of Suites 3-4, 136 Main Street, Osborne Park WA 6017
Circular to Shareholders including NOTICE OF GENERAL MEETING EXPLANATORY STATEMENT PROXY FORM General Meeting of Fairstar Resources Limited to be held at the Hyatt Hotel, 99 Adelaide Terrace, Perth WA 6000 on Wednesday, the 9th day of May 2012 commencing at 2.00 pm (WST).This document should be read in its entirety. If after reading
this Circular to Shareholders, you have any questions or doubts as to how you should vote, you should contact your stockbroker, solicitor, accountant or professional adviser.
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FAIRSTAR RESOURCES LIMITED ACN 115 157 689 Corporate Directory Directors Kevin J. Robertson Managing DirectorCon Markopoulos Director - Non-Executive
Harold J. Paiker Director - Non-Executive
Secretary Alan Thomas Head Office Suites 3-4136 Main Street
OSBORNE PARK
WESTERN AUSTRALIA 6017
Phone: (08) 9242 5111
Fax: (08) 9242 5677
Website: www.fairstarresources.com
Registered Office Suites 3-4136 Main Street
OSBORNE PARK
WESTERN AUSTRALIA 6017
Auditors Stantons International Audit and Consulting Pty Ltd1 Havelock Street
WEST PERTH
WESTERN AUSTRALIA 6005
Lawyers Lawton GillonLevel 11
16 St Georges Terrace
PERTH
WESTERN AUSTRALIA 6000
Share Registry Advanced Share Registry Services150 Stirling Highway
NEDLANDS
WESTERN AUSTRALIA 6009
ASX Code FAS FASO2
RG 12/N O M 09 MAY AMENDED.DOC FC
FAIRSTAR RESOURCES LIMITED ACN 115 157 689 Notice of General Meeting
NOTICE IS GIVEN THAT a General Meeting of the Company will be
held at the Hyatt Hotel,
99 Adelaide Terrace, Perth WA 6000 on Wednesday, the
9th day of May 2012 commencing at
2.00 pm (WST).
Information on the proposals to which the resolutions set out
below relates is contained in the
Explanatory Statement which accompanies and forms part of
this Notice of Meeting.
BUSINESS OF THE MEETING ORDINARY BUSINESS
RESOLUTION
1. RESOLUTION 1 - APPROVAL TO ISSUE SHARES
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
"That for the purpose of Listing Rule 7.1 of the Listing Rules of the ASX
and for all other purposes the Company be authorised to issue up to
300,000,000 fully paid ordinary Shares at an issue price of not less than 80 per cent of the average market price of the fully paid ordinary Shares of the Company where the average market price is calculated over the last 5 days on which sales in the Company's Shares were recorded before the day on which the issue is made and otherwise on the terms and conditions
as set out in the Explanatory Statement."
Voting Exclusion
In accordance with Listing Rule 7.3.8, any votes cast on Resolution 1 by or on behalf of a person who may participate in the issue and a person who might obtain a benefit, except a benefit solely in the capacity as a holder of Shares, if Resolution 1 is passed, and any of the respective associates of such persons, will be disregarded.
However, the Company need not disregard a vote if:
• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.
2. RESOLUTION 2 - RATIFICATION OF ISSUE OF SECURITIESTo consider and, if thought fit, pass with or without amendment the following resolution as an ordinary resolution:
"That for the purposes of Listing Rule 7.4 of the Listing Rules of the ASX
and for all other purposes, the issue of or agreement to issue
80,393,156 Shares on the dates and on the terms set in the Explanatory
Statement be subsequently approved."
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Voting Exclusion
In accordance with Listing Rule 7.5.6, any votes cast on Resolution 2 by or on behalf of a person who participated in the placement and any of the respective associates of such persons, will be disregarded.
However, the Company need not disregard a vote if:
• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.
3. RESOLUTION 3 - APPROVAL TO ISSUE SHARES TO HOLDER OF CONVERTIBLE NOTETo consider and, if thought fit, pass the following resolution as an ordinary resolution:
"That for the purposes of Listing Rule 7.1 of the Listing Rules of the ASX
and for all other purposes, the Company be authorised to issue up to
14,285,715 fully paid ordinary shares at an issue price of 7 cents per share to Kelvin Park Pty Ltd in the event that Kelvin Park Pty Ltd elects to convert its debt of $1,000,000.00 to shares in the Company."
Voting Exclusion
In accordance with Listing Rule 7.3.8, any votes cast on Resolution 3 by or on behalf of a person who may participate in the issue and a person who might obtain a benefit, except a benefit solely in the capacity as a holder of Shares, if Resolution 3 is passed, and any of the respective associates of such persons, will be disregarded.
However, the Company need not disregard a vote if:
• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.
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"Snap-Shot" Time
The Corporations Act permits the Company to specify a time,
not more than 48 hours before the meeting, at which a
"snap-shot" of Shareholders will be taken for the purposes of
determining Shareholder entitlements to vote at the
meeting.
The Company's directors have determined that all Shares of
the Company that are quoted on ASX at 5.00 pm WST, 7 May 2012
shall, for the purposes of determining voting entitlements at
the General Meeting, be taken to be held by the persons
registered as holding the Shares at that time.
PROXIES
Please note that:
(a) a member of the Company entitled to attend and vote at
the General Meeting is entitled to appoint a proxy;
(b) a proxy need not be a member of the Company; and
(c) a member of the Company entitled to cast two or more
votes may appoint two proxies and may specify the proportion
or number of votes each proxy is appointed to exercise, but
where the proportion is not specified each proxy may exercise
half of the votes.
The enclosed proxy form provides further details on
appointing proxies and lodging proxy forms.
DATED: 13 April 2012
BY ORDER OF THE BOARD
Alan Thomas Company Secretary Fairstar Resources Limited
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EXPLANATORY STATEMENTThis Explanatory Statement is an important document. You should read the document. If you have any questions regarding the matters set out in this Explanatory Statement or the preceding Notice of Meeting, you should contact your stockbroker or other professional adviser.
General Information.
This Explanatory Statement has been prepared for the
information of Shareholders of Fairstar Resources in
connection with the business to be conducted at the General
Meeting to be held at the Hyatt Hotel, 99 Adelaide Terrace,
Perth, Western Australia on the date set out in the notice of
meeting.
The purpose of this Explanatory Statement is to provide
Shareholders with information which is reasonably required by
Shareholders to decide how to vote upon the resolution. This
Explanatory Statement should be read in conjunction with the
accompanying Notice of General Meeting.
The purpose of this Explanatory Statement is to provide
Shareholders with all information known to the Company which
is material to a decision on how to vote on the resolutions
in the accompanying Notice of General Meeting. This
Explanatory Statement should be read in conjunction with the
Notice of General Meeting. Capitalised terms in this
Explanatory Statement are defined in the Glossary.
Background for Resolution 1
Proposed subsequent shareholder approval
As at the date of this notice FAS is in negotiations with a
number of potential investors with a view to securing a
cornerstone shareholder. This will assist the Company with
funds needed to progress mine development activities at its
Steeple Hill Iron Project.
Listing Rule 7.1 imposes a 15 per cent cap on the number of
new securities that a company can issue over any 12 month
period without shareholder approval. Listing Rule 7.1 allows
a company to seek the approval of shareholders to an issue of
securities which would exceed the 15 per cent annual cap
prescribed by it.
To give the Company flexibility and the capacity to issue
Shares to a potential new shareholder within 3 months of the
date of this meeting, the Company seeks approval of
shareholders to enable up to 300,000,000 fully paid ordinary
Shares to be issued at not less than 80 per cent of the
market price of the Company's Shares calculated over the last
5 days on which sales in the Shares were recorded before the
day on which the issue is made.
The Company has not identified any allottees of the proposed
Shares and does not have any arrangements in place to issue
the Shares.
Effect of proposal
If Resolution 1 is approved, the Company will have the
capacity to issue up to 300,000,000 fully paid ordinary
Shares to various allottees as per the purpose stated above
The funds raised will be used for general working capital
purposes to assist in the development of the Company's
Steeple Hill Iron Project.
For the purposes of Listing Rule 7.3 the Company provides the
following information:
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(a) the maximum number of securities to be issued is
300,000,000 fully paid Shares;
(b) the Shares will be issued within 3 months of the date of
this meeting or such later date as approved by ASX. It is
intended that the Shares will be allotted progressively;
(c) the issue price of the Shares is to be not less than 80
per cent of the market price of the Company's Shares
calculated over the last 5 days on which sales in the Shares
were recorded before the day on which the issue is made;
(d) the Shares will be issued to various allottees who are
yet to be determined, however it is intended that the
allottees will be sophisticated or other exempt investors to
whom the Shares can be offered without disclosure and in any
event will not be directors, their associates or related
parties;
(e) these Shares will be issued on the same terms and
conditions as the Company's existing ordinary Shares;
(f) the amount raised from the issue of the Shares is not
able to be determined at this time, however the amount raised
will be used for general working capital of the Company,
including the advancement of the Company's Steeple Hill Iron
Project.
Recommendation
The Directors unanimously recommend that Shareholders vote in favour of Resolution 1.
RESOLUTION 2 - RATIFICATION OF ISSUE OF SECURITIESProposed subsequent shareholder approval
Listing Rule 7.1 imposes a 15% cap on the number of new securities that a company can issue over any 12 month period without shareholder approval. ASX Listing Rule 7.4 allows a company to seek the subsequent approval of shareholders for an issue of securities. Shareholder approval of securities issued under the Placement refreshes the Company's 15% annual capacity to raise additional capital without the need to obtain shareholder approval. This provides additional funding flexibility for the Company.
Effect of the proposal
If Resolution 2 is approved, the Company will not have to
count the securities issued under the Placement towards the
15% limit of securities that may be issued by the Company in
any 12 month period under Listing Rule 7.1. Accordingly, if
Resolution 2 is passed, the Company's annual capacity to
issue capital within the 15% limit under Listing Rule 7.1 (in
respect of the Placement, being 80,393,156 Shares) will be
refreshed. The Directors of the Company consider it prudent
to maintain such funding flexibility as part of the Company's
capital management strategy.
If Resolution 2 is not approved, it will have no effect upon
the 80,393,156 Shares issued or agreed to be issued. Those
Shares have already been either issued and quoted on the ASX
or the Company has agreed to issue the Shares. However the
Shares would be counted towards the
15% of additional securities that may be issued by the
Company in any twelve month period under
Listing Rule 7.1. The Shares which have been issued were
issued to the following:
Allottee | No of Shares | Issue price | Date issued |
Gurney Capital Nominees Pty Ltd | 6,032,218 | 0.0332 | 25.10.11 |
Gurney Capital Nominees Pty Ltd | 6,748,060 | .0.0296 | 15.11.11 |
Donald Brady | 1,499,569 | 0.0333 | 15.11.11 |
PCB Holdings | 4,322,707 | 0.0326 | 15.11.11 |
Kim Buswell | 1,908,390 | 0.0320 | 15.11.11 |
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Allottee | No of Shares | Issue price | Date issued |
Gurney Capital Nominees Pty Ltd | 7,576,870 | 0.0330 | 25.11.11 |
Goldlaw | 2,424,599 | 0.0330 | 25.11.11 |
Joel Terrace Pty Ltd | 2,960,118 | 0.0383 | 1.12.11 |
Kelvin Park Pty Ltd | 5,920,236 | 0.0383 | 1.12.11 |
Brian Manning | 347,827 | 0.0383 | 5.12.11 |
Gurney Capital Nominees Pty Ltd | 10,271,892 | 0.0292 | 21.12.11 |
Gurney Capital Nominees Pty Ltd | 3,762,530 | 0.0266 | 3.1.12 |
Gurney Capital Nominees Pty Ltd | 3,815,847 | 0.0262 | 23.1.12 |
Gurney Capital Nominees Pty Ltd | 6,836,523 | 0.0366 | 28.2.12 |
Gurney Capital Nominees Pty Ltd | 7,597,692 | 0.0329 | 9.3.12 |
Gurney Capital Nominees Pty Ltd | 8,368,078 | 0.0299 | 23.3.12 |
TOTAL No OF SHARES | 80,393,156 |
Use of funds raised
The funds raised from the Placement were used for general
working capital purposes.
The Shares were issued on the same terms and conditions as
the Company's existing ordinary
Shares.
Recommendation
In order to ensure that the Company has adequate funding flexibility, the Directors unanimously recommend that Shareholders vote in favour of Resolution 2.
RESOLUTION 3 - APPROVAL TO ISSUE SHARES TO HOLDER OF CONVERTIBLE NOTEBackground for Resolution 3
The Company entered into a Convertible Note with Kelvin Park
Pty Ltd on 13 February 2012 whereby Kelvin Park advanced the
sum of $1,000,000 to the Company. Kelvin Park has the right
to convert the debt, or any part thereof, to shares in the
Company at an exercise price of 7 cents, which means the
maximum number of shares the Company may be obliged to issue
to Kelvin Park is 14,285,714.
The other terms of the Convertible Note Agreement are as
follows:
(a) Interest is payable on the sum of $1,000,000 at the rate
of 12.5 per cent per annum to be paid quarterly in arrears.
At the election of Kelvin Park Pty Ltd the interest may be
satisfied through the issue of shares in Fairstar Resources
at an issue price of 3 cents. The maximum number of shares
which may be issued in satisfaction of the interest component
is 4,166,667, which shares will if necessary be issued from
the Company's placement capacity.
(b) The term of the convertible note expires 31 January
2013.
The Company seeks approval to issue the shares in
anticipation of Kelvin Park electing to convert the debt to
equity so the issue of the shares does not count towards the
Company's 15 per cent placement capacity.
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For the purposes of Listing Rule 7.3 the Company provides the
following information: (a) the maximum number of securities
to be issued is 14,285,714;
(b) the Shares will be issued within 3 months of the date of
this meeting or such later date as approved by ASX. It is
intended that the Shares will be allotted progressively;
(c) the shares will be issued when Kelvin Park issues a
notice to the Company requiring the allotment of the
shares;
(d) the issue price of the shares will be 7 cents per share;
(e) the shares will be allotted to Kelvin Park Pty Ltd;
(f) the shares will be issued on the same terms and
conditions of the Company's existing ordinary shares;
(g) no funds will be raised from the issue of the shares as
the Company has already received the sum of $1,000,000 from
Kelvin Park Pty Ltd.
Recommendation
The Directors unanimously recommend the shareholders vote in favour of Resolution 3.
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In this Notice of Meeting and Explanatory Statement, the following terms have the following unless the context otherwise requires:
DEFINITIONS
"ASIC" means the Australian Securities & Investments Commission;
"ASX" means ASX Limited (ACN 008 624 691);
"Board" means the Directors of the Company from time to time;
"Business Day" has the meaning ascribed to that term by the Listing Rules; "Company" means Fairstar Resources Limited (ACN 115 157 689); "Directors" means each of the persons who acts as directors of the Company; "Listing Rules" means the official listing rules of ASX;
"Meeting" and "Shareholders' Meeting" means the meeting of Shareholders convened by the
Notice;
"Notice" means the notice of meeting to which this Explanatory Statement is attached;
"Shares" means ordinary fully paid Shares in the capital of the Company and "Shareholders"
has a corresponding meaning;
"WST" means western standard Australian time.
NOTES
A shareholder who is entitled to attend and vote at a meeting of shareholders is entitled to appoint not more than two proxies. Where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the shareholder's voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half of the votes. A proxy need not be a shareholder of the company.
Where a voting exclusion applies, the company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions of the proxy form or it is cast by a person chairing the meeting as proxy for person who is entitled to vote in accordance with the direction of the proxy form to vote as the proxy decides. The directors of the company have set a snapshot date to determine the identity of those entitled to attend and vote at the meeting. The snapshot date is stated above.
A proxy form is attached. If required, it should be completed, signed and returned in accordance with the proxy instructions on that form. To be effective, the proxy form (and any power of attorney) must be lodged at the registered office of the company not less than 48 hours before the time of holding the meeting. The proxy may be lodged by facsimile transmission to Advanced Share Registry Services facsimile number:- (08) 9389 7871.
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