Metminco Regulatory News (MNC)

METMINCO LIMITED

ABN 43 119 759 349

The Extraordinary General Meeting (Meeting) of Shareholders of Metminco Limited (Metminco or the Company) will be held on Friday 14th September 2018 at 10.30am AEDT at the offices of Grant Thornton, Collins Square Tower 2, Level 6 727 Collins Street, Melbourne, Victoria ,3008.

The Explanatory Statement that accompanies and forms part of this Notice describes the matters to be considered at the Meeting. Terms used in this Notice and the accompanying Explanatory Statement are defined in the Glossary set out at the end of the Explanatory Statement.

ITEMS OF BUSINESS

Ordinary Business

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

Voting Exclusion Statement

The entity will disregard any votes cast in favour of the resolution by or on behalf of: 

In accordance with the ASX Listing Rules the Company will disregard any votes cast in favour of this Resolution by a person who participated in the issue, and any associate of that person.

However, the Company will not disregard a vote if:

· It is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

· It is cast by the Chairman 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.

If the Chairman is appointed as a proxy for a person who is permitted to vote on this Resolution, the Chairman will vote any proxies which do not indicate the way the Chairman must vote, in favour of the Resolution.

Special Business

Resolution 2 - Amendment to the Constitution to include Proportional Takeover Provisions

To consider and, if thought fit, pass the following resolution as a special resolution:

"That the Company's Constitution be amended to include the Proportional Takeover Provisions as set out in the Explanatory Statement".

There are no voting restrictions on this resolution.

For the purposes of regulation 7.11.37 of the Corporations Regulations 2001 (Cth), the Company determines that Shareholders recorded on the Company's register at 10:30 am (Melbourne time) or 1.30am (BST) Wednesday 12th September 2018 (Record Date) will be entitled to attend and vote at the Meeting. If you are not a registered Shareholder at the Record Date, you will not be entitled to vote in respect of that Share.

If you cannot attend the Meeting in person, you are encouraged to sign and deliver the accompanying proxy form and return it in accordance with the instructions set out below.

APPOINTMENT OF PROXIES

A Shareholder entitled to attend and vote at the Annual General Meeting may appoint an individual or a body corporate as a proxy to attend the Meeting and, on a poll, vote on the Shareholder's behalf. A proxy need not be a Shareholder. A Shareholder entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. The enclosed proxy form provides further details on proxies and lodging proxy forms. If a Shareholder appoints a person related to the Placement as proxy, the person is not able to vote proxies on Resolution 1 unless the Shareholder directs them how to vote by marking the boxes on the proxy form for Resolution 1. If a Shareholder appoints the Chairman of the Meeting as proxy, the Shareholder can direct the Chairman how to vote by either marking the relevant boxes on the proxy form (i.e. 'for', 'against' or 'abstain') OR by marking the Chairman's voting direction box on the proxy form (in which case this will be considered to be an express direction to the Chairman of the Meeting to vote in favour of Resolution 1 even though Resolution 1 is connected directly or indirectly with the Placement and/or even if the Chairman of the Meeting has an interest in the outcome of this Resolution. If no direction is provided and the Chairman's voting box is not marked (or if the direction is to 'abstain') the Chairman of the Meeting will not be able to cast the Shareholder's votes on Resolution 1 and those votes will not be counted in calculating the required majority on a poll.

Subject to the paragraphs above, if a Shareholder appoints the Chairman of the Meeting as the Shareholder's proxy and does not specify how the Chairman is to vote on a Resolution, the Chairman will vote, as proxy for that Shareholder, in favour of that Resolution on a poll. For Shareholders registered on the Australian register, section 250B of the Corporations Act stipulates that the proxies must be delivered prior to 10:30 am (Melbourne time) on Wednesday 12th September 2018 to:

Metminco Limited

Link Market Services

Locked Bag A14

Sydney South NSW 1235 Australia

QUESTIONS

If you have any questions about any matter contained in the Notice of Meeting, please contact the Company Secretary, on (03) 9867-719 or geoffrey.widmer@metminco.com.au and/or andrew.metcalfe@metminco.com.au

By order of the Board

Geoffrey Widmer

Company Secretary

13th August 2018

Voting Entitlements

The Company has determined that for the purpose of voting at the Meeting, Shareholders eligible to vote at the Meeting are those persons who are the registered holders of Shares at 10.30am (Melbourne time) or 1.30am (BST) on 12th September 2018.

How to vote

Explanatory Statement

The purpose of this Explanatory Statement is to explain the resolutions in the accompanying Notice of Annual General Meeting and to provide Shareholders with all information known to the Company that is material to a decision on how to vote on those resolutions.

The Directors recommend Shareholders read the Notice and this Explanatory Statement in full before making any decision in relation to the Resolutions.

Capitalised terms in this Explanatory Statement are defined in the glossary at the end of this document.

The Company is seeking shareholder approval and ratification of the Placement of 68,734,589 fully paid ordinary shares and 22,911,530 options issued under ASX Listing Rule 7.1 to certain institutional and sophisticated investors on 22nd May 2018 arranged by Patersons to raise approximately AUD$549,877, before expenses. These share and options were issued to:

· 25,109,589 share and 8,369,863 options to Kobia Holdings Ltd

· 25,000,000 shares and 8,333,333 options to Blue Bone PTY LTD

· 7,250,000 shares and 23,416,671 options to Mr George Henry Millar Grant

· 2,100,000 shares and 700,000 options to Owen Clark

· 2,000,000 shares and 666,666 options to Burley WA Pty Ltd

· 1,875,000 shares and 625,000 options to Garnett Superannuation

· 1,187,500 shares and 395,833 options to Ocean View WA Pty Ltd

· 1,187,500 shares and 395,833 options to Osiris Capital Investments WA Pty Ltd

· 1,150,000 shares and 383,333 options to ESM Limited

· 625,000 shares and 208,333 options to Samantha Lyn Clarke

· 500,000 shares and 166,666 options to Timothy Michael Gregg

· 500,000 shares and 166,666 options to Damien Lee Gullone

· 250,000 shares and 166,666 options to Christopher William Drayton Jamieson

The Placement Shares rank equally with existing Shares. The terms of the offer for the above subscribers is the same as that offered in the Entitlement Offer of 24th April 2018. The terms of the options are detailed in the Glossary.

ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rules 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

At the time of the Placement, the Company determined that the share issue did not require shareholder approval under ASX Listing Rule 7.1 because the shares issued to certain institutional and sophisticated investors in the last 12 months did not exceed the 15% threshold prescribed by ASX Listing Rule 7.1.

To refresh the Company's capacity to issue further securities pursuant to ASX Listing Rule 7.1, shareholder approval is sought for the prior issue of the 68,734,589 fully paid ordinary shares and 22,911,530 options. This will enable to enable the Company to consider additional funding opportunities over the next 12 months should they arise, consistent with the provisions of ASX Listing Rule 7.1 and the Corporations Act.

ASX Listing Rule 7.5 sets out a number of matters which must be included in a notice of meeting seeking an approval under ASX Listing Rule 7.4. For the purposes of ASX Listing Rule 7.5, the following information is provided in relation to the placement and this Resolution 1:

(a) The total number of fully paid ordinary shares in the Company Shares and Options that were issued is 68,734,589 and 22,911,530 respectively.

(b) The Shares were issued at a price of AUD $0.008 per Share;

(c) The Options issued as free and are exercisable at AUD $0.011 on or before June 2020 and were issued on the basis of 1 option for every 3 shares subscribed under this Placement.

(d) The Shares allotted and issued rank equally with the existing shares on issue;

(e) The Shares were allotted and issued to certain new and existing sophisticated investors who subscribed under the Placement; and

(f) These funds raised (after costs) are used to fund Metminco's Colombian mineral exploration program in the Quinchia area of Colombia.

This is a normal resolution and requires shareholder approval by majority vote.

The Directors unanimously recommend that shareholders vote in favour of this Resolution

The Company is seeking shareholder approval to incorporate Proportional Takeover provisions in the Constitution.

The Proportional Takeover provisions of the Corporations Act entitle a company that adopts such provisions to prohibit a proportional takeover bid being launched that may not be in the best interests of all shareholders.

What is a Proportional Takeover Bid?

A proportional takeover bid involves the bidder offering to buy a proportion only of each shareholder's shares in a company. Without this provision, a proportional takeover would only seek to acquire a certain percentage of each shareholder's parcel. The consequences of this bid may be to entrench minority shareholders, who see control pass without an opportunity to make a complete exit and / or receive the appropriate premium for the change of control being paid to shareholders.

Therefore, this provision provides a mechanism whereby the company, as a whole, can preclude that outcome by a majority vote of all shareholders.

What is the effect of the proportional takeover approval provisions?

If a proportional takeover bid is made, the Directors must ensure that Shareholders vote on a resolution to approve the bid more than 14 days before the bid period closes.

The vote is decided on a simple majority by each registered shareholder having a vote. However, the bidder and their associates are not allowed to vote.

If the vote on the resolution is not passed, the transfer of the shares to the bidder from the acceptance of a bid will not be registered, the bid will be taken to have been withdrawn and any share transfers reversed. If the bid is approved (or taken to have been approved as it was not voted within the 14 day deadline) the transfers must be registered if they comply with the Corporations Act and the Constitution.

The Corporations Act permits companies to include proportional takeover provisions in its Constitution but given there are differing legal and commercial views on the efficiency and effectiveness of such measures, the Corporations Act provides the Company a mechanism to revoke this provision from its Constitution. The Corporations Act requires the provision to be refreshed every three years, with approval by a 75% majority in each case, and disclosure about the advantages and disadvantages. The proportional takeover approval provisions do not apply to full takeover bids.

Commentary

The inclusion of this provision has the potential impact to:

· Ensure that all shareholders have the opportunity to study a proportional bid proposal and vote on the bid at a general meeting. This is more likely to ensure a potential bidder structures its offer in a way which is attractive to a majority of Shareholders, including appropriate pricing.

· Reduce choices available to shareholders by attracting less potential bidders and therefore removes the opportunity for the merits of the takeover to be judged in the market and for shareholders to trade their shares.

· Could be considered an unwarranted restriction in the market, as it precludes the opportunity for shareholders to effect changes in a company where improvement is needed so as to underpin the share price. However its exclusion from the Constitution does give the minority shareholder locked into a successful proportional take-over, the potential for some "upside" if the company performance improves. A successful proportional take-over also conserves cash resources whilst making appropriate management changes.

This is a special resolution and requires 75% of the shareholder votes for approval.

The Directors recommend that this Resolution be approved by shareholders as it provides the appropriate net benefit and mechanism to ensure maximum shareholder value.

The proposed changes to the Constitution are listed below:-

1. Interpretation

Proportional Takeover Provisions means a mechanism to prohibit a proportional takeover bid being for a percentage of shareholders equity being made by a shareholder(s).

2. Inserted into Table of Contents

25 APPROVAL OF PROPORTIONAL TAKEOVER BIDS

25.1 Resolution to Approve Proportional Takeover Bid

25.2 Meetings

25.3 Notice of Resolution

25.4 Takeover Resolution Deemed Passed

25.5 Takeover Resolution Rejected

25.6 Renewal

3. Inserted as Clause 25 with the following provisions

APPROVAL OF PROPORTIONAL TAKEOVER BIDS

25.1 Resolution to Approve Proportional Takeover Bid

Where offers have been made under a Proportional Takeover Bid in respect of Shares included in a class of shares in the Company:

(a) the registration of a transfer giving effect to a contract resulting from the acceptance of an offer made under the Proportional Takeover Bid is prohibited unless and until a resolution (in this clause 25.1 referred to as an "approving resolution") to approve the Proportional Takeover Bid is passed in accordance with the provisions of this Constitution;

(b)

I. a person (other than the bidder or a person associated with the bidder)who, as at the end of the day on which the first offer under the ProportionalTakeover Bid was made, held shares included in that class is entitled to voteon an approving resolution and, for the purposes of so voting, is entitled to onevote for each of the last mentioned shares;

II. the bidder or a person associated with the bidder is not entitled to vote on an approving resolution; and

III. an approving resolution is to be voted on at a meeting, convened and conducted by the Company, of the persons entitled to vote on theresolution; and

(b) an approving resolution, being a resolution that has been voted on, is to be  taken to have been passed if the proportion that the number of votes  in favour of the resolution bears to the total number of votes on the  resolution is greater than one half, and otherwise is taken to have been rejected.

25.2 Meetings

(a) The provisions of this Constitution that apply in relation to a general meeting of the Company apply, with modifications as the circumstances require, in relation to a meeting that is convened pursuant to this clause 25.2 as if the last mentioned meeting was a general meeting of the Company.

(b) Where takeover offers have been made under a Proportional Takeover Bid, the Directors are to ensure that a resolution to approve the Proportional Takeover Bid is voted on in accordance with this clause 25 before the approving resolution deadline specified by sub-section 648D(2) of the Corporations Act("approving resolution deadline").

25.3 Notice of Resolution

Where a resolution to approve a Proportional Takeover Bid is voted on in accordance with this clause 25 in relation to the Proportional Takeover Bid, beforethe approving resolution deadline, the Company is, on or before the approving resolution deadline:

(a) to give to the bidder; and

(b) to serve on each relevant financial market in relation to the Company,

a notice in writing stating that a resolution to approve the Proportional Takeover Bid has been voted on and that the resolution has been passed, or has been rejected, as the case requires.

25.4 Takeover Resolution Deemed Passed

Where, at the end of the day before the approving resolution deadline no resolution to approve the Proportional Takeover Bid has been voted on in accordance with this clause 25, a resolution to approve the Proportional Takeover Bid is to be, for the purposesof this clause 25, deemed to have been passed in accordance with this clause 25.

25.5 Takeover Resolution Rejected

Where a resolution to approve a Proportional Takeover Bid under which offers have been made is voted on, in accordance with this clause 25, before the approving resolution deadline and is rejected, then:

(a) despite section 652A of the Corporations Act, all offers under the Proportional Takeover Bid that have not as at the end of the approving resolution deadline, been accepted, and all offers (in this clause 25.5 referred to as the "accepted offers") under the Proportional Takeover Bid that have been accepted and from whose acceptance binding contracts have not, at the end of the approving resolution deadline, resulted, are deemed to be withdrawn at the end of the approving resolution deadline;

(b) the bidder is, as soon as practicable after the end of the approving resolution deadline, to return to each person in respect of their accepted offer any documents that were sent by the person to the bidder with the acceptance of theoffer;

(c) the bidder is entitled to rescind, and must, as soon as practicable after the end ofthe approving resolution deadline, rescind each contract resulting from the acceptance of an offer made under the Proportional Takeover Bid; and

(d) a person who has accepted an offer made under the Proportional Takeover Bid is entitled to rescind the contract (if any) resulting from that acceptance.

25.6 Renewal

Glossary

ASX ASX Limited (ACN 008 624 691)

Board the board of Directors

BST British Summer Time

Business Day a trading day on the financial market operated by ASX

Company (or Metminco) Metminco Limited (ABN 43 119 759 349)

Constitution the constitution of the Company

Corporations Act Corporations Act 2001 (Cth)

Director a director of the Company

Explanatory Statement this explanatory statement

Listing Rules the Listing Rules of ASX

Meeting the Extraordinary General Meeting of the Company to be held on 14th September 2018 May at 10:30am (Melbourne time)

Non-Executive Directors the Company's non-executive Directors, being Mr Roger Higgins and Mr Glenister Lamont

Notice the Notice of Extraordinary General Meeting accompanying this Explanatory Statement

Option a free option issued for a subscribed Share, is exercisable at AUD$0.011 per share by 1 June 2020

Placement the placement of 68,734,589 ordinary shares to sophisticated and institutional investors on 22nd May 2018

Placement Options the issue of 22,911,530 Options exercisable to sophisticated and institutional investors on 22 May 2018 as per the Entitlement Offer Prospectus dated 23 March 2018, on the basis of one (1) free option for every three (3) Shares subscribed for by those Subscribers under the Placement. It is exercisable at AUD$0.011 per share by June 2020.

Placement Shares the 68,734,589 ordinary shares issued under the Placement to sophisticated and institutional on 22nd May 2018.

Patersons Patersons Securities Limited (AFSL 239052)

Proportional Takeover

Provisions a mechanism to prohibit a proportional takeover bid being for a percentage of shareholders equity being made by a shareholder(s)

Resolution a resolution contained in the Notice

Share a fully paid ordinary share in the capital of the Company

Shareholder (or member) a registered member of the Company