Explanatory Memorandum

Transcription

1 Explanatory Memorandum incorporating Notice of General Meeting to be held on Friday 15 June 2012 at 11am (Sydney time) at Press Room, Radisson Blu Hotel, 27 O Connell Street, Sydney NSW 2000, Australia and a Proxy Form THE DIRECTORS OF COALWORKS RECOMMEND THAT YOU: VOTE IN FAVOUR OF RESOLUTION 1 PROPOSED BY THE BOARD VOTE AGAINST MACQUARIE RESOLUTIONS 2, 3, 4 AND 5 This is an important document and requires your immediate attention. You should read this document in its entirety before deciding whether or not to vote in favour of any resolutions at the general meeting. If you are in doubt as to what you should do, you should consult your legal, investment or other professional adviser. If you have questions about the general meeting or the resolutions to be voted on please call the shareholder information line on within Australia) or (outside Australia) Monday to Friday between 9.00am and 5.00pm (Sydney Time). If you have recently sold all of your Coalworks shares, please disregard this document. This Explanatory Memorandum is dated 8 May 2012

2 Notice of Meeting and Agenda NOTICE IS HEREBY GIVEN that a General Meeting (Meeting) of Coalworks Limited (Coalworks or the Company) will be held at Press Room, Radisson Blu Hotel, 27 O Connell Street, Sydney NSW 2000, Australia at am (Sydney time) on Friday 15 June This Explanatory Memorandum describes the various resolutions to be considered at the Meeting. FOR Resolutions RECOMMENDED by your Board of Directors for approval The Chairman intends to vote all undirected proxies in favour of resolution 1. Resolution 1: Ratification of Issue of Shares To consider and if thought fi t, pass the following resolution as an ordinary resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders ratify the allotment and issue of 22,363,343 shares on the terms and conditions set out in the Explanatory Memorandum Voting Exclusion Statement: The Company will disregard any votes cast on resolution 1 by a person who participated in the issue (and any of their associates) except in the instance that the votes are cast in a capacity as proxy for a party who did not participate in the issue and is entitled to vote on the resolution. 2 COALWORKS LTD» EXPLANATORY MEMORANDUM

3 NOTICE OF MEETING AND AGENDA AGAINST resolutions Resolutions proposed by Macquarie Bank Limited which your Board of Directors recommends you VOTE AGAINST The Chairman intends to vote all undirected proxies against 2,3,4 and 5. Resolution 2: Removal of Mr Wayne Douglas Mitchell as Director To consider and if thought fi t, pass the following resolution as an ordinary resolution: That, conditional on passage of Resolution 4, Mr Wayne Mitchell be removed from office as a director of the Company with effect from the close of the Meeting Resolution 3: Removal of Dr Andrew Edwin Firek as Director To consider and if thought fi t, pass the following resolution as an ordinary resolution: That, conditional on passage of Resolution 5, Dr Andrew Edwin Firek be removed from office as a director of the Company with effect from the close of the Meeting Resolution 4: Election of Anthony J. Ferguson as a Director To consider and if thought fi t, pass the following resolution as an ordinary resolution: That, conditional on passage of Resolution 2, Mr Anthony J. Ferguson be appointed as a director of the Company, with effect from the close of the Meeting Resolution 5: Election of Johann C. Jooste-Jacobs as a Director To consider and if thought fi t, pass the following resolution as an ordinary resolution: That, conditional on passage of Resolution 3, Mr Johann C. Jooste-Jacobs be appointed as a director of the Company, with effect from the close of the Meeting COALWORKS LTD» EXPLANATORY MEMORANDUM 3

4 NOTICE OF MEETING AND AGENDA Proxies A member entitled to attend and vote at the Meeting may appoint a proxy and, if entitled to cast two or more votes is entitled to appoint two proxies in which case each proxy may be appointed to represent a specifi ed proportion of the member s voting rights. A proxy need not be a member of the Company and a member may appoint an individual or a body corporate to act as its proxy. Two proxy forms have been included in this information package, a green form and a white form. The green proxy form has been completed in line with the recommendations of the Coalworks Board. If you wish to vote in accordance with the recommendations of the Coalworks Board, you should sign the green form and fax or mail the form to the Coalworks Share Registry following the instructions on the form. If you sign and return the green proxy form, you do not need to complete the white proxy form. The white proxy form is incomplete. If you do not wish to vote in accordance with the recommendations of the Coalworks Board, you will need to follow the instructions on the white proxy form to indicate your voting instructions. Once you have completed this form, please fax or mail the form to the Coalworks Share Registry following the instructions on the form. The Chairman of the meeting for the purposes of each resolution intends to vote undirected proxies in favour of resolution 1 and against resolutions 2, 3, 4 and 5. For an appointment of a proxy to be effective, proxy forms and, if applicable, the powers of attorney (or a certifi ed copy of the powers of attorney) under which they are signed must be lodged at the Company s share registry, Boardroom Pty Limited at least 48 hours before the appointed time of the meeting. Share registry s contact details: Post: GPO Box 3993 Sydney NSW 2000 Facsimile: In person: Level 7, 207 Kent Street, Sydney, NSW 2000 If you are entitled to vote and wish to appoint a proxy, you should be aware that your proxy s vote on your behalf will be valid only if you direct your proxy how to vote on the proxy form and the proxy does vote as directed. It has been determined that under the Corporations Regulations , for the purposes of the Meeting, shares will be taken to be held by the persons who are the registered holders at 7pm (Sydney Time) on 13 June Accordingly, share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting. By order of the Board Nathan Bartrop Company Secretary Dated: Tuesday, 8 May COALWORKS LTD» EXPLANATORY MEMORANDUM

5 Explanatory Memorandum Introduction This Explanatory Memorandum accompanies and forms part of the notice of general meeting ( Notice ) of Coalworks Limited ( the Company ) and is intended to provide shareholders of the Company with information to assess the merits of the Resolutions contained in the business to be conducted at the general meeting to be held on Friday 15 June A Notice accompanies this document. The directors ( the Directors ) of the Company recommend that shareholders read this Explanatory Memorandum before making any decisions in relation to the Resolutions. Background to the meeting The Meeting has been requisitioned by Macquarie to consider several resolutions put forward by them, being resolutions 2, 3, 4 and 5. In addition to these resolutions the board has proposed an additional resolution for consideration by shareholders, being resolution 1. In the absence of this general meeting, the board would have waited until the next Annual General Meeting to propose resolution 1. Essentially, the resolution put forward requires shareholders to approve of shares issued by the Company under the recent capital raising. Voting against resolutions 2, 3, 4 and 5 will result in a board comprised of Wayne Mitchell, Andrew Firek and Ian Craig. Voting for resolutions 2, 3, 4 and 5 will result in a board comprised of Anthony Ferguson, Johann Jooste-Jacobs and Ian Craig. Frequently asked questions Why has the Meeting been called? What has Macquarie proposed in the Notice of Meeting? Why has Macquarie proposed to remove Wayne Mitchell and Andrew Firek as Directors of Coalworks and appoint new directors? On 17 April 2012 Macquarie requisitioned a meeting of shareholders pursuant to section 249 of the Corporations Act, by sending a requisition notice to the Company. Macquarie currently holds 12,763,429 ordinary shares, which is more than 5% of the Company s issued share capital, entitling Macquarie to requisition a shareholder meeting. Macquarie has proposed resolutions 2, 3, 4 and 5 which seek to remove Mr Wayne Mitchell and Dr Andrew Firek as Directors of Coalworks and replace these directors with Macquarie s proposed directors, Mr Anthony J. Ferguson and Mr Johann C. Jooste Jacobs. A copy of Macquarie s member s statement, pursuant to Section 249P of the Corporations Act is set out at pages 11 and 12. Coalworks does not agree with the reasons put forward by Macquarie. Further information If you have questions about the general meeting or the resolutions to be voted on please call the shareholder information line on within Australia) or (outside Australia) Monday to Friday between 9.00am and 5.00pm (Sydney Time). COALWORKS LTD» EXPLANATORY MEMORANDUM 5

6 EXPLANATORY MEMORANDUM Important dates and times Last date for receipt of valid proxies am (Sydney time) on Wednesday 13 June 2012 Record date for shareholders eligible to vote 7.00 pm (Sydney Time) on Wednesday 13 June 2012 General Meeting am (Sydney time) on Friday 15 June 2012 Ordinary business RESOLUTION COMMENTARY RECOMMENDATION Resolution 1: Ratification of Issue of Shares Resolution 1 relates to the ratifi cation of the recent share placement undertaken by the Company. By ratifying this issue, the Company will retain the fl exibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval. The following information is provided in accordance with Listing Rule 7.5: 1. 22,363,343 shares were allotted. 2. The shares were allotted at 78 cents per share. 3. The shares were issued on the terms and conditions as fully paid ordinary shares on issue. 4. The shares were allotted and issued to a range of sophisticated and institutional investors in Australia and overseas. The funds raised from the issue will enable Coalworks to purchase long lead items for the Vickery South project, to apply for port capacity, possible acquisition of land and to strengthen the Company s working capital. Whilst Coalworks is not required by law to seek shareholder approval for this share issuance, it is seeking the ratifi cation of shareholders to retrospectively approve the issuance. The Directors of the Company are unanimously in favour of Resolution 1. The Chairman of the Meeting for the purposes of considering Resolution 1 intends to vote undirected proxies in favour of Resolution 1. 6 COALWORKS LTD» EXPLANATORY MEMORANDUM

7 NOTICE OF MEETING AND AGENDA RESOLUTION COMMENTARY RECOMMENDATION Resolution 2: Removal of Mr Wayne Douglas Mitchell as Director Resolution 3: Removal of Dr Andrew Edwin Firek as Director Resolution 4: Election of Anthony J. Ferguson as a Director Resolution 5: Election of Johann C. Jooste-Jacobs as a Director Resolution 2 relates to the removal of Mr Wayne Mitchell as a Director of the Company. Mr Mitchell is a qualifi ed accountant with more than 30 years extensive senior management experience in the natural resource sector, both in Australia and in Southeast Asia. In the early 1970s, Mr Mitchell and two partners were the initial promoters and developers of Thailand s major zinc deposit located at Mae Sot, Northern Thailand. This resource deposit is now owned and operated by a Thai public company, Padaeng Industry Company Ltd. Information on the proposed director is contained in the attached statement by Mr Wayne Mitchell Resolution 3 relates to the removal of Dr Andrew Firek as a Director of the Company. Dr Firek has been involved in the coal mining and processing industry at operational and executive levels for over 20 years. Dr Firek is a former group leader at the CSIRO, Division of Fossil Fuels in Sydney. He was a United Nations expert in fossil fuels and has worked on coal, oil and gas projects in Europe and Africa. He managed teams involved in coal and oil from coal projects at the CSIRO and has participated in developing coal and mineral exploration strategies for projects in Tasmania. Information on the proposed director is contained in the attached statement by Dr Andrew Firek. Resolution 4 relates to the election of Mr Anthony Ferguson as a Director of the Company. Information on the proposed director is included in the attached statement supplied by Macquarie and has not been prepared by the Company. Resolution 5 relates to the election of Johann Jooste- Jacbos as a Director of the Company. Information on the proposed director is included in the attached statement supplied by Macquarie and has not been prepared by the Company. The Directors of the Company are against the removal of Mr Wayne Mitchell as a Director of the Company. The Chairman of the Meeting for the purposes of considering Resolution 2 intends to vote undirected proxies against Resolution 2. The Directors of the Company are against the removal of Dr Andrew Edwin Firek as a Director of the Company. The Chairman of the Meeting for the purposes of considering Resolution 3 intends to vote undirected proxies against Resolution 3. The Directors of the Company are against the appointment of Mr Anthony Ferguson as a Director of the Company. The Chairman of the Meeting for the purposes of considering Resolution 4 intends to vote undirected proxies against Resolution 4. The Directors of the Company are against the election of Mr Jooste- Jacobs as a Director of the Company. The Chairman of the Meeting for the purposes of considering Resolution 5 intends to vote undirected proxies against Resolution 5. COALWORKS LTD» EXPLANATORY MEMORANDUM 7

8 Director s Statement Wayne Mitchell Independent Non-Executive Chairman: Dear Shareholder, Coalworks stands at a pivotal stage of its development, with the start of production from our outstanding Vickery South project just three years away, marking our evolution into a new independent Australian coal producer. Now more than ever, it is imperative that Coalworks has a Board and management team that has the commercial and operational skills to deliver on that vision, and more importantly with the independence to ensure the best outcome for all of our shareholders. Since I was appointed Chairman in November 2007, Coalworks has made substantial progress to reach the stage it is at today. Despite the turmoil caused by the Global Financial Crisis, Coalworks has continued to advance on its plan to develop a suite of strategic, high quality coal assets. Signifi cant value has been added at all of our projects. A pre-feasibility study has been completed at Vickery South, while at Ferndale we have announced a 743 million-ton JORC inferred resource. At Oaklands North, baseline environmental work and the prefeasibility study into a coal-to-liquids project continue to move forward. Following the $17.4 million placement last month, Coalworks is well funded to expedite this ongoing work. The company is working hard on the defi nitive feasibility study at Vickery South, which is due later this year, while long-lead items for the project are due to be ordered during the current quarter. Conceptual mine studies are expected to commence at Ferndale in the short term following the release of the JORC resource last month. Despite weakness in global coal and equity markets, Coalworks is gaining increasing recognition from the market for these achievements. Since the start of 2012, Coalworks shares have gained 42% and the company has attracted a number of high quality institutional investors to its share register. Further recognition was gained last month with Noble Group becoming a signifi cant shareholder in the company. Noble s experience in developing integrated supply chains for emerging coal producers will be invaluable as we pursue the successful development of our project pipeline. This progress, and the recognition it has received, has come during a period of signifi cant consolidation in the Australian coal industry that has included our previous major shareholder Boardwalk Resources, which is now part of the enlarged Whitehaven Coal group. It has also come against a backdrop of weaker thermal coal prices, and as delays in project approvals weaken some of our peers in the sector. From speaking with investors in Australia and overseas, they recognise and value Coalworks status as an emerging independent force in the Australian coal industry and they also recognise the high quality, strategic nature of the company s assets. It is my belief that an independently Chaired board is best placed to manage Coalworks through this period, in order to ensure the best outcome for all shareholders, particularly given Whitehaven s unsolicited takeover offer for Coalworks. I am fi rmly of the belief that the current composition of the Coalworks Board is entirely appropriate and that the company adheres to proper standards of corporate governance. I am also of the belief that the action taken by the requesting shareholder will only serve to destabilise the company at a time when Coalworks requires strong leadership to ensure its ongoing independence, and to achieve its goals. As a result of this shareholder action, I have been forced to defend my position as Chairman of Coalworks, a position in which I believe I have been an effective and valued leader of this company, applying my experience and knowledge for the benefi t of all shareholders. I remain strongly committed to executing on the strategy we have begun at Coalworks, and I therefore ask for the support of all Coalworks shareholders to continue in my role as Chairman. Yours Sincerely, Wayne Mitchell Independent Non-Executive Chairman 8 COALWORKS LTD» EXPLANATORY MEMORANDUM

9 DIRECTOR S STATEMENT Dr. Andrew Firek Managing Director and Chief Executive Officer: Dear Shareholder, My name is Andrew Firek and I have been Managing Director and Chief Executive Offi cer of Coalworks for almost seven years. Since our successful listing in 2008 and under my stewardship, Coalworks has made considerable progress with our foundation Oaklands project, and gone on to successfully acquire the high quality Vickery South and Ferndale projects, which we expect to deliver fi rst production to the company as soon as My contribution to the progress Coalworks has made stems from more than 20 years in the coal industry in Australia and overseas, where I have worked in a number of operational and executive roles including as a former group leader of the fossil fuels division of the CSIRO in Sydney. My experience also includes the successful development and commissioning of a $220 million magnesia production facility in Queensland for Pancontinental Mining Limited, and a founding Executive Director of Allegiance Mining NL, which discovered Tasmania s largest nickel sulphide resource and which was subsequently sold to Zinifex in 2008 for more than $800 million. At the same time being a director of coking coal producer Gujarat NRE Coking Coal Limited provides additional valuable coal industry knowledge to my role at Coalworks. However, it is the past seven years with Coalworks that represent the proudest period of my career. Signifi cant value has been added to our asset and project pipeline, and Coalworks has developed into an independent Australian coal company of genuine quality that is now receiving increasing recognition from the industry and the equity market. To have attracted a global leader in the coal industry such as Noble to become a signifi cant shareholder in Coalworks, and to be working alongside a partner of the quality of Itochu at Vickery South, demonstrates the standing that has been achieved through the hard work of the Board and management team in the four years since this company was fl oated. Our work is not yet done however, and we now move into a crucial phase for Coalworks, one in which having a stable, experienced and independent Board and management team will be fundamental in order for Coalworks to deliver on imminent commercialisation. I fi rmly believe that we have the right team in place to deliver on our strategy, with the optimal blend of operational and commercial experience, and I believe that some of the milestones we have announced over the past few months are strong evidence of what we can achieve as a group. As a group, the Coalworks management team remains wholly committed to delivering signifi cant value to our shareholders through building a new independent coal producer. I believe that I speak for myself and the other members of the team, in saying that we plan to work tirelessly together in order to achieve that goal. In summary then, I believe that I have made a signifi cant contribution to the success of Coalworks over the past seven years, and I also believe that with the progress we have made, and amidst the ongoing consolidation of the Australian coal sector, this company is set for a further re-rating. On that basis, I request your support to vote against the resolution being proposed and to allow me to continue in my role as Chief Executive Offi cer and Managing Director of Coalworks. Yours sincerely, Dr Andrew Firek Chief Executive Offi cer and Managing Director COALWORKS LTD» EXPLANATORY MEMORANDUM 9

10 DIRECTOR S STATEMENT The following statements apply in respect of the information in this notice that relates to the Ferndale Mineral Resource: The information is based on, and accurately refl ects information compiled by Mr Stephen Hyland, who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Hyland is a geologist employed as Principal Consultant by Ravensgate, mineral industry consultants. He has the relevant experience in relation to the coal deposits being reported on to qualify as a Competent Person as defi ned in the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Identifi ed Mineral Resources and Ore Reserves. Mr Hyland has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears. 10 COALWORKS LTD» EXPLANATORY MEMORANDUM

11 Macquarie Bank Member Statement COALWORKS LTD» EXPLANATORY MEMORANDUM 11

12 MACQUARIE BANK MEMBER STATEMENT 12 COALWORKS LTD» EXPLANATORY MEMORANDUM