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Kincora Copper Limited — Capital/Financing Update 2021
Mar 25, 2021
43337_rns_2021-03-25_42239634-c351-410e-9210-de6aa2297ccb.pdf
Capital/Financing Update
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PRE – QUOTATION DISCLOSURE
The following information is required to be provided to ASX Limited ( ASX ) for release to the market in connection with the official quotation of CHESS Depositary Interests ( CDIs ) over fully paid ordinary shares ( Shares ) in Kincora Copper Limited (ARBN 645 457 763, British Columbia company incorporation number C0694911) ( Company ). One Share is equivalent to one CDI.
Capitalised terms which have not been otherwise defined in this document have the meaning given to them in the prospectus lodged by the Company with the Australian Securities and Investments Commission ( ASIC ) on 1 March 2021.
1. Close of offer
The initial public offering of 40,000,000 to 50,000,000 CDIs at an offer price of A$0.20 per CDI to raise between A$8,000,000 and A$10,000,000 closed on 19 March 2021 ( Offer ).
The offer raised A$10,000,000 and the issue of 50,000,000 CDIs under the Offer was completed on 26 March 2021.
There are no other issues of any unquoted securities that had not been issued prior to the application for admission but to be issued prior to the commencement of official quotation.
2. Dispatch date
The Company’s share registry despatched CHESS holding statements and allotment confirmation advices on 29 March 2021.
3. Restricted securities and escrow
The Company confirms that none of the CDIs pursuant to the Offer or other securities will be classified by ASX as restricted securities as at the date of quotation.
The number of securities subject to voluntary escrow and the escrow period applied to those securities is as follows:
| Class of security | Number of securities | Escrow period |
|---|---|---|
| Common shares | 4,983,333 | Voluntary lock up of 12 months from 27 March 2020 to 27 March 2021, extended on its terms. |
The common shares above held by RareX are proposed to remain in contractual escrow under their current terms until the exploration licences which were acquired from RareX (Company acquired at least a 51% ownership interest in such licences) are re-registered in the name of the Company as the legal owner on the relevant Government registers.
As described in Section 10.6 of the Prospectus, Morgans Corporate Limited and Bridge Street Partners Pty Ltd are entitled to receive options in connection with the Offer ( Lead Manager Options ). The Lead Manager Options will not be issued until the Company has adopted the provisions of Listing Rule 15.12 into its Articles of Association. The Lead Manager Options will be subject to a 24-month escrow from the date the CDIs are quoted on the ASX.
www.kincoracopper.com
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4. Capital structure
The Company’s current capital structure at the date of admission is as follows:
| Class of security | Number of securities |
|---|---|
| Shares / CDIs | 120,712,026 |
| Options (see summary below) | 6,672,153 |
| Warrants (see summary below) | 38,602,283 |
Options summary
| Exercise Price (C$) | Expiry Date | Number of securities |
|---|---|---|
| $1.58 | 13-Sep-21 | 200,007 |
| $1.13 | 13-Sep-21 | 200,006 |
| $0.33 | 27-Sep-21 | 2,181,625 |
| $0.75 | 27-Sep-22 | 1,090,728 |
| $0.33 | 30-Apr-22 | 118,810 |
| $0.75 | 30-Apr-23 | 118,810 |
| $0.26 | 30-Apr-23 | 757,661 |
| $0.48 | 8-Jan-24* | 2,004,506 |
| Total | 6,672,153 |
- The options issued on 8 Jan 2021 with an expiry date of 8 Jan 2024 are exercisable at C$0.445 per share within the first two-year period and C$0.48 per share in the final third year.
Warrants summary
| Exercise Price (C$) | Expiry Date | Number of securities |
|---|---|---|
| $0.75 | 11-Jun-21 | 15,264,321 |
| $0.75 | 2-Aug-21 | 5,574,000 |
| $0.75 | 26-Aug-22 | 17,763,962 |
| TOTAL | 38,602,283 |
5. Waivers granted by ASX
ASX has granted the Company the following waivers.
Timely quotation of securities
- A waiver from Listing Rules 1.1, condition 6 and 2.4 to permit the Company to only apply for quotation of such Shares that are represented by CDIs, and Listing Rule 2.8 to allow the Company to apply for ongoing quotation of CDIs on a monthly basis.
Reporting requirements
- A waiver from Listing Rules 4.2A and 4.2B to permit the Company not to lodge a half-year financial report subject to standard market conditions.
www.kincoracopper.com
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A waiver from Listing Rules 5.3 and 5.5 to permit the Company not to lodge a Quarterly Activity Report and Appendix 5B subject to standard market conditions.
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A waiver from Listing Rule 4.10.9 to allow the Company to not include details of the 20 largest holders of its quoted securities in its annual report.
Articles
- The Company’s Articles will be amended to include ASX provisions regarding restricted securities at a shareholder meeting of the Company called after it is admitted to the Official List and prior to the issue of the Lead Manager Options. A waiver from Listing Rule 1.1 Condition 2 subject to standard market conditions.
Meetings
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A waiver from Listing Rule 6.10.3 to permit the Company to set the “specified time” for determining whether a shareholder is entitled to vote at a shareholder meeting in accordance with Canadian law (the Company’s home jurisdiction).
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A waiver from Listing Rule 14.2.1 to allow the Company to not provide the ability for holders of CDIs to vote against resolutions relating to election of a director or appointment of an auditor in its proxy form.
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A waiver from Listing Rule 14.3 to enable the Company to comply with the requirements of Canadian securities laws and British Columbia corporate law for the nomination of directors
Market announcements
- A waiver from Listing Rule 15.7 to permit the Company to provide announcements simultaneously to both ASX and TSX-V subject to standard market conditions.
Options
- A waiver from Listing Rules 6.16, 6.19 6.20, 6.21, 6.22, 6.23.3 and 6.23.4 to permit the Company to have existing on-foot options on issue following completion of the IPO with terms inconsistent with the Listing Rules, subject to the Company undertaking not to issue any further options under the existing Share Option Plan.
Termination benefits
- A waiver from Listing Rule 10.18 to permit the Company to, upon a change in control, pay termination benefits to the Company’s employees pursuant to the terms of the Company’s existing employment contracts.
Issue of shares to directors
- A waiver from Listing Rule 10.14 to permit the Company’s directors to participate in future security placements without seeking shareholder approval for such participation, subject to the Company complying with the requirements imposed by its home exchange (the TSX-V).
6. Conversion
The Company confirms that no conversion has been completed in respect of Warrants or Options.
7. Bookbuild
The Company provides the following information in relation to the institutional bookbuild undertaken for the Offer ( Bookbuild ):
www.kincoracopper.com
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the number of CDIs allocated under the institutional bookbuild was 24,921,000 CDIs at a price of A$0.20 per CDI;
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no concessionary fees or other arrangements have been entered into which have had the result that the effective transfer price paid by some allottees under the Bookbuild differ to the Bookbuild price of A$0.20 per CDI;
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no arrangements have been entered into which have had the result that some allottees under the Bookbuild received a material benefit for agreeing to participate in the bookbuild at the Bookbuild price of A$0.20 per CDI and which have not been received by other allottees;
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no arrangements have been entered into with associates of the Company or the bookrunner to avoid a shortfall, or the appearance of a shortfall, in the Bookbuild; and
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LIM Advisors, being an existing substantial shareholder of the Company, acquired 7,000,000 CDI’s in the offering at the same price as all other investors.
8. Updated Pro-forma Statement of Financial Position
An updated pro-forma statement of financial position based on the actual amount of funds raised under the Prospectus ($10,000,000) is set out below.
The pro forma historical statement of financial position of the company as at 30 June 2020 shows the consolidated historical statement of financial position as at 30 June 2020 (reviewed) and pro-forma adjustments as detailed in Section 4.1 of the Prospectus based upon a capital raising of $10,000,000.
| Kincora Copper Pro-Forma Pro-Forma – |
|
|---|---|
| as at adjustments (includes as at |
|
| 30 June 2020 significant subsequent events) 30 June 2020 |
|
| Current Assets Cash and cash equivalents Receivables, prepaids and deposits Total Current Assets Non-Current Assets Equipment Exploration and evaluation assets Total Non-Current Assets Total Assets Current Liabilities Accounts payable Total Current Liabilities Total Liabilities Net Assets Equity |
AUD$ 000’s AUD$ 000’s AUD$ 000’s 2,294 10,251 12,545 223 - 223 |
| 2,517 10,251 12,768 |
|
| 103 - 103 54,546 (28,356) 26,190 |
|
| 54,649 (28,356) 26,293 |
|
| 57,166 (18,105) 39,061 |
|
| 511 - 511 |
|
| 511 - 511 |
|
| 511 - 511 |
|
| 56,655 (18,105) 38,550 |
|
www.kincoracopper.com
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| Share Capital Share -based payment reserve Obligation to issue shares Deficit/Accumulated losses Total Equity |
184,661 13,701 198,362 11,555 1,836 13,391 105 (105) - (139,666) (33,537) (173,203) |
|---|---|
| 56,655 (18,105) 38,550 |
The Accompanying notes related to the Pro-forma Statement of Financial Position can be found at Section 4.1 and 4.2 of the Prospectus.
The Pro forma Statement of Financial Position is to be read in conjunction with the Investigating Accountant’s Report as set out in Section 8 of the Prospectus.
9. Use of funds
The following table shows the Company’s expected use of funds in the two-year period following Admission based on the actual amount of funds raised under the Prospectus (A$10,000,000).
The Directors believe that the use of funds raised from the Offer will provide the Company with sufficient working capital to achieve the Company’s stated objectives (as set out in the Prospectus).
| Source of funds | $ |
|---|---|
| Existing cash reserves | 3,500,000 |
| NSW Co-operative funding grant | 120,000 |
| Funds raised from the Offer | 10,000,000 |
| Total | 13,620,000 |
| Allocation of Funds | $ |
| Exploration on Trundle Project–NSW | 7,125,000 |
| Exploration on Fairholme Project–NSW | 1,905,000 |
| Exploration on Northern Junee-Narromine Belt Projects-NSW | 920,000 |
| Project Generation, Mongolian & Other Projects | 520,000 |
| Administration and Working Capital | 2,200,000 |
| Legal, Accounting, Fundraising Costs | 950,000 |
| Total | 13,620,000 |
10. Subscription rights
The Company advises that:
- (a) The pro rata subscription right granted to the European Bank for Reconstruction and Development ( EBRD ) pursuant to a Subscription Agreement dated 21 September 2017 (as further described in Section 10.3 of the Prospectus) has lapsed as EBRD no longer holds at least 2.5% of the total issued common shares in the Company.
www.kincoracopper.com
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- (b) The pro rata subscription right granted LIM Asia Special Situations Master Fund Limited ( LIM Asia ) pursuant to a Subscription Agreement dated June 2019 (as further described in Section 10.4 of the Prospectus) has been varied by mutual agreement between the Company and LIM Asia, such that LIM Asia may participate in private placements at the Company’s discretion but will no longer be entitled to participate in subsequent offerings of the Company’s securities on a pro rata basis.
11. Regulatory matters
The Company’s general corporate activities (aside from offering securities in Australia and ongoing obligations as a foreign registered company) are not regulated by the Corporations Act 2001 (Cth) and are instead regulated under the Business Corporations Act SBC 2002, c 57 (British Columbia) administered by the Registrar established under that Act. The Company’s activities as a public company in Canada are primarily regulated by the Securities Act (British Columbia) and the British Columbia Securities Commission and, so long as the Company’s securities are listed for trading on the TSX Venture Exchange, the rules and policies of the TSX Venture Exchange.
Authorised on behalf of the Kincora Copper Limited Board by Jonathan (Sam) Spring, Executive Director, President and Chief Executive Officer.
Media enquiries: Please contact the Company on [email protected]
www.kincoracopper.com