Re: Our Expectations now we are a Tier 1 Miner
Posted: Sun Nov 17, 2024 10:30 am
by Irish24
This is a summary of the terms of agreement for the acquisition, most of which seem to have been satisfied. Sorry for the format not being so friendly, I had to copy and paste from the Web into word and then copy to here.
SUMMARYOF THE TERMS OF THE ACQUISITION
Overview The Company announced on 10 September 2024 that the Company and certain of its wholly owned subsidiaries have entered into an agreement with certain members of the Newmont Group to acquire, subject to certain conditions being satisfied, the Target Assets. The Target Assets comprise a 70% ownership interest in Havieron, 100% ownership of Telfer and certain related assets and interests, thus consolidating the Group’s ownership of Havieron to 100%. 2. Acquisition Agreement On 10 September 2024, Greatland Pty Ltd and other members of the Group, being Greatland Juri Pty Ltd, Greatland Exploration Pty Ltd, Greatland West Pty Ltd and Greatland Holdings Group Pty Ltd (the “Buyers”) entered into a sale and purchase agreement (the “Acquisition Agreement”) with certain members of the Newmont Group, being Newcrest NOL, Newcrest USA, Inc., Newcrest Mining, Newcrest Services Pty Limited and Newgen Pty Ltd (the “Sellers”). As the ultimate holding company of the Buyers, the Company has agreed to guarantee the Buyers’ obligations under the Acquisition Agreement. Key terms of the Acquisition Agreement include the following. Target Assets Pursuant to the Acquisition Agreement, the Sellers have agreed to sell, and the Buyers have agreed to buy, the Target Assets. The Target Assets include the following assets owned by the Sellers at Acquisition Completion: • the Telfer Production Tenements; Telfer infrastructure (including the gas-fired power station, processing plant and other mine infrastructure located at Telfer); Telfer mine property, plant and equipment; the Sellers’ interests in Telfer mine contracts; the Telfer mine approvals and permits capable of transfer; and all other assets, tenements and properties related to the Telfer mine (“Telfer Mine Assets”), which are proposed to be acquired by Greatland Pty Ltd; • the Sellers’ 70% interest in the Havieron Tenements and other Havieron JV assets (“Havieron Assets”) which are proposed to be acquired by Greatland Pty Ltd; • the Telfer Exploration Tenements, which are located in proximity to Telfer and within the Paterson Province, and associated assets (“Telfer Exploration Assets”), which are proposed to be acquired by Greatland Exploration Pty Ltd; • the Sellers’ 51% interest in the Juri Tenements and the Juri JV (“Juri Sale Interest”), which are proposed to be acquired by Greatland Juri Pty Ltd; • 410,264,785 ordinary shares in Antipa and 27,075,000 unlisted Antipa share options with an exercise price of A$0.02 per option, which are proposed to be acquired by Greatland Holdings Group Pty Ltd; and • the Sellers’ rights and interest under the Wilki FIA and related agreements (“Wilki Interests”), which are proposed to be acquired by Greatland West Pty Ltd. The acquisition of the Wilki Interests is subject to Antipa’s consent. Completion of the acquisition of the remaining Target Assets is not conditional on the transfer of the Wilki Interests. Consideration The consideration payable by the Buyers for the Target Assets is the aggregate of: • the “Cash Consideration” of US$155,088,263, which will be paid at Acquisition Completion, subject to the adjustments described below; • the “Consideration Shares”, comprising 2,669,182,291 Ordinary Shares, with a value at the Placing Price of US$167,500,000, to be issued to a member of the Newmont Group nominated by the Sellers on Readmission, and subject to the Lock-In and Orderly Market Deed, Relationship Agreement and Wyloo Call Option Deed as described below. The Company reserves the right to increase the size of the Placing and in the event that the gross Placing Proceeds exceed US$325 million (approximately £248.65 million), the first US$83.75 million (approximately £64.1 million) of additional Placing Proceeds will be paid to the Sellers and the Consideration Shares will be reduced. The minimum number of Consideration Shares that Newmont would hold would be 1,334,591,146 which are expected to represent 10.2% of the Enlarged Share Capital; • the “Deferred Consideration”, comprising up to US$100 million in deferred cash payments that may be payable by Greatland Pty Ltd through a gold price linked payment structure with a 50% price upside participation by the Sellers in respect of gold produced from Havieron above a US$1,850/oz hurdle price, pursuant to the Deferred Consideration Deed the terms of which are summarised below; and • the “O’Callaghans Royalty”, comprising the agreement by Greatland Exploration Pty Ltd to pay a 1.5% net smelter royalty under the O’Callaghans Royalty Deed, the terms of which are set out below, in respect of any mineral products extracted in the future from the Telfer Exploration Tenement M45/203 on which the O’Callaghans polymetallic deposit (discussed in paragraph 4.4 of Part 3 (Information on the Assets, Market and Jurisdiction) of this document). Acquisition Conditions Acquisition Completion is subject to several Acquisition Conditions precedent, including: • the Buyers and the Sellers each receiving foreign investment approval from the Treasurer of the Commonwealth of Australia for the transactions contemplated under the Acquisition Agreement (including the acquisition of the Target Assets and the issue of the Consideration Shares); • the receipt of consents and approvals from the relevant State and Commonwealth Ministers and agencies required for the transfer from the Sellers to the Buyers of certain mining tenements, a Crown Lease at Port Hedland relating to product export facilities, a Crown Lease relating to Telfer Pipeline infrastructure, and certain key environmental approvals and water licences that form part of the Target Assets; • the receipt of certain third party contract consents related to the operation of the Telfer Pipeline; • the Sellers being granted a licence under Part V of the EP Act authorising the operation of evaporation ponds at the Havieron mine, and the renewal of the existing licence granted under Part V of the EP Act in respect of the operation of Telfer; • the passing of the Acquisition Resolutions and Readmission; • the Engineer of Record for TSF8: • confirming that remediation works at TSF8 have been completed in accordance with the remediation plan; and • approving the recommencement of the deposition of tailings into TSF8, and DEMIRS lifting any prohibition on the deposition of tailings into TSF8 (the “TSF8 Remediation Condition”); and • the Sellers having restarted processing operations at Telfer and recommenced deposition of tailings into TSF8 (as remediated in accordance with the TSF8 Remediation Condition) for a period of 14 consecutive days (the “TSF8 Restart Condition”). Certain of the Acquisition Conditions may be waived by the Buyers in their discretion. Acquisition Completion It is intended that Acquisition Completion will occur ten business days after all Acquisition Conditions have been satisfied or (if applicable) waived. Acquisition Completion will take place upon, and simultaneously with, Readmission. If an Acquisition Condition remains unsatisfied and, where eligible, is not waived, by 14 February 2025 (or such later date as may be agreed or extended for a material adverse event in the manner set out below) (“Longstop Date”) the Buyers or the Sellers may terminate the Acquisition Agreement. If a material adverse event comprising (i) any statutory or administrative action which has a significant and prolonged, material and adverse impact on the operation or viability of TSF7 or TSF8, or material physical damage to TSF7 or TSF8, or (ii) material physical damage or destruction to certain material Target Assets (as applicable, a “Material Adverse Event”) is subsisting on the date of Acquisition Completion, then unless that Material Adverse Event is waived by the Buyers, Acquisition Completion will be delayed until the date that is 10 business days after the Material Adverse Event is resolved. If within the one month period before the Longstop Date; • the TSF8 Remediation Condition or the TSF8 Restart Condition has not been satisfied; or • aMaterial Adverse Event is subsisting (and is not waived by the Buyers), then the Buyers or Sellers may elect to extend the Longstop Date by six months if there is a reasonable likelihood that the TSF8 Remediation Condition or TSF8 Restart Condition will be capable of being satisfied, or the Material Adverse Event will be remedied, as applicable, by such time. Title to the Target Assets will pass from the Sellers to the Buyers, and the consideration payable by the Buyers will pass to the Sellers, at Acquisition Completion. If for any reason certain contractual rights or approvals comprising a Target Asset are unable to be assigned to the Buyers at Acquisition Completion, the Sellers will hold their rights, title and interest in such Target Assets for the benefit of the Buyers and will act on the Buyers’ directions in respect of that Target Asset and the Group will indemnify the Sellers for any liability the Sellers incur in respect of those contractual rights or approvals until they are assigned to the Buyers (including under any guarantee which is not replaced but is subsequently called). Adjustments The Cash Consideration is subject to certain adjustments, including for: • Run-of-mine ore stockpiled at Telfer as at Acquisition Completion, with adjustments: • First, adjusted for on Acquisition Completion, ore stockpiles above or below a target baseline of 6Mt (paid by the Buyers if above, and the Sellers if below) at a rate of A$10/t for stockpiles mined prior to 1 October 2024 less any net reduction in ore stockpiles remaining at Acquisition Completion. There is currently expected to be in the order of 9.6Mt of stockpiles at 1 October 2024. • Second, paid within 180 days after Acquisition Completion, for incremental additional stockpiles mined after 1 October 2024 until Acquisition Completion, at the same rate of A$10/t. • Anadjustment paid within 180 days after Acquisition Completion to compensate the Sellers for only operating one of the two Telfer processing trains from the processing restart (expected to occur in late September or October) until Acquisition Completion (thus preserving Telfer stockpiles and ore for the Buyers to process after Acquisition Completion). The adjustment is calculated based on a rate of between A$25 to A$20 per tonne of ore that would otherwise have been processed if the second processing train were operating at an approximately 11Mtpa rate, payable for the period starting two weeks after the processing restart until Acquisition Completion, but only for days on which only processing one train is operating. If the aggregate payment due within 180 days after Acquisition Completion for ore stockpiles (described above) and processing (described in this paragraph) would exceed A$40 million, then the excess will be due within 366 days after Acquisition Completion. • Customary inventory, gold in store value, and 70% of certain accrued transferring employee entitlements adjustments, adjusted for on Acquisition Completion. • Outstanding TSF7 remediation costs (described below), adjusted for on Acquisition Completion. • Recent Havieron JV expenditure and the residual Havieron JV cash balance, adjusted for on Acquisition Completion. At Acquisition Completion, the Cash Consideration, as adjusted by an estimate of the above amounts, will be payable. A final adjustment will be calculated and made following the preparation and agreement of a final post-completion statement, with the final adjustment expected to be agreed or determined within 6 months of Acquisition Completion. The Company expects that the net effect of adjustments at Acquisition Completion will result in an adjustment in the Sellers’ favour, depending on when Acquisition Completion occurs. For illustrative purposes only the Pro Forma in, Part 9 (Pro Forma Statement of Net Assets of the Enlarged Group) of this document provides an example of how this might work, based on certain assumptions set out in that Part. The actual adjustments can only be calculated at or following Acquisition Completion. On Acquisition Completion, Greatland Pty Ltd will also make the Havieron JV Loan Repayment (of approximately $52.4 million) to fully repay the outstanding balance of the Newmont NOL Loan Agreement. Pre-Acquisition Completion covenants The Acquisition Agreement includes customary conduct of business covenants by the Sellers in respect of the period until Acquisition Completion, including to conduct the Target Assets, business and employees in the ordinary and usual course with due care and in compliance with laws, approvals and conditions, and to consult on and obtain the Buyers consent for certain material matters. There are specific covenants regarding: • Continuation of mining operations in accordance with the current business plan, progress of the TSF8 raise construction, and progress of the TSF7 remediation works described in described in paragraph 3.4 of Part 3 (Information on the Assets, Market and Jurisdiction) of this document. • Operation of one of the two Telfer processing trains during the period from the restart of processing (as contemplated by the TSF8 Restart Condition described above) until Acquisition Completion, except in circumstances where operating both processing trains is necessary for health, safety, legal or regulatory reasons, or to comply with the TSF8 operating procedures. • Undertaking certain activities in relation to the carve-out and transition of information technology systems. Warranties and limits of liability The Acquisition Agreement contains customary warranties given by the Sellers in relation to its capacity, solvency, and ownership of each of the Target Assets. The Acquisition Agreement also contains customary warranties in relation to the operation of the Target Assets, compliance with laws, and other matters relating to the Target Assets. The Buyers have also given customary warranties in favour of the Sellers, including in relation to capacity, solvency, the Company’s share capital and the Consideration Shares. Customary warranties are also given in relation to the conduct of the business of the Buyers (excluding Havieron and Juri) and compliance with laws. The aggregate limit of liability of each of the Sellers and Buyers for breaches of warranties as to capacity, solvency and in the case of the Sellers ownership of the Target Assets and in the case of the Buyers their share capital, as well as each of their total liability under the agreement is limited to a portion of the consideration, and the liability for the other warranties is limited to a customary smaller portion of the consideration. Claims are subject to de minimis thresholds, customary exclusions and must be made within 18 months from Acquisition Completion. Pre-completion and post-completion liabilities On and from Acquisition Completion the Buyers will generally assume from the Sellers the liabilities in relation to the Target Assets, whether arising or accruing before, on or after Acquisition Completion (“Assumed Liabilities”). The Buyers have also agreed to indemnify the Sellers in respect of Assumed Liabilities. Although the Buyers are assuming the Assumed Liabilities: • The Sellers have agreed to reimburse the Buyers for reasonable costs and expenses incurred to investigate and remediate any fact, matter or circumstance occurring in respect of specific areas of TSF8 (Lots 12 and 13) which cause processing operations at Telfer to be suspended for a period of at least 10 consecutive days (“Post-Completion TSF8 Event”), in circumstances where (in general terms): (i) that relevant Post-Completion TSF8 Event occurs within the period of nine months from Acquisition Completion; and (ii) is caused or contributed to by the Sellers’ or its personnel’s acts or omissions prior to Acquisition Completion. The Sellers’ liability for a Post-Completion TSF8 Event is subject to certain exclusions and limited to A$30 million in aggregate. • In relation to TSF7, the Sellers are required to use its reasonable endeavours to carry out the further TSF7 remediation works described in paragraph 3.4 of Part 3 (Information on the Assets, Market and Jurisdiction) of this document. To the extent the TSF7 remediation works remain incomplete at Acquisition Completion, a purchase price adjustment will be made in the Buyers’ favour for the estimated remaining costs. • The Sellers have retained and will indemnify the Buyers for any fines or monetary penalties incurred: (i) in respect of the TSF8 and TSF7 issues that gave rise to the DEMIRS prohibition notices and the EPN (described in paragraph 3.4 of Part 3 (Information on the Assets, Market and Jurisdiction)); (ii) for breach or non-compliance in respect of an overtopping event that occurred at the evaporation ponds at Havieron as a result of unusually high rainfall; and (iii) certain existing contractual disputes in respect of Telfer. • Asdescribed in paragraph 3.9.2 of Part 3 (Information on the Assets, Market and Jurisdiction) of this document, the Sellers have given certain undertakings in favour of the Buyers in relation to the potential imposition by the Western Australian Department of Energy, Mines, Industry Regulation and Safety of a security in respect of the rehabilitation liability associated with certain Telfer mining leases. The Buyers have agreed to indemnify the Sellers for any claims under the security and has also agreed to reimburse the Sellers for any out of pocket carrying costs in providing the security. The Sellers have customary protections to secure this indemnity. The indemnity of the Buyers will be secured by a mining mortgage over the Telfer mining leases which are the subject of the security review and the Havieron Tenements and which will be second ranking to security to be granted in favour of the Buyers’ financiers for facilities related to the construction, development or operation of Telfer and Havieron, and corporate costs (including the security to be granted to the Banks in respect of the Working Capital Facilities). Once the Buyers have achieved Havieron commercial production, then the Buyers must replace the security procured by the Sellers within 60 days. The Buyers are also required to replace the security on a change of control of any member of the Seller Group which hold the relevant mining lease or the Company. Where following a change of control of the Company (other than in connection with a reorganisation associated with an ASX Listing of the holding company of the Group), there is material adverse change in the financial standing of the Company that affects the Company’s ability to meet its financial obligations under the Acquisition Agreement, the Company is required to procure a replacement guarantee for its obligations under the Acquisition Agreement from the new holding company of the Group or provide an alternative guarantee (to be agreed by the parties, acting reasonably). Employees The Acquisition Agreement requires that Greatland Pty Ltd make offers of employment to the proposed Transferring Employees that are currently employees of Newcrest Mining. The offers of employment must be on terms and conditions that are generally substantially similar to and considered on an overall basis to be no less favourable to those under which the proposed Transferring Employee is employed by Newcrest Mining immediately before Acquisition Completion. If a Proposed Transferring Employee accepts an offer of employment by the Buyers, then the Sellers must release that employee from their employment and pay that employee all accrued entitlements and benefits as at the date of Acquisition Completion, other than any redundancy pay entitlements and accrued but untaken sick leave and carer’s leave, annual leave and long service leave entitlements, certain short term incentives (whose responsibility for those entitlements are assumed by the Buyers, subject to the 70% Acquisition Completion adjustment referred to above). If a Transferring Employee accepts an offer of employment by Greatland Pty Ltd and certain accrued entitlements prior to Acquisition Completion crystallise within an agreed period after Acquisition Completion, then the Sellers must reimburse the Buyer for 70% of those entitlements. Termination The Acquisition Agreement may be terminated prior to Acquisition Completion in the following circumstances: • byany party where any Acquisition Condition remains outstanding and is not waived, or where a Material Adverse Event is subsisting and has not been waived, at the Longstop Date (as may be extended as described above); • by any party if there is a breach of capacity and authority warranties by the other party, if there is an insolvency event in respect of the other party, and if a Seller receives a nonrenewal notice or forfeiture notice prior to Acquisition Completion occurring, in respect of certain key Telfer Production Tenements; or • by the Buyers if there is a breach of title warranties in respect of the Telfer Production Tenements and Havieron Tenements. Governing Law The Acquisition Agreement is governed by the laws of Western Australia. 3. Deferred Consideration Deed The consideration payable by Greatland Pty Ltd for the Acquisition includes up to US$100 million of Deferred Consideration to Newmont NOL. As a term of the Acquisition Agreement, Greatland Pty Ltd and Newmont NOL have agreed to enter into a Deferred Consideration Deed on the date of Acquisition Completion to record the terms of the Deferred Consideration. The obligation for Greatland Pty Ltd to pay the Deferred Consideration commences on the first day of the next calendar quarter following first commercial production at Havieron and is payable annually for a period of up to five years. For each payment year, Greatland Pty Ltd’s payment obligations to Newmont NOL will be equal to 50% of the difference between the average market price of gold in the payment year (as published by the London Bullion Market Association) and a hurdle price of US$1,850.00 per ounce for every ounce of gold metal produced at Havieron that is sold, in accordance with the following formula: Deferred Consideration for the relevant payment year (“Payment Year”) = 50% x (market price– hurdle price) x sum of total gold sold for the relevant year (inc. doré and concentrate) The Deferred Consideration will be subject to a total cap of US$100 million and an annual cap of US$50 million. Greatland Pty Ltd will have the option to buy-back Newmont NOL’s right to receive the Deferred Consideration at any time, by paying to Newmont NOL an amount equal to US$100 million less any Deferred Consideration already paid. No interest is payable on the Deferred Consideration. Newmont NOL will have the right to lodge a caveat against M 45/1287 in accordance with the Mining Act 1978 (WA) (“Mining Act”) have the benefit of a parent company guarantee (on customary terms which are substantially similar to the parent company guarantee in the Acquisition Agreement described above) from the Company to support Greatland Pty Ltd’s obligation to pay the Deferred Consideration. Under the terms of the Deferred Consideration Deed, Greatland Pty Ltd may only create an encumbrance over Havieron tenure in favour of a third party (such as a bank) if the third party and Greatland Pty Ltd enter into a deed of covenant with Newmont NOL substantially in a form agreed under the Deferred Consideration Deed. The deed of covenant contains customary terms including that the third party agrees that it will comply with the disposal and transfer provisions in the Deferred Consideration Deed if it were to transfer or dispose of the Havieron tenure on enforcement of its encumbrance. 4. Lock-In and Orderly Market Deed The consideration payable by the Buyers for the Acquisition includes the issue of the Consideration Shares to Newmont NOL. On or before Acquisition Completion the Company and Newmont NOL will enter into a Lock-In and Orderly Market Deed under which Newmont NOL (or any permitted transferee) agrees to certain restrictions on disposal of the Consideration Shares, and other Ordinary Shares which may be acquired or issued in certain circumstances during the Lock-In Period or Orderly Market Period (each as defined below) (together, the “Lock-In Shares”). Under the Lock-In and Orderly Market Deed, Newmont NOL (and any permitted transferee) will agree that for a period of 12 months starting on the date of Readmission (the “Lock-In Period”), it will not dispose of any interest in the Lock-In Shares, other than as permitted by certain limited exceptions. These limited exceptions include disposal to Wyloo under the Wyloo Call Option Deed (see summary at paragraph 6 below), disposal pursuant to the acceptance of a general offer for the ordinary share capital of the Company made in accordance with the Code or a disposal otherwise consented to by the Company (the “Exceptions to Disposal Restriction”). Further, Newmont NOL (and any permitted transferee) will agree that for the period of 12 months starting on the day after the end of the Lock-In Period (the “Orderly Market Period”), it will not dispose of any interest in the Lock-In Shares unless it first complies with the process and requirements set out in the Lock-In and Orderly Market Deed. These requirements in relation to the disposal of any Lock-In Shares include (amongst others) that the Lock-In Shares can only be disposed to a public equity investor (being an entity whose primary activity is making minority investments to generate financial returns, other than those investors whose business directly involves mining exploration, development or operations or private equity or activist funds), but are subject to limited exceptions (including the Exceptions to Disposal Restriction). Should the Company proceed with the ASX Listing, Newmont NOL will have certain co-operation obligations in relation to assisting with the completion of the ASX Listing, including an obligation to agree a modification to the terms of the Lock-In and Orderly Market Deed to the extent necessary to comply with the Australian Corporations Act and the ASX Listing Rules, or enter into a new agreement (provided no modification or new agreement is more onerous for Newmont NOL). 5. Relationship Agreement The Company and Newmont NOL will enter into a Relationship Agreement on or before Acquisition Completion, under which the Company and Newmont NOL agree certain parameters in relation to their conduct, and the exercise of Newmont NOL’s rights as a substantial shareholder of the Company. Under the Relationship Agreement, if the Company (or any other member of the Group) enters into or varies an arrangement with Newmont NOL (or any of its associates), or waives any rights under such arrangement (a “Substantial Shareholder Transaction”), Newmont NOL will agree to ensure that the Substantial Shareholder Transaction is entered into on an arm’s length basis and on normal commercial terms, and that any such Substantial Shareholder Transaction will only be dealt with on behalf of the Company by a committee comprising of independent directors. Newmont NOL (or a permitted transferee) will also agree to certain restrictions on the exercise of its rights under the Relationship Agreement, including that it will not: • exercise any rights as a shareholder in the Company in such a manner that would preclude the Company from carrying on its business independently of Newmont NOL (and its associates) for the benefit of the Company’s shareholders as a whole; • exercise any rights as a shareholder in the Company in such a manner as to propose a shareholder resolution which would circumvent the application of relevant regulatory requirements; • exercise any rights as a shareholder in the Company in such a manner as to cause or authorise anything which would have the effect of the prejudicing the Company’s status as a public company with its shares admitted to trading on AIM or prejudice the Company’s ability to list on the ASX (other than in relation to specific exceptions); or • propose or vote in favour of any resolution which is intended to effect the cancellation of admission of the Company’s securities from trading on AIM or the cancellation of admission of the Company’s securities from trading on the ASX. Should the Company proceed with the ASX Listing, Newmont NOL will have certain co-operation obligations in relation to assisting with the completion of the ASX Listing, including an obligation to agree a modification to the terms of the Relationship Agreement to the extent necessary to comply with the Australian Corporations Act and the ASX Listing Rules, or enter into a new agreement (provided no modification or new agreement is more onerous for Newmont NOL). The Relationship Agreement will cease to apply if Newmont NOL’s shareholding in the Company falls below 10% of the Company’s issued share capital. 6. Wyloo Call Option Deed Newmont NOL will enter into the Wyloo Call Option Deed with Wyloo on or about the same time as the Acquisition Agreement. Under the Wyloo Call Option Deed, Newmont NOL will grant Wyloo an option to purchase up to 1,334,591,145 Consideration Shares (being 50% of the maximum number of the Consideration Shares) (“Option Shares”). The call option is granted from the date of Readmission and ending at 11:59 p.m. on the fourth anniversary of the date of Readmission (“Option Term”), and is exercisable by written notice from Wyloo to Newmont NOL. Should Wyloo choose to exercise the option (in whole or in part), it must provide the required notice and pay to Newmont NOL a cash amount equal to 7.2 pence (“Exercise Price”) per Option Share in respect of which the notice is given (equivalent to a 50% premium to the Placing Price). In the event of any capital restructure or any UK court approved scheme of arrangement to introduce a new holding company (whether Australian or UK) as the sole shareholder of the Company and pursuant to which the shareholders in the Company at the effective time become holders of securities in the new holding company of the Group (“Re-organisation”) of the Company, the number of Option Shares and Exercise Price shall be adjusted in accordance with the formula set out in the Wyloo Call Option Deed. Further, under the Wyloo Call Option Deed, Newmont NOL will grant Wyloo a right of first refusal in respect of any Consideration Shares that Newmont NOL wishes to sell during the Option Term (or enter into an irrevocable undertaking or commitment in relation to a takeover of the Company in respect of), and sets out the process that Newmont NOL needs to follow before it sells any Consideration Shares. Should Wyloo decide to exercise the right of first refusal, the number of Option Shares remaining will be reduced by the number equal to the number of Consideration Shares sold to Wyloo. Should Wyloo choose not to exercise its right of first refusal, and Newmont NOL subsequently sells those Consideration Shares to a third party buyer in accordance with the relevant process, the Consideration Shares that are sold to that third party buyer will only reduce the number of Option Shares to the extent that Newmont NOL does not hold Consideration Shares in excess of the number of Option Shares (“Non-Option Shares”) (or the number of Non-Option Shares is not sufficient to cover the total number of shares sold). However, the right of first refusal does not apply to certain limited ‘permitted disposals’, including any disposal of Consideration Shares pursuant to a Re-organisation or third party takeover. Should the Company proceed with the ASX Listing, Newmont NOL and Wyloo agree to enter into such arrangements as are necessary on no more onerous terms to facilitate the completion of the ASX Listing, including a variation to the Wyloo Call Option Deed to the extent necessary to comply with the Australian Corporations Act and the ASX Listing Rules, or enter into a new agreement (provided no modification or new agreement is more onerous (or less beneficial) for either party) or to provide for an option over the ordinary shares of such holding company in replacement of the option over the Option Shares. 7. Transitional Services Agreement Pursuant to the Acquisition Agreement, the Buyers and the Sellers have agreed to negotiate in good faith and use reasonable endeavours to agree the terms of a transitional services agreement as soon as reasonably practicable after execution of the Acquisition Agreement (the “Transitional Services Agreement”), with each party required to deliver an executed copy of the Transitional Services Agreement as an Acquisition Completion deliverable. There is a risk that the Transitional Services Agreement is not executed in a timely manner, or not executed on terms which are commercially advantageous for the Buyers or provide all services that the Buyer will require. The parties have agreed that the Transitional Services Agreement will contain provisions which address the following: • the provision by the Sellers to the Buyers of agreed services, resources and support that have previously been provided in relation to the Target Assets during the 12 month period immediately prior to Acquisition Completion. Such services (subject to the Sellers reasonably having the internal capacity and/or capability) may include: information technology– systems access and SAP data; data migration; systems support in respect of health, safety, security and/or environment; procurement, contracting and cataloguing services; general accounting support with respect to records, information and systems; shared services; and site support; • the transitional services will be provided for up to 12 months; • the timing and manner of the transfer and migration of software forming part of the Target Assets and access and maintenance to that software until that transfer and migration has occurred; • the fees to be paid for the transitional services, such fees to be calculated on a cost-pass through basis (including the cost of internal time and third party disbursements incurred in the provision of the transitional services) and at no margin; • the standard of the transitional services to be provided by the Sellers; • the establishment of a transition committee on and from Acquisition Completion to oversee and direct the provision of the transitional services; and • limitations of liability in respect of the provision of the transitional services. Whilst the parties have agreed to engage and negotiate in good faith and exercise reasonable endeavours to agree the terms for and to enter into the Transitional Services Agreement, the supply of these services remain subject to documentation, and the risks set out in this paragraph above. The other key risks relating to the transition of ownership and integration are set out in paragraphs 2.10 and 2.12 of Part 6 (Risk Factors) of this document. 8. O’Callaghans Royalty Deed Pursuant to the Acquisition Agreement, the parties have agreed that Greatland Exploration Pty Ltd and a member of the Sellers’ group will negotiate in good faith to finalise the terms of, enter into, and deliver as an Acquisition Completion deliverable, the O’Callaghans Royalty Deed. The parties have agreed that the deed will provide for the payment by Greatland Exploration Pty Ltd of a 1.5% net smelter royalty in respect of any mineral products extracted in the future from Telfer Exploration Tenement M45/203 on which the O’Callaghans polymetallic deposit (discussed in paragraph 4.4 of Part 3 (Information on the Assets, Market and Jurisdiction) of this document) is located; that Greatland Exploration Pty Ltd’s obligations under the deed will be guaranteed by the Company; and that the remaining terms of the deed will be consistent with the usual terms of net smelter return royalties used in the Western Australian mining industry. The royalty deed is required to be delivered on Acquisition Completion.
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