Notice of General Meeting

Transcription

1 CORONA MINERALS LIMITED ABN Notice of General Meeting and Explanatory Statement General Meeting to be held at Level Murray St West Perth Western Australia 11 April 2012 commencing at 11am (WST) IMPORTANT INFORMATION This Notice of General Meeting, Explanatory Statement and Proxy Form should be read carefully and in their entirety. If you do not understand or in doubt as to how you should vote, you should seek advice from your accountant, solicitor or other professional adviser without delay. If you are unable to attend the General Meeting, please complete and return the enclosed Proxy Form in accordance with the specified directions.

2 Notice of General Meeting Notice is given that a general meeting of the members of Corona Minerals Limited ABN (Company) will be held at Level 1, 703 Murray St, West Perth on 11 April 2012 at 11am (WST), for the purpose of transacting the following business referred to in this Notice of General Meeting. Please note terms used in the Resolutions contained in this Notice of Meeting have the same meaning as set out in the Glossary of the Explanatory Statement accompanying this Notice. Items of Business 1. Resolution: Proposed Issue of Shares and increase in the exercise price of Options To consider, and if thought fit, pass the following resolution as an ordinary resolution: That, for the purposes of section 208 of the Corporations Act and for all other purposes, the Company approves and authorises: (i) the increase in the exercise price from A$0.05 to A$0.10 of each of the 1,000,000 Options previously granted to Terrence Michael Allen on 31 December 2010; (ii) the increase in the exercise price from A$0.05 to A$0.10 of each of the 1,000,000 Options previously granted to Michael Peter Wright on 31 December 2010; (iii) the increase in the exercise price from A$0.05 to A$0.10 of each of the 3,000,000 Options previously granted to Terence William Middleton on 31 December 2010; (iv) the issue and allotment of 250,000 Shares to Terrence Michael Allen (or his nominee(s)) for nil consideration; (v) the issue and allotment of 250,000 Shares to Michael Peter Wright (or his nominee(s)) for nil consideration; (vi) the issue and allotment of 750,000 Shares to Terence William Middleton (or his nominee(s)) for nil consideration, on the terms and conditions set out in the Explanatory Statement which accompany this Notice. Voting Exclusion Statement The Company will disregard any votes cast on the Resolution by Messrs Allen, Wright and Middleton and any of their Associates. However, the Company need not disregard a vote if: it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form and it is not cast on behalf of Messrs Allen, Wright and Middleton or an Associate of Messrs Allen, Wright and Middleton; and it is cast by the Chairman as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. Further, a Restricted Voter who is appointed as a proxy will not vote on the Resolution unless:

3 the appointment specifies the way the proxy is to vote on the Resolution; or the proxy is the Chairman and the appointment expressly authorises the Chairman to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. Shareholders should note that the Chairman intends to vote any undirected proxies in favour of the Resolution. 2. Other Business To deal with any other business which may be brought forward in accordance with the Constitution and the Corporations Act. By Order of the Board of Directors Terrence Allen Director DATE: 29 February 2012

4 VOTING INFORMATION How to vote Shareholders can vote by either: attending the meeting and voting in person or by attorney or, in the case of corporate shareholders, by appointing a corporate representative to attend and vote; or appointing a proxy to attend and vote on their behalf using the proxy form accompanying this Notice of Meeting and by submitting their proxy appointment and voting instructions in person, by post or by facsimile. Voting in person (or by attorney) Shareholders, or their attorneys, who plan to attend the meeting are asked to arrive at the venue 15 minutes prior to the time designated for the meeting, if possible, so that their holding may be checked against the Company's share register and attendance recorded. Attorneys should bring with them an original or certified copy of the power of attorney under which they have been authorised to attend and vote at the meeting. Voting by a corporation A Shareholder that is a corporation may appoint an individual to act as its representative and vote in person at the meeting. The appointment must comply with the requirements of section 250D of the Corporations Act. The representative should bring to the meeting evidence of his or her appointment, including any authority under which it is signed. Voting by proxy A Shareholder entitled to attend and vote is entitled to appoint not more than two proxies. Each proxy will have the right to vote on a poll and also to speak at the meeting. The appointment of the proxy may specify the proportion or the number of votes that the proxy may exercise. Where more than one proxy is appointed and the appointment does not specify the proportion or number of the shareholder's votes each proxy may exercise, the votes will be divided equally among the proxies (i.e. where there are two proxies, each proxy may exercise half of the votes). A proxy need not be a shareholder. The proxy can be either an individual or a body corporate. If a proxy is not directed how to vote on an item of business, the proxy may generally vote, or abstain from voting, as they think fit. However, where a Restricted Voter is appointed as a proxy, the proxy may only vote on the Resolution if the proxy is the Chair of the Meeting and the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. Should any resolution, other than those specified in this Notice, be proposed at the meeting, a proxy may vote on that resolution as they think fit. If a proxy is instructed to abstain from voting on an item of business, they are directed not to vote on the shareholder's behalf on the poll and the shares that are the subject of the proxy appointment will not be counted in calculating the required majority. Shareholders who return their proxy forms with a direction how to vote but do not nominate the identity of their proxy will be taken to have appointed the Chairman of the meeting as their proxy to vote on their behalf. If a proxy form is returned but the nominated proxy does not attend the meeting, the Chairman of the meeting will act in place of the nominated proxy and vote in accordance with any instructions. Proxy appointments in favour of the Chairman of the meeting, the secretary or any Director that do not contain a direction how to vote will be used where possible to support the resolution proposed in this Notice, provided they are entitled to cast votes as a proxy under the voting exclusion rules which apply to the proposed resolution. These rules are explained in this Notice. To be effective, proxies must be lodged by 11am (WST) on 9 April Proxies lodged after this time will be invalid. Proxies may be lodged by returning a completed proxy form in person or by post using the pre-addressed envelope provided with this Notice to Level 1, 703 Murray Street, West Perth, WA, 6005 or by faxing a completed proxy form to The proxy form must be signed by the shareholder or the shareholder's attorney. Proxies given by corporations must be executed in accordance with the Corporations Act. Where the appointment of a proxy is signed by the appointer's attorney, a certified copy of the power of attorney, or the power itself, must be received by the Company at the above address, or by facsimile, and by 11am (WST) on 9 April 2012 If facsimile transmission is used, the power of attorney must be certified. Shareholders who are entitled to vote In accordance with Regulations and of the Corporations Regulations 2001, the Board has determined that a person's entitlement to vote at the General Meeting will be the entitlement of that person set out in the Register of Shareholders as at 11am (WST) on 9 April 2012.

5 Explanatory Statement This Explanatory Statement has been prepared for the information of Shareholders in relation to the business to be conducted at the Company s General Meeting. The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the resolution in the accompanying Notice of General Meeting. This Explanatory Statement should be read in conjunction with the Notice of General Meeting. Capitalised terms in this Explanatory Statement are defined in the Glossary. RESOLUTION PROPOSED ISSUE OF SHARES AND INCREASE IN THE EXERCISE PRICE OF OPTIONS Due to the circumstances set out under the title "Background" below, the Company proposes to increase the exercise price of Options granted to Messrs Allen, Wright and Middleton (Participating Directors) on 31 December 2010 from A$0.05 to A$0.10 each and in consideration for the increase in the exercise price, issue and allocate Shares to each of them as follows: Optionholder Number of Shares Mr T Allen 250,000 Mr M Wright 250,000 Mr T Middleton 750,000 Other than the exercise price, the Options will be governed by the same terms and conditions as when the Options were issued on 31 December 2010 and as set out in Annexure A. The increase in the exercise price of the Options and the subsequent issue of Shares will be subject to receiving conditional approval of a listing of the ordinary shares of the Company on the TSX Venture Exchange (TSX-V) and conditional approval of an initial public offering of the Company from the TSX-V (collectively, the Conditional Approval). Background The Company has applied for an initial public offering (IPO) of Shares in Canada on the TSX-V. The listing of these Shares will be conditional upon the Company fulfilling all listing requirements and conditions of the TSX-V. Under the IPO, the Company plans to raise a minimum of C$5,000,000 up to a maximum of C$6,500,000 by issuing between 33,333,333 to 43,333,333 units (Units) at a price of C$0.15 per Unit. Each unit will consist of one Share and one half of one Share purchase warrant (each full Share purchase warrant, a Warrant). A Warrant will entitle the holder to acquire, subject to adjustment in certain circumstances, one Share at an exercise price of $0.25 on or before 5:00 p.m. (Vancouver time) on the date that is 18 months from the closing of the IPO, after which time the Warrants will be void and of no value. In the Company s application for listing on the TSX-V, one of the matters raised by the TSX-V was the current exercise price of the following options granted to Directors and an employee on 31 December 2010 (the Options): Optionholder Number of Options Exercise price (A$) Mr T Allen 1,000,000 $0.05 Mr M Wright 1,000,000 $0.05 Mr T Middleton 3,000,000 $0.05 Mr C Hughes 1,000,000 $0.05 The TSX-V requires that the exercise price of the Options be a minimum of C$0.10 for the Company to become listed pursuant to Canadian securities law. The Company has agreed with the TSX-V that it will implement an increase of the exercise price of each of the Options from A$0.05 to A$0.10, subject to Shareholder approval and grant of Conditional Approval by the TSX- V.

6 Consequence of increase in exercise price In the event the Options are exercised, this table compares the amounts that will need to be paid to the Company by the participating Directors at the current exercise price and the proposed exercise price: Director Total consideration payable to exercise options at current exercise price of A$0.05 each Total consideration payable to exercise options at proposed exercise price of A$0.10 each Mr Allen, or his nominee(s) $50,000 $100,000 Mr Wright, or his nominee(s) $50,000 $100,000 Mr Middleton, or his nominee(s) $150,000 $300,000 Total $250,000 $500,000 If the Resolution is passed and the TSX-V grants Conditional Approval, the Company will therefore receive A$500,000 from the Participating Directors should all their Options be exercised, rather than A$250,000 at the current exercise price. The increase in the exercise price of the Options will potentially create a financial shortfall for each of the Participating Directors. The TSX-V has agreed that the Company could decide to compensate the Participating Directors for the potential shortfall by an issue of Shares for nil consideration and in proportion to the Options held by each of the Participating Directors. Each Share to be issued to the Participating Directors has a deemed issue price of C$0.15 per Share which is equivalent to the proposed issue price per Unit for the Canadian listing. The number of shares to be issued to each of the Participating Directors has been calculated to compensate the Participating Directors for approximately 75% of the potential financial shortfall. If the resolution is passed and the TSX-V grants Conditional Approval, the Shares will be issued as follows: Director Number of Shares Mr Allen, or his nominee(s) 250,000 Mr Wright, or his nominee(s) 250,000 Mr Middleton, or his nominee(s) 750,000 Total 1,250,000 Remuneration The issue of the Options to the Participating Directors (or their nominees) was designed to recognise and reward the services and contributions provided by these individuals to the Company, and to provide an ongoing incentive to grow the Company and hence achieve value for all Shareholders. The Options were issued in addition to their normal remuneration payable by the Company (presently $nil). The Participating Directors have agreed to accept the proposed increase in the exercise price of their Options, subject to the issue of Shares explained in this Explanatory Statement and Conditional Approval granted by the TSX-V. On the condition that the Resolution is passed and Conditional Approval is granted by the TSX-V, the Directors and the participating employee Mr Hughes have also agreed to increase the exercise price of the 1,000,000 Options held by Mr Hughes from A$0.05 to A$0.10 and for the Company to issue 250,000 Shares to Mr Hughes (or his nominee(s)) at nil consideration. Financial benefit to a related party

7 The issuing of securities to a related party (or their eligible associate) as contemplated by the Resolution will constitute the giving of a financial benefit to a related party and the Resolution is put to Shareholders for that reason. The Resolution is also put pursuant to section 195 of the Corporations Act. This section permits the Directors to seek Shareholder approval to a given matter where a majority of Directors have a material personal interest in a matter being considered by the Board and there are not sufficient remaining independent Directors to consider the resolution. Since all of the Directors are materially interested in the resolutions, Shareholder approval is also sought for the purposes of section 195 of the Corporations Act and the Directors have not, as a Board, considered this resolution except for the purposes of convening the meeting of Shareholders. Corporations Act Chapter 2E of the Corporations Act prohibits a public company from giving a financial benefit to a related party of the public company unless either: (a) (b) the giving of the financial benefit falls within one of the nominated exceptions to the provision; or shareholder approval is obtained prior to the giving of the financial benefit and the benefit is given within 15 months after obtaining such approval. A related party for the purposes of the Corporations Act is defined widely. It includes a director of a public company and specified members of the director s family. A financial benefit for the purposes of the Corporations Act is also defined widely. It includes a public company issuing securities or granting options to a related party. In determining whether or not a financial benefit is being given, it is necessary to look to the economic and commercial substance and the effect of the transaction (rather than just the legal form) and any consideration which has been given is to be disregarded, even if it is full or adequate. For the purposes of Chapter 2E of the Corporations Act, the Participating Directors are considered related parties of the Company. The Resolution provides for the issue and allocation of Shares to the Participating Directors which are a financial benefit for the purposes of Chapter 2E of the Corporations Act. Current Holdings Set out below are details of each of the Participating Directors relevant interest in Shares of the Company as at the date of the Notice: Director Number of Shares Mr Allen (1) 14,012,778 Mr Wright (2) 9,270,000 Mr Middleton (3) 1,033,125 Total 24,315,903 Notes: (1) Terrence Michael Allen s shares are held as follows: (2) T&E Allen Investments Pty Ltd. 1,387,582 Terrence Michael Allen & Elizabeth Allen 2,311,375 Terrence Michael Allen 256,250 Weybridge Pty Ltd. 7,430,071 Lental Pty Ltd. 2,562,500 Lental Superannuation Pty Ltd. 65,000 Michael Peter Wright s shares are held as follows: Vector Nominees Pty Ltd. 8,945,000 Michael Wright 325,000

8 (3) Terence William Middleton s shares are held as follows: Terence William Middleton & Judith Mary Middleton itf 870,625 Hercules Superannuation Fund Judith Mary Middleton 162,500 Set out below are details of the each of the Participating Directors relevant interest in Options of the Company as at the date of this Notice. Director Number of Options (1) Mr Allen 1,000,000 Mr Wright 1,000,000 Mr Middleton 3,000,000 Total 5,000,000 (1) These Options are the subject of the Resolution. INFORMATION REQUIREMENTS For the purposes of Chapter 2E of the Corporations Act the following information is provided. (a) The related party to whom the proposed resolution would permit the financial benefit to be given Subject to shareholder approval and Conditional Approval granted by the TSX-V, the following maximum number of Shares will be granted to the following related parties or their respective nominees: Director Number of Shares Mr Allen (or nominee) 250,000 Mr Wright (or nominee) 250,000 Mr Middleton (or nominee) 750,000 Total 1,250,000 (b) The nature of the financial benefit The proposed financial benefit to be given is the issue and allocation of Shares for the increase in exercise price of the options held by the Participating Directors as noted above. (c) Directors recommendations All Directors were available to consider the Resolution. The Participating Directors declined to make a recommendation to Shareholders in respect of the Resolution as they have a material personal interest in the outcome of the resolution by virtue of the proposed issue of Shares to each of them. Mr Brian Hurley (who does not have an interest in the Resolution) recommends that Shareholders approve the issue of Shares under the Resolution for the reasons outlined above. (d) Other information that is reasonably required by Shareholders to make a decision whether it is in the best interests of the Company to pass the Resolutions that is known to the Company or any of its Directors The proposed ordinary Resolution would have the effect of giving power to the Directors to issue Shares as set out in this Explanatory Statement. The Company currently has 56,356,988 Shares and 6,000,000 Options on issue. If the Shares proposed to be granted to them (or their eligible associates) under the Resolution is increased and no other Shares are issued in the meantime, the number of issued Shares would increase by 1,250,000 to a total of 57,606,988 Shares, representing 2.17% of the total Shares. The Participating Directors fees per annum (including superannuation) and the total financial benefit to be received by them in this current period as a result of the issue of the Shares subject to the Resolution are as follows:

9 Director Fees p.a. Value of Shares (C$) (based on a deemed issue price equal to the proposed TSX-V IPO Unit price) Total Financial Benefit (C$) Mr Allen Nil 0.15 $,37,500 Mr Wright Nil 0.15 $ 37,500 Mr Middleton Nil 0.15 $112,500 (e) Other information Other than as disclosed in this Explanatory Statement, the Directors do not consider that from an economic and commercial point of view, there are any costs or detriments including opportunities cost or taxation costs for the Company or benefits foregone by the Company in issuing the 1,250,000 Shares pursuant to the Resolution. Neither the Directors nor the Company are aware of other information that would be reasonably required by shareholders to make a decision in relation to the financial benefits contemplated by the proposed resolutions. (f) Voting Note that a voting exclusion applies to the Resolution in the terms set out in the Notice of Meeting. In particular, the Participating Directors and other Restricted Voters may not vote on this Resolution and may not cast a vote as proxy, unless the appointment gives a direction on how to vote or the proxy is given to the Chair and expressly authorises the Chair to exercise your proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. The Chair will use any such proxies to vote in favour of the Resolution. Shareholders are urged to carefully read the proxy form and provide a direction to the proxy on how to vote on this Resolution.

10 Glossary In this Explanatory Statement, the following terms have the following unless the context otherwise requires: Accounting Standards has the meaning given to that term in the Corporations Act; Associate has the meaning given in the Corporations Act; A$ means Australian dollars; Board means the board of Directors of the Company; Closely Related Party has the meaning given in the Corporations Act; Company or Corona means Corona Minerals Limited ABN ; Constitution means the Company's constitution, as amended from time to time; Corporations Act means Corporations Act 2001 (Cth); C$ means Canadian dollars; Explanatory Statement means this explanatory statement accompanying the Notice; Directors means the Directors of the Company; IPO means the initial public offering of the Shares on the TSX-V; Key Management Personnel has the meaning given in the accounting standards; Meeting means the general meeting the subject of the Notice; Notice means the Notice of General Meeting; Option means the option to acquire a Share; Restricted Voter means the Key Management Personnel and their Closely Related Parties; Resolution means a resolution contained in this Notice; Shares means fully paid ordinary shares in the capital of the Company; Shareholder means the holder of a Share; and TSX-V means the TSX Venture Exchange; WST means Australian Western Standard Time.

11 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) ANNEXURE A OPTION TERMS & CONDITIONS Expiry Date Options (Options) are exercisable on or before 31 December Options not exercised by that date shall lapse. Exercise Price Each Option shall entitle the Optionholder to acquire one ordinary fully paid share (Share) in Corona Minerals Limited (Company) upon payment of A$0.05 per Share (Exercise Price) to the Company. Notice of Exercise Each Option may be exercised by notice in writing to the Company on the Exercise Dates. Any notice of exercise of an Option received by the Company with payment in full of the Exercise Price will be deemed to be a notice of the exercise of that Option as at the date of receipt. Issue of Options to Nominee The Optionholder may elect to have his/her Options issued to a nominee (i.e. another person, a company, etc.). If the Optionholder elects to do this, he/she acknowledges that the tax consequences of doing so may not be the same as if he/she elected to apply for the Options directly. Transferability of Options and Shares Options may be transferred and/or sold to another person at any time after issue and before expiry. Shares resulting from the exercise of Options are also the Optionholder s to deal with as he/she sees fit. Participation Rights or Entitlements There are no participating rights or entitlements inherent in the Options and Optionholders will not be entitled to participate in new issues of securities offered to Shareholders during the currency of the Options. However, subject to clause (c) above, 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 so as to give Optionholders the opportunity to exercise any Options before the date for determining entitlements to participate in any issue. Shares Allotted on Exercise Shares allotted pursuant to the exercise of Options will be allotted following receipt of all the relevant documents and payments and will rank equally with other issued ordinary Shares. Reconstruction/Issue of Share Capital In the event of a reconstruction (including consolidation, subdivision, reduction or return) of the issued capital of the Company, or a major rights issue, placement or other equity raising, all rights of the Optionholder shall be reconstructed as specified in the listing Rules of ASX Limited ACN (ASX Listing Rules) (whether or not the Company is listed on the ASX at the time). Bonus Issues If, from time to time, before the expiry of the Options the Company makes a bonus issue of Shares to Shareholders for nil consideration, the number of Shares over which an Option is exercisable will be increased by the number of Shares which the Optionholder would have received if the Option had been exercised before the date for calculating entitlements to the bonus issue. Change in Exercise Price

12 If there is a pro-rata issue (other than a bonus issue), to the holders of Shares during the currency of, and prior to the exercise of any options, the Exercise Price of an option will be reduced according to the formula provided for in the ASX Listing Rules (whether or not the Company is listed on the ASX at the time).