Announcement PDF PINNACLE MINERALS LIMITED ACN 655 033 677 NOTICE OF ANNUAL GENERAL MEETING Notice is given that the Meeting will be held at: TIME: 12:00pm (WST) DATE: 27 November 2024 PLACE: Suite 6, Level 1/389 Oxford Street MOUNT HAWTHORN WA 6016 The business of the Meeting affects your shareholding and your vote is important. This Notice should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting. The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 12:00pm (WST) on 25 November 2024. BUSINESS OF THE MEETING AGENDA 1. FINANCIAL STATEMENTS AND REPORTS To receive and consider the annual financial report of the Company for the financial year ended 30 June 2024 together with the declaration of the Directors, the Director’s report, the Remuneration Report and the auditor’s report. 2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution: “That, for the purposes of section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial year ended 30 June 2024.” Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company. 3. RESOLUTION 2 – RE-ELECTION OF LINCOLN LIU To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution: “That, for the purpose of clause 14.2 of the Constitution, Listing Rule 14.5 and for all other purposes, Lincoln Liu, a Director, retires by rotation, and being eligible, is reelected as a Director.” 4. RESOLUTION 3 – APPROVAL OF 7.1A MANDATE To consider and, if thought fit, to pass the following resolution as a special resolution: “That, for the purposes of Listing Rule 7.1A and for all other purposes, approval is given for the Company to issue up to that number of Equity Securities equal to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Statement.” 5. RESOLUTION 4 – APPROVAL TO ISSUE INCENTIVE PERFORMANCE RIGHTS TO WILLIAM WITHAM To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 828,000 Class A Performance Rights, 621,000 Class B Performance Rights and 621,000 Class C Performance Rights to William Witham (or his nominee(s)) on the terms and conditions set out in the Explanatory Statement.” 6. RESOLUTION 5 – APPROVAL TO ISSUE INCENTIVE PERFORMANCE RIGHTS TO STEPHEN ROSS To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 552,000 Class A Performance Rights, 414,000 Class B Performance Rights and 414,000 Class C Performance Rights to Stephen Ross (or his nominee(s)) on the terms and conditions set out in the Explanatory Statement.” 5619-03/3545964_10 1 7. RESOLUTION 6 – APPROVAL TO ISSUE INCENTIVE PERFORMANCE RIGHTS TO LINCOLN LIU To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue to issue 276,000 Class A Performance Rights, 207,000 Class B Performance Rights and 207,000 Class C Performance Rights to Lincoln Liu (or his nominee(s)) on the terms and conditions set out in the Explanatory Statement.” 8. RESOLUTION 7 – RENEWAL OF PROPORTIONAL TAKEOVER PROVISIONS IN THE CONSTITUTION To consider and, if thought fit, to pass the following resolution as a special resolution: “That, for the purposes of sections 136(2) and 648G of the Corporations Act and for all other purposes, approval is given for the Company to modify its existing Constitution by renewing clause 36 for a period of three years from the date of approval of this Resolution.” 2 Voting Prohibition Statements Resolution 1 – Adoption of Remuneration Report Resolution 4 – Issue of Incentive Performance Rights to William Witham Resolution 5 – Issue of Incentive Performance Rights to Stephen Ross Resolution 6 – Issue of Incentive Performance Rights to Lincoln Liu A vote on this Resolution must not be cast (in any capacity) by or on behalf of either of the following persons: (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or (b) a Closely Related Party of such a member. However, a person (the voter) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either: (a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or (b) the voter is the Chair and the appointment of the Chair as proxy: (i) does not specify the way the proxy is to vote on this Resolution; and (ii) expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 4 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 4 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 4 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel. In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 5 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 5 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 5 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel. In accordance with section 224 of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a related party of the Company to whom the Resolution would permit a financial benefit to be given, or an associate of such a related party (Resolution 6 Excluded Party). However, the above prohibition does not apply if the vote is cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution and it is not cast on behalf of a Resolution 6 Excluded Party. In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if: (a) the proxy is either: (i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and (b) the appointment does not specify the way the proxy is to vote on this Resolution. Provided the Chair is not a Resolution 6 Excluded Party, the above prohibition does not apply if: (a) the proxy is the Chair; and 3 (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel. Voting Exclusion Statements In accordance with Listing Rule 14.11, the Company will disregard any votes cast in favour of the Resolution set out below by or on behalf of the following persons: Resolution 4 – Issue of Incentive Performance Rights to William Witham Resolution 5 – Issue of Incentive Performance Rights to Stephen Ross Resolution 6 – Issue of Incentive Performance Rights to Lincoln Liu William Witham (or his nominee(s)) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons. Stephen Ross (or his nominee(s)) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons. Lincoln Liu (or his nominee(s)) and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company) or an associate of that person or those persons. However, this does not apply to a vote cast in favour of the Resolution by: (a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or (b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met: (I) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and (II) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way. Voting by proxy To vote by proxy, please complete Proxy Form and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form In accordance with section 249L of the Corporations Act, Shareholders are advised that: • each Shareholder has a right to appoint a proxy; • the proxy need not be a Shareholder of the Company; and • a Shareholder who is 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. If the Shareholder appoints two proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes. Shareholders and their proxies should be aware that: • if proxy holders vote, they must cast all directed proxies as directed; and • any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed. Voting in person To vote in person, attend the Meeting at the time, date and place set out above. Should you wish to discuss the matters in this Notice please do not hesitate to contact the Company Secretary on +61 412 474 180. 4 EXPLANATORY STATEMENT This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions. 1. FINANCIAL STATEMENTS AND REPORTS In accordance with the Corporations Act, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2024 together with the declaration of the Directors, the Directors’ report, the Remuneration Report and the auditor’s report. The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. The Company’s annual financial report is available on its website at www.pinnacleminerals.com.au. 2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT 2.1 General The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report to be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the company or the directors of the company. The remuneration report sets out the company’s remuneration arrangements for the directors and senior management of the company. The remuneration report is part of the directors’ report contained in the annual financial report of the company for a financial year. The chair of the meeting must allow a reasonable opportunity for its shareholders to ask questions about or make comments on the remuneration report at the annual general meeting. 2.2 Voting consequences A company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company (Spill Resolution) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings. If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting (Spill Meeting) within 90 days of the second annual general meeting. All of the directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting. Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company. 2.3 Previous voting results At the Company’s previous annual general meeting the votes cast against the remuneration report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Meeting. 5619-03/3545964_10 5 3. RESOLUTION 2 – RE-ELECTION OF LINCOLN LIU 3.1 General Listing Rule 14.5 provides that an entity which has directors must hold an election of directors at each annual general meeting. The Constitution sets out the requirements for determining which Directors are to retire by rotation at an annual general meeting. Lincoln Liu, who has held office without re-election since 25 November 2022 and being eligible retires by rotation and seeks re-election. Further information in relation to Lincoln Liu is set out below. 3.2 Qualifications, experience and other material directorships Lincoln Liu has worked in Australian equities including stockbroking, research and investment banking for over a decade. Mr Liu has experience in IPO's, Placements, Private Equity and M&A. His industry expertise includes resources and he has worked extensively with growth companies. Mr Liu is the founder of a Sydney based Corporate advisory firm. He holds a Bachelor of Business and Commerce (Applied Finance) from UWS, Master of Commerce in Finance from UNSW & and a Master of Business Administration from USYD. Term of office Lincoln Liu has served as a Director since 3 December 2021 and was last re-elected on 25 November 2022. Independence If re-elected, the Board considers that Lincoln Liu will be an independent Director. Board recommendation Having received an acknowledgement from Lincoln Liu that he will have sufficient time to fulfil his responsibilities as a Director and having reviewed the performance of Lincoln Liu since his appointment to the Board and the skills, knowledge, experience and capabilities required by the Board, the Directors (other than Lincoln Liu) recommend that Shareholders vote in favour of this Resolution. Technical information required by Listing Rule 14.1A If this Resolution is passed, Lincoln Liu will be re-elected to the Board as an independent Director. If this Resolution is not passed, Lincoln Liu will not continue in their role as an independent Director. The Company may seek nominations or otherwise identify suitably qualified candidates to join the Company. As an additional consequence, this may detract from the Board and Company’s ability to execute on its strategic vision. 4. RESOLUTION 3 – APPROVAL OF 7.1A MANDATE 4.1 General This Resolution seeks Shareholder approval by way of special resolution for the Company to have the additional 10% placement capacity provided for in Listing Rule 7.1A to issue Equity Securities without Shareholder approval. Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary shares it had on issue at the start of that period. Under Listing Rule 7.1A, an Eligible Entity may seek shareholder approval by way of a special resolution passed at its annual general meeting to increase this 15% limit by an extra 10% to 25% (7.1A Mandate). The Company is an Eligible Entity. 6 4.2 Technical information required by Listing Rule 14.1A For this Resolution to be passed, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be cast in favour of the Resolution. If this Resolution is passed, the Company will be able to issue Equity Securities up to the combined 25% limit in Listing Rules 7.1 and 7.1A without any further Shareholder approval. If this Resolution is not passed, the Company will not be able to access the additional 10% capacity to issue Equity Securities without Shareholder approval under Listing Rule 7.1A and will remain subject to the 15% limit on issuing Equity Securities without Shareholder approval set out in Listing Rule 7.1. 4.3 Technical information required by Listing Rule 7.3A REQUIRED INFORMATION DETAILS Period for which the 7.1A Mandate is valid The 7.1A Mandate will commence on the date of the Meeting and expire on the first to occur of the following: Minimum price (a) the date that is 12 months after the date of this Meeting; (b) the time and date of the Company’s next annual general meeting; and (c) the time and date of approval by Shareholders of any transaction under Listing Rule 11.1.2 (a significant change in the nature or scale of activities) or Listing Rule 11.2 (disposal of the main undertaking). Any Equity Securities issued under the 7.1A Mandate must be in an existing quoted class of Equity Securities and be issued for cash consideration at a minimum price of 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 trading days on which trades in that class were recorded immediately before: (a) the date on which the price at which the Equity Securities are to be issued is agreed by the entity and the recipient of the Equity Securities; or (b) if the Equity Securities are not issued within 10 trading days of the date in paragraph (a) above, the date on which the Equity Securities are issued. Use of funds The Company intends to use funds raised from issues of Equity Securities under the 7.1A Mandate for the acquisition of new assets and investments (including expenses associated with such an acquisition), and continued expenditure in the Company’s current business and/or general working capital. Risk of economic and voting dilution Any issue of Equity Securities under the 7.1A Mandate will dilute the interests of Shareholders who do not receive any Shares under the issue. If this Resolution is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 7.1A Mandate, the economic and voting dilution of existing Shares would be as shown in the table below. The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in Listing Rule 7.1A.2, on the basis of the closing market price of Shares and the number of Equity Securities on issue or proposed to be issued as at 16 October 2024. The table also shows the voting dilution impact where the number of Shares on issue (Variable A in the formula) changes 7 REQUIRED INFORMATION DETAILS and the economic dilution where there are changes in the issue price of Shares issued under the 7.1A Mandate. DILUTION Issue Price Number of Shares on Issue (Variable A in Listing Rule 7.1A.2) Shares issued – 10% voting dilution $0.030 $0.059 $0.089 50% decrease Issue Price 50% increase Funds Raised Current 45,463,317 Shares 4,546,331 Shares $136,389 $268,233 $404,623 50% increase 68,194,976 Shares 6,819,497 Shares $204,584 $402,350 $606,935 100% increase 90,926,634 Shares 9,092,663 Shares $272,779 $536,467 $809,247 *The number of Shares on issue (Variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a pro-rata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1. The table above uses the following assumptions: 1. There are currently 45,463,317 Shares on issue. 2. The issue price set out above is the closing market price of the Shares on the ASX on 16 October 2024 (being $0.059) (Issue Price). The Issue Price at a 50% increase and 50% decrease are each rounded to three decimal places prior to the calculation of the funds raised. 3. The Company issues the maximum possible number of Equity Securities under the 7.1A Mandate. 4. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in Listing Rule 7.2 or with approval under Listing Rule 7.1. 5. The issue of Equity Securities under the 7.1A Mandate consists only of Shares. It is assumed that no Options are exercised into Shares before the date of issue of the Equity Securities. If the issue of Equity Securities includes quoted Options, it is assumed that those quoted Options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders. 6. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances. 7. This table does not set out any dilution pursuant to approvals under Listing Rule 7.1 unless otherwise disclosed. 8. The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%. 9. The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 7.1A Mandate, based on that Shareholder’s holding at the date of the Meeting. Shareholders should note that there is a risk that: (a) the market price for the Company’s Shares may be significantly lower on the issue date than on the date of the Meeting; and (b) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue. 8 REQUIRED INFORMATION Allocation policy under 7.1A Mandate DETAILS The recipients of the Equity Securities to be issued under the 7.1A Mandate have not yet been determined. However, the recipients of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company. The Company will determine the recipients at the time of the issue under the 7.1A Mandate, having regard to the following factors: Previous approval under Listing Rule 7.1A.2 (a) the purpose of the issue; (b) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue, share purchase plan, placement or other offer where existing Shareholders may participate; (c) the effect of the issue of the Equity Securities on the control of the Company; (d) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company; (e) prevailing market conditions; and (f) advice from corporate, financial and broking advisers (if applicable). The Company previously obtained approval from its Shareholders pursuant to Listing Rule 7.1A at its annual general meeting held on 30 November 2023 (Previous Approval). During the 12 month period preceding the date of the Meeting, being on and from 27 November 2023, the Company has not issued any Equity Securities pursuant to the Previous Approval. Voting exclusion statement As at the date of this Notice, the Company is not proposing to make an issue of Equity Securities under Listing Rule 7.1A. Accordingly, a voting exclusion statement is not included in this Notice. 5. RESOLUTIONS 4 TO 6 – ISSUE OF INCENTIVE PERFORMANCE RIGHTS TO DIRECTORS 5.1 General These Resolutions seek Shareholder approval for the purposes of Chapter 2E of the Corporations Act and Listing Rule 10.11 for the issue of an aggregate of 4,140,000 Performance Rights to the Directors, William Witham, Stephen Ross and Lincoln Liu (or their nominee(s)) (Incentive Performance Rights) as follows: (a) 828,000 Class A Performance Rights, 621,000 Class B Performance Rights and 621,000 Class C Performance Rights to William Witham (or his nominee(s)) (being the subject of Resolution 4); (b) 552,000 Class A Performance Rights, 414,000 Class B Performance Rights and 414,000 Class C Performance Rights to Stephen Ross (or his nominee(s)) (being the subject of Resolution 5); and (c) 276,000 Class A Performance Rights, 207,000 Class B Performance Rights and 207,000 Class C Performance Rights to Lincoln Liu (or his nominee(s)) (being the subject of Resolution 6). The terms and conditions of the Incentive Performance Rights are set out in Schedule 1. 9 5.2 Director Recommendation Each Director has a material personal interest in the outcome of these Resolutions on the basis that all of the Directors (or their nominee(s)) are to be issued Incentive Performance Rights should these Resolutions be passed. For this reason, the Directors do not believe that it is appropriate to make a recommendation on these Resolutions. 5.3 Chapter 2E of the Corporations Act Chapter 2E of the Corporations Act requires that for a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must: (a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and (b) give the benefit within 15 months following such approval, unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act. The issue constitutes giving a financial benefit and each of the proposed recipients is a related party of the Company by virtue of being a Director. As the Incentive Performance Rights are proposed to be issued to all of the Directors, the Directors are unable to form a quorum to consider whether one of the exceptions set out in sections 210 to 216 of the Corporations Act applies to the issue. Accordingly, Shareholder approval for the issue is sought in accordance with Chapter 2E of the Corporations Act. 5.4 Listing Rule 10.11 Listing Rule 10.11 provides that unless one of the exceptions in Listing Rule 10.12 applies, a listed company must not issue or agree to issue equity securities to: 10.11.1 a related party; 10.11.2 a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder in the company; 10.11.3 a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder in the company and who has nominated a director to the board of the company pursuant to a