Extraordinary General Meeting – 15 April 2009 by lindash

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Extraordinary General Meeting – 15 April 2009

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    ASX ANNOUNCEMENT 
    16 March 2009 

                                                         
                                                         
                  Extraordinary General Meeting – 15 April 2009  
     
    PanAust Limited forwards the Notice of Meeting, Explanatory Statement and Proxy Form 
    for an Extraordinary General Meeting of Shareholders (EGM) to be held on Wednesday 
    15 April 2009 at 10am.  The meeting will be held at the Stamford Plaza Hotel at the corner 
    of Margaret and Edward Streets, Brisbane, Queensland.  
    The EGM will consider a resolution to approve the issue of 75million options to Goldman 
    Sachs JBWere Capital Markets Limited.  The requirement to seek shareholder approval was 
    foreshadowed in the announcement to the ASX on 5 January 2009.  
    In addition, the EGM will consider a resolution to provide subsequent approval for the 
    issue of shares under the private share placement successfully completed in January 2009.   
    All relevant information relating to the resolutions, including information required to be 
    provided under the ASX Listing Rules, is provided in the Explanatory Statement.  
    For further information contact: 
     
    Mr Paul Scarr                                                Mr Allan Ryan 
    Company Secretary                                            Investor Relations Manager 
     
    PanAust Limited                                               
    Tel: +61 7 3117 2000   
    Email: info@panaust.com.au  
    Website: www.panaust.com.au 

     
     
     




     
                                       PanAust Limited  ABN 17 011 065 160 
                       Level 2, 99 Melbourne Street • PO Box 3468 • South Brisbane Qld 4101 
                             Phone +61 (0) 7 3117 2000 • Facsimile +61 (0) 7 3846 4899 
                                   info@panaust.com.au • www.panaust.com.au 
     
              ABN 17 011 065 160




NOTICE OF EXTRAORDINARY GENERAL
             MEETING
        OF SHAREHOLDERS
  AND EXPLANATORY STATEMENT




     To be held on Wednesday 15 April 2009

                   at 10.00am

            The Stamford Plaza Hotel

   Corner of Margaret Street and Edward Street

            Brisbane Queensland 4000
                 NOTICE OF EXTRAORDINARY GENERAL MEETING 

An Extraordinary General Meeting of PanAust Limited ABN 17 011 065 160 (“the
Company”) will be held at the Stamford Plaza Hotel, corner of Edward and Margaret Streets,
Brisbane, Queensland on Wednesday 15 April 2009 at 10.00am.


Resolution 1 – Issue of Options to Goldman Sachs JBWere Capital Markets Limited


1.      To consider and, if thought fit, pass the following resolution as an ordinary
        resolution:
        THAT the issue of 75 million options to Goldman Sachs JBWere Capital Markets
        Limited on the terms and conditions described in the explanatory statement be
        approved.


Resolution 2 – Subsequent approval of shares issued under Share Placement


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

        THAT the issue of 147,065,717 fully paid ordinary shares by way of share
        placement on 28 January 2009 (on the terms described in the explanatory statement)
        be subsequently approved for the purposes of Listing Rule 7.4.


By order of the Board




P. M. Scarr
Company Secretary
Brisbane
16 March 2009

NOTES

Voting exclusion

The Company will, in accordance with Listing Rule 14.11, disregard any votes cast:

        (a)        in respect of Resolution 1, by Goldman Sachs JBWere Capital Markets
                   Limited and its associates; and

        (b)        in respect of Resolution 2, by any of the allottees of shares under the Share
                   Placement and their respective associates.

2                              Notice of Extraordinary General Meeting                              
However, the Company will not disregard any votes cast on any resolution if:

•        it is cast by a person excluded from voting, as proxy for a person who is entitled to vote in
         accordance with the directions on the proxy form; or
•        it is cast by the person chairing the meeting as proxy for a person who is entitled to vote,
         in accordance with a direction on the proxy form to vote as the proxy decides.

Voting

The Company has determined that the shareholders who are on the Company’s share register
at 7.00pm on 9 April 2009 will be taken, for the purposes of the Extraordinary General
Meeting, to be entitled to attend and vote at the meeting.

Proxies

    1.         A Member who is entitled to vote at the meeting may appoint:

                         (a)      one proxy if the Member is only entitled to one vote; or

                         (b)      one or two proxies if the Member is entitled to more than one
                                  vote.

    2.         Where the Member appoints two proxies, the appointment may specify the
               proportion or number of votes that each proxy may exercise. If the appointment
               does not specify a proportion or number, each proxy may exercise half of the votes
               in which case any fraction of votes will be disregarded.

    3.         If you require an additional proxy form, the Company will supply it on request.

    4.         A proxy need not be a Member of the Company.

    5.         The proxy form and the power of attorney or other authority (if any) under which it
               is signed (or a certified copy) must be received by the Company, no later than
               10.00am Monday 13 April 2009, at:

               (a)       the Company's share registry office, Computershare Investor Services Pty
                         Limited, Level 19, 307 Queen Street, Brisbane Queensland 4000
                         AUSTRALIA; or

               (b)       at Computershare Investor Services Pty Limited GPO Box 242,
                         Melbourne, Victoria 3001 AUSTRALIA; or

               (c)       by fax on:        1800 783 447 (within Australia); or
                                          +61 3 9473 2555 (outside Australia), or

               (d)       online through www.investorvote.com.au

Proxy Form

A proxy form is enclosed with this Notice of Meeting. The Proxy Form is an integral part of
this Notice and both documents should be read together.

                                      Notice of Extraordinary General Meeting                           3 
                                EXPLANATORY STATEMENT 
Introduction

This Explanatory Statement has been prepared for the shareholders of PanAust Limited
ABN 17 011 065 160 (the “Company”) in conjunction with the Notice of Extraordinary
General Meeting of the Company to be held at the Stamford Plaza Hotel, corner of Edward
Street and Margaret Streets, Brisbane on Wednesday 15 April 2009 at 10.00am.

1. Resolution 1 – Issue of 75 million options to Goldman Sachs JBWere Capital
   Markets Limited (“GSJBW”)

     1.1 Background

     The Company has previously announced that GSJBW agreed to extend the date for
     repayment of its fully subordinated bridge facilities to 31 March 2010 (the “GSJBW
     Facility”). As at 4 March 2009, the total amount outstanding under the GSJBW Facility
     was US$79,555,711.26.

     The GSJBW Facility is fully subordinated to the interests of the banks providing the
     project financing facility (“Senior Project Banks”) in relation to the Phu Kham Copper
     Gold Operations. The subordination continues whilst the Company provides a guarantee
     of the project financing obligations (this period is referred to as the “subordination
     period”). During the subordination period, GSJBW cannot take any enforcement action
     without the consent of the Senior Project Banks. However, if there is an event of default,
     GSJBW may take certain actions including requiring the Company to take steps to raise
     capital to repay the GSJBW Facility.

     The key commercial terms of the GSJBW Facility are as follows:

     (a)     Up to 31 July 2009, the interest rate is 12%. If any part of the facility is unpaid as
             at 1 August 2009, then the interest rate on the unpaid amount increases to 15%.
             Interest can be capitalised.
     (b)     Up to 31 July 2009, a redemption fee of up to US$5 million is payable upon
             repayment of the whole facility. This redemption fee is reduced on a pro rata
             basis if part of the facility is repaid.
             If any part of the facility remains unpaid after 31 July 2009, then the maximum
             redemption fee rises to US$10 million and becomes payable when the facility is
             repaid or at maturity. The redemption fee is reduced on a pro rata basis where
             there has been a partial repayment prior to 31 July 2009.
             The total amount of redemption fees payable is capped at US$10 million. The
             redemption fees comprise a base fee and a variable component linked to the
             market capitalisation of the Company as at the date of redemption.
     (c)     The Company agreed to convene this Extraordinary General Meeting to consider
             a resolution to approve the issue of 75 million options to GSJBW with an exercise
             price of A$0.105. A failure to issue the options prior to 16 April 2009 constitutes
             an event of default under the GSJBW Facility (the consequences of such an event
             of default are expanded upon in section 1.4 below).


4                                       Explanatory Statement 
    (d)     If the Company does not repay all of the GSJBW Facility prior to 1 August 2009,
            then a further tranche of 75 million options (the “second tranche”) must be issued
            at an exercise price determined by reference to the market price plus a premium
            of 10%. The issue of this second tranche of 75 million options is not the subject
            of this resolution.

    The GSJBW Facility is structured to provide a commercial incentive to the Company to
    repay the facility in full prior to 1 August 2009. If that does not occur, then there is an
    increase in the applicable rate of interest and the redemption fee. In addition, the
    obligation to issue the second tranche of 75 million options would be triggered. The
    Company has engaged Rothschild Australia Limited to manage a process to refinance the
    GSJBW Facility. The Company is confident that this process will be completed prior to 1
    August 2009.

    1.2 Why is shareholder approval required?

    Under Listing Rule 7.1 (the “15% rule”), a Company cannot issue more than 15% of its
    total issued securities in any twelve month period without first obtaining shareholder
    approval. Given the share placement (the subject of resolution 2), the Company did not
    have capacity under the 15% rule to issue the 75 million options to GSJBW. GSJBW
    agreed to extend the GSJBW Facility on the basis that the Company convene this
    Extraordinary General Meeting to seek such shareholder approval.

    1.3 What are the terms of the options proposed to be issued to GSJBW?

    The terms of the options are as follows:

    (a)     The exercise price of each option is A$0.105. This was a 23.5% premium to the
            closing Company share price for PanAust shares on the last trading day prior to
            entry into the agreement with GSJBW to extend the maturity date of the GSJBW
            Facility to 31 March 2010.

    (b)     The exercise period of the options is three years. If the issue of the options is
            approved by shareholders and the options issued on the date of this Extraordinary
            General Meeting, then the exercise period will commence on 15 April 2009
            (being the proposed date of issue) and expire on 14 April 2012. Upon exercise,
            the Company will issue one fully paid ordinary share for each option.

    (c)     As indicated above, the Company agreed to enter into an option deed as part of
            the consideration for the extension of the GSJBW Facility. Accordingly, there is
            no issue price for the new options.

    (d)     If approval is granted by shareholders, it is proposed that the options will be
            issued to GSJBW or a nominated affiliate of GSJBW on 15 April 2009.

    (e)     If the Company makes a pro rata issue or a bonus issue, there will be an
            adjustment to the exercise price of the options or the number of options on issue
            in accordance with the formula provided in the Listing Rules. Similarly, if there is
            a reconstruction of the issued capital of the Company, there is an adjustment to


                                       Explanatory Statement                                    5 
                 the number of options, the exercise price of the options or the number of shares
                 issued so as to comply with the Listing Rules.
     (f)         The holder of the options is only permitted to participate in new issues of
                 securities if it has exercised its options prior to the new issue.
     (g)         Prior to 31 March 2010 and the date on which the GSJBW Facility is repaid in
                 full (“Transfer Restriction Date”), the options can only be transferred to an
                 affiliate of GSJBW. After the Transfer Restriction Date, an option holder may
                 transfer the options without restriction provided that if the options are still held by
                 GSJBW or an affiliate they must give at least five business days’ prior notice to
                 the Company of any proposed transfer.
     (h)         After the options are exercised, then GSJBW or an affiliate (for a period of time
                 after becoming the holder of shares) must give five business days’ prior notice to
                 the Company of any proposed transfer and consult in good faith with the
                 Company in relation to such proposed transfer.

     1.4 Effect of the proposal

           If the 75 million options are issued to GSJBW and are exercised, then GSJBW will
           acquire a 3.97% interest in the Company on a fully diluted basis. Accordingly,
           shareholders should note that if the options are approved, it will have a small
           dilutionary effect on existing shareholders’ interests. However, that impact must be
           balanced against the consequences arising under the GSJBW Facility if the
           Company fails to issue the 75 million options.

           As indicated above, if the shareholders do not approve the issue of the options to
           GSJBW, then that constitutes an event of default under the GSJBW Facility. This
           has the following consequences:

           (a)         Default interest would accrue under the GSJBW Facility. This would
                       represent an extra 2% above the applicable interest rate (a total interest rate
                       of 14% up to 31 July 2009 and 17% thereafter).
           (b)         The total amount outstanding under the GSJBW Facility would, at
                       GSJBW’s election, become due and payable, subject to the terms of
                       subordination with the Senior Project Banks.
           (c)         The Company would be obliged to raise capital within three months (by 15
                       July 2009) to repay the total amount outstanding under the GSJBW Facility.
                       The total amount outstanding under the GSJBW Facility would comprise
                       principal, interest (including the elevated rate of default interest), the
                       redemption fee and other fees, charges and expenses usual for a debt
                       facility.
           (d)         If the Company were unsuccessful in raising capital to pay GSJBW the total
                       amount outstanding under paragraph (c) within the three month period, then
                       default interest would continue to accrue. The proceeds of any future
                       capital raising by the Company would have to be applied in priority to
                       repay the total amount outstanding. During the subordination period,
                       GSJBW would be limited in the enforcement action that it could take
                       without the consent of the Senior Project Banks.


6                                           Explanatory Statement 
     1.5 Use of funds raised

         There is no issue price for the new options. Should the options be issued and
         exercised, the funds raised by the exercise of the options would be used by the
         Company for working capital.


     1.6 Voting exclusion

         In accordance with Listing Rule 14.11, Goldman Sachs JBWere Capital Markets
         Limited and any of its associates are excluded from voting on this resolution.

2.       Resolution 2 – Subsequent approval of issue of shares under share placement

     2.1 Background

         On 28 January 2009, the Company issued 147,065,717 shares to institutional and
         sophisticated investors under a private share placement (the “Share Placement”).
         The issue price was $0.15 per share. The issue price was at a 19% discount to the
         closing price for PanAust shares of A$0.185 per share on 16 January 2009 (the last
         trading day prior to obtaining binding commitments to participate in the Share
         Placement). The shares are fully paid ordinary shares with the same terms and
         conditions as all other shares currently quoted on the ASX.

         Allottees were selected on the basis that they were institutional investors or
         sophisticated investors having the attributes necessary to permit the Company to
         issue shares to them under a private share placement.

     2.2 Proposed subsequent shareholder approval

         Under Listing Rule 7.1, there is a 15% cap on the number of new securities a
         company can issue over any 12 month period. Listing Rule 7.4 provides that a
         company may seek the subsequent approval of shareholders to an issue of securities.
         The benefit of obtaining such approval is that the Company’s capacity to raise
         additional capital without the need to obtain shareholder approval is refreshed. This
         provides additional funding flexibility for the Company.

     2.3 Effect of the proposal

         If the resolution is approved, the Company will not have to count the shares issued
         under the Share Placement towards the 15% of additional securities that may be
         issued by the Company in any twelve month period under Listing Rule 7.1. To that
         extent, the Company’s capacity to issue capital in compliance with the 15% limit
         under Listing Rule 7.1 will be refreshed. The Directors of the Company consider it
         prudent to maintain such funding flexibility as part of the Company’s capital
         management strategy.

         If the resolution is not approved, this will have no impact upon the shares issued
         under the Share Placement. Those shares have already been issued and quoted on
         the ASX. It would simply mean that in calculating the capacity of the Company to
         raise capital under Listing Rule 7.1, the shares issued under the Share Placement


                                      Explanatory Statement                                    7 
         would be counted towards the 15% of additional securities that may be issued by the
         Company in any twelve month period.

     2.4 Use of funds raised

         The funds raised from the Share Placement have been used for the working capital
         requirements of the Company. The particular uses include supporting the Phu Kham
         Copper Gold Operations and advancing feasibility studies for the Ban Houayxai
         Gold Silver Project and the Puthep Project in northern Thailand.

     2.5 Voting exclusion

         In accordance with Listing Rule 14.11, those shareholders who received an
         allotment of shares under the Share Placement and their associates are excluded
         from voting on this resolution.  




8                                    Explanatory Statement 
                                                                                                Lodge your vote:
                                                                                                      Online:
                                                                                                      www.investorvote.com.au


                                                                                                      By Mail:
                                                                                                      Computershare Investor Services Pty Limited
                                                                                                      GPO Box 242 Melbourne
                                                                                                      Victoria 3001 Australia
                000001 000 PNA                                                                  Alternatively you can fax your form to
                MR SAM SAMPLE
                FLAT 123                                                                        (within Australia) 1800 783 447
                123 SAMPLE STREET                                                               (outside Australia) +61 3 9473 2555
                THE SAMPLE HILL
                SAMPLE ESTATE
                SAMPLEVILLE VIC 3030                                                            For all enquiries call:
                                                                                                (within Australia) 1300 552 270
                                                                                                (outside Australia) +61 3 9415 4000




Proxy Form

                 Lodge your vote online, 24 hours a day, 7 days a week:
                 www.investorvote.com.au
                                                                        Your secure access information is:
          Cast your proxy vote                                          Control Number: 999999
                                                                        SRN/HIN: I9999999999
          Review and update your securityholding                             PLEASE NOTE: For security reasons it is important that you keep your
                                                                             SRN/HIN confidential.


      For your vote to be effective it must be received by 10.00am Monday 13 April 2009
How to Vote on Items of Business                                              Signing Instructions
All your securities will be voted in accordance with your directions.         Individual: Where the holding is in one name, the securityholder
                                                                              must sign.
Appointment of Proxy                                                          Joint Holding: Where the holding is in more than one name, all of
                                                                              the securityholders should sign.
Voting 100% of your holding: Direct your proxy how to vote by
                                                                              Power of Attorney: If you have not already lodged the Power of
marking one of the boxes opposite each item of business. If you do
                                                                              Attorney with the registry, please attach a certified photocopy of the
not mark a box your proxy may vote as they choose. If you mark
                                                                              Power of Attorney to this form when you return it.
more than one box on an item your vote will be invalid on that item.
                                                                              Companies: Where the company has a Sole Director who is also
                                                                              the Sole Company Secretary, this form must be signed by that
Voting a portion of your holding: Indicate a portion of your
                                                                              person. If the company (pursuant to section 204A of the Corporations
voting rights by inserting the percentage or number of securities
                                                                              Act 2001) does not have a Company Secretary, a Sole Director can
you wish to vote in the For, Against or Abstain box or boxes. The
                                                                              also sign alone. Otherwise this form must be signed by a Director
sum of the votes cast must not exceed your voting entitlement or
                                                                              jointly with either another Director or a Company Secretary. Please
100%.
                                                                              sign in the appropriate place to indicate the office held.
Appointing a second proxy: You are entitled to appoint up to two
proxies to attend the meeting and vote on a poll. If you appoint two          Attending the Meeting
proxies you must specify the percentage of votes or number of                 Bring this form to assist registration. If a representative of a corporate
securities for each proxy, otherwise each proxy may exercise half of          securityholder or proxy is to attend the meeting you will need to
the votes. When appointing a second proxy write both names and                provide the appropriate “Certificate of Appointment of Corporate
the percentage of votes or number of securities for each in Step 1            Representative” prior to admission. A form of the certificate may be
overleaf.                                                                     obtained from Computershare or online at www.computershare.com.

A proxy need not be a securityholder of the Company.                          Comments & Questions: If you have any comments or questions
                                                                              for the company, please write them on a separate sheet of paper and
                                                                              return with this form.


                                                                              GO ONLINE TO VOTE,
                                                                              or turn over to complete the form
MR SAM SAMPLE


                                                                                                                   *I9999999999*
                                                                         Change of address. If incorrect,
FLAT 123                                                                 mark this box and make the
123 SAMPLE STREET                                                        correction in the space to the left.
THE SAMPLE HILL                                                          Securityholders sponsored by a
SAMPLE ESTATE
                                                                         broker (reference number
SAMPLEVILLE VIC 3030
                                                                         commences with ‘X’) should advise
                                                                         your broker of any changes.               I 9999999999                           I ND

     Proxy Form                                                                                 Please mark                 to indicate your directions

               Appoint a Proxy to Vote on Your Behalf                                                                                                         XX
     I/We being a member/s of PanAust Limited hereby appoint
            the Chairman                                                                                                  PLEASE NOTE: Leave this box blank if
                                                                                                                          you have selected the Chairman of the
            of the meeting OR                                                                                             Meeting. Do not insert your own name(s).

     or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy
     to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as
     the proxy sees fit) at the Extraordinary General Meeting of PanAust Limited to be held at the Stamford Plaza Hotel, corner of Edward and
     Margaret Streets, Brisbane, Queensland on Wednesday 15 April 2009 at 10.00am and at any adjournment of that meeting.

                                                    PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your
               Items of Business                    behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.




      1         Issue of options to Goldman Sachs JBWere Capital Markets Limited


      2         Subsequent approval of shares issued under Share Placement




               Signature of Securityholder(s)                     This section must be completed.
     Individual or Securityholder 1                   Securityholder 2                                          Securityholder 3




     Sole Director and Sole Company Secretary         Director                                                  Director/Company Secretary

                                                                              Contact
     Contact                                                                  Daytime                                                          /          /
     Name                                                                     Telephone                                             Date



     PNA                                             150409A

								
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