ENCOUNTER RESOURCES LIMITED — Capital/Financing Update 2020

Oct 22, 2020

Proposed issue of securities

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Announcement Summary

Entity name

ENCOUNTER RESOURCES LIMITED

Announcement Type

New announcement

Date of this announcement

Friday October 23, 2020

The Proposed issue is:

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A placement or other type of issue

Total number of +securities proposed to be issued for a placement or other type of issue

		Maximum Number of
ASX +security code	+Security description	+securities to be issued
n/a	Unlisted options exercisable at $0.228 per Option expiring 30	1,500,000
	October 2021.
ENR	ORDINARY FULLY PAID	33,157,878
Proposed +issue date
Friday October 30, 2020

Refer to next page for full details of the announcement

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Part 1 - Entity and announcement details

1.1 Name of +Entity

ENCOUNTER RESOURCES LIMITED

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

ABN

Registration Number

47109815796

1.3 ASX issuer code

ENR

1.4 The announcement is

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New announcement

1.5 Date of this announcement

Friday October 23, 2020

1.6 The Proposed issue is:

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A placement or other type of issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity Yes

7A.1a Conditions

Approval/Condition	Date for determination	Is the date estimated or	** Approval
+Security holder approval	Friday December 4, 2020	actual?	received/condition met?
		Estimated	No

Comments

Shareholder approval required for director participation in the share placement, amounting to 1,578,948 shares on the same terms as the unrelated parties

Part 7B - Issue details

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional No securities in a class that is already quoted or recorded by ASX)? Existing class

Details of +securities proposed to be issued

ASX +security code and description

ENR : ORDINARY FULLY PAID

Number of +securities proposed to be issued

33,157,878

Offer price details

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Are the +securities proposed to be issued being issued for a cash consideration? Yes

In what currency is the cash What is the issue price per consideration being paid? +security? AUD - Australian Dollar AUD 0.19000

Will these +securities rank equally in all respects from their issue date with the existing issued +securities in that class? Yes

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional No securities in a class that is already quoted or recorded by ASX)? New class

Details of +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from Will the entity be seeking quotation ASX that the terms of the proposed of the 'new' class of +securities on +securities are appropriate and ASX? equitable under listing rule 6.1? No No ASX +security code +Security description New class-code to be confirmed Unlisted options exercisable at $0.228 per Option expiring 30 October 2021.

+Security type

Options

Number of +securities proposed to be issued

1,500,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? No

Please describe the consideration being provided for the +securities

Option fee payable to the Lead Manager for services provided in relation to the capital raising (Refer 7E.1b for further details).

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Proposed issue of securities
Please provide an estimate of the AUD equivalent of the consideration being
provided for the +securities
107,934.000000
Will all the +securities issued in this class rank equally in all respects from
their issue date?
Yes
Options details
+Security currency Exercise price	Expiry date
AUD - Australian Dollar AUD 0.2280	Saturday October 30, 2021
Details of the type of +security that will be issued if the option is exercised
ENR : ORDINARY FULLY PAID
Number of securities that will be issued if the option is exercised 1,500,000
Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities
proposed to be issued or provide the information by separate announcement. Terms and conditions of unlisted options included in notice of meeting referred to in 7A1.a

Part 7C - Timetable

7C.1 Proposed +issue date Friday October 30, 2020

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the entire issue under listing rule 7.1? No 7D.1b Are any of the +securities proposed to be issued without +security holder approval using the entity's 15% placement capacity under listing rule 7.1? Yes

7D.1b ( i ) How many +securities are proposed to be issued without security holder approval using the entity's 15% placement capacity under listing rule 7.1?

31,578,930 ordinary fully paid shares; and 1,500,000 unlisted options.

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7D.1c Are any of the +securities proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A (if applicable)? No

7D.2 Is a party referred to in listing rule 10.11 participating in the proposed issue? Yes

7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No

7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? Yes

7E.1a Who is the lead manager/broker?

Euroz Hartleys Securities Limited (AFSL 243302)

7E.1b What fee, commission or other consideration is payable to them for acting as lead manager/broker?

Placement fees amount to:

i) a management fee, in cash, equal to 1.0% of the total gross dollar amount raised under the Placement (Management Fee);

ii) an equity raising fee, in cash, equal to 4.0% of the total gross dollar amount raised under the Placement (Equity Raising Fee) with the exception of funds raised from Company Board and Management, which attract a nil Equity Raising Fee; and

iii) an option fee, whereby the Company will issue Euroz Hartleys 1,500,000 options to acquire fully paid ordinary shares in the Company at an exercise price equivalent to a 20% premium to the placement price, with an expiry date of 12 months from the date of issue (Option Fee).

7E.2 Is the proposed issue to be underwritten? No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue None

Part 7F - Further Information

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7F.01 The purpose(s) for which the entity is issuing the securities

• Gold-copper exploration in the Paterson Province of Western Australia;

• Copper exploration in the Northern Territory;

• Accelerating gold and base metal project generation activities; and

• General working capital purposes and costs of the offer.

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue None

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