Speciality Metals International Limited Annual Report 2019

Page | 21 DIRECTORS’ REPORT S IGNIFICANT C HANGES Significant changes in the state of affairs of the Group for the financial year were as follows: (a) Increase in contributed equity of $4,378,166 resulting from: Date Shares $ Tranche 1 - Placement of 83,231,463 shares at $0.018 per share to institutional and sophisticated investors to fund the 100% acquisition Mt Carbine Quarries Pty Ltd which owns and operates the Mt Carbine Quarry and mining leases ML4867 and ML 4919 (refer ASX announcement dated 14 May 2019). 16-05-2019 83,231,463 1,498,166 Tranche 2 - Placement of 160,000,000 shares to institutional and sophisticated investors to fund the 100% acquisition of Mt Carbine Quarries Pty Ltd at $0.018 per share following approval by shareholders at a General Meeting held on 17 June 2019 (refer ASX announcement dated 14 May 2019). 26-06-2019 160,000,000 2,880,000 Sub-Total 4,378,166 Share issue costs (280,654) TOTAL 4,097,512 (b) On 14 May 2019, the Company executed a binding agreement for the acquisition of 100% of Mt Carbine Quarries Pty Ltd (MCQ), an entity that owns and operates the Mt Carbine Quarry and Mining Leases ML 4867 and ML 4919 as well entering into a Joint Venture with Cronimet Asia Pte Ltd for the development of the Mt Carbine Tailings Retreatment and Stockpile Projects. Production from the tailings retreatment is expected to commence during the 4 th quarter of 2019. (c) On 17 June 2019, the Company repealed its Constitution and adopted a new constitution in its place following approval by shareholders at a General Meeting held on the same date. (d) The Company announced on 27 June 2019 that the unincorporated Joint Venture between Speciality Metals and Cronimet Asia Pte Ltd for the commencement of development of the Mt Carbine Tailings Retreatment and Stockpile Projects had commenced. (e) Speciality Metals completed the 100% acquisition of Mt Carbine Quarries Pty Ltd on 28 June 2019 (refer ASX Announcement dated 2 July 2019). (f) On 12 August 2019 the Company appointment two new Directors to the Board of Speciality Metals following the acquisition of Mt Carbine Quarries Pty Ltd namely Mr Oliver Kleinhempel, a representative of Cronimet and Mr Yeo Zui Pei. Mr Roland Nice resigned as Director has part of the Board changes. The Directors are not aware of any other significant changes in the state of affairs of the Company occurring during the financial period, other than as disclosed in this report. M ATTERS S UBSEQUENT TO THE E ND OF THE F INANCIAL Y EAR At the date of this Directors’ Report, the Directors are not aware of any matter or circumstance that has arisen that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group in the financial year subsequent to 30 June 2019 other than: - On 2 July 2019 the Company announced that it had completed the acquisition of Mt Carbine Quarries Pty Ltd, an entity that owns and operates the Mt Carbine Quarry and holds Mining Leases ML 4867 and M 4919. The Company also advised that it would be undertaking a capital raise via a pro-rata non-renounceable shareholder entitlement offer to raise up to approximately $2.9 million. The offer entitles eligible shareholders to acquire 1 new share for every 5 existing shares held in Speciality Metals at $0.018 cents per share. The Offer was fully underwritten by Rymill Global Venture Ltd. - On 26 July 2019 the Company announced that its recent underwritten pro-rata non-renounceable 1 for 5 entitlement offer closed at 5.00 pm on 23 July 2019 with a total of 112,733,514 shares being placed raising $2,029,203. A further 46,888,236 shortfall shares totalling $843,988, remained after the close of the offer which were subscribed in full by Rymill Global Ventures Ltd as per the Underwriting Agreement. In addition, vesting conditions were met for 25,000,000 Performance Rights which were issued to Directors and identified in their respective Appendix 3Ys All shares were issued on 2 August 2019 (refer ASX Announcement “Appendix 3B and Cleansing Notice”).-