PTR MINERALS LTD - Capital/Financing Update 2018

PETRATHERM LIMITED

ACN 106 806 884

PROSPECTUS

For the offer of 100,000,000 ordinary Shares at an offer price of $0.04 each to raise $4,000,000.

Oversubscriptions of up to a further 25,000,000 ordinary Shares at an offer price of $0.04 each to raise up to a further $1,000,000 may be accepted.

This Prospectus is a re-compliance prospectus for the purposes of satisfying Chapters 1 and 2 of the

ASX Listing Rules and to satisfy ASX requirements for re-listing following a change to the nature and scale of the Company’s activities.

Important Information

This document provides important information to assist prospective investors in deciding whether or not to invest in the Company. It should be read in its entirety. If you do not understand it, you should consult your professional advisers.

THE SHARES OFFERED UNDER THIS PROSPECTUS ARE OF A SPECULATIVE NATURE.

IMPORTANT NOTICES

Change In Nature and Scale - ReCompliance with Chapters 1 and 2 of the ASX Listing Rules

The Company has historically operated as a geothermal and oil and gas exploration company with tenement interests in South Australia, Spain and Tasmania.

Petratherm has divested its interests in the Spanish and Tasmanian projects, and Petratherm and its joint venture partner Beach Energy Limited (ASX Code: BPT) ( Beach Energy ) resolved in June 2016 to plug and abandon the Paralana 2 geothermal well and complete surface rehabilitation before undertaking a formal surrender of Petratherm’s Paralana Geothermal Energy Licence (GEL 156). Beach Energy completed planning studies to undertake the plugging and abandonment of the Paralana 2 geothermal well and surface rehabilitation of the site, but at the date of this Prospectus, the remediation work has not been initiated.

On 25 May 2017, Petratherm’s securities were suspended from quotation on the ASX as Petratherm’s operations were, in ASX’s opinion, not sufficient to warrant the continued quotation of Petratherm’s securities and its continued listing on the ASX. Petratherm’s securities have remained suspended since that date.

However, as announced to ASX on 15 December 2017 and 27 December 2017 respectively, the Company has entered into:

a Letter Agreement (which has since been formalised by a Mining Farm-In and Joint Venture Agreement) to acquire up to a 75% interest in a silver, lead and zinc prospective tenement, EL

5497 ( MGV Tenement ), from Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV) ( Musgrave ); and

 a Tenement Purchase Agreement to acquire two gold and base-metal prospective tenements, EL 5306 and EL 5717 ( SAEX Tenements ), from SAEX Pty Ltd ACN 154 922 728 ( SAEX ).

In addition, as disclosed in the Company’s Notice of Extraordinary General Meeting dated 25 January 2018, the Company has applied for ELA 2017/250 ( Gilles Downs Tenement ) in respect of an area in Gilles Downs, South Australia which adjoins the MGV Tenement.

The acquisition of the abovementioned interests in the MGV Tenement, the SAEX Tenements and the Gilles Down Tenement (together, the Project Acquisition ) will result in a significant change to the nature and scale of the Company’s activities which requires approval of its Shareholders under Chapter 11 of the ASX Listing Rules.

The Company has convened a general meeting of its Shareholders to be held on or about 28 February 2018 to seek Shareholder approval for, amongst other approvals, the change in nature and scale of the Company’s activities and the Consolidation of the Company’s Shares. A copy of the notice of meeting is available on ASX’s website.

conditions referred to in those resolutions and the satisfaction or waiver of the conditions precedent in the Mining Farm-In and Joint Venture Agreement and the Tenement Purchase Agreement. If Resolutions 1 to 10 are not passed, the conditions referred to in those resolutions are not satisfied or the conditions precedent in the Mining Farm-In and Joint Venture Agreement or the Tenement Purchase Agreement are not satisfied or waived, this Offer will not proceed, no Shares will be allotted pursuant to this Prospectus and the Company will repay all money received from Applicants without interest.

The Company must comply with ASX requirements to re-list on ASX, which include re-complying with Chapters 1 and 2 of the ASX Listing Rules. This Prospectus is issued to assist the Company to re-comply with these requirements.

This Prospectus is dated 14 February 2018 and was lodged with the Australian Securities and Investments Commission ( ASIC ) on that date. Neither ASIC nor ASX Ltd ( ASX ) takes any responsibility for the contents of this Prospectus. No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. The Directors of and advisers to the Company do not guarantee the success of the Company, repayment of capital, payment of dividends or the price at which Shares will trade on ASX.

Electronic Prospectus

This Prospectus will be issued in paper form and as an electronic Prospectus which may be accessed on the internet at

www.petratherm.com.au. The Offer of Shares pursuant to the paper form or electronic Prospectus is only available to persons receiving this Prospectus in Australia. The Corporations Act

prohibits any person passing onto another person the Application Form unless it is attached to, or accompanied by, the complete and unaltered version of this Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the Company by email at [email protected].

Financial Forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

Consolidation of Capital

Unless otherwise stated, all references to securities of the Company as set out in this Prospectus are on the basis that the proposed Consolidation (on a two-for-one basis) of the Company’s capital (proposed for Shareholder approval at the general meeting of Shareholders to be held on or about 28 February 2018) has been implemented.

Foreign Jurisdictions

This Prospectus does not constitute an offer or invitation in any place in which, or to persons to whom, it would not be lawful to make an offer. Distribution of this Prospectus in jurisdictions outside Australia may be restricted by law, and persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Failure to comply with such restrictions may constitute a violation of

applicable securities laws.

Risk Factors

Potential investors should be aware that subscribing for Shares in the Company involves a number of risks. The key risk factors of which investors should be aware are set out in Section 1.7 and Section 4 of this Prospectus. These risks together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Shares in the future. Accordingly, an investment in the Company should be considered highly speculative. Investors should consider consulting their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

Forward Looking Statements

This Prospectus may contain forward looking statements or information. Forward-looking statements can be identified by the use of words such as ‘may’, ‘should’, ‘will’, ‘expect’, ‘anticipate’, ‘believe’, ‘estimate’, ‘intend’, ‘scheduled’ or ‘continue’ or similar expressions. Such statements and information are subject to risks and uncertainties and a number of assumptions, which may cause the actual results or events to differ materially from the expectations described in such forward looking statements or information. Whilst the Company considers the expectations reflected in any perceived forward looking statements or information in this Prospectus are reasonable, no assurance can be given that such expectations will prove to be correct. The risk factors outlined in Section 1.7 and in Section 4 of this Prospectus, as well as other matters as not yet known to the Company or not currently considered material by the Company, may cause actual

events to be materially different from those expressed, implied or projected in any perceived forward looking statements or information. Any forward looking statements or information contained in this Prospectus is qualified by this cautionary statement.

Website Address

The Prospectus can be downloaded from www.petratherm.com.au.

Photographs and Diagrams

Items and undertakings depicted in photographs and diagrams in this Prospectus are not assets of the Company, unless otherwise stated. Diagrams appearing in this Prospectus are illustrative only and may not be drawn to scale.

Definitions

Throughout this Prospectus abbreviations and defined terms are used. Abbreviations and legal terms are contained in the Definitions in Section 12 of this Prospectus. Technical terms are defined in the Independent Geologist’s Report included in Section 7 of this Prospectus. Defined terms are generally identified by the uppercase first letter.

Conditions Precedent

P a g e | 2

resolutions are not satisfied or if the conditions precedent in the Mining Farm-in and Joint Venture Agreement or the Tenement Purchase Agreement are not satisfied or waived, this Offer will not proceed, no Shares will be allotted pursuant to this Prospectus and the Company will repay all money received from Applicants without interest.

Disclaimer

No person is authorised to give any information or to make any representation in connection with the Offer described in this Prospectus that is not contained in this Prospectus. Any information not so contained may not be relied upon as having been authorised by the Company or any other person in connection with the Offer. You should rely only on information in this Prospectus.

P a g e | 3

Key Offer Information

Key Dates

Key Dates
Lodgement of this Prospectus with ASIC and ASX	14 February 2018
General Meeting of Petratherm’s Shareholders	28 February 2018
Opening Date of the Offer	1 March 2018
Expected Closing Date of the Offer	15 March 2018
Issue of Shares under this Prospectus	22 March 2018
Despatch of holding statements	29 March 2018
Expected Date for re-quotation of Shares on ASX	29 March 2018

Note: This timetable is indicative only. Unless otherwise indicated, all times are in Adelaide Time. The Company and the Lead Manager reserve the right to vary the dates and times of the Offer, including to close the Offer early or to accept late Applications, either generally or in particular cases, without notification. Investors are encouraged to submit their Applications as soon as possible.

Key Offer Statistics

Key Offer Statistics
Company Name	Petratherm Limited (ACN 106 806 884)
ASX Code	PTR
Securities Offered	Fully paid ordinary shares
Issue Price per Offer Share	$0.04 per Share
Minimum number of Shares available under the Offer	100,000,000 Shares
Gross proceeds from the Offer based on the Minimum Subscription being raised (and before exercise of any Options)	$4,000,000
Total number of Shares and Options on issue at Completion of the Offer based on Minimum Subscription	151,403,752 Shares 14,570,188 Options
Total number of Shares available under the Offer based on the Maximum Subscription being raised	125,000,000 Shares
Gross proceeds from the Offer based on the Maximum Subscription being raised	$5,000,000
Total number of Shares and Options on issue at Completion of the Offer based on Maximum Subscription (and before exercise of any Options)	176,403,752 Shares and 15,320,188 Options

How to Invest

Applications for Shares can only be made by completing and lodging the Application Form included in or accompanying this Prospectus.

Instructions on how to apply for Shares are set out in Section 2.6 of this Prospectus.

P a g e | 4

CONTENTS
IMPORTANT NOTICES	1 - 3
KEY OFFER INFORMATION	4
CORPORATE DIRECTORY	6
LETTER FROM THE CHAIRMAN	7 – 9
KEY ISSUES SUMMARY	10 – 18
SECTION 1: INVESTMENT OVERVIEW	19 – 30
SECTION 2: DETAILS OF THE OFFER	31 – 34
SECTION 3: OVERVIEW OF THE COMPANY, THE	35 – 46
PROJECT ACQUISITION AND THE PROJECTS
SECTION 4: RISKS	47 – 51
SECTION 5: FINANCIAL INFORMATION	52 – 63
SECTION 6: INDEPENDENT LIMITED ASSURANCE	64 – 67
REPORT
SECTION 7: INDEPENDENT GEOLOGIST’S REPORT	68 – 137
SECTION 8: SOLICITOR’S REPORT ON TENEMENTS	138 – 154
SECTION 9: MATERIAL CONTRACTS	155 – 158
SECTION 10: ADDITIONAL INFORMATION	159 – 173
SECTION 11: DIRECTORS’ CONSENTS	174
SECTION 12: DEFINITIONS	175 – 177
APPLICATION FORM AND INSTRUCTIONS TO
INVESTORS

P a g e | 5

34638 : 1251591

Corporate Directory

Current Directors

Simon Thomas O’Loughlin - Non-Executive Chairman (To be Non-Executive Director post Reinstatement) Donald Clinton Stephens - Non-Executive Director (To be Non-Executive Director post Reinstatement) Andrew John Haythorpe - Non-Executive Director (To resign post Reinstatement)

Incoming Director (to be appointed post Reinstatement)

Derek Carter – To be Non-Executive Chairman post Reinstatement

Solicitors to the Company

O’Loughlins Lawyers Level 2, 99 Frome Street Adelaide SA 5000

Investigating Accountant and Auditor

Grant Thornton Audit Pty Ltd Grant Thornton House Level 3 170 Frome Street Adelaide SA 5000

Lead Manager

Company Secretary

Donald Clinton Stephens

Taylor Collison Limited Level 16, 211 Victoria Square Adelaide SA 5000

Registered Office

HLB Mann Judd (SA) Pty Ltd Level 1, 169 Fullarton Road Dulwich SA 5065 Email: [email protected] Website: www.petratherm.com.au

Independent Geologist

Metalzoic PO Box 224 Unley BC SA 5061

Share Registrar

Computershare Investor Services Pty Limited Level 5 115 Grenfell Street ADELAIDE SA 5000 Website: www.computershare.com/au

P a g e | 6

34638 : 1251591

LETTER FROM THE CHAIRMAN

14 February 2018

Dear Investor,

On behalf of the Directors of Petratherm Limited ACN 106 806 884 ( Petratherm or the Company ), it is my pleasure to introduce this Prospectus to you and invite you to become a shareholder of the Company.

This Prospectus has been issued by Petratherm to enable the Company to re-comply with Chapters 1 and 2 of the ASX Listing Rules and for the offer of 100,000,000 new Shares at $0.04 per Share to raise $4,000,000 (up to a further 25,000,000 Shares at $0.04 per Share may be accepted as oversubscriptions to raise up to a further $1,000,000) ( Offer ).

Petratherm was incorporated on 24 October 2003 and has historically operated as a geothermal and oil and gas company with tenement interests in Spain, South Australia and Tasmania. Petratherm has divested its interests in the Spanish and Tasmanian projects, and Petratherm and its joint venture partner Beach Energy Limited (ASX Code: BPT) ( Beach Energy ) resolved in June 2016 to plug and abandon the Paralana 2 geothermal well and complete surface rehabilitation before undertaking a formal surrender of Petratherm’s Paralana Geothermal Energy Licence (GEL 156). Beach Energy completed planning studies to undertake the plugging and abandonment of the Paralana 2 geothermal well and surface rehabilitation of the site, but at the date of this Prospectus, the remediation work has not been initiated.

However, as announced to ASX on 15 December 2017 and 27 December 2017, the Company has now moved into an exciting new phase of its development by entering into a Letter Agreement (which has since been formalised by a Mining Farm-in and Joint Venture Agreement) to acquire up to a 75% interest in a silver, lead and zinc prospective tenement, EL 5497 ( MGV Tenement ), from Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV) ( Musgrave ) and a Tenement Purchase Agreement to acquire two gold and base-metal prospective tenements (EL 5306 and EL 5717 ( SAEX Tenements )) from SAEX Pty Ltd ACN 154 922 728 ( SAEX ).

In addition, as disclosed in Petratherm’s Notice of Extraordinary General Meeting dated 25 January 2018, Petratherm has applied for ELA 2017/250 ( Gilles Downs Tenement ) in respect of an area in Gilles Downs, South Australia which adjoins the MGV Tenement.

The Company will be well capitalised following the minimum $4 million equity raising comprising this Offer. Existing and new funds will be primarily directed to exploration expenditure and working capital.

The acquisition of interests in the MGV Tenement, the SAEX Tenements and the Gilles Down Tenement (together, the Project Acquisition ) will result in a significant change to the nature and scale of the Company’s activities and as such requires approval of its Shareholders under Chapter 11 of the ASX Listing Rules. The Company has convened a general meeting of its Shareholders to be held on or about 28 February 2018 to seek Shareholder approval for, amongst other approvals, the change in nature and scale of the Company’s activities and the Consolidation of the Company’s Shares.

Further details of the Mining Farm-In and Joint Venture Agreement and the Tenement Purchase

P a g e | 7

Agreement are contained in Section 9.1 of this Prospectus.

The restructured Board that will be in place post Reinstatement has the necessary background to ensure there is focus on sound development of the Company’s business targets whilst seeking to build shareholder wealth in the process. Further details on each of the Company's current and proposed Directors are contained in Section 1.15 of this Prospectus.

The Directors believe that the decision to complete the Project Acquisition will deliver a significant opportunity to create increased value for current and future shareholders. The Board believe the main drivers of value from the Project Acquisition and Capital Raising are:

Allowing the Company’s securities to be reinstated to quotation on the ASX.
Likely increased liquidity in the securities of the Company, both due to the ability for investors to recommence trading in the Company’s securities and due to anticipated increased investor interest in the Company having regard to the sparse trading of its securities prior to its suspension from quotation.
The Project Acquisition provides current and future shareholders of the Company with exposure to mineral exploration opportunities, and the Company will be well capitalised following the successful completion of the Offer and intends to direct existing and new funds to developing the Company’s interests in the Projects.

The Company will seek to divest its remaining interest in the Paralana 2 geothermal well once the plugging and rehabilitation of the site has been complete and will focus on the mineral exploration opportunities presented by the Project Acquisition. This Prospectus, having been prepared on the basis that the Company will shortly seek to finalise the divestment of that interest, does not therefore contain detailed reporting of the Company’s geothermal exploration project.

The Petratherm Board believes the proposed Project Acquisition and change of business are both very positive and in the best interests of current and future shareholders.

However, as with any investment, there are risks associated with investing in the Company. The key risks are identified in Section 1.7 of this Prospectus, and other risks are identified in Section 4 of this Prospectus. The key risks include:

Mineral exploration is inherently associated with risk and there is no assurance that recoverable mineral resources will be identified. Even if identified, other factors such as technical difficulties, geological conditions, adverse changes in government policy or legislation or lack of access to sufficient funding may mean that the resource is not economically recoverable or may otherwise preclude the Company from successfully exploiting the resource.
The Company’s Directors and incoming Director have significant experience in the mining exploration industry, and initially, the Company will rely heavily on the experience of its Directors. The loss of the services of certain personnel could have an adverse effect on the Company and its activities.
Commodity prices are subject to influencing factors beyond the control of the Company and can be subject to significant fluctuations, including as a result of world demand for particular commodities, the level of production costs in major commodity producing regions and expectations regarding inflation, interest rates and exchange rates. Any significant and/or sustained fluctuation in exchange rates or commodity prices could have a materially adverse effect on the Company’s operations and its financial position.
The funds raised by the Capital Raising will be used to carry out work on the Company’s Projects. If the Company incurs unexpected costs or is unable to generate sufficient operating

P a g e | 8

income, further funding may be required. The Company may require additional funding to carry out further exploration, undertake feasibility studies, develop mining operations and/or acquire new projects. Any additional financing through share issues will dilute existing shareholdings. Debt financing may not be available to support the scope and extent of proposed developments. If available, it may impose restrictions on operating activities or anticipated expansion of the Company’s operations.

These key risks are discussed in further detail in Section 1.7 of this Prospectus.

This Prospectus contains detailed information about Petratherm and its business, subject to the Project Acquisitions completing, and includes an Independent Geologist’s Report. Please read this Prospectus carefully before you make a decision to invest and, where necessary, consult with your professional advisers.

Yours sincerely

==> picture [101 x 66] intentionally omitted <==

Simon O’Loughlin Non-Executive Chairman

P a g e | 9

Key Issues Summary

The information set out in this Section is intended to be a summary only and should be read in conjunction with the more detailed information elsewhere in this Prospectus. In deciding whether to apply for Shares under the Offer, you should read this Prospectus carefully and in its entirety and consult your professional advisers.

Question	Answer	More information
Introduction and overview of the Company and the Project Acquisition
What is the business of the Company?	Upon completion of the Offer and the Project Acquisition, the Company will hold the following interests:  the right to earn up to a 75% interest in a silver, lead and zinc prospective tenement, EL 5497 (MGV Tenement), from Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV) ;  two gold and base-metal prospective tenements, EL 5306 and EL 5717; and  ELA 2017/250 (Gilles Downs Tenement) in respect of an area in Gilles Downs, South Australia which adjoins the MGV Tenement. The Company intends to operate in the mineral exploration business, and will focus on exploring and developing its interests in the Projects.	Section 1.2, 1.3 Section 3.2, 3.3
How does Petratherm generate its income and what are its key costs?	Petratherm does not currently derive any income from mineral exploration activities, and does not anticipate any such income in the immediate future. Petratherm’s key costs are anticipated to be the costs of the Offer, exploration expenditure and working capital, and administrative and compliance costs.	Sections 3.2, 3.3 and 3.4
Who are Petratherm’s customers?	Petratherm does not currently have any customers, and does not anticipate achieving any sales to customers in the immediate future.	Section 3.2
Where are Petratherm’s operations located?	Petratherm’s registered office is located at Level 1, 169 Fullarton Road, Dulwich SA 5065. The Projects are located in Corunna, Gilles Downs and Walparuta, South Australia.	Section 3
Who are Petratherm’s competitors?	Petratherm will compete in the highly competitive mineral exploration market with its competitors including listed and unlisted companies of various sizes.	Section 3.2, Section 4.3

P a g e | 10

Question	Answer	More information
What is Petratherm’s strategy?	The Company’s business strategy (post Project Acquisition) centres on the following key elements:  the conduct of exploration on the Projects and, if warranted, the development of mining operations;  The active pursuit of other opportunities, both in Australia and overseas, with the aim of creating value for the Company’s shareholders.	Section 3.3
Directors and key management
Who are the current and incoming Directors of the Company and what is their experience?	Post Reinstatement, the Board will be comprised of three independent Directors, all of whom are highly experienced ASX listed company directors. The current and incoming Directors are as follows: Current Directors 1. Simon O’Loughlin –Non-Executive Chairman 2. Donald Stephens – Independent Non-Executive Director 3. Andrew Haythorpe - Non-Executive Director Directors (post Reinstatement) 1. Derek Carter – Independent Non-Executive Chairman 2. Simon O’Loughlin –Non-Executive Director 3. Donald Stephens – Independent Non-Executive Director See Section 1.15 for more information on the Company’s Directors and Proposed Director and their experience. Donald Stephens will continue to act as the Company Secretary.	Section 1.15
Who will be the leadership team of the Company post Reinstatement and what is their expertise?	The Company’s operations will be led by its Directors, headed by Derek Carter. Derek Carter BSc, MSc, FAusIMM(CP) – Non-executive Chairman (post Reinstatement) Mr Carter has over 40 years’ experience in exploration and mining geology and management. He held senior positions in the Shell Group of Companies and Burmine Ltd before founding Minotaur Gold NL in 1993. He is the Chairman of Highfield Resources Ltd, former Chairman of Petratherm Limited (resigned 31 March 2014) and Minotaur Exploration Ltd (resigned November 2016), and a former board member of Intrepid Mines Ltd (resigned November 2015) and Mithril Resources Ltd (resigned December 2014), all ASX listed companies. Mr Carter is a former President of the South Australian Chamber of Mines and Energy, former board member of the Australian Gold Council,is a member of the South Australian	Section 1.15

P a g e | 11

Question	Answer	More information
	Minerals and Petroleum Experts Group and the Minerals and Energy Advisory Council, and a former Chairman of the Minerals Exploration Advisory Group. He was awarded AMEC’s Prospector of the Year Award (jointly) in 2003 and is a Centenary Medallist. See Section 1.15 for more information on the Company’s leadership team, post Reinstatement.
Overview of the Offer and the Project Acquisition
Who is the issuer of this Prospectus?	Petratherm Limited ACN 106 806 884 (ASX Code: PTR)	Section 2.2
The Project Acquisition	The Company has entered into:  a Mining Farm-In and Joint Venture Agreement to acquire up to a 75% interest in a silver, lead and zinc prospective tenement, EL 5497 (MGV Tenement), from Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV); and  a Tenement Purchase Agreement to acquire two gold and base-metal prospective tenements, EL 5306 and EL 5717, from SAEX Pty Ltd ACN 154 922 728. In addition, the Company has applied for ELA 2017/250 in respect of an area in Gilles Downs, South Australia which adjoins the MGV Tenement. Details of the Mining Farm-In and Joint Venture Agreement and the Tenement Purchase Agreement are contained in Section 9.1 of this Prospectus and details of Petratherm’s business and the Projects are contained in Section 3 of this Prospectus.	Section 1.3 Section 3.2 Section 9.1
What is the Offer?	An offer of new Shares at an Offer Price of $0.04 per Share to raise a minimum of $4 million (Minimum Subscription), with the ability to receive oversubscriptions of $1 million to raise a maximum of $5 million (Maximum Subscription). The purpose of the Offer is to facilitate an application by the Company for re-admission of the Company to the official list of ASX and to raise at least $4,000,000. The Company is seeking to satisfy Chapters 1 and 2 of the ASX Listing Rules and to satisfy ASX requirements for re-listing following a change to the nature and scale of the Company’s activities. The Offer is for fully paid ordinary shares in the capital of the Company ranking equally with existing Shares on issue. For details relating to the rights and liabilities of the Shares, refer to Section 10.4.	Section 1.8 Section 1.10 Section 2.2 Section 10.4

P a g e | 12

Question	Answer	More information
What happens if the Minimum Subscription is not received?	The Minimum Subscription for the Offer to proceed is $4 million. If the Minimum Subscription is not obtained within four months after the date of this Prospectus (or any longer period permitted by law), the Company will repay all Application Money in full without interest as soon as practicable or issue a supplementary or replacement prospectus and allow Applicants one month to withdraw their Applications and be repaid their Application Money in full without interest. In this circumstance, the Project Acquisition will not occur and trading in the Company’s Shares on ASX will remain suspended.	Section 2.2
What is the Company’s Share Capital Structure on Completion of the Offer?	The Company’s indicative share capital structure at the various levels of subscription will be: Minimum Maximum Subscription Subscription $4 million $5 million Existing shares on issue (pre Consolidation) 100,307,503 100,307,503 Existing shares on issue (post Consolidation) 50,153,752 50,153,752 Issued to SAEX (post Consolidation) 1,250,000 1,250,000 Shares issued under this Prospectus (post Consolidation) 100,000,000 125,000,00 Total Shares on issue at Reinstatement (post Consolidation) 151,403,752 176,403,752	Section 1.11
What is the proposed use of proceeds received in connection of with the Offer?	The Company’s primary use of funds will be to pay for:  Costs of the Offer;  Capital Raising fees; and  Exploration expenditure / working capital.	Section 1.13
How is the Offer structured? And where will the Offer be made?	The Offer presented in this Prospectus is open to investors who have a registered address in Australia. No action has been taken to register or qualify the Shares, or, otherwise permit a public offering of the Shares the subject of this Prospectus, in any jurisdiction outside Australia. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.	Section 2.12
Is the Offer	The Offer is not underwritten.	Section 2.14

P a g e | 13

Question	Answer	More information
underwritten?
Who is the Lead Manager?	Taylor Collison Limited has been appointed as the Lead Manager.	Section 9.3
What fees and costs are payable to the Lead Manager?	The Company will pay the Lead Manager a fee equal to 1% the total proceeds raised under the Offer, and a selling fee of 5% of funds raised by the Lead Manager, for its role in managing the Offer. In addition, the Company will issue to the Lead Manager that number of Options equating to 5% of the issued capital of the Company (calculated post completion of the Issue) on the terms set out in Section 10.5(a) of this Prospectus. In addition, the Company will reimburse the Lead Manager for all reasonable out of pocket expenses incurred by the Lead Manager and legal fees capped at $15,000.	Section 9.3
When will the Shares be quoted?	The Company will apply to ASX within seven days of the date of this Prospectus, for quotation of the Shares issued pursuant to this Prospectus. Quotation of the Shares is expected to occur on 29 March 2018 (this date is subject to change). If approval for Quotation of the Shares is not granted within three months after the date of this Prospectus (or any longer period permitted by law), the Company will withdraw the Offer and refund all Application Money received without interest as soon as practicable in accordance with the requirements of the Corporations Act or issue a supplementary or replacement prospectus and allow Applicants one month to withdraw their Applications and be repaid their Application Money in full without interest.	Section 2.10
Are there any restrictions on the disposal of Shares?	Upon Completion of the Offer and subject to the ASX Listing Rules, the Shares issued under this Prospectus will not be subject to any restrictions on disposal. It is expected that the Shares to be issued to SAEX pursuant to the Tenement Purchase Agreement, and the Options to be issued to the Directors and Taylor Collison will be subject to escrow requirements imposed by ASX.	Section 1.21 Section 10.2(b)
What is the allocation policy?	The allocation of Shares will be determined by the Lead Manager and the Directors in their sole discretion.	Section 2.7 Section 2.8
Is there any brokerage, commission or stamp duty payable by Applicants?	No brokerage, commission or stamp duty is payable by Applicants on acquisition of Shares under the Offer.	Section 2.9
What are the tax implications	The taxation consequences of an investment in the Shares will depend onyourparticular circumstances. It isyour	Section 1.19

P a g e | 14

Question	Answer	More information
of investing in the Shares?	responsibility to make your own enquiries concerning the taxation consequences of an investment in the Company.
How can I apply?	Applications for Shares can only be made by completing and returning the Application Form attached to this Prospectus, together with payment in full for the quantity of Shares being applied for. Applications must be for a minimum of 50,000 Shares ($2,000) and thereafter in multiples of 5,000 Shares ($200). To the extent permitted by law, an Application by an Applicant under the Offer is irrevocable. See Section 2.6 for further information on how to apply.	Section 2.6
When will I receive confirmation that my Application is successful?	The Company expects that holding statements confirming Applicants’ allocations under the Offer will be sent to successful Applicants by regular post about seven days after the Closing Date.	Section 2.7
CHESS and Issuer Sponsorship	The Company participates in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company.	Section 2.11
When are the Shares expected to commence trading?	It is expected that shares will commence trading on ASX on a normal settlement basis on or about 29 March 2018. After re-quotation, Shareholders and other investors may buy or sell Shares at the prevailing market price. There may or may not be a liquid market for Shares, and the Shares may trade above or below the Offer Price. It is the responsibility of each Applicant to confirm their holding before trading Shares. Applicants who sell Shares before they receive an initial holding statement do so at their own risk.	Section 2.10
Can the Offer be withdrawn?	Yes. The Company reserves the right not to proceed with the Offer at any time before the issue of Shares to successful Applicants. If the Offer does not proceed, Application Monies will be refunded. No interest will be paid on any Application Monies refunded as a result of the withdrawal of the Offer.	Section 2.6, Section 2.7
Is there a cooling off period?	No.	Section 2.6
Where can I find more information about this Prospectus or	If you would like more information or have any questions relating to the Offer, please call the Company on (08) 8133 5000 (within Australia) or +61 8 8133 5000 (outside Australia). An electronic copy of the Prospectus can be downloaded at	Section 2.15

P a g e | 15

Question	Answer	More information
the Offer?	www.petratherm.com.au. If you are uncertain as to whether an investment in the Company is suitable for you, please contact your stockbroker, financial adviser, accountant, lawyer or other professional adviser.
Key strengths and key risks
What are the key strengths of the Company and the Project Acquisition?	The key strengths of the Company and the Project Acquisition are:  Allowing the Company’s securities to be reinstated to quotation on the ASX.  Likely increased liquidity in the securities of the Company, both due to the ability for investors to recommence trading in the Company’s securities and due to anticipated increased investor interest in the Company having regard to the sparse trading of its securities prior to its suspension from quotation.  The Project Acquisition provides current and future shareholders of the Company with exposure to mineral exploration opportunities, and the Company will be well capitalised following the successful completion of the Offer and intends to direct existing and new funds to developing the Company’s interests in the Projects.	Section 1.5
What are the key risks?	The key risks are:  Mineral exploration is inherently associated with risk and there is no assurance that recoverable mineral resources will be identified. Even if identified, other factors such as technical difficulties, geological conditions, adverse changes in government policy or legislation or lack of access to sufficient funding may mean that the resource is not economically recoverable or may otherwise preclude the Company from successfully exploiting the resource.  The Company’s Directors and incoming Director have significant experience in the mining exploration industry, and initially, the Company will rely heavily on the experience of its Directors. The loss of the services of certain personnel could have an adverse effect on the Company and its activities.  Commodity prices are subject to influencing factors beyond the control of the Company and can be subject to significant fluctuations, including as a result of world demand for particular commodities, the level of production costs in major commodity producing	Section 1.7, Section 4.2

P a g e | 16

Question	Answer	More information
	regions and expectations regarding inflation, interest rates and exchange rates. Any significant and/or sustained fluctuation in exchange rates or commodity prices could have a materially adverse effect on the Company’s operations and its financial position.  The funds raised by the Capital Raising will be used to carry out work on the Company’s Projects. If the Company incurs unexpected costs or is unable to generate sufficient operating income, further funding may be required. The Company may require additional funding to carry out further exploration, undertake feasibility studies, develop mining operations and/or acquire new projects. Any additional financing through share issues will dilute existing shareholdings. Debt financing may not be available to support the scope and extent of proposed developments. If available, it may impose restrictions on operating activities or anticipated expansion of the Company’s operations.
Significant interests of key people
Who are the significant shareholders of the Company and what is their interest in the Company upon completion of the Offer and the Project Acquisition?	The key Shareholders in Petratherm Limited are currently as follows, and their Shareholding upon Reinstatement at the various levels of subscription are noted below: Shareholder Shares Held % Ownership as at date of this Prospectus % Ownership at Minimum Subscription % Ownership at Maximum Subscription Ouro Pty Ltd 2,750,000 5.48% 1.82% 1.56% Greenslade Holdings Pty Ltd 2,739,638 5.46% 1.81% 1.55% Calama Holdings Pty Ltd 2,666,442 5.32% 1.76% 1.51% Total 8,156,080 16.26% 5.39% 4.62%* Assumes the issue of the Consideration Shares has taken place, no Options are exercised after the date of this Prospectus and before Reinstatement, and the Shareholders do not participate in the Offer.	Section 1.12
What significant benefits are payable to Directors and the other persons connected with the Company or the Offer and	Messrs Simon O’Loughlin and Donald Stephens will each be paid a director’s fee of $36,000 per annum (inclusive of statutory superannuation). The Company’s incoming Non-executive Chairman will be paid a director’s fee of $50,000 per annum (inclusive of statutory superannuation). Directors are also entitled to be reimbursed for travelling and other expenses reasonably incurred in attending to the business of the Company. The maximum interests that the Directors will hold in the Company upon Reinstatement at the Minimum Subscription and Maximum	Section 1.16

P a g e | 17

Question	Answer	More information	More information
what significant interests do they hold?	Subscription is noted below (on a post-Consolidation basis): Shares beneficially held % Ownership on Completion (Minimum Subscription) * % Ownership on Completion (Maximum Subscription) Options beneficially* held Derek Carter 1,311,1671 0.87% 0.74% 1,000,000 Simon O’Loughlin 1,691,9632 1.12% 0.96% 1,625,000 Donald Stephens 1,332,7333 0.88% 0.76% 1,625,000 Andrew Haythorpe 2,750,0004 1.82% 1.56% 2,250,000 Total 7,085,863 4.68% 4.02% 6,500,000 1Assumes that Derek Carter (or his associates) is issued 500,000 Shares under the Capital Raising, per resolution 5 of the Company’s Notice of Meeting dated 25 January 2018 2Assumes that Simon O’Loughlin (or his associates) is issued 500,000 Shares under the Capital Raising, per resolution 3 of the Company’s Notice of Meeting dated 25 January 2018 3Assumes that Donald Stephens (or his associates) is issued 500,000 Shares under the Capital Raising, per resolution 4 of the Company’s Notice of Meeting dated 25 January 2018 4Shares held by Ouro Pty Ltd, an associate of Mr Haythorpe *Assumes the issue of the Consideration Shares has taken place and no Options are exercised after the date of this Prospectus. Includes the issue of 1,000,000 Options to each of Messrs O’Loughlin, Stephens and Carter on the assumption that their issue is approved at the general meeting of the Company’s Shareholders to be held on or about 28 February 2018.

P a g e | 18

Section 1: Investment overview

1.1 Important

The Shares offered by this Prospectus are of a speculative nature. Prospective investors should carefully consider the risk factors outlined in Section 4 of this Prospectus.

The information in this Section 1 is a high level summary only and is not intended to provide comprehensive details of the Offer. Prospective investors should read the full text of this Prospectus and, if in any doubt, consult with their professional advisers before deciding whether to apply for Shares. The Shares offered under this Prospectus carry no guarantee in respect of return of capital, return on investment, payment of dividends or the future value of the Shares.

1.2 The Company

Petratherm Limited was incorporated on 24 October 2003 and has been listed on the Australian Securities Exchange (ASX Code: PTR) since 27 July 2004.

1.3 The Project Acquisition

The Company has entered into:

a Mining Farm-In and Joint Venture Agreement to acquire up to a 75% interest in a silver, lead and zinc prospective tenement, EL 5497 ( MGV Tenement ), from Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV); and
a Tenement Purchase Agreement to acquire two gold and base-metal prospective tenements, EL 5306 and EL 5717, from SAEX Pty Ltd ACN 154 922 728.

In addition, the Company has applied for ELA 2017/250 in respect of an area in Gilles Downs, South Australia which adjoins the MGV Tenement.

Details of the Mining Farm-In and Joint Venture Agreement and the Tenement Purchase Agreement are contained in Section 9.1 of this Prospectus and details of Petratherm’s proposed business and the Projects are contained in Section 3 of this Prospectus.

Subject to the satisfaction or waiver of the conditions precedent in the Mining Farm-In and Joint Venture Agreement and the Tenement Purchase Agreement, the approval of Petratherm’s application in respect of ELA 2017/250 and the passing of Resolutions 1 to 10 (inclusive) at the general meeting of Petratherm’s Shareholders on or about 28 February 2018, the Company will acquire the Projects.

If the Project Acquisition proceeds:

(a) Petratherm will acquire the Projects;
(b) the Consideration Shares will be issued to SAEX (or its nominee) in consideration of the acquisition of the SAEX Tenements;
(c) Derek Carter will be appointed as non-executive Chairman of the Board, whilst Simon O’Loughlin and Donald Stephens will remain as non-executive Directors and Andrew Haythorpe will resign as a Director of the Company; and
(d) Petratherm will apply to ASX for the re-admission of the Company to the official list of ASX.

P a g e | 19

1.4 The Company’s Objectives

The Company’s main objective, post Completion, is to explore and develop its interests in the Projects, with the aim of creating value for the Company’s current and future shareholders. The Projects are further discussed in Section 3 of this Prospectus.

1.5 Investment Highlights

The main highlights of Petratherm’s business and the proposed Project Acquisition are as follows:

Allowing the Company’s securities to be reinstated to quotation on the ASX.
Likely increased liquidity in the securities of the Company, both due to the ability for investors to recommence trading in the Company’s securities and due to anticipated increased investor interest in the Company having regard to the sparse trading of its securities prior to its suspension from quotation.
The Project Acquisition provides current and future shareholders of the Company with exposure to mineral exploration opportunities, and the Company will be well capitalised following the successful completion of the Offer and intends to direct existing and new funds to developing the Company’s interests in the Projects.

1.6 Summary Financial Information

Historical Profit and Loss Statement

	Audited	Audited	Reviewed
	Year ended 30 June 2016 $	Year ended 30 June 2017 $	Half year ended 31 December 2017 $
Loss before income tax	(606,983)	(627,772)	(181,775)
Income tax expense	(1,941)	(13,013)	-
Loss for theperiod	(608,924)	(640,785)	(181,775)
Total comprehensive income for theperiod	(608,924)	(640,785)	(181,775)

Refer to Section 5: Financial information for further details on the Historical Profit and Loss Statement

Statement of Financial Position

	Statement of financial position Minimum $	Statement of financial position Maximum $
Current Assets Cash assets	4,229,895 5,168,320
Total Assets Total Liabilities	4,297,096 5,235,521 275,733 275,733
Net Assets	4,021,363 4,959,788

For an explanation of the adjustments made, see the notes to the Historical Statements of Financial Position in Section 5 (Financial Information) of this Prospectus.

1.7 Key Risks

The business, assets and operations of the Company 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 the Company.

The Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of the risks are, however, highly unpredictable and the extent to which they can be effectively managed is limited.

P a g e | 20

Set out below are the key risks which the Directors consider are associated with an investment in the Company. Further risks associated with an investment in the Company are outlined in Section 4 of this Prospectus:

 Mineral Exploration

Mineral exploration is inherently associated with risk. Notwithstanding the experience, knowledge and careful evaluation a company brings to an exploration project there is no assurance that recoverable mineral resources will be identified. Even if identified, other factors such as technical difficulties, geological conditions, adverse changes in government policy or legislation or lack of access to sufficient funding may mean that the resource is not economically recoverable or may otherwise preclude the Company from successfully exploiting the resource.

 Reliance on Key Personnel

The Company’s Directors and incoming Director have significant experience in the mining exploration industry. If growth objectives are to be met, this will depend on the ability of the Directors to implement the current exploration strategies and to adapt, where necessary, to accommodate and manage any unforeseen difficulties. Initially, the Company will rely heavily on the experience of its Directors. The loss of the services of certain personnel could have an adverse effect on the Company and its activities.

 Commodity and Currency Price Volatility

Commodity prices are subject to influencing factors beyond the control of the Company and can be subject to significant fluctuations. Just some of these influencing factors include:

world demand for particular commodities;
the level of production costs in major commodity producing regions;
expectations regarding inflation, interest rates and exchange rates.

Any significant and/or sustained fluctuation in exchange rates or commodity prices could have a materially adverse effect on the Company’s operations and its financial position.

 Additional Requirements for Capital

The funds raised by the Capital Raising will be used to carry out work on the Company’s Projects. If the Company incurs unexpected costs or is unable to generate sufficient operating income, further funding may be required. The Company may require additional funding to carry out further exploration, undertake feasibility studies, develop mining operations and/or acquire new projects. Any additional financing through share issues will dilute existing shareholdings. Debt financing may not be available to support the scope and extent of proposed developments. If available, it may impose restrictions on operating activities or anticipated expansion of the Company’s operations.

1.8 The Offer

The Company is offering 100,000,000 Shares for subscription at an Offer Price of $0.04 per Share to raise $4,000,000. Oversubscriptions of up to a further 25,000,000 Shares may be accepted to raise up to a further $1,000,000. The Minimum Subscription is 100,000,000 Shares. The key information relating to the Offer and references to further details are set out below.

P a g e | 21

1.9 Indicative Timetable for the Offer

1.9 Indicative Timetable for the Offer
Event	Date
Lodgement of this Prospectus with ASIC and ASX	14 February 2018
General Meeting of Petratherm’s Shareholders	28 February 2018
Opening Date of the Offer	1 March 2018
Expected Closing Date of the Offer	15 March 2018
Issue of Shares under this Prospectus	22 March 2018
Despatch of holding statements	29 March 2018
Expected Date for re-quotation of Shares on ASX	29 March 2018

The above dates are indicative only and may vary, subject to the requirements of the ASX Listing Rules and the Corporations Act.

1.10 Purpose of the Offer

The purpose of the Offer is to facilitate an application by the Company for re-admission of the Company to the official list of ASX and to raise at least $4,000,000.

The Company is seeking to satisfy Chapters 1 and 2 of the ASX Listing Rules and to satisfy ASX requirements for re-listing following a change to the nature and scale of the Company’s activities.

The Company aims to achieve the objectives set out above, the completion of the Project Acquisition and the exploration and development of the Company’s interest in the Projects, as described in this Prospectus.

1.11 Capital Structure

Following completion of the proposed Project Acquisition and the Offer, the capital structure of the Company on a post-Consolidation basis will be as set out in the table below (assuming that Resolutions 1 to 10 (inclusive) are passed at the general meeting of Shareholders to be held on or about 28 February 2018 and the Project Acquisition is completed). References to ‘Resolutions’ in the tables below are to the resolutions contained in the notice convening the above meeting, a copy of which notice is available on the Company’s website.

(a) Minimum Subscription

	Shares	% Total Shares	Options
Current issued capital(pre Consolidation)	100,307,503		7,000,000
Total issued capital(post
Consolidation)assuming none of
the current issued Options are	50,153,752		3,500,000
exercised before the Consolidation
(Resolution 10)1
Issued to SAEX(post Consolidation)2	1,250,000	0.83%4
Issued pursuant to Capital Raising (Resolution 2)3	100,000,000	66.05%
Issued to Taylor Collison (Resolution 6)5			7,570,188
Issued to Directors(Resolutions 7, 8 and 9)6			3,000,000

P a g e | 22

	Shares	Options
Total issued capital on
Reinstatement (assuming none of the current issued Options are	151,403,752	14,070,188
exercised before Reinstatement)3

Subject to rounding up of existing holdings.
Assumes that Completion occurs pursuant to the Tenement Purchase Agreement.
Assumes that, pursuant to Resolution 2, the minimum number of 100,000,000 Shares are issued and includes the 500,000 Shares to be issued to each of existing Directors Simon O’Loughlin and Donald Stephens and proposed Director Derek Carter pursuant to Resolutions 3, 4 and 5.

4.Assumes that SAEX does not participate in the Offer and that no Options are exercised between the date of this Prospectus and the date of Reinstatement.

Options to be issued to Taylor Collison Ltd (or its nominee) pursuant to the terms of its mandate letter entered into with Petratherm Limited in respect of the Capital Raising.

Excludes Shares to be issued to Directors as part of the Capital Raising, pursuant to Resolutions 3, 4 and 5.

(b) Maximum Subscription

	Shares	% Total Shares	Options
Current issued capital(pre Consolidation)	100,307,503		7,000,000
Total issued capital(post
Consolidation)assuming none of
the current issued Options are	50,153,752		3,500,000
exercised before the Consolidation
(Resolution 10)1
Issued to SAEX(post Consolidation)2	1,250,000	0.71%4
Issued pursuant to Capital Raising (Resolution 2)3	125,000,000	70.86%
Issued to Taylor Collison (Resolution 6)5			8,820,188
Issued to Directors(Resolutions 7, 8 and 9)6			3,000,000
Total issued capital on
Reinstatement (assuming none of the current issued Options are	176,403,752		15,320,188
exercised before Reinstatement)3

Subject to rounding up of existing holdings.
Assumes that Completion occurs pursuant to the Tenement Purchase Agreement.
Assumes that, pursuant to Resolution 2, the maximum number of 125,000,000 Shares are issued and includes the 500,000 Shares to be issued to each of existing Directors Simon O’Loughlin and Donald Stephens and proposed Director Derek Carter pursuant to Resolutions 3, 4 and 5.

4.Assumes that SAEX does not participate in the Offer and that no Options are exercised between the date of this Prospectus and the date of Reinstatement.

5.Options to be issued to Taylor Collison Ltd (or its nominee) pursuant to the terms of its mandate letter entered into with Petratherm Limited in respect of the Capital Raising.

Excludes Shares to be issued to Directors as part of the Capital Raising, pursuant to Resolutions 3, 4 and 5.

Rights attaching to the Shares are summarised in Section 10.4 of this Prospectus. Terms and conditions of the Options are summarised in Section 10.5 of this Prospectus.

P a g e | 23

1.12 Substantial Shareholders

Those Shareholders holding 5% or more of the Shares on issue at the date of this Prospectus on a pre Consolidation basis are:

Consolidation basis are:
Shareholder	Shares	%
Ouro Pty Ltd	5,500,000	5.48%
Greenslade Holdings Pty Ltd	5,479,276	5.46%
Calama Holdings PtyLtd	5,332,883	5.32%

Upon Reinstatement (assuming no existing substantial Shareholder subscribes for and receives additional Shares pursuant to the Offer and no Options are exercised prior to reinstatement), the interests of the Shareholders referred to above (on a post Consolidation basis) will be:

		%	%
Shareholder	Shares	Minimum1	Maximum2
Ouro Pty Ltd3	2,750,000	1.82%	1.56%
Greenslade Holdings Pty Ltd	2,739,638	1.81%	1.55%
Calama Holdings Pty Ltd	2,666,442	1.76%	1.51%
TOTAL	8,156,080	5.39%	4.62%

1 Assumes that the minimum number of 100,000,000 Shares are issued.

2 Assumes that the maximum number of 125,000,000 Shares are issued.

3 Shareholder associated with Director Andrew Haythorpe.

The Company will announce to the ASX details of its top-20 Shareholders (following completion of the Offer and the Acquisition) prior to the Shares commencing trading on ASX.

1.13 Use of Funds

The proposed application of funds over two calendar years from the date on which the Shares allotted under this Prospectus are quoted on the ASX is as follows:

(a) Minimum Subscription

(a) Minimum Subscription
		Funds Available	Post-
Use of Funds (A$)	Notes	Post Completion of	Completion of the Offer /	Year 2 Spend	Total Spend
		the Offer	Year 1 Spend
Pre-offer Cash	1	$632,233
Total Funds Raised Under The Offer		$4,000,000
Total Funds Available		$4,632,233
Expenses of the Offer	2	$162,338	-	-	$162,338
Capital Raising Fees	2	$240,000	-	-	$240,000
Exploration expenditure	3	$2,145,000	$845,000	$1,300,000	$2,145,000
Working Capital/Capital available to manage growth	4	$2,084,895	$1,042,448	$1,042,447	$2,084,895
Total Funds Applied		$4,632,233	$1,887,448	$2,342,447	$4,632,233

Notes:

Represents cash on hand as at 31 December 2017, (actual cash levels at the date of the Completion of the Issue will likely differ from the above).
Refer to section below which details the expenses of the Offer.
Budgeted expenditure relates to the MGV Tenement and the SAEX Tenements only. The use of development expenditure and working capital is more fully described in Section 3.4 of this Prospectus.
The use of development expenditure and working capital is more fully described in Section 3 of this Prospectus.

P a g e | 24

(b) Maximum Subscription

(b) Maximum Subscription
Use of Funds (A$)	Notes	Funds Available Post Acquisition	Post Completion of the Offer / Year 1 Spend	Year 2 Spend	Total Spend
Pre-offer Cash	1	$632,233
Total Funds Raised Under The Offer		$5,000,000
Total Funds Available		$5,632,233
Expenses of the Offer	2	$163,913	-	-	$163,913
Capital Raising Fees	2	$300,000	-	-	$300,000
Exploration expenditure	3	$2,615,000	$1,012,000	$1,603,000	$2,615,000
Working Capital/Capital available to manage growth	4	$2,553,320	$1,276,660	$1,276,660	$2,553,320
Total Funds Applied		$5,632,233	$2,288,660	$2,879,660	$5,632,233

Notes:

Represents cash on hand as at 31 December 2017, (actual cash levels at the date of the Completion of the Issue will likely differ from the above).
Refer to section below which details the expenses of the Offer.
Budgeted expenditure relates to the MGV Tenement and the SAEX Tenements only. The use of development expenditure and working capital is more fully described in Section 3 of this Prospectus.
The use of development expenditure and working capital is more fully described in Section 3 of this Prospectus.

1.14 Expenses of the Offer

The estimated expenses (exclusive of GST) connected with the Offer and the Project Acquisition which are payable by the Company, based on the Minimum Subscription and Maximum Subscription amounts of $4,000,000 and $5,000,000 respectively, are as follows:

Expenses of the Offer – Cash	Minimum Subscription	Maximum Subscription
costs	(A$)	(A$)
Independent Limited Assurance Report	6,750	6,750
Legal Expenses	100,000	100,000
Independent Geologist’s Report	9,600	9,600
ASX and ASIC fees	12,338	13,913
Capital Raising Fees	240,000	300,000
Other including accounting,
printing, marketing and	33,650	33,650
distribution
Total – cash costs	402,338	463,913
Non cash items
Fair value of Options to be issued to the Lead Manager	302,455	352,397
Total expenses of the offer	704,793	816,310

(cash and non cash)

The above tables are statements of current intentions at the date of the lodgement of this Prospectus with ASIC. As with any budget or estimate, intervening events (including market success or failure) and new circumstances have the potential to affect the ultimate way funds will be applied. The Board reserves the right to alter the way funds are applied in these circumstances.

P a g e | 25

The Directors are satisfied that, upon completion of the Issue, the Company will have sufficient funds to meet its stated objectives for a period of at least two years.

1.15 Directors and Key Personnel

The Company’s Board post Reinstatement possesses a broad range of technical, commercial and financial skills with significant experience in the mineral exploration sector. Profiles of the current and proposed new directors are set out below.

CURRENT DIRECTORS

Simon O’Loughlin BA (Acc), Law Society Certificate in Law Non-Executive Chairman

(Non-Executive Director post Reinstatement)

Simon O’Loughlin is the founder of O’Loughlins Lawyers, an Adelaide based, specialist commercial law firm. He has extensive experience in the corporate and commercial law fields while practising in Sydney and Adelaide, and also holds accounting qualifications.

Mr O’Loughlin is the non-executive chairman of Arc Exploration Limited, Chesser Resources Limited and Bod Australia Limited .

Mr O’Loughlin has extensive experience and involvement with companies in the small industrial and resources sectors. He has also been involved in the listing and back-door listing of numerous companies on the ASX. He is a former Chairman of the Taxation Institute of Australia (SA Division) and Save the Children Fund (SA Division).

Donald Stephens BA (Acc), FCA Non-Executive Director

(Non-Executive Director post Reinstatement)

Donald Stephens is a Chartered Accountant and corporate advisor with over 25 years’ experience in the accounting, mining and services industries, including 14 years as a partner of HLB Mann Judd (SA), a firm of Chartered Accountants. He is a Chartered Accountant and corporate adviser specialising in small cap ASX listed entities.

Mr Stephens is a director of Mithril Resources Limited and Gooroo Ventures Limited. Additionally, he is Company Secretary of Highfield Resources Limited, Gooroo Ventures Limited, Duxton Water Limited, Duxton Broadacre Farms Limited and Mithril Resources Limited and various other unlisted public companies.

Andrew Haythorpe Non-Executive Director

(Will resign post Reinstatement)

Andrew Haythorpe has 30 years’ experience in the mining industry and has over 18 years of experience in the management of public companies listed on ASX and TSX. His recent directorships include Managing Director of Crescent Gold Limited, where he assisted to grow the company from an $8m explorer to a $240m producer in 3 years. Since 1999, Mr Haythorpe has been involved in over A$250m worth of mergers and acquisitions and capital raisings in resources and technology. Mr Haythorpe is a Member of the Australasian Institute of Mining & Metallurgy and the Australian Institute of Company Directors.

PROPOSED DIRECTOR TO BE APPOINTED POST REINSTATEMENT

A profile of the proposed new director to be appointed post Reinstatement is as follows:

P a g e | 26

Derek Carter BSc, MSc, FAusIMM(CP)

Derek Carter has over 40 years’ experience in exploration and mining geology and management. He held senior positions in the Shell Group of Companies and Burmine Ltd before founding Minotaur Gold NL in 1993. He is the Chairman of Highfield Resources Ltd, former Chairman of Petratherm Limited (resigned 31 March 2014) and Minotaur Exploration Ltd (resigned November 2016), and a former board member of Intrepid Mines Ltd (resigned November 2015) and Mithril Resources Ltd (resigned December 2014), all ASX listed companies.

Mr Carter is a former President of the South Australian Chamber of Mines and Energy, former board member of the Australian Gold Council, is a member of the South Australian Minerals and Petroleum Experts Group and the Minerals and Energy Advisory Council, and a former Chairman of the Minerals Exploration Advisory Group. He was awarded AMEC’s Prospector of the Year Award (jointly) in 2003 and is a Centenary Medallist.

1.16 Disclosure of Interests

Each Director is entitled to such remuneration from the Company as the Directors decide, but the total amount provided to all non-executive directors must not exceed in aggregate the amount fixed by the Company in a general meeting. The aggregate maximum remuneration for all non-executive Directors is currently $300,000 (inclusive of superannuation) per annum.

For the financial year ending 30 June 2018, it is expected that Petratherm’s Directors’ remuneration (inclusive of superannuation) will be as follows:

of superannuation) will be as	follows:
Director	Remuneration (year	Remuneration
	ending 30 June	From 1 April 2018
	2018)*	(per annum)
Simon O’Loughlin	$33,638	$36,000
Donald Stephens	$29,484	$36,000
Andrew Haythorpe	$20,455	Nil
Derek Carter	$12,500	$50,000

*Fees have been apportioned for the period from 1 July 2017 to 30 June 2018 . In particular, Mr Haythorpe intends to resign as a Director of the Company post Reinstatement, and his fees have been apportioned for that period. The annual fee for the Proposed Director Mr Carter (to be appointed post Reinstatement) has also been apportioned accordingly.

The Company has agreed to pay Proposed Director, Derek Carter $50,000 per annum (inclusive of superannuation) when he commences in the position as non-executive chairman of Petratherm post Reinstatement.

The remuneration of the Directors of Petratherm as outlined above is current as at the date of this Prospectus, but is subject to adjustment in the ordinary course of business. All Directors are entitled to be paid all travelling and other expenses properly incurred by them in attending, participating in and returning from meetings of the Directors or any committee of the Directors or general meetings of the Company or otherwise in connection with the Company’s business.

Mr Simon O’Loughlin is a Consultant to O’Loughlins Lawyers which has acted as the solicitors to the Company in relation to the Offer. Details of the amounts paid to O’Loughlins Lawyers are set out in Section 10.8 of this Prospectus.

The Company maintains Directors’ and Officers’ Liability Insurance on behalf of the Directors and

P a g e | 27

officers of the Company.

The direct and indirect interests of the current Directors in the securities of the Company as at the date of this Prospectus (on a post-Consolidation basis) are as follows:

	Shares	Shares		Options	Options
Current Director	Direct	Indirect	% Total	Direct	Indirect
			Shares
Simon O’Loughlin	225,063	966,900	2.38%	Nil	625,000
Donald Stephens	Nil	832,733	1.66%	Nil	625,000
Andrew Haythorpe	2,750,000	Nil	5.48%	Nil	2,250,000
Total	2,975,063	1,799,633	9.52%	-	3,500,000

The direct and indirect interests of Proposed Director Derek Carter in the securities of the Company as at the date of this Prospectus (on a post-Consolidation basis) are as follows:

	Shares	Shares		Options	Options
Proposed Director	Direct	Indirect	% Total	Direct	Indirect
			Shares
Derek Carter	448,000	363,167	1.62%	Nil	Nil

Assuming all resolutions are passed at the general meeting of Shareholders to be held on or about 28 February 2018 and that the Project Acquisition is completed:

(a) The maximum direct and indirect interests (post Consolidation) of the current Directors in the securities of the Company will be as follows:

Director	Shares	Shares			Options	Options
	Direct	Indirect	% Total Shares (Minimum Subscription)1	% Total Shares (Maximum Subscription)2	Direct	Indirect4
Simon O’Loughlin3	225,063	1,466,900	1.12%	0.96%	Nil	1,625,000
Donald Stephens3	Nil	1,332,733	0.88%	0.76%	Nil	1,625,000
Andrew Haythorpe	2,750,000	Nil	1.82%	1.56%	Nil	2,250,000
Total	2,975,063	2,799,633	3.82%	3.28%	Nil	5,500,000

1 Assumes that, pursuant to Resolution 2, the minimum number of 100,000,000 Shares are issued such that the Company has total issued capital on Reinstatement of 151,403,752 Shares (assuming none of the current issued Options are exercised before Reinstatement and Completion of the Project Acquisition has occurred).

2 Assumes that, pursuant to Resolution 2, the maximum number of 125,000,000 Shares are issued such that the Company has total issued capital on Reinstatement of 176,403,752 Shares (assuming none of the current issued Options are exercised before Reinstatement and Completion of the Project Acquisition has occurred).

3 Assumes that Messrs O’Loughlin and Stephens (and/or their associates) each apply for and are issued 500,000 Shares under the Capital Raising, as per Resolutions 3 and 4.

4Assumes that each of Messrs O’Loughlin and Stephens (and/or their associates) are issued 1,000,000 Options, as per Resolutions 7 and 8.

(b) The maximum direct and indirect interests (post-Consolidation) of proposed Director Derek Carter in the securities of the Company will be as follows:

P a g e | 28

		Shares
	Direct	Indirect	% Total Shares	% Total Shares	Direct	Indirect4
			(Minimum	(Maximum
Proposed Director			Subscription)1	Subscription)2
Derek Carter	448,000	863,167	0.87%	0.74%	Nil	1,000,000

1 Assumes that, pursuant to Resolution 2, the minimum number of 100,000,000 Shares are issued such that the Company has total issued capital on Reinstatement of 151,403,752 Shares (assuming none of the current issued Options are exercised before Reinstatement and Completion of the Project Acquisition has occurred).
2 Assumes that, pursuant to Resolution 2, the maximum number of 125,000,000 Shares are issued such that the Company has total issued capital on Reinstatement of 176,403,752 Shares (assuming none of the current issued Options are exercised before Reinstatement and Completion of the Project Acquisition has occurred).

3 Assumes that Mr Carter (and/or his associates) applies for and is issued 500,000 Shares under the Capital Raising, as per Resolution 5.

4Assumes that Mr Carter (and/or his associates) is issued 1,000,000 Options, as per Resolution 9.

1.17 Agreements with Directors or Related Parties

The Company’s policy in respect of related party arrangements is:

(a) a Director with a material personal interest in a matter is required to give notice to the other Directors before such a matter is considered by the Board; and
(b) for the Board to consider such a matter, the Director who has a material personal interest is not present while the matter is being considered at the meeting and does not vote on the matter.

Legal Costs Agreement – Simon O’Loughlin

Simon O’Loughlin is a Consultant to O’Loughlins Lawyers which has acted as the solicitors to the Company in relation to the Offer and the Acquisition. The Company and O’Loughlins Lawyers have entered into a costs agreement under which the Company has agreed to pay fees calculated on a time costing basis at O’Loughlins Lawyers’ usual hourly rates. Details of the amounts paid to O’Loughlins Lawyers are set out in Section 10.8 of this Prospectus.

Indemnity, Insurance and Access Deeds

The Company has entered into an Indemnity, Insurance and Access Deed with each of Messrs Simon O’Loughlin, Donald Stephens and Derek Carter. Pursuant to the Deed the Directors are indemnified by the Company against any liability incurred in their capacity as an officer of the Company to the maximum extent permitted by law subject to certain exclusions.

The Company must keep a complete set of company documents until the later of the date which is seven years after the Director ceases to be an officer of the Company and the date after a final judgment or order has been made in relation to any hearing, conference, dispute, enquiry or investigation in which the Director is, or has reason to believe will become, involved as a party, witness or otherwise because the Director is or was an officer of the Company ( Relevant Proceedings ).

The Director has the right to inspect and/or copy a company document in connection with Relevant Proceedings during the period referred to above.

The Company must use its best endeavours to ensure that so far as is practical (having regard to the cost of coverage and its availability) it maintains an insurance policy insuring the Director against liability as a director and officer of the Company while the Director is an officer of the Company and

P a g e | 29

until the later of the date which is seven years after the Director ceases to be an officer of the Company and the date any Relevant Proceedings commenced before the date referred to above have been finally resolved.

1.18 Corporate Governance

To the extent applicable, in light of the Company’s size and nature, the Company has adopted The Corporate Governance Principles and Recommendations (3[rd] Edition) as published by ASX Corporate Governance Council ( Recommendations ).

The Company’s main corporate governance policies and practices as at the date of this Prospectus and the Company’s compliance and departures from the Recommendations are set out in Section 10.2(a) of this Prospectus.

In addition, the Company’s full Corporate Governance Plan is available from the Company’s website http://petratherm.com.au).

1.19 Taxation

The Australian taxation consequences of any investment in Shares will depend upon an investor’s particular circumstances. It is an obligation of investors to make their own enquiries concerning the taxation consequences of an investment in the Company. If you are in doubt as to the course of action you should take, you should consult your professional advisers.

1.20 Dividend Policy

The Company does not yet have a dividend policy. The Company has no immediate intention to declare or distribute dividends. Payment of future dividends will depend upon the future profitability and financial position of the Company.

1.21 Restricted Securities

Subject to the Company being re-admitted to the Official List, certain of the Shares and Options issued in conjunction with the Offer and/or the Project Acquisition ( Escrowed Securities ), are likely to be classified by ASX as restricted securities and will be required to be held in escrow for the period imposed by ASX under the ASX Listing Rules ( Escrow Period ).

Under the Tenement Purchase Agreement, SAEX has agreed to execute such form of restriction agreement in respect of the Consideration Shares as may be required by ASX.

Further details are set out in Section 10.2(b) of this Prospectus.

P a g e | 30

Section 2: Details of the Offer

2.1 Introduction

The information set out in this Section is not comprehensive and should be read together with the entire context of this Prospectus.

2.2 The Offer and Subscription

All Shares issued pursuant to this Prospectus will be issued as fully paid ordinary shares and will rank equally in all respects with the Shares already on issue. The rights attaching to the Shares are summarised in Section 10.4 of this Prospectus.

If the Minimum Subscription for the Offer is not achieved within four months after the date of this Prospectus, the Company will repay all money received from Applicants, without interest, as soon as practicable or issue a supplementary or replacement prospectus and allow Applicants one month to withdraw their Applications and be repaid their Application Money in full without interest.

2.3 Offer Period

The Offer will open on the Opening Date and will remain open until 4.30 pm (Adelaide Time) on the Closing Date. The Company reserves the right to either open or close the Offer at an earlier time or date or to extend the time or date without prior notice. Applicants are encouraged to submit their Applications as early as possible.

2.4 Conditions Precedent

The Offer made under this Prospectus and the issue of Shares pursuant to this Prospectus are subject to and conditional upon Shareholders passing Resolutions 1 to 10 (inclusive) at the meeting to be held on or about 28 February 2018, the satisfaction of the conditions referred to in those resolutions and the satisfaction or waiver of the conditions precedent in the Tenement Purchase Agreement and the Mining Farm-In and Joint Venture Agreement, details of which are set out in Section 9.1 of this Prospectus. If Resolutions 1 to 10 (inclusive) are not passed, the conditions referred to in those resolutions are not satisfied or the conditions precedent in the Tenement Purchase Agreement and the Mining Farm-In and Joint Venture Agreement are not satisfied or waived, this Offer will not proceed, no Shares will be allotted pursuant to this Prospectus and the Company will repay all money received from Applicants without interest.

2.5 Exposure Period

In accordance with Chapter 6D of the Corporations Act this Prospectus is subject to an Exposure Period of seven days from the date of lodgement with ASIC. This period may be extended by ASIC for a further period of up to seven days. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. If this Prospectus is found to be deficient, Applications received during the Exposure Period will be dealt with in accordance with section 724 of the Corporations Act. Applications received prior to the expiration of the Exposure Period will not be processed until after the Exposure Period.

P a g e | 31

2.6 How to Apply

Applications must be for a minimum of 50,000 Shares ($2,000) and thereafter in multiples of 5,000 Shares ($200) and can only be made by completing the Application Form attached to this Prospectus. The Company reserves the right to reject any Application or to allocate any investor fewer Shares than the number for which the Applicant has applied.

Applications under the Offer may be made, and will only be accepted, in one of the following forms:

on the relevant Application Form accompanying this Prospectus; or
on a paper copy of the relevant electronic Application Form which accompanies the electronic version of this Prospectus, both of which can be found at and can be downloaded from www.petratherm.com.au.

Application Forms must be accompanied by a personal cheque or a bank draft, payable in Australian dollars, for an amount equal to the number of Shares for which you wish to apply multiplied by the Application Price of $0.04 per Share. Cheques or bank drafts should be made payable to ‘Petratherm Limited – Share Offer’ and crossed ‘Not Negotiable’. No brokerage or stamp duty is payable by Applicants. The amount payable on Application will not vary during the period of the Offer.

Applicants should ensure that cleared funds are available at the time the Application is lodged, as dishonoured cheques will result in the Application being rejected. Application monies will be held in trust in a subscription account established and controlled by the Company until allotment has taken place.

Completed Application Forms should be mailed to:

Petratherm Limited C/- Computershare Investor Services Pty Limited GPO Box 1326 ADELAIDE SA 5001

Application Forms must be received by the Share Registrar no later than 4.30 pm (Adelaide Time) on the Closing Date.

Detailed instructions on how to complete paper Application Forms are set out on the reverse of those forms. You are not required to sign the Application Form. The Company reserves the right to reject any Application (including where an Application Form has not been correctly completed) or allocate any person fewer Shares than that person applied for, or vary the dates and times of the Offer without prior notice and independently of other parts of the Offer. The Company reserves the right not to proceed with the Offer at any time prior to issuing Shares to successful Applicants. Where the Offer is withdrawn, Applications are rejected or fewer Shares are allotted than applied for, surplus Application Money will be refunded. No interest will be paid on any Application Money refunded.

An Application may not be withdrawn after lodgement unless the Applicant is permitted to withdraw the Application in accordance with the Corporations Act.

2.7 Allocation and Allotment of Shares

Subject to ASX granting approval for quotation of the Shares issued pursuant to this Prospectus, the allotment of Shares will occur as soon as practicable after the Offer closes. All Shares issued pursuant to the Offer will rank pari passu in all respects with the existing Shares of the Company. Holding statements will be dispatched as required by ASX. It is the responsibility of Applicants to determine their allocation prior to trading in Shares.

The Directors reserve the right to reject any Application or to allot a lesser number of Shares than

P a g e | 32

subscribed for in an Application Form. If the number of Shares allocated is less than that applied for, or no allotment is made, the surplus Application Monies will be promptly refunded without interest.

2.8 Lead Manager

Taylor Collison Limited has agreed to act as Lead Manager to the Offer. Details of the terms of appointment of the Lead Manager, including fees payable, are set out in Section 9.3 of this Prospectus.

2.9 Brokerage and Handling Fees

No brokerage, commission or stamp duty is payable by Applicants on acquisition of Shares under the Offer.

2.10 Stock Exchange Listing

Application will be made to ASX within seven days after the date of this Prospectus for Quotation of the Shares issued pursuant to this Prospectus. If approval for Quotation of the Shares is not granted within three months after the date of this Prospectus, the Company will not allot or issue any Shares pursuant to the Offer and will repay all Application Money without interest as soon as practicable or issue a supplementary or replacement prospectus and allow Applicants one month to withdraw their Applications and be repaid their Application Money in full without interest.

2.11 Clearing House Sub-Register Systems CHESS and Issuer Sponsorship

The Company participates in the Clearing House Electronic Subregister System ( CHESS ), operated by ASX Settlement Pty Limited, a wholly owned subsidiary of ASX, in accordance with the Listing Rules and ASX Settlement Operating Rules.

Under this system, the Company will not issue certificates to investors in relation to their Shares. Instead, Shareholders will receive a statement of their shareholdings in the Company.

If an investor is broker sponsored, ASX Settlement Pty Limited will send them CHESS statements. The CHESS statements will set out the number of Shares allotted to each investor under this Prospectus, give details of the Shareholder’s holder identification number ( HIN ) and give the participant identification number of the sponsor.

Alternatively, if an investor is registered on the issuer sponsored sub register, the statements will be dispatched by the Share Registrar and will contain the number of Shares allotted under this Prospectus and the Shareholder’s security holder reference number ( SRN ).

A CHESS statement or issuer sponsored statement will routinely be sent to Shareholders at the end of any calendar month during which the balance of their holding changes. A Shareholder may request a statement at any other time, however a charge may be made for additional statements.

2.12 Overseas Investors

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Lodgement of a duly completed Application Form will be taken by the Company as to constitute a representation that there has been no breach of such laws.

No action has been taken to register or qualify the Shares, or the Offer, or otherwise to permit a public offering of the Shares, in any jurisdiction outside Australia.

The Offer pursuant to the paper form or electronic Prospectus is only available to persons receiving this Prospectus within Australia.

P a g e | 33

2.13 Privacy Act

The Company collects information about each Applicant from the Application Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant’s shareholding in the Company.

By submitting an Application Form, each Applicant agrees that the Company may use the information in the Application Form for the purposes set out in this Prospectus and may disclose it for those purposes to the Share Registrar, the Company’s related bodies corporate, agents, contractors and third party service providers (including mailing houses), ASX, ASIC and other regulatory authorities.

If an Applicant becomes a Shareholder of the Company, the Corporations Act requires the Company to include information about the Shareholder (name, address and details of the Shares held) in its public registers. This information must remain in the registers even if that person ceases to be a Shareholder of the Company. Information contained in the Company’s registers is also used to facilitate distribution payments and corporate communications (including the Company’s financial results, annual reports and other information that the Company may wish to communicate to its Shareholders) and compliance by the Company with legal and regulatory requirements. Successful Applicants may request access to their personal information held by (or on behalf of) the Company by telephoning or writing to the Company Secretary.

If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Application.

2.14 No Underwriting

The Offer is not underwritten.

2.15 Investor Enquiries

This document is important and should be read in its entirety. Persons in doubt as to the course of action to be followed should consult their stockbroker, solicitor, accountant or other professional adviser without delay.

Additional copies of this Prospectus can be obtained from the Share Registrar by telephone on 1300 783 611 (within Australia) or (+61 3) 9415 4240 (outside Australia).

Questions relating to the Offer or further advice on how to complete the Application Form can be directed to the Company by telephone on (08) 8133 5000 (within Australia) or +61 8 8133 5000 (outside Australia).

P a g e | 34

Section 3: Overview of the

Company, the Project Acquisition

and the Projects

3.1 Introduction

Petratherm Limited was incorporated on 24 October 2003 and has been listed on the Australian Securities Exchange (ASX Code: PTR) since 27 July 2004.

3.2 Company Overview

Petratherm has historically operated as a geothermal and oil and gas exploration company with tenement interests in South Australia, Spain and Tasmania.

Petratherm now intends to focus on mineral exploration, and as announced to ASX on 15 December 2017 and 27 December 2017, Petratherm has entered into:

a Letter Agreement (which has since been formalized by a Mining Farm-In and Joint Venture Agreement) to acquire up to a 75% interest in a silver, lead and zinc prospective tenement, EL 5497 ( MGV Tenement ), from Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV); and
a Tenement Purchase Agreement to acquire two gold and base-metal prospective tenements, EL 5306 and EL 5717, from SAEX Pty Ltd ACN 154 922 728.

In addition, the Company has applied for ELA 2017/250 in respect of an area in Gilles Downs, South Australia which adjoins the MGV Tenement.

Details of the Mining Farm-In and Joint Venture Agreement and the Tenement Purchase Agreement are contained in Section 9.1 of this Prospectus.

P a g e | 35

3.3 The Projects

The exploration property assets in which the Company may acquire an interest pursuant to the Agreements and application referred to below, Corunna and Walparuta, are located in two distinct geological provinces of South Australia, the Gawler Craton and Curnamona Province respectively (Figure 1). A comprehensive summary of the regional and local geology, historical exploration and tenement prospectivity is contained in the Independent Geologist’s Report in Section 7 of this Prospectus. A comprehensive summary of the status of the tenements can be found in the Solicitors’ Report on Tenements in Section 8 of this Prospectus. A glossary of technical terms used in this Section can be found at the end of the Independent Geologist’s Report in Section 7 of this Prospectus.

Following completion of the Offer and the satisfaction of certain conditions precedent, the Company may acquire up to a 75% interest in EL 5497 (Corunna) from Musgrave Minerals Ltd (MGV), subject to meeting the terms of the Mining Farm-In and Joint Venture Agreement (a summary of which is contained in Section 9.1(b) of this Prospectus). In addition, the Company has applied for an adjoining area (ELA 2017/250) which will be 100% beneficially owned by the Company upon granting. The Company has also entered into a Tenement Purchase Agreement (a summary of which is contained in Section 9.1(a) of this Prospectus) to acquire 100% of the Walparuta Project (EL 5306 and EL 5717) from SAEX Pty Ltd (SAEX), subject to completion of the Offer and the satisfaction of certain conditions precedent.

==> picture [377 x 267] intentionally omitted <==

Figure 1 Petratherm tenements and outline of geological provinces

The Corunna Project is considered by the Company to be prospective for epithermal-style Ag-Pb-Zn and volcanogenic Pb-Zn-Ag skarn/carbonate replacement bodies, which are linked to the Hiltaba Event. The Hutchinson Group is also prospective for metasomatic sedimentary-hosted Pb-Zn-Ag-Cu deposits, and there is also significant outcropping Corunna Conglomerate in the project area, which is considered prospective for Hiltaba aged epithermal Au and U mineralisation.

The Walparuta Project is considered by the Company to be prospective for a range of deposit types and styles. The main exploration focus is Broken Hill Type exhalite hosted Pb-Zn-Ag and various styles of Cu-Au mineralisation including: shear hosted, magnetite skarn, and strataform/stratabound mineralisation. There is in addition recognised potential for Co associated with Cu-Au mineralisation,

P a g e | 36

Li-REE-U and phosphate within mapped pegmatites across the basement inlier and graphite within favourable metasedimentary sequences.

Details of the Corunna and Walparuta Project tenements are presented below.

Table 1 Petratherm Tenements

Project	Tenement Name	Licence Nos.	Current Holder	Area (Km2)	Status	Grant Date	Expiry Date
Corunna Project	Corunna North	EL 5497	Musgrave Minerals	260	Granted	13/10/2014	12/10/2018
	Gilles Downs	ELA 2017/250	Petratherm	721	Application	TBA	TBA
Walparuta Project	Whey Whey Creek	EL 5306	SAEX	26	Granted	18/07/2013	17/07/2018
	Walparuta	EL 5717	SAEX	52	Granted	21/06/2015	20/06/2019

Corunna Project

The Corunna Project comprises one granted tenement (EL 5497) and one adjoining tenement application (ELA 2017/250), located in the southeast Gawler Craton, within the Cleve Subdomain. The northern most extent of the project area is fringed by the southern margin of the Lower Gawler Range Volcanics (GRV).

The Cleve Subdomain is a belt of Palaeoproterozoic metasediments, which includes clastic shallow marine sediments, iron formations, carbonates, mafic volcanics and minor felsic volcanics, which collectively make up the Hutchison Group. The main exploration focus for the Corunna project is epithermal-style Ag-Pb-Zn, volcanogenic skarn/carbonate replacement Pb-Zn-Ag and metasomatic sedimentary-hosted Pb-Zn sulphides associated with Hutchison Group metasediments. There is also recognised potential for epithermal Au-Ag (Pb-Zn) within the Corunna Conglomerate.

Noted examples of this style of mineralization in the local region include the following:

Paris epithermal Ag-Pb-Zn deposit - Mineral Resource Estimate (JORC 2012) containing total Indicated and Inferred Resources of 9.3 Mt for 42,000,000 ounces of Ag and 55 Kt of Pb (ASX: IVR 24[th] August, 2017).
Menninnie Dam volcanogenic carbonate replacement Pb-Zn-Ag deposit - consists of two main mineralised zones (Menninnie Central and Viper), which have a combined Inferred Resource Estimate (JORC 2004) of 7.7Mt @ 3.1% Zn, 2.6% Pb and 27g/t Ag at a 2.5% Pb+Zn cut-off (ASX: TZN 1[st] March 2011).
Parkinson Dam epithermal Au-Ag-Pb-Zn mineralisation - extends over an area of ~4km[2] and the best intersection includes 21m at 21g/t Au and 83g/t Ag.

P a g e | 37

==> picture [441 x 424] intentionally omitted <==

Figure 2 Corunna Project solid geology, tenements and analogous regional mineralisation.

Epithermal and skarn/carbonate replacement mineralisation identified to date, occurs proximal to the margin of the Lower GRV and the major Uno Fault, whereas metasomatic Pb-Zn-Ag-Cu mineralisation has been identified much further to the south (~110km).

In low sulphidation epithermal systems, the mineralisation and corresponding alteration is confined to major structures. Epithermal alteration is magnetite destructive (i.e. advanced argillic alteration), so for this reason linear magnetic lows are primary targets for epithermal Ag-Pb-Zn. The primary focus for exploration at Corunna Project, is along faults in zones of structural complexity where a secondary fault intersects a major structure. A structural and geochemical review completed by MGV in 2017, highlighted a spatial correlation between these structures and anomalous geochemistry. Initial desktop review studies of the historical aero-magnetic data over ELA 2017/250 has highlighted several potential areas of faulting and magnetite destruction. These focus areas will undergo regional and infill geochemical soil sampling, ahead of potential drill testing.

The Corunna Project area contains numerous historic early stage mineral prospects, which demonstrate anomalous Ag-Pb-Zn and are summarised in the independent geologist report. The most advanced and recent and work undertaken by MGV identified several new areas of anomalous silver in soil following regional and infill soil geochemistry grid survey work. MGV also reviewed the best analytical methods for low level Ag detection and determined that Terra Leach Digest TL1

P a g e | 38

(Intertek Genalysis) with an ICP-MS and AAS finish combination to be the most effective technique to apply. This advancement of soil sampling analysis methods, renders most historic sampling ineffective. As such, first past soil geochemical surveying will form an important component of the early exploration campaign to define drill targets.

Follow-up shallow air-core drilling undertaken in August 2015 by MGV at its Area 1 Prospect, intersected anomalous silver, lead and zinc (Figure 3). Best intercepts include:

CAOC17 - 11m @ 1.0% Pb, 0.5% Zn and 4.2g/t Ag from 19m
CAOC18 - 6m @ 1.0% Pb, 0.2% Zn and 8.2g/t Ag from 14m
CAOC19 - 13m @ 0.6% Pb, 0.4% Zn and 7.2g/t Ag from 32m
CAOC21 - 22m @ 0.5% Pb, 0.2% Zn and 13.2g/t Ag from 17m

The silver-lead-zinc anomalism is present in five drill holes over a strike length of 300 m and is open to both the north and south (refer to MGV 27[th] August 2015 ASX release for further details). No basement drilling into the fresh rock at depth has been completed to date beneath target Area 1, which will be priority for follow up drill testing.

==> picture [451 x 306] intentionally omitted <==

Figure 3 Pseudo-colour image of silver in soils, showing areas of high silver (red to white colours) and drill hole collar locations.

The Company believes the Corunna Project warrants further prospect targeting work and drilling, given the presence of the highly prospective Hutchison Group (i.e. host rock to Paris and Menninnie Dam), the prospective Corunna Conglomerate (i.e. host rock to Parkinson Dam), multiple surficial Ag occurrences (spatially associated with structures) and the advancement of soil sampling analysis methods.

P a g e | 39

For further information on the Corunna Project please see Section 3 of the Independent Geologist’s Report in Section 7 of this Prospectus.

Walparuta Project

The Walparuta Project is located 30 kilometres north of Mannahill, and covers strata of the Curnamona Province of South Australia (Figure 4). The Curnamona Province contains widespread base-metal, gold and uranium occurrences and several commercial mines, most notably the worldclass Broken Hill Ag-Pb-Zn deposit and more recently Havilah Resources Limited’s operating Portia Gold Mine. The project comprises two tenements totalling 78 km[2] and includes several historic prospects for Au-Cu and Ag-Pb-Zn (Figure 4).

==> picture [452 x 334] intentionally omitted <==

Figure 4 Walparuta Project solid geology, tenements and prospect locations.

The, historic Walparuta Au-Cu Prospect, has been the subject of irregular small scale prospector mining between 1894-1953. Production figures from government records reported 23.9 tonnes of treated ore, yielding 11.6 g/t gold, and no figure for copper ore production was determined. Previous drilling beneath the main workings by other explorers in the 1960’s and early 1970’s, comprised seven angled drill holes to test the depth extent of mineralisation. A table summarising the drilling intercepts is presented below.

P a g e | 40

Table 2 Walparuta Cu-Au Prospect – Historical Drilling

Hole ID	Easting	Northing	Dip (Deg)	Azimuth (Deg)	EOH Depth (m)	Cu-Au Drill Interception
WP 1	409672	6433678	-50	315	113.4	135.1–146.3 (11.2m)
						@0.34% Cu and 0.35g/t Au
						Including137.2 – 138.7m(1.5m) @1% Cu and 1.2g/t Au
WP 2	409972	6433398	-55	315	78.5	18.3–29.0m (10.7m)
						@0.41%Cu and 0.2g/t Au
						Including 21.3–24.4 (3.1m)
						@0.64% Cu and 0.37g/t Au
WP 3	410022	6433378	-50	305	196.3	48.8–65.5m (16.7m)
						@0.44% Cu and 0.17g/t Au
						Including 57.9–64.0 (6.1m)
						@0.64% Cu and 0.31g/t Au
WP 4	410022	6433278	-50	305	228.24	132.6–161.5m (28.9m)
						@0.3% Cu and 0.16g/t Au
						Including 135.6 – 141.7m (6.1m) @ 0.47% Cu and 0.52g/t Au
WPP 1	409672	6433378	-60	?	230	-
WP01	410465	6433347	-50	315	179	58-86m (28m)
						@0.25% Cu and 0.4g/t Au
						Including 82–84m (2m)
						@0.6% Cu and 1.15g/t Au
WP02	410630	6433531	-55	315	167	114-116m (2m)
						@0.17% Cu and 1.15g/t Au
WP03	410965	6433487	-60	315	100	-

(Please note supporting information for the historical drilling is contained in the Independent Geologist’s Report in Section 7 of this Prospectus)

These drill intersections were all in sulphide mineralisation and below any likely zone of secondary enrichment. The mineralisation is open at depth and along strike. Also of note in the Walparuta geochemistry were moderately elevated Co values. Historic assays recorded a peak value of 760ppm which is around 50-100 x background. Many of the other Cu-Au and Cu occurrences in the area have associated anomalous Co.

The Creagh Dhubh (Gaelic for black crag) prospect is a prominent manganese stained hill of banded Mn-grunerite metachert (Figure 5). This Mn-rich chemical sediment is interpreted to be an exhalite related to mafic volcanism and may be similar to the manganiferous exhalites seen associated with the Broken Hill mineralisation . Marathon Resources Limited (MTN) completed an Airborne electromagnetic (EM) survey (REPTEM Helicopter TDEM) across the Creagh Dhubh prospect (ASX: MTN announcement, 30[th] April 2014), which defined a significant EM anomaly on the western margins of the Creagh Dhubh prospect starting at approximately 250 m depth.

As part of the audit process for the Independent Geologist’s Report contained in Section 7 of this Prospectus, the historic EM data was reviewed. The review found that the previously modelled conductor at depth beneath a thin conductive cover was more likely an artefact caused by an unrealistic decay (elevated noise) in channels 13-16.

The REPTEM system used in the MTN survey is a low-power / high-noise system compared with many other helicopter-borne TEM systems. It is not an ideal system for resolving bedrock conductors at depth. As such, this target warrants further ground EM surveying to determine if a bedrock conductor can been found within the exhalite. There is in addition, some surficial geochemical evidence to support the exploration model with rock chips returning peak values of 1200 ppm Zn,

P a g e | 41

500ppm Cu, 10g/t Ag, 235ppm Ni, 250ppm Co, 180ppm As and 11.2% Mn with up to 0.29g/t Au.

==> picture [436 x 327] intentionally omitted <==

Figure 5 The Creagh Dhubh Prospect - Outcropping manganiferous exhalite. Photo courtesy DPC Resources & Energy Group, SA.

During the recent EM review process a number of other potential bedrock conductors were identified (Figure 6) that require follow-up. Given the REPTEM system is a relatively low power / high noise system, these anomalies are considered tenuous and require validation with a deep exploration airborne EM system or ground EM.

P a g e | 42

==> picture [452 x 320] intentionally omitted <==

Figure 6 Prioritised EM anomalies

Of significant interest in the southern airborne EM survey was a UTEM conductor, which could potentially represent a large graphite body, with dimensions similar to Archer Exploration Limited’s (ASX: AXE 6[th] December 2012) Campoona graphite deposit. Field reconnaissance by SAEX located graphite bearing schist at the site of the EM anomaly but did not undertake any further analytical work. The recent EM review as part of the IGR report, found that the previously modelled conductor was weaker than would be expected from a high-grade graphite source. Given the REPTEM system used to acquire the data is not ideal (as outlined previously), follow up investigation with a higher powered system is warranted.

There are numerous pegmatite dykes across the tenure containing rare earth minerals in the form of Samarskite, which also have the potential to host lithium in minerals such as spodumene, uranium minerals such as alanite, and phosphate minerals such as apatite. The project area contains numerous other historic early stage mineral prospects and summary details can be found in the IGR. The Walparuta Project presents an opportunity to follow up with ground geophysical methods (principally EM and magnetics) several highly prospective base and precious metal targets.

For further information on the Walparuta Project please see section 4 of the Independent Geologist’s Report in Section 7 of this Prospectus.

3.4 Project and Development Programmes

The main initial focus for the Company post Completion will be to explore and develop its interests in the Projects, with the aim of creating value for the Company’s current and future shareholders.

The majority of the Company’s planned expenditure over the next two years will be applied to the following:

P a g e | 43

Corunna Project

Undertake RC and/or diamond drilling of the basement strata beneath the Corunna Area 1 Prospect
Undertake shallow AC drill testing of other defined Ag in soil targets on the Corunna North Tenement
Undertake regional and infill soil geochemical surveys
Trial ground geophysical surveys over defined prospects to aid drill targeting
Complete Native Heritage Surveys over new target areas and undertake test drilling.

Walparuta Project

Ground geophysical surveys at Creagh Dhubh and Walparuta Prospects to aid drill targeting
Complete Native Title Agreement and Heritage Surveys to allow drilling of prospects
Drill testing at Creagh Dhubh and Walparuta Prospects
Reconnaissance mapping and sampling of pegmatites
Drill testing of graphite target

Generative

Pursue new projects and opportunistic acquisitions in the resource sector in various jurisdictions to create additional Shareholder value.

The Company proposes to fund its intended activities as outlined in the table below from the proceeds of the Offer. It should be noted that the budgets will be subject to modification on an ongoing basis depending on the results obtained from exploration undertaken. This will involve an ongoing assessment of the Company's project interests and may lead to increased or decreased levels of expenditure on certain interests, reflecting a change in emphasis. Subject to the above, the following budgets are proposed which takes into account the proposed expense over the next 2 years to complete initial exploration of the Tenements.

Funds (net of costs) raised from this Offer will be used as follows, contemplating a minimum raising:

P a g e | 44

Expenditure Activity	Year 1 ($)	Year 2 ($)	Total ($)
CORUNNA PROJECT
Geophysics - surveys, processing and interpretation	25,000 $	120,000 $	145,000 $
Geological Studies - research, exploration planning, management and reporting	85,000 $	135,000 $	220,000 $
Soil geochemistry surveys	120,000 $	60,000 $	180,000 $
Drilling - air core, reverse circulaton and diamond	270,000 $	420,000 $	690,000 $
Rehabilitation	21,000 $	18,000 $	39,000 $
Native Title	25,000 $	30,000 $	55,000 $
Field costs and tenement administration	44,000 $	63,000 $	107,000 $
CORUNNA - TOTAL	590,000 $	846,000 $	1,436,000 $
WALPARUTA PROJECT
Geophysics - surveys, processing and interpretation	75,000 $	60,000 $	135,000 $
Geological Studies - research, exploration planning, management and reporting	85,000 $	85,000 $	170,000 $
Soil and rock chip geochemistry surveys	6,000 $	2,000 $	8,000 $
Drilling - reverse circulaton and diamond		240,000 $	240,000 $
Rehabilitation		8,000 $	8,000 $
Native Title	70,000 $	25,000 $	95,000 $
Field costs and tenement administration	19,000 $	34,000 $	53,000 $
WALPARUTA - TOTAL	255,000 $	454,000 $	709,000 $
EXPLORATION - TOTAL	845,000 $	1,300,000 $	2,145,000 $

Table 3 Exploration Activities Budget – Years 1 & 2 (Minimum Subscription: $4 million)

Note : Exploration budget above covers only the granted tenements

Maximum Subscription - Contemplating a maximum raising ($5 million) the additional funds will be used for follow up drilling of Prospects which return positive drilling results and for additional predrill surface exploration activities to define additional targets.

Funds (net of costs) raised from this Offer will be used as follows, contemplating a maximum raising:

P a g e | 45

Table 4 Exploration Activities Budget – Years 1 & 2 (Maximum Subscription: $5 million)

Expenditure Activity	Year 1 ($)	Year 2 ($)	Total ($)
CORUNNA PROJECT
Geophysics - surveys, processing and interpretation	55,000 $	120,000 $	175,000 $
Geological Studies - research, exploration planning, management and reporting	125,000 $	175,000 $	300,000 $
Soil geochemistry surveys	120,000 $	90,000 $	210,000 $
Drilling - air core, reverse circulaton and diamond	300,000 $	520,000 $	820,000 $
Rehabilitation	23,000 $	23,000 $	46,000 $
Native Title	35,000 $	40,000 $	75,000 $
Field costs and tenement administration	53,000 $	77,000 $	130,000 $
CORUNNA - TOTAL	711,000 $	1,045,000 $	1,756,000 $
WALPARUTA PROJECT
Geophysics - surveys, processing and interpretation	75,000 $	75,000 $	150,000 $
Geological Studies - research, exploration planning, management and reporting	125,000 $	125,000 $	250,000 $
Soil and rock chip geochemistry surveys	9,000 $	4,000 $	13,000 $
Drilling - reverse circulaton and diamond	-	270,000 $	270,000 $
Rehabilitation	-	8,000 $	8,000 $
Native Title	70,000 $	35,000 $	105,000 $
Field costs and tenement administration	22,000 $	41,000 $	63,000 $
WALPARUTA - TOTAL	301,000 $	558,000 $	859,000 $
EXPLORATION - TOTAL	1,012,000 $	1,603,000 $	2,615,000 $

Note : Exploration budget above covers only the granted tenements

P a g e | 46

Section 4: Risks

4.1 Introduction

The risks contained both in Section 1.7 and this Section 4 should be considered carefully by potential investors

The Shares offered under this Prospectus should be considered speculative because of the nature of the commercial activities of the Company. Potential investors should be aware that an investment in the Company involves risks, which may be higher than the risks associated with an investment in other companies.

There are numerous widespread risks associated with investing in any form of business and with investing in the share market generally. There is also a range of specific risks associated with the Company’s activities and its proposed involvement in the mineral exploration industry. These risk factors are largely beyond the control of the Company and its Directors because of the nature of the proposed activities of the Company.

Persons considering whether or not to invest in the Company should read the whole of this Prospectus in order to fully appreciate such matters and the manner in which the Company intends to operate, before any decision is made to apply for Shares. Prospective investors should consider whether the Shares offered are a suitable investment for them having regard to their own personal investment objectives and financial circumstances and the risk factors set out below. If in any doubt, prospective investors should consult with their professional advisers before deciding whether to apply for Shares.

The following, which is not exhaustive, identifies some of the major risks associated with an investment in the Company, of which potential investors need to be aware before making a decision on whether or not to invest in the Company’s Shares.

4.2 Key Risks

The Key Risks identified in Section 1.7 of the Prospectus are as follows:

 Mineral Exploration

 Reliance on Key Personnel

 Commodity and Currency Price Volatility

Commodity prices are subject to influencing factors beyond the control of the Company and can be subject to significant fluctuations. Just some of these influencing factors include:

world demand for particular commodities;
the level of production costs in major commodity producing regions;

P a g e | 47

 expectations regarding inflation, interest rates and exchange rates.

Any significant and/or sustained fluctuation in exchange rates or commodity prices could have a materially adverse effect on the Company’s operations and its financial position.

 Additional Requirements for Capital

4.3 Risks

The future performance of the Company and the future investment performance of the Shares may be influenced by a range of factors. Some of these factors can be mitigated. However, many are outside the control of the Board and the Company. Prior to making any decision to accept the Offer, investors should carefully consider the following general and specific risk factors applicable to the Company:

(a) Specific Risk Factors

There are a range of specific risks associated with the Projects and Petratherm’s proposed involvement in the mineral exploration industry. The following list of specific risk factors ought not to be taken as exhaustive. The risk factors referred to in this Section 4, and others not specifically referred to, may in the future materially affect the financial performance of the Company and the value of the Shares to be offered under this Prospectus.

 Resource Estimations

Resources estimates are inherently imprecise as they are expressions of judgement at a particular time based on available information, interpreted using experience and resource modelling techniques. The estimates, while made by qualified professionals, may change over time as other information becomes available which differs from information known or predicted by past drilling, sampling and geological interpretation. Estimates remain subject to change which may adversely affect the Company’s operations or the commercial viability of its projects.

 Tenure and Access

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 or that current exploration tenement applications will be granted.

Tenements are subject to numerous State-specific legislation conditions. The renewal of the term of a granted tenement (and grant of tenement applications) is also subject to the discretion of the relevant Minister. Renewal conditions may include increased expenditure and work commitments or compulsory relinquishment of areas of the tenements. The imposition of new conditions either during the term of a tenement or upon renewal, or the inability to meet those conditions may adversely affect the operations, financial position and/or performance of the Company.

 Development and Mining

Possible future development of mining operations at any of the Projects is also subject to numerous risks. The Company’s operations may be delayed or prevented as a result of weather conditions, mechanical difficulties, shortage of technical expertise or equipment. There may be difficulties with obtaining government and/or third party approvals, operational difficulties encountered with extraction and production activities, unexpected shortages or increase in the

P a g e | 48

price of consumables, plant and equipment, cost overruns or lack of access to required levels of funding.

If the Company commences production, its operations may be curtailed or disrupted by a number of risks beyond its control such as environmental hazards, industrial accidents and disputes, technical failures, unusual or unexpected geological conditions, adverse weather conditions, fires, explosions and other accidents.

The Company’s operations may be adversely affected by higher than anticipated ore treatment costs, worse than anticipated metallurgical conditions, fluctuations in base and metal prices or lack of availability of smelter capacity.

No assurance can be given that the Company will achieve commercial viability through development of any of its projects.

 Native Title and Aboriginal Heritage

The Native Title Act 1993 (Cth) recognises certain rights of indigenous Australians over land where those rights have not been extinguished. These rights, where they exist, may impact on the ability of the Company to carry out exploration or obtain production tenements. In applying for certain production tenements, the Company must observe the provisions of Native Title legislation (where applicable) and Aboriginal Heritage legislation which protects Aboriginal sites and objects of significance.

In certain circumstances the consent of registered Native Title claimants must be obtained prior to carrying out certain activities on land to which their claim relates. It is possible that the terms of registered Native Title agreements may restrict the Company’s ability to gain access to its tenements and conduct exploration, development and mining operations, or that the conditions imposed by Native Title claimants on such consent may be on terms unacceptable to the Company.

 Compulsory Work Obligations

Tenements are subject to expenditure and work commitments which must be met in order to keep such tenements in good standing. These commitments may be varied on application by the tenement holder but any such variation is at the sole discretion of the Minister administering the relevant State mining legislation. If no variation is approved, and there is failure to meet the commitments, this could lead to forfeiture of the tenement.

 Environmental

The Company’s projects are subject to both the relevant State and also Commonwealth laws and regulations relating to environmental matters. Should the Company proceed to development of one or more mines, it could be expected that such developments would have numerous environmental impacts which would require various statutory approvals to be put in place. There is no guarantee that such approvals would be granted. The Company intends to conduct its operations in an environmentally responsible manner and in accordance with relevant legislation. However, the Company is unable to predict the effect of future changes to environmental legislation or policy and the cost effect of such changes on its operations and financial position.

 Non-granting of Gilles Downs ELA

There is no guarantee the Company’s application for the Gilles Downs ELA will be successful or that the Company will be granted an EL or other exploration rights as a result of that application.

 Joint Ventures

The Company may wish to undertake future projects through joint venture arrangements (and, if it earns an interest in the MGV Tenement, its interest in that tenement and activities in respect of it will be governed by and subject to the Mining Farm-In and Joint Venture Agreement). Any joint

P a g e | 49

ventures entered into by, or interests in joint ventures assigned to, the Company could be affected by the failure or default of any of the joint venture participants.

 Government Policies and Legislation

The Company may be affected by changes to government policies, legislation and taxation. Changes in Government policies, legislation and taxation can have a significant influence on a business’ prospects and return to investors. The Company’s products could be subject to government regulation, and the regulatory approval and maintenance process for such products may be expensive, time-consuming, and uncertain both in timing and in outcome.

 Insurance Risks

The Company insures its business and operations. However, the Company’s insurance may not be of a nature or level to provide adequate insurance cover to insure against the occurrence of all events that may impact on the operations of the Company. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial conditions and results of the Company.

Insurance against all risks associated with mining exploration and production is not always available and where available the costs can be prohibitive.

 Competition Risk

The industry in which the Company will be involved is subject to domestic and global competition. Although the Company will undertake all 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’s projects and business.

 Litigation

The Company may in the ordinary course of business be involved in possible disputes. These disputes could give rise to litigation. While the extent of any disputes and litigation cannot be ascertained at this time, any dispute or litigation may be costly and may adversely affect the operational and financial results of the Company.

(b) General Risk Factors

 Share Market Conditions

Share market conditions may affect listed securities regardless of operating performance. Share market conditions are affected by many factors such as general economic outlook, movements in, or outlook on interest rates and inflation rates, currency fluctuations, commodity prices, changes in investor sentiment towards particular market sectors, press newspaper and other media reports and the demand for, and supply of, capital. Investors should recognise that once the Shares are re-listed on ASX, the price of the Shares may fall as well as rise. Many factors will affect the price of the Shares including those listed above.

 Accounting Standards

Changes in accounting standards and subjective assumptions, estimates, and judgements by management related to complex accounting matters could significantly affect the Company’s financial results or financial position.

 Taxation Risks

Tax policies in the countries where Petratherm operates from time to time may change so as to adversely affect the profitability of Petratherm’s operations, and where Petratherm trades internationally, it will be exposed to operational and financial risks associated with taxation in multiple jurisdictions.

P a g e | 50

 Operational Risks

The Company is exposed to a number of risks beyond its control, such as industrial actions and disputes or unusual or unexpected events such as fires or other accidents.

There may be difficulties with obtaining government and/or third party approvals, unexpected shortages or increase in the price of consumables, plant and equipment.

The Company’s operations may be adversely affected by higher than anticipated costs or worse than anticipated fluctuations in prices and currencies.

No assurance can be given that the Company will achieve commercial viability through development of any of its Projects.

 Economic Conditions Risk

The performance of Petratherm is likely to be affected by changes in economic conditions. Profitability of the business may be affected by some of the matters listed below:

future demand for minerals;
general financial issues which may affect policies, exchange rates, inflation and interest rates;
deterioration in economic conditions, possibly leading to reductions in spending and other potential revenues which could be expected to have a corresponding adverse impact on Petratherm’s operating and financial performance;
the strength of the equity and share markets in Australia and throughout the world;
financial failure or default by any entity with which Petratherm may become involved in a contractual relationship;
industrial disputes in Australia and in countries in which Petratherm may trade or operate from time to time;
changes in investor sentiment towards particular market sectors;
the demand for, and supply of, capital; and
terrorism or other hostilities.

 Other General Risks

Other general risks associated with investment in the Company may include:

fluctuation of the price at which the Company’s shares trade due to market factors; and
price volatility of the Company’s shares in response to factors such as:
additions or departures of key personnel;
litigation and legislative change;
press newspaper or other media reports; and
actual or anticipated variations in the Company’s operating results.

Summary

This investment is regarded as highly speculative. Neither the Company nor its Directors nor any other party to be associated with the preparation of this Prospectus represents or warrants that any specific objective of the Company will be achieved or that any particular targets of the Company will be achieved.

P a g e | 51

Section 5: Financial Information

5.1 OVERVIEW

This section contains a summary of the Historical Financial Information and Pro Forma Historical Financial Information (collectively referred to as the Financial Information) in relation to Petratherm Limited (‘ Petratherm ’ or the ‘ Company ’) which the Directors consider relevant to investors.

Investors are referred to Section 3 of the Prospectus for an overview of Petratherm’ corporate structure.

Historical Financial Information

The Historical Financial Information comprises the following:

a) the Audited Historical Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2016 ( FY16 ) and 30 June 2017 ( FY17 );
b) the Reviewed Historical Statement of Profit or Loss and Other Comprehensive Income for the half year ended 31 December 2017 ( 1HY18 );
c) the Audited Historical Statement of Cash Flows for the year ended 30 June 2016 and 30 June 2017;
d) the Reviewed Historical Statement of Cash Flows for the half year ended 31 December 2017; and
e) the Reviewed Historical Statement of Financial Position as at 31 December 2017.

Pro Forma Historical Financial Information

The Pro Forma Historical Financial Information comprises the following:

a) the Pro Forma Consolidated Statement of Financial Position as at 31 December 2017; and
b) selected notes to the Pro Forma Consolidated Statement of Financial Position.

(the Historical Financial Information and Pro Forma Historical Financial Information together form the Financial Information ).

The Financial Information should be read in conjunction with the risk factors associated with an investment in Petratherm set out in Section 4, the Independent Limited Assurance Report in Section 6 and the other information contained in this Prospectus. Investors should note the scope and limitations of the Independent Limited Assurance Report.

Investors should be aware that past performance is not an indication of future performance.

P a g e | 52

5.2 BASIS OF PREPARATION OF THE FINANCIAL INFORMATION

The Directors of the Company are responsible for the preparation and presentation of the Financial Information contained in this Prospectus. The Financial Information is intended to present potential investors with information to assist them in understanding the historical financial performance, cash flows and financial position of the Company.

The Company’s significant accounting policies are set out in Note 5.7.

The Financial Information contained in this section of the Prospectus is presented in an abbreviated form and does not contain all the disclosures that are usually provided in an annual report prepared in accordance with Australian Accounting Standards and the Corporations Act. In the view of the Directors of the Company, the omitted disclosures would provide no further relevant information to potential investors.

All amounts disclosed in this section are presented in Australian Dollars.

Historical Financial Information

The Historical Statement of Profit or Loss and Other Comprehensive Income and the Historical Statements of Cash Flows for FY16 and FY17 have been extracted from the audited financial statements. The financial statements for FY16 and FY17 were audited by Grant Thornton Audit Pty Ltd who issued unqualified opinions. An emphasis of matter paragraph outlining a material uncertainty related to going concern was included in the FY17 Independent Auditor’s Report citing Petratherm’s net loss of $640,785 and net cash outflows from operating and investing activities totalling $459,098 for the year ended 30 June 2017.

The Historical Statement of Profit or Loss and Other Comprehensive Income, the Historical Statement of Cash Flows for 1HY18 and Historical Statement of Financial Position as at 31 December 2017 have been extracted from the reviewed financial statements. The financial statements for 1HY18 were reviewed by Grant Thornton Audit Pty Ltd who issued an unmodified review conclusion thereon.

Pro Forma Historical Financial Information

The Pro Forma Historical Financial Information of Petratherm has been compiled from the reviewed financial information of Petratherm as at 31 December 2017, after adjusting for certain pro forma transactions as outlined in Section 5.4.

The Pro Forma Historical Financial Information has been prepared in accordance with the recognition and measurement principles of Australian Accounting Standards other than that it includes adjustments that reflect the impact of the Offer as if it occurred as at 31 December 2017.

Due to its nature, the ProForma Financial Information does not represent the Company’s actual or prospective financial position.

P a g e | 53

5.3 SUMMARY OF HISTORICAL FINANCIAL PERFORMANCE AND CASH FLOWS

Set out below is the Historical Financial Information for Petratherm.

The basis of preparation of the Historical Financial Information is set out in Section 5.2. The accounting policies are set out in Section 5.7.

Historical Statement of Profit or Loss and Other Comprehensive Income

	Audited Year ended Audited Year ended Reviewed Half Year ended Reviewed Half Year ended 30 June 2016 30 June 2017 31 December 2016 31 December 2017 $ $ $ $
Revenue 9,465 11,785 4,533 7,173 Other income - 4,648 - - Impairment of exploration assets (182,120) - - - Employee benefits expense (107,317) (323,538) (93,237) (48,139) Share based payments - - (130,034) - Foreign exchange gains 15,458 - - - Other expenses (342,469) (320,667) (245,056) (140,809) Loss before income tax (606,983) (627,772) (463,794) (181,775) Income tax benefit (1,941) (13,013) (13,013) - Loss for the period (608,924) (640,785) (476,807) (181,775) Other comprehensive income - - - - Total comprehensive income for the period (608,924) (640,785) (476,807) (181,775)	9,465 11,785 4,533 7,173 - 4,648 - - (182,120) - - - (107,317) (323,538) (93,237) (48,139) - - (130,034) - 15,458 - - - (342,469) (320,667) (245,056) (140,809)
	(606,983) (627,772) (463,794) (181,775)
	(1,941) (13,013) (13,013) -
	(608,924) (640,785) (476,807) (181,775)
	(608,924) (640,785) (476,807) (181,775)

P a g e | 54

Historical Statement of Cash Flows

	Audited Year ended Audited Year ended Reviewed Half Year ended Reviewed Half Year ended 30 June 2016 30 June 2017 31 December 2016 31 December 2017 $ $ $ $
Cash flows from operating activities: Payments to suppliers and employees Other income received Interest received Net cash used in operating activities Cash flows from investing activities: Payments for exploration activities Net cash used in investing activities Cash flows from financing activities: Proceeds from issue of shares Payment of transactions costs Net cash provided by financing activities Net increase/(decrease)in cash and cash equivalents held Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	(398,638) (475,531) (328,144) (208,614) - 4,648 - - 9,464 11,785 4,533 7,173
	(389,174) (459,098) (323,611) (201,441)
	(91,415) - - -
	(91,415) - - -
	735,591 676,500 676,500 - (67,308) (47,320) (47,320) -
	668,283 629,180 629,180 -
	187,694 170,082 305,569 (201,441) 475,898 663,592 663,592 883,674
	663,592 883,674 969,161 632,233

P a g e | 55

5.4 PRO FORMA FINANCIAL INFORMATION

Set out below is the Pro Forma Financial Information for Petratherm.

The basis of preparation of the Pro Forma Financial Information and details of the Pro Forma adjustments made are set out in Section 5.5.

Pro Forma Consolidated Statement of Financial Position

Refer CURRENT ASSETS Cash and cash equivalents 5.6.1 Trade and other receivables Other current assets TOTAL CURRENT ASSETS NON CURRENT ASSETS Exploration assets 5.6.2 TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS SHAREHOLDERS EQUITY Issued capital 5.6.3 Reserves 5.6.3 Accumulated losses 5.6.3	Reviewed Petratherm 31 December 2017 Pro Forma Minimum Subscription Pro Forma Maximum Subscription $ $ $ 632,233 4,229,895 5,168,320 7,941 7,941 7,941 9,323 9,323 9,323
	649,497 4,247,159 5,185,584
	- 50,000 50,000
	- 50,000 50,000
	649,497 4,297,159 5,235,584
	34,733 34,733 34,733 241,000 241,000 241,000
	275,733 275,733 275,733
	275,733 275,733 275,733
	373,764 4,021,426 4,959,851
	34,760,564 38,179,311 39,063,012 130,034 552,349 602,291 (34,516,834) (34,710,235) (34,705,452)
	373,764 4,021,426 4,959,851

P a g e | 56

5.5 ASSUMPTIONS USED IN PREPARING THE PRO FORMA HISTORICAL FINANCIAL INFORMATION

The Pro Forma Historical Statements of Financial Position presented in Section 5.4 reflect the following pro forma adjustments:

(a) Consolidation of Shares and Options

Subject to Shareholders’ approval, the Company will consolidate its Shares and Options on issue as at 28 February 2018 on a two to one basis (rounded up to the nearest whole number) ( Consolidation ), such that the number of Shares in the Company immediately following the Consolidation will be 50,153,752 and the number of Options on issue will be 3,500,000.

(b) Assuming Minimum Subscription

The issue of 100,000,000 Offer Shares at an issue price of $0.04 per share to raise $4,000,000, less associated capital raising costs estimated to be $402,338 (excluding the issue of share options to the lead manager outlined in (f)) of which $328,798 has been directly off-set against raised capital, and $73,540 has been expensed in accordance with Australian Accounting Standards.

(c) Acquisition of Tenements

On 20 December 2017, Petratherm signed an agreement with Saex Pty Ltd to acquire two exploration licences subject to conditions precedent (refer Section 9.1(a)). As the consideration for the acquisition, Petratherm will issue that number of fully paid ordinary shares in the Company with a value of $50,000 based on $0.04 per share (calculated to be 1,250,000 shares).

(d) Issue of Options to Directors

The Non-Executive Directors are to be issued a total of 3,000,000 unlisted options with an exercise price of $0.04 and an expiry date of the third anniversary of the date of issue. The total fair value of these options is $119,860 and this amount has been expensed.

(e) Assuming Maximum Subscription

The issue of an additional 25,000,000 Offer Shares upon Maximum Subscription at an issue price of $0.04 per share to raise an additional $1,000,000, less additional capital raising costs (excluding the issue of share options to the lead manager outlined in (f)) estimated to be $61,575. Total capital raising costs associated with the Maximum Subscription are estimated to be $463,913 of which $395,155 has been directly off-set against raised capital, and $68,758 has been expensed in accordance with Australian Accounting Standards.

(f) Issue of Share Options to the Lead Manager

Assuming the Minimum Subscription, 7,570,188 share options with a total fair value of $302,455 are to be issued to the Lead Manager, Taylor Collison in accordance with their Mandate Letter (refer to Section 9.3).

P a g e | 57

Assuming the Maximum Subscription, an additional 1,250,000 share options with a total fair value of $49,942 would be issued to the Lead Manager.

5.6 NOTES TO THE FINANCIAL INFORMATION

5.6.1. Cash and cash equivalents

		Minimum Subscription Maximum Subscription
Balance at 31 December 2017 (Reviewed) Proforma adjustments Issue of Shares pursuant to this Prospectus – Refer Section 5.5(b) and (e) Costs of the offer – Refer Section 5.5(b) and (e) Proforma cash and cash equivalents 5.6.2. Exploration assets Balance at 31 December 2017 (Reviewed) Proforma adjustments Acquisition of tenements– Refer Section 5.5(c) Proforma exploration assets		$ $ 632,233 632,233
		4,000,000 5,000,000 (402,338) (463,913)
		4,229,895 5,168,320
		Minimum Subscription Maximum Subscription $ $ - - 50,000 50,000 50,000 50,000

P a g e | 58

5.6.3. Consolidated Statement of Changes in Equity

	Issued Capital	Reserves	Accumulated	Total
			Losses
	$	$	$	$
Balance at 31 December 2017 (Reviewed)	34,760,564	130,034	(34,516,834)	373,764
Pro forma transactions
Share Consolidation on a two to one basis	-	-	-	-
Issue of 100,000,000 Offer Shares in the
Company pursuant to this Prospectus –
Minimum Subscription – Refer 5.5(b)	4,000,000	-	-	4,000,000
Expenses of the offer– Refer Section 5.5(b)	(328,798)	-	(73,540)	(402,338)
Acquisition of tenements pursuant to
agreement – Refer 5.5(c)	50,000	-	-	50,000
Fair value of share options to Lead Manager
on successful capital raise pursuant to their
Mandate Letter – Refer 5.5(f)	(302,455)	302,455	-	-
Fair value of 3,000,000 share options to
Directors – Refer 5.5(d)	-	119,860	(119,860)	-
Pro forma balance - Minimum Subscription	38,179,311	552,349	(34,710,234)	4,021,426
Issue of an additional 25,000,000 Offer
Shares in the Company pursuant to this
Prospectus – Maximum Subscription Refer
5.5(e)	1,000,000	-	-	1,000,000
Additional expenses of the offer– Refer
Section 5.5(e)	(66,357)	-	4,782	(61,575)
Fair value of additional share options to Lead
Manager on successful capital raise pursuant
to their Mandate Letter – Refer 5.5(f)	(49,942)	49,942	-	-
Pro forma balance - Maximum Subscription	39,063,012	602,291	(34,705,452)	4,959,851

5.6.4 Issued capital

	Minimum Subscription	Minimum Subscription	Maximum Subscription	Maximum Subscription
	No. of Shares	$	No. of Shares	$
Issued Capital at 31 December 2017	100,307,503	34,760,564	100,307,503	34,760,564

Proforma adjustments
Share consolidation	(50,153,751)	-	(50,153,751)	-
Capital Raising pursuant to the offer	100,000,000	4,000,000	125,000,000	5,000,000
Offer costs (cash)	-	(328,798)	-	(395,155)
Fair value of options issued to the Lead Manager	-	(302,455)	-	(352,397)
Consideration shares for acquisition of tenements	1,250,000	50,000	1,250,000	50,000

P a g e | 59

	Minimum Subscription	Minimum Subscription	Maximum Subscription	Maximum Subscription
	No. of Shares	$	No. of Shares	$
Total Shares issued post transaction and Offer	151,403,752	38,179,311	176,403,752	39,063,012

5.6.5. Share Options

Based on the Maximum Subscription, the following options are to be issued in accordance with the offer:

Allottee	Number of options	Exerciseperiod	Exerciseprice	Vesting criteria
Lead Manager*	8,820,188	3 years from	$0.04	Not applicable
		date of issue
Directors	3,000,000	3 years from	$0.04	Not applicable
		date of issue

*At the Minimum Subscription, a total of 7,570,188 options will be issued to the Lead Manager

The options have been valued using the Black-Scholes valuation method with the following assumptions:

Fair value of shares at grant date:	$0.04
Strike price:	$0.04
Expiry date	31 December 2020
Volatility rate:	373.73%
Risk free rate:	2.57%

5.7 SIGNIFICANT ACCOUNTING POLICIES

(a) Income Tax

The tax expense recognised in the statement of profit or loss and other comprehensive income comprises of current income tax expense plus deferred tax expense.

Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax is not provided for the following:

The initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
Taxable temporary differences arising on the initial recognition of goodwill.
Temporary differences related to investment in subsidiaries, associates and jointly controlled entities to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.

P a g e | 60

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilised.

Current and deferred tax is recognised as income or an expense and included in profit or loss for the period except where the tax arises from a transaction which is recognised in other comprehensive income or equity, in which case the tax is recognised in other comprehensive income or equity respectively.

(b) Research and development tax incentive

Research and development tax incentive income is recognised at fair value when there is reasonable assurance that the income will be received. Income from research and development tax incentives is recognised as an offset against income tax expense or benefit.

(c) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

(d) Trade and other payables

Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided prior to the end of the financial year that are unpaid and arise when the company becomes obliged to make future payments in respect of the purchase of these goods and services.

(e) Goods and services tax (GST)

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payable are stated inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.

Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(f) Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are

P a g e | 61

measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

loans and receivables;
financial assets at fair value through profit or loss (FVTPL);
available-for-sale financial assets (AFS); and
held-to-maturity investments (HTM).

All financial assets except for those at FVTPL are subject to review for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired.

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.

All financial assets of the company are loans and receivables.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group’s trade and most other receivables fall into this category of financial instruments.

Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and region of a counterparty and other shared credit risk characteristics. The impairment loss estimate is then based on recent historical counterparty default rates for each identified group.

Classification and subsequent measurement of financial liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or ‘other financial liabilities’ depending on the purpose for which the liability was acquired.

The Company’s financial liabilities include trade and other payables which are measured subsequently at amortised cost using the effective interest method.

P a g e | 62

(g) Exploration assets

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. As the asset is not available for use it is not depreciated or amortised.

Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the period in which the decision to abandon that area is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. When provisions for closure and rehabilitation are initially recognised, the corresponding cost is capitalised as an asset representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of closure and rehabilitation activities is recognised in property, plant and equipment and depreciated accordingly. The value of the provision is progressively increased over time as the effect of discounting unwinds, creating an expense which is recognised in finance costs. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology discounted to their present value.

Any changes in the estimates for the costs are accounted on a prospective basis in the consolidated statement of profit or loss and other comprehensive income. In determining the costs of site restoration, there is an uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that restoration will be completed within one year of abandoning the site.

(h) Equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

P a g e | 63

Section 6: Independent Limited

Assurance Report

==> picture [415 x 588] intentionally omitted <==

P a g e | 64

==> picture [479 x 678] intentionally omitted <==

P a g e | 65

==> picture [475 x 670] intentionally omitted <==

P a g e | 66

==> picture [481 x 681] intentionally omitted <==

P a g e | 67

Section 7: Independent Geologist’s

Report

==> picture [371 x 525] intentionally omitted <==

P a g e | 68

==> picture [483 x 685] intentionally omitted <==

P a g e | 69

==> picture [481 x 679] intentionally omitted <==

P a g e | 70

==> picture [484 x 685] intentionally omitted <==

P a g e | 71

==> picture [485 x 686] intentionally omitted <==

P a g e | 72

==> picture [485 x 686] intentionally omitted <==

P a g e | 73

==> picture [493 x 696] intentionally omitted <==

P a g e | 74

==> picture [490 x 695] intentionally omitted <==

P a g e | 75

==> picture [496 x 702] intentionally omitted <==

P a g e | 76

==> picture [487 x 689] intentionally omitted <==

P a g e | 77

==> picture [498 x 704] intentionally omitted <==

P a g e | 78

==> picture [498 x 704] intentionally omitted <==

P a g e | 79

==> picture [494 x 701] intentionally omitted <==

P a g e | 80

==> picture [496 x 703] intentionally omitted <==

P a g e | 81

==> picture [500 x 708] intentionally omitted <==

P a g e | 82

==> picture [494 x 700] intentionally omitted <==

P a g e | 83

==> picture [494 x 700] intentionally omitted <==

P a g e | 84

==> picture [494 x 700] intentionally omitted <==

P a g e | 85

==> picture [494 x 701] intentionally omitted <==

P a g e | 86

==> picture [495 x 701] intentionally omitted <==

P a g e | 87

==> picture [498 x 706] intentionally omitted <==

P a g e | 88

==> picture [492 x 696] intentionally omitted <==

P a g e | 89

==> picture [492 x 696] intentionally omitted <==

P a g e | 90

==> picture [500 x 706] intentionally omitted <==

P a g e | 91

==> picture [493 x 698] intentionally omitted <==

P a g e | 92

==> picture [496 x 702] intentionally omitted <==

P a g e | 93

==> picture [498 x 704] intentionally omitted <==

P a g e | 94

==> picture [493 x 698] intentionally omitted <==

P a g e | 95

==> picture [497 x 703] intentionally omitted <==

P a g e | 96

==> picture [496 x 702] intentionally omitted <==

P a g e | 97

==> picture [496 x 701] intentionally omitted <==

P a g e | 98

==> picture [494 x 698] intentionally omitted <==

P a g e | 99

==> picture [494 x 698] intentionally omitted <==

P a g e | 100

==> picture [494 x 698] intentionally omitted <==

P a g e | 101

==> picture [494 x 698] intentionally omitted <==

P a g e | 102

==> picture [499 x 706] intentionally omitted <==

P a g e | 103

==> picture [494 x 698] intentionally omitted <==

P a g e | 104

==> picture [492 x 695] intentionally omitted <==

P a g e | 105

==> picture [492 x 696] intentionally omitted <==

P a g e | 106

==> picture [494 x 698] intentionally omitted <==

P a g e | 107

==> picture [495 x 700] intentionally omitted <==

P a g e | 108

==> picture [496 x 701] intentionally omitted <==

P a g e | 109

==> picture [499 x 706] intentionally omitted <==

P a g e | 110

==> picture [495 x 700] intentionally omitted <==

P a g e | 111

==> picture [500 x 707] intentionally omitted <==

P a g e | 112

==> picture [492 x 695] intentionally omitted <==

P a g e | 113

==> picture [496 x 702] intentionally omitted <==

P a g e | 114

==> picture [496 x 702] intentionally omitted <==

P a g e | 115

==> picture [494 x 699] intentionally omitted <==

P a g e | 116

==> picture [496 x 702] intentionally omitted <==

P a g e | 117

==> picture [500 x 707] intentionally omitted <==

P a g e | 118

==> picture [496 x 702] intentionally omitted <==

P a g e | 119

==> picture [494 x 698] intentionally omitted <==

P a g e | 120

==> picture [493 x 697] intentionally omitted <==

P a g e | 121

==> picture [492 x 695] intentionally omitted <==

P a g e | 122

==> picture [492 x 695] intentionally omitted <==

P a g e | 123

==> picture [496 x 701] intentionally omitted <==

P a g e | 124

==> picture [494 x 700] intentionally omitted <==

P a g e | 125

==> picture [494 x 699] intentionally omitted <==

P a g e | 126

==> picture [496 x 701] intentionally omitted <==

P a g e | 127

==> picture [498 x 704] intentionally omitted <==

P a g e | 128

==> picture [496 x 702] intentionally omitted <==

P a g e | 129

==> picture [495 x 700] intentionally omitted <==

P a g e | 130

==> picture [495 x 700] intentionally omitted <==

P a g e | 131

==> picture [497 x 704] intentionally omitted <==

P a g e | 132

==> picture [494 x 698] intentionally omitted <==

P a g e | 133

==> picture [497 x 703] intentionally omitted <==

P a g e | 134

==> picture [495 x 700] intentionally omitted <==

P a g e | 135

==> picture [493 x 698] intentionally omitted <==

P a g e | 136

==> picture [493 x 697] intentionally omitted <==

P a g e | 137

Section 8: Solicitor’s Report on

Tenements

==> picture [416 x 589] intentionally omitted <==

P a g e | 138

==> picture [485 x 687] intentionally omitted <==

P a g e | 139

==> picture [475 x 672] intentionally omitted <==

P a g e | 140

==> picture [475 x 672] intentionally omitted <==

P a g e | 141

==> picture [485 x 686] intentionally omitted <==

P a g e | 142

==> picture [488 x 691] intentionally omitted <==

P a g e | 143

==> picture [485 x 687] intentionally omitted <==

P a g e | 144

==> picture [495 x 700] intentionally omitted <==

P a g e | 145

==> picture [492 x 695] intentionally omitted <==

P a g e | 146

==> picture [494 x 699] intentionally omitted <==

P a g e | 147

==> picture [484 x 684] intentionally omitted <==

P a g e | 148

==> picture [492 x 695] intentionally omitted <==

P a g e | 149

==> picture [485 x 687] intentionally omitted <==

P a g e | 150

==> picture [466 x 658] intentionally omitted <==

P a g e | 151

==> picture [479 x 678] intentionally omitted <==

P a g e | 152

==> picture [466 x 660] intentionally omitted <==

P a g e | 153

==> picture [484 x 685] intentionally omitted <==

P a g e | 154

Section 9: Material Contracts

Set out below are summaries of the more important provisions of contracts to which the Company is a party and which are or may be material in terms of the Offer or the operations of the Company or otherwise are or may be relevant to an investor who is contemplating the Offer.

9.1 Project Acquisition Agreements

(a) Tenement Purchase Agreement

The Company and Saex Pty Ltd ACN 154 922 728 ( SAEX ) entered into a Tenement Purchase Agreement dated 20 December 2017 ( TPA ), pursuant to which the Company agreed to acquire two gold and basemetal prospective tenements, EL 5306 and EL 5717 ( SAEX Tenements ) and related technical information from SAEX.

The TPA is subject to:

the Company conducting due diligence in respect of the SAEX Tenements and being satisfied in its absolute discretion with such due diligence;
the Company obtaining all shareholder approvals required under the Corporations Act and the ASX Listing Rules in order for its Shares to be reinstated to quotation on ASX including for a significant change to the nature or scale of the Company’s activities, and for the issue of Shares pursuant to this Prospectus;
the Company raising at least $4 million via a prospectus (being this Prospectus);
the Company obtaining conditional approval (subject only to the imposition of conditions usual for such approvals) from ASX for its Shares to be reinstated to quotation; and
the Company obtaining any approvals or consents required under the law of South Australia,

( Conditions Precedent ).

Either party may terminate the TPA if the Conditions Precedent are not satisfied by 31 March 2018 (or such other date agreed by the parties) (provided that party is not in default). As at the date of this Prospectus, only the due diligence condition precedent referred to above has been satisfied.

In consideration for the acquisition of the SAEX Tenements and related technical information, the Company agreed to issue to SAEX 1,250,000 Shares upon completion of the TPA (which shall take place three Business Days after satisfaction or waiver of the last of the Conditions Precedent.

The parties each have the right to terminate the TPA for breach.

(b) Mining Farm-In and Joint Venture Agreement

Pursuant to a Mining Farm-In and Joint Venture Agreement dated 21 December 2017 ( JV Agreement the Company may earn and acquire up to a 75% interest in a silver, lead and zinc prospective tenement, EL 5497 ( MGV Tenement ) (and related rights and information), from Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV) ( Musgrave ).

The JV Agreement is subject to:

the Company conducting due diligence in respect of the MGV Tenements and being satisfied in its absolute discretion with such due diligence;
the Company obtaining all shareholder approvals required under the Corporations Act and the ASX Listing Rules in order for its Shares to be reinstated to quotation on ASX including for a significant change to the nature or scale of the Company’s activities, and for the issue of Shares pursuant to this Prospectus;
the Company raising at least $4 million via a prospectus (being this Prospectus);

P a g e | 155

the Company obtaining conditional approval (subject only to the imposition of conditions usual for such approvals) from ASX for its Shares to be reinstated to quotation; and
the Company obtaining any approvals or consents required under the Mining Act 1971 (SA),

( Conditions Precedent ).

Pursuant to the terms of the JV Agreement, the Company can earn and acquire:

a 51% legal and beneficial interest in the MGV Tenement (and associated rights and information) ( Stage One Interest ) by expending a total of $500,000 on exploration on the MGV Tenement ( Stage One Commitment ), within the period of 18 months commencing on the date of satisfaction or waiver of the last of the Conditions Precedent ( Effective Date ); and
a further 24% legal and beneficial interest in the MGV Tenement (and associated rights and information) ( Stage Two Interest ), for a total 75% interest, by completing the Stage One Commitment and expending a further $500,000 on exploration on the MGV Tenement ( Stage Two Commitment ) within a further 12 months commencing on the date the Company notifies Musgrave of its intention to earn the further 24% interest (which must be within 30 days after providing Musgrave with evidence verifying that the Company has spent the Stage One Commitment).

Provided the Company completes the Stage One Commitment, the Company and Musgrave will form an unincorporated joint venture ( Joint Venture ) and their participating interests will be either:

51% (Petratherm) and 49% (Musgrave), if Petratherm elects not to (or fails to) complete the Stage Two Commitment or fails to notify Musgrave of its intention to earn the further interest within the required time; or
75% (Petratherm) and 25% (Musgrave), if Petratherm completes the Stage Two Commitment within the prescribed period.

The Company’s right to receive a transfer of the abovementioned interests is also subject to it obtaining all necessary government consents.

During the abovementioned earn-in periods, Petratherm is required to pay all fees, rents, taxes, rates and other outgoings associated with the maintenance of the MGV Tenement and otherwise maintain the MGV Tenement in good standing.

Petratherm cannot withdraw from the JV Agreement unless it has completed work programs to test the Area 1 prospect (refer to Section 3.3) on the MGV Tenement (geophysical surveys and/or drilling) totalling $60,000 ( Minimum Expenditure ).

The purpose of the Joint Venture will be to explore the MGV Tenement area for minerals, carry out all activities relating to the discovery, delineation, testing and analysis of ore bodies and carry out a feasibility study on such parts of the MGV Tenement area that indicates the existence of a resource of minerals. The name of the joint venture will be the “Corunna Joint Venture”.

The parties will form an operating committee comprised of two persons nominated by each party, whose function will be to oversee and direct the policy of the Joint Venture and decide the nature and content of exploration programs and budgets. Petratherm will be the manager of the Joint Venture until it either resigns or is removed in accordance with the JV Agreement or if Musgrave holds a majority interest in the MGV Tenement.

Petratherm can withdraw from the Agreement prior to earning the Stage One Interest by giving no less than 20 Business Days’ notice to Musgrave, in which case it will have no further interest in the MGV Tenement and will be required to comply with certain reporting and remediation obligations under the JV Agreement.

P a g e | 156

Petratherm can also withdraw from earning the Stage Two Interest by giving no less than 20 Business Days’ notice to Musgrave, in which case it will retain its Stage One Interest pursuant to the unincorporated joint venture, and will be required to comply with certain reporting and remediation obligations under the JV Agreement.

The JV Agreement otherwise contains terms standard in an agreement of that nature.

9.2 Barngarla Native Title Mining Agreement

Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV) ( Musgrave ) entered into a Native Title Mining Agreement ( Agreement ) with The Barngarla Aboriginal Corporation (being a Prescribed Body Corporate representing Barngarla Native Title Claimaints) ( Claimants ) on 1 December 2014.

A native title determination application known as the Brangarla Native Title Claim ( Claim ) was lodged on behalf of the Claimants in the Federal Court. Musgrave is the registered holder and beneficial owner of EL 5497 ( MGV Tenement ), which is wholly located upon land being subject to the Claim.

The Agreement governs the rights and obligations of Musgrave and the Claimants in respect of the MGV Tenement, which the Company will have the right to earn an interest in pursuant to the Mining Farm-In and Joint Venture Agreement (as summarised in Section 9.1(b) of this Prospectus).

The Agreement requires Musgrave to apply to the Claimants for clearance, before undertaking new mining exploration activities on the MGV Tenement. The Claimants’ nominee will assemble a survey team to inspect the relevant area, to determine whether there are any areas of significance pursuant to the Aboriginal Heritage Act 1988 (SA) and the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) and to ensure the Company complies with its obligations under the Mining Act1971 (SA).

The Company is required to pay certain costs of or incurred by the survey team, as further set out in the Agreement.

Subject to the Company complying with its obligations, the Claimants will not seek to challenge the validity of the MGV Tenement or object or complain of any future breach of the Aboriginal Heritage Act 1988 (SA) and the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth).

If Petratherm earns an interest in the MGV Tenement pursuant to the Mining Farm-In and Joint Venture Agreement, it will be required to enter into a Deed of Assumption in favour of the Claimants, to observe and comply with the obligations of the Company under the Agreement.

9.3 Taylor Collison Mandate Letter

By a letter agreement entered into between Taylor Collison Limited ( Lead Manager ) and the Company dated 21 December 2017 ( Lead Manager Agreement ) the Lead Manager agreed to conditionally act as lead manager of the Offer.

The Lead Manager’s agreement to act as lead manager of the Offer is subject to:

a due diligence program having been designed and implemented by the Company’s legal advisers, to the satisfaction of the Lead Manager;
the preparation of an acceptable prospectus in relation to the proposed Reinstatement, including appropriate expert reports as required or deemed desirable and satisfactory to the Lead Manager;
general market conditions being conducive to the Offer and the Reinstatement;
there not being any material adverse change to the Company’s prospects during the course of the Lead Manager’s appointment;
receipt of sign-offs in relation to due diligence in terms satisfactory to the Lead Manager from the Company’s legal advisers; and
escrow arrangements to be approved by the Lead Manager.

P a g e | 157

Pursuant to the Lead Manager Agreement, the Company has agreed to pay the Lead Manager:

a management fee of 1% of the total funds raised under the Offer; and
a selling fee of 5% payable on funds raised by the Lead Manager under the Offer.

The Company has also agreed to issue to the Lead Manager Options equating to 5% of the Shares on issue post Completion of the Offer, on the terms set out in Section 10.5(a).

In addition to the fees payable to the Lead Manager set out above, the Company has agreed to reimburse the Lead Manager for reasonable costs and expenses incurred, provided that the Lead Manager will seek the Company’s approval before incurring individual out of pocket expenses greater than $1,000 per month. The Lead Manager is also entitled to appoint its own legal advisers, whose fees will be for the account of the Company provided that such fees will be capped at $15,000.

If the Lead Manager Agreement is terminated for any reason, the Company is responsible for payment of all costs of the Offer incurred to that date either directly by it or on its behalf by the Lead Manager.

Under the Lead Manager Agreement, the Company agrees to take full responsibility for the contents and issue of the Prospectus, and agrees to broadly indemnify the Lead Manager against all liability and loss arising from, and all costs, charges and expenses incurred in connection with, the content, preparation and issue of this Prospectus and the Issue (except to the extent that such liability and loss was the direct result of the Lead Manager’s negligence or willful misconduct, breach of contract and/or fraud).

Subject to the parties signing a further offer management agreement, either party can terminate the Lead Manager Agreement by giving 7 days’ written notice to the other party. If the Company terminates the Lead Manager Agreement other than for material default (which cannot or has not been remedied within a reasonable period following notice), negligence or breach of law or the Lead Manager terminates the Lead Manager Agreement with cause, the Lead Manager will continue to be entitled to the offer management and selling fees detailed above if the Company completes Reinstatement within a period of nine months from the date of termination.

P a g e | 158

Section 10: Additional Information

10.1 Tax Status and Financial Year

The Company is taxed in Australia as a public company. The financial year of the Company ends on 30 June annually.

10.2 Corporate Governance and Restricted Securities

The Board of Directors is responsible for the corporate governance of the Company including its strategic development.

The Board of Directors acknowledges the Corporate Governance Principles and Recommendations (3[rd] Edition) set by the Australian Securities Exchange ( ASX ) Corporate Governance Council. However in view of the Company’s current size and extent of nature of operations, full adoption of the recommendations is currently not practical. The Board will continue to work towards full adoption of the recommendations in line with growth and development of the Company in the years ahead. Where the Company’s framework is different to the Corporate Governance Principles and Recommendations set by the ASX Corporate Governance Council ( ASX Principles ), it has been noted.

A copy of the full Corporate Governance Statement adopted by the Board is available on the Company’s website: www.petratherm.com.au.

A summary of the corporate governance practices as currently adopted by the Board is as follows:

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1 – Companies should disclose the respective roles and responsibilities of the Board and management, and those matters reserved to the Board and those delegated to management.

Recommendation 1.2 – Companies should undertake appropriate checks before appointing a person or putting forward a candidate for election as a director and provide shareholders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

Recommendation 1.3 – Companies should have a written agreement with each director and senior executive setting out the terms of their appointment.

Recommendation 1.4 – Company secretaries should be accountable directly to the Board through the Chair on all matters to do with the proper functioning of the Board.

Recommendation 1.5 – Companies should have a diversity policy and should disclose at the end of each reporting period the measurable objectives for achieving gender diversity and the progress towards achieving those objectives.

Recommendation 1.6 – Companies should disclose the process for periodically evaluating the performance of the Board, its committees and Directors, and in relation to each reporting period, whether a performance evaluation has been undertaken.

Recommendation 1.7 – Companies should disclose the process for periodically evaluating the performance of senior executives, and in relation to each reporting period, whether a performance evaluation was undertaken.

The Company will have a small Board of three Directors (upon Reinstatement), Non-Executive Chairman Derek Carter, and Non-Executive Directors Donald Stephens and Simon O’Loughlin. The Company discloses the respective roles and responsibilities of its Board and management, and how their performance is monitored and evaluated in its Annual Report.

The Company’s Corporate Governance Statement sets out (amongst other things) the roles and responsibilities of the Board.

P a g e | 159

Prior to the appointment of a person, or putting forward to security holders a candidate for election, as a director, the Company undertakes checks which it believes are appropriate to verify a director’s character, experience, education, criminal record and bankruptcy history including for new directors.

The Company ensures that all material information in its possession relevant to a shareholder’s decision whether to elect or re-elect a director, including the information referred to in Recommendation 1.2, is provided to shareholders in the Company’s Notice of Annual General Meeting.

The Company does not currently engage a managing director, and the Non-Executive Directors do not currently have written agreements with the Company. The Board considers this appropriate having regard to the nature and size of the Company, and its limited recent operating history.
The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board.
The day to day management of the Company’s affairs and the implementation of the corporate strategy and policy initiatives are managed by the Board due to the size and nature of the Company.
The Company has not yet developed or disclosed a formal diversity policy. The Company considers this is appropriate at this time, but it does use diversity as a consideration for staff and Director recruitment.
The Board recognises that as a result of the Company’s size, the assessment of the Board’s overall performance and its own succession plan is conducted on an ad hoc basis. Whilst Recommendation 1.6 is not strictly followed the Directors consider that the evaluation process of Company directors is appropriate and effective. A more formal process of Board assessment will be considered in the future as the Company develops.
The Company does not currently engage any senior executives, and therefore has nothing to disclose pursuant to Recommendation 1.7.

As at the date of this Prospectus, there are the following departures from Principle 1:

Recommendations 1.3, 1.5, 1.6 and 1.7: as noted above.

Principle 2: Structure the Board to add value

Recommendation 2.1 – Companies should have a Nomination Committee which has at least 3 members, a majority of whom are independent and is chaired by an independent director.

Recommendation 2.2 – Companies should disclose a board skills matrix setting out the mix of skills and diversity that the Board currently has or is looking to achieve in its membership.

Recommendation 2.3 – Companies should disclose the directors considered by the Board to be independent and the length of service of each director and whether a director has an interest in, position, association or relationship which the Board believes does not compromise the independence of the director.

Recommendation 2.4 – A majority of the Board should be independent directors

Recommendation 2.5 – The Chair should be an independent director and should not be the same person as the CEO of the Company.

Recommendation 2.6 – Companies should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain skills and knowledge needed to perform their role as directors effectively.

The Board has no formal nomination committee. Acting in its ordinary capacity from time to time as required, the Board carries out the process of determining the need for, screening and

P a g e | 160

appointing new Directors. In view of the size and resources available to the Company, it is not considered that a separate nomination committee would add any substance to this process.

The Board aims in its membership to maintain a combination of skills and experience that ensure the Board has the expertise to meet both its responsibilities to stakeholders and its strategic objectives. As part of this process, the Board is aware of the need for diversity among its Directors, both in gender and experience. The Board closely assesses diversity criteria when considering Board candidates.
The Board comprises three Directors from diverse backgrounds with a range of business experience, skills and attributes, and their experience and skills are reported on in the Directors’ profiles in Section 1.15 of this Prospectus.
The Group’s desired mix of skills and competence is listed below. The Board considers its current composition adequately meets these required competencies.

Area	Competence
Leadership	Business Leadership,Public Listed CompanyExperience
Business and Finance	Accounting, Audit, Business Strategy, Competitive Business Analysis, Corporate Financing, Financial Literacy, Mergers and Acquisitions,Risk Management,Tax – Australia
Sustainability and Stakeholder Management	Community Relations, Corporate Governance, Health and Safety,Human Resources,Remuneration
Technical	Engineering Qualifications,Exploration experience

In the opinion of the Board, and having regard to the ASX Recommendations, to qualify as being ‘independent’, a director must be independent of management and free of any business or other relationship which could materially interfere or could reasonably be perceived to interfere materially with the Director’s independent exercise of their judgement.

Derek Carter and Donald Stephens are considered by the Board to be independent Directors, having regard to the factors set out above. Therefore the Company will, upon Reinstatement, follow the recommendation of Principle 2.4.. The Board considers the current composition appropriate for the size and leadership of the Company.

The Company undertakes appropriate checks before appointing a person to the Board of the Company. All material information relevant to the decision as to whether or not to elect or reelect a director is submitted for review by members in the Company’s Notice of Annual General Meeting.
The Company has a policy for inducting all new Directors, which includes access to discussions with the Company’s Directors and senior staff (when it has them, or otherwise the Chariman), as well as copies of relevant corporate policies and documentation. The Company additionally supports all Directors by allowing the reimbursement for appropriate professional development opportunities to develop and maintain the skills and knowledge needed to perform their role as Directors effectively.

As at the date of this Prospectus there are the following departures from Principle 2:

Recommendation 2.1 , as set out above.

Principle 3: Act ethically and responsibly

Recommendation 3.1 – Companies should establish a code of conduct for its directors, senior executives and employees and disclose that code or a summary of it.

The Company has developed a Code of Conduct and Ethics ( Code ) which has been fully endorsed by the Board and applies to all directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the group’s integrity and to take into account legal

P a g e | 161

obligations and reasonable expectations of the Company’s stakeholders.

In summary, the Code requires that at all times all Company personnel act with the utmost integrity, objectivity and in compliance with the letter and the spirit of the law and company policies.

The Company also has a Share Trading Policy which outlines the restrictions, closed periods and processes required when Directors and key management personnel trade company securities. Broadly, it restricts the purchase and sale of Company securities by Directors and employees during the following time periods:

the period between the end of the March, June, September and December quarters and the release of the Company’s quarterly report to ASX for so long as the Company is required by the Listing Rules to lodge quarterly reports; and
24 hours after the following events:
any major announcements;
the release of the Company’s quarterly, half yearly and annual financial results to the ASX; and
the Annual General Meeting and all other General Meetings.

Any transactions undertaken in the above mentioned periods must be notified to the Board in advance.

The Directors are satisfied that the Company has complied with its policies on ethical standards, including trading in securities.

As at the date of this Prospectus, there are no departures from Principle 3.

Principle 4: Safeguard integrity in corporate reporting

Recommendation 4.1 – Companies should have an audit committee which consists of at least 3 members all of whom are non-executive directors and a majority of whom are independent directors and the committee should be chaired by an independent director who is not the chair of the Board.

Recommendation 4.2 – The Board should have, before it approves the Company’s financial statements, a declaration from the CEO and CFO that in their opinion the financial records of the Company have been properly maintained and they comply with appropriate accounting standards and give a true and fair view of the financial position and performance of the Company.

Recommendation 4.3 – Companies that hold an AGM should ensure that their external auditor attends the AGM and is available to answer questions relevant to the audit.

The Company has established an Audit, Business Risk and Compliance Committee. After Reinstatement the Committee will comprise of Non-Executive Directors, Messrs Donald Stephens and Simon O’Loughlin and Chairman Mr Derek Carter. Mr Donald Stephens, an independent Director (who is not the chair of the Board) is the chair of the Committee. The Committee will have a majority of independent Directors as members, and therefore follows recommendation 4.1. Given the size and composition of the Company the Board deems this appropriate. The Committee assists the Board to carry out the process of reviewing its corporate reporting and appointment and removal of the auditor.
The Board receives regular reports on the Company’s financial and operational results in conjunction with its Board meetings.
Before the adoption by the Board of the half-year and full-year financial statements, the Board receives written declarations from the Company Secretary that the financial records of the Company have been properly maintained in accordance with section 286 of the Corporations Act, and the Company’s financial statements and notes comply with accounting standards and

P a g e | 162

give a true and fair view of the consolidated entity’s financial position and performance for the financial period.

The Company’s external auditor attends each AGM of the Company and is always available to answer questions from security holders relevant to the audit.

As at the date of this Prospectus, there are the following departures from Principle 4:

Recommendation 4.2, as the Company does not currently have a CEO or CFO it does not strictly comply with Recommendation 4.2.

Principle 5: Make timely and balanced disclosure

Recommendation 5.1 – Companies should establish written policies to ensure compliance with the disclosure obligations under the Listing Rules.

The Company has a Continuous Disclosure Policy that outlines the processes followed by the Company to ensure compliance with its continuous disclosure obligations and the corporate governance standards applied by the Company in its communications to the market. The Continuous Disclosure Policy can be viewed, together with information about the Company and its operations, at: www.petratherm.com.au .

Information about the Company’s corporate governance (including links to the Company’s corporate governance policies) can be accessed from the Corporate Governance page.

As at the date of this Prospectus, there are no departures from Principle 5.

Principle 6: Respect the rights of shareholders

Recommendation 6.1 – Companies should provide information about themselves and their governance to investors via their websites.

Recommendation 6.2 – Companies should design and implement an investor relations program to facilitate effective two way communication with investors.

Recommendation 6.3 – Companies should disclose policies and processes they have in place to facilitate and encourage participation at shareholder meetings.

Recommendation 6.4 – Companies should give shareholders the option to receive communications from, and send communications to, the Company and the Share Registry electronically.

Information about the Company, its operations and its corporate governance (including its corporate governance policies) can be accessed at www.petratherm.com.au.
The Company has a Shareholder Communication Policy that outlines the processes followed by the Company to ensure communication with shareholders and the investment community is effective, consistent and adheres to the principles of continuous disclosure. The Shareholder Communication Policy can be viewed on the Company’s website: www.petratherm.com.au.
The Shareholder Communication Policy sets out the policies and processes the Company has in place to facilitate and encourage participation at meetings of security holders. The Company permits shareholders to cast their proxies prior to a General Meeting if they are unable to attend the meeting.
The Company gives security holders the option to receive communications from, and send communications to, the Company and its security registry electronically, as provided for in the Company’s Shareholder Communication Policy.

As at the date of this Prospectus, there are no departures from Principle 6.

Principle 7: Recognise and manage risk

Recommendation 7.1 – The Board should establish a risk management committee made up of at least 3 members, with a majority of independent directors and chaired by an independent director.

P a g e | 163

Recommendation 7.2 – The Board or a committee of the Board should review the risk management framework of the Company at least annually and disclose in relation to each reporting period whether that review has taken place.

Recommendation 7.3 – Companies should disclose if they have an internal audit function and if so how that function is structured and if not the processes employed for evaluating and continually improving the effectiveness of their risk management processes.

Recommendation 7.4 – Companies should disclose whether they have any material exposure to economic, environmental and social sustainability risks and if so how they manage or intend to manage those risks.

The Board is responsible for ensuring that management has developed and implemented a sound system of risk management and internal control.

The Audit, Business Risk and Compliance Committee is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems.

The Committee monitors the Company’s risk management by overseeing management’s actions in the evaluation, management, monitoring and reporting of material operational, financial, compliance and strategic risks. In providing this oversight, the committee:

reviews Company-wide objectives in the context of the management of corporate risk;
reviews and, where necessary, approves guidelines and policies governing the identification, assessment and management of the Company’s exposure to risk; and
reviews and approves the delegations of financial authorities and addresses any need to update these authorities on an annual basis.

Management is responsible for designing, implementing and reporting on the adequacy of the Company’s risk management and internal control systems and has to report to the Audit, Business Risk and Compliance Committee on the effectiveness of:

the risk management and internal control systems, and
the Company’s management of its material business risks.
The Company does not have a separate internal audit function.

The Company’s policy it to identify and manage potential or apparent business, economic, environmental and social sustainability risks (if appropriate) . The Company at present has not identified specific material risk exposure in these categories. Reports are continually created by management on the efficiency and effectiveness of the Company’s risk management and associated internal compliance and control procedures.

The Board believes the Company’s risk management and internal compliance and control procedures are operating efficiently and effectively in all material aspects appropriate for a company of Petratherm’s size and nature.

As at the date of this Prospectus, there are the following departures from Principle 7:

The Company has established an Audit, Business Risk and Compliance Committee. After Reinstatement the Committee will comprise of Non-Executive Directors, Messrs Simon O’Loughlin and Donald Stephens and Chairman Mr Derek Carter. Mr Donald Stephens, an independent Director (who is not the chair of the Board) is the chair of the Committee. The Committee will have a majority of independent Directors as members, and therefore does not depart from recommendation 7.1. Recommendation 7.2, as the Company has not undertaken a specific review during the year in relation to the Company’s risk management framework. As noted above, it is the Board’s responsibility to

P a g e | 164

satisfy itself that the Company has a sound system of risk management and internal control. This is continually monitored by the Board at Directors meetings and in communication with management. The Company believes this to be appropriate given the size and nature of the Company at this time.

Principle 8: Remunerate fairly and responsibly

Recommendation 8.1 – The Board should establish a remuneration committee of at least 3 members, a majority of whom are independent and which is chaired by an independent director.

Recommendation 8.2 – Companies should separately disclose policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.

Recommendation 8.3 – Companies which have an equity based remuneration scheme should establish a policy on whether participants are permitted to enter into transactions which limit the economic risk of participating in the scheme.

Given the current size of the Board, the Company does not have a remuneration committee. The Board therefore fulfils the duties of the committee.
The Company’s policies and practices regarding the remuneration of non-executive Directors and the remuneration of executive Directors and other senior executives (when applicable) are (or will be in the future) set out in the Remuneration Report in the Company’s Annual Report which is (or will be) available on the Company’s website.
The Company has an equity-based remuneration scheme being an Employee Share Option Plan. The Company’s Securities Trading Policy provides that participants in the scheme must not enter into any transaction which would have the effect of hedging or otherwise transferring to any other person the risk of any fluctuation in the value of any unvested equity interest. The Securities Trading Policy may be viewed at www.petratherm.com.au.

As at the date of this Prospectus, there are no departures from Principle 8.

10.2(b) Restricted Securities

Under the Tenement Purchase Agreement, SAEX agreed to execute, or cause its nominee to execute, an escrow deed for the Shares to be issued to it for the period imposed by ASX under the Listing Rules ( Escrow Period ).

The escrow deed to be entered into by SAEX (or its nominee) will be in the form as may be required by ASX, and will include standard terms prohibiting SAEX during the Escrow Period from:

disposing of, or agreeing to offer to dispose of, the Consideration Shares;
creating, or agreeing to offer to create, any security interest in the Consideration Shares;
doing, or omitting to do, any act if the act or omission would have the effect of transferring effective ownership or control of the Consideration Shares; and
participating in a return of capital made by the Company.

The imposition of the Escrow Period will:

help to create a stable market for the Company’s Shares (by reducing the number of shares that can be traded immediately after Quotation of the Shares on ASX);
prevent SAEX from selling out of the Company within the Escrow Period (which could diminish the value of the Company’s Shares); and
keep SAEX interested in the operations and success of the Company.
The Consideration Shares will constitute no more than 0.83% of the total Shares on issue following

P a g e | 165

Completion of the Offer and the Project Acquisition (assuming the Minimum Subscription is achieved and no Options are exercised prior to Completion).

It is expected that ASX will also impose escrow restrictions on the Options to be issued to the Directors (pursuant to Resolutions 7, 8 and 9 of the Company’s Notice of Meeting dated 25 January 2018) and to Taylor Collison pursuant to its Mandate Letter (as described in Section 9.3 of this Prospectus).

The Company will announce to the ASX full details (quantity and duration) for the Shares and Options required to be held in escrow prior to the Shares commencing trading on ASX.

10.3 Litigation

As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.

10.4 Rights Attaching To Shares

The Shares to be issued under this Prospectus will rank equally with the issued fully paid ordinary shares in the Company. The rights attaching to Shares are set out in the Company’s Constitution and, in certain circumstances, are regulated by the Corporations Act, the Listing Rules and general law.

The following is a summary of the more significant rights of the holders of Shares of the Company.

This summary is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of the Company’s members.

(a) General Meeting

Each member is entitled to receive notice of, and to attend and vote at, general meetings of the Company and to receive all notices, accounts and other documents required to be sent to members under the Company’s Constitution, the Corporations Act or the Listing Rules.

(b) Voting

Subject to any rights or restrictions for the time being attached to any class or classes of shares whether by the terms of their issue, the Constitution, the Corporations Act or the Listing Rules, at a general meeting of the Company every holder of fully paid ordinary shares present in person or by a representative has one vote on a show of hands and every such holder present in person or by a representative, proxy or attorney has one vote per share on a poll. A person who holds an ordinary share which is not fully paid is entitled, on a poll, to a fraction of a vote equal to the proportion which the amount paid bears to the total issue price of the share. A member is not entitled to vote unless all calls presently payable by the member in respect of shares in the Company have been paid. Where there are two or more joint holders of the share and more than one of them is present at a meeting and tenders a vote in respect of the share (whether in person or by proxy or attorney), the Company will count only the vote cast by the member whose name appears before the other(s) in the Company’s register of members.

(c) Issues of Further Shares

The Directors may, on behalf of the Company, issue, grant options over or otherwise dispose of unissued shares to any person on the terms, with the rights, and at the times that the Directors decide. However, the Directors must act in accordance with the restrictions imposed by the Company’s Constitution, the Listing Rules, the Corporations Act and any rights for the time being attached to the shares in special classes of shares.

(d) Variation of Rights

At present, the Company has on issue one class of shares only, namely ordinary shares. The rights attached to the shares in any class may be altered only if authorised by a special resolution of the Company and a special resolution passed at a separate meeting of the holders of the issued shares of the affected class or with the written consent of the holders

P a g e | 166

of at least three quarters of the issued shares of the affected class.

(e) Transfer of Shares

Subject to the Company’s Constitution, the Corporations Act, the ASX Settlement Operating Rules and the Listing Rules, ordinary shares are freely transferable.

Shares may be transferred by a proper transfer effected in accordance with ASX Settlement Operating Rules, or by a written instrument of transfer in any usual form or in any other form approved by the Directors. The Company may decline to register a transfer of Shares in the circumstances described in the Company’s Constitution and where permitted to do so under the Listing Rules. If the Company declines to register a transfer, the Company must, within five business days after the transfer is lodged with the Company, give the lodging party written notice of the refusal and the reasons for refusal. The Directors must decline to register a transfer of Shares when required by law, by the Listing Rules or by the ASX Settlement Operating Rules.

(f)

Partly Paid Shares

The Directors may, subject to compliance with the Company’s Constitution, the Corporations Act and the Listing Rules, issue partly paid shares upon which amounts are or may become payable at a future time(s) in satisfaction of all or part of the unpaid issue price.

(g)

Dividends

The Directors, or the Company in general meeting following a recommendation of the Directors, may from time to time declare a dividend (subject to the Corporations Act).

Subject to the rights of members entitled to shares with special rights as to dividend (if any), all dividends in respect of shares (including ordinary shares) are to be declared and paid proportionally to the amount paid up (not credited as paid up) on the shares.

(h) Winding Up

If the Company is wound up, the liquidator may, with the sanction of a special resolution of the Company, divide among the shareholders in kind the whole or any part of the property of the Company and may for that purpose set such value as the liquidator considers fair on any property to be so divided and may determine how the division is to be carried out as between the shareholders or different classes of shareholders.

(i) Dividend Plans

The Directors or the members of the Company in general meeting, may implement a dividend plan under which (among other things) a member may elect that dividends payable by the Company be reinvested by way of subscription for shares in the Company.

(j)

Directors

The Company’s Constitution states that the minimum number of directors is three and the maximum number of directors is nine.

(k)

Powers of the Board

The Directors have power to manage the business of the Company and may exercise that power to the exclusion of the members, except as otherwise required by the Corporations Act, any other law, the Listing Rules or the Company’s Constitution.

(l)

Listing Rules

If the Listing Rules require the Constitution to contain a provision or not to contain a provision the Constitution is deemed to contain that provision or not to contain that provision (as the case may be). If any provision of the Constitution is or becomes

P a g e | 167

inconsistent with the Listing Rules, the Constitution is deemed not to contain that provision to the extent of the inconsistency.

10.5 Terms and Conditions of Options

10.5(a) Options to Directors and Options to Taylor Collison

If the Offer is completed, and subject to obtaining Shareholder approval at the meeting of Petratherm’s Shareholders to be held on or about 28 February 2018, the Company will grant:

up to 8,820,188 Options (post-Consolidation) to Taylor Collison; and
1,000,000 Options to each of Simon O’Loughlin, Donald Stephens and Derek Carter,

on the following terms and conditions:

Each Option entitles the holder to one ordinary share in the Company.
Each of the Options will be exercisable at $0.04.
Each Option is exercisable in whole or in part at any time during the period commencing on the date of issue and expiring on the third anniversary of the date of issue ( Exercise Period ). Options not exercised before the expiry of the Exercise Period will lapse.
Options are exercisable by notice in writing to the Board delivered to the registered office of the Company and payment of the exercise price per option in cleared funds.
The Company will not apply to ASX for official quotation of the Options.
The Company will make application for official quotation on ASX of new shares allotted on exercise of the Options. Those shares will participate equally in all respects with existing issued ordinary shares, and in particular new shares allotted on exercise of the Options will qualify for dividends declared after the date of their allotment.
Options can only be transferred with Board approval, except that if at any time before expiry of the Exercise Period the Optionholder dies, the legal personal representative of the deceased Optionholder may:
elect to be registered as the new holder of the Options;
whether or not he becomes so registered, exercise those Options in accordance with the terms and conditions on which they were granted; and
if the deceased has already exercised Options, pay the exercise price in respect of those Options.
An optionholder may only participate in new issues of securities to holders of ordinary shares in the Company if the Option has been exercised and shares allotted in respect of the Option before the record date for determining entitlements to the issue. The Company must give prior notice to the Optionholder of any new issue before the record date for determining entitlements to the issue in accordance with the ASX Listing Rules.
If there is a bonus issue to the holders of ordinary shares in the capital of the Company, the number of ordinary shares over which the Option is exercisable will be increased by the number of ordinary shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.
If the Company makes a rights issue (other than a bonus issue), the exercise price of Options on issue will be reduced according to the following formula:

A = O – E [P – (S + D)]

(N + 1)

Where:

P a g e | 168

A = the new exercise price of the Option;
O = the old exercise price of the Option;
E = the number of underlying ordinary shares into which one Option is exercisable;
P = the average closing sale price per ordinary share (weighted by reference to volume) recorded on the stock market of ASX during the five trading days immediately preceding the ex rights date or ex entitlements date (excluding special crossings and overnight sales and exchange traded option exercises);
S = the subscription price for a security under the pro rata issue;
D = the dividend due but not yet paid on existing underlying securities (except those to be issued under the pro rata issue); and
N = the number of securities with rights or entitlements that must be held to receive a right to one new security.
If, during the currency of the Options the issued capital of the Company is reorganised, those Options will be reorganised to the extent necessary to comply with ASX Listing Rules.

10.5(b) Existing Options on issue to Simon O’Loughlin and Donald Stephens

As at the date of this Prospectus, the Company has granted 625,000 Options (post Consolidation) to each of Simon O’Loughlin and Donald Stephens on the same terms as set out in Section 10.5(a) save and except that:

Each of the Options has an exercise price of $0.10.
Each Option is exercisable in whole or in part at any time during the period commencing on 24 November 2016 and expiring on 24 November 2019 ( Exercise Period ). Options not exercised before the expiry of the Exercise Period will lapse.

10.5(c) Existing Options on issue to Andrew Haythorpe

As at the date of this Prospectus, the Company has granted 2,250,000 Options (post Consolidation) to Andrew Haythorpe on the same terms as set out in Section 10.5(a) save and except that:

500,000 Options have an exercise price of $0.10.
750,000 Options have an exercise price of $0.18.
1,000,000 Options have an exercise price of $0.24.
Each Option is exercisable in whole or in part at any time during the period commencing on 24 November 2016 and expiring on 24 November 2019 ( Exercise Period ). Options not exercised before the expiry of the Exercise Period will lapse.

10.6 Employee Share Option Plan

The Company has established an Employee Share Option Plan ( Plan ) to assist in the attraction, retention and motivation of employees of the Company.

The summary of the Plan is set out below for the information of potential investors in the Company. The detailed terms and conditions of the Plan may be obtained free of charge by contacting the Company.

All full time employees, and Directors, are eligible to participate in the Plan.

The allocation of Options to each employee is in the discretion of the Board.

If permitted by the Board, Options may be issued to an employee’s nominee.

Each Option is to subscribe for one fully paid ordinary share in the Company and will expire five years from its date of issue (unless otherwise determined by the Directors). Subject to vesting under applicable vesting condition (if any) or satisfaction of applicable performance condition (if any) an

P a g e | 169

Option is exercisable at any time from its date of issue.

Options will be issued free (unless otherwise determined by the Directors). The exercise price of Options will be the amount determined by the Board. The total number of Options granted under the Plan and any other employee share plan during any five year period, must not exceed 5% of the Company’s issued share capital at the time of grant of the Options.

If, prior to the expiry date of Options, a Director ceases to be a Director (other than pursuant to a determination by the Directors that the relevant Director has acted fraudulently, dishonestly or in breach of their obligations to the Company and that Option is to be forfeited) the Options held by that Director must be exercised within 30 days after that Director ceases to be a Director (but prior to the expiry date of the Options) otherwise they will automatically lapse. Where a Director is removed from office by resolution of a general meeting of the Company, they will only be entitled to exercise a proportion of their Options.

If, prior to the expiry date of Options, an employee’s employment is terminated where such termination has either been voluntary on the employee’s part or otherwise has occurred without cause the Options held by that person must be exercised within 30 days after the termination (but prior to the expiry date of Options) otherwise they will automatically lapse.

Except with the consent of the Board, Options may not be transferred and will not be quoted on or by ASX.

Shares issued as a result of the exercise of Options will rank equally with the Company’s previously issued shares.

Optionholders may only participate in new issues of securities by first exercising their Options.

If there is a bonus share issue to the holders of shares, the number of shares over which an Option is exercisable will be increased by the number of shares which the Optionholder would have received if the Option had been exercised before the record date for the bonus issue.

If there is a pro rata issue (other than a bonus share issue) to the holders of shares, the exercise price of an Option will be reduced to take account of the effect of the pro rata issue in accordance with the following formula:

O[1] = O – E[P – (S + D)]

where:

O[1 ] = the new exercise price
O = the old exercise price
E = the number of Shares into which an Option is exercisable
P = the value of a Share at the time the pro-rata rights issue is made as determined by an accountant independent of the Company, but if the Shares are listed on the ASX, the Market Price (as defined in the Plan) on each of five trading days ending on the day immediately before the record date relevant for that rights issue
S = the subscription price for a Share under the pro rata issue
D = any dividend due but not yet paid on existing Shares which will not be payable in respect of new Shares issued under the rights issue
N = the number of Shares with rights or entitlements that must be held to receive a right to one new Share

If there is a reorganisation of the issued capital of the Company, unexercised Options will be reorganised in accordance with the Listing Rules.

The Board may amend the Plan Rules subject to the requirements of the Listing Rules, the Corporations Act and the Company’s Constitution.

P a g e | 170

10.7 Directors’ Interests

Except as disclosed in this Prospectus, no Director (whether individually or in consequence of a Director’s association with any company or firm or in any material contract entered into by the Company) has now, or has had, in the two year period ending on the date of this Prospectus, any interest in:

the formation or promotion of the Company; or
property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer of the Shares; or
the Offer of the Shares.

Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, Options or otherwise) have been paid or given or agreed to be paid or given to any Director or to any company or firm with which a Director is associated to induce him or her to become, or to qualify as, a Director, or otherwise for services rendered by him or her or any company or firm with which the Director is associated in connection with:

the formation or promotion of the Company; or
the Offer of the Shares.

Mr Simon O’Loughlin is a Consultant to O’Loughlins Lawyers which has acted as solicitors to the Company in relation to the Offer.

10.8 Interests of Named Persons

Except as disclosed in this Prospectus, no promoter, underwriter, expert or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus, nor any firm in which any of those persons is or was a partner nor any company in which any of those persons is or was associated with, has now, or has had, in the two year period ending on the date of this Prospectus, any interest in:

the formation or promotion of the Company; or
property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer of the Shares; or
the Offer of the Shares.

Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, Options or otherwise) have been paid or given or agreed to be paid or given to any promoter, underwriter, expert or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus, or to any firm in which any of those persons is or was a partner or to any company in which any of those persons is or was associated with, for services rendered by that person in connection with the formation or promotion of the Company or the Offer under this Prospectus.

Grant Thornton Audit Pty Ltd have acted as the Investigating Accountant in relation to the Offer. As Investigating Accountant, Grant Thornton Audit Pty Ltd have prepared the Independent Limited Assurance Report which has been included in this Prospectus. In respect of this work the Company has agreed to pay a total of $6,750 (exclusive of GST) for these services.

The Company has incurred professional fees in the sum of $62,413 (exclusive of GST) in respect of audit services provided by Grant Thornton Audit Pty Ltd during the last 24 months.

O’Loughlins Lawyers have acted as the solicitors to the Company in relation to the Offer, and in that capacity and otherwise assisting the Company with the preparation of this Prospectus, O’Loughlins Lawyers have been involved in undertaking certain due diligence enquiries in relation to legal matters and providing legal advice to the Company in relation to the Offer, the Project Acquisition and related matters and have also prepared the Solicitor’s Report on Tenements which has been included in

P a g e | 171

Section 8 of this Prospectus. In respect of this work, the Company has agreed to pay O’Loughlins Lawyers $100,000 (exclusive of GST) for these services. O’Loughlins Lawyers have been paid $124,997 (exclusive of GST and disbursements) for professional fees from the Company during the last 24 months.

Metalzoic have acted as the Independent Geologist in relation to the Offer. As Independent Geologist, Metalzoic have prepared the Independent Geologist’s Report which has been included in this Prospectus. In respect of this work the Company has agreed to pay a total of $9,600 (exclusive of GST) for these services.

Computershare Investor Services Pty Ltd has agreed to provide share registry services to the Company in accordance with a proposal dated 7 February 2018 for share registry services for the capital raising and re-listing transaction.

Taylor Collison Limited will receive the remuneration outlined in Section 9.3 of this Prospectus in respect of its services as Lead Manager to the Offer.

10.9 Consents

Chapter 6D of the Corporations Act imposes a liability regime on the Company (as offeror of the Shares), the directors of the Company, persons named in the Prospectus with their consent as proposed directors of the Company, any underwriters, persons named in this Prospectus with their consent as having made a statement in this Prospectus and persons involved in a contravention in relation to this Prospectus, with regard to misleading or deceptive statements made in this Prospectus. Although the Company bears primary responsibility for this Prospectus, other parties involved in the preparation of this Prospectus can also be responsible for certain statements made in it.

In light of the above, each of the parties referred to below, to the maximum extent permitted by law, expressly disclaims all liabilities in respect of, makes no representations regarding and takes no responsibility for any statements in or omissions from this Prospectus, other than the reference to its name in the form and context in which it is named and a statement or report included in this Prospectus with its consent as specified below.

Grant Thornton Audit Pty Ltd have given their written consent to the inclusion in Section 6 of this Prospectus of their Independent Limited Assurance Report and to all statements referring to that report in the form and context in which they appear, and to being named as Investigating Accountant and as Auditor, and have not withdrawn such consent before lodgement of this Prospectus with ASIC.

Metalzoic have given their written consent to the inclusion in Section 7 of this Prospectus of the Independent Geologist’s Report and to all statements referring to that report in the form and context in which they appear, and to being named as Independent Geologist, and have not withdrawn such consent before lodgement of this Prospectus with ASIC.

O’Loughlins Lawyers have given their written consent to the inclusion in Section 8 of this Prospectus of the Solicitor’s Report on Tenements and to all statements referring to that report in the form and context in which they appear, and to being named as Solicitors to the Company, and have not withdrawn such consent before lodgement of this Prospectus with ASIC.

Taylor Collison Limited has given its written consent to being named as Lead Manager to the Offer and has not withdrawn such consent before lodgement of this Prospectus with ASIC.

Computershare Investor Services Pty Ltd has given and, as at the date hereof, has not withdrawn its written consent to be named as Share Registrar in the form and context in which it is named. Computershare Investor Services Pty Ltd has had no involvement in the preparation of any part of this Prospectus other than being named as Share Registrar to the Company. Computershare Investor Services Pty Ltd has not authorised or caused the issue of any part of this Prospectus.

There are a number of other persons referred to in this Prospectus who are not experts and who have not made statements included in this Prospectus nor are there any statements made in this

P a g e | 172

Prospectus on the basis of any statements made by those persons. These persons did not consent to being named in this Prospectus and did not authorise or cause this issue of the Prospectus.

10.10 Electronic Prospectus

If you have received this Prospectus as an electronic prospectus or in paper form please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please email the Company at [email protected] and the Company will send to you, for free, either a hard copy or a further electronic copy of this Prospectus or both.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with this Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered. In such case, the Application Monies received will be dealt with in accordance with section 722 of the Corporations Act.

10.11 Documents Available for Inspection

Copies of the following documents may be inspected free of charge at the registered office of the Company during normal business hours:

the Constitution of the Company; and
the consents referred to in Section 10.9 of this Prospectus.

P a g e | 173

Section 11: Directors’ Consents

Each of the Directors and Proposed Director have consented in writing to the lodgement of this Prospectus with ASIC and has not withdrawn that consent.

Dated: 14 February 2018 Signed for and on behalf of the Company

==> picture [115 x 75] intentionally omitted <==

Simon O’Loughlin Chairman

P a g e | 174

Section 12: Definitions

In this Prospectus unless the context otherwise requires:

$ or A$ means the lawful currency of Australia.

Adelaide Time means legal time in Adelaide, South Australia.

Applicant means a person who submits an Application Form under this Prospectus.

Application Form means the Application Form contained in this Prospectus or a copy of the application form contained in this Prospectus or a direct derivative of the application form which is contained in this Prospectus.

Application Money means money paid or payable pursuant to an application to subscribe for Shares pursuant to the Offer.

Application means a valid application to subscribe for Shares.

ASIC means the Australian Securities and Investments Commission.

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

ASX Listing Rules or Listing Rules means the official listing rules of ASX.

ASX Settlement means ASX Settlement Pty Ltd (ACN 008 504 532).

ASX Settlement Operating Rules mean the operating rules of ASX Settlement.

Board of Directors and Board means the Board of Directors of the Company as constituted from time to time.

Business Day means a business day as defined in the ASX Listing Rules.

Capital Raising means the capital raising to be completed by the Company of at least A$4,000,000 (minimum subscription) and up to an additional A$1,000,000 (maximum subscription) at an issue price of no less than A$0.04 per Company Share.

CHESS means the Clearing House Electronic Subregister System operated by ASX Settlement.

Closing Date means the date on which the Offer closes (refer to expected closing date in Section 1.9 of this Prospectus).

Company means Petratherm Limited ACN 106 806 884.

Completion means completion of the Project Acquisition.

Completion of the Offer means the allotment of at least 100,000,000 Shares offered under this Prospectus.

Consideration Shares means 1,250,000 Shares;

Consolidation means the consolidation of the existing securities of the Company on a two to one basis (rounded up to the nearest whole number), which consolidation is proposed to become effective prior Completion of the Offer.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Corporations Regulations means the Corporations Regulations 2001 (Cth).

Directors means the directors of the Company.

EL and Exploration Licence means an area granted in respect to mineral exploration.

Exposure Period means the period of seven days (or longer as ASIC may direct) from the date of lodgement

P a g e | 175

of this Prospectus with ASIC.

Gilles Downs ELA means South Australian Exploration Licence Application 2017/250, and any EL issued in respect of that application.

HIN means holder identification number.

Issue means the issue of Shares pursuant to this Prospectus.

Issuer Sponsored means securities issued by an issuer that are held in uncertificated form without the holder entering into a sponsorship agreement with a broker or without the holder being admitted as an institutional participant in CHESS.

Maximum Subscription means $5,000,000 or 125,000,000 Shares.

MGV Tenement means EL 5497.

Minimum Subscription means $4,000,000 or 100,000,000 Shares.

Mining Farm-In and Joint Venture Agreement means the Mining Farm-In and Joint Venture Agreement dated 21 December 2017 between the Company and Musgrave relating to the acquisition by the Company of the right to earn up to a 75% interest in the MGV Tenement.

Musgrave means Musgrave Minerals Limited ACN 143 890 671 (ASX Code: MGV).

Offer means the invitation to apply for Shares pursuant to this Prospectus.

Offer Period means the period commencing on the Opening Date and ending on the Closing Date.

Offer Price means $0.04, being the amount payable in respect of each Share under the Offer.

Official List means the Official List of ASX.

Opening Date means the date immediately following the expiry of the Exposure Period.

Option means a right to subscribe for a Share.

Optionholder means a holder of an Option.

Petratherm Limited or Petratherm means Petratherm Limited ACN 106 806 884.

Project Acquisition means the acquisition by the Company of the Projects.

Project Acquisition Agreements means the Tenement Purchase Agreement and the Mining Farm-In and Joint Venture Agreement.

Projects means:

the right to earn up to a 75% interest in the MGV Tenement, on the terms of the Mining Farm-In and Joint Venture Agreement;
the SAEX Tenements; and
the Gilles Downs ELA.

Proposed Director means Derek Carter.

Prospectus means this disclosure document.

Quotation means quotation of the Shares on the Official List.

Reinstatement means reinstatement of the Company’s Shares to official quotation on the ASX.

SAEX means SAEX Pty Ltd ACN 154 922 728.

SAEX Tenements means EL 5306 and EL 5717.

Share Registrar means Computershare Investor Services Pty Ltd.

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

Shareholder means a holder of a Share.

P a g e | 176

Tenement Purchase Agreement means the Tenement Purchase Agreement dated 20 December 2017 between the Company and SAEX relating to the purchase by the Company of the SAEX Tenements and certain information and rights relating to SAEX Tenements.

P a g e | 177

AI assistant

PTR MINERALS LTD — Capital/Financing Update 2018

65621_rns_2018-02-13_66eb7eb8-f8b7-4120-9621-f69dbe16d166.pdf

PETRATHERM LIMITED

PROSPECTUS

Important Information

IMPORTANT NOTICES

Change In Nature and Scale - ReCompliance with Chapters 1 and 2 of the ASX Listing Rules

Electronic Prospectus

Financial Forecasts

Consolidation of Capital

Foreign Jurisdictions

Risk Factors

Forward Looking Statements

Website Address

Photographs and Diagrams

Definitions

Conditions Precedent

Disclaimer

Key Offer Information

Key Dates

Key Offer Statistics

How to Invest

Corporate Directory

Current Directors

Solicitors to the Company

Investigating Accountant and Auditor

Lead Manager

Company Secretary

Registered Office

Independent Geologist

Share Registrar

LETTER FROM THE CHAIRMAN

14 February 2018

Dear Investor,

Key Issues Summary

Section 1: Investment overview

1.1 Important

1.2 The Company

1.3 The Project Acquisition

1.4 The Company’s Objectives

1.5 Investment Highlights

1.6 Summary Financial Information

Historical Profit and Loss Statement

Statement of Financial Position

1.7 Key Risks

 Mineral Exploration

 Reliance on Key Personnel

 Commodity and Currency Price Volatility

 Additional Requirements for Capital

1.8 The Offer

1.9 Indicative Timetable for the Offer

1.10 Purpose of the Offer

1.11 Capital Structure

(a) Minimum Subscription

(b) Maximum Subscription

1.12 Substantial Shareholders

1.13 Use of Funds

(a) Minimum Subscription

(b) Maximum Subscription

1.14 Expenses of the Offer

(cash and non cash)

The Directors are satisfied that, upon completion of the Issue, the Company will have sufficient funds to meet its stated objectives for a period of at least two years.

1.15 Directors and Key Personnel

CURRENT DIRECTORS

Simon O’Loughlin BA (Acc), Law Society Certificate in Law Non-Executive Chairman

(Non-Executive Director post Reinstatement)

Donald Stephens BA (Acc), FCA Non-Executive Director

(Non-Executive Director post Reinstatement)

Andrew Haythorpe Non-Executive Director

(Will resign post Reinstatement)

PROPOSED DIRECTOR TO BE APPOINTED POST REINSTATEMENT

Derek Carter BSc, MSc, FAusIMM(CP)

1.16 Disclosure of Interests

officers of the Company.

1.17 Agreements with Directors or Related Parties

Legal Costs Agreement – Simon O’Loughlin

Indemnity, Insurance and Access Deeds

1.18 Corporate Governance

1.19 Taxation

PTR MINERALS LTD Capital/Financing Update 2018