Announcement PDF AUSTRALIAN POTASH LIMITED ACN 149 390 394 PROSPECTUS For an offer of up to 6,000,000,000 Shares at an issue price of $0.001 per Share to raise up to $6 million, together with one (1) free attaching Option for every two (2) Shares issued, exercisable at $0.0015 per Option on or before the date that is three (3) years from the date of issue (Share Offer). The Share Offer is conditional upon satisfaction of the Conditions, which are detailed further in Section 4.3. No Shares will be issued pursuant to this Prospectus until those Conditions are satisfied. The Share Offer is partially underwritten up to $2.75 million by Canaccord Genuity (Australia) Limited (AFSL 234666). IMPORTANT NOTICE This document is important and should be read in its entirety. If, after reading this Prospectus you have any questions about the Securities being offered under this Prospectus or any other matter, then you should consult your professional advisers without delay. The Securities offered by this Prospectus should be considered as highly speculative. IMPORTANT NOTICE This Prospectus is dated 14 March 2024 and was lodged with the ASIC on that date. The ASIC, the ASX and their respective officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. No Securities will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus. It is important that you read this Prospectus in its entirety and seek professional advice where necessary. The Securities offered under this Prospectus should be considered as highly speculative. Suspension from trading on ASX The Company is currently suspended from trading on ASX. The purpose of the Offer is to enable the Company to raise sufficient funds to enable the Company to apply to ASX for the Company’s Securities to reinstated to trading on ASX. Whilst the Company is suspended from trading, the Company remains an enhanced disclosure entity under the Corporations Act. Information about the Company’s announcements can be found on the ASX website at: https://www.asx.com.au/market s/company/apc. No offering where offering would be illegal The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should observe any of these restrictions, including those set out below. Failure to comply with these restrictions may violate securities laws. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed. This Prospectus does not constitute an offer or invitation to apply for Securities in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. No action or formality has been taken to register or qualify the Securities or the Offers, or to otherwise permit a Offering of the Securities in any jurisdiction outside Australia. This Prospectus has been prepared for publication in Australia and New Zealand and may not be distributed outside Australia except to institutional and professional investors in New Zealand in transactions exempt from local prospectus or registration requirements, as contemplated below. Information for New Zealand Residents The Offer to New Zealand investors is a regulated offer made under Australian and New Zealand law. In Australia, this is Chapter 8 of the Corporations Act and regulations made under that Act. In New Zealand, this is subpart 6 of Part 9 of the Financial Markets Conduct Act 2013 and Part 9 of the Financial Markets Conduct Regulations 2014. The Offer and the content of this Prospectus are principally governed by Australian rather than New Zealand law. In the main, the Corporations Act and the regulations made under that Act set out how the Offer must be made. There are differences in how financial products are regulated under Australian law. For example, the disclosure of fees for managed investment schemes is different under the Australian regime. The rights, remedies, and compensation arrangements available to New Zealand investors in Australian financial products may differ from the rights, remedies, and compensation arrangements for New Zealand financial products. Both the Australian and New Zealand financial markets regulators have enforcement responsibilities in relation to the Offer. If you need to make a complaint about the Offer, please contact the Financial Markets Authority, New Zealand (http://www.fma.govt.nz). The Australian and New Zealand regulators will work together to settle your complaint. The taxation treatment of Australian financial products is not the same as for New Zealand financial products. If you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial adviser. The Offer may involve a currency exchange risk. The currency for the financial products is not New Zealand dollars. The value of the financial products will go up or down according to changes in the exchange rate between that currency and New Zealand dollars. These changes may be significant. If you expect the financial products to pay any amounts in a currency that is not New Zealand dollars, you may incur significant fees in having the funds credited to a bank account in New Zealand in New Zealand dollars. If the financial products are able to be traded on a financial product market and you wish to trade the financial products through that market, you will have to make arrangements for a participant in that market to sell the financial products on your behalf. If the financial product market does not operate in New Zealand, the way in which the market operates, the regulation of participants in that market, and the information available to you about the financial products and trading may differ from financial product markets that operate in New Zealand. US securities law matters This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the US. In particular, the Securities have not been, and will not be, registered under the United States Shares Act of 1933, as amended (the US Securities Act), and may not be offered or sold in the US or to, or for the account or benefit of, US Persons (as defined in Regulation S under the US Securities Act) except in transactions exempt from, or not subject to, the registration requirements of the US Securities Act. Each applicant will be taken to have represented, warranted and agreed as follows: (a) it understands that the Securities have not been, and will not be, registered under the US Securities Act and may not be offered, sold or resold in the US, except in a transaction exempt from, or not subject to, registration under the US Securities Act and any other applicable securities laws; (b) it is not in the US; (c) it has not and will not send this Prospectus or any other material relating to the Offers to any person in the US; and (d) it will not offer or resell the Securities in the US or in any other jurisdiction outside Australia except in transactions exempt from, or not subject to, registration under the US Securities Act and in compliance with all applicable laws in the jurisdiction in which the Securities are offered and sold. Target Market Determination In accordance with the design and distribution obligations under the Corporations Act, the Company has determined the target market for the offer of Options issued under this Prospectus. The Company and the Lead Manager will only distribute this Prospectus to those investors who fall within the target market determination (TMD) as set out on the Company’s website (www.australianpotash.com.au) . By making an application under the Offer, you warrant that you have read and understood the TMD and that you fall within the target market set out in the TMD. Electronic Prospectus A copy of this Prospectus can be downloaded from the website of the Company at www.australianpotash.com.au. If you are accessing the electronic version of this Prospectus for the purpose of making an investment in the Company, you must be an Australian or New Zealand resident and must only access this Prospectus from within Australia or New Zealand. The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to or accompanied by the complete and unaltered version of this Prospectus. You may obtain a Australian Potash Limited hard copy of this Prospectus free of charge by contacting the Company by phone on +61 8 9322 1003 during office hours or by emailing the Company at admin@australianpotash.com.au. investors. There may be risk factors in addition to these that should be considered in light of your personal circumstances. 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 electronic 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. This Prospectus contains forwardlooking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties. Company Website No document or other information available on the Company’s website is incorporated into this Prospectus by reference. No cooling-off rights Cooling-off rights do not apply to an investment in Securities issued under this Prospectus. This means that, in most circumstances, you cannot withdraw your application once it has been accepted. No Investment Advice The information contained in this Prospectus is not financial product advice or investment advice and does not take into account your financial or investment objectives, financial situation or particular needs (including financial or taxation issues). You should seek professional advice from your accountant, financial adviser, stockbroker, lawyer or other professional adviser before deciding to subscribe for Securities under this Prospectus to determine whether an investment in the Company meets your objectives, financial situation and needs. Risks You should read this document in its entirety and, if in any doubt, consult your professional advisers before deciding whether to apply for Securities. There are risks associated with an investment in the Company. The Securities offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the Securities. Refer to Section D of the Investment Overview as well as Section 7 for details relating to some of the key risk factors that should be considered by prospective Forward-looking statements These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the Directors and the Company’s management. 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 and investors are cautioned not to place undue reliance on these forward-looking statements. The Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law. These forward looking statements are subject to various risk factors that could cause the Company’s performance and actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are set out in Section 7. Financial Forecasts The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of iii potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection. Competent Person’s statement The information in the Investment Overview Section of this Prospectus, included at Section 3, the Company and Projects Overview, included at Section 5, and the Independent Technical Assessment Report, included at Annexure A of the Prospectus, which relate to exploration targets and exploration results, is based on, and fairly represents, information and supporting documentation prepared by Malcolm Castle. Malcolm Castle has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code). Malcolm Castle is a full time employee of Agricola Mining Consultants. Malcolm Castle consents to the inclusion of the information in these Sections of this Prospectus in the form and context in which it appears. Continuous obligations disclosure The Company is a “disclosing entity” (as defined in section 111AC of the Corporations Act) and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Securities. Price sensitive information is publicly released through ASX before it is disclosed to Shareholders and market participants. Distribution of other information to Shareholders and market participants is managed through disclosure to the ASX. In addition, the Company posts this information on its website after the ASX confirms an announcement has been made, with the aim of making the information readily accessible to the widest audience. Australian Potash Limited Clearing House Electronic SubRegister System (CHESS) and Issuer Sponsorship The Company participates in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS is issuer sponsored by the Company. Electronic sub-registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with statements (similar to a bank account statement) that set out the number of Securities issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship. Electronic sub-registers also mean ownership of securities can be transferred without having to rely upon paper documentation. Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month. Photographs and Diagrams Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person shown endorses this Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale. Definitions and Time Unless the contrary intention appears or the context otherwise requires, words and phrases contained in this Prospectus have the same meaning and interpretation as given in the Corporations Act and capitalised terms have the meaning given in the Glossary in Section 12. All references to time in this Prospectus are references to Australian Western Standard Time. Privacy statement If you complete an Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder. The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your Securities in the context of takeovers, regulatory bodies including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the share registry. You can access, correct and update the personal information that we hold about you. If you wish to do so, please contact the share registry at the relevant contact details set out in this Prospectus. Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on your application for Securities under this Prospectus, the Company may not be able to accept or process your application. Use of Trademarks This Prospectus includes the Company’s registered and unregistered trademarks. All other trademarks, tradenames and service marks appearing in this Prospectus are the property of their respective owners. Enquiries If you are unclear in relation to the matters raised in this Prospectus or are in doubt as to how to deal with it, you should seek professional advice from your accountant, financial adviser, stockbroker, lawyer or other professional adviser without delay. Should you have any questions in relation to the Offer or how to accept the Offer please contact the Company Secretary on +61 8 9322 1003. iv CORPORATE DIRECTORY Directors Investigating Accountant Catherine Moises Non-Executive Chair RSM Corporate Australia Pty Ltd Level 32 Exchange Tower 2 The Esplanade PERTH WA 6000 Matthew Shackleton Managing Director & CEO Jonathan Fisher Non-Executive Director Company Secretary Joel Ives ASX Code APC Registered Office Level 4 The Read Buildings 16 Milligan Street PERTH WA 6000 Telephone: + 61 8 9322 1003 Email: admin@australianpotash.com.au Website: www.australianpotash.com.au Legal advisers Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000 Auditor* KPMG 235 St Georges Terrace PERTH WA 6000 Proposed Auditor In Corp Audit & Assurance Pty Ltd Suite 11 Level 1 4 Ventnor Street WEST PERTH WA 6005 Independent Geologist Agricola Mining Consultants Pty Ltd Email: mcastle@castleconsulting.com.au Lead Manager/Underwriter Canaccord Genuity (Australia) Limited Level 23 Exchange Tower 2 The Esplanade PERTH WA 6000 Telephone: + 61 8 9263 1111 Co-Manager Cumulus Wealth Pty Ltd Level 7 330 Collins Street MELBOURNE VIC 3000 Share Registry* Automic Registry Services Level 5 191 St Georges Terrace PERTH WA 6000 Telephone: 1300 288 664 Facsimile: +61 2 8583 3040 * This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus. 4018-18/3367509_19 v TABLE OF CONTENTS 1. LETTER FROM CHAIR ..................................................................................................... 7 2. KEY OFFER INFORMATION............................................................................................ 8 3. INVESTMENT OVERVIEW ............................................................................................... 9 4. DETAILS OF THE OFFERS .............................................................................................. 17 5. COMPANY AND PROJECTS OVERVIEW ..................................................................... 25 6. FINANCIAL INFORMATION......................................................................................... 33 7. RISK FACTORS ............................................................................................................ 57 8. BOARD AND KEY MANAGEMENT AND CORPORATE GOVERNANCE ....................... 69 9. MATERIAL CONTRACTS .............................................................................................. 78 10. ADDITIONAL INFORMATION ...................................................................................... 86 11. DIRECTORS’ AUTHORISATION .................................................................................. 104 12. GLOSSARY ................................................................................................................ 105 ANNEXURE A – INDEPENDENT TECHNICAL ASSESSMENT REPORT ......................................... 109 ANNEXURE B – SOLICITOR’S REPORT ON TENEMENTS............................................................ 110 ANNEXURE C – INDEPENDENT LIMITED ASSURANCE REPORT ................................................ 111 4018-18/3367509_19 vi 1. LETTER FROM CHAIR Dear Investor On behalf of the directors of Australian Potash Limited (Company), it gives me great pleasure to invite you to participate in this capital raising by the Company. We have structured the Share Offer to ensure existing Shareholders have as much opportunity as possible to participate. The Company was admitted to the Official List of the ASX on 15 December 2011. Since that time, it has been engaged in mineral exploration and development activities in Western Australia, primarily for gold, base metals and potash. The Lake Wells Sulphate of Potash Project (LSOP) was progressed towards development and pending a final investment decision in 2021/22, however, external factors led to the funding requirements not being met and the tenure underpinning the LSOP was surrendered in 2023. The Company retains the hydrogeological database and other intellectual property associated with the LSOP’s development. The LWG Project, a core asset since ASX listing, was the subject of a joint venture with producer St Barbara Limited over the period 2018-2022 and remains prospective for gold and base metals with a number of drill ready targets identified. During 2023, the Company expanded its footprint in Western Australia by pegging a tenement in the West Arunta area of the Kimberley region and entering into a purchase agreement for a contiguous tenement, both prospective for rare earths and lithium. On 6 December 2023 the Company entered voluntary administration with the objective of restructuring its liabilities and progressing a recapitalisation strategy. The Company came out of administration on 1 February 2024 following the execution of a Deed of Company Arrangement, and the purpose of this Prospectus now is to convert debt and raise sufficient funds to recapitalise the Company. This Prospectus contains detailed information about the Company, its business and the Offers, as well as the risks of investing in the Company, and I encourage you to read it carefully. The Shares offered by this Prospectus should be considered highly speculative. There are inherent risks in the business operations of mineral exploration companies, and therefore risks in investing in mineral exploration companies. Those risks, as they relate to the Company, are outlined in this Prospectus. The Board have significant expertise and experience in the resources sector and will aim to ensure that funds raised through the Share Offer will be utilised in a costeffective manner to advance the Company’s business. Before you make your investment decision, I urge you to read this Prospectus in its entirety and seek professional advice if required. Yours sincerely Cathy Moises Non-Executive Chair Australian Potash Limited 7 2. KEY OFFER INFORMATION INDICATIVE TIMETABLE1 Lodgement of Prospectus with the ASIC 14 March 2024 Opening date of the Offers 14 March 2024 Shareholders’ meeting date to approve issue of Securities 28 March 2024 Closing date of Offers 5pm on 5 April 2024 Issue of Securities under the Offers2 12 April 2024 Despatch of holding statements 15 April 2024 Expected date for quotation on ASX 15 April 2024 1. The above dates are indicative only and may change without notice. Unless otherwise indicated, all times given are in WST. The Company reserves the right to extend the closing date or close the Offers early without prior notice. The Company also reserves the right not to proceed with the Offers at any time before the issue of Shares to applicants. 2. If the Offers are cancelled or withdrawn before completion of the Offers, then all application monies will be refunded in full (without interest) as soon as possible in accordance with the requirements of the Corporations Act. Investors are encouraged to submit their applications as soon as possible after the Offers open. KEY STATISTICS OF THE OFFERS Minimum Subscription1 Maximum Subscription2 $0.001 $0.001 Shares currently on issue 1,038,689,490 1,038,689,490 Shares to be issued under the Share Offer 2,750,000,000 6,000,000,000 Gross Proceeds of the Share Offer $2,750,000 $6,000,000 Shares on issue post-Offers (undiluted) 3,788,689,490 7,038,689,490 Market Capitalisation postOffers (undiluted)4 $3,788,689 $7,038,689 Options currently on issue 115,408,645 115,408,645 1,375,000,000 3,000,000,000 Options to be issued under the Option Offer3 2,705,000,000 2,705,000,000 Options on issue post-Offers 4,195,408,645 5,820,408,645 Shares on issue post-Offers (fully diluted) 7,984,098,135 12,859,098,135 Offer price per Share Options to be issued under the Share Offer Notes: 1. Assuming the Minimum Subscription of $2,750,000 is achieved under the Share Offer. 2. Assuming the Maximum Subscription of $6,000,000 is achieved under the Share Offer. 3. Refer to Section 10.4 for the terms and condition of the Options to be issued under the Options Offer. 4. Assuming a Share price of $0.001 however the Company notes that the Shares may trade above this price. Australian Potash Limited 8 3. INVESTMENT OVERVIEW This Section is a summary only and is not intended to provide full information for investors intending to apply for Shares offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety. Item A. Summary Further information Company Who is the issuer of this Prospectus? Australian Potash Limited (ACN 149 390 394) (Company or APC). Section 5.1 Who is the Company? The Company is an Australian listed public company, incorporated on 6 April 2011. Since incorporation, the Company has focused on gold exploration and potash project development activities. Section 5.1 What is the Company’s interest in the Projects? The Company currently holds the interests in the Section 5.2 following projects: and (a) Lake Wells Gold Project (LWG Project); Annexure A and (b) West Arunta Rare Earth Project (WAR Project), (together, the Projects). B. Company Strategy What is the Company’s Strategy? Following completion of the Offers, the Company’s proposed strategy will be to focus on exploration and development of mineral resource opportunities, and specifically exploration and development of the Projects, initially as per the Company’s proposed exploration programs. The Company proposes to fund its exploration activities as outlined in the table at Section 5.6. A detailed explanation of the Company’s strategy post-Offer is provided at Section 5.3 and a summary of the Company’s proposed exploration programs is set out at Section 5.4. Section 5.3 What are the key business objectives of the Company? The Company’s main objectives upon completion of the Offers will be to: (a) to commence exploration of the LWG Project, which is prospective for gold and base metals. Following a review of all previous exploration results, a number of drill ready targets have been identified; and Section 5.3 (b) Australian Potash Limited commence negotiations with the traditional custodians of the land on which the tenements of the WAR Project are located so that the 9 Item appropriate heritage and agreements are put in place. What are the key dependencies of the Company’s business model? C. access The key dependencies influencing the viability of the Company’s business model are: (a) maintaining title and obtaining access to the Tenements; (b) the Company’s ability to obtain and retain all necessary approvals (including any regulatory or third-party approvals) required to undertake its proposed exploration programs; (c) completion of the Beau Agreement to acquire exploration licence 80/5778; (d) exploration success on the Projects, resulting in increased confidence in the commercial viability of the Projects; (a) retaining and recruiting key personnel skilled in the mining and resources sector; (b) sufficient worldwide demand for gold, base metals, lithium and rare earth elements; (c) the market price of gold and/or lithium r