*This photograph is the property of and is being reprinted with permission of the Grenfell Historical Society Inc.
PROSPECTUS For Initial Public Offering This is a supplementary prospectus to the replacement prospectus lodged with ASIC on 8 June 2011. This supplementary prospectus is dated 24 August 2011.
BLIGH RESOURCES LIMITED ACN 130 964 162 Level 8, 84 Pitt Street Sydney NSW 2000 Australia Phone: (61) 2 9233 4677 Fax: (61) 2 9230 0710 Email: [email protected] WEB: www.blighresources.com.au BLIGH RESOURCES LTD PROSPECTUS
1. Important Information about this Supplementary Prospectus This Supplementary Prospectus is issued by Bligh Resources Limited and is dated 24 August 2011.
A copy of this Supplementary Prospectus was lodged with the Australian Securities and Investments Commission (ASIC) on 24 August 2011. ASIC and ASX Limited (ASX) take no responsibility for the content of this Supplementary Prospectus.
This Supplementary Prospectus must be read together with the Replacement Prospectus dated 8 June 2011 (Prospectus), relating to an offer of shares by the Company.
Words used in this Supplementary Prospectus have the meanings given in the Prospectus, unless the contrary intention appears.
This Supplementary Prospectus prevails to the extent of any inconsistency with the Prospectus.
This Supplementary Prospectus and the Prospectus may be viewed on the Company’s website. During the period of the Offer, you may obtain a paper copy of the Prospectus and this Supplementary Prospectus free of charge by contacting the Company.
You may only apply for Shares using an application form attached to or accompanied by a complete copy of the Prospectus and this Supplementary Prospectus (Application Form). A person must not pass on a copy of the Application Form unless it is accompanied by a complete copy of the Prospectus and this Supplementary Prospectus.
2. Why has the Company issued this Supplementary Prospectus? Bligh has issued this Supplementary Prospectus to:
extend the Closing Date under the Offer to 5.00 p.m. (WST) on 18 November 2011 and thereby;
i. amend the date and time reference in the definition of Closing Date in the Prospectus to be 5.00 p.m. (WST) on 18 No- vember 2011; and,
ii. amend any date and time reference in the Prospectus relating to the expiry of the Offer or the last date for receipt of completed Application Forms and or the payment of Application Monies in the Prospectus to read 5.00 p.m. (WST) on 18 November 2011.
provide a revised Application Form;
tell you that ASIC has made a declaration under section 741(1) of the Corporations Act 2001 (Cth) (Corporations Act), to modify certain sections of the Corporations Act, as they apply to Blight Resources Limited, as follows:
under section 723(3)(b) of the Corporations Act, if Shares offered under the Prospectus are not admitted to quotation on ASX within three months after the date of the Prospectus, an issue of Shares in response to an application made under the Prospectus is void;
• under section 724(1)(b)(ii) of the Corporations Act, if Shares offered under the Prospectus are not admitted to quota- tion on ASX within three months after the date of the Prospectus, Bligh must repay money received from applicants under the Prospectus or issue a supplementary prospectus and give applicants one month to withdraw their application and be repaid;
• ASIC has modified the above sections of the Corporations Act so the time periods specified in those sections will re- commence from the date of this Supplementary Prospectus provided that Bligh gives all persons, who have applied for Shares prior to the issue of this Supplementary Prospectus, one month to withdraw their application an be repaid their application money.
2 BLIGH RESOURCES LTD PROSPECTUS
3. What is the new indicative timetable for the Offer? As mentioned above, the Directors have resolved to extend the Closing Date under the Offer to 18N ovember 2011. The new indicative timetable for the Offer is as follows:
Key Dates* Offer Opens 7 June 2011 Date of Supplementary Prospectus 24 August 2011 Closing Date for Applications 18 November 2011 * These dates are indicative only. The Directors reserve the right to extend the Offer or close the Offer early without prior notice.
4. Why has the Company extended the Closing Date under the Offer? On 26 July 2011, Bligh entered into an underwriting agreement for the minimum subscription amount of $3,500,000.
As at the date of this Supplementary Prospectus, the Company has not received applications from a sufficient number of applicants to meet Condition 7 of ASX Listing Rule 1.1 for admission to the official list of the ASX (Spread of Shareholders).
The Directors have decided to extend the offer period to provide additional time to achieve the Spread of Shareholders. The Directors intend to close the offer as soon as practicable after the Spread of Shareholders is achieved.
5. your right to withdraw your application and be repaid If you applied for Shares under the Prospectus before the date of this Supplementary Prospectus, you may withdraw your application and be repaid, provided the Company receives your written notice of your wish to do so before 24 September 2011.
Your withdrawal notice should be sent to either of the addresses under Lodgement Instructions on the Application Form.
If you do not wish to withdraw your application, you do not need to take any action.
6. Consents Each Director has given his consent to the issue of this Supplementary Prospectus and to its lodgement with ASIC. No Director has withdrawn that consent prior to lodgement of this Supplementary Prospectus with ASIC.
Robert Benussi Chairman
3 *This photograph is the property of and is being reprinted with permission of the Grenfell Historical Society Inc.
PROSPECTUS For Initial Public Offering This is a replacement prospectus to the prospectus lodged with ASIC on 31 May 2011. This replacement prospectus is dated 8 June 2011.
BLIGH RESOURCES LIMITED ACN 130 964 162 Level 8, 84 Pitt Street Sydney NSW 2000 Australia Phone: (61) 2 9233 4677 Fax: (61) 2 9230 0710 Email: [email protected] WEB: www.blighresources.com.au IMPORTANT NOTICE
THIS IS AN IMPORTANT DOCUMENT AND SHOULD BE READ IN ITS ENTIRETY. YOU MAY WISH TO CONSULT YOUR STOCKBROKER, ACCOUNTANT, SOLICITOR OR OTHER PROFESSIONAL ADVISER ABOUT ITS CONTENTS.
This Prospectus is dated 31 May 2011 and was lodged with ASIC on that date. ASIC and ASX and their officers take no responsibility for the contents of this Prospectus or the merits of the investment to which the Prospectus relates.
No Shares may be issued on the basis of this Prospectus later than the expiry date of the Prospectus being the date that is 13 months after the date of this Prospectus. Shares allotted or issued pursuant to this Prospectus will be allotted or issued on the terms and conditions set out in this Prospectus. Application will be made to ASX within seven (7) days after the date of the Prospectus for Official Quotation of the Shares to be issued pursuant to this Prospectus.
This Prospectus will be issued as an Electronic Prospectus and may be accessed on the Internet at www.blighresources.com.au. The Offer pursuant to an Electronic Prospectus is only available to persons receiving an electronic version of this prospectus within Australia. The Corporations Act prohibits any person from passing to another person the Application Form unless it is attached to or accompanies the complete and unaltered version of this Prospectus. During the Offer period, any person may obtain a hard copy of the Prospectus by contacting the Company.
This Prospectus does not constitute an issue or invitation in any place in which, or to any person to whom, it would not be lawful to do so. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and any person into whose possession this Prospectus comes (including nominees, trustees or custodians) who would, or otherwise intend to, forward this Prospectus to any jurisdiction outside Australia should seek appropriate advice before taking any action. 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 the Offer, or otherwise to permit a public offering of the Shares, in any jurisdiction outside Australia.
No person is authorised to give any information or to make any representation in connection with the Offer that is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised in connection with the Offer.
The Company reserves the right to refuse any Application, including an Application from a person where the Company has reason to believe that when the person was given the Application Form he was not provided with a complete and unaltered copy of this Prospectus and any relevant supplementary or replacement Prospectus. If you have received an Application Form without a complete and unaltered copy of this Prospectus, please contact the Company who will send you, free of charge, either a printed or electronic version of this Prospectus.
The Corporations Act 2001 prohibits any person passing an Application Form on to another person unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered electronic version of this Prospectus.
Potential investors should read this Prospectus in its entirety before making an investment decision. Shares offered by this Prospectus should be considered speculative. Potential investors should consider the risk factors that may affect the financial performance of the Company. A summary of these factors is contained in Section 11. Potential investors should consider carefully these factors in the light of the potential investor’s personal circumstances (including financial and taxation issues) and seek professional advice from an accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest.
Certain terms and abbreviations used in this Prospectus have defined meanings that are explained in the Glossary.
Any assets depicted in photographs in this Prospectus are not assets of the Company unless otherwise stated.
Exposure Period In accordance with Chapter 6D of the Corporations Act 2001, this Prospectus is subject to an exposure period of seven (7) days from the date of lodgement with ASIC. This period may be extended by ASIC for a further period of seven (7) days. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. If this Prospectus is found to be deficient, any Application Forms received during the Exposure Period will be dealt with in accordance with Section 724 of the Corporations Act 2001. Application Forms received prior to the expiration of the Exposure Period will not be processed until after the Exposure Period. All Application Forms received during the Exposure Period will be treated as if they were received simultaneously on the Opening Date. BLIGH RESOURCES LTD PROSPECTUS
CONTENTS
SECTION one COMPANY DIRECTORY 2
SECTION TWo CHAIRMAN’S LETTER 4
SECTION three INVESTMENT OVERVIEW 7
SECTION Four DETAILS OF THE OFFER 11
SECTION FIve HOW TO INVEST 15
SECTION SIX DIRECTORS AND GOVERNANCE 17
SECTION Seven BLIGH RESOURCES AND ITS PROJECTS 24
SECTION EIght INDEPENDENT GEOLOGIST’S REPORT 42
SECTION NIne FINANCIAL INFORMATION 118
SECTION ten INVESTIGATING ACCOUNTANT’S REPORT 125
SECTION eleven RISK FACTORS 132
SECTION TWelve ADDITIONAL INFORMATION 137
SECTION THIrteen GLOSSARY OF DEFINED TERMS 143
SECTION Fourteen DIRECTORS’ AUTHORISATION 145
APPLICATION FORM 147
1 BLIGH RESOURCES LTD PROSPECTUS
SECTION ONE COMPANY DIRECTORY
2 BLIGH RESOURCES LTD PROSPECTUS
Board of Directors Auditors Robert J Benussi: Non-Executive Chairman PricewaterhouseCoopers Charles William Guy: Executive 201 Sussex Street, Hanjing Xu: Non-Executive Sydney NSW 2000 Peiqi Zhang: Non-Executive Australia Liming Nui: (Alternate for H. Xu)
Independent Geologists Company Secretary Al Maynard & Associates Pty Ltd Adrian Di Carlo
Investigating Accountants Registered and Principal Office PricewaterhouseCoopers Securities Ltd Level 8 / 84 Pitt Street 201 Sussex Street, Sydney NSW 2000 Sydney NSW 2000 Australia Australia Ph: 02 9233 4677 Fax: 02 9230 0710 Email: [email protected] Website: www.blighresources.com.au LEAD MANAGER Markiewicz & Company Level 6, 229-231 Macquarie Street Sydney NSW 2000 Share Registry Link Market Services Limited Ground Floor, 178 St Georges Terrace Perth WA 6000 Investor Relations Ph: 1300 554 474 Six Degrees Investor Relations Pty Ltd Fax: 02 8280 7111 Level 10 / 84 Pitt Street Sydney NSW 2000 Ph: 02 9230 0661
3 BLIGH RESOURCES LTD PROSPECTUS
SECTION TWO CHAIRMAN’S LETTER
4 BLIGH RESOURCES LTD PROSPECTUS
Dear Investors
On behalf of the Board of Directors, I am delighted to present this prospectus to you and invite you to become a shareholder in Bligh Resources Limited (“Bligh Resources”, “Bligh” or the “Company”).
Bligh Resources has 100 per cent ownership of five exploration projects that the Directors consider prospective for economic deposits of manganese, gold and base metals. These projects are located in Western Australia, the Northern Territory and New South Wales, and cover a combined area of approximately 1474 km2.
Bligh has assembled a technical and corporate team of professionals that have a track record of success in the growth and development of resource exploration companies, with a specific focus on manganese. The Directors believe this skills base and experience represents one of the Company’s key strengths.
Bligh Resources offers a portfolio of manganese and gold exploration tenements at a time when the gold price is trading at a near record, and manganese, which is an essential commodity for steel making, is in very high demand in emerging growth economies such as China, India and Brazil.
Four of Bligh’s five exploration projects are prospective for manganese, and exploration for this commodity will be the main focus for the Company. These projects include:
The historical Grenfell Manganese Field in New South Wales which reportedly contained up to 50% manganese in oxide ore (MnO), and was mined up until the 1950s. The area has been largely untested by modern exploration and drilling. The Independent Geologist’s Report in section 8 of this prospectus states that high grade deposits of the Grenfell Manganese Field are probably chemical sediments formed by hot spring hydrothermal activity.
The Manilla Manganese Project in New South Wales near Tamworth covers thirty historical manganese mines and deposits, mainly containing rhodonite. This area has also never been evaluated by modern exploration techniques.
The Kumarina Manganese Project in Western Australia has the potential for supergene manganese mineralisation. The project lies immediately west of Montezuma Mining Company Limited’s Butcher Bird project which recently reported an Inferred Maiden Mineral Resource Estimate of 64.7 million tonnes @ 11.7% Mn at an 8% Mn cut-off.
The Bootu Creek Two Project in the Northern Territory lies some 40 km south of the Bootu Creek Manganese Mine operated by OM Holdings Limited and has similar geological and structural features.
Bligh also has a secondary focus on gold exploration and has tenements prospective for gold:
The Leonora Gold Project in Western Australia is divided into two prospective areas, the Diorite King and the Mt. Davis Prospects which cover approximately 49.0 km2. Bligh’s tenements are situated six kilometres southeast of the Tarmoola Gold Mine that has produced over 3 million ounces of gold.
The Grenfell district in New South Wales also became the richest gold field in New South Wales from 1867 to 1871 and produced a total of 320,000 ounces of gold. While gold exploration is not a primary focus at Grenfell, the Company will assess all geological data it collects.
5 BLIGH RESOURCES LTD PROSPECTUS
I recommend that you read the Independent Geologist’s report carefully to gain a better understanding of Bligh Resources’ projects. There are some references in this prospectus to estimates of resources in accordance with the JORC Code for other companies which have projects near to the tenements that Bligh has. These references are for context only, and Bligh does not seek to rely on the work of those other companies in any way.
Overall, Bligh’s projects have a number of prospective targets that are, in most cases, located within close proximity of existing infrastructure, including road and rail transportation and necessary utilities such as power and water.
Bligh has spent the last two years assembling this portfolio of tenements and now plans to raise additional capital through this proposed Initial Public Offering to undertake an active exploration program commencing in the second half of calendar 2011. To date, Bligh Resources is well funded having raised a total of $2.8 million out of which $550k has been invested in securing the tenements, preparation of the initial public offering, some initial exploration activity, establishing the new office and general administration, giving the company a current cash balance of $2.25 million.
This prospectus invites subscriptions for 20,000,000 ordinary shares at an issue price of $0.25 per share to raise $5,000,000 with a minimum subscription of $3,500,000. All shares issued pursuant to this prospectus will be issued as fully paid ordinary shares and will rank equally in all respects with the shares already on issue.
The funds raised, together with Bligh’s existing cash balance, will be used to undertake an active exploration program across all of its tenements. Some initial exploration activity has already been undertaken, and Bligh intends to prioritise immediate drilling activity around its Grenfell and Kumarina projects.
While Bligh’s Directors believes the Company possesses a portfolio of highly prospective tenements, the Company also plans to assess new projects, pursue Joint Venture opportunities, and review possible acquisitions with a primary focus on manganese exploration and production.
The Directors believe that an investment in Bligh presents a good opportunity for investors to participate in the early development of the Company. However, attendant risks should be considered. At this stage of its development, Bligh is a junior explorer and there can be no guarantee that it will progress to production stage with its prospects or generate any income from them. The ability of the Company to successfully exploit its prospects is subject to a number of risks which are not foreseeable at the present time, for example the matters discussed in section 11.2.1 Exploration and Development Risk; section 11.2.3 Environmental Risk; 11.2.8 Regulatory Risk; and 11.2.9 Additional Capital Requirements. Any investment of this nature should be considered as speculative. Investors should seek their own investment advice on this. Please also refer to the non-exhaustive summary of risks relating to the offer contained in section 11 of this prospectus.
On behalf of the Directors of Bligh Resources Limited, I look forward to welcoming you as a shareholder of the Company and I commend Bligh Resources to you.
Yours Sincerely
Rob Benussi Chairman 31 May 2011
6 BLIGH RESOURCES LTD PROSPECTUS
SECTION THREE INVESTMENT OVERVIEW
7 BLIGH RESOURCES LTD PROSPECTUS
3.0 Investment Highlights and Risks
Corporate an experienced Board of Directors a successful and experienced management team – well credentialed in exploration and corporate skills with ASX-listed companies excellent technical team experienced in manganese exploration Well funded – Bligh already has $2.2 million of cash at bank
Projects extensive exploration portfolio – almost 1,500 sq km of tenements all projects are 100 per cent owned by Bligh many projects possess historical workings and have previous exploration results the majority of projects are close to existing essential infrastructure – transport, water and power bligh has undertaken preliminary exploration and field work – some projects ‘drill ready’
Risks Prospective investors are referred to section 11 of this Prospectus for more detail of the risks associated with an investment in the Company. There are various factors, although currently not foreseen, which could impact on the ability of the Company to successfully exploit its prospects. These factors could include the specific risks set out in section 11.2 of this Prospectus such as – • section 11.2.1 Exploration and Development Risk; • section 11.2.3 Environmental Risk; • section 11.2.8 Regulatory Risk; and • section 11.2.9 Additional Capital Requirements
exploration work on the Company’s tenements is at an early stage and there is no certainty that the Company can develop mining operations on its tenements market conditions may vary and result in insufficient funds being raised to conduct the necessary exploration despite encouraging historical data and workings, Bligh’s tenements may not contain economic deposits of commodities Inherent access issues within the mining industry are always present
3.1 Important Notice This Section is not intended to provide full information for investors intending to apply for Shares under this Prospectus. This Prospectus should be read and considered in its entirety.
3.2 Summary of Offer By this Prospectus, the Company invites investors to apply for 20,000,000 Shares at an issue price of 25 cents each to raise $5,000,000.
3.3 Indicative Timetable Lodgement of Prospectus with ASIC: 31 May 2011 Opening Date: 7 June 2011 Closing Date: 6 October 2011
The above dates are indicative only. The Directors reserve the right to extend the Offer or close theO ffer early without prior notice, which may have a consequential effect on other dates. Applicants are encouraged to apply for Shares as soon as possible after the Offer opens.
8 BLIGH RESOURCES LTD PROSPECTUS
3.4 Purpose of the Offer and Use of Funds The purpose of the Offer is to raise funds to: fund the Company’s drilling programs on the Bligh Properties; fund the Company’s pursuit of manganese, copper and gold opportunities; provide funds for the administration of the Company; meet the expenses of the Offer of approximately $385,000; and provide working capital for the Company.
Pursuant to the Offer, Bligh Resources is seeking to raise $5,000,000, with a minimum subscription level of $3,500,000. It is proposed that these funds will be utilised in the two years after listing as follows:
$5M Raising $3.5M Raising
funds available ($) ($)
Cash on hand 2,250,000 2,250,000
Funds raised under the Offer 5,000,000 3,500,000
Total funds available $7,250,000 $5,750,000
Allocation of funds ($) ($)
Drilling and Exploration programs on Bligh Properties (refer Section 7 Table 1) 2,785,000 2,785,000
Repayment of debt and other payables 80,000 80,000
Administration, corporate overheads & working capital, including new project 4,000,000 2,575,000 development, investments and acquisitions.
Expenses of the Offer (including fees and commissions) 385,000 310,000
Total funds aPPLIED $7,250,000 $5,750,000
The information set out in the above table is a statement of present intention as at the date of this Prospectus. The exact quantum of funds expended by the Company on any particular item will be dependent on many factors that cannot be ascertained with complete accuracy at the date of this Prospectus.
The Directors are satisfied that upon completion of the Issue, the Company will have sufficient working capital to carry out its stated objectives.
3.5 Pro Forma Capital Structure of the Company The pro forma capital structure of the Company following completion of the Offer and the further issues more particularly described in Section 4.2 is summarised below:
9 BLIGH RESOURCES LTD PROSPECTUS
Shares No. of Shares($5M) % No. of Shares($3.5M) %
Shares issued to ordinary holders 19,945,332 31.4 19,945,332 34.7
Shares issued under the Offer 20,000,000 31.5 14,000,000 24.4
Shares issued to Founders / Vendors * 22,500,000 35.5 22,500,000 39.1
Shares issued to Promoters ** 1,030,000 1.6 1,030,000 1.8
Total Shares on issue 63,475,332 100.0 57,475,332 100.0
Unlisted Options on Issue: 16.0M at $0.25 exercisable from 16,000,000 - 16,000,000 - date of listing until 5 years after the date of listing
* the shares are subject to restriction agreements with an escrow period of 24 months from listing on the ASX. ** the issue of these securities was for the purposes of geological services and capital raising initiatives. The shares are subject to restriction agreements with an escrow period of 24 months from listing on the ASX. The Company however proposes to undertake a non-renounceable entitlement issue of Options within three to six months after the Shares commence trading on the ASX. Please refer to Section 3.6 for further details of the entitlement issue of Options.
3.6 Rights Issue of Options after Listing The Company intends to undertake a non-renounceable entitlements issue of Options (“Options Issue”) within three to six months after the Shares commence trading on ASX. All Shareholders registered on the share register of the Company at a date to be announced by the Company to ASX will be entitled to participate in the Options Issue on the basis of one (1) Option for every ten (10) Shares held. The Options will be issued at a price of one (1) cent each with an exercise price of 30 cents and an expiry date of 30 June 2013. Funds raised by this Options Issue will be used for working capital purposes.
A disclosure document for the issue of Options will be issued when the Options are offered. A person should consider the disclosure document in deciding whether to subscribe for Options. Anyone who wishes to subscribe for the Options will need to complete the application form that will be in or accompany the disclosure document.
It is proposed to apply for the Options issued pursuant to the issue to be listed for quotation on ASX.
3.7 Management The company intends to enter into executive service agreements with both Robert Benussi (post 30 June 2011) and Charles William (Bill) Guy. Rob Benussi will have responsibility for day to day management of corporate and financial matters.B ill Guy will be responsible for exploration work.
The company will also utilise the services of Dr VRC Stocklmayer on geological matters. Dr Stocklmayer D.Phil, MAIG is a geologist with over 45 years experience, 30 years of which have been spent in Australia. He has worked as an exploration geologist for BHP Minerals and later as an independent consultant and has been involved in the search for and evaluation of mineral deposits throughout Australia as well as in many countries in Asia, Europe and Africa. He has experience in a variety of mineral commodities and has spent much of his time looking at iron ore, manganese, lateritic nickel and mineral sand deposits. Currently he is working as a consultant for a number of Junior Australian companies.
3.8 Investment Risk Prospective investors in the Company should be aware that subscribing for Shares under this Prospectus involves a number of risks. These risks are set out in greater detail in Section 11 and investors are urged to consider those risks carefully (and if necessary, consult their professional adviser) before deciding whether to invest in the Company. An investment in the Company is considered a speculative investment.
10 BLIGH RESOURCES LTD PROSPECTUS
SECTION FOUR DETAILS OF THE OFFER
11 BLIGH RESOURCES LTD PROSPECTUS
This Section is not intended to provide full information for those intending to apply for Shares under this Prospectus. This Prospectus should be read and considered in its entirety.
4.1 the Offer The Offer is for a total of 20,000,000 Shares at an issue price of $0.25 per Share, payable in full on Application. The Shares the subject of the Offer will be issued as fully paid and will rank pari passu with the existing Shares on issue. The terms and conditions and rights and liabilities attaching to Shares are set out in Section 12.8. Those wishing to apply for Shares under the Offer should refer to Section 5. The Directors may accept oversubscriptions up to 10% in excess of the shares on offer in this prospectus.
4.2 Minimum subscription The minimum subscription pursuant to the Offer is $3,500,000. In accordance with section 723(2) of the Corporations Act, no Shares will allotted by the Company until the minimum subscription is reached. Should the minimum subscription not be reached within 4 months after the date of this Prospectus, the Company will either repay the Application Monies to the Applicants or issue a supplementary or replacement prospectus and allow Applicants one month to withdraw their Application and be repaid their Application Monies. Interest will not be paid on Application Monies refunded.
4.3 Opening and Closing Dates The Opening Date for acceptances of the Offer will be on expiry of the Exposure Period required by the Corporations Act. Under the proposed timetable this is 7 June 2011. The Closing Date for the Offer is 6 October 2011. These dates are indicative only and the Directors reserve the right, at their discretion, to close the Offer at any other time after the Opening Date.
4.4 Underwriting and Handling Fee The Offer is not underwritten. The Company may pay a handling fee in respect of Applications lodged by any member organisation of ASX, or the holder of an Australian Financial Services Licence, and accepted by the Company, provided the relevant stamp for the organisation is on the Application Form.
4.5 Allotment under the Offer Subject to the ASX granting Official Quotation of the Shares, the allotment and issue of Shares under the Offer will take place as soon as practicable after the Closing Date. Prior to allotment, all Application Monies for the Offer shall be held in trust in a separate bank account on behalf of the Applicants until the Shares are issued. The Company, irrespective of whether the allotment of Shares takes place, will retain any interest earned on the Application Monies.
The Directors reserve the right, in their absolute discretion, to allot the Shares applied for under any Application in full or to allot any lesser number or to decline any Application. Directors may in their absolute discretion give preference to certain investors in accepting Applications under the Offer. Where the number of Shares allotted is less than the number applied for, or where no allotment is made, the surplus Application Monies will be returned by cheque to the Applicant.
Following the allocation of Shares, successful Applicants will receive a statement of shareholding that sets out the number of Shares they have been allocated in the Offer. It is expected that statements of shareholding together with any refunds of Application Monies in the event of oversubscriptions will be dispatched by standard post as soon as practicable after the Closing Date.
It is the responsibility of Applicants to determine their allocation before trading in the Shares. Applicants trading Shares before receiving a statement of shareholding will do so at their own risk.
12 BLIGH RESOURCES LTD PROSPECTUS
4.6 Granting of Official Quotation on ASX Application will be made by the Company to the ASX, within seven days after the date of this Prospectus, for the Company to be admitted to the Official List and for the Shares offered under this Prospectus, the existing Shares on issue and other Shares to be issued as referred to elsewhere in this Prospectus to be admitted for quotation on ASX.
If the Company is not admitted to the OfficialL ist and the Shares offered under this Prospectus not admitted to quotation on the ASX within four months after the date of this Prospectus, all Application Monies will be refunded without interest and no Shares will be issued.
The ASX takes no responsibility for the contents of this Prospectus. The fact that ASX may admit the Company to its Official List and grant quotation of the Company’s Shares is not to be taken in any way as an indication of the merits of the Company or the Shares offered pursuant to this Prospectus.
4.7 Non-Resident Offers This Prospectus does not, and is not intended to, constitute an offer or invitation to subscribe 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 such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities law. No action has been taken to register or qualify the Shares, or Offer, or otherwise permit a public offering of the Shares in any jurisdiction outside Australia. The Offer pursuant to an Electronic Prospectus is only available to persons receiving an electronic version of this Prospectus within Australia. It is the responsibility of Applicants outside Australia to obtain all necessary approvals for the allotment and issue of Shares pursuant to this Prospectus. The return of a completed Application Form by Applicants outside Australia will be taken by the Company to constitute a representation and warranty by that Applicant that all relevant approvals have been obtained and that the Company may lawfully issue the Shares applied for to that Applicant.
4.8 CHESS The Company will apply to be admitted to participate in the Clearing House Electronic Subregister System (“CHESS”), operated by ASTC, a wholly owned subsidiary of ASX, in accordance with the Listing Rules and ASTC Settlement Rules. On admission to CHESS the Company will operate an electronic issuer sponsored sub-register and an electronic CHESS sub-register. The 2 sub- registers together will make up the Company’s principal register of securities.
The Company will not issue share certificates to investors. Instead, investors who elect to hold their Shares on the issuer-sponsored sub-register will be provided with a holding statement (similar to a bank account statement) by the Company which sets out the number of Shares allotted to each investor under this Prospectus. For investors who elect to hold their Shares on the CHESS sub- register, the Company will, on allotment, issue an advice to investors that sets out the number of Shares allotted to the investor under this Prospectus and at the end of the month following the allotment, CHESS (acting on behalf of the Company) will provide investors with a holding statement that confirms the number of Shares allotted.
A holding statement (whether issued by CHESS or the Company) will also provide details of an investor’s Holder Identification Number (in the case of a holding on the CHESS sub-register) or Shareholder Reference Number (in the case of a holding on the issuer sponsored sub-register). Following distribution of these initial holding statements to all investors, a holding statement will only routinely be provided to an investor at the end of any subsequent month during which the investor’s holding of Shares changes.
13 BLIGH RESOURCES LTD PROSPECTUS
4.9 Restricted Securities Subject to the Company being admitted to the Official List, certain of the issued Shares, other than those subscribed for under this Prospectus, may be classified by ASX as restricted securities and will be required to be held in escrow pursuant to ASX Listing Rules.
4.10 Dividend Policy The Directors intend to give priority to maximising the development and growth of the Company. Accordingly, the Directors do not anticipate paying a dividend in the immediate future.
4.11 Risk Factors Prospective investors in the Company should be aware that subscribing for Shares under this Prospectus involves a number of risks. These risks are set out in Section 10 of this Prospectus and investors are urged to consider those risks carefully (and if necessary, consult their professional adviser) before deciding whether to invest in the Company. The risk factors set out in Section 11, and other general risks applicable to all investments in listed securities not specifically referred to, may in future affect the value of the Shares. Accordingly, an investment in Shares described in this Prospectus should be considered speculative.
4.12 Financial Forecasts and Forward-Looking Statements The Directors have considered the matters set out in ASIC Policy Statement 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the proposed operations of the Company for the foreseeable future 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.
4.13 Privacy Act The Company collects information about each Applicant from an Application Form for the purpose of processing the Application and, if the Applicant is successful, to administer the Applicant’s security holding in the Company.
By submitting an Application Form, each Applicant agrees that the Company may use the information in the Application Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Share Registry, the Company’s related bodies corporate, agents, contractors and third party service providers, (including mailing houses), the ASX, the ASIC and other regulatory authorities.
If an Applicant becomes a security holder of the Company, the Corporations Act requires the Company to include information about the security holder (name, address and details of the securities held) in its public register. This information must remain in the register even if that person ceases to be a security holder of the Company. Information contained in the Company’s register is also used to facilitate distribution payments and corporate communications (including the Company’s financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.
If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Application.
4.14 Enquiries This Prospectus provides information for potential investors in the Company, and should be read in its entirety. If after this Prospectus, you have any questions about any aspect of an investment in the Company, please contact your stockbroker, accountant or independent financial adviser.
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SECTION FIVE HOW TO INVEST
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Applications for Shares pursuant to the Offer can only be made on an Application Form attached to and forming part of this Prospectus. Please read carefully the instructions on the Application Form before completing it.
All Applications must be for a minimum of 8,000 Shares and thereafter in multiples of 1,000 Shares.
Payment will be accepted only in Australian dollars by cheque or bank draft drawn on, and payable at any Australian bank.
Cheques or drafts should be made payable to “Bligh Resources Limited Share Issue Account” and crossed “Not Negotiable”. Participants are asked not to send cash. Receipts for payment will not be issued. Personal cheques drawn on overseas banks in Australia or a foreign currency will not be accepted. These will be returned and the Application deemed invalid.
If an Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted by the Company. The Company’s decision as to whether to accept the Application or how to construe, amend or complete it, shall be final, but no Applicant will be treated as having offered to purchase more Shares than is indicated by the amount of the cheque for the Application Monies.
Completed Application Forms and accompanying cheques should be mailed to: Bligh Resources Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235
Or delivered to: Bligh Resources Limited or Bligh Resources Limited C/- Link Market Services Limited c/- Link Market Services Limited Level 12 Ground Floor 680 George Street 178 St Georges Terrace Sydney NSW 2000 Perth WA 600
Applicants are encouraged to submit their Applications as soon as possible as the Offer may be closed prior to the scheduled Closing Date without prior notice.
If you have any questions about how to participate in the Offer you should consult your stock broker, accountant, or financial adviser.
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SECTION SIX DIRECTORS AND GOVERNANCE
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6.1 Directors Robert John Benussi, Non-Executive Chairman, MIPA Mr Benussi until recently held the positions of Chief Financial Officer, Company Secretary and General Manager, Corporate of Jupiter Mines Ltd (ASX: Code JMS) since 2006. Mr Benussi also assumed the role of Acting Chief Executive Officer within Jupiter during the period of May to December 2007.
Mr Benussi has an extensive background in finance, corporate advisory, stockbroking and business development with companies such as Olin Corporation, Lend Lease, Dalgety and Lion Nathan.
Mr Benussi holds a Diploma from the Institute of Public Accountants and remains a member of this Organisation.
He has been a Non-Executive Director of Resource Star Limited (ASX: RSL) since 2009 and a Non-Executive Director of Connxion Limited (ASX: CXN) since May 2011.
Hanjing Xu, Non-Executive Director, BBus., CA Hanjing Xu has more than 25 years with resource companies. The unique character of his mining career is that he has been a decision making executive in both Chinese state-owned conglomerates, as Director of China Nonferrous Metals Industry Corporation (CNNC), and international listed mining companies, as Executive Director of Sino Gold Ltd and Managing Director, Eldorado Gold China. His knowledge of China was instrumental to the success of Sino Gold.
Mr Xu has a BA degree from Chengdu University of Electronic Sciences. He worked as a teacher of English and editor of China Greater Encyclopaedia Publishing House before joining CNNC. He led the Chinese corporation in its opening to international resource industry with a number of first breakthroughs in Chinese mining industry, including first trade investment in alumina, first international project finance for mining, and first international company mining in China. He is now actively involved in research on Chinese mining reform and regarded as a leading authority in this area.
Liming Nui, Alternate for Hanjing Xu Mr Nui has 23 years experience in the field of mining and mineral exploration. He is currently Chairman of Shanghai Chengming Corp Limited, a position he has held since 2003. His earlier experience includes senior management positions with Shanghai Yi Tak Industrial Company Limited and Able Lemon Distribution Pty Ltd (both as Chief Executive Officer) and as General Manager of MITSUI & Co., LTD (Beijing Office).
Charles William Guy, Non-Executive Director, BSc Charles William (Bill) Guy is a member of the Australian Institute of Geoscience (AIG), has over twenty years experience in the mining, exploration, and environmental industry inclusive of 10 plus years working within consulting firms, providing technical and consultancy services to the mining industry. His career has encompassed both Australian and overseas projects including Cockatoo Island Iron Ore Mine (Kimberley’s WA) Nickel Laterite (Romblon Philippines), Exploration of Mabuhay Epithermal Gold Project Philippines, and numerous mineral exploration projects within WA.
His most recent role has been as Exploration Manager at Jupiter Mines Ltd (ASX code: JMS). Here, he implemented a management style and set of exploration protocols which enabled some projects to progress from a grass roots enterprise through to a viable resource development phase. This approach led to the successful delineation of Mt Mason and Mt Ida
Peiqi Zhang , Non-Executive Director Mr Peiqi Zhang has more than 30 years experience and knowledge in the Chinese mining industry. Mr Zhang is the Chairman and founder of China Shanxi Guxian Jin Yu Coking Co., Ltd, Chairman of Inner Mongolia Jiyuan Iron and Steel Company, a senior member of Shanxi Province Federation of Industry and the Standing Committee, and a senior member of the CPPCC Standing Committee of Linfen City.
China Shanxi Guxian Jin Yu Coking Co., Ltd mining enterprise has annual sales income of more than one billion yuan, fixed assets of 500 million yuan, employs 650 workers and has an annual production of 800,000 tons of coal. He is also a fellow of world academy of productivity science, and the Vice President of Glory Institution, a well known charity organisation in China. Mr Zhang is one of the prominent leaders in the mining industry of Shanxi Province.
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Adrian Di Carlo, Company Secretary, BBus(Acc) MBA GradDipACG CPA ACIS Adrian has been appointed as the company secretary and advised numerous ASX listed entities with the professional services firm,C ompany Matters Pty Limited. Previously, Adrian worked for the Barrick Gold Corporation/Antofagasta Minerals joint venture and prior to that, Adrian worked within the Wesfarmers Group for several years in various accounting, systems and project and commercial management positions. Adrian has completed a Bachelor of Business degree (Accounting) and a Master of Business Administration degree at Curtin University. Adrian has also completed a Graduate Diploma in Applied Corporate Governance, and is qualified as a Certified Practising Accountant and a Chartered Secretary.
6.2 Corporate Governance Statement Bligh Resources Limited 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 they are applicable, the Company has adopted the Essential Corporate Governance Principles and Best Practice Recommendations (“Recommendations”) as published by ASX Corporate Governance Council.
A summary of the Company’s corporate governance practices is set out below.
Summary of Board Charter The Board is collectively responsible for promoting the success of the Company. The Board supervises the Company’s framework of control and accountability systems and ensures the Company is properly managed. The Board also approves and monitors major capital expenditure, capital management, and acquisitions and divestitures. It approves the annual budget and monitors the financial performance of the Company as wells as its financial and other reporting. The Board provides overall corporate governance to the Company, including conducting regular reviews of the balance of responsibilities within the Company to ensure division of functions remain appropriate to the needs of the Company. The Board has agreed to guidelines for assessing materiality.
The Board appoints (with shareholder ratification) and liaises with the external auditor and Audit Committee (if applicable). The Board is also responsible for monitoring and ensuring compliance with all of the Company’s legal obligations.
The chairperson is responsible for leadership of the Board, for the efficient organisation and conduct of the Board’s function. The roles of the Managing Director, independent directors and management are summarised in the Charter.
Summary of Audit Committee Charter The role of the Audit Committee (or its equivalent) is to monitor the integrity of the financial statements of the Company and review significant financial reporting judgments. The Audit Committee (or its equivalent) also reviews the Company’s internal financial control system, risk management systems and any internal audit function.
The Audit Committee (or its equivalent) monitors and reviews the external audit function including matters concerning appointment and remuneration, independence and non-audit services. The Audit Committee (or its equivalent) also performs such other functions as assigned by law, the Company’s constitution, or the Board.
The Audit Committee (or its equivalent) has the power to conduct or authorise investigations into matters within the committee’s scope of responsibilities and has the authority, as necessary, to retain independent legal, accounting or other advisors.
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Summary of Nomination Committee Charter The role of the Nomination Committee (or its equivalent) is to determine the state of director nominees for election to the Board and to identify and recommend candidates to fill casual vacancies.T he Nomination Committee (or its equivalent) regularly reviews the size and composition of the Board, and makes recommendations to the Board on any appropriate changes.
The Nomination Committee (or its equivalent) establishes evaluation methods of rating the performance of Board members and implements ways of enhancing the competency levels of directors. The Nomination Committee (or its equivalent) also provides directors with access to ongoing education relevant to their position in the Company.
Summary of Remuneration Committee Charter The function of the Remuneration Committee (or its equivalent) is to assist the Board in fulfilling its corporate governance responsibilities with respect to remuneration by reviewing and making appropriate recommendations.
The Remuneration Committee makes decisions (as it is comprised of the full Board) with respect to appropriate remuneration and incentive policies for executive directors and senior executives.
The Remuneration Committee (or its equivalent) - ensures that executive remuneration packages involve a balance between fixed and incentive pay, reflecting short and long term performance objectives appropriate to the Company’s circumstances and objectives. ensures that fees paid to non-executive directors are within the aggregate amount approved by shareholders and makes recommendations to the Board with respect to the need for increases to this aggregate amount at the Company’s annual general meeting. reviews and makes recommendations concerning long-term incentive compensation plans and reviews and if necessary improves any existing benefit programs established for employees.
Summary of Remuneration Policy Emoluments of Directors and senior executives are set by reference to payments made by other companies of similar size in the industry, and by reference to the skills and experience of the Directors and executives. Details of the nature and amount of emoluments of each Director of the Company are disclosed annually in the Company’s annual report.
The Company’s policy is to remunerate non-executive directors at market rates (for comparable companies) for time, commitment and responsibilities. Fees for non-executive directors are not linked to the performance of the Company. The maximum aggregate amount of fees that can be paid to non- executive directors is subject to approval by shareholders at General Meeting.
Executive pay and reward consists of a base salary and performance incentives. Long term performance incentives to date have comprised options granted at the discretion of the Board in order to align the objectives of executives with shareholders and the Company.
Summary of Code of Conduct This Code of Conduct sets out the principles and standards which the Board, management and employees of the Company are encouraged to strive towards when dealing with each other, shareholders and the broad community.
The Company is to comply with all legislative and common law requirements which affect its business. The Company will deal with others in a way that is fair and will not engage in deceptive practices.
The Code of Conduct sets out directives for Directors, management and staff relating to conflicts of interests, protection of the Company’s the assets and confidentiality.
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Summary of Procedure for the Selection, Appointment and rotation of External Auditor The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor when any vacancy arises, as per the recommendations of the Audit Committee (or its equivalent) with the decision being ratified by shareholders at the next annual general meeting of the Company.
Candidates for the position of external auditor of the Company must be able to demonstrate complete independence from the Company and an ability to maintain independence through the engagement period.
The Audit Committee (or its equivalent) will review the performance of the external auditor on an annual basis and make any recommendations to the Board.
Summary Shareholder Communication Strategy The Board aims to ensure that the shareholders are informed of all major developments affecting theC ompany. All shareholders receive the Company’s annual report. The Company maintains a website on which the Company makes certain information available on a regular basis.
Summary of Risk Management Policy The Company has established a risk management policy which sets out a framework for a system of risk management and internal compliance and control, whereby the Board delegates day-to-day management of risk to the managing director. The managing director, with the assistance of senior management as required, has responsibility for identifying, assessing, treating and monitoring risks and reporting to the Board on risk management. The policy also sets out the Company’s risk profile.
As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance structures will be given further consideration.
The Board sets out below its “if not, why not” report in relation to those matters of corporate governance where the Company’s practices depart from the Recommendations.
Principle 2 Recommendation 2.1: A majority of the Board should be Independent Directors
Notification of Departure: At present, only Hanging Xu meets the tests of independence in the ASX Corporate Governance Principles.
Explanation of Departure: Due to their size and structure, it is not always suitable for smaller mining exploration company Boards to have a majority of independent directors. However, the company intends to recruit additional directors with skills to complement those of the current board members and will utilise that opportunity to have the Board comprise a majority of independent directors over time.
Recommendation 2.2: The Chair should be an Independent Director
Notification of Departure: The Chairman, Robert Benussi does not meet the tests of independence in the ASX Corporate Governance Principles.
Explanation of Departure: Due to their size and structure, it is not always suitable for smaller mining exploration company Boards to have a Chair who is an independent director. However, the company intends to recruit additional directors with skills to complement those of the current board members and will utilise that opportunity to appoint a Chair who is an independent director.
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Summary of Policy and Procedure for Selection and Appointment of New Directors The Board considers and selects candidates for the Board by reference to a number of factors. Directors are initially appointed by the full Board, subject to election by shareholders at the next general meeting.
Summary of Process for Performance Evaluation of the Board, Board Committees, Individual Directors and Key Executives The chairperson is responsible for conducting an annual review of the Board performance.
Summary of Policy for Trading in Company Securities The Board has adopted a policy and procedure on dealing in the Company’s securities by directors, officers and employees which prohibits dealing in the Company’s securities when those persons possess inside information. It also provides that the written acknowledgement of the chairperson should be obtained prior to trading in the case of directors. The Policy also sets out blackout periods during which trading by key management personnel is not permitted.
Summary of Diversity Policy The Diversity policy embraces strategies for: recruiting from a diverse pool of candidates for all positions; reviewing succession plans to ensure an appropriate focus on diversity; identifying specific factors to take account of in recruitment and selection processes to encourage diversity; developing programs to develop a broader pool of skilled and experienced senior management and board candidates.
The Board will include in the Annual Report each year: the Measurable Objectives, if any, set by the Board; progress against the Objectives; and the proportion of women employees in the whole organisation, at senior management level and at Board level.
Summary of Compliance Procedures Detailed compliance procedures for ASX Listing Rule disclosure requirements have been adopted by the Company. It appoints an officer of the Company to be responsible for compliance. It is detailed in its application covering the following areas: 1. appointment of the responsible officer and description of his/her duties;
2. identifies area of risk for the Company;
3. provides guidelines for:
(a) identifying disclosure material; and
(b) monitoring share price movements;
4. guide for use of trading halts;
5. guide for decision making process;
6. details on record keeping;
7. education of Board and management;
8. confidentiality;
9. release of disclosure material; and
10. updating of compliance procedures.
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Recommendation 2.4: The Board should establish a Nomination Committee
Notification of Departure: A separate nomination committee has not been formed.
Explanation of Departure: Due to the size and structure of the Board, a separate nomination committee was not considered to add any efficiency or other benefits to the Company. The Board considers that it is more appropriate to discuss nomination related matters on an on-going basis, as required. When considering matters of nomination, the Board functions in accordance with the Nomination Committee Charter.
Principle 4 Recommendation 4.2: The Board should establish an audit committee
Notification of Departure: A separate audit committee has not been formed and therefore is not structured in accordance with the compositional recommendation. Further, the Chairman maintains the chair during audit related discussions.
Explanation for Departure: The role of the audit committee is carried out by the full Board. The Board considers that given its size and composition, no efficiencies or other benefits would be gained by establishing a separate committee. When considering audit related matters, the Board functions in accordance with its Audit Committee Charter. The Audit Committee Charter also provides that the Board may meet with the external auditor, without management present, as required.
Principle 8 Recommendation 8.1: The Board should establish a Remuneration Committee
Notification of Departure: A separate remuneration committee has not been formed.
Explanation for Departure: The Board considers that no efficiencies or other benefits would be gained by establishing a separate remuneration committee. However, similar to its approach to nomination and audit related matters, the Board has adopted a Remuneration Committee Charter, which it applies when convening as the remuneration committee. In addition, all matters of remuneration will continue to be determined in accordance with Corporations Act requirements, especially in respect of related party transactions. That is, no directors participate in any deliberations regarding their own remuneration or related issues.
Copies of the charters and policies discussed in this section are available on the Company’s website at www.blighresources.com.au/investorrelations/governance.
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SECTION SEVEN BLIGH RESOURCES PROJECT OVERVIEW
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7.1 Background The Company was incorporated in New South Wales on 7 May 2008 as “Tradebooks Services Pty Limited”. The Company changed its name to “Bligh Resources Pty Limited” on 14 July 2009 and converted to a public company on 17 December 2009. Its name then changed to Bligh Resources Limited.
7.2 Manganese Market Short-term predictions for the manganese market are very positive with the market structurally supported by the steel industry. Steelmaking accounts for 85% to 90% of manganese demand with no known replacement product for manganese steel. Manganese demand is directly influenced by global carbon steel production with continued strength in global steel and manganese production and supply. The Directors believe that Chinese manganese imports are likely to rise because of increasing local costs and more stringent environmental regulations.
The global manganese market is likely to exceed 21.9 million metric tonnes by 2015 with demand being driven by end users in Asia, Latin America and the Middle East. Investment in new infrastructure, and the replacement of ageing infrastructure, are the key demand drivers. While China remains a large producer of manganese, most of what is produced is of a lower grade, and China therefore relies on the import of high-grade manganese. Consumption of manganese in the Asia-Pacific region is forecast to grow at a compounded annual rate of 7.9% until 2015.
Source: Global Industry Analysts Inc – 2011 Report
Figure 1 Manganese price
20
16
12
8 U S$ / mtu
4
0 2007 2008 2009 2010 2011 2012
Consensus Estimates: Bloomberg, CRU 2010.
Land-based manganese resources are large but irregularly distributed with South Africa containing about 80% of currently known manganese resources followed by the Ukraine, Australia, China and Gabon. It is an opportune time for the exploration for, and exploitation of, manganese ore. Bligh Resources has acquired tenements over four manganese prospects in Australia and is well placed to capitalise on these predicted markets.
7.3 Corporate Objectives and Strategies The Company’s principal objective is to become a successful mineral exploration and production company. It intends to be characterised by, and committed to, applying the Company’s funds in an efficient manner and providing above average and sustainable returns through both capital appreciation and the payment of dividends when in a position to do so. In order to achieve its objectives the Company has developed the following strategies:
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Short term. Effective exploration programs will be implemented to assess the Bligh Properties economic potential. Prop- erty acquisition, development opportunities and project evaluation will ongoing process.
Medium term. Participate in the development of the tenements drilled, if economically viable, and to establish positive cash flows. Continue to explore the Bligh Properties and new areas of interest acquired. Source and participate in explora- tion and development opportunities in Australia and other parts of the world.
Long Term. Develop a capacity to independently access, develop and operate manganese, gold and copper opportunities and pay dividends.
7.4 The Bligh Properties 7.4.1 Highlights The Company has assembled a portfolio of mineral tenements in New South Wales, Western Australia and the Northern Territory which cover areas considered to be prospective for economic deposits of manganese, gold and base metals (Figure 2).The New South Wales manganese projects contain known occurrences, some with historically high grades that are close to infrastructure.
two Exploration Licence Applications cover the historical Grenfell manganese mines in New South Wales where numerous small, high grade manganese deposits reportedly contained up to 50% Mn. Production ceased in the 1950s and this area has never been evaluated by modern exploration techniques.
three contiguous Exploration Licence Applications totalling 787.7sq km at Manilla in north-eastern New South Wales cover thirty old manganese mines and deposits, mostly containing rhodonite. The mines were small but, again, this area has never been evaluated by modern exploration techniques.
the Kumarina Manganese Project in Western Australia comprises a single Exploration Licence Application over part of the alluvium-covered eastern sector of the Collier Sub-basin. To the west, the Collier Sub-basin is known to host manganese mineralisation at surface and at depth. This area also has potential for base metals.
a single Exploration Licence Application of 136 sq km in area covers manganiferous sediments of the Bootu Formation in the Northern Territory. The Bootu Creek Two Project has near identical geology and structural setting to the OMH Bootu Creek Manganese Mine.
The Leonora Gold Project in Western Australia comprises two discrete areas referred to as Mt Davis and Diorite King. Exploration on the Leonora Gold Project will focus on the testing of major structural targets buried beneath deep overburden and conduct follow-up work on the Mt Davis and the Eagle prospects.
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Figure 2 Project Location Map
7.4.2 Exploration Strategy and Budgets Bligh Resources’ exploration strategy will be to target under-explored areas underlain by geological units prospective for gold and manganese. The company will develop an effective exploration protocol for each project area.
The Company intends to conduct systematic exploration over the historical manganese prospects in New South Wales to evaluate the potential of both the remaining high grade ore and the large tonnage lower grade mineralisation envelopes that were not economically viable during historical mining.
At almost all of the previous exploration on Bligh Resources’ project areas has predated modern exploration technology, advances in ore geology and genesis. Geophysical techniques that capture high quality data will aid in ore discovery across large tracks of ground.
Bligh Resources proposes to implement a staged success-based exploration program undertaken over 2 year period. The exploration budgets are contingent on results, circumstances and other opportunities. Expenditure may be reallocated between existing or new projects or to general working capital.
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Table 1 Exploration Expenditure – Applicable under a $5.0M or $3.5M Capital Raising
Leonora Exploration Activity / 2 YEARS Grenfell Bootu Two Kumarina Gold Manilla Total
Data collection & validation $15,000 $12,000 $3,600 $4,200 $12,000 $46,800
Geological- salaries and consultants $299,800 $50,040 $44,540 $50,500 $65,560 $510,440
Mapping and rock-chip sampling $14,000 $20,000 $0 $20,000 $30,000 $84,000
Geophysical surveys $170,000 $50,000 $3,000 $0 $60,000 $283,000
Satellite data collection & interpretation $17,500 $20,000 $10,000 $30,000 $0 $77,500
Drilling- RAB, RC, Diamond $235,500 $153,200 $187,000 $277,000 $151,000 $1,003,700
Environmental studies $30,000 $12,000 $12,000 $15,000 $11,000 $80,000
Metallurgical test work $130,000 $30,000 $50,000 $0 $20,000 $230,000
Tenement administration (incl. office expenses) $139,000 $84,900 $92,813 $92,900 $60,800 $470,413
Total $1,050,800 $432,140 $402,953 $489,600 $410,360 $2,785,853
7.5 Projects All of Bligh Resources’ projects are located in Australia, but with considerable geographic spread. The Kumarina manganese and Leonora gold projects are situated in Western Australia; the Bootu Creek Two project is in the Northern Territory whilst the Grenfell and Manilla manganese projects are located in rural New South Wales. Currently Bligh Resources has 1,457 sq km of tenements under management and application (Table 2).
Table 2 Projects and Area under Management
Grenfell Bootu Two Kumarina Leonora Gold Manilla Total
AREA Km2 313 136 165 57 786 1457
7.5.1 Kumarina Project - Western Australia Western Australia has two main manganese provinces. The older is associated with shales of the Nabberu Basin sequence and economic concentrations occur as surface lateritic enrichment. These were extensively exploited in the Peak Hill area for some 60 years between 1926 and 1986 and known deposits are virtually exhausted.
The younger province comprises the Collier and Manganese Subgroups of the Bangemall Group. The eastern Pilbara deposits lie within the Manganese Subgroup and consist of supergene enrichment of manganiferous sediments (Ripon Hills, Ant Hill, etc) or of cavity-fill deposits within the Carawine Dolomite and associated Pinjian Chert Breccia (Woodie Woodie). It has been suggested that the primary manganese within the sediments was introduced during sedimentation.
A similar situation appears to be present in the Collier Subgroup where numerous occurrences of manganese have been identified in the shales of the uppermost unit, the Ilgarari Formation. Bligh Resources identified the potential of this region and applied for an Exploration Licence over what appears to be a sub-basin in the Collier Subgroup; the Kumarina Project.
The Kumarina Project comprises a single Exploration License Application, ELA52/2462, that is centred on approximately 7300000N and 785000E (MGA 1994, Zone 50) and lies immediately to the east of the surfaced Great Northern Highway linking Newman (125 km to the north) and Meekatharra (350 km to the south). The nearest railhead is at Newman (125 km), but this is a company iron ore railway and third party access is unlikely. The Cloudbreak iron ore railhead is further (175 km), but there is a possibility that the railway may be opened to other users. The road distance from Butcher Bird East to Port Hedland would be in the order of 560 km.
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The Ilgarari Formation consisting of siltstone, mudstone and fine-grained sandstone.T his includes units previously mapped as the Kurabuka Formation.
The Calyie Sandstone comprises sandstone, siltstone, mudstone, conglomerate and dolostone. This includes units previously mapped as the Mount Vernon Sandstone and the Stag Arrow Formation. The 1:250,000 geological map, Collier (SG 50-4), shows the Calyie Sandstone outcropping in an arcuate pattern along the northern, eastern and western edges of the tenement. The core of this structure, which underlies the majority of Bligh’s tenement, comprises colluvium, alluvium, calcrete and wind-blown sands. No outcrop of Ilgarari sediments is shown and a brief field visit confirmed that much of the geology was obscured by an unknown thickness of surficial material. It can be assumed that Ilgarari Formation lithologies underlie this surficial material (Figure 3).
Figure 3 Regional geology of the Kumarina Project (E52/2462) area showing the possible outline of the covered Ilgarari Formation.
(Note the number of exploration targets within the better exposed lithologies of the adjacent Montezuma Mining Limited Tenement (E52/2350). See Figure 6).
Ilgarari Formation shales outcrop extensively around and to the west of the Great Northern Highway with the most easterly occurrence noted to date at the Butcher Bird Mine, immediately to the west of Bligh’s tenement. Additionally, a small outcrop comprising thin slabs of hard botryoidal manganese was noted at a point adjacent to the western boundary of ELA52/2462 (Photograph 1).
PHOTOGRAPH 1 Five centimetre-thick slabs of botryoidal manganese ore from outcrops located immediately outside the western edge of ELA52/2462
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Historical and current exploration has identified numerous zones containing interesting manganese mineralisation. bhP Exploration discovered surficial enrichment of the shale to an average depth of 1 metre over large areas in their tene- ment which lay astride the Great Northern Highway. The enrichment consists of replaced shale slabs and fragments grading downwards to enriched subcrop shale. It was estimated that the recovery of manganese slabs would not exceed 20% but the Mn, Fe and Fe+ Mn contents indicate a satisfactory ferruginous manganese grade with acceptable phosphorus but unac- ceptably high silica.
alcoa of Australia Ltd, who were exploring in E52/24 for a concept-based target for exhalative-style base metal mineraliza- tion in an area adjacent to the Ilgarari Copper Mine completed a diamond drill hole that intersected 112 metres averaging 9% manganese from surface.
Pilbara Manganese Pty Ltd also completed four costeans on E52/1508, targeting the botryoidal-textured manganese-rich slabs which extend to depth within the weathering profile. An initial bulk sample returned an assay value of over 40% Mn but with extremely poor recoveries. Follow-up channel sampling indicated that the mineralized horizon contains about 23% manganese ore at a grade of about 40% Mn.
recent ASX releases by Montezuma Mining Company Ltd describe results of their extensive drilling and metallurgical test- work carried out on their Butcher Bird tenement which abuts ELA52/2462 to the west. They conclude that they have a total exploration target of 100-130 Mt ore grading 8-15% Mn in three of the five prospects they are working on. Preliminary dense media separation testwork yields grades of up to 39.7% Mn. Most of the target areas drilled lie within a few kilometres of the western boundary of ELA52/2462. Highlights are shown on Figure 4.
Figure 4 Exploration targets identified by Montezuma Mining Limited on their tenement E52/2350 relative to Bligh Resources’ tenement ELA52/2462
It is considered possible that the manganese was chemically deposited in a large, relatively shallow basin and subsequently enriched by near-surface supergene processes. The possible mechanism is shown in Figure 5, below.
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Figure 5 Schematic mechanism for the deposition of manganese from oceans
Manganese and iron remain in solution in the deeper anoxic water and are precipitated out as manganese deposits at the anoxic/oxygenated interface in a shallow portion of the basin. Bligh Resources have a tenement covering what they believe to be the shallow part of a small sub-basin in the Collier Subgroup.
7.5.2 Bootu Creek Two Project – Northern Territory A single Exploration Licence Application, ELA27654, covering an area of 136.3 sq km in central Northern Territory is situated immediately west of the Stuart Highway and lies 820 km south-southeast of Darwin and 70 km north of Tennant Creek.
The geology and structural setting of ELA27654 is similar to that of OM Holding’s Bootu Creek Manganese Mine which is situated 40 km to the north and has a 2009 resource of 32.9Mt at an average of 23.1% manganese.
In the Bootu Creek area, primary sedimentological textures that might be expected in a sedimentary deposit are absent, but these may have been overprinted by later hydrothermal and/or supergene processes. The manganese deposits in the lower Bootu Formation show evidence of having been formed by the cumulative influence of a combination of processes, including supergene enrichment. A possible mechanism is shown diagrammatically in Figure 6, below.
Figure 6 Possible Mechanism for the Formation of the Bootu Creek Manganese Deposit. Source: Scriven and Munsen
ELA27654 covers part of a north-trending regional syncline that plunges to the south and is modified by several faults that are sub-parallel to the fold axis. Main lithological units comprise sediments of the Proterozoic Attack Creek and Bootu Creek formations, the latter made up predominantly of sandstone and conglomerate with lesser siltstone, mudstone, shale and
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limestone. This synclinal nature is well shown by the aeromagnetic pattern (Figure 7). As such, it closely resembles the Bootu Creek Mine area.
The stratiform manganese mineralisation in the project area occurs near the base of the Bootu Creek Formation. It is at a consistent stratigraphic level, lying just below a laterally widespread sandstone unit that is approximately 50m above the base of the succession. There is a 17km long potential strike-length along this contact.
Typically, the ore-zones at Bootu Creek Mine (owned by OMH Limited) comprise a basal, high grade manganiferous shale several metres in width, overlain by a similar width of lower-grade, medium-grained manganiferous sandstone. The mineralization occurs as epigenetic lens and vein replacements of interbedded quartz arenite, dololutite and dolomitic siltstone and grade varies along strike. Manganese oxides predominantly consist of amorphous and massive cryptomelane, with minor psilomelane, pyrolusite and hollandite.
Reconnaissance mapping and rock chip sampling by Carpentaria Exploration in 1990 returned 17 samples which assayed over 0.5% Mn, with a peak value of 21% Mn. More recent attempts at exploration were abandoned because of unresolved Aboriginal Clearance issues.
Figure 7 Aeromagnetic Image Over ELA27654 Showing Well-developed Synclinal Structure and Known Manganese Occurrences
There is a well-defined zone of interest; the manganese mineralization lies near the base of the Bootu Creek Formation and there is 17 km of prospective stratigraphy to be evaluated. The strataform manganese mineralization shows variations in grade along strike, but the exact controls of enrichment are not understood.
7.5.3 Grenfell Project – New South Wales Currently two Exploration Licence Applications cover a total area of 313 km2 in the Grenfell district of southeast central New South Wales targeting manganese and gold mineralization. Grenfell has excellent power and water supplies, good railway and road infrastructure and is situated less than 400km from Sydney in a well serviced, regional population centre.
The manganese deposits found in the Grenfell area are part of a series of manganese lenses and veins of various grades and sizes occurring along a major line of faulting extending from Gundagai to Cookamidgera near Parkes (Figure 8). The manganese-rich rocks are interpreted to have been chemical sediments formed by hot spring hydrothermal activity on the sea floor possibly associated with island arcs.
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Manganese mineralisation is common throughout the Upper Ordovician rocks as fracture and joint coatings of black oxide. Along and adjacent to the jasper-chert contact it occurs as a series of replacement veins and lenses of various sizes and small replacement lenses of manganese oxide also occur within the jasper-chert in these areas. The contacts constitute the main zones of mineralisation, and some of the larger lenses have been mined.
Secondary manganese oxides were worked in many localities around Grenfell, mainly between World War I and 1940, as sources of high-grade manganese oxides. The Hoskins mine, near Grenfell, was the largest producer and produced 25,700t of ore between 1915 and 1941.
Other larger deposits include the Simpson’s Deposit and the Bell Bird Mine and, in all, there are nine registered manganese occurrences in EL7556.
Mining at some of the historic workings appears to have ended prematurely because the down-dip mineralisation terminated against a major, flat, west-dipping fault that forms the contact between the Lower Palaeozoic strata and the Devonian granite basement.
There is relatively little data available on the manganese deposits or the mines and no data on the grades mined appears to be available. However, the small size, multiple occurrence and high grade of the manganese deposits together with their close spatial relationship with a jasper/chert horizon suggests that they could be volcanogenic in origin.
There are numerous varieties of volcanogenic manganese deposit types, but the one that best fits the Grenfell occurrences is what Mosier and Page (1988) refer to as the Franciscan type that are associated with chert, shale and greywacke with grades around 36% Mn and 5% Fe (Figure 9). Although deposits tend to be small, a small proportion contain over 25, 000 tonnes manganese. They tend to occur in clusters.
An alternative and far more optimistic model is that the manganese deposits in the Grenfell area are of a similar origin to the deposits of the Kalahari Mineral Field of South Africa and hence that a significant manganese resource potentially awaits discovery at Grenfell. The Kalahari Mineral Field contains the largest known manganese deposits in the world that are believed to have formed along mid-oceanic ridges and were later probably upgraded by the hydrothermal alteration of primary sedimentary ore to high grade material along a system of faults. Both models will be borne in mind when conducting the exploration of the Grenfell project.
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Figure 8 Grenfell Project Bedrock Local Geology and Tenements Map.
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Figure 9 Generalised Model of a Franciscan-type Manganese Deposit (From Mosier and Page)
7.5.4 Manilla Project – New South Wales The Manilla Project comprises three contiguous Exploration Licences covering 787.7 sq kilometres in northeast New South Wales. The tenements lie to the east of the small regional town of Manilla which is located 460 km north of Sydney and 330 km north- northeast of Newcastle (Figure 10). An integrated rail and road network exist in NSW.
The project area covers a section of the Tamworth Belt, part of the southern New England Orogen and incorporates some thirty historical manganese workings listed in Table 3 below. The regionally extensive Peel Fault crosses the eastern edge of the tenement area and divides the gently folded sediments of the western Tamworth Belt from the deformed, deep water sediments of the Central Block to the east.
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Table 3 Historical Manganese Prospects Under Bligh Resources Management in NSW
Prospect Name Mineralogy Latitude Longitude
Unnamed Mn 30.602 151.013
Unnamed Mn 30.599 151.016
Roseneath South Manganese Deposit Mn, Rdn, GS 30.693 150.943
Warrabah Rhodonite Deposit Mn, Rdn, GS 30.599 150.923
Tarwonga Rhodonite Rdn, GS, Mn 30.561 150.892
Den Manganese Mine Mn, Rdn, GS 30.777 151.01
Mt McDonald Deposit Mn, Rdn, GS 30.797 150.99
Bendemeer Mn Mine 2 Mn, Rdn 30.918 151.183
Black Jack Mountain Manganese Deposit Mn, Rdn, GS 30.973 151.125
Unnamed Mn 30.875 151.094
Unnamed Mn 30.815 151.161
Heather Glen Mn, Rdn, GS 30.797 151.029
Crocketts Delight Mine Mn 31.015 151.242
Mount Sally Manganese Mn 31.006 151.136
Glen Morangie Mn Mn, Rdn, GS 30.869 151.243
Bendemeer Mine 1 Rdn, Mn 30.913 151.198
Unnamed Mn 30.988 151.252
Flaggy Mountain Mn 30.992 151.251
Danglemah 2 Mn 30.968 151.129
Unnamed Mn 30.851 151.146
Spring Ck Rhodonite Mn, Rdn, GS 30.851 151.079
Manganese Mountain Mn, Rdn, GS 30.775 151.01
Mount Jasper Mine Mn, Rdn, GS 30.789 150.941
Unnamed Mn 30.831 150.942
Fentons Deposit Rdn, GS, Mn 30.596 151.025
Unnamed Mn 30.603 151.012
Pine Glen Mn, Rdn, GS 30.695 150.944
Roseneath Mine Rdn, GS, Mn 30.684 150.931
Spring Valley Rhodonite Deposit Mn, Rdn, GS 30.67 150.922
Mount Lowry Rhodonite Deposit Mn, Rdn, GS 30.607 150.845
Unnamed Mn 30.558 150.896
Fogartys Manganese Deposit Mn, Rdn, GS 30.612 150.835
O'Neills Deposit Mn, Rdn, GS 30.617 150.835
Note: Prospect names are historical (non-Jorc). Mn= manganese , Rdn= rhodonite, GS= galena
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Figure 10 Manilla Project. Geology, Tenements and Historical Manganese Prospects
Manganese silicate deposits (primarily rhodonite) are hosted by chert and jasper sequences within metasediments of the Central Block. This mineralisation has been dated as Permian in age. Production from the Manilla-Narrabri district up until 1960 amounted to approximately 180t of industrial rhodonite and 600-700t of rhodonite for gemstones.
The best quality rhodonite in the district occurs in thermal aureoles around Permian granites. Gemstone quality rhodonite was mined at Wood’s Manganese Mine (not a Bligh Asset), near Bendemeer, which is approximately 40km north-northeast of Tamworth in the excised area on EL7586 (Photograph 2).
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PHOTOGRAPH 2 Rhodonite from the Tamworth area.
Photograph by courtesy of Outback Mining
The relatively numerous small size of the deposits, their lithological associations and the presence of abundant rhodonite suggests that these manganese deposits are of the volcanogenic type similar to those at Grenfell (Figure 8).
The three tenement application areas have never undergone systematic, coordinated exploration and must therefore be considered to be essentially under-explored. Historical mining data for the Manilla region is very scant but the fact that there are numerous known manganese occurrences of rhodonite and manganese oxide highlighted on the DPI mineral data system on the Bligh leases would seem to suggest that the mineralisation is far more extensive than the small, individual mining operations would appear to indicate.
7.5.5 Gold Projects - Leonora Bligh Resources Limited’s Leonora project area is divided into the Diorite King and Mount Davis prospects. Both prospective areas are located north and northwest of Leonora, predominantly in the Mount Clifford greenstone sequence, within the Eastern Goldfields. A major geological feature is the asymmetrical Tarmoola Anticline, hosting the 3Moz Tarmoola gold deposit (Figure 11). Tenements include 53 granted Prospecting Licenses and 21 Prospecting Licence applications for a total land area of 7,125 ha. - Gold Nuggets from Mt Davies Figure 11 Diorite King and Mt Davis Prospects.- Geology and Tenement Locations
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Gold within the Leonora district was discovered in the 1890s and since this time, gold endowment is estimated to be 14Moz of contained gold. Significant gold deposits within theL eonora district (Sons of Gwalia, Tower Hill, Harbour Lights and Tarmoola) have several key geological features in common: 1. deposits are closely related to granitic intrusions 2. Favourable host rocks are observed to be high-magnesian basalts and ultramafic rock types adjacent to granitic intrusions 3. gold mineralisation is typically hosted within brittle-ductile shear zones (along lithological boundaries) associated with district scale structural corridors 4. a potassic alteration, pyrite and arsenopyrite mineralisation is observed to be associated with gold mineralisation.
The Diorite King and Mount Davis projects have similar geological features compared to the significant gold deposits within the district and are deemed to be under explored at depth (Figure 12). Of particular note: 1. both project areas have rock types similar to favourable host rocks for gold mineralisation at Tarmoola, Habour Lights, Tower Hill and Sons of Gwalia 2. the proximity of mafic and ultramafic volcanic rock types adjacent to granitic rock types at the Diorite King project. 3. the Mount George structural corridor, a controlling feature for gold mineralisation at Harbour lights, continues through the Mount Davis project area.
Figure 12 Regional Simplified Geological Map
Historic gold production for the Diorite King project is in excess of 3,200 oz. Limited modern day exploration has been completed over the Diorite King project and is in the format of sparse Rotary Air Blast (RAB) drilling.
Historic gold exploration over the Mount Davis project between the 1980s and 1990s comprised rock chip, pisolite and stream sediment sampling. Gold anomalies defined by surface sampling were followed-up by RAB drilling identifying the Grattan Well deposit and other targets including the Mount Davis deposit (200kt at 1.8 g/t Au for 11,500oz; Mount Davis Annual Report, 1997) and Eagle (1m @ 4.44 g/t Au from 23m in a RAB hole). Anomalous results from the Gratten Well prospect (east of Grattan Well deposit) trend along strike onto Bligh’s tenements.
Modern day exploration including remote sensing (LANDSAT 7 ETM+) identified alteration geochemistry and structural geology targets over both project areas. Geological models for gold exploration at Diorite King and Mount Davis should be based on orogenic gold lode deposits located within the Leonora district. Of particular interest would be significant geological structures intersecting granitic rock types, adjacent to greenstone. Modern day production from the significant gold deposits within the Leonora district was mostly by bulk mining methods exploiting free-milling, oxide resources. Mining of a significant gold deposit at Diorite King or Mount Davis would be well serviced by infrastructure and processing facilities. The closest, operating processing facility to the project areas is the Gwalia Mill that has a 1.8Mtpa processing capability, located immediately south of Leonora. The St Barbara annual report for 2010 states that ore processed totalled 633kt through the Gwalia mill for the year. These figures would suggest that third party mill feed (from Diorite King or Mount Davis) could supplement mill feed through the Gwalia mill.
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7.6 Title and Leasehold Information
Project Tenement No. Current Holders Granted Expires Status Area (ha) Diorite King Diorite King WA P37/7782 Bligh 24-Jun-10 23-Jun-14 Granted 200 Diorite King WA P37/7783 Bligh 24-Jun-10 23-Jun-14 Granted 200 Diorite King WA P37/7784 Bligh 24-Jun-10 23-Jun-14 Granted 200 Diorite King WA P37/7785 Bligh 24-Jun-10 23-Jun-14 Granted 179 Diorite King WA P37/7786 Bligh 24-Jun-10 23-Jun-14 Granted 182 Diorite King WA P37/7787 Bligh 24-Jun-10 23-Jun-14 Granted 199 Diorite King WA P37/7788 Bligh 24-Jun-10 23-Jun-14 Granted 74 Diorite King WA P37/7789 Bligh 24-Jun-10 23-Jun-14 Granted 191 Diorite King WA P37/7790 Bligh 24-Jun-10 23-Jun-14 Granted 118 Diorite King WA P37/7791 Bligh 24-Jun-10 23-Jun-14 Granted 108 Diorite King WA P37/7792 Bligh 24-Jun-10 23-Jun-14 Granted 117 Diorite King WA P37/7793 Bligh 24-Jun-10 23-Jun-14 Granted 120 Diorite King WA P37/7794 Bligh 24-Jun-10 23-Jun-14 Granted 98 Diorite King WA P37/7795 Bligh 24-Jun-10 23-Jun-14 Granted 112 Diorite King WA P37/7796 Bligh 24-Jun-10 23-Jun-14 Granted 106 Diorite King WA P37/7797 Bligh 24-Jun-10 23-Jun-14 Granted 111 Diorite King WA P37/7798 Bligh 24-Jun-10 23-Jun-14 Granted 104 Diorite King WA P37/7799 Bligh 24-Jun-10 23-Jun-14 Granted 56 Diorite King WA P37/7800 Bligh 24-Jun-10 23-Jun-14 Granted 180 Diorite King WA P37/7801 Bligh 24-Jun-10 23-Jun-14 Granted 200 Diorite King WA P37/7802 Bligh 24-Jun-10 23-Jun-14 Granted 174 Diorite King WA P37/7807 Bligh 24-Jun-10 23-Jun-14 Granted 120 Diorite King WA P37/7808 Bligh 24-Jun-10 23-Jun-14 Granted 120 Diorite King WA P37/7809 Bligh 24-Jun-10 23-Jun-14 Granted 182 Diorite King WA P37/7810 Bligh 24-Jun-10 23-Jun-14 Granted 120 Diorite King WA P37/7811 Bligh 24-Jun-10 23-Jun-14 Granted 120 Diorite King WA P37/7812 Bligh 24-Jun-10 23-Jun-14 Granted 95 Diorite King WA P37/7813 Bligh 24-Jun-10 23-Jun-14 Granted 120 Diorite King WA P37/7814 Bligh 24-Jun-10 23-Jun-14 Granted 109 Diorite King WA P37/7815 Bligh 24-Jun-10 23-Jun-14 Granted 73 Diorite King WA P37/7816 Bligh 24-Jun-10 23-Jun-14 Granted 122 Diorite King WA P37/7828 Bligh 20-Oct-10 19-Oct-14 Granted 113 Diorite King WA P37/7829 Bligh 20-Oct-10 19-Oct-14 Granted 199 Diorite King WA P37/7830 Bligh 20-Oct-10 19-Oct-14 Granted 30 Diorite King WA P37/7831 Bligh 20-Oct-10 19-Oct-14 Granted 161 Diorite King WA P37/7832 Bligh 20-Oct-10 19-Oct-14 Granted 67 Mt Davis WA P37/7803 Bligh 24-Jun-10 23-Jun-14 Granted 41 Mt Davis WA P37/7804 Bligh 24-Jun-10 23-Jun-14 Granted 149 Mt Davis WA P37/7820 Bligh 24-Jun-10 23-Jun-14 Granted 117 Mt Davis WA P37/7821 Bligh 24-Jun-10 23-Jun-14 Granted 119 Mt Davis WA P37/7824 Bligh 20-Oct-10 19-Oct-14 Granted 90 Mt Davis WA P37/7825 Bligh 20-Oct-10 19-Oct-14 Granted 200 Mt Davis WA P37/7826 Bligh 20-Oct-10 19-Oct-14 Granted 182 Mt Davis WA P37/7827 Bligh 20-Oct-10 19-Oct-14 Granted 160
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Project Tenement No. Current Holders Granted Expires Status Area (ha)
Kumurina
Kumarina WA E52/2462 Bligh 01-Oct-10 30-Sept-15 Granted 165.8 KM2
Bootu Bootu Creek EL27654 Bligh 14-Jul-10 13-July-16 Granted 136.27 TWO NT
Manilla
Manilla NSW EL7584 Bligh 30-Jul-10 29-Jul-12 Granted 277.2
Manilla NSW EL7585 Bligh 30-Jul-10 29-Jul-12 Granted 268.9
Manilla NSW EL7586 Bligh 30-Jul-10 29-Jul-12 Granted 241.6
Grenfell
Grenfell NSW EL7492 Bligh 31-Mar-10 30-Mar-12 Granted 108
Grenfell NSW EL7556 Bligh 26-May-10 25-May-12 Granted 205
7.7 other Opportunities The Directors intend to pursue further working interest opportunities in the mineral sector. The focus of the Company will be on pursuing opportunities, and taking into account the geological and economic merit of opportunities presented.
The Company does not currently envisage taking an operating role resulting from any future participation interest. However, should an opportunity present itself and the Directors were of the opinion that it was in the interests of the Company to take an operatorship, the Directors believe they could source appropriate personnel to bring together the skills necessary to successfully operate projects.
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SECTION EIGHT INDEPENDENT GEOLOGIST’S REPORT
AL MAYNARD & ASSOCIATES PTY LTD
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Australian & International Exploration & Evaluation of Mineral Properties
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1.1 Introduction...... 3 1.2 Location and Access...... 3 1.3 Tenure...... 4 1.4 Geology...... 4 1.4.1 Regional Geology...... 4 1.4.2 Local Geology...... 5 1.4.3 Manganese Mineralisation...... 7 1.5 Previous Exploration...... 8 1.6 Exploration Potential...... 8 1.7 Exploration Rationale ...... 9 1.8 Proposed Exploration Program and Budget...... 9 2.1 Introduction...... 10 2.2 Location and Access...... 10 2.3 Tenure ...... 11 2.4 Geology...... 12 2.4.1 Regional Geology...... 12 2.4.2 Local Geology...... 13 2.5 Previous Mining...... 14 2.6 Previous Exploration...... 15 2.6.1 Regional Manganese Exploration...... 15 2.7 Exploration Potential...... 17 2.8 Proposed Exploration Program and Budget...... 20 3.1 Introduction...... 21 3.2 Location and Access ...... 22 3.3 Tenure ...... 22 3.4 Geology...... 24 3.4.1 Regional Geology...... 24 3.4.2 Local Geology...... 26 3.5 Previous Mining...... 26 3.6 Exploration Potential...... 29 3.7 Proposed Exploration Program and Budget...... 32 4.1 Introduction...... 33 4.2 Location and Access...... 34 4.3 Tenure...... 35 4.4 Geology...... 36 4.4.1 Regional Geology...... 36 4.4.2 Local Geology...... 38 4.5 Exploration Potential...... 40 4.6 Previous Manganese Mining ...... 41 4.6.1 Hoskins Mine ...... 41 4.6.2 Simpson’s Deposit ...... 42 4.6.3 Bell Bird Mine ...... 42 4.6.4 Deposit No. 28 ...... 42 4.6.5 Miscellaneous...... 42 4.7 Exploration Rationale and Strategy...... 44 4.8 Proposed Exploration Program and Budget...... 45 5.1 Introduction...... 45
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5.2 Location and Access...... 46 5.3 Tenure...... 47 5.4 Geology...... 50 5.4.1 Regional Geology...... 50 5.4.2 Local Geology...... 52 5.4.3 Gold Mineralisation ...... 55 5.5 Previous Geological Exploration...... 57 5.5.1 Nickel and Base Metals...... 57 5.5.2 Gold ...... 57 5.6 Exploration Rationale and Strategy...... 62 5.7 Proposed Exploration Program and Budget...... 62
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YEAR ONE YEAR TWO TOTAL ACTIVITY $000s $000s $000s Data collection and validation 12 0 12 Geological- salaries & consultants 30 20 50 Mapping, geochemistry 15 5 20 Geophysical surveys 0 50 50 20 0 20 Satellite Data collection &
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Interpretation Drilling- RAB, RC, Diamond 60 93 153 Environmental studies 12 0 12 Metallurgical test work 0 30 30 Tenement administration* 45 40 85 TOTAL 194 238 432
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The Bligh group of projects all have merit since they are situated over ground that has not been subjected to best systematic, modern day exploration methodology yet has demonstrated prospectivity from previous workers. We are of the opinion that Bligh has satisfactorily and clearly defined exploration and expenditure programs which are reasonable having regard to the stated objectives of the Company; and sufficient exploration work has taken place in the past two years to justify the budgeted exploration and expenditure program. Bligh exploration programs have been phased over two years, but they may be altered in view of results gained which could revise the emphasis of current priorities. Yours faithfully, Allen J. Maynard
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SECTION NINE FINANCIAL INFORMATION
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9.1 INTRODUCTION This Section sets out the historical financial information and pro-forma financial information for the Company. The basis for preparation and presentation is set out in Sections 9.2 and 9.3 below. The Board is responsible for the inclusion of all financial information in this Prospectus. PricewaterhouseCoopers Securities Ltd has prepared an Investigating Accountant’s Report in respect of the historical and pro-forma financial information, and a copy of this report is set out in Section 10 of this Prospectus. The historical and pro-forma financial information has been prepared in accordance with the measurement and recognition criteria of Australian Accounting Standards and the significant accounting policies set out in Note 1 to the financial information. The historical and pro-forma financial information is presented in an abbreviated form insofar as it does not include all the disclosures and notes required in an annual financial report prepared in accordance with Australian Accounting Standards and the Corporations Act.
9.2 HISTORICAL FINANCIAL INFORMATION The historical financial information for the Company as set out in this Section comprises: the balance sheet as at 30 April 2011; selected notes to the balance sheet as at 30 April 2011; a summary income statement for the year ended 30 June 2010; and a summary income statement for the ten month period ended 30 April 2011.
The historical financial information has been prepared on the basis detailed, and in accordance with the accounting policies set out in Note 1 to the financial information.T he historical financial information has been extracted from the audited accounts of the Company for the year ended 30 June 2010 and the auditor reviewed accounts of the Company for the ten months ended 30 April 2011. Historical financial information does not include a statement of cash flows. The 30 June 2010 general purpose financial report can also be found on Bligh’s website at www.blighresources.com.au.
9.3 PRO-FORMA FINANCIAL INFORMATION The pro-forma financial information set out in this Section comprises: the unaudited pro-forma balance sheets as at 30 April 2011; and notes to the unaudited pro-forma balance sheets.
The unaudited pro-forma balance sheets have been derived from the auditor reviewed balance sheet as at 30 April 2011, adjusted for a number of pro-forma transactions as if they had occurred at 30 April 2011.
Collectively, the historical financial information and the pro-forma financial information are referred to as the Financial Information.
9.4 SUMMARY INCOME STATEMENTS
Year ended 30 JUNE 2010 10 MONTHS ended 30 APRIL 2011 Summary Income Statements ($) AUDITED UNAUDITED
Other income 17,109 50,477
Exploration and evaluation expenditure written off (26,576) (6,598)
Administration costs (21,701) (9,256)
Travel expenses (7,513) (6,167)
Other expenses (8,650) (54,948)
Total Expenses (64,440) (76,969)
Loss from continuing operations before income tax (47,331) (26,492)
Income tax expense - -
Loss from continuing operations after income tax (47,331) (26,492)
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9.5 HISTORICAL AND PRO-FORMA BALANCE SHEETS The unaudited pro-forma balance sheet has been derived from the auditor reviewed balance sheet as at 30 April 2011 adjusted for the following pro-forma transactions: the issue of 500,000 on 17 May 2011 at an issue price of $0.20 each raising $100,000; the issue of 20,000,000 Shares at an Issue Price of $0.25 per Share to raise $5,000,000 before the expenses of the Offer (the $5m raise capital) or the issue of 14,000,000 Share at an Issue Price of $0.25 per Share to raise $3,500,000 before the expenses of the Offer (the $3.5m raise).A ll Shares issued pursuant to this Prospectus will be issued as fully paid and will rank equally in all respects with the Shares currently on issue; and total costs expected to be incurred directly recognised against equity in connection with the preparation of this Prospectus and the completion of the Offer amount to approximately $394,625 for the $5m raise (or $317,750 for the $3.5m raise) of which $68,416 had been initially recognised in other assets and $35,000 had been accrued as at 30 April 2011. (Note: total costs for the $5m raise are $385,000 plus $9,625 of irrecoverable GST and total costs for the $3.5m raise are $310,000 plus irrecoverable GST of $7,750.)
Pro-forma as at Pro-forma as at As at 30 April 2011 30 April 2011 30 April 2011 Summary Balance Sheets ($) Unaudited Unaudited Unaudited ($5m Raise) ($3.5m Raise)
Assets
Current assets
Cash and cash equivalents 2,185,184 6,923,975 5,500,850
Trade and other receivables 37,198 37,198 37,198
Other assets 68,416 - -
Total current assets 2,290,798 6,961,173 5,538,048
Non-current assets
Fixed Assets 46,791 46,791 46,791
Exploration Interests 351,009 351,009 351,009
Other receivables 11,000 11,000 11,000
Total non-current assets 408,800 408,800 408,800
Total assets 2,699,598 7,369,973 5,946,848
Liabilities
Current liabilities
Trade and other payables 117,239 82,239 82,239
Total current liabilities 117,239 82,239 82,239
Total liabilities 117,239 82,239 82,239
Net assets 2,582,359 7,287,734 5,864,609
Equity
Contributed equity 2,654,581 7,359,956 5,936,831
Option Reserve 1,600 1,600 1,600
Accumulated losses (73,822) (73,822) (73,822)
Total Equity 2,582,359 7,287,734 5,864,609
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9.6 NOTES TO THE FINANCIAL INFORMATION NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of this financial information are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.
Basis of preparation The historical and pro forma financial information has been prepared in accordance with the measurement and recognition criteria of Australian Accounting Standards.
Compliance with IFRS This financial information also complies with the measurement and recognition criteria of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Historical cost convention This financial information is presented under historical cost convention.
Critical accounting estimates The preparation of financial information requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The area involving a higher degree of judgement of complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 1(i). a. Income Tax Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. b. exploration and Evaluation Expenditure Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Accumulated costs in relation to an abandoned area are written off in full to the statement of comprehensive income in the year in which the decision to abandon the area is made. c. Impairment of Assets At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. d. cash and Cash Equivalents For the purpose of presentation in the statement of cash flows cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.
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e. revenue and Other Income Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Company’s activities as described below. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and specifics of each arrangement.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument.
All dividends received shall be recognised as revenue when the right to receive payment has been established. All revenue is stated net of the amount of goods and services tax (GST). f. trade Receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts as they are due for settlement. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income. g. trade and Other Payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Company during the reporting period which remains unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability. h. goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
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i. critical Accounting Estimates and Assumptions The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Key Estimates i. Impairment The Company assesses impairment at each reporting date by evaluating conditions specific to the company that may lead to impairment of assets. If there is evidence of impairment for any of the group’s financial assets carried at amortised cost, the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial asset’s original effective interest rate. The loss is recognised in profit or loss.
Key Judgements in applying the Company’s Accounting Policies i. exploration and Evaluation Expenditure The Company’s accounting policy for exploration and evaluation expenditure results in certain items of expenditure being capitalised for an area of interest where it is considered likely to be recoverable by future exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure under the policy, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to the statement of comprehensive income. j. contributed Equity 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.
NOTE 2 CONTRIBUTED EQUITY
Contributed Equity no. of no. of securities $5m ($) securities $3.5m ($)
Shares
Founder shares at 30 June 2010 2,500,000 50,100 2,500,000 50,100
Ordinary shares at 30 June 2010 33,006,332 1,364,705 33,006,332 1,364,705
Promoter shares 1,030,000 154,500 1,030,000 154,500
Third Seed Capital Raise 6,939,000 1,387,776 6,939,000 1,387,776
Less: costs of issue - (202,500) - (202,500)
43,475,332 43,475,332
Shares issued under Offer 20,000,000 5,000,000 14,000,000 3,500,000
Less: Offer expenses (394,625) (317,750)
Pro-forma Shares on issue at 30 April 2011 63,475,332 57,475,332
Unlisted Options
Unlisted options on issue at 30 June 2010 16,000,000 1,600 16,000,000 1,600
Unlisted options on issue at 30 April 2011 16,000,000 16,000,000
Pro-forma contributed equity at 30 April 2011 7,361,556 5,938,431
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9.7 Dividend policy and forecast distribution The directors do not anticipate declaring any dividends out of the profits of Bligh in the near term.
Future payment of dividends by Bligh will depend upon the availability of distributable earnings, and Bligh’s franking credit position, operating results, available cash flows, financial condition, taxation position, future capital requirements, general business and financial conditions, and other factors the Directors consider relevant. The Directors give no assurances about the payment of dividends, the extent of payout ratios or the future level of franking of dividends.
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SECTION TEN INVESTIGATING ACCOUNTANT’S REPORT
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BL IGH RE S 10.OURCE S LTD INVESTIGATING ACCOUNTANT’S REPORT PROSPECTUS
The Directors Bligh Resources Limited Level 10, 84 Pitt Street Sydney NSW 2000
3123 MMayay 20112011
Dear Directors
Subject: Investigating Accountant’s Report on Historical and Pro Forma Financial Information and Financial Services Guide
We have prepared this report on certain historical and pro forma financial information of Bligh Resource Limited (the Company) for inclusion in a prospectus dated on or about 2331 May 2011 (the Prospectus) relating to the issue of ordinary shares in the Company (the “Issue’).
Expressions defined in the Prospectus have the same meaning in this report.
The nature of this report is such that it should be given by an entity which holds an Australian financial services licence under the Corporations Act 2001. PricewaterhouseCoopers Securities Ltd, which is wholly owned by PricewaterhouseCoopers, holds the appropriate Australian financial services licence. This report is both an Investigating Accountant’s Report, the scope of which is set out below, and a Financial Services Guide, as attached at Appendix A.
Scope
You have requested PricewaterhouseCoopers Securities Ltd to prepare this investigating accountant’s report (the Report) covering the following information:
Financial information
(f)(a) the historical income statements of the Company for the year ended 30 June 2010 and for the ten months ended 30 April 2011;
(g)(b) the historical and pro forma balance sheet as at 30 April 2011 which assumes completion of the proposed transactions disclosed in Section 9.5 of the Prospectus (the Pro Forma Transactions),
(collectively, the Financial Information).
This Report has been prepared for inclusion in the Prospectus. We disclaim any assumption of responsibility for any reliance on this Report or on the Financial Information to which this Report relates for any purposes other than the purpose for which it was prepared.
PricewaterhouseCoopers Securities Ltd, ACN 003 311 617 ABN 54 003 311 617 Holder of Australian Financial Services Licence No 244572 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 DX 77 Sydney, Australia T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au 48
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Scope of review of Financial Information
The Financial Information set out in Section 9.4 and 9.5 of the Prospectus has been extracted from the audited financial statements of the Company for the period ended 30 June 2010 and the special purpose financial statements of the Company for the ten months ended 30 April 2011 which were subject to a review by the auditor.
The financial statements for the period ended 30 June 2010 were audited by PricewaterhouseCoopers who issued an unqualified audit opinion and the financial statements for the ten months ended 30 April 2011 were reviewed by PricewaterhouseCoopers who issued an unqualified review opinion on them.
The Financial Information incorporates such pro forma transactions and adjustments as the Directors considered necessary to reflect the financial position of the Company going forward. The Directors are responsible for the preparation of the Financial Information, including the determination of the Pro Forma Transactions and adjustments.
We have conducted our review of the Financial Information in accordance with Australian Auditing Standards applicable to review engagements. We made such inquiries and performed such procedures as we, in our professional judgement, considered reasonable in the circumstances including:
a review of work papers, accounting records and other documents
a review of the adjustments made to the Financial Information
a review of the assumptions (which include the Pro Forma Transactions) used to compile the Pro Forma Balance Sheet
a comparison of consistency in application of the recognition and measurement principles under Australian Accounting Standards and other mandatory professional reporting requirements in Australia, and the accounting policies adopted by the Company disclosed in Section 9.6 of the Prospectus, and
enquiry of Directors, management and others.
These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion on the Financial Information.
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Review statement on Financial Information
Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that:
the Pro Forma Balance Sheet has not been properly prepared on the basis of the Pro Forma Transactions
the Pro Forma Transactions do not form a reasonable basis for the Pro Forma Balance Sheet
the Financial Information, as set out in Section 9.4 and 9.5 of the Prospectus, does not present fairly:
(a) the historical income statements of the Company for the period ended 30 June 2010 and the ten month period ended 30 April 2011; and
(b) the historical and pro forma balance sheets of the Company as at 30 April 2011, assuming completion of the Pro Forma Transactions in accordance with the recognition and measurement principles prescribed under Australian Accounting Standards and other mandatory professional reporting requirements in Australia, and the accounting policies adopted by the Company disclosed in Section 9.6 of the Prospectus.
Subsequent events
Apart from the matters dealt with in this Report, and having regard to the scope of our Report, to the best of our knowledge and belief no material transactions or events outside of the ordinary course of business of the Company have come to our attention that would require comment on, or adjustment to, the information referred to in our Report or that would cause such information to be misleading or deceptive.
Independence or disclosure of interest
PricewaterhouseCoopers Securities Ltd does not have any interest in the outcome of the Issue other than the preparation of this Report for which normal professional fees will be received.
Liability
PricewaterhouseCoopers Securities Ltd has consented to the inclusion of this Report in the Prospectus in the form and context in which it is included. The liability of PricewaterhouseCoopers Securities Ltd is limited to the inclusion of this Report in the Prospectus. PricewaterhouseCoopers Securities Ltd makes no representation regarding, and has no liability for, any other statements or other material in, or any omissions from, the Prospectus.
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Financial Services Guide
We have included our Financial Services Guide as Appendix A to our Report. The Financial Services Guide is designed to assist retail clients in their use of any general financial product advice in our Report.
Yours faithfully
Andrew J Parker Authorised Representative of PricewaterhouseCoopers Securities Ltd
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Appendix A – Financial Services Guide
PRICEWATERHOUSECOOPERS SECURITIES LTD FINANCIAL SERVICES GUIDE
This Financial Services Guide is dated 2331 May 2011
1. About us
PricewaterhouseCoopers Securities Ltd (ABN 54 003 311 617, Australian Financial Services Licence no 244572) ("PwC Securities") has been engaged by Bligh Resources Limited (“Bligh”) to provide a report in the form of an Investigating Accountants Report in relation to the Financial Information (the “Report”) for inclusion in the prospectus dated on or about 2331 May 2011.
You have not engaged us directly but have been provided with a copy of the Report as a retail client because of your connection to the matters set out in the Report.
2. This Financial Services Guide
This Financial Services Guide ("FSG") is designed to assist retail clients in their use of any general financial product advice contained in the Report. This FSG contains information about PwC Securities generally, the financial services we are licensed to provide, the remuneration we may receive in connection with the preparation of the Report, and how complaints against us will be dealt with.
3. Financial services we are licensed to provide
Our Australian financial services licence allows us to provide a broad range of services, including providing financial product advice in relation to various financial products such as securities, interests in managed investment schemes, derivatives, superannuation products, foreign exchange contracts, insurance products, life products, managed investment schemes, government debentures, stocks or bonds, and deposit products.
4. General financial product advice
The Report contains only general financial product advice. It was prepared without taking into account your personal objectives, financial situation or needs.
You should consider your own objectives, financial situation and needs when assessing the suitability of the Report to your situation. You may wish to obtain personal financial product advice from the holder of an Australian Financial Services Licence to assist you in this assessment.
5. Fees, commissions and other benefits we may receive
PwC Securities charges fees to produce reports, including this Report. These fees are negotiated and agreed with the entity who engages PwC Securities to provide a report. Fees are charged on an hourly basis or as a fixed amount depending on the terms of the agreement with the person who engages us. In the preparation of this Report our fees are charged on a fixed basis and are $35,000.
Directors or employees of PwC Securities, PricewaterhouseCoopers, or other associated entities, may receive partnership distributions, salary or wages from PricewaterhouseCoopers.
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6. Associations with issuers of financial products
PwC Securities and its authorised representatives, employees and associates may from time to time have relationships with the issuers of financial products. For example, PricewaterhouseCoopers may be the auditor of, or provide financial services to, the issuer of a financial product and PwC Securities may provide financial services to the issuer of a financial product in the ordinary course of its business.
PricewaterhouseCoopers is the auditor of Bligh Resources Limited.
7. Complaints
If you have a complaint, please raise it with us first, using the contact details listed below. We will endeavour to satisfactorily resolve your complaint in a timely manner. In addition, a copy of our internal complaints handling procedure is available upon request.
If we are not able to resolve your complaint to your satisfaction within 45 days of your written notification, you are entitled to have your matter referred to the Financial Ombudsman Service ("FOS"), an external complaints resolution service. FOS can be contacted by calling 1300 780 808. You will not be charged for using the FOS service.
8. Contact Details
PwC Securities can be contacted by sending a letter to the following address:
Mr Andrew Parker, Tower 2, Darling Park 201 Sussex Street, Sydney NSW 2000
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SECTION ELEVEN RISK FACTORS
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11.1 Introduction This Section identifies the areas the Directors regard as the major risks associated with an investment in the Company. Investors should be aware that an investment in the Company involves many risks, which may be higher than the risks associated with an investment in other companies. Intending investors should read the whole of this Prospectus in order to fully appreciate such matters and the manner in which the Company intends to operate before any decision is made to apply for Shares.
There are numerous widespread risks associated with investing in any form of business and with investing in the share market generally. There is also a range of specific risks associated with the Company’s business and its involvement in the mining exploration industry. These risk factors are largely beyond the control of the Company and its Directors because of the nature of the proposed business of the Company. The following summary, which is not exhaustive, represents some of the major risk factors which potential investors should be aware of.
11.2 Specific Risks A number of specific risk factors that may impact the future performance of the Company are described below. Shareholders should note that this list of risk factors is not exhaustive. Some of the risks may be mitigated by the use of appropriate safeguards and systems, whilst others are outside the control of the Company and cannot be mitigated.
11.2.1 Exploration & Development Risk Minerals exploration involves significant risk only occasionally providing high rewards. In addition to the normal competition for prospective ground, and the high costs of discovery and development of economic deposit, factors such as demand for commodities, stock market fluctuations affecting access to new capital, sovereign risk, environmental issues, labour disruption, foreign currency fluctuations and technical problems all affect the ability of a company to profit from a discovery.
There is no assurance that exploration and development of the successful prospects in the areas described in this Prospectus, or any other projects that may be acquired in the future, will result in the discovery of an economic mineral deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited.
11.2.2 Drilling & Operating Risk Mineral drilling activities are subject to numerous risks, many of which are beyond the Company’s control. The actual costs of drilling may be substantially more than the drilling costs estimated due to unforeseen circumstances encountered when drilling. The Company’s operations may be curtailed, delayed or cancelled as a result of weather conditions, mechanical difficulties, storage or delays in the delivery of rigs and/or other equipment and compliance with government requirements. Damage occurring as a result of such risks may give rise to claims against the Company. Although the Company believes that it or the operator will carry adequate insurance with respect to its operations in accordance with industry practice, in certain circumstances the Company’s or the operator’s insurance may not cover or be adequate to cover the consequences of such events. In addition, the Company may be subject to liability for pollution, or other hazards against which the Company or the operator does not insure or against which it may elect not to insure because of high premium costs or other reasons. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the operations of the Company. There is no assurance that the Company will be able to maintain adequate insurance in the future at rates that it considers is reasonable.
11.2.3 Environmental Risks The Company’s operations are subject to the environmental risks inherent in the mining exploration industry. The Company is subject to environmental laws and regulations in connection with all of its operations. Although the Company believes that it is in compliance in all material respects with all applicable environmental laws and regulations, there are certain risks inherent to its activities, such as accidental spills, leakages or unforseen circumstances that could subject the Company to extensive liability. Further, the Company may require approval from the relevant authorities before it can undertake activities which are likely to impact the environment. Failure to obtain such approvals will prevent the Company from undertaking its desired activities. The Company is unable to predict the effect of additional environmental laws and regulations which may be adopted in the future, including whether any such laws or regulations would materially increase the Company’s cost of doing business or affect its operations in any area.
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11.2.4 Title & Title opinions The system for obtaining title to mineral leases varies in the different states ofA ustralia, and is complex given that numerous parties may hold undivided mineral rights to a particular tract of land. In order to independently verify the parties with whom the Company is dealing are correct and sole holders of the mineral rights and to analyse the full rights and restrictions applying to the interest held by those parties, the Company may obtain detailed title opinion from appropriately qualified and experienced lawyers. This can be a lengthy and expensive process and the final opinions are often the subject of numerous qualifications. It is therefore customary that such title opinions are not sought until the Company proposes to conduct a drilling operation and/ or expend significant amounts of money on a particular lease. As a consequence there may be third parties that hold or claim mineral rights in relation to the Bligh Properties, which have not previously been identified.
Further, some of the leases in which the Company has an interest may have a fixed term and be subject to applications for renewal. The renewal term of each permit or licence is usually at the discretion of the relevant lessor.
11.2.5 Resource and Reserve Estimates Resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates that were valid when made may change significantly when new information becomes available. In addition, resource estimates are necessarily imprecise and depend to some extent on interpretations, which may prove to be inaccurate. Should the Company encounter minerals deposits or formations different from those predicted by past drilling, sampling and similar examinations, resource estimates may have to be adjusted and production plans may have to be altered in a way which could adversely affect the Company’s operations.
11.2.6 Regulation in General The mining exploration industry in Australia is extensively regulated. Extensive federal and state laws and regulations relating to the exploration for and development, production, gathering and marketing of minerals will affect the Company’s operations. Numerous environmental laws impact and influence our operations. As with the industry in general, compliance with existing and anticipated regulations increases the overall cost of the business. Environmental regulations have historically been subject to frequent change, and therefore, one cannot predict with certainty the future costs or other future impacts of environmental regulations on future operations. If the Company fails to comply with environmental laws it may be subject to liabilities to the government and third parties, including civil and criminal penalties. New laws and regulations, or modifications of or new interpretations of existing laws and regulations, may increase substantially the cost of compliance or adversely affect mining operations and financial conditions.
11.2.7 Sale of Minerals Most sales of minerals are not currently regulated and are generally made at market prices. The price received from the sale of these products is affected by the cost of transporting the products to the market.
11.2.8 Regulation in Exploration & Production Licences are required by the state for drilling operations, and the filing of reports concerning operations and these may impose other requirements relating to the exploration and production of minerals. The Company is required to comply with various federal and state regulations regarding site rehabilitation, which may have a material adverse effect on the Company’s financial performance.
11.2.9 Additional Requirements for Capital The Company’s funding requirements depend on numerous factors including the Company’s ability to generate income from the Bligh Properties. It may require further financing in addition to amounts raised and referred to in this Prospectus. Additional equity financing, if available, may be dilutive to Shareholders and at lower prices than the current market price. Debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations or anticipated expansion.
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11.2.10 Ability to Exploit Successful Discoveries It may not always be possible for the Company to participate in the exploitation of successful discoveries made in areas in which the Company has an interest. Such exploitation will involve the need to obtain the necessary licences or clearances from the relevant authorities, which may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible for such conditions to be satisfied. The infrastructure requirements around a successful discovery may also impact on the exploitation of a discovery. Further the decision to proceed to further exploitation may require the participation of other companies whose interests and objectives may not be the same as the Company. As described above, such work may require the Company to meet or commit to financing obligations for which it may have not planned.
11.2.11 Joint Venture Parties & Contractors The directors are unable to predict the risk of: financial failure, default or non-compliance with respective obligations by a participant in any joint venture to which the Company is, or may become, a party; insolvency or other managerial failure by any of the contractors used by the Company in its exploration activities; or insolvency or other managerial failure by any of the other service provider used by the Company for any activity.
11.2.12 Access Land Owners and Heritage Issues The Company’s activities in Australia are subject to the Native Title Act. Native title and Aboriginal land rights may affect the Company’s ability to gain access to prospective exploration areas to obtain mining titles and may generally affect the Company’s plans. Compensatory obligations may be necessary in relation to settling native title claims lodged over any of the tenements in which the Company has an interest. The level of impact of these matters will depend, in part, on the location and status of the tenements that the Company currently or in the future may have an interest.
11.2.13 Infrastructure Risks Where any of the Company’s assets are in regions not adequately serviced by rail, port or other infrastructure to facilitate the transportation of extracted product from the region, the success of these projects will be subject to significant infrastructure risk. This may include any proposed private or public constructions of rail, port or other infrastructure servicing the region, and the ability of the Company to access such infrastructure on reasonable terms. No assurance can be given by the Company as to the timetable for construction of such adequate facilities. Any requirement for the Company to incur significant cost to construct adequate services or to contribute to the cost of construction, may significantly impact on the commercial feasibility of developing the tenements.
11.3 General Risks The future prospects of the Company’s business may be affected by circumstances and external factors beyond the Company’s control. Financial performance of the Company may be affected by a number of business risks that apply to companies generally and may include economic, financial, market or regulatory conditions.
The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.
11.3.1 Economic Conditions Economic conditions, in Australia, the USA and globally, may affect the performance of the Company. Factors such as fluctuations in currencies, commodity prices, inflation, interest rates, supply and demand and industrial disruption may have an impact on operating costs and share market prices. The Company’s future possible revenues and share price can be affected by these factors, all of which are beyond the control of the Company or its Directors. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company. In addition, the Company’s ability to raise additional capital, should it be required, may be affected.
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11.3.2 Market Conditions A number of factors affect the performance of share market investments that could also affect the price at which the Shares trade on the ASX. The market price of Shares can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general. These factors may materially affect the market price of the Company’s Shares regardless of the Company’s operational performance.
11.3.3 Changes in Legislation and Government Regulation Government legislation in Australia or any other relevant jurisdiction, including changes to the taxation system, may affect future earnings and relative attractiveness of investing in the Company. Changes in government policy or statutory changes may affect the Company and the attractiveness of an investment in it.
11.3.4 Competition The Company competes with other companies, including major mining companies. Some of these companies have greater financial and other resources than the Company and, as a result may be in a better position to compete for future business opportunities. Many of the Company’s competitors not only explore for and produce minerals, but also carry mining operations and market their products on a worldwide basis. There is no assurance that the Company can compete effectively with these competitors.
11.3.5 Foreign Exchange Risk The Company’s main business undertakings will be based in Australia, and revenues, cash flows, expenses, capital expenditure and commitments will be primarily denominated in Australian dollars. To comply with Australian reporting requirements for the Company, the income, expenditure and cash flows from the Company’s interest in the Bligh Properties will be accounted for in Australian dollars. Foreign exchange risk should be minimal initially, but pricing of products in overseas markets could affect the viability of projects.
11.3.6 Product Price Volatility – International Markets The demand for, and price of, minerals is dependent on a variety of factors, including supply and demand, the level of consumer product demand, weather conditions, the price and availability of alternatives, actions taken by governments and international cartels, and global economic political developments.
11.4 Speculative Nature of Investment 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 speculative and should consult their professional advisers before deciding whether to apply for Shares.
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SECTION TWELVE ADDITIONAL INFORMATION
137 BLIGH RESOURCES LTD PROSPECTUS
12.1 Company Details Incorporation The Company was incorporated in New South Wales on 7 May 2008 as “Tradebooks Services Pty Limited”. The Company changed its name to “Bligh Resources Pty Limited” on 14 July 2009 and converted to a public company on 17 December 2009. Its name then changed to Bligh Resources Limited.
Company Tax Status The Directors expect the Company will be taxed in Australia as a public company.
Balance Date The accounts of the Company will be made up to 30 June annually.
12.2 Disclosure of Directors’ Shareholding Directors are not required under the Constitution to hold any Shares. As at the date of this Prospectus, the Directors have relevant interests in Shares as set out in the table below:
Director No. of Securities
4,500,000 ordinary shares* Robert J Benussi 3,900,000 options
4,500,000 ordinary shares** William C Guy 3,900,000 options
270,000 ordinary shares*** Hanjing Xu 83,333 promoter shares
4,000,000 ordinary shares**** Liming Nui (alternate for H. Xu) 83,334 promoter shares
Peiqi Zhang 4,000,000 ordinary shares
* these Shares are held by Intrepid Concepts Pty Ltd. Robert Benussi is sole director, secretary and shareholder of Intrepid Concepts Pty Ltd. The options are exercisable at $0.25 per option at any time from the date of listing of the company on ASX until the date which is 5 years from the date of listing, subject to escrow requirements in the ASX listing rules. ** these Shares are held by Mineral Rock Pty Ltd. Charles William Guy is sole director, secretary and shareholder of Mineral Rock Pty Ltd. The options are exercisable at $0.25 per option at any time from the date of listing of the company on ASX until the date which is 5 years from the date of listing, subject to escrow requirements in the ASX listing rules. **** These Shares are held by Mrs Yao Xu, who is the wife of Hanjing Xu. **** These Shares are held by Keen Source Holdings Ltd. Liming Nui is a director of Keen Source Holdings Ltd. Nothing in this Prospectus will be taken to preclude Directors, officers or employees of Bligh Resources from applying for Shares under this Prospectus.
12.3 Remuneration of Directors The Constitution provides that the non-executive Directors may collectively be paid as remuneration for their services a fixed sum not exceeding the aggregate sum determined by a general meeting. The aggregate remuneration is currently set at an amount of $250,000 per annum. A Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties. Executive Directors may be paid on commercial terms as the Directors see fit.
The remuneration of executive Directors will be fixed by the Directors and may be paid by way of fixed salary. As at the date of this Prospectus, the Company does not have any commitments or contractual obligation with respect to executive Directors. It is though proposed to enter into executive service agreements with both of Robert Benussi and Charles William Guy.
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12.4 Fees and Benefits of Directors Except as disclosed in this Prospectus, no Director or proposed Director (whether individually or in consequence of a Director’s association with any company or firm or in any material contract entered into by the Company) has now, or has had in the two year period ending on the date of this Prospectus, any interest in: the formation or promotion of the Company; or property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or the Offer.
Except as disclosed in this Prospectus, no amounts of any kind (whether in cash or Shares or otherwise) have been paid or agreed to be paid to any Director or to any company or firm with which aD irector is associated to induce him or her to become, or to qualify as, a Director, or otherwise for services rendered by him or any company or firm with which the Director is associated in connection with the formation or promotion of the Company or Offer.
The Company proposes to enter into Deeds of Indemnity and Access with each of the Directors under which the Company agrees to indemnify the Directors against certain liabilities incurred by the Directors while acting as a Director of the Company, to use its best endeavours to insure the Directors against certain risks to which the Directors are exposed to as a Director of the Company and to grant to the Director a right of access to certain records of the Company for a period of up to seven years after the Director ceases to be a Director.
12.5 Interests of Named Persons Other than as set out below or elsewhere in this Prospectus, no expert or 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 nor any firm in which any of those persons is or was associated with has now, or has had, in the 2 year period ending on the date of this Prospectus an interest in: the formation or promotion of the Company; any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the Offer; or 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 those persons or for services rendered in connection with the formation or promotion of the Company or the Offer. PricewaterhouseCoopers Securities Ltd has acted as the Investigating Accountant and has prepared an Investigating Accountant’s Report which has been included in Section 10 of this Prospectus. In respect of this work the Company will pay approximately $35,000 for these services.
Al Maynard & Associates Pty Ltd has prepared an Independent Geologist’s Report with respect to the tenement holdings which has been included in Section 8 of this Prospectus. In respect of this work the Company will pay approximately $25,000 for these services.
The amounts disclosed above are exclusive of any amount of goods and services tax payable by the Company in respect of those amounts.
12.6 Consents Each of the parties referred to in this Section: does not make, or purport to make, any statement in this Prospectus or on which a statement made in this Prospectus is based other than those referred to in this Section; and to the maximum extent permitted by law, expressly disclaims 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.
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PricewaterhouseCoopers Securities Ltd has given its written consent to the inclusion in this Prospectus of its Investigating Accountant’s Report and all statements referring to that report in the form and context in which they are included and has not withdrawn such consent prior to lodgement of this Prospectus with the ASIC.
Al Maynard & Associates Pty Ltd has given its written consent to the inclusion in this Prospectus of its Independent Geologist’s Report and all statements referring to that report in the form and context in which they are included and has not withdrawn such consent prior to lodgement of this Prospectus with the ASIC.
Each of the following has consented to being named in the Prospectus in the capacity as noted below and have not withdrawn such consent prior to lodgement of this Prospectus with the ASIC: (i) link Market Services Limited as Share Registry for the Company; (ii) PricewaterhouseCoopers Securities Ltd as Investigating Accountant; (iii) PricewaterhouseCoopers as auditor to the Company; and (iv) Al Maynard & Associates Pty Ltd as Independent Geologist;
12.7 Material Contracts The following are contracts which have been entered into by the Company and which have been identified as material and relevant to potential investors – a. commercial Lease the company has entered into a lease of a premises at suite 804, level 8, 84 Pitt Street, Sydney. The term of the lease is 2 years commencing 15 October 2010 and terminating 14 October 2012. Rent is $40,000pa, payable monthly. b. mandate Agreement the company has entered into a mandate agreement with Markiewicz & Company dated 25 May 2011 for them to act as a corporate advisor in relation to the fund raising. Key provisions of the mandate are as follows: i. term is 6 months, unless terminated earlier. ii. Fees payable to Markiewicz & Company are - • A Broker Fee of 5% of total funds raised under the Transaction payable on successful listings day • A Management Fee of $10,000 payable upon signing the Mandate • A Retainer Fee of $5,000 per Month payable in advance on the first day of each month, from the earlier of the date of official listing of the Company on the ASX or 1 July 2011.
12.8 Rights Attaching to Shares 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. The following are the more important rights, privileges and restrictions attaching to the Shares offered for subscription by this Prospectus:
12.8.1 General Meetings and Notice Each Shareholder is entitled to receive notice of all general meetings of the Company and to receive all notices, accounts and other documents required to be furnished to Shareholders under the Constitution, the Corporations Act or the ASX Listing Rules. 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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12.8.2 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: each Shareholder entitled to vote may vote in person or by proxy, attorney or representative; 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 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 her, or in respect of which he or she is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares shall have a fraction of a vote to the proportion which the amount paid is of the total amounts paid and payable.
12.8.3 Dividend Rights The Directors may from time to time declare such dividends as appear to the Directors to be justified by the profits of the Company.
Subject to the rights of persons entitled to Shares with special rights as to dividends (at present there are none), all dividends are paid in the proportion that the amounts paid on those Shares bear to the issue price of the Shares.
12.8.4 Winding-Up If the Company is wound up, the liquidator may, with the sanction of a special resolution, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he or she 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.
12.8.5 Transfer of Shares Shares in the Company are freely transferable, subject to formal requirements, and so long as the registration of the transfer does not result in a contravention of or failure to observe the provisions of a law of Australia and the transfer is not in breach of the Corporations Act or the Listing Rules.
12.8.6 Variation of Rights The Company may, subject to the Corporations Act and with the sanction of a special resolution passed at a meeting of Shareholders, or with the written consent of the majority of shareholders in the affected class, vary or abrogate the rights attaching to Shares.
12.9 Taxation The Company does not propose to give any taxation advice and neither the Company, its Directors nor its officers or advisers accept any responsibility or liability for any taxation consequences to applicants. Applicants should consult their own professional tax advisers in regard to taxation implications of accepting any Offer pursuant to this Prospectus.
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12.10 Expenses of the Offer The total expenses of the Offer are estimated to be approximately $385,000 (exclusive ofG ST) comprising the following:
$5M Raising $3.5M Raising
Commission and handling fees * $250,000 $175,000
ASX and ASIC fees $31,000 $31,000
Professional fees $59,000 $59,000
Printing and miscellaneous expenses $20,000 $20,000
Independent Geological Report $25,000 $25,000
Total Estimated Expenses $385,000 $310,000
* Assuming a handling fee of 5% is payable on all applications received.
12.11 Litigation As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.
12.12 Electronic Prospectus Pursuant to Class Order 00/044 the ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an Electronic Prospectus on the basis of a paper Prospectus lodged with ASIC and the issue of Shares in response to an electronic application form, subject to compliance with certain provisions.
If you have received this Prospectus as an Electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please email the Company at [email protected] and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus or both.
The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the Electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered. In such a case, the Application Monies received will be dealt with in accordance with section 722 of the Corporations Act.
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SECTION THIRTEEN GLOSSARY OF DEFINED TERMS
143 BLIGH RESOURCES LTD PROSPECTUS
13.1 Where the following terms are used in this Prospectus they have the following meanings: A$ or $ means an Australian dollar unless otherwise stated. Applicant(s) means person(s) who submit a valid Application pursuant to this Prospectus. Application means a valid application to subscribe for a specified number of Shares made on an Application Form. Application Form means the application form for the Offer enclosed with or attached to this Prospectus. Application Monies means monies received by the Company from Applicants. ASIC means Australian Securities and Investments Commission. ASTC means ASX Transfer and Settlement Corporation Pty Ltd (ACN 008 504 532). ASTC Settlement Rules means the settlement rules of ASTC. ASX means ASX Limited ABN 98 008 624 691 and, where the context permits, the Australian Securities Exchange operated by ASX Limited. Board means the Board of Directors of the Company as constituted from time to time. CHESS means ASX Clearing House Electronic Subregistry System. Closing Date means the closing date for receipt of Application Forms under this Prospectus, being 5.00pm (WST) on 6 October 2011 (unless extended or closed early). Constitution means the Constitution of the Company. Corporations Act means the Corporations Act 2001 (Cth). Director(s) means the director(s) of the Company at the date of this Prospectus. Electronic Prospectus means an electronic version of this Prospectus. Exposure Period means the period of seven (7) days after the date of lodgement of this Prospectus, which period may be extended by the ASIC by not more than seven (7) days pursuant to Section 727(3) of the Corporations Act 2001. Investigating Accountant means PricewaterhouseCoopers Securities Ltd. Investigating Accountant’s Report means the report contained in Section 10. Independent Geologist means Al Maynard & Associates Pty Ltd. Independent Geologist’s Report means the report contained in Sections 8. Issue means the issue of the Shares pursuant to this Prospectus. Listing Rules or ASX Listing Rules means the official Listing Rules of the ASX. Bligh Properties means the properties described in Section 7.3. Bligh Resources or the Company means Bligh Resources Limited (ACN 130 964 162). Offer means the offer of 20,000,000 Shares at 25 cents per Share pursuant to this Prospectus, to raise $5,000,000. Official List means the official list of ASX. Official Quotation means official quotation by ASX in accordance with the Listing Rules. Opening Date means 7 June 2011. Option means an option to acquire one (1) Share. Prospectus means this Prospectus and includes the Electronic Prospectus. Section means a section of this Prospectus. Share(s) means a fully paid ordinary share in the capital of the Company and Shares has a corresponding meaning. Share Registry means Link Market Services Limited. Shareholder(s) means the registered holder of a Share(s) in Bligh Resources.
WST means Australian western standard time.
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SECTION FOURTEEN DIRECTORS’ AUTHORISATION
145 BLIGH RESOURCES LTD PROSPECTUS
The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that no statements made by the Directors in this Prospectus are misleading or deceptive and that in respect to any other statements made in this Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make such statement, those persons have given their consent to the statements being included in this Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with the ASIC.
This Prospectus is issued by Bligh Resources Limited and its issue has been authorised by a resolution of Directors. The Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to likely investors or their professional advisers.
Each of the Directors of Bligh Resources Limited has consented in writing to the lodgement of this Prospectus with the ASIC in accordance with Section 720 of the Corporations Act and has not withdrawn that consent.
______Signed for and on behalf of
Bligh Resources Limited by Robert J Benussi Chairman
31 May 2011
146 Bligh Resources Limited Broker Code Adviser Code ACN 130 964 162
Public Offer Application Form This is an Application Form for Shares in Bligh Resources Limited under the Public Offer on the terms set out in the Prospectus dated 31 May 2011. You may apply for a minimum of 8,000 Shares and multiples of 1,000 thereafter. This Application Form and your cheque or bank draft must be received by 5:00pm (WST) on 18 November 2011. If you are in doubt as to how to deal with this Application Form, please contact your accountant, lawyer, stockbroker or other professional adviser. The Prospectus contains information relevant to a decision to invest in Shares and you should read the entire Prospectus carefully before applying for Shares.
Shares applied for Price per Share Application Monies A , , at A$0.25 B A$ , , . (minimum 8,000 Shares, thereafter in multiples of 1,000 Shares)
PLEASE COMPLETE YOUR DETAILS BELOW (refer overleaf for correct forms of registrable names) Applicant #1 – Surname/Company Name + C Title First Name Middle Name
Joint Applicant #2 – Surname
Title First Name Middle Name
Designated account e.g.
TFN/ABN/Exemption Code First Applicant Joint Applicant #2 Joint Applicant #3 D
TFN/ABN type – if NOT an individual, please mark the appropriate box Company Partnership Trust Super Fund
PLEASE COMPLETE ADDRESS DETAILS PO Box/RMB/Locked Bag/Care of (c/-)/Property name/Building name (if applicable) E Unit Number/Level Street Number Street Name
Suburb/City or Town State Postcode
Email address (only for purpose of electronic communication of shareholder information)
CHESS HIN (if you want to add this holding to a specific CHESS holder, write the number here) F X Please note: that if you supply a CHESS HIN but the name and address details on your Application Form do not correspond exactly with the registration details held at CHESS, your Application will be deemed to be made without the CHESS HIN and any Shares + issued as a result of the Offer will be held on the issuer sponsored sub-register.
Telephone Number where you can be contacted during Business Hours Contact Name (PRINT) G ( ) Cheques or bank drafts should be made payable to “Bligh Resources Limited Share Issue Account” in Australian currency and crossed “Not Negotiable”. Cheque or Bank Draft Number BSB Account Number H -
Total Amount A$ , , . LODGEMENT INSTRUCTIONS You must return your application so it is received before 5:00pm (WST) on 18 November 2011 to: Mailing Address: Bligh Resources Limited, C/- Link Market Services Limited, Locked Bag A14, Sydney South NSW 1235; or Hand Delivery Addresses: Bligh Resources Limited, C/- Link Market Services Limited, Level 12, 680 George Street, Sydney, NSW; or Bligh Resources Limited, C/- Link Market Services Limited, Ground Floor, 178 St Georges Terrace, Perth, WA. BLI IPO001 Your Guide to the Application Form Please complete all relevant white sections of the Application Form in BLOCK LETTERS, using black or blue ink. These instructions are cross-referenced to each section of the form. The shares to which this Application Form relates are Bligh Resources Limited (“Bligh Resources”) Shares. Further details about the shares are contained in the Prospectus dated 31 May 2011 issued by Bligh Resources. The Prospectus will expire on 30 June 2012. While the Prospectus is current, Bligh Resources will send paper copies of the Prospectus, any supplementary document and the Application Form, free of charge on request. The Australian Securities and Investment Commission requires that a person who provides access to an electronic application form must provide access, by the same means and at the same time, to the relevant Prospectus. This Application Form is included in the Prospectus. The Prospectus contains important information about investing in the Shares. You should read the Prospectus before applying for Shares.
A Insert the number of Shares you wish to apply for. The Application must E Please enter your postal address for all correspondence. All communications be for a minimum of 8,000 Shares and thereafter in multiples of 1,000 to you from Bligh Resources and the Share Registry will be mailed to Shares. You may be issued all of the Shares applied for or a lesser the person(s) and address as shown. For joint Applicants, only one number. address can be entered. B Insert the relevant amount of Application Monies. To calculate your F If you are already a CHESS participant or sponsored by a CHESS Application Monies, multiply the number of Shares applied for by the participant, write your Holder Identification Number (HIN) here. If the issue price. Amounts should be in Australian dollars. Please make sure name or address recorded on CHESS for this HIN is different to the the amount of your cheque or bank draft equals this amount. details given on this form, your Shares will be issued to Bligh Resources’s C Write the full name you wish to appear on the register of Shares. This issuer sponsored subregister. must be either your own name or the name of a company. Up to three G Please enter your telephone number(s), area code and contact name in joint Applicants may register. You should refer to the table below for the case we need to contact you in relation to your Application. correct registrable title. H Please complete the details of your cheque or bank draft in this section. D Enter your Tax File Number (TFN) or exemption category. Business The total amount of your cheque or bank draft should agree with the enterprises may alternatively quote their Australian Business Number amount shown in section B. (ABN). Where applicable, please enter the TFN or ABN for each joint Make your cheque or bank draft payable to “Bligh Resources Limited Applicant. Collection of TFN(s) and ABN(s) is authorised by taxation Share Issue Account” in Australian currency and cross it “Not laws. Quotation of TFN(s) and ABN(s) is not compulsory and will not Negotiable”. Your cheque or bank draft must be drawn on an Australian affect your Application. However, if these are not provided, Bligh bank. Sufficient cleared funds should be held in your account, as cheques Resources will be required to deduct tax at the highest marginal rate of returned unpaid are likely to result in your Application being rejected. tax (including the Medicare Levy) from payments. If you receive a firm allocation of Shares from your Broker make your cheque payable to your Broker in accordance with their instructions.
LODGEMENT INSTRUCTIONS This Application Form and your cheque or bank draft must be mailed or delivered so that it is received before 5:00pm (WST) on 18 November 2011 at: Mailing Address: Hand Delivery Addresses: Bligh Resources Limited Bligh Resources Limited or Bligh Resources Limited C/- Link Market Services Limited C/- Link Market Services Limited C/- Link Market Services Limited Locked Bag A14 Level 12, 680 George Street Ground Floor, 178 St Georges Terrace Sydney South NSW 1235 Sydney New South Wales Perth WA 6000 (do not use these addresses for mailing purposes)
Link Market Services Limited advises that Chapter 2C of the Corporations Act 2001 requires information about you as a shareholder (including your name, address and details of the shares you hold) to be included in the public register of the entity in which you hold shares. Information is collected to administer your shareholding and if some or all of the information is not collected then it might not be possible to administer your shareholding. Your personal information may be disclosed to the entity in which you hold shares. You can obtain access to your personal information by contacting us at the address or telephone number shown on this form. Our privacy policy is available on our website (www.linkmarketservices.com.au).
CORRECT FORMS OF REGISTRABLE NAMES Note that ONLY legal entities are allowed to hold Shares. Applications must be in the name(s) of natural persons or companies. At least one full given name and the surname is required for each natural person. The name of the beneficiary or any other non-registrable name may be included by way of an account designation if completed exactly as described in the examples of correct forms below. Type of Investor Correct Form of Registration Incorrect Form of Registration Individual Use given names in full, not initials Mrs Katherine Clare Edwards K C Edwards Company Use Company’s full title, not abbreviations Liz Biz Pty Ltd Liz Biz P/L or Liz Biz Co. Joint Holdings Mr Peter Paul Tranche & Peter Paul & Use full and complete names Ms Mary Orlando Tranche Mary Tranche Trusts Mrs Alessandra Herbert Smith Alessandra Smith Use the trustee(s) personal name(s)
Put the name(s) of any joint Applicant(s) and/or account description using < > as indicated above in designated spaces at section C on the Application Form. BLIGH RESOURCES LIMITED ACN 130 964 162
Level 8, 84 Pitt Street Sydney NSW 2000 Australia
Phone: (61) 2 9233 4677 Fax: (61) 2 9230 0710
Email: [email protected] WEB: www.blighresources.com.au