For the conditional offer of 1,000 Shares at an issue price of $0.01 each to raise $10 (Offer).
This Prospectus has also been prepared primarily for the purposes of section 708A(11) of the Corporations Act to remove any trading restrictions on the sale of certain Shares issued prior to the Closing Date. Please refer to Section 4.3 for further details.
This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.
This is an important document that should be read in its entirety. Please read the instructions in this document and on the accompanying Application Form regarding acceptance of the Offer. If you do not understand this document you should consult your stockbroker, accountant or other professional adviser. The Securities offered by this Prospectus should be considered as highly speculative.
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IMPORTANT INFORMATION
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General
The Prospectus is dated 20 October 2015 and a copy of this Prospectus was lodged with ASIC on that date. ASIC and ASX and their respective officers do not take any responsibility for the contents of this Prospectus or the merits of the investment to which the Prospectus relates.
This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act.
Within 7 days of the date of this Prospectus, the Company will make an application to ASX for the Shares offered pursuant to this Prospectus to be admitted for quotation on ASX. No Shares will be issued pursuant to this Prospectus later than 13 months after the date of this Prospectus.
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Conditional Offer
The Offer is conditional on the Company achieving the minimum subscription as set out in Section 4.2.
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Electronic Prospectus
In addition to issuing the Prospectus in printed form, a read-only version of the Prospectus is also available on the Company's website at www.capitalmining.com.au. Applications cannot be made online. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian resident and must only access the Prospectus from within Australia. The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered electronic version of this Prospectus.
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 Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.
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Application for Securities
Please read the instructions in this Prospectus and on the accompanying Application Form regarding the acceptance of the Offer. By returning an Application Form or lodging an Application Form with your stockbroker or otherwise arranging for payment for Securities in accordance with the instructions on the Application Form, you acknowledge that you have received and read this Prospectus, you have acted in accordance with the terms of the relevant Offer detailed in this Prospectus and you agree to all of the terms and conditions as detailed in this Prospectus.
Applications for Shares offered pursuant to this Prospectus can only be submitted on an original Application Form which accompanies this Prospectus.
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Risk factors
Before deciding to invest in the Company, potential investors should read the entire Prospectus. In considering the prospects for the Company, potential investors should
consider the assumptions underlying the prospective financial information and the specific risk factors set out below and further risk factors set out in Section 6 that could affect the performance of the Company (but are not exhaustive of all such potential risks). Potential investors should carefully consider these factors in light of personal circumstances (including financial and taxation issues) and seek professional advice from a stockbroker, accountant or other independent financial adviser before deciding to invest.
Risks specific to the Company include, without limitation:
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Going Concern Risk
The Company's 2015 Annual Report contains a 'going concern' note. Due to the Company's losses in recent years and the Company's dependency on the ability to raise additional funds in the following 12 months indicate significant uncertainty as to whether the Company will continue as a going concern and therefore, whether it will be able to realise its assets and extinguish its liabilities in the normal course of business.
Notwithstanding the 'going concern' note included in the Company's 2015 Annual Report, the Directors believe that there are reasonable grounds to believe that the Company will be able to continue as a going concern. However, in the event that the Offer is not completed successfully or is delayed, there is significant uncertainty as to whether the Company can meet its commitments to its creditors and continue as a going concern, which is likely to have a material adverse effect on the Company's activities.
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Exploration Risk
The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions.
Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company's viability.
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No JORC code compliant resource
There is no JORC code compliant resource in relation to any of the Company's assets and there is no guarantee that a JORC code compliant resource in relation to any of the Company's assets will be achieved in the future.
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Resource Estimates
In the event that the Company successfully delineates a JORC compliant resource on any of the tenements in which it has an interest, that resource estimate will be an expression of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company's operations.
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Commodity, Price Volatility and Exchange Rate Risks
If the Company achieves success leading to production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for commodities, technological advancements, forward selling activities and other macro-economic factors.
Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company are and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.
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Operating Risks
The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, and plant and equipment.
No assurances can be given that the Company will achieve commercial viability through the successful exploration of its mineral interests. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.
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Title and Tenure
A number of the Company's tenements are exploration licenses. Exploration licenses are subject to periodic renewal. The renewal of the term of a granted tenement 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 comprising the Company's projects. The imposition of new conditions or the inability to meet those conditions may adversely affect the operations, financial position and/or performance of the Company.
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Failure to Satisfy Expenditure Commitments
Each licence or lease carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in the Tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.
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Environmental Risks
The Company's exploration programs will, in general, be subject to approval by governmental authorities. Development of any of the Company's properties will be dependent on the project meeting environmental guidelines and, where required, being approved by governmental authorities. As with most mineral exploration and development projects, the Company's activities are expected to have an impact on the surrounding environment, particularly if advanced exploration or mine development proceeds.
It is the Company's intention to conduct its activities to the highest standard of environmental obligations required, including compliance with the relevant environmental laws.
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Additional Requirements for Capital
The Company's ability to effectively implement its business and operations plans in the future, to take advantage of opportunities for acquisitions, joint ventures or other business opportunities and to meet any unanticipated liabilities or expenses which the Company may incur may depend in part on its ability to raise additional funds.
The Company may seek to raise further funds through equity or debt financing, joint ventures, production sharing arrangements or other means. Market conditions which are then generally prevailing will impact on the price or cost at which the Company will be able to raise such funds and no assurance can be given that such funding will be available on terms acceptable to the Company. Failure to obtain sufficient financing for the Company's activities and future projects may result in delay and indefinite postponement of the Company's business. There can be no assurance that additional finance will be available when needed or, if available, the terms of the financing might not be favourable to the Company. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations.
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New business opportunities and acquisitions
The Company has to date and will continue to actively pursue and assess other new business opportunities. The Company cannot confirm the structure or proposed form of any potential business opportunity.
The acquisition of a business or asset may require the payment of monies (as a deposit) after only limited due diligence and prior to the completion of comprehensive due diligence. There can be no guarantee that any proposed acquisition will be completed or successful. If the proposed acquisition is not completed, monies already advanced may not be recoverable, which may have a material adverse effect on the Company.
If an acquisition is completed, the Directors will need to reassess, at that time, the funding allocated to current projects and the new business and/or assets, which may result in the Company reallocating funds from its existing activities and/or the raising of additional capital (if available). Furthermore, notwithstanding that an acquisition may proceed upon the completion of due diligence, the usual risks associated with the new business activities will remain.
In addition, if a new investment or acquisition by the Company is completed, ASX may require the Company to seek Shareholder approval and to meet the admission requirements under Chapters 1 and 2 of the Listing Rules as if the Company were a new listing. There would be costs associated in re-complying with the admission requirements. The Company may be required to incur these costs in any event, were it to proceed to seek to acquire a new business or asset which is considered to result in a significant change to the nature or scale of its existing operations.
If a new investment or acquisition is not completed, then the Company may not be in a position to comply with the Listing Rules, which includes but is not limited to, maintaining a sufficient level of operations and financial position.
Any new asset or business acquisition may change the risk profile of the Company, particularly if the new asset or business is located or operates in another jurisdiction and/or changes the Company's capital/funding requirements. Should the Company propose or complete the acquisition of a new asset or business activity, investors should re-assess their investment in the Company in light of the new asset/business activity.
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Market for Shares
There can be no guarantee that an active market in the Company's Shares or listed Options will exist In future.
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No Profit to Date
The Company has incurred losses and it is therefore not possible to evaluate the future prospects based on past performance.
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Publicly available information
Information about the Company is publicly available and can be obtained from ASIC and ASX (including ASX's website www.asx.com.au). The contents of any website or ASIC or ASX filing by the Company are not incorporated into this Prospectus and do not constitute part of the Offer. This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision on whether or not to invest in Securities or the Company.
No person is authorised to give any information or make any representation in connection with the Offer which is not contained in this Prospectus. Any such extraneous information or representation may not be relied upon.
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Offer restrictions
The offer of Securities made pursuant to this Prospectus are not made to persons or in places to which, or in which, it would not be lawful to make such an offer of Securities. No action has been taken to register the Offer under this Prospectus or otherwise permit the Offer to be made in any jurisdiction outside Australia. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law in those jurisdictions and therefore persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate applicable laws.
This Prospectus does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.
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Representations
No person is authorised to give any information or to make any representation in relation to the Offer which is not contained in this Prospectus. Any information or representation not so contained may not be relied upon as having been authorised by the Company or the Directors in relation to the Offer.
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Forward-looking statements
This Prospectus contains forward-looking statements which incorporate an element of uncertainty or risk, such as 'intents', 'may', 'could', 'believes', 'estimates', 'targets' or 'expects'. These statements are based on an evaluation of current economic and operating conditions, as well as assumptions regarding future events. These events, as at the date of this Prospectus, are expected to take place, but there is no guarantee that such will occur as anticipated or at all given that many of the events are outside the Company's control.
Accordingly, the Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Prospectus will actually occur. Further, the Company may not update or revise any forward-looking statement if events subsequently occur or information subsequently becomes available that affects the original forward-looking statement.
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Interpretation
A number of terms and abbreviations used in this Prospectus have defined meanings which are set out in Section 9.
All references in this Prospectus to $, AUD or dollars are references to Australian currency, unless otherwise stated.
All references to time in this Prospectus relate to the time in Perth, Western Australia.
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CORPORATE DIRECTORY
Directors
Mr Peter Torney - Non-Executive Director Mr Peter Dykes - Non-Executive Director
Mr Anthony Dunlop - Non-Executive Director
Company Secretary
Mrs Elizabeth Hunt
Registered Office Level 11, London House 216 St Georges Terrace Perth WA 6000
Share Registry (for information purposes only) Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
1300 737 760 (in Australia)
+61 29290 9600 (international) www.boardroomlimited.com.au
Auditor (for information purposes only) Bentleys Audit & Corporate (WA) Pty Ltd Level 1, 12 Kings Park Road
West Perth WA 6005
Legal Advisor (for information purposes only) Steinepreis Paganin
Level 4, The Read Buildings 16 Milligan Street
Perth WA 6000
ASX Code
CMY, CMYO
Website
www.capitalmining.com.au
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TIMETABLE
The timetable for the Offer is as follows:
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Event
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Date
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Lodgement of this Prospectus with ASIC
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20 October 2015
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Opening Date
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21 October 2015
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Closing Date
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27 October 2015
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Expected Date of Official Quotation of the Shares (subject to ASX approval of that Official Quotation)
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30 October 2015
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The above dates are indicative only and may be subject to change. The Directors reserve the right to vary these dates, including the Closing Date, without prior notice but subject to any applicable requirements of the Corporations Act or the ASX Listing Rules. This may include extending the Offer or accepting late acceptances, either generally or in particular cases.
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DETAILS OF THE OFFER
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Offer
The Company is making an offer of 1,000 Shares to investors identified by the Directors at an issue price of $0.01 each to raise $10 before expenses of the Offer. The Offer has a minimum subscription of 1,000 Shares to raise $10. The Offer will only be made to investors identified by the Directors, however no Shares will be issued under the Offer to Directors, related parties of the Company or any other person if the issue would breach the takeover prohibition in section 606 of the Corporations Act.
The Company reserves the right to reject any Application Form or to allocate any Applicant fewer Shares than the number for which the Applicant has applied.
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Condition of the Offer
The Offer is conditional upon the Company achieving the minimum level of subscription for the Offer, being 1,000 Shares to raise $10.
Satisfaction of the above condition is a requirement for the issue of Shares under the Offer. In the event that this condition is not met within 4 months of the date of this Prospectus (or such period as varied by the ASIC), all Application Monies will be returned to Applicants without interest as soon as practicable thereafter and no Shares will be issued under the Offer.
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Purpose of the Offer
The Company is seeking to raise only a nominal amount of $10 under this Prospectus and accordingly, the purpose of this Prospectus is not to raise capital. The Directors intend to apply the proceeds from the Offer to expenses of the Offer.
The Offer is for the purpose of section 708A(11) of the Corporations Act to remove any trading restrictions on the sale of certain Shares issued prior to the Closing Date, including the placement of up to 22,000,000 Shares to be issued, to investors to whom the Company is not required to issue a disclosure document under the Corporations Act, on 18 September 2015 at an issue price of $0.015 per Share (Placement).
The Shares issued pursuant to the Placement will rank equally with existing Shares on issue.
The funds raised via the Placement will be used for general working capital purposes, current and potential projects, business development purposes, potential acquisition of new projects (although no such acquisitions are currently identified by the Directors) and consultancy fees.
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Cleansing
Relevantly, section 708A(11) of the Corporations Act provides that an offer of securities for sale does not need disclosure to investors if:
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the relevant securities are in a class of securities that are quoted securities of the body; and
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either:
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a prospectus is lodged with ASIC on or after the day on which the relevant securities were issued but before the day on which the sale offer is made; or
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a prospectus is lodged with ASIC before the day on which the relevant securities are issued and offers of securities that have been made under the prospectus are still open for acceptance on the day on which the relevant securities were issued; and
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the prospectus is for an offer of securities issued by the body that are in the same class of securities as the relevant securities.
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Rights and liabilities attaching to new Securities
The Shares to be issued pursuant to the Offer are of the same class and will rank equally in all respects with the existing Shares on issue. The rights and liabilities attaching to the Shares are further described in Section 7.2.
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Minimum subscription
The Offer is conditional on the Company achieving the minimum level of subscription of 1,000 new Shares to raise $10. No Shares under the Offer will be issued until the minimum subscription has been reached. If the minimum subscription has not been achieved within 4 months from the date of this Prospectus (or such period as varied by the ASIC), all Application Monies will be refunded to Applicants without interest in accordance with the Corporations Act.
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Oversubscriptions
No oversubscriptions for the Offer will be accepted by the Company.
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Underwriting
The Offer is not underwritten.
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Commissions on Offer applications
The Company reserves the right to pay a fee of up to 6% (exclusive of GST) of amounts subscribed to any licensed securities dealer or Australian Financial Services Licensee in respect of valid Application Forms lodged and accepted by the Company with the stamp of the licensed securities dealer or Australian Financial Services Licensee. Payments will be subject to receipt of a proper tax invoice from the licensed securities dealer or Australian Financial Services Licensee.
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Applications
Applications for Securities under the Offer can only be made on the relevant original Application Form attached to or accompanying this Prospectus. Under the Offer, Applicants may apply for a minimum parcel of 100 Shares, representing a minimum investment of $1.00 using an Application Form. Applicants seeking additional Shares must apply thereafter for Shares in multiples of 100 (equivalent to $1.00).
All applications must be completed in accordance with the detailed instructions on the Application Form and be accompanied by a cheque or bank cheque drawn and payable on an Australian bank (if applicable). The cheque must be made payable to 'Capital Mining Limited' and should be crossed 'Not Negotiable'. No brokerage or stamp duty is payable.
Completed Application Forms and accompanying cheques (if applicable) must be received by the Company before 5.00pm (WST) on the Closing Date by either being delivered to, or mailed to, the following address: