TESORO GOLD LTD — Capital/Financing Update 2019

Oct 2, 2019

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3 October 2019

Execution of Share Purchase Agreement and Updated Timetable for the acquisition of Tesoro Resources Ltd

The Directors of Plukka Limited ( Plukka or the Company ) (ASX: PKA) are pleased to announce the Company has today executed a Share Purchase Agreement ( SPA ) pursuant to which the Company has agreed, subject to the satisfaction of certain conditions precedent, to acquire 100% of the issued capital of Tesoro Resources Ltd (ACN 618 093 306) ( Tesoro ) ( Acquisition ).

Share Purchase Agreement

The SPA replaces the previously announced binding term sheet ( Term Sheet ) entered into between the Company, Tesoro and two of the major shareholders of Tesoro (refer to the Company’s ASX announcement dated 1 August 2019). Whilst the key commercial acquisition terms of the SPA are consistent with the Term Sheet, a change has been made to the consolidation ratio, capital raising price and resultant capital structure for the Company.

The revised capital structure is set out in the table below. It is important to note these changes have not changed the fundamental deal metrics, being:

• the implied dollar value of the consideration being paid to Tesoro shareholders;

• the amount to be raised via the Capital Raising; or

• the pro forma market capitalisation of the Company at completion.

Consolidation and Capital raising

The Company intends to consolidate its securities on a 15:4 basis with fractional entitlements rounded down to the nearest whole Share ( Consolidation ).

The Company also plans, subject to shareholder approval, to conduct a public offer, on a post Consolidation basis, of 150,000,000 Shares at $0.03 per Share to raise at least $4,500,000 ( Minimum Subscription ). The company may accept oversubscriptions of up to $1,000,000 under the offer to raise a total of up to $5,500,000 ( Maximum Subscription ) ( Capital Raising ).

The pro-forma capital structure of the company following completion of the Acquisition, the Consolidation and the Capital Raising is:

	Minimum Subscription	Maximum Subscription
Shares currently on issue in Plukka	175,535,232	175,535,232
Consolidation of capital	(128,725,837)	(128,725,837)
Shares on issue in Plukka	46,809,395	46,809,395
Shares to be issued to Tesoro Shareholders	112,294,158	112,294,158

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	Minimum Subscription	Maximum Subscription
Shares to issued on conversion of Tesoro Convertible Loan	12,500,000	12,500,000
Shares to be issued to the Lead Manager on conversion of Tesoro Convertible Loan	625,000	625,000
Shares to be issued to Tesoro creditors on conversion of debt	16,824,967	16,824,967
Shares to be issued pursuant to the Capital Raising	150,000,000	183,333,333
Shares to be issued to the Lead Manager	19,166,667	19,166,667
Total Shares on completion of the Acquisition (post- Consolidation)	358,220,187	391,553,520

	Number
Performance Rights currently on issue in Plukka	Nil
Class A Performance Rights1	46,720,000
Class B Performance Rights2	50,060,000
Class C Performance Rights3	20,030,000
Class D Performance Rights4	20,030,000
Total Performance Rights on completion of the Acquisition (post- Consolidation)	136,840,000

Notes:

1. Convert into Plukka Shares on a one for one basis on Plukka establishing an Inferred Resource of at least 250,000 ounces equivalent at a gold grade of 1.0 g/t or greater, as defined by the JORC Code at the El Zorro Project or the Espina Project within 18 months after completion of the Acquisition.

2. Convert into Plukka Shares on a one for one basis on Plukka establishing an Inferred Resource of at least 1 million ounces equivalent, at a gold grade 1.0 g/t or greater, as defined by the JORC Code at the El Zorro Project or the Espina Project within 36 months after completion of the Acquisition.

3. Convert into Plukka Shares on a one for one basis on Plukka establishing an Inferred Resource of at least 2 million ounces equivalent, at a gold grade 1.0 g/t or greater, as defined by the JORC Code at the El Zorro Project or the Espina Project within 48 months after completion of the Acquisition.

4. Convert into Plukka Shares on a one for one basis on Plukka completing either a Bankable Feasibility Study or a Definitive Feasibility Study in relation to any resource (as defined by the JORC Code) at the El Zorro Project or the Espina Project, confirming the relevant project is commercially viable within 60 months after completion of the Acquisition.

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Updated Timetable

The Company expects to send its Notice of Meeting to its shareholders shortly.

An indicative timetable for completion of the Acquisition is set out below:

Event	Date*
Execution of the Binding Term Sheet	1 August 2019
Execution of the Share Purchase Agreement	3 October 2019
Notice of Meeting for the Acquisition sent to Shareholders	7 October 2019
Lodge prospectus for the Capital Raise with ASIC	Mid October 2019
Opening date of Capital Raising	Mid October 2019
Shareholder Meeting to approve the Acquisition, Consolidation and Capital Raise	7 November 2019
Consolidation of Capital	Early November 2019
Closing date of Capital Raising	Early November 2019
Issue of Securities under the Capital Raising	Mid November 2019
Completion of Acquisition	Mid November 2019
Despatch of holding statements	Mid November 2019
Re-quotation on the ASX	Late November 2019

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

For more information, please contact:

John Toll jt@azurecapital.com.au Chairman