Delecta : Nabberu Minerals Acquisition / Calvista Disposal

DELECTA LIMITED

ACN 009 147 924

Building 41

9-45 Ashley Street Braybrook Victoria 3019

Phone: 61 3 9695 5858

Fax: 61 3 9686 0644

8 April 2022

The Manager

Market Announcements Office Australian Securities Exchange Exchange Centre

20 Bridge Street SYDNEY NSW 2000

Delecta Limited to acquire a 100% interest in Nabberu Minerals Pty Ltd and to dispose of Calvista Business

Highlights:

(a) DLC to enter into binding share sale agreement to acquire a 100% of the issued share capital of Nabberu Minerals Pty Ltd.

• (b) Nabberu Minerals owns the Woodlands Base Metal and Gold Project located in in the Gascoyne Province of Western Australia and has applied for exploration licence E08/3319 (the Mt Amy Project) located 107 km southeast of Onslow, Western Australia.

• (c) Acquisition of Nabberu Minerals is proposed to occur by way of the share sale agreement with consideration being paid to the shareholders of Nabberu Minerals in DLC ordinary shares and options.

• (d) DLC to dispose of its Calvista wholesale business to an entity related to current director, Malcolm Day.

The Board of Delecta Limited (ACN 009 147 924) (ASX: DLC) (DLC or the Company) is pleased to announce it is finalising the terms of a share sale agreement (Share Sale Agreement) pursuant to which the Company will, subject to satisfaction of certain conditions precedent, acquire 100% of the issued share capital of Nabberu Minerals Pty Ltd (Proposed Acquisition).

Nabberu Minerals Pty Ltd (ACN 651 652 916) (Nabberu Minerals), an Australian proprietary company, has an interest in the following projects:

• (a) one granted exploration licence at the Woodlands Base Metal and Gold Project:

  E 52/3895 granted on 18 January 2021; and

• (b) one application for an exploration licence at the Mount Amy Base Melas Project:

  E 08/3319 applied for on 11 January 2021,

together, the Nabberu Minerals Projects.

In conjunction with the Proposed Acquisition, the Company is finalising the terms upon which it will agree, subject to receipt of shareholder approval under Listing Rule 10.1, to dispose of its current wholesale business undertaken by Calvista Australia Pty Ltd and Calvista New Zealand Limited to Calvista Holdings Pty Ltd, a related party of current director, Malcolm Day (Proposed Disposal).

Further details of the Proposed Acquisition and Proposed Disposal are set out in this announcement.

Change of Activities

The Proposed Acquisition will constitute a change in the nature and scale of the Company's activities. In these circumstances, the Company will be required, pursuant to Listing Rule 11.1.2, to obtain approval from DLC's shareholders at a general meeting. The Company will also be required, pursuant to Listing Rule 11.1.3, to re-comply with chapters 1 and 2 of the Listing Rules.

Consolidation

As part of the Proposed Acquisition and the Company's proposed re-compliance with Chapters 1 and 2 of the ASX Listing Rules, the Company will be required to consolidate its issued capital to facilitate a theoretical share price and option exercise price of at least $0.20.

The Company has obtained a waiver from Listing Rule 2.1 (Condition 2) to enable it to issue Shares under the Offer below $0.20 per Share and Listing Rule 1.1 (condition 12) to enable it to have options on issue with an exercise price less than $0.20.

Accordingly, in this circumstance, the Company proposes to consolidate its issued capital on the basis that every 2.5 securities will consolidate into 1 security (Consolidation) subject to shareholders' approval.

Proposed Acquisition Terms

A summary of the key terms of the Proposed Acquisition is set out below.

1. Consideration

Subject to satisfaction or waiver of the conditions precedent to the Proposed Acquisition (summarised in section 2 below), in consideration for acquiring a 100% of the issued share capital of Nabberu Minerals, DLC has agreed to issue upon settlement of the Proposed Acquisition, the following securities to the vendors of the Nabberu Minerals, on a post-Consolidation basis:

• (a) the issue of $900,000 worth of fully paid ordinary shares in the capital of DLC (DLC Shares) with a deemed issue price of $0.02 per DLC Share to the shareholders of Nabberu Minerals, being: Paranoid Enterprises Pty Ltd, Whistler Street Pty Ltd as trustee for the Warburton Discretionary Trust, Mr Andrew William Spencer and Mrs Benedicte Marie Spencer as trustee for the Spencer Super Fund, Matthew Blumberg, Cityscape Asset Pty Ltd as trustee for ther Cityscape Family Account and Coral Brook Pty Ltd (the Vendors) or their nominees. None of the Vendors are related parties of the Company; and

• (b) the issue of 30,000,000 options to acquire DLC Shares (DLC Options) exercisable at $0.03 per DLC Option on or before that date which is three years from the date of issue between the Vendors (or their nominees).

The DLC Shares and DLC Options will be allocated amongst the Vendors as follows:

2. Conditions Precedent

Settlement of the Proposed Acquisition is subject to of the following conditions precedent:

• (a) the parties obtaining all shareholder, statutory and regulatory approvals and/or waivers required to undertake the Proposed Acquisition and matters contemplated by the Share Sale Agreement, or that are required by DLC;

• (b) the parties obtaining, in a form reasonably satisfactory to DLC, all third-party consents or waivers which are, in the opinion of DLC, necessary or desirable to complete the Transaction (including but not limited to confirmations or waivers of the ASX Listing Rules);

• (c) DLC completing the Consolidation;

• (d) DLC preparing a prospectus and lodging the prospectus with ASIC to complete an offer of a minimum of 150,000,000 DLC Shares at an issue price of $0.02 per Purchaser Share to raise a minimum of $3,000,000 and up to a maximum of 200,000,000 Purchaser Shares at an issue price of $0.02 per Share to raise a maximum of $4,000,000 and receiving valid acceptances under the prospectus for not less than $3,000,000;

• (e) DLC receiving ASX conditional approval to reinstate the securities of DLC to official quotation on ASX, subject to DLC's re-compliance with Chapters 1 and 2 of the ASX Listing Rules, on terms and conditions acceptable to DLC;

• (f) settlement of the Proposed Disposal occuring; and

• (g) the Vendors delivering to the Purchaser signed restriction agreements relating to all the Consideration, in accordance with, and to the extent required by, the ASX Listing Rules (to the extent that ASX requires those securities to be escrowed,

  (together, the Conditions).

If the Conditions to settlement of the Proposed Acquisition are not satisfied or waived by 31 July 2022 or such other date as agreed in writing between the parties (End Date), any party may terminate the Share Sale Agreement by giving notice, in which case the agreement constituted by this Share Sale Agreement will be at an end and the parties will be released from their obligations under the Share Sale Agreement, otherthan any pre-existing liabilities for breach of the Share Sale Agreement, which shall survive termination.

3. Settlement

Settlement of the Proposed Acquisition will occur on that date which is 5 business days after the satisfaction or waiver of the last outstanding Condition, or such other date as is agreed in writing (Settlement).

Proposed Disposal Terms

In parallel with the Proposed Acquisition, the Company is proposing to dispose of all of the issued share capital of Calvista Australia Pty Ltd (Calvista Australia) and Calvista New Zealand Limited (Calvista NZ) to Calvista Holdings Pty Ltd (the Purchaser) (a related party of current director, Malcolm Day), subject to the satisfaction or waiver of certain conditions precedent (Calvista Sale Agreement).

A summary of the key terms of the Proposed Disposal is set out below.

1. Consideration

Subject to satisfaction or waiver of the conditions precedent to the Proposed Disposal (summarised in section 2 below), in consideration for the sale of 100% of the issued share capital of Calvista Australia and Calvista NZ to the Purchaser, DLC will receive a total of $1,500,000 cash consideration as follows:

• (a) $1,000,000 cash to be paid at settlement of the Calvista Disposal (First Consideration Payment); and

• (b) $500,000 cash to be paid on that date which is 12 months after settlement of the Calvista Disposal (Second Consideration Payment), subject to an adjustment to be completed prior to payment of the Second Consideration Payment.

2.

Conditions Precedent

Settlement of the Proposed Disposal is subject to satisfaction or waiver of the following conditions precedent:

• (a) the Parties obtaining all necessary shareholder, statutory and regulatory approvals and/or waivers required to undertake the Transaction as required by the Corporations Act, the ASX Listing Rules or any other law, including shareholder approval pursuant to ASX Listing Rule 10.1 for the Proposed Disposal;

• (b) an independent expert's report prepared for the purpose of the Approvals concluding that the Proposed Disposal is either fair and reasonable or not fair but reasonable to the non-associated shareholders of DLC;

• (c) the parties obtaining all third-party consents or waivers which are necessary of desirable to complete the Proposed Disposal and matters contemplated by the Calvista Sale Agreement;

• (d) DLC completing the Consolidation;

(e) DLC preparing a prospectus and lodging the prospectus with ASIC to complete an offer of a minimum of 150,000,000 DLC Shares at an issue price of $0.02 per Purchaser Share to raise a minimum of $3,000,000 and up to a maximum of 200,000,000 Purchaser Shares at an issue price of $0.02 per Share to raise a maximum of $4,000,000 and receiving valid acceptances under the prospectus for not less than $3,000,000;

(f)receipt of ASX conditional approval to reinstate the securities of DLC to official quotation on ASX, subject to DLC's re-compliance with Chapters 1 and 2 of the ASX Listing Rules, on terms and conditions reasonably acceptable to DLC;

(g) settlement of the Proposed Acquisition occurring.

(together, the Conditions).

If the Conditions to settlement of the Proposed Disposal are not satisfied or waived by 31 July 2022 or such other date as agreed in writing between the parties (End Date) then a party not in breach of its obligations under the Calvista Sale Agreement may terminate the Calvista Sale Agreement.

3.

Settlement

Settlement of the Proposed Disposal will occur on that date which is 5 business days after the satisfaction or waiver of the last outstanding Condition, or such other date as is agreed in writing (Settlement).

Capital Raising

To assist the Company to re-comply with Chapters 1 and 2 of the ASX Listing Rules (Listing Rules) the Company plans, subject to shareholder approval, to conduct a capital raising under a full form prospectus (Prospectus) for the issue of not less than 150,000,000 fully paid ordinary shares in the capital of the Company (Shares) at an issue price of $0.02 per Share to raise a minimum of $3,000,000 and up to 200,000,000 Shares at an issue price of $0.02 per Share to raise a maximum of $4,000,000 (Offer).

The Company intends to apply the funds raised from the Offer in accordance with the use of funds table set out below.

DLC has engaged CPS Capital Pty Group Ltd (CPS) to act as the Lead Manager to the Offer. The Company proposes to pay the following fees to CPS in consideration for its lead manager services:

• (a) a management fee of 2% (plus GST) for managing the Offer;

• (b) a placing fee of 4% (plus GST) for funds raised under the Offer (CPS will not receive fees on any amount the Company raises); and

(b)

20,000,000 DLC Options exercisable at $0.03 each on or before the date which is three years from issue,

Subject to the Company re-listing on ASX, CPS will receive a monthly corporate advisory fee of $5,000 (plus GST), for a period of 12 months, for corporate advisory services to be performed by CPS.

The Offer will not be underwritten.

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