FREEHILL MINING LIMITED. — Capital/Financing Update 2018

Oct 22, 2018

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Freehill Mining Limited ACN 091 608 025 Tel: (+61 3) 8602 1700 88 Miller Street Email: info@freehillmining.com West Melbourne VIC 3003 Australia Website: www.freehillmining.com

23 October 2018

Dear Sirs

Non-Renounceable Rights Issue – Information for Optionholders

We refer to the Convertible Securities Agreement (“CSA”) dated on or about 19 December 2017 and to the options issued to Yaniv Equity LP thereunder on or about 16 May 2018 (“Options”).

On 22 October 2018, Freehill Mining Limited (“Freehill” or the “Company”; ASX: FHS) announced a capital raising by way of a non-renounceable pro-rata rights issue (“Rights Issue” or “Entitlement Offer”), offering eligible shareholders the opportunity to subscribe for 1 new share for every 2 shares held on 25 October 2018 at an issue price of $0.015 (1.5 cents) to raise approximately $3,075,000. The Rights Issue is not underwritten.

The net proceeds of the funds raised under the Rights Issue will be used to strengthen the Company’s financial position and fund the initial drilling with a view to establishing a JORC Resource.

A copy of the Offer Booklet in respect of the Rights Issue has been lodged with the ASX and is available on the ASX website.

Optionholders

The terms and conditions of the Options you currently hold do not entitle you to participate in the Rights Issue unless you exercise the Options in time for new shares to be allotted and entered on the Company’s register of members on or before the Record Date of 25 October 2018.

To exercise the Options and thereby participate in the Rights Issue, you will need to deliver the following to the Company in accordance with the terms of the options:

1. an exercise form substantially in the form prescribed by the CSA; and

2. payment of an amount equal to the exercise price multiplied by the number of options which are being exercised.

Pursuant to term 1.5 of the Options, due to the Rights Issue, the exercise price of the Options will be reduced in accordance with the following formula as provided by ASX Listing Rule 6.22.2:

New exercise price = old exerise price − ([P −0.015] 3 )

Where “P” is the volume weighted average market price of Freehill shares calculated over the 5 trading days ending on the day before the “Ex” date for the Rights Issue, being 24 October 2018.

To ensure that the above are allotted prior to the Record Date, the above items must be received by the Company no later than 24 October 2018. If received after this date, allotment of the new shares prior to the Record Date cannot be assured.

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Below is a summary of the key terms of the Rights Issue:

Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:	Type of offerNon-Renounceable Rights IssueIssue Ratio1 New Share for every 2 Shares heldIssue Price$0.015 per New ShareFractional EntitlementWhere the determination of an Eligible Shareholder’s Entitlementresults in a fraction of a New Share, such a fraction shall berounded up to the nearest whole New Share.Eligible ShareholdersShareholders who have a registered address in Australia andNew Zealand may apply for new shares under the Rights Issue.Shareholders who have a registered address outside Australiaand New Zealand may not subscribe for new shares under theRights Issue.DiscountThe Company’s share closing price on 19 October 2018 (thetrading day before the Rights Issue was announced) was $0.018.Therefore the Rights Issue price of $0.015 represents a discountof approximately 16.67% to this closing price.Capital RaisedApproximately $3,075,000 (before costs of the Rights Issue).Use of Capital RaisedThe proceeds of the Rights Issue will be used to strengthen theCompany’s financial position and fund the initial drilling with aview to establishing a JORC Resource.New Shares to beissuedApproximately 205,000,000.Shares on issuefollowing Rights IssueApproximately 611,408,212 (assuming the Rights Issue is fullysubscribed; does not include any shares which may be issued onconversion of convertible notes or exercise of options).The indicative timetable for the Rights Issue is as follows:
	ollowing Rights Issuesc	ubscribed; does noonversion of conve		t include any sharrtible notes or ex		es which mercise of opt	ay be issued onions).
	indicative timetable for the	Rights Issue is as f		ollows:
Event	nt				Dat	e
Announcement of Entitlement Offer, and Appendix 3B and					Monday, 22 October 2018
Offer Booklet lodged with ASX
Shareholder notice dispatched					Tuesday, 23 October 2018
						We		dnesday, 24 Oc	tober 2018
Sha	res traded on an “ex” Entitlem		ent basis
						7:00PM on		Thursday, 25 Oc	tober 2018
Rec	ord Date for eligibility to partici		pate in the Entitl	ement Offer
Offe	r Booklet and Entitlement and		Acceptance For	m				Tuesday, 30 Oc
despatched to Shareholders
					9:00AM Tuesday, 30 October 2018
Opening Date for the Entitlement Offer
Last Date to extend the Closing Date for the Entitlement Offer					Monday, 5 November 2018

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											5:00PM on	Thu	rsda	y, 8	Novem	ber 2018
	C	losi	g Date for	he Entitleme	nt Offer
												F	rida	y, 9	Novem	ber 2018
	N	ew	Shares Quo	ted on a Def	erred Settl	eme	nt Ba	sis
												Tues	day,	13	Novem	ber 2018
	N	otific	ation to AS	X of Under S	ubscriptio	ns
	Is	sue	of New Sha	res under th	e Entitlem	ent O	ffer	and	Deferred		T	hurs	day,	15	Novem	ber 2018
STD	S	ettle	ment Tradi	ngEnds
												Fr	iday,	16	Novem	ber 2018
	T	radi	ng of New S	ecurities on	ASX Com	menc	es
		ates	and times	in this annou	ncement a	re in	dica	tive	only and s	ubje	ct to chang	e. All	dat	es a	nd tim

Dates and times in this announcement are indicative only and subject to change. All dates and times are references to Melbourne time.

Freehill reserves the right to amend any or all of these dates and times, subject to the Corporations Act, the ASX Listing Rules and other applicable laws and regulations.

Applications

In the event the Rights Issue is not fully subscribed, the Company’s Directors have determined to offer Eligible Shareholders the right to apply for new shares arising out of any shortfall. The Company may, subject to any restrictions imposed by the Corporations Act or the Listing Rules, exercise a discretion to impose restrictions on the number of new shares which can be taken up by any shareholder under the Shortfall Facility. In exercising this discretion, factors such as the number of applications made and the number of available new shares will be taken into consideration.

The Entitlement and Acceptance Form will be dispatched together with the Offer Booklet. Eligible shareholders must complete the Entitlement and Acceptance Form in order to take up their Entitlements and to apply for Shortfall Securities. Entitlement and Acceptance Forms must be properly completed and received by the Company no later than 5.00pm (AEDT) on 8 November 2018 in order for Applicants to be issued new shares and Shortfall Securities.

Quotation

New shares issued under the Offer Booklet will rank equally with the Company’s existing shares. The Company has applied to ASX for quotation of the New Ordinary Shares on the Official List of the ASX. If approval is not granted by ASX within 3 months after the date of the Offer Booklet, the Company will not issue any new shares and will repay all Application monies without interest.

Enquiries

If you have questions relating to the Entitlement Offer, please call the Company on +61 3 8602 1700 between 9:00am and 5:00pm (Melbourne time) on business days during the offer period for the Entitlement Offer.

Yours faithfully

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Raymond Mangion

Non-Executive Chairman

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