PEAKO LIMITED — Capital/Financing Update 2022

Aug 2, 2022

Shareholder Entitlement Offer to Fund Eastman PGE Drill Testing

3 August 2022

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Highlights

• 1 for 5 Non-Renounceable Entitlement Offer to raise approximately $1.2million

• Commitments exceeding $320,000 received from largest shareholder group

• New Shares to be issued at $0.02 per share

• One New Option to be granted for every New Share subscribed, exerciseable at $0.05 on or before 30 September 2025

• Pro-rata issue to existing shareholders, with opportunity to apply for unaccepted shares under a Priority Shortfall Offer

• Funds to support exploration activities including infill drilling at Eastman PGE Project, prior to onset of wet season

Peako Limited ( ASX: PKO ) is pleased to announce a 1 for 5 Non-Renounceable Prorata Entitlement Offer ( Rights Issue ) to raise additional capital up to approximately $1.2 million (before costs).

Funds will be used to support Peako’s exploration activities including supporting the ability to carry out infill drilling at its Eastman PGE Project, prior to commencement of this year’s wet season.

Overview

• The 1 for 5 Non-Renounceable Entitlement Offer will raise up to approximately $1.2 million of new capital

• New Shares to be issued at $0.02 per share together with the grant of one New Option for every new Share subscribed, exerciseable at $0.05 on or before 30 September 2025

• Funds will support Peako’s exploration activities, with a focus on its Eastman PGE drilling program

• Pro-rata issue to existing shareholders with opportunity to apply for unaccepted shares under a Priority Shortfall Offer

Eastman PGE Project

Peako’s Eastman PGE Project is focused on the Eastman Intrusion, a large underexplored intrusive complex that Peako considers has potential for a major PGE resource. It is located within the Central Zone of the Halls Creek Orogen, a province with established PGE endowment.

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Peako is presently undertaking a 4,500m RC drill program designed as a first-pass test of PGE endowment across the ultramafic stratigraphy along the Eastman Intrusion’s 16.5km strike length where historical data and anomalous PGE intercepts indicate the potential for an extensive PGE-mineralised system.

The initial 4,500m RC drill program is designed to identify zones of PGE mineralisation for follow-up infill drilling.

Encouraged by visual observation of the current RC drillholes completed to date (refer announcement dated 1 August 2022), and conscious of the short-drilling window offered in the Kimberley each year, Peako is inviting shareholders to participate in a modest raise to ensure the Company’s ability to fund infill drilling prior to commencement of this year’s wet season. Assay results from the first batch of drilling samples are anticipated to be received by mid-September.

Peako Chairman, Geoff Albers said:

“ We are currently testing PGE-endowment across the Eastman Intrusion and aim to be able to follow-up on areas identified in the first phase of drilling before the onset of this year’s wet season. To ensure we can do so, we need to strengthen our existing cash reserves.

Having reviewed various funding options available to the Company, the Board considers a Rights Issue is the fairest way to allow all shareholders to participate in this exciting forward program.

Shareholders are encouraged to review the Company’s latest Investor Presentation released today.

This issue will support our ability to carry out programs in timeframes that add the most value for shareholders.

I intend to participate in the Offer, personally and in respect of entities that I control, to a minimum of 80%, amounting to a further investment in Peako in excess of $320,000.”

Rights Issue Details

Peako shareholders are being offered the opportunity to acquire fully paid ordinary shares in the capital of the Company (New Shares) via a Non-Renounceable Entitlement Issue. The Rights Issue is on the basis of one (1) new Share for every five (5) shares held by eligible shareholders registered at 5.00pm (EST) on 8 August 2022 (Record Date), at an issue price of $0.02 (2 cents) per new Share (Offer Price) to raise up to approximately $1.2 million before costs (Offer). In addition, one New Option will be granted for every new Share subscribed, exerciseable at $0.05 on or before 30 September 2025.

The Offer Price represents a ~17.6% premium to the $0.017 closing price of Peako shares on the ASX on 2 August 2022 (the last trading day of Peako shares before this announcement) as well as to the Company’s 5-day VWAP of ~$0.017 (as determined on the 5 trading days prior to the date of this announcement).

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Eligible Peako shareholders will comprise those shareholders with a registered address in Australia or New Zealand.

Eligible Peako shareholders will also be given first opportunity to apply for additional shortfall shares beyond their 1 for 5 entitlements. In the event that demand for the additional shortfall shares exceeds the number of shortfall shares that are available (if any), then there will be a scale back on a pro-rata basis in accordance with their entitlement.

The Directors of the Company have reserved the right, subject to the requirements of the ASX Listing Rules and the Corporations Act 2001 (Cth), to place any shortfall shares in accordance with an allocation policy to be set out in the prospectus within 3 months of close of the Offer.

The Offer is not underwritten.

The Company is pleased to advise that its largest Shareholder group, representing the holdings of Chairman Mr Geoff Albers and his associates ( Albers Shareholders ), has committed to take up at least 80% of their Entitlements under the Entitlement Offer, amounting to an investment of approximately $320,000.

The Albers Shareholders presently hold 32.80% of Peako’s issued share capital and if no other Shareholders were to take up their entitlements, there is a chance that the Albers Shareholders’ voting power could increase by a maximum of 4.14% to 36.94%. To the extent that other Shareholders and Entitlements holders take up their Entitlement under the Offer, the Albers Shareholders’ voting power will not increase to the extent above.

To enable the Albers Shareholders to take up their full entitlements under the Rights Issue the Company intends to appoint, subject to ASIC approval, a nominee to sell new Shares that might otherwise have been issued to Shareholders resident outside of Australia and New Zealand (“ Ineligible Shareholders ”). The appointment of a nominee will ensure that the Rights Issue falls within the “rights issue” exception in Section 611 of the Corporations Act to the general prohibition on acquisition of shares contained in Section 610 of the Act.

In the event that the appointment of a nominee is not approved by ASIC, the Company may be required to limit the number of new Shares issued to Albers Shareholders to ensure that the Albers Shareholders voting interest does not increase by more than 3% from that six months ago. If no other applications are received under the Rights Issue, and appointment of a nominee is not approved, the total number of shares that can be issued to Albers Shareholders would be limited to approximately 14,387,831 new Shares (representing 71% of the Albers Shareholders total entitlements) which will result in the Company receiving funds of $287,756).

Assuming all entitlements are accepted, or if all shortfall shares are placed, following completion of both the Offer and the Shortfall Placement, the Company will have issued approximately 61.69 million new Shares, resulting in a total of approximately 370.14 million fully paid ordinary shares on issue. A total of 61.69 New Options will also have been allotted.

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Peako intends to apply the funds raised from the Offer to the following:

• To fund exploration work at its East Kimberley project, focussing on drilling at its Eastman PGE Project

• To fund general corporate activities and capital raising costs.

Offer Documents

Further information regarding the Entitlement Offer, including how Eligible Shareholders may apply for their Entitlement, will be set out in a prospectus to be released to ASX today ( Prospectus ). A copy of the Prospectus (including a personalised entitlement and acceptance form) will be sent to Eligible Shareholders on or about 10 August 2022. Those Shareholders who the Company determines to be Ineligible Shareholders will also be notified by letter.

Indicative Timetable

The proposed timetable for the Offer is set out below. The dates are indicative and the Company reserves the right to vary the dates including the right to extend the closing date.

Company reserves the right to vary the dates including the date.	right to extend the closing
Lodgement of Prospectus with ASIC Lodgement of Prospectus & Appendix 3B with ASX	3 August 2022
Existing Shares quoted on an "ex" basis	5 August 2022
Record Date for determining Entitlements	8 August 2022
Prospectus despatched to Eligible Shareholders and Offer opening date	10 August 2022
Last day to extend the Closing Date	25 August 2022
Closing Date	30 August 2022
New Shares quoted on a deferred settlement basis	31 August 2022
ASX notified of Shortfall	2 September 2022
Issue of New Shares and allotment of New Options Lodgement of Appendix 2A applying for quotation of the New Shares. Deferred settlement trading ends	6 September 2022
Quotation of new Shares commences	7 September 2022

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Enquiries

The Prospectus and associated ASX releases will be made available on the Company’s website at www.peako.com.au and on ASX.

Copies of the Prospectus and Entitlement Forms will be sent to all eligible shareholders (by mail or email in accordance with their respective communication elections) and will also be accessible to download on the Peako website at www.peako.com.au as from the Offer opening date.

For enquiries in regard to individual shareholdings please contact Automic Registry Services on 1300 288 664 (within Australia) or +61 (0) 2 9698 5414 (outside Australia).

For all other enquiries, visit www.peako.com.au or contact:

Rae Clark

Director, Peako Limited | +61 3 8610 4723 | info@peako.com.au | |

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