MOAB MINERALS LIMITED — Proxy Solicitation & Information Statement 2022

Jun 9, 2022

DELECTA LIMITED ACN 009 147 924

Building 41 9-45 Ashley Street Braybrook Victoria 3019 Phone: 61 3 9695 5858

13 June 2022 Dear Shareholders,

2022 EXTRAORDINARY GENERAL MEETING

An extraordinary meeting of the shareholders of Delecta Ltd ( Company ) is scheduled to be held in Perth, Western Australia on Tuesday, 12 July 2022 at 9:00am (WST) ( Meeting ).

The Company is continuing to monitor the impact of the COVID-19 virus in Western Australia and following guidance from the Federal and State Governments. Having considered the current circumstances, at this stage the Directors have made the decision that a physical meeting will be held. Accordingly, Shareholders will be able to attend the Meeting in person.

The Company strongly encourages Shareholders to lodge a directed proxy form prior to the Meeting . Questions should also be submitted in advance of the Meeting as this will provide management with the best opportunity to prepare for the Meeting, for example by preparing answers in advance to Shareholders questions. However, questions may also be raised during the Meeting.

In accordance with new provisions under the Corporations Act 2001 (Cth) ( Corporations Act ), the Company will not be sending hard copies of the Notice of Meeting to shareholders unless a shareholder has previously requested a hard copy.

• A copy of the Meeting documents can be viewed and downloaded online as follows:

• On the Company’s website at: www.delecta.com.au

• On the Company’s ASX market announcements page (ASX: DLC)

If you have nominated an email address and have elected to receive electronic communications from the Company, you will also receive an email to your nominated email address with a link to an electronic copy of the Notice of Meeting and Explanatory Statement.

In order to receive electronic communications from the Company in the future, please update your Shareholder details online at www.advancedshare.com.au and log in with your unique shareholder identification number and postcode (or country for overseas residents), which you can find on your enclosed personalised proxy form. Once logged in you can also lodge your proxy vote online by clicking on the “Vote” tab.

If you are unable to access the Notice of Meeting and Explanatory Statement online please contact the Company Secretary, John Burness, on +61 3 9695 5858 or via email at admin@delecta.com.au.

The Company will notify Shareholders via the Company’s website at www.delecta.com.au and the Company’s ASX Announcement Platform at asx.com.au (ASX: DLC) if changing circumstances impact the planning or arrangements for the Meeting.

This announcement is authorised for market release by Delecta Ltd Managing Director.

Sincerely

Malcolm Day Managing Director

DELECTA LIMITED (TO BE RENAMED ‘MOAB MINERALS LIMITED’) ACN 009 147 924 NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 9:00am (WST) DATE : 12 July 2022 PLACE : Level 3, 101 St Georges Terrace, Perth, Western Australia, 6000

The business of the Meeting affects your shareholding and your vote is important.

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Independent Expert’s Report: Shareholders should refer to the Independent Expert’s Report prepared for the purposes of the Shareholder approval being sought under ASX Listing Rule 10.1 in respect of Resolution 1. The Independent Expert’s Report comments on the fairness and reasonableness of the disposal the subject of Resolution 1 to the non-associated Shareholders. The Independent Expert has determined the disposal the subject of Resolution 1 is not fair but reasonable to the non-associated Shareholders.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 9:00am (WST) on 10 July 2022.

ASX and ASIC take no responsibility for the contents of this Notice of Meeting.

BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – DISPOSAL OF MAIN UNDERTAKING TO RELATED PARTY

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, subject to and conditional upon the passing of the Essential Resolutions, purposes of section 195(4) and section 208 of the Corporations Act of ASX Listing Rule 10.1, 11.2 and for all other purposes, approval is given for the sale by the Company of 100% of the issued share capital of Calvista Australia and Calvista NZ to Calvista Holdings, on the terms and conditions set out in the Explanatory Statement.”

Short Explanation: The Company has entered into the Disposal Agreement pursuant to which the Company has agreed to dispose of its wholesale business undertaken by Calvista Australia and Calvista NZ to Calvista Holdings. Mr Malcolm Day is a director of and holds one-third of the shares on issue in, Calvista Holdings and is a Director and substantial shareholder of the Company. Calvista Holdings is deemed a related party and a substantial shareholder by virtue of ASX Listing Rule 10.1.1 and 10.1.3. Accordingly, the Company seeks Shareholder approval for the Acquisition in accordance with Listing Rule 10.1.

Independent Expert’s Report :

Shareholders should carefully consider the Independent Expert’s Report included with this Notice of Meeting, prepared by the Independent Expert for the purposes of the Shareholder approval required under ASX Listing Rule 10.1. The Independent Expert’s Report comments on the fairness and reasonableness of the transaction the subject of this Resolution to the non-associated Shareholders in the Company. The Independent Expert has determined the grant of the Security as part of the Disposal is not fair but reasonable to the non-associated Shareholders.

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

2. RESOLUTION 2 – CHANGE TO NATURE AND SCALE OF ACTIVITIES – ACQUISITION AND DISPOSAL

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, subject to and conditional upon the passing of the Essential Resolutions, for the purpose of ASX Listing Rule 11.1.2 and for all other purposes, approval is given for the Company to make a significant change to the nature and scale of its activities resulting from completion of the Transactions, as described in the Explanatory Statement.”

Short Explanation: The Company has entered into the Acquisition Agreement pursuant to which the Company has agreed to acquire, and the Nabberu shareholders have agreed to sell, 100% of the issued capital of Nabberu. The Company has entered into the Disposal Agreement pursuant to which the Company has agreed to dispose of its wholesale business undertaken by Calvista Australia and Calvista NZ to Calvista Holdings. If successful, the Transactions will result in the Company changing the nature and scale of its activities. ASX Listing Rule 11.1.2 requires the Company to seek Shareholder approval where it proposes to make a significant change to the nature or scale of its activities. In addition, ASX has also advised the Company that it will also be required to re-comply with the

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requirements of Chapters 1 and 2 of the ASX Listing Rules in accordance with ASX Listing Rule 11.1.3. Please refer to the Explanatory Statement for further details.

A voting exclusion statement applies to this Resolution. Please see below.

3. RESOLUTION 3 – CONSOLIDATION OF CAPITAL

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

"That, subject to and conditional upon the passing of all Essential Resolutions, from the effective date of 12 July 2022, pursuant to section 254H of the Corporations Act and for all other purposes, the issued capital of the Company be consolidated on the basis that every two and a half (2.5) Shares be consolidated into one (1) Share ( Consolidation ) and, where this Consolidation results in a fraction of a Share being held, the Company be authorised to round that fraction down to the nearest whole Share (as the case may be)."

4. RESOLUTION 4 – ISSUE OF CONSIDERATION SECURITIES TO NABBERU SHAREHOLDERS IN CONSIDERATION FOR ACQUISITION

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, subject to and conditional upon the passing of all Essential Resolutions, for the purpose of Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue 45,000,000 Consideration Shares and 30,000,000 Consideration Options (on a post-Consolidation basis) to the Nabberu shareholders (or their nominee/s) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Refer below.

5. RESOLUTION 5 – PUBLIC OFFER

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, subject to and conditional upon the passing of all Essential Resolutions, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 200,000,000 Shares (on a postConsolidation basis) at an issue price of $0.02 per Share on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

6. RESOLUTION 6 – APPROVAL TO ISSUE OPTIONS – CORAL BROOK PTY LTD

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 20,000,000 Options (on a postConsolidation basis) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

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7. RESOLUTION 7 – APPROVAL TO ISSUE LEAD MANAGER OPTIONS TO CPS CAPITAL

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 20,000,000 Options (on a postConsolidation basis) to CPS Capital Pty Ltd (or it/s nominee/s) in consideration for services provided in connection with the Public Offer, on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

8. RESOLUTION 8 – APPROVAL TO ISSUE DIRECTOR INCENTIVE OPTIONS – MALCOLM DAY

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue up to 6,000,000 Options (on a post-Consolidation basis), to Malcolm Day (or his nominee/s) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

9. RESOLUTION 9 – APPROVAL TO ISSUE DIRECTOR INCENTIVE OPTIONS – BRYAN HUGHES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue up to 4,000,000 Options (on a post-Consolidation basis) to Bryan Hughes (or his nominee/s) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

10. RESOLUTION 10 – APPROVAL TO ISSUE DIRECTOR INCENTIVE OPTIONS – DAVID WHEELER

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of section 195(4) and section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue up to 4,000,000 Options (on a post-Consolidation basis) to David Wheeler (or his nominee/s) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement and voting prohibition statement applies to this Resolution. Please see below.

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11. RESOLUTION 11 – DIRECTOR PARTICIPATION IN PUBLIC OFFER - MALCOLM DAY

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue up to 2,500,000 Shares (on a postConsolidation basis) to Mr Malcolm Day (or his nominee/s) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

12. RESOLUTION 12 – DIRECTOR PARTICIPATION IN PUBLIC OFFER - BRYAN HUGHES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

• “That, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue up to 2,500,000 Shares (on a postConsolidation basis) to Mr Bryan Hughes (or his nominee/s) on the terms and conditions set out in the Explanatory Statement.”

A voting exclusion statement applies to this Resolution. Please see below.

13. RESOLUTION 13 – CHANGE OF COMPANY NAME

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, subject to and conditional on the completion of the Disposal, for the purposes of section 157(1)(a) and for all other purposes, approval is given for the name of the Company to be changed to Moab Minerals Limited .”

14. RESOLUTION 14 – REPLACEMENT OF CONSTITUTION

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, subject to and conditional upon the passing of all Essential Resolutions, for the purposes of section 136(2) of the Corporations Act and for all other purposes, approval is given for the Company to repeal its existing Constitution and adopt a new constitution in its place in the form as signed by the chairman of the Meeting for identification purposes.”

Dated: 9 June 2022

By order of the Board

John Burness Company Secretary

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Voting Exclusion Statements

In accordance with Listing Rule 14.11, the Company will disregard any votes cast in favour of the Resolutions set out below by or on behalf of the following parties:

Resolution 1 – Disposal of Main Undertaking to Related Party	Calvista Holdings (or any of their associates) or any other person who will obtain a material benefit as a result of the transaction (except a benefit solely by reason of being a holder of ordinary securities in the entity).
Resolution 2– Change to Nature and Scale of Activities – Acquisition and Disposal	A counterparty to the transaction that, of itself or together with one or more transactions, will result in a significant change to the nature and scale of the entity’s activities and any other person who will obtain a material benefit as a result of the transaction (except a benefit solely by reason of being a holder of ordinary securities in the Company) (namely the Nabberu shareholders and Calvista Holdings), or an associate of that person or those persons.
Resolution 4 – Issue of Consideration Shares to the Nabberu Shareholders in consideration for Acquisition	A person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) namely, the Nabberu shareholders, or their nominees or an associate of that person (or those persons).
Resolution 6 – Approval to issue Options – Coral Brook Pty Ltd	A person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) (namely Coral Brook Pty Ltd or an associate of that person (or those persons).
Resolution 7 – Approval to Issue Lead Manager Options to CPS Capital	CPS Capital Pty Ltd (or its nominee/s) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 8 – Approval to Issue Director Incentive Options– Malcolm Day	Malcolm Day (or his nominee/s) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 9 – Approval to Issue Director Incentive Options – Bryan Hughes	Bryan Hughes (or his nominee/s) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 10 – Approval to Issue Director Incentive Options – David Wheeler	David Wheeler (or his nominee/s) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 11 – Director Participation in Public Offer - Malcolm Day	Malcolm Day (or his nominee/s) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.
Resolution 12 – Director Participation in Public Offer - Bryan Hughes	Mr Bryan Hughes (or his nominee/s) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons.

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However, this does not apply to a vote cast in favour of the Resolution by:

• (a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and

• (ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Voting Prohibition Statement:

Resolution 1 – Disposal of Main Undertaking to Related Party

In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 1 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 1 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 1 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Resolutions 8 to 10 – Issue of Director Incentive Options to Directors

In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 8 to 10 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 8 to 10 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and

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• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

Provided the Chair is not a Resolution 8 to 10 Excluded Party, the above prohibition does not apply if:

(a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Voting by proxy

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

• each Shareholder has a right to appoint a proxy;

• the proxy need not be a Shareholder of the Company; and

• a Shareholder who is entitled to cast two (2) or more votes may appoint two (2) proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints two (2) proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Voting in person

To vote in person, attend the Meeting at the time, date and place set out above.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on + 61 3 9695 5858.

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions which are the subject of the business of the Meeting.

1. BACKGROUND

1.1 Background to the Transactions

Delecta Limited (ACN 009 147 924) (ASX: DLC) ( DLC or the Company ) is a minerals exploration and wholesaler listed on the Australian Securities Exchange ( ASX ).

As noted in the Company’s ASX announcement on 8 April 2022 the Company proposed to enter into the Acquisition and Disposal (together the Transactions ).

The Company was incorporated on 3 September 1985 as Western Minerals Ltd. In June 1999 the Company acquired a business selling adult products and after recomplying with Listing Rule 11.1.3 changed its name to Adultshop.com Ltd. In September 2000, the Company entered the adult products wholesale market with the acquisition of Calvista Australia Pty Ltd.

Since 2005 the Company has had a wholesale operation in New Zealand which the group continues to operate under the name Calvista New Zealand Ltd.

In November 2011 the Company disposed of the business of adultshop.com and the Company was renamed Delecta Ltd.

The Company also holds 11 million shares in European Lithium Ltd (ASX code: EUR) ( EUR ). Given the Company’s investment in EUR, the Company has continued to seek and evaluate other investment opportunities in the battery minerals space. The increased demand for battery minerals, like lithium and cobalt, is primarily due to the rapid advancement and demand for electric vehicles.

On 17 September 2018, the Company announced an option to acquire a cobaltcopper project in the Goodsprings district of Nevada (the Highline Project ). The Highline Project comprises 5 patented mining claims totalling 90.4 acres located within the Goodsprings mining district in southern Nevada USA, 48 kms southwest of Las Vegas and approximately 3 kilometres southwest of the town of Goodsprings, Nevada. They form 2 groups, the Highline claim group consisting of the Chance, Chance 2, Redstreak and Highline Claim and the Pocahontas claim. The claims are readily accessible via interstate route I15 from Las Vegas to Los Angeles.

The Goodsprings region has a history of high-grade mineral production. Given the Highline mine’s previous mining and exploration was circa 100 years ago, the Company believes that the Highline Cobalt-Copper project represents a relatively low risk opportunity in an area of known mineralisation.

In June 2020, the Company acquired 60% of the shares in Sunrise Minerals Inc, a Colorado based US company that holds the REX Uranium-Vanadium Project located in Montrose County, Colorado ( REX Project ). Since the acquisition, the Company has worked with American Vanadium Pty Ltd to conduct exploration of the REX project.

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1.2 Background to the Transactions

On 2 May 2022 the Company entered into a share sale agreement pursuant to which the Company will acquire 100% of the issued capital in Nabberu Minerals Pty Ltd from the Nabberu shareholders ( Acquisition ).

The material terms and conditions of the share sale agreement with Nabberu Minerals ( Acquisition Agreement ) are set out below in Section 1.6 of this Notice.

Nabberu is the legal and beneficial owner of:

• (a) one granted exploration licence at the Woodlands Base Metal and Gold Project, E 52/3895 granted on 18 January 2021; and

• (b) one application for an exploration licence at the Mount Amy Base Melas Project, E 08/3319 applied for on 11 January 2021,

(together, the Nabberu Projects ).

Further details of the Nabberu Projects are set out in Section 1.3 below and in Schedule 1 to this Notice.

In conjunction with the Acquisition, on2 May 2022 the Company entered into a share sale agreement to dispose of its current wholesale business undertaken by Calvista Australia Pty Ltd ( Calvista Australia ) and Calvista New Zealand Limited ( Calvista NZ ) to Calvista Holdings (an entity which Director, Malcolm Day, is a director of and holds one-third of the shares on issue in), subject to the satisfaction or waiver of certain conditions precedent ( Disposal Agreement ). Under the terms of the Disposal Agreement, the Company has agreed, among other things, to sell 100% of the issued share capital of Calvista Australia and Calvista NZ to Calvista Holdings subject to Shareholder approval, on the terms and conditions summarised in Section 1.7 below ( Disposal ).

The material terms and conditions of the share sale agreement with Calvista Holdings ( Disposal Agreement ) are set out below in Section 1.7 of this Notice.

ASX has advised that Calvista Australia and Calvista NZ constitute the main undertaking of the Company and, as such, the Company require approval under Listing Rules 11.2 for the Disposal.

Malcolm Day is a director of and holds one-third of the shares on issue in, Calvista Holdings and also Director of the Company. Accordingly, Calvista Holdings is considered a related party for the purposes of ASX Listing Rule 10.1 on the basis that it is controlled by Mr Day. Calvista Holdings (and associated entities including Mr Day) currently holds a relevant interest in 15.24% in the Company and is therefore a substantial (10%) holder for the purpose of ASX Listing Rule 10.1. As a result, the completion of the Disposal will result in the disposal of a substantial asset to a related party (and/or a substantial (10%) holder) of the Company. The Company is therefore required to seek Shareholder approval under ASX Listing Rule 10.1.

The Disposal is conditional on the Company obtaining all necessary regulatory and Shareholder approvals to effect the Disposal and satisfying all other requirements of ASX. The Company will not proceed with the Disposal if Shareholder and regulatory approvals are not obtained.

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1.3 Project Overview

On completion of the Acquisition ( Completion ), the Company will acquire the Nabberu Projects. Further details in respect of each of these projects are set out below.

Woodlands Project (WA)

The Woodlands base metal and gold project is an early stage greenfields project located in the Gascoyne Province of Western Australia. The project consists of one exploration licence (E52/3895) that was granted in January 2021 and covers 193km[2] (63 graticular blocks). The project is located 875km northeast of Perth, 245km southwest of Newman and 220km northwest of Meekathara. The Woodlands – Mt Augustus Rd passes through the north of the tenement. The tenement straddles the boundary of the Shire of Upper Gascoyne and the Shire of Meekatharra.

The tenement is situated on the key east-west trending Jillawarra Mineralised Belt that includes the Abra Deposit at the eastern end (Galena Mining Ltd – 34.5Mt @ 7.2% Pb & 16g/t Ag), 75km east of Woodlands.

Mt Amy Project (WA)

The Mt Amy Project comprises a single exploration licence application (E08/3319) covering an area of 155.34km[2] (49 graticular blocks). The Project is located 1060km north of Perth and 107 km southeast of Onslow, in the Shire of Ashburton, Western Australia.

The Project area is located 43km northwest of the Paulsens Gold Mine (Northern Star Resources Ltd). Access from Perth is via the Great Northern Highway and North West Coastal Highway to the south of the tenement, then turning west on the Nanutarra Road. Gravel tracks provide access from the south and north of the tenure. The Cane River runs east-west through the north of the property. A prominent 16km[2] outcrop in the centre of the tenure forms Mt Amy, which has a peak at 364m RL

1.4 Technical Project Information

Detailed technical information in respect of the Woodlands Project and Mt Amy Project accompanies this Notice at Schedule 1.

The information at Schedule 1 of the Notice which relates to exploration results is based on information prepared by Ms Justine Tracey (Principal) and was reviewed by Mrs Christine Standing (Principal) both of Optiro Pty Limited.

Ms Justine Tracey and Mrs Christine Standing meet the competency criteria as set out under Section 11 of the JORC Code, 2012 and Section 3.1 of the VALMIN Code, 2015. Ms Tracey (MAusIMM-CP) is responsible for this report. Ms Tracey is a Principal Consultant with Optiro Pty Ltd and has sufficient experience, which is relevant to the style of mineralisation, type of deposits under consideration and to the activities being undertaken to qualify as a Competent Person as described by the VALMIN Code, 2015 and the JORC Code, 2012. Ms Tracey consents to the inclusion in this Report of the matters based on her information in the form and context in which it appears

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Shareholders are encouraged to refer to Schedule 1 of the Notice for a detailed explanation of the Project and regional geology, exploration history and exploration programmes planned by the Company in respect of each of the Nabberu Projects.

1.5 Summary of Resolutions

This Notice of Meeting sets out the Resolutions necessary to complete the Acquisition and associated transactions, being (as set out below) Resolutions 1 to 5 ( Essential Resolutions ).

Each of the Essential Resolutions are conditional upon the approval by Shareholders of each of the other Essential Resolutions. If one of the Essential Resolutions is not approved by Shareholders, all of the Essential Resolutions will fail, and completion of the Acquisition will not occur.

A summary of the Essential Resolutions is as follows:

• (a) ( Resolution 1 ): the Disposal, if successfully completed, will represent a disposal of the Company’s main undertaking to a related party, for which Shareholder approval is required under Listing Rules 10.1 and 11.2;

• (b) ( Resolution 2 ): the Transactions, if successfully completed, will represent a significant change in the nature and scale of the Company’s operations, for which Shareholder approval is required under Listing Rule 11.1.2;

• (c) ( Resolution 3 ): the consolidation of the Company’s Shares on a 2.5:1 basis, which, if approved, will result in the existing number of Shares (1,204,908,705) having been consolidated to 481,963,482 Shares on issue (subject to rounding of fractional entitlements;

• (d) ( Resolution 4 ): the issue of 45,000,000 Consideration Shares and and 30,000,000 Consideration Options (on a post-Consolidation basis) to the Nabberu shareholders (or their nominee/s) in consideration for the Acquisition;

• (e) ( Resolution 5 ): the Company will need to re-comply with Chapters 1 and 2 of the Listing Rules and, to achieve this, must undertake a Public Offer by issuing up to 200,000,000 Shares, at $0.02 per Share, to raise up to $4,000,000 (at maximum subscription), with a minimum subscription of $3,000,000 (150,000,000 Shares) (on a post-Consolidation basis)( Public Offer ); and

• (f) ( Resolution 14 ): the Company will need to re-comply with Chapters 1 and 2 of the Listing Rules and, to achieve this, must repeal its existing Constitution and adopt a new constitution in its place.

In addition to the above Essential Resolutions, the Company is seeking Shareholder approval for various other non-essential resolutions.

Resolution 6 (which relates to the issue of Options to Coral Brook Pty Ltd), Resolution 7 (which relates to the issue of the Lead Manager Options to CPS Capital in connection with the Public Offer), Resolutions 8 to 10 (which relate to the issue of Director Incentive Options to the Directors), Resolutions 11 and 12 (which relate to the Director’s participation in the Public Offer) and Resolution 13 (which relates to the change of the Company’s name) are not considered Essential Resolutions, due to the fact that if they were not to be passed, the

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Company considers that the Transactions could still proceed on the terms set out in the Acquisition Agreement and Disposal Agreement.

1.6

Acquisition Agreement

The material terms of the Acquisition Agreement are as follows:

• (a) ( Acquisition ): the Company has agreed to acquire, and the Nabberu shareholders have each agreed to sell, all of their fully paid ordinary shares in the capital of Nabberu ( Nabberu Shares ), free from encumbrances;

• (b) ( Consideration ): in consideration for the Acquisition, the Company has agreed to issue to the Nabberu Shareholders an aggregate of 45,000,000 Shares at a deemed issue price of $0.02 per Share ( Consideration Shares ) and 30,000,000 options ( Consideration Options ) (on a post-Consolidation basis), to be apportioned amongst the Nabberu shareholders pro-rata according to their respective shareholdings in Nabberu (together the Nabberu Consideration );

• (c) ( Conditions Precedent ): Completion is conditional upon the satisfaction (or waiver by the Company) of the following conditions precedent on or before 31 July 2022:

• (i) ( Regulatory Approvals ): the Company and Nabberu obtaining all necessary shareholder, statutory and regulatory approvals and/or waivers required to undertake the Acquisition and, as required by the Corporations Act, the ASX Listing Rules or any other law, including shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of the Consideration and ASX Listing Rule 11.1.2;

• (ii) ( Consents and Waivers ): the Company and Nabberu obtaining, in a form reasonably satisfactory to the Company, all third-party consents or waivers which are, in the opinion of the Company, necessary of desirable to complete the Acquisition;

• (iii) ( Consolidation ): the Company completing the Consolidation;

• (iv) ( Public Offer ): the Company preparing a prospectus and lodging the prospectus with ASIC to complete an offer of a minimum of 150,000,000 Shares at an issue price of $0.02 per Share to raise a minimum of $3,000,000 and up to a maximum of 200,000,000 Shares at an issue price of $0.02 per Share to raise a maximum of $4,000,000 and receiving valid acceptances under the prospectus for not less than $3,000,000;

• (v) ( Re-compliance ): receipt of ASX conditional approval to reinstate the securities of the Company to official quotation on ASX, subject to the Company’s re-compliance with Chapters 1 and 2 of the ASX Listing Rules, on terms and conditions reasonably acceptable to the Company;

• (vi) ( Disposal ): settlement of the Disposal occurring; and

• (vii) ( Restriction Agreements ): the Nabberu Shareholders delivering to the Company signed restriction agreements relating to all the Nabberu Consideration, in accordance with, and to the extent

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required by, the ASX Listing Rules (to the extent that ASX requires those securities to be escrowed).

The Acquisition Agreement otherwise contains terms and conditions considered standard for an agreement of its nature, including standard representations and warranties provided by both parties and confidentiality and settlement obligations.

1.7 Disposal Agreement

The material terms of the Disposal Agreement are as follows:

• (a) ( Disposal ): the Company has agreed to sell, and Calvista Holdings (an entity which Director, Malcolm Day is a director of, and holds one-third of the shares on issue in) agreed to buy, 100% of the fully paid ordinary shares in the capital of Calvista Australia and Calvista NZ, free from encumbrances;

• (b) ( Consideration ): in consideration for the Disposal, Calvista Holdings has agreed to pay to the Company:

• (i) $1,000,000 to be paid on the date which is 5 Business Days after the satisfaction or waiver of the last outstanding condition of the Disposal Agreement ( Calvista Settlement ); and

• (ii) $500,000 to be paid on that date which is 12 months after the Calvista Settlement,

(together the Calvista Consideration

• (c) ( Conditions Precedent ): Completion is conditional upon the satisfaction (or waiver by the Company) of the following conditions precedent on or before 31 July 2022:

• (i) ( Regulatory Approvals ): the Company and Nabberu obtaining all necessary shareholder, statutory and regulatory approvals and/or waivers required to undertake the Disposal as required by the Corporations Act, the ASX Listing Rules or any other law, including shareholder approval pursuant to ASX Listing Rule 10.1 for the Disposal ( Approvals );

• (ii) ( Independent Expert Report ): an independent expert’s report prepared for the purpose of the Approvals concluding that the Disposal is either fair and reasonable or not fair but reasonable to the non-associated shareholders of the Company;

• (iii) ( Consents and Waivers ): the Company and Calvista Holdings obtaining, in a form reasonably satisfactory to Calvista Holdings, all third-party consents or waivers which are, in the opinion of the Calvista Holdings, necessary of desirable to complete the Disposal;

• (iv) ( Consolidation ): the Company completing the Consolidation;

• (v) ( Public Offer ): the Company preparing a prospectus and lodging the prospectus with ASIC to complete an offer of a minimum of 150,000,000 Shares at an issue price of $0.02 per Share to raise a minimum of $3,000,000 and up to a maximum of 200,000,000

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Shares at an issue price of $0.02 per Share to raise a maximum of $4,000,000 and receiving valid acceptances under the prospectus for not less than $3,000,000;

• (vi) ( Re-compliance ): receipt of ASX conditional approval to reinstate the securities of the Company to official quotation on ASX, subject to the Company’s re-compliance with Chapters 1 and 2 of the ASX Listing Rules, on terms and conditions reasonably acceptable to the Company; and

• (vii) ( Acquisition ): settlement of the Acquisition occurring.

The Disposal Agreement otherwise contains terms and conditions considered standard for an agreement of its nature, including standard representations and warranties provided by both parties and confidentiality and settlement obligations.

1.8

Regulatory Matters

No person or entity will acquire a holding of Shares of, or increase their holding, to an amount in excess of 20% of all the Shares on issue at completion of the Transactions.

Trading in the Company’s Securities is currently suspended and will remain suspended until the Company re-complies with Chapters 1 and 2 of the Listing Rules following completion of the Transactions. The Transactions are conditional on the Company obtaining all necessary regulatory and Shareholder approvals and satisfying all other requirements of ASX for the reinstatement to Official Quotation of the Company’s Securities on the ASX (amongst other things).

The Company has made a number of enquiries and investigations into the businesses and assets of Nabberu. These enquiries consisted of having a geologist review previous exploration and geological results in the area of the mineral claims held by Nabberu, reviewing the consolidated audited financial accounts of Nabberu, confirming Nabberu’s title to the mineral claims and undertaking a general corporate legal review of Nabberu. The Company recently completed these due diligence investigations and was satisfied with the results. Consequentially, as was announced by the Company on 4 May 2022, the Company entered into the Acquisition Agreement to acquire 100% of the issued capital of Nabberu.

The Company has undertaken appropriate enquiries into the assets and liabilities, financial position and performance, profits and losses, and prospects of Nabberu for the Company’s Board to be satisfied that the Acquisition is in the best interests of the Company and its Shareholders, subject to it completing the various conditions precedent of the Acquisition Agreement to its satisfaction.

ASX has an absolute discretion in deciding whether or not to re-admit the Company to the Official List and to reinstate the Company’s Securities to quotation on the Official List and therefore the Acquisition may not proceed if ASX exercises that discretion. Investors should take account of these uncertainties in deciding whether or not to vote in favour of or against the Resolutions.

1.9 Previous Security Issues

In the preceding 6 months:

(a) The Company has issued:

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• (i) 8,125,000 Shares following the exercise of 8,125,000 options exercisable at $0.008 each on 2 November 2021, raising $65,000. The funds were used for operating activities in respect to the Company’s Existing Projects and for general working capital purposes.

• (ii) 3,750,000 Shares following the exercise of 3,750,000 options exercisable at $0.008 each on 22 October 2021, raising $30,000. The funds were used for operating activities in respect to the Company’s Existing Projects and for general working capital purposes.

• (iii) 20,000,000 Shares in consideration for corporate advisory and project generation services at a deemed issue price of $0.012 per Share on 8 October 2021 (no funds raised).

• (iv) 20,000,000 Shares following the exercise of 20,000,000 options exercisable at $0.008 each on 30 September 2021, raising $160,000. The funds were used for operating activities in respect to the Company’s Existing Projects and for general working capital purposes.

• (v) 139,412,500 Shares following the exercise of 139,412,500 options exercisable at $0.008 each on 20 September 2021, raising $1,115,300. The funds were used for operating activities in respect to the Company’s Existing Projects and for general working capital purposes.

• (b) Nabberu Minerals has issued 3,000,001 fully paid ordinary shares at an issue price of $0.10 per share, pursuant to which $300,000.10 has been raised. These funds have been used towards the acquisition of tenements and associated costs (including stamp duty, rent on tenements and due diligence costs), overheads and general working capital purposes.

Nabberu will not be issuing any other securities between the date of this Notice and re-admission to the Official List. None of the above issues were underwritten by any party. Funds raised by the issues of the above securities were applied toward Nabberu’s exploration programmes at the Nabberu Projects and working capital, as detailed in Schedule 2B.

The Company expects that all Consideration Shares issued to the Nabberu Shareholders in consideration for the Acquisition will be restricted from trading for a period of up to 24 months from the date of official re-quotation of the Company’s securities on ASX in accordance with the ASX Listing Rules.

1.10 Business Model

Following completion of the Public Offer and the Transactions, the Company’s proposed business model will be to further explore the Projects. The Company’s main objectives on completion of the Public Offer are the:

• (a) Woodlands Project - reprocessing and interpreting all previous geophysical surveys, potential ground or drone geophysics surveys, field reconnaissance trip to assess targets including validation of historic geochemical sampling and mapping and potential dill programs;

• (b) Mt Amy Project (following grant) - field reconnaissance, to identify and map any outcrop; regional scale aircore drilling program over areas of

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previous gold in soil anomalism, and areas of significant rock chip analysis; potential second phase of drilling will follow to test the grade, thickness and depth extensions of any mineralisation;

• (c) Existing Projects (REX Project, Speedway Project and Highlight Project) - Includes various ongoing exploration, geological mapping, rock chip sampling, airborne magnetic surveys, orthophoto surveys and verification and integration of historical information, detailed stratigraphical field mapping and potential drill programs.

1.11 Key Dependencies of the Business Model

The key dependencies influencing the viability of the Transactions are:

• (a) Completion of the Disposal;

• (b) Completion of the Acquisition;

• (c) the Company’s capacity to re-comply with Chapters 1 and 2 of the Listing Rules to enable re-admission to quotation of the Company’s Securities;

• (d) tenure and access to the Projects;

• (e) commodity price volatility and exchange rate risk;

• (f) ability to meet resource and reserves and exploration targets;

• (g) raising minimum Subscription to satisfy expenditure requirements, exploration and operating costs; and

• (h) minimising environmental impact and complying with health and safety requirements.

1.12 Key Investment Highlights

The Directors are of the view that the key highlights on an investment in the Company include:

• (a) Base metal and gold projects opportunity in Western Australia;

• (b) Completion of the Calvista Disposal enabling the Company to transition from an industrial to exploration business; and

• (c) strong board with extensive, directly relevant, corporate and local technical experience with commercial, legal and development / mining backgrounds.

1.13

Group Structure

A group structure diagram is set out below, which assumes completion of the Transactions:

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==> picture [407 x 202] intentionally omitted <==

The Company also holds 11 million shares in European Lithium Ltd (ASX code: EUR) ( EUR ). Other than the Company’s investment in EUR, the Company does not have any other material interests in entities.

The Consideration Shares to be issued to the Nabberu shareholders in consideration for the Acquisition will be issued pro-rata to the Nabberu shareholders’ respective holdings in Nabberu (as set out in the table below on a post-Consolidation basis).

Vendor name	Vendor Shares	%	Proportional Allocation of Consideratio n Shares		Proportional Allocation of Consideration Options
Paranoid Enterprises Pty Ltd	900,000	30.00%	13,499,996		8,999,997
Whistler Street Pty Ltd as trustee for the Warburton Discretionary Trust	150,000	5.00%	2,249,999		1,500,000
Mr Andrew William Spencer and Mrs Benedicte Marie Spencer as trustee for the Spencer Super Fund	850,000	28.33%	12,749,996		8,499,997
Matthew Blumberg	100,000	3.33%	1,500,000		1,000,000
Cityscape Asset Pty Ltd as trustee for the Cityscape Family Account	1,000,000	33.33%	14,999,995		9,999,997
Coral Brook Pty Ltd	1	0.00%	14		9
TOTAL	3,000,001	100.00%	45,000,000		30,000,000

1.14 Re-compliance with Chapters 1 and 2 of the Listing Rules

ASX has advised the Company that as the Transactions will amount to a significant change in the nature and scale of the Company’s activities, the Company is

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required to obtain Shareholder approval for the Transactions and must re-comply with Chapters 1 and 2 of the Listing Rules before it can be re-instated to trading on the ASX (including any ASX requirement to treat the Company’s Securities as restricted Securities).

Trading in the Company’s Securities is currently suspended and will remain suspended until the Company re-complies with Chapters 1 and 2 of the Listing Rules following completion of the Transactions. The Transactions are conditional on the Company obtaining all necessary regulatory and Shareholder approvals to effect the Transactions and satisfying all other requirements of ASX for the reinstatement to Official Quotation of the Company’s Securities on the ASX (among other things).

If any of the Essential Resolutions are not approved at the Meeting, the Transactions will not be able to proceed.

1.15 ASX waivers and confirmations obtained

Listing Rule 2.1 (Condition 2) and Listing Rule 1.1 (Condition 12)

Listing Rule 2.1 (Condition 2) provides that the issue price or sale price of all the securities for which an entity seeks quotation (except options) must be at least 20 cents in cash.

Listing Rule 1.1 (Condition 12) provides that if an entity has options on issue, the underlying security (the exercise price) must be at least 20 cents.

The Company has obtained from ASX a conditional waiver from the requirements of:

• (a) Listing Rule 2.1 (Condition 2) to allow the Company to offer Shares under the Public Offer with an issue price which is less than 20 cents; and

• (b) Listing Rule 1.1 (Condition 12) to allow the Company to be reinstated to the Official List with Options on issue at less than 20 cents each.

The ASX granted the Company a waiver from Listing Rules 2.1 (Condition 2) and 1.1 (Condition 12) to the extent necessary to permit the issue price of the ordinary shares issued under the Prospectus not to be at least $0.20 each, on the following conditions:

• (a) the issue price of the ordinary securities issued by the Company in connection with the Acquisition and the Public Offer is not less than $0.02 each, and the exercise price of the Options is not less than $0.02 each;

• (b) the terms of the waivers and terms and conditions of the securities are clearly disclosed in this Notice of Meeting and in the Prospectus; and

• (c) Shareholders approve:

• (i) the issue price of the ordinary securities as part of the approvals obtained under Listing Rule 11.1.2 for the Acquisition and Public Offer; and

• (ii) the exercise price of the options as part of the approvals obtained under Listing Rule 11.1.2 for the Acquisition.

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• (d) the Company completes a consolidation of its capital structure in conjunction with the Acquisition such that its securities are consolidated at a ratio that will be sufficient, based on the lowest price at which the Company’s securities traded over the 20 trading days preceding the date of the suspension of the Company’s securities from official quotation, to achieve a market value for its securities of not less than the Offer price.

1.16 Indicative timetable

An indicative timetable for completion of the Transactions and the associated transactions set out in this Notice is set out below:

Event	Date
Announcement of Acquisition and Disposal	8 April 2022
Notice of Meeting for the Acquisition and Disposal sent to Shareholders	13 June 2022
Lodge Prospectus with ASIC	16 June 2022
Opening date of the Offer	24 June 2022
Shareholder Meeting to approve the Acquisition	12 July 2022
Closing date of the Offer	13 July 2022
Issue of Shares under the Offer	21 July 2022
Settlement of Acquisition and Disposal	21 July 2022
Expected date for reinstatement of the Company to official quotation	4 August 2022

*Please note this timetable is indicative only and the Directors reserve the right to amend the timetable as required.

1.17 Public Offer and Proposed Use of Funds

To assist the Company to re-comply with Chapters 1 and 2 of the Listing Rules and to support its strategy post-completion of the Acquisition, the Company intends, subject to Shareholder approval, to conduct the Public Offer. Shareholder approval to issue the Securities the subject of the Public Offer is the subject of Resolution 5.

The Company intends to apply funds raised from the Public Offer, together with existing cash reserves, over the first two years following re-admission of the Company to the Official List of ASX as follows:

Funds available	Minimum Subscription ($)	(%)	Maximum Subscription ($)	(%)
Existing cash reserves	2,892,318	39	2,892,618	34
Funds received from Disposal	1,500,000	20	1,500,000	18
Funds raised from the Public Offer	3,000,000	41	4,000,000	48

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	Funds available	Minimum Subscription ($)	(%)	Maximum Subscription ($)	(%)
	Total	7,392,618	100	8,392,618	100
	Allocation of funds
	Exploration and development expenditure – Nabberu Projects1	1,475,000	20	1,475,000	18
	Exploration and development expenditure – Existing Projects2	2,625,000	36	2,625,000	31
	Administration costs3	1,700,000	23	1,700,000	20
	Expenses of the Offer and recompliance4	656,451	9	717,734	9
	Working capital5	936,167	13	1,874,618	32
	Total	7,392,618	100	8,392,618	100

Notes:

1. Includes the following for the Woodlands Project: reprocessing and interpreting all previous geophysical surveys, potential ground or drone geophysics surveys, field reconnaissance trip to assess targets including validation of historic geochemical sampling and mapping and potential dill programs. Includes the following in relation to Mt Amy (following grant): field reconnaissance, to identify and map any outcrop; regional scale aircore drilling program over areas of previous gold in soil anomalism, and areas of significant rock chip analysis; potential second phase of drilling will follow to test the grade, thickness and depth extensions of any mineralisation.

2. Includes various ongoing exploration, geological mapping, rock chip sampling, airborne magnetic surveys, orthophoto surveys and verification and integration of historical information, detailed stratigraphical field mapping and potential drill programs amongst the Existing Projects.

3. Administration costs include, without limitation, general corporate costs such as the provision of contract services to the Company, annual ASX listing fees, Board and executive remuneration, office rent, and ongoing audit and accounting costs.

4. Expenses of the Offer include legal fees, ASX fees, advisor fees, investigating accountant fees, independent geologist fees, share registry fees and brokerage costs

5. Working capital provides for additional capital to be used for additional exploration following the planned exploration programs, as well as investment in new mineral exploration projects not yet to identified by the Directors.

In the event the amount raised is between the minimum subscription and the maximum subscription, the funds raised above the minimum subscription will be applied firstly to additional expenses of the Public Offer and then to additional exploration expenditure on drilling and working capital.

It should be noted that the Company’s budgets will be subject to modification on an ongoing basis depending on the results obtained from exploration and evaluation work carried out. This will involve an ongoing assessment of the Company’s mineral interests. The results obtained from exploration and evaluation programs may lead to increased or decreased levels of expenditure on certain projects reflecting a change in emphasis.

The above table is a statement of current intentions as at the date of this Notice. As with any budget, intervening events, including exploration success or failure, and new circumstances have the potential to affect the manner in which the

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funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

The Directors consider that following completion of the Public Offer, the Company will have sufficient working capital to carry out its stated objectives. It should however be noted that an investment in the Company is speculative and investors are encouraged to read the risk factors outlined in Section 1.28

1.18 No Underwriter

The Public Offer will not be underwritten.

1.19 Lead Manager to the Public Offer

On 1 February 2022, the Company entered into a lead manager mandate with CPS Capital Pty Ltd (ACN 088 055 636) ( CPS Capital ) ( Lead Manager Mandate ), pursuant to which the Company engaged CPS Capital to act as lead manager and broker in respect of the Public Offer.

The material terms of the Lead Manager Mandate are as follows:

• (a) Engagement: The Company agrees to appoint CPS Capital as lead manager in respect of managing the Public Offer on an exclusive basis.

• (b) Fees : The Company will pay CPS the following fees in respect of the Public Offer:

• (i) a management fee of 2% of the gross proceeds of the Public Offer (plus GST) in consideration for managing the Public Offer process;

• (ii) a placement fee of 4% of the gross proceeds of the Public Offer (plus GST) in consideration for raising capital under the Public Offer;

• (iii) up to 20,000,000 Options exercisable at $0.03 each on or before the date which is three (3) years from reinstatement of the Company’s securities to the Official List (the Lead Manager Options ).

• (c) Corporate Advisory Fee : Subject to the Company re-listing on ASX, CPS will receive a monthly corporate advisory fee of $5,000 (plus GST), for a period of 12 months, for corporate advisory services to be performed by CPS.

• (d) Termination : The Lead Manager Mandate may be terminated as follows:

• (i) The Company may terminate the agreement by providing CPS with 7 days written notice.;

• (ii) either party may terminate the Lead Manager Mandate with immediate effect if the other party has materially failed to comply with its obligations under the Lead Manager Mandate and failed to rectify the non-compliance within one month of being given notice by the first mentioned party to do so; and

• (iii) the parties may terminate the Lead Manager Mandate at any time by mutual agreement in writing.

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On termination, CPS Capital is entitled to receive all fees and expenses which have accrued or been incurred before the effective date of termination.

The Lead Manager Mandate otherwise contains terms and conditions considered standard for an agreement of its nature.

1.20

Lead Manager Options

As noted in Section 1.19 above, the Company has agreed, pursuant to the Lead Manager Mandate and subject to obtaining Shareholder approval, to issue up to 20,000,000 Lead Manager Options (on a post-Consolidation basis) to CPS Capital (or its nominee) as part consideration for the provision of its services in connection with the Public Offer. The Company is seeking Shareholder approval under Resolution 7 for the issue of the Lead Manager Options.

1.21 Pro Forma Capital Structure

The pro-forma capital structure of the Company following completion of the Acquisition and issues of all Securities contemplated by this Notice is set out below.

Shares

	Minimum Subscription ($3,000,000)	Maximum Subscription ($4,000,000)
PRE-CONSOLIDATION
Shares currently on issue	1,204,908,705	1,204,908,705
POST-CONSOLIDATION1
Shares on issue post-Consolidation	481,963,482	481,963,482
Shares to be issued pursuant to the Offer2	150,000,000	200,000,000
Shares to be issued to the Vendors of Nabberu Minerals3	45,000,000	45,000,000
Total Shares on issue on completion of the **Offer4 **	676,963,482	726,963,482

Notes :

1. Assumes a consolidation ratio of 1:2.5. Totals may vary due to rounding and exercise of Options.

2. Assumes an issue price of $0.02 per Share.

3. $900,000 worth of Shares at a deemed issue price of $0.02 per Share.

4. This assumes no Options currently on issue in Delecta are exercised.

Options

	Minimum Subscription ($3,000,000)	Maximum Subscription ($4,000,000)
PRE-CONSOLIDATION
Options currently on issue1	70,025,000	70,025,000

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	Minimum Subscription ($3,000,000)	Maximum Subscription ($4,000,000)
POST CONSOLIDATION2
Options on issue post-Consolidation3	28,010,000	28,010,000
Options to be issued under the Offer	Nil	Nil
Options to be issued to the Vendors of Nabberu Minerals4	30,000,000	30,000,000
Options to be issued to the Lead Manager5	20,000,000	20.000.000
Options to be issued to Coral Brook Pty Ltd4	20,000,000	20,000,000
Options to be issued to Directors4	7,000,000	14,000,000
Total Options on issue on completion of the Offer5	105,010,000	112,010,000

Notes :

1. 60,025,000 unlisted options exercisable at $0.008 (on a pre-Consolidation basis) on or before 3 September 2023; 10,000,000 unlisted options exercisable at $0.01 (on a preConsolidation basis) on or before 31 December 2023.

2. Assumes a consolidation ratio of 1:2.5. Totals may vary due to rounding and exercise of Options.

3. 24,010,000 unlisted options exercisable at $0.02 (on a post-Consolidation basis) on or before 3 September 2023; 4,000,000 unlisted options exercisable at $0.025 (on a postConsolidation basis) on or before 31 December 2023.

4. Unlisted Options exercisable at $0.03 (on a post-Consolidation basis) on or before that date which is three years from the date of issue.

5. This assumes no Options currently on issue in Delecta are exercised.

No person will acquire a holding of Shares of, or increase their holding, to an amount in excess of 20% of all the Shares on issue on Settlement of the Transactions.

1.22 Financial Information

Pro forma balance sheet and financial effect of the Acquisition

The pro-forma balance sheet of the Company following completion of the Acquisition and issues of all Securities contemplated by this Notice is set out in Schedule 2A of this Notice. The historical and pro-forma information is presented in an abbreviated form, insofar as it does not include all of the disclosure required by the Australian Accounting Standards applicable to annual financial statements.

The pro forma balance sheet sets out the principal effect of the Acquisition on the consolidated total assets and total equity interests of the Company.

The Company does not expect to generate revenues from operations or sale of assets during the relevant period.

The effect of the Acquisition on the Company’s expenditure will be to increase expenditure as set out in the use of funds table above.

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Nabberu Financial Information

Reviewed accounts for Nabberu from incorporation on 2 July 2021 to the half year ended 31 December 2021 are set out Schedule 2B of this Notice.

1.23 Composition of the Board of Directors

Upon Settlement of the Acquisition, it is intended that there will be no changes to the Board of the Company. The Board currently comprises:

(a) Malcolm Day (Bachelor of Applied Science Surveying and Mapping. Licensed Surveyor) – Managing Director

Mr Day worked in the civil construction industry for approximately ten years, six of which were spent in senior management roles, as a Licensed Surveyor and then later as a Civil Engineer. In June 1999 Mr Day became managing director of Adultshop.com Ltd (previously known as Western Minerals Ltd) which was listed on the ASX. In November 2011 the Company disposed of the business of adultshop.com (to Mr Day) and the Company was renamed Delecta Ltd. Between November 2011 and May 2019 Mr Day privately owned 100% of adultshop.com which is one of Australia’s largest retailers of adult products and Calvista Australia Pty Ltd’s largest customer. In July 2012, Mr Day was appointed as a nonexecutive director of European Lithium Limited (previously Paynes Find Gold Limited).

The Board considers that Malcolm Day is not an independent Director.

(b) Bryan Hughes (B.Com, CA, MAICD) – Non-Executive Chairman

Mr Hughes was appointed as the Company’s Non-Executive Chairman on 5 November 2019.

Mr Hughes is the Chairman of Pitcher Partners Perth Accountants, Auditors and Advisors and specialises in corporate advisory, corporate finance, turnaround and reconstruction. His experience as a Corporate Advisor as well as his former directorship of both ASX-listed and private companies provide a comprehensive skillset which assists the resolution of disputes and negotiating commercial outcomes in complex circumstances.

Mr Hughes has undertaken postgraduate studies at Columbia University Executive Business School in New York. He has 30 years’ experience in the resources sector where he has facilitated, engineered and overseen many projects to significant financial success. Mr Hughes has worked in 15 different jurisdictions and is the global Chair of the Bakertilly Global Natural Resources Group. He has a substantial international network of resource industry focussed investment funds.

The Board considers that Bryan Hughes is an independent Director.

(c) David Wheeler (FAICD) – Non-Executive Director

Mr Wheeler has more than 30 years of senior executive management, directorships, and corporate advisory experience both in Australia and foreign countries and regions including the USA, UK, Europe and Asia. He is a foundation director and partner of Pathways Corporate, a boutique corporate advisory firm that undertakes assignments on behalf of a range of clients including ASX listed companies.

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Mr Wheeler is a Fellow of the Australian Institute of Company Directors and has experience on both public and private boards and currently holds a number of directorships and advisory positions in Australian companies. He is currently a director of listed companies PVW Resources Limited (previously Thred Limited), Avira Resources Limited, POW Limited, Cycliq Limited, Ragnar Minerals Limited, Tyranna Resources Limited, Cradle Resources Limited, Athena Resources Ltd and Health House International Limited. In the last three years Mr Wheeler has also been a director of Syntonic Ltd, Antilles Oil NL, Ausmex Mining Group Limited, Blaze International Limited, Castillo Copper Limited, Eneabba Gas Limited, and 333D Limited.

The Board considers that David Wheeler is an independent Director.

1.24 Director Interests in Securities

Directors are not required under the Constitution to hold any Shares to be eligible to act as a Director.

Details of the Directors’ interests in Securities of the Company upon completion of the Transactions (assuming the Public Offer is subscribed to the Minimum Subscription level) are set out in the table below:

Director	Shares1	Options2	Percentage (%) (Undiluted)	Percentage (%) (Fully Diluted)
Malcolm Day	75,955,907	4,900,000	11.22%	9.71%
Bryan Hughes	2,500,000	2,400,000	0.37%	0.32%
David Wheeler	Nil	1,600,000	Nil	Nil

Notes:

1. Shares held on a post-Consolidation basis.

2. Shares held on a post-Consolidation basis.

1.25 Advantages of the Acquisition

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder’s decision on how to vote on the Essential Resolutions:

• (a) the Company will not have the operational costs associated with Calvista Australia and Calvista NZ following the settlement of the Disposal;

• (b) the continued investment in the Company’s existing business may not have been consistent with the investment objectives of all Shareholders;

• (c) the Company will be able to focus on minerals exploration business where it sees a better opportunity for growth for Shareholders;

• (d) the Independent Expert has concluded that the Disposal is not fair but reasonable to non-associated Shareholders of the Company

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• (e) the Company will obtain ownership of the Nabberu Projects pursuant to the Acquisition;

• (f) the potential increase in market capitalisation of the Company following completion of the Acquisition and the associated Public Offer may lead to access to improved equity capital market opportunities and increased liquidity;

• (g) Shareholders may be exposed to further debt and equity opportunities that the Company did not have prior to the Transactions;

• (h) the Company will re-comply with the ASX Listing Rules, ensuring its reinstatement to quotation and continued liquidity of its listed Shares (however, the Company notes that the ASX reserves the right to re-admit the Company and there is no guarantee that the Company will successfully re-comply with Chapters 1 and 2 of the ASX Listing Rules); and

• (i) the cash reserves of the Company will be conserved as the consideration for the Acquisition is comprised of Shares.

1.26 Disadvantages of the Acquisition

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder’s decision on how to vote on the Essential Resolutions:

• (a) the Disposal involves the Company selling its principal operating business activities, although, it will acquire a business which the Company feels is a better opportunity for Shareholders;

• (b) the Company will be changing the scale of its activities which may not be consistent with the objectives of all Shareholders;

• (c) the Acquisition, Public Offer and associated transactions the subject of this Notice will result in the issue of a significant number of Shares and new investors which will have a dilutionary effect on the holdings of Shareholders;

• (d) there are inherent risks associated with the change in nature of the Company’s activities. Some of these risks are summarised in Section 1.28 below; and

• (e) future outlays of funds from the Company may be required for its proposed business and exploration operations.

1.27 Restricted Securities and free float

Subject to the Company re-complying with Chapters 1 and 2 of the Listing Rules and completing the Public Offer, certain Securities on issue (including the securities issued in consideration for the Acquisition) may be classified by ASX as restricted securities and will be required to be held in escrow for up to 24 months from the date of Official Quotation.

The Shares issued pursuant to the Public Offer, however, will not be classified as restricted securities and will not be required to be held in escrow.

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The Consideration Shares and Options are likely to be restricted from trading for a period of 12 to 24 months after the date of re-admission of the Company to the Official List.

The Company expects to announce to the ASX full details (quantity and duration) of the Securities required to be held in escrow prior to the Company’s listed securities being reinstated to trading on ASX (which reinstatement is subject to ASX’s discretion and approval).

The Company confirms that:

• (a) all issues of securities to be issued in connection with the Acquisition which require Shareholder approval under the ASX Listing Rules and Corporations Act have been included in this Notice;

• (b) no fees were paid or are payable by the Company to any other corporate advisors for finding, arranging or facilitating the Transactions.

Assuming Minimum Subscription under the Public Offer, the Company’s ‘free float’ (being the percentage of Shares not subject to escrow and held by Shareholders that are not related parties of the Company (or their associates) at the time of admission to the Official List) will be approximately 81.0%, comprising all Shares issued pursuant to the Public Offer (other than Shares to be applied for by the Directors) and all Shares currently on issue (other than those held by related parties of the Company) and assuming Minimum Subscription.

1.28 Risk Factors

The key risks of the Acquisition are:

(a) Risks relating to Change in Nature and Scale of Activities

(i) Re-quotation of shares on ASX

As part of the Company’s change in nature and scale of activities, ASX will require the Company to re-comply with Chapters 1 and 2 of the ASX Listing Rules. The Company's securities are currently suspended and will remain suspended from the date of the general meeting convened to seek Shareholder approval for the Transactions until completion of those transactions, the Offer, re-compliance by the Company with Chapters 1 and 2 of the ASX listing rules and compliance with any further conditions ASX imposes on such reinstatement.

There is a risk that the Company will not be able to satisfy one or more of those requirements and that its securities will consequently remain suspended from official quotation. The Company however, following the recent detailed discussions with the ASX surrounding these acquisitions and the Company’s re-compliance obligations, at the moment sees no reason why the Company should not be able to re-comply according with these conditions within a few weeks of the this Meeting.

(ii) Completion Risk

The Company has agreed to acquire 100% of the issued share capital of Nabberu Minerals, completion of which is subject to the fulfilment of certain conditions. There is a risk that the

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conditions for completion of Acquisition cannot be fulfilled and, in turn, that completion of the Acquisition does not occur.

If the Proposed Acquisition is not completed, the Company will incur costs relating to advisors and other costs without any material benefit being achieved.

(iii) Dilution Risk

• (A) The Company currently has 1,204,908,705 Shares (on a pre-Consolidation basis) on issue. Pursuant to the Acquisition, the Company is proposing to issue (on a post-Consolidation basis):

• (B) 45,000,000 Consideration Shares and 30,000,000 Options (being the Securities the subject of Resolution 4) to the Nabberu shareholders;

• (C) up to 200,000,000 Shares under the Public Offer (being the Shares the subject of Resolution 5) to investors under the Public Offer;

• (D) up to 20,000,000 Options (being the Options the subject of Resolution 6) to Coral Brook Pty Ltd;

• (E) up to 20,000,000 Options (being the Options the subject of Resolution 7) to CPS Capital Pty Ltd;

• (F) up to 14,000,000 Options (comprising up to 6,000,000 options to Malcolm Day, up to 4,000,000 options to Bryan Hughes and up to 4,000,000 options to David Wheeler, being the Shares the subject of Resolutions 8 to 10).

Following the Consolidation the subject of Resolution 3 and subject to the passing of the Resolutions the subject of this Notice (i.e. the issue of the abovementioned securities (and assuming minimum subscription under the Public Offer):

• (A) the existing Shareholders will retain approximately 71.19% of the Company’s issued Share capital;

• (B) the current Nabberu shareholders will together hold approximately 6.64% of the Company’s issued Share capital; and

• (G) the investors under the Public Offer will hold approximately 22.16% of the Company’s issued Share capital.

(b) Risks relating to the Company

• (i) Suspension

As the Company’s Securities have been suspended from trading for approximately 3 months, there is currently no public market for Shares. There is no guarantee that an active trading market in the Company’s Securities will develop or that that prices at which Shares trade will increase following completion of the

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Acquisition and the Public Offer. The prices at which Shares trade may be above or below the price of the Public Offer and may fluctuate in response to several factors.

(ii)

Tenure, access and grant of applications

The Tenements are at various stages of application and grant, specifically the tenement for the Mount Amy Project is still under application. There can be no assurance that the tenement application that is currently pending will be granted. There can be no assurance that when the tenement is granted, it will be granted in its entirety. The Company is unaware of any circumstances that would prevent the Mount Amy Project application from being granted, other than the competing applications, however the consequence of being denied the applications for reasons beyond the control of the Company could be significant specifically for the Mount Amy Project.

Mining and exploration tenements are subject to periodic renewal. There is no guarantee that current or future tenements or future applications for production tenements will be approved.

Tenements are subject to the applicable mining acts and regulations. The renewal of the term of a granted tenement is also subject to the discretion of the relevant authority. Renewal conditions may include increased expenditure and work commitments or compulsory relinquishment of areas of the tenements comprising the Company’s projects. The imposition of new conditions or the inability to meet those conditions may adversely affect the operations, financial position and/or performance of the Company.

(iii)

Exploration and operating

Potential investors should understand that mineral exploration and development are high-risk undertakings. There can be no assurance that future exploration of the tenements, or any other mineral licences that may be acquired in the future, will result in the discovery of an economic resource. Even if an apparently viable resource is identified, there is no guarantee that it can be economically exploited.

The future exploration activities of the Company may be affected by a range of factors including geological conditions, limitations on activities due to seasonal weather patterns or adverse weather conditions, unanticipated operational and technical difficulties, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, industrial and environmental accidents, industrial disputes, unexpected shortages and increases in the costs of consumables, spare parts, plant, equipment and staff, native title process, changing government regulations and many other factors beyond the control of the Company.

The success of the Company will also depend upon the Company being able to maintain title to the mineral exploration

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licences comprising the Projects and obtaining all required approvals for their contemplated activities. In the event that exploration programs prove to be unsuccessful this could lead to a diminution in the value of the Projects, a reduction in the cash reserves of the Company and possible relinquishment of the mineral exploration licence comprising the Projects.

(iv)

Additional requirements for capital

The funds to be raised under the Public Offer are considered sufficient to meet the immediate objectives of the Company. Additional funding may be required in the event costs exceed the Company’s estimates and to effectively implement its business and operational plans in the future to take advantage of opportunities for acquisitions, joint ventures or other business opportunities, and to meet any unanticipated liabilities or expenses which the Company may incur. If such events occur, additional funding will be required.

In addition, should the Company consider that its exploration results justify commencement of production on any of its Projects, additional funding will be required to implement the Company’s development plans, the quantum of which remain unknown at the date of this Notice.

Following completion of the Public Offer, the Company may seek to raise further funds through equity or debt financing, joint ventures, licensing arrangements, or other means. Failure to obtain sufficient financing for the Company’s activities may result in delay and indefinite postponement of their activities and the Company’s proposed expansion strategy. There can be no assurance that additional finance will be available when needed or, if available, the terms of the financing may not be favourable to the Company and might involve substantial dilution to Shareholders.

(v)

Coronavirus (COVID-19)

The outbreak of the coronavirus disease ( COVID-19 ) is impacting global economic markets. The nature and extent of the effect of the outbreak on the performance of the Company remains unknown. The Company’s Share price may be adversely affected in the short to medium term by the economic uncertainty caused by COVID-19. Further, any governmental or industry measures taken in response to COVID-19 may adversely impact the Company’s operations and are likely to be beyond the control of the Company.

The COVID-19 pandemic may also give rise to issues, delays or restrictions in relation to land access and the Company's ability to freely move people and equipment to and from exploration projects may cause delays or cost increases. The effects of COVID -19 on the Company's Share price and global financial markets generally may also affect the Company's ability to raise equity or debt or require the Company to issue capital at a discount, which may in turn cause dilution to Shareholders.

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The Directors are monitoring the situation closely and have considered the impact of COVID-19 on the Company’s business and financial performance. However, the situation is continually evolving, and the consequences are therefore inevitably uncertain.

(vi)

Ukraine / Russia

The current evolving conflict between Ukraine and Russia ( Ukraine Conflict ) is impacting global economic markets. The nature and extent of the effect of the Ukraine Conflict on the performance of the Company remains unknown. Following reinstatement to the Official List, the Company’s Share price may be adversely affected in the short to medium term by the economic uncertainty caused by the Ukraine Conflict.

The Directors are continuing to closely monitor the potential secondary and tertiary macroeconomic impacts of the unfolding events, including the changing pricing of commodity and energy markets and the potential of cyber activity impacting governments and businesses. Further, any governmental or industry measures taken in response to the Ukraine Conflict, including limitations on travel and changes to import/export restrictions and arrangements involving Russia, may adversely impact the Company’s operations and are likely to be beyond the control of the Company. The Company is monitoring the situation closely and considers the impact of the Ukraine Conflict on the Company’s business and financial performance to, at this stage, be limited. However, the situation is continually evolving, and the consequences are therefore inevitably uncertain.

(vii)

Climate Change

There are a number of climate-related factors that may affect the operations and proposed activities of the Company. The climate change risks particularly attributable to the Company include:

• (A) the emergence of new or expanded regulations associated with the transitioning to a lower-carbon economy and market changes related to climate change mitigation. The Company may be impacted by changes to local or international compliance regulations related to climate change mitigation efforts, or by specific taxation or penalties for carbon emissions or environmental damage. These examples sit amongst an array of possible restraints on industry that may further impact the Company and its profitability. While the Company will endeavour to manage these risks and limit any consequential impacts, there can be no guarantee that the Company will not be impacted by these occurrences; and

• (B) climate change may cause certain physical and environmental risks that cannot be predicted by the Company, including events such as increased severity of weather patterns and incidence of extreme weather

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events and longer-term physical risks such as shifting climate patterns. All these risks associated with climate change may significantly change the industry in which the Company operates.

(viii) Agents and Contractors

The Company intends to outsource substantial parts of its exploration activities pursuant to service contracts with third party contractors. The Company is yet to enter into these formal arrangements. The Directors are unable to predict the risk of financial failure or default of the insolvency of any of the contractors that will be used by the Company in any of its activities or other managerial failure by any of the other service providers used by the Company for any activity. Contractors may also underperform their obligations of their contract, and in the event that their contract is terminated, the Company may not be able to find a suitable replacement on satisfactory terms.

(ix)

Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

(x)

Operating and Development Risks

The Company’s ability to achieve production, development, operating cost and capital expenditure estimates on a timely basis cannot be assured. The business of mining involves many risks and may be impacted by factors including ore tonnes, grade and metallurgical recovery, input prices (some of which are unpredictable and outside the control of the Company), overall availability of free cash to fund continuing development activities, labour force disruptions, cost overruns, changes in the regulatory environment and other unforeseen contingencies. Other risks also exist such as environmental hazards (including discharge of pollutants or hazardous chemicals), industrial accidents, occupational and health hazards, cave-ins and rock bursts. Such occurrences could result in damage to, or destruction of, production facilities, personal injury or death, environmental damage, delays in mining, increased production costs and other monetary losses and possible legal liability to the owner or operator of the mine. The Company may become subject to liability for pollution or other hazards against which it has not insured or cannot insure, including those in respect of past mining activities for which it was not responsible.

In addition, the Company’s profitability could be adversely affected if for any reason its production and processing of or mine development is unexpectedly interrupted or slowed. Examples of events which could have such an impact include unscheduled plant shutdowns or other processing problems, mechanical failures, the unavailability of materials and equipment, pit slope failures, unusual or unexpected rock

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formations, poor or unexpected geological or metallurgical conditions, poor or inadequate ventilation, failure of mine communications systems, poor water condition, interruptions to gas and electricity supplies, human error and adverse weather conditions.

(xi)

Resource and reserves and exploration targets

The Company has identified a number of exploration targets based on geological interpretations and limited geophysical data, geochemical sampling and historical drilling. Insufficient data however, exists to provide certainty over the extent of the mineralisation. Whilst the Company intends to undertake additional exploratory work with the aim of defining a resource, no assurances can be given that additional exploration will result in the determination of a resource on any of the exploration targets identified. Even if a resource is identified no assurance can be provided that this can be economically extracted.

Reserve and Resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when initially calculated may alter significantly when new information or techniques become available. In addition, by their very nature resource and reserve estimates are imprecise and depend to some extent on interpretations which may prove to be inaccurate.

(xii)

Failure to satisfy Expenditure Commitments

Interests in tenements are governed by the mining acts and regulations that are current in the relevant location of the tenements and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in the tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

(xiii)

Native Title and Aboriginal Heritage

In relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected.

(xiv) Mine development

Possible future development of a mining operation at any of the Company’s projects is dependent on a number of factors including, but not limited to, the acquisition and/or delineation of economically recoverable mineralisation, favourable geological conditions, receiving the necessary approvals from all relevant authorities and parties, seasonal weather patterns,

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unanticipated technical and operational difficulties encountered in extraction and production activities, mechanical failure of operating plant and equipment, shortages or increases in the price of consumables, spare parts and plant and equipment, cost overruns, access to the required level of funding and contracting risk from third parties providing essential services. If the Company commences production, its operations may be disrupted by a variety of risks and hazards which are beyond its control, including environmental hazards, industrial accidents, technical failures, labour disputes, unusual or unexpected rock formations, flooding and extended interruptions due to inclement or hazardous weather conditions and fires, explosions or accidents. No assurance can be given that the Company will achieve commercial viability through the development or mining of its Projects.

(xv)

Equipment and availability

The Company’s ability to undertake mining and exploration activities is dependent upon its ability to source and acquire appropriate mining equipment. Equipment is not always available and the market for mining equipment experiences fluctuations in supply and demand. If the Company is unable to source appropriate equipment economically or at all then this would have a material adverse effect on the Company's financial or trading position.

(xvi) Risks specific to Nabberu Minerals

The business, assets and operations of Nabberu Minerals are subject to certain risk factors that have the potential to influence the operating and financial performance of the Company in the future. These risks can impact on the value of an investment in the securities of our Company and include those set out in above as they relate to Nabberu Minerals’ Projects: tenure, access and grant of applications, exploration and operating, commodity price volatility, resources and reserves and exploration targets, failure to satisfy expenditure commitments and environmental and regulatory risks as they relate to operating in Australia.

In addition, Nabberu Minerals was only recently incorporated on 2 July 2021 and has only limited operating history and limited historical financial performance. Exploration has previously been conducted on the area of land the subject of the Nabberu Projects, however, Nabberu Minerals is yet to conduct its own exploration activities and the Company will not commence these activities until it has been readmitted to the Official List.

No assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining of the Projects. Until the Company is able to realise value from its projects, it is likely to incur operating losses.

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(c) Industry Specific Risks

(i) Exploration and Mining Titles

The ability of the Company to carry out successful exploration and mining activities will depend on the ability to maintain or obtain tenure to mining titles. The maintenance or issue of any such titles must be in accordance with the laws of the relevant jurisdiction and in particular, the relevant mining legislation. Conditions imposed by such legislation must also be complied with. No guarantee can be given that tenures will be maintained or granted, or if they are maintained or granted, that the Company will be in a position to comply with all conditions that are imposed or that they will not be planted by third parties.

(ii) Exploration Costs

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

(iii)

Exploration Success

The mineral assets in which the Company will acquire an interest are at various stages of exploration, and potential investors should understand that mineral exploration and development are high-risk undertakings.

There can be no assurance that exploration of these assets, or any other assets that may be acquired in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

(iv)

Operations

The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

No assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining of its Projects. Until the Company is able to realise value from its Projects, it is likely to incur ongoing operating losses.

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(v) Environmental

The operations and proposed activities of the Company are subject to laws and regulations concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

Mining operations have inherent risks and liabilities associated with safety and damage to the environment and the disposal of waste products occurring as a result of mineral exploration and production. The occurrence of any such safety or environmental incident could delay production or increase production costs. Events, such as unpredictable rainfall or bushfires may impact on the Company’s ongoing compliance with environmental legislation, regulations and licences. Significant liabilities could be imposed on the Company for damages, clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous operations or noncompliance with environmental laws or regulations.

The disposal of mining and process waste and mine water discharge are under constant legislative scrutiny and regulation. There is a risk that environmental laws and regulations become more onerous making the Company’s operations more expensive.

Approvals are required for land clearing and for ground disturbing activities. Delays in obtaining such approvals can result in the delay to anticipated exploration programmes or mining activities.

(vi)

Regulatory risk

The Company’s exploration and development activities are subject to extensive laws and regulations relating to numerous matters including resource licence consent, conditions including environmental compliance and rehabilitation, taxation, employee relations, health and worker safety, waste disposal, protection of the environment, native title and heritage matters, protection of endangered and protected species and other matters. The Company requires permits from regulatory authorities to authorise the Company’s operations. These permits relate to exploration, development, production and rehabilitation activities.

Obtaining necessary permits can be a time-consuming process and there is a risk that the Company will not obtain these permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could materially delay or restrict the Company from proceeding with the development of a project or the operation or development of a mine. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result

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in material fines, penalties or other liabilities. In extreme cases, failure could result in suspension of the Company’s activities or forfeiture of one or more of the Tenements.

(d) General Risks

(i) Economic

General economic conditions, introduction of tax reform, new legislation, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company, as well as on its ability to fund its operations.

(ii) Commodity price volatility and exchange rate risk

If the Company achieves success leading to mineral production, the revenue it will derive through the sale of product exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors.

Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

(iii) Competition risk

The industry in which the Company will be involved is subject to domestic and global competition. Although the Company will undertake reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or actions of its competitors, which activities or actions may, positively or negatively, affect the operating and financial performance of the Company.

(iv) Market conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

• (A) general economic outlook;

• (B) introduction of tax reform or other new legislation;

• (C) currency fluctuations

• (D) interest rates and inflation rates;

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• (E) changes in investor sentiment toward particular market sectors;

• (F) the demand for, and supply of, capital; and

• (G) terrorism or other hostilities.

The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general. Neither the Company, the Directors warrant the future performance of the Company or any return on an investment in the Company.

Securities listed on the stock market experience extreme price and volume fluctuations that have often been unrelated to the operating performance of such companies. These factors may materially affect the market price of the Shares regardless of the Company’s performance.

(v) Force majeure

The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company including labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, epidemics or quarantine restrictions.

(vi) Litigation risks

The Company is exposed to possible litigation risks including native title claims, tenure disputes, environmental claims, occupational health and safety claims and employee claims. Further, the Company may be involved in disputes with other parties in the future which may result in litigation. Any such claim or dispute if proven, may impact adversely on the Company’s operations, financial performance and financial position. The Company is not currently engaged in any litigation.

1.29 Plans for the Company if completion of the Transactions does not occur

If any of the Essential Resolutions are not passed and the Transactions are therefore not able to be completed, the Company will continue to look for alternative potential transactions to take the Company forward.

Shareholders should note that if the Essential Resolutions are not approved at the Meeting, the Transactions will not proceed.

Trading in the Company’s Securities is currently suspended and will remain suspended until the Company re-complies with Chapters 1 and 2 of the Listing Rules following completion of the Transactions or can otherwise satisfy ASX that its level of its operations are sufficient for the purposes of Listing Rule 12.1.

1.30 Directors’ interests in the Proposed Transactions

Subject to shareholder approval (sought by Resolution 2 of this notice) the Company will dispose of its current wholesale business undertaken by Calvista Australia and Calvista NZ to Calvista Holdings (an entity which Director, Malcolm

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Day is a director of and holds one-third of the shares on issue in), subject to the satisfaction or waiver of certain conditions precedent.

Other than Malcolm Day, none of the Directors have any interest in the Transactions, other than as disclosed in this Notice.

1.31 Vendors’ interests in the Company

None of the Nabberu shareholders (or their associates) are related parties of the Company as at the date of this Notice or have any interest in the Company, other than as disclosed below.

Nabberu Shareholder	DLC Shares1	Options
Coral Brook Pty Ltd	44,285,000	Nil
Andrew Spencer and Benedicte Spencer	32,089,645	Nil

Notes:

1. On a pre-consolidation basis.

1.32 Forward looking statements

The forward-looking statements in this Explanatory Statement are based on the Company’s current expectations about future events. However, they are subject to known and unknown risks, uncertainties and assumptions, many of which are outside the control of the Company and the Directors, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by the forward-looking statements in this Explanatory Statement. These risks include but are not limited to, the risks detailed in Section 1.28. Forward looking statements include those containing words such as ‘anticipate’, ‘estimates’, ‘should’, ‘will’, ‘expects’, ‘plans’ or similar expressions.

1.33 Material Information

The Directors confirm that all accessible and material information available to the Company has been included in this Notice and that the Company is in compliance with its continuous disclosure obligations under ASX Listing Rule 3.1.

2. RESOLUTION 1 – DISPOSAL OF MAIN UNDERTAKING TO A RELATED PARTY

2.1 General

This Notice of Meeting has been prepared to seek shareholder approval for the matters required to complete the Disposal. Resolution 1 seeks Shareholder approval for the purposes of ASX Listing Rules 10.1 for the Disposal to Calvista Holdings.

This resolution also seeks Shareholder approval for the purposes of ASX Listing Rule 11.2 for the Disposal of a substantial asset to a related party and substantial (10%) holder of the Company.

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2.2 ASX Listing Rule 10.1

ASX Listing Rule 10.1 provides that an entity must ensure that neither it, nor any of its child entities, acquires a substantial asset from, or disposes of a substantial asset to, amongst other persons:

• (a) a related party of the Company;

• (b) a subsidiary of the Company;

• (c) a person who is, or was at any time in the 6 months before the transaction or agreement, a substantial (10%+) holder in the Company;

• (d) an associate of a person referred to in Listing Rules 10.1.1 to 10.1.3; or

• (e) a person whose relationship to the entity or a person referred to in Listing Rules 10.1.1 to 10.1.4 is such that, in ASX’s opinion, the transaction should be approved by Shareholders.

without the prior approval of holders of the entity’s ordinary shareholders.

Substantial Asset

For the purposes of ASX Listing Rule 10.1, an asset is substantial if its value, or the value of the consideration for it is, or in ASX’s opinion is, 5% or more of the equity interests of the entity as set out in the latest accounts given to ASX under the ASX Listing Rules.

The equity interests of the Company as defined by the ASX Listing Rules and as set out in the latest accounts given to ASX under the ASX Listing Rules (being for the half-year ending 30 December 2021) was $10,253,000. Given that, as at 31 December 2021, the Company’s total equity was $10,253,000, any asset valued at greater than $512,650 would constitute a substantial asset.

As further set out in section 1.7 above, the consideration for the Disposal is greater than $512,650. This amount is greater than 5% of the equity interests in the Company, as such ASX Listing Rule 10,1 applies to this transaction.

Related Party

For the purposes of ASX Listing Rule 10.1, a related party of a company includes the directors and entities controlled by the directors. ‘Control’ for the purposes of ASX Listing Rule 10.1 means the capacity to determine the outcome of decisions about the entity’s financial and operating policies.

Malcolm Day is a director and one-third shareholder of Calvista Holdings and is also Director of the Company. Accordingly, Calvista Holdings is considered a related party for the purposes of ASX Listing Rule 10.1 on the basis that it is controlled by Mr Day.

Substantial holder

For the purposes of ASX Listing Rule 10.1, a substantial (10%) holder is a person who has a relevant interest (either directly or through its associates) or had at any time in the six months before the transaction, in at least 10% of the total votes attaching to the voting securities of the Company.

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Malcolm Day (and associated entities) currently holds a relevant interest in 15.24% in the Company and as a result Calvista Holdings (due to being controlled by Mr Day) is therefore a substantial (10%) holder for the purpose of ASX Listing Rule 10.1.

Requirement for shareholder approval

As a result of the above conclusions, the completion of the Disposal will result in the disposal of a substantial asset to a related party (and/or a substantial (10%) holder) of the Company. The Company is therefore required to seek Shareholder approval under ASX Listing Rule 10.1.

As stated above, ASX Listing Rule 10.5.10 requires a notice of meeting containing a resolution under ASX Listing Rule 10.1 to include a report on the transaction from an independent expert. The Company has engaged Moore Australia Corporate Finance (WA) Pty Ltd to act as independent expert in the context of the Disposal.

The Independent Expert’s Report has been prepared for the purpose of assisting Shareholders’ consideration and assessment of the merits of the Disposal and making of their decision whether to vote in favour of Resolution 1. Shareholders are urged to carefully read the Independent Expert’s Report, to understand the scope of the report, and the methodology and valuation and assumptions made.

The Company advises that, on 14 May 2022 (subsequent to announcement of execution of the Disposal Agreement on 4 May 2022), the Company received an unsolicited offer from Mr William Nash to acquire all of the shares in Calvista Australia and Calvista New Zealand for $3,000,000 ( Alternative Offer ). The Alternative Offer included conditions of:

• (a) completion of legal, technical and financial due diligence by 14 July 2022;

• (b) obtaining all necessary shareholder and regulatory and ASX approvals by 14 July 2022; and

• (c) termination of the Disposal Agreement prior to 30 June 2022.

The Company provided a copy of the Alternative Offer to the Independent Expert and the Independent Expert has considered the Alternative Offer as part of the Independent Expert’s Report. Please refer to sections 2.16 to 2.32 of the Independent Expert’s Report for the Independent Expert’s consideration of the Alternative Offer.

As set out in section 2.29 of the Independent Expert’s Report:

• (a) the Independent Expert’s opinion is primarily based on its assessment that the quantitative impact of the Alternative Offer to non-associated Shareholders is not substantial enough to warrant the risk and uncertainty associated with the outcome of the due diligence process; and

• (b) It is the Independent Expert’s opinion that non-associated Shareholders are in a better position if they accept a certain and firm, although quantitatively lower, offer under the Disposal, than risk the due diligence process and potential renegotiation or withdrawal of the Alternative Offer.

The Independent Expert has concluded that the Disposal is NOT FAIR BUT REASONABLE to the non-associated Shareholders of the Company.

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The non-associated Directors have outlined the advantages and disadvantages of the Disposal in Sections 1.25 and 1.26 above. The non-associated Directors consider that those are relevant to all Shareholders. All material information required for Shareholders to consider Resolution 1 is outlined in this Notice of Meeting (and the Independent Expert’s Report).

A copy of the Independent Expert’s Report accompanies this Notice of Meeting at Schedule 5.

2.3 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The Disposal constitutes the giving of a financial benefit to Calvista Holdings, who is a related party by virtue of being controlled by Mr Day, a Director of the Company. Upon completion of the Disposal, Mr Day will receive a financial benefit in the form of an interest in Calvista Australia and Calvista NZ in consideration for the Disposal (described in further detail below).

The financial benefit being given to Calvista Holdings is 100% of the issued capital of Calvista Australia and Calvista NZ. As stated in section 8.2 of the Independent Expert’s Report, the enterprise value of Calvista Australia and Calvista NZ on a control basis has been assessed to be in the range of approximately $711,000 to $2,061,000 (based on the capitalisation of future maintainable earnings methodology set out in that section).

Whilst the Directors (other than Mr Day who has a material personal interest in Resolution 1) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not technically required in respect of Resolution 1, the Directors have resolved to seek Shareholder approval pursuant to Chapter 2E of the Corporations Act in the interests of good governance.

2.4 ASX Listing Rule 11.2

ASX Listing Rule 11.2 provides that an entity must obtain the approval of its shareholders for a disposal of its main undertaking. The Disposal is a disposal of the entity’s main undertaking for these purposes.

Resolution 1 seeks Shareholder approval of the Disposal under and for the purposes of ASX Listing Rule 11.2.

2.5

Technical Information required by Listing Rule 14.1A

Resolution 1 is an Essential Resolution. Accordingly, if Resolution 1 is passed, the Company will be able to proceed with the Disposal.

If the Essential Resolutions (including this Resolution 1) are approved at the Meeting, the Company will be able to proceed with the Transactions.

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If Resolution 1 is not passed, the Company will not be able to proceed with the Disposal.

2.6 Technical information required by ASX Listing Rule 10.5 and section 219 of the Corporations Act

Pursuant to and in accordance with ASX Listing Rule 10.5 and section 219 of the Corporations Act, the following information is provided in relation to the Disposal:

• (a) the Company is entering into the Disposal Agreement with Calvista Holding;

• (b) The Company and Calvista Holdings are related parties by virtue of the Managing Director of the Company, Malcolm Day. Mr Day is a director of Calvista Holdings and a substantial (10%) holder of both the Company and Calvista Holdings. Accordingly, Calvista Holdings is deemed to be a “related party” of the Company and therefore falls within the category set out in ASX Listing Rule 10.1.1;

• (c) the consideration payable by Calvista Holdings is set out in Section 1.7 above;

• (d) summaries of the material terms of the Agreements are set out in Section 1.7 above;

• (e) the Company intends to use the funds received as consideration under the Agreements for exploration and development expenditure;

• (f) an indicative timetable is set out at Section 1.16 above;

• (g) a voting exclusion statement is included in Resolution 1 of this Notice;

• (a) Bryan Hughes and David Wheeler recommends that Shareholders vote in favour of Resolution 1 for the reasons set out in Section 1.25;

• (b) Malcolm Day has a material personal interest in the outcome of Resolution 1 on the basis that the Company and Calvista Holdings are related parties by virtue of Mr Day being a director of Calvista Holdings and a substantial (10%) holder of both the Company and Calvista Holdings. For this reason Mr Day does not believe that it is appropriate to make a recommendation on Resolution 1 of this Notice;

• (a) the Board is not aware of any other information that is reasonably required by Shareholders to allow them to decide whether it is in the best interests of the Company to pass Resolution 1; and

• (h) the Independent Expert’s Report is included at Schedule 5 of this Notice.

2.7 Independent Expert’s Report

ASX Listing Rule 10.5.10 requires a notice of meeting containing a resolution under ASX Listing Rule 10.1 to include a report on the transaction from an independent expert.

The Independent Expert's Report accompanying this Notice sets out a detailed independent examination of the Disposal to enable non-associated Shareholders to assess the merits and decide whether to approve Resolution 1. The

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independent expert has concluded that the Disposal is NOT FAIR BUT REASONABLE to the non-associated Shareholders.

Shareholders are urged to carefully read the Independent Expert’s Report to understand its scope, the methodology of the valuation and the sources of information and assumptions made.

3. RESOLUTION 2 – CHANGE TO NATURE AND SCALE OF ACTIVITIES

3.1 General

Resolution 2 seeks the approval of Shareholders for a change in the nature and scale of the Company’s activities via the Transactions.

A detailed description of the Transactions is outlined in Section 1 above. The key terms and conditions of the Acquisition Agreement and Disposal Agreement are set out in Sections 1.6 and 1.7 of this Notice.

3.2

Listing Rule 11.1

Listing Rule 11.1 provides that where an entity proposes to make a significant change, either directly or indirectly, to the nature or scale of its activities, it must provide full details to ASX as soon as practicable (and before making the change) and comply with the following:

• (a) provide to ASX information regarding the change and its effect on future potential earnings, and any information that ASX asks for;

• (b) if ASX requires, obtain the approval of holders of its shares and comply with any requirements of ASX in relation to the notice of meeting; and

• (c) if ASX requires, meet the requirements of Chapters 1 and 2 of the Listing Rules as if the entity were applying for admission to the Official List.

ASX has indicated to the Company that the change in the nature and scale of the Company’s activities as a result of the Transactions requires the Company, in accordance with Listing Rule 11.1.2, to obtain Shareholder approval and the Company must comply with any requirements of ASX in relation to the Notice of Meeting.

3.3

Listing Rule 11.1.2

The Company is proposing to undertake the Transactions and to re-comply with the Listing Rules.

Listing Rule 11.1.2 empowers ASX to require a listed company to obtain the approval of its shareholders to a significant change to the nature or scale of its activities. The Transactions will involve a significant change to the nature or scale of the Company’s activities for these purposes and, as its usual practice, ASX has imposed a requirement under Listing Rule 11.1.2 that the Company obtain shareholder approval to the Transactions.

Resolution 2 seeks the required Shareholder approval to the Transactions and for the purposes of Listing Rule 11.1.2.

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3.4 Technical information required by Listing Rule 14.1A

Resolution 2 is an Essential Resolution. Accordingly, if Resolution 2 is passed, the Company will be able to proceed with the Transactions, which will allow the Company to change the nature and scale of its activities.

If the Essential Resolutions (including this Resolution 2) are approved at the Meeting, the Company will be able to proceed with the transactions and will change the change the nature and scale of its activities subject to the conditions precedent to the Transactions being satisfied and completion occurring.

If Resolution 2 is not passed, the Company will not be able to proceed with the Transactions.

3.5 Suspension until re-compliance with Chapters 1 and 2 of the Listing Rules

ASX has also indicated to the Company that the change in the nature and scale of the Company’s activities requires the Company to (in accordance with Listing Rule 11.1.3) re-comply with the admission requirements set out in Chapters 1 and 2 of the Listing Rules (including any ASX requirement to treat the Company’s Securities as restricted Securities).

The Company’s securities have been suspended from quotation since 15 February 2022 and, subject to Shareholder approval being obtained, will remain suspended from quotation until the Company has completed the Transactions and recomplied with Chapters 1 and 2 of the Listing Rules, including by satisfaction of ASX’s conditions precedent to reinstatement.

4. RESOLUTION 3 – CONSOLIDATION OF CAPITAL

4.1 Background

The Directors are seeking Shareholder approval to consolidate the number of Shares on issue on a 2.5:1 basis ( Consolidation ). If Resolution 3 is passed and excluding any Shares issued pursuant to the other Resolutions, the number of Shares on issue will be reduced from 1,204,908,705 to 481,963,482 (subject to rounding). For the avoidance of doubt, the Consolidation excludes the Shares and Options to be issued under the Resolutions the subject of this Notice.

4.2 Legal requirements

Section 254H of the Corporations Act provides that a company may, by resolution passed in a general meeting, convert all or any of its shares into a larger or smaller number.

4.3 Fractional entitlements

Not all Shareholders will hold that number of Shares which can be evenly divided by Consolidation ratio. Where a fractional entitlement occurs, the Company will round that fraction down to the nearest whole Share.

4.4 Taxation

It is not considered that any taxation implications will exist for Shareholders arising from the Consolidation. However, Shareholders are advised to seek their own tax advice on the effect of the Consolidation and neither the Company, nor its advisers, accept any responsibility for the individual taxation implications arising from the Consolidation.

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4.5 Holding statements

From the date that is two Business Days after the Consolidation is approved by Shareholders, all holding statements for Securities will cease to have any effect, except as evidence of entitlement to a certain number of Securities on a postConsolidation basis.

After the Consolidation becomes effective, the Company will arrange for new holding statements for Shares to be issued to those Shareholders.

It is the responsibility of each Shareholder to check the number of Shares held prior to disposal or exercise (as the case may be).

4.6

Effect on capital structure

The effect which the Consolidation will have on the Company’s capital structure is set out in the table in Section 1.21 above.

4.7 Indicative timetable

The Consolidation will be completed in accordance with the timetable set out in the ASX Listing Rules:

Event	Date*
Following Shareholder approval, Company announces Shareholder approval of the Consolidation and announces the effective date of the Consolidation	12 July 2022
Effective Date*	12 July 2022
Last date for trading on pre-Consolidation basis*	13 July 2022
Post-Consolidation trading commences on a deferred settlement basis*	14 July 2022
Record Date Last day for Company to register transfers on a pre-Consolidation basis	15 July 2022
First day for Company to update register and send holding statements to security holders reflecting pre and post Consolidation holdings *	18 July 2022
Last day for Company to update register and send holding statements to security holders reflecting pre and post Consolidation holdings and to notify ASX that this has occurred*	22 July 2022

• Trading in the Company’s Securities on ASX is currently suspended and will remain suspended until the Company re-complies with Chapters 1 and 2 of the ASX Listing Rules following completion of the Acquisition. These items have been included in the timetable for consistency with the standard ASX mandated timetable to effect a capital restructure.

Please note this timetable is indicative only and the Directors reserve the right to amend the timetable as required.

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5. RESOLUTION 4 – ISSUE OF CONSIDERATION SHARES AND OPTIONS TO NABBERU SHAREHOLDERS IN CONSIDERATION FOR THE ACQUISITION

5.1 General

The Company has entered into the Acquisition Agreement, pursuant to which it has agreed to issue an aggregate of 45,000,000 Shares ( Consideration Shares ) and 30,000,000 Options ( Consideration Shares ) (on a post-Consolidation basis) to the Nabberu shareholders ( Consideration Securities ), in consideration for the Company’s acquisition of their respective Nabberu Shares.

5.2 ASX Listing Rule 7.1

Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary shares it had on issue at the start of that period.

The proposed issue of the Consideration Securities does not fall within any of the exceptions to Listing Rule 7.1 that are set out in Listing Rule 7.2 and exceeds the 15% limit in Listing Rule 7.1. It therefore requires the approval of Shareholders under Listing Rule 7.1.

5.3

Technical information required by Listing Rule 14.1A

If Resolution 4 is passed, the Company will be able to proceed with the issue of the Consideration Securities to the Nabberu shareholders. In addition, the issue of the Consideration Securities to the Nabberu shareholders will be excluded from the calculation of the number of equity securities that the Company can issue without Shareholder approval under Listing Rule 7.1.

If the Essential Resolutions (including this Resolution 4) are approved at the Meeting, the Company will be able to proceed with the Acquisition and will acquire Nabberu subject to the conditions precedent to the Acquisition being satisfied and completion occurring.

If the Essential Resolutions (including this Resolution 4) are not approved at the Meeting, the Acquisition will not proceed.

Resolution 4 seeks Shareholder approval for the purposes of Listing Rule 7.1 for the issue of the Consideration Securities to the Nabberu shareholders.

5.4 Technical information required by Listing Rule 7.1

Pursuant to and in accordance with Listing Rule 7.3, the following information is provided in relation to Resolution 4:

• (a) the Consideration Securities will be issued to the Nabberu shareholders (who are named in the table above in Section 1.13 and are not related parties of the Company) pro-rata to their Respective Proportions of Nabberu, as set out in Section 1.13;

• (b) on a post-Consolidation basis the maximum number of Consideration Shares to be issued to the Nabberu shareholders is 45,000,000 Shares and the maximum number of Options to be issued is 30,000,000, to be issued to each of the Nabberu shareholders in the amounts set out in the table in Section 1.13;

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• (c) the Consideration Shares will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (d) the Options will be issued on the terms and conditions set out in Schedule 3;

• (e) the Consideration Securities will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is intended that issue of the Consideration Securities will occur on the same date;

• (f) the Consideration Shares will be issued at a deemed issue price of $0.02 per Share and nil per Option, in consideration for the Company’s acquisition of the Nabberu Shares currently held by the Nabberu shareholders, which the Company has agreed to acquire pursuant to the Acquisition Agreement. The Company will not receive any other consideration for the issue of the Shares and Options (other than in respect of funds received on exercise of the Options);

• (g) the purpose of the issue of the Consideration Securities is to satisfy the Company’s obligations under the Acquisition Agreement and to effect the Acquisition;

• (h) the Consideration Securities are being issued to the Nabberu shareholders under the Acquisition Agreement. A summary of the material terms of the Acquisition Agreement is set out in Section 1.6 above;

• (i) the Consideration Securities are not being issued under, or to fund, a reverse takeover; and

• (j) a voting exclusion statement is included in Resolution 4 of the Notice.

5.5 Dilution

Assuming no Options are exercised or other Shares issued and the maximum number of Consideration Shares to the Nabberu shareholders are issued, the number of Shares on issue would increase from 481,963,482 (being the number of Shares on issue as at the date of this Notice on a post-Consolidation basis) to 526,963,482 Shares (on a post-Consolidated basis) and the shareholding of existing Shareholders would be diluted by 9.33%. Further, assuming no Options are exercised, no convertible securities are converted or other Shares issued and the maximum number of Shares as set out above are issued, in the event all the Options issued pursuant to this Resolution were exercised the number of Shares on issue would increase to 556,963,482 and the shareholding of existing Shareholders would be diluted by 5.69%.

6. RESOLUTION 5 - PUBLIC OFFER

6.1 General

Resolution 5 seeks Shareholder approval for the issue of up to 200,000,000 Shares (on a post-Consolidation basis) at an issue price of $0.02 per Share, to raise up to $4,000,000 under the Public Offer ( Maximum Subscription ).

The Public Offer will be undertaken via the Prospectus to assist the Company in complying with Chapters 1 and 2 of the Listing Rules (which the Company is

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required to obtain re-instatement of the Shares to trading on the Official List on completion of the Disposal).

The minimum subscription under the Public Offer will be $3,000,000 (150,000,000 Shares on a post-Consolidation basis) ( Minimum Subscription ). It is noted that the Shares the subject of the Public Offer will only be issued if:

• (a) the Minimum Subscription is raised;

• (b) the Company has received conditional approval from ASX for the Company to be reinstated to Official Quotation on ASX following the Company’s compliance with Listing Rule 11.1.3 and Chapters 1 and 2 of the Listing Rules; and

• (c) the issue occurs contemporaneously with completion of the Transactions, which requires, amongst other things, the passing of all Essential Resolutions set out in this Notice.

Further details of the Public Offer will be set out in the Prospectus.

A summary of Listing Rule 7.1 is set out in Section 5.2 above.

The proposed issue of the Public Offer Shares does not fall within any of the Exceptions and exceeds the 15% limit in Listing Rule 7.1. It therefore requires the approval of Shareholders under Listing Rule 7.1.

6.2 Technical Information required by Listing Rule 14.1A

Resolution 5 seeks the required Shareholder approval to the issue of the Public Offer Shares under and for the purposes of Listing Rule 7.1.

If Resolution 5 is passed, the Company will be able to proceed with the issue of the Public Offer Shares. In addition, the issue of the Public Offer Shares will be excluded from the calculation of the number of equity securities that the Company can issue without Shareholder approval under Listing Rule 7.1.

If the Essential Resolutions (including this Resolution 5) are approved at the Meeting, the Company will be able to proceed with the Disposal and will acquire Nabberu subject to the conditions precedent to the Disposal being satisfied and completion occurring.

If the Essential Resolutions (including this Resolution 5) are not approved at the Meeting, the Disposal will not proceed.

6.3 Technical information required by Listing Rule 7.1

Pursuant to and in accordance with Listing Rule 7.3, the following information is provided in relation to this Resolution:

• (a) the Shares will be issued to subscribers under the Public Offer. The Directors, in conjunction with CPS Capital, will determine to whom the Shares will be issued, on a basis to ensure the Company’s re-compliance requirements are met, but these persons will not be related parties of the Company unless otherwise approved by Shareholders pursuant to Resolutions 11 and 12.

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• (b) in accordance with paragraph 7.2 of ASX Guidance Note 21, the Company confirms that it does not presently intend that any of the recipients will be:

• (i) related parties of the Company, members of the Company’s Key Management Personnel, substantial holders of the Company, advisers of the Company or an associate of any of these parties; and

• (ii) issued more than 1% of the issued capital of the Company

(other than those Shares to be issued to the participating Directors, being the Shares the subject of Resolutions 11 and 12 of this Notice);

• (c) the maximum number of Shares to be issued is 200,000,000 Shares (on a post-Consolidation basis);

• (d) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (e) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is intended that issue of the Shares will occur on the same date;

• (f) the issue price of the Shares will be $0.02 per Share. The Company will not receive any other consideration for the issue of the Shares;

• (g) the purpose of the issue of the Shares is to raise capital, which the Company intends to apply towards the proposed purposes as set out in Section 1.17;

• (h) the Shares are not being issued under an agreement;

• (i) the Shares are not being issued under, or to fund, a reverse takeover; and (j) a voting exclusion statement is included in Resolution 5 of the Notice.

7. RESOLUTION 6 – APPROVAL TO ISSUE OPTIONS – CORAL BROOK PTY LTD

7.1 General

The Company has entered into an agreement to issue up to 20,000,000 Options (on a post-Consolidation basis)( Consulting Options ) to Coral Brook Pty Ltd ( Coral Brook ) subject to Coral Brook providing various consulting services to the Company in relation to the Pubic Offer ( Consulting Agreement ).

Under the Consulting Agreement, Coral Brook will provide the following consulting services:

• (a) identifying potential investors in the Public Offer;

• (b) introducing those potential investors to the Company who will pass on such investors’ details to CPS Capital, who will deal with such investors directly in relation to the Public Offer;

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• (c) such that an amount of $1,000,000 is raised under the Public Offer by the issue of Shares to those investors introduced by Coral Brook.

(together, the Services ).

In consideration for the Services, subject to receipt of shareholder approval and the further conditions precedent (outlined below), the Company agreed to issue Coral Brook (or its nominee) with 20,000,000 Options exercisable at $0.03 (on a post-consolidation basis) on or before that date which is three years from the date of issue.

The issue of the Consulting Options to Coral Brook (or its nominee) is subject to and conditional upon:

• (d) the Company receiving shareholder approval for the issue of the Consulting Options;

• (e) the Company preparing the Prospectus and lodging the Prospectus with ASIC to complete the Public Offer and receiving valid acceptances under the Prospectus for not less than $3,000,000;

• (f) receipt of ASX conditional approval to reinstate the securities of the Company to official quotation on ASX, subject to the Company’s recompliance with Chapters 1 and 2 of the ASX Listing Rules, on terms and conditions reasonably acceptable to the Company; and

• (g) Coral Brook delivering to the Company a signed restriction agreement relating to the Consulting Options, in accordance with, and to the extent required by, the ASX Listing Rules (to the extent that ASX requires those securities to be escrowed),

(together, the Conditions Precedent ).

If any of the Conditions Precedent are not satisfied by 31 July 2022 ( End Date ), or the parties agree that any of the Conditions Precedent cannot be satisfied at any time prior to the End Date, either party may give notice to the other party of termination of the Consulting Agreement.

The Consulting Agreement will terminate upon the occurrence of one or more of the following events:

• (a) Either party may terminate the Consulting Agreement with immediate effect by written notice to the other party advising of such;

• (b) If the Company’s Lead Manager Mandate with CPS Capital is terminated for any reason;

• (c) If the minimum subscription of $3,000,000 is not raised under the Public Offer; or

• (d) If one or more of the Conditions Precedent are not satisfied for any reason by the End Date.

As summarised in Section 5.2 above, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary shares it had on issue at the start of that period.

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The proposed issue of the Consulting Options does not fall within any of the exceptions set out in Listing Rule 7.2 and exceeds the 15% limit in Listing Rule 7.1. It therefore requires the approval of Shareholders under Listing Rule 7.1.

7.2 Technical information required by Listing Rule 14.1A

If Resolution 6 is passed, the Company will be able to proceed with the issue of the Consulting Options. In addition, the issue of the Consulting Options will be excluded from the calculation of the number of equity securities that the Company can issue without Shareholder approval under Listing Rule 7.1.

If Resolution 6 is not passed, the Company will not be able to proceed with the issue of the Consulting Options.

Resolution 6 seeks Shareholder approval for the purposes of Listing Rule 7.1 for the issue of the Consulting Options.

7.3

Technical information required by Listing Rule 7.1

Pursuant to and in accordance with Listing Rule 7.3, the following information is provided in relation to Resolution 6:

• (a) the Consulting Options will be issued to Coral Brook Pty Ltd;

• (b) the maximum number of Consulting Options to be issued is 20,000,000 (on a post-Consolidation basis). The terms and conditions of the Consulting Options are set out in Schedule 3;

• (c) the Consulting Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is intended that issue of the Consulting Options will occur on the same date;

• (d) the Consulting Options will be issued at a nil issue price, in consideration for the Services provided by Coral Brook Pty Ltd;

• (e) the purpose of the issue of the Consulting Options is to satisfy the Company’s obligations to Coral Brook Pty Ltd under the Consulting Agreement;

• (f) the Consulting Options are being issued to Coral Brook Pty Ltd under the Consulting Agreement. A summary of the material terms of the Consulting Agreement is set out in Section 7.1; and

• (g) the Consulting Options are not being issued under, or to fund, a reverse takeover.

8. RESOLUTION 7 - ISSUE OF LEAD MANAGER OPTIONS TO CPS CAPITAL

As set out in Section 1.19 above, the Company has entered into a lead manager mandate with CPS Capital, pursuant to which CPS Capital have agreed to provide lead manager services to the Company in connection with the Public Offer ( Lead Manager Mandate ).

Resolution 7 seeks Shareholder approval for the issue of up to 20,000,000 Options (on a post Consolidation basis) exercisable at $0.03 each, on or before the date which is 3 years from their date of issue to CPS Capital ( Lead Manager Options ), in

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consideration for the lead manager services to be provided to the Company in connection with the Public Offer.

As set out above in Section 5.2 above, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary shares it had on issue at the start of that period.

The proposed issue of the Lead Manager Options does not fall within any of these exceptions and exceeds the 15% limit in Listing Rule 7.1. It therefore requires the approval of Shareholders under Listing Rule 7.1.

Resolution 7 seeks the required Shareholder approval for the issue of the Lead Manager Options under and for the purposes of Listing Rule 7.1.

The effect of Resolution 7 will be to allow the Company to issue the Lead Manager Options during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

8.1 Technical Information Required by Listing Rule 14.1A

If Resolution 7 is passed, the Company will be able to proceed with the issue of the Lead Manager Options. In addition, the issue will be excluded from the calculation of the number of equity securities that the Company can issue without Shareholder approval under Listing Rule 7.1.

If Resolution 7 is not passed, the Company will not be able to proceed with the issue of the Lead Manager Options and would need to seek an alternative means of compensating CPS Capital for providing lead manager services in connection with the Public Offer.

Resolution 7 has not been denoted as an Essential Resolution, however, should Shareholder approval not be received for the issue of the Lead Manager Options Options, the ability of the Company to complete the Public Offer and satisfy its recompliance conditions may be jeopordised.

8.2 Technical information required by Listing Rule 7.1

Pursuant to and in accordance with Listing Rule 7.3, the following information is provided in relation to the issue of the Lead Manager Options:

• (a) the Lead Manager Options will be issued to CPS Capital, who is not a related party of the Company;

• (b) the maximum number of Lead Manager Options to be issued is 20,000,000 Options (on a post Consolidation basis);

• (c) the Lead Manager Options will be issued on the terms and conditions set out in Schedule 3;

• (d) the Lead Manager Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is intended that issue of the Options will occur on the same date;

• (e) the Lead Manager Options will be issued for nil cash consideration in consideration for lead manager services to be provided by CPS Capital to the Company in connection with the Public Offer. The Company will

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not receive any other consideration for the issue of the Lead Manager Options (other than the funds received on exercise of the Options);

• (f) the purpose of the issue of the Lead Manager Options is to satisfy the Company’s obligations under the Lead Manager Mandate;

• (g) no funds will be raised from the issue of the Lead Manager Options as they are being issued as consideration for lead manager services to be provided by CPS Capital to the Company in connection with the Public Offer;

• (h) the Lead Manager Options are being issued under the Lead Manager Mandate, which is summarised above in Section 1.19 of this Notice;

• (a) the Lead Manager Options are not being issued under, or to fund, a reverse takeover; and

• (b) a voting exclusion statement is included in Resolution 7 of the Notice.

9. RESOLUTIONS 8 TO 10 – APPROVAL TO ISSUE DIRECTOR INCENTIVE OPTIONS – MALCOLM DAY, BRYAN HUGHES AND DAVID WHEELER

9.1 General

The Company has agreed, subject to obtaining Shareholder approval, to issue up to 14,000,000 Options (on a post-Consolidation basis) as follows:

• (a) Up to 6,000,000 options to Mr Malcolm Day (or his nominee/s), being the options the subject of Resolution 8;

• (b) Up to 4,000,000 options to Mr Bryan Hughes (or his nominee/s), being the options the subject of Resolution 9; and

• (c) Up to 4,000,000 options to Mr David Wheeler (or his nominee/s), being the options the subject of Resolution 10.

(together, the Director Incentive Options ), on the terms and conditions set out below.

Resolutions 8 to 10 seek Shareholder approval for the issue of the Director Incentive Options to Mr Day, Mr Hughes and Mr Wheeler (or their respective nominee/s).

9.2 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

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The issue of Options to the Related Parties constitutes giving a financial benefit and each of the Related Parties is a related party of the Company by virtue of being a Director.

As the Options are proposed to be issued to all of the Directors, the Directors are unable to form a quorum to consider whether one of the exceptions set out in sections 210 to 216 of the Corporations Act applies to the issue of the Options. Accordingly, Shareholder approval for the issue of Options to the Related Parties is sought in accordance with Chapter 2E of the Corporations Act.

9.3 Listing Rule 10.11

Listing Rule 10.11 provides that unless one of the exceptions in Listing Rule 10.12 applies, a listed company must not issue or agree to issue equity securities to:

• 10.11.1 a related party;

• 10.11.2 a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder in the company;

• 10.11.3 a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder in the company and who has nominated a director to the board of the company pursuant to a relevant agreement which gives them a right or expectation to do so;

• 10.11.4 an associate of a person referred to in Listing Rules 10.11.1 to 10.11.3; or

• 10.11.5 a person whose relationship with the company or a person referred to in Listing Rules 10.11.1 to 10.11.4 is such that, in ASX’s opinion, the issue or agreement should be approved by its shareholders,

unless it obtains the approval of its shareholders.

The issue of the Director Incentive Options falls within Listing Rule 10.11.1 and does not fall within any of the exceptions in Listing Rule 10.12. It therefore requires the approval of Shareholders under Listing Rule 10.11.

Resolutions 8 to 10 seek the required Shareholder approval for the issue of the Director Incentive Options under and for the purposes of Chapter 2E of the Corporations Act and Listing Rule 10.11.

9.4 Technical information required by Listing Rule 14.1A

If Resolutions 8 to 10 are passed, the Company will be able to proceed with the issue of the Director Incentive Options to the Related Parties within one month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the Listing Rules). As approval pursuant to Listing Rule 7.1 is not required for the issue of the Director Incentive Options (because approval is being obtained under Listing Rule 10.11), the issue of the Director Incentive Options will not use up any of the Company’s 15% annual placement capacity.

If Resolutions 8 to 10 are not passed, the Company will not be able to proceed with the issue of the Director Incentive Options and will consider alternative means of remuneration for the Directors.

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9.5 Technical Information required by Listing Rule 10.13 and section 219 of the Corporations Act

Pursuant to and in accordance with Listing Rule 10.13 and section 219 of the Corporations Act, the following information is provided in relation to Resolutions 8 to 10:

• (a) the Options will be issued to the following persons:

• (i) Mr Day (or his nominee) pursuant to Resolution 8;

• (ii) Mr Hughes (or his nominee) pursuant to Resolution 9; and

• (iii) Mr Wheeler (or his nominee) pursuant to Resolution 10,

each of whom falls within the category set out in Listing Rule 10.11.1 by virtue of being a Director;

• (b) the maximum number of Options to be issued to the Related Parties (being the nature of the financial benefit proposed to be given) is 14,000,000 (on a post-Consolidation basis) comprising:

• (i) up to 6,000,000 Options to Mr Day (or his nominee) pursuant to Resolution 8;

• (ii) up to 4,000,000 Options to Mr Hughes (or his nominee) pursuant to Resolution 9; and

• (iii) up to 4,000,000 Options to Mr Wheeler (or his nominee)pursuant to Resolution 10,

• (c) the terms and conditions of the Options are set out in Schedule 3;

• (d) the Company received a waiver from ASX Listing Rule 10.13.5 on 17 May 2022 to issue the Options later than 1 month after the date of the Meeting on the following conditions:

• (i) the Options are issued no later than the date that the Public Offer are issued which must be no later than three (3) months after the date of the Meeting;

• (ii) the Options are issued pursuant to the relevant terms and conditions set out in the notice of meeting pursuant to which the Company will seek the approval required under listing rule 11.1.2 for the Transactions;

• (iii) the circumstances of the Company, as determined by the ASX, have not materially changed since the Company’s shareholders approved the issue of the Options; and

• (iv) the terms of the waiver are clearly disclosed in the Notice and in the prospectus to be issued in respect of the Public Offer;

• (e) the issue price of the Options will be nil. The Company will not receive any other consideration in respect of the issue of the Options (other than in respect of funds received on exercise of the Options);

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• (f) the purpose of the issue of the Options is to provide a performance linked incentive component in the remuneration package for the Related Parties to align the interests of the Related Parties with those of Shareholders, to motivate and reward the performance of the Related Parties in their roles as Directors and to provide a cost effective way from the Company to remunerate the Related Parties, which will allow the Company to spend a greater proportion of its cash reserves on its operations than it would if alternative cash forms of remuneration were given to the Related Parties;

• (g) the Options are unquoted Options. The Company has agreed to issue the Options to the Related Parties subject to Shareholder for the following reasons:

• (i) the Options are unquoted; therefore, the issue of the Options has no immediate dilutionary impact on Shareholders;

• (ii) the deferred taxation benefit which is available to the Related Parties in respect of an issue of Options is also beneficial to the Company as it means the Related Parties are not required to immediately sell the Options to fund a tax liability (as would be the case in an issue of Shares where the tax liability arises upon issue of the Shares) and will instead, continue to hold an interest in the Company; and

• (iii) it is not considered that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Options on the terms proposed;

• (h) the number of Options to be issued to each of the Related Parties has been determined based upon a consideration of:

• (i) current market standards and/or practices of other ASX listed companies of a similar size and stage of development to the Company;

• (ii) the remuneration of the Related Parties; and

• (iii) incentives to attract and ensure continuity of service of the Related Parties who have appropriate knowledge and expertise, while maintaining the Company’s cash reserves.

The Company does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Options upon the terms proposed;

(i) the total remuneration package for each of the Related Parties for the previous financial year and the proposed total remuneration package for the current financial year are set out below:

Related Party	Current Financial Year (Minimum)	Current Financial Year (Maximum)	Previous Financial Year4
Mr Day	$293,5231	$319,0461	$288,000
Mr Hughes	$83,0152	$100,0302	$86,100

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Mr Wheeler $57,015[3] $74,030[3] $53,600

Notes:

1. Comprising Directors’ fees of $80,000, consultancy fees of $180,000, superannuation of $8,000 and share-based payments of $25,523 (Minimum Subscription) and share-based payments of $51,046 (Maximum Subscription).

2. Comprising Directors’ fees of $60,000, superannuation of $6,000 and share-based payments of $17,015 (Minimum Subscription) and share-based payments of $34,030 (Maximum Subscription).

3. Comprising Directors’ fees of $40,000 and share-based payments of $17,015 (Minimum Subscription) and share-based payments of $34,030 (Maximum Subscription).

4. Inclusive of Director fees, consultancy fees, superannuation and share based payment expense. Refer to the 2021 Annual Report for further details.

5. (j) the value of the Options and the pricing methodology is set out in Schedule 4;

6. (k)

7. the Options are not being issued under an agreement;

8. (l) the relevant interests of the Related Parties in securities of the Company as at the date of this Notice are set out in Section 1.24 above;

9. (m) if the Options issued to the Related Parties are exercised, a total of 14,000,000 Shares would be issued (on a post-Consolidation basis). This will increase the number of Shares on issue from 481,963,482 (being the total number of Shares on issue as at the date of this Notice) to 495,963,482 (on a post-Consolidation basis) assuming that no Shares are issued and no convertible securities vest or are exercised) with the effect that the shareholding of existing Shareholders would be diluted by an aggregate of 2.90%, comprising 1.24% by Mr Day, 0.83% by Mr Hughes and 0.83% by Mr Wheeler;

The market price for Shares during the term of the Options would normally determine whether the Options are exercised. If, at any time any of the Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Options, there may be a perceived cost to the Company.

• (n) the trading history of the Shares on ASX in the 12 months before the date of this Notice is set out below:

	Price	Date
Highest	$0.020	10 November 2021
Lowest	$0.005	13 May 2021 26, 27 and 30 August 2021 4 and 5 August 2021
Last	$0.011	14 February 2022

Subject to the approval of Resolution 3 the issued capital of the Company be consolidated on the basis that every two and a half (2.5) Shares be consolidated into one (1) Share, which will effect the share price of the Company.

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• (o) each Director has a material personal interest in the outcome of Resolutions 8 to 10 on the basis that all of the Directors (or their nominees) are to be issued Options should Resolutions 8 to 10 be passed. For this reason, the Directors do not believe that it is appropriate to make a recommendation on Resolutions 8 to 10 of this Notice; and

• (p) the Board is not aware of any other information that is reasonably required by Shareholders to allow them to decide whether it is in the best interests of the Company to pass Resolutions 8 to 10.

10. RESOLUTIONS 11 AND 12 – DIRECTOR PARTICIPATION IN PUBLIC OFFER

10.1 General

Pursuant to Resolution 5, the Company is seeking Shareholder approval for the allotment and issue of up to 200,000,000 Shares (on a post-Consolidation basis) at an issue price of $0.02 per Share to raise up to $4,000,000 under the Public Offer.

Each of Mr Bryan Hughes and Malcolm Day are Directors (and therefore related parties) and wish to participate in the Public Offer.

Resolutions 11 and 12 seek Shareholder approval for the in the allotment and issue of up to 5,000,000 Shares to the Directors at an issue price of $0.02 to raise up to $100,000, comprising(on a post-Consolidation basis):

• (a) up to 2,500,000 Shares to Mr Malcolm Day (or his nominee or family trust); and

• (b) up to 2,500,000 Shares to Mr Bryan Hughes (or his nominee or family trust),

arising from their respective participation in the Public Offer ( Participation ).

For the avoidance of doubt, nominees of the above Directors may include each of the Directors’ family members (including parents), whether in their personal capacity or as beneficiaries under a family trust.

10.2 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in Sections 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

The Participation will result in the issue of Shares which constitutes giving a financial benefit and Messrs Day and Hughes are each related parties of the Company by virtue of being Directors in accordance with ASX Listing Rule 10.11.1.

The Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the Participation because the Shares will be issued to Messrs Day and Hughes on the same terms as Shares issued to

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non-related party participants in the Public Offer and as such the giving of the financial benefit is on arm’s length terms.

10.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

ASX Listing Rule 10.11 is further summarised in Section 9.2 above.

As the Participation involves the issue of Shares to related parties of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

10.4 Technical information required by Listing Rule 14.1A

If Resolutions 11 and 12 are passed, the Company will be able to proceed with the issue of the Shares to Messrs Day and Hughes under the Public Offer within one month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the Listing Rules). As approval pursuant to Listing Rule 7.1 is not required for the issue of the Shares (because approval is being obtained under Listing Rule 10.11), the issue of the Shares will not use up any of the Company’s 15% annual placement capacity.

If Resolutions 11 and 12 are not passed, the Company will not be able to proceed with the issue of the Shares to the Directors.

10.5 Technical Information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to the Participation:

• (a) the Shares will be allotted and issued to Messrs Day and Hughes (or their nominee/s), each of whom fall within the category set out in Listing Rule 10.11.1. As set out above, Messrs Day and Hughes are related parties of the Company by virtue of being Directors;

• (b) the maximum number of Shares to be issued is 5,000,000 (on a postConsolidation basis), comprising:

• (i) up to 2,500,000 Shares to Mr Malcolm Day (or his nominee or family trust); and

• (ii) up to 2,500,000 Shares to Mr Bryan Hughes (or his nominee or family trust).

As set out in Section 9.1 above, nominees of each of the above Directors (to whom the Company will issue the Shares under the Participation, subject to Resolutions 11 and 12 being passed) may include each of the Directors’ family members (including parents), whether in their personal capacity or as beneficiaries under a family trust.

(c) the Company received a waiver from ASX Listing Rule 10.13.5 on 17 May 2022 to issue the Shares later than 1 month after the date of the Meeting on the following conditions:

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• (i) the Shares are issued no later than the date that the Public Offer are issued which must be no later than three (3) months after the date of the Meeting;

• (ii) the Shares are issued pursuant to the relevant terms and conditions set out in the notice of meeting pursuant to which the Company will seek the approval required under listing rule 11.1.2 for the Transactions;

• (iii) the circumstances of the Company, as determined by the ASX, have not materially changed since the Company’s shareholders approved the issue of the Shares; and

• (iv) the terms of the waiver are clearly disclosed in the Notice and in the prospectus to be issued in respect of the Public Offer;

• (d) the issue price will be $0.02 per Share, being the same as all other Shares issued under the Public Offer, with all funds raised under the Public Offer to be spent in accordance with the use of funds detailed at Section 1.17;

• (e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and

• (f) the funds raised will be used for the same purposes as all other funds raised under the Public Offer as set out in Section 1.17 of this Explanatory Statement.

Approval pursuant to ASX Listing Rule 7.1 is not required for the Participation as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Shares to Messrs Day and Hughes (or their respective nominees) will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

11. RESOLUTION 13 – CHANGE OF COMPANY NAME

Section 157(1)(a) of the Corporations Act provides that a company may change its name if the company passes a special resolution adopting a new name.

Resolution 13 seeks the approval of Shareholders for the Company to change its name to ‘ Moab Minerals Limited ’.

If Resolution 13 is passed the change of name will take effect when ASIC alters the details of the Company’s registration.

The proposed name has been reserved by the Company and if Resolution 13 is passed, the Company will lodge a copy of the special resolution with ASIC on completion of the Disposal in order to effect the change.

The Board proposes this change of name on the basis that it more accurately reflects the proposed future operations of the Company.

12. RESOLUTION 14 – REPLACEMENT OF CONSTITUTION

12.1 General

A company may modify or repeal its constitution or a provision of its constitution by special resolution of shareholders.

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Resolution 14 is a special resolution which will enable the Company to repeal its existing Constitution and adopt a new constitution ( Proposed Constitution ) which is of the type required for a listed public company limited by shares updated to ensure it reflects the current provisions of the Corporations Act and Listing Rules.

This will incorporate amendments to the Corporations Act and Listing Rules since the current Constitution was adopted in November 2010.

The Directors believe that it is preferable in the circumstances to replace the existing Constitution with the Proposed Constitution rather than to amend a multitude of specific provisions.

The Proposed Constitution is broadly consistent with the provisions of the existing Constitution. Many of the proposed changes are administrative or minor in nature including but not limited to:

• (a) updating references to bodies or legislation which have been renamed (e.g. references to the Australian Settlement and Transfer Corporation Pty Ltd, ASTC Settlement Rules and ASTC Transfer); and

• (b) expressly providing for statutory rights by mirroring these rights in provisions of the Proposed Constitution.

The Directors believe these amendments are not material nor will they have any significant impact on Shareholders. It is not practicable to list all of the changes to the Constitution in detail in this Explanatory Statement, however, a summary of the proposed material changes is set out below.

A copy of the Proposed Constitution is available for review by Shareholders at the Company’s website and at the office of the Company. A copy of the Proposed Constitution can also be sent to Shareholders upon request to the Company Secretary. Shareholders are invited to contact the Company if they have any queries or concerns.

12.2 Summary of material proposed changes

Restricted Securities (clause 2.12)

The Proposed Constitution complies with the recent changes to Listing Rule 15.12 which took effect from 1 December 2019. As a result of these changes, ASX will require certain more significant holders of restricted securities and their controllers (such as related parties, promoters, substantial holders, service providers and their associates) to execute a formal escrow agreement in the form Appendix 9A, as is currently the case. However, for less significant holdings (such as non-related parties and non-promoters), ASX will permit the Company to issue restriction notices to holders of restricted securities in the form of the new Appendix 9C advising them of the restriction rather than requiring signed restriction agreements.

Minimum Shareholding (clause 3)

Clause 3 of the Constitution outlines how the Company can manage shareholdings which represent an “unmarketable parcel” of shares, being a shareholding that is less than $500 based on the closing price of the Company’s Shares on ASX as at the relevant time.

The Proposed Constitution is in line with the requirements for dealing with “unmarketable parcels” outlined in the Corporations Act such that where the Company elects to undertake a sale of unmarketable parcels, the Company is

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only required to give one notice to holders of an unmarketable parcel to elect to retain their shareholding before the unmarketable parcel can be dealt with by the Company, saving time and administrative costs incurred by otherwise having to send out additional notices.

Clause 3 of the Proposed Constitution continues to outline in detail the process that the Company must follow for dealing with unmarketable parcels.

Fee for registration of off market transfers (clause 8.4(c))

On 24 January 2011, ASX amended Listing Rule 8.14 with the effect that the Company may now charge a “reasonable fee” for registering paper-based transfers, sometimes referred to “off-market transfers”.

Clause 8.4 of the Proposed Constitution is being made to enable the Company to charge a reasonable fee when it is required to register off-market transfers from Shareholders. The fee is intended to represent the cost incurred by the Company in upgrading its fraud detection practices specific to off-market transfers.

Before charging any fee, the Company is required to notify ASX of the fee to be charged and provide sufficient information to enable ASX to assess the reasonableness of the proposed amount.

Direct Voting (clause 13, specifically clauses 13.35 – 13.40)

The Proposed Constitution includes a new provision which allows Shareholders to exercise their voting rights through direct voting (in addition to exercising their existing rights to appoint a proxy). Direct voting is a mechanism by which Shareholders can vote directly on resolutions which are to be determined by poll. Votes cast by direct vote by a Shareholder are taken to have been cast on the poll as if the Shareholder had cast the votes on the poll at the meeting. In order for direct voting to be available, Directors must elect that votes can be cast via direct vote for all or any resolutions and determine the manner appropriate for the casting of direct votes. If such a determination is made by the Directors, the notice of meeting will include information on the application of direct voting.

Dividends (clause 22)

Section 254T of the Corporations Act was amended effective 28 June 2010.

There is now a three-tiered test that a company will need to satisfy before paying a dividend replacing the previous test that dividends may only be paid out of profits.

The amended requirements provide that a company must not a pay a dividend unless:

• (a) the company’s assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend;

• (b) the payment of the dividend is fair and reasonable to the company’s shareholders as a whole; and

• (c) the payment of the dividend does not materially prejudice the company’s ability to pay its creditors.

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The existing Constitution reflects the former profits test and restricts the dividends to be paid only out of the profits of the Company. The Proposed Constitution is updated to reflect the new requirements of the Corporations Act. The Directors consider it appropriate to update the Constitution for this amendment to allow more flexibility in the payment of dividends in the future should the Company be in a position to pay dividends.

Partial (proportional) takeover provisions (new clause 36)

A proportional takeover bid is a takeover bid where the offer made to each shareholder is only for a proportion of that shareholder’s shares.

Pursuant to section 648G of the Corporations Act, the Company has included in the Proposed Constitution a provision whereby a proportional takeover bid for Shares may only proceed after the bid has been approved by a meeting of Shareholders held in accordance with the terms set out in the Corporations Act.

This clause of the Proposed Constitution will cease to have effect on the third anniversary of the date of the adoption of last renewal of the clause.

Information required by section 648G of the Corporations Act

Effect of proposed proportional takeover provisions

Where offers have been made under a proportional off-market bid in respect of a class of securities in a company, the registration of a transfer giving effect to a contract resulting from the acceptance of an offer made under such a proportional off-market bid is prohibited unless and until a resolution to approve the proportional off-market bid is passed.

Reasons for proportional takeover provisions

A proportional takeover bid may result in control of the Company changing without Shareholders having the opportunity to dispose of all their Shares. By making a partial bid, a bidder can obtain practical control of the Company by acquiring less than a majority interest. Shareholders are exposed to the risk of being left as a minority in the Company and the risk of the bidder being able to acquire control of the Company without payment of an adequate control premium. These amended provisions allow Shareholders to decide whether a proportional takeover bid is acceptable in principle, and assist in ensuring that any partial bid is appropriately priced.

Knowledge of any acquisition proposals

As at the date of this Notice of Meeting, no Director is aware of any proposal by any person to acquire, or to increase the extent of, a substantial interest in the Company.

Potential advantages and disadvantages of proportional takeover provisions

The Directors consider that the proportional takeover provisions have no potential advantages or disadvantages for them and that they remain free to make a recommendation on whether an offer under a proportional takeover bid should be accepted.

The potential advantages of the proportional takeover provisions for Shareholders include:

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• (a) the right to decide by majority vote whether an offer under a proportional takeover bid should proceed;

• (b) assisting in preventing Shareholders from being locked in as a minority;

• (d) increasing the bargaining power of Shareholders which may assist in ensuring that any proportional takeover bid is adequately priced; and

• (e) each individual Shareholder may better assess the likely outcome of the proportional takeover bid by knowing the view of the majority of Shareholders which may assist in deciding whether to accept or reject an offer under the takeover bid.

The potential disadvantages of the proportional takeover provisions for Shareholders include:

• (a) proportional takeover bids may be discouraged;

• (b) lost opportunity to sell a portion of their Shares at a premium; and

• (c) the likelihood of a proportional takeover bid succeeding may be reduced.

Recommendation of the Board

The Directors do not believe the potential disadvantages outweigh the potential advantages of adopting the proportional takeover provisions and as a result consider that the proportional takeover provision in the Proposed Constitution is in the interest of Shareholders and unanimously recommend that Shareholders vote in favour of Resolution 14.

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GLOSSARY

$ means Australian dollars.

Acquisition Agreement has the meaning given to it in Section 1.6.

Amended Constitution has the meaning given to it Section 9.5.

ASIC means the Australian Securities & Investments Commission.

Associated Body Corporate means:

• (a) a related body corporate (as defined in the Corporations Act) of the Company;

• (b) a body corporate which has an entitlement to not less than 20% of the voting Shares of the Company; and

• (c) a body corporate in which the Company has an entitlement to not less than 20% of the voting shares.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chair of the Meeting.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act.

Company means Delecta Limited (ACN 009 147 924) (to be renamed ‘Moab Minerals Limited’, approval for which is sought under Resolution 13).

Constitution means the Company’s constitution.

CPS Capital means CPS Capital Group Pty Ltd (ACN 088 055 636).

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

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Eligible Shareholder means an Australian resident existing Shareholder as at the date of this Notice.

Essential Resolution has the meaning given in Section 1.5.

Existing Projects means the Company’s current projects being the Highline Project, the REX Project and the Speedway Gold Project.

Explanatory Statement means the explanatory statement accompanying the Notice.

General Meeting or Meeting means the meeting convened by the Notice.

Nabberu means Nabberu Minerals Pty Ltd (ACN 651 652 916).

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

Lead Manager means CPS Capital Group Pty Ltd.

Lead Manager Mandate means the agreement entered into on 1 February 2022 between CPS Capital and the Company, pursuant to which the Company agreed to engage CPS Capital to provide lead manager and brokerage services in connection with the Public Offer, to the Company.

Listing Rules means the Listing Rules of ASX.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

Official List means the official list of the ASX.

Official Quotation means quotation of securities on the Official List.

Option means an option to acquire a Share.

Option Offer means the non-renounceable, pro rata entitlement offer of one (1) Option for each Share held by Eligible Shareholders.

Disposal means the Company’s Disposal of 100% of the issued share capital of Calvista Australia and Calvista NZ.

Projects means the Existing Projects and the Nabberu Projects.

Prospectus means the full form prospectus to be issued by the Company in connection with the Public Offer.

Proxy Form means the proxy form accompanying the Notice.

Public Offer means the Company’s proposed public offer of up to 200,000,000 Shares to raise up to $4,000,000 (with a minimum of 150,000,000 Shares), being the Shares the subject of Resolution 5.

Record Date means the date of this Notice.

67

3962-05/2898137_14

Re-compliance means the Company re-complying with the admission requirements set out in Chapters 1 and 2 of the Listing Rules.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Section means a section of the Explanatory Statement.

Securities means the Company’s issued securities.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a registered holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

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3962-05/2898137_14

SCHEDULE 1 – PROJECT DETAILS

The Company provides the following information in respect of the Nabberu Projects to be acquired as part of the Acquisition:

1. WOODLANDS PROJECT

1.1 OVERVIEW

The Woodlands Project is located 875 km northeast of Perth and 200 km north-west of Meekatharra in the Gascoyne Province of Western Australia, Figure 3.1 . The Woodlands Project is comprised of one exploration licence (E52/3895) which was granted in January 2021 and covers 193 km[2] . One graticular block is excised within the south-centre of the tenure, which is host to gem quality variscite and secondary gold. The total annual minimum expenditure commitment is currently A$62,000.

Access to the tenement is via the Woodlands - Mt Augustus Road which passes through the northern area of the tenement. Various station tracks and exploration grids provide access within the Project area.

The arid to semi-arid climate has extremes in temperature from an average minimum in winter of 5˚C to an average maximum in summer of 35˚C with occasional days up to 46˚C. Precipitation is variable and averages 200 mm per annum. The wettest period is usually during the summer months as a result of monsoonal depressions. The Project area is reasonably rugged with east west trending ridges and scarps making access to some areas difficult. The terrain is generally open woodland of mulga, shrubs and grasslands with flood plains and epithermal creeks. Most of the Project area lies on the Mulgal pastoral station.

69

Figure 3.1 – Location plan of the Woodlands Project, in Western Australia (source: Beau Resources)

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1.2 GEOLOGY

1.2.1 REGIONAL GEOLOGY

The Woodlands Project is located in the Mesoproterozoic Edmund Basin (formerly referred to as the Bangemall Basin), one of a series of sedimentary basins formed between the Archaean Yilgarn and Pilbara cratons ( Figure 3.2 ). The Edmund Basin is composed of sedimentary sequences deposited during intracratonic extensional reactivation of structures formed during earlier stages of the Capricorn Orogen, 1800 -1529 Ma (Martin et al, 2005). Due to the compression of the Yilgarn and Pilbara Cratons, the basin is elongate in a west northwest orientation and is transected by a series of north-east to south-west trending structures.

The sedimentary sequence is approximately 4 km thick (Martin et al, 2007) and starts with coarse continental clastic sediments, which were deposited unconformably on the older Palaeoproterozoic Ashburton and Blair Basin basement as alluvial fan and river channel deposits (Martin et al, 2005). These lenticular occurrences of basal terrigenous clastics, exemplified by Mt Augustus, were overlain by finer sandstones, siltstones, shales and carbonates of the Edmund Group and intruded by mafic sills. The entire basin is folded on an east-west to west-north-west axes.

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Figure 3.2 – Woodlands Project located in the Edmund Basin, WA (source: Beau Resources)

==> picture [415 x 295] intentionally omitted <==

1.2.2 LOCAL GEOLOGY

The Woodlands Project is located in the western extent of the Jillawarra Belt, a structurally controlled zone of clastic and carbonate sedimentary rocks developed during an extensional phase of basin development (McInerney et al, 1994). Basement schist and granitoid are exposed in the cores of the Woodlands and Coobarra Domes (Hardy, 2017). The disconformable contact between the dolomitic sediments of the Irregully Formation and the polymictic conglomerate of the Kiangi Creek Formation is an important marker for the Abra Pb-Zn-Cu-Au deposit (Galena Mining, 2021).

The stratigraphy is folded along west-northwest axes which are dislocated by regional scale strike- slip faults. Short strike-length second order splay faults have a north-northeast orientation which results in a series of en-echelon prismatic fault blocks. This structural framework may represent the early basement structures prior to the onset of basin development.

Within the tenement two major anticlines are developed: the Lyons River anticline to the north and the Mulgul anticline in the south. These two fold structures are the focus for base metal exploration as they provide the best exposure of the Kiangi Creek Formation and proximity to the lower contact with Irregully Formation. A simplified stratigraphic column of the Woodlands Project area is presented in Figure 3.3.

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Figure 3.3 – Stratigraphic subdivision of the Woodlands Project area, showing Abra deposit setting in the upper sequence of Irregully Formation (after Peregoodoff, 1998)

==> picture [292 x 355] intentionally omitted <==

Descriptions of the formations that are mapped within the Woodlands Project area are as follows:

IRREGULLY FORMATION

Hardy (2017) describes the Irregully Formation as a variably dolomitic siltstoneshale sequence with lesser fine to coarse (sometimes dolomitic) quartz arenites and massive dolomites that in places display algal mat banding and stomatolitic textures. Deposition occurred in a shallow water environment with carbonate rich mud and sandy silt. The thickness of this formation varies greatly (from 350 m to more than 2,000 m) due to movement along the Talga Fault (Martin et al, 2007).

Proximal to the Abra deposit, the Irregully Formation is often referred to as the Gap Well Formation (Hardy, 2017). The Abra deposit sits in the uppermost unit, which contains carbonates.

KIANGI CREEK FORMATION

The Kiangi Creek Formation disconformably overlies the Irregully Formation (Martin et al, 2007). The Kiangi Creek Formation is comprised of siliciclastic sequence of fine to coarse quartz arenites and wackestones with interbedded siltstones, local clean quartzites, minor conglomerates and minor dolomites (Hardy, 2017). The Formation is transgressive and overlaps the Coobarra Dome. Drill core from above the Abra deposit, at the eastern end of the Jillawarra Belt, contains multiple graded units from granule conglomerate to shale (Thorne et al, 2009).

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DEVIL CREEK FORMATION

The Devil Creek Formation is a carbonate unit of thin- to thick-bedded dolostone, dolomitic siltstone, siltstone, dolostone breccia, dolomitic sandstone, stomatolitic dolostone and minor chert (Martin et al, 2007). The succession is 85 m to 200 m thick.

ULLAWARRA FORMATION

The Ullawarra Formation consists mainly of thin-bedded black and maroon siltstone and mudstone with lesser interbedded fine- to medium-grained sandstone and minor chert and dolostone (Martin et al, 2007). This formation varies in thickness from 100 m to 650 m.

NARIMBUNNA DOLERITE

The Narimbunna Dolerite sills are a series of dolerite and gabbro sills intruded into the Edmund Group. The sills are locally concordant with the host sedimentary rocks (Martin et al, 2007). The dolerite is moderately to distinctly altered, massive, medium to coarse grained and equigranular with local, irregular patches of pegmatitc leucogabbro (Blay et al, 2020). Emplacement of the dolerite is dated at 1,465 to 1,450 Ma.

1.2.3

MINERALISATION

The Edmund Basin is host to a number of small or low grade deposits of gold, copper, lead and zinc. These occurrences are epigenetic, usually structurally controlled and sometimes related to dolerite sill emplacement (McLatchie and Haynes, 1997). A gem quality variscite deposit is located within an excised block within the tenure. The Abra polymetallic (lead-zinc-copper-gold) deposit is located approximately 80 km east Figure 3.4 .

BASE METALS

Known base metal deposits occur in an east-west sub-basin, formerly known as the Jillawarra sub basin, which is 65 km long by 10 km wide. Base metal mineralisation occurs mainly in the upper part of the Irregully Formation of siltstone and dolomite.

The Woodlands Project area is situated on the south side of the Lyons RiverQuartzite Well Fault, ( Figure 3.5 ) which is a key structure that is interpreted to be a conduit for mineralising fluids at the Abra deposit. Most of the base metal prospects in the “Jillawarra Belt” are spatially related to this fault (within 5 km).

The Abra polymetallic deposit is a sedimentary exhalative deposit (SEDEX); an underwater basin setting, where hydrothermal fluids have risen through deep seated structures, and deposited stratiform lead-silver deposits, with copper-gold rich feeder breccias. At Abra, the contact between the dolomitic sediments of the Irregully Formation and the low polymictic conglomerate of the Kiangi Creek Formation represents an important marker for the occurrence of base metal mineralisation (Galena Mining, 2021). Abra is spatially related to the major east west Lyons River - Quartzite Well Fault, which is responsible for the introduction of the base metals. The age and geological setting of Abra style base metal mineralisation is similar to the mineralisation at the Nifty and Mt Isa deposits (Balfe, 2021).

The Abra deposit was discovered by drilling a combined magnetic and gravity anomaly that was intersected at depth with no outcrop. For this reason,

73

subsequent exploration in the Jillawarra Belt has focussed on detailed high resolution magnetic and gravity surveys to define model targets . The Abra mineralisation is at 200 m depth. Chlorite-siderite alteration of laminated sediments are overprinted by intense hydrothermal breccia grading to upright laminated veins and zones of quartz- haematite-chalcopyrite-gold-pyrite-magnetitedolomite.

Figure 3.4 – Woodlands Project - location map and surrounding mineralisation occurrences (source: Beau Resources)

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WOODLA
NDS
PPROJECT
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Figure 3.5 – Google earth underlay from Mt Augustus to the Abra deposit showing structures of the Lyons River – Quartzite Well Fault and Deadman Fault zones through the project area (source: Beau Resources)

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----- Start of picture text -----

WOODLANDS
PPROJECT
----- End of picture text -----

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HYDROTHERMAL STYLE: GOLD - VARISCITE

The most common form of mineralisation located to date appears related to remobilisation of metals by low temperature acidic hydrothermal fluids that have deposited anomalous levels of zinc, copper, lead, gold, arsenic, molybdenite, silver, cadmium, stibnite, potassium and uranium (Cu, Pb, Au, As, Mo, Ag, Cd, Sb, P and U) within siltstones of the Kiangi Creek Formation (Calderwood, 2014). A one graticular block (E52/2790) excision within the south-centre of the Woodlands tenure is host to variscite mineral occurrence (MINDEX S33277 - Waldburg Variscite) which has been reported to contain gold as fine-grained disseminations. Variscite is found in argillaceous sediments and silicified breccias of the Upper Kiangi Creek Formation (Archer and Vaughan, 2010).

Variscite occurs in a number of conformable veins and seams in a zone about half a meter wide which has discrete gold particles and crystalline intergrowths associated with the variscite. Gold mineralisation is likely associated with the hydrothermal alteration that produced the variscite as the rock is also strongly silicified. Prospectors developed a small gouge pit on the mineralisation, which was later back-filled with dirt to conceal the mineralisation.

Sub outcrop of variscite is known to extend for about one kilometre of strike within the excised tenement E52/2790, however, the interpreted structures which control the mineralisation extends into E52/3895 where they have not yet been explored. The variscite-gold mineralisation occurs within the Lyons River - Quartzite Well Fault zone implying that this fault zone was a significant source of hydrothermal fluids.

Figure 3.6 – Variscite specimen from E52/2790 with native gold particles (source: Beau Resources)

==> picture [418 x 215] intentionally omitted <==

1.3 PREVIOUS EXPLORATION

Exploration within the Woodlands Project area commenced in 1966 with stream sediment sampling when it was recognised that the Bangemall region sediments are similar in geology and age to the Mt Isa sediments that host large stratiform lead-zinc deposits. Since this period, exploration over the Project area has included aerial and ground geophysical surveys, mapping, rock sampling, lag sampling, RAB, RC and diamond drilling.

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AMOCO MINERALS AUSTRALIA COMPANY 1974-79

Recognition of the Woodlands Project area’s similarity to the Mt Isa style deposits provided the basis for the initial phase of exploration by Amoco by geochemical and geophysical prospecting in areas where the prospective host sequence was exposed (Hardy, 2017). Spotty anomalous copper lead zinc values were obtained in a soil survey close to the Lyons River-Quartzite Wlll Fault zone, (Carmichael, 1993). Initial exploration was targeting the Irregully, Jillawarra and Discovery Chert Formations, but this changed to the Irregully Formation after the identification of the Thumb Print anomaly (Amoco, 1978).

GEOPEKO WALLSEND OPERATIONS LTD 1981-84

Geopeko Wallsend Operations Ltd (Geopeko) acquired the tenure to explore for base metal sulphide mineralisation occurring within the Bangemall Group sediments and gold saddle reefs in structural traps and stratiform base metal mineralisation associated with black shale and evaporite chert facies in the Jillawarra Formation.

The Project area was flown for magnetics, and prospective areas were followed up with detailed magnetic, gravity and transient electromagnetic surveys (SIROTEM). Follow-up aerial photo interpretation and field mapping identified several anomalies for further exploration. Field reconnaissance and rock chip sampling of the gossanous sediments and veins was carried out at the magnetic anomalies with the best results retuning 2.5% zinc and 0.024 g/t gold at Anomaly 1 in gossanous rock and 3.08 g/t gold from quartz-sulphide at Anomaly 27, which remains not fully tested with WWPDH6 (Hanna and Mutton, 1984).

Reconnaissance ground geophysics was conducted over Anomalies 3, 4, 11 and 13 which was followed up by close spaced RAB drilling for 2,264 m. RAB results were considered disappointing with few base metal assays of over 200 ppm. Anomalies 2, 3, 4, 11 and 27 were subsequently followed up by RC drilling for 392 m. Only two drillholes were successful in hitting primary rock with reported difficult drilling conditions (Hanna and Mutton, 1984).

The tenure was relinquished in 1984 when Geopeko concluded that the anomalies are due to magnetic pisolitic laterite in buried alluvial channels and the gold occurrence in Anomaly 27 does not appear to continue down dip.

WESTERN MINING CORPORATION 1992-1994

Western Mining Corporation (WMC) explored the Project area for stratiform sediment hosted base metal mineralisation and possible discordant copper-gold mineralisation hosted within Jillawarra Formation sequences that lie below the Lyons River drainage system (Carmichael, 1993). WMC undertook aerial photo analysis, geological mapping, extensive geophysical (aeromagnetic, ground magnetic, induced polarisation and gravity) surveys and sampling programs.

Geochemical lag sampling on outcropping areas consisted of 3,122 samples to test for up-dip base metal anomalism in the inferred lead-zinc horizon. The delineated weak copper-zinc anomalism was not followed up due to WMC deciding to not continue looking for lead-zinc orebodies. Rock chip sampling was undertaken of 76 samples reported as ‘random’ by Carmichael (1993) and did not return any significant anomalism.

At Wittenoom Well West, the Wittenoom Well - Quartzing Well Fault intersection was drill tested by 10 RC holes (MJGC13-16,24-25,28-31). MJGC14 returned 10 m grading at 0.14% zinc from 48 m. Five RC holes (MJGC8- MJGC 12) were drilled at

76

Wittenoom Well to test a coincident magnetic and gravity anomaly. All five holes ended in dolerite and MJGC10 was extended to 198 m with diamond tail. This drillhole returned 42 m at 350 ppm copper in sediments and 2 m at 0.15% zinc at a siliceous siltstone dolerite contact. The gravity magnetic anomaly was modelled at 350 m and was tested with hole MJD-26 which was drilled to 564m. Analytical results from this drillhole were reported as unimpressive (WMC, 1994). Best results are from a 23 cm bed of pyrrhotite silt shale (390.9 m) which assayed 0.08% copper, 0.14% zinc and 0.14% lead.

BHP MINERALS PTY LTD EXPLORATION 1994-1998

BHP Minerals Pty Ltd Exploration (BHP) tenure covered the Woodlands Project area as part of their Ginginjibby Bore Project, which was explored for base metals (Peregoodoff, 1998). No field work was conducted within the Woodlands tenure. The BHP tenement was dropped in 1998 as surface geochemistry, ground geophysics and drilling returned negative results.

EXPLAURUM LIMITED 2014

No field work was undertaken on the tenure other than ground truthing to identify outcropping features with the potential to host mineralisation and the source of the geochemical anomalies identified in the lag, soil and stream samples collected by previous exploration (Calderwood, 2014). Additionally, government open file geophysics data was reprocessed. Outcomes of the ground truthing and data analysis concluded that mineralisation occurs as quartz-gossan breccia shear structures and also as stratiform carbonate/silica with sulphide replacement. Three gossan areas were identified for follow-up exploration. The Project area was surrendered as it was considered the least prospective of Explaurum Limited (Explaurum) properties (Calderwood, 2014).

1.3.1 SIGNIFICANT INTERCEPTS

A database has been created for the Woodlands Project from historic WAMEX reports that contains data from :

• (a) 28 reverse circulation drillholes

• (b) 3 diamond drillholes

• (c) 4,871 LAG samples (not all within lease boundary)

• (d) 57 rock samples.

Drillhole details (approximate co-ordinates) and significant drill intercepts from the Woodlands Project area listed noted in Table 3.1 and Table 3.2 . All intercepts are down hole and the relationship between the down hole and true width of the intercept is not known. Significant rock assays are reported in Table 3.3 .

Table 3.1 – Woodlands RC/DD drillhole information

Hole ID	Type	Area	Easting	Northing	Azimuth	Dip	Depth	Company	Date
WWPDH1	RC	Wittenoom Well	565370	7274800			116	Geopeko	1982
WWPDH2	RC	Anomaly 4	563700	7272750			38	Geopeko	1982
WWPDH3	RC	Anomaly 11	565200	7273200			32	Geopeko	1982
WWPDH4	RC	Anomaly 2	567920	7276800			60	Geopeko	1982

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Hole ID	Type	Area	Easting	Northing	Azimuth	Dip	Depth	Company	Date
WWPDH5	RC	Anomaly 2	567940	7276800			64	Geopeko	1982
		Anomaly 27				-75
WWPDH6	RC		561500	7275800	350		82	Geopeko	1982
		anticline
MJGC08	RC	Wittenoom Well	568000	7276900	0	-90	132	WMC	1993
MJGC09	RC	Wittenoom Well	568000	7274750	0	-90	64	WMC	1993
MJGC11	RC	Wittenoom Well	568000	7275500	0	-90	100	WMC	1993
MJGC12	RC	Wittenoom Well	568000	7276700	0	-90	132	WMC	1993
		Wittenoom Well				-90
MJGC13	RC		563000	7273450	0		58	WMC	1993
		West
		Wittenoom Well				-90
MJGC14	RC		563000	7272300	0		150	WMC	1993
		West
		Wittenoom Well				-90
MJGC15	RC		563000	7272800	0		102	WMC	1993
		West
		Wittenoom Well				-90
MJGC16	RC		563000	7273000	0		118	WMC	1993
		West
		Wittenoom Well				-90
MJGC24	RC		563000	7273800	0		128	WMC	1993
		West
		Wittenoom Well				-90
MJGC25	RC		563000	7274100	0		82	WMC	1993
		West
		Wittenoom Well				-90
MJGC28	RC		563000	7275100	0		110	WMC	1993
		West
		Wittenoom Well				-90
MJGC29	RC		563000	7275400	0		104	WMC	1993
		West
		Wittenoom Well				-90
MJGC30	RC		563000	7275600	0		78	WMC	1993
		West
		Wittenoom Well				-90
MJGC31	RC		563000	7276100	0		114	WMC	1993
		West
MJGD10	DD	Wittenoom Well	568000	7275200	0	-90	198	WMC	1993
MJGD26	DD	Wittenoom Well	568000	7276500	0	-67	564	WMC	1993

Table 3.2 – Woodlands RC/DD significant drilling intercepts

Hole ID	Reported intercept
MJGC14	10 m at 0.14% Zn from 48m
MJGD10	42 m at 350 ppm Cu in sediments. 2 m at 0.15% Zn at siltstone/dolerite contact
MJGD26	23 cm pyrrhotitic silt shale bed 0.14%Zn, 0.14%Pb, 0.08%Cu

Table 3.3 – Woodlands significant rock assays – Geopeko and WMC 1992

					Gold	Copper	Lead	Zinc
Company	Sample	Easting	Northing	Area					Silver g/t
					ppb	ppm	ppm	ppm
				Wittenoom
Geopeko	1913	573140	7280515		<1	340	-5	8,000	6.8
				Well
Geopeko	1914	573141	7280515	Anomaly 1	24	950	7	25,000	2.2
Geopeko	1915	573142	7280515	Anomaly 1	<1	142	<5	2,950	1.4
Geopeko	1921	561521	7275900	Anomaly 27	164	79	28	49	8.2

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					Gold	Copper	Lead	Zinc
Company	Sample	Easting	Northing	Area					Silver g/t
					ppb	ppm	ppm	ppm
Geopeko	1930	561522	7275900	Anomaly 27	3,080	115	390	100	22
Geopeko	1931	561523	7275900	Anomaly 27	780	40	40	80	6.5
Geopeko	1937	573144	7280515	Anomaly 1	-	115	5	2,600	<0.1
Geopeko	1938	573145	7280515	Anomaly 1	<1	495	<5	7,550	14.5
Geopeko	1939	573146	7280515	Anomaly 1	<1	270	<5	3,800	10.5
Geopeko	18021	566560	7272175	Variscite	8	1,150	<5	655	5.0
	AB3889
WMC		513200	7288600	Munjang	17	1,350	485	2,100	7.0
	35
	AB3889
WMC		513200	7288550	Munjang	6	245	1550	340	9.5
	36
	AB3889
WMC		513200	7288550	Munjang	6	1,150	30	2,200	2.5
	37
	AB3889
WMC		537200	7280500	Munjang	0.5	50	1	2,300	2.5
	40
	GB4758
WMC		573054	7280688	Munjang	10	2,300	14	3,950	14.5
	27

1.4 EXPLORATION POTENTIAL

The Woodlands Project is an early stage gold and base metals project. It is located at the western end of the Jillawarra Mineralised Belt, which hosts the Abra polymetallic deposit with a reported Mineral Resource of 34.5 Mt at 7.2% lead and 16 g/t silver (Galena Mining Ltd). Early explorers in the region recognised the prospective stratigraphy and identified gossans with highly anomalous gold, silver, lead and zinc values ( Figure 3.7 ). RC and diamond drilling in the 1980s and 1990s targeted geophysical anomalies akin to the Abra deposit, however, many drillholes did not reach target depth, leaving the targets untested. Historic surface geochemical exploration has identified a number of zinc - copper targets within favourable stratigraphy, which have not been drill tested.

Key factors that are favourable for base metal mineralisation within the tenure include:

• (a) Proximity to a major structural “break” or corridor – the Tribulation-Deverell Fault system which is a splay from the Lyons River - Quartzite Well Fault.

• (b) Presence of a structural “high” – the Lyons River and Mulgul anticlines run the length of the property which is similar to the structural “high” present at Abra. Folding and structural uplift post-date deposition of mineralisation in sag basins adjacent to the major faults and may remobilise mineralisation into structurally controlled replacement type deposits.

• (c) Favourable host rocks – according to GSWA Mt Egerton 1:100,000 mapping and various exploration reports (e.g., Hanna and Mutton, 1984), the stratigraphy comprises interbedded sandstone and siltstone, together with minor pebbly sandstone, conglomerate and dolomitic sandstone of the Kiangi Creek Formation. These sediments are typical of the Kiangi Creek Formation. Carbonate sediments of the Irregully Formation are extensively developed to the south and west of the tenement indicating

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that a complete stratigraphic section of the key stratigraphy is present (Delecta, 2021).

Further to the base metal target, there is evidence of hydrothermal alteration (variscite - gold occurrence with reported gold of up to 17g/t, within the tenement excision). The host structures for this mineralisation extend into the Woodlands tenure, which have not yet been explored for gold.

Figure 3.7 – Woodlands Project exploration summary (source: Delecta)

==> picture [404 x 392] intentionally omitted <==

1.5 WORK PROGRAM

The first phase of exploration at the Woodlands Project will be reprocessing and interpreting all previous geophysical surveys. If the previous geophysical surveys do not provide enough detail, further ground or drone geophysical surveys will be implemented.

Following the geophysical review, a field reconnaissance trip will be undertaken to assess all exploration targets. This will include validation of historic geochemical sampling, mapping of known gossans and rock chip sampling along strike of the exploration targets for multi-element geochemistry.

Based on the geophysical targeting and field reconnaissance, a drill program will be planned. Down- hole EM logging of drillholes will be undertaken to check for off-hole conductors. Concurrent to the base metal exploration, resampling and

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mapping of the Geopeko “Anomaly 27” will be undertaken which will then be followed-up with diamond drilling.

Soil sampling will be used to explore for a structurally controlled or shear zone hosted gold deposit associated with hydrothermal variscite mineralisation in the south of the tenement.

Woodlands	Year 1 (A$)	Year 2 (A$)	Total (A$)
Heritage Agreement/Survey	$50,000	$20,000	$70,000
Field Reconnaissance/Target generation	$10,000	$10,000	$20,000
Geochemistry	$5,000	$5,000	$10,000
Geophysics	$25,000	-	$25,000
Drilling and assaying	$500,000	-	$500,000
Corporate Overheads	$210,000	-	$210,000
Total	$800,000	$35,000	$835,000

Two-year exploration budget - Woodlands

2. MT AMY PROJECT

2.1 OVERVIEW

The Mt Amy Project is located 1,050 km north of Perth and 100 km south-east of Onslow, in the Shire of Ashburton, Western Australia, Figure 4.1. The Mt Amy Project comprises a single exploration licence which is under application (E08/3319) covering an area of 155.34 km[2] .

Figure 4.1 – Location plan for the Mt Amy Project, in Western Australia (source: Beau Resources)

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==> picture [250 x 356] intentionally omitted <==

Access to the Project area is obtained either along the North West Coastal Highway to the south of the tenement, then turning west on the Nanutarra Road. Alternate access is inland from Meekatharra then north-west along the unsealed Ashburton Downs – Meekatharra road, however, the use of this road is not recommended in wet weather. Various station tracks and exploration grids provide access within the Project area. The Project lies over the Mount Stuart, Red Hill and Yarraloola Pastoral Leases.

The arid to semi-arid climate has extremes in temperature from an average minimum in winter of 5˚C to an average maximum in summer of 35˚C with occasional days up to 46˚C. Precipitation is variable and averages at 200 mm per annum. The wettest period is usually during the summer months as a result of monsoonal depressions. The Cane River runs east-west through the north of the property. A prominent 16km[2] outcrop in the centre of the tenure forms Mt Amy, which has a peak at 364 mRL. Vegetation consists of mainly spinifex grassland with scattered trees, shrubs and scrublands with wattle and trees. Eucalypts are common along main drain ways.

There are no registered heritage sites within E08/3319.

2.2 GEOLOGY

2.2.1 REGIONAL GEOLOGY

The Mt Amy Project is located within the Ashburton Basin ( Figure 4.2 ). The Ashburton Basin is in the north of the Capricorn Orogen, which is a major orogenic zone of Proterozoic deformation, metamorphism and magmatism between the Pilbara and Yilgarn Cratons (Martin et al, 2005). The basin has undergone a series

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of deformation events, the most significant being the Capricorn Orogeny; a collision between the Archaean Yilgarn and Pilbara Cratons (Martin et al, 2005), which has given a broad northwest trend. The basin is comprised of a 12 km thick series of Proterozoic metasedimentary and metavolcanic stratigraphy (Thorne and Seymour, 1991).

Figure 4.2 – Location plan of the Mt Amy Project, with tectonic units (source: Delecta)

==> picture [344 x 327] intentionally omitted <==

The Mt Amy Project is at the northern extent of the Nanjilgandy Fault, the same structure that hosts the Paulsens and Mt Olympus Gold Deposits. The “Capricorn Seismic Line” (10GA-CP-1) completed by the GSWA concluded that the regional scale Nanjilgardy and the Baring Downs Faults are major orogenic structures and are mantle tapping (Thorne et al, 2011). A simplified stratigraphic column of the Mt Amy Project area is presented in Figure 4.3 .

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Figure 4.3 – Stratigraphic subdivision of the southwestern Pilbara, showing Mt Amy Project setting (after Thorne and Seymour, 1991)

==> picture [334 x 313] intentionally omitted <==

MINNIE GROUP

The Minnie Group is a series of sandstone, mudstone and conglomerate, which is sometimes silicified (Seymour et al, 1988). It unconformably overlies the Ashburton Group and forms a series of outliers in the north-western part of the Ashburton Basin (Thorne and Seymour, 1991). It has been interpreted as a fan-delta sediment deposit within a small, fault bounded basin (Thorne and Seymour, 1991).

ASHBURTON FORMATION

The Ashburton Formation (of the Wyloo Group) is a greenschist facies sequence of mudstone, siltstone and thin to very thick-bedded lithic quartz sandstone; minor pebble- to cobble- conglomerate, felsic to mafic volcanics, banded iron formation, dolomite and quartzite (Thorne et al, 1991).

2.2.2 LOCAL GEOLOGY

Rocks within the Mt Amy Project area are moderately well exposed, comprising folded and metamorphosed sediments of the Ashburton Formation (Wynne, 2011). The ground is dominated by siltstones, bedded lithic quartz sandstones and felsic volcanic rock, which is extensively overlain by quaternary and Paleoproterozoic alluvial and colluvial cover (Cable, 2018).

The tenement comprises an extensive pile of Ashburton Group sediments which are folded around the northern margin of a large Proterozoic granitic dome (Boolaloo granodiorite). In the Mt Amy Project area there is a change in the orientation of regional structures from north-west to east-west, associated with this dome and fold structure (Balfe, 2021a)

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A large outcropping of Minnie Group sediments dominates the northern portion of the tenement. The Project area is overlain by extensive quaternary and Paleoproterozoic alluvial and colluvial cover.

2.2.3 MINERALISATION

The majority of gold, copper, silver, lead and uranium mineralisation within the Ashburton Basin occurs within quartz veins and faults, that were formed late in the tectonic evolution of the area (Thorne and Seymour, 1991) and this has been the primary focus of previous explorers. The Mt Amy prospect is situated on the northern projection of the Nanjilgardy deformation corridor, where faults break up into a series of parallel structures. A number of small gold and base metal prospects occur along this structural corridor and extend as far as the Mt Amy tenement.

GOLD

The earliest record of gold in the Ashburton Basin was in 1890, with the majority of pre-1940s recovered from alluvial workings (Thorne and Seymour, 1991). Gold deposits in the Ashburton Basin have been classified into four principal types (Thorne and Seymour, 1991):

• (a) Post Wyloo Group quartz veins in Wyloo Dome: characterised by auriferous quartz veins, strong pyrite association, some ankerite, dolomite and evidence of secondary enrichment. This is the mineralisation style at Paulsens Gold Mine, which is held by Northern Star Resources Ltd, located 45 km north-west of the Project.

• (b) Quartz veins in the Ashburton Formation: gold is usually in the associated with the weathered parts of the vein, with goethite, and sometimes minor galena.

• (c) Cainozoic alluvial-colluvial deposits where the source of the gold appears to be Ashburton Formation quartz veins, gold-silver mineralisation style at Mt Clement, which is held by Northern Star Resources Ltd, located 75 km north-west of the Project and has a Mineral Resource that contains 64 koz of gold and 619 koz of silver (Zakharia, 2020).

COPPER

Small amounts of vein and shear hosted copper have been extracted from the Red Hill and Ashburton Downs districts (Thorne and Seymour, 1991). Quartz veins, hosted by Ashburton Formation sediments, contain lenses of malachite, cuprite, chalcopyrite, chalcocite and iron oxides, with grades of up to 1.74% copper (Marston, 1979).

LEAD-SILVER

Lead and silver occurrences within the Ashburton Basin occur within quartz veins and shears, containing galena, cerussite, beudantite and plumbojarosite (Thorne and Seymour, 1991). Most of the lead and silver that has been extracted from the Ashburton Basin has come from the Kooline district, where galena bearing veins occur within Ashburton Formation mudstone, siltstone and sandstone (Thorne and Seymour, 1991).

The “ Mt Amy South Pb” MINDEX site (S0030735) is located within the Project area to the immediate south of the Mt Amy peak. The site is based on a single sample ‘15297’ reported by Otter (Williams, 1992). The sample is from a gossan sampled

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within a 1 m wide quartz vein with galena, chalcocite, smithsonite, cerussite returning 49% lead, 17.2% zinc and 0.22% copper.

2.3 PREVIOUS EXPLORATION

Historic exploration within the Mt Amy Project area has included aerial and ground geophysical surveys, mapping, rock, soil and stream sampling, and vacuum drilling.

OTTER EXPLORATION NL.1981

Otter Exploration NL. (Otter) explored the area for uranium as the Ashburton Uranium Project. Otter undertook reconnaissance mapping and sampling and ground scintillometer readings from nine target locations. Anomalous concentrates of uranium (50 ppm) were obtained from a granophyre outcrop from the south-east margin of the Mt Amy mastiff. As discussed above, one rock sample returned assays of 49% lead, 17.2% zinc and 0.22% copper. This anomalous result was not followed up.

A spectrometer survey (280 line km) of was flown over the Project area which returned ten uranium channel anomalies: two located in the Redhill mastiff and the remaining from the basement areas. Two anomalies were field checked with discouraging results, (Kojan, 1981) The Project was subsequently relinquished.

CRA EXPLORATION PTY. LIMITED1992-1993

CRA Exploration Pty. Limited (CRA) explored the area for base metals and uranium mineralisation concentrated on the unconformity at the contact of the Mt Minnie Group and the Ashburton Formation. Exploration undertaken in this period included rock chip sampling (43 samples), stream sediment samples (eight samples screened to minus 80 mesh), aerial photography and geological mapping (at a 1:10,000 scale to map the alteration zones).

Rock and soil sampling identified anomalous base metal results associated with weak uranium anomalies. Significant rock chip results include a quartz vein in sandstone with 0.41g/t gold and 0.16% lead, and a ferruginous vein with 0.22% cobalt, 0.1% nickel and 0.06% copper.

CRA concluded that the uranium and base metal anomalies in the area are attributable to surface enrichment below lateritic weathering surfaces, there is no apparent rock alteration and the anomalous veins are discontinuous features confined to the upper pallid zones, and decided further work was not warranted (Williams, 1992).

ASHBURTON MINERALS LTD1997/1998

Ashburton Minerals Ltd (Ashburton) explored the Project area for a large tonnage gold deposit similar to those of the Proterozoic deposits like Telfer. Ashburton undertook office studies, field investigations, prospecting and sampling. Sampling was of 42 stream samples tested for multielements which returned very low anomalism (<0.2 ppb gold) confirming a background gold geochemical signature of the area. The tenement was surrendered so that that Ashburton’s efforts could be channelled into higher priority areas (Hronsky, 2000).

SANDFIRE RESOURCES NL 2005-2010

Sandfire Resources NL (Sandfire) explored the Project area for gold and base metals in the interpreted extensional structures in Wyloo Group rocks in the

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Ashburton Basin. Work conducted included geological mapping, airborne magnetic and radiometric survey, ground gravity survey, soil (vacuum), stream sediment and rock chip sampling (Wynne, 2011).

Geochemical sampling included rock chips (3), soils (1,611) and stream sediments (7). Follow-up vacuum drilling of seven shallow holes resulted in the collection of 456 samples with a further 48 soil samples taken by hand at locations of shallow sub-crop where it was not suitable for vacuum sampling. This program identified one area of interest: a low level gold anomalism hosted in the Ashburton Formation marginal to a granite intrusion (Wynne and Roberts, 2008). This target area was not followed-up with drilling prior to the tenure being surrendered.

FORTESCUE METAL GROUP LTD 2012-2018

Fortescue Metal Group Ltd ( FMG ) explored the Project area for iron ore, gold and base metals. An airborne magnetic and radiometric survey was undertaken and a compilation gravity survey was undertaken for the Pilbara region (Cable, 2018). Intensive interpretation and review of these surveys was undertaken by FMG, however, no targets could be identified and the tenement was relinquished (Cable, 2018).

2.3.1 SIGNIFICANT INTERCEPTS

A database has been created for the Mt Amy Project, based on data available from historic WAMEX reports, containing:

• (a) 7 vacuum drillholes

• (b) 142 rock chip samples

• (c) 79 stream sediment samples

• (d) 5,433 soil samples (including 3,454 shallow vacuum samples <3 m). Significant rock assay results are reported in Table 4.1.

Table 4.1 Mt Amy significant rock assays

				Date	Gold	Silver	Arsenic	Cobalt	Coppe	Nickel	Lead	Zinc
Sample	Easting	Northing	Company
					ppb	g/t	ppm	ppm	r ppm	ppm	ppm	ppm
			Otter	1981
15297	385165	7537017							2200		490000	172000
			Exploration
231280				1992
	388739	7538755	CRA		2	-1	340	2200	580	1000	270	670
7
231281				1992
	388639	7538755	CRA		7	-1	6	980	350	380	-10	210
1
273399				1992
	389439	7537755	CRA		411	-1	160	51	380	240	1600	320
0
UR0029	390544	7534840	Sandfire	2005	6				1203		84	209
UR0053	392729	7547442	Sandfire	2005	21	6	528		2235		3262	525
UR0054	392506	7547288	Sandfire	2007	-1	0.5	647		2236		1059	982
UR0065	382460	7530200	Sandfire	2007	61	0.8	8		430		86	14
UR0066	382500	7532260	Sandfire	2007	244	1.6	39		8917		18	29
UR0072	390010	7535650	Sandfire	2007	663	0.1	1770		59		730	344
UR0073	390000	7536900	Sandfire	2007	46	0.2	99		170		105	184

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				Date	Gold	Silver	Arsenic	Cobalt	Coppe	Nickel	Lead	Zinc
Sample	Easting	Northing	Company
					ppb	g/t	ppm	ppm	r ppm	ppm	ppm	ppm
UR0074	390000	7536950	Sandfire	2007	35	0.7	288		763		111	293

2.4 EXPLORATION POTENTIAL

The Mt Amy Project is a conceptual gold target which is complimented by base metal potential in the Ashburton Basin, with no sub-surface exploration. Historic surface sampling has outlined a number of anomalous areas, including a robust 1,500 m by 450 m +10ppb gold in soil target to the southeast of the Mt Amy massif. Significant areas of transported overburden are masking the underlying geology, which may link areas of anomalism.

Historic rock sampling has returned anomalous base metal assays, which have not been fully tested. The quartz vein in gossan sampled by Otter Exploration (49% lead, 17.2% zinc and 0.22% copper), and the rock samples by CRA Exploration (up to 0.22% cobalt) require further investigation and rock

samples collected for verification. Soil sampling has failed to produce any significant gold anomalies with two minor results that have been flagged for follow up air core drilling (Figure 4.4).

The continuation of the Nanjilgardy Fault through the northern part of the tenement has yet to be fully tested for gold targets as it is covered by transported soils and remnants of the Mt Minnie Group sediments. The current 40 m TMI government magnetic imagery is insufficient to interpret other parallel structures for targeting (Banfe, 2021b).

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Figure 4.4 – Mt Amy Project exploration summary plan with targets (source: Delecta)

==> picture [409 x 372] intentionally omitted <==

2.5 WORK PROGRAM

The first phase of exploration at the Mt Amy Project will be to undertake field reconnaissance to identify and map any outcrop. Following this, a regional scale aircore drilling program will be undertaken over areas of previous gold in soil anomalism and areas of anomalous results from rock chip analysis. If results from the first exploration phase are favourable, a second phase of drilling will follow to test the grade, thickness and depth extensions of mineralisation.

Mt Amy	Year 1 (A$)	Year 2 (A$)	Total (A$)
Heritage Agreement/Survey	$50,000	$20,000	$70,000
Reconnaissance/Target generation	$10,000	$10,000	$20,000
Geochemistry	-	$10,000	$10,000
Geophysics	-	-	-
Drilling and assaying	-	$150,000	$150,000
Corporate Overheads	$390,000	$100,000	$390,000
Total	$450,000	$190,000	$640,000

Two-year exploration budget – Mt Amy

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3. BUSINESS MODEL

The proposed activities and business model of the Company on completion of the Offer and Acquisition will the exploration and development of the Company’s resources projects.

The Company’s main objectives on completion of the Offer are:

• (a) Woodlands Project - The first phase of exploration at the Woodlands Project will be to reprocess and interpret all previous geophysical surveys. If the previous geophysical surveys do not provide enough detail, further ground or drone geophysics surveys will be implemented. Following the geophysical review, a field reconnaissance trip will assess all targets. This will include validation of historic geochemical sampling and mapping; follow up known gossans and sample along strike. Based on the geophysical targeting and field reconnaissance, a drill program will be planned. Concurrent to the base metal exploration, resampling and mapping of Geopeko “Anomaly 27” is recommended; followed by drilling a hole that is deep enough to test the modelled magnetic anomaly below it.

• (b) Mt Amy Project – The first phase of exploration at the Mt Amy Project will be field reconnaissance of the area, to identify and map any outcrop. Following this will be a regional scale aircore drilling programme over areas of previous gold in soil anomalism, and areas of significant rock chip analysis. If results from the first exploration phase are favourable, a second phase of drilling will follow to test the grade, thickness and depth extensions of any mineralisation.

• (c) REX Project – The first phase of exploration at the Rex Project will be to obtain and digitise all available historic data, to create a comprehensive database. This process is underway. This will be followed by verification and validation of sample and drill locations in the field, plus mapping of the Salt Wash Sandstone member and any accessible underground workings. The objective is to extrapolate the Salt Wash Sandstone member under covered areas where it can be targeted by a drill program. If results from the first exploration phase are favourable, a second phase of drilling will follow to test the grade, thickness and depth extensions of any mineralisation.

• (d) Speedway Project – A work program involving geological mapping, rock chip sampling, airborne magnetic survey, orthophoto survey and integration of historical information with the new Delecta information is underway. A number of gold targets have already been selected for more focussed follow-up. Once the follow-up is completed it is envisaged that an initial RC drill program will be undertaken.

• (e) Highline Project - Ongoing exploration at the Highline Project area will include detailed stratigraphical field mapping of the entire Highline claim group, focussing on locating and sampling the prospective Anchor Limestone unit within the Monte Cristo Formation. This will be followed by diamond drilling of the highest priority targets, to assess the thickness and grade of any identified mineralization.

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4. COMPETENT PERSON’S STATEMENT

The information in this schedule has been prepared by Ms Justine Tracey (Principal) and was reviewed by Mrs Christine Standing (Principal) both of Optiro Pty Limited.

Ms Justine Tracey and Mrs Christine Standing meet the competency criteria as set out under Section 11 of the JORC Code, 2012 and Section 3.1 of the VALMIN Code, 2015. Ms Tracey (MAusIMM-CP) is responsible for this report. Ms Tracey is a Principal Consultant with Optiro Pty Ltd and has sufficient experience, which is relevant to the style of mineralisation, type of deposits under consideration and to the activities being undertaken to qualify as a Competent Person as described by the VALMIN Code, 2015 and the JORC Code, 2012. Ms Tracey consents to the inclusion in this Report of the matters based on her information in the form and context in which it appears

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SCHEDULE 2A – PRO FORMA BALANCE SHEET

	Reviewed 31 December 2021	Pro forma adjustments – Public Offer (Minimum)	Pro forma adjustments – Calvista Disposal	Pro forma adjustments – Nabberu Acquisition	Pro forma adjustments – Other (Expenses of the Offer and Issue of Options)	Total Pro forma adjustments (Minimum)	Pro forma 31 December 2021 (Minimum)
	$	$	$	$	$	$	$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	2,892,618	3,000,000	1,000,000	41,020	(656,451)	3,384,569	6,277,187
Trade and other receivables	2,116,989	-	(2,116,957)	-	-	(2,116,957)	32
Deferred consideration	-	-	500,000	-	-	500,000	500,000
Inventories	3,706,508	-	(3,706,508)	-	-	(3,706,508)	-
Financial assets at fair value through OCI	1,430,000	-	-	-	-	-	1,430,000
Prepayments and deposits	1,087,597	-	(959,007)	-	-	(959,007)	128,590
TOTAL CURRENT ASSETS	11,233,712	3,000,000	(5,282,472)	41,020	(656,451)	(2,897,903)	8,335,809
NON-CURRENT ASSETS
Property,plant and equipment	228,877	-	(228,877)	-	-	(228,877)	-
Right of use asset	565,831	-	(565,831)	-	-	(565,831)	-
Exploration and evaluation	395,295	-	-	1,151,760	-	1,151,760	1,547,055
Deferred tax asset	21,406	-	(21,406)	-	-	(21,406)	-
TOTAL NON-CURRENT ASSETS	1,211,409	-	(816,114)	1,151,760	-	335,646	1,547,055
TOTAL ASSETS	12,445,121	3,000,000	(6,098,586)	1,192,780	(656,451)	(2,562,257)	9,882,864
CURRENT LIABILITIES
Trade and otherpayables	(1,128,059)	-	1,051,026	(37,552)	-	1,013,474	(114,585)
Current tax liabilities	(29,504)	-	29,504	-	-	29,504	-
Lease liabilities	(167,822)	-	167,822	-	-	167,822	-

92

Provisions	(260,330)	-	260,330	-	-	260,330	-
TOTAL CURRENT LIABILTIES	(1,585,715)	-	1,508,682	(37,552)	-	1,471,130	(114,585)
Non-Current Liabilities
Lease liabilities	(457,499)	-	457,499	-	-	457,499	-
Provisions	(149,047)	-	149,047	-	-	149,047	-
Total Non-Current Liabilities	(606,546)	-	606,546	-	-	606,546	-
TOTAL LIABILITIES	(2,192,261)	-	2,115,228	(37,552)	-	2,077,676	(114,585)
NET ASSETS	10,252,860	3,000,000	(3,983,358)	1,155,228	(656,451)	(484,581)	9,768,279
EQUITY
Issued capital	72,815,805	3,000,000	-	900,000	(520,302)	3,379,698	76,195,503
Reserves	1,304,129	-	-	255,228	399,855	655,083	1,959,212
Accumulated losses	(63,867,074)	-	(3,983,358)	-	(536,004)	(4,519,362)	(68,386,436)
TOTAL EQUITY	10,252,860	3,000,000	(3,983,358)	1,155,228	(656,451)	(484,581)	9,768,279

93

	Reviewed 31 December 2021	Pro forma adjustments – Public Offer (Maximum)	Pro forma adjustments – Calvista Disposal	Pro forma adjustments – Nabberu Acquisition	Pro forma adjustments – Other (Expenses of the Offer and Issue of Options)	Pro forma adjustments (Maximum)	Pro forma 31 December 2021 (Maximum)
	$	$	$	$	$	$	$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	2,892,618	4,000,000	1,000,000	41,020	(717,734)	4,323,286	7,215,904
Trade and other receivables	2,116,989	-	(2,116,957)	-	-	(2,116,957)	32
Deferred consideration	-	-	500,000	-	-	500,000	500,000
Inventories	3,706,508	-	(3,706,508)	-	-	(3,706,508)	-
Financial assets at fair value through OCI	1,430,000	-	-	-	-	-	1,430,000
Prepayments and deposits	1,087,597	-	(959,007)	-	-	(959,007)	128,590
TOTAL CURRENT ASSETS	11,233,712	4,000,000	(5,282,472)	41,020	(717,734)	(1,959,186)	9,274,526
NON-CURRENT ASSETS
Property,plant and equipment	228,877	-	(228,877)	-	-	(228,877)	-
Right of use asset	565,831	-	(565,831)	-	-	(565,831)	-
Exploration and evaluation	395,295	-	-	1,151,760	-	1,151,760	1,547,055
Deferred tax asset	21,406	-	(21,406)	-	-	(21,406)	-
TOTAL NON-CURRENT ASSETS	1,211,409	-	(816,114)	1,151,760	-	335,646	1,547,055
TOTAL ASSETS	12,445,121	4,000,000	(6,098,586)	1,192,780	(717,734)	(1,623,540)	10,821,581
CURRENT LIABILITIES
Trade and otherpayables	(1,128,059)	-	1,051,026	(37,552)	-	1,013,474	(114,585)
Current tax liabilities	(29,504)	-	29,504	-	-	29,504	-
Lease liabilities	(167,822)	-	167,822	-	-	167,822	-
Provisions	(260,330)	-	260,330	-	-	260,330	-
TOTAL CURRENT LIABILTIES	(1,585,715)	-	1,508,682	(37,552)	-	1,471,130	(114,585)

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Non-Current Liabilities
Lease liabilities	(457,499)	-	457,499	-	-	457,499	-
Provisions	(149,047)	-	149,047	-	-	149,047	-
Total Non-Current Liabilities	(606,546)	-	606,546	-	-	606,546	-
TOTAL LIABILITIES	(2,192,261)	-	2,115,228	(37,552)	-	2,077,676	(114,585)
NET ASSETS	10,252,860	4,000,000	(3,983,358)	1,155,228	(717,734)	454,136	10,706,996
EQUITY
Issued capital	72,815,805	4,000,000	-	900,000	(580,302)	4,319,698	77,135,503
Reserves	1,304,129	-	-	255,228	459,408	714,636	2,018,765
Accumulated losses	(63,867,074)	-	(3,983,358)	-	(596,840)	(4,580,198)	(68,447,272)
TOTAL EQUITY	10,252,860	4,000,000	(3,983,358)	1,155,228	(717,734)	454,136	10,706,996

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SCHEDULE 2B – NABBERU ACCOUNTS

96

Nabberu Minerals Pty Ltd ABN 93 651 652 916

Interim Report 31 December 2021

CONTENTS

Director’s Report Auditor’s Independence Declaration Statement of Profit or Loss and Other Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Director’s Declaration Independent Auditor’s Review Report	Page
	3 4 5 6 7 8 9 14 15

Nabberu Minerals Pty Ltd

-2-

CORPORATE INFORMATION

ABN 93 651 652 916

Director

Paul Geoffrey Lloyd

Company Secretary

Paul Mario Jurman

Registered office

Suite 9, Level 2 389 Oxford Street Mount Hawthorn WA 6016

Principal place of business

Suite 9, Level 2 389 Oxford Street Mount Hawthorn WA 6016

Auditors

HLB Mann Judd (WA Partnership) Level 4, 130 Stirling Street Perth WA 6000

Nabberu Minerals Pty Ltd

-3-

DIRECTOR’S REPORT

Your Director submits the financial report of Nabberu Minerals Pty Ltd (“the Company”) for the period from the date of the Company’s incorporation, 2 July 2021 to 31 December 2021. The Director reports as follows:

Directors

The name of the Director who held office during or since the end of the interim period and until the date of this report is noted below. The Director was in office for the entire period unless otherwise stated.

Paul Geoffrey Lloyd

Review of Operations

The loss for the half-year ended 31 December 2021 was $28,502.

During the period, the Company entered into a Heads of Agreement with Beau Resources Pty Ltd (“Beau”), whereby the Company acquired the Woodlands Gold and Base Metals project (E52/3895) and the right to acquire the Mt Amy Base Metals project (E08/3319)) from Beau for consideration comprising cash of $250,000 plus GST and a 2% gross value royalty payable to Beau or its nominee for all minerals, metals and products recovered and sold from the projects’ tenement boundaries.

The Company also entered into a Non-Binding Terms Sheet with ASX listed Delecta Limited (“Delecta”) whereby Delecta would acquire 100% of the Company’s issued capital subject to certain conditions precedent. This transaction would form part of Delecta’s re-compliance listing with ASX.

Events Subsequent to Reporting Date

There have been no matters or circumstances that have arisen after balance date that have significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods.

Auditor’s Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Director of the Company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on page 4 and forms part of this Director’s report for the half-year ended 31 December 2021.

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---

Paul Geoffrey Lloyd Director

4 March 2022

Nabberu Minerals Pty Ltd

-4-

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the review of the financial report of Nabberu Minerals Pty Ltd for the half-year ended 31 December 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• b) any applicable code of professional conduct in relation to the review.

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Perth, Western Australia L Di Giallonardo 4 March 2022 Partner

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Nabberu Minerals Pty Ltd

-5-

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note Continuing operations Other income Bank charges Corporate consulting Auditor’s review fee Loss before income tax expense Income tax expense Loss after income tax Other comprehensive income, net of income tax Other comprehensive income Other comprehensive income for the period, net of income tax Total comprehensive loss for the period	31 December 2021 $
	- (2) (25,000) (3,500)
	(28,502) -
	(28,502) -
	-
	(28,502)

The accompanying notes form part of these financial statements.

Nabberu Minerals Pty Ltd

-6-

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021

Notes Assets Current assets Cash and cash equivalents Total current assets Non-current assets Exploration and evaluation expenditure 3 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 4 Total current liabilities Total liabilities Net assets Equity Share capital 5 Accumulated losses Total equity	31 December 2021 $
	41,020
	41,020
	268,030
	268,030
	309,050
	37,552
	37,552
	37,552
	271,498
	300,000 (28,502)
	271,498

The accompanying notes form part of these financial statements.

Nabberu Minerals Pty Ltd

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STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Balance at incorporation Loss for the period Other comprehensive income for the period Total comprehensive loss for the period Shares issued during the half-year Balance at 31 December 2021	Share capital Accumulated losses Total equity $ $ $
	- - - - (28,502) (28,502) - - -
	- (28,502) (28,502) 300,000 - 300,000
	300,000 (28,502) 271,498

The accompanying notes form part of these financial statements.

Nabberu Minerals Pty Ltd

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STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Notes Cash flows from operating activities Payments to suppliers and employees for admin and corporate Net cash outflow from operating activities 6 Cash flows from investing activities Payments for exploration and evaluation expenditure Net cash outflow from investing activities Cash flows from financing activities Proceeds from the issue of shares Net cash inflow from financing activities Net increase in cash held Cash and cash equivalents at incorporation Cash and cash equivalents at the end of the period The accompanying notes form part of these financial statements.	31 December 2021 $
	(2)
	(2)
	(258,978)
	(258,978)
	300,000
	300,000
	41,020 -
	41,020

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Nabberu Minerals Pty Ltd

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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

These interim financial statements are general purpose financial statements, which have been prepared in accordance with the requirements of Australian Accounting Standards including AASB 134 Interim Financial Reporting , Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

For the purposes of preparing the financial statements, the Company is a for-profit entity.

The interim financial statements do not include full disclosures of the type normally included in the full financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Company as in the full financial report. The Company was incorporated on 2 July 2021. Accordingly, these interim financial statements are the first financial statements produced by the Company. Accordingly, no comparatives are applicable.

The accounting policies adopted by the Company are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

The interim financial statements have been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets.

The Company is domiciled in Australia and all amounts are presented in Australian dollars.

For the purpose of preparing the interim financial statements, the half-year has been treated as a discrete reporting period.

(b) Adoption of new and revised standards

Standards and Interpretations in issue not yet adopted

The Directors have reviewed all of the new and revised Standards and Interpretations in issue not yet adopted for the halfyear ended 31 December 2021. As a result of this review the Directors have determined that there is no material impact of the Standards and Interpretations in issue not yet adopted on the Company and, therefore, no change is necessary to Company accounting policies.

(c) Statement of compliance

The interim financial statements were authorised for issue on 4 March 2022.

The interim financial statements comply with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the interim financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

(d) Significant accounting estimates and judgements

The preparation of the interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were as follows:

Exploration and evaluation expenditure

The recoverability of the carrying value of exploration and evaluation expenditure caried forward has been reviewed by the Director. In conducting this review, the recoverable amount has been assessed by reference to the higher of “fair value less costs to sell” and “value in use”. In determining value in use, future cash flows are based on various parameters.

Variations to expected future cash flows and timing thereof, could result in significant changes to the impairment test results, which in turn could impact future financial results.

(e) Going concern

The interim financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlements of liabilities in the ordinary course of business. At balance date, the Company had a working capital surplus of $3,468. The Director believes that the Company is a going concern as it has the ability to raise further equity as required to fund ongoing operations.

If the Company is unable to raise further equity sufficient to fund ongoing operations, there is a material uncertainty that may cast significant doubt as to whether the Company will continue as a going concern and whether it will be able to realise its assets and extinguish its liabilities in the normal course of business.

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Nabberu Minerals Pty Ltd

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(f) Income tax

The charge for current income tax is based on the profit/loss for the year adjusted for any non-assessable or disallowed items. It is calculated using the rates that have been enacted or are substantively enacted by the balance date.

Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of profit or loss and other comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future profit will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(g) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, net of outstanding bank overdrafts.

(h) Exploration and evaluation expenditure

Exploration costs are expensed as incurred. Acquisition costs are accumulated in respect of each separate area of interest. Acquisition costs are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through the sale or successful development and exploitation of the area of interest, or where exploration and evaluation activities in the area of interest have not yet reached a stage that permits a reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period in which that decision is made, to the extent that they will not be recovered in the future. Amortisation is not charged on acquisition costs carried forward in respect of areas of interest in the development phase until production commences.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

(i) Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. All revenue is stated net of the amount of goods and service tax (GST).

(j) Impairment of assets

At each reporting date, the directors review the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit or loss and other comprehensive income.

Where it is not possible to estimate the recoverable amount of an individual asset, the directors estimate the recoverable amount of the cash-generating unit to which the asset belongs.

(k) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial period which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Nabberu Minerals Pty Ltd

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Due to their short-term nature, they are measured at amortised cost and are not discounted.

(l) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(m) Share-based payments

The fair value of options at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and risk free interest rate for the term of the option.

The fair value of the options granted excludes the impact of any non-market vesting condition (for example, exploration related targets). Non-market vesting conditions are included in the assumption about the number of options that are expected to become exercisable.

Upon the exercise of options, the balance of the share-based payments reserve relating to these options is transferred to share capital.

The market value of shares issued to employees for no cash consideration is recognised as an employee benefits expense with a corresponding increase in equity when the employees become entitled to the shares.

NOTE 2: SEGMENT REPORTING

AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly reviewed by the Chief Operating Decision Maker in order to allocate resources to the segment and to assess its performance.

The Company’s operating segments have been determined with reference to the monthly management accounts used by the Director to make decisions regarding the Company’s operations and allocation of working capital. Due to the size and nature of the Company, the Director has been determined as the Chief Operating Decision Maker.

Based on the quantitative thresholds included in AASB 8, there is only one reportable segment, being Mineral Exploration and one geographical segment, namely Australia.

The revenues and results of this segment are those of the Company as a whole and are set out in the statement of profit or loss and other comprehensive income and the assets and liabilities of the Company as a whole are set out in the statement of financial position.

NOTE 3: EXPLORATION AND EVALUATION EXPENDITURE

OTE 3: EXPLORATION AND EVALUATION EXPENDITURE
Balance at incorporation Additions Balance at 31 December 2021	Half-Year to 31 December 2021 $
	- 268,030
	268,030

Ultimate recovery of exploration and evaluation expenditure carried forward is dependent upon the recoupment of costs through successful development and commercial exploitation, or alternatively, by sale of the respective areas.

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Nabberu Minerals Pty Ltd

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NOTE 4: TRADE AND OTHER PAYABLES

Current Other payables Accrued tenement rent Accrued auditor’s review fee OTE 5: SHARE CAPITAL Ordinary shares Issued and fully paid Movements in ordinary shares Balance on incorporation Shares issued during the period Balance at end of the period	31 December 2021 $ 25,000 9,052 3,500 37,552 31 December 2021 $ 300,000 Half-Year to 31 December 2021 No. $ - - 3,000,001 300,000
	3,000,001 300,000

NOTE 5: SHARE CAPITAL

NOTE 6: RECONCILIATION OF CASH USED IN OPERATING ACTIVITIES TO LOSS

Loss after income tax Changes in operating assets and liabilities: Increase in trade and other payables Net cash used in operating activities	Half-Year to 31 December 2021 $
	(28,502) 28,500
	(2)

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Nabberu Minerals Pty Ltd

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NOTE 7: FINANCIAL INSTRUMENTS

The Director considers that the carrying value of the financial assets and financial liabilities recognised in the financial statements approximate their fair values.

Financial assets Cash and cash equivalents Financial liabilities Financial liabilities held at amortised cost Trade and other payables	31 December 2021 Carrying amount Fair value $ $
	41,020 41,020 37,552 37,552

NOTE 8: CONTINGENCIES

The Company has no contingent liabilities.

The consideration for the Company’s acquisition of tenements from Beau Resources Pty Ltd (“Beau”) includes a 2% gross value royalty payable to Beau or its nominees for all minerals, metals and products recovered and sole from the projects’ tenement boundaries.

NOTE 9: COMMITMENTS

Exploration commitments

To maintain current rights of tenure to exploration tenements, the Company is required to meet minimum expenditure requirements specified by the State Government. The minimum amount required to retain tenure is $62,000. These obligations are expected to be fulfilled in the normal course of business.

NOTE 10: EVENTS SUBSEQUENT TO REPORTING DATE

There have been no matters or circumstances that have arisen after balance date that have significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods.

NOTE 11: RELATED PARTY DISCLOSURES

The Director, Paul Lloyd, has provided corporate consulting services to the Company amounting to $15,000. These services were provided on normal commercial terms and conditions.

NOTE 12: AUDITOR’S REMUNERATION

OTE 12: AUDITOR’S REMUNERATION
Accrued review services	Half-Year to 31 December 2021 $
	3,500

Nabberu Minerals Pty Ltd

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DIRECTOR’S DECLARATION

In the opinion of the Director of Nabberu Minerals Pty Ltd (the ‘Company’):

• a. the accompanying interim financial statements and notes are in accordance with AASB 134 Interim Financial Reporting including:

• i. giving a true and fair view of the Company’s financial position as at 31 December 2021 and of its performance for the half-year then ended; and

• ii. complying with Australian Accounting Standards, professional reporting requirements and other mandatory requirements.

• b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

• c. the interim financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.

This declaration is signed in accordance with a resolution of the Director.

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____ Paul Geoffrey Lloyd Director

4 March 2022

Nabberu Minerals Pty Ltd

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Nabberu Minerals Pty Ltd

Report on the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of Nabberu Minerals Pty Ltd (“the company”) which comprises the statement of financial position as at 31 December 2021, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Nabberu Minerals Pty Ltd does not comply with AASB 134 Interim Financial Reporting , including:

• (a) giving a true and fair view of the company’s financial position as at 31 December 2021 and of its performance for the half-year ended on that date; and

• (b) complying with other mandatory professional reporting requirements in Australia.

Basis for conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s responsibilities for the review of the financial report section of our report. We are independent of the company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Material uncertainty related to going concern

We draw attention to Note 1(e) in the financial report, which indicates that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

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Nabberu Minerals Pty Ltd

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Responsibility of the director for the financial report

The director of the company is responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with AASB 134 Interim Financial Reporting and for such internal control as the director determines is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility for the review of the financial report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with AASB 134 Interim Financial Reporting, including giving a true and fair view of the company’s financial position as at 31 December 2021 and its performance for the half-year ended on that date, and complying with other mandatory professional reporting requirements in Australia.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

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HLB Mann Judd L Di Giallonardo Chartered Accountants Partner

Perth, Western Australia 4 March 2022

SCHEDULE 3 – TERMS AND CONDITIONS OF OPTIONS

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b)

Exercise Price

Subject to paragraph (i), the amount payable upon exercise of each Option will be $0.03 (on a post-Consolidation basis) ( Exercise Price )

(c)

Expiry Date

Each Option will expire at 5:00 pm (WST) on the date that is three (3) years from the date of issue ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d)

Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e)

Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f)

Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g)

Timing of issue of Shares on exercise

Within 5 Business Days after the Exercise Date, the Company will:

• (i) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (iii) if admitted to the official list of ASX at the time, apply for Official Quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being

97

ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(i) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Option holder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(j) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(k) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(l) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

98

SCHEDULE 4 – VALUATION OF OPTIONS

The Options to be issued to the Related Parties pursuant to Resolutions 8 to 10 have been valued by internal management .

Using the Black & Scholes option model and based on the assumptions set out below, the Options were ascribed the following value:

Assumptions:
Valuation date	4 April 2022
Share price at date of grant (post consolidation)	$0.02 cents
Exercise price	$0.03 cents
Expiry date (length of time from issue)	3 years
Risk free interest rate	1.77%
Volatility (discount)	80%
Indicative value per Related Party Option	$0.0085 cents
Total Value of Options (Minimum)	$59,553
- Malcolm Day (Resolution 8)	$25,523
- Bryan Hughes (Resolution 9)	$17,015
- David Wheeler (Resolution 10)	$17,015
Total Value of Options (Maximum)	$119,106
- Malcolm Day (Resolution 8)	$51,046
- Bryan Hughes (Resolution 9)	$34,030
- David Wheeler (Resolution 10)	$34,030

Note : The valuation noted above is not necessarily the market price that the Options could be traded at and is not automatically the market price for taxation purposes.

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SCHEDULE 5 – INDEPENDENT EXPERTS REPORT

100

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Delecta Limited

Independent Expert’s Report and Financial Services Guide

31 May 2022

The Proposed Transaction is not fair but reasonable to the NonAssociated Shareholders of Delecta Limited

Prepared by Moore Australia Corporate Finance (WA) Pty Ltd Australian Financial Services License No. 240773

www.moore-australia.com.au

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MOORE AUSTRALIA CORPORATE FINANCE (WA) PTY LTD

Australian Financial Services License No. 240773

FINANCIAL SERVICES GUIDE

This Financial Services Guide provides financial information about the supply of financial services to the shareholders of Delecta Limited (“Delecta”). We have been engaged by Delecta to prepare an Independent Expert’s Report in connection with the proposed disposal of 100% of Delecta’s interest in its subsidiaries, Calvista Australia Pty Ltd and Calvista New Zealand Ltd (collectively, “Calvista”) to related party, Calvista Holdings Pty Ltd, in exchange for the Consideration payable (the “Proposed Transaction”). Our report has been prepared at the request of the Directors of Delecta for inclusion in the Notice of Meeting to be dated on or around 12 July 2022.

Moore Australia Corporate Finance (WA) Pty Ltd

Moore Australia Corporate Finance (WA) Pty Ltd (“MACF”) has been engaged by the directors of Delecta to prepare an independent expert’s report expressing our opinion as to whether or not the Proposed Transaction is “fair and reasonable” to the shareholders of Delecta.

MACF holds an Australian Financial Services Licence – Licence No 240773.

Financial Services Guide

As a result of our report being provided to you we are required to issue to you, as a retail client, a Financial Services Guide (“FSG”). The FSG includes information on the use of general financial product advice and is issued so as to comply with our obligations as holder of an Australian Financial Services Licence.

Financial Services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide reports for the purposes of acting for and on behalf of clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate restructures or share issues, and to carry on a financial services business to provide general financial product advice for securities to retail and wholesale clients.

We provide financial product advice by virtue of an engagement to issue a report in connection with the issue of securities of a company or other entities.

Our report includes a description of the circumstances of our engagement and identifies the party who has engaged us. You have not engaged us directly but will be provided with a copy of our report as a retail client because of your connection with the matters on which our report has been issued. We do not accept instructions from retail clients and do not receive remuneration from retail clients for financial services.

Our report is provided on our own behalf as an Australian Financial Services Licensee authorised to provide the financial product advice contained in this report.

General Financial Product Advice

Our report provides general financial product advice only, and does not provide personal financial product advice, because it has been prepared without taking into account your particular personal circumstances or objectives either financial or otherwise, your financial position or your needs.

Some individuals may place a different emphasis on various aspects of potential investments.

Benefits that we may receive

We will charge fees for providing our report. The basis on which our fees will be determined has been agreed with, and will be paid by, the person who engaged us to provide the report. Our fees have been agreed on either a fixed fee or time cost basis. We estimate that our fees for the preparation of this report will be approximately $40,000 plus GST.

Remuneration or other benefits received by our employees

All our employees receive a salary. Employees may be eligible for bonuses based on overall productivity and contribution to the operation of MSPCS or related entities but any bonuses are not directly in connection with any assignment and in particular are not directly related to the engagement for which our report was provided.

Referrals

We do not pay commissions or provide any other benefits to any parties or person for referring customers to us in connection with the reports that we are licensed to provide.

Associations and relationships

MACF is the licensed corporate advisory arm of Moore Australia Perth, Chartered Accountants. The directors of MACF may also be partners in Moore Australia Perth Chartered, Accountants.

Moore Australia Perth, Chartered Accountants is comprised of a number of related entities that provide audit, accounting, tax, and financial advisory services to a wide range of clients.

MACF’s contact details are set out on our letterhead.

Neither MACF nor its related entities have previously provided any professional services to Delecta.

Complaints resolution

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to The Complaints Officer, Moore Australia Corporate Finance (WA) Pty Ltd, PO Box 5785, St George’s Terrace, Perth WA 6831.

On receipt of a written complaint we will record the complaint, acknowledge receipt of the complaint and seek to resolve the complaint as soon as practical.

If we cannot reach a satisfactory resolution, you can raise your concerns with the Australian Financial Complaints Authority Limited (“AFCA”). AFCA is an independent body established to provide advice and assistance in helping resolve complaints relating to the financial services industry. MACF is a member of AFCA. AFCA may be contacted directly via the details set out below.

Australian Financial Complaints Authority Limited

GPO Box 3 Melbourne VIC 3001 Toll free: 1800 931 678 Facsimile: 03 9613 6399 Email: info@afca.org.au

An individual’s decision in relation to the proposed transaction may be influenced by their particular circumstances and, therefore, individuals should seek independent advice.

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Contents

1.	INTRODUCTION ......................................................................................................... 4
2.	SUMMARY & OPINION ............................................................................................... 4
3.	SUMMARY OF TRANSACTION .................................................................................. 8
4.	SCOPE OF THE REPORT ........................................................................................ 11
5.	PROFILE OF DELECTA ............................................................................................ 11
6.	INDUSTRY ANALYSIS .............................................................................................. 19
7.	VALUATION APPROACH ......................................................................................... 19
8.	VALUATION OF A DELECTA SHARE PRIOR TO THE PROPOSED TRANSACTION
	................................................................................................................................. 21
9.	VALUATION OF A DELECTA SHARE POST THE PROPOSED TRANSACTION ..... 37
10.	IS THE PROPOSED TRANSACTION FAIR TO DELECTA SHAREHOLDERS? ....... 41
11.	IS THE PROPOSED TRANSACTION REASONABLE? ............................................. 41
12.	INDEPENDENCE ...................................................................................................... 46
13.	QUALIFICATIONS ..................................................................................................... 46
14.	DISCLAIMERS AND CONSENTS ............................................................................. 46
APPENDIX A – SOURCE OF INFORMATION ..................................................................... 48
APPENDIX B – VALUATION METHODOLOGIES ................................................................ 49
APPENDIX C – COMPARABLE COMPANIES: DISTRIBUTORS ......................................... 51
APPENDIX D – COMPARABLE COMPANIES: SPECIALTY RETAILERS ........................... 52
APPENDIX E - GLOSSARY ................................................................................................. 53

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Moore Australia

Level 15, Exchange Tower, 2 The Esplanade, Perth, WA 6000 PO Box 5785, St Georges Terrace, WA 6831 T +61 8 9225 5355 F +61 8 9225 6181 www.moore-australia.com.au

31 May 2022

The Directors Delecta Limited Building 41, 9-45 Ashley Street BRAYBROOK VICTORIA 3019

Dear Directors

Independent Expert’s Report

1. INTRODUCTION

• 1.1 This Independent Expert’s Report (“IER”) has been prepared to accompany the Notice of General Meeting and Explanatory Statement (“Notice”) to be provided to shareholders for a General Meeting of Delecta Limited (“Delecta” or “the Company”) at which shareholder approval will be sought for the disposal of 100% of Delecta’s interest in the issued share capital of its wholesale operating segment comprising:

• 100% of Calvista Australia Pty Ltd (“Calvista Australia”); and

• 100% of Calvista New Zealand Ltd (“Calvista NZ”).

(collectively “Calvista”) in exchange for $1,000,000 to be paid on completion and $500,000 to be paid within 12 months of completion (“Consideration”) by Calvista Holdings Pty Ltd, a company controlled by Mr Malcolm Day who is also a director and substantial shareholder of Delecta and part of senior management of Calvista (“Mr Day) (the “Proposed Transaction”).

Further details of the Proposed Transaction are set out in Section 3.

2. SUMMARY AND OPINION

Purpose of the Report

• 2.1 Listing Rule 10.1 requires the approval of the Company’s shareholders where it has proposed to dispose of a “substantial asset” to:

• A related party, or an associate of a related party of the Company; or

• A subsidiary, or an associate of a subsidiary of the Company; or

• A substantial shareholder, or an associate of a substantial shareholder of the Company. A substantial shareholder is defined under ASX listing rules as a shareholder with a relevant interest at any time in the previous six months prior to the transaction, in at least 10% of the total votes attaches to the voting securities in the entity.

• 2.2 A substantial asset includes those with a value greater than 5% of the total equity interests of the entity at the date of the last set of financial statements provided to the ASX.

• 2.3 Mr Day is a director, and 33.33% shareholder of Calvista Holdings Pty Ltd. Mr Day is also a director of Delecta and the General Manager of Calvista and a substantial shareholder of Delecta, with a current relevant interest in Delecta of 183,639,768 shares (15.2% interest).

• 2.4 The value of Calvista exceeds 5% of the value of the total equity of Delecta as at 31 December 2021 (the date of the latest set of consolidated financial information prepared by Delecta). As such, shareholder approval is required, and an Experts Report is to be included in a Notice of Meeting, stating whether the Proposed Transaction is fair and reasonable to the Non-Associated Shareholders.

Moore Australia Corporate Finance (WA) Pty Ltd as trustee – ABN 41 421 048 107. An independent member of Moore Global Network Limited - members in principal cities throughout the world. Liability limited by a scheme approved under Professional Standards Legislation.

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• 2.5 The directors of Delecta have engaged Moore Australia Corporate Finance (WA) Pty Ltd (“MACF”) being independent and qualified for the purpose, to prepare an Independent Expert’s Report to express an opinion as to whether or not the Proposed Transaction is fair and reasonable to the shareholders of Delecta not associated with the Proposed Transaction (the “NonAssociated Shareholders”).

• 2.6 Our assessment of the Proposed Transaction relies on financial information and instructions provided by the Company and the Directors. We have critically analysed the information provided to us, but we have not completed any audit or due diligence of the information which has been provided for the entities which have been valued. This report does not contain any accounting or taxation advice.

Approach

• 2.7 Our report has been prepared having regard to Australian Securities & Investments Commission (“ASIC”) Regulatory Guide 111 Content of Expert’s Reports (“RG 111”) and Regulatory Guide 112 Independence of Expert’s (“RG 112”)

• 2.8 In arriving at our opinion, we have assessed the terms of the Proposed Transaction, as outlined in the body of our report, by considering the following;

• How the value of a share in the Company prior to the Proposed Transaction on a minority basis compares to the value of a share in the Company post the Proposed Transaction on a minority basis;

• Advantages and disadvantages of approving the Proposed Transaction;

• The likelihood of a superior alternative Proposed Transaction being available to Delecta;

• Other factors which we consider to be relevant to the shareholders of Delecta in their assessment of the Proposed Transaction; and

• The position of the shareholders of Delecta should the Proposed Transaction not be successful.

Further information on the approach we have employed in assessing whether the Proposed Transaction is “fair and reasonable” is set out at Section 4 of this Report.

Opinion

• 2.9 We have considered the terms of the Proposed Transaction as outlined in the body of our report and have concluded that the Proposed Transaction is not fair but reasonable to the NonAssociated Shareholders of Delecta, as set out in Sections 10 and 11 of this Report.

Fairness

• 2.10 When assessing fairness, we have used two methods to determine our opinion. In Sections 8 and 9, we compared the value of a share in Delecta prior to the Proposed Transaction on a minority basis to the value of a share in Delecta post the Proposed Transaction on a minority basis.

• 2.11 Our assessed values of a Delecta share prior to and post the Proposed Transaction from Sections 8 and 9 are summarised in the table below.

Assessed values

	Section	Low Value $	Preferred $	High Value $
Assessed Fair Value of a share in the
Company prior to the Proposed	8	0.013	0.014	0.016
Transaction on a minority basis
Assessed Fair Value of a share in the
Company post the Proposed	9	0.010	0.011	0.012
Transaction on a minority basis

Source: MACF analysis

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• 2.12 In the absence of any other relevant information, in our opinion, this indicates that the Proposed Transaction is not fair to the Non-Associated Shareholders of Delecta as the valuations do not demonstrate overlap.

Reasonableness

• 2.13 RG 111 establishes that an offer is reasonable if it is fair. It may also be reasonable if, despite not being fair, there are sufficient reasons for security holders to accept the Proposed Transaction in the absence of a higher bid before the Proposed Transaction closes. We have considered the analysis in Section 11 of this report, in terms of both:

• Advantages and disadvantages of the Proposed Transaction;

• Alternative Offers; and

• Other considerations if the Proposed Transaction is successful and the position of shareholders of Delecta if the Proposed Transaction is not successful.

• 2.14 In our opinion, the position of the Non-Associated Shareholders if the Proposed Transaction is approved is more advantageous than the position if it is not approved. We are of this opinion as there are sufficient reasons for Delecta to dispose of Calvista and focus on its primary operating segment going forward, being exploration and evaluation. The current diversification of Delecta between Calvista and its exploration segment presents inefficiencies and a lack of focus for the Company. A focussed position going forward will enable the directors and staff of Delecta to take advantage of the current positive market sentiment towards the resources sector and will help the Company to raise capital to fund its exploration activities.

• 2.15 The advantages and disadvantages considered are summarised below:

Advantages of approving the Proposed Transaction

Advantage 1 – Focus

The Proposed Transaction will allow the Directors and management of Delecta to focus the Company’s Exploration and Evaluation activities. The two business segments of Delecta are vastly different and as such do not share many synergies. The sale of Calvista and focus of directors, staff and operations on one business segment will help to reduce inefficiencies associated with the diverse operations currently. The resources sector is currently very buoyant with significant positive sentiment.

Advantage 2 – Condition of the acquisition of Nabberu

The completion of the Proposed Transaction is a condition of the Acquisition of Nabberu which will allow Delecta to take advantage of exploration projects owned by Nabberu.

Advantage 3 – Easier to raise capital

The Proposed Transaction allows Delecta to focus on the Company’s exploration and evaluation activities which will make it easier for the Company to raise capital from investors. The completion of the Proposed Transaction is a condition of the Capital Raising which is expected to raise between $3,000,000 and $4,000,000 before costs.

Advantage 4 – Receipt of cash consideration

The Consideration receivable as part of the Proposed Transaction is in the form of cash. The cash will help to fund the development of the exploration and evaluation segment of the business.

Advantage 5 – ASX re-compliance

The completion of the Proposed Transaction is a condition of re-compliance with ASX listing rules. Completion of the Proposed Transaction could result in the reinstatement to quotation and the liquidity of Delecta shares.

Advantage 6 – Potential reduced profitability of Calvista

The recent loss of the exclusive supplier contract with Calvista’s biggest supplier indicates that there will be a significant deterioration in the profitability of the business on cessation of the

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contract in June 2022. Now may therefore be a good time to sell the business as cashflows generated are likely to decline with profitability going forward.

Disadvantages of approving the Proposed Transaction

Disadvantage 1 – The Proposed Transaction is not fair

The Proposed Transaction is not considered to be fair

Disadvantage 2 – Loss of interest in profitable, cash generating assets

The Proposed Transaction would result in Delecta losing 100% of its interest in Calvista. Calvista generated a net profit before tax of $1.98m during the year ended 30 June 2021 and has historically generated operating cash flows for Delecta.

Disadvantage 3 – Requirement to raise capital

The Consideration receivable as part of the Proposed Transaction, prior to discounting, is $1.5m. This is unlikely to be a sufficient amount of cash to fund the exploration and evaluation operations of the business for an extended period of time and it is expected that without operating cash inflows from Calvista, Delecta will need to raise capital in the market within 12 months.

Disadvantage 4 – Diversification

The Proposed Transaction would reduce the diversification in Delecta to one business segment.

Disadvantage 5 – Cost sharing

Currently, Calvista bears a portion of the annual cost of the salary for Mr John Burness (FY21: $60k, FY22 estimated to be $40k). Whilst not material, going forward Delecta will need to absorb this cost directly.

Disadvantage 6 – Alternative Offer

There is a quantitively superior alternative offer available to the Non-Associated Shareholders of Delecta.

Alternative Proposal

• 2.16 We have been advised that Delecta received a legitimate Alternative Offer from Mr W Nash for the sale of 100% of Calvista. Mr W Nash is believed to be an informed shareholder of Delecta and has been active in the industry in which Calvista operates for a number of years.

• 2.17 A summary of the key terms and conditions of the Alternative Offer are noted below:

• Consideration of $3,000,000 payable on completion;

• Subject to completion of legal, technical and financial due diligence by 14 July 2022;

• Obtaining all necessary shareholder and regulatory and ASX approvals by 14 July 2022; and

• The termination of the binding sale agreement with Calvista Holdings Pty Ltd prior to 30 June 2022.

• 2.18 We are not aware that Calvista Holdings Pty Ltd has revised his original offer on receipt of the Alternative Proposal.

• 2.19 The Alternative Offer represents a premium to the Non-Associated Shareholders over the Proposed Transaction by between $615,000 and $637,000, which is a 26% premium when compared to the Consideration and Dividend payable under the Proposed Transaction and has been calculated as a premium of $0.001 per share. The premium represents approximately 6% of the net assets of Delecta as at 31 December 2021.

• 2.20 We have recalculated the value of a Delecta share on the basis of the Alternative Offer proceeding alongside the proposed acquisition of Nabberu and the Capital Raising and confirm that under the Alternative Offer, the transaction would also be not fair.

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• 2.21 Whilst a quantitatively superior proposal, the Alternative Offer is conditional on the successful completion of legal, technical and financial due diligence as well as shareholder and regulatory approval. There is some uncertainty regarding the outcome of these conditions, and there is a risk that Mr Nash may renegotiate the consideration payable or terminate the Alternative Offer. In contrast, the Proposed Transaction is not subject to the outcome of any due diligence investigations and as such the completion of the transaction is considered to be firm and more certain to proceed.

• 2.22 We understand that whilst the Capital Raising and Acquisition of Nabberu are dependent on the sale of Calvista, these transactions are not conditional on Calvista being sold to a specific buyer, and as such these transactions are expected to proceed regardless of whether Delecta were to proceed with either the Proposed Transaction, or the Alternative Offer.

• 2.23 Further information on the Alternative Offer is included in Section 11 of this report.

Other Key Matters

• 2.24 If the Proposed Transaction does not proceed, then the Company will endeavour to sell Calvista to Mr Nash under the Alternative Offer, or to a third party in order to focus on the exploration and evaluation segment of the business.

• 2.25 In the absence of a successful sale of Calvista, in order to enable the Company to focus on its exploration and evaluation activities, the Company may choose to wind up the operations of Calvista. We have considered the estimated value that the Directors of Delecta may be able to realise on liquidation of the Calvista business, including an assessment of the fair value of the Calvista inventory on a liquidation basis, as performed by an independent valuer. Based on our assessment, the liquidation of Calvista would likely realise approximately $1.3m, assuming a provision for redundancies and professional fees of $600,000. The Consideration payable by Calvista Holdings under the Proposed Transaction exceeds the estimated value that Delecta may be able to realise if they choose to liquidate the business. Even if no legal fees or redundancy payments are made, the expected value that could be recovered from a liquidation is not significantly different to the Consideration available as part of the Proposed Transaction.

• 2.26 Delecta currently benefits from net cash inflows from Calvista’s operating activities which help to fund the corporate costs and development of the exploration assets. Whilst Delecta may be able to continue operating Calvista profitably for the foreseeable future, the historical volatility of earnings in Calvista and the recent loss of the exclusive distribution agreement with Calvista’s largest FY21 supplier represents a significant risk to the future profitability and operating cashflows of the business.

• 2.27 In order to enable the Company to focus on its exploration and evaluation activities, the Company may choose to wind up the operations of Calvista. We have considered the estimated value that the Directors of Delecta may be able to realise on liquidation of the Calvista business, including an assessment of the fair value of the Calvista inventory on a liquidation basis, as performed by an independent valuer. Based on our assessment, the Consideration payable by Calvista Holdings Pty Ltd may exceed the estimated value that Delecta may be able to realise if they choose to liquidate the business.

• 2.28 On review of the historical share price of Delecta, the market has reacted primarily to changes in the uranium price as opposed to fluctuations in the Calvista earnings. The lack of sensitivity to Calvista’s operations is indicative that the value of the Company is largely supported by its involvement in uranium exploration, and not on the business of Calvista.

• 2.29 Our opinion is primarily based on our assessment that the quantitative impact of the Alternative Proposal to the Non-Associated Shareholders is not substantial enough to warrant the risk and uncertainty associated with the outcome of the due diligence process. In our opinion, we think that the Non-Associated Shareholders are in a better position if they accept a certain and firm, although quantitatively lower, offer under the Proposed Transaction, than risk the due diligence process and potential renegotiation or withdrawal of the Alternative Offer.

• 2.30 Therefore, in the absence of any other relevant information, we consider that the Proposed Transaction is reasonable for the Non-Associated Shareholders of Delecta.

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• 2.31 If an individual shareholder comes to a different conclusion after analysis of the matters noted above, then their opinion on reasonableness may be different.

• 2.32 An individual shareholder’s decision in relation to the Proposed Transaction may be influenced by his or her individual circumstances. If in doubt, shareholders should consult an independent advisor.

3. SUMMARY OF TRANSACTION

• 3.1 Delecta has entered into a binding Agreement to dispose of 100% of Delecta’s interest in Calvista for Consideration receivable from related party, Calvista Holdings Pty Ltd (the “Proposed Transaction”).

• 3.2 Calvista comprises:

• 100% of Calvista Australia Pty Ltd (“Calvista Australia”); and

• 100% of Calvista New Zealand Ltd (“Calvista NZ”).

• 3.3 Calvista is to be sold subsequent to the payment of a dividend of $885,740.72, which represents the cash at bank for Calvista Australia and Calvista NZ as at 31 December 2021 (the “Dividend”).

• 3.4 The Consideration receivable comprises:

• $1,000,000 payable on completion (the “First Consideration Payment”); and

• $500,000 payable within 12 months of completion (the “Second Consideration Payment”).

• 3.5 If the Proposed Transaction proceeds, Delecta will lose all of its interest in Calvista, leaving just the Exploration and Evaluation business segment remaining.

Key conditions of the Proposed Transaction

• 3.6 The Proposed Transaction is conditional upon a number of conditions precedent, including:

• Delecta obtaining all necessary shareholder, regulatory and ASX approvals;

• Delecta completing a consolidation of capital on the basis of every 2.5 shares currently on issue converting into 1 ordinary share post consolidation (the “Consolidation”);

• Delecta lodging a prospectus to issue a minimum of 150,000,000 shares at an issue price of $0.02 per share (post consolidation) to raise a minimum of $3,000,000, and up to a maximum of 200,000,000 shares at an issue price of $0.02 to raise a maximum of $4,000,000 (the “Public Offer” or “Capital Raising”);

• Receipt of conditional approval to reinstate the securities of Delecta to official quotation on ASX; and

• The settlement of the acquisition of all of the issued capital of Nabberu Minerals Pty Ltd (“Nabberu”) by Delecta (the “Acquisition”). Further details of the Acquisition are noted below.

The Acquisition

• 3.7 The Proposed Transaction is conditional upon the acquisition of 100% of the issued share capital of an Australian registered company, Nabberu Minerals Pty Ltd, that was incorporated on 2 July 2021. During 2021, Nabberu acquired the Woodlands Gold and Base Metals project located in the Gascoyne Province of Western Australia (E52/3895 exploration licence granted in January 2021) and the right to acquire the Mt Army Base Metals project located 107km southeast of Onslow in Western Australia (E08/3319 exploration licence application) for $250,000 and a 2% gross value royalty. As consideration for the acquisition of Nabberu, Delecta will issue 45,000,000 fully paid ordinary shares in Delecta (on a post consolidation basis) at a deemed issue price of $0.02 per share and 30,000,000 options (on a post consolidation basis) to acquire one share in Delecta with an exercise price of $0.03 per option over a term of 3 years from the date of issue.

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Rationale for the Proposed Transaction

• 3.8 The disposal of Calvista allows the Group to concentrate its focus on the Exploration and Evaluation segment.

Impact of Proposed Transaction on Delecta’s Capital Structure

• 3.9 The disposal of Calvista in isolation has no impact on the capital structure of Delecta, however the various conditions of the Proposed Transaction do impact the capital structure of Delecta and as such we have set out a summary of these both prior to, and post completion of the Proposed Transaction. All shares noted in the table below (both pre and post the Proposed Transaction) are presented on a post Consolidation basis.

	Pre-Proposed Transaction Post Proposed Transaction	Pre-Proposed Transaction Post Proposed Transaction	Pre-Proposed Transaction Post Proposed Transaction
Indicative share capital (No)	% Low % High %
Non-associated shareholders Associated shareholders Public Offeri Shares to be issued on Acquisitionii	406,007,575 84.2 75,955,907 15.8 - - - -	406,007,575 60.0 75,955,907 11.2 150,000,000 22.2 45,000,000 6.6	406,007,575 55.8 75,955,907 10.4 200,000,000 27.5 45,000,000 6.2
Number of shares on issue	481,963,482 100	676,963,482 100	726,963,482 100
Indicative options (No)
Non-associated optionholders Associated optionholders Options to be issued on Acquisitionii Capital Raising optionsiii Lead manager optionsiii Director Incentive optionsiv	23,110,000 82.5 4,900,000 17.5 - - - - - - - -	23,110,000 22.0 4,900,000 4.7 30,000,000 28.6 20,000,000 19.0 20,000,000 19.0 7,000,000 6.7	23,110,000 20.6 4,900,000 4.4 30,000,000 26.8 20,000,000 17.9 20,000,000 17.9 14,000,000 12.5
Number of options on issue	28,010,000 100	105,010,000 100	112,010,000 100

• 3.10 The above analysis has been prepared on the following assumptions:

• i. Delecta is expected to issue a minimum of 150,000,000 shares at an issue price of $0.02 per share to raise a minimum of $3,000,000, and up to a maximum of 200,000,000 shares at an issue price of $0.02 to raise a maximum of $4,000,000 under the Public Offer.

• ii. Delecta is expected to issue 45,000,000 shares and 30,000,000 options as consideration for the acquisition of Nabberu Minerals Pty Ltd.

• iii. Delecta is expected to issue 20,000,000 options to Mr Paul Lloyd as consideration for capital raising services provided and 20,000,000 options to the lead manager as consideration for the Public Offer.

• iv. Delecta is expected to issue incentive options to directors which will vest on the completion of certain performance related milestones.

• 3.11 The aggregated shareholding of the Non-Associated shareholders in Delecta will decline from 84.2% prior to the Proposed Transaction to between 60.0% and 55.8% under the low and high valuations respectively.

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4. SCOPE OF THE REPORT

Regulatory guidance

• 4.1 The Listing Rules do not define the meaning of ‘fair and reasonable’. In determining whether the Proposed Transaction is fair and reasonable, we have had regard to the views expressed by ASIC in RG 111. This regulatory guide provides guidance as to what matters an independent expert should consider to assist security holders to make informed decisions about transactions.

Adopted basis of evaluation

• 4.2 RG 111 states that a transaction is fair if the value of the offer price or consideration is greater than the value of the value of the asset being acquired. This comparison should be made assuming a knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at arm’s length.

• 4.3 Further to this, RG 111 states that a transaction is reasonable if it is fair. It might also be reasonable if despite being ‘not fair’ the expert believes that there are sufficient reasons for NonAssociated Shareholders to accept the Proposed Transaction in the absence of any higher bid.

• 4.4 Having regard to the above, MSPCS has completed this comparison in three parts:

• A comparison between the value of Calvista prior to the Proposed Transaction and the value of the Consideration (fairness – see Section 10 – Assessment of Fairness); and

• An investigation into other significant factors to which Non-Associated Shareholders might give consideration, prior to accepting the Proposed Transaction, after reference to the value derived above (reasonableness – see Section 11 -Assessment of Reasonableness).

5. PROFILE OF DELECTA

Background

• 5.1 Delecta was incorporated in 1985 and is based in Braybrook, Australia. The Company, which listed on the ASX in 1999 and acquired Calvista in 2000 followed by the acquisition of Video Wholesalers in 2005. The Video Wholesalers investment has since been divested to focus on the Calvista business segment.

• 5.2 The Company was formerly known as Adultshop.com Limited and changed its name to Delecta in 2010.

• 5.3 The main activities of Delecta are the operations of the wholly owned subsidiaries, Calvista Australia Pty Ltd and Calvista New Zealand Ltd (collectively, “Calvista”) that form the wholesale operating segment of the business. Delecta’s other operations relate to Exploration and Evaluation activities.

• 5.4 As at 14 February 2022, Delecta’s share price was $0.011, giving a market capitalisation of approximately $13m at that date.

Business Segments

Exploration and Evaluation

• 5.5 The Exploration and Evaluation Segment of Delecta includes the operation of multiple exploration sites as follows:

Speedway Gold Project (“Speedway Project”)

• 5.6 The Speedway Project is based in Western Utah. Delecta has a 100% interest in the SW claims and an option to purchase SI claims with a residual royalty to the vendor of 2%. In January 2021, Delecta entered into a mining lease and option to acquire 18 lode mining claims. During due diligence a further 55 claims surrounding the original 18 have been staked to build a stronger ground position.

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REX Uranium-Vanadium Project (“REX Project”)

• 5.7 The REX Project is based in Utah and was acquired in 2020. Delecta has a 60% interest in the REX Project through its shareholding in subsidiary Sunrise Minerals Inc. Initial sampling results indicate high grade uranium and vanadium results in the area. Due to the increasing uranium prices, Delecta plans to focus on exploring this area fully.

Highline Copper-Cobalt Project (“Highline Project”)

• 5.8 The Highline Project is based in Nevada and was acquired in February 2019. Delecta has a 100% interest in the Highline Project claims.

Wholesale Operating (Calvista)

• 5.9 Delecta’s two wholly owned operating subsidiaries, Calvista Australia Pty Ltd and Calvista New Zealand Ltd, are in the business of selling adult products in Australia and New Zealand via ecommerce websites on a wholesale basis to retailers and distributers. Calvista is the largest wholesale distributor of sexual health and pleasure products in Australia. All of Calvista’s revenue is generated from business-to-business sales and does not supply consumers directly.

• 5.10 Calvista operates out of a warehouse and office based in Victoria, distributing products to Australia and New Zealand. Approximately 93% of revenue is generated from sales within Australia.

• 5.11 For FY17, FY18 and FY19, revenue declined year on year from a high of $18.5m in FY17 to a low of approximately $15.3m in FY19. During the Covid19 pandemic, travel restrictions and government stimulus packages led to an increase in disposable income and demand. This resulted in an increase in revenue by 8% in FY20, followed by a 1% decline in FY21. The impact of the increase in demand during the pandemic period is not expected to lead to any long-term growth in the business.

• 5.12 Calvista is reliant on a number of key customers. Calvista’s top ten customers made up over 52% of its total revenue for FY21, with its top five customers making up over 40% of total revenue for FY21, and its top customer making up over 16% of revenue for FY21.

• 5.13 The diagram below illustrates Calvista’s customer mix for FY21.

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Source: Calvista Information Memorandum December 2021

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• 5.14 Calvista is also reliant on key suppliers with its top ten suppliers generating over 71% of total revenue for FY21, with its top five suppliers generating 54% of total revenue for FY21, and its top supplier generating over 16% of revenue for FY21.

• 5.15 The diagram below illustrates Calvista’s supplier mix for FY21.

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Source: Calvista Information Memorandum December 2021

• 5.16 Calvista is party to over 20 exclusive distribution agreements with various suppliers/brands. Revenue generated from the products related to these exclusive agreements accounted for approximately 65.6% of total revenue for FY21. Three of the top four suppliers for Delecta in FY21 were under exclusive distribution agreements. These three exclusive distribution agreements generated approximately 34% of FY21 revenue and gross profit.

• 5.17 These exclusive distribution agreements do not have any fixed terms and as such may be cancelled with between one and three months’ notice, depending on the agreement. We understand that management of Calvista were informed that the exclusive agreement with Delecta’s top supplier is not going to be renewed as of 30 June 2022. The products distributed under that agreement generated 16% of revenue in FY21.

Business Overview and Strategy

• 5.18 Delecta is looking to divest its interests in the wholesale operating segment in order to develop and focus on its exploration and evaluation segment.

Board of Directors

• 5.19 The current Board of Directors are:

Name	Title	Experience
Mr Bryan Hughes	Non-Executive	Mr Hughes is the chairman of Pitcher Partners Accountants,
	Chairman	Auditors and Advisors. He has over 30 years’ experience in
		the resources sector.
Malcolm Day	Managing	Mr Day is a civil engineer and licenced surveyor with 10 years’
	Director	experience in the civil construction industry. He is also the Non-Executive Director of European Lithium Limited.
David Wheeler	Non-Executive	Mr Wheeler has over 30 years’ experience in corporate
	Director	advisory and is the founding directors and partner of Pathways
		Corporate, a boutique corporate advisory firm. He is a fellow
		of the Australian Institute of Company Directors and holds a
		number of directorships in Australian companies.

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The Historical Consolidated Financial Information

• 5.20 The information below provides a summary of the financial information of the Delecta Group for the years ended 30 June 2019, 2020, 2021 and for the six months ended 31 December 2021. The financial information for the years ended 30 June 2019, 2020 and 2021 has been extracted from the audited consolidated financial statements of the Company. The financial information for the half year ended 31 December 2021 has been extracted from the reviewed financial statements for the period then ended.

• 5.21 The auditor of Delecta, Ernst & Young, issued an unqualified opinion on the financial statements for the years ended 30 June 2019, 2020 and 2021 and no adverse findings for the half year ended 31 December 2021.

• 5.22 The table below sets out the Consolidated Statement of Financial Position of Delecta as at 30 June 2019, 2020 and 2021, and as at 31 December 2021.

Consolidated Statement of Financial Position Ref	30-Jun-19 30-Jun-20 30-Jun-21 31-Dec-21
	$'000 $'000 $'000 $'000
ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables i Inventories ii Financial assets at fair value through other comprehensive income iii Prepayments and deposits iv TOTAL CURRENT ASSETS NON-CURRENT ASSETS Right of use assets v Property, plant and equipment vi Exploration and evaluation assets vii Deferred tax asset TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables viii Share placements received in advance Current tax liability Provisions ix Lease liabilities x TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Lease liabilities x Provisions ix TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS xi	637 1,722 1,845 2,893 2,076 2,329 1,827 2,117 3,473 2,100 3,202 3,707 946 539 572 1,430 702 938 1,028 1,088
	7,834 7,628 8,474 11,235
	- 798 647 566 219 184 258 229 917 908 336 395 - 15 18 21
	1,136 1,905 1,259 1,211
	8,970 9,533 9,733 12,446
	1,415 990 792 1,129 - 440 - - 6 14 30 160 182 223 260 - 121 156 168
	1,575 1,739 1,185 1,587
	- 704 549 457 104 116 117 149
	104 820 666 606
	1,679 2,559 1,851 2,193
	7,291 6,974 7,882 10,253

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Consolidated Statement of Financial Position Ref	30-Jun-19 30-Jun-20 30-Jun-21 31-Dec-21
	$'000 $'000 $'000 $'000
EQUITY Issued capital xii Other reserves xiii Retained earnings Equity attributable to equity holders of the parent Non-controlling interests TOTAL EQUITY	70,118 70,497 71,229 72,816 541 143 449 1,304 (63,368) (63,666) (63,805) (63,867)
	7,291 6,974 7,873 10,253 - - 9 -
	7,291 6,974 7,882 10,253

Source: Audited Delecta financial statements for the years ended 30 June 2019, 2020 and 2021 and reviewed financial statements for the six months ended 31 December 2021.

Commentary on financial position

• 5.23 We note the following in relation to the financial position of Delecta:

• i. Trade and other receivables largely relate to trade receivables due from third parties. Trade receivables are unsecured and interest free.

• ii. Inventory relates to finished trading goods measured on a weighted average cost.

• iii. Financial assets relate to an investment in listed company European Lithium Limited, measured at fair value.

• iv. Prepayments and deposits largely relate to prepaid inventory and deposit held for rental property.

• v. Right of use assets and associated lease liabilities relate to the warehouse and offices used by Calvista in Victoria, Australia. The lease runs to May 2025 with no option for renewal.

• vi. Property, plant and equipment comprises mostly of leasehold improvements and computer hardware. These assets are carried at depreciation cost.

• vii. Exploration and evaluation assets relate to expenditure on the Speedway Gold project.

• viii. Trade and other payables relate to trade payables, GST and accruals.

• ix. Provisions relate to employee leave provisions and make good provisions related to the leased property.

• x. Lease liabilities relate to right of use assets.

• xi. As at 31 December 2021 the Company had net assets of $10.3m and net current assets of $9.6m.

• xii. During the year ended 31 December 2021 Delecta issued share capital of $1.6m as a result of options exercised.

• xiii. Other reserves include the Share Based Payment Reserve, the Foreign Currency Translation Reserve and the Fair Value Asset Reserve for financial assets recognised at fair value through other comprehensive income.

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• 5.24 The table below sets out the Consolidated Statement of Financial Performance of Delecta for the years ended 30 June 2019, 2020 and 2021 and for the six months ended 31 December 2021.

Consolidated Statement of Financial Performance	FY19 FY20 FY21 HY22
	$'000 $'000 $'000 $'000
Revenue i Cost of sales Gross profit ii Other income iii Expenses Distribution expense iv Marketing expense v Administration expense vi Occupancy expense vii Write off exploration and evaluation expenditure Finance expense Other expenses Net profit/(loss) before tax Income tax benefit/(expense) Net profit/(loss) after tax Other Comprehensive Income Foreign currency translation vii Fair value movement on assets at fair value through other comprehensive income ix Net Profit after tax	15,284 16,652 16,543 8,159 (11,288) (12,452) (11,226) (5,760)
	3,996 4,200 5,317 2,399 288 365 128 47 (238) (184) (132) (64) (294) (119) (84) (48) (3,398) (3,482) (3,215) (1,814) (487) (425) (297) (41) - - (1,223) - - (29) (30) (13) (602) (633) (678) (525)
	(735) (307) (214) (59) - 9 (16) (12)
	(735) (298) (230) (71) (18) 9 1 (3) (1,364) (407) 33 858
	(2,117) (696) (196) 784

Source: Audited Delecta financial statements for the years ended 30 June 2019, 2020 and 2021 and reviewed financial statements for the six months ended 31 December 2021.

Commentary on financial performance

• 5.25 We note the following in relation to the Company’s financial performance:

• i. Revenue is generated from Calvista through the sale of adult toys and related products to wholesale customers in Australia and New Zealand. Delecta itself does not generate external revenue. It incurs the administrative expenses for the listed group.

• ii. Gross profit has fluctuated with movements in the USD/AUD exchange rate and the margin on the product mix at the time of sale.

• iii. Other income includes government subsidies, supplier discounts received.

• iv. Administration expenses include employment expenses.

• v. Occupancy expenses include the cost of the leasehold warehouse and office used in the Calvista operations.

• vi. The write off of exploration and evaluation expenditure during the year ended 30 June 2021 largely relates to the divestment of Goodsprings Mining District.

• vii. Finance costs relate to the notional finance costs relating to the leased property, recognised on adoption of AASB 16as of 1 July 2019.

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viii. The foreign currency movement is recognised on the translation of foreign subsidiaries to Australian dollars on consolidation.

• ix. The fair value movement relates to the fair value adjustment to the listed investment in European Lithium Limited.

Group Structure

• 5.26 The Delecta Group includes the following non-dormant subsidiaries:

Name	Business Segment	Ownership %
Calvista Australia Pty Ltd	Wholesale Operating	100
Calvista New Zealand Ltd (NZ)	Wholesale Operating	100
Silver Queen Mining Pty Ltd	Exploration and Evaluation	100
Silver Queen Mining Inc (USA)	Exploration and Evaluation	100
Sunrise Minerals Inc (USA)	Exploration and Evaluation	60
Speedway Gold Inc (USA)	Exploration and Evaluation	100

Capital Structure

• 5.27 As at 18 February 2022 Delecta had 1,204,908,705 ordinary shares on issue (on a pre consolidation basis). Details of the top 10 shareholders as at 18 February 2022 are as follows:

		No of Ordinary
		Shares (pre
	Shareholder	consolidation)	% of total
1	Goldshore Investments Pty Ltd	171,139,768	14.2
2	HSBC Custody Nominees (Australia) Limited	81,073,863	6.7
3	BNP Paribas Nominees Pty Ltd	71,637,130	5.9
4	Mr Andrew William Spencer & Mrs Benedicte Marie Francoise Spencer	31,697,489	2.6
5	Coral Brook Pty Ltd	24,285,000	2.0
6	JETMAX Trading Pty Ltd	22,560,456	1.9
7	Coral Brook Pty Ltd	20,000,000	1.7
8	BNP Paribas Nominees Pty Ltd	17,974,154	1.5
9	Citicorp Nominees Pty Ltd	12,709,770	1.1
10	Mr Michael Simon Bevilacqua & Mrs Sally Claudia Bevilacqua	12,608,008	1.0

Source: Delecta’s share register as at 18 February 2022

Options

• 5.28 As at 18 February 2022, Delecta had the following options on issue over unissued shares (on a pre consolidation basis):

	No of options
Code	(pre	Issue date	Expiry date	Exercise price $
	consolidation)
DLCAB	60,025,000	Sep 2020	Sep 2023	0.008
DLCAC	10,000,000	Jan 2021	Dec 2023	0.010

Source: Delecta’s option register as at 18 February 2022

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Share Price Performance

• 5.29 The figure below sets out a summary of Delecta’s closing share price and volume of Delecta shares traded for the twelve months to the last trading day prior to the announcement of the Proposed Transaction. We note that the announcement made by Delecta prior to 31 August 2021 did not have a material effect on the Delecta share price. On 31 August 2021 the Company announced their earnings for the financial year ended 30 June 2021. Management stated that the resulting increase in volume of Delecta shares traded and resulting increase in share price was likely due to the positive sentiment in the Uranium industry and increase in uranium prices. The share price peaked at $0.020 in November 2021 before a significant drop in the share price to $0.010 in January 2022. Subsequent to November 2021 the volume of shares traded has dropped significantly with few non-routine announcements made by the Company.

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Source: S&P Capital IQ

• 5.30 Over the period, Delecta shares traded at a high of $0.020 in November 2021 and a low of $0.005 in August 2021. Trading volumes prior to 31 August 2021 were low and infrequent.

• 5.31 We have considered the volume weighted average price (“VWAP”) of Delecta Shares over a range of periods ending 14 February 2022, the last trading day prior to the announcement of the Proposed Transaction. An analysis of the trading volume of Delecta’s Shares for 1, 5, 10, 30, 60 and 90 trading day periods prior to 14 February 2022 is set out in the table below:

Traded volumes of Delecta Shares to 15 February 2022

	1 Day	5 Day	10 Day	30 Day	60 Day	90 Day
VWAP $	0.011	0.011	0.010	0.011	0.012	0.014
Total Volume (000's)	6,469	33,880	43,620	175,813	396,372	966,079
Total Volume as % of Total Shares	0.54%	2.81%	3.62%	14.59%	32.90%	80.18%
Low Price $	0.011	0.010	0.009	0.009	0.009	0.009
High Price $	0.011	0.011	0.011	0.012	0.016	0.020

Source: S&P Capital IQ, Moore Australia analysis

• 5.32 The table above shows the current VWAP of Delecta shares. 32.9% of the Company’s shares were traded in the 60 trading days prior to the announcement of the Proposed Transaction. This is indicative of a liquid stock.

Other Information

• 5.33 Delecta is a listed disclosing entity for the purposes of the Corporations Act and therefore is subject to continuous disclosure obligations and listing rules. A substantial amount of information about Delecta, including its ASX announcements, can be obtained from its website www.delecta.com.au.

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6. INDUSTRY ANALYSIS

• 6.1 Calvista is the largest distributor of adult toys and sexual wellness and pleasure products in Australia, having developed a wide range of products for all customers, catering for all genders and sexual preferences.

• 6.2 The global adult toy market was valued at US$33.6bn in 2020 after experiencing an increase in growth of 26% in 2020 as a result of the pandemic[1] . The industry has a projected compound annual growth rate of 8% between 2021 and 2028.[1]

• 6.3 The industry is highly fragmented with industry concentration low, creating potential for small players to grow their market share. This also indicates a highly competitive market, with the presence of global e-commerce sites available.

Outlook

• 6.4 Demand in the industry surged during FY20 and FY21 partly due to pandemic related government stimulus packages and lockdowns led to an increase in household discretionary income. At the same time, the market has become more widely accepted amongst mainstream society with demand impacted by the change in consumer attitudes and behaviour as demographic shifts towards the acceptance of adult products in mainstream society. Sex related products and material related to sexual wellness are more prevalent and as such have become less taboo in recent years and this trend is expected to continue over the next five years, leading to a broader use of adult products in society.

• 6.5 Female-centric products have dominated the market historically. Demand for male-centric and LGBTQ+ toys are expected to grow in the future.

• 6.6

• The forecast industry revenue from adult product retailing in Australia for FY22 is $1.04bn.[2]

• 6.7 The industry is moderately influenced by technological disruption, with the increased uptake in adult products providing an opportunity for supplementation with technology such as advanced virtual reality, robotic devices and immersive entertainment.[3] This may pose as a threat to established operators who don’t adapt to these changes.

Distribution channels

• 6.8 The prevalence of e-commerce platforms in this sector has increased substantially over recent years with self-isolation and lockdowns, coupled with the anonymity of online retailing. This trend is expected to continue for the foreseeable future, being the leading driver of growth in the segment as traditional bricks and mortar stores were adversely affected by pandemic related restrictions[4] .

7. VALUATION APPROACH

Definition of Value

• 7.1 RG 111 states that a transaction is fair if the value of the consideration is greater than the value of the net assets being disposed of. This comparison should be made assuming a knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at arm’s length. Further to this, RG 111 states that a transaction is reasonable if it is fair. It might also be reasonable if despite being ‘not fair’ the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher bid.

1 - Global Sex Toys Market Size & Share Report, 2021 2028 (grandviewresearch.com)

2 IBISWorld ANZSIC Report G4279 Tobacco and Other Store Based Retailing in Australia, Tom Youl, November 2021

3 - Global Sex Toys Market Size & Share Report, 2021 2028 (grandviewresearch.com)

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Valuation Approach Adopted

• 7.2 There are a number of methodologies which can be used to value a company. The principal methodologies which can be used are as follows:

• Capitalisation of future maintainable earnings (‘FME’)

• Discounted cash flow (‘DCF’)

• Quoted market price basis (‘QMP’)

• Net asset value (‘NAV’)

• Market approach method (Comparable market transactions)

• 7.3 A summary of each of these methodologies is outlined in Appendix B.

Value of a Delecta Share Prior to the Proposed Transaction

• 7.4 In assessing the value of a Delecta share prior to the Proposed Transaction, we have selected to value Calvista plus Delecta (exclusive of the value of Calvista) using the sum of parts methodology. To value Calvista we have utilised the capitalisation of FME as our primary methodology and NAV on a going concern basis as our secondary valuation methodology. To value Delecta (exclusive of Calvista) we have utilised the NAV on a going concern basis.

• 7.5 Our primary valuation methodology for Calvista was selected on the following basis:

• Calvista has a history of profitable earnings;

• We do not consider that the DCF basis of valuation is appropriate as the Management of Calvista are not able to reliably and accurately forecast the future cash flows of the business;

• In the absence of reliable cash flow forecasts, FME is a reasonable proxy for operating cash flows;

• There are few publicly listed companies with operations sufficiently similar to Calvista to provide meaningful analysis;

• The NAV methodology is not usually preferred for a trading business, such as Calvista, as the value of the business is not derived from the value of its tangible assets; and

• Calvista on its own is a private business (owned by Delecta) and as such its shares are not traded on a stand-alone basis.

• 7.6 Our secondary valuation methodology for Calvista is the NAV on a going concern basis. This valuation method has been considered due to the volatile profitability of Calvista.

• 7.7 Our primary valuation methodology for Delecta, exclusive of Calvista, is the NAV on a going concern basis as the company is not trading and does not have a history of profitable earnings.

• 7.8 Our valuation of a Delecta share prior to the Proposed Transaction will be compared to the QMP of a Delecta share prior to the announcement of the Proposed Transaction.

• 7.9 Our valuation of a Delecta share prior to the Proposed Transaction has been performed on a minority interest basis.

• 7.10 We note that we have not obtained an independent specialist valuation of the exploration assets currently owned by Delecta. In our opinion, the impact of any change in value of the exploration assets currently held by Delecta would not change our opinion (since any value is included in the pre and post transaction analysis) and the value of the exploration assets is not the focus of our Report.

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Value of a Delecta Share Post the Proposed Transaction

• 7.11 In assessing the value of a Delecta share post the Proposed Transaction, we have selected to use the sum of parts methodology We have valued Delecta (exclusive of Calvista) using the NAV on a going concern basis, with adjustments for transactions associated with the Proposed Transaction.

• 7.12 The Consideration receivable under the terms of the Proposed Transaction involves the payment of cash consideration in the form of the cash consideration payable on completion, and deferred cash consideration payable within 12 months of completion. As the Consideration receivable is cash based, the value of the Consideration is readily determined, subject to discounting.

• 7.13 The Acquisition of Nabberu has been valued using recent acquisition values for the assets acquired.

• 7.14 Our valuation of a Delecta share post the Proposed Transaction has been performed on a minority basis.

8. VALUATION OF A DELECTA SHARE PRIOR TO THE PROPOSED TRANSACTION

• 8.1 As stated at Section 7 we have assessed the value of a Delecta share prior to the Proposed Transaction on the Sum of Parts basis. We have assessed the value of Calvista separately to the rest of Delecta, using the capitalisation of future maintainable earnings basis as our primary valuation methodology and using net asset value on a going concern basis as our secondary valuation methodology. The value of Delecta (excluding Calvista) has been assessed on the net asset value on a going concern basis.

Assessed value of a Delecta share on a control basis

Ref	Low High
Equity value for Calvista ($’000) 8.51 Equity value for Delecta excluding Calvista ($’000) 8.57 Value of Delecta on a control basis ($’000) Minority Interest Discount 8.59 Value of Delecta on a minority interest basis No of shares on issue in Delecta prior to the Proposed Transaction (on a consolidated basis) 3.9 Value of a Delecta share on a minority interest basis prior to the Proposed Transaction	4,703 5,584 3,488 3,883
	8,191 9,467 23% 17% 6,307 7,857
	481,963,482 481,963,482
	$0.013 $0.016

Source: MACF analysis

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Capitalisation of future maintainable earnings (primary methodology for the valuation of Calvista)

• 8.2 We have assessed the enterprise value of Calvista on a control basis to be in the range of approximately $711,000 to $2,061,000 based on the capitalisation of FME methodology, as summarised in the table below.

Assessed value of Calvista on a control basis

Ref	Low $’000 High $’000
Assessed EBITDA of Calvista 8.12 Assessed EBITDA multiple for Calvista 8.36 Enterprise value on a control basis Add surplus assets/(liabilities) 8.38 Add net cash/(debt) 8.42 Equity Value on a control basis	250 500 1.8 3.6
	450 1,800 - - 261 261
	711 2,061

Source: MACF analysis

8.3 The capitalisation of earnings methodology estimates the value of the equity of a company by capitalising the future maintainable earnings of the underlying business at an appropriate multiple, which reflects the underlying risk profile and growth prospects of the business applying a premium for control where necessary, adding the value of any surplus or non-operating assets (or deducting any excess or non-operating liabilities) and deducting net debt (or adding net cash). Accordingly, valuing Calvista using the capitalisation of maintainable earnings methodology requires the determination of the following variables:

• future maintainable earnings;

• an appropriate capitalisation multiple;

• an appropriate premium for control;

• the current level of net debt or net cash; and

• the value of surplus assets or liabilities.

• 8.4 Our considerations with regard to each of these factors is presented below:

Future maintainable earnings

8.5 Our calculation of future maintainable earnings of Calvista is based on Calvista’s earnings before interest, tax, depreciation and amortisation (EBITDA). We have used EBITDA as it allows earnings and therefore appropriate capitalisation rates to be compared to other companies as:

• the EBITDA calculation is unaffected by capital structure (level of gearing);

• the EBITDA calculation is not impacted by tax structure or different income tax rates; and

• EBITDA is a fair representation of the actual cash that flows through the company.

• 8.6

• In assessing future maintainable earnings, we have had regard to the following financial results:

• Management accounts for Calvista for the years ended 30 June 2017, 2018, 2019, 2020, 2021 and the six months ended 31 December 2021. The financial information of Calvista has not been audited on a standalone basis;

• Management accounts of Calvista for the two months ended 28 February 2022; and

• Unaudited monthly forecast financial information for Calvista for the year ended 30 June 2022.

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Financial performance of Calvista

• 8.7 The table below shows a summary of the historical financial performance of Calvista for the years ended 30 June 2017, 2018, 2019, 2020, 2021, derived from the unaudited management accounts of Calvista, and the unaudited financial performance for the eight months ended 28 February 2022. The financial information for the period to 28 February 2022 includes the actual historical financial performance for the eight months ended 28 February 2022. The FY22 annualised financial information includes the actual historical financial performance for the eight months ended 28 February 2022 annualised for twelve months.

Financial Performance	FY17 FY18 FY19 FY20 FY21 28 Feb 22 FY22
	Actual Actual Actual Actual Actual Actual Annualised
	$'000 $'000 $'000 $'000 $'000 $'000 $’000
Revenue i Cost of sales Freight Gross profit ii Gross profit % ii Other income iii Expenses Employment iv Marketing v Occupancy vi Administration vi Bad and doubtful debts vii EBITDA EBITDA % Depreciation Amortisation vii Finance expense ix Interest received Lease interest expense Net Profit before tax Income tax benefit/(expense) Net Profit after tax	18,495 15,855 15,284 16,652 16,543 10,579 15,869 (13,057) (11,219) (11,286) (12,451) (11,313) (7,636) (11,454) (194) (222) (238) (184) (132)
	5,244 4,414 3,760 4,017 5,098 2,943 4,338 28% 28% 25% 24% 31% 28% 28% 329 210 260 361 61 111 167 (2,366) (2,409) (2,360) (2,369) (2,255) (233) (167) (237) (51) 8 (478) (503) (487) (410) (116) (647) (651) (653) (601) (519) (12) (17) (63) (23) (26)
	1,837 877 220 924 2,251 1,239 1,859 35% 20% 6% 23% 44% 42% 42% (84) (77) (77) (95) (84) (86) (129) - - - - (162) (81) (122) (6) (4) (3) (2) - - - 4 4 3 3 1 - - - - - (3) (30) (17) (26)
	1,751 800 143 827 1,976 1,055 1,583 - - - 9 (16) - -
	1,751 800 143 836 1,960 1,055 1,583

Source: Unaudited management accounts of Calvista

• 8.8 The financial performance of Calvista has fluctuated significantly, with demand in FY20, FY21 and the period ended 28 February 2022 being boosted by government stimulus packages and travel restrictions which increased household disposable income. This followed a period of poor performance in FY19 after the loss of Calvista’s top exclusive distribution agreement at the time which had a material impact on gross profit generated.

• 8.9 The results of Calvista for the eight months ended 28 February 2022 indicate that Calvista still benefited from government stimulus incentives in FY22. We anticipate that these benefits will decline as restrictions across Australia and New Zealand ease, with operations expected to return to pre pandemic levels. During March 2022 Calvista was notified that it had lost a major exclusive distribution agreement effective as of 30 June 2022. The agreement commenced in February 2015 and is with Calvista’s number one supplier for FY21. This loss is likely to have a substantial impact on profitability going forward.

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• 8.10 We have made the following normalisation adjustments to the EBITDA for Calvista:

Normalisation Adjustments Ref	FY17 FY18 FY19 FY20 FY21 FY22
	Actual Actual Actual Actual Actual Annualised
	$'000 $'000 $'000 $'000 $'000 $'000
EBITDA 8.7 Adjustments: Salary adjustment i Government subsidies ii Forex for supplier purchases iii Loss of major exclusive distribution agreement iv AASB 16 adjustment v Donations vi (Profit)/loss on sale of non- current assets vi Bad debt expense vi Adjusted EBITDA	1,837 877 220 924 2,251 1,549 (140) (140) (140) (140) (140) (160) - - - (117) (50) - (55) (2) 15 (103) (74) -* (497) (454) (427) (628) (979) (976) 325 337 328 293 - - 5 5 1 - - - - (6) 1 (2) - - 12 17 63 23 26 - .
	1,487 638 61 250 1,034 723

Source: MACF analysis

*Included in EBITDA for FY22

• 8.11 We have made the following normalisation adjustments to the EBITDA for Calvista:

• i. The salary for Calvista’s chief financial officer (“CFO”) is split between Delecta and Calvista. There is no expense in the earnings of Calvista for the Managing Director of Delecta for time spent on Calvista business. We note that both roles spend time in Calvista on a part time basis. Based on our analysis of market rate salaries we have included an adjustment to recognise the additional cost to Calvista if the two part time roles were replaced with one full time managing director and CFO at a commercial rate salary of $200k per annum.

• ii. We have added back the government subsidies received by Calvista as part of the Covid19 stimulus packages. The subsidies received were not necessary for the retention of staff and as such are considered to be one off income streams that were not required for the maintenance of normal business revenue and expenditure.

• iii. Calvista purchases many of its products from the USA, China, Europe etc. The realised foreign exchange impact of these purchases have not been recognised in the management accounts of Calvista directly. We consider that these costs form part of the costs of sale in Calvista.

• iv. In early March 2022 Calvista was notified that it had lost a major exclusive distribution agreement effective as of 30 June 2022. The agreement commenced in February 2015 and is with Calvista’s number one supplier for FY21 and has a significant contribution to Calvista’s gross profit line. We have included an adjustment, being the actual gross profit contribution from the sale of this suppliers’ products during each period. There are no other costs specific to this contract and as such the gross profit adjustment is considered to be an accurate estimation of the EBITDA impact of the loss. We have made an adjustment to the FY22 normalised EBITDA using the actual gross profit contribution from the supplier for the half year ended 31 December 2021, annualised for FY22.

• v. During the years ended FY17-FY20, Calvista incurred a rental expense in EBITDA for the property lease. On adoption of AASB 16 Leases and the commencement of a new rental agreement in June 2020, Calvista capitalised their current property lease as a right of use asset (“ROU Asset”) which means that the lease expense was no longer recognised in EBITDA but as a finance and amortisation expense. We have made an adjustment to the EBITDA of FY17-FY20 to include an AASB 16 Leases adjustment for comparison purposes. We have adjusted the FY17-FY20 EBITDA to assume that AASB 16 had been adopted prior to June 2020 to allow consistency between the financial year’s earnings being

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reviewed. In order to do this, we have added back the cost of the property operating lease that was expensed in FY17-FY20. Subsequent to FY20 these costs were capitalised in the balance sheet and amortised over the asset lease term. This amortisation is below the EBITDA line in FY21 and FY22 and as such, no adjustment is required in these periods. The published EBITDA data for the comparable companies noted below has been prepared post AASB 16 adoption and therefore the adjustment ensures that the EBITDA information for Calvista is prepared on a consistent basis to the comparable companies used in our analysis.

• vi. Donations, profits/losses generated on the sale of fixed assets and bad debt write offs have been added back as one-off transactions.

• 8.12 We note that during FY17-FY19 Calvista attended a number of tradeshows and roadshows, including hosting a significant three-day commercial exhibition for its customers and suppliers to showcase the latest products in the industry. The exhibition is called AdultEX (operated by and a trademark of Calvista) and is on an invite only basis. AdultEX was cancelled in FY20, FY21 and FY22 as a result of uncertainty surrounding pandemic restrictions. The actual cost of hosting special events (excluding associated travel costs) in FY17, FY18 and FY19 was $217k, $143k and $206k respectively. Whilst we acknowledge that AdultEX is a good marketing opportunity for Calvista to strengthen commercially beneficial supplier and customer relationships, Calvista has no commitment nor obligation to continue hosting it going forward, and Calvista does not necessarily benefit from an increase in revenue as a direct result of the tradeshow, as is evident from the financial performance of Calvista for FY20, FY21 and FY22 when AdultEX was not held. We acknowledge that under current management AdultEX is likely to continue to be hosted in some shape or form, we however do not consider this to be a necessary cost of the business and as such have not included a normalisation adjustment above.

• 8.13 On the basis of our review of the financial information, and from our discussions with management and our comments above, we consider the future maintainable EBITDA of Calvista to be between $250,000 and $500,000.

Assessment of Capitalisation Multiple

• 8.14 Based on our analysis of comparable company multiples, we consider an appropriate controlling multiple for Calvista to be in the range of 1.8 to 3.6 times.

		Multiple Range	Multiple Range
	Ref	Low	High
EBITDA multiple for Calvista after business specific risk discount	8.36	1.8	3.6

• 8.15 In selecting an appropriate capitalisation multiple to value Calvista we have considered the trading multiples of equities of listed companies based on the following criteria:

• Exposure to the distribution of goods;

• EBITDA greater than $nil; and

• Operations largely in Australia with primary or secondary listing on the ASX.

Comparable trading company multiples: Distributors

• 8.16 The table below sets out a summary of the historic and forecast EBITDA multiples of entities listed on the ASX whose operations and activities are reasonably comparable to those of Calvista. A brief description of each of the comparable companies is set out at Appendix C.

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Summary of comparable company trading multiples: Distributors

Company Name	Ticker	Market Cap ($)	Cash ($)	Debt ($)	Enterprise Value ($)*	FY21 EBITD A ($)	LTM EBITD A ($)	NTM EBITD A ($)	FY21 EBITDA Multiple (x)	LTM EBITDA Multiple (x)	NTM EBITDA Multiple (x)
Bapcor Limited	ASX: BAP	2,050.1	79.8	535.0	3,017.8	216.9	204.1	298.8	13.9x	14.8x	10.1x
National
Tyre & Wheel	ASX: NTD	169.9	45.0	134.0	301.4	36.1	35.5	48.5	8.3x	8.5x	6.2x
Limited
Supply Network Limited	ASX: SNL	359.3	4.0	43.5	488.7	22.5	27.4	-	21.7x	17.8x	NA
Average		859.8	42.9	237.5	1,269.3	91.8	89.0	115.8	14.7x	13.7x	8.2x
Median		359.3	45.0	134.0	488.7	36.1	35.5	48.5	13.9x	14.8x	8.2x

Source: S&P Capital IQ, MACF analysis

*Includes a premium of control of 25%

• 8.17 A total of three publicly listed companies were identified as reasonably comparable based on the search criteria above.

• 8.18 We make the following observations in relation to the comparable companies identified:

• We have considered comparable companies with a broad range of market caps. All companies identified are exposed to the wholesale distribution of non-perishable products in Australia. We note that all of the companies identified are involved in the distribution of products to the automotive industry.

• Due to the date of this report, most companies have recently reported on their financial performance for the half year ended 31 December 2021, the share prices, and therefore market capitalisation, for the comparable companies identified reflect the anticipated earnings for FY22 based on half year results and announced earnings guidance, rather than historical earnings for FY21. As such we have used the publicly available information for expected earnings for FY22 where available.

• We note that the EBITDA data noted in the table above is stated post the adoption of AASB 16 Leases . The adoption of AASB 16 has the effect of increasing the EBITDA of a company as the operating lease payments, which had previously been recognised as an expense in the P&L, is now recognised as a mix of lease interest expense and amortisation, both of which sit below the EBITDA line. Overall, the valuation of a company will be unchanged due to the adoption of AASB 16, which is an accounting adjustment only and has no impact on cashflows, and as such a company will have a lower multiple post the adoption of AASB 16 when compared to pre AASB 16. The EBITDA we have adopted in our FME analysis is based on post AASB 16 financial information and as such is prepared on a consistent basis to the comparable company financial information above.

• 8.19 We note that the current market capitalisation, and therefore enterprise values are reflective of the most up to date EBITDA information, being HY22 EBITDA and expected results for FY22, although estimated at this stage. Given that the HY22 financial year end has now passed, and all earnings guidance announcements have been issued, there is a high degree of certainty regarding the FY22 EBITDA. As such the NTM multiple data is considered to be based on what is now historical financial information. As such, we consider an appropriate EBITDA multiple of between 6x and 8x to be appropriate, based on the table above.

• 8.20 We are of the opinion that the selected companies’ operations reflect a good initial basis for our assessment of listed company multiples. We acknowledge that the distributors included in the comparable companies above are limited to the distribution of automobile industry products. This narrow industry focus may influence the multiple presented. Whilst not solely distributors, as a comparison, we have also reviewed multiples for the last twelve months and those anticipated for FY22 for retailers of specialty products in Australia, in order to reflect the niche nature of the industry in which Calvista operates.

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• 8.21 In selecting the appropriate comparables we have considered the trading multiples of equities of listed companies based on the following criteria:

• Exposure to the retailing of specialty products;

• EBITDA greater than $nil;

• Market capitalisation less than $300m; and

• Operations largely in Australia with primary or secondary listing on the ASX.

Comparable trading company multiples: Specialty Retailers

• 8.22 The table below sets out a summary of the historic and forecast EBITDA multiples of entities listed on the ASX based on the criteria above. A brief description of each of the comparable companies is set out at Appendix D.

Summary of comparable company trading multiples: Specialty Retailers

Company Name	Ticker	Market Cap ($)	Cash ($)	Debt ($)	Enterprise Value ($)*	FY21 EBITDA ($)	LTM EBITDA ($)	NTM EBITD A ($)	FY21 EBITDA Multiple (x)	LTM EBITDA Multiple (x)	NTM EBITDA Multiple (x)
Dusk Group Limited	ASX: DSK	152.6	33.3	37.4	194.8	41.7	25.8	28.4	4.7x	7.6x	6.9x
Joyce Corporatio n Ltd	ASX: JYC	94.6	17.2	13.7	114.7	20.4	19.8	NA	5.6x	5.8x	NA
Shaver
Shop Group	ASX: SSG	147.4	36.3	28.8	176.7	28.5	26.9	39.1	6.2x	6.6x	4.5x
Limited
Average		131.5	28.9	26.6	162.1	30.2	24.2	33.8	5.5	6.6	5.7
Median		147.4	33.3	28.8	176.7	28.5	25.8	33.8	5.6	6.6	5.7

Source: S&P Capital IQ, MACF analysis

*Includes a premium of control of 25%

• 8.23 A total of three publicly listed companies were identified as reasonably comparable based on the search criteria above.

• 8.24 We make the following observations in relation to the comparable companies identified:

• All companies identified are specialty retailers of mainly non-perishable products in Australia.

• Due to the date of this report, most companies have recently reported on their financial performance for the half year ended 31 December 2021, the share prices, and therefore market capitalisation, for the comparable companies identified reflect the anticipated earnings for FY22 based on half year results and announced earnings guidance, rather than historical earnings for FY21. As such we have used the publicly available information for expected earnings for FY22 where available.

• We note that the EBITDA data noted in the table above is stated post the adoption of AASB 16 Leases. The adoption of AASB 16 has the effect of increasing the EBITDA of a company as the operating lease payments, which had previously been recognised as an expense on the P&L, is now recognised as a mix of lease interest expense and amortisation, both of which sit below the EBITDA line. Overall, the valuation of a company will be unchanged due to the adoption of AASB 16, which is an accounting adjustment only and has no impact on cashflows, and as such a company will have a lower multiple post the adoption of AASB 16 when compared to pre AASB 16. The EBITDA we have adopted in our FME analysis is based on post AASB 16 financial information and as such is prepared on a consistent basis to the comparable company financial information above.

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• 8.25 We note that the current market capitalisation, and therefore enterprise values are reflective of the most up to date EBITDA information, being HY22 EBITDA and expected results for FY22, although estimated at this stage. Given that the HY22 financial year end has now passed, and all earnings guidance announcements have been issued, there is a high degree of certainty regarding the FY22 EBITDA. As such the NTM multiple data is considered to be based on what is now historical financial information. Based on the above table, we consider an appropriate EBITDA multiple to be in the region of 5x to 7x.

• 8.26 Based on our analysis, the multiple for specialty retailers supports the multiple derived in paragraph 8.19 above, although at the lower end. As such we have used a range of 6x to 8x in our valuation of Calvista and considered the impact of the lower range of multiples from specialty retailing in our business risk analysis below.

Adjustments to the comparable company trading multiples

Control premium

• 8.27 We note that the Share price of a listed company represents the market value of a non-controlling interest in that company and, as such, any earnings multiple derived from those share prices are consequently non-controlling multiples and they do not reflect a premium for control. In order to calculate the value of a controlling interest prior to adjusting for surplus assets/liabilities and net debt, we must apply a control premium to the enterprise value multiple.

• 8.28 We have reviewed the control premiums paid in recent years by companies listed on the ASX. There is significant variability in control premiums paid which are affected by such factors as:

• Nature and magnitude of non-operating assets;

• Quality of management;

• Nature and magnitude of business opportunities/assets not currently being exploited;

• Degree and confidence in future synergies;

• Level of pre-announcement speculation of the transaction;

• Level of liquidity in the trade of the acquiree’s securities; and

• The stage in the economic cycle.

• 8.29 A review of control premiums paid by acquirers of companies listed on the ASX in recent years indicates a range of premiums between 20% and 30% is reasonable. We believe that this reflects an appropriate rate of control premia to be applied in our valuation of Calvista.

Business specific risk

• 8.30 The EBITDA multiple derived, prior to considering business specific risk is based on our analysis of comparable companies. This represents companies which are still considerably more diversified and larger than Calvista in terms of market capitalisation, revenue and scale. Given this we consider it appropriate to further consider additional factors specific to Calvista which should be reflected in adopting an appropriate EBITDA multiple to apply to the Company.

• 8.31 Consideration of business specific risk results in an adjustment made to comparable company trading multiples in order to allow for the perceived differences between the comparable companies used to arrive at a comparable multiple and the target business being valued, which are then taken into account in arriving at the specific multiple selected to be applied to the target business being valued. It is not limited solely to consideration of the risks specific to the target business being valued but also to consideration of investment related risks from a potential investor’s perspective.

• 8.32 In carrying out this analysis the information we have obtained in respect of the comparable companies is limited to that information that is publicly available from those companies and our interpretation of that information. Accordingly, there is an element of judgement applied in arriving at the business specific risk to apply to Calvista. Business specific risk is a subjective adjustment made to comparable company trading multiples in order to allow for the differences between the comparable companies used to arrive at a comparable multiple and the specific multiple applied to the target business being valued.

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• 8.33 When assessing any business specific risk adjustment, we have considered the following:

  • Calvista is a private company and as such its shares have limited marketability;

  • Calvista lacks the scale and diversification of the comparable companies;

  • Calvista operates in a very niche market and lacks the breadth or diversification of the sectors that the comparable companies are exposed to;

  • Calvista is reliant on key customers with no contracts in place, given the niche product range, there is a limited pool of significant customers which acts as a constraint to growth in operations;

  • 65% of Calvista’s FY21 revenue was generated from products sold under exclusive distribution agreements which have no fixed term and are cancellable with little or no notice. Calvista is therefore reliant on these key suppliers and the successful retendering of the exclusive distribution agreements. The risk associated with this is evident from the historical volatility of their earnings on the loss of a key contract;

  • Due to the lack of fixed term customer and supplier contracts, the specific industry that Calvista operates in is heavily reliant on relationships between suppliers and customers and key management; and

  • The lack of scale is represented in Calvista’s EBITDA, revenue and net assets which are at the lower end of the range of the comparable companies.

• 8.34 In terms of allocating business specific risk to specific factors we have allocated as follows;

• Private company 25% - 30%

• Size, scale, growth expected to be less than comparable companies 5%

• Niche industry with a lack of diversity of products 10%

• Reliance on key customers with no long-term contracts 5% - 10%

• Reliance on exclusive distribution agreements with no fixed term and little or no cancellation period 10% - 15%

• 8.35 Based on our analysis of business specific risk, we are of the opinion that Calvista carries significantly more risk than the comparable companies used in our analysis. We consider that it is reasonable to apply a business specific risk discount of between 55% and 70% to the comparable company multiple.

Conclusion on capitalisation multiple

• 8.36 Based on our analysis of comparable company multiples, we consider an appropriate controlling multiple, prior to any business specific discount, to be in the range of 6 to 8 times.

Assessed Multiples of Calvista

	Multiple Range
Ref	Low High
EBITDA multiple for comparable listed companies 8.26 Less: business specific discount (55% - 70%) 8.35 EBITDA multiple (on a controlling basis)	6.0 8.0 (4.2) (4.4)
	1.8 3.6

Source: MACF analysis

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Equity Value

• 8.37 In calculating the equity value of Calvista we make the following adjustments to the Enterprise Value:

Equity Value on a Control Basis

Ref	Low $’000 High $’000
Enterprise value 1.1 Add surplus assets/(liabilities) 8.38 Add net cash/(debt) 8.42 Equity Value on a control basis	450 1,800 - - 261 261
	711 2,061

Source: MACF analysis

We make the following comments in relation to the adjustments to derive equity value:

Surplus assets/(liabilities)

• 8.38 Surplus assets and liabilities are those assets and liabilities not required to sustain the adopted level of earnings. We have reviewed the net assets of Calvista as at 31 December 2021 and do not consider any of the assets and liabilities to be surplus to the operations of the business.

Working Capital

• 8.39 We have reviewed the working capital position of Calvista as at 31 December 2021, which appears within the normal range of working capital balances for the 12 months prior to 31 December 2021.

• 8.40 Our working capital analysis is based on a calculation that excludes cash or cash equivalents and any short-term finance balances. Using book values as at 31 December 2021 working capital was $5.5m, compared to an average of $5.5m over the 12 months to 31 December 2021. Whilst the working capital balance appears high, this is appears normal for Calvista given the large portion of slow-moving inventory held.

• 8.41 As the calculation excludes cash and cash equivalent balances and short-term finance balances, we consider that the cash balance represents assets in excess of standard working capital requirements and the payment of this out to Delecta as a dividend as part of the Proposed Transaction does not create a working capital deficit in the business.

Net cash/debt

• 8.42 We have assessed that Calvista has the following cash and debt as at 31 December 2021:

Ref	31 December 2021 $’000
Cash and cash equivalents 8.45 Lease liabilities (current and non-current) 8.45 Net cash/(debt) Source: MACF analysis	886 (625)
	261

Valuation summary for Calvista on an FME basis

• 8.43 Our assessed value of Calvista on a control basis, as calculated using the FME valuation methodology noted above, is between $711,000 and $2,061,000

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Net Asset Valuation of Calvista on a Going Concern Basis (secondary methodology)

• 8.44 In order to provide a comparison and cross check to our FME valuation, we have assessed the value of Calvista on a control basis based on the Net Asset Value method, as summarised in the table below.

• 8.45 The NAV method (assuming an orderly realisation of tangible assets) estimates fair market value by determining the amount that would be distributed to shareholders, after payment of all liabilities including realisation costs that arise, assuming assets are realised in an orderly manner.

Statement of Financial Position of Calvista	31-Dec-21 LOW HIGH
Ref	$'000 $'000 $'000
ASSETS CURRENT ASSETS Cash and cash equivalents i Trade and other receivables ii Inventories iii Additional specific provision for inventory iii Other assets iv Prepaid inventory iii Deferred tax asset v TOTAL CURRENT ASSETS NON-CURRENT ASSETS Right of use assets vi Property, plant and equipment vii TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables viii Income tax liability viii Lease liabilities viii Provisions ix TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Lease liabilities viii Provisions ix TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS	886 886 886 2,117 2,117 2,117 3,707 2,390 2,921 - (350) - 181 181 181 778 778 778 21 21 21
	7,690 6,023 6,904
	566 566 566 229 229 229
	795 795 795
	8,485 6,818 7,699
	1,051 1,051 1,051 30 30 30 168 168 168 260 260 260
	1,509 1,509 1,509
	457 457 457 149 149 149
	606 606 606
	2,115 2,115 2,115
	6,370 4,703 5,584

• 8.46 The Statement of Financial Position of Calvista as at 31 December 2021 has been extracted from the unaudited management accounts for the period then ended.

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• i. Cash and cash equivalents as at 31 December 2021 are comprised of cash deposits at bank.

• ii. Trade and other receivables include mainly trade receivables which are unsecured and payable between 30 and 60 days. These receivables are stated net of any bad debt provision, and the balance has been confirmed as recoverable.

• iii. Inventory consists of finished trading goods, carried at impaired cost. The inventory as at 16 March 2022 has been valued by an independent valuer at Fair Market Value in Continued Use at $2,654,672. Using a 10% margin of error either side of this valuation, we have included a value for the inventory of $2,390,000 in our low valuation and $2,921,000 in our high valuation.

The additional specific provision for inventory relates to inventory relating to the exclusive distribution agreement that is set to cease on 30 June 2022. Calvista will no longer be entitled to sell this inventory beyond 30 June 2022 and has not negotiated a successful agreement to resell the inventory back to the relevant supplier. As such, we have included an adjustment in our low valuation for the fair value of this inventory expected to be held on cessation of the contract on 30 June 2022.

Prepaid inventory relates to amounts prepaid for inventory not yet delivered. As the inventory relates to recent purchases, no impairment is considered necessary.

• iv. Other assets relate to minor prepayments and the deposit paid on the property lease.

• v. The deferred tax asset relates to temporary timing differences.

• vi. The right of use asset relates to the lease for the office and warehouse in Victoria. The asset is amortised over the life of the lease which expires in May 2025 with no option for renewal. We note that Calvista has accounted for a make good provision in relation to the work required to restore the leased property to original condition on termination of the lease. As such, no adjustment is considered necessary.

• vii. The property, plant and equipment relates to computer equipment and leasehold improvements. The assets are measured at depreciated cost. We have confirmed that the assets are in good working order and none are idle. Given the termination of the office and warehouse lease in May 2025 with no option for renewal, we have considered the impairment of the leasehold improvements in isolation. We have confirmed that the leasehold improvements are depreciated over the life of the lease and as such no further impairment is considered necessary.

• viii. We have confirmed that payables are complete as at 31 December 2021.

• ix. Provisions consist of employee leave provisions and a make good provision for the property lease. We have confirmed that provisions are complete as at 31 December 2021.

• 8.47 We have confirmed that Calvista does not own any intellectual property. Calvista does not have any fixed term contracts with customers or suppliers, and any contracts in place can be cancelled with little or no notice. The industry is largely based around the contacts and relationships held by key management. Whilst Calvista owns the trademark for AdultEX, the tradeshow that Calvista has historically hosted on an annual basis (pre pandemic), the trademark itself does not have any value and can be easily replicated using a different name.

Control Premium

• 8.48 Calvista Holdings Pty Ltd is proposing to acquire 100% of Calvista. As such, the value of Calvista should be prepared on a controlling basis. The net asset value methodology implies a premium for control has already been factored into the value. Therefore, our calculation of the fair market value of Calvista has been prepared on a control basis.

Valuation summary for Calvista on a NAV on a going concern basis

• 8.49 Our assessed value of Calvista on a controlling basis calculated using the net assets on a going concern basis methodology noted above, is between $4,703,000 and $5,584,000.

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Valuation conclusion for Calvista

• 8.50 The valuations performed above provide a wide range of values for Calvista, between $711,000 and $5,584,000 as follows:

		Low	High
	Ref	$’000	$’000
Fair value of Calvista using the capitalisation of FME basis	8.43	711	2,061
Fair value of Calvista using the NAV on a going concern basis	8.49	4,703	5,584

Source: MACF analysis

• 8.51 Ordinarily for a distribution company, we consider the capitalisation of FME valuation methodology to be the most reliable indicator of the fair value. However, as Calvista is a trading company with substantial working capital, generating revenue from a substantial reserve of inventory, we consider that the Net Asset Value on a going concern basis to be the preferred valuation methodology for Calvista.

Net Asset Valuation of Delecta (excluding Calvista) on a Going Concern Basis

(primary methodology)

• 8.52 We have assessed the value of Delecta (excluding Calvista) on a control basis based on the Net Asset Value method, as summarised in the table below.

• 8.53 The NAV method (assuming an orderly realisation of tangible assets) estimates fair market value by determining the amount that would be distributed to shareholders, after payment of all liabilities including realisation costs that arise, assuming assets are realised in an orderly manner.

Statement of Financial Position of Delecta (excluding Calvista)	31-Dec-21 LOW HIGH
Ref	$'000 $'000 $'000
ASSETS CURRENT ASSETS Cash and cash equivalents i Financial assets ii Prepayments and deposits iii TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration and evaluation assets iv TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables v TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS	2,007 2,007 2,007 1,430 1,430 1,430 129 129 129
	3,566 3,566 3,566
	395 - 395
	395 - 395
	3,961 3,566 3,961
	78 78 78
	78 78 78
	- - -
	78 78 78
	3,883 3,488 3,883

• 8.54 The Statement of Financial Position of Delecta (excluding Calvista) as at 31 December 2021 has been extracted from the unaudited management accounts for the period then ended.

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• i. Cash and cash equivalents as at 31 December 2021 are comprised of cash deposits at bank.

• ii. Financial assets relate to an investment in listed company European Lithium Limited, measured at fair value using the quoted market value as at 31 December 2021.

• iii. Other assets relate to minor prepayments and the deposit paid on the property lease.

• iv. Exploration and evaluation assets relate to expenditure on the Speedway Gold project in Utah which is considered to be prospective for gold. The recoverability of this asset is dependent on the successful development and commercial exploitation, or alternatively the sale, of the respective area of interest. We have not obtained an independent valuation of this asset as it appears unchanged on both sides of the valuation and therefore has no impact on our assessment of fairness.

• v. We have confirmed that payables are complete as at 31 December 2021.

• 8.55 We have confirmed that Delecta does not own any intellectual property.

Control Premium

• 8.56 The net asset value methodology implies a premium for control has already been factored into the value. Therefore, our calculation of the fair market value of Delecta (excluding Calvista) has been prepared on a control basis.

Valuation summary for Delecta (excluding Calvista) on a NAV on a going concern basis

• 8.57 Our assessed value of Delecta (excluding Calvista) on a controlling basis calculated using the net assets on a going concern basis methodology noted above, is between $3,488,000 and $3,883,000.

Valuation conclusion for a Delecta share prior to the Proposed Transaction

• 8.58 The valuations performed above provide a range of values for a Delecta share prior to the Proposed Transaction on a controlling basis to be between $0.013 and $0.016 as noted below.

Assessed value of a Delecta share on a control basis

Ref	Low High
Equity value for Calvista ($’000) 8.51 Equity value for Delecta excluding Calvista ($’000) 8.57 Value of Delecta on a control basis ($’000) Minority Interest Discount 8.59 Value of Delecta on a minority interest basis No of shares on issue in Delecta prior to the Proposed Transaction (on a consolidated basis) 3.9 Value of a Delecta share on a minority interest basis prior to the Proposed Transaction	4,703 5,584 3,488 3,883
	8,191 9,467 23% 17% 6,307 7,857
	481,963,482 481,963,482
	$0.013 $0.016

Source: MACF analysis

• 8.59 We have applied a minority interest discount to the controlling interest value of Delecta in order to reflect the underlying value of a minority interest share. We have applied a discount of between 17% and 23%, which is the inverse of a typical control premium of between 20% and 30%.

Quoted Market Price Valuation of Delecta (secondary valuation methodology)

• 8.60 In order to provide a cross check and comparison to our valuation of a Delecta share prior to the Proposed Transaction above, we have also assessed the value of a Delecta share prior to the Proposed Transaction using the Quoted Market Price (“QMP”) valuation methodology prior to the announcement of the Proposed Transaction.

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• 8.61 The figure below sets out a summary of Delecta’s closing share price and volume of Delecta shares traded for the twelve months to the last trading day prior to the announcement of the Proposed Transaction. We note that the announcement made by Delecta prior to 31 August 2021 did not have a material effect on the Delecta share price. On 31 August 2021 the Company announced their earnings for the financial year ended 30 June 2021. Management stated that the resulting increase in volume of Delecta shares traded and resulting increase in share price was likely due to the positive sentiment in the Uranium industry and increase in uranium prices. The share price peaked at $0.020 in November 2021 before a significant drop in the share price to $0.010 in January 2022. Subsequent to November 2021 the volume of shares traded has dropped significantly with few non-routine announcements made by the Company.

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Source: S&P Capital IQ

• 8.62 Over the period, Delecta shares traded at a high of $0.020 in November 2021 and a low of $0.005 in August 2021. Trading volumes prior to 31 August 2021 were low and infrequent.

• 8.63 We have considered the volume weighted average price (“VWAP”) of Delecta Shares over a range of periods ending 14 February 2022, the last trading day prior to the announcement of the Proposed Transaction. An analysis of the trading volume of Delecta’s Shares for 1, 5, 10, 30, 60 and 90 trading day periods prior to 14 February 2022 is set out in the table below:

Traded volumes of Delecta Shares to 14 February 2022

	1 Day	5 Day	10 Day	30 Day	60 Day	90 Day
VWAP $	0.011	0.011	0.010	0.011	0.012	0.014
Total Volume (000's)	6,469	33,880	43,620	175,813	396,372	966,079
Total Volume as % of Total Shares	0.54%	2.81%	3.62%	14.59%	32.90%	80.18%
Low Price $	0.011	0.010	0.009	0.009	0.009	0.009
High Price $	0.011	0.011	0.011	0.012	0.016	0.020

Source: S&P Capital IQ, Moore Australia analysis

• 8.64 The table above shows the current VWAP of Delecta shares. 32.9% of the Company’s shares were traded in the 60 trading days prior to the announcement of the Proposed Transaction.

• 8.65 We note that to rely on the quoted market price for the valuation of Valmec there is a requirement for the security to trade in a ‘deep’ market. RG111.69 indicates that a ‘deep’ market should reflect a liquid and active market.

• 8.66 Characteristics synonymous with a deep market are:

• Regular trading in a company’s securities;

• An average of 1% of a company’s securities traded on a weekly basis;

• Non-significant spread of the stock;

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• A significant spread of ownership of the securities (i.e. the top 10 shareholders do not control more than 50% of the company); and

• There are not regular unexplained movements in the share price.

• 8.67 For a security to be considered ‘deep’ it should fit with all the above characteristics. Although if it does fail to meet all of the above characteristics it does not automatically characterise the share price trading as irrelevant for valuation purposes, rather it means that it should not purely be relied upon and should be considered within this context.

• 8.68 We note that in the case of Delecta, we consider there to be a deep market for the Company’s shares and as such the stock is considered to be liquid. As such, we consider a range of values between $0.010 to $0.011 (the range of values between 1 and 30 day VWAP) is a reasonable reflection of the quoted market price valuation of a Delecta share on a minority basis prior to the Proposed Transaction.

Valuation conclusion for a Delecta share prior to the Proposed Transaction

• 8.69 Our assessed values of a Delecta share on a controlling basis is summarised in the table below.

		Low	High
	Ref	$	$
Assessed fair value of a Delecta share prior to the Proposed Transaction on a minority interest basis using the Sum of Parts methodology	8.58	0.013	0.016
Assessed fair value of a Delecta share prior to the Proposed Transaction on a minority interest basis using the Quoted Market Price methodology	8.68	0.010	0.011

Source: MACF analysis

• 8.70 On review of the historical share price of Delecta, the market has reacted primarily to changes in the uranium price as opposed to fluctuations in the Calvista earnings. The lack of sensitivity to Calvista’s operations is indicative that the value of the Company is largely supported by its involvement in uranium exploration, and the market does not fully value the business of Calvista. As such, our assessed value of a Delecta share on a controlling basis, as calculated above, is between $0.013 and $0.016.

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9. VALUATION OF A DELECTA SHARE POST THE PROPOSED TRANSACTION

• 9.1 As stated at Section 7 we have assessed the value of a Delecta share post the Proposed Transaction on the Sum of Parts basis.

Assessed value of a Delecta share on a minority basis

Ref	Low High
Equity value for Delecta excluding Calvista ($’000) 8.57 Consideration on disposal of Calvista ($’000) 9.3 Dividend receivable ($’000) 3.3 Assets acquired under the Acquisition agreement ($’000) 9.14, 9.16 Public Offer before costs ($’000) 3.6 Lead manager costs of the Public Offer ($’000)2 Other cash costs of the Proposed Transaction and conditional transactions ($’000)3 Value of Delecta on a control basis ($’000) Minority discount1 Value of Delecta on a minority basis ($’000) No of shares on issue in Delecta post the Proposed Transaction 3.9 Value of a Delecta share on a minority basis prior to the Proposed Transaction	3,488 3,883 1,477 1,499 886 886 271 834 3,000 4,000 (180) (240) (320) (320)
	8,623 10,541
	23% 17%
	6,640 8,749 676,963,482 726,963,482
	0.010 0.012

1 Being the inverse of the premium for control

2 Being 6% of the Capital Raising as per the lead broker mandate

3 As per Company estimates

Source: MACF analysis

Consideration on disposal of Calvista

• 9.2 If the Proposed Transaction is approved, Delecta will receive Consideration as follows:

• $1,000,000 payable on completion (the “First Consideration Payment”); and

• $500,000 payable within 12 months of completion (the “Second Consideration Payment”).

• 9.3 We have assessed the fair value of the Consideration receivable as follows:

Ref	Low value $’000 High Value $’000
First Consideration Payment 9.4 Second Consideration Payment 9.5 Total value of Consideration	1,000 1,000 477 499
	1,477 1,499

Source: MACF analysis

First Consideration Payment

• 9.4 Due to the short-term nature of the First Consideration Payment, this portion of the Consideration receivable has not been discounted.

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Second Consideration Payment

• 9.5 Given that there is a period of 12 months from completion until the date that the Second Consideration Payment is payable, we have discounted the Second Consideration Payment as follows:

	Ref	Low	High
Face value of Second Consideration Payment ($’000)	9.2	500	500
Term to maturity	9.2	12	12
Discount rate applied to cash flows	9.8, 9.9	4.72%	0.25%
Net Present Value of Second Consideration Payment ($’000)	9.3	477	499

Source: MACF analysis

• 9.6 In the fair value calculation above, we have assessed the Net Present Value of the Second Consideration Payment using a 12-month maturity term as per the agreement for sale, and a discount rate of between 0.25% and 4.72%.

Discount rate

• 9.7 In order to ascertain the appropriate discount rate to apply to the Second Consideration Payable we have considered the opportunity cost to Delecta of the cash payment. There is limited information available on the appropriate interest rate that Delecta could obtain from a similar investment with a comparable risk profile. In our opinion, the opportunity cost of capital available to Delecta would range from a risk-free government bond or treasury deposit for a 12-month period, to the growth of a diversified portfolio of listed investments over the same period.

• 9.8 As such, for our low valuation we have discounted the Second Consideration Payment by 4.72% which represents the higher of the growth in the All Ords ASX Share Price Index and the S&P 200 ASX Share Price Index for the 12 months ended 31 January 2022.

• 9.9 For our high valuation, we have discounted the Second Consideration Payment by 0.25% which represents the lower of the annual interest rate applicable for a 12-month treasury deposit or government bond.

Nabberu Acquisition

• 9.10 We have assessed the value of Nabberu on a control basis based on an assessment of the Net Asset Value method, and the consideration payable by Delecta as part of the Acquisition.

Net Asset Value on a Going Concern

• 9.11 The NAV is summarised in the table below and assumes an orderly realisation of tangible assets by estimates fair market value by determining the amount that would be distributed to shareholders, after payment of all liabilities including realisation costs that arise, assuming assets are realised in an orderly manner.

Statement of Financial Position of Nabberu	31-Dec-21 LOW HIGH
Ref	$'000 $'000 $'000
ASSETS CURRENT ASSETS Cash and cash equivalents i TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration and evaluation assets ii TOTAL NON-CURRENT ASSETS TOTAL ASSETS	41 41 41
	41 41 41
	268 268 268
	268 268 268
	309 309 309

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Statement of Financial Position of Nabberu	31-Dec-21 LOW HIGH
Ref	$'000 $'000 $'000
LIABILITIES CURRENT LIABILITIES Trade and other payables iii TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS	38 38 38
	38 38 38
	- - -
	38 38 38
	271 271 271

Source: MACF analysis

• 9.12 The Statement of Financial Position of Nabberu as at 31 December 2021 has been extracted from the reviewed financial statements for the period from incorporation (being 2 July 2021) to 31 December 2021.

• i. Cash and cash equivalents as at 31 December 2021 are comprised of cash deposits at bank.

• ii. During 2021, Nabberu acquired the Woodlands Gold and Base Metals project located in the Gascoyne Province of Western Australia (E52/3895 exploration licence granted in January 2021) and the right to acquire the Mt Army Base Metals project located 107km southeast of Onslow in Western Australia (E08/3319 exploration licence application) for $250,000 and a 2% gross value royalty. The recoverability of this asset is dependent on the successful development and commercial exploitation, or alternatively the sale, of the respective area of interest. Neither Nabberu, nor Delecta, have obtained an independent valuation of this asset. Due to the recent acquisition of the asset in an arm’s length transaction, we have included the value of the exploration asset in both our high and low valuations at cost.

• iii. Payables include tenement rent and other payables.

Control Premium

• 9.13 The net asset value methodology implies a premium for control has already been factored into the value. Therefore, our calculation of the fair market value of Nabberu has been prepared on a control basis.

• 9.14 Our assessed value of Delecta (excluding Calvista) on a controlling basis calculated using the net assets on a going concern basis methodology noted above, is $271,000 and is included in our low valuation above.

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Nabberu Consideration payable by Delecta

• 9.15 As consideration for the acquisition of Nabberu, Delecta will issue 45,000,000 fully paid ordinary shares in Delecta (“Consideration Shares”) at a deemed issue price of $0.02 per share and 30,000,000 options (“Consideration Options”) to acquire one share in Delecta with an exercise price of $0.03 per option over a term of 3 years from the date of issue. For the purpose of our valuation, we have relied on our pre–Proposed Transaction valuation range to determine the value of the consideration.

• 9.16 We have assessed the fair value of the consideration payable for Nabberu as between $689,000 and $979,000, with a preferred value of $834,000 follows:

Ref	Low value $’000 High Value $’000
Consideration Shares 9.15 Consideration Options 9.18 Total value of Consideration	589 734 100 245
	689 979

• 9.17 The options vest on issue and as such we have used the Black-Scholes valuation model to derive the value of the options.

• 9.18 The Consideration Options have been valued on the following criteria:

Ref	Low value High Value
Exercise price 3.7 Term 3.7 Current share price2 3.6 Risk free rate1 Volatility 9.22 Dividend yield3 Number of options Total value of Consideration Options 9.16	$0.03 $0.03 3 years 3 years $0.013 $0.016 1.48% 1.48% 70% 100% Nil Nil 30,000,000 30,000,000
	$100,000 $245,000

1 Being the Commonwealth government yield for a three-year bond

2 Valuation determined in our pre-Proposed Transaction assessment of the value of a Delecta share

3 Delecta has not historically paid a dividend and given that post the Proposed Transaction exploration will be the Company’s primary activity, no dividend is expected to be payable within the three-year term

Source: MACF analysis

Volatility

• 9.19 Delecta is a listed company and as such we have assessed the Company’s historical volatility over a 12-month period prior to suspension for the announcement of the Proposed Transaction for the expected future volatility of the Company’s share price. We note that the historical share price of the Company includes the impact of operations of Calvista, however on analysis of historical share price movements, fluctuations appear to be responsive the movement in the uranium price and not on Calvista related announcements. The historical Delecta share price volatility for the 12-month period prior to 15 February 2022 is 145%.

• 9.20 As a cross check to the Delecta historical volatility, we have reviewed the 12 month share price volatility for comparable companies that meet the following criteria:

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• Primary listing on the ASX with a market capitalisation of less than $100m;

• Similar operations to Delecta post the Proposed Transaction, with exposure to exploration in uranium, gold, base metals in Australia; and

• In exploration phase of operations, with nil revenue earned in the last 12 months.

• 9.21 Our review based on the above criteria indicates that the average 12-month volatility for peer companies is approximately 70%.

• 9.22 Based on our analysis above, we have used a range of volatility in our valuation above of between 70% and 100%.

10. IS THE PROPOSED TRANSACTION FAIR TO DELECTA SHAREHOLDERS?

• 10.1 When assessing fairness, we have used two methods to determine our opinion. In Sections 8 and 9, we compared the value of a share in Delecta prior to the Proposed Transaction to the value of a share in Delecta post the Proposed Transaction.

• 10.2 Our assessed values of a share in Delecta prior to the Proposed Transaction and the value of a share in Delecta post the Proposed Transaction, from Sections 8 and 9 are summarised in the table below.

Assessed values

		Sec	Low Value	Preferred	High Value
		tion	$	$	$
Assessed Fair Value of a share in Delecta prior to the ProposedTransactiononaminorityinterest basis		8	0.013	0.014	0.016
Assessed Fair Value of a share in Delecta post the Proposed Transaction on a minority interest basis		9	0.010	0.011	0.012

Source: MACF analysis

• 10.3 In the absence of any other relevant information, in our opinion, this indicates that the Proposed Transaction is not fair to the Non-Associated Shareholders of Delecta as the valuations do not demonstrate overlap.

11. IS THE PROPOSED TRANSACTION REASONABLE?

• 11.1 RG111 establishes that a Proposed Transaction is reasonable if it is fair. If a Proposed Transaction is not fair it may still be reasonable after considering the specific circumstances applicable to it. In our assessment of the reasonableness of the Proposed Transaction, we have given consideration to:

• The future prospects of Delecta if the Proposed Transaction does not proceed; and

• Other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transaction proceeding.

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Advantages and Disadvantages

• 11.2 In assessing whether the Non-Associated Shareholders are likely to be better off if the Proposed Transaction proceeds than if it does not, we have also considered various advantages and disadvantages that are likely to accrue to the Non-Associated Shareholders.

Advantages of approving the Proposed Transaction

Advantage 1 – Focus

The Proposed Transaction will allow the Directors and management of Delecta to focus the Company’s Exploration and Evaluation activities. The two business segments of Delecta are vastly different and as such do not share many synergies. The sale of Calvista and focus of directors, staff and operations on one business segment will help to reduce inefficiencies associated with the diverse operations currently. The resources sector is currently very buoyant with significant positive sentiment.

Advantage 2 – Condition of the acquisition of Nabberu

The completion of the Proposed Transaction is a condition of the Acquisition of Nabberu which will allow Delecta to take advantage of exploration projects owned by Nabberu.

Advantage 3 – Easier to raise capital

The Proposed Transaction allows Delecta to focus on the Company’s exploration and evaluation activities which will make it easier for the Company to raise capital from investors. The completion of the Proposed Transaction is a condition of the Capital Raising which is expected to raise between $3,000,000 and $4,000,000 before costs.

Advantage 4 – Receipt of cash consideration

The Consideration receivable as part of the Proposed Transaction is in the form of cash. The cash will help to fund the development of the exploration and evaluation segment of the business.

Advantage 5 – ASX re-compliance

The completion of the Proposed Transaction is a condition of re-compliance with ASX listing rules. Completion of the Proposed Transaction could result in the reinstatement to quotation and the liquidity of Delecta shares.

Advantage 6 – Potential reduced profitability of Calvista

The recent loss of the exclusive supplier contract with Calvista’s biggest supplier indicates that there will be a significant deterioration in the profitability of the business on cessation of the contract in June 2022. Now may therefore be a good time to sell the business as cashflows generated are likely to decline with profitability going forward.

Disadvantages of approving the Proposed Transaction

Disadvantage 1 – The Proposed Transaction is not fair

The Proposed Transaction is not considered to be fair

Disadvantage 2 – Loss of interest in profitable, cash generating assets

The Proposed Transaction would result in Delecta losing 100% of its interest in Calvista. Calvista generated a net profit before tax of $1.98m during the year ended 30 June 2021 and has historically generated operating cash flows for Delecta.

Disadvantage 3 – Requirement to raise capital

The Consideration receivable as part of the Proposed Transaction, prior to discounting, is $1.5m. This is unlikely to be a sufficient amount of cash to fund the exploration and evaluation operations of the business for an extended period and it is expected that without operating cash inflows from Calvista, Delecta will need to raise capital in the market within 12 months.

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Disadvantage 4 – Diversification

The Proposed Transaction would reduce the diversification in Delecta to one business segment.

Disadvantage 5 – Cost sharing

Currently, Calvista bears a portion of the annual cost of the salary for Mr John Burness (FY21: $60k, FY22 estimated to be $40k). Whilst not material, going forward Delecta will need to absorb this cost directly.

Disadvantage 6 – Alternative Offer

There is a quantitively superior alternative offer available to the Non-Associated Shareholders of Delecta.

Alternative Proposal

• 11.3 We have been advised that Delecta received an Alternative Offer from Mr W Nash for the sale of 100% of Calvista. Mr W Nash is a shareholder of Delecta and has been active in the industry in which Calvista operates for a number of years.

• 11.4 We understand that Calvista was informally on the market for a number of years and that Delecta engaged advisors to prepare an Information Memorandum and proceed with the formal marketing of Calvista to a selection of potential buyers in December 2021. The potential buyers were selected based on known retailers and distributors in the industry in Australia. Mr W Nash was approached by Delecta as part of this process. No firm offers were received during that process.

• 11.5 A summary of the key terms and conditions of the Alternative Offer are noted below:

• Consideration of $3,000,000 payable on completion;

• Subject to completion of legal, technical and financial due diligence by 14 July 2022;

• Obtaining all necessary shareholder and regulatory and ASX approvals by 14 July 2022; and

• The termination of the binding sale agreement with Calvista Holdings Pty Ltd prior to 30 June 2022.

• 11.6 To the best of our knowledge, the alternative offer is considered to be a legitimate bid, and not highly speculative because the agreement for the sale of shares under the Alternative Offer is well documented, extensive and has been prepared by a reputable law firm. The agreement has been prepared with substantial detail about the operations of Calvista, indicating that Mr W Nash is an informed bidder. The agreement for the sale of shares under the Alternative Offer has also been executed by Mr W Nash and witnessed.

• 11.7 There is no break fee involved in the termination of the share sale agreement with Calvista Holdings Pty Ltd and as such, there is no substantial financial liability arising from the acceptance of the alternative offer.

• 11.8 As an industry player, who was approached by Delecta as part of the original sales process, Mr Nash is considered to be an informed bidder. We believe that Mr Nash is also aware of the current trading performance of Calvista.

• 11.9 We are not aware that Calvista Holdings Pty Ltd has revised his original offer on receipt of the Alternative Proposal.

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• 11.10 We have included a comparison between the between consideration payable by Calvista Holdings Pty Ltd in the Proposed Transaction and the consideration proposed by Mr Nash under the alternative bid below:

	Consideration payable: Proposed Transaction	Ref	Low Value $’000	High Value $’000
Consideration payable under the Proposed Transactions		9.3	1,477	1,499
Dividend payable by Calvista to Delecta prior to completion of
the Proposed Transaction (a condition of the Proposed		3.3	886	886
Transaction)1
Total value			2,363	2,385
	Consideration payable: Alternative Offer
Consideration payable under the Alternative Offer		11.4	3,000	3,000
Total value			3,000	3,000
	Alternative Offer exceeds the consideration under the Proposed Transaction by		637	615

1Included because no such dividend is a condition of the Alternative Proposal and as such this cash will be retained in Calvista under the Alternative Proposal

• 11.11 The Alternative Offer represents a premium to the Non-Associated Shareholders over the Proposed Transaction by between $615,000 and $637,000, which is a 26% premium when compared to the Consideration and Dividend payable under the Proposed Transaction. The premium represents approximately 6% of the net assets of Delecta as at 31 December 2021.

• 11.12 We have recalculated the value of a Delecta share on the basis of the Alternative Offer proceeding alongside the proposed acquisition of Nabberu and the Capital Raising and confirm that under the Alternative Offer, the transaction would also be not fair.

• 11.13 This represents a premium of $0.001 per share.

• 11.14 To illustrate the impact of this to the Non-Associated Shareholders of Delecta, this is equivalent to the following based on a range of shareholdings:

Current value of	No of shares held based	Estimated value of impact
shareholding	on 1 day VWAP	of premium on holding
$1,000	90,909	$77
$10,000	909,091	$769
$50,000	4,545,455	$3,847
$100,000	9,090,909	$7,694

• 11.15 Whilst a quantitatively superior proposal, the Alternative Offer is conditional on the successful completion of legal, technical and financial due diligence as well as shareholder and regulatory approval. There is some uncertainty regarding the outcome of these conditions, and there is a risk that Mr Nash may renegotiate the consideration payable or terminate the Alternative Offer. In contrast, the Proposed Transaction is not subject to the outcome of any due diligence investigations and as such the completion of the transaction is considered to be firm and more certain to proceed.

• 11.16 We understand that whilst the Capital Raising and Acquisition of Nabberu are dependent on the sale of Calvista, these transactions are not conditional on Calvista being sold to a specific buyer, and as such these transactions are expected to proceed regardless of whether Delecta were to proceed with either the Proposed Transaction, or the Alternative Offer.

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Future prospects of Delecta if the Proposed Transaction does not proceed

• 11.17 If the Proposed Transaction does not proceed, then the Company will endeavour to sell Calvista Mr Nash under the Alternative Offer, or to a third party in order to focus on the exploration and evaluation segment of the business.

• 11.18 In the absence of a successful sale of Calvista, in order to enable the Company to focus on its exploration and evaluation activities, the Company may choose to wind up the operations of Calvista. We have considered the estimated value that the Directors of Delecta may be able to realise on liquidation of the Calvista business, including an assessment of the fair value of the Calvista inventory on a liquidation basis, as performed by an independent valuer. Based on our assessment, the liquidation of Calvista would likely realise approximately $1.3m, assuming a provision for redundancies and professional fees of $600,000. The Consideration payable by Calvista Holdings under the Proposed Transaction exceeds the estimated value that Delecta may be able to realise if they choose to liquidate the business. Even if no legal fees or redundancy payments are made, the expected value that could be recovered from a liquidation is not significantly different to the Consideration available as part of the Proposed Transaction.

Conclusion on Reasonableness

• 11.19 In our opinion, based on the analysis set out above, the position of the Non-Associated Shareholders if the Proposed Transaction is approved is more advantageous than the position if it is not approved.

• 11.20 We are of this opinion as there are sufficient reasons for Delecta to dispose of Calvista and focus on its primary operating segment going forward, being exploration and evaluation. The current diversification of Delecta between Calvista and its exploration segment presents inefficiencies and a lack of focus for the Company. Completion of the Proposed Transaction will enable the directors and staff of Delecta to take advantage of the opportunities associated with the Nabberu Acquisition, the current positive market sentiment towards the resources sector and will help the Company with the Capital Raising to fund its exploration activities.

• 11.21 Whilst Delecta may be able to continue operating Calvista profitably for the foreseeable future, the historical volatility of earnings in Calvista and the recent loss of the exclusive distribution agreement with Calvista’s largest FY21 supplier represents a significant risk to the future profitability and operating cashflows of the business. This uncertainty is likely to require additional time and focus from the staff and directors and as such will be a cost to the overall Delecta group and a distraction from its exploration activities.

• 11.22 On review of the historical share price of Delecta, the market has reacted primarily to changes in the uranium price as opposed to fluctuations in the Calvista earnings. The lack of sensitivity to Calvista’s operations is indicative that the value of the Company is largely supported by its involvement in uranium exploration, and not on the business of Calvista.

• 11.23 Our opinion is primarily based on our assessment that the quantitative impact of the Alternative Proposal to the Non-Associated Shareholders is not substantial enough to warrant the risk and uncertainty associated with the outcome of the due diligence process. In our opinion, we think that the Non-Associated Shareholders are in a better position if they accept a certain and firm, although quantitatively lower, offer under the Proposed Transaction, than risk the due diligence process and potential renegotiation or withdrawal of the Alternative Offer.

• 11.24 Therefore, in the absence of any other relevant information, we consider that the Proposed Transaction is reasonable for the Non-Associated Shareholders of Delecta.

• 11.25 If an individual shareholder comes to a different conclusion after analysis of the matters noted above, then their opinion on reasonableness may be different.

• 11.26 An individual shareholder’s decision in relation to the Proposed Transaction may be influenced by his or her individual circumstances. If in doubt, shareholders should consult an independent advisor.

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12. INDEPENDENCE

Moore Australia Corporate Finance (WA) Pty Ltd is entitled to receive a fee of approximately $35,000, excluding GST and reimbursement of out of pocket expenses. Except for this fee Moore Australia Corporate Finance (WA) Pty Ltd has not received and will not receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of this report.

Prior to accepting this engagement Moore Australia Corporate Finance (WA) Pty Ltd has considered its independence with respect to Delecta and the associated shareholders of Delecta, and their respective associates with reference to RG 112, Independence of Expert’s Reports. It is the opinion of Moore Australia Corporate Finance (WA) Pty Ltd that it is independent of Delecta and the associated shareholders of Delecta, and their respective associates.

Moore Australia Corporate Finance (WA) Pty Ltd and Moore Australia Perth have not had at the date of this report any relationship which may impair their independence.

We have held discussions with management of Delecta regarding the information contained in this report. We did not change the methodology used in our assessment as a result of discussions and our independence has not been impaired in any way.

13. QUALIFICATIONS

Moore Australia Corporate Finance (WA) Pty Ltd is a professional practice company, wholly owned by the Perth practice of Moore Australia, Chartered Accountants. The firm is part of the National and International network of Moore Australia independent firms and provides a wide range of professional accounting and business advisory services.

Moore Australia Corporate Finance (WA) Pty Ltd holds an Australian Financial Services License to provide financial product advice on securities to retail clients (by way of experts reports pursuant to the listing rules of the ASX and the Corporations Act) and its principals and owners are suitably professionally qualified, with substantial experience in professional practice.

The director responsible for the preparation and signing of this report is Mr Peter Gray who is a director of Moore Australia Corporate Finance (WA) Pty Ltd. Mr Gray has approximately 15 years’ experience as a Chartered Accountant and has significant experience in the preparation of independent expert’s reports, valuations and related advice.

At the date of this report neither Mr Gray nor any member or Director of Moore Australia Corporate Finance (WA) Pty Ltd has any interest in the outcome of the Offer.

14. DISCLAIMERS AND CONSENTS

Moore Australia Corporate Finance (WA) Pty Ltd has been requested to prepare this report, to be included in the Notice of Meeting which will be sent to Delecta’s shareholders.

Moore Australia Corporate Finance (WA) Pty Ltd consents to this report being included in the Notice of Meeting to be sent to shareholders of Delecta. This report or any reference thereto is not to be included in or attached to any other document, statement or letter without prior consent from Moore Australia Corporate Finance (WA) Pty Ltd.

Moore Australia Corporate Finance (WA) Pty Ltd has not conducted any form of audit or any verification of information provided to us and which we have relied upon in regard to Delecta, however we have no reason to believe that any of the information provided, is false or materially incorrect.

The statements and opinions provided in this report are given in good faith and in the belief that they are not false, misleading or incomplete.

Neither Moore Australia Corporate Finance (WA) Pty Ltd nor Mr Gray take any responsibility for nor have they authorised or caused the issue of any part of this report for any third party other than the shareholders of Delecta in the context of the scope and purpose defined in section 3 of this report.

With respect to taxation implications it is recommended that individual shareholders obtain their own taxation advice, in respect of the Offer, tailored to their own specific circumstances. The advice provided in this report does not constitute legal or taxation advice to shareholders of Delecta or any other party.

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The statements and opinions expressed in this report are given in good faith and with reliance upon information generated both independently and internally and with regard to all of the circumstances pertaining to the Offer.

In regard to any projected financial information noted in this report, no member or director of Moore Australia Corporate Finance (WA) Pty Ltd has had any involvement in the preparation of the projected financial information.

Furthermore, we do not provide any opinion whatsoever as to any projected financial or other results prepared for Delecta and in particular do not provide any opinion as to whether or not any projected financial results referred to in the report will or will not be achieved.

Yours faithfully

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Peter Gray Director

Moore Australia Corporate Finance (WA) Pty Ltd

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APPENDIX A – SOURCE OF INFORMATION

In preparing this report we have had access to the following principal sources of information:

• Non-binding Term Sheet;

• Draft acquisition agreement;

• Disposal Agreement;

• Draft Notice of Meeting;

• Audited financial statements for Delecta for the years ended 30 June 2019, 2020 and 2021;

• Reviewed interim financial statements for Delecta for the half year ended 31 December 2021;

• Unaudited management accounts of Calvista for the years ended 30 June 2017, 2018, 2019, 2020, 2021 and the six months ended 31 December 2021;

• Unaudited management accounts of Calvista for the six months ended 31 December 2021 and for the two months ended 28 February 2022;

• Unaudited monthly forecast financial information for Calvista for the year ended 30 June 2022;

• Information Memorandum for Calvista dated December 2021;

• Pickles Valuation Report for the value of Adult Product Inventory of Calvista dated 23 March 2022;

• Publicly available information in relation to Delecta, including ASX announcements;

• Information in the public domain;

• Share registry information for Delecta;

• IBISWorld;

• S&P Capital IQ database; and

• Discussions with directors and management of Delecta and Calvista.

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APPENDIX B – VALUATION METHODOLOGIES

We have considered which valuation methodology is the most appropriate in light of all the circumstances and information available. We have considered the following valuation methodologies and approaches:

• Discounted cash flow methodology (‘DCF’);

• Capitalisation of future maintainable earnings methodology (‘FME’);

• Net assets value method (‘NAV’);

• Quoted market price methodology (‘QMP’); and

• Market approach method (Comparable market transactions)

Valuation Methodologies and Approaches

Discounted Cash Flow Method

Discounted cash flow methods estimate fair market value by discounting a company’s future cash flows to their net present value. These methods are appropriate where a forecast of future cash flows can be made with a reasonable degree of confidence. Discounted cash flow methods are commonly used to value early stage companies or projects with a finite life.

Capitalisation of Maintainable Earnings Method

The capitalisation of maintainable earnings method estimates “fair market value” or “enterprise value”, by estimating a company’s future maintainable earnings and dividing this by a market capitalisation rate. The capitalisation rate represents the return an investor would expect to earn from investing in the company which is commensurate with the individual risks associated with the business.

It is appropriate to apply the capitalisation of maintainable earnings method where there is an established and relatively stable level of earnings which is likely to be sustained into the foreseeable future.

The measure of earnings will need to be assessed and can include, net profit after taxes (NPAT), earnings before interest and taxes (EBIT) and earnings before interest, taxes, depreciation and amortisation (EBITDA).

The capitalisation of maintainable earnings method can also be considered a market based methodology as the appropriate capitalisation rate or ‘earnings multiple’ is based on evidence of market transactions involving comparable companies.

An extension of the capitalisation of maintainable earnings method involves the calculation of share value of an entity. This process involves the calculation of the enterprise value, which is then adjusted for the net tangible assets of the entity.

Net Assets Value Method (Orderly Realisation of Assets)

The net assets value method (assuming an orderly realisation of assets) estimates fair market value by determining the amount that would be distributed to shareholders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the company is wound up in an orderly manner.

Liquidation of assets - The Liquidation method is similar to the orderly realisation of asset method except the liquidation method assumes the assets are sold in a shorter time frame.

Net assets – The net assets method is based on the value of the assets of a business less certain liabilities at book values, adjusted to a market value.

The asset based approach, as a general rule, ignores the possibility that a company’s value could exceed the realisable value of its assets as they ignore the value of intangible assets such as customer lists, management, supply arrangements, and goodwill.

The asset based approach is most appropriate when companies are not profitable, a significant proportion of assets are liquid, or for asset holding companies.

Cost Based Approach - The cost based approach involves determining the fair market value of an asset by deducting the accumulated depreciation from the asset’s replacement cost at current prices.

Like the asset based approach, the cost based approach has a number of disadvantages, primarily that the cost of an asset does not necessarily reflect the assets ability to generate income. Accordingly, this approach is only useful in limited circumstances, usually associated with intangible asset valuation.

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Valuation Methodologies and Approaches

Quoted Market Price Methodology

The method relies on the pricing benchmarks set by sale and purchase transactions in a fully informed market the ASX which is subject to continuous disclosure rules aimed at providing that market with the necessary information to make informed decisions to buy or to sell.

Consequently, this approach provides a “fair price”, independently determined by a real market. However, the question of a fair price for a particular transaction requires an assessment in the context of that transaction taken as a whole.

In taking a quoted market price based assessment of the consideration to both parties to the proposed transaction, the overall reasonableness and benefits to the non-participating shareholders must be carefully evaluated.

Market Approach Method

The market based approach estimates a company’s fair market value by considering the market prices of transactions in its shares or the market value of comparable assets.

This includes, consideration of any recent genuine offers received by the target for an entire entity’s business, or any business units or asset as a basis for the valuation of those business units or assets, or prices for recent sales of similar assets

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APPENDIX C – COMPARABLE COMPANIES: DISTRIBUTORS

											FY21	FY21	LTM	LTM	NTM	NTM
				Enterprise		FY21	LTM	FY21	LTM	NTM	EBITDA		EBITDA		EBITDA
Company	Market			**Value ***		REVENUE	REVENUE	EBITDA	EBITDA	EBITDA	Multiple		Multiple		Multiple
Name	Cap ($)	Cash ($)	Debt ($)		($)	($)	($)	($)	($)	($)		(x)		(x)		(x)	Business description
Bapcor	2,050.1	79.8	535.0	3,017.8		1,761.7	1,778.2	216.9	204.1	298.8	13.9x		14.8x		10.1x		Bapcor Limited sells and distributes automotive aftermarket parts,
Limited																	accessories, equipment, and services and solutions in Australia, New
ASX: BAP																	Zealand, and Thailand. The company operates through four segments:
																	Bapcor Trade, Bapcor Specialist Wholesale, Bapcor Retail, and Bapcor
																	NZ. The Bapcor Trade segment offers automotive aftermarket parts and
																	consumables to trade workshops for the service and repair of passenger
																	and commercial vehicles; automotive workshop equipment, such as vehicle
																	hoists and scanning equipment, including the servicing of the equipment;
																	and automotive accessories and maintenance products to do-it-yourself
																	vehicle owners. As of June 30, 2021, it operated 200 stores. The Bapcor
																	Specialist Wholesale segment engages in the automotive aftermarket
																	wholesale of brake, bearing, electrical, suspension, 4WD, cooling, diesel,
																	and engine control systems and parts for light and heavy commercial
																	vehicles. The Bapcor Retail segment operates 341 company owned and
																	franchise stores comprising 133 Autobarn stores, 74 Autopro stores, 30
																	Sprint Auto Parts stores, and 104 Midas and ABS workshop service stores.
																	Bapcor NZ segment is involved in the wholesale of batteries, steering and
																	suspension products, auto electrical and precision equipment, and vehicle
																	workshop equipment; and diesel distribution activities. This segment also
																	supplies automotive parts and accessories to workshops, trucks, and trailer
																	parts through the Truck and Trailer Parts brand. It operates through a
																	network of 76 stores in 85 locations, as well as 102 Battery Town locations.
																	The company was formerly known as Burson Group Limited and changed
																	its name to Bapcor Limited in July 2016. Bapcor Limited was founded in
																	1971 and is based in Preston, Australia.
National	169.9	45.0	134.0	301.4		461.5	500.6	36.1	35.5	48.5	8.3x		8.5x		6.2x		National Tyre & Wheel Limited engages in the distribution and marketing of
Tyre &																	motor vehicle tires, wheels, tubes, and related products in Australia, New
Wheel																	Zealand, and South Africa. The company products include truck and bus
Limited																	tires, agricultural and off-the-road tires, industrial tires, and original
ASX: NTD																	equipment tires and wheel packages. National Tyre & Wheel Limited was
																	founded in 1989 and is headquartered in Hamilton, Australia.
Supply	359.3	4.0	43.5	488.7		162.6	180.6	22.5	27.4	-	21.7x		17.8x		NA		Supply Network Limited provides aftermarket parts to the commercial
Network																	vehicle industry in Australia and New Zealand. The company sells truck
Limited																	and bus parts under the Multispares brand name, as well as offers a range
ASX: SNL																	of services comprising parts interpreting, procurement, and supply
																	management. Supply Network Limited was incorporated in 1986 and is
																	headquartered in Pemulwuy, Australia.
Average	859.8	42.9	237.5	1,269.3		795.3	819.8	91.8	89.0	115.8	14.7x		13.7x		8.2x
Median	359.3	45.0	134.0	488.7		461.5	500.6	36.1	35.5	48.5	13.9x		14.8x		8.2x

Source: S&P’s Capital IQ

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APPENDIX D – COMPARABLE COMPANIES: SPECIALTY RETAILERS

										FY21	LTM	NTM
				Enterprise	FY21	LTM	FY21	LTM	NTM	EBITDA	EBITDA	EBITDA
Company Name	Market Cap ($)	Cash ($)	Debt ($)	Value ($)*	REVENUE ($)	REVENUE ($)	EBITDA ($)	EBITDA ($)	EBITDA ($)	Multiple (x)	Multiple (x)	Multiple (x)	Business description
Dusk Group	152.6	33.3	37.4	194.8	148.6	137.7	41.7	25.8	28.4	4.7x	7.6x	6.9x	Dusk Group Limited operates as an omni-channel specialty
Limited ASX: DSK													retailer that focuses on home fragrance products in Australia. It
													offers novelty, scented, scented pillar, unscented, taper, outdoor,
													tealight, and votive candles; candle holders, candle accessories,
													and wax melts; and home fragrance products, including
													diffusers, air purifiers, essential oils, reed diffusers, mood reed
													refills, incense products, fragrant oils, room and linen sprays,
													pillow mist, and fragrant gel gems. The company also provides
													plant therapy essential oils and sets; candle holders, such as
													tealight holders, votive holders, hurricanes, lanterns, pillar
													holders, taper holders, plates and tray sets, and accessories; oil
													burners, candle care products, and related storage products; and
													storage boxes, and gift cards and packs. It operates through a
													network of physical stores and online stores under the dusk
													brand name. The company was incorporated in 2014 and is
													based in Alexandria, Australia.
Joyce Corporation	94.6	17.2	13.7	114.7	111.2	119.9	20.4	19.8	NA	5.6x	5.8x	NA	Joyce Corporation Ltd retails kitchen and wardrobe products in
Ltd ASX: JYC													Australia. It owns four Bedshed retail stores; and franchises
													Bedshed retail bedding stores. The company also operates
													kitchen and wardrobe showrooms under the Kitchen Connection
													and Wallspan brand names. Joyce Corporation Ltd was founded
													in 1886 and is based in Perth, Australia.
Shaver Shop	147.4	36.3	28.8	176.7	213.7	217.2	28.5	26.9	39.1	6.2x	6.6x	4.5x	Shaver Shop Group Limited engages in the retail of personal
Group Limited													grooming products in Australia and New Zealand. The company
ASX: SSG													offers electric shavers, beard trimmers, hair clippers, body
													groomers, manual shavers, oral care, massage and exercise,
													and skincare and haircare products for men; and hair removal,
													hair styling, beauty, oral care, massage and exercise, and
													fragrance products for women. As of June 30, 2021, it operated
													through a network of 121 stores. It also offers its products online
													through its websites. The company was formerly known as
													Lavomer Riah Holdings Pty Ltd and changed its name to Shaver
													Shop Group Limited in May 2016. Shaver Shop Group Limited
													was founded in 1986 and is based in Chadstone, Australia.
Average	131.5	28.9	26.6	162.1	157.8	158.3	30.2	24.2	33.8	5.5	6.6	5.7
Median	147.4	33.3	28.8	176.7	148.6	137.7	28.5	25.8	33.8	5.6	6.6	5.7

Source: S&P’s Capital IQ

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APPENDIX E - GLOSSARY

In this report, unless the context requires otherwise:

Term	Meaning
$	Australian Dollar
Acquisition	The acquisition of 100% of the share capital of Nabberu Minerals Pty Ltd by Delecta for 45,000,000 fully paid ordinary shares and 30,000,000 options in Delecta(on a post consolidation basis)
Calvista	100% of the issued share capital of Calvista Australia Pty Ltd and Calvista NZ PtyLtd
Calvista Australia Pty Ltd	ACN: 91673559
Calvista NZ Pty Ltd	NZCN: 1629610
Consolidation	The consolidation of the capital in Delecta on a 2.5:1 basis
Act	Corporations Act 2001
ASIC	Australian Securities and Investments Commission
Associated Shareholders	Shareholders associated with Mr Malcolm Day
ASX	Australian Securities Exchange or ASX Limited ACN 008 624 691
Board	The Board of Directors of Delecta Limited
Business Day	has the meaning given in the Listing Rules
Company	Delecta Limited
Consideration	Comprises the following: • $1,000,000 payable on completion (the “First Consideration Payment”); and • $500,000 payable within 12 months of completion (the “Second Consideration Payment”).
Control basis	Assuming the shareholder/s have control of the entity in which equityis held
Delecta	Delecta Limited and its controlled entities
Directors	The Directors of Delecta Limited
Disposal Agreement	The Share Sale Agreement between Calvista, Delecta, Calvista Holdings PtyLtd and Mr Malcolm Day
Dividend	A dividend of $885,740.72 payable by Calvista prior to completion of the Proposed Transaction
Explanatory Statement	The explanatory statement accompanying the Notice
First Consideration Payment	$1,000,000 payable on completion
FME	Future Maintainable Earnings
FY	Financial Year
HY	Half Year
IER	This Independent Experts Report
Income Tax Assessment Act	the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997
Listing Rules	the official listing rules of ASX and includes the business rules of ASX

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Term	Meaning
LTM	Last Twelve Months
Moore Australia or MACF	Moore Australia Corporate Finance (WA) Pty Ltd
Mr Malcolm Day	Director and shareholder of Calvista Holdings Pty Ltd and a director and substantial shareholder of Delecta
Nabberu	Nabberu Minerals Pty Ltd (ACN 651 652 916)
Non-Associated Shareholders	Shareholders who are not a party to, or associated with a party to, the Proposed Transaction
Notice	The notice of meeting
NTM	Next Twelve Months
Proposed Transaction	The disposal of 100% of Calvista to Calvista Holdings Pty Ltd in exchange for Consideration receivable
Public Offer	The Public Offer of between 150,000,000 and 200,000,000 shares in Delecta at $0.02 per share to raise between $3,000,000 and $4,000,000 before costs
Register	the register of members of Delecta shareholders or option holders, as the case requires
RG111	ASIC Regulatory Guide 111_Content of Experts Reports_
S&P Capital IQ	Third party provider of company and other financial information
Second Consideration Payment	$500,000 payable within 12 months of completion

Page | 54

CONTACT US

Level 15, 2 The Esplanade, Perth WA 6000

T +61 8 9225 5355 F +61 8 9225 6181

E perth@moore-australia.com.au

www.moore-australia.com.au

HELPING YOU THRIVE IN A CHANGING WORLD

LODGE YOUR PROXY APPOINTMENT ONLINE

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ONLINE PROXY APPOINTMENT

www.advancedshare.com.au/investor-login

MOBILE DEVICE PROXY APPOINTMENT

Lodge your proxy by scanning the QR code below, and enter your registered postcode. It is a fast, convenient and a secure way to lodge your vote.

GENERAL MEETING PROXY FORM

I/We being shareholder(s) of Delecta Limited and entitled to attend and vote hereby:

APPOINT A PROXY

The Chair of  PLEASE NOTE: If you leave the section blank, the Chair OR the Meeting of the Meeting will be your proxy.

or failing the individual(s) or body corporate(s) named, or if no individual(s) or body corporate(s) named, the Chair of the Meeting, as my/our proxy to act generally at the Meeting on my/our behalf, including to vote in accordance with the following directions (or, if no directions have been given, and to the extent permitted by law, as the proxy sees fit), at the General Meeting of the Company to be held at Level 3, 101 St Georges Terrace, Perth, Western Australia, 6000 on 12 July 2022 at 9.00am (WST) and at any adjournment or postponement of that Meeting.

Chair’s voting intentions in relation to undirected proxies: The Chair intends to vote all undirected proxies in favour of all Resolutions. In exceptional circumstances, the Chair may change his/her voting intentions on any Resolution. In the event this occurs, an ASX announcement will be made immediately disclosing the reasons for the change.

Chair authorised to exercise undirected proxies on remuneration related resolutions: Where I/we have appointed the Chair of the Meeting as my/our proxy (or the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolutions 1, 8, 9 & 10 (except where I/we have indicated a different voting intention below) even though these resolution are connected directly or indirectly with the remuneration of a member(s) of key management personnel, which includes the Chair .

VOTING DIRECTIONS

	GENERAL MEETING PROXY FORM I/We being shareholder(s) of Delecta Limited and entitled to attend and vote hereby:
STEP 1	APPOINT A PROXY The Chair of the Meeting OR PLEASE NOTE:If you leave the section blank, the Chair of the Meeting will be your proxy. or failing the individual(s) or body corporate(s) named, or if no individual(s) or body corporate(s) named, the Chair of the Meeting, as my/our proxy to act generally at the Meeting on my/our behalf, including to vote in accordance with the following directions (or, if no directions have been given, and to the extent permitted by law, as the proxy sees fit), at the General Meeting of the Company to be held atLevel 3, 101 St Georges Terrace, Perth, Western Australia, 6000 on 12 July 2022 at 9.00am (WST)and at any adjournment or postponement of that Meeting. Chair’s voting intentions in relation to undirected proxies:The Chair intends to vote all undirected proxies in favour of all Resolutions. In exceptional circumstances, the Chair may change his/her voting intentions on any Resolution. In the event this occurs, an ASX announcement will be made immediately disclosing the reasons for the change. Chair authorised to exercise undirected proxies on remuneration related resolutions:Where I/we have appointed the Chair of the Meeting as my/our proxy (or the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolutions 1, 8, 9 & 10 (except where I/we have indicated a different voting intention below) even though these resolution are connected directly or indirectly with the remuneration of a member(s) of key management personnel, which includes the Chair .
	VOTING DIRECTIONS
STEP 2	Resolutions For Against Abstain*
	1 Disposal of Main Undertaking to Related Party ◼ ◼ ◼
	2 Change to Nature and Scale of Activities – Acquisition and Disposal ◼ ◼ ◼
	3 Consolidation of Capital ◼ ◼ ◼
	4 Issue of Consideration Shares to the Nabberu Shareholders in consideration for Acquisition ◼ ◼ ◼
	5 Public Offer ◼ ◼ ◼
	6 Approval to issue Options – Coral Brook Pty Ltd ◼ ◼ ◼
	7 Approval to Issue Lead Manager Options to CPS Capital ◼ ◼ ◼
	8 Approval to Issue Director Incentive Options– Malcolm Day ◼ ◼ ◼
	9 Approval to Issue Director Incentive Options – Bryan Hughes ◼ ◼ ◼
	10 Approval to Issue Director Incentive Options – David Wheeler ◼ ◼ ◼
	11 Director Participation in Public Offer - Malcolm Day ◼ ◼ ◼
	12 Director Participation in Public Offer - Bryan Hughes ◼ ◼ ◼
	13 Change of Company Name ◼ ◼ ◼
	14 Replacement of Constitution ◼ ◼ ◼
	* If you mark the Abstain box for a particular Resolution, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. 
	SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED
	Shareholder 1(Individual) Joint Shareholder 2(Individual) Joint Shareholder 3(Individual)
3	Sole Director and Sole CompanySecretary Director/CompanySecretary (Delete one) Director
STEP	This form should be signed by the shareholder. If a joint holding, all the shareholders should sign. If signed by the shareholder’s attorney, the power of
	attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed
	in accordance with the company’s constitution and the Corporations Act 2001 (Cth).
	Email Address
	Please tick here to agree to receive communications sent by the Company via email. This may include meeting notifications, dividend remittance, and selected announcements.

HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM

IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE MEETING, PLEASE BRING THIS FORM WITH YOU. THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE.

CHANGE OF ADDRESS

This form shows your address as it appears on Company’s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes.

APPOINTMENT OF A PROXY

If you wish to appoint the Chair as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chair, please write that person’s name in the box in Step 1. A proxy need not be a shareholder of the Company. A proxy may be an individual or a body corporate.

DEFAULT TO THE CHAIR OF THE MEETING

If you leave Step 1 blank, or if your appointed proxy does not attend the Meeting, then the proxy appointment will automatically default to the Chair of the Meeting.

VOTING DIRECTIONS – PROXY APPOINTMENT

You may direct your proxy on how to vote by placing a mark in one of the boxes opposite each resolution of business. All your shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any resolution by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given resolution, your proxy may vote as they choose to the extent they are permitted by law. If you mark more than one box on a resolution, your vote on that resolution will be invalid.

CORPORATE REPRESENTATIVES

If a representative of a nominated corporation is to attend the Meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A Corporate Representative Form may be obtained from Advanced Share Registry.

SIGNING INSTRUCTIONS ON THE PROXY FORM

Individual:

Where the holding is in one name, the security holder must sign.

Joint Holding:

Where the holding is in more than one name, all of the security holders should sign.

Power of Attorney:

If you have not already lodged the Power of Attorney with Advanced Share Registry, please attach the original or a certified photocopy of the Power of Attorney to this form when you return it.

Companies:

Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held.

LODGE YOUR PROXY FORM

PROXY VOTING BY KEY MANAGEMENT PERSONNEL

If you wish to appoint a Director (other than the Chair) or other member of the Company’s key management personnel, or their closely related parties, as your proxy, you must specify how they should vote on Resolutions 1, 8, 9 & 10, by marking the appropriate box. If you do not, your proxy will not be able to exercise your vote for Resolutions 1, 8, 9 & 10.

PLEASE NOTE: If you appoint the Chair as your proxy (or if they are appointed by default) but do not direct them how to vote on a resolution (that is, you do not complete any of the boxes “For”, “Against” or “Abstain” opposite that resolution), the Chair may vote as they see fit on that resolution.

APPOINTMENT OF A SECOND PROXY

You are entitled to appoint up to two persons as proxies to attend the Meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning Advanced Share Registry Limited or you may copy this form and return them both together.

To appoint a second proxy you must:

• (a) on each Proxy Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and

• (b) return both forms together.

COMPLIANCE WITH LISTING RULE 14.11

In accordance to Listing Rule 14.11, if you hold shares on behalf of another person(s) or entity/entities or you are a trustee, nominee, custodian or other fiduciary holder of the shares, you are required to ensure that the person(s) or entity/entities for which you hold the shares are not excluded from voting on resolutions where there is a voting exclusion. Listing Rule 14.11 requires you to receive written confirmation from the person or entity providing the voting instruction to you and you must vote in accordance with the instruction provided.

This Proxy Form (and any power of attorney under which it is signed) must be received at an address given below by 9.00am (WST) on 10 July 2022, being not later than 48 hours before the commencement of the Meeting. Proxy Forms received after that time will not be valid for the scheduled Meeting.

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ONLINE PROXY APPOINTMENT www.advancedshare.com.au/investor-login

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BY MAIL Advanced Share Registry Limited 110 Stirling Hwy, Nedlands WA 6009; or PO Box 1156, Nedlands WA 6909

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BY FAX +61 8 6370 4203 BY EMAIL admin@advancedshare.com.au IN PERSON Advanced Share Registry Limited 110 Stirling Hwy, Nedlands WA 6009 ALL ENQUIRIES TO Telephone: +61 8 9389 8033

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By lodging your proxy votes, you confirm to the company that you are in compliance with Listing Rule 14.11.