17 Sep 2010 07:00
Scotgold Resources Limited ("Scotgold" or the "Company")
PROSPECTUS
FOR
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A pro-rata non-renounceable rights issue of up to 29,326,690 Shares on the basis of one Share for every four Shares held on the Record Date at an issue price $0.035 per Share, to raise approximately $1,026,434. Every two Shares subscribed for will have one free attaching Option, exercisable at 8 cents on or before 30 April 2012.
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The Rights Issue closes at 5.00pm WST on 3 November 2010.
IMPORTANT NOTICE
This document is important and requires your immediate attention. It should be read in its entirety before deciding to participate. If you do not understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser. Investment in securities offered by this Prospectus should be considered speculative. Investors may lose some or all of their investment.
The Company sought quotation of the Shares and Options on ASX on 16 September 2010.
TABLE OF CONTENTS
| SECTION |
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| Section 1 | DETAILS OF THE RIGHTS ISSUE | 6 |
| Section 2 | EFFECT OF THE RIGHTS ISSUE ON THE COMPANY | 11 |
| Section 3 | RISK FACTORS | 13 |
| Section 4 | ADDITIONAL INFORMATION | 17 |
| Section 5 | DEFINED TERMS | 23 |
| Section 6 | DIRECTORS' RESPONSIBILITY STATEMENT & CONSENT | 25 |
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| Summary of Important Dates* |
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| Announcement of Rights Issue | 16 September 2010 |
| Lodge Prospectus with ASIC | 17 September 2010 |
| Shares quoted ex-rights | 22 September 2010 |
| Record Date to determine Entitlements under the Rights Issue | 28 September 2010 |
| Opening Date and despatch of Prospectus | 5 October 2010 |
| Closing Date for Rights Issue Offer | 3 November 2010 |
| Notification to ASX of under subscriptions | 8 November 2010 |
| Allotment and despatch of holding statements | 11 November 2010 |
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\* These dates are indicative only. The Directors reserve the right to vary the key dates at their sole discretion, subject to compliance with the Listing Rules. Applicants are urged to lodge their Application Form as soon as possible. Deferred Settlement trading will not be taking place.
IMPORTANT NOTICE
Shareholders should read this Prospectus in its entirety and, if in doubt, should consult their professional advisers before deciding whether to accept their Entitlement. This Prospectus is dated 17 September 2010. A copy of this Prospectus was lodged with the ASIC on 17 September 2010. No responsibility for the contents of this Prospectus is taken by ASIC nor ASX, nor any of their officers. No applications for Shares and Options will be accepted nor will Shares and Options be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.
In preparing this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act 2001 and that certain matters may reasonably be expected to be known to investors and professional advisers who investors may consult. No person is authorised to give any information or to make any representation in connection with the Rights Issue described in this Prospectus. Any information or representation which is not contained in this Prospectus or disclosed by the Company pursuant to its continuous disclosure obligations may not be relied upon as having been authorised by the Company in connection with the issue of this Prospectus.
This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom it would not be lawful to make such an offer or invitation. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Prospectus is being sent to all Shareholders with registered addresses in Australia, New Zealand and the United Kingdom at the Record Date. Eligible Shareholders who are nominees, trustees or custodians should seek independent advice as to whether they are eligible to participate in the Offer.
Investors can only apply for Shares and Options on the accompanying Acceptance Form and on the terms and conditions referred to in this Prospectus. Please read carefully the instructions on the reverse of the Acceptance Form regarding an application for Shares and Options pursuant to this Prospectus.
In preparing this Prospectus, regard has been had to the fact that as the Company is a disclosing entity for the purposes of the Corporations Act, it is subject to regular reporting and disclosure obligations. Accordingly, certain matters may reasonably be expected to be known to investors and their professional advisers. This Prospectus is issued pursuant to section 713 of the Corporations Act. Section 713 allows the issue of a more concise prospectus in relation to an offer of continuously quoted securities. This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all information that would be included in a prospectus for an initial public offering.
This document is important and it should be read in its entirety. The Shares and Options to be issued pursuant to this Prospectus should be viewed as a speculative investment and investors should refer to the Risk Factors affecting the Company set out in Section 3. Accordingly, before deciding to apply for Shares and Options, potential investors should consider whether or not such Shares and Options are a suitable investment having regard to their personal circumstances. If in doubt, potential investors should consult their stockbroker, solicitor, accountant or other professional adviser prior to completing and lodging an Acceptance Form.
No person is authorised to give any information or to make any representation in relation to the Offer which is not contained in this Prospectus and any such information may not be relied upon as having been authorised by the Directors.
A copy of this Prospectus can be downloaded from the Company's website at www.scotgoldresources.com. The offer constituted by an electronic version of this Prospectus is only available to persons receiving an electronic version of this Prospectus within Australia. There is no facility for Applications to be accepted electronically or by applying online. The Corporations Act prohibits any person from passing on to another person the Acceptance Form unless it is attached to or accompanied by a complete and unaltered version of the Prospectus. The Company will not accept a completed Acceptance Form if it has reason to believe that the Applicant has not received a complete and unaltered copy of the Prospectus. Any person may obtain a hard copy of this Prospectus by contacting the Company prior to the Closing Date.
Throughout this Prospectus, for ease of reading, various words and phrases have been defined rather than used in full on each occasion and are set out in Section 5 of this Prospectus.
CORPORATE DIRECTORY
DIRECTORS
John Bentley Non-Executive Chairman
Chris Sangster CEO / Managing Director
Phillip Jackson Non Executive Director
Edmond Edwards Non Executive Director
Shane Sadleir Non Executive Director
Adam Davey Non Executive Director
SECRETARY Peter Newcomb
REGISTERED OFFICE 63 Lindsay Street
Perth WA 6000
Telephone: +61 8 9428 2950
Facsimile: +61 8 9428 2955
Email: sgz@scotgoldresources.com
Website: www.scotgoldresources.com
AUDITORS HLB Mann Judd
Level 4, 130 Stirling Street
PERTH WA 6000
SOLICITORS TO THE ISSUE Price Sierakowski Corporate
Level 24 St Martins Tower
44 St Georges Terrace
PERTH WA 6000
SHARE REGISTRY Computershare Investor Services Pty Ltd
Level 2, 45 St George's Terrace
PERTH WA 6000
Telephone: +61 8 9323 2000
Facsimile: +61 8 9323 2033
STOCK EXCHANGE LISTING Australian Securities Exchange
Code: SGZ
AIM Market of the London Stock Exchange
TIDM Code: SGZ
BRIEF INSTRUCTIONS
THE RIGHTS ISSUE
For Eligible Shareholders
What You May Do
The number of Shares and Options to which you are entitled is shown on the accompanying Entitlement and Acceptance Form. You may:
·; Accept your Entitlement in full or part; or
·; Accept your Entitlement in full and apply for Shortfall Shares and Options; or
·; Allow the whole of the Entitlement to lapse.
If You Wish To Take Up All or Part Of Your Entitlement or Take Up All of Your Entitlement and apply for Shortfall Shares and Options:
Complete the accompanying Entitlement and Acceptance Form in accordance with the instructions set out in the form. Forward your completed Entitlement and Acceptance Form, together with your cheque for the amount shown on the form or for such amount as you wish to apply for, so as to reach the Company's share registry no later than 5:00pm WST on 3 November 2010.
Entitlements Not Taken Up
If you decide not to accept all or part of your Entitlement pursuant to the Rights Issue, you are not required to take any action. The Shares and Options not accepted will form part of the Shortfall.
THIS PROSPECTUS IS IMPORTANT. PLEASE READ IT IN ITS ENTIRETY INCLUDING THE RISK FACTORS IN SECTION 3 BEFORE DECIDING HOW TO DEAL WITH YOUR ENTITLEMENT.
1. DETAILS OF THE RIGHTS ISSUE
1.1 The Offer
This Prospectus is for a pro-rata non-renounceable rights issue of up to 29,326,690 Shares on the basis of one Share for every 4 Shares held on the Record Date at an issue price $0.035 per Share, to raise approximately $1,026,434. Every two Shares subscribed for will be issued with one free attaching Option, exercisable at 8 cents each on or before 30 April 2012 ("Rights Issue"). The terms and conditions relating to the Shares and Options are outlined in Sections 4.6 and 4.7 of this Prospectus. Fractional entitlements will be rounded down to the nearest whole number.
As at the date of this Prospectus, 117,306,762 Shares are on issue. The Shares issued pursuant to this Rights issue will rank equally with existing Shares on issue.
All Eligible Shareholders are entitled to participate in the Offer.
The number of Shares and Options to which you are entitled as an Eligible Shareholder is shown on the accompanying personalised Entitlement and Acceptance Form.
1.2 Purpose of the Rights Issue and Use of Funds
The funds raised will be applied towards the following:
(a) funding the costs of the Rights Issue;
(b) regional exploration programs at the Company's projects over the next 12 months; and
(c) administration including Cononish planning application.
The following table illustrates the proposed application of funds raised from the Rights Issue (assuming full subscription):
| Use of Funds | $ |
| Expenses of the Rights Issue | 40,000 |
| Regional exploration programs | 500,000 |
| Administration including Cononish planning application | 486,434 |
| TOTAL | $1,026,434 |
1.3 No Rights Trading
Entitlements to Shares and Options pursuant to the Rights Issue are non-renounceable and accordingly, Eligible Shareholders may not dispose of or trade any part of their Entitlement.
1.4 Minimum Subscription
There is no minimum subscription under the Rights Issue.
1.5 Oversubscriptions
Oversubscriptions will not be accepted.
1.6 Opening and Closing Dates
The Rights Issue will open for receipt of acceptances at 9.00am WST on 5 October 2010.
The Rights Issue will close at 5.00pm WST on 3 November 2010, or such later date as the Directors, in their absolute discretion and subject to compliance with the Listing Rules, may determine and provided that the Company gives ASX notice of the change at least 6 Business Days prior to the Closing Date.
1.7 Underwriting
The Rights Issue is not underwritten.
1.8 Entitlements and Acceptance
Rights Issue
The number of Shares and Options to which you are entitled is shown in the accompanying Entitlement and Acceptance Form.
In determining entitlements, any fractional entitlement will be rounded down to the nearest whole number.
Acceptance of Entitlement in Full
If you are an Eligible Shareholder and wish to take up all of your Entitlement under the Rights Issue, please complete the Entitlement and Acceptance Form in accordance with the instructions set out on the reverse of that form.
Partial Acceptance of Entitlement
If you are an Eligible Shareholder and wish to take up part of your Entitlement pursuant to the Rights Issue, please complete the Entitlement and Acceptance Form in accordance with the instructions set out on the reverse of that form and insert the number of Shares and Options for which you wish to accept.
Acceptance of Terms
All applications for Shares and Options must be made on the Entitlement and Acceptance Form. Any application will be treated as an offer from the applicant to acquire Shares and Options on the terms and conditions set out in the Prospectus. The Directors reserve the right to reject any applications for Shares and Options. Please ensure the completed Entitlement and Acceptance Form and your cheque is received by the Company's Share Registry at:
| By Mail | In Person |
| Scotgold Resources Limited | Scotgold Resources Limited |
| Computershare Investor Services Pty Ltd | Computershare Investor Services Pty Ltd |
| Locked Bag 2508 | Level 2, 45 St Georges Terrace |
| Perth, WA 6001 | Perth WA 6000 |
Completed Entitlement and Acceptance Forms must be received no later than 5.00pm (WST) on the Closing Date.
BPay Facility
Those who elect to pay via BPAY must follow the instructions for BPAY set out in the Entitlement and Acceptance Form. Investors who elect to pay via BPAY will not need to return their completed Entitlement and Acceptance Form.
Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment and it is the responsibility of the applicant to ensure that funds are received through BPAY by the date and time mentioned above.
Non-Acceptance of Entitlement
If you do not wish to take up any part of your Entitlement under the Rights Issue, you are not required to take any action. If you decide not to accept all or part of your Entitlement, the Shares and Options not accepted will be dealt with in accordance with Section 1.9 of this Prospectus.
Enquiries
If you have any queries regarding your Entitlement, please contact Company Secretary Peter Newcomb by telephone on +61-8-9428-2950 or your stockbroker or professional adviser.
1.9 Rights Issue Shortfall
If you decide not to accept all or part of your Entitlement pursuant to the Rights Issue, you are not required to take any action. The Shares and Options not accepted by Eligible Shareholders ("Shortfall Shares and Options") will form part of the Shortfall and will be dealt in accordance with this Section 1.9.
Eligible Shareholders who have subscribed for their Entitlements in full may apply for Shortfall Shares and Options by completing the relevant section of their Entitlement and Acceptance Forms and returning it to the Company together with the relevant application money.
To the extent that Eligible Shareholders do not take up their Entitlements in full, the resultant Shortfall will be allocated to those Eligible Shareholders who apply for Shortfall Shares and Options as follows:
1) Firstly, subject to availability, 30,000 shares ($1,050) or such lower amount subscribed for; and
2) Secondly to those Eligible Shareholders who apply for Shortfall Shares and Options in excess of 30,000 then the number applied for pro rata to their Entitlement.
Therefore, your application for Shortfall Shares and Options may not be successful (whether wholly or partially). The decision of the Company on the number of Shortfall Shares and Options to be allocated to you (if any) will be final.
Any application monies received for more than your final allocation of Shortfall Shares and Options will be refunded (without interest) by the Company in accordance with the provisions of the Corporations Act. The Company does not guarantee that you will receive any Shortfall Shares and Options.
Subject to the Corporations Act and Listing Rules, the Directors reserve the right to deal with, at their absolute discretion, the Shortfall Shares and Options which are not taken up by Eligible Shareholders under the Offer within 3 months after the Closing Date. The Shortfall Shares and Options will be issued at the same issue price as offered to Eligible Shareholders under the Rights Issue. Following completion of the Offer, the Directors may invite persons to apply for the Shortfall under this Prospectus by completing a Shortfall Application Form and returning it to the Company together with the relevant application money.
Shortfall Shares and Options not taken up by Shareholders will not be placed to the directors or related parties or any associates of the directors or related parties.
1.10 Issue and Allotment of Shares and Options
The Shares and Options are expected to be issued and allotted by no later than 11 November 2010.
Until issue and allotment of the Shares and Options under this Prospectus, application moneys will be held in trust in a separate bank account opened and maintained for that purpose only. Any interest earned on the money will be for the benefit of the Company and will be retained by it irrespective of whether allotment of the Shares and Options takes place. Where no allotment is made, the amount tendered on application with the relevant Application Form will be returned in full by cheque as soon as practicable and in accordance with section 724 of the Corporations Act.
Subject to ASX granting approval for quotation of the Shares and Options, the allotment of the Shares and Options will occur as soon as practicable after the Offer closes. All Shares will be granted on the terms and conditions outlined in section 4.7 and Options will be granted on the terms and conditions outlined in section 4.6. Statements of Shareholdings and Optionholdings will be dispatched as required by ASX.
1.11 Quotation of Shares and Options
The Company applied to ASX on 16 September 2010 for official quotation of the Shares and Options offered pursuant to this Prospectus. If approval is not granted by ASX within 3 months after the date of this Prospectus, applications will be dealt with in accordance with section 724 of the Corporations Act. No interest will be paid on any returned application monies.
A decision by ASX to grant official quotation of the Shares and Options is not to be taken in any way as an indication of ASX's view as to the merits of the Company, or the Shares and Options now offered for subscription.
1.12 No Issue of Shares or Options after 13 months
No Shares or Options will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.
1.13 Overseas Investors
The Company is of the view that it is unreasonable to make an offer under the Rights Issue under this Prospectus to Eligible Shareholders outside of Australia, New Zealand and the United Kingdom having regard to:
(a) the number of Eligible Shareholders registered outside of Australia, New Zealand and the United Kingdom
(b) the number and value of the securities to be offered to Eligible Shareholders registered outside of Australia, New Zealand and the United Kingdom; and
(c) the cost of complying with the legal requirements and requirements of regulatory authorities in the overseas jurisdictions.
Accordingly, the Company is not required to make Rights Issue offers under the Prospectus to Eligible Shareholders registered outside of Australia, New Zealand and the United Kingdom.
This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.
The total consideration of the offer under the Rights Issue shall be less than Euro €2,500,000. Therefore, in accordance with section 85 and schedule 11A of the Financial Services and Markets Act 2000, this document does not constitute a prospectus for the purposes of the Prospectus Rules of the Financial Services Authority in the United Kingdom and a copy of it has not been, and will not be, reviewed by the Financial Services Authority in the United Kingdom or the UK Listing Authority.
1.14 Privacy Disclosure
The Company collects information about each applicant from an Application Form for the purposes of processing the application and, if the application is successful, to administer the applicant's security holding in the Company.
By submitting an Application Form, each applicant agrees that the Company may use the information in the Application Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the share registry, the Company's related bodies corporate, agents, contractors and third party service providers (including mailing houses), the ASX, the ASIC and other regulatory authorities on the basis that they deal with such information in accordance with the relevant privacy laws
If an applicant becomes a security holder of the Company, the Corporations Act requires the Company to include information about the security holder (name, address and details of the securities held) in its public register. This information must remain in the register even if that person ceases to be a security holder of the Company. Information contained in the Company's registers is also used to facilitate distribution payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.
If you do not provide the information required on the Application Form, the Company may not be able to accept or process your application.
1.15 CHESS and Issuer Sponsorship
The Company operates an electronic CHESS sub-register and an electronic issuer sponsored sub-register. These two sub-registers make up the Company's register of Shares. The Company will not issue certificates to Shareholders. Rather, holding statements (similar to bank statements) will be despatched to Shareholders as soon as practicable after allotment. Holding statements will be sent either by CHESS (for Shareholders who elect to hold Shares on the CHESS sub-register) or by the Company's Share Registry (for Shareholders who elect to hold their Shares on the Issuer sponsored sub-register). The statements will set out the number of Shares and Options allotted under the Prospectus and provide details of a Shareholders' Holder Identification Number (for Shareholders who elect to hold Shares on the CHESS sub register) or Reference Number (for Shareholders who elect to hold their Shares on the issuer sponsored sub-register). Updated holding statements will also be sent to each Shareholder following the month in which the balance of their holding of Shares or Options changes, and also as required by the ASX Listing Rules or the Corporations Act.
1.16 Risks
As with any share investment, there are risks associated with investing in the Company. The principal risks that could affect the financial and market performance of the Company are detailed in Section 3 of this Prospectus. The Shares and Options on offer under this Prospectus should be considered speculative. Accordingly, before deciding to invest in the Company, applicants should read this Prospectus in its entirety and should consider all factors in light of their individual circumstances and seek appropriate professional advice.
Factors affecting an investment in the Company include stock market fluctuations, exploration and development risks, foreign currency exchange rate fluctuations, economic risks and external market factors, additional requirements for capital, regulatory issues and governmental policy regarding environmental protection.
A specific risk investors should consider is the uncertainty of the Company's ability to proceed with the establishment of a proposed gold and silver mine at Cononish. A more detailed explanation of this risk is set out in Section 3.17 of this Prospectus.
In addition investors are directed to Section 3 of this Prospectus which sets out other certain key risks associated with making an investment in the Company.
1.17 Taxation
It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers before investing in the Shares or Options. Taxation consequences will depend on particular circumstances. Neither the Company nor any of its officers accept any liability or responsibility in respect of the taxation consequences of the matters referred to above or any other taxation consequences connected with an investment in the Shares and Options in the Company or dealing with an Entitlement under this Offer.
2 EFFECT OF THE RIGHTS ISSUE ON THE COMPANY
2.1 Principal Effects
The principal effects of the Rights Issue (assuming full subscription) is:
(a) the Company's cash funds will increase by approximately $1,026,434 less expenses of the Rights Issue and Placement Offer, which are estimated to be approximately $40,000;
(b) to increase the total number of Shares on issue from 117,306,762 to 146,633,452; and
(c) there will be approximately 14,663,345 Options on issue, each exercisable at $0.08 and expiring on 30 April 2012.
2.2 Capital Structure
The pro-forma capital structure of the Company following the Rights Issue (assuming full subscription is obtained) pursuant to this Prospectus is set out below:
| Issued Capital - Shares | Number |
| Existing Shares | 117,306,762 |
| Shares offered under this Prospectus | 29,326,690 |
| Total Shares after completion of the Rights Issue | 146,633,452 |
| Issued Capital - Options | Number |
| Existing Options | Nil |
| Options attaching to shares issued under this prospectus | 14,663,345 |
| Total Options on issue after completion of Rights Issue | 14,663,345 |
2.3 Consolidated Balance Sheet
Set out as follows is a pro forma Consolidated Balance Sheet based on the Company's audited accounts as at 30 June 2010 and adjusted to reflect:
·; the Rights Issue of 29,326,690 Shares and 14,663,345 Options;
·; the costs of the Rights Issue of $40,000. For a breakdown of the expenses of the Rights Issue see section 4.10 of the Prospectus.
Pro-forma Balance Sheet Reflecting Proposed Rights Issue
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| 30 June |
| Proforma |
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| 2010 |
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| CURRENT ASSETS | $ |
| $ |
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| Cash and cash equivalents | 1,592,997 |
| 2,579,431 |
| Trade and other receivables | 122,548 |
| 122,548 |
| Other current assets | 6,527 |
| 6,527 |
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| Total Current Assets | 1,722,072 |
| 2,708,506 |
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| NON CURRENT ASSETS |
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| Trade and other receivables | 87,719 |
| 87,719 |
| Property, plant and equipment | 199,573 |
| 199,573 |
| Deferred exploration and evaluation expenditure | 8,917,502 |
| 8,917,502 |
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| Total Non Current assets | 9,204,794 |
| 9,204,794 |
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| TOTAL ASSETS | 10,926,866 |
| 11,913,300 |
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| CURRENT LIABILITIES |
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| Trade and other payables | 298,948 |
| 298,948 |
| Other current liabilities | 36,189 |
| 36,189 |
| Interest bearing liabilities | 7,478 |
| 7,478 |
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| Total Current Liabilities | 342,615 |
| 342,615 |
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| TOTAL LIABILITIES | 342,615 |
| 342,615 |
| NET ASSETS | 10,584,251 |
| 11,570,685 |
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| EQUITY |
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| Issued capital | 12,324,019 |
| 13,310,453 |
| Accumulated losses | (1,739,768) |
| (1,739,768) |
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| TOTAL EQUITY | 10,584,251 |
| 11,570,685 |
Notes to the pro-forma consolidated balance sheet
1. The Pro Forma Balance Sheet includes $1,026,434 (less estimated Rights Issue costs of $40,000) received by virtue of the Rights Issue.
2. No account is taken of any transactions between 30 June 2010 and the date of this Prospectus. The Pro Forma Balance Sheet reflects only the Rights Issue the subject of this Prospectus.
3 RISK FACTORS
3.1 Introduction
This section identifies the areas the Directors regard as the more significant risks associated with participation in the Rights Issue. Investors should be aware that an investment in the Company involves many risks, which may be higher than the risks associated with an investment in other companies. Prospective investors should read the whole of this Prospectus in order to fully appreciate such matters and the manner in which the Company intends to operate before any decision is made to apply for Shares.
The Shares and Options being offered under this Prospectus are considered speculative due to the present stage of development of the Company. This Prospectus carries no guarantee with respect to the return of capital or price at which the Shares, Options and Shares resulting from the exercise of the Options will trade.
The risks identified in this section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Company's quoted securities.
There are numerous widespread risks associated with investing in any form of business and with investing in the share market generally. There is also a range of specific risks associated with the Company's business and its involvement in the mining industry. These risk factors are largely beyond the control of the Company and its Directors because of the nature of the proposed business of the Company. The following summary, which is not exhaustive, represents some of the major risk factors which potential investors need to be aware of.
The Shares and Options offered under this Prospectus are considered speculative, and involve investors being exposed to risk. The Directors recommend potential applicants examine the contents of this Prospectus and consult their professional advisers before deciding whether to apply for Shares and Options offered pursuant to this Prospectus.
The risks identified in this section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Company's quoted securities.
3.2 Operation and Development Risks
By its nature, the business of exploration and mineral development which the Company may continue to participate in contains risks. Prosperity depends on the successful exploration and/or acquisition of reserves, design and construction of efficient processing facilities, competent operation and management, and efficient financial management. For its part, exploration is a speculative endeavour, while mining operations which the Company anticipates commencing in the short to medium term can be hampered by force majeure circumstances, environmental considerations and cost overruns for unforeseen events.
3.3 Government Policy
Capacity to explore and mine, as well as industry profitability generally, can be affected by changes in government policy which are beyond the control of the Company.
3.4 Exploration Risks
The Company currently is the holder of various claim reservations, claims, claim applications and mining concessions in relation to various exploration projects. There is no certainty that the Company will discover commercially viable resources or that if it does it will be able to exploit these profitably.
Mineral exploration involves a high degree of risk and exploration projects are frequently unsuccessful. Few prospects that are explored are ultimately developed into producing mines. To the extent that the Company is involved in exploration of metal deposits, the long-term success of the Company's operations will be related to the cost and success of its exploration programme. There can be no assurance that the Company's future exploration efforts will be successful. The risks associated with exploration include the identification of potential metal mineralisation based on analysis of geological data and the capital available for exploration and development.
If reserves are developed, it could take a number of years from the initial phases of drilling and identification of mineralisation until production is possible, during which time the economic feasibility of production may change. Substantial expenditure may be required to establish ore reserves through drilling, to determine metallurgical processes to extract metals from ore and, in the cases of new properties, to construct mining and processing facilities. As a result of these uncertainties, there can be no assurance that current and future exploration programmes will result in the discovery of reserves, the expansion of the Company's existing reserves or the development of mines.
No assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company's viability.
3.5 Share Market
Share market conditions may affect the value of the Company's quoted securities regardless of the Company's operating performance. Share market conditions are affected by many factors including but not limited to the following:
·; general economic outlook;
·; interest rates and inflate rates;
·; currency fluctuations;
·; mineral price fluctuations;
·; changes in investor sentiment towards particular market sectors;
·; the demand for, and supply of, capital;
·; terrorism and other hostilities;
·; taxation treatment; and
·; other factors beyond the control of the Company.
3.6 Legal, Tax and Regulatory Risks
Legal, tax and regulatory changes could occur during the operations of the Company, which may adversely affect the Company and its activities. Moreover, the tax laws and their interpretation in the jurisdictions in which the Company operates might be subject to amendments, possibly with retroactive effect, which might adversely affect the tax position of the Company. There is also no certainty that the legal framework regarding mining operations in Scotland or in any other jurisdiction will remain favourable to the activities of the Company.
3.7 Commodity Risk
In the future, the Company's revenue will come from sale of product. Therefore, its earnings will be closely related to the price and arrangements it enters into for selling of its product. Product prices fluctuate and are affected by factors including the relationship between global supply and demand for gold, forward selling by producers, the cost of production and general global economic conditions.
Commodity prices are also affected by the outlook for inflation, interest rates, currency exchange rates and supply and demand issues. These factors may have an adverse affect on the Company's exploration, development and production activities as well as its ability to fund those activities.
3.8 Tenements
The Company's exploration, mining and processing activities are dependent upon the grant, renewal or continuance in force of appropriate licences, concessions, leases permits and regulatory consents which may be valid only for a defined time period, may be subject to limitations and may provide for withdrawal in certain circumstances. There can be no assurance that such licences, concessions, leases, permits and regulatory consents will be granted, renewed or continue in force, or, if so, on what terms. In particular there is no certainty that the Company will be able to obtain the exploitation licences which it will require to exploit any commercial discoveries in the area covered by its existing tenements.
3.9 Mining and processing risks
There are risks inherent in the development and exploitation of mineral deposits. The business of mining by its nature involves risks and hazards often outside the Company's control including geological, geotechnical and seismic factors and production risks (ore grade/quality, tonnages and recovery/yields), industrial and mechanical incidents, unscheduled plant shutdowns or other processing problems, technical failures, labour disputes, environmental hazards including the discharge of toxic chemicals, fire, drought, flooding and other events outside the Company's control. The exploration, development and production of natural resources is an activity that involves financial risk.
In common with all operations, there is uncertainty associated with the Company's operating parameters and costs. While costs can be budgeted with a reasonable degree of confidence, operating parameters can be difficult to predict and are often affected by factors outside the Company's control.
3.10 Limited operating history
As a result of its short history, the Company is subject to all the risks associated with the operations of a developing business. The Company's prospects may be jeopardised by the type of difficulties that often afflict businesses in the early stages of their development. There can be no guarantee that the Company will move into profitability.
3.11 Competitive Market
The activity of exploring mineral resources is competitive and involves a high degree of uncertainty. There can be no assurance that the Company will be able to locate suitable investments and be profitable. It is possible that competition for appropriate mining opportunities may increase, which may reduce the number of opportunities available to the Company and/or adversely affect the terms upon which such activities can be made.
3.12 Speculative Nature of Investment
The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered under this Prospectus.
3.13 Sovereign Risk
The Company has project interests located in Scotland. Possible sovereign risks include changes in the terms of mining tenements, royalty arrangements, taxation rates and concessions and the ability to enforce legal rights. Any of these factors may adversely affect the financial performance of the Company and the market price of the Shares. No assurance can be given regarding future stability in any other country which the Company has an interests.
3.14 Dependence on key executives and personnel
The Company's development and prospects are dependent upon the continued services and performance of its directors, senior management and other key personnel. The loss of the services of any of the directors, senior management and other key personnel may have an adverse impact on the Company. Even if the Company would be able to maintain all key directors and managers there is a possibility that the Company will have difficulties in recruiting suitable personnel performing the mining activities of the Company and/or establishing successful relationships with contractors, service providers and co-operative parties.
3.15 Litigation
While the Company currently has no outstanding litigation, there can be no guarantee that the current or future actions of the Company will not result in litigation since the mining industry, as all industries, is subject to claim, both with and without merit. Defence and settlement costs can be substantial, even with respect to claims that have no merit. Owing to the inherent uncertainty of the litigation process, there can be no assurance that the resolution of any particular legal proceeding will not have a material effect on the Company's financial position or results of operations.
3.16 Environmental and Other Regulations and Risks
Mining projects may be subject to the environmental and other laws of countries in which the Company operates. These laws may result in limitation of mining activities, which may become increasingly strict in the future. In order for the Company to lawfully explore and to conduct mining operations it may be necessary to apply for and be granted approvals, licences and other permissions by government authorities at various levels. The grant of these may be subject to the exercise of discretions. There is a risk that they will not be granted or, if granted, will be granted subject to conditions that may have a materially adverse impact on the Company. Environmental awareness on the part of the public has been increasing, as has public pressure on environmental authorities. No assurance can be given that the need to comply with current or future environmental laws, regulations or commitments will have an adverse material effect on the activities of the Company or that the liabilities resulting from any environmental damage caused by the Company will not be material.
The company will minimise the potential impact of these laws and regulations by taking steps to ensure compliance occurs and, where possible by carrying appropriate insurance. In the event of development of any of the Company's projects, significant liability could be imposed on the Company for damages, clean up costs or penalties in the event of environmental damage caused by non compliance with environment laws or regulations.
3.17 Cononish Planning Application
In order for the Company to commence its proposed underground mining operation on the Cononish gold project it was necessary to lodge an application to revise and extend planning permission. In April 2007 the Company submitted an application to extend the planning permission. On 18 August 2010 the Company advised the ASX that Loch Lomond and The Trossachs National Parks Board had voted to refuse the Company's application for planning permission for the establishment of the proposed gold and silver mine at Cononish. The Company is considering its options including but not limited to making an appeal to the Scottish Ministers. Investors should be aware that there is a risk that in the event that planning permission is never given then the development of the Company's Cononish project may no be able to proceed.
3.18 Financing
The successful mining of base and precious metal deposits will require significant capital investment. In addition, delays in the construction and commissioning of any of the Company's mining projects or other technical difficulties may result in projected target dates for related production being delayed and/or further capital expenditure being required. In common with all mining operations, there is uncertainty, and therefore risk, associated with operating parameters and costs resulting from the scaling up of extraction methods tested in laboratory conditions. The Company's ability to raise further funds will depend on the success of existing and acquired operations. The Company may not be successful in procuring the requisite funds and, if such funding is not available, the Company may be required to reduce the scope of its operations or anticipated expansion and curtail its budgeted exploration programmes.
3.19 Currency risk
The Company's financial statements are presented in Australian dollars, the functional currency of the Company. The Company's operations are subject to exchange rate fluctuations. Such fluctuations may affect the cash flows of the Company.
3.20 Speculative Nature of Investment
The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares and Options offered under this Prospectus.
Potential investors should consider that the investment in the Company is speculative and should consult their professional advisors before deciding whether to apply for Shares and Options in the Company.
4 ADDITIONAL INFORMATION
4.1 Nature of this Prospectus
The Company is a "disclosing entity" under the Corporations Act and is subject to the regime of continuous disclosure and periodic reporting requirements. Specifically as a listed company, the Company is subject to the Listing Rules of ASX which require continuous disclosure to the market of any information possessed by the Company which a reasonable person would expect to have a material effect on the price or value of its securities.
The information in this Prospectus principally concerns the terms and conditions of the Offer and the information reasonably necessary to make an informed assessment of:
·; the effect of the Offer on the Company; and
·; the rights and liabilities attaching to the Shares and Options offered by this Prospectus.
The Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Shareholders should therefore also have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest in the Shares.
4.2 Applicability of Corporations Act and Listing Rules
The Company is listed on the ASX and its Shares are quoted on ASX under the code "SGZ".
As a "disclosing entity", the Company has issued this Prospectus in accordance with section 713 of the Corporations Act applicable to prospectuses for an offer of securities which are Shares to acquire quoted enhanced disclosure ("ED") securities and the securities underlie a class of securities that were quoted ED securities at all times in the 3 months before the issue of this Prospectus.
Having taken such precautions and having made such enquiries as are reasonable, the Company believes that it has complied with the provisions of the Listing Rules as in force from time to time which apply to disclosing entities, and which require the Company to notify ASIC of information available to the stock market conducted by ASX, throughout the 3 month period before the issue of this Prospectus.
Copies of documents lodged by, or in relation to, the Company with ASIC may be obtained from, or inspected at, an office of ASIC.
The Shares to be issued under this Prospectus are Shares in respect of a class of Shares that were continuously quoted securities at all times in the 3 months before the issue of this Prospectus.
4.3 Information Available to Shareholders
The Company will provide a copy of each of the following documents, free of charge, to any investor who so requests during the application period under this Prospectus. The documents are also available from the Company's website www.scotgoldresources.com.
(a) the Annual Financial Report of the Company for the year ending 30 June 2010;
(b) there have been no notifications to ASX of information relating to the Company during the period after lodgement of the Annual Financial Report of the Company for the year ending 30 June 2010 and before the issue of this Prospectus.
4.4 Market Prices of Shares on ASX
The highest and lowest closing market sale prices of Shares on ASX during the 3 months immediately preceding the date of this Prospectus and the respective dates of those sales were $0.093 on 23 June 2010 and $0.043 on 8 September 2010 and 16 September 2010. The latest available market sale price of Shares on ASX immediately before the date of issue of this Prospectus was $0.043 on 16 September 2010.
4.5 Litigation
The Directors are not aware of any legal proceedings which have been threatened or actually commenced against the Company.
4.6 Terms and Conditions of Options
The terms and conditions of the Options are as follows:
(a) Each Option gives the Optionholder the right to subscribe for one Share. To obtain the right given by each Option, the Optionholder must exercise the Options in accordance with the terms and conditions of the Options.
(b) The Options will expire at 5:00 pm (WST) on 30 April 2012 ("Expiry Date"). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
(c) The amount payable upon exercise of each Option will be $0.08 ("Exercise Price").
(d) An Optionholder may exercise their Options in whole or part by lodging with the Company, before the Expiry Date:
(i) a written notice of exercise of Options specifying the number of Options being exercised; and
(ii) a cheque or electronic funds transfer for the Exercise Price for the number of Options being exercised;
("Exercise Notice").
(e) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
(f) Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Options specified in the Exercise Notice.
(g) All Shares allotted upon the exercise of Options will upon allotment rank pari passu in all respects with other Shares. The Company will apply for quotation of all Shares allotted pursuant to the exercise of Options on ASX within 10 Business Days after the date of allotment of those Shares.
(h) The Company will apply for quotation of the Options on ASX.
(i) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
(j) There are no participating rights or entitlements inherent in the Options and Shareholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days (or such longer period as required under the Listing Rules) after the issue is announced. This will give Shareholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.
(k) An Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the Option can be exercised.
4.7 Rights attaching to Shares
Full details of the rights attaching to Shares are set out in the Company's Constitution a copy of which can be inspected, free of charge, at the Company's registered office during normal business hours.
The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.
All Shares issued pursuant to this Prospectus will from the time they are issued, rank pari passu with all the Company's existing Shares.
(a) General Meetings and Notice
Each Shareholder is entitled to receive notice of all general meetings of the Company and to receive all notices, accounts and other documents required to be sent to Shareholders under the Constitution, the Corporations Act or the ASX Listing Rules. Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.
Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act.
(b) Voting Rights
Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:
·; each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
·; on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and
·; on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him or her, or in respect of which he or she is appointed a proxy, attorney or representative, have one vote for every fully paid Share, but in respect of partly paid Shares shall have a fraction of a vote equal to the proportion that the amount paid bears to the issue price of the Shares.
(c) Dividend Rights
The Directors may from time to time declare such dividends as appear to the Directors to be justified by the profits of the Company.
Subject to the rights of persons entitled to Shares with special rights as to dividends (at present there are none), all dividends are paid in the proportion that the amounts paid on those Shares bear to the issue price of the Shares.
(d) Winding-Up
If the Company is wound up, the liquidator may, with the authority of a special resolution, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he or she considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.
(e) Transfer of Shares
Shares in the Company are freely transferable, subject to formal requirements, and so long as the registration of the transfer does not result in a contravention of or failure to observe the provisions of a law of Australia and the transfer is not in breach of the Corporations Act or the Listing Rules.
(f) Variation of Rights
The Company may, subject to the Corporations Act and with the sanction of a special resolution passed at a meeting of Shareholders, or with the written consent of the majority of shareholders in the affected class, vary or abrogate the rights attaching to Shares.
4.8 Interests of Directors
Directors' Holdings
At the date of this Prospectus the relevant interests of each of the Directors in the Shares of the Company are as follows:
| Director | Direct | Indirect | Total |
| John Bentley | 495,000 | 405,000 | 900,000 |
| Chris Sangster | 4,500,000 | - | 4,500,000 |
| Phillip Jackson | 1,750,000 | - | 1,750,000 |
| Edmond Edwards | - | 1,847,843 | 1,847,843 |
| Shane Sadleir | 11,582,785 | - | 11,582,785 |
Remuneration of Directors
Details of remuneration provided to Directors and their associated entities during the past two financial years are as follows:
Year ended 30 June 2009
| Director | Fees $ | Consulting $ | Total $ |
| John Bentley | 31,000 | - | 31,000 |
| Chris Sangster | - | 246,154 | 246,154 |
| Phillip Jackson | 51,669 | - | 51,669 |
| Edmond Edwards | 22,500 | 8,250 | 30,750 |
| Shane Sadleir | 16,425 | 15,330 | 31,755 |
| Adam Davey | 16,500 | - | 16,500 |
| Ron Thom | - | 134,000 | 134,000 |
Year ended 30 June 2010
| Director | Fees $ | Consulting $ | Total $ |
| John Bentley | 84,000 | - | 84,000 |
| Chris Sangster | - | 228,340 | 228,340 |
| Phillip Jackson | 54,000 | 52,000 | 106,000 |
| Edmond Edwards | 54,000 | 24,000 | 78,000 |
| Shane Sadleir | 54,000 | 50,400 | 104,400 |
| Adam Davey | 54,000 | - | 54,000 |
The Company has agreements with the Directors and their related entities for the provision of services as follows:
| Director | Associated Entity | Amount Per Year (Director's Fees) | Amount Per Year (Consultancy Fees) |
| John Bentley | Ptarmigan Natural Resources Ltd | $84,000 | - |
| Chris Sangster | N/A | - | £125,000 |
| Phillip Jackson | Holihox Pty Ltd | $54,000 | - |
| Edmond Edwards | Tied Investments Pty Ltd | $54,000 | $24,000 |
| Shane Sadleir | Mineral Products Holdings Pty Ltd | $54,000 | $50,400 |
| Adam Davey | Shenton Park Investments Pty Ltd | $54,000 | - |
Except as disclosed in this Prospectus, no Director (whether individually or in consequence of a Directors' association with any company or firm or in any material contract entered into by the Company) has now, or has had, in the 2 year period ending on the date of this Prospectus, any interest in:
·; the formation or promotion of the Company; or
·; property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Rights Issue; or
·; the Rights Issue
Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, Options or otherwise) have been paid or agreed to be paid to any Director or to any company or firm with which a Director is associated to induce him to become, or to qualify as, a Director, or otherwise for services rendered by him or his company or firm with which the Director is associated in connection with the formation or promotion of the Company or the Rights Issue.
Each Director is a party to a Deed of Access and Indemnity with the Company.
4.9 Interests of Named Persons
Except as disclosed in this Prospectus, no expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, nor any firm in which any of those persons is or was a partner nor any company in which any of those persons is or was associated with, has now, or has had, in the 2 year period ending on the date of this Prospectus, any interest in:
·; the formation or promotion of the Company;
·; property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Rights Issue; or
·; the Rights Issue.
Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, Options or otherwise) have been paid or agreed to be paid to any expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, or to any firm in which any of those persons is or was a partner or to any company in which any of those persons is or was associated with, for services rendered by that person in connection with the formation or promotion of the Company or the Rights Issue.
Price Sierakowski Corporate has acted as solicitors to the Company in relation to this Prospectus. In respect of their work on this Prospectus, the Company will pay approximately $10,000 for these professional services.
The amounts disclosed above are exclusive of any amount of GST payable by the Company in respect of those amounts.
4.10 Expenses of the Rights Issue
The approximate expenses of the Rights Issue are $40,000. These expenses are payable by the Company, and are broken down as follows:
|
| Description | Costs ($) |
| 1. | Legal Fees | 10,000 |
| 2. | Printing and Registry | 15,000 |
| 3. | ASIC Fees | 2,000 |
| 4. | ASX Fees | 9,000 |
| 5. | Miscellaneous | 4,000 |
|
| Total | 40,000 |
4.11 Consents
Each of the parties referred to in this Section 4.11:
(a) does not make, or purport to make, any statement in this Prospectus or on which a statement made in the Prospectus is based, other than as specified in this Section 4.11; and
(b) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section 4.11.
Each of the following has consented to being named in this Prospectus in the capacity as noted below and have not withdrawn such consent prior to the lodgement of this Prospectus with the ASIC:
(a) HLB Mann Judd as the auditors of the Company;
(b) Computershare Investor Services Pty Ltd as Share Registrar to the Company; and
(c) Price Sierakowski as solicitors to the Rights Issue.
There are a number of persons referred to elsewhere in this Prospectus who are not experts and who have not made statements included in this Prospectus nor are there any statements made in this Prospectus on the basis of any statements made by those persons. These persons did not consent to being named in the Prospectus and did not authorise or cause the issue of the Prospectus.
4.12 Electronic Prospectus
Pursuant to Class Order 00/044, ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.
If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the relevant Acceptance Form. If you have not, please contact the Company and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus or both.
The Company reserves the right not to accept an Entitlement and Acceptance Form from a person if it has reason to believe that when that person was given access to the electronic version of the 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.
5 DEFINED TERMS
"$" means an Australian dollar;
"£" means pounds sterling;
"€" means Euro;
"Application Form" means the Entitlement and Acceptance Form or, if relevant, the Shortfall Application Form
"ASIC" means the Australian Securities & Investments Commission;
"ASX" means ASX Limited (ACN 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX Limited;
"Business Day" means every day other than a Saturday, Sunday, New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day;
"Closing Date" means 5.00pm WST on 3 November 2010;
"Company" means Scotgold Resources Limited ACN (127 042 773);
"Corporations Act" means the Corporations Act 2001 (Cth);
"Directors" means the directors of the Company;
"Eligible Shareholder" is a shareholder of the Company as at the Record Date and has a registered address in Australia, New Zealand or the United Kingdom;
"Entitlement" means the entitlement of an Eligible Shareholder to participate in the Rights Issue, as shown on the Entitlement and Acceptance Form;
"Entitlement and Acceptance Form" means the entitlement and acceptance form accompanying this Prospectus for use in connection with the Rights Issue;
"GST" means any tax, import or other duty raised on the supply of goods and services and imposed by the Commonwealth or a State or Territory of Australia;
"Listing Rules" means the Listing Rules of ASX;
"Offer" means the offer of one Share for every four Shares held by Eligible Shareholders on the Record Date at an issue price of $0.035 per Share, to raise approximately $1,026,434. Every two Shares subscribed for will have one free attaching Option;
"Option" means an Option offered pursuant to the Rights Issue on the terms in Section 4.6;
"Optionholder" means the holder of an Option;
"Prospectus" means this prospectus dated 17 September 2010;
"Record Date" means 5.00 p.m. WST on 28 September 2010;
"Rights Issue" means the issue pursuant to the Prospectus a pro-rata non-renounceable rights issue of up to 29,326,690 Shares on the basis of one Share for every 4 Shares held on the Record Date at an issue price $0.035 per Share, to raise approximately $1,026,434. Every two Shares subscribed for will have one free attaching Option, exercisable at 8 cents on or before 30 April 2012;
"Share" means an ordinary fully paid share in the capital of the Company;
"Shortfall Application Form" means an application form provided to persons invited to apply for the Shortfall under this Prospectus by the Directors (other than Eligible Employees);
"Shortfall" means the number of Shares and Options comprising the difference between the Shares and Options the subject of the Offer and the number of Shares and Options for which valid applications have been received and accepted by the Company under the Offer by the Closing Date;
"Shortfall Shares and Options" means the Shares and Options which may be applied for by Eligible Shareholders under the Shortfall; and
"WST" means Western (Australian) Standard Time.
6 DIRECTORS' RESPONSIBILITY STATEMENT & CONSENT
This Prospectus is dated 17 September 2010 and is issued by Scotgold Resources Limited.
The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and that in respect of any other statements made in the Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons have given their consent to the statements being included in this Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with ASIC, or to the Directors knowledge, before any issue of Shares and Options pursuant to this Prospectus.
This Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to likely investors or their professional advisers.
Each Director has consented to the lodgement of this Prospectus with the ASIC in accordance with section 720 of the Corporations Act and has not withdrawn that consent.
For further information:
United Kingdom:
| Scotgold Resources Limited | Westhouse Securities Limited | Bankside Consultants |
| Chris Sangster (CEO) | Richard Baty / Petre Norton | Simon Rothschild / Oliver Winters |
| Tel: +44 (0)1838 400 306 | Tel: +44 (0)20 7601 6100 | Tel +44 (0)20 7367 8888 |
Australia:
| Scotgold Resources Limited | Professional Public Relations |
| Shane Sadleir (Non-Executive Director) | Karen Oswald |
| Tel: +61 (8) 9428 2950 Mobile: +61 (0) 411 704 498 | Tel: +61 (8) 9388 0944 Mobile: +61 (0) 423 602 353 |