offer of in the money options, page-2

re: offer of in the money options rubbish " 1free option for every 2 shares. options are in the money,"


Where did you read such rubbish?

Sometimes I wonder about the illusion some people experience!!

ACN 107 118 678
ENTITLEMENT PROSPECTUS
For a non-renounceable entitlement issue of one (1) Option for every two (2)
Shares held by Shareholders registered at 5.00pm (WST) on 2 January 2007 at an
issue price of 1 cent per Option (Entitlement Issue).
The Entitlement Issue is fully underwritten.
See Section 8.2 for further details.
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 stockbroker,
accountant or other professional adviser.
The securities offered by this Prospectus should be considered as speculative.
TABLE OF CONTENTS
1. SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES ......................................... 1
2. CORPORATE DIRECTORY.................................................................................................. 3
3. CHAIRMAN’S LETTER ......................................................................................................... 4
4. DETAILS OF THE OFFER...................................................................................................... 5
5. PURPOSE AND EFFECT OF THE OFFER .............................................................................. 9
6. RIGHTS AND LIABILITIES ATTACHING TO THE OPTIONS ............................................... 12
7. RISK FACTORS ................................................................................................................. 15
8. ADDITIONAL INFORMATION.......................................................................................... 18
9. AUTHORITY OF DIRECTORS............................................................................................. 24
10. DEFINITIONS .................................................................................................................... 25
1
1. SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES
TIMETABLE AND IMPORTANT DATES
Lodgement of Prospectus with ASIC 19 December 2006
Ex Date 22 December 2006
Record Date for determining Shareholder entitlements 2 January 2007
Prospectus despatched to Shareholders 4 January 2007
Closing Date of Offer 18 January 2007
Despatch date/Options entered into shareholders security
holdings
29 January 2007
* These dates are determined based upon the current expectations of the
Directors and may be changed without notice.
IMPORTANT NOTES
Shareholders should read this document in its entirety and, if in doubt, should
consult their professional advisors.
This Prospectus is dated 19 December 2006 and a copy of this Prospectus was
lodged with the ASIC on that date. The ASIC and ASX take no responsibility for
the content of this Prospectus.
The expiry date of the Prospectus is 18 January 2008 (Expiry Date). No securities
will be allotted or issued on the basis of this Prospectus after the Expiry Date.
Applications for Options offered pursuant to this Prospectus can only be
submitted on an original Entitlement and Acceptance Form which accompanies
this Prospectus.
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 such 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 on and observe any of these restrictions. Failure to comply with
these restrictions may violate securities laws. Applicants who are resident in
countries other than Australia should consult their professional advisers as to
whether any governmental or other consents are required or whether any other
formalities need to be considered and followed.
No person is authorised to give information or to make any representation in
connection with this Prospectus which is not contained in the 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.
In making representations in this Prospectus regard has been had to the fact that
the Company is a disclosing entity for the purposes of the Corporations Act and
certain matters may reasonably be expected to be known to investors and
professional advisers whom potential investors may consult.
2
ELECTRONIC PROSPECTUS
Any person accessing the electronic version of this Prospectus for the purpose of
making an investment in the Company must be an Australian resident and must
only access the Prospectus from within Australia.
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. Any person
may obtain a hard copy of this Prospectus free of charge by contacting the
Company.
3
2. CORPORATE DIRECTORY
* These parties are included for information purposes only. They have not been
involved in the preparation of this Prospectus.
Directors
Malcolm James (Chairman)
Craig Bromley
Tom Kelly
Chief Executive Officer
John Canaris
Company Secretary
Jonathan Whyte
Registered Office
278 Barker Road
Subiaco WA 6008
Telephone (08) 9382 8711
Facsimile (08) 9382 8722
Auditor*
Somes & Cooke
1304 Hay Street
West Perth WA 6005
Share Registry*
Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St Georges Terrace
Perth WA 6000
Telephone 1300 557 010
Facsimile (08) 9323 2033
Solicitors
Steinepreis Paganin
Lawyers and Consultants
Level 4
16 Milligan Street
PERTH WA 6000
Underwriter
Corporate & Resource Consultants Pty Ltd
Ground Floor
30 Ledgar Road
BALCATTA WA 6021
4
3. CHAIRMAN’S LETTER
Dear Shareholder
On behalf of the Board of Directors, I have pleasure in offering you the
opportunity to participate in this non-renounceable entitlement issue of one
Option for every two Shares held by Shareholders in Lefroy Resources Limited
(Lefroy) at 5.00pm (WST) on 2 January 2007.
The Directors view the Entitlement Issue as an opportunity to reward loyal
Shareholders for their support of Lefroy over the previous 12 months. Principally,
these funds will be used to carry out specific project evaluation and due
diligence of potential opportunities within the resources sector.
The Board of Directors takes this opportunity to thank all Shareholders for your
support since the listing of Lefroy in 2004 and looks forward to your continued
support in the future.
Yours faithfully
Malcolm James
Chairman
5
4. DETAILS OF THE OFFER
4.1 Offer of Options
The Offer is being made as a non-renounceable entitlement issue of one
(1) Option for every two (2) Shares held by Shareholders registered at
5.00pm (WST) on 2 January 2007 at an issue price of 1 cent per Option.
Fractional Entitlements will be rounded up to the nearest whole number.
Based on the capital structure of the Company (and assuming no
existing Options are exercised prior to the Record Date), the maximum
number of Options to be issued pursuant to this Offer is approximately
31,056,251. The Offer will raise up to approximately $310,563. The purpose
of the Offer and the use of funds raised are set out in Section 5 of this
Prospectus.
The Company currently has 5,746,000 Options on issue. The terms and
conditions of these Options do not allow for the participation by those
Option holders in new issues of securities. Those Option holders will,
however, be entitled to exercise their Options during the time period set
out in the ASX Listing Rules in order to participate in the Offer.
The Offer is fully underwritten by Corporate and Resource Consultants Pty
Ltd (CRC). Please refer to Section 8.2 for further details.
4.2 How to Accept the Offer
Your acceptance of the Offer must be made on the Entitlement and
Acceptance Form accompanying this Prospectus. Your acceptance
must not exceed your Entitlement as shown on that form. If it does, your
acceptance will be deemed to be for the maximum Entitlement.
You may participate in the Offer as follows:
(a) if you wish to accept your Entitlement in full:
(i) complete the Entitlement and Acceptance Form, filling
in the details in the spaces provided; and
(ii) attach your cheque for the amount indicated on the
Entitlement and Acceptance Form; or
(b) if you only wish to accept part of your Entitlement:
(i) fill in the number of Options you wish to accept in the
space provided on the Entitlement and Acceptance
Form; and
(ii) attach your cheque for the appropriate application
monies (at $0.01 per Option); or
(c) if you do not wish to accept all or part of your Entitlement, you
are not obliged to do anything.
All cheques must be drawn on an Australian bank or bank draft made
payable in Australian currency to “Lefroy Resources Limited – Entitlement
Issue Account” and crossed “Not Negotiable”.
6
Your completed Entitlement and Acceptance Form and cheque must
reach the Company’s share registry no later than 5pm WST on the
Closing Date.
The Offer is non-renounceable. Accordingly, a holder of Shares may not
sell or transfer all or part of their Entitlement.
4.3 Australian Stock Exchange Listing
Application for official quotation by ASX of the Options offered pursuant
to this Prospectus will be made within 7 days after the date of this
Prospectus. If approval is not obtained from ASX before the expiration of
3 months after the date of issue of the Prospectus, (or such period as
varied by the ASIC), the Company will not issue any Options and will
repay all application monies for the Options within the time prescribed
under the Corporations Act, without interest.
The fact that ASX may grant official quotation to the Options is not to be
taken in any way as an indication of the merits of the Company or the
Options now offered for subscription.
4.4 Shortfall Offer
Any Entitlement not taken up pursuant to the Offer will form the Shortfall
and will be dealt with in accordance with the Underwriting Agreement.
The Directors and the Underwriter reserve the right to issue Shortfall
Options at their absolute discretion.
You should only complete a Shortfall Application Form if directed to do
so by the Underwriter. The offer of any Shortfall Options is a separate offer
made pursuant to this Prospectus and will remain open for up to 3
months following the Closing Date. The issue price of any Shortfall Options
shall be 1 cent being the price at which the Entitlement has been offered
to Shareholders pursuant to this Prospectus.
4.5 Allotment of Options
Options issued pursuant to the Offer will be allotted as soon as
practicable after the Closing Date. Where the number of Options issued
is less than the number applied for, or where no allotment is made,
surplus application monies will be refunded without any interest to the
applicant as soon as practicable after the Closing Date.
Pending the allotment and issue of the Options or payment of refunds
pursuant to this Prospectus, all application monies will be held by the
Company in trust for the Applicants in a separate bank account as
required by the Corporations Act. The Company, however, will be
entitled to retain all interest that accrues on the bank account and each
Applicant waives the right to claim interest.
Statements of holding for the New Options will be mailed as soon as
possible after the Closing Date.
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4.6 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 Options 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 Options will not be issued to Shareholders with a
registered address which is outside Australia or New Zealand.
Shareholders resident in New Zealand should consult their professional
advisors as to whether any government or other consents are required,
or other formalities need to be observed, to enable them to exercise
their Entitlements under the Offer.
4.7 Taxation Implications
The Directors do not consider that it is appropriate to give Applicants
advice regarding the taxation consequences of applying for Options
under this Prospectus, as it is not possible to provide a comprehensive
summary of the possible taxation consequences. The Company, its
advisers and officers, do not accept any responsibility or liability for any
taxation consequences to Applicants. Potential Applicants should,
therefore, consult their own professional tax adviser in connection with
the taxation implications of the Options offered pursuant to this
Prospectus.
4.8 Minimum Subscription
There is no minimum subscription.
4.9 Privacy Act
If you complete an application for Options, you will be providing
personal information to the Company (directly or by the Company’s
share registry). The Company collects, holds and will use that information
to assess your application, service your needs as an Option holder,
facilitate distribution payments and corporate communications to you as
an Option holder and carry out administration.
The information may also be used from time to time and disclosed to
persons inspecting the register, bidders for your securities in the context
of takeovers, regulatory bodies, including the Australian Taxation Office,
authorised securities brokers, print service providers, mail houses and the
Company’s share registry.
You can access, correct and update the personal information that we
hold about you. Please contact the Company or its share registry if you
wish to do so at the relevant contact numbers set out in this Prospectus.
Collection, maintenance and disclosure of certain personal information is
governed by legislation including the Privacy Act 1988 (Cth) (as
amended), the Corporations Act and certain rules such as the ASTC
8
Settlement Rules. You should note that if you do not provide the
information required on the application for Options, the Company may
not be able to accept or process your application.
4.10 Enquiries
Any questions concerning the Offer should be directed to the Company
Secretary, Jonathan Whyte, on (08) 9420 9333.
9
5. PURPOSE AND EFFECT OF THE OFFER
5.1 Purpose of the Offer
The purpose of the Offer is to raise approximately $310,563. As
announced to ASX on 22 November 2006, the funds raised from the Offer
(after expenses) will be used together with the $600,000 raised under the
recent placement (Placement) announced on the same date to
undertake project evaluation and due diligence enquiries for potential
opportunities within the resource sector, and for general working capital
as set out in the table below:
$
Project evaluation and due diligence 455,282
Working capital 430,861
Expenses of the Offer* 24,420
Total raised pursuant to Offer and placement 910,563
* Refer to Section 8.6 of this Prospectus for further details relating to
the expenses of the Offer.
5.2 Effect of the Offer and Pro Forma Statement of Financial Position
The principal effect of the Offer will be to:
(a) increase the cash reserves by approximately $286,143
immediately after completion of the Offer after deducting the
estimated expenses of the Offer; and
(b) increase the number of Options on issue from 5,746,000 Options
as at the date of this Prospectus, to approximately 36,802,251
Options, on the basis that the Offer is fully subscribed.
5.3 Statement of Financial Position
The unaudited Statement of Financial Position as at 31 October 2006 and
the unaudited Pro Forma Statement of Financial Position as at 31
October 2006 shown on the following page have been prepared on the
basis of the accounting policies normally adopted by the Company and
reflect the changes to its financial position. They have been prepared on
the assumption that all Options pursuant to this Prospectus are issued and
that the placement to CRC announced on 22 November 2006 has taken
place to raise a further $600,000.
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Pro Forma Statement of Financial Position
Unaudited
Pro forma
Unaudited
31 October
2006
31 October
2006
CURRENT ASSETS
Cash and cash equivalents 7,897,569 8,183,712
Trade and other receivables 80,391 80,391
Total Current Assets 7,977,960 8,264,103
NON-CURRENT ASSETS
Trade and other receivables 69,851 69,851
Property, plant and equipment 33,551 33,551
Exploration and evaluation expenditure 4,016,948 4,016,948
Total Non-current Assets 4,120,350 4,120,350
TOTAL ASSETS 12,098,310 12,384,453
CURRENT LIABILITIES
Trade and other payables 223,052 223,052
Total Current Liabilities 223,052 223,052
TOTAL LIABILITIES 223,052 223,052
NET ASSETS 11,875,258 12,161,401
EQUITY
Issued Capital 11,861,881 11,861,881
Reserves 45,701 331,844
Retained Earnings/(Losses) (32,324) (32,324)
TOTAL EQUITY 11,875,258 12,161,401
11
5.4 Effect on Capital Structure
A comparative table of changes in the capital structure of the Company
as a consequence of the Offer is set out below, assuming that the Offer is
fully subscribed.
Shares
The Company currently has 62,112,501 Shares on issue. No Shares will be
issued under the Offer.
Options
500,000 Exercisable at $0.25 on or before 31/12/2007
1,500,000 Exercisable at various exercise prices on or before
30/06/2008
246,000 Exercisable at various exercise prices on or before
31/06/2008
3,000,000 Exercisable at $0.25 on or before 30/06/2009
500,000 Exercisable at $0.25 on or before 28/11/2009
31,056,250* Options offered pursuant to the Prospectus.
36,802,250 Total options on issue
Notes:
* The Company intends to apply to ASX for these Options issued under
this Prospectus to be listed as a separate class of securities on ASX. Refer
to Section 6.1 for the terms of these options.
12
6. RIGHTS AND LIABILITIES ATTACHING TO THE OPTIONS
6.1 Terms and Conditions of Options
The material terms and conditions of the Options are as follows:
(a) the Options will be exercisable at any time prior to 5.00pm WST
on 30 June 2009 (Option Expiry Date). Options not exercised on
or before the Option Expiry Date will automatically lapse;
(b) the Options may be exercised wholly or in part by completing an
application form for Shares (Notice of Exercise) delivered to the
Company's share registry and received by it any time prior to the
Expiry Date;
(c) each Option will entitle the holder to subscribe (in respect of
each Option held) for a Share with an exercise price of 25 cents;
(d) upon the exercise of an Option and receipt of all relevant
documents and payment, the holder will be allotted and issued
a Share ranking pari passu with the then issued Shares. The
Company will apply to ASX to have the Shares granted Official
Quotation;
(e) a summary of the terms and conditions of the Options, including
the Notice of Exercise, will be sent to all holders of Options when
the initial holding statement is sent;
(f) any Notice of Exercise received by the Company’s share registry
on or prior to the Expiry Date will be deemed to be a Notice of
Exercise as at the last Business Day of the month in which such
notice is received;
(g) there will be no participating entitlements inherent in the Options
to participate in new issues of capital which may be offered to
Shareholders during the currency of the Options. Prior to any
new pro rata issue of securities to Shareholders, holders of
Options will be notified by the Company and will be afforded 7
Business Days before the record date (to determine entitlements
to the issue), to exercise Options;
(h) in the event of any reconstruction (including consolidation, subdivision,
reduction or return) of the issued capital of the
Company prior to the Expiry Date, all rights of an Option Holder
are to be changed in a manner consistent with the ASX Listing
Rules. Subject to the Corporations Act, the ASX Listing Rules and
the Constitution, the Options may be transferred at any time
prior to the Expiry Date; and
(i) Shares issued pursuant to the exercise of an Option will be issued
not more than 14 days after the date of the Notice of Exercise.
6.2 Rights Attaching to Shares upon Conversion of Options
The rights attaching to Shares in the Company are set out in the
Constitution of the Company, a copy of which is available for inspection
13
during normal business hours at the registered business office of the
Company.
The following is a summary of the more significant rights and liabilities
attaching to Shares upon conversion of Options to be issued pursuant to
this Prospectus. This summary is not exhaustive and does not constitute a
definitive statement of the rights and liabilities of Shareholders. To obtain
such a statement, persons should seek independent legal advice.
General Meetings
Shareholders are entitled to be present in person, or by proxy, attorney or
representative to attend and vote at general meetings of the Company.
Shareholders may requisition meetings in accordance with Section 249D
of the Corporations Act and the Constitution of the Company.
Voting Rights
Subject to any rights or restrictions for the time being attached to any
class or classes of Shares, at general meetings of Shareholders or classes
of Shareholders:
(a) each Shareholder entitled to vote may vote in person or by
proxy, attorney or representative;
(b) 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
(c) on a poll, every person present who is a Shareholder or a proxy,
attorney or representative of a Shareholder shall, in respect of
each Share held by him, or in respect of which he is appointed a
proxy, attorney or representative, have one vote for each Share
held, but in respect of partly paid shares shall have a fraction of
a vote equivalent to the proportion which the amount paid up
bears to the total issue price for the share.
Dividend Rights
The Directors may from time to time declare and pay or credit a
dividend in accordance with the Corporations Act. Subject to any
special right as to dividends attaching to a Share, all dividends will be
declared and paid according to the proportion which the amount paid
on the Shares is the total amount payable in respect of the Shares (but
any amount paid during the period in respect of which a dividend is
declared only entitles the Shareholder to an apportioned amount of that
dividend as from the date of payment). The Directors may from time to
time pay or credit to the Shareholders such interim dividends as they may
determine. No dividends shall be payable except out of profits. A
determination by the Directors as to the profits of the Company shall be
conclusive. No dividend shall carry interest as against the Company.
The Directors may from time to time grant to Shareholders or any class of
shareholders the right to elect to reinvest cash dividends paid by the
Company by subscribing for Shares in the Company on such terms and
conditions as the Directors think fit. The Directors may, at their discretion,
14
resolve in respect of any dividend which it is proposed to pay or to
declare on any Shares of the Company, that holders of such Shares may
elect to forgo their right to the whole or part of the proposed dividend
and to receive instead an issue of Shares credited as fully paid to the
extent and on the terms and conditions of the Constitution. The Directors
may set aside out of the profits of the Company such amounts as they
may determine as reserves, to be applied at the discretion of the
Directors, for any purpose for which the profits of the Company may be
properly applied.
Winding-Up
If the Company is wound up, the liquidator may, with the authority of a
special resolution, divide among the Shareholders in kind the whole or
any part of the property of the Company, and may for that purpose set
such value as he considers fair upon any property to be so divided, and
may determine how the division is to be carried out as between the
Shareholders or different classes of Shareholders. The liquidator may, with
the authority of a special resolution, vest the whole or any part of any
such property in trustees upon such trusts for the benefit of the
contributories as the liquidator thinks fit, but so that no Shareholder is
compelled to accept any Shares or other securities in respect of which
there is any liability.
Transfer of Shares
Generally, Shares in the Company are freely transferable, subject to
formal requirements, the registration of the transfer not resulting in a
contravention of or failure to observe the provisions of a law of Australia
and the transfer not being in breach of the Corporations Act and the
Listing Rules.
Future Increase In Capital
The allotment and issue of any new Shares is under the control of the
Directors of the Company. Subject to restrictions on the issue or grant of
securities contained in the Listing Rules, the Constitution and the
Corporations Act (and without affecting any special right previously
conferred on the holder of an existing share or class of shares), the
Directors may issue Shares as they shall, in their absolute discretion,
determine.
Variation of Rights
Under Section 246B of 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 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.
15
7. RISK FACTORS
7.1 Introduction
Set out below is a list of some of the risk factors which should be
considered before subscribing for Options under this Prospectus. Some
of these risk factors can be mitigated by the use of safeguards and
appropriate systems and actions, but many are outside the control of the
Company and cannot be mitigated. The Directors are of the view that
the Options offered under this Prospectus should be considered
speculative because of the nature of the Company’s business. This list is
not exhaustive and potential Applicants should examine the contents of
this Prospectus and consult their professional advisers before deciding
whether to apply for Options.
7.2 Exploration Success
The mineral tenements of the Company as described in this Prospectus
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 Company’s projects
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.
7.3 Economic Risks
General economic conditions, movements in interest and inflation rates
and currency exchange rates may have an adverse effect on the
Company’s exploration, development and production activities, as well
as on its ability to fund those activities.
7.4 Market Conditions
The market price of the Shares and Options can fall as well as rise and
may be subject to varied and unpredictable influences on the market for
equities in general and offshore resource exploration stocks in particular.
Neither the Company nor the Directors warrant the future performance
of the Company or any return on an investment in the Company.
7.5 Operating Risks
The operations of the Company may be affected by various factors,
including failure to locate or identify mineral deposits; failure to achieve
predicted grades in exploration and mining; operational and technical
difficulties encountered in mining; difficulties in commissioning and
operating plant and equipment; mechanical failure or plant breakdown;
unanticipated metallurgical problems which may affect extraction costs;
adverse weather conditions; industrial and environmental accidents;
industrial disputes; and unexpected shortages or increases in the costs of
consumables, spare parts, plant and equipment.
16
7.6 Environmental Risks
The operations and proposed activities of the Company are subject to
State and Federal laws and regulation concerning the environment. As
with most exploration projects and mining operations, the Company’s
activities are expected to have an impact on the environment,
particularly if advanced exploration or mine development proceeds. The
Company conducts its activities to the highest standard of
environmental obligation, including compliance with all environmental
laws.
7.7 Commodity Price Volatility and Exchange Rate Risks
If the Company achieves success leading to mineral production, the
revenue it will derive through the sale of commodities exposes the
potential income of the Company to commodity price and exchange
rate risks. Commodity prices fluctuate and are affected by many factors
beyond the control of the Company. Such factors include supply and
demand fluctuations for precious and base metals, technological
advancements, forward selling activities and other macro-economic
factors.
Furthermore, international prices of various commodities are
denominated in United States dollars, whereas the income and
expenditure of the Company are and will be taken into account in
Australian currency, exposing the Company to the fluctuations and
volatility of the rate of exchange between the United States dollar and
the Australian dollar as determined in international markets.
7.8 Title Risks and Native Title
Interests in tenements in Australia are governed by the respective State
legislation and are evidenced by the granting of licences or leases. Each
licence or lease 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 tenements if licence conditions are not met or if insufficient
funds are available to meet expenditure commitments.
It is also possible that, in relation to tenements which the Company has
an interest in or will in the future acquire such an interest, there may be
areas over which legitimate common law native title rights of Aboriginal
Australians exist. If native title rights do exist, the ability of the Company to
gain access to tenements (through obtaining consent of any relevant
landowner), or to progress from the exploration phase to the
development and mining phases of operations may be adversely
affected.
Presently all of the Company’s tenements are situated in the state of
Tasmania and there are currently no Native Title claimants in regards to
the Tenements.
17
7.9 Investment Speculative
The list of risk factors ought not to be taken as exhaustive of the risks
faced by the Company or by investors in the Company. The risk factors,
and others not specifically referred to above, may in the future materially
affect the financial performance of the Company and the value of the
securities offered under this Prospectus.
Therefore, the Options to be issued pursuant to this Prospectus carry no
guarantee with respect to the payment of dividends, returns of capital or
the market value of those Options.
Potential investors should consider that the investment in the Company is
speculative and should consult their professional advisers before
deciding whether to apply for Options.
18
8. ADDITIONAL INFORMATION
8.1 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 Company’s securities. The Options which will be
issued pursuant to this Prospectus are in the same class of Options that
have been quoted on the official list of the ASX during the 12 months
prior to the issue of this Prospectus.
This Prospectus is a “transaction specific prospectus”. In general terms
“transaction specific prospectuses” are only required to contain
information in relation to the effect of the issue of securities on the
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.
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 12 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.
Information that is already in the public domain has not been reported in
this Prospectus other than that which is considered necessary to make
this Prospectus complete.
The Company, as a disclosing entity under the Corporations Act states
that:
(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with the ASIC in relation to the
Company (not being documents referred to in Section
1274(2)(a) of the Corporations Act) may be obtained from, or
inspected at, the offices of the ASIC; and
19
(c) it will provide a copy of each of the following documents, free of
charge, to any person on request between the date of issue of
this Prospectus and the Closing Date:
(i) the financial statements of the Company for the financial
year ended 30 June 2006 being the last financial
statements for a financial year, of the Company lodged
with the ASIC before the issue of this Prospectus; and
(ii) any documents used to notify ASX of information relating
to the Company in the period from lodgement of the
financial statements referred to in paragraph (i) above
until the issue of the Prospectus in accordance with the
Listing Rules as referred to in Section 674(1) of the
Corporations Act.
Copies of all documents lodged with the ASIC in relation to the
Company can be inspected at the registered office of the Company
during normal office hours.
The Company has lodged the following announcements with ASX since
the lodgement of the 2006 audited financial statements:
Date Description of Announcement
13/12/2006 Share Placement and Option Issue
13/12/2006 Appendix 3B
8/12/2006 Appendix 3B
28/11/2006 Results of Meeting
28/11/2006 AGM Presentation – Exploration Summary 2006
22/11/2006 Appointment of Technical Consultant &
Placement
22/11/2006 Trading Halt
17/11/2006 Joint Company Secretary Resignation
25/10/2006 First Quarter Cashflow Report
25/10/2006 First Quarter Activities Report
24/10/2006 Notice of Annual General Meeting
24/10/2006 Notice of Annual General Meeting
10/10/2006 New Gold Reef Discovered During Deep Drilling
– Lefroy NE Tasmania
04/10/2006 Resource Upgrade for Pinafore Inferred
Resource
28/09/2006 Annual Report
ASX maintains files containing publicly available information for all listed
companies. The Company’s file is available for inspection at ASX during
normal office hours.
20
8.2 Material Contracts
The following are summaries of the significant terms of the material
agreements which relate to the business of the Company.
Underwriting Agreement
CRC has provided a written undertaking to unconditionally underwrite
the Offer. CRC will not be paid any fees for acting as Underwriter of the
Offer.
8.3 Directors’ Interests
Other than as set out below or elsewhere in this Prospectus, no Director
nor any firm in which such a Director is a partner, has or had within 2
years before the lodgement of this Prospectus with the ASIC, any interest
in:
(a) the formation or promotion of the Company;
(b) property acquired or proposed to be acquired by the Company
in connection with its formation or promotion or the Offer of
securities pursuant to this Prospectus; or
(c) the Offer of securities pursuant to this Prospectus,
and no amounts have been paid or agreed to be paid (in cash or Shares
or otherwise) to any Director or to any firm in which any such Director is a
partner, either to induce him to become, or to qualify him as, a Director
or otherwise for services rendered by him or by the firm in connection
with the formation or promotion of the Company or Offer of securities
pursuant to this Prospectus.
Directors’ interests in securities of the Company at the date of this
Prospectus are:
Name Shares Existing options Entitlement to
Options
Malcolm James 409,280 - 204,640
Craig Bromley 4,000,000 - 2,000,000
Tom Kelly 3,062,501 - 1,531,251
Notes:
1. Each of the directors has indicated that it is their present intention
to take up their full Entitlement under the Offer.
The Constitution of the Company provides that the non-executive
Directors may be paid for their services as Directors a sum not exceeding
such fixed sum per annum as may be determined by the Company in
general meeting, to be divided among the non-executive Directors as
21
determined by the Directors and in default of agreement, then in equal
shares.
In the last two (2) years the Company paid $78,480 for the year ended 30
June 2005 and $78,480 for the year ended 30 June 2006 to all Directors.
For the period from 1 July 2006 to the date of this Prospectus $32,700 has
been paid or is payable by the Company by way of remuneration for
services provided by all Directors (executive, non-executive and
alternate), companies associated with those Directors or their associates
in their capacity as directors, employees, consultants or advisers (and
including superannuation payments). Directors, companies associated
with the Directors or their associates are also reimbursed for all
reasonable expenses properly incurred in the course of conducting their
duties which include, but are not in any way limited to, out of pocket
expenses, travelling expenses, disbursements made on behalf of the
Company and other miscellaneous expenses.
8.4 Interests and Consents of Experts and Advisers
Other than as set out below or elsewhere in this Prospectus, no expert,
underwriter, promoter or any other person named in this Prospectus as
performing a function in a professional advisory or other capacity in
connection with the preparation or distribution of the Prospectus, nor any
firm in which any of those persons is or was a partner, nor any company
with which any of those persons is or was associated, has or had within 2
years before the lodgement of this Prospectus with the ASIC, any interest
in:
(a) the formation or promotion of the Company; or
(b) property acquired or proposed to be acquired by the Company
in connection with its formation or promotion or the Offer of
securities pursuant to this Prospectus; or
(c) the Offer of securities pursuant to this Prospectus,
and no amounts have been paid or agreed to be paid (in cash or Shares
or otherwise) to any expert, underwriter, promoter or any other 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, or to any firm in which any of those persons
is or was a partner, or to any company with which any of those persons is
or was associated, for services rendered by that person, or by the firm or
the company, in connection with the formation or promotion of the
Company or the Offer of securities pursuant to this Prospectus.
Pursuant to Section 716 of the Corporations Act, Steinepreis Paganin has
given, and has not withdrawn its consent to being named as Solicitors to
the Company in the Corporate Directory of this Prospectus in the form
and context in which it is named. Steinepreis Paganin has not caused or
authorised the issue of this Prospectus, does not make or purport to make
any statement in this Prospectus and takes no responsibility for any part
of this Prospectus.
22
Steinepreis Paganin act as solicitors to the Company. Steinepreis Paganin
will be paid approximately $5,000 for services in relation to this
Prospectus.
Pursuant to Section 716 of the Corporations Act, Corporate & Resources
Consultants Pty Ltd has given, and has not withdrawn its consent to
being named as the Underwriter of the Offer in this Prospectus.
Corporate & Resources Consultants Pty Ltd has not caused or authorised
the issue of this Prospectus, does not make or purport to make any
statement in this Prospectus and takes no responsibility for any part of this
Prospectus.
Corporate & Resources Consultants Pty Ltd act as a Technical Consultant
to the Company and are paid fees for the services provided to the
Company. Corporate & Resources Consultants Pty Ltd will not be paid
any fees for acting as Underwriter of the Offer.
8.5 Legal Proceedings
There is no litigation, arbitration or proceedings pending against or
involving the Company as at the date of this Prospectus.
8.6 Estimated Expenses of Offer
In the event that the Offer is fully subscribed, the estimated expenses of
the Offer are as follows:
$
ASIC fees 2,010
Listing fees 14,112
Legal expenses 5,000
Printing and other expenses 3,298
Total 24,420
8.7 Market Price of Shares
The Company is a disclosing entity for the purposes of the Corporations
Act and its Shares are enhanced disclosure securities quoted on ASX.
The highest and lowest market sale prices of the Company’s Shares on
ASX during the three months immediately preceding the date of
lodgement of this Prospectus with the ASIC and the respective dates of
those sales were:
Highest: 33 cents on 5 December 2006; and
Lowest: 17 cents on 29 September 2006, 9 October 2006, 20 October
2006, 31 October 2006, 1 November 2006 and 6-10
November 2006.
The latest available closing sale price of the Company’s Shares on ASX
prior to the lodgement of this Prospectus with the ASIC was 27 cents on
18 December 2006.
23
8.8 Electronic Prospectus
Pursuant to Class Order 00/044, the ASIC has exempted compliance with
certain provisions of the Corporations Act 2001 to allow distribution of an
electronic prospectus and electronic application form on the basis of a
paper prospectus lodged with the 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 Entitlement and Acceptance Form. If you have not, please phone
the Company on (08) 9382 8711 and the Company will send you, for free,
either a hard copy or a further electronic copy of the Prospectus, or
both.
The Company reserves the right not to accept an Entitlement and
Acceptance Form from a person if it has reason to believe that when
that person was given access to the electronic Entitlement and
Acceptance 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.
24
9. AUTHORITY OF DIRECTORS
9.1 Directors’ Consent
Each of the Directors of Lefroy Resources Limited has consented to the
lodgement of this Prospectus with the ASIC in accordance with Section
720 of the Corporations Act.
Dated the 19th day of December 2006
25
10. DEFINITIONS
Applicant means a Shareholder or Underwriter who applies for Options
pursuant to the Offer.
ASIC means the Australian Securities and Investments Commission.
ASTC Settlement Rules means the settlement rules of the securities
clearing house which operates CHESS.
ASX means the Australian Stock Exchange Limited (ACN 008 624 691).
Board means the board of Directors unless the context indicates
otherwise.
Business Day means a day on which trading takes place on the stock
market of ASX.
Closing Date means the closing date of the Offer, being 5pm (WST) on 18
January 2007 (unless extended).
Company or Lefroy means Lefroy Resources Limited (ACN 107 118 678).
Constitution means the Company’s Constitution as at the date of this
Prospectus.
Corporations Act means the Corporations Act 2001 (Cth).
Directors means the directors of the Company at the date of this
Prospectus.
Dollar or “$” means Australian dollars.
Entitlement means the entitlement of a Shareholder who is eligible to
participate in the Offer.
Entitlement and Acceptance Form means the application form either
attached to or accompanying this Prospectus.
Issue means the issue of Options offered by this Prospectus.
Listing Rules or ASX Listing Rules means the Listing Rules of the ASX.
Offer means the non-renounceable entitlement offer of one (1) Option
for every two (2) Shares to Shareholders on the Record Date, further
details of which are included in the “Details of the Offer” section of this
Prospectus.
Offer Period means the period commencing on the Opening Date and
ending on the Closing Date.
Official List means the official list of ASX.
Option means an option to acquire a Share on the terms outlined in
Section 6.1.
Prospectus means this prospectus.
26
Quotation and Official Quotation means official quotation on ASX.
Record Date means 5pm (WST) on 2 January 2007.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means a shareholder of the Company.
Shortfall means those Options under the Offer not applied for by
Shareholders under their respective Entitlement.
Shortfall Application Form means the shortfall application form attached
to or accompanying this Prospectus.
Underwriter means Corporate & Resource Consultants Pty Ltd (ABN 59
610 857 130).
Underwriting Agreement means the underwriting agreement entered into
by the Directors on the date of this Prospectus.
WST means Western Standard Time.
ONLY COMPLETE THIS SHORTFALL APPLICATION FORM IF INSTRUCTED BY THE UNDERWRITER OR THE COMPANY.
SHORTFALL APPLICATION FORM
LEFROY RESOURCES LIMITED
ACN 107 118 673
REGISTERED OFFICE: 278 Barker Road
SUBIACO WA 6008
SHARE REGISTRY: Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St Georges Terrace
PERTH WA 6000
Tel: 1300 557 010 Fax: (08) 9323 2033
APPLICANT’S DETAILS:
Full name (PLEASE PRINT)
Title, Given Name(s) & Surname or Company Name
Joint Applicant #2 or
Joint Applicant #3 or
Postal Address (PLEASE PRINT)
Street Number Street
Suburb/Town State Post Code
ABN, Tax File Number or Exemption Applicant #2 Applicant #3
CHESS HIN or Existing SRN (where
applicable)
Number of Options applied for Application Money enclosed at 1 cent per Option
A$……………………………
I/We whose full name(s) and address appear above hereby apply for the number of Options shown above (to be allocated to me/us by the
Company in respect of this Application) under the Prospectus on the terms set out in the Prospectus.
Cheque Details:
PLEASE ENTER Drawer Bank BSB or Branch Amount
CHEQUE
DETAILS
THANKYOU
My/Our contact numbers in the case of inquiry are:
Telephone ( ) . . . . . . . . . . . . . . . . . . . . . . . . . Fax ( ) . . . . . . . . . . . . . . . . . . . . . . .
NOTE: Cheques should be made payable to “Lefroy Resources Limited – Entitlement Issue Account”, crossed “NOT NEGOTIABLE” and
forwarded to the Company’s share registry to arrive no later than 5.00 pm WST on that date which is 3 months after the Closing
Date (or such earlier date as directed by the Company).
Declaration
This Shortfall Application Form does not need to be signed. By lodging this Shortfall Application Form and a cheque for the application money this
Applicant hereby:
(1) applies for the number of Options specified in the Shortfall Application Form or such lesser number as may be allocated by the Directors;
(2) agrees to be bound by the constitution of the Company; and
(3) authorises the Directors to complete or amend this Shortfall Application Form where necessary to correct any errors or omissions.
INSTRUCTIONS TO APPLICANTS
Please post or deliver the completed Shortfall Application Form together with a cheque to the share registry of the Company. If an
Applicant has any questions on how to complete this Shortfall Application Form, please telephone the Share Registry on 1300 557
010. The Form must be received by the Registry no later than 5.00 pm on the date which is 3 months after the Closing Date (or
such earlier date as directed by the Company).
A. Application for Shares
The Shortfall Application Form must only be completed in accordance with instructions included in the Prospectus.
B. Name of Applicant
Write the Applicant’s FULL NAME. This must be either an individual’s name or the name of a company. Please refer to the
bottom of this page for the correct form of registrable title. Applications using the incorrect form of registrable title may be
rejected.
C. Name of Joint Applicants or Account Designation
If JOINT APPLICANTS are applying, up to three joint Applicants may register. If applicable, please provide details of the
Account Designation in brackets. Please refer to the bottom of this page for instructions on the correct form of registrable title.
D. Address
Enter the Applicant’s postal address for all correspondence. If the postal address is not within Australia, please specify Country
after City/Town.
E. Contact Details
Please provide a contact name and daytime telephone number so that the Company can contact the Applicant if there is an
irregularity regarding the Shortfall Application Form.
F. CHESS HIN or existing SRN Details
The Company participates in CHESS. If the Applicant is already a participant in this system, the Applicant may complete this
section with their existing CHESS HIN. If the applicant is an existing shareholder with an Issuer Sponsored account, the SRN
for this existing account may be used. Otherwise leave the section blank and the Applicant will receive a new Issuer Sponsored
account and statement.
G. Cheque Details
Make cheques payable to “Lefroy Resources Limited – Entitlement Issue Account” in Australian currency and cross them “Not
Negotiable”. Cheques must be drawn on an Australian Bank. The amount of the cheque should agree with the amount shown
on the Shortfall Application Form.
H. Declaration
By completing the Shortfall Application Form, the Applicant will be taken to have made to the Company the declarations and
statements therein. The Shortfall Application Form does not need to be signed.
If a Shortfall Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still
be accepted. Any decision of the Directors as to whether to accept a Shortfall Application Form, and how to construe, amend
or complete it, shall be final. A Shortfall Application Form will not however, be treated as having offered to subscribe for more
Shares and Options than is indicated by the amount of the accompanying cheque.
Forward your completed application together with the application money to:
Lefroy Resources Limited – Entitlement Issue Account
C/- Computersahre Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St Georges Terrace
PERTH WA 6000
CORRECT FORMS OF REGISTRABLE TITLE
Note that ONLY legal entities are allowed to hold securities. Shortfall Application Forms must be in the name(s) of a natural person(s),
companies or other legal entities acceptable to the Company. At least one full given name and the surname is required for each
natural person. Shortfall Application Forms cannot be completed by persons under 18 years of age. Examples of the correct form of
registrable title are set out below.
Type of Investor Correct Form of Registration Incorrect Form of Registration
Individual Use given names in full, not initials Mr John Alfred Smith J A Smith
Company Use the company’s full title, not abbreviations ABC Pty Ltd ABC P/L or ABC Co
Joint Holdings
Use full and complete names
Mr Peter Robert Williams &
Ms Louise Susan Williams
Peter Robert &
Louise S Williams
Trusts
Use the trustee(s) personal name(s).
Mrs Susan Jane Smith

Sue Smith Family Trust
Deceased Estates
Use the executor(s) personal name(s).
Ms Jane Mary Smith &
Mr Frank William Smith

Estate of late John Smith
or
John Smith Deceased
Minor (a person under the age of 18)
Use the name of a responsible adult with an appropriate designation.
Mr John Alfred Smith

Master Peter Smith
Partnerships
Use the partners personal names.
Mr John Robert Smith &
Mr Michael John Smith

John Smith and Son
Long Names. Mr John William Alexander
Robertson-Smith
Mr John W A Robertson-Smith
Clubs/Unincorporated Bodies/Business Names
Use office bearer(s) personal name(s).
Mr Michael Peter Smith

ABC Tennis Association
Superannuation Funds
Use the name of the trustee of the fund.
Jane Smith Pty Ltd

Jane Smith Pty Ltd
Superannuation Fund