BRIGHTSTAR RESOURCES LIMITED — M&A Activity 2023

Mar 14, 2023

Kingwest Resources Ltd

ASX: KWR

Shares on Issue 281,726,818

Directors & Management

Executive Chairman Gregory Bittar

Chief Operating Officer Dean Vallve

Non Executive Directors Jonathan Downes Ashok Parekh

Company Secretary Stephen Brockhurst

Principal Place of Business

Unit 3, Churchill Court 335 Hay Street Subiaco WA 6008

Registered Office Level 8 216 St Georges Terrace Perth WA 6000

Contact

T 08 9481 0389 E admin@kingwestresources.com.au W www.kingwestresources.com.au

Investor Relations

Lucas Robinson

T +61 408 228 889

E lucas@corporatestorytime.com

15 March 2023

KINGWEST AND BRIGHTSTAR AGREE REVISED CONSIDERATION IN STRATEGIC MERGER TO UNLOCK SIGNIFICANT POTENTIAL VALUE FOR SHAREHOLDERS

• Kingwest Resources and Brightstar Resources have agreed to revised consideration for the proposed merger via a Kingwest Scheme of Arrangement under which Brightstar will acquire 100% of the shares in Kingwest
• Kingwest Shareholders to receive 1 Brightstar share for every 0.38 shares held at the Scheme Record Date; previously 1 Brightstar share for every 0.44 shares held
• Upon implementation of the Scheme, Kingwest shareholders will hold approximately 47% and Brightstar shareholders will hold approximately 53% of the Merged Group, respectively¹ ,
• The Revised Scheme is unanimously recommended by the Board of Kingwest and each director of Kingwest intends to vote all Kingwest shares they control in favour of the Scheme, in the absence of a Superior Proposal and subject to an Independent Expert opining that the Scheme is in the best interests of Kingwest Shareholders²
• Strategic consolidation of the gold assets of Brightstar and Kingwest to materially increase scale to the benefit of all shareholders and reduce timeline to potential production

Kingwest Resources Limited (Kingwest) (ASX: KWR) refers to the Scheme Implementation Deed (SID) announced on 23 December 2022 between Kingwest and Brightstar Resources Limited (Brightstar) (ASX: BTR) pursuant to which Brightstar would acquire 100% of the issued capital of Kingwest by Scheme of Arrangement (Initial Scheme). The consideration proposed under the Initial Scheme was for Kingwest Shareholders to receive 1 Brightstar share for every 0.44 shares held (Initial Scheme Consideration).

Following stakeholder engagement and feedback in relation to the Initial Scheme, Kingwest and Brightstar engaged in negotiations and have agreed to increase the Scheme consideration such that each Kingwest Shareholder will now receive 1 Brightstar share for every 0.38 Kingwest shares held at the Scheme record date (Revised Scheme). If the Scheme is approved and implemented, shareholders of Brightstar and Kingwest will hold 53% and 47%, respectively in the Merged Group compared with 57% and 43% respectively under the Initial Scheme.

In addition, pursuant to a separate scheme of arrangement for Kingwest optionholders, outstanding Kingwest options (including share appreciation rights)

² Refer to SID for details.

¹ Undiluted basis.

will be exchanged for new Brightstar options at the same revised exchange ratio of 1 Brightstar option for every 0.38 Kingwest options held. The new Brightstar options will be issued on equivalent termsto the existing Kingwest Options, including an adjusted exercise price and the same maturity dates.

A revised Option and Share Appreciation Rights conversion table is included as Appendix 1.

The Initial Scheme contemplated Kingwest Directors Gregory Bittar, Jonathan Downes and Ashok Parekh joining the Brightstar Board of Directors upon implementation of the transaction. In consideration of the proposed Brightstar Board size and composition, Ashok Parekh has indicated that he supports a smaller Board with reduced financial impost on Brightstar and hence he will not join the Brightstar Board.

It is now contemplated that the Brightstar Board following the merger will compromise five Directors: three from Brightstar including Managing Director Alex Rovira and two from Kingwest.

Kingwest and Brightstar have entered into a Letter of Variation to the SID (attached to this announcement) to effect these changes and the revised timetable below.

No other changes have been made to the SID as announced on 23 December 2022.

Kingwest Board Unanimously Recommends the Revised Scheme

The Directors of Kingwest unanimously recommend that Kingwest shareholders vote in favour of the Revised Scheme at the Scheme Meeting, in the absence of a superior proposal and subject to the Independent Expert concluding in the Independent Expert's Report (and continuing to conclude) that the revised Scheme is in the best interests of Kingwest shareholders.

Subject to those same qualifications, each member of the Kingwest Board intends to vote, or cause to be voted, all Kingwest shares held or controlled by them in favour of the revised Scheme.

Since the SID was announced on 23 December 2022, no party has engaged with Kingwest with regard to evaluating or providing a competing proposal.

Gregory Bittar, Chairman of Kingwest, commented:

"The Kingwest Board is pleased to announce the agreement with Brightstar which provides for a merger of equals as a first step towards transforming Kingwest into a larger and more diverse junior gold company. At a time which appears to mark a positive momentum shift for gold equities globally, the opportunity to combine the assets of Kingwest and Brightstar presents a significant value opportunity for all shareholders.

I would also like to express Kingwest's great appreciation to Ashok for his support during his time on the Kingwest Board, particularly through this transaction. Whilst Ashok was incredibly enthusiastic about being part of the merged group and serving on the Brightstar Board, he recognised that it was in the interests of all shareholders for the size of the merged Board to be appropriate for the size and scale of the merged group."

UPDATED SCHEME TIMETABLE AND NEXT STEPS

Kingwest Shareholders and Optionholders do not need to take any action in relation to the Schemes at this stage.

A Scheme Booklet will be circulated to all Kingwest Shareholders and Optionholders. The Booklet will contain important information about the revised Schemes, the Scheme Meetings, the reasons for the Kingwest Directors' recommendation and the Independent Expert's Report.

An updated indicative timeline is set out below:

Action	Date
Original Announcement of Proposed	23 December 2022
KWR submits draft Scheme Booklet to ASIC and ASX	17 March 2023
First Court Hearing	5 April 2023
Kingwest to Dispatch Scheme Documents to Shareholders and Optionholders	12 April 2023
Scheme Meetings	12 May 2023
Second Court Hearing	18 May 2023
Effective Date	19 May 2023
Record Date	23 May 2023
Implementation Date	26 May 2023

Steinepreis Paganin is acting as legal advisor to Kingwest.

Authorised for release to the ASX by the Board of Kingwest.

Further information contact:

Gregory Bittar Executive Chairman T: +61 8 9481 0389 E: admin@kingwestresources.com.au

Appendix 1

Revised Option and Share Appreciation Rights Conversion

Exchange Ratio 0.38

		Proposed Brightstar Options
Current Kingwest Options/Share Appreciation Rights	Number	Number	Exercise Price
KWRAI : Share Appreciation Rights
- Strike price of \$0.28 expiring 7 October 2024	2,970,000	7,815,789	0.106
- Strike price of \$0.18 expiring 15 September 2023	1,125,000	2,960,526	0.068
	4,095,000	10,776,316
KWRAM : Option Expiring 21-OCT-2024 EX \$0.20	8,000,000	21,052,632	0.076
KWRAL : Option Expiring 15-SEP-2024 EX \$0.17	6,250,000	16,447,368	0.065
KWRAO : Option Expiring 15-FEB-2025 EX \$0.285	1,700,000	4,473,684	0.108
KWRAJ : Option Expiring 30-DEC-2023 EX \$0.15	22,512,500	59,243,421	0.057
KWRAQ : Option Expiring 28-APR-2025 EX \$0.25	1,250,000	3,289,474	0.095
KWRAR : Option Expiring 29-FEB-2024 EX \$0.10	19,376,834	50,991,668	0.038
KWRAS: Option Expiring 16-JAN-2026 EX \$0.06	1,250,000	3,289,474	0.023
KWRAT: Option Expiring 16-JAN-2026 EX \$0.10	1,500,000	3,947,368	0.038
	61,839,334	162,735,089

Deed of Amendment

Kingwest Resources Limited (ACN 624 e72 185)

and

Brightstar Resources Limited (ACN 10A 727 491)

Table of contents

1.	Definitions and interpretation		2
	1.1	Definitions	2
	1.2	Terms defined in Scheme lmplementation Deed	2
2.	Amendments		2
3.	General		3
Schedule I - Timetable			4
Schedule 2 - Capital structure details			5

Date: March2023

Parties

KWR	Name	Kingwest Resources Limited
	ACN	624 972 185
	Address	Level 8, 216 St Georges Terrace, Perth WA 6000
	Email	Davidm@m in in gcorporate.com.au
	Attention	David McEntaggart
BTR	Name	Brightstar Resources Limited
	ACN	100727 491
	Address	3/25 Belgravia Street, Belmont WA 6104
	Email	joshh@brig htstarresources.com.au

Background

• (A) KWR and BTR are parties to the Scheme lmplementation Deed,
• (B) This deed records the parties' agreed amendments to the Scheme lmplementation Deed.

Operative provisions

¹ Definitions and interpretation

Definitions 1.1

ln this deed:

Effective Date means the date on which this deed is signed by allthe parties.

Seheme lmplementation Deed means the scheme implementation deed between KWR and BTR dated 22 December 2022.

1.2 Terms defined in Scheme lmplementation Deed

Unless the context otherwise requires, terms defined in the Scheme lmplementation Deed have the same meaning in this deed.

2. Amendments

ln accordance with clause 17.7 of the Scheme lmplementation Deed, with effect from the Effective Date, each party acknowledges and agrees that the Scheme lmplementation Deed is amended as follows:

(a) the definition of 'Transaction Ratio' in clause 1.1 of the Scheme lmplementation Deed is deleted and replaced with the following:

Transaction Ratio means:

in the case of the Share Scheme, 1 new BTR Share for every 0.38 KWR Shares held;and (a)

• (b) in the case of the Option Scheme, 1 new BTR Option for every 0.SB KWR Options held.
• clause 6.5(b)(ii) of the Scheme lmplementation Deed is deleted; (b)
• Schedule 2 of the Scheme lmplementation Deed is deleted and replaced with the Schedule 1 of this deed; and (c)
• Schedule 5 of the Scheme lmplementation Deed is deleted and replaced with Schedule 2 of this deed. (d)

3. General

• (a) The parties acknowledge and agree that:
• the amendments to the scheme lmplementation Deed in this deed are a valid variation under the terms of the Scheme lmplementation Deed and do not affect its validity or enforceability in relation to any accrued rights and obligations of the parties; (i)
• (ii) each party continues to enjoy all the rights and benefits conferred on the party under or in respect of the Scheme lmplementation Deed;
• each party continues to be bound by all of the obligations and liabilities imposed on the party under or in respect of the Scheme lmplementation Deed (as varied by this deed); and (ii i)
• (iv) if there is a conflict between the scheme lmplementation Deed and this deed, the terms of this deed prevail.
• other than as amended by this deed, the scheme lmplementation Deed shall continue in full force and effect. (b)
• on and from the Effective Date, the scheme lmplementation Deed is to be read together with this deed as a single integrated document incorporating the amendments effected by this deed. (c)
• This deed contains the entire agreement between the parties as at the date of this deed with respect to its subject matter and supersedes all prior agreements and understandings between the parties in connection with it. (d)
• This deed may be executed in any number of counterparts. All counterparts together will be taken to constitute one instrument. (e)
• This deed is governed by the laws of western Australia. Each party irrevocably submits to the non-exclusive jurisdiction of the courts of Western Australia and courts competent to hear appeals from those courts. (f)

Schedule 1 - Timetable

Announce Transaction	23 December 2022
KWR submits draft Scheme Booklet to ASIC and ASX	17 March2023
First Court hearing	5 April2023
Scheme Booklet made available to Scheme Participants	12 April2023
Scheme Meetings	12 May 2023
Second Court hearing to approve Schemes	18 May 2023
Effective Date	19 May 2023
Record Date	23May 2423
lmplementation Date	26I'Aay 2023

Schedule 2 - Capital structure details

1 BTR details

1.1 Currently on issue

Shares	829,128,923
Options
Options exercisable at \$0.01 each expiring 0910412023 a	15,000,000
Options exercisable at \$0.045 each expirin g 2210012024 a	5,000,000
Options exercisable at \$0.10 each expiring31l1212023 a	4,000,000
Options exercisable at \$0.06 each expiring 3111212023 a	4,000,000
Options exercisable at \$0.08 each expiring 3111212023 a	4,000,000
Options exercisable at \$0.05 each expirin g 0111212024 a	2,200,000
Options exercisable at \$0.10 each expiring 1210212024 a	1,000,000
Options exercisable at \$0.05 each expiring 3111212024 a	20,000,000
Options with nil exercise price expiring 3011112026 a	8,000,000
Options with nil exercise price expiring 3011112026 a	2,000,000
TotalOptions	65,200,000

1.2 Agreed to be issued

Shares	3,500,000	Shares to be issued pursuant to a placement announced by BTR on 23 December 2022, subject to the receipt of prior BTR Shareholder approval.
Performance Rights	80,000,000	Performance Rights agreed to be issued to Alex Rovira (or his nominee) pursuant to BTR's Employee lncentive Securities Plan, subject to the receipt of prior BTR Shareholder approval.

2. KWR details

Shares	281,726,818
Options
Share Appreciation Rights exercisable at \$0.18 each (unless a cash settled) expiring 1510912023	1,125,000
Share Appreciation Rights exercisable at \$0.28 each (unless a cash settled) expiring 711012024	2,970,000
Options exercisable at \$0.20 each expiring 2111012024 a	8,000,000
Options exercisable at \$0.17 each expiring 1510912024 a	6,250,000
Options exercisable at \$0.285 each expiring 1510212025 a	1,700,000
Options exercisable at \$0.15 each expiring30l1212023 a	22,512,500
Options exercisable at \$0.25 each expiring 2810412025 a	1,250,000
Options exercisable at \$0.10 each expiring 2910212024 a	19,376,834
Options exercisable at \$0.06 each expiring 1610112026 a	1,250,000
Options exercisable at \$0.10 each expiring 1610112026 a	1,500,000
Total Options	65,934,334

Executed as a deed

Executed hy Kingwest Resourcee Limited (ACN 624 972 tBS) in accordance with sectlon '127(1) of the Corporations Act 2001 {Cth):

,/ /!,-#-.

of Director

Bittar

Name of Director in fult

Signatr ;re of Secretary/other Direetor

Jonathan Downes Name of Secretarylother Director in full

Exocuted by Brightstar Re\$ources Limitod (AGN 100 727 4911in

accordance with section 127(1) of the Corporations Act 2@7 (Cth):

Director

Alexander Rovira

Name of Director in full

Signature of Secrelary/other Director

(* {,"*^ t4r^'r

Name of Secretary/other Director irr full