LitheXLitheXResources Limited
Lithex Resources Limited
This is an important document which should be read in its entirety.
You may wish to consult your professional advisor about the contents of this prospectus,
an investment in shares offered by this prospectus should be considered as speculative
Prospectus
ASCOT SECURITIES PTY. LTD.L E A D M A N A G E R
For the issue of 10,000,000 Shares at an issue price of 20 cents each
to raise $2,000,000.
Oversubscriptions of up to a further 10,000,000 Shares at an issue price of
20 cents each to raise up to a further $2,000,000 may be accepted.
ACN 140 316 463
LitheXLitheXResources Limited
11 Rafferty Close
MANDURAH WA 6210
Website: www.lithex.com.au
Email: [email protected]
Tel: (08) 9583 5109
Fax: (08) 9264 8207
ACN 140 316 463
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LITHEX RESOURCES LIMITED
ACN 140 316 463
PROSPECTUS
For the issue of 10,000,000 Shares
at an issue price of 20 cents each
to raise $2,000,000
(Oversubscriptions of up to a further 10,000,000 Shares
at an issue price of 20 cents each to raise up to a further
$2,000,000 may be accepted)
IMPORTANT NOTICE
Shares offered by this Prospectus should be considered speculative and potential investors should refer to Section
for further details concerning the Risk Factors.
This document is important and requires your immediate attention. It should be read in its entirety. If you do not
understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or
professional adviser.
Neither Lithex Resources Limited nor any other person guarantees the performance of the Shares offered pursuant
to this Prospectus, or the performance of Lithex Resources Limited, or the return on any investment.
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DIRECTORS
COMPANY SECRETARY
REGISTERED OFFICE
LEAD MANAGER & CORPORATE ADVISER
Ascot Securities Pty Ltd
SOLICITOR TO THE COMPANY
House Legal
SOLICITOR TO THE OFFER
Steinepreis Paganin Lawyers & Consultants
INDEPENDENT GEOLOGIST
Al Maynard and Associates
Malcolm Carson Non Executive Chairman
Robert Mandanici Managing Director
Steven Crabbe Executive Director
Neal Shoobert
11 Rafferty Close
MANDURAH WA 6210
Website: www.lithex.com.au
Email: [email protected]
Tel: (08) 9583 5109
Fax: (08) 9264 8207
Level 8
530 Little Collins Street
MELBOURNE VIC 3000
Website: www.ascotsecurities.com.au
Tel: 03 8686 5788
Fax: 03 8686 5790
86 First Avenue
MOUNT LAWLEY WA 6050
Level 4, The Read Buildings
16 Milligan Street
PERTH WA 6000
9/280 Hay Street
SUBIACO WA 6008
AUDITOR
Rothsay Chartered Accountants
INVESTIGATING ACCOUNTANT
Rothsay Consulting Services Pty Ltd
SHARE REGISTRY
Security Transfer Registrars Pty Ltd
Level 18
6-10 O'Connell Street
SYDNEY NSW 2000
Level 18
6-10 O'Connell Street
SYDNEY NSW 2000
770 Canning Highway
APPLECROSS WA 6153
Email: [email protected]
Tel: (08) 9315 2333
Fax: (08) 9315 2233
DIRECTORY
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INVESTMENT HIGHLIGHTS
RISKS SUMMARY
• Large strategic tenement holding within the East Pilbara and Gascoyne Geological Provinces of
Western Australia.
focussing on exploration and adding value for shareholders through exploration and strategic
business development;
taking advantage of the upsurge in demand and strong commodity prices for rare mineral
commodities;
developing at least one of Lithex Resources' projects into a viable mine and rare minerals export
business; and
minimising other costs and administration overheads.
There are risks associated with investing in the share market generally and in this Company specifically. These risks
are more clearly outlined in Section of the Prospectus, however, listed below are, in the Directors' opinion, the key
risks associated with this investment:
• Substantial position within the historical tin and tantalum producing districts of the Achaean Pilbara
Craton.
• Operations ceased 25 years ago due to weak demand and prices for rare metal commodities at thattime.
• Prices of rare metal commodities have firmed to record highs and Lithex Resources will undertakemodern exploration on these abandoned fields.
• The Moolyella, Shaw River and Pilgangoora projects are strategically located between Marble Bar andPort Hedland within trucking distance of ports.
• The Arthur River project is located within the Gascoyne Mineral Field approx. 250 KM east of
Carnarvon and north of Gascoyne Junction. This is a region known to contain rare metal pegmatites.
• Lithex Resources is managed by a board with a blend of technical, corporate and capital market
experience.
• Lithex Resources represents an opportunity for investors seeking exposure to lithium, tantalum, tin
and rare earth metals.
• The directors are committed to:
• The tenements are at various stages of exploration, which of itself is a high risk undertaking. There can
be no guarantee that the exploration activities of the Company will result in the discovery of an
economic deposit;
• no guarantee that tenements in application stage will ultimately be granted;
• environmental bond review by the State Government may affect Company funding;
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Key Risks
INVESTMENT HIGHLIGHTS AND RISKS SUMMARY
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•
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•
no assurance can be given that the cost estimates of proposed exploration expenditures and the
underlying assumptions will be realised in practice, which may materially and adversely affect the
Company's viability;
the overall share market may negatively impact an investment in the Company;
commodity prices may go down;
access to land may be stopped;
the Company may be unable to obtain environmental approvals;
the Company may not be able to raise further funds as and when required; and
Directors and consultants may leave the Company.
Tantalite recovered from surface sampling at The Moolyella Project - 2010
INVESTMENT HIGHLIGHTS AND RISKS SUMMARY
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CHAIRMAN'S LETTER
Dear Investor,
On behalf of the Directors of Lithex Resources Limited (“Lithex” or “the Company”), it is my pleasure to introduce
this Prospectus to you and invite you to become a Shareholder of the Company.
This Prospectus has been issued by Lithex for the purposes of offering 10 million Shares at $0.20 each to raise $2
million before costs. Oversubscription of up to a further 10 million Shares at an issue price of $0.20 each to raise up
to a further $2 million may be accepted.
Lithex was incorporated on 30 October 2009 for the purpose of exploration on tenements it has secured the rights
to acquire which are located within the Pilbara and Gascoyne regions of Western Australia.
Lithex tenements cover areas which contain the valuable transition metal minerals including tin, tantalum,
niobium, alkali metals including lithium, potassium and with scope to define rare mineral lanthanides and
actinides.
Lithex's tenements near Marble Bar (Moolyella and Shaw River) cover areas which were mined extensively for tin
with secondary tantalum and niobium for nearly 100 years. Operations ceased in the mid 1980's due to the collapse
in tin prices which was caused by the massive stockpiles acquired by the International Tin Council (ITC) to support
the price against competitive pressure from aluminium and plastic substitutes. In 1985 the ITC could no longer
finance the stockpiles and was forced to sell tin into the market both suppressing the price and causing capacity to
be shut-down. Following the disposal of the inventory (in the 1990's) tin prices have dramatically improved due to
increased demand from China and Indonesia, new high-tech uses and constrained supply.
World tin production doubled 1990 levels in 2004/2005 (351,800t) and uses for tin broadened from solder, tin foil
and plating for tin cans to modern applications which take advantage of its “superconductor” properties, such as in
mobile phones. For example, tin when combined with niobium (a metal associated with tantalum and which exists
on Lithex's tenements) is used in wires for very light superconducting magnets. There are also a number of
applications for tin in organotin compounds.
Lithex's projects are well placed to move from exploration to development and to achieve an early cash flow which
places the Company in a strong position to take advantage of the demand and high prices for these rare minerals.
In addition, to the west of Marble Bar Lithex has tenements located on rock units with potential to contain tin,
tantalum, lithium and rare earth mineralisation and which are positioned in the Pilbara near the Wodgina
tin/tantalum mine operated by Talison Minerals and Mt Cassiterite deposits and in the Gascoyne the Arthur River
tantalum niobium mine operated by Tantalum Australia.
Therefore, tin is enjoying a revival and the price and the accessory rare metals and rare earth minerals market is
strengthening in anticipation of expanding uses of these minerals in sophisticated electronics, batteries for hybrid
cars and a range of highly prized exotic uses.
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CHAIRMAN'S LETTER
Tantalum which naturally occurs with niobium, melts at a uniquely high 3,000C and also has unique electrical
properties. Tantalum's electronic properties are used in sophisticated electronics including computers and
mobile phones. Its physical properties are exploited in gas turbine blades which operate at very high
temperatures.
Lithex's budgets presented with this prospectus capture the implementation of exploration and evaluation
programs on these tenements which have not been explored thoroughly with modern techniques. The
tenements have historically produced substantial quantities of tin and tantalum over many decades from large
alluvial deposits, with the primary source yet to be discovered.
Furthermore the company has been fortunate to secure the services of Executive Directors Rob Mandanici and
Steve Crabbe. They have experience in the operation of private and public companies, knowledge of the local
mineralisation, practical hands-on experience in mining operations and the ambition to drive these projects to
define tangible assets, build a viable mining business and add value for shareholders.
This Prospectus contains detailed information about Lithex and the Company's current exploration projects in
addition to independent professional reports.
Please read this Prospectus carefully before you make your investment decision and, where necessary, consult
your professional advisers.
Once again, on behalf of the Board, I commend Lithex to you and invite you to become a Shareholder and a part
of this exciting investment opportunity.
Yours sincerely
Chairman
There are modern opportunities for miners of tin, tantalum/niobium, lithium and rare earth minerals and the
opportunity to revitalise an industry which closed down 25 years ago.
Therefore, the Directors of Lithex believe its projects are exciting and have the scope to add shareholder value
through strategically focussed exploration.
Lithex Resources Limited
Malcolm Carson
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TABLE OF CONTENTS
1. DETAILS OF THE OFFER .................................................................................................11
2. COMPANY OVERVIEW AND THE PROJECTS....................................................................18
3. BOARD AND MANAGEMENT.........................................................................................23
4. RISK FACTORS...............................................................................................................30
1.1 Pro Forma Capital Structure ............................................................................................................11
1.2 Options ............................................................................................................................................11
1.3 Indicative Timetable ........................................................................................................................11
1.4 Shares Offered for Subscription.......................................................................................................11
1.5 Montezuma Mining Company Ltd and South Boulder Mines Limited Shareholders.......................12
1.6 Public Offer......................................................................................................................................12
1.7 Minimum Subscription ....................................................................................................................12
1.8 Purpose Of The Offer.......................................................................................................................12
1.9 Underwriting ...................................................................................................................................14
1.10 Risks.................................................................................................................................................14
1.11 Brokerage and Handling Fees ..........................................................................................................14
1.12 Cash Flow Projections......................................................................................................................14
1.13 Allotment and Allocation Of Shares ................................................................................................15
1.14 Applicants outside Australia ............................................................................................................15
1.15 ASX Listing .......................................................................................................................................15
1.16 CHESS and Issuer Sponsored Holdings ............................................................................................15
1.17 Enquiries in Relation to the Offer ....................................................................................................16
1.18 How to Apply ...................................................................................................................................16
1.19 Escrow Provisions ............................................................................................................................16
1.20 Electronic Prospectus ......................................................................................................................17
1.21 Privacy Disclosure............................................................................................................................17
2.1 The Company...................................................................................................................................18
2.2 Corporate Objectives.......................................................................................................................19
2.3 Exploration History ..........................................................................................................................19
2.4 Projects Overview............................................................................................................................20
2.5 Exploration Expenditure Summary..................................................................................................22
3.1 Board of Directors............................................................................................................................23
3.2 Corporate Governance ....................................................................................................................24
4.1 Exploration Success .........................................................................................................................30
4.2 Failure to satisfy expenditure commitments ...................................................................................30
4.3 No JORC compliant resource ...........................................................................................................31
4.4 Contract Risk....................................................................................................................................31
4.5 Application Risk ...............................................................................................................................31
4.6 The overall share market may negatively impact an investment in the Company ..........................31
4.7 The Company may be unable to obtain environmental approvals ..................................................31
4.8 Environmental Bonds ......................................................................................................................31
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4.9 The Company may not be able to secure insurance ........................................................................31
4.10 A commercial return may not be achievable ...................................................................................32
4.11 Native Title.......................................................................................................................................32
4.12 The Company may not be able to secure additional capital if required ..........................................32
4.13 External economic factors may negatively impact prospects ..........................................................32
4.14 Key management may leave the Company......................................................................................32
8.1 Rights Attaching to Shares ...............................................................................................................91
8.2 Summary of Material Contracts.......................................................................................................92
8.3 Interests of Directors of the Company.............................................................................................94
8.4 Interests of Persons Named in this Prospectus................................................................................95
8.5 Consents ..........................................................................................................................................95
8.6 Expenses of the Offer ......................................................................................................................96
8.7 Taxation............................................................................................................................................96
8.8 Exposure Period...............................................................................................................................97
8.9 Litigation ..........................................................................................................................................97
8.10 Electronic Prospectus ......................................................................................................................97
8.11 Terms and Conditions of Options ....................................................................................................97
8.12 Consent by the Directors .................................................................................................................98
5. INDEPENDENT GEOLOGIST'S REPORT............................................................................33
6. INVESTIGATING ACCOUNTANT'S REPORT......................................................................72
7. SOLICITOR'S REPORT ON TENEMENTS...........................................................................82
8. ADDITIONAL INFORMATION .........................................................................................91
9. GLOSSARY OF NAMES AND TERMS ...............................................................................99
TABLE OF CONTENTS
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IMPORTANT NOTICE
This Prospectus is dated 9 March 2011
A copy of this Prospectus was lodged with ASIC on 9 March 2011. Neither ASIC nor ASX takes any responsibility for
the contents of this Prospectus.
This Prospectus will be issued in paper form and as an electronic Prospectus, which may be viewed online at
www.lithex.com.au. The offer of Shares pursuant to this Prospectus is available to persons receiving an electronic
version of this Prospectus in Australia. The Corporations Act prohibits any person from passing on the Application
Form to another person unless it is attached to or accompanied by a complete and unaltered version of this
Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the
Company by e-mail at [email protected].
No person or entity is authorised to give any information or to make any representation in connection with the offer
which is not contained in this Prospectus. Any information or representation not so contained may not be relied on
as having been authorised by the Company in connection with the Offer.
No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.
Application will be made within seven days after the date of this Prospectus for permission for the Shares offered by
this Prospectus to be listed for Quotation.
This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful
to make an offer. 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 and observe any such restrictions. Any
failure to comply with such restrictions may constitute a violation of applicable securities laws.
In accordance with Chapter 6D of the Corporations Act, this Prospectus is subject to an Exposure Period of 7 days
from the date of lodgement of the Prospectus with ASIC. This period may be extended by ASIC for a further period
of 7 days. The purpose of this Exposure Period is to enable the Prospectus to be examined by market participants
prior to the raising of the funds, which examination may result in the identification of deficiencies in this
Prospectus. If this Prospectus is found to be deficient, Applications received during the Exposure Period will be
dealt with in accordance with section 724 of the Corporations Act. Applications received prior to the expiration of
the Exposure Period will not be processed until after the Exposure Period. No preference will be conferred upon
Applications received during the Exposure Period.
Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisers
before deciding whether to apply for Shares. There are risks associated with an investment in Lithex Resources Ltd
and the Shares offered under this Prospectus must be regarded as a speculative investment. The Shares offered
under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the
future value of the Shares.
Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally
identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in
Section 9 of this Prospectus and also within its body.
All amounts are in Australian dollars unless otherwise specified.
The people and assets depicted in photographs in this Prospectus are not employees or assets of Lithex
Resources Ltd, unless otherwise stated. Diagrams appearing in this Prospectus are illustrative only and may not
be drawn to scale.
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DETAILS OF THE OFFER
1. DETAILS OF THE OFFER
1.1 Pro Forma Capital Structure
1.2 Options
1.3 Indicative Timetable
1.4 Shares Offered for Subscription
The pro-forma capital structure of Lithex Resources Ltd is summarised below and assumes the Offer is fully
subscribed.
7,130,000 unlisted options exercisable at 20 cents at any time prior to 30 June 2015 have been issued to
certain of the promoters, vendors and advisers or their nominees. The terms and conditions of these options
are set out in Section 8.11. In addition, the Company will issue an additional 4,500,000 Options as part
consideration for the acquisition of the various tenements. Further details of the Company's issued capital
are contained in the Independent Accountant's Report in Section . Summaries of the Project Purchase
Agreements are outlined in Section 8.2.
These dates are indicative only and may vary. Lithex reserves the right to close the Offer early, or extend the
Closing Date without prior notice. Applicants are therefore encouraged to submit Applications as soon as
possible after the Opening Date.
Subject to Section 1.13 this Prospectus invites investors to apply for a total of 10,000,000 Shares at an issue
price of 20 cents per Share to raise $2,000,000 before expenses of the Offer.
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Lodgement of Prospectus with ASIC 9 March 2011
Opening Date for Applications 17 March 2011
Closing Date for Applications 6 May 2011
Dispatch of Statements of Shareholdings 10 May 2011
Quotation of Shares on ASX expected to commence 16 May 2011
Number % Over
Subscription
% Over
Subscribed
Shares on issue at date of Offer 15,630,010 46% 15,630,010 36%
Shares to be issued as vendor
consideration
8,000,000 24% 8,000,000 18%
Shares to be issued pursuant to Offer 10,000,000 30% 20,000,000 46%
33,630,010 43,630,010Issued capital on completion of Offer 100% 100%
,000,000Amount to be raised $2,000,000 $4
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DETAILS OF THE OFFER
Oversubscription of up to a further 10,000,000 Shares at an
n only be made b
issue price of 20 cents each to raise up to a
further $2,000,000 may be accepted. All Shares issued pursuant to this Prospectus will be issued as fully
paid and will rank equally in all respects with the Shares already on issue.
Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares
($400), and ca y completing the Application Form attached to this Prospectus.
The Company reserves the right to reject any Application or to allocate any Applicant fewer Shares than the
number applied for.
Lithex is inviting all Montezuma and South Boulder shareholders ( ) to apply as priority
applicants for Shares by completing the Application Form enclosed with the Prospectus. Priority
Shareholders may apply for a minimum of 10,000 Shares representing a minimum investment of $2,000.
Whilst the Company will endeavour to offer all eligible Priority Shareholders Shares, the allocation of Shares
to Priority Shareholders will be at the Board's discretion.
The Public Offer is open to public investors.
Applications must be made on the Application Form enclosed with the Prospectus.
Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares
($400), and can only be made by completing the Application Form attached to this Prospectus.
The minimum subscription to the Offer is 10,000,000 Shares raising $2,000,000 before expenses of the Offer.
In accordance with the Corporations Act, no shares will be allotted by the Company until the minimum
subscription has been received.
If the minimum subscription is not achieved within 4 months after the date of this Prospectus, the Company
will either repay the Application Monies to Applicants or issue a supplementary or replacement Prospectus
and allow Applicants one month to withdraw their Applications and be repaid their Application Monies.
The purpose of the Offer is to provide Lithex with funding to prioritise and evaluate projects and identify
potential acquisition opportunities.
1.5 Montezuma Mining Company Ltd and South Boulder Mines Limited Shareholders
Priority Shareholders
1.6 Public Offer
1.7 Minimum Subscription
1.8 Purpose Of The Offer
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DETAILS OF THE OFFER
Year 1
Moolyella 250,000 500,000
Shaw River 180,000 360,000
Pilgangoora 150,000 200,000
Arthur River 120,000 200,000
Total 700,000 1,260,000
Year 2
Moolyella 320,000 600,000
Shaw River 250,000 400,000
Pilgangoora 160,000 200,000
Arthur River 140,000 200,000
Total 870,000 1,400,000
Exploration expenditure – sub total 1,570,000 2,660,000
Expenses of the Offer 287,000 412,000
Vendor Consideration 66,000 66,000
Administration 700,000 700,000
Additional Project Generation 0 600,000
Unallocated working capital 36,284 287,284
Total Funds Applied $2,659,284 $4,659,284
Use of Funds over 2 years Minimum $ Maximum $
Pre-Offer cash and receivables 659,284 659,284
Total raised in the Offer 2,000,000 4,000,000
Total Funds Available 2,659,284 4,659,284
EXPLORATION EXPENDITURE
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Notes:
1. In the event that the Company raises more than minimum subscription by accepting
oversubscriptions but less than the full oversubscriptions, the additional funds raised will be first
applied towards the expenses of the Offer, followed by exploration on the Projects, with any residual
funds allocated to unallocated working capital.
2. Exploration expenditures will be reviewed on an on-going basis, depending upon the progressive
results of the proposed work programs.
The above table states the intended use of the funds raised by the Company as at the date of this
Prospectus. However, it must be recognised that all exploration budgets may change as the
conducted programs provide encouragement or disappointment and new opportunities may be
identified elsewhere.
3. It is the Company's intention to increase and accelerate its exploration and drilling programs to
achieve results as soon as practicable and, subject to encouraging results being obtained, to
delineate resources. The Company may seek to raise additional funds within two years after listing
on ASX to the extent required to increase and accelerate the exploration and drilling programs as
determined by the Board.
Following the completion of the Offer, the Company will have sufficient working capital to carry out its
stated objectives.
The Offer is not underwritten.
An investment in Lithex is speculative in nature. Risks associated with investments in exploration companies
such as Lithex are generally considered high. Investment risks include share market, exploration, operating,
insurance, commercialisation, competition, no profit to date, future capital needs, environmental,
economic and government, government regulation and policy, commodity and exchange, key personnel,
native title and tenure and access.
Investors are directed to Section 4 of this Prospectus which provides further details of the above and some
other risks associated with making an investment in the Company.
The company will pay the lead manager, Ascot Securities Pty Ltd (AFSL: 246718) a management fee of
$60,000 plus GST and a commission of 6% plus GST on the total amount raised under the offer. Out of the
commission, Ascot Securities Pty Ltd may pay other Australian Financial Service Licence holders a fee for
Applications bearing their stamp.
Lithex is a lithium, tantalum, tin, rare earth metal and base metals exploration company. Given the
speculative nature of exploration and lithium, tantalum, tin, rare earth metals and base metal development
and production, there are significant uncertainties associated with forecasting future revenue. On this
basis, the Directors believe that reliable forecasts cannot be prepared and accordingly have not included
forecasts in this Prospectus.
1.9 Underwriting
1.10 Risks
1.11 Brokerage and Handling Fees
1.12 Cash Flow Projections
DETAILS OF THE OFFER
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1.13 Allotment and Allocation Of Shares
1.14 Applicants outside Australia
1.15 ASX Listing
1.16 CHESS and Issuer Sponsored Holdings
CHESS
Subject to ASX granting approval for the Company to be admitted to the Official List, the allotment of Shares
to Applicants will occur as soon as possible after the Offer is closed, following which statements of
Shareholdings will be dispatched. It is the responsibility of Applicants to determine the number of shares
allotted to them prior to trading in Shares. Applicants who sell Shares before they receive their holding
statements will do so at their own risk.
Pending the issue of the Shares, or return of the Application Monies, the Application Monies will be held in
trust for the Applicants.
The Directors in consultation with the Company's Lead Manager & Corporate Adviser, Ascot Securities Pty
Ltd, have the right to allocate Shares under the Offer. The Company may reject any Application or allocate
any Applicant fewer Shares than applied for under the Offer.
If an Application is not accepted, or is accepted in part only, the relevant part of the Application Monies will
be refunded. Interest will not be paid on Application Monies refunded.
This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom,
it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any Applicant who
is resident outside Australia to ensure compliance with all laws of any country relevant to their Application,
and any such Applicant should consult their professional advisers as to whether any government or other
consents are required, or whether any formalities need to be observed to enable them to apply for and be
allotted Shares.
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.
Within 7 days after the date of this Prospectus, application will be made for the Company to be admitted to
the Official List and for the Shares offered by this Prospectus to be granted Quotation.
If approval for Quotation is not granted within 3 months after the date of this Prospectus, the Company will
not allot or issue any Shares, and will repay all Application Monies without interest as soon as practicable.
ASX takes no responsibility for the contents of this Prospectus. The fact that ASX may admit Lithex to its
Official List 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.
Lithex will apply to participate in the Clearing House Electronic Subregister System ( ), operated by ASX
Settlement Pty Ltd (a wholly owned subsidiary of ASX), in accordance with the Listing Rules and ASX
Settlement Operating Rules. On admission to CHESS, the Company will operate an electronic issuer-
sponsored subregister and an electronic CHESS subregister. The two subregisters together will make up the
Company's register of securities.
Under CHESS, the Company will not issue certificates to Shareholders. Instead, the Company will provide
Shareholders with a holding statement (which is similar to a bank account statement) that sets out the
number of Shares allotted to that Shareholder under this Prospectus.
DETAILS OF THE OFFER
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DETAILS OF THE OFFER
This statement will also advise investors of either their Holder Identification Number ( ) in the case of a
holding on the CHESS sub-register or Security Holder Reference Number ( ) in the case of a holding on the
issuer sponsored sub-register.
HIN
SRN
-
A statement will be routinely sent to holders at the end of any calendar month during which their holding
changes. A holder may request a statement at any other time however a charge may be incurred for
additional statements.
This Prospectus provides information for potential investors in Lithex, and should be read in its entirety.
Additional copies of the Prospectus
or further advice on how to complete the Application Form can be obtained by contacting or visiting:
Applications for Shares under the Offer can only be made on the Application Form attached to this
Prospectus.
The Application Form must be completed in accordance with the instructions set out on the back of each
Application Form.
Cheques must be made payable to and crossed “Not Negotiable”.
No brokerage or stamp duty is payable by Applicants.
Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares
($400) at the issue price of 20 cents per Share.
Securities on issue as at the date of this Prospectus may be subject to the restricted securities provisions of
the Listing Rules. Accordingly, a proportion of such securities may be required to be held in escrow for up to
24 months and may not be transferred, assigned or otherwise disposed of during that period.
1.17 Enquiries in Relation to the Offer
1.18 How to Apply
Completed Application Forms and accompanying cheques should, at any time after the Opening Date be:
“Lithex Resources Ltd - Share Account”
1.19 Escrow Provisions
If,
after reading this Prospectus, you have any questions about any aspect of an investment in Lithex, please
contact your stockbroker, accountant or independent financial adviser.
Posted to:
Lithex Resources Limited
c/- Security Transfer Registrars Pty Ltd
GPO Box 535
APPLECROSS WA 6953
Delivered to:
Lithex Resources Limited
c/- Security Transfer Registrars Pty Ltd
770 Canning Highway
APPLECROSS WA 6153
Lithex Resources Limited
11 Rafferty Close
MANDURAH WA 6210
(08) 9583 5109
www.lithex.com.au
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DETAILS OF THE OFFER
Agreements in respect of all such restricted securities have been or will be entered into in accordance with
the Listing Rules and as required by ASX.
This Prospectus is available on-line at www.lithex.com.au
The Company collects information in relation to each Applicant as provided on an Application Form
( ) for the purposes of processing the Application Form and, should the Application be
successful, to administer the Applicant's security holding in the Company ( ).
The Company may use the Information for the Purposes and the Company may disclose the Information for
the Purposes to the Share Registrar, the Company's related bodies corporate, agents, contractors and third
party service providers, and to ASX, ASIC and other regulatory authorities.
The Information may also be used and disclosed to persons inspecting the register, including bidders for
Shares in the context of take-overs, licensed securities dealers, mail houses, and regulatory bodies including
the Australian Taxation Office.
1.20 Electronic Prospectus
1.21 Privacy Disclosure
Information
Purposes
Processed & Un-Processed Material Remaining At The Moolyella Project 2010
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2. COMPANY OVERVIEW AND THE PROJECTS
2.1 The Company
Lithex Resources Limited was incorporated on 30 October 2009 in anticipation of the acquisition of certain
mineral interests of a number of Public and Private Companies within the existing Marble Bar / Pilbara
Mineral Field as well as the Gascoyne Mineral Field.
The Company has specifically targeted these projects as they provide the Company and investors with
exposure to lithium, tantalum, tin and rare earth metals.
Lithex believes that the lithium, tantalum, tin and rare earth metal markets are well placed to see robust
price increases in the near and medium term.
(Figure 1).
18
Figure 1 - Lithex Resources Limited Project Location Map
COMPANY OVERVIEW AND THE PROJECTS
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2.2 Corporate Objectives
2.3 Exploration History
The Moolyella Tin Field
The Shaw River Tin Field
The Pilgangoora Tantalite Field
The Arthur River Project
• Immediately undertake a comprehensive exploration programme over the most prospective targets.
• Achieve the maximum value from exploration programmes for Shareholders.
• Conduct exploration activities at the highest technical standards in the industry.
• Effectively communicate with Shareholders and the broader market.
Prior to the incorporation of Lithex Resources Limited, tin mining operations at Moolyella were largely
continuous from their discovery in 1898 until 1986. Between 1965 and 1985 Endeavour Resources Ltd
undertook exploration for alluvial, eluvial, deep lead and pegmatite hosted tin/tantalum mineralisation and
several substantial alluvial and eluvial tin/tantalum deposits were identified.
The first large scale mining operation of the Moolyella tin/tantalum field occurred following the purchase by
Endeavour Resources Ltd of all the Moolyella mining tenements and treatment plant in 1978. These mining
operations continued till 1986 and were closed due to the fall in tin prices in late 1985.
was discovered in 1890 and had produced a total of 6,585 tonnes of tin concentrate
by 1975. Greenbushes Ltd first acquired leases in the Shaw River district in 1978 and explored for tin and
tantalum from 1979 to 1981. Further exploration was conducted for tin, tantalum and rare earth metals
under a joint venture between Greenbushes and Western Australia Rare Metals until 1987. A mining
feasibility study was completed in 1988.
was first discovered in 1905 and by 1947 had produced approximately 0.7
tonnes of tantalite concentrates from small scale alluvial operations. Following 1947, larger scale mining
operations were employed and by 1975 approximately 50 tonnes of high grade tantalite together with some
13 tonnes of tin oxide (cassiterite) were produced from the area. Large scale operations continued with
Pilgan Mining between 1978-1982 and by the Pilgangoora Mining Venture between 1992 to 1996 producing
approximately 140 tonnes of tantalite concentrates from an estimated 800,000 bank cubic meters(“BCM”)
of screened alluvial and eluvial material.
Mining on Lithex's Pilgangoora Project leases was only conducted by The Pilgangoora Mining Venture which
collected bulk samples from two creeks as part of its Pilgangoora resource estimation program in 1996.
is located in the Gascoyne Mineral Field. In the early 1900's gold was mined at The
Bangemall Gold Mine. Records of gold production have not been located.
Unknown parties in the early 1940's recovered mica, beryl, tantalum-columbite and bismuth from
pegmatites and uranium style mineralisation in the area. Records of production have not been located.
COMPANY OVERVIEW AND THE PROJECTS
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From 2004-2006 Tantalum Australia NL at the Arthur River tantalum-niobium Mine, was mining an alluvial
placer deposit. The mine is now on care and maintenance. The tantalum and niobium minerals in the
alluvials were derived locally from a columbite - tantalite granitic rare metal pegmatites. Drilling by Tantalum
Australia of a source pegmatite has yielded significant niobium mineralisation up to 1280 ppm (0.128%)
Ta O Tantalum Australia subsequently defined an Exploration Target consisting of 55,000 to 60,000 tonnes
at 0.03 percent Ta O .
The Company's projects and prospects are fully described in the Independent Geologist's Report in Section 6
of this Prospectus. An overview of Lithex's projects is presented below.
Lithex's projects are located in the East Pilbara and Gascoyne Regions of Western Australia. The East Pilbara
projects lie within the highly mineralised and historical tin and tantalum producing districts of the Achaean
Pilbara Craton. These tin and tantalum districts include Moolyella, Shaw River and Pilgangoora. The Arthur
River project is located within the Gascoyne Mineral Field, an area known to contain rare metal pegmatites.
Although exploration over Lithex's tenements is at an early stage, particularly for a large hardrock style
mineralisation, it is considered that the properties are well located with respect to the regional geological
and structural setting to be considered highly prospective for the discovery of deposits of lithium, tantalum,
tin and rare earth metal mineralisation.
The Moolyella project is within the highly prospective Pilbara Goldfield and is located 23 kilometres east-
north-east of the township of Marble Bar. The tenements cover The Moolyella Tin Field where continuous
mining activities were ongoing from their initial discovery in 1898 to 1986. From 1986 limited small scale
intermittent mining has been carried out on the field. A comprehensive exploration program is required to
prove up known deposits of rare metals (tin, tantalum, lithium) and rare earths (lanthanides), to locate new
alluvial deposits and to explore for the hard rock primary deposit from which these alluvial minerals have
originated.
The Shaw River project is located within the highly prospective Pilbara Goldfield and is located 50 km
southwest of Marble Bar. The project is centred on the Shaw River Tin Field which was discovered in
1890 and by 1975 produced a total of 6,585 tonnes of tin concentrate.
From 1978 to 1998 a number of companies conducted further evaluation and exploration activities
primarily for tin, tantalum and rare earth metals. A mining feasibility study of the Shaw River tin field, under
a joint venture between Greenbushes and Western Australia Rare Metals, was completed in 1988. Due to
the collapse in the tin price the project was deemed to be sub economic and the tenements were
subsequently dropped in 1989.
2 5.
2 5
2.4 Projects Overview
Moolyella (M45/1081, E45/3172 and E45/3424) - 90%
Shaw River (E45/3354 and E45/3439) - 90%
COMPANY OVERVIEW AND THE PROJECTS
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The project area requires further evaluation and current “state of the art” exploration for alluvial and hard
rock pegmatite deposits containing lithium, tantalum, tin and rare earth metals.
The Pilgangoora Tantalum Field is located approximately 120 km south-southeast of Port Hedland and is
adjacent and south, southwest of Lithex's Pilgangoora Project tenements. The project is accessed by
unsealed shire and station roads, various tracks that service abandoned mine workings and pastoral
stations.
The Type 1 pegmatites (Quartz-spodumene-albite-microcline pegmatites) are the primary source of
tin/tantalum mineralisation at Pilgangoora and form north north-east trending bodies up to 60m thick in
greenstones within an 8km long and 1.5km wide corridor that begins south- southwest of the tenements
and extends northwards into the Pilgangoora Project tenements.
The spodumene content of these pegmatites (~ 25 %) has previously been the focus of evaluation studies by
Pancontinental Mining Limited as a source of lithium concentrates. However whilst it is understood the
pegmatites extend in to Lithex's tenements none of these deposits studied by Pancontinental Mining
Limited in that report are located in the Pilgangoora Project tenements. Therefore the project requires
modern state of the art exploration targeting these lithium pegmatites.
* Lithex has the right to purchase a 90% interest in the tin, tantalum and lithium on this tenement
The tenements comprising the Arthur River Project are located in the Gascoyne Mineral Field,
approximately 250 kilometres east of Carnarvon. The area can be accessed via gravel road from Carnarvon
via Gascoyne Junction and then via gravel roads that connect the various pastoral leases.
Lithex's projects cover approximately 772 km and are located approximately 120 km south east of Port
Hedland and 250 km East of Carnarvon. The Company holds seven granted exploration licences, one mining
lease application and one exploration licence application as outlined in the table below.
Pilgangoora (E45/2375* and E45/3373) 90%
Arthur River (E09/1066 and E09/1067) 100%
Tenure and Location of Projects
2
21
COMPANY OVERVIEW AND THE PROJECTS
Project Tenement Area Approx
Area (km2)
Status Equity Annual
Expenditure
Commitment
Arthur River E09/1066 12 Blocks 33 Granted 100 % $30,000.00
Arthur River E09/1067 3 Blocks 8 Granted 100 % $20,000.00
Moolyella E45/3424 56 Blocks 156 Granted 90 % $56,000.00
Moolyella E45/3172 70 Blocks 196 Application 90 % N / A
Moolyella M45/1081 526 Ha Application 90 % N / A
Shaw River E45/3439 66 Blocks 184 Granted 90 % $66,000.00
Shaw River E45/3354 62 Blocks 173 Granted 90 % $62,000.00
Pilgangoora E45/2375 3 Blocks 8 Granted 90 % $20,000.00
Pilgangoora E45/3373 5 Blocks 14 Granted 90 % $15,000.00
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2.5 Exploration Expenditure Summary
The Company intends initially to fund the planned exploration activities from the proceeds of the offer as
outlined in the tables below. It should be noted that budgets were formulated on the basis of the
programmes detailed in the Independent Geologist's Report and will be subject to assessment and
modification on an ongoing basis depending on progressive results from the exploration work undertaken.
The Company will be continually reviewing all exploration activities which may lead to higher or lower levels
of expenditure on each property reflecting a change in emphasis. Subject to the above, the following
expenditure is proposed:
COMPANY OVERVIEW AND THE PROJECTS
Exploration Expenditure Summary by Activity on Granted Tenements
Data Compilation
Geochemical surveys
Sampling
Drilling
Geology & Field Work
Tenement & Administration
Total
Minimum
84,000
62,500
110,000
210,000
138,500
95,000
$700,000
Over
Subscription
151,000
114,000
195,000
385,000
250,000
165,000
$1,260,000
Minimum
114,000
65,000
132,000
270,000
161,000
128,000
$870,000
Over
Subscription
190,000
100,000
215,000
440,000
260,000
195,000
$1,400,000
Activity Year 1 $ Year 2 $
Exploration Expenditure Summary by Project on Granted Tenements
Minimum Minimum Over
Subscription
Moolyella
Shaw River
Pilgangoora
Arthur River
Total
Project Year 1 $ Year 2 $
250,000
180,000
150,000
120,000
$700,000
500,000
360,000
200,000
200,000
$1,260,000
320,000
250,000
160,000
140,000
$870,000
600,000
400,000
200,000
200,000
$1,400,000
Over
Subscription
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3. BOARD AND MANAGEMENT
3.1 Board of Directors
Malcolm Carson - Chairman
Robert Mandanici - Managing Director
Steven Crabbe - Executive Director
Neal Shoobert - Company Secretary
Brian Davis - Exploration Geologist
Mr Carson has over 35 years experience in all aspects of the resources sector ranging from mineral resource
exploration to investment banking (project finance, debt and equity funding, royalty finance, corporate
finance and treasury), government, mining equipment manufacture and hire, asset acquisition, corporate
restructuring and business development. Mr Carson has held various senior exploration and mine
management, director and chief executive positions during his career in the mining industry, including in ASX
listing companies.
As a project exploration geologist and exploration manager, Mr Carson has been responsible for supervising
early exploration which has led to a number of mineral resource discoveries and the development of gold,
coal and nickel mines and major discoveries of iron ore and copper yet to be developed.
Mr Carson has direct relevant experience in exploration for tin and tantalum in the Pilbara Mineral Fields and
rare earth oxides.
Mr Mandanici has worked in both the Private and Government sector and has extensive knowledge of
corporate governance, process and procedure. He was previously a director of Auvex Resources Limited.
Steve Crabbe has held senior positions in mining companies in the maintenance and production areas. He
has 34 years experience in the mining and processing of iron ore, titanium minerals, alumina, gold and
manganese. Steve was the founder of Auvex Resources Limited and as Managing Director took the company
from inception to a producing manganese miner. Steve is a Director of Naracoota Resources Limited, an
exploration company with Gold projects.
He is the founder and director of a successful mining services company.
A qualified accountant for over 20 years, Neal Shoobert is an accomplished financial and management
consultant possessing extensive experience in corporate compliance and provides company secretarial
services for several ASX listed companies.
Mr Davis has over 30 years experience as an exploration geologist and has held many senior positions across
all facets of the mining industry. Mr Davis has extensive geological experience both within Australia and
internationally.
BOARD AND MANAGEMENT
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BOARD AND MANAGEMENT
3.2 Corporate Governance
Principle 1 - Lay solid foundations for management and oversight
The Board is responsible for the overall corporate governance of the Company, and it recognises the need for
the highest standards of ethical behaviour and accountability. The Board is committed to administering its
Corporate Governance structures to promote integrity and responsible decision-making.
The following policies and procedures have been implemented and are available in full on the Company's
website at www.lithex.com.au;
In accordance with the recommendations of the ASX, information published on the Company's web site
includes charters of the Board and its subcommittees, codes of conduct and other policies and procedures
relating to the Board and its responsibilities.
To the extent that they are relevant to the organisation, the Company has adopted the Eight Corporate
Governance Principles and Best Practice Recommendations as published by the ASX Corporate Governance
Council.
The Board's primary role is to represent Shareholders and to promote and protect the interests of Lithex by
governing the Company.
To fulfill this role the Board is responsible, amongst other things, for:
• Statement of Board and Management Functions;
• Nomination Committee Charter;
• Code of conduct for Directors and Key Executives;
• Code of Conduct for Dealing in Securities;
• Audit Committee Charter;
• Continuous Disclosure Policy;
• Shareholder Communications Strategy;
• Risk Management Charter;
• Remuneration Committee Charter; and
• Corporate Code of Conduct.
•
•
•
Recommendation 1.1: Companies should establish the functions reserved to the board and those delegated
to senior executives.
overseeing the activities of the Company, including its control and accountability systems;
providing input into and final approval of corporate strategy and performance objectives;
reviewing, ratifying and monitoring systems of risk management and internal control;
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•
•
•
•
•
•
•
•
•
monitoring performance and implementation of strategy;
approving policies of Company-wide and general application;
approving and monitoring budgets, capital management and acquisitions and divestments;
approving and monitoring all financial reporting to the market;
formal determinations that are required by the Company's constitutional documents or by law orother external regulation.
Beyond those matters, the Board has delegated all authority to the Managing Director for management of
the Company's business within any limits imposed by the Board.
The Company currently only employs one executive being the Managing Director. The Company has
established a nomination committee which is responsible for the evaluation of all executives and Board
members.
The Board comprises three directors, one of whom is a non-executive however only the chair is classified as
independent. The Board believes that this is both appropriate and acceptable at this stage of the Company's
development.
.
The Chair is independent.
.
These positions are held by separate persons.
Established and operates under the Nomination Committee Charter. The nomination committee's main
responsibilities include, but are not limited to:
implement processes to assess the necessary and desirable competencies of Board membersincluding, experience, expertise, skills and performance of the Board and its committees;
evaluate on the performance of the Managing Director;
annually evaluate the performance and effectiveness of the Board to facilitate the directors fulfillingtheir responsibilities in a manner that serves the interests of shareholders;
before recommending an incumbent, replacement or additional director, review his or herqualifications, including capability, availability to serve, conflicts of interest, and other relevantfactors;
Recommendation 1.2:
Principle 2 - Structure the board to add value
Companies should disclose the process for evaluating the performance of senior
executives.
A majority of the board should be independent directors.
The chair should be an independent director
The roles of chair and chief executive officer should not be exercised by the same
individual
The board should establish a nomination committee.
Recommendation 2.1:
Recommendation 2.2:
Recommendation 2.3:
Recommendation 2.4:
BOARD AND MANAGEMENT
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• assist in identifying, interviewing and recruiting candidates for the Board; and
Disclosed under the Nomination Committee Charter which is available on the Company's website.
The Board has established Code of Conduct which all employees and Directors are expected, at a minimum
to follow. The Code of Conduct categorises five main areas:
Lithex has established a Code for Dealing in Securities ( ) which sets out the requirements for Directors,
employees, consultants and contractors of Lithex dealing in Lithex securities. In order to ensure that Lithex
personnel do not inadvertently breach the insider trading provisions of the Corporations Act, they are only
permitted to deal in Lithex securities in limited circumstances specified in determined by this Code. These
limited circumstances are called “ ”
Even during trading windows, a securities dealing written request must be submitted to and approved by the
Chair or his delegate prior to any dealing in Lithex securities.
• annually review the composition of each committee and present recommendations for committee
memberships to the Board as needed.
• the treatment each other with respect and dignity;
• respect for the law and acting accordingly;
• fairness and honesty in our dealings;
• use of the Company's property responsibly and in the best interest of the Company and its reputation;
and
• responsibility for our actions and accountable for their consequences.
•
•
•
•
Recommendation 2.5:
Recommendation 3.1:
Recommendation 3.2:
Recommendation 4.1:
Recommendation 4.2:
Recommendation 4.3:
Companies should disclose the process for evaluating the performance of the board,
its committees and individual directors.
Companies should establish a code of conduct and disclose the code.
Companies should establish a policy concerning trading in company securities.
The board should establish an audit committee.
The audit committee should be structured so that it:
The audit committee should have a formal charter.
Principle 3 - Promote ethical and responsible decision-making
Code
trading windows
Principle 4 - Safeguard integrity in financial reporting
consists only of non-executive directors
consists of a majority of independent directors
is chaired by an independent chair, who is not chair of the board
has at least three members
BOARD AND MANAGEMENT
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Lithex has established an Audit Committee consisting of the Company Secretary and 2 directors, only one of
whom is classified as independent. The Audit Committee operates under the Audit Committee Charter
which lists the main responsibilities of the Committee being:
Lithex has adopted a Continuous Disclosure Policy, a copy of which is available on the Company's website.
The policy aims to:
The Company has a Shareholder Communication policy, a copy of which is available on the Company's
website. The Policy states that The Board of the Company aims to ensure that the shareholders are informed
of all major developments affecting the Company's state of affairs.
•
•
•
•
•
•
•
•
•
•
review any financial reports externally;
monitor corporate risk assessment processes;
review the nomination and performance of the external auditor;
monitor the establishment of appropriate ethical standards;
monitor the procedures to ensure compliance with the Corporations Act and the ASX Listing Rules
and all other regulatory requirements;
address any matters outstanding with auditors, regulatory bodies and financial institutions; and
review the results and findings of the auditor, the adequacy of accounting and financial controls and
to monitor the implementation of any recommendations made.
ensure that the Company, as a minimum, complies with its continuous disclosure obligations under
the Corporations Act and ASX Limited Listing Rules and as much as possible seeks to achieve and
exceed best practice;
provide shareholders and the market with timely, direct and equal access to information issued by the
Company; and
promote investor confidence in the integrity of the Company and its securiti
Principle 5 - Make timely and balanced disclosure
Principle 6 - Respect the rights of shareholders
Recommendation 5.1:
Recommendation 6.1:
Companies should establish written policies designed to ensure compliance with ASX
Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that
compliance.
Companies should design a communications policy for promoting effective
communication with shareholders and encouraging their participation at general meetings.
es.
BOARD AND MANAGEMENT
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Principle 7 - Recognise and manage risk
Principle 8 - Remunerate fairly and responsibly
Recommendation 7.1:
Recommendation 7.2:
Recommendation 7.3:
Recommendation 8.1:
Companies should establish policies for the oversight and management of material
business risks.
The board should require management to design and implement the risk
management and internal control system to manage the company's material business risks and report to it
on whether those risks are being managed effectively.
The board should disclose whether it has received assurance from the chief executive
officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in
accordance with section 295A of the Corporations Act is founded on a sound system of risk management and
internal control and that the system is operating effectively in all material respects in relation to financial
reporting risks.
The board should establish a remuneration committee.
The Company has established a Risk Management Committee to monitor and review on behalf of the Board
the system of risk management which the Group has established. This system aims to identify, assess,
monitor and manage operational and compliance risks.
The Audit and Risk Committee determines the Group's “risk profile” and is responsible for overseeing and
approving risk management strategy and policies, internal compliance and non-financial internal control.
The Committee will report to the Board on this system of risk management and make appropriate
recommendations to ensure the adequacy of the system.
When required, the Board will receive written assurances from the CEO and CFO (or equivalent) in relation to
the above statement.
A Remuneration Committee has been formed which operates under the Remuneration Committee Charter.
Its primary responsibilities are:
• assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration
levels and policies including incentive policies for directors and senior executives;
• assess the market to ensure that senior executives are being rewarded commensurate with their
responsibilities;
• review recommendations from the managing director relating to proposed merit increases;
• obtain the best possible advice in establishing salary levels;
• set policies for senior executives' remuneration;
• review the salary levels of senior executives and make recommendations to the Board on any
proposed increases;
BOARD AND MANAGEMENT
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BOARD AND MANAGEMENT
• propose, for full Board approval, the terms and conditions of employment for the managing director;
and
The Board will consider on an ongoing basis its Corporate Governance procedures and whether they are
sufficient as the Company's activities develop in size, nature and scope.
The Company has adopted a securities trading policy for the purpose of outlining the procedures for all
Directors, employees, consultants and contractors ( ) in relation to the buying and selling of the
Company's Securities in order to ensure that those parties do not inadvertently breach the insider trading
provisions of the Australian Corporations Act.
As a matter of law, all Personnel must not deal (meaning any change whatsoever including, but not limited
to, any sale, purchase, exercise of options (even if due to expire), discharge of any right or obligation, or
transfer) in Securities where:
In addition, no Personnel are entitled to trade in the Company's Securities during the following periods:
Even during trading windows, prior to any dealing in the Company's Securities a dealing request must be
submitted to and approved by the Managing Director or his delegate or, in the case of Directors (other than
the Chairman) by the Chairman. Such approval shall be in the form approved by the Managing Director from
time to time and shall include electronic approval via email.
A full outline of the securities trading policy is available from the Company.
• undertake a review, which will be reported to and confirmed by the full Board, of the managing
director's performance, at least annually, including setting the managing director goals for the coming
year and reviewing progress in achieving those goals.
• they possess information which is not generally available;
• that information may have a material effect on the price or value of the Securities; and
• they know or ought reasonably to know that the information is not generally available and if it were it
might have a material effect on the price of Securities, as such information constitutes inside
information.
• where the Managing Director or his delegate has issued an instruction prohibiting trading in Company
Securities by Employees; or
• it is the day on which the Company has made, or is expected to make, an announcement to the ASX, up
until the time the announcement is released by ASX.
3.3 Code for Dealing in Securities
Personnel
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4. RISK FACTORS
Investors wishing to subscribe for Shares offered by this Prospectus should read this Prospectus in its
entirety in order to make an informed assessment of the effect of the issue of Shares on the Company and
the rights attaching to the Shares offered by this Prospectus.
Investors should consider carefully whether Shares in the Company are an appropriate investment for them
and should appreciate that share prices can fall as well as rise.
Shares under this Prospectus should be viewed as highly speculative and whilst the Directors recommend
the Offer, investors should be aware of and take into account the risk factors described below, together with
information contained elsewhere in this Prospectus, before deciding whether to apply for Shares.
The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.
The Tenements are at various stages of exploration, and potential investors should understand that mineral
exploration and development are high risk undertakings.
There can be no assurance that exploration of the Tenements, or any other tenements that may be acquired
in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is
identified, there is no guarantee that it can be economically exploited.
The future exploration activities of the Company may be affected by a range of factors including geological
conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and
technical difficulties, industrial and environmental accidents, native title processes, changing government
regulations and many other factors beyond the control of the Company.
The success of the Company will also depend upon the Company having access to sufficient development
capital, being able to maintain title to its Tenements and obtaining all required approvals for its activities. In
the event that exploration programmes prove to be unsuccessful this could lead to a diminution in the value
of the Tenements, a reduction in the cash reserves of the Company and possible relinquishment of the
Tenements.
4.1 Exploration Success
The exploration costs of the Company described in the Independent Geologist's Report are based on certain
assumptions with respect to the method and timing of exploration. By their nature, these estimates and
assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ
from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and
the underlying assumptions will be realized in practice, which may materially and adversely affect the
Company's viability.
Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the
granting of licenses or permits. Each licence is or permit is for a specific term and carries with it annual
expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently,
the Company could lose title to or its interest in the Tenements if any licence conditions are not met or if
insufficient funds are available to meet expenditure commitments.
The Company considers that given the number of Tenements that it currently has an interest in, in the event
that only the minimum subscription is raised, the Company will have sufficient funds to meet the
expenditure commitments on its granted Tenements, as well as the remaining applications, assuming that
they are granted to the Company.
4.2 Failure to satisfy expenditure commitments
RISK FACTORS
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4.3 No JORC compliant resource
4.4 Contract Risk
The Company has not currently defined a JORC resource on any of its Tenements. Further exploration is
required to determine the extent of the Company's viable base metals deposits on all of the Tenements.
There can be no assurance that exploration of the Tenements, or any other tenements that may be acquired
by the Company in the future, will result in the discovery of a JORC Code resource classification.
The Company is acquiring its interests in a number of Tenements through a series of agreements entered into
with unrelated parties, all of which are intended to settle following the completion of the Offer and the
receipt of confirmation from ASX that the Company will be conditionally admitted to Quotation on ASX.
Should the other parties to those agreements fail to satisfy their obligations to transfer the respective
Tenements to the Company as agreed, there is a risk that the Company would have to take action to enforce
the agreements with those parties. Any such action may delay the time at which the Company will gain access
to those Tenements and delay the Company's exploration programmes. The Company has no current reason
to believe that the parties that it has contracted with will not meet and satisfy their respective obligations
under each of the acquisition agreements. Each of the acquisition agreements are summarised in Section 8.2
below.
4.5 Application Risk
4.6 The overall share market may negatively impact an investment in the Company
4.7 The Company may be unable to obtain environmental approvals
4.8 Environmental Bonds
Department
4.9 The Company may not be able to secure insurance
The Company cannot guarantee that those Tenements in which it has an interest and which are still in the
application stage will ultimately be granted in whole or in part pursuant to the applicable legislation.
The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable
influences on the market for equities in general.
The Company's exploration programmes will, in general, be subject to approval by State and Federal
governmental authorities. Development of any of the Company's properties will be dependent on the
project meeting environmental guidelines and, where required, being approved by governmental
authorities.
The Western Australian Department of Mines and Petroleum ( ) from time to time reviews the
environmental bonds that are placed on tenements. The Directors are not in a position to state whether a
review is imminent or whether the outcome of such a review would be detrimental to the funding needs of
the Company.
The Company intends to insure its operations in accordance with industry practice. However, in certain
circumstances the Company's insurance may not be of a nature or level to provide adequate insurance cover.
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 Company.
Insurance of all risks associated with mineral exploration and production is not always available and where
available the costs can be prohibitive.
RISK FACTORS
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4.10 A commercial return may not be achievable
Even if the Company discovers commercial quantities of minerals, there is a risk that the Company will not
achieve a commercial return. The Company may not be able to transport the minerals at a reasonable cost or
may not be able to sell the minerals to customers at a price which would cover its operating and capital costs.
The Company will also need to receive regulatory approval to convert its existing exploration licenses into
mining leases. There is a risk that this approval may not be obtained.
4.11 Native Title
4.12 The Company may not be able to secure additional capital if required
4.13 External economic factors may negatively impact prospects
4.14 Key management may leave the Company
The Tenements extend over areas in which legitimate common law native title rights of indigenous
Australians exist. The ability of the Company to gain access to its Tenements and conduct exploration,
development and mining operations remains subject to native title rights and the terms of registered native
title agreements.
The Directors will closely monitor the potential effect of native title claims involving the Tenements in which
the Company has or may have an interest.
The Company's capital requirements depend on numerous factors. Depending on the Company's ability to
generate income from its operations, the Company may require further financing in addition to amounts
raised under the capital raising. Any additional equity financing will dilute shareholdings, and 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 and
scale back its exploration programs as the case may be.
Economic factors beyond the control of the Company, such as changes in commodity prices, interest rates,
inflation, exchange rates and taxation, may negatively impact on the Company's exploration, development
and production activities as well as its ability to fund those activities, and also on the revenue and
profitability of the Company.
The responsibility of overseeing the day-to-day operations and the strategic management of the Company
depends substantially on its management and its personnel. There can be no assurance that there will be no
detrimental impact on the Company if one or more of these employees cease their employment.
RISK FACTORS
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INDEPENDENT GEOLOGIST'S REPORT
5. INDEPENDENT GEOLOGIST'S REPORT
A M AL AYNARD& SSOCIATES
Consulting Geologists
Australian & International Exploration & Evaluation of Mineral Properties
INDEPENDENT GEOLOGICAL REPORT ON THE MINERAL
RESOURCES AND EXPLORATION ASSETS OF LITHEX RESOURCES
www.geological.com.au (ABN 95 336 331 535)
9/280 Hay Street, Tel: (+618) 9388 1000 Mob: 04 0304 9449
SUBIACO, WA, 6008 Fax: (+618) 9388 1768 [email protected]
Australia
Allen J Maynard, BAppSc (Geol), MAIG, MAusIMM.
1st March, 2011
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Contents
1. SUMMARY OF THE LITHEX RESOURCES PROJECTS 41
1.0 MOOLYELLA PROJECT 42
2.0 SHAW RIVER PROJECT 49
3.0 THE PILGANGOORA PROJECT 54
4.0 6
5.0 REFERENCES 67
6.0 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS 68
List of FIGURES
List of TABLES
Figure 1 Lithex Resources Limited Project Location Map.....................................................................................18
Figure 1 Project Locality Map...............................................................................................................................38
Figure 2 Location of East Pilbara Tin Projects ......................................................................................................41
Figure 3 Solid geology map of the Shaw River tin field........................................................................................46
Figure 4 Solid geology map of the Shaw River tin field........................................................................................52
Figure 5 Solid geology map of the Pilgangoora Project........................................................................................56
Figure 6 A schematic block diagram showing a generalised mineral distribution within a
complex zoned pegmatite after Anderson I.G., 1979 .............................................................................59
Figure 7 Arthur River - Geology and Mineral Occurrences ..................................................................................62
Figure 8: Arthur River tenement E9/1066 airborne uranium anomalies ..............................................................64
Table 1: Moolyella Project Tenement Details.......................................................................................................42
Table 2: Exploration Targets of the Moolyella tin/tantalum field.........................................................................44
Table 3: Heavy mineral concentrate grades of Tin and Tantalite at Moolyella.....................................................45
Table 4: Exploration Targets of primary tin mineralisation at Moolyella .............................................................45
Table 5: Moolyella 1982 geochemistry from drill cuttings in pegmatites ............................................................47
Table 6: Moolyella 2010 geochemistry from alluvial stockpile grab samples
(composites from 16 samples) ...............................................................................................................48
Table 7: Moolyella Proposed Expenditure...........................................................................................................49
Table 8: Shaw River Project Tenement Details .....................................................................................................50
ARTHUR RIVER PROJECT 0
INDEPENDENT GEOLOGIST'S REPORT
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Table 9: Exploration Targets of the Shaw River tin/tantalite project alluvials.......................................................51
Table 10: ExplorationTargets of the Shaw River tin/tantalite high-grade .............................................................51
Table 11: Proposed Expenditure Shaw River Project ............................................................................................54
Table 12: Pilgangoora Tenement Details ...............................................................................................................55
Table 13: Remaining volume estimate by Prima Resources for the Pilgangoora Project alluvials (1996) .............57
Table 14: Remaining volume estimate by Jays Exploration for the Pilgangoora Project alluvials (1981) ..............57
Table 15: Pilgangoora Project Proposed Expenditure ..........................................................................................60
Table 16: Arthur River Project Tenement Details ..................................................................................................61
Table 17: 2007 Geochemical sample Highlights....................................................................................................63
Table 18: Arthur River Project Proposed Expenditure .........................................................................................66
.
INDEPENDENT GEOLOGIST'S REPORT
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INDEPENDENT GEOLOGIST'S REPORT
A M AL AYNARD& SSOCIATES
Consulting Geologists
Australian & International Exploration & Evaluation of Mineral Properties
www.geological.com.au (ABN 95 336 331 535)
9/280 Hay Street, Tel: (+618) 9388 1000 Mob: 04 0304 9449
SUBIACO, WA, 6008 Fax: (+618) 9388 1768 [email protected]
Australia
The Directors 1st March, 2011
Lithex Resources Ltd
11 Rafferty Close
Mandurah, WA. 6210.
Dear Sirs,
Al Maynard and Associates (“AM&A”) has been engaged by Lithex Resources Limited (LTX)
to prepare an Independent Geological Report of the mineral assets to be acquired by LTX
pursuant to the various agreements outlined elsewhere in this prospectus. Opinions are
presented in accordance with the JORC Code (2005) and other regulations and guidelines
that govern the preparation of such reports.
This report is to be included in a prospectus to be lodged with ASIC on or about the 24 of
January, 2011 offering for subscription 10 million shares at an issue price of 20 cents per
share (“Prospectus”) to raise a total of $2.0 million (before costs associated with the issue).
These funds will primarily be used for the exploration, evaluation and development of the
mineral properties as outlined in this report.
The legal status, including Native Title considerations associated with the tenure of the LTX
Mineral Assets, is subject to a separate Independent Solicitor's Report, which appears in
Section 7 of this Prospectus. These matters have not been independently verified by
AM&A. The present status of tenements listed in this report is based on information
provided by LTX and the report has been prepared on the assumption that the tenements
will prove lawfully accessible for evaluation and development.
The LTX mineral assets comprise four projects in Western Australia that are at various stages
of exploration ranging from encouraging results from surface sampling and drilling to
second stage investigation. All the projects have potential to host their target commodities
as described hereunder and warrant the exploration and testing programs as set out. The
projects are currently at an advanced stage of exploration and have potential to host
economic mineral deposits. The localities of LTX's Mineral Assets are depicted in Figure 1
and Figure 2.
INDEPENDENT REPORT ON MINERAL ASSETS
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It is our opinion that the mineral properties described in this report warrant the proposed
evaluation exploration and testing programs. It is noted that proposed programs may be
subject to change according to results yielded as work is carried out. We are of the opinion
that LTX has satisfactorily defined exploration and expenditure programs which are
reasonable, having regard to the stated objectives of LTX.
INDEPENDENT GEOLOGIST'S REPORT
Figure 1 - Project Locality Map
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INDEPENDENT GEOLOGIST'S REPORT
In the course of the preparation of this report, access has been provided to all relevant data
held by LTX and various other technical reports and information quoted in the bibliography.
We have made all reasonable endeavours to verify the accuracy and relevance of the
database LTX has warranted to AM&A that full disclosure has been made of all material in
its possession and that information provided, is to the best of its knowledge, accurate and
true. None of the information
.
provided by LTX has been specified as being confidential and
not to be disclosed in our report. The author is familiar with the areas covered by the LTX
Mineral Assets. As recommended by the Valmin Code, LTX has indemnified AM&A for any
liability that may arise from AM&A's reliance on information provided by LTX or not
provided by LTX.
The information in this report that relates to Exploration Results, Mineral Resources or Ore
Reserves is based on information compiled by, A.J. Maynard who is a Member of the AIG
and the AusIMM and is qualified to provide such reports for the purpose of inclusion in
public company prospectuses. A.J. Maynard has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a competent person as defined in the 2004 Edition of the
Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
A.J. Maynard consents to the inclusion in the report of the matters based on his information
in the form and context in which it appears. This report has been prepared in accordance
with the relevant requirements of the Listing Rules of the Australian Securities Exchange
Limited, Australian Securities and Investments Commission (“ASIC”) Regulatory Guidelines
111 & 112 and the Guidelines for Assessment and Valuation of Mineral Assets and Mineral
Securities for Independent Expert reports (the Valmin Code) which is binding on members
of the Australasian Institute of Mining and Metallurgy (“AusIMM”).
With reference to the description of material described as “Exploration Targets” on the
tenements for the quantification of volumes and grade of alluvial tin material there is no
implied status that it constitutes a Mineral Resource as identified by the JORC code (2005).
As such the potential quality and grade is conceptual in nature, mainly based upon historical
data which has had insufficient exploration to be defined as a Mineral Resource. It is
uncertain if further exploration will result in the determination of a Mineral Resource.
AM&A is an independent geological consultancy established 25 years ago and has operated
continuously since then. Neither AM&A nor any of its directors, employees or associates
have any material interest either direct, indirect or contingent in LTX nor in any of the
mineral properties included in this report nor in any other asset of LTX nor has such interest
existed in the past. This report has been prepared by AM&A strictly in the role of an
independent expert. Professional fees payable for the preparation of this report constitutes
our only commercial interest in LTX. Payment of fees is in no way contingent upon the
conclusions of these documents. A.J. Maynard is employed by AM & A.
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INDEPENDENT GEOLOGIST'S REPORT
AM&A observes Section 947B of the Corporations Act 2001 (Cwlth). In accordance with
Corporations Regulation 7.6.01(1)(u) and Corporations Amendment Regulations 2003 (No.
7) 2003 No. 202, this Independent Consulting Geologist’s Report is not financial product
advice but is intended to provide investors with expert opinion on matters relevant to an
investment in the Company. Neither Allen J Maynard nor AM&A are operating under an
Australian financial services licence and the advice in this Independent Consulting
Geologist’s Report is an opinion on matters other than financial products and does not
include advice on a financial product.
Yours faithfully,
BAppSc(Geol), MAIG, MAusIMM.Allen J. Maynard
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1. SUMMARY OF THE LITHEX RESOURCES PROJECTS
• The Moolyella, Shaw River, Pilgangoora and Arthur River tenements have a strong history of alluvial
tin mining and due to fragmented small land holdings and fluctuations of the tin price there has been
no large scale commercial development.
• There are several previously sampled alluvial tin-tantalite Exploration Targets at Moolyella,
Pilgangoora and Shaw River.
• No REE deposits within the district have been discovered to date despite the REE bearing Euxenite
group minerals commonly occurring in the tantalum concentrates. Therefore the potential remains
high for the discovery of economic quantities of this mineral group and all occurrences should be
evaluated.
• Within the spodumene rich 'type 1' pegmatites at Pilgangoora as well as in the pegmatites of
Moolyella there is potential for lithium deposits.
INDEPENDENT GEOLOGIST'S REPORT
Figure 2 - Location of East Pilbara Tin Projects
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INDEPENDENT GEOLOGIST'S REPORT
1.0 MOOLYELLA PROJECT
1.1 Introduction
1.2 Location and Access
1.3 Tenure
1.4 Exploration History
The tin/tantalum deposits of the Pilbara Craton are derived from pegmatites associated with the 28902830
Ma highly fractionated late to post-tectonic monzogranite to syenogranite plutons of the Split Rock
Supersuite. Tin and tantalum bearing minerals associated with the Split Rock Supersuite include Cassiterite
(SnO2), the Tantalite-Columbite group (Fe,Mn)(Ta,Nb)2O6, the Euxenite group((Y,Ca,Ce,U,Th)(Nb,Ta,Ti)2)O6
and the Fergusonite group ((Y,Er,Ce,La,Nd,Dy,U,Zr,Th,Ca,Fe )(Nb,Ta,Ti,Sn,W))O4.
The Moolyella project is within the highly prospective Pilbara Goldfield and is located 23 kilometres east-
north-east of the township of Marble Bar. The tenements cover the Moolyella Tin Field where continuous
mining activities have been ongoing since their initial discovery in 1898. From 1986 limited mining activities
and exploration has been undertaken. A more comprehensive program of geological activities is required to
locate additional alluvial/eluvial tin/ tantalum deposits and their source of origin.
The project is also prospective for quartz vein style gold deposits found in the Talga Talga gold centre.
Anomalous zinc values have been identified at Murphy's well from rock chip sampling and similarly
anomalous nickel has been reported from rock chip samples in the vicinity of the Talga Talga gold centre.
The Moolyella Project is situated 23 kilometres east-north-east of Marble Bar with access via unsealed shire
and station roads and tracks.
The Moolyella project comprises one Mining Lease application covering 526 hectares one granted
Exploration Licence that covers 56 graticular blocks and one Exploration Licence application that covers 70
graticular blocks. Tenement details are summarised in (Table 1) with locations shown in Figure 3.
Tin mining operations in Moolyella area were mostly continuous from their discovery in 1898 until 1986. The
important prospects within the Moolyella Tin field and associated geology are illustrated in Figure 4.
2+
Table 1: Moolyella Project Tenement Details.
Tenement Status Share Current Date Area
Number % Holder Application
M45/1081 Pending 90 Stubbs, Jeanette Rae 22/11/2004 526Ha
E45/3172 Pending 90 Ellis, Michael Jeremy 19/11/2007 70Blks
E45/3424 Granted 90 JML Resources Ltd 01/05/2009 56Blks
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Between 1965 and 1985 Endeavour Resources Ltd undertook exploration for alluvial, eluvial, deep lead and
pegmatite hosted tin/tantalum mineralisation and several substantial alluvial and eluvial tin/tantalum
deposits were identified. The exploration programs consisted predominantly of widely spaced costeaning
and pitting and some auguring.
In 1981-1982 Endeavour Resources conducted an 18 drill-hole program to target four areas, previously
identified from mapping, for primary mineralisation.
Figure 3 shows the locations of the tin/tantalum targets, the alluvial and eluvial areas sampled by Endeavour
Resources Ltd and the local drainage systems that host the alluvial placers. Historically the highest grades of
the field came from the Moolyella lead and the McDonald lead.
The drill holes were all 51m deep except for one hole to 188m. The program intersected numerous
pegmatites with grades varying between 10 to 6,750 ppm Sn (Tin) in cassiterite as well as 4 to 110ppm Nb
(Niobium) and 10 to 120ppm Ta (Tantalum) in columbite-tantalite and rare molybdenum (Mo). The best
intercept of the program was 12m averaging 1,099ppm Sn in drill hole DH1. No further exploration has been
undertaken in the project area since this time.
The first large scale mining operation of the Moolyella tin/tantalum field occurred following the purchase, by
Endeavour Resources Ltd (Endeavour), of all the Moolyella mining tenements and treatment plant in 1978.
These mining operations continued to 1986 and subsequently closed due to the fall in tin prices.
In 1989 W.J. Ryan of Ryteck Pty Ltd, a former Endeavour geologist at Moolyella, published a report for Viking
Resources, a wholly owned subsidiary of Centamin Limited.
The report post dates the mining operations of Endeavour and provides a comprehensive list of Exploration
Targets due to the variability within alluvial and eluvial deposits. The report includes descriptions of the
targets, recovered and expected grades of heavy mineral concentrates as well as expected stripping ratios.
A summary of the quoted Exploration Targets is tabulated in Table 2. The composition of previous
concentrates from this field and subsequent chemical analysis can be found in Table 3.
Three shallow areas of mineralisation were quantified from the Endeavour Resource drilling program using
pegmatite intercepts over 1,000ppm Sn and an S.G. of 2.6. The results of the volume analysis are shown in
Table 4.
Between 1890 and 1940 narrow stratabound quartz veins within the McPhee Formation of the Marble Bar
greenstone belt were mined to produce 60.6kg of gold, predominantly from the McPhee Reward mine. A
similar amount is also likely to have been mined from alluvial material.
The area containing the Talga Talga gold centre is currently excised from the Moolyella Project tenements
(see Figure 3).
From 1969-1973 Hawkstone Minerals explored for base metals adjacent to the Talga Talga gold centre where
anomalous gossanous rock chip samples assaying as high as 2,295ppm Ni were recorded.
INDEPENDENT GEOLOGIST'S REPORT
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Esso explored the northern region of the Moolyella Project area discovering base metal mineralisation at
the Murphy Well prospect (see Figure 3). The mineralisation is associated with narrow quartz veins in a
granitoid that has intruded the felsic volcanoclastic dominated Duffer Formation.
The veins are locally anomalous in base metals at Murphy Well, and 7km to the east-southeast, surface
samples assayed 3.4% Zn, 2.7% Cu, and 0.149% Pb. Esso eventually abandoned the tenement as the
prospect showed little potential for large-tonnage mineralisation.
Table 2 Exploration Targets of the Moolyella tin/tantalum field.:
Note - the swell factor from BCM to LCM is approx. 1.3 for alluvials and 1.1 for tailings.
55,800 62,000
13,500 15,000
Material Volume
BCM
(Lower
Range)
Volume
BCM
(Upper
Range)
Grade by
Ryteck
kg/LCM
(Lower
Range)
Grade by
Ryteck
kg/LCM
(Upper
Range)
Raw
Conc.
(tonnes
– lower
range)
Raw
Conc.
(tonnes –
upper
range)
Tested Alluvials
Prospectors Creek 38,520 42,800 0.66 0.74 37 41
Dead Donkey Lead 30,240 33,600 0.77 0.86 34 38
Six Mile and Tribs 0.85 0.95 69 77
Subtotal 124,560 138,400 0.76 0.86 140 156
Untested Alluvials
West Brockman
South
90,000 100,000 0.77 0.86 105 116
Prospector Tribs
South
27,000 30,000 0.77 0.86 31 35
Five Mile Creek
North
18,000 20,000 0.77 0.86 20 23
East Huntsman Tribs 0.77 0.86 15 17
Eight Mile Creek 22,500 25,000 0.77 0.86 26 29
Moolyella Channels 49,500 55,000 0.77 0.86 58 64
Subtotal 220,500 245,000 0.77 0.86 255 284
Eluvial tested 364,500 405,000 0.40 0.45 213 237
Eluvial untested 450,000 500,000 0.36 0.40 198 220
Tailings
Subtotal 814,500 905,000 0.38 0.42 411 457
No. 1 Main plant 22,500 25,000 0.31 0.35 9 10
No. 2 90,000 100,000 0.36 0.40 40 44
No. 4 Carron Dam 54,000 60,000 0.36 0.40 23 26
No. 5 Lower
McDonald
45,000 50,000 0.81 0.90 45 50
Subtotal 238,500 265,000 0.44 0.49 128 143
Transplant -
Moolyella
27,000 30,000 0.36 0.40 11 13
TOTAL 1,398,060 1,553,400 934 1040
INDEPENDENT GEOLOGIST'S REPORT
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INDEPENDENT GEOLOGIST'S REPORT
Note: With reference to the description of material described as “Exploration Targets” for the quantification
of volumes and grade of alluvial tin there is no implied status that it constitutes a Mineral Resource as
identified by the JORC code (2004). As such the potential quality and grade is conceptual in nature, mainly
based upon historical data which has had insufficient exploration to be defined as a Mineral Resource. It is
uncertain if further exploration will result in the determination of a Mineral Resource.
The geology of the Moolyella Project is dominated by the Mt Edgar Granite complex which occupies the
southern and central areas of the tenements. Within the Mt Edgar Granite complex four suites of granites
have been recognised. They are the migmatised Callina (or possibly Tambina) supersuite (3,490-3,460 Ma),
the Emu Pool (3,325-3,290 Ma) and later Cleland (3,275-3,225 Ma) Supersuites and the Moolyella
Monzogranite pluton of the Split Rock Supersuite (2,890-2,830 Ma) as illustrated in Figure 3.
Swarms of simple and complex pegmatites associated with the highly fractionated Moolyella pluton have
intruded the adjacent migmatised (and foliated) Callina Supersuite granites forming a few cm to 3 m thick
bodies that can be traced for over 300m along strike (N-S) and dip gently to the east. Sediments derived from
these pegmatites form alluvial deposits of primarily cassiterite and also tantalite-columbite.
1.5 Geology
Mass in kg Percentage Tin (Sn %)Tantalite
(Ta2O5 %)
56,416 100.00
45,896 81.35 73.50 2.56
6817 12.08 1.22 26.10
3267 5.79
436 0.77
Raw concentrate
Cassiterite concentrate
Tantalite concentrate
Garnet
Magnetite
TOTAL 56,416 100.00 59.9 5.24
Table 3: Heavy mineral concentrate grades of Tin and Tantalite at Moolyella.
Area
Volume
m3
(Lower
Range)
Volume m3
(Upper
Range)
Tonnes
(Lower
Range)
Tonnes
(Upper
Range)
Grade in
kg/t Sn
(Lower
Range)
Grade in
kg/t Sn
(Upper
Range)
Pegmatite Gully 11,880 13,200 30,807 34,230 1.85 2.05
Roadside A 27,720 30,800 72,072 80,080 1.07 1.19
Roadside B 12,150 13,500 31,590 35,100 0.93 1.03
Tin Creek 810 900 2,106 2,340 1.80 2.00
TOTAL 52,560 58,400 136,572 151,750 1.41 1.56
Table 4: Exploration Targets of primary tin mineralisation at Moolyella.
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The alluvial systems in the Moolyella tin field vary from less than one metre to more than 7 metres deep with
the placers always occurring in the lowermost alluvial layer. A number of flat-lying plateau occur between
the major drainages. These areas are prospective for eluvial concentrations of cassiterite and tantalite-
columbite with significant volumes estimated by previous explorers (see Table 2) although the layer of
eluvials is usually less than 0.5m thick.
In the northwest, the project area overlies metamorphosed Archaean volcanics and metasediments of the
Warrawoona Group greenstone belt, host to the Talga Talga gold centre.
Figure 3 - Solid geology map of the Shaw River tin field
INDEPENDENT GEOLOGIST'S REPORT
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1.6 Potential
The historical reports suggest that there are two likely sources for further discoveries of economic
tin/tantalum mineralisation. These are firstly within the braided Brockman Creek system, where over 8km of
the primary drainage channel in the Moolyella district has been only sparsely sampled. The second source is
in the widespread eluvials that exist between the creek systems.
Potential also exists for economic mineralisation within the saprolite zone. To date no systematic drilling
program has tested this target. Reports of soft clay-rich and weathered bedrock beneath the alluvial placers
may indicate, if extensively developed, an enriched and easily dug source of mineralisation.
The tenor of Ta2O5 in the tantalum concentrates of the Moolyella tin field (~25 % Ta2O5) suggests the
tantalum bearing minerals in the concentrates are unlikely to be dominated by the higher grade tantalite-
columbite group. This leaves open the possibility that the tantalum concentrates are dominated by the rare
earth elements (REE) rich euxenite or fergusonite minerals. The literature indicates that, to date, most
samples have only been assayed for tin (Sn), Tantalum (Ta2O5)and Niobium (Nb2O5) and thus there exists
the potential for economic concentrations of REEs that at this point are untested.
Bed rock sources for the alluvial and eluvial mineral occurrences have not been identified and their
discovery is therefore a potentially substantial source of mineralisation.
Percussion drilling completed by Endeavour in 1982 tested bedrock pegmatites in three locations. Assays
from 247 samples indicated the presence of several significant elements as outlined in Table 5:
INDEPENDENT GEOLOGIST'S REPORT
Element Symbol Range From Range To Comment
Tin
Tantalum
Niobium
Lithium
Tungsten
Gold
Silver
Sn
Ta
Nb
Li
W
Au
Ag
10ppm
10ppm
4ppm
70ppm
10ppm
0ppm
0ppm
6750ppm
120ppm
110ppm
500ppm
70ppm
0.008ppm
0ppm
Significant
Significant
Significant
Significant
Weak
Very Weak
Absent
Table 5: Moolyella 1982 geochemistry from drill cuttings in pegmatites.
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Grab samples taken from abandoned stockpiles during a visit to the area in June 2010 confirmed the
existence of other anomalous and significant elements contained within the tin-tantalum product. (See
Table 6)
Little exploration attention has been paid to minerals such as the rare earths, lithium, tungsten and
molybdenum on the tenement area. However, the above tables demonstrate that there could be
commercial value for some minerals in the pegmatites.
The project area has potential for base metal mineralisation as anomalous nickel bearing gossans have been
reported from rock chip samples in the vicinity of the Talga Talga gold centre. At Murphy's Well zinc values
have been identified from rock chip sampling of gossan outcrops.
The area is also prospective for gold mineralisation of the Talga Talga type, particularly within faults and
shears in the Warrawoona Basalts.
Collation of all the existing data on a GIS database is proposed as a first priority. Following the database
review target identification and field location to be geologically mapped utilizing the latest satellite imagery
with a focus on a detailed structural survey. Ground geochemical and geophysical surveys are to follow. The
generated targets are to be tested by RAB and RC drilling programs primarily for pegmatite definition and
their tin/ tantalum and REEs content and for gold and base metal mineralisation also.
An exploration budget of $250,000 is proposed for the first year and $320,000 for year two.
1.7 Proposed Program and Expenditure
INDEPENDENT GEOLOGIST'S REPORT
*Level at which element is considered anomalous in that environment
Table 6: Moolyella 2010 geochemistry from alluvial stockpile grab
samples (composites from 16 samples).
Element Symbol Range
From
Range
To
Anomalous
Threshhold*
Tin Sn 50ppm 2250ppm 1000ppm
Tantalum Ta 5.2ppm 69.4ppm 10ppm
Beryllium Be 4.6ppm 161ppm 10ppm
Lithium Li -5ppm 130ppm 50ppm
Strontium Sr 58ppm 276ppm 500ppm
Silver Ag -2ppm 8ppm 1ppm
Thorium Th 2.1ppm 8ppm 20ppm
Titanium Ti 120ppm 2350ppm 1000ppm
Uranium U 0.7ppm 1.7ppm 5ppm
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2.1 Introduction
2.2 Location and Access
2.3 Tenure
The Shaw River project is within the highly prospective Pilbara Goldfield and is located 50 km southwest of
Marble Bar and is centred on the Shaw River tin field. It comprises two granted Exploration Licences that
cover 62 graticular blocks and 66 graticular blocks respectively.
The Shaw River tin field was discovered in 1890 and by 1975 produced a total of 6,585 tonnes of tin
concentrate.
From 1978 to 1998 a number of companies conducted further evaluation and exploration activities
primarily for tin, tantalum and REEs. A mining feasibility study of the Shaw River tin field, under a joint
venture between Greenbushes and Western Australia Rare Metals, was completed in 1988. The project was
deemed to be sub economic and the tenements were subsequently dropped in 1989.
The project area requires further evaluation and subsequent detailed exploration for the discovery of
additional tin tantalum and REEs.
The Shaw River project is located approximately 50 km southwest of Marble Bar and is centred on the Shaw
River tin field. Access is via unsealed Shire and station roads and various bush tracks that service abandoned
mine workings see Figure 2.
The Shaw River project comprises two granted Exploration Licences that cover 128 graticular blocks. Their
details are summarised in (Table 8) and locations shown in Figure 4.
49
INDEPENDENT GEOLOGIST'S REPORT
Moolyella
Item Year 1 $ Year 2 $ Total $
Data Compilation 30,000 35,000 65,000
Geochemical Surveys 15,000 15,000 30,000
Sampling 40,000 55,000 95,000
Drilling 80,000 100,000 180,000
Geology & Field Work 50,000 66,000 116,000
Tenement & Administration 35,000 49,000 84,000
Total $250,000 $320,000 $570,000
Minimum Expenditure 56,000 56,000 112,000
Table 7: Moolyella Proposed Expenditure.
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2.4 Exploration History
The Shaw River tin field was discovered in 1890 and by 1975 produced a total of 6,585 tonnes of tin
concentrate. In 1978 Greenbushes Ltd acquired leases in the Shaw River district and conducted exploration
for tin and tantalum from 1979 to 1981. Further exploration was conducted for tin, tantalum and REEs under
a joint venture between Greenbushes and Western Australia Rare Metals until 1987 and a mining feasibility
study was completed in 1988.
The feasibility study included extensive plans of the sample type and location. The project was then deemed
to be sub-economic and the tenements were subsequently dropped in 1989.
In 1994 Mount Edon Gold Mines (MEGM) conducted an exploration program for tin, tantalum and REEs.
MEGM utilised scintillometers and undertook an alluvial bulk sampling program with the aim of testing for
both alluvial and primary mineralisation. MEGM reported using an airborne scintillometer survey to cover
the tenements. However, no report has been found confirming the data generated from this work.
No further exploration programs have occurred within the Shaw River Project leases since 1995.
P. Kimber of Greenex Ltd, on behalf of the Western Australian Rare Metals / Greenbushes J.V., prepared an
Exploration Target volume for the project. The report describes the sampling methodology and discusses
the results and potential of each area in a summary table. The volumes relevant to the current Shaw River
Project tenements are found below in Table 9.
Between 1994 and 1998 Valdrew Resources investigated two of the Exploration Targets (Five Mile Creek and
Spear Hill) detailed in the Greenex Ltd report with the intent to develop the deposits. Follow up sampling by
Valdrew Resources did not confirm the Greenex Ltd data and they subsequently abandoned the tenements.
In 1997 P. Kimber of Reynard Australia Pty Ltd prepared a high-grade Exploration Target for the Shaw River tin
field and the relevant volumes that occur on the Shaw River Project tenements are found below in Table 10.
Tenement Status Share Current Date Area
Number % Holder Granted/Application
E45/3354 Granted 90
Duketon
Consolidated Ltd 23/11/2009 62Blks
E45/3439 Granted 90
Duketon
Consolidated Ltd 18/06/2010 66Blks
Table 8: Shaw River Project Tenement Details.
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175k – 190k 1.0 - 1.12189.9 -
211.010.037 - 0.049 8.46 – 9.38
90k - 100k 1.0 -1.196.57 -
107.300.05 - 0.065 5.76 - 6.40
85k - 90k 1.0 -1.1593.33 -
103.710.025 - 0.033 2.70 - 2.98Hartigans
Combos
Creek
TOTAL
ProspectRange of
Tonnes
Range
SnO2 kg/t
Tonnes
SnO2
Range Ta 2O5
kg/t
Tonnes
Ta2 5O
Table 10: Exploration Targets of the Shaw River tin/tantalite high-grade.
51
Breens
Lower Cooglegong
Creek
Combos Creek
Eleys Creek
TOTAL
Prospect
Hartigans
97,312 to
108,1251.17 to 1.30
126.27 to
140.31
0.058 to
0.065
12.28 to
13.65
216,562 to
240,6250.83 to 0.92
199.26 to
221.40
0.040 to
0.045
9.71 to
10.79
88,312 to
98,1250.80 to 0.89
78.59 to
87.33
0.039 to
0.044
3.85 to
4.28
40,950 to
45,5000.85 to 0.94
38.40 to
42.67
0.033 to
0.037
1.53 to
646,558 to
718,400
0.96 to
1.09
703.20 to
781.36
0.048 to
0.054
43.26 to
48.08
Range of
Volume in
LCM
Range SnO2
kg/LCM Tonnes
Range
Ta2 5O
kg/LCM
Tonnes
203,422 to
226,0251.15 to 1.28
260.68 to
289.65
0.070 to
0.078
15.89 to
17.66
Ta2 5OSnO2
1.70
Table 9: Exploration Targets of the Shaw River tin/tantalite project alluvials.
( Note. These volumes are based on a cut off grade of 0.5 kg/LCM of SnO2.)
INDEPENDENT GEOLOGIST'S REPORT
Note: With reference to the description of material described as “Exploration Targets” for the quantification
of volumes and grade of alluvial tin, there is no implied status that it constitutes a Mineral Resource as
identified by the JORC code (2004). As such the potential quality and grade is conceptual in nature, mainly
based upon historical data which has had insufficient exploration to be defined as a Mineral Resource. It is
uncertain if further exploration will result in the determination of a Mineral Resource.
The geology of the Shaw River Project is dominated by the Shaw granitic complex whose evolution includes
four episodes of granite emplacement. The oldest granites of the complex are the highly migmatised Callina
Supersuite (3,490-3,460 Ma) that are intruded by the significantly less deformed leucogranites of the
Tambina Supersuite (3,450-3,420 Ma), Sisters Supersuite (2,945-2,930 Ma) and later Cooglegong
Monzogranite of the Split Rock Supersuite (2,890-2,830 Ma) as illustrated in Figure 4.
Swarms of simple and complex <10 cm and up to 3 m thick pegmatites are associated with the Cooglegong
Monzogranite and cut across the banding of the adjacent gneissic rocks. The pegmatites, when associated
with rare metal mineralisation, have an apatite composition with accessory spessartine, green muscovite,
cassiterite, zinnwaldite, lepidolite, fluorite, tantalite and magnetite.
The locality and geology of the major tin -tantalite prospects in the project area are illustrated in Figure 4.
2.5 Geology
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Figure 4 - Solid geology map of the Shaw River tin field
INDEPENDENT GEOLOGIST'S REPORT
Shows location of the tin/tantalum prospects and deposits, and the outlines of the sampled alluvials.
2.6 Exploration Potential
Alluvial deposits, derived from the pegmatites, have developed in an area of low undulating relief with small
shallow creeks and in major deeply incised braided streams. Eluvial and colluvial deposits are also found on
ridges and divides and typically occur as a 0.5m thick layer of cover (notably at Spear Hill and Hillside).
A granite-greenstone contact exists along the eastern margin of the Shaw River Project tenements. In other
tin-tantalum districts of the Pilbara, simple and complex pegmatites of substantial width have formed within
the foliated greenstones and around the greenstone-granite contact.
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Limited work appears to have been done in the Shaw River district to investigate them for their
mineralisation and mineral content and therefore they represent potential exploration targets. Within
some of the deeper alluvial systems in the Shaw River tin field the placers were auger drilled and
sampled.
Auger drilling historically underestimates mineral content in alluvial and eluvial type deposits. Consequently
grade and volume estimations so derived are in general conservative. Therefore there is potential for
increased mineral content using other drilling techniques such as RC.
Assays of the tantalum-bearing minerals from the Shaw River district have produced some significant results
for uranium (up to 4,750 ppm U).
The project area is considered to be potentially prospective for uranium bearing pegmatites. Furthermore
no work has been done to assess the potential for palaeo-placer type uranium deposits.
Collation of all the existing data on a GIS database is proposed as a first priority Following the database
review target identification and field location to be geologically mapped utilizing the latest satellite imagery
with a focus on a detailed structural survey.
Ground geochemical and geophysical surveys are to follow. The generated targets are to be tested by RAB
and RC drilling programs primarily for pegmatite definition and their tin/ tantalum and REE content and
uranium will be searched for also.
An exploration budget of $180,000 is proposed for the first year and $250,000 for year two.
2.7 Proposed Program and Expenditure
.
INDEPENDENT GEOLOGIST'S REPORT
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Item
Data Compilation
Geochemical Surveys
Sampling
Drilling
Geology & Field Work
Tenement & Administration
Total
Minimum Expenditure
Year 1 $ Year 2 $ Total $
INDEPENDENT GEOLOGIST'S REPORT
20,000 34,000 54,000
17,500 20,000 37,500
25,000 32,000 57,000
50,000 80,000 130,000
42,500 45,000 87,500
25,000 39,000 64,000
$180,000 $250,000 $430,000
130,000 130,000 260,000
Shaw River
Table 11: Proposed Expenditure Shaw River Project.
3.0 THE PILGANGOORA PROJECT
3.1 Introduction
3.2 Location and Access
The Pilgangoora project is within the highly prospective Pilbara Goldfield and is located approximately 120
km south-southeast of Port Hedland and a portion of it covers the Pilgangoora tantalum field. The project
comprises two granted Exploration Licences that cover 8 graticular blocks.
The Pilgangoora tantalite field was first discovered in 1905 and by 1947 had produced approximately 0.7
tonnes of tantalite concentrates from small scale alluvial operations. Larger scale mining operations were
introduced in 1974 and by 1975 approximately 50 tonnes of high grade tantalite together with some 13
tonnes of cassiterite were produced from the area.
From 1978-1982 Pilgan Mining and between 1992-1996 the Pilgangoora Mining Venture continued with
bulk scale mining operations that produced approximately 140 tonnes of tantalite concentrates from an
estimated 800,000 BCM of screened alluvial and eluvial material.
The project area contains three types of zoned tin/tantalum bearing pegmatites that requires more
detailed exploration and evaluation.
The Pilgangoora tantalum field is located approximately 120 km south-southeast of Port Hedland and is
found predominantly to the south southwest of and stretching northward into, the Pilgangoora Project
tenements. The project is accessed by unsealed shire and station roads, various tracks that service
abandoned mine workings and the stations (see Figure 2).
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3.3 Tenure
3.4 Exploration History
The Pilgangoora project comprises two granted Exploration Licences that cover 8 graticular blocks.
Their details are summarised in (Table 10) and locations shown in Figure 5.
The Pilgangoora tantalite field was first discovered in 1905 and by 1947 had producedapproximately 0.7 tonnes of tantalite concentrates from small scale alluvial operations. After 1947,larger scale mining operations were introduced and by 1975 approximately 50 tonnes of high gradetantalite together with some 13 tonnes of cassiterite were produced from the area.
From 1978-1982 Pilgan Mining and between 1992-1996 the Pilgangoora Mining Venture continued
with bulk scale mining operations that produced approximately 140 tonnes of tantalite
concentrates from an estimated 800,000 BCM of screened alluvial and eluvial material.
In 1996 P.B. Kimber of Prima Resources, a JV partner of the Pilgangoora Mining Venture, estimateda volume for the project area, see Table 13. His estimates utilised the estimates made by JaysExploration in 1981, see table 14.
Several creeks were re-sampled by backhoe pits dug on a 10m by 100m grid with 6 litre verticalchannel samples taken across the placers. The locations of the creeks are indicated in Figure 5.
Due to concerns about the repeatability of the resource estimates, Prima Resources bulk sampledcreeks 4 and 5. The results of this bulk sample program are not included in the available reports.
Tenement
Number Status Share Current Holder
Date
Granted Area
E45/2375 Granted 90 South Boulder Mines Ltd 13/02/2006 3Blks
E45/3373 Granted 90 JML Resources Pty Ltd 15/02/2010 5Blks
Table 12: Pilgangoora Tenement Details.
INDEPENDENT GEOLOGIST'S REPORT
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Figure 5 - Solid geology map of the Pilgangoora Project
Shows the approximate outlines of the sampled alluvials
INDEPENDENT GEOLOGIST'S REPORT
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Note: With reference to the description of material described as “Exploration Targets” for the quantification
of volumes and grade of alluvial tin there is no implied status that it constitutes a Mineral Resource as
identified by the JORC code (2004). As such the potential quality and grade is conceptual in nature, mainly
based upon historical data which has had insufficient exploration to be defined as a Mineral Resource. It is
uncertain if further exploration will result in the determination of a Mineral Resource.
The Pilgangoora Project tenements overlie the steeply dipping and synclinally folded East Strelley
Greenstone belt, and locally, the Carlindi granitic complex to the north. The greenstone belt consists of
ultramafic, mafic and felsic volcanics with intercalated chert and sedimentary rocks of the Warrawoona
(3,525-,3426 Ma) and overlying Kelly (3,350-3,300 Ma) Groups. The composition of the Carlindi granitic
complex is similar to those of the Moolyella and Shaw River districts with four episodes of granite
emplacement including the initial highly migmatised Callina Supersuite (3,490-3,460 Ma) followed by the
Cleland Supersuite (3,275-3,225 Ma), the Sisters Supersuite (2,945-2,930 Ma) and lastly by
monzogranites of the Split Rock Supersuite (,2890-2,830 Ma). Both the greenstone belt and the
migmatised granites show a well developed schistosity that trends north northeast and dips steeply to
the east.
3.5 Geology
Location Volume
in LCM
(Lower
Range)
Volume in
LCM
(Upper
Range)
Ta 2O5kg/LCM
(Lower
Range)
Ta 2O5kg/LCM
(Upper
Range)
Tonnes
Ta 2 5O
(Lower
Range)
Tonnes
Ta 2O5
(Lower
Range)
Creek 1 6,804 7,560 0.50 0.56 3.80 4.23
Creek 2 6,480 7,200 0.55 0.61 3.95 4.39
Creek 7 19,656 21,840 0.33 0.37 7.27 8.08
TOTAL 32,940 36,600 0.46 0.46 15.02 16.71
Table 13: Remaining volume estimate by Prima Resources for the Pilgangoora
Project alluvials (1996).
Location Volume in
LCM
(Lower
Range)
Volume in
LCM (Upper
Range)
Ta2O5
kg/LCM
(Lower
Range)
Ta2O5
kg/LCM
(Upper
Range)
Tonnes
Ta 2O5
(Lower
Range)
Tonnes
Ta 2O5
(Lower
Range)
Creek 1 6,804 7,560 0.50 0.56 3.80 4.23
Creek 2 11,400 12,667 0.45 0.50 5.69 6.33
Creek 7 19,656 21,840 0.33 0.37 7.27 8.08
TOTAL 37,860 42,067 0.42 0.44 16.76 18.64
Table 14: Remaining volume estimate by Jays Exploration for the Pilgangoora
Project alluvials (1981).
INDEPENDENT GEOLOGIST'S REPORT
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Three types of tin/tantalum bearing pegmatites have been found in the Pilgangoora district and these are:
Quartz-spodumene-albite-microcline pegmatites.
Quartz-microcline, albite-muscovite pegmatites.
Quartz-muscovite-feldspar-cassiterite pegmatites.
The type 1 pegmatites are the primary source of tin/tantalum mineralisation at Pilgangoora and form north
north-east trending bodies up to 60m thick in greenstones within an 8km long and 1.5km wide corridor that
begins south- southwest of the tenements and extends northwards into the Pilgangoora Project tenements
(see Figure 5). The spodumene content of these pegmatites (~ 25 %) has previously been the focus of
feasibility studies for lithium, however none of the volumes presented in that report occur on the
Pilgangoora Project tenements.
Type 2 pegmatites occur at or close to the granite-greenstone contact and are found in the area covered by
the Pilgangoora Project tenements. The tantalum concentrates derived from these pegmatites are of a
lower tenor than the type 1 pegmatites and this is likely to be the reason for the lower grade tantalum
concentrates (~ 25 % Ta2O5) of the Pilgangoora Project than the higher (40 % and 60 % Ta2O5) grades found
in the main Pilgangoora tantalum field to the south southwest.
The type 3 pegmatites typically occur to the south of the Pilgangoora Project tenements and are usually
small and are cassiterite rich.
A schematic block diagram, showing the generalised composition with mineral distribution, within a
complex zoned pegmatite is illustrated in Figure 6.
There are two potential sources for further concentrations of tantalum minerals to be discovered within the
Pilgangoora Project leases. These include alluvials in creeks to the north of those already sampled as well as
eluvial and hard rock deposits associated with the type 1 pegmatites found within the central area of the
tenements (see Figure 5). These type 1 pegmatites may also be host to economic quantities of Li bearing
spodumene.
Little work appears to have been done on the chemistry of the tantalum bearing minerals associated with
the type 2 pegmatites and the possibility exists that economic accumulations of REEs exist in the project
area.
Alluvial gold was discovered at McPhees Patch around the turn of the 19th century. It was not until 1935 that
some attempt was made to treat the low-grade gold lodes as a large mining operation and these efforts
persisted until the outbreak of the Second World War. No further serious investigations occurred until the
gold boom of the 1980s, when various companies explored the area. From 1995 to 1998 Lynas Gold NL
mined the 125,000 ounce Lynas Find deposit.
The exploration rights for gold only exist for (E45/3373) the northern most lease of the Pilgangoora Project.
The most significant gold deposit in this area is the Birthday Gift prospect with historical production of 1,473
tonnes for 232.7 oz Au.
1
2
3
3.6 Mineralisation Potential
INDEPENDENT GEOLOGIST'S REPORT
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Figure 6 - A schematic block diagram showing a generalised mineral distribution within a
complex zoned pegmatite after Anderson I.G., 1979.
INDEPENDENT GEOLOGIST'S REPORT
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3.7 Proposed Program and Expenditure
4.1 Introduction
Collation of all the existing data on a GIS database is proposed as a first priority Following the database
review target identification and field location to be geologically mapped utilizing the latest satellite imagery
with a focus on a detailed structural survey. Ground geochemical and geophysical surveys are to follow. The
generated targets are to be tested by RAB and RC drilling programs primarily for pegmatite definition and
their tin/ tantalum and REE content. Gold will also be explored for.
An exploration budget of $150,000 is proposed for the first year and $160,000 for year two.
The Arthur River project is located in the Gascoyne Mineral Field, approximately 250km east of Carnarvon
and consists of two granted Exploration Licences covering 15 graticular blocks.
In the early 1900's the Bangemall Gold Mine mined gold but no records of production figures have been
located.
Unknown parties in the early 1940's recovered mica, beryl, tantalum-columbite and bismuth from
pegmatites in the area. No records of production have been located.
From 2004-2006 Tantalum Australia NL mined the placer type Arthur River tantalum-niobium mine, now on
care and maintenance. The tantalum and niobium minerals are derived locally from columbite - tantalite
granitic rare metal pegmatites. Drilling of the source pegmatite has yielded significant tantalum
mineralisation and subsequently an Exploration Target consisting of 55,000 to 60,000 tonnes at 0.025 to
0.03 percent Ta O has been reported.
.
Note: With reference to the description of material described as “Exploration Targets” for the
quantification of volumes and grade of alluvial tin there is no implied status that it constitutes a Mineral
Resource as identified by the JORC code (2004).
4.0 Arthur River Project
2 5
Pilgangoora
Item Year 1 $ Year 2 $ Total $
Data Compilation 17,000 22,000 39,000
Geochemical Surveys 15,000 15,000 30,000
Sampling 25,000 25,000 50,000
Drilling 50,000 50,000 100,000
Geology & Field Work 25,000 28,000 53,000
Tenement & Administration 18,000 20,000 38,000
Total $150,000 $160,000 $310,000
Minimum Expenditure 35,000 35,000 70,000
Table 15: Pilgangoora Project Proposed Expenditure.
INDEPENDENT GEOLOGIST'S REPORT
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As such the potential quality and grade is conceptual in nature, mainly based upon historical data which has
had insufficient exploration to be defined as a Mineral Resource. It is uncertain if further exploration will
result in the determination of a Mineral Resource.
The tin tantalum potential of the region has not been fully explored and consequently requires additional
field programs to map the pegmatite occurrences.
Previous explorers have located anomalous hard rock, beryl-pegmatite and calcrete style uranium
mineralisation. Additionally uranium bearing pyrochlore has been noted during the excavation of the
Arthur River mine.
The project area has potential for the occurrence of gold, tin/tantalum, tungsten-molybdenum, REE and
uranium mineralisation.
The tenements comprising the Arthur River Project are located in the Gascoyne Mineral Field,
approximately 250 kilometres east of Carnarvon. The area can be accessed via gravel road from Carnarvon
via Gascoyne Junction and then via gravel roads that connect the various pastoral leases. (Figure 2).
The project consists of two granted Exploration Licences covering a total area of approximately 10,294
hectares (15 graticular blocks). Details of the Mining Licences are summarised in Table 16 and locations
shown in Figure 7.
4.2 Locality and Access
4.3 Tenure
Tenement Number Status Share % Current Holder Date Status Area
E09/1066 Live 100 Hazelwood Resources Ltd Granted 12Blks
E09/1067 Live 100 Hazelwood Resources Ltd Granted 3Blks
Table 16 Arthur River Project Tenement Details.:
INDEPENDENT GEOLOGIST'S REPORT
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4.4 Exploration History
From 1992 - 2000
In the early 1900s the Bangemall Gold Mine mined gold but no records of production figures have been
located.
There is documentation that during the early 1940s mica, beryl, tantalum-columbite, and bismuth were
recovered from pegmatites by unknown parties No records of production have been located.
In April 1973 Pacminex Pty Ltd explored for hard rock and calcrete style uranium mineralisation. Utilising
airborne radiometric and detailed mapping primary and secondary uranium anomalism was indentified.
Cameco Australia Pty and PNC Exploration Australia Pty Ltd were active in an area
approximately 20 kilometres south of the westernmost EL. Several areas of significant uranium
mineralisation were identified within the regolith.
Figure 7 - Arthur River - Geology and Mineral Occurrences
INDEPENDENT GEOLOGIST'S REPORT
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In 2004 Agip Nucleare explored for Uranium and discovered a uranium- beryl pegmatite.
During 2004-2006,Tantalum Australia NL mined the Arthur River tantalum-niobium mine, now on care and
maintenance. The deposit is a placer type containing tantalum and niobium minerals derived locally from
columbite- tantalite granitic rare metal pegmatites. A placer Exploration Target estimate of 55,000 to 60,000
tonnes at 0.025% to 0.03% Ta O has been reported.
.
Additionally, uranium bearing pyrochlore has been noted during the excavation of the Arthur River mine.
During 2007, Uranium exploration company U O Limited, recommenced Uranium exploration at the Wabli
Creek and Minindi Creek prospects, located near the occurrence discovered by Agip in 2004, and located 10
to 20 kilometres from the eastern-most Arthur River project tenement. U O Limited reported significant
calcrete uranium values of 500 to 600 ppm.
Geochemistry reported from rock chip sampling by Hazlewood Resources Pty Ltd in September 2007
indicated that there are several prospective elements present on tenement E9/1067. See Table 17 below:
From 2009 Hazelwood has completed a detailed airborne radiometric survey and has undertaken
preliminary field work. Field activities were restrained by the rugged terrain. Further field work is required
for verification of anomalies arising from the radiometric data and this will be undertaken with the
assistance of all terrain vehicles.
2 5
3 8
3 8
Note: With reference to the description of material described as “Exploration Targets” for the quantification
of volumes and grade of alluvial tin there is no implied status that it constitutes a Mineral Resource as
identified by the JORC code (2004). As such the potential quality and grade is conceptual in nature, mainly
based upon historical data which has had insufficient exploration to be defined as a Mineral Resource. It is
uncertain if further exploration will result in the determination of a Mineral Resource
INDEPENDENT GEOLOGIST'S REPORT
Element Range From
ppm
Range To
ppm
Comment
Lithium (Li) 0.99 77.2 Very significant
Rubidium (Rb) 3.56 82.2 Very significant
Tin (Sn) 0.14 3.36 significant
Niobium (Nb) 0.11 3.28 significant
Thorium (Th) 1.44 61.9 significant
Uranium (U) 0.64 21.5 Very significant
Cerium (Ce) 5.81 200 Very significant
Cesium (Cs) 0.20 23.2 significant
Table 17: 2007 Geochemical sample Highlights.
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4.5 Geology
The basement rocks to the Mt Phillip 1:250,000 sheet belong to the Gascoyne Province, a belt of high grade
metamorphic rocks of dominantly Proterozoic age. The oldest rocks on the sheet are reworked Archaean
gneisses, which occur as banded biotite gneiss, with minor microcline augen, layered intermediate gneiss
and pink granite gneiss. Lesser amounts of biotite granite and pegmatite have resulted from Proterozoic
reworking.
The Proterozoic is mainly represented by the Morrisey Metamorphic Suite, which is a mixture of prograde
schists and felsic paragneiss. Smaller bodies of amphibolite, calc-silicate gneiss and marble also exist.
Retrograde sericite schists have been mapped also. Peak metamorphism reached mid to upper amphibolite
facies and is later overwritten by a retrogressive greenschist facies event.
Two phases of granite have been described. The first is biotite augen gneiss and is syn-peak metamorphism
(2,400Ma).
The second is a biotite granodiorite (1,700Ma). The structural grain is dominated by tightly folded,
northwest trending folds, with steep southeast plunges.
The Proterozoic basins, that comprises the Bangemall and Mt James Formations, onlap the Morrisey
Complex.
Palaeozoic sediments of the Carnarvon Basin onlap the area in the west.
Within the project area, the geology is dominated by aeolian sands and colluvium and alluvium. Where
outcrop and subcrop do occur they are dominantly quartzo-feldspathic conglomerates and grits, silicified
sandstone, siliceous limestone, quartzite, slates and cherts.
Figure 8 - Arthur River tenement E9/1066 airborne uranium anomalies
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4.6 Mineralisation Potential
4.7 Proposed Program and Expenditure
The project area is regarded to be very prospective for the discovery of additional tantalum-niobium and
other rare metals associated with pegmatites. Furthermore numerous occurrences of pegmatitic rare metal
mineralisation occur within the Morrisey Metamorphic suite of the Ashburton Formation, some of which
have been exploited for bismuth, beryl and tantalum in the past.
Occurrences of uranium mineralisation are recorded within 10 to 20km of the Arthur River project area. The
most noteworthy are Wabli Creek; a carnotite-calcrete style deposit, and Paddy Well; a pegmatite style
deposit.
Consequently the project is considered to be prospective to host both Jabiluka and Calcrete-Carnotite - style
uranium mineralisation supported by the known occurrences of pegmatite and calcrete associated uranium
mineralisation in areas adjacent to the project.
Exploration companies including U3O8 Limited and Tantalum Australia Ltd have recently indicated their
intention to recommence uranium exploration in areas immediately adjacent to the Arthur River Project.
Collation of all the existing data on a GIS database is proposed as a first priority. Following the database
review target identification and field location to be geologically mapped utilizing the latest satellite imagery
with a focus on a detailed structural survey. Ground geochemical and geophysical surveys are to follow. The
generated targets are to be tested by RAB and RC drilling programs primarily for pegmatite definition and
their tin/ tantalum and REE content. Uranium and gold will be searched for also.
An exploration budget of $120,000 is proposed for the first year and $140,000 for year two.
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INDEPENDENT GEOLOGIST'S REPORT
Arthur River
Item Year 1 $ Year 2 $ Total $
Data Compilation 17,000 23,000 40,000
Geochemical Surveys 15,000 15,000 30,000
Sampling 20,000 20,000 40,000
Drilling 30,000 40,000 70,000
Geology & Field Work 21,000 22,000 43,000
Tenement & Administration 17,000 20,000 37,000
Total $120,000 $140,000 $260,000
Minimum Expenditure 50,000 50,000 100,000
Table 18: Arthur River Project Proposed Expenditure.
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5.0 REFERENCES
The number of reports referenced for the purposes of carrying out of an independent geological review of
the mineral properties are too numerous to list. The following reports listed below, therefore, are those
that are the principal sources of information.
Anderson I. G., 1979: Tantalum-Niobium (Columbium) A Geological Review. Unpublished Internal
Geological Report: Rio Tinto (Rhodesia) Limited.
Cooper D. G., 1961: The Geology of the Bikita Pegmatite. The Geology of Some Ore Deposits of Southern
Africa: Volume 2. Geological Society of South Africa Publication.
Williams S. J., Williams I. R., Chin R, J., Muhling P. C., and Hoching, R. M., 1983: 1:250,000 Explanatory Notes,
Mount Phillips, Sheet S.G. 50-2. Western Australia. Geological Survey of Western Australia. Publication.
Hickman A. H., and Lipple, S. L., 1978: 1:250,000 Explanatory Notes, Marble Bar, Sheet S.F. 50-8. Western
Australia. Geological Survey of Western Australia Publication.
Various Open file WAMEX Annual Technical Reports covering previous exploration in the region and
tenements.
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6.0 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS
6.1 Glossary
Aeromagnetic Survey
Alteration Zone -
Anomaly
Anomalous
Anticline
Axial plane
Axis
Basalt
Batholith
Bedding
Cleavage
Country rock
Dip
Domain
Dyke
Exploration Target
Fault
Felsic
mafic
Fold
Foliation
Footwall
A survey made from the air for the purpose of recording magnetic
characteristics of rocks.
Zone within which rock forming minerals have been chemically changed.
Value higher or lower than the expected or norm.
Outlining a zone of potential exploration interest but not necessarily of
commercial significance.
Upward arching fold or rock strata (antonym = syncline).
A plane which joins the hinge lines of successive beds in a fold.
Hinge-line of a fold.
A fine - grained volcanic rock composed primarily of plagioclase feldspar and
mafic minerals.
A very large, usually granitic intrusion.
A rock surface parallel to the surface of deposition.
The tendency of a rock and minerals to split along closely spaced, parallel
planes.
A general term applied to rock surrounding or penetrated by mineral veins.
The angle at which a rock layer, fault of any other planar structure is inclined
from the horizontal.
The areal extent of given lithology or environment.
A tabular intrusive body of igneous rock that cuts across bedding at a high
angle.
A volume of mineralised rock that has not yet been defined as a mineral
resource.
A fracture in rocks on which there has been movement on one of the sides
relative to the other, parallel to the fracture.
Descriptive of an igneous rock which is predominantly of light coloured
minerals (antonym: of ).
A bend in the rock strata or planar structure.
The laminated structure resulting from the parallel arrangement of different
minerals.
Rocks underlying mineralisation .
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Geophysics
Granitoid
Hanging wall
Igneous
Inferred Resource
Isocline
JORC Code
Lamination
Lineament
Lode
Mafic
Metamorphism
Mineral Resource
Mineralisation
Opencut
Ore
Orebody -
Outcrop
Plunge
Porphyry
Primary mineralisation -
Study of the earth by quantitative physical methods.
A general field term for coarse grained rocks containing quartz and felspars.
Rocks overlying mineralisation.
Formed by solidification from a molten or partly molten state.
A resource inferred from geoscientific evidence, drillholes, underground
openings or other sampling procedures where lack of data is such that
continuity cannot be predicted with confidence and where geoscientific data
may not be known with a reasonable level of reliability.
An anticline or syncline so closely folded that the two sides have the same dip.
Joint Ore Reserves Committee- Australasian Code for Reporting of Identified
Resources and Ore Reserves.
The finest bedding, often found in shales and fine grained sandstones.
A naturally occurring major linear feature in the earth's crust, often associated
with mineral deposits.
A deposit of potentially valuable material or minerals between definite
boundaries.
A loosely used group - name for silicate minerals that are rich in iron and
magnesium, and for rocks in which these minerals are abundant.
The mineralogical, structural and chemical changes induced within solid rocks
through the actions of heat, pressure or the introduction of new chemicals.
Rocks so altered are prefixed "meta" as in "metabasalt".
A defined tonnage and volume of rock with mineralisation of economic
interest (according to JORC/ASX standards).
In economic geology, the introduction of valuable elements into a rock body.
Descriptive of a mine worked open from the surface.
A mixture of minerals, host rock and waste material which is expected to be
mineable at a profit.
A continuous, well defined mass of ore.
The surface expression of a rock layer (verb: to crop out).
Angle of the axis of folding with a horizontal plane.
A rock with conspicuous crystals in a fine-grained ground mass.
Mineralisation which has not been affected by near surface oxidising process.
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RAB
RC
Resource
Reverse Fault
Shear (zone)
Silicified
Soil sampling
Strike
Strike slipfault
Stringer
Subcrop
Syncline
Unconformity
Vein
Rotary Air Blast (as related to drilling) - A drilling technique in which the sample
is returned to the surface outside the rod string by compressed air.
Reverse Circulation (as relating to drilling) - A drilling technique in which the
cuttings are recovered through the drill rods thus minimising sample losses
and contamination.
In-situ mineral occurrence from which valuable or useful minerals may be
recovered, but from which only a broad knowledge of the geological character
of the deposit is based on relatively few samples or measurements.
A fracture in rocks in which the strata above the fracture have been displaced
up the fracture plane relative to the strata below the fracture.
A zone in which shearing has occurred on a large scale so that the rock is
crushed and brecciated.
Containing a high proportion of silicon dioxide.
Systematic collection of soil samples at a series of different locations in order to
study the distribution of soil geochemical values.
The direction or bearing of the outcrop of an inclined bed or structure on a level
surface.
Faults parallel to the strike of the rock strata.
A narrow vein or irregular filament of mineral traversing a rock mass.
The surface expression of a mostly concealed rock layer.
A fold where the rock strata dip inwards towards the axis (antonym: anticline).
Lack of parallelism between rock strata in sequential contact, caused by a time
break in sedimentation.
A narrow intrusive mineral body.
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6.2 Abbreviations
Ag Silver
As Arsenic
Au Gold
Ba Barium
Bi Bismuth
Ce Cerium
Cs Cesium
Cu Copper
g gram
kg kilogram
km kilometre
km square kilometre
Li Lithium
m metre
m square metre
m cubic metre
mm millimetre
MMI Mobile Metal Ions
Nb Niobium
Pb Lead
t tonne
oz troy ounce, equivalent to 31.103477g.
ppb parts per billion
ppm parts per million
Ta Tantalum
Zn Zinc
2
2
3
INDEPENDENT GEOLOGIST'S REPORT
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6. INVESTIGATING ACCOUNTANT'S REPORT
27 February 2011
The Directors
Lithex Resources Limited
11 Rafferty Close
Mandurah WA 6210
Dear Sirs
This report has been prepared at the request of the Directors of Lithex Resources Limited (" " or “
”) for inclusion in a Prospectus to be dated on or around 10 February 2011 (“the Prospectus”)
relating to the proposed issue by Lithex of 10,000,000 shares to be issued at a price of 20 cents per share to
raise $2,000,000. The Company may accept oversubscriptions of up to a further 10,000,000 shares to be
issued at 20 cents per share to raise up to a further $2,000,000.
This report has been prepared to provide investors with information on historical results and the assets and
liabilities of Lithex. This report does not address the rights attaching to the securities to be issued in
accordance with the Prospectus, nor the risks associated with the investment. Rothsay Consulting Services
Pty Ltd has not been requested to consider the prospects for Lithex, the securities on offer and related
pricing issues, nor the merits and risks associated with becoming a shareholder and accordingly, has not
done so, nor purports to do so. Rothsay Consulting Services Pty Ltd accordingly, takes no responsibility for
those matters or for any matter or omission in the Prospectus, other than responsibility for this report.
Lithex was incorporated on 30 October 2009 with the issue of 10 ordinary share of $0.20. On 11 February
2010, 11,000,000 ordinary shares were issued to the founders and advisers at 0.01 cents ($11,000). On 25
February 2010, 5,000,000 ordinary shares were issued to seed investors at 5 cents ($250,000) On 1 May
2010 1,360,000 ordinary shares were issued to seed investors at 5 cents ($68,000) and on 28 September
2010 770,000 ordinary shares were issued to seed investors at 5 cents ($38,500). On 9 December 2010 a
further 100,000 ordinary shares were issued to the vendors for nil consideration. On 22 December 2010
6,380,000 of the founder and adviser shares were cancelled. On 25 January 2011 780,000 ordinary shares
were issued to seed investors at 10 cents ($78,000). On 31 January 2011 3,000,000 ordinary shares were
issued to seed investors at 16 cents ($480,000)
The seed investors have 7,130,000 attached options exercisable at 20 cents each expiring 30 June 2015.
RE: INDEPENDENT ACCOUNTANT'S REPORT
1. Introduction
Lithex the
Company
2. Basis of Preparation
3. Background
th
INVESTIGATING ACCOUNTANT'S REPORT
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Potential investors should read the Prospectus in full and note the value attributed to the exploration
properties acquired.
Details on all contracts entered into between Lithex and other parties are outlined in the Material Contracts
section of the Prospectus.
You have requested Rothsay Consulting Services Pty Ltd prepare an Independent Accountant's Report on:
(a) The statement of financial position of Lithex as at 30 September 2010;
(b) The pro-forma statement of financial position of Lithex as at 30 September 2010 adjusted to include
funds to be raised by the Prospectus; and
(c) The pro-forma statement of financial position of Lithex as at 30 September 2010 adjusted to include
funds to be raised by the Prospectus and the maximum amount of over subscriptions.
We have examined the financial statements and other relevant information and made such enquiries, as we
considered necessary for the purposes of this report. The scope of our examination was substantially less
than an audit examination conducted in accordance with Australian Auditing Standards and accordingly, we
do not express such an opinion. Our examination included:
(i) Discussions with Directors and other key management of Lithex;
(ii) A review of the accounts of Lithex;
(iii) A review of publicly available information; and
(iv) A review of work papers, accounting records and other documents.
In our opinion, the proforma statement of financial position as set out in Appendix 1 presents fairly, the
proforma statement of financial position of Lithex as at 31 August 2010 in accordance with the accounting
methodologies required by Australian Accounting Standards on the basis of assumptions and transactions
set out in Appendix 2.
To the best of our knowledge and belief, there have been no other material items, transactions or events
subsequent to 31 August 2010, that have come to our attention during the course of our review which would
cause the information included in this report to be misleading.
4. Scope of Examination
5. Opinion
INVESTIGATING ACCOUNTANT'S REPORT
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INVESTIGATING ACCOUNTANT'S REPORT
6. Other matters
ROTHSAY CONSULTING SERVICES PTY LTD
Graham R Swan FCA MAICD
Director
At the date of this report, Rothsay Consulting Services Pty Ltd does not have any material interest in Lithex
either directly or indirectly, or in the outcome of the offer. Rothsay Chartered Accountants have been
appointed auditors of Lithex. Apart from this report, Rothsay Consulting Services Pty Ltd was not involved in
the preparation of any other part of the Prospectus, and accordingly, make no representations or warranties
as to the completeness and accuracy of any information contained in any other part of the Prospectus.
Rothsay Consulting Services Pty Ltd has consented to the inclusion of this report (including Appendices 1 to
3) in the Prospectus in the form and content in which it is included. At the date of this report, this consent
has not been withdrawn.
Yours faithfully
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INVESTIGATING ACCOUNTANT'S REPORT
Note
Audited
30 Sept
2010
Pro- forma
30 Sept
2010
Pro-forma
including
over sub-
scriptions
30 Sept
2010
$ $ $
Current Assets
Cash Assets 3 101,284 2,222,508 4,097,508
Trade and other receivables 247 247 247
Total Current Assets 101,531 2,222,755 4,097,755
Non-Current Assets
Capitalised tenement acquisitioncosts 4 40,000 1,706,000 1,706,000
Total Non-Current Assets 40,000 1,706,000 1,706,000
Current Liabilities
Trade and other payables 73,147 73,147 73,147
Borrowings - - -
Total Current Liabilities 73,147 73,147 73,147
Net Assets 68,384 3,855,608 5,730,608
Equity
Contributed equity 5 350,607 4,221,607 6,096,607
Accumulated losses (282,223) (365,999) (365,999)
Total Equity 68,384 3,855,608 5,730,608
To be read in conjunction with Appendix 3
INDEPENDENT ACCOUNTANT'S REPORT
APPENDIX 2
CONDENSED STATEMENTS OF FINANCIAL POSITION
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1. Statement of Significant Accounting Policies
(a) Statement of Compliance
The financial information has been prepared in accordance with the measurement requirements, but
not the disclosure requirements, of the Australian Accounting Standards (AASBs) of the Australian
Accounting Standards Board (AASB), Australian Accounting Interpretations and the Corporations Act
2001.
(b) Basis of Accounting
The financial information has been prepared on an accruals basis and is based on historical costs in
accordance with Australian Accounting Standards, Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting Standards Board.
(c) Revenue Recognition
Interest revenue is recognised on a time proportionate basis that takes into account the effective
yield on the financial assets.
(d) Income Tax
The income tax expense or revenue for the year is the tax payable on the current year's taxable
income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred
tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the countries where the Company's subsidiaries and
associated operate and generate taxable income. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements. However, the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time
of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the
reporting date and are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled.
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.
INDEPENDENT ACCOUNTANT'S REPORT
APPENDIX 2
NOTES TO THE STATEMENTS OF FINANCIAL POSITION
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Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in controlled entities where the parent entity is able to control
the timing of the reversal of the temporary differences and it is probable that the differences will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
(e) Impairment of Assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment, or more frequently if events or changes in circumstances indicate
that they might be impaired. Other assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from other
assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that
suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
(f) Investments and Other Financial Assets
The Company classifies its investments in the following categories: financial assets at fair value
through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale
financial assets. The classification depends on the purpose for which the investments were acquired.
Management determines the classification of its investments at initial recognition and, in the case of
assets classified as held-to-maturity, re-evaluates this designation at each reporting date.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They are included in current assets, except for those with
maturities greater than 12 months after the reporting date which are classified as non-current assets.
Loans and receivables are included in trade and other receivables in the statement of financial
position. Loans and receivables are carried at amortised cost using the effective interest method.
(g) Plant and Equipment
All plant and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.For
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Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Company and the cost of the item can be measured reliably. The carrying amount of any
component accounted for as a separate asset is derecognised when replaced. All other repairs and
maintenance are charged to the statement of comprehensive income during the reporting period in
which they are incurred.
Depreciation of plant and equipment is calculated using the reducing balance method to allocate
their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the
case of leasehold improvements and certain leased plant and equipment, the shorter lease term. The
rates vary between 20% and 40% per annum.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each
reporting date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These
are included in the statement of comprehensive income. When revalued assets are sold, it is
Company policy to transfer the amounts included in other reserves in respect of those assets to
retained earnings.
(h) Exploration and Evaluation Costs
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition
costs which are carried forward where right of tenure of the area of interest is current and they are
expected to be recouped through the sale or successful development and exploitation of the area of
interest or, where exploration and evaluation activities in the area of interest have not reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves.
Where an area of interest is abandoned or the directors decide that it is not commercial, any
accumulated acquisition costs in respect of that area are written off in the financial period the
decision is made. Each area of interest is reviewed at the end of each accounting period and
accumulated costs are written off to the extent that they will not be recoverable in the future.
(i) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Company prior to the end
of the financial period which are unpaid. The amounts are unsecured, non-interest bearing and are
paid on normal commercial terms.
(j) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in the statement of comprehensive income over the
period of the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the
extent there is no evidence that it is probable that some or all of the facility will be drawn down, the
fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to
which it relates.
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The fair value of the liability portion of a convertible bond is determined using a market interest rate
for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost
basis until extinguishment on conversion or maturity of the bonds. The remainder of the proceeds is
allocated to the conversion option. This is recognised and included in shareholders' equity.
Borrowings are removed from the statement of financial position when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount of a
financial liability that has been extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income
or finance cost.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer
settlement of the liability for atleast 12 months after the reporting date.
(k) Employee Benefits
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be
settled within 12 months of the reporting date are recognised in other payables in respect of
employees' services up to the reporting date and are measured at the amounts expected to be paid
when the liabilities are settled.
(l) 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. Incremental costs directly attributable to the issue of new
shares or options for the acquisition of a business are not included in the cost of the acquisition as
part of the purchase consideration.
(m) Goods and services Tax
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost
of acquisition of the asset or as part 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 statement of financial position.
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2. Actual and Proposed Transactions to Arrive at Proforma Statement of Financial
Position
Actual and proposed transactions adjusting the 30 September 2010 Audited Statement of Financial Position
in the pro-forma Statement of Financial Position are as follows:
Note
Audited
30 Sept 2010
Pro -forma
30 Sept 2010
Pro-forma
including
over sub-
scriptions
30 Sept 2010
$ $ $
3. Cash and Cash EquivalentsAt 30 September 2010 101,284 101,284 101,284
Issue of seed capital (e) 78,000 78,000
Issue of seed capital (f) 480,000 480,000
Payments to suppliers & employees (g) (83,776) (83,776)
Issue of Shares pursuant toprospectus (a) - 2,000,000 4,000,000Payment of fundraising costs (b) - (287,000) (412,000)Payment of tenement acquisitioncosts (c) - (66,000) (66,000)
101,284 2,222,508 4,097,508
Capitalised Tenement AcquisitionCostsAt 30 September 2010 40,000 40,000 40,000Cash payment to vendors (c) - 66,000 66,000Shares issued to Vendors (d) 1,600,000 1,600,000
40,000 1,706,000 1,706,000
4.
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INVESTIGATING ACCOUNTANT'S REPORT
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INVESTIGATING ACCOUNTANT'S REPORT
Note
Audited
30 Sept 2010
Pro -forma
30 Sept 2010
Pro-forma
including
over sub-
scriptions
30 Sept 2010
5. Contributed EquityAt 30 September 2010 350,607 350,607 350,607Issue of seed capital (e) 78,000 78,000Issue of seed capital (f) 480,000 480,000Issue of Shares pursuant toProspectus (a) - 2,000,000 4,000,000Payment of fundraising costs (b) - (287,000) (412,000)Shares issued to vendors (d) - 1,600,000 1,600,000
350,607 4,221,607 6,096,607
a) The issue of 10,000,000 ordinary shares at 20 cents each pursuant to this Prospectus to raise
$2,000,000. The Company may accept oversubscriptions of up to a further 10,000,000 shares to be
issued at 20 cents per share to raise up to a further $2,000,000;
b) The payment of fundraising costs estimated at $287,000 on 10,000,000 shares, and $412,000 on
20,000,000 shares;
c) Cash payment of $66,000 to a vendor for tenement acquisition;
d) The issue of 8,000,000 ordinary shares to vendors, at a deemed cost of 20 cents per share, for a total
cost of $1,600,000, as consideration for tenement acquisitions;
e) The issue of 780,000 ordinary shares at 10 cents per share to seed investors;
f) The issue of 3,000,000 ordinary shares at 16 cents per share to seed investors;
g) Payments to suppliers and employees in the period to the issue of the prospectus;
Based on discussions with the Directors and legal advisors, to our knowledge, the Company has contingent
liabilities as noted by proforma adjustments (c) to (e) upon Listing. These payments of cash and issues of
shares and options all relate to tenement acquisition agreements entered into by the Company.
Based on discussions with the Directors the Company has exploration commitments of $279,000 in the first
year to maintain its exploration permits in good standing. Additional exploration expenditure is likely to
occur on a discretionary basis.
8. Contingent Liabilities
9. CommitmentsFor
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7. SOLICITOR'S REPORT ON TENEMENTS
9 February 2011
The Directors
Lithex Resources Ltd
11 Rafferty Close
MANDURAH WA 6210
Dear Sirs
This report is prepared for inclusion in a prospectus ( ) to be dated on or about 14 February 2011
for issue by Lithex Resources Limited ACN 140 316 463 ( ) of 10,000,000 shares at an issue price of
20 cents ($0.20) per share to raise $ 2,000,000 with provision for oversubscriptions of a further 10,000,000
Shares to raise up to a further $2,000,000.
This Report relates to various mining tenements in Western Australia held by the
Company. The WA Tenements are set out in full in the Tenements Schedule at the end of this
Report.
We have conducted the following searches and enquiries on 6 February 2011:
(a) searches of the WA Tenements in the register maintained by the Department of Mines and Petroleum
of Western Australia pursuant to the Mining Act 1978 (WA) );
(b) quick appraisal searches of the WA Tenements obtained on-line from the Tengraph system
maintained by the DMP; and
(c) searches of the native title application summaries maintained by the National Native Title Tribunal
( ) in relation to those native title claims which affect the Tenements.
Solicitor's Report
Prospectus
Company
(WA Tenements)
(Schedule)
(DMP) (Mining Act (WA)
NNTT
1 Searches
SOLICITOR'S REPORT ON TENEMENTS
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Based on our searches and enquiries and subject to the statements set out below, we confirm at the date of
the searches:
(a) the details of the WA Tenements referred to in the Schedule are accurate as to the status and
registered holders of those tenements;
(b) all applicable rents due in respect of the WA Tenements under the Mining Act (WA) have been paid;
and
(c) none of the WA Tenements are subject to any unusual conditions of a material nature other than as
disclosed in the Schedule.
In preparing this Report:
(a) we have relied on the information provided as a result of the searches which we have made or caused
to be made of the register and the Tengraph system maintained by DMP and the register maintained
by the NNTT being accurate and complete;
(b) where compliance with requirements necessary to maintain a WA Tenement in good standing or a
possible claim in respect of a WA Tenement is not disclosed on the face of the searches referred to
above, we express no opinion on that compliance or claim;
(c) where any agreement, dealing or act (including disturbing the land for exploration or mining) in a WA
Tenement requires an authorisation, approval, permission or consent ( ) under the
Mining Act (WA), any regulations made thereunder or any other relevant legislation, we have
assumed that Authorisation has been or will be granted in due course;
(d) where any dealing in a WA Tenement has been lodged for registration but is not yet registered, we
express no opinion as to whether the registration will be effected, or the consequences of non-
registration;
(e) we have assumed that the Company has complied with all applicable provisions of the Mining Act
(WA) and all other legislation relating to the WA Tenements;
(f) we have not researched the underlying land tenure in respect of the WA Tenements to determine if
native title rights have or have not been extinguished, or the extent of any extinguishment;
2 Assumptions and qualifications
Authorisation
(g) we have not undertaken the extensive research necessary to establish if native title claims may be
made in the future over the area of the WA Tenements; and
(h) we have not researched the area of the WA Tenements to determine if there are any registered or
unregistered sites of significance to aboriginal people within the area.
SOLICITOR'S REPORT ON TENEMENTS
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3 WA Tenements
The WA Tenements comprise both applications for and granted exploration licences and one mining lease
application.
Each granted WA Tenement is subject to standard conditions including conditions requiring the holder to
pay rent, meet certain expenditure and reporting obligations, pay necessary government royalties on
minerals mined, obtain the consent of the relevant officer of the DMP prior to conducting any ground
disturbing work, basic environmental and rehabilitation conditions for minor disturbances, and prohibitions
or restrictions on disturbing existing infrastructure such as roads and powerlines. Additional specific
conditions are set out in the Schedule.
Significant amendments to the Mining Act (WA) ( ) came into operation on 10 and 11 February
2006. The Amendments fundamentally affect the administration of mining tenements in Western Australia.
The exploration licences were applied for or granted both prior to and after the Amendments. All were
granted with 5 year terms. The terms of those applied for prior to the Amendments may be extended for up
to 4 years in prescribed circumstances and further periods of 1 year in exceptional circumstances. The terms
of those exploration licences applied for and granted after the Amendments may be extended for a further
period of 5 years, and thereafter for further periods of 2 years.
Exploration licences applied for prior to the Amendments carry an obligation on the holder to relinquish 50%
of the area of the tenements at the end of its 3 year and again at the end of the 4 year of their grant.
Exemptions from that requirement may be obtained.
An exploration licence applied for and granted after the Amendments came into operation will be subject to
a requirement that the holder must relinquish 40% of the area of an exploration licence at the end of the 5
year of the term of the exploration licence. This relinquishment requirement may be deferred for one year
but not avoided.
Ministerial consent is required under the Mining Act (WA) before any legal or equitable interest in an
exploration licence can be created or dealt with during the first year of the term of the licence. An
agreement to sell an interest may be entered into provided that it is subject to a condition requiring the
consent of the Minister.
Amendments
rd th
th
The Mining Act (WA) gives the holder of an exploration licence the right to apply for a mining lease (or mining
leases) over the area the subject of the exploration licence. The grant of any mining lease is subject to
compliance with the Mining Act (WA). A mining lease may only be applied for over land where, at minimum,
a mineral resource (not to a JORC standard) exists or if a mining proposal has been lodged with the
application.
Mining leases are granted for a period of 21 years, renewable for a further 21 years. Ministerial consent is
required under the Mining Act (WA) prior to assigning an interest in a mining lease.
SOLICITOR'S REPORT ON TENEMENTS
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The Schedule sets out a brief description of the WA Tenements and a summary of any encumbrances and
material conditions.
In relation to the Schedule, we make the following comments:
(a) references to the areas of the WA Tenements are taken from the details shown on the searches, it is
not possible to verify those areas without conducting a survey which has not been undertaken;
(b) exploration licences are measured by graticular blocks which, depending on where the licence is
located, range in area from approximately 2.8 km to 3.3km ; and
(c) the rights of a holder of the WA Tenements is subject to compliance by that holder with the terms and
conditions under the Mining Act (WA) and regulations made thereunder and the conditions
specifically set out in the grant of the relevant WA Tenement.
In (1992 175 CLR 1) the Australian common law recognised a form of native title
giving Aboriginal people certain rights to their traditional lands. The rights recognised in native title may
vary from place to place and from people to people but in each case will originate in customary rights and the
Aboriginal group claiming the rights must have maintained a traditional connection with the land.
Native title rights may be extinguished voluntarily or by legislative or executive action inconsistent with the
native title such as the grant of a freehold interest in land. Native title may also be partially extinguished by
the grant of rights over native title land not wholly inconsistent with native title rights. Where native title
has been partially extinguished, it will co-exist with other rights to the land.
The (Cth) ( ) was enacted in response to the common law recognition of
native title. Among other things, the Native Title Act:
(a) provides a procedure for the recognition of native title claims in the Federal Court;
(b) confirms the validity of titles granted by the Federal Government prior to the commencement of the
Native Title Act and provides for the States and Territories to validate such titles; and
(c) specifies the procedure for the grant of mining tenements which may affect native title rights.
The Native Title Act was amended in 1998 by the The Western Australian
Parliament has enacted the which adopts
the Native Title Act in Western Australia.
2 2
4 Native Title
Mabo v Queensland (No 2)
Native Title Act 1993
Native Title Amendment Act 1998.
Titles (Validation) and Native Title (Effect of Past Acts) Act 1995
Native Title Act
SOLICITOR'S REPORT ON TENEMENTS
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SOLICITOR'S REPORT ON TENEMENTS
5 Native Title Claims
6 Validity of titles
7 Aboriginal Heritage
A person claiming to hold native title may lodge an application for determination of native title with the
Federal Court. If the claim satisfies the registration test set out in the Native Title Act (Registration Test) it
will be entered on the Register of Native Title Claims maintained by the NNTT. Registered claimants are
afforded certain procedural rights, including the "right to negotiate". Claims which fail the Registration Test
are, nevertheless heard by the Federal Court.
Native Title Claims affecting the WA Tenements have been noted in the Schedule.
The fact a claim has been lodged does not necessarily mean that native title exists over the area claimed, nor
does the absence of a claim necessarily indicate that no native title exists over that area. The existence of
native title will be established in due course as the claims are determined by the Federal Court.
Under the Native Title Act, and subject to certain exceptions, the grant of a mining tenement on or after 1
January 1994 that affects native title is a “future act”. Mining tenements granted after 23 December 1996
that affect native title will be valid only if the applicable processes of the Native Title Act have been complied
with. We understand that the DMP has complied with such processes but have not undertaken
independent enquiries to confirm this is the case.
(Cth) (
) is aimed at the preservation and protection of any Aboriginal areas and objects that
may be located on the WA Tenements.
Under the Commonwealth Heritage Act, the Minister for Aboriginal Affairs may make interim or
permanent declarations of preservation in relation to significant Aboriginal areas or objects, which
have the potential to halt exploration activities. Compensation is payable by the Minister to a person
who is, or is likely to be, affected by a permanent declaration of preservation.
It is an offence to contravene a declaration made under the Commonwealth Heritage Act.
(a) Commonwealth Legislation
Commonwealth
Heritage Act
The Aboriginal and Torres Strait Islander Heritage Protection Act 1984
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(b) Western Australia
Heritage Act
Sites that may be of spiritual, cultural or heritage significance to Aboriginal persons may be protected
by the ( ).
The Heritage Act makes it an offence to alter or damage a site of significance to Aboriginal people. The
Heritage Act provides for but does not compel the registration of such sites. It is an obligation of a
party disturbing any area of the state to ensure it does not disturb such a site.
We have not undertaken any searches or investigations as to whether there are or may be any sites
protected by the Heritage Act within the area of the WA Tenements. It is common practice for an
explorer to undertake surveys of any area that may host such sites prior to carrying out any ground
disturbing activity.
This report is given on the date set out at the commencement and unless specified to the contrary, speaks
only to the laws in force on that date.
House Legal has consented to the inclusion of this Report in the Prospectus in the form and context in which
it is included and have not withdrawn that consent before the lodgement of the Prospectus with ASIC.
Yours faithfully
House Legal
Aboriginal Heritage Act 1972
8 Consent
SOLICITOR'S REPORT ON TENEMENTS
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SOLICITOR'S REPORT ON TENEMENTS
Ten
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SOLICITOR'S REPORT ON TENEMENTS
Key to Holders:
DCL Duketon Consolidated Pty Ltd ACN 103 340 496
Elliss Michael Jeremy Elliss
HRL Hazelwood Resources Ltd ACN 118 738 999
JML JML Resources Pty Ltd ACN 126 154 256
Lithex Lithex Resources Ltd ACN 140 316 463
SBM South Boulder Mines Ltd ACN 097 904 302
Stubbs Jeanette Rae Stubbs
Each granted tenement is subject to standard conditions including conditions requiring the holder to obtain
the consent of the relevant officer of the Department of Mines and Petroleum ( ) prior to conducting
any ground disturbing work, basic environmental and rehabilitation conditions (such as the removal of all
waste, capping of drill holes etc) and prohibitions or restrictions on disturbing existing infrastructure such as
roads and survey stations. In addition to these conditions, the following applies.
1. The area of this tenement is subject to the Wajarri Yamatji (WAD6033/98; WC04/10) registered native
title claim.
2. The area of this tenement is subject to the Gnulli (WAD6161/98; WC97/028) registered native title
claim.
3. This tenement was recommended for grant on 20 March 2008.
4. The area of this tenement is subject to the Njamal (WAD6028/98; WC99/008) registered native
title claim.
Notes
DMP
5. No exploration or mining may be carried out on Public Utility and Stopping Place for Travellers
Reserve 7080 without the prior written consent of the Minister.
6. This tenement was recommended for grant on 14 January 2005.
7. No exploration to be undertaken on Timber Reserve 13665 without the prior written consent of
the Minister.
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8. No interference with the use of an Aerial Landing Ground affecting the tenement and activity on that
Aerial Landing Ground being confined to below a depth of 15m from the natural surface.
9. This tenement encroaches upon the Water Reserves 4974, 12402 and Timber Reserve 13684. No
mining may be undertaken on those reserves without the prior written consent of the Minister.
10. The area of this tenement is subject to the Njamal 10 (WAD6003/005; WC00/005) registered native
title claim.
11. The area of this tenement is subject to the Warrarn 1 (WAD0082/98; WC95/061) registered native
title claim.
12. Lithex has the right to purchase all of HRL's title to this tenement on terms set out in section 8.2 of this
Prospectus under the heading Summary of Material Contract - Arthur River Purchase Agreement.
13. Lithex has the right to purchase a 90% interest in this tenement on the terms set out in section 8.2 of
this Prospectus under the heading Summary of Material Contracts - East Kimberley Purchase
Agreement.
14. Lithex has the right to purchase a 90% interest in the tin, tantalum and lithium on this tenement on the
terms set out in section 8.2 of this Prospectus under the heading Summary of Material Contracts -
East Kimberley Purchase Agreement. The remaining mineral rights are held by Montezuma Mining
Company Ltd.
15. This tenement is held beneficially by DCL.
SOLICITOR'S REPORT ON TENEMENTS
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8. ADDITIONAL INFORMATION
8.1 Rights Attaching to Shares
There is only one class of shares in the Company being fully paid ordinary shares. The rights attaching to
shares in the Company are:
a) set out in the constitution of the Company, a copy of which is available for inspection at the registered
office of the Company during normal business hours; and
b) in certain circumstances, regulated by the Corporations Act, the Listing Rules of ASX, the SCH
Business Rules and the general law.
The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This
summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of
Shareholders.
All Shares issued pursuant to this Prospectus will from the time they are issued, rank pari passu with all the
Company's existing Shares.
Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present
there are none), at meetings of Shareholders of Lithex:
(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative
of a Shareholder has one vote; and
(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a
Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is
appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly
paid Shares, shall have such number of votes as bears the same proportion which the amount paid
(not credited) is of the total amounts paid and payable (excluding amounts credited).
Subject to the rights of holders of shares with special rights in a winding up (at present there are none), on a
winding up of the Company all assets that may be legally distributed among members will be distributed in
proportion to the number of fully paid Shares held by them (and a partly paid share is counted as a fraction of
a fully paid share equal to the amount paid on it, divided by the total issue price of the share).
Subject to the Constitution of the Company, the Corporations Act, and any other laws and ASTC Settlement
Rules and ASX Listing Rules, Shares are freely transferable.
(a) Voting Rights
(b) Rights on Winding Up
(c) Transfer of Shares
(d) Future Increases in Capital
The allotment and issue of any Shares is under the control of the Directors. Subject to restrictions on the
allotment of Shares to Directors or their associates, the ASX Listing Rules, the Constitution of the Company
and the Corporations Act, the Directors may allot or otherwise dispose of Shares on such terms and
conditions as they see fit.
ADDITIONAL INFORMATION
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ADDITIONAL INFORMATION
(e) Variation of Rights
(f) Dividend Rights
(a) Project Purchase Agreements
Under the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting
of Shareholders vary or abrogate the rights attaching to Shares. If at any time the share capital is divided into
different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of the
issue of the shares of that class), whether or not the Company is being wound up may be varied or abrogated
with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised
by a special resolution passed at a separate meeting of the holders of the Shares of that class.
Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there
are none), the profits of the Company which the Directors determine to distribute by way of dividend are
divisible among the holders of ordinary Shares in proportion to the number of Shares held by them.
The summary of the contracts to which the Company is a party which may be material in terms of the Offer or
the operation of the business of the Company are:
On 13 May 2010, Lithex entered into the Arthur River Purchase Agreement with Hazelwood Resources Ltd
ACN 118 738 999 ( ) whereby Lithex will purchase a 100% interest in each of Exploration Licences
09/1066 and 09/1067 ( ). Completion of the purchase is conditional upon Lithex
receiving conditional approval to be admitted to the Official List and will take place within 3 business days of
receipt of such approval.
Lithex will issue 1,000,000 Options and 2,000,000 Shares to Hazelwood as consideration for the purchase of
the Arthur River Project.
8.2 Summary of Material Contracts
Arthur River Purchase Agreement
Hazelwood
Arthur River Project
East Kimberley Purchase Agreement
DCL SBM
JML Ellis Stubbs
On 12 February 2010, Lithex entered into the East Kimberley Purchase Agreement with Duketon
Consolidated Pty Ltd ACN 103 340 496 ( ), South Boulder Mines Ltd ACN 097 904 302 ( ), JML
Resources Pty Ltd ACN 126 154 256 ( ), Michael Jeremy Elliss ( ) and Jeanette Rae Stubbs ( )
whose interest is beneficially held by Duketon. The parties subsequently agreed to vary the term of the East
Kimberley Purchase Agreement to extend the end date for settlement until 31 May 2011. The Company
issued the vendors 100,000 Shares as consideration for the extension of the end date.
Under the East Kimberley Purchase Agreement, Lithex is entitled to purchase a 90% interest in each of
Exploration Licences 45/2375, 45/3172, 45/3354, 45/3373, 45/3424, 45/3439 and M45/1081. Completion
of the purchase is conditional upon Lithex receiving conditional approval to be admitted to the Official List
and will take place within 5 business days of receipt of such approval.
In consideration for the purchase of the tenements, Lithex will pay DCL a total of $100,000 in three tranches.
The first two, totalling $40,000, have been paid, the third, being $60,000, will be paid within 14 days of Lithex
being admitted to the Official List.
Lithex will also, on completion, issue DCL 2,300,000 Shares, Montezuma Mining Company Ltd (Montezuma)
1,500,000 Shares, JML 1,200,000 Shares, SBM 1,000,000 Shares and DCL 3,500,000 Options.
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On completion, each of the sellers' 10% remaining interest in the tenements will be free carried until Lithex
makes a decision to commence any commercial mining on the tenement. The holder of the residual 10%
interest will, at that point, elect to contribute to the cost of mining in proportion to its 10% interest (under a
joint venture to be prepared on terms that are usual in mining projects) or convert its interest to a royalty of
1.5% of gross revenue.
The rights Lithex is acquiring to E45/2375 are limited to the rights to explore for and mine tin, tantalum and
lithium only, with rights to the remaining minerals being retained by Montezuma (with respect to 90%) and
SBM (with respect to 10%).
On 8 January 2010 the Company entered into an Executive Service Agreement with Mr Mandanici (Service
Agreement).
Under the Agreement, Mr Mandanici is engaged by the Company to provide services to the Company in the
capacity of Managing Director and CEO, and is entitled to be paid an annual salary of $180,000 (inclusive of
superannuation entitlement) and to receive a performance incentive of 1,000,000 shares at the end of one
year's continuous and satisfactory service and a further 1,000,000 shares at the end of two years continuous
and satisfactory service.
The Agreement is effective from Lithex's admission to the Official List of the ASX and continues until
terminated by either Mr Mandanici or the Company. Mr Mandanici is entitled to a minimum notice period of
3 months from the Company and the Company is entitled to a minimum notice period of 3 months from Mr
Mandanici.
(b) Executive Service Agreement - Robert Mandanici
(c) Executive Service Agreement - Steven Crabbe
(d) Engagement Letters - Non -Executive Director
On 8 January 2010 the Company entered into an Executive Service Agreement with Mr Crabbe (Service
Agreement).
Under the Agreement, Mr Crabbe is engaged by the Company to provide services to the Company in the
capacity of Technical Director, and is entitled to be paid an annual salary of $50,000 (inclusive of
superannuation entitlement) and to receive a performance incentive of 1,000,000 shares at the end of one
year's continuous and satisfactory service and a further 1,000,000 shares at the end of two years continuous
and satisfactory service.
The Agreement is effective from Lithex's admission to the Official List of the ASX and continues until
terminated by either Mr Crabbe or the Company. Mr Crabbe is entitled to a minimum notice period of 3
months from the Company and the Company is entitled to a minimum notice period of 3 months from Mr
Crabbe.
Pursuant to letter agreements between the Company and Mr Carson, dated 2 June 2010, appointment to the
Board as Chairman was confirmed.
In consideration for the services provided by Mr Carson, the Company will pay him $45,000 per annum
(inclusive of superannuation entitlement) from the date of Admission to the Official List, and to receive a
performance incentive of 500,000 shares at the end of one year's continuous and satisfactory service. A Non-
Executive Director is entitled to fees or other amounts as the Board determines where they perform special
duties or otherwise perform services outside the scope of the ordinary duties of a Director. They may also be
reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.
ADDITIONAL INFORMATION
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Director No. of Shares No. of Options
Malcolm Carson 500,000 Nil
Robert Mandanici 1,970,000 Nil
Steven Crabbe 2,500,000 500,000
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(e) Ascot Securities Pty Ltd Letter of Engagement
By letter dated 8 December 2010, Lithex engaged Ascot Securities Pty Ltd (Ascot) to act as Lead Manager &
Corporate Advisor. The company will pay the lead manager, Ascot Securities Pty Ltd (AFSL: 246718) a
management fee of $60,000 plus GST and a commission of 6% plus GST on the total amount raised under the
offer. Out of the commission, Ascot Securities Pty Ltd may pay other Australian Financial Service Licence
holders a fee for Applications bearing their stamp.
Except as disclosed in this Prospectus, no Director holds, or during the last two years has held any interest in:
(a) the formation or promotion of Lithex Resources Ltd;
(b) property acquired or proposed to be acquired by Lithex in connection with its formation or promotion
of the Offer; or
(c) the Offer,
and no amounts of any kind (whether in cash, Shares or otherwise) have been paid or agreed to be paid to
any Director to induce him to become or to qualify as a Director or otherwise for services rendered by him in
connection with the formation or promotion of Lithex or the Offer.
The Directors are not required to hold any Shares in Lithex under the constitution of Lithex.
At the date of this Prospectus the relevant interests of each of the Directors in the Shares of the Company are
as follows:
Nothing in this Prospectus precludes Directors, officers or employees of Lithex from applying for Shares
under this Prospectus.
Pursuant to the Employment Agreement, the Directors have arranged for Mr Mandanici to provide his
services as Managing Director of Lithex. Lithex will pay Mr Mandanici at an annual salary of $180,000
(inclusive of superannuation guarantee).
Mr Carson will receive director's fees of $45,000 per annum (inclusive of superannuation guarantee).
Mr Crabbe will receive director's fees of $50,000 per annum (inclusive of superannuation guarantee).
8.3 Interests of Directors of the Company
Directors' Shareholdings
Directors' Remuneration
ADDITIONAL INFORMATION
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8.4 Interests of Persons Named in this Prospectus
8.5 Consents
Other than as set out below or elsewhere in this Prospectus, no 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 has, or has had within the two years before lodgement of this Prospectus with
ASIC, any interest in:
(a) the formation or promotion of Lithex;
(b) any property acquired or proposed to be acquired by Lithex in connection with its formation or
promotion or in connection with the Offer; or
(c) the Offer.
and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given
to any of those persons for services rendered by them in connection with the formation or promotion of the
Company or the Offer.
Rothsay Consulting Services Pty Ltd will receive professional fees of $7,000 for accounting services in
connection with this Prospectus including the provision of the Investigating Accountant's Report.
Rothsay Chartered Accountants will act as auditors of the Company for which they will be paid at their usual
commercial rates. Rothsay have not provided any other services to the Company since incorporation.
Al Maynard & Associates will receive professional fees of $10,000 for the provision of the Independent
Geologist's Report.
House Legal will receive professional fees of $10,000 for the provision of the Solicitor's Report included in
Section 7 of this Prospectus.
Steinepreis Paganin will receive professional fees of $10,000 for the provision of professional services in
relation to the preparation of this Prospectus.
Security Transfer Registrars Pty Ltd has been appointed as the Company's share registry and will be paid for
these services on normal commercial terms.
The following persons have each consented to being named in the Prospectus and to the inclusion of the
following statements and statements identified in this Prospectus as being based on statements made by
those persons, in the form and context in which they are included, and have not withdrawn that consent
before lodgement of this Prospectus with ASIC:
In addition, Security Transfer Registrars Pty Ltd and Steinepreis Paganin have each consented to being named
in the Prospectus in the form and context in which they are included, and have not withdrawn that consent
before lodgement of this prospectus with ASIC.
To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and
takes no responsibility for any part of this Prospectus other than the statements referred to above and the
statements identified in this Prospectus as being based on statements made by those persons.
• Al Maynard & Associates - Independent Geologist's Report;
• Rothsay Consulting Services Pty Ltd - Investigating Accountant's Report; and
• House Legal - Solicitor's Report on Title and Section 8.2 (a)-(b).
ADDITIONAL INFORMATION
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The following persons have consented to being named in this Prospectus but, except as noted above, have
not made any statements that are included in this Prospectus or statements identified in this Prospectus as
being based on any statements made by those persons, and have not withdrawn their consent before
lodgement of this Prospectus with ASIC:
To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and
takes no responsibility for any part of this Prospectus other than the references to their name.
It is estimated that Lithex will pay the following costs in connection with the preparation and issue of this
Prospectus:
The acquisition and disposal of Shares in Lithex will have tax consequences which will differ depending on
the individual financial affairs of each investor. All potential investors in Lithex are urged to obtain
independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and
generally.
To the maximum extent permitted by law, Lithex, its officers and each of their respective advisers accept no
liability or responsibility with respect to the taxation consequences of subscribing for Shares under this
Prospectus.
• Ascot Securities Pty Ltd - as lead manager & corporate adviser;
• House Legal - as legal adviser;
• Rothsay Chartered Accountants Pty Ltd - as auditor;
• Al Maynard & Associates - as Independent Geologist; and
• Rothsay Consulting Services Pty Ltd - as Independent Accountants;
• Security Transfer Registrars Pty Ltd - as Share Registry.
8.6 Expenses of the Offer
8.7 Taxation
ADDITIONAL INFORMATION
Expense Cost (Min) Cost (Max)
IPO & Secretarial Services $20,000 $20,000
Brokerage & Management Fees $180,000 $300,000
Legal services $20,000 $20,000
Accounting services $7,000 $7,000
Independent Geologist’s services $10,000 $10,000
Printing & graphic design costs $15,000 $15,000
ASIC and ASX fees $30,000 $35,000
Disbursements and contingencies $5,000 $5,000
Total $287,000 $412,000
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8.8 Exposure Period
8.9 Litigation
8.10 Electronic Prospectus
8.11 Terms and Conditions of Options
This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to
enable this Prospectus to be examined by market participants prior to the raising of funds. Potential
investors should be aware that this examination may result in the identification of deficiencies in the
Prospectus and, in those circumstances any Application that has been received may need to be dealt with in
accordance with Section 724 of the Corporations Act. Applications for Shares under this Prospectus will not
be accepted by the Company until after the expiry of the Exposure Period. No preference will be conferred
on persons who lodge Applications prior to the expiry of the Exposure Period.
The Company is not involved in any material litigation or arbitration proceedings, nor, so far as the Directors
are aware, are any such proceedings pending or threatened against the Company.
Pursuant to Class Order 00/044 ASIC has exempted compliance with certain provisions of the Corporations
Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper
prospectus lodged with ASIC, and the publication of notices referring to an electronic prospectus or
electronic application form, subject to compliance with certain conditions.
If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the
entire Prospectus accompanied by the Application Form.
If you have not, please email the Company at and the Company will send you, free of
charge, either a hard copy or a further electronic copy of the Prospectus or both.
Alternatively, you may obtain an electronic copy of the Prospectus from the Company's website at:
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.
7,130,000 Options have been granted as specified in Section 1.2 on the following terms and conditions:
(a) Each option entitles the holder, to acquire one fully paid ordinary share in the Company.
(b) The Options may be exercised at any time until 5pm, 30 June 2015. Each Option may be exercised by
forwarding to the Company at its principal office the exercise notice, duly completed together with
payment of the sum of 20cents ($0.20) per Option exercised. The Options will lapse at 5pm on 30 June
2015.
(c) The Options may not be transferred.
(d) Option holders shall be permitted to participate in new issues of securities on the prior exercise of
options in which case the Option holders shall be afforded the period of at least ten business days
prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the
Option.
www.lithex.com.au
ADDITIONAL INFORMATION
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(e) Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt
of a properly executed exercise notice and application moneys. Shares allotted pursuant to the
exercise of an Option will rank equally with the then issued ordinary shares of the Company in all
respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for
Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and
the Listing Rules.
(f) In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the
issued capital of the Company, all rights of the Option holder will be charged to the extent necessary
to comply with the Listing Rules applying to the reconstruction of capital at the time of the
reconstruction.
(g) If there is a bonus issue to Shareholders, the number of Shares over which the Option is exercisable
may be increased by the number of Shares which the holder of the Option would have received if the
Option had been exercised before the record date for the bonus issue.
(h) In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying
securities of the Company, the exercise price of the Options may be reduced in accordance with
Listing Rule 6.22.
The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds
to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and
that with 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 statements, 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 ASIC, or to the
Directors' knowledge, before any issue of Shares pursuant to this Prospectus.
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 Lithex Resources Ltd has consented to the lodgement of this Prospectus in
accordance with Section 720 of the Corporations Act and has not withdrawn that consent.
Dated 9 March 2011
Signed for and on behalf of
8.12 Consent by the Directors
Lithex Resources Limited
Robert Mandanici
ADDITIONAL INFORMATION
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GLOSSARY OF NAMES AND TERMS
9. GLOSSARY OF NAMES AND TERMS
Applicant
Application
Application Form
Application Monies
ASIC
ASTC
ASX
Auditors
Board
Business Day
CHESS
Closing Date
Company or Lithex
Corporations Act
Directors
Dollars or $
Exposure Period
Independent Accountant
Independent Accountant's Report
Independent Geologist
Independent Geologist's Report
Issue
Listing Rules
a person who submits an Application.
a valid application to subscribe for Shares.
the application form attached to and forming part of this
Prospectus.
monies received by Lithex from Applicants.
Australian Securities and Investments Commission.
ASX Settlemenat and Transfer Corporation Pty Ltd
ACN 008 504 532.
ASX Limited ACN 008 624 691
Rothsay Chartered Accountants Pty Ltd.
the board of Directors unless the context indicates otherwise.
Monday to Friday inclusive, except New Year's Day, Good Friday,
Easter Monday, Christmas Day, Boxing Day, and any other day
that ASX declares is not a business day.
ASX Clearing House Electronic Subregistry System.
5.00pm WST on 6 May 2011.
Lithex Resources Limited ACN 140 316 463
the (Cth) of Australia.
the directors of the Company from time to time.
Australian dollars unless otherwise stated.
the period of 7 days after the date of lodgement of this
Prospectus, which period may be extended by ASIC by not more
than seven (7) days pursuant to Section 727(3) of the
Corporations Act.
Rothsay Consulting Pty Ltd
the report contained in Section 6 of this Prospectus.
Al Maynard & Associates.
the report contained in Section 5 of this Prospectus.
funds raised in accordance with this Prospectus.
Listing Rules of the ASX.
Corporations Act 2001
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Offer
Offer Period
Official List
Opening Date
Option
Prospectus
Quotation
Share
Shareholder
Share Registrar
Solicitor's Report on the Tenements
WST
the offer of up to 10,000,000 Shares pursuant to this
Prospectus.
the period commencing on the Opening Date and ending on the
Closing Date.
the Official List of the ASX.
the date on which the Offer opens.
an option to acquire 1 Share
this prospectus dated 9 March 2011 for the issue of 10,000,000
Shares at 20 cents including any electronic or online version.
quotation of the Shares on ASX.
1 fully paid ordinary share in Lithex.
a holder of Shares.
Security Transfer Registrars Pty Ltd (ACN 008 894 488)
the report contained in Section 7 of this Prospectus.
Western Standard Time, Perth, Western Australia
GLOSSARY OF NAMES AND TERMS
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SHARE REGISTRY:Security Transfer Registrars Pty LtdAll Correspondence to:PO BOX 535, APPLECROSS WA 6953770 Canning Highway, APPLECROSS WA 6153T: +61 8 9315 2333 F: +61 8 9315 2233E: [email protected]: www.securitytransfer.com.au
LITHEX RESOURCES LIMITEDACN: 140 316 463
APPLICATION FORMTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.
E & O.E.
LIT 5
REGISTRY DATE STAMPDeclaration and Statements:(1) I/We declare that all details and statements made by me/us are complete and accurate.(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.(3) I/We authorise the Company to complete and execute and documentation necessary to effect the issue of Securities to me/us.(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the
Application Form or a direct derivative of the Application Form before applying for the Securities.(5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribefor Securities in the
Company and that no notice of acceptance of the application will be provided.
Before completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM
BROKER STAMP
Broker Code
Advisor Code
(where applicable)CHESS HIN
X If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do notmatch those registered) any securities issued will be held on the Issuer Sponsored subregister.
(e.g.: THE SMITH SUPER FUND A/C)Account Designation
< >
Shares at AUD $0.20 per share
Contact Number
( )Contact Name
Email Address
@
Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only)
I/We apply for:
, , AI/We lodge full application of monies of:
$ , , .or such lesser number of Shares which may be allocated to me/us by their Directors.
Title (e.g.: Dr, Mrs) Given Name(s) or Company NameFull Name of Applicant / Company
Title (e.g.: Dr, Mrs) Given Name(s) or Company NameJoint Applicant #2
Title (e.g.: Dr, Mrs) Given Name(s) or Company NameJoint Applicant #3
Unit Street Number Street Name or PO BOXPostal Address
/
PostcodeStateSuburb/Town/City
Country Name (if not Australia)
*I am a South Boulder Mines Ltd
Montezuma Mining Company Ltd shareholder and my HIN/SRN is:
*NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for thePriority to apply.
9999444422229999333377773333777744448888
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APPLICATION FORMSPlease complete all parts of the Application Form using BLOCK LETTERS. Use correct forms of registrable name (see below). Applications using the wrong form of name may berejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.
Insert the number of Shares you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 2,000 Shares. The applicant(s) agree(s)upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to theapplicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.
No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of theapplication.
Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is aquery in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign the Application Form. TheCompany's decision as to whether to treat your application as valid, and how to construe, amend or complete it shall be final.
PAYMENTAll cheques should be made payable to LITHEX RESOURCES LIMITED - SHARE ACCOUNT and drawn on an Australian bank and expressed in Australian currency and crossed"Not Negotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency w ill NOT be accepted. Any such cheques will be returned and theacceptance deemed to be invalid.
Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.
LODGING OF APPLICATIONSCompleted Application Forms and cheques must be:
Posted to: OR Delivered to:Lithex Resources Limited Lithex Resources LimitedC/- Security Transfer Registrars Pty Ltd C/- Security Transfer Registrars Pty LtdPO Box 535 770 Canning HighwayAPPLECROSS WA 6953 APPLECROSS WA 6153
Applications must be received by no later than 5.00pm (WST) on the Closing Date 6 May 2011 which may be changed immediately after the Opening Date at any time andat the discretion of the Company.
CHESS HIN/BROKER SPONSORED APPLICANTSThe Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If youare a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESSHIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.
TAX FILE NUMBERSThe collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the lawnot to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfrankeddividend distribution at the maximum tax rate.If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from theAustralian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contactyour taxation adviser or any Taxation Office.
CORRECT FORM OF REGISTRABLE TITLENote that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to LithexResources Limited. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable name may beincluded by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:
TYPE OF INVESTOR CORRECT INCORRECTIndividual Mr John Alfred Smith J A SmithUse given names in full, not initials.
Company ABC Pty Ltd ABC P/L or ABC CoUse the company's full title, not abbreviations.
Joint Holdings Mr Peter Robert Williams & Peter Robert &Use full and complete names. Ms Louise Susan Williams Louise S Williams
Trusts Mrs Susan Jane Smith Sue Smith Family TrustUse trustee(s) personal name(s), Do not use the name of the trust. <Sue Smith Family A/C>
Deceased Estates Ms Jane Mary Smith & Estate of Late John SmithUse the executor(s) personal name(s). Mr Frank William Smith or
<Estate John Smith A/C> John Smith Deceased
Minor (a person under the age of 18) Mr John Alfred Smith Master Peter SmithUse the name of a responsible adult with an appropriate designation. <Peter Smith A/C>
Partnerships Mr John Robert Smith & John Smith and SonUse the partners' personal names. Do not use the name of the partnership. Mr Michael John Smith
<John Smith and Son A/C>Superannuation FundsUse the name of the trustee(s) of the super fund. Jane Smith Pty Ltd Jane Smith Pty Ltd Superannuation Fund
<JSuper Fund A/C>
TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSONUNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 9 MARCH 2011 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.
This Application Form relates to the Offer of Fully Paid Shares in Lithex Resources Limited pursuant to the Prospectus dated 9 March 2011.
PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for s ecurities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments andother corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details ofyour personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.
6666444422228888333377773333777744444444
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SHARE REGISTRY:Security Transfer Registrars Pty LtdAll Correspondence to:PO BOX 535, APPLECROSS WA 6953770 Canning Highway, APPLECROSS WA 6153T: +61 8 9315 2333 F: +61 8 9315 2233E: [email protected]: www.securitytransfer.com.au
LITHEX RESOURCES LIMITEDACN: 140 316 463
APPLICATION FORMTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.
E & O.E.
LIT 5
REGISTRY DATE STAMPDeclaration and Statements:(1) I/We declare that all details and statements made by me/us are complete and accurate.(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.(3) I/We authorise the Company to complete and execute and documentation necessary to effect the issue of Securities to me/us.(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the
Application Form or a direct derivative of the Application Form before applying for the Securities.(5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribefor Securities in the
Company and that no notice of acceptance of the application will be provided.
Before completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM
BROKER STAMP
Broker Code
Advisor Code
(where applicable)CHESS HIN
X If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do notmatch those registered) any securities issued will be held on the Issuer Sponsored subregister.
(e.g.: THE SMITH SUPER FUND A/C)Account Designation
< >
Shares at AUD $0.20 per share
Contact Number
( )Contact Name
Email Address
@
Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only)
I/We apply for:
, , AI/We lodge full application of monies of:
$ , , .or such lesser number of Shares which may be allocated to me/us by their Directors.
Title (e.g.: Dr, Mrs) Given Name(s) or Company NameFull Name of Applicant / Company
Title (e.g.: Dr, Mrs) Given Name(s) or Company NameJoint Applicant #2
Title (e.g.: Dr, Mrs) Given Name(s) or Company NameJoint Applicant #3
Unit Street Number Street Name or PO BOXPostal Address
/
PostcodeStateSuburb/Town/City
Country Name (if not Australia)
*I am a South Boulder Mines Ltd
Montezuma Mining Company Ltd shareholder and my HIN/SRN is:
*NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for thePriority to apply.
9999444422229999333377773333777744448888
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APPLICATION FORMSPlease complete all parts of the Application Form using BLOCK LETTERS. Use correct forms of registrable name (see below). Applications using the wrong form of name may berejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.
Insert the number of Shares you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 2,000 Shares. The applicant(s) agree(s)upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to theapplicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.
No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of theapplication.
Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is aquery in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign the Application Form. TheCompany's decision as to whether to treat your application as valid, and how to construe, amend or complete it shall be final.
PAYMENTAll cheques should be made payable to LITHEX RESOURCES LIMITED - SHARE ACCOUNT and drawn on an Australian bank and expressed in Australian currency and crossed"Not Negotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency w ill NOT be accepted. Any such cheques will be returned and theacceptance deemed to be invalid.
Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.
LODGING OF APPLICATIONSCompleted Application Forms and cheques must be:
Posted to: OR Delivered to:Lithex Resources Limited Lithex Resources LimitedC/- Security Transfer Registrars Pty Ltd C/- Security Transfer Registrars Pty LtdPO Box 535 770 Canning HighwayAPPLECROSS WA 6953 APPLECROSS WA 6153
Applications must be received by no later than 5.00pm (WST) on the Closing Date 6 May 2011 which may be changed immediately after the Opening Date at any time andat the discretion of the Company.
CHESS HIN/BROKER SPONSORED APPLICANTSThe Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If youare a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESSHIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.
TAX FILE NUMBERSThe collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the lawnot to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfrankeddividend distribution at the maximum tax rate.If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from theAustralian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contactyour taxation adviser or any Taxation Office.
CORRECT FORM OF REGISTRABLE TITLENote that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to LithexResources Limited. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable name may beincluded by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:
TYPE OF INVESTOR CORRECT INCORRECTIndividual Mr John Alfred Smith J A SmithUse given names in full, not initials.
Company ABC Pty Ltd ABC P/L or ABC CoUse the company's full title, not abbreviations.
Joint Holdings Mr Peter Robert Williams & Peter Robert &Use full and complete names. Ms Louise Susan Williams Louise S Williams
Trusts Mrs Susan Jane Smith Sue Smith Family TrustUse trustee(s) personal name(s), Do not use the name of the trust. <Sue Smith Family A/C>
Deceased Estates Ms Jane Mary Smith & Estate of Late John SmithUse the executor(s) personal name(s). Mr Frank William Smith or
<Estate John Smith A/C> John Smith Deceased
Minor (a person under the age of 18) Mr John Alfred Smith Master Peter SmithUse the name of a responsible adult with an appropriate designation. <Peter Smith A/C>
Partnerships Mr John Robert Smith & John Smith and SonUse the partners' personal names. Do not use the name of the partnership. Mr Michael John Smith
<John Smith and Son A/C>Superannuation FundsUse the name of the trustee(s) of the super fund. Jane Smith Pty Ltd Jane Smith Pty Ltd Superannuation Fund
<JSuper Fund A/C>
TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSONUNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 9 MARCH 2011 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.
This Application Form relates to the Offer of Fully Paid Shares in Lithex Resources Limited pursuant to the Prospectus dated 9 March 2011.
PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for s ecurities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments andother corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details ofyour personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.
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LitheXLitheXResources Limited
Lithex Resources Limited
This is an important document which should be read in its entirety.
You may wish to consult your professional advisor about the contents of this prospectus,
an investment in shares offered by this prospectus should be considered as speculative
Prospectus
ASCOT SECURITIES PTY. LTD.L E A D M A N A G E R
For the issue of 10,000,000 Shares at an issue price of 20 cents each
to raise $2,000,000.
Oversubscriptions of up to a further 10,000,000 Shares at an issue price of
20 cents each to raise up to a further $2,000,000 may be accepted.
ACN 140 316 463
LitheXLitheXResources Limited
11 Rafferty Close
MANDURAH WA 6210
Website: www.lithex.com.au
Email: [email protected]
Tel: (08) 9583 5109
Fax: (08) 9264 8207
ACN 140 316 463
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