Announcement PDF 1 VARISCAN MINES LIMITED ACN 003 254 395 PROSPECTUS For a renounceable entitlement offer of approximately 234,316,347 New Shares and 234,316,347 New Options, on the basis of four New Shares for every three Shares held by Eligible Shareholders on the Record Date at an issue price of $0.015 per New Share, together with one New Option for every New Share, exercisable at $0.015 during the Exercise Period, and for the offer of the Shortfall. The Entitlement Offer will raise up to $3,514,745 before costs The Entitlement Offer closes at 5.00pm AEST on 27 April 2015 Important Information: This is an important document that should be read in its entirety. If you do not understand any part of this Prospectus, or are in any doubt as to how to deal with it or the Entitlement Offer, you should consult your stockbroker, solicitor, accountant or other professional adviser. The New Shares and New Options offered by this Prospectus should be considered speculative. ASX Code: VAR Patersons Securities Limited is engaged as Lead Manager to the Entitlement Offer. 2 IMPORTANT INFORMATION This Prospectus is dated 24 March 2015 and a copy of this Prospectus was lodged with ASIC on the same date. Neither ASIC nor the ASX nor any of their respective officers take any responsibility for the contents of this Prospectus. The expiry date of this Prospectus is 13 months from the date of this Prospectus (Expiry Date). No New Shares or New Options will be issued on the basis of this Prospectus after the Expiry Date. We will apply to the ASX within seven days of the date of this Prospectus for Official Quotation of the New Shares and New Options. This Prospectus is a transaction-specific prospectus for an offer of ‘continuously quoted securities’ (as defined in the Corporations Act) and has been issued pursuant to section 713 of the Corporations Act. This Prospectus does not contain the same level of disclosure as an initial public offering prospectus. In making statements in this Prospectus, we have had regard to the fact that we are a ‘disclosing entity’ for the purposes of the Corporations Act and that certain matters may reasonably be expected to be known by you and professional advisers whom you may consult. You must read this Prospectus in conjunction with publicly available information we have disclosed to the ASX. No person is authorised to give any information or to make any representation in connection with the Entitlement Offer which is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied on as having been authorised by the Company in connection with the Entitlement Offer. The distribution of this Prospectus in jurisdictions outside Australia, New Zealand and Singapore (including electronic copies) may be restricted by law. If you come into possession of this Prospectus you should seek advice on and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of those laws. This Prospectus does not constitute an offer of New Shares or New Options in any jurisdiction where, or to any person to whom, it would be unlawful to make such an offer. Lodgement of a duly completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of such laws. Investors in New Zealand New Shares and New Options being offered under this Prospectus are also being offered to Shareholders with registered addresses in New Zealand in reliance on the Securities Act (Overseas Companies) Exemption Notice 2013. This Prospectus is not an investment statement or prospectus under New Zealand law, and may not contain all the information that an investment statement or prospectus under New Zealand law is required to contain. Investors in Singapore This Prospectus has not been registered and will not be registered as a prospectus with the Monetary Authority of Singapore (MAS). This Prospectus is not a prospectus as defined in the Securities and Futures Act (Chapter 289) of Singapore (SFA). Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply. 3 This Prospectus and any other document or material in connection with the offer or sale of the New Shares or New Options may not be circulated or distributed, nor may the New Shares or New Options be offered or sold, whether directly or indirectly, to persons in Singapore other than: (a) to an institutional investor (as defined in section 4A of the SFA (Institutional Investor)) pursuant to section 274 of the SFA; (b) to a relevant person (as defined in section 275(2) of the SFA) (Singapore Relevant Person) pursuant to section 275(1) of the SFA, or any person pursuant to section 275(1A) of the SFA, and in accordance with the conditions specified in section 275 of the SFA; or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Unless otherwise permitted under the SFA, where the New Shares or New Options are subscribed for by a person pursuant to section 274 or 275 of the SFA, such New Shares or New Options shall not be transferable for six months after that person has subscribed for the New Shares or New Options, except: (a) to another person who is an Institutional Investor or a Singapore Relevant Person; or (b) pursuant to section 275(1A) of the SFA. Unless otherwise permitted under the SFA, where the New Shares or New Options are initially acquired in Singapore pursuant to an offer made in reliance on an exemption under Section 275 of the SFA by: (a) a corporation referred to in section 276(3) of the SFA (a Relevant Corporation), the securities of the Relevant Corporation shall not be transferred within six months after the Relevant Corporation has acquired any New Shares or New Options unless the transfer is in accordance with the conditions of section 276(3) of the SFA; and (b) a trust referred to in section 276(4) of the SFA (a Relevant Trust), the rights and interest (howsoever described) of the beneficiaries thereof in the Relevant Trust shall not be transferred within six months after any New Shares or New Options have been acquired for the Relevant Trust unless the transfer is in accordance with the conditions of section 276(4) of the SFA. Seek Professional Advice The information provided in this Prospectus is not financial product advice and has been prepared without taking into account your investment objectives, financial situation and particular needs. It is important that you read this Prospectus in its entirety before deciding to invest and, if in any doubt, consult your professional adviser before deciding whether to accept the Entitlement Offer or to participate in the Shortfall Offer. In considering the Company’s prospects you should consider the risk factors that could affect the Company’s performance in light of your personal circumstances (including financial and taxation issues) and seek professional guidance from your stockbroker, solicitor, accountant or other professional financial adviser before deciding whether to invest. SECTION 6 contains a non- 4 exhaustive list of risk factors that investors should consider in respect of the Entitlement Offer and the Shortfall Offer. The New Shares and New Options carry no guarantee with respect to return on capital investment or the future value of the New Shares, the New Options or other Shares or Options. Revenues and expenditures disclosed in this Prospectus are exclusive of the amount of GST unless otherwise disclosed. Privacy The Company collects information about each person who lodges an Entitlement and Acceptance Form for the purposes of processing the application and, if it is successful, administering the New Shares, New Options and Shortfall. Lodgement of an Entitlement and Acceptance Form constitutes an agreement that the Company may use the information in that 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, agents, contractors, and third party service providers (including mailing houses), the ASX, ASIC and other regulatory bodies and in any way required by Australian law or regulatory bodies. This includes the requirement that information about Shareholders, including their name, address and details of Shares or Options held, must be recorded in the Company’s public register, even after a Shareholder ceases to hold Shares or Options. The Company will also use this information to facilitate distribution payments and corporate communications. If you do not provide the correct information required on the Entitlement and Acceptance Form the Company may not be able to issue you with your Entitlement. Defined Words Certain words and terms used in this Prospectus have defined meanings which are set out in SECTION 10. In this Prospectus, the words ‘we’, ‘our’ and ‘us’ refer to the Company. The words ‘you’ and ‘your’ refer to Eligible Shareholders. Forward-looking Statements This Prospectus contains forward-looking statements which are identified by terminology such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the development of the markets and the industry in which the Company operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this Prospectus. For further information on the risks, uncertainties 5 and assumptions which may cause our actual results to differ from the forward-looking statements contained in this Prospectus, please refer to SECTION 6. Subject to the requirements of the Listing Rules and applicable law, the Company does not undertake to publicly release the result of any revisions of any forward-looking statements in this Prospectus that may occur due to any change in the Company’s expectations or to reflect events or circumstances after the date of this Prospectus. 6 TABLE OF CONTENTS IMPORTANT INFORMATION 2 TABLE OF CONTENTS AND TIMETABLE 6 SECTION 1. CORPORATE DIRECTORY 7 SECTION 2. DETAILS OF THE ENTITLEMENT OFFER 8 SECTION 3. BACKGROUND TO MINING IN FRANCE 16 SECTION 4. INVESTMENT HIGHLIGHTS 18 SECTION 5. PURPOSE AND EFFECT OF THE ENTITLEMENT OFFER 28 SECTION 6. RISKS 36 SECTION 7. RIGHTS ATTACHING TO SHARES AND OPTIONS 47 SECTION 8. ADDITIONAL INFORMATION 51 SECTION 9. DIRECTORS’ CONSENTS 60 SECTION 10. DEFINITIONS 61 TIMETABLE Event Date Lodgement of Prospectus with ASIC 24 March 2015 Notice to Shareholders and Optionholders+ 25 March 2015 Shares trade ex Entitlement commence trading 26 March 2015 Record Date for determining Entitlements 30 March 2015 Opening date and despatch of Prospectus to Shareholders 2 April 2015 Entitlement trading ends 20 April 2015 New Shares quoted on a deferred settlement basis 21 April 2015 Closing Date of Entitlement Offer 27 April 2015 Notify ASX of under subscriptions 30 April 2015 Despatch date 4 May 2015 Notes: * These dates are the latest dates on which each relevant event may take place. + Optionholders must be advised by this date of the Entitlements Offer and their inability to participate unless they exercise their Unlisted Options prior to the Record Date. This timetable is indicative only and we reserve the right to vary it at any time without providing you with prior notice, subject to the Listing Rules and the Corporations Act. 7 SECTION 1. CORPORATE DIRECTORY Directors Auditors Patrick Elliott (Non-Executive Chairman) Gregory Jones (Managing Director) Jack Testard (Executive Director) Kwan Chee Seng (Non-Executive Director) Foo Fat Kah (Non-Executive Director) Alan Breen (Non-Executive Director) HLB Mann Judd Level 19 207 Kent Street Sydney NSW 2000 Solicitors Company Secretary Ivo Polovineo Gadens Level 12 77 Castlereagh Street Sydney NSW 2000 Registered Office Share Registry Level 1 80 Chandos Street St Leonards NSW 2065 Boardroom Pty Limited Level 7 207 Kent Street Sydney NSW 2000 PO Box 3993, Sydney NSW 2001 Telephone: (02) 9290 9600 Facsimile: (02) 9279 0664 Website: www.boardroomlimited.com.au Contact Details ASX Code Variscan Mines Limited Telephone: (02) 9906 5220 Facsimile: (02) 9906 5233 Website: www.variscan.com.au Email: info@variscan.com.au VAR 21129237.17 SZW SZW 8 SECTION 2. DETAILS OF THE ENTITLEMENT OFFER 2.1 The Entitlement Offer By this Prospectus we offer a renounceable pro rata issue of New Shares to Eligible Shareholders on the basis of four New Shares for every three Shares held by Eligible Shareholders on the Record Date. Each New Share has an offer price of $0.015 and will be issued together with one New Option exercisable at $0.015. The New Options are exercisable on or before the end of the Exercise Period. Optionholders, who exercise their Unlisted Options prior to the Record Date, are entitled to participate in the Entitlement Offer. The New Shares offered pursuant to this Prospectus will rank equally with existing Shares on issue. The maximum number of New Shares to be issued under the Entitlement Offer is approximately 234,316,347 and the maximum number of New Options to be issued under the Entitlement Offer is approximately 234,316,347 (if no Unlisted Options are exercised prior to the Record Date). If some or all of the Unlisted Options are exercised prior to the Record Date, this will increase the maximum number of New Shares and New Options to be issued under the Entitlement Offer. The maximum amount to be raised by the Entitlement Offer is approximately $3,514,745 before costs (if no Unlisted Options are exercised prior to the Record Date). Please refer to Section 5.1 for details of the purpose of the Entitlement Offer and Section 5.5 for details of how we intend to use the amount raised by the Entitlement Offer. In the calculation of Entitlements, fractions will be rounded down to the nearest whole number. 2.2 The Offer Price The offer price of $0.015 per New Share represents a 48.28% discount to the closing market price of the Shares on 20 March 2015. This offer price represents a 46.32% discount to the volume weighted average price (VWAP) over the last five trading days (fifteen day VWAP: 46.73%) on which the Shares traded to 20 March 2015, being prior to the announcement of the Entitlement Offer. 2.3 The Shortfall Offer Any New Shares under the Entitlement Offer that are not applied for will become Shortfall offered under the Shortfall Offer. The Shortfall Offer is a separate offer under the Prospectus. Eligible Shareholders may apply for any Shortfall by completing the relevant Shortfall section in the Entitlement and Acceptance Form and sending it to the Company’s Share Registry (refer to Section 2.5) with payment by cheque or BPAY® transfer on the same terms as in Section 2.5. 9 Application for Shortfall accompanied by Application Money does not guarantee the allotment of any Shortfall. All Application Money in relation to which Shortfall is not allocated will be returned without interest. It is your responsibility to ensure that you will not breach the takeovers provisions in the Corporations Act by applying for Shortfall. The Shortfall will be issued within three months of the Closing Date. The Company reserves the right to issue Shortfall at its discretion, including as between Eligible Shareholders. The Shortfall will not be issued at a price less than $0.015 per New Share (with attached New Option). The Company intends to allocate Shortfall in accordance with the following priorities: (a) first priority will be given to Eligible Shareholders that have subscribed for their full Entitlement, provided that the issue of the Shortfall to an Eligible Shareholder would not be in breach of the Corporations Act or the Listing Rules; and (b) second priority will be given to unrelated parties to the Company applying for Shortfall who are sophisticated, professional or institutional investors, including parties introduced by the Lead Manager. As no underwriter will be engaged to manage any remaining Shortfall, that remaining Shortfall will not be subscribed and therefore will not be issued. Some Eligible Shareholders will not be able to subscribe for Shortfall due to constraints in the Listing Rules and the Corporations Act. In particular, related parties, such as Directors of the Company will not be able to subscribe for Shortfall without the approval of the Shareholders. If you are unsure whether you are restricted from participating in the Shortfall Offer you should seek legal and financial advice. If you wish to apply for Shortfall, please refer to Section 2.6. 2.4 Risks Relating to New Shares The Company is listed on the ASX. Consequently, share market conditions may affect the price of Shares and Options regardless of operating performance. Many factors will affect the price of the New Shares and New Options including local and international stock markets, movements in commodity prices, interest rates, economic conditions and investor sentiment generally. In particular, you should be aware that mineral exploration by its nature is a high risk endeavour and accordingly there is a significant risk that our proposed exploration programmes will not result in exploration success. Our current focus on our French projects carries specific risks, such as currency and commodity price fluctuations, and potential changes to mining and exploration law and regulation. There is also some uncertainty of process or outcome in relation to government authorisation and community response. Please refer to SECTION 6 for further details of the risks associated with the Entitlement Offer. 10 2.5 Application, Allotment and Allocation of the Entitlement Offer To subscribe to the Entitlement Offer, you must complete the accompanying personalised Entitlement and Acceptance Form in accordance with the instructions set out in the Entitlement and Acceptance Form. You may take up your Entitlement either in whole or in part. If you do not wish to take up any part of your Entitlement, you are not required to take any action. The part of your Entitlement that you do not take up will form part of the Shortfall Offer. Please pay by cheque or by BPAY®. If you pay by: (a) cheque, you should make the cheque payable to "Variscan Mines Limited" and crossed "Not Negotiable"; (b) BPAY®, payment should be made in accordance with the instructions set out on the Entitlement and Acceptance Form using the reference number shown on the form. If you make your payment by BPAY® you do not need to complete and return the Entitlement and Acceptance Form. Your BPAY® payment cannot be withdrawn. Your payment must be in Australian currency. The amount payable on application will be deemed not to have been received until cleared funds are received. Completed Entitlement and Acceptance Forms (and, if paying by cheque a cheque for the Application Money) must be mailed to the postal address, or delivered by hand to the delivery address set out below: POSTAL DELIVERY HAND DELIVERY Variscan Mines Limited C/-Boardroom Pty Ltd GPO Box 3993 SYDNEY NSW 2001 Variscan Mines Limited C/-Boardroom Pty Ltd Level 7 207 Kent Street SYDNEY NSW 2000 All acceptances must be received by 5:00pm (AEST) on the Closing Date, being 27 April 2015. A completed and lodged Entitlement and Acceptance Form constitutes a binding offer to acquire New Shares and New Options on the terms and conditions set out in this Prospectus and, once lodged or paid, cannot be withdrawn. If the Entitlement and Acceptance Form is not completed correctly it may still be treated as a valid Entitlement and Acceptance Form. The Directors’ (or their delegates’) decision whether to treat an application as valid and how to construe, amend or complete the Entitlement and Acceptance Form is final. If we receive your Entitlement and Acceptance Form after 5.00pm (AEST) on 27 April 2015, the Directors may, at their discretion, accept or reject your application. We will allot and issue your New Shares and New Options as soon as practicable after the date of this Prospectus and otherwise in accordance with the Listing Rules. We will also despatch holding statements in relation to your New Shares and New Options as soon as practicable after the date of this Prospectus. 11 2.6 Participation in the Shortfall Offer As noted above in Section 2.3, we will make the Shortfall Offer to Eligible Shareholders within three months of the Closing Date of the Entitlement Offer. If you wish to participate in the Shortfall Offer, you should complete the part of the accompanying Entitlement and Acceptance Form relating to the Shortfall in accordance with the instructions set out in the form and return it to us so that we receive the form by 5.00pm (AEST) on the Closing Date of 27 April 2015. Importantly, as noted in Section 2.3, the Directors reserve the right to make the Shortfall Offer to sophisticated, professional and institutional investors and, as such, an indication that you wish to participate in the Shortfall Offer does not guarantee that you will receive any Shortfall. Directors of the Company (including the Company’s substantial shareholder, Mr Kwan) will not be eligible to participate in the Shortfall Offer without the approval of Shareholders. 2.7 Dealing with your Entitlement (a) Taking up all of your Entitlement If you wish to take up all of your Entitlement, complete the accompanying Entitlement and Acceptance Form for New Shares and New Options in accordance with the instructions set out in that form. You should then forward your completed Entitlement and Acceptance Form together with your Application Money in accordance with Section 2.5 to reach the Company’s Share Registry no later than 5.00pm (AEST) on the Closing Date. (b) If you wish to sell all of your Entitlement Complete the section marked “Instructions to Stockbroker” on the back of the Entitlement and Acceptance Form, which accompanies this Prospectus, in accordance with the instructions contained on the form and lodge it with your stockbroker as soon as possible. Entitlements trading will commence on ASX on 26 March 2015. Sale of your Entitlement must be completed by 20 April 2015 when Entitlement trading is expected to cease. (c) If you wish to take up part of your Entitlement and sell the balance Please complete the Entitlement and Acceptance Form, which accompanies this Prospectus, by inserting the number of New Shares and New Options for which you wish to accept (being equal to or less than the number specified on the Entitlement and Acceptance Form) and complete the section marked “Instructions to Stockbroker” on the back of the form in respect of that part of your Entitlement you wish to sell. Forward the form to your stockbroker together with your cheque for the total amount payable, or follow the procedure for BPAY®, in respect of the New Shares and New Options accepted. Your stockbroker will need to ensure that 12 the completed Entitlement and Acceptance Form reaches the Company’s Share Registry, by 5.00 pm (AEST) on the Closing Date. Entitlements trading will commence on the ASX on 26 March 2015. Sale of your Entitlements must be completed by 20 April 2015 when Entitlements trading is expected to cease. (d) If you wish to transfer your Entitlement other than on ASX You may transfer all or part of your Entitlement to another person other than on the ASX provided that the purchaser is not an Ineligible Shareholder or would not be an Ineligible Shareholder if the purchaser was the registered holder of Shares. If you wish to transfer all of your Entitlement to another person other than on the ASX, forward a completed standard renunciation and acceptance form (obtainable from the Company’s Share Registry) and the applicable transferee’s cheque or BPAY® for the New Shares and New Options they wish to subscribe for to the Company’s Share Registry by no later than 5.00pm (AEST) on the Closing Date. If you wish to transfer only part of your Entitlement to another person other than on the ASX, but also want to take up some or all of the balance of your Entitlement, you will need to take the steps described above in relation to the Entitlements you wish to transfer and complete the accompanying Entitlement and Acceptance Form in respect of the Entitlement you wish to take up. You will need to lodge the Entitlement and Acceptance Form in accordance with the procedure in Section 2.5. If the Share Registry receives both a completed renunciation and acceptance form and a completed Entitlement and Acceptance From in respect of the same Entitlements, the renunciation will be given priority to the acceptance. (e) Entitlements not taken up If you are an Eligible Shareholder and do not wish to accept all (or part) of your Entitlement, you are not obliged to do anything. If you do nothing, you will receive no benefit, New Shares or New Options and your Entitlement will become Shortfall and will be offered as part of the Shortfall Offer. If you wish to receive a benefit, you must take action to accept your Entitlement in accordance with the instructions above and on the accompanying Entitlement and Acceptance Form. The number of existing Shares you hold as at the Record Date and the rights attached to those existing Shares will not change if you choose not to accept any of your Entitlement. Your Entitlement may have value and accordingly you should consider renouncing (selling) your Entitlement rights, rather than allowing them to lapse. Any Entitlements that lapse will form part of the Shortfall Offer. See Section 2.3 for more information on the Shortfall Offer. 13 2.8 ASX Official Quotation We will apply to the ASX within seven days after the date of this Prospectus for Official Quotation of the New Shares and New Options. If the ASX does not grant permission for Official Quotation of the New Shares and New Options within three months of the date of this Prospectus, or such longer period as is permitted by the Corporations Act, we will not allot or issue any New Shares or New Options (unless ASIC grants to the Company an exemption permitting the allotment and issue). In this case, we will refund all Application Money, though any interest earned on Application Money will remain with the Company. The fact that the ASX may grant Official Quotation to the New Shares and New Options is not an indication of the merits of the Company or the New Shares or New Options. 2.9 CHESS The Company participates in CHESS. CHESS is operated by ASTC (a wholly owned subsidiary of ASX) in accordance with the Listing Rules and the ASTC Settlement Rules. If you have a CHESS sponsorship agreement with your stockbroker, ASTC will send you a CHESS statement. The CHESS statement will set out your holding of Shares and Options (including New Shares and New Options issued under this Prospectus), provide details of your holder identification number, and provide the participant identification number of the sponsor. If you are not broker-sponsored, your New Shares and New Options will be registered on the Issuer Sponsored Subregister by default. If you are registered on the Issuer Sponsored Subregister, your statement will be despatched by the Share Registry and will contain the number of New Shares and New Options issued to you under this Prospectus and your security holder reference number. CHESS statements and Issuer Sponsored statements will routinely be sent out to Shareholders and Optionholders at the end of any calendar month during which the balances of their holdings change. Shareholders and Optionholders may request a statement at any other time, however, a charge may be payable for additional statements. We will not be issuing share certificates in respect of the New Shares and New Options. 2.10 Overseas Shareholders This Entitlement 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. It is not practicable for us to comply with the securities laws of overseas jurisdictions having regard to the number of Ineligible Shareholders, the number and value of New Shares and attaching New Options that these Ineligible Shareholders would be offered and the cost of determining and complying with regulatory requirements in each 14 relevant jurisdiction. Accordingly, the Entitlement Offer is not being extended, and New Shares and New Options will not be issued, to Ineligible Shareholders. If you reside in New Zealand or Singapore, you should consult your professional advisers as to whether any government or other consents are required, or other formalities need to be observed, to enable you to exercise your Entitlements under the Entitlement Offer. 2.11 Taxation You should seek and rely upon independent taxation advice regarding your investment in the Company as the taxation consequences will depend on your particular circumstances. 2.12 Ranking The New Shares offered pursuant to this Prospectus will rank equally with existing Shares on issue. Shares issued upon the exercise of New Options will also rank equally with existing Shares on issue. Details on the rights and liabilities attaching to New Shares and New Options are set out in SECTION 7. 2.13 Renounceable Entitlements are renounceable. Section 2.7 sets ou