Announcement PDF RED MOUNTAIN MINING LTD ACN 119 568 106 ENTITLEMENT ISSUE PROSPECTUS This Prospectus contains the offer of a pro-rata non-renounceable entitlement issue of one (1) Share for every three (3) Shares held by those Shareholders registered at the Record Date at an issue price of $0.001 per Share together with one (1) free New Option for every two (2) Shares applied for and issued to raise up to approximately $891,192 (based on the number of Shares on issue as at the Record Date) (Offer). This Offer is partially underwritten by Still Capital Pty Ltd (ACN 647 521 604) (AFSL 519872) (Underwriter). Refer to Section 6.4.1 for details regarding the terms of the underwriting. IMPORTANT NOTICE This document is important and should be read in its entirety. If, after reading this Prospectus you have any questions about the Securities being offered under this Prospectus or any other matter, then you should consult your professional advisers without delay. The Securities offered by this Prospectus should be considered as highly speculative. IMPORTANT NOTICE This Prospectus is dated 26 March 2024 and was lodged with the ASIC on that date. The ASIC, ASX and their respective officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. No Securities may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. No person is authorised to give information or to make any representation in connection with this Prospectus, 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 this Prospectus. It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. The Securities offered by this Prospectus should be considered as highly speculative. Applications for Securities offered pursuant to this Prospectus can only be made by an original Entitlement and Acceptance Form or Shortfall Application Form. This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus and is only required to contain information in relation to the effect of the issue of securities on a company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company. Representations contained in this Prospectus are made taking into account that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters are publicly available information or may reasonably be expected to be known to investors and professional advisers whom prospective investors may consult. No Investment Advice The information contained in this Prospectus is not financial product advice or investment advice and does not take into account your financial or investment objectives, financial situation or particular needs (including financial or taxation issues). You should seek professional advice from your accountant, financial adviser, stockbroker, lawyer or other professional adviser before deciding to subscribe for Securities under this Prospectus to determine whether it meets your objectives, financial situation and needs. Forward-looking statements This Prospectus contains forwardlooking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the Directors and the Company’s management. The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forwardlooking statements contained in this Prospectus will actually occur and investors are cautioned not to place undue reliance on these forwardlooking statements. The Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law. These forward-looking statements are subject to various risk factors that could cause the Company’s actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are set out in Section 5. Overseas shareholders This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. Accordingly, the Offer is not being extended and Securities will not be issued to Shareholders with a registered address which is outside Australia or New Zealand. For further information on overseas Shareholders please refer to Section 2.10. Continuous disclosure obligations The Company is a “disclosing entity” (as defined in section 111AC of the Corporations Act) for the purposes of section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Securities. This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest. Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the three months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX. Please refer to Section 6.2 for further details. 1 Target Market Determination In accordance with the design and distribution obligations under the Corporations Act, the Company has determined the target market for the offer of Options issued under this Prospectus. The Company and the Lead Manager will only distribute this Prospectus to those investors who fall within the target market determination (TMD) as set out on the Company’s website (www.redmountainmining.com.au). By making an application under the Offer, you warrant that you have read and understood the TMD and that you fall within the target market set out in the TMD. Electronic Prospectus A copy of this Prospectus can be downloaded from the website of the Company at www.redmountainmining.com.au . If you are accessing the electronic version of this Prospectus for the purpose of making an investment in the Company, you must be an Australian or New Zealand resident and must only access this Prospectus from within Australia or New Zealand. The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. You may obtain a hard copy of this Prospectus free of charge by contacting the Company by phone on +61 8 6559 1792 during office hours or by emailing the Company at mp@miradorcorporate.com. 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. Company Website No documents or other information available on the Company’s website is incorporated into this Prospectus by reference. Financial forecasts The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection. Clearing House Electronic SubRegister System (CHESS) and Issuer Sponsorship The Company will apply to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Electronic sub-registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with statements (similar to a bank account statement) that set out the number of Securities issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship. Electronic sub-registers also mean ownership of securities can be transferred without having to rely upon paper documentation. Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month. authorised securities brokers, print service providers, mail houses and the share registry. You can access, correct and update the personal information that we hold about you. If you wish to do so, please contact the share registry at the relevant contact number set out in this Prospectus. Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Securities, the Company may not be able to accept or process your application. Enquiries If you are in any doubt as to how to deal with any of the matters raised in this Prospectus, you should consult with your broker or legal, financial or other professional adviser without delay. Should you have any questions about the Offers or how to accept the Offer please call the Company Secretary on +61 8 6559 1792. Definitions and Time Unless the contrary intention appears or the context otherwise requires, words and phrases contained in this Prospectus have the same meaning and interpretation as given in the Corporations Act and capitalised terms have the meaning given in the Glossary in Section 8. All references to time in this Prospectus are references to Australian Western Standard Time. Privacy statement If you complete an Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder. The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your securities in the context of takeovers, regulatory bodies including the Australian Taxation Office, 2 CORPORATE DIRECTORY Directors Share Registry* Troy Flannery Non-Executive Chairman Automic Level 5 126 Phillip Street SYDNEY NSW 2000 Lincoln Ho Non-Executive Director Robert Parton Non-Executive Director Company Secretary Mauro Piccini Registered Office Suite 11, Level 2 23 Railway Road SUBIACO WA 6008 Telephone: +61 8 6559 1792 Email: mp@miradorcorporate.com Website: www.redmountainmining.com.au Auditor RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade PERTH WA 6000 Telephone: 1300 288 664 (within Australia) +61 2 9698 5414 (outside Australia) Website: www.automicgroup.com.au/ Legal Advisers Steinepreis Paganin Lawyers and Consultants Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000 Lead Manager Xcel Capital Pty Ltd (ACN 617 047 319) Suite 1 38 Colin Street WEST PERTH WA 6005 Underwriter Still Capital Pty Ltd (ACN 647 521 604) AFSL 519872 10 Direction Way NORTH FREMANTLE WA 6012 *This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus and has not consented to being named in this Prospectus. 3 TABLE OF CONTENTS 1. KEY OFFER INFORMATION............................................................................................ 5 2. DETAILS OF THE OFFER ................................................................................................ 11 3. PURPOSE AND EFFECT OF THE OFFER ......................................................................... 18 4. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES ................................................. 22 5. RISK FACTORS ............................................................................................................ 27 6. ADDITIONAL INFORMATION ...................................................................................... 36 7. DIRECTORS’ AUTHORISATION .................................................................................... 51 8. GLOSSARY .................................................................................................................. 52 4 1. KEY OFFER INFORMATION 1.1 Timetable Announcement of Offer and lodgement of Appendix 3B with ASX Friday, 22 March 2024 Lodgement of Prospectus with ASIC and ASX and lodgement of updated Appendix 3B with ASX Tuesday, 26 March 2024 Ex date Friday, 5 April 2024 Record Date for determining Entitlements Monday, 8 April 2024 Offer opening date, Prospectus sent out to Shareholders and Company announces this has been completed Thursday, 11 April 2024 Last day to extend the Closing Date Wednesday, 17 April 2024 Closing Date as at 5:00pm* Monday, 22 April 2024 Securities quoted on a deferred settlement basis Tuesday, 23 April 2024 ASX and Underwriter/Sub-Underwriter notified of under subscriptions Wednesday, 24 April 2024 Underwriter subscribes for Shortfall under terms of Underwriting /Sub-Underwriting Agreement Wednesday, 24 April 2024 Issue date and lodgement of Appendix 2A with ASX applying for quotation of the Securities By no later than Tuesday, 30 April 2024 (before noon Sydney time) Quotation of Securities issued under the Offer** Wednesday, 1 May 2024 *The Directors may extend the Closing Date by giving at least 3 Business Days’ notice to ASX prior to the Closing Date. Accordingly, the date the Securities are expected to commence trading on ASX may vary. 1.2 Key statistics of the Offer Shares Maximum Subscription ($891,192)2 Offer Price per Share Entitlement Ratio (based on existing Shares) $0.001 1:3 Shares currently on issue 2,673,576,037 Shares to be issued under the Offer 891,192,013 Gross proceeds of the issue of Shares $891,192 Shares on issue Post-Offer 3,564,768,050 Notes: 1. Assuming the Maximum Subscription of $891,192 is achieved under the Offer. 2. Refer to Section 4.1 for the terms of the Shares. 5 Options Maximum Subscription ($891,192)2 Offer Price per New Option Nil Option Entitlement Ratio (based on Shares subscribed for) 1:2 Options currently on issue 374,087,106 New Options to be issued pursuant to the Offer 445,596,007 Options to be issued under the Options Offers 310,000,000 Gross proceeds of the issue of Options Options on issue Post-Offer Nil 1,129,683,113 Notes: 1.3 1. Assuming the Maximum Subscription of $891,192 is achieved under the Offer. 2. Refer to Section 4.2 for the terms of the New Options. Key Risk Factors Prospective investors should be aware that subscribing for Securities involves a number of risks and an investment in the Company should be considered as highly speculative. The future performance of the Company and the value of the Securities may be influenced by a range of factors, many of which are largely beyond the control of the Company and the Directors. The key risks associated with the Company’s business, the industry in which it operates and general risks applicable to all investments in listed securities and financial markets generally are set out in Section 5. The predominant risks relating to the Company and the Offer are summarised below: Further Information Risk Description Potential for significant dilution Risks relating to the dilutionary impacts of the Offer. Section 5.2 Mining risk Risks relating to exploration of mining tenements. Section 5.3 Going concern Risks relating to the financial condition of the Company. Section 5.2 Risks relating to the future capital requirements of the Company and its ability to obtain suitable funding. Section 5.2 Additional requirements for capital Environmental Risk Risks relating to environmental issues. Section 5.2 6 1.4 Directors' Interests in Securities The relevant interest of each of the Directors in the Securities of the Company as at the date of this Prospectus, together with their respective Entitlement, is set out in the table below: Director Shares Options Share Entitlement New Option Entitlement $ Troy Flannery 12,500,0001 38,750,0002 4,166,667 2,083,333 $4,166.67 Lincoln Ho 12,500,0003 33,416,6674 4,166,667 2,083,333 $4,166.67 Robert Parton Nil 6,000,0005 Nil Nil Nil Notes: 1. Indirectly held by Jack Rory Pty Ltd (an entity which Mr Troy Flannery is a director) and Mr Troy Anthony Flannery and Ms Joanne Flannery <Flannery Super Fund A/C> (Mr Troy Flannery is a beneficiary of the super fund). 2. Indirectly held by Jack Rory Pty Ltd and Mr Troy Anthony Flannery + Ms Joanne Flannery <Flannery Super Fund A/C> comprising: 3. 4. (i) 15,000,000 unquoted options exercisable at $0.015 on or before 4 February 2025; (ii) 2,500,000 unquoted options exercisable at $0.011 on or before 2 December 2025; and (iii) 21,250,000 RMXOK Quoted Options at $0.008 expiring on or before 14 September 2026. Comprising: (i) 4,000,000 Shares held by Saltus Corporate Pty Ltd as trustee for the LLPMH Investment Trust, an entity in which Mr Lincoln Ho is a director of the trustee and beneficiary of the trust; and (ii) 8,500,000 Shares directly held by Mr Lincoln Ho. Comprising: (i) 5,000,0000 unquoted options exercisable at $0.011 on or before 2 December 2025, held by Saltus Corporate Pty Ltd as trustee for the LLPMH Investment Trust, an entity in which Mr Lincoln Ho is a director of the trustee and beneficiary of the trust; (ii) 12,000,000 unquoted options directly held by Mr Lincoln Ho exercisable at $0.015 on or before 4 February 2025; (iii) 166,667 unquoted options directly held by Mr Lincoln Ho exercisable at $0.011 on or before 2 December 2025; and (iv) 16,250,000 RMXOK quoted options directly held by Mr Lincoln Ho exercisable at $0.008 on or before 14 September 2026. 5. Indirectly held by TPG Australasia Pty Ltd, an entity which Mr Parton is a director of, comprising: (i) 3,000,000 unquoted options directly held by Mr Parton exercisable at $0.015 on or before 4 February 2025; and (ii) 3,000,000 RMXOK quoted options directly held by Mr Parton exercisable at $0.008 on or before 14 September 2026. The Board recommends all Shareholders take up their Entitlements. The Directors do not intend to take up their Entitlements under this Prospectus. 7 1.5 Details of Substantial Holders Based on publicly available information as at the date of this Prospectus, those persons which (together with their associates) have a relevant interest in 5% or more of the Shares on issue are set out below: Shareholder Shares % McNeil Nominees Pty Limited 217,814,839 8.15% Lithic Lithium LLC 154,358,974 5.77% In the event all Entitlements are accepted there will be no change to the substantial holders on completion of the Offer. 1.6 Lead Manager Xcel Capital Pty Ltd (ACN 617 047 319) (Lead Manager) has been appointed as the lead manager of the Offer. Terms of the lead manager mandate and total fees payable are set out in Section 6.4.3 below. 1.7 Underwriting and sub-underwriting The Offer is partially underwritten by Still Capital Pty Ltd (ACN 647 521 604) (AFSL 519872) (Underwriter). Refer to Section 6.4.1 for details of the terms of the underwriting. Subject to completion of the Offer, the Company agrees to issue the Underwriter (or their nominee/s) (1) New Option for every three (3) Shares subscribed for by the Underwriter pursuant to its underwriting obligations, to be issued under the Options Offer. Refer to Section 2.2 for further details of the Options Offer. The New Options to be issued to the Underwriter under the Options Offer will be issued pursuant to the Company’s Listing Rule 7.1 placement capacity. The Underwriter has entered into a number of sub-underwriting agreements in respect of the Shortfall Securities. The Underwriter is responsible for any fees payable, and securities to be issued, to any sub-underwriters or other parties involved in the Offer and introduced by the Underwriter or the Company. Under the sub-underwriting agreements, the Underwriter has agreed to: (a) pay through to each sub-underwriter a fee ranging between 3% - 4% (as set out in the relevant sub-underwriting agreement) (plus GST) of the amount subscribed for by each sub-underwriter; and (b) issue each sub-underwriter one (1) New Option for every (3) Shares subscribed for by each sub-underwriter. No sub-underwriter will increase their shareholding to above 19.99% as a direct result of the issue of Securities under the Offer. Where Shares are issued pursuant to the exercise of New Options, the voting power of the sub-underwriters who exercise their New Options will increase. The likelihood of New Options being exercised is dependent on the price of Shares from time to time until the New Options expire. Refer to Section 6.4.2 for further detail of the sub-underwriting agreements. 8 1.8 Effect on Control The Underwriter is presently not a Shareholder and is not a related party of the Company for the purposes of the Corporations Act. The issue of Shares under this Prospectus to the Underwriter may increase its interest in the Company and dilute the Shareholding of other Shareholders to the extent they elect not to participate in the Offer or are ineligible to participate in the Offer. In accordance with the terms of the Underwriting Agreement, the Underwriter will allocate the Shortfall to its sub-underwriters and/or clients and people who have otherwise agreed to assist with the completion of the Offer such that neither the Underwriter, the sub-underwriters nor any of the Underwriter’s clients, individually, will have a voting power in the Company in excess of 19.9% after the issue of the Shortfall. The Company, in consultation with the Underwriter, will ensure that the Offer (including the equitable dispersion of any Shortfall Securities) complies with the provisions of Chapter 6 of the Corporations Act 2001 (Cth) and is otherwise consistent with the policy guidelines contained in ASIC Regulatory Guide 6 and Takeovers Panel Guidance Note 17. 1.9 Potential dilution on non-participating Shareholders In addition to potential control impacts set out in Section 1.8, Shareholders should note that if they do not participate in the Offer, their holdings are likely to be diluted by approximately 25% (as compared to their holdings and number of Shares on issue as at the date of this Prospectus). No immediate dilution will occur as a result of the issue of New Options under this Prospectus. However subsequent exercise of any or all of the New Options will result in dilution. Assuming all New Options offered pursuant to this Prospectus are issued and exercised into Shares, Shareholders who do not participate in the Offer, are likely to be diluted by an aggregate of approximately 42% (as compared to their holdings and number of Shares on issue as at the date of the Prospectus). For illustrative purposes, the table below shows how the dilution may impact the holdings of Shareholders: Holder Holding as at Record date % at Record Date Entitlements under the Offer Holdings if Offer not taken Up % post Offer Shareholder 1 10,000,000 0.37% 3,333,333 10,000,000 0.28% Shareholder 2 5,000,000 0.19% 1,666,667 5,000,000 0.14% Shareholder 3 1,500,000 0.06% 500,000 1,500,000 0.04% Shareholder 4 400,000 0.01% 133,333 400,000 0.01% Shareholder 5 50,000 0.00% 16,667 50,000 0.00% Total 2,673,576,037 891,192,013 3,564,768,050 Notes: 1. This is based on a share capital of 2,673,576,037 Shares as at the date of the Prospectus and assumes no Options currently on issue or other Shares are issued through the exercise of Options. 2. The dilutionary effect shown in the table is the maximum percentage on the assumption that those Entitlements not accepted by Eligible Shareholders are placed under the 9 Underwriting and Shortfall Offer. In the event all Entitlements are not accepted and some or all of the resulting Shortfall was not subsequently placed, the dilution effect for each Shareholder not accepting their Entitlement would be a lesser percentage. 10 2. DETAILS OF THE OFFER 2.1 The Offer The Offer is being made as a pro-rata non-renounceable entitlement issue of one (1) Share for every three (3) Shares held by Shareholders registered at the Record Date at an issue price of $0.001 per Share together with one New Option for every two Shares subscribed for and issued. Fractional entitlements will be rounded down to the nearest whole number. Based on the capital structure of the Company as at the date of this Prospectus, (and assuming Shares are issued prior to the Record Date including on exercise or conversion of securities on issue) approximately 891,192,013 Shares and 445,596,007 New Options may be issued under the Offer to raise up to $891,192. No funds will be raised from the issue of the New Options. As at the date of this Prospectus the Company has 374,087,106 Options on issue all of which may be exercised prior to the Record Date in order to participate in the Offer. Please refer to Section 4.2 for information on the exercise price and expiry date of the Options on issue. All of the Shares offered under this Prospectus will rank equally with the Shares on issue at the date of this Prospectus. Please refer to Section 4.1 for further information regarding the rights and liabilities attaching to the Shares. The New Options will be exercisable at $0.002 on or before the date that is three (3) years from the date of issue and otherwise on the terms set out in Section 4.2. The purpose of the Offer and the intended use of funds raised are set out in Section 3. 2.2 Options Offer The Prospectus includes the offer of an aggregate of 310,000,000 New Options to selected applicants (Options Offer). The Options Offer will comprise of: (a) up to 250,000,000 New Options on the basis of one (1) Option for every three (3) Shares underwritten by the Underwriter and sub-underwriter, pursuant to the terms of the Underwriting Agreement; and (b) an aggregate of 60,000,000 New Options to the Lead Manager (or its nominees), in part consideration for lead manager services provided in relation to the Offer. Only parties notified by the Company or the Underwriter should apply for Options under the Options Offer. The Options offered under the Options Offer will be issued on the terms and conditions set out in Section 4.2. All Shares issued on conversion of the Options will rank equally with the Shares on issue as at the date of this Prospectus. Further details of the Underwriting Agreement and Lead Manager Mandate are set out in Sections 6.4.1 and 6.4.3. 2.3 What Eligible Shareholders may do The number of Securities to which Eligible Shareholders are entitled is shown on the personalised Entitlement and Acceptance Form which can be accessed by you (using your Securityholder Reference Number (SRN) or Holder Identification 11 Number (HIN) from your latest Holding Statement, and your postcode) by visiting: https://investor.automic.com.au. Eligible Shareholders may choose any of the options set out in the table below. Option Key Considerations Take up all of your Entitlement • Should you wish to accept all of your Entitlement, then your application for Securities under this Prospectus must be made by following the instructions