Nelson Resources : Supplementary Prospectus

For personal use only

Nelson Resources Limited

ACN 127 620 482

SUPPLEMENTARY PROSPECTUS

Important Information

This is a supplementary prospectus (Supplementary Prospectus) intended to be read with the prospectus dated 24 January 2022 (Prospectus) issued by Nelson Resources Limited (Company).

This Supplementary Prospectus is dated 21 February 2022 and was lodged with the Australian Securities and Investments Commission (ASIC) on that day. Neither ASIC nor ASX (and their respective officers) take any responsibility as to the contents of this Supplementary Prospectus.

To the extent of any inconsistency between this Supplementary Prospectus and the Prospectus, this Supplementary Prospectus will prevail. Unless otherwise indicated, terms defined and used in the Prospectus have the same meaning in this Supplementary Prospectus.

This is an important document and should be read in its entirety. If you do not understand it you should consult your professional advisors without delay.

1. ISSUE OF FURTHER SECURITIES UNDER THE PROSPECTUS
   The Company advises that, as a result of excess demand under the Shortfall Offer it has agreed to issue an additional 22,283,122 New Shares and 11,141,561 attaching New Options under the Prospectus to raise an additional $557,078 (Follow-onPlacement). Additional funds raised will be used for the purposes set out in this Supplementary Prospectus.
   The Follow-on Placement is made without Shareholder approval, and the securities will be issued under the Company's existing capacity under Listing Rule 7.1.
   The New Options will be listed under the ASX code NESO.
   Attached to this Supplementary Prospectus is an announcement made by the Company to the ASX on 18 February 2022.
   The Company now closes the Shortfall Offer and no further offers will be made under the Prospectus.
2. AMENDMENTS TO PROSPECTUS
   The following sections of the Prospectus are amended as follows:

JA:00179867-007

Page 1

For personal use only

2.1 Capital structure

Sections 2, 4 and 5.4 of the Prospectus are amended to reflect the current number of securities on issue:

Shares on issue prior to the Offer	194,292,195
New Shares issued under the Prospectus	100,000,000
Total Shares on issue	294,292,280
Total convertible securities on issue prior to the Offer	72,156,339
New Options issued under the Prospectus	50,000,000
Total convertible securities on issue following the Offer	122,156,339
Amount raised under the Prospectus (before costs)	$2,500,000

The number of Shares and NESO Options issued is subject to rounding.

The above table excludes 2,500,000 Underwriter Options issued to the Underwriter in part satisfaction of its fees. See section 8.4 of the Prospectus for further details on the fees to be paid to the Underwriter.

2.2 Use of funds

Sections 4 and 5.2 of the Prospectus are amended to reflect the increased amount raised:

Use of funds (approx.)	Amount (A$)
AC Drilling	350,000
RC Drilling	330,000
Assays	150,000
Geophysics Surveys	120,000
Exploration Other	342,852
Working Capital	944,851
Costs of the Offer	262,307
Total use of funds	2,500,000

JA:00179867-007

Page 2

For personal use only

2.3 Statement of financial position

Set out in the annexure to this Supplementary Prospectus is the unaudited Statement of Financial Position for the Company, as at 31 December 2021 and on the basis of the following assumptions:

1. the Offer was effective on 31 December 2021;
2. no further Shares are issued other than all Shares offered under this Prospectus (the Offer and Follow-on Placement);
3. $2,500,000 is received under the Offers; and
4. (cash) costs of the Offer are $262,307.

The pro-forma Statement of Financial Position 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 set out in the annexure to this Supplementary Prospectus. The 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.

2.4 Dilution

Shareholders who did not participate in the Offer will have their holdings diluted. Following is a table which sets out the dilutionary effect on the basis of the full amount raised under the Prospectus and assuming no further Shares are issued or Options exercised:

	Holding at		Holding following the Offer if
Holder	Record Date	Entitlement	no Entitlement taken up
	Number	%		Number	%
1	14,547	0.007	4,156	14,547	0.005
2	72,737	0.037	20,782	72,737	0.025
3	145,473	0.075	41,564	145,473	0.049
4	1,454,732	0.749	415,638	1,454,732	0.494

2.5 Consents

Each of the persons referred to in this section:

1. has given and has not, before the date of lodgement of this Supplementary Prospectus with ASIC withdrawn their written consent:
2. 1. to be named in the Supplementary Prospectus in the form and context which it is named; and

JA:00179867-007

Page 3

For personal use only

1. 1. where applicable, to the inclusion in this Supplementary Prospectus of the statement(s) and/or reports (if any) by that person in the form and context in which it appears in this Supplementary Prospectus;
2. has not caused or authorised the issue of this Supplementary Prospectus;
3. has not made any statement in this Supplementary Prospectus or any statement on which a statement in this Supplementary Prospectus is based, other than specified below;
4. to the maximum extent permitted by law, expressly disclaims all liability in respect of, makes no representation regarding, and takes no responsibility for, any part of this Supplementary Prospectus, other than the references to their name and the statement(s) and/or report(s) (if any) specified below and included in this Supplementary Prospectus with the consent of that person.

Name	Role
Mahe Capital Pty Limited	Lead Manager and Underwriter

2.6 Expenses of the Offer

The total (cash) expenses of the Offer excluding GST are estimated to be $256,017, consisting of the following:

Cost1	A$
Legal fees	10,000
ASX and ASIC fees	22,307
Capital raising fees2	210,000
Printing, postage and other expenses	20,000
Total	262,307

1. These expenses have or will be paid by the Company.
2. The Company has also agreed to issue 2,500,000 New Options to the Underwriter in part satisfaction of its fees. See section 8.4 of the Prospectus for details.

The Directors do not consider the circumstances disclosed in this Supplementary Prospectus to be materially adverse from the point of view of an investor, and no withdrawal rights will be offered to investors.

This Supplementary 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 the lodgement of this Supplementary Prospectus with ASIC.

JA:00179867-007

Page 4

For personal use only

Dated: 21 February 2022

By Mr Adam Schofield Executive Director

On behalf of Nelson Resources Limited

JA:00179867-007

Page 5