UNION STAR METALS LTD — M&A Activity 2020

Oct 28, 2020

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29 October 2020

VARIATION OF TERMS OF PROPOSED ACQUISITION

Thred Limited ( Thred or Company ) refers to its announcement dated 14 September 2020 of its intention to acquire all of the securities in PVW Resources NL ACN 624 170 074 ( PVW ) ( Proposed Acquisition ).

Included in that announcement (at paragraph 29) was a reference to the Company’s intention to seek a so-called “2-cent waiver” to enable it to issue securities at less than $0.20, notwithstanding that the Proposed Transaction requires Thred to recomply with ASX’s admission and quotation requirements contained in Chapters 1 and 2 of ASX’s listing rules.

The Company has now determined that it will not seek a 2-cent waiver and will, subject to Shareholder approval, issue shares under the proposed Public Offer at $0.20 per share. One consequence of this decision is the need to adjust the proposed consolidation ratio for existing securities. The adjustment to the consolidation ratio has a flow-on effect to all other proposed issues of securities associated with the Proposed Acquisition.

The Company and PVW have now agreed to the required changes to the consolidation ratio and the capital structure - those changes are set out in the table in Schedule 1. There are no other material changes to the terms of the Proposed Acquisition. An updated summary of the Proposed Acquisition will be included in the Company’s quarterly report to be released on 30 October 2020.

The Company notes that ASX is currently reviewing the notice for Thred’s 2020 annual general meeting at which Shareholders will consider the resolutions to put the Proposed Acquisition into effect. At this stage, the Company expects to hold the AGM in mid-December.

Joe Graziano Company Secretary

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SCHEDULE 1 – VARIATIONS TO TERMS SHEET

The indicative share capital structure of Thred post-acquisition of PVW, based on the current Thred securities on issue and including the Public Offer, will be as follows (on a post-Consolidation basis):

Variable	Terms Sheet structure	Varied structure
Public Offer issue price	$0.03	$0.20
Consolidation ratio	1-for-12	1-for-75
Existing shareholders*	149,115,906 (37.7%)	23,858,545 (39.1%)
Consideration Shares to PVW vendors	151,515,152 (38.3%)	24,242,424 (39.7%)
Public Offer Shares	83,333,333 (21.1%)	12,500,000 (20.5%)
Advisor Shares**	11,363,636 (2.9%)	484,848 (0.8%)
Total Shares	395,328,027 (100%)	61,085,818 (100%)
Advisor options	10,000,000 exercisable @ $0.045 10,000,000 exercisable @ $0.06 10,000,000 exercisable @ $0.08	1,600,000 exercisable @ $0.30 1,600,000 exercisable @ $0.40 1,600,000 exercisable @ $0.55
Director options	15,000,000 exercisable @ 0.045	2,400,000 exercisable at $0.30
Performance rights	20,000,000	3,200,000

(numbers in the table may not add up due to rounding) * on a post-consolidation basis ** further adjusted following negotiations with advisors