specified amounts for participation or the multiples of New Alkane Shares to be offered under the Plan. Price of New Alkane Shares The price of New Alkane Shares to be issued under the Plan will be determined by calculating a discount to the average market price of existing fully paid ordinary shares in Alkane quoted on the ASX during the 5 trading days up to and including the relevant record date or closing date specified by the directors of Alkane as the date for determining the price of New Alkane Shares under the Plan. Issue of Alkane Shares New Alkane Shares to be issued under the Plan will be issued as soon as reasonably practicable after the closing date specified by the directors of Alkane in the relevant offer. New Alkane Shares issued under the Plan will rank equally in all respects with all other fully paid ordinary shares in Alkane from the date of issue. Shareholding statements will be issued in respect of all New Alkane Shares issued under the Plan. Alkane will, promptly after issue of New Alkane Shares under the Plan, make application for those New Alkane Shares to be admitted to quotation on the ASX and all other stock exchanges (if any) on which existing fully paid ordinary shares in Alkane are listed. Costs of Participation No brokerage, commission or other transaction costs will be payable by participants in respect of the application for, and issue of, New Alkane Shares under the Plan.

5 Applications and Notices At the discretion of the directors of Alkane, Alkane will send eligible shareholders an offer, accompanied by an entitlement and acceptance form, inviting them to subscribe for New Alkane Shares under the Plan. Notices and statements to participants may be given by Alkane in any manner prescribed by its Constitution. Modification and termination of the Plan Alkane may modify or terminate the Plan at any time. Alkane will notify the ASX of any modification to, or termination of, the Plan. The omission to give notice of any modification to, or termination of, the Plan or the failure of the ASX to receive such notice will not invalidate the modification or termination. Without limiting the above, Alkane may issue to any person fewer New Alkane Shares than the person applied for under the Plan if the issue of the New Alkane Shares applied for would contravene any applicable law or the Listing Rules of ASX. Dispute resolution Alkane may settle in any manner it thinks fit any difficulties, anomalies or disputes which may arise in connection with or by reason of the operation of the Plan whether generally or in relation to any participant, application or New Alkane Shares, and the decision of Alkane will be conclusive and binding on all shareholders and other persons to whom that determination relates. Alkane reserves the right to waive strict compliance with any provision of these terms and conditions. The powers of Alkane under these conditions may be exercised by the directors of Alkane or any delegate of the directors of Alkane.

6 ACN Share Purchase Plan Entitlement and Acceptance Form Offer closes 5.00pm Perth time 19 March 2003 THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR PROFESSIONAL ADVISER Record Date: 5.00pm WST 18 February 2003 Date on which offer closes: 5.00pm WST 19 March 2003 Anticipated Issue Date: 26 March 2003 HIN / SRN: Non-renounceable offer of New Alkane Shares to each holder of existing fully paid ordinary shares in Alkane as at the Record Date. I/We, the above mentioned, being registered at 5.00pm WST on 18 February 2003 as the holder(s) of Alkane shares hereby accept the below mentioned New Alkane Shares issued in accordance with the Share Purchase Plan. I/We authorise you to place my/our name(s) on the register of members in respect of the number of New Alkane Shares issued to me/us. I/We agree to be bound by the Constitution of. I/We enclose my/our cheque made payable to. I/We certify that the aggregate of the application price for the New Alkane Shares the subject of this application and any other Alkane shares applied for in the 12 months prior to the date of this application under the Share Purchase Plan or any similar arrangement, does not exceed $5000. Application for Shares To participate in the Share Purchase Plan shareholders must select only one of the 5 following alternatives. Please mark the selected box. Offer A Offer B Offer C Offer D Offer E $1,000 OR $2,000 OR $3,000 OR $4,000 OR $5,000 Return of this document with the required remittance will constitute your acceptance of the New Alkane Shares being offered. Please refer to the attached letter for the number of New Alkane Shares to be issued by Alkane on the issue date. The subscription price will be 95% of the average market price (as defined in the Listing Rules of Australian Stock Exchange Limited) of existing Alkane shares quoted on the ASX during the 5 trading days up to and including the offer closing date of 19 March Please complete the following cheque payment details: Drawer Bank Branch or BSB Amount Cheques should be made payable to and crossed Not Negotiable and sent to: By post: In Person: c/- Advanced Share Registry Services c/-advanced Share Registry Services PO Box th Level, 200 Adelaide Terrace EAST PERTH WA 6892 PERTH WA 6000 by 5.00pm WST on 19 March Please ensure you submit the correct amount. Incorrect payments may result in your application being rejected. Telephone number where we may contact you during business hours. ( ) Contact Name: Offer Closes 5.00pm Perth time 19 March 2003