return on capital definition by abe23

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									                                                 ASX ANNOUNCEMENT


                             NOTICE OF MEETING – RETURN OF CAPITAL



Please find attached a copy of the Notice of Meeting and Explanatory Memorandum for
the shareholders meeting to be held at 10.00am on Thursday, 30 May 2002 at Level 8,
Exchange Plaza, 2 The Esplanade, Perth, Western Australia. These documents are
being dispatched to shareholders today.




For and on behalf of the Board




GREG FITZGERALD
Company Secretary




23 April 2002




                                                    RESOLUTE MINING LIMITED
                                                           A.C.N. 097 088 689
   4th Floor, BGC Centre, 28 The Esplanade, Perth, Western Australia 6000. P.O. Box 7232 Cloisters Square, Perth, Western Australia 6850
                       Telephone : (08) 9261 6100 Facsimile : (08) 9322 7541 Email : contact@resolute-ltd.com.au
                                           ACN 097 088 689




                          NOTICE OF GENERAL MEETING
Notice is given that a general meeting of shareholders of Resolute Mining Limited (the
"Company") will be held at the Conference Centre, Level 8, Exchange Plaza, 2 The
Esplanade, Perth, Western Australia on Thursday, 30 May 2002 commencing at 10.00 am.



BUSINESS

Capital Return to Shareholders

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

          "That, for the purposes of section 256C of the Corporations Act and all other purposes, the
          capital of the Company be reduced by means of a distribution to the holders of fully paid
          ordinary shares in the Company of an aggregate of $15,381,317, such distribution to be
          made pro rata to the number of fully paid ordinary shares held by each shareholder on the
          register at 6 June 2002."

OTHER BUSINESS

To transact any other business which may legally be brought before the meeting.



BY ORDER OF THE BOARD

Greg Fitzgerald
Company Secretary
22 April 2002



Notes:

1.       This notice of meeting should be read in conjunction with the accompanying
         explanatory memorandum, which forms part of this notice.

2.       If you have recently changed your address or if there is any error in the name and
         address used for this notice, please notify the company’s share registry accordingly. In
         the case of a corporation, notification is to be signed by a director or company secretary.
                                               2.


PROXIES

A member who is entitled to vote at the meeting has a right to appoint a proxy and should use
the proxy form which accompanies this notice of meeting. The proxy need not be a member of
the Company.

A member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the
proportion or number of votes each proxy is appointed to exercise. If a member appoints
2 proxies and the appointment does not specify the proportion or number of the member's
votes each proxy may exercise, each proxy may exercise half of the votes (ignoring fractions).

Additional proxy forms may be obtained by telephoning the Company's share registry, Security
Transfer Registrars on (08) 9221 4200.

A proxy's authority to speak and vote for a member at the meeting is suspended if the member
is present at the meeting.

The proxy form must be signed and dated by the member or the member's attorney. Joint
members must each sign.

Proxy forms and the original or a certified copy of the power of attorney (if the proxy form is
signed by an attorney) must be received:
•      at Security Transfer Registrars, Level 1, 168 Adelaide Terrace, East Perth WA 6004; or
•      on fax number (08) 9221 1581,

not later than 48 hours before the time fixed for holding of the meeting.

BODIES CORPORATE

A body corporate may appoint an individual as its representative to exercise any of the powers
the body may exercise at meetings of the Company's shareholders. The appointment may be a
standing one. Unless the appointment states otherwise, the representative may exercise all of
the powers that the appointing body could exercise at a meeting or in voting on a resolution.
                                                         ACN 097 088 689



                                                 PROXY FORM
The Secretary
Resolute Mining Limited
C/- Security Transfer Registrars
PO Box 6405
East Perth WA 6892

I/We.............................................................................................................………………………...of
..........................................................................................................................………………………..

am/are a member of Resolute Mining Limited (“the Company”) and I/we appoint
...................................................................................................………………………………………...
or failing him or her.................................................................................……………………………..
as my/our proxy at the general meeting of the Company to be held at the Conference Centre,
Level 8, Exchange Plaza, 2 The Esplanade, Perth, Western Australia on Thursday, 30 May
2002 at 10.00am to vote for me/us at that meeting and at any adjournment of the meeting.

If no person is named above or if the person named does not attend the meeting or is not a
legally effective choice, the Chairman of the meeting will be my/our proxy to vote for me/us
on my/our behalf at the meeting or any adjournment of the meeting. I/we understand that
the Chairman intends to vote in favour of the resolution.

I/We understand that if I/we have not directed my/our proxy how to vote, my/our proxy
may vote or abstain from voting as he or she thinks fit.

Resolution                                                                             For         Against         Abstain
Capital Return to Shareholders

Appointment of a second proxy
If appointing a second proxy, state the percentage of your
                                                                                                                      %
voting rights applicable to the proxy appointed by this
form.

To be effective, proxy forms must be either:
a) deposited at the office of Security Transfer Registrars, Level 1, 168 Adelaide Terrace, East
    Perth, WA 6004
b) returned by mail to Security Transfer Registrars – PO Box 6405, East Perth WA 6892, or
c) faxed to the Company’s share registry (Fax No. 08 9221 1581 of if overseas 618 9221 1581)
not later than 10:00am on Tuesday, 28 May 2002.

PLEASE REFER TO OVER THE PAGE FOR SIGNING
                                                                               2.


DATED:
A. For use by individual or joint members



........................................................................        ........................................................................
Signature of Member                                                             Signature of Joint Member


B. For use by an Attorney
SIGNED for and on behalf of                                                )
                                                                           )
by its duly appointed attorney in the                                      )
presence of:                                                               )


..................................................................                    ...................................................................
Witness                                                                               Attorney
Name (printed):                                                                       Name (printed):
                                                                                      Date of Power of Attorney:



C. For use by companies having a common seal


THE COMMON SEAL of
the fixing of which was witnessed by:




Signature of director/secretary                                                         Signature of director/sole director




Name                                                                                    Name

D. For use by companies not having a common seal

EXECUTED by                                             :



Signature of director/secretary                                                         Signature of director/sole director




Name                                                                                    Name

* Delete whichever is not applicable


                                                                                                                                                            2.
                                        ACN 097 088 689



      EXPLANATORY MEMORANDUM TO ACCOMPANY
             NOTICE OF GENERAL MEETING


1.    INTRODUCTION

      This explanatory memorandum has been prepared for the shareholders of Resolute
      Mining Limited (the "Company") in connection with the general meeting of the
      Company to be held on 30 May 2002. It should be read in conjunction with the
      accompanying Notice of Meeting.

      At the general meeting, shareholders will be asked to consider a resolution authorising a
      return of the capital of the Company by way of a distribution of an aggregate of
      $15,381,317 to the holders of fully paid ordinary shares in the Company ("Ordinary
      Shareholders"), pro rata to the number of fully paid ordinary shares in the Company
      ("Ordinary Shares") held as at 6 June 2002 ("Record Date").

      For the purposes of the Corporations Act 2001, the proposed capital return is treated as
      an "equal" reduction of capital and requires the approval of an ordinary resolution of
      shareholders in general meeting.

      The purpose of this explanatory memorandum is to provide shareholders with
      information that the Company's board of directors ("Board") believes to be material to
      shareholders in deciding whether or not to approve the above resolution.

      This explanatory memorandum is an important document and should be read carefully
      in full by all shareholders. Shareholders are strongly advised to consult their legal or
      financial advisers if they require further advice in connection with the matters
      contained in this explanatory memorandum.

2.    DETAILS OF THE PROPOSED RETURN OF CAPITAL

2.1   Reasons For The Return Of Capital

      As at 31 March 2002, the Company had cash, bullion and liquid securities worth
      approximately $38 million and net assets of approximately $75 million.

      The directors have reviewed the Company’s cash and bullion position and its ongoing
      cash requirements and have concluded that it would be in shareholders' interests to
      return capital at this time.

      The directors consider the remaining cash and bullion along with budgeted cashflow
      from its operations will be adequate to continue its development and acquisition
      objectives. However, this would not preclude raising further capital in future should a
      substantial opportunity arise or circumstances change.

      The directors believe that the value of the surplus cash is not fully reflected in the
      Company’s share price and this makes it difficult to obtain the best value for
      shareholders should the directors contemplate a share issue at a later date as part of an
      acquisition.

      While the Company continues to examine opportunities that may utilise this cash,
      nothing suitable has emerged at this time.

2.2   Who Will Participate In The Proposed Distribution?

      Subject to shareholder approval being obtained, the proposed distribution will be made
      to the holders ("Ordinary Shareholders") of ordinary fully paid shares in the Company
      ("Ordinary Shares"), pro rata to the number Ordinary Shares held by each Ordinary
      Shareholder as at the Record Date (6 June 2002)(ie. the Ordinary Shares will trade “ex”
      from the commencement of trade on 31 May 2002).

2.3   How Much Will Each Ordinary Shareholder Receive In The Proposed Distribution?

      As at the date of this explanatory memorandum, there are 153,813,168 Ordinary Shares
      on issue.

      The Company also has on issue 2,000,000 options to subscribe for Ordinary Shares with
      an exercise price of 52 cents each and 2,460,000 options to subscribe for Ordinary
      Shares with an exercise price of $2.30 each. These options will not participate in the
      return of capital (unless they are exercised prior to the Record Date) but, following any
      return of capital, this exercise price will be reduced as a consequence of the return of
      capital – see Section 5 below for further details.

      Subject to no further Ordinary Shares being issued prior to the Record Date, the
      proposed capital return will result in each Ordinary Shareholder receiving 10 cents per
      Ordinary Share.

2.4   When Will The Distribution Be Made?

      The Company will inform the ASX of the outcome of the resolution immediately after
      the general meeting has been held. If shareholder approval is obtained, it is the
      directors' intention that the Company will make the distribution to Ordinary
      Shareholders before 30 June 2002.

3.    EFFECT OF THE PROPOSED RETURN OF CAPITAL ON THE COMPANY

      If the proposed capital reduction is approved, the share capital account of the
      Company will be reduced by $15,381,317. The financial impact on the Company of the
      proposed capital reduction is reflected in the pro forma 31 December 2001 statement of
      financial position set out in appendix 1 to this Explanatory Memorandum.

      The directors are satisfied that the capital reduction will not materially prejudice the
      Company's ability to pay its creditors.
      No shares will be cancelled as part of the return of capital – the issued share capital of
      the Company will not be affected by the proposal.

4.    EFFECT OF THE PROPOSED RETURN OF CAPITAL ON ORDINARY SHAREHOLDERS –
      TAXATION IMPLICATIONS

      The Company has obtained advice from Ernst & Young regarding the taxation
      implications for shareholders of the proposed return of capital. Ernst & Young advise
      that, on the assumption that shareholders hold their shares on capital account, the
      return of capital should generally create no immediate tax liability for shareholders. A
      return of capital on shares acquired after 19 September 1985 will generally reduce the
      capital gains tax cost base of the shares held in Resolute Mining Limited. This reduction
      in cost base may result in an increased capital gain, or reduced capital loss, upon
      eventual disposal of the shares in Resolute Mining Limited. A return of capital will only
      create a capital gain at the time of the return if the return of capital is in excess of the
      cost base of the relevant share.

      The taxation implications of the proposed capital return may vary depending on the
      particular circumstances applicable to each shareholder. Accordingly, shareholders are
      urged to seek their own advice based on their own particular circumstances in relation
      to the tax consequences of the return of capital.

5.    EFFECT OF THE PROPOSED CAPITAL RETURN ON HOLDERS OF OPTIONS

5.1   Employee Options

      Clause 8.5 of the Company's employee share option plan ("Plan") provides that in the
      event of a return of capital of the Company not involving a cancellation of shares, the
      number of employee options must remain the same and the exercise price of each
      employee option must be reduced by the same amount as the amount returned in
      relation to each Ordinary Share.

      The Company has issued 2,000,000 options under the Plan. These have an exercise
      price of 52 cents and expire on 10 December 2006.

      On the capital return taking place, the exercise price of each employee option will be
      reduced by 10 cents, to 42 cents.

5.2   Other Options

      The Company has also issued a further 2,460,000 options with an exercise price of
      $2.30 and an expiry date of 4 January 2005. On the capital return taking place, the
      exercise price of each of these options will be reduced by 10 cents, to $2.20.



This explanatory memorandum is dated 22 April 2002.
                                               Appendix 1


                                  RESOLUTE MINING LIMITED
                           PROFORMA STATEMENT OF FINANCIAL POSITION
                                    AS AT 31 DECEMBER 2001

                                                Notes       Resolute       Proforma   Resolute Mining
                                                            Mining        Adjustments
                                                            Limited                        Limited
                                                        Audit Reviewed                    Proforma
                                                        at 31 Dec. 2001                at 31 Dec. 2001
                                                             A$'000         A$'000         A$'000
CURRENT ASSETS
 Cash assets                                      1              29,884        (15,381)         14,503
 Receivables                                                      2,383               -          2,383
 Other financial assets                                             338               -            338
 Inventories                                                     20,358               -         20,358
 Prepayments                                                      2,131               -          2,131
 Deferred mining costs                                              438               -            438
TOTAL CURRENT ASSETS                                             55,532        (15,381)         40,151
NON-CURRENT ASSETS
 Receivables                                                      2,850               -          2,850
 Other financial assets                                           3,600               -          3,600
 Mineral exploration & development interests                     12,881               -         12,881
 Property, plant & equipment                                     35,983               -         35,983
 Deferred mining costs                                           12,280               -         12,280
TOTAL NON-CURRENT ASSETS                                         67,594               -         67,594
TOTAL ASSETS                                                    123,126        (15,381)        107,745
CURRENT LIABILITIES
 Payables                                                        17,981               -         17,981
 Interest bearing liabilities                                        60               -             60
 Provisions                                                      10,451               -         10,451
 Tax liability                                                    1,502               -          1,502
TOTAL CURRENT LIABILITIES                                        29,994               -         29,994
NON-CURRENT LIABILITIES
 Interest bearing liabilities                                        38               -             38
 Provisions                                                      11,404               -         11,404
 Deferred tax liability                                           8,982               -          8,982
TOTAL NON-CURRENT LIABILITIES                                    20,424               -         20,424
TOTAL LIABILITIES                                                50,418               -         50,418
NET ASSETS                                                       72,708        (15,381)         57,327
SHAREHOLDERS' EQUITY
 Share capital                                    1              64,281        (15,381)         48,900
 Reserves                                                         1,741               -          1,741
 Retained profits                                                 5,796               -          5,796
Parent entity interest in equity                                 71,818        (15,381)         56,437

Outside equity interest                                             890               -            890

TOTAL SHAREHOLDERS' EQUITY                                       72,708        (15,381)         57,327
Note 1 - Cash assets & Share capital
Return of capital per ordinary share                                              $0.10
Number of ordinary shares on issue                                          153,813,168
Total return of capital                                                     $15,381,317

								
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