5 Jan 2009 10:25
Range Resources LtdABN 88 002 522 0091 Havelock StreetWest Perth, WA 6005P +61 8 9488 5200F +61 8 9324 2400www.rangeresources.com.au5 January 2009Rights Issue Prospectus
Range Resources Limited ("Range") wishes to advise that it has today lodged a copy of its prospectus for a pro-rata non-renounceable entitlement issue of 1 New Option for every 2 Shares held at the Record Date together with 1 free Attaching Option for every 4 New Options subscribed for. The issue price for each New Option is 1.5 cents ($0.015) and each New Option shall have an exercise price of 1.5 cents ($0.015) and may be exercised at any time on or before 31 May 2009. The Offer seeks to raise approximately $1,569,787 before expenses of the Offer.
The text of the prospectus follows below, with a full formatted copy of the prospectus available on Range's website at www.rangeresources.com.au.
For and on behalf of the Board.
PETER LANDAUExecutive DirectorContactsRange ResourcesPeter LandauAus: +61 (8) 8 9488 5220UK: +44 (0) 207 389 8191plandau@rangeresources.com.auAustraliaPPR RFC Corporate FinanceDavid Tasker (Nominated Advisor)+61 (8) 9388 0944 Stuart Laingdtasker@pprwa.com.au +61 (8) 9480 2500LondonConduit PR Fox-Davies CapitalJonathan Charles (Broker)+ 44 (0) 20 7429 6666 Daniel Fox-Daviesjonathan@conduitpr.com +44 (0) 207 936 5200
1. Summary of important dates and important notes
TIMETABLE AND IMPORTANT DATES
Lodgement of Prospectus with ASIC 5 January 2009Lodgement of Prospectus and Appendix 3B 5 January 2009with ASXNotice sent to Optionholders 6 January 2009Notice sent to Shareholders 7 January 2009Ex date 8 January 2009Record Date 5:00pm (WDST) on 14 January 2009
Prospectus and Entitlement and Acceptance 20 January 2009
Forms despatched to ShareholdersClosing Date* 5:00pm (WDST) on 6 February 2009
ASX notified of under subscriptions 10 February 2009 Despatch holding statements*
12 February 2009
* The Directors may extend the Closing Date by giving at least 6 Business Days notice to ASX prior to the Closing Date. Consequently, the date on which the New Options and Attaching Options are allotted, holding statements despatched and Attaching Options quoted on ASX may vary.
IMPORTANT NOTES
Shareholders should read this document in its entirety and, if in doubt, should consult their professional advisers.
This Prospectus is dated 5 January 2009 and a copy of this Prospectus was lodged with ASIC on that date. ASIC and ASX take no responsibility for the content of this Prospectus.
The Expiry Date of this Prospectus is 13 months after the date the Prospectus was lodged with ASIC. No New Options or Attaching Options will be allotted or issued on the basis of this Prospectus after the Expiry Date.
No person is authorised to give information or to make any representation in connection with this Prospectus which is not contained in the 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.
Applications for New Options, together with free Attaching Options, offered pursuant to this Prospectus can only be submitted on an original Entitlement and Acceptance Form or Shortfall Application Form which accompanies this Prospectus.
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 distribution of this Prospectus in jurisdictions outside Australia (except to existing Shareholders in New Zealand and the United Kingdom) may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate applicable securities laws. Having regard to the number of existing Shareholders resident in countries outside Australia, New Zealand and the United Kingdom, the number and value of securities that would be offered to existing Shareholders in those countries and the cost of complying with legal and regulatory requirements, Shareholders with registered addresses in countries outside Australia, New Zealand and the United Kingdom will not be entitled to participate in the Offer.
This Prospectus is a transaction specific prospectus and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been has to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.
RISK FACTORS
Potential investors should consider any investment in the Company speculative and should consult their professional advisers before deciding whether to apply for New Options, together with free Attaching Options, pursuant to this Prospectus. For further information in relation to the risk factors relating to the Company, please refer to Section 7 of this Prospectus.
ELECTRONIC PROSPECTUS
A copy of this Prospectus can be downloaded from the website of the Company at www.rangeresources.com.au. Any person accessing the electronic version of the Prospectus for the purposes of making an investment in the Company must be an Australian resident and must only access the Prospectus from within Australia.
The Corporations Act prohibits any person passing onto another person anApplication Form unless it is attached to a hard copy of this Prospectus or itaccompanies the complete and unaltered version of this Prospectus. Any personmay obtain a hard copy of this Prospectus free of charge by contacting theCompany.2. CORPORATE DIRECTORYDirectors Share Registries* Marcus Edwards-Jones Australia Computershare Investor Services PtySir Sam Jonah Ltd Peter Landau Level 2, 45 St Georges Terrace PERTH WA 6000 Company Secretary Telephone: (08) 9323 2000 Peter Landau Facsimile: (08) 9323 2033 United Kingdom Computershare Investor Services PLCAustralian Business Number The Pavillions Bridgwater Road88 002 522 009 Bristol BS99 7NH UNITED KINGDOM Telephone: (+44) 870 702 0000 Facsimile: (+44) 870 703 6101Registered Office AuditorsLevel 31 Havelock Street BDO Kendalls Audit & Assurance (WA) Pty LtdWEST PERTH WA 6005 128 Hay StreetTelephone: (08) 9488 5220 SUBIACO WA 6008Facsimile: (08) 9324 2400 Telephone: (08) 9360 4200 Facsimile: (08) 9481 2524Home Stock ExchangeAustralian Securities ExchangeExchange Plaza2 The Esplanade PERTH WA 6000ASX Code: RRS Overseas Stock ExchangeAlternative Investment Market (AIM)c/- London Stock Exchange10 Paternoster SquareLondon EC4M 7LSUNITED KINGDOMAIM Code: RRL
* Neither Computershare Investor Services Pty Ltd nor Computershare Investor Services PLC has been involved in the preparation of this Prospectus and neither has consented to being named in this Prospectus. Their names have been included for information purposes only.
3. Letter TO Shareholders
Dear Shareholder
Your Directors are pleased to offer you an opportunity to participate in the Company's Rights Issue to raise approximately $1,569,787 on the basis of the Offer being fully subscribed. Full details of the Offer are set out in Section 4. For information regarding the use of proceeds raised from the Offer, please refer to Section 5. An update of the Company's activities is set out below.
While the Board shares Shareholder frustration over the delay in the commencement of the drilling of the first well in Puntland for over 16 years, the Board is confident that 2009 will provide the results that have attracted Shareholders to the Company. With Africa Oil demonstrating that oil exploration activity can be completed successfully in Puntland with the completion of the seismic programme, the next step is for drilling to commence.
On Shore Seismic and Drilling Programme
The Company's joint venture partner, Africa Oil, recently announced the completion of its 2D seismic programme in Puntland's Dharoor Valley. A total of 782 km of good quality vibroseis data, comprising a grid of 15 lines were recorded (see diagram below).
Africa Oil is currently processing the new survey and combining the results with 555 km of older seismic data previously acquired. Mapping of this combined survey is scheduled to commence in early 2009 and drilling locations will be selected before the end of the first quarter 2009. A more definitive timetable for rig mobilisation and drilling will be announced as drilling locations are finalised early in 2009.
Range notes that the current world financial crisis combined with recent low oil prices has meant that rig availability has increased significantly while budgeted drilling costs have decreased significantly, thereby providing Africa Oil greater flexibility in finalising its programme.
The Company has commenced contributions to the expenditure programme on the Dharoor Valley (subject to finalisation of cost allocation under the joint operating agreement with Africa Oil). The Company will provide a drilling budget when finalised early in 2009. It should be noted that Africa Oil's expenditure to date includes a rig mobilisation fee and purchased and delivered inventory (mainly well heads and casing) sufficient for 4 wells.
Offshore Programme
Work is underway to compile and review previously collected seismic data in order to design a new 2D seismic acquisition programme for Puntland's offshore oil and gas areas. Discussions regarding possible joint ventures with third parties are expected to be finalised early in 2009. The key point to note is that, in line with the world economic situation referred to above, the proposed costs of any proposed offshore programme have reduced significantly and, to this end, the Company is looking at alternative operators in addition to renegotiating the current offer from the Chinese geophysical group. The Company (with the input of its new management team) believes that one or more joint ventures with industry partners in offshore Puntland would allow the Company to explore while reducing exposure to exploratory risk and significant capital expenditures. The Board remains confident that the oil and gas potential of offshore Puntland matches that of other successfully developed international offshore oil and gas areas.
Puntland Elections
The Presidential election for Puntland is scheduled to be held 9-10 January 2009. As discussed at the Company's recent Annual General Meeting, the Company is confident of the re-election of current President Hersi. However, if President Hersi is not re-elected, the Company will work with any new President and provide relevant updates to Shareholders. The timing and structure of the Rights Issue is designed to coincide with the outcome of the Puntland elections. The Company will send an update of the election results to Shareholders in conjunction with the mailing of this Prospectus on 20 January 2009.
Rights Issue
Given the Company's current Share price and the state of global capital markets, the Board has attempted to make the Offer as attractive as possible to Shareholders. While everyone is frustrated with the delays to the drilling programme, the Puntland programme has progressed and all of the requirements are currently there for at least 2 wells to be drilled in 2009.
The Closing Date for acceptances is 5:00pm (WDST) on Friday, 6 February 2009.
The Company looks forward to your support.
Yours faithfullyPeter LandauExecutive Director4. DETAILS OF The Offer4.1 The Offer
The Offer is being made as a non-renounceable entitlement issue on the basis of 1 New Option for every 2 Shares held by Shareholders registered at the Record Date, together with 1 free Attaching Option for every 4 New Options subscribed for. The subscription price for each New Option shall be 1.5 cents ($0.015) and each New Option shall have an exercise price of 1.5 cents ($0.015) and is exercisable at any time on or before 31 May 2009. Each Attaching Option shall have an exercise price of 5 cents ($0.05) and is exercisable at any time on or before 31 December 2011.
For every New Option which a subscriber exercises following subscription, the subscriber shall receive 1 Share and, for every 4 New Options exercised, a subscriber shall receive 3 further Attaching Options.
Fractional Entitlements will be rounded down to the nearest whole number.
Based on the capital structure of the Company as at the date of this Prospectus and assuming no Existing Options are exercised prior to the Record Date, the maximum number of New Options to be issued pursuant to this Offer is approximately 104,652,472 New Options, together with approximately 26,163,118 Attaching Options. The Offer will raise up to approximately $1,569,787.
As at the date of this Prospectus, the Company has 68,078,215 Existing Options on issue, comprising 64,901,186 listed options ($1.00; 1 October 2010) and 3,177,029 unlisted options ($0.50; 30 June 2012). Holders of Existing Options will not be entitled to participate in the Offer without first exercising their Existing Options and becoming registered as a Shareholder on or before the Record Date, in accordance with the terms and conditions of the Existing Options.
However, the Company will allow the holders of Existing Options and those persons who held Expired Options (at the date of their expiry) to apply for New Options and Attaching Options under the Shortfall Offer, on a priority basis. Please refer to Section 4.4.
All Shares issued upon the exercise of the New Options and Attaching Options offered under this Prospectus will rank equally with the Shares on issue at the date of this Prospectus. Please refer to Section 6.3 for further information regarding the rights and liabilities attaching to the Shares.
All of the New Options and Attaching Options offered under this Prospectus will have the terms and conditions set out in Section 6.1 and 6.2, respectively.
The purpose of the Offer and the use of funds raised are set out in Section 5.1.
4.2 Further Attaching Options
The further Attaching Options issued upon the exercise of the New Options will not be issued to holders of New Options until such time as the Company has prepared a disclosure document for the purposes of complying with the technical requirements of the Corporations Act in respect of the grant of these subsequent Attaching Options.
Although the Company retains the discretion to issue the disclosure document earlier, the Company may not issue such a document until such time as all New Options have either been exercised or expired.
For clarity, the Attaching Options issued upon the exercise of the New Options will not be able to be transferred or exercised until such time as they are issued.
4.3 Application for New Options
Your acceptance of the Offer must be made on the Entitlement and Acceptance Form accompanying this Prospectus. Your acceptance must not exceed your Entitlement as shown on that form. If it does, your acceptance will be deemed to be for the maximum Entitlement.
You may participate in the Offer as follows:
(a) if you wish to accept your full Entitlement:
(i) complete the Entitlement and Acceptance Form; and (ii) attach your cheque, drawn on an Australian bank or a bank draft made payable in Australian currency, for the amount indicated on the Entitlement and Acceptance Form; or
(b) if you wish to accept part of your Entitlement: (i) fill in the number of New Options you wish to accept in the space provided on the Entitlement and Acceptance Form; and
(ii) attach your cheque, drawn on an Australian bank or bank draft made payable in Australian currency, for the appropriate application monies (at 1.5 cents ($0.015) per New Option); or
(c) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything. Shareholders who wish to apply for more than their Entitlement will need to apply for additional New Options under the Shortfall Offer. Please refer to Section 4.4 for further information on the Shortfall Offer.
Completed Entitlement and Acceptance Forms and accompanying cheques made payable to "Range Resources Ltd - Option Offer Account" and crossed "Not Negotiable" must be mailed or delivered to the following addresses by not later than the Closing Date:
Range Resources Ltd or Computershare Investor Services Pty LtdLevel 3 Locked Bag 25081 Havelock Street Perth WA 6001West Perth WA 6005 AUSTRALIAAUSTRALIA
Alternatively, Applicants may pay via credit card by following the instructions set out on the Entitlement and Acceptance Form.
The Offer is non-renounceable. Accordingly, a Shareholder may not sell or transfer all or part of their Entitlement.
4.4 Shortfall Offer
Any Entitlements not taken up pursuant to the Offer will form the Shortfall Offer. The Directors reserve the right to issue Shortfall Options at their absolute discretion. However, it is the intention of the Directors to give priority under the Shortfall Offer to the holders of Existing Options and those persons who held Expired Options (at the date of their expiry).
Shareholders who wish to subscribe for Shortfall Options are invited to complete the relevant field on their Entitlement and Acceptance Form accompanying this Prospectus and return it to the Company, together with a cheque for the value of the Shortfall Options subscribed. Alternatively, Shareholders may pay via credit card by following the instructions set out on the Entitlement and Acceptance Form.
The Directors reserve the right to allot to an Applicant a lesser number of Shortfall Options than the number for which the Applicant applied for on their Entitlement and Acceptance Form or Shortfall Application Form, or to reject an application, or to not proceed with placing the Shortfall.
The Shortfall Offer is a separate offer made pursuant to this Prospectus and may remain open up to 3 months after the Closing Date. However, Shareholders should note that unless the Company has received commitments, to its satisfaction, by the Closing Date for the entire Shortfall, the Offer will not proceed and no New Options or Attaching Options will be issued and the Company will return all application monies to Applicants in accordance with the Corporations Act.
The issue price for each New Option issued under the Shortfall Offer shall be 1.5 cents ($0.015) being the price at which New Options have been offered under the Offer. The New Options issued under the Shortfall Offer will be issued with free Attaching Options in the same ratio as offered under the Offer.
The Company has agreed to pay a fee of 6% of the value of New Options subscribed to any broker who places New Options and Attaching Options under the Shortfall Offer.
4.5 Allotment of Securities
New Options and Attaching Options issued pursuant to the Offer will be allotted as soon as practicable after the Closing Date and in accordance with the ASX Listing Rules and timetable set out in Section 1.
New Options and Attaching Options issued pursuant to the Shortfall Offer will be allotted as soon as possible after the Closing Date. Where the number of New Options and Attaching Options issued is less than the number applied for, or where no allotment is made, surplus application monies will be refunded without any interest to the Applicant as soon as practicable after the Closing Date.
Pending the allotment and issue of the New Options and Attaching Options or payment of refunds pursuant to the Prospectus, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. However, the Company will be entitled to retain all interest that accrues on application monies and each Applicant waives the right to claim interest.
Holding statements for New Options and Attaching Options issued under the Offer will be mailed as soon as possible after the Closing Date and in accordance with the ASX Listing Rules and timetable set out in Section 1 and, for New Options and Attaching Options issued under the Shortfall Offer, as soon as practicable after their issue.
4.6 Australian Securities Exchange Listing
The New Options issued pursuant to this Prospectus will not be quoted on ASX. However, application for Official Quotation of the Attaching Options offered pursuant to this Prospectus will be made in accordance with the timetable set out in Section 1 of this Prospectus and in any event within 7 days after the date of this Prospectus. If approval is not obtained from ASX before the expiration of 3 months after the date of issue of the Prospectus, (or such period as varied by the ASIC), the Company will not issue any New Options or Attaching Options and will repay all application monies within the time prescribed under the Corporations Act, without interest.
The fact that ASX may grant Official Quotation to the Attaching Options is not to be taken in any way as an indication of the merits of the Company or the Attaching Options being offered under this Prospectus.
4.7 Overseas Shareholders
This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus.
No action has been taken to register or qualify the New Options or Attaching Options the subject of the Offer or otherwise permit a public offering of the New Options or Attaching Options the subject of the Offer in any jurisdiction outside Australia (other than to existing Shareholders resident in New Zealand or the United Kingdom). Having regard to the number of existing Shareholders resident in countries outside Australia, New Zealand and the United Kingdom, the number and value of securities that would be offered to existing Shareholders in those countries and the cost of complying with legal and regulatory requirements, Shareholders with registered addresses in countries outside Australia, New Zealand and the United Kingdom will not be entitled to participate in the Offer.
The return of a completed Shortfall Application Form by an Applicant with a registered address outside Australia will be taken by the Company to constitute a representation and warranty by the Applicant that all applicable securities laws have been complied with and that any necessary approvals have been obtained.
Shareholders resident in New Zealand and the United Kingdom should consult their professional advisers as to whether any governmental or other regulatory consents are required, or other formalities need to be observed, to enable them to take up the Entitlements under the Offer.
4.8 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship
The Company will not be issuing option certificates in respect of any New Options or Attaching Options issued pursuant to the Offer. The Company is a participant in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of securities can be transferred without having to rely upon paper documentation.
Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with separate statements (similar to a bank account statement) that sets out the number of New Options and Attaching Options allotted 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.
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.
4.9 Privacy Act
If you complete an application for New Options, you will be providing personal information to the Company (directly or through the Company's share registry). The Company collects, holds and will use that information to assess your application, service your needs as a holder of securities in the Company, facilitate distribution payments and corporate communications to you as a holder of securities in the Company and carry out corporate administrative tasks.
The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mailing houses and the Company's share registry.
You can access, correct and update the personal information that the Company holds about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in the Section 2.
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 ASTC Settlement Rules. You should note that if you do not provide the information required on the application for New Options, the Company may not be able to accept or process your application.
4.10 Enquiries
Any questions concerning the Offer should be directed to Peter Landau, Executive Director and Company Secretary, on +61 8 9488 5220 or at admin@rangeresources.com.au.
5. PURPOSE AND EFFECT OF THE OFFER
5.1 Purpose of the Offer
The purpose of the Offer is to raise up to approximately $1,569,787. The proceeds of the Offer are planned to be used in accordance with the table set out below:
Item Activity / Purpose Full Subscription1 1 Exploration costs in relation to the $1,239,787 Puntland Projects 2 Working capital $300,000 3 Expenses of the Offer2 $30,000 Total $1,569,787Notes:
1. Unless the Offer is fully subscribed or the Company has received commitments, to its satisfaction, by the Closing Date for the entire Shortfall, the Offer will not proceed and no New Options or Attaching Options will be issued and the Company will return all application monies to Applicants in accordance with the Corporations Act.
2. Refer to Section 8.6 of this Prospectus for further details relating to the estimated expenses of the Offer.
The amounts referred to in the above table are indicative only and are estimates based on the Company's intentions at the date of this Prospectus.
As the exercise of the New Options and Attaching Options is uncertain, the additional funds that the Company may receive have not been included in the table.
5.2 Effect of the Offer
The principal effect of the Offer, assuming all New Options and Attaching Options offered under the Prospectus are issued and no Existing Options are exercised prior to the Record Date, will be to:
(a) increase the cash reserves of the Company by approximately $1,539,787 (after deducting the expenses of the Offer) immediately after completion of the Offer; and
(b) increase the number of Options on issue from 68,078,215 as at the date of this Prospectus to 198,893,805.
5.3 Pro-Forma Consolidated Balance Sheet
The audited Consolidated Balance Sheet as at 30 June 2008 and the unaudited Pro-Forma Consolidated Balance Sheet as at 30 June 2008 shown on this page have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position. They have been prepared assuming all New Options and Attaching Options offered under this Prospectus are issued, no Existing Options are exercised prior to the Record Date, and after deducting the expenses of the Offer.
The Balance Sheet has been prepared to provide investors with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.
Audited Adjustments Unaudited 30 June 2008 Pro Forma Consolidated Consolidated A$ A$ASSETSCURRENT ASSETSCash and cashequivalents * 4,137,360 1,539,787 5,677,147Trade and otherreceivables 1,441,220 - 1,441,220Other current assets 108,932 - 108,932TOTAL CURRENT ASSETS 5,687,512 1,539,787 7,227,299 NON-CURRENT ASSETSFinancial assetsavailable forsale 2,004,561 - 2,004,561Property, plant andequipment 288,119 - 288,119Exploration & evaluationexpenditure 77,120,784 - 77,120,784TOTAL NON-CURRENTASSETS 79,413,464 - 79,413,464TOTAL ASSETS 85,100,976 1,539,787 86,640,763 CURRENT LIABILITIESTrade and other payables 815,190 - 815,190TOTAL LIABILITIES 815,190 - 815,190 NET ASSETS 84,285,786 1,539,787 85,825,573 EQUITYIssued capital 101,619,057 - 101,619,057Reserves 11,014,714 1,539,787 12,554,501Accumulated losses (28,347,985) - (28,347,985)TOTAL EQUITY 84,285,786 1,539,787 85,825,573
* As stated in the 30 September 2009 Appendix 5B, cash and cash equivalents balance was $2,709,746. (Pro-forma cash balance after rights issue $4,249,533).
5.4 Effect on Capital Structure
The effect of the Offer on the capital structure of the Company, assuming all New Options and Attaching Options offered under the Prospectus are issued and no Existing Options are exercised prior to the Record Date, is set out below.
Shares NumberShares currently on issue 209,304,944Shares offered pursuant to the Offer NilTotal Shares on issue after completion of 209,304,944the OfferOptions NumberOptions (listed) 64,901,186
(exercise price $1.00; expiry date 1 October 2010) Options (unlisted)
3,177,029(exercise price $0.50; expiry date 30 June 2012)New Options offered pursuant to the Offer1 104,652,472
(unlisted)
(exercise price $0.015; expiry date 31 May 2009)Attaching Options offered pursuant to the Offer1 26,163,118(listed)(exercise price $0.05; expiry date 31 December2011)Total Options on issue after completion of the 198,893,805OfferNote:
1 The terms and conditions of the New Options and Attaching Options are set out in Section 6.1 and 6.2, respectively.
In the event all the New Options issued pursuant to this Prospectus are exercised 1 Share will be issued per New Option exercised and 3 further Attaching Options will be issued for every 4 New Options exercised by each subscriber. As a result the number of Shares and Options on issue will be 313,957,416 and 172,730,687, respectively.
6. Rights and liabilities attaching to securities
6.1 New Options
The terms and conditions of the New Options to be issued pursuant to this Prospectus are as follows:
(a) Each New Option entitles the holder to subscribe for 1 Share upon the payment of the exercise price 1.5 cents ($0.015) per New Option (the "Exercise Price").
(b) The New Options will expire at 5.00pm (WST) on 31 May 2009 (the "Expiry Date"). (c) The Company will not apply to ASX for official quotation of the New Options nor will the New Options be transferable.
(d) For every New Option exercised the holder will receive 1 Share and, for every 4 New Options exercised, the holder shall receive 3 free Attaching Options issued on the terms and conditions set out in Section 6.2. However, these Attaching Options will not be issued until such time as the Company has prepared a disclosure document for the purposes of complying with the technical requirements of the Corporations Act in respect of the grant of these subsequent Attaching Options. Although the Company retains the discretion to issue the disclosure document earlier, the Company may not issue such a document until such time as all New Options have either been exercised or expired.
(e) Shares issued on the exercise of New Options will rank equally with all existing Shares of the Company from the date of issue.
(f) Subject to paragraph (g), the New Options may be exercised wholly or in part by notice in writing to the Company received at any time on or before the Expiry Date, together with payment of the Exercise Price for the number of New Options being exercised. Any New Options not exercised by the Expiry Date will automatically lapse at the Expiry Date.
(g) Where the New Options are exercised in part, they must be exercised in multiples of 10,000 on each occasion. If the holder of New Options holds less than 10,000 New Options, the New Options must be exercised in whole if exercised.
(h) The Company will allot the number of Shares and Attaching Options the subject of any exercise notice and, at its cost, apply for quotation of the Shares and Attaching Options so allotted.
(i) There are no participating rights or entitlements inherent in the New Options and holders of New Options will not be entitled to participate in new issues of capital, which may be offered to Shareholders during the currency of the New Options, without first exercising their New Options. To this end, holders of New Options will be given at least 6 Business Days notice prior to and inclusive of the book's record date (to determine entitlements to the issue), to exercise the New Options.
(j) In the event of any re-organisation (including reconstruction, consolidation, subdivision, reduction or return of capital) of the issued capital of the Company:
(i) the number of New Options, the exercise price of the New Options, or both will be reconstructed (as appropriate) in a manner consistent with the ASX Listing Rules, but with the intention that such reconstruction will not result in any benefits being conferred on the holders of New Options which are not conferred on Shareholders; and
(ii) subject to the provisions with respect to rounding of entitlements as sanctioned by a meeting of Shareholders approving a reconstruction of capital, in all other respects the terms for the exercise of the New Options will remain unchanged.
(k) If the Company proceeds with a pro rata issue (except a bonus issue) of securities to Shareholders after the date of the issue of the New Options, the exercise price of the New Options may be reduced in accordance with the formula set out in ASX Listing Rule 6.22.2.
(l) If there is a bonus issue to Shareholders, the number of Shares over which a New Option is exercisable may be increased by the number of Shares which the holder of the New Option would have received if the New Option had been exercised before the record date for the bonus issue.
(m) The terms of the New Options shall only be changed if Shareholders (whose votes are not to be disregarded), approve such a change. However, the terms of the New Options shall not be changed to reduce the Exercise Price, increase the number of New Options or change any period for exercise of the New Options.
6.2 Attaching Options
The terms and conditions of each Attaching Option to be issued are as follows:
(a) Each Attaching Option entitles the holder to subscribe for 1 Share upon the payment of the exercise price of 5 cents ($0.05) per Attaching Option (the "Exercise Price").
(b) The Attaching Options will expire at 5.00pm (WST) on 31 December 2011 (the "Expiry Date").
(c) The Company will apply to ASX for official quotation of the Attaching Options.
(d) Shares issued on the exercise of Attaching Options will rank equally with all existing Shares of the Company from the date of issue.
(e) Subject to paragraph (f), the Attaching Options may be exercised wholly or in part by notice in writing to the Company received at any time on or before the Expiry Date, together with payment of the Exercise Price for the number of Attaching Options being exercised. Any Attaching Options not exercised by the Expiry Date will automatically lapse at the Expiry Date.
(f) Where the Attaching Options are exercised in part, they must be exercised in multiples of 10,000 on each occasion. If the holder of Attaching Options holds less than 10,000 Attaching Options, the Attaching Options must be exercised in whole if exercised.
(g) The Company will allot the number of Shares the subject of any exercise notice and, at its cost, apply for quotation of the Shares so allotted.
(h) There are no participating rights or entitlements inherent in the Attaching Options and holders of Attaching Options will not be entitled to participate in new issues of capital, which may be offered to Shareholders during the currency of the Attaching Options, without first exercising their Attaching Options. To this end, holders of Attaching Options will be given at least 6 Business Days notice prior to and inclusive of the book's record date (to determine entitlements to the issue), to exercise the Attaching Options.
(i) In the event of any re-organisation (including reconstruction, consolidation, subdivision, reduction or return of capital) of the issued capital of the Company:
(i) the number of Attaching Options, the exercise price of the Attaching Options, or both will be reconstructed (as appropriate) in a manner consistent with the ASX Listing Rules, but with the intention that such reconstruction will not result in any benefits being conferred on the holders of Attaching Options which are not conferred on Shareholders; and
(ii) subject to the provisions with respect to rounding of entitlements as sanctioned by a meeting of Shareholders approving a reconstruction of capital, in all other respects the terms for the exercise of the Attaching Options will remain unchanged.
(j) If the Company proceeds with a pro rata issue (except a bonus issue) of securities to Shareholders after the date of the issue of Attaching Options, the exercise price of the Attaching Options may be reduced in accordance with the formula set out in ASX Listing Rule 6.22.2.
(k) If there is a bonus issue to Shareholders, the number of Shares over which an Attaching Option is exercisable may be increased by the number of Shares which the holder of the Attaching Option would have received if the Attaching Option had been exercised before the record date for the bonus issue.
(l) The terms of the Attaching Options shall only be changed if Shareholders (whose votes are not to be disregarded), approve such a change. However, the terms of the Attaching Options shall not be changed to reduce the Exercise Price, increase the number of Attaching Options or change any period for exercise of the Attaching Options.
6.3 Shares
The following is a summary of the more significant rights and liabilities attaching to the Shares which will be issued upon the exercise of New Options and Attaching Options issued pursuant to this Prospectus. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.
Full details of the rights attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company's registered office during normal business hours.
(a) Notice of Meetings
Each Shareholder is entitled to receive notice of general meetings of the Company. Except in certain circumstances, Shareholders are entitled to be present in person, or by proxy, attorney or representative, to speak or to vote at general meetings of the Company, or to join in demanding a poll. Shareholders may requisition general meetings in accordance with the Corporations Act.
(b) Voting
At a general meeting, on a show of hands, every person present who is either a member, a proxy, an attorney or a representative of a Shareholder has one vote. At the taking of a poll, every Shareholder present in person or by proxy, attorney or representative has one vote for each Share held.
(c) Dividends
The Directors may from time to time authorise and pay dividends out of the profits of the Company. Dividends are payable in proportion to the number of Shares held by Shareholders.
(d) Winding Up
If the Company is wound up, the liquidator may, with the sanction of a special resolution, divide among the Shareholders the whole or any part of the property of the Company. The liquidator may also, with the sanction of a special resolution, vest the whole or any part of the property in a trustee on trust for Shareholders.
(e) Transfer of Shares
A Shareholder may transfer Shares by a written transfer or by a transfer effected under a computerised or electronic system recognised by the ASX Listing Rules or by the Corporations Act. The Directors may refuse to register a transfer of Shares where the ASX Listing Rules permit the Company to do so. On any refusal to register a transfer of Shares, the Company must give written notice to the transferee and the reasons for the refusal.
(f) Creation and Issue of Further Shares
Shareholders in general meeting may from time to time increase the Company's capital. The allotment and issue of any shares is under the control of the Directors. Subject to restrictions on the allotment of shares to Directors and their associates, the ASX Listing Rules, the Constitution and the Corporations Act, the Directors may allot, issue, grant options over or otherwise dispose of shares on such terms and conditions and with such rights and privileges as they see fit.
(g) Variation of Rights
At present the Company has only ordinary shares on issue. If shares of another class were issued, the rights and privileges attaching to the shares could be altered with the sanction of a special resolution passed at a separate meeting of holders of the shares of that class.
7. RISK FACTORS
7.1 Introduction
The New Options and Attaching Options offered under this Prospectus are considered speculative, and involve investors being exposed to risk. The Directors strongly recommend Applicants and potential applicants examine the contents of this Prospectus and consult their professional advisers before deciding whether to apply for New Options and free Attaching Options pursuant to this Prospectus.
There are specific risks which relate directly to the Company's business. In addition, there are other general risks, many of which are beyond the control of the Company and the Directors. The risks indentified in this Section, and other risk factors, may have a material and adverse impact on the financial performance of the Company and the market price of Shares.
The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.
7.2 Specific Socio-Political, Title and Access Risks Associated with the Company's Exploration Rights in Puntland
The Company's principal assets are oil and gas and mineral exploration and exploitation rights held under various agreements with the government and parliament of the semi-autonomous state of Puntland in the African nation of Somalia. While the Company has been assured of the validity of its rights by the Government and Parliament of Puntland and has received appropriate legal advice, there is no clear undisputable legal authority giving the Puntland Government the power to grant these rights. This is largely a function of the unstable recent political history of both Somalia and, to a lesser extent, Puntland.
Given the relatively formative nature of Somalia and Puntland's legal systems, there is also a high risk that the Company would not be able to effectively and legally enforce any of its rights under its agreements should it need to for any reason. The enforcement of its rights relies heavily on its ability to maintain good relationships with the government and other key stakeholders in Puntland. The maintenance of such relationships in turn relies heavily on the ability of the Company to retain its key executives, directors, consultants and partners who contribute significantly to the Company's key relationships in Puntland. While the Company currently enjoys a strong relationship with the existing Puntland Government, there can be no guarantee that the Company will enjoy a similarly strong relationship with future Puntland Governments.
The result of the Puntland presidential election scheduled for 9-10 January 2009 may impact on the Company's rights in relation to its Puntland Projects. The Company will provide an update on the election results to Shareholders with this Prospectus on despatch of the Prospectus to Shareholders on or around 20 January 2009.
Furthermore, the Company's ability to carry out exploration and future exploitation activities in Puntland depends on it being able to safely access the areas it wishes to explore or exploit. While the Puntland Government is currently facilitating such access, Puntland has experienced times of internal instability and armed conflict in its past and, more recently, acts of piracy in its offshore areas, and this may prevent the Company and its partners from accessing their planned exploration or exploitation areas.
7.3 Specific Technical Risks Associated with the Company's Exploration Projects
No resources or reserves of oil or gas or minerals have yet been identified at the Company's Puntland Projects, and there can be no guarantee that any economically recoverable accumulations of oil and gas or minerals will be delineated. Furthermore, whilst estimates of undiscovered resources of oil in place have been made for the Nogal Basin in Puntland and comparisons have been made between the hydrocarbon geology of the Nogal and Dharoor Basins in Puntland and productive basins in Yemen, there is no guarantee that any producible reservoirs will be identified through exploration by the Company and its partners. This may be due to the lack of adequate closure (seal or otherwise) on the postulated reservoir structures, poor reservoir qualities or other factors.
7.4 Joint Venture Partner Risk
The work commitments on the Company's key exploration project areas, the Nogal and Dharoor Basins, are being fully funded (up to US$22.5 million in each basin) by the Company's joint venture partner, Africa Oil. While Africa Oil has raised some funding to help carry out the remainder of its exploration programme, it has not yet raised funding to fully meet its 4 well work commitments. While it is considered remote (given the key backers of Africa Oil), there is a risk that Africa Oil will not be able to raise sufficient extra funding to meet the work commitments, and this could result in the forfeiting of the rights in relation to those areas.
7.5 General Exploration and Mining Risks
The future viability and profitability of the Company as an exploration and mining company will be dependent on a number of risk factors, including, but not limited to, the following:
(a) commodity prices and exchange rates and, in particular, the price of oil and gas; (b) the discovery and delineation of hydrocarbon and/or mineral reserves which can be economically exploited on any of the permits in which the Company has an interest cannot be guaranteed. The presence of hydrocarbon resources will not be known until the target reservoir has been drilled and the ability to commercially extract the hydrocarbons will not be known until appropriate well tests and feasibility studies have been completed. There is always a risk that any potential hydrocarbon hosting structures identified by geophysical and other techniques will not contain hydrocarbons due to inappropriately placed or timed hydrocarbon migration, ineffective seal on the structure, later disruption of the structure or various other critical factors. A potential reservoir structure may also contain non-commercial volumes due to adverse reservoir conditions, inadequate hydrocarbon charge and the cost and availability of extraction and delivery infrastructure;
(c) the cost and timing of exploration activities - which can be adversely affected by the availability of and competition for drilling rigs, remote sensing equipment and appropriately skilled and experienced consultants. In particular, the failure to secure a drilling rig within permit work programme timetables may result in the need to renegotiate permit terms with the relevant authority or relinquishment of the permit;
(d) poor weather conditions over a prolonged period which might adversely affect exploration, development and production activities with associated increase in costs and the timing of earning revenues;
(e) unforeseen equipment failures, breakdowns or repairs may result in significant delays to exploration, development or production activities, notwithstanding regular programs of repair, maintenance and upkeep;
(f) the granting and renewal of relevant permits and approvals for exploration, development and production activities from relevant government authorities;
(g) access to funding for ongoing exploration and development activities will be essential until the Company has established a profitable production base. The availability and terms of such funding cannot be guaranteed, and may result in the curtailment of activities, the possible relinquishment or disposal of permit interests and the possible substantial dilution of current Shareholders' interests in the Company's assets;
(h) the risk of material adverse changes in the government policies or legislation of Puntland affecting the level of mining and exploration activities or otherwise affecting the profitability of the Company's projects and other future mining operations;
(i) the Company is heavily reliant on the expertise and relationships of its relatively small executive team, and it may be adversely affected if it was unable to retain the services of these personnel or other suitable senior personnel;
(j) environmental management issues which the Company may be required to comply with from time to time and the potential risk that regulatory environmental requirements or circumstances could impact on the economic performance of the Company's operations.
7.6 Other General Business and Share Ownership Risks
(a) Economic Risks General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company's exploration, development and production activities, as well as on its ability to fund those activities.
(b) Market Conditions 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 such as:
(i) general economic outlook;
(ii) interest rates and inflation rates;
(iii) changes in investor sentiment toward particular market sectors;
(iv) the demand for, and supply of, capital; and
(v) terrorism or other hostilities. The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the performance of the Company or any return on an investment in the Company.
(c) Taxation The acquisition and disposal of Shares issued upon the exercise of New Options or Attaching Options will have tax consequences which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring New Options and Attaching Options and of acquiring and disposing of Shares following the exercise of New Options and/or Attaching Options, from a taxation viewpoint and generally.
To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability or responsibility with respect to the taxation consequences of subscribing for New Options and free Attaching Options issued under this Prospectus or arising following the issue and disposal of Shares following the exercise of New Options and/or Attaching Options.
(d) Investment Speculative The above list of risk factors should not be regarded as an exhaustive list of the risk factors 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 and adversely affect the financial performance of the Company and the value of the securities offered under this Prospectus.
Therefore, the New Options and free Attaching Options issued pursuant to this Prospectus carry no guarantee with respect to returns of capital or the market value of the New Options and Attaching Options nor any Shares issued upon the exercise of such New Options or Attaching Options.
Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for New Options and free Attaching Options pursuant to this Prospectus.
8. ADDITIONAL INFORMATION
8.1 Continuous Disclosure Obligations
The Company is a "disclosing entity" (as defined in Section 111AC of the Corporations Act) for the purposes of section 713 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 Company's securities.
This Prospectus is a "transaction specific prospectus". In general terms, a "transaction specific prospectus" is only required to contain information in relation to the effect of the issue of the securities on the Company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.
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 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. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.
Having taken such precautions and having made such enquiries as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the 3 months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.
Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.
The Company, as a disclosing entity under the Corporations Act, states that:
(a) it is subject to regular reporting and disclosure obligations; (b) copies of documents lodged with ASIC in relation to the Company (not being documents referred to in Section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of ASIC; and
(c) it will provide a copy of each of the following documents free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:
(i) the annual financial report most recently lodged by the Company with ASIC (ii) any half-year financial report lodged by the Company with the ASIC after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with ASIC; and
(iii) any continuous disclosure documents given by the Company to ASX in accordance with the ASX Listing Rules as referred to in section 674(1) of the Corporations Act after the lodgement of the annual financial report referred to in paragraph (i) above and before the lodgement of this Prospectus with ASIC.
Copies of all documents lodged with ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.
Details of documents lodged with ASX since the date of lodgement of the annual financial report and before the lodgement of this Prospectus with the ASIC are set out in the table below:
Lodgement Date Description of Announcement
23 October 2008 Notice of 2008 Annual General Meeting24 October 2008 Suspension from Official Quotation24 October 2008 Company Request for Voluntary Suspension29 October 2008 Key Appointments and Initiatives re Puntland Project30 October 2008 Reinstatement to Official Quotation31 October 2008 September 2008 Quarterly Activities and Cashflow Report3 November 2008 Final Director's Interest Notice20 November 2008 Range Resources Clarifies Inaccurate Newspaper Article24 November 2008 Results of Annual General Meeting24 November 2008 AGM Presentation2 December 2008 Change of Registered Office and Company Secretary19 December 2008 Appendix 3B24 December 2008 Ceasing to be a Substantial Shareholder31 December 2008 Ceasing to be a Substantial Shareholder
ASX maintains files containing publicly available information for all listed companies. The Company's file is available for inspection at ASX during normal hours.
8.2 Underwriting Agreement
In order to allow the Directors to participate in the Offer, the Offer is underwritten to the extent of $150,000 by Doull Holdings Pty Ltd. Doull Holdings Pty Ltd is a related party of the Company by virtue of the fact that it is controlled by Peter Landau, a Director. By an agreement dated 5 January 2009, Doull Holdings Pty Ltd agreed to underwrite the Offer to the extent of $150,000.
The only terms of the Underwriting Agreement are:
(a) no fees, commissions or expenses are payable to Doull Holdings Pty Ltd; and (b) the agreement to underwrite the Offer to the extent of $150,000 is conditional upon the Company receiving commitments (including the amount of $150,000 committed by Doull Holdings Pty Ltd), to its satisfaction, for the entire Shortfall by the Closing Date.
8.3 Directors' Interests
Other than as set out below or elsewhere in this Prospectus, no Director nor any firm in which such a Director is a partner, has or had within 2 years before the lodgement of this Prospectus with ASIC, any interest in:
(a) the formation or promotion of the Company; (b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
(c) the Offer,
and no amounts have been paid or agreed to be paid (in cash or shares or otherwise) to any Director or to any firm in which any such Director is a partner, either to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him or by the firm in connection with the formation or promotion of the Company or the offer of New Options pursuant to this Prospectus.
The Directors' relevant interests in securities of the Company as at the dateof this Prospectus are:Director Shares Options EntitlementSir Sam Jonah 8,270,025 Nil 4,135,012 New Options and 1,033,753 Attaching OptionsMr Peter Landau Nil Nil Nil1Mr Marcus Edwards-Jones 600,000 Nil 300,000 New Options and 75,000 Attaching Options
Notes: 1 Pursuant to the Underwriting Agreement, Doull Holdings Pty Ltd, a company controlled by Peter Landau, has agreed to underwrite the Offer to the extent of $150,000. Subject to the condition to the Underwriting Agreement being met, if the Shortfall Offer is not fully subscribed, Mr Landau will be required to subscribe for up to a maximum of 6,666,667 New Options and 1,666,666 Attaching Options. For a summary of the Underwriting Agreement, please refer to Section 8.2.
Marcus Edwards-Jones has indicated that he intends to take up his full Entitlement under the Offer.
The Constitution provides that the Directors may be paid for their services as Directors, a sum not exceeding such fixed sum per annum as may be determined by the Company in general meeting, to be divided among the Directors and, in default of agreement, then in equal shares.
The Company paid to the Directors and former directors of the Company (both executive and non-executive), a total of $1,031,958 for the year ended 30 June 2008. For the period from 1 July 2008 to the date of this Prospectus $652,134 has been paid or is payable by the Company by way of approved remuneration for services provided by all Directors or former directors of the Company (executive and non-executive), companies associated with those Directors or former directors of the Company or their associates in their capacity as Directors or former Directors of the Company, employees, consultants or advisers (and including superannuation payments).
Directors, companies associated with the Directors or their associates are also reimbursed for all reasonable expenses properly incurred in the course of conducting their duties which include, but are in no way limited to, out of pocket expenses, travelling expenses, disbursements made on behalf of the Company and other miscellaneous expenses.
8.4 Interests of Experts and Advisers
Other than as set out below or elsewhere in this Prospectus, no expert, promoter, adviser or any other person named in the 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 with which any of those persons is or was associated, has or had within 2 years before the lodgement of this Prospectus with ASIC, any interest in:
(a) the formation or promotion of the Company;
(b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion, or the Offer; or
(c) the Offer,
and no amounts have been paid or agreed to be paid (in cash or shares or otherwise) to any expert, promoter, adviser 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 this Prospectus, or to any firm in which any of those persons is or was a partner, or to a company with which any of those persons is or was associated, for services rendered by that person, or by the firm or the company, in connection with the formation or promotion of the Company or the Offer.
8.5 Litigation
As at the date of this Prospectus, the Company is not involved in any legal proceedings, and the Directors are not aware of any legal proceedings pending or threatened against the Company.
8.6 Expenses of the Offer
If the Offer is fully subscribed, the expenses of the Offer are estimated tobe approximately $30,000 (excluding GST), comprising the following individualexpenses: Item Amount ($)ASIC Fees 2,010ASX Fees 5,412Printing, postage and other expenses 22,578Total 30,000
In addition, the Company has agreed to pay a fee of 6% of the value of New Options subscribed to any broker who places New Options and Attaching Options under the Shortfall Offer. For details relating to the Shortfall Offer, please refer to Section 4.4.
8.7 Market Price of Shares
The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX.
The highest, lowest and last market sale prices of the Shares on ASX during the three months immediately preceding the date of lodgement of this Prospectus with ASIC and the respective dates of those sales were:
Highest 8.5 cents 6 October 2008 Lowest 2.6 cents 1 December 2008 Last 4.6 cents 31 December 2008
8.8 Electronic Prospectus
Pursuant to Class Order 00/44, 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 Application Form. If you have not, please phone the Company on (08) 9488 5220 and the Company will send you, for free, either a hard copy or further electronic copy of the Prospectus or both. Alternatively, you may obtain a copy of this Prospectus from the Company's website at www.rangeresources.com.au.
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 Prospectus and any relevant supplementary or replacement prospectus, or any of those documents, they were incomplete or unaltered.
9. DIRECTORS' AUTHORISATION
This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.
In accordance with section 720 of the Corporations Act, each Director has consented to lodgement of this Prospectus with ASIC.
Peter LandauExecutive Directorfor and on behalf ofRANGE RESOURCES LTD5 January 200910. Glossary
"$" means Australian dollars.
"Africa Oil" means Africa Oil Corporation.
"Applicant" means a Shareholder who applies for New Options pursuant to the Offer or a Shareholder or other party who applies for Shortfall Options pursuant to the Shortfall Offer.
"Annual General Meeting" means the annual general meeting of the Company held on 24 November 2008.
"Application Form" means the Entitlement and Acceptance Form and/or the Shortfall Application Form, as the context requires.
"ASIC" means the Australian Shares and Investments Commission.
"ASX" means ASX Limited (ACN 008 624 691).
"ASX Listing Rules" means the Listing Rules of ASX.
"Attaching Option" means an option to subscribe for a Share on the terms and conditions set out in Section 6.2.
"Board" means the Board of Directors of the Company from time to time.
"Business Day" means a Monday to Friday inclusive, except for any day which ASX declares is not a Business Day.
"Closing Date" means 5:00pm (WDST) on 6 February 2009, unless extended.
"Company" means Range Resources Ltd (ACN 002 522 009).
"Constitution" means the constitution of the Company as at the date of this Prospectus.
"Corporations Act" means the Corporations Act 2001 (Cth) as amended from time to time.
"Directors" means the directors of the Company.
"Entitlement" means the entitlement of a Shareholder who is eligible to participate in the Offer.
"Entitlement and Acceptance Form" means the entitlement and acceptance form either attached to or accompanying this Prospectus.
"Existing Option" means an option to subscribe for a Share and which is on issue as at the date of this Prospectus.
"Expired Options" means those options to subscribe for a Share at an exercise price of $1.00 which expired on 1 October 2008.
"New Option" means an option to subscribe for a Share on the terms and conditions set out in Section 6.1.
"Offer" or "Rights Issue" means the non-renounceable entitlement issue of one New Option for every 2 Shares held by Shareholders on the Record Date (together with 1 free Attaching Option for every 4 New Options subscribed for) at an issue price of 1.5 cents ($0.015) per New Option with each New Option having an exercise price of 1.5 cents ($0.015) and being exercisable at any time on or before 5:00pm (WST) on 31 May 2009, to raise up to approximately $1,569,787 if fully subscribed.
"Official Quotation" has the same meaning as that expression in the ASX Listing Rules.
"Options" means any or all of the Attaching Options, Existing Options or New Options, as the context requires.
"Prospectus" this prospectus dated 5 January 2009.
"Puntland Projects" means the Company's oil and gas exploration activities in the Dharoor Basin and Nogal Basin in Puntland and proposed oil and gas activities on offshore Puntland.
"Record Date" means 5:00pm (WDST) on 14 January 2009.
"Section" means a section of this Prospectus.
"Share" means a fully paid ordinary share in the capital of the Company.
"Shareholder" means a holder of a Share.
"Shortfall" means the New Options, together with free Attaching Options, not applied for under the Offer (if any).
"Shortfall Application Form" means the shortfall application form either attached to or accompanying this Prospectus.
"Shortfall Offer" means the offer of the Shortfall in accordance with this Prospectus.
"Shortfall Options" means those New Options, and free Attaching Options on the same ratio as made under the Offer, available for subscription under the Shortfall Offer (if any).
"WDST" means Western Daylight Saving Time, as observed in Perth, Western Australia or, if WDST is not being observed, WST.
"WST" means Western Standard Time, as observed in Perth, Western Australia.
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