Pacific Bauxite : Prospectus

Pacific Bauxite Limited

(subject to Deed of Company Arrangement)

personal use only

ACN 112 914 459

PROSPECTUS

For the offer of 22,500,000 Shares at an issue price of $0.20 per Share, with free attaching Placement Options (each exercisable at $0.30 and expiring three

1. years from the date of issue) on the basis of one (1) Placement Option for every two (2) Shares issued, to raise $4,500,000 (before costs) (Offer).

The Offer comprises a priority offer to Eligible Shareholders of the Company as at the Priority Offer Record Date (Priority Offer) and an offer to the general public (Public Offer).

For

This Prospectus also contains ancillary offers of:

1. Vendor Shares to the Vendors (Vendor Offer);
2. Proponent Securities to Oceanic (and/or its nominee/s) (Proponent Offer);
3. Aurum Securities to Aurum (Aurum Offer);
4. Administrator Shares to the Administrators (Administrator Offer);
5. Conversion Securities to Convertible Note holders (Convertible Note Offer);
6. Director Shares to Peter Lewis (Director Offer);
7. Bellatrix Shares to Bellatrix (Bellatrix Offer);
8. Incentive Options to Directors (Incentive Offer); and
9. Advisor Options to Advisors (Advisor Offer), (collectively, the Ancillary Offers).

The Offer and the Ancillary Offers are collectively referred to throughout this Prospectus as the 'Offers'. Refer to Section 4 for further details on the Offers.

This is a re-compliance prospectus for the purposes of satisfying Chapters 1 and 2 of the Listing Rules and to satisfy ASX's requirements for re-quotation of Shares on the Official List, following the effectuation of the DOCA and a change to the scale of the Company's activities as a result of the Proposed Acquisitions and the Proposed Divestment.

IMPORTANT INFORMATION

This document is important and should be read in its entirety. If you do not understand it or if you have any questions about the Shares being offered under this Prospectus or any other matter, you should consult you professional advisers without delay. An investment in the securities offered by this Prospectus should be considered as highly speculative. Refer to Section 8 for a summary of the key risks associated with an investment in the Company.

Important Notices

onlyImportant Notices

This Prospectus is dated 7 February 2022 and was lodged with the ASIC on that date. The ASX, ASIC and its officers take no responsibility for the contents

f this Prospectus or the merits of the investment to which the Prospectus relates.

No Securities may be issued on the basis useof this Prospectus later than 13 months

after the date of this Prospectus.

It is important that investors read this Prospectus in its entirety and seek professional advice where necessary before deciding whether to invest. The securities the subject of this Prospectus should be considered highly speculative. The securities offered pursuant to this Prospectus carry no guarantee in respect of return of capital, return on investment,

personalpayment of dividends or the future value of the securities.

This Prospectus does not take into ccount the investment objectives, fi ancial, taxation or particular needs of any Applicant. Before making any i vestment in the Company, each Applicant should consider whether such an investment is appropriate to their particular needs and consider their individual risk profile for highly peculative investments, investment objectives and individual financial circumstances. Each Applicant should consult their professional advisers without delay. Some of the risk factors that should be considered by potential investors are outlined in Section 8.

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. You should be aware that this examination

Formay result in the identification of deficiencies in this Prospectus and, in those circumstances, any application that has been received may need to be dealt with in accordance with section 724 of the Corporations Act. Applications for securities under this Prospectus will not be processed until after the expiry of the Exposure Period. No preference will be conferred on applications lodged prior to the expiry of the Exposure Period.

Application will be made to ASX within seven days after the date of this Prospectus for Official Quotation of the Shares the subject of this Prospectus.

Persons wishing to apply for securities pursuant to the Offer must do so by using the Application Form accompanying this Prospectus either in paper form

or online form. Online Applications for securities under the Offer must be made by following the instructions at https://pbxoffer.thereachagency.com. The Corporations Act prohibits any person passing onto another person an Application Form unless it accompanies the complete and unaltered version of this Prospectus.

By completing an Application Form, you acknowledge that you have received and read this Prospectus and you have acted in accordance with the terms of the Offer detailed in this Prospectus.

No person is authorised to give any information or to make any representation in relation to the Offer which is not contained in this Prospectus. Any information or representation not so contained may not be relied upon as having been authorised by the Company or the Directors in relation to the Offer. You should only rely on information in this Prospectus.

Proposed Recapitalisation of the Company and Reinstatement to Official List of ASX

On 24 December 2019, the securities of the Company were suspended from official quotation on the Official List of the ASX. On the same date, the Company announced that the Administrators were appointed as Joint and Several Voluntary Administrators of the Company pursuant to Section 436A of the Corporations Act.

On 7 January 2020, the Administrators convened the first meeting of the Company's creditors pursuant to Section 436E of the Corporations Act. The purpose of the first creditors meeting was for the Administrators to provide an update on the voluntary administration of the Company and ratify their appointment.

On 18 June 2020, the Administrators convened a second meeting of creditors of the Company pursuant to Section 439A of the Corporations Act. The purpose of the second creditors meeting was to determine the future of the Company. At the second creditors meeting, the Company resolved that the DOCA proposal presented by First Guardian be accepted by the Company. The Administrators consented to be the deed administrators of the DOCA proposal presented by First Guardian. On 9 July 2020, the DOCA was executed by First Guardian and the Company.

Following multiple extensions granted to First Guardian to satisfy the conditions precedent required under their DOCA, on 16 June 2021 the Administrators advised the market that First Guardian had withdrawn from the DOCA. On 5 August 2021, a replacement proponent Oceanic presented to the Administrators a revised recapitalisation proposal which was accepted by creditors on 23 August 2021.

On 6 September 2021, the Administrators announced that the Company's creditors resolved to accept the variation to the DOCA and the recapitalisation proposal. The DOCA variation was executed on

6 September 2021 and control of the Company passed to the new board of Directors with the Administrators retaining supervisory powers. Refer to Section 9.1 for further details on the Oceanic DOCA.

This Prospectus has been prepared by the Directors and the Administrators are not responsible for its contents. Accordingly, the Administrators and their agents and employees do not make any representation or warranty (express or implied) as to the accuracy, reasonableness or completeness of the information contained in this Prospectus and do not accept responsibility or liability for the accuracy of any information, included, or any failure to include information in this Prospectus.

Change in scale of activities and Re-Compliance with Chapters 1 and 2 of the Listing Rules

Prior to the appointment of the Administrators as referred to above, the Company focused solely on bauxite exploration. The Company currently holds an interest in two projects prospective for bauxite and other minerals comprising the Darling Ranges Project and the Nendo Bauxite Project.

A condition of the Oceanic DOCA is for the Company's interest in the Nendo Bauxite Project to be divested. For further information on the Proposed Divestment refer to Section 5.3.

As announced to ASX on 31 December 2021, the Company has entered into the Proposed Acquisition Agreements to acquire 100% of the issued capital of Western Yilgarn and AAM Resources. For further information on Western Yilgarn and AAM Resources and the Proposed Acquisition, refer to Sections 5.4 and 9.3.

PACIFIC BAUXITE LIMITED (Subject to a Deed Of Company Arrangement)

Prospectus

For personal use only

The Proposed Divestment and the Proposed Acquisitions will result in a significant change to the scale of the Company's activities, requiring Shareholder approval under Chapter 11 of the Listing Rules.

At the Company's Annual General Meeting Shareholder approval was obtained for, amongst other things, the issue of Securities pursuant to the Offers the subject of this Prospectus (which includes the issue of Vendor Shares in consideration for the Proposed Acquisition) and the change in the scale of the Company's activities.

The Company must also comply with ASX requirements for re-quotation of its Shares on the Official List, which includes re-complying with Chapters 1 and 2 of the Listing Rules. This Prospectus is issued to assist the Company to meet these requirements and to facilitate the Offers. The Offers under this Prospectus are conditional on the satisfaction of certain conditions. Refer to Section 4.3 for further details.

The Company's Securities have been suspended from official quotation since 24 December 2019 and will continue to be suspended until the Company satisfies the requirements of Chapters 1 and 2 of the Listing Rules.

There is a risk that the Company may not be able to meet the requirements of ASX for re-quotation of its Shares on the Official List. In the event that the conditions to the Offer are not satisfied or the Company does not receive conditional approval for re-quotation of its Shares on the Official List, on terms which the Board reasonably considers are capable of satisfaction, then the Company will not proceed with the Offer, the Ancillary Offers, the Proposed Divestment and the Proposed Acquisitions and will repay all Application Monies (without interest) in accordance with the provisions of the Corporations Act.

Conditional Offers

The Offers contained in this Prospectus are subject to and conditional on certain events occurring. Refer to Section 4.3 for further information.

Post-Consolidation basis

All securities offered under this Prospectus are described and offered on a post-Consolidation basis. On 31 January 2022, Shareholders of the Company approved a consolidation of the issued capital of the Company on a 1 for 50 basis (Consolidation). The record date of the Consolidation was 1 February 2022 and the Consolidation is in the process of being completed.

Unless otherwise stated, all references to Securities of the Company as set out in this Prospectus are on the basis that the Consolidation has completed and has taken effect.

ASX Guidance Note 33 - Removal of long-term suspended entities

Pursuant to ASX policy contained in ASX Guidance Note 33, an entity that has been in continuous suspension for more than 2 years will be automatically removed from the Official List on the second anniversary of its suspension date if it is still suspended.

The Company has now been in continuous suspension for a period of more than 2 years (having been initially suspended on 24 December 2019 when it was placed into voluntary administration).

ASX may agree to a short extension of this deadline if the Company can demonstrate to ASX's satisfaction that it is in the final stages of implementing a transaction that will lead to the resumption of trading in its Shares within a reasonable period. For these purposes, ASX considers "final stages" to mean:

1. having announced the transaction to market;
2. having signed definitive legal agreements for the transaction (including for any financing required in respect of the transaction);
3. if the transaction requires a prospectus or product disclosure statement to be lodged with ASIC, having lodged that document with ASIC; and
4. if the transaction requires security holder approval, having obtained that approval.

ASX has granted a short extension of the Company's automatic removal date until 2 May 2022. The Company must be reinstated before commencement of trading on this date to avoid automatic removal from the official list of the ASX. ASX have advised that no further extensions will be considered or granted. Investors should be aware that there is no guarantee that the Company will be able to achieve reinstatement to trading by ASX's removal deadline.

Web Site - Electronic Prospectus

A copy of this Prospectus can be downloaded from the website of the Company at www.pacificbauxite.com or at https://pbxoffer.thereachagency. com. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must only access

this Prospectus from within Australia.

Persons having received a copy of this Prospectus in its electronic form may obtain a paper copy of this Prospectus and any supplementary prospectus and a paper version of the Application Form (free of charge) by contacting the Company at [phone] between 9.00am and 5.00pm (WST) Monday to Friday (excluding public holidays).

A copy of this Prospectus is available for inspection at the registered office of the Company at 2A/300 Fitzgerald Street, North Perth WA 6006 during normal business hours.

Applications for securities under the Offer will only be accepted by submitting an Application Form which accompanies this Prospectus either in paper form or online form. The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to, or accompanied by, the complete unaltered version of the Prospectus. If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus with the relevant online Application Form.

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 Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

Overseas Applicants

The offer of securities made pursuant to this Prospectus is not made to persons to whom, or places in which, it would be unlawful to make such an offer of securities. No action has been taken to register or qualify the Offer under this Prospectus or otherwise permit the Offer to be made in any jurisdiction outside of Australia. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law in those jurisdictions and therefore persons who come into possession of this Prospectus should seek legal advice on, and observe, any of those restrictions. Failure to comply with these restrictions may violate securities laws.

It is the responsibility of any overseas Applicant to ensure compliance with all laws of any country relevant to his or her Application. The return of a duly completed Application Form will be taken by the Company to constitute a representation and warranty that there has been no breach of such law and that all necessary approvals and consents have been obtained.

1

Important Notices

onlyContinuous disclosure obligations The Company is a "disclosing entity" (as defined in Section 111AC of the Corporations Act) and, as such, is subject to regular reporting and disclosure

bligations. Specifically, like all listed

c mpanies, the Company is required to c ntinuously disclose any information it has to the market which a reasonable would expect to have a material effect on

usethe price or the value of the Company's s curities.

Price sensitive information will be publicly released through ASX before it is disclosed to Shareholders and market participants. Distribution of other information to Shareholders and market participants will also be managed through disclosure to ASX. In addition, the Company will post this information on its website after the ASX confirms an

personalannouncement has been made, with the im of making the information readily ccessible to the widest audience.

Forward-looking statements

This Prospectus may contain forward- looking statements which are identified by words such as 'may', 'should', 'will', 'expect', 'anticipate', 'believes', 'estimate', 'intend', 'scheduled' or 'continue' or

ther similar words. Such statements and information are subject to risks and uncertainties and a number of

a sumptions, which may cause the actual esults or events to differ materially

f om the expectations described in the forward-looking statements or information.

While the Company considers the expectations reflected in any forward- looking statements or information in this Prospectus are reasonable, no assurance can be given that such expectations will prove to be correct. The risk factors

Foroutlined in Section 8, as well as other matters not yet known to the Company or not currently considered material to the Company, may cause actual events to be materially different from those expressed, implied or projected in any forward- looking statements or information. Any forward-looking statement or information contained in this Prospectus is qualified by this cautionary statement.

Privacy statement

If you complete an Application for securities, you will be providing personal information to the Company. The Company will collect, hold and use that information to assess your Application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder.

The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your securities in the context of takeovers; regulatory bodies, including the Australian Taxation Office; authorised securities brokers; print service providers; mail houses and the Share Registry.

You can access, correct and update the personal information that the Company holds about you. If you wish to do so, please contact the Share Registry at the relevant contact number set out in the Corporate Directory. Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the Application Form, the Company may not be able to accept or process your Application.

Photographs and diagrams

Photographs and diagrams used in this Prospectus that do not have descriptions are for illustration only and should not be interpreted to mean that any person shown in them endorses this Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in charts, graphs and tables is based on information available as at the date of this Prospectus.

Competent persons statement

The information in this Prospectus that relates to Exploration Results for the Company's projects is based on and fairly represents information and supporting documents prepared by George Karageorge who is a member of the Australasian Institute of Mining and Metallurgy (AusIMM) who fairly represents this information.

George Karageorge is a consultant to the Company who has sufficient experience of relevance to the styles of mineralisation and the types of deposit under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 edition

of the "JORC Australian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves". George Karageorge consents to the inclusion in this Prospectus of the matters based on information in the form and context in which it appears.

Company Website

The Company maintains a website at www.pacificbauxite.com. Any references to documents included on the Company's website are for convenience only, and information contained in or otherwise accessible through this or a related website is not a part of this Prospectus.

Definitions

A number of defined terms are used in this Prospectus. Unless the contrary intention appears, the context requires otherwise or words are defined in Section 12, words and phrases in this Prospectus have the same meaning and interpretation as in the Corporations Act or Listing Rules.

Enquiries

If you are in any doubt as to how to deal with any of the matters raised in this Prospectus, you should consult your broker or legal, financial or other professional adviser without delay. Should you have any questions about the Offer or how to accept the Offer, please call the Company at [phone].

2 PACIFIC BAUXITE LIMITED (Subject to a Deed Of Company Arrangement)

Prospectus

For personal use only

Corporate Directory

Directors

Peter Lewis

Non-Executive Chairman

Peter Michael

Non-Executive Director

John Traicos

Non-Executive Director

Joint Company Secretaries

Melissa Chapman

Catherine Grant-Edwards

Registered Office and Principal Place of Business

2A/300 Fitzgerald Street North Perth WA 6006

+ 61 8 6166 9107

Company Website

www.pacificbauxite.com

ASX Code

PBX

Administrators*

Richard Albarran and Cameron Shaw of Hall Chadwick Chartered Accountants

Level 11, 77 St Georges Terrace

Perth WA 6000

Investigating Accountant

Moore Australia Corporate Finance (WA) Pty Ltd

Level 15, Exchange Tower

2 The Esplanade

Perth WA 6000

Independent Geologist

SRK Consulting (Australasia) Pty Ltd

Level 3, 18-32 Parliament Place

West Perth WA 6005

Independent Solicitor

Hopgood Ganim

Level 27, Allendale Square

77 St Georges Terrace

Perth WA 6000

Lawyers

Larri Legal

Suite 6, 152 High Street

Fremantle WA 6160

Auditors*

Rothsay Auditing

Level 1, Lincoln House

4 Ventnor Avenue

West Perth WA 6005

Share Registry*

Computershare Investor Services Pty Limited

Level 11, 172 St Georges Terrace

Perth WA 6000

* These entities are included for information purposes only. They have not been involved in the preparation of this Prospectus.

3