Announcement PDF ACN 151 155 207 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ NOTICE OF 4th ANNUAL GENERAL MEETING EXPLANATORY MEMORANDUM PROXY FORM ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Date of Meeting Thursday 13th November, 2014 Time of Meeting 11.00 a.m. (AEDT) Place of Meeting Estrella Resources Limited Level 57, MLC Centre, 19 – 29 Martin Place SYDNEY NSW 2000 NOTICE OF 2014 ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the fourth Annual General Meeting of the members of Estrella Resources Limited (“the Company”) will be held at the offices of Estrella Resources Limited at Level 57, MLC Centre, 19‐29 Martin Place, Sydney on Thursday 13th November, 2014 commencing at 11.00 a.m. (AEDT). BUSINESS: ITEM 1: TO RECEIVE THE CONSOLIDATED FINANCIAL REPORT To receive and consider the Consolidated Financial Report of the Company, together with the reports of the Directors and Auditor, for the financial year ended 30 June 2014. Note: There is no requirement for Shareholders to approve these reports. ITEM 2: Resolution 1: ORDINARY RESOLUTIONS: Adoption of Remuneration Report “That the Shareholders adopt the Remuneration Report for the financial year ended 30 June 2014.” Note: The vote on this Resolution is advisory only and does not bind the Directors or the Company. Voting Exclusion Statement: In accordance with section 250R (4) of the Act, no member of the key management personnel of the Company or a closely related party of such a member may vote on Resolution 1. However, in accordance with the Act, a person described above may vote on Resolution 1 if: • It is cast by such person as proxy for a person who is permitted to vote, in accordance with the direction specified on the proxy form how to vote; or • It is cast by the Chairman as proxy for a person who is permitted to vote, in accordance with an express direction specified on the proxy form to vote as the proxy decides. Chairman appointed as proxy: If the Chairman is appointed as a proxy for a person who is permitted to vote on this Resolution 1, the Chairman will vote any proxies which do not indicate on their proxy form the way the Chairman must vote, in favour of Resolution 1. 2 Resolution 2: To re‐elect a Director – Mr Julian Bavin “That, for the purposes of clause 15.3 of the Company’s Constitution and for all other purposes, Julian Bavin retires as a Director of the Company by rotation pursuant to the Company’s Constitution and, being eligible, is re‐elected as a Director of the Company.” Resolution 3: To re‐elect a Director – Mr Robert Thomson “That, for the purposes of clause 15.1 (c) of the Company’s Constitution and for all other purposes, Robert Thomson, being a Director appointed to fill a casual vacancy since the last Annual General Meeting, retires as a Director of the Company and, being eligible, is re‐elected as a Director of the Company.” ITEM 3: SPECIAL BUSINESS: Resolution 4: Approve Issue of Options to the Non‐Executive Chairman ‐ Mr Robert Thomson “That, for the purposes of Listing Rule 10.11 of the Australian Securities Exchange Listing Rules and for all other purposes, approval is hereby given for the grant, issue and allotment of 1,500,000 options over ordinary shares in the Company to the Non‐executive Chairman, Mr Robert Thomson, or his nominee, to acquire 1,500,000 fully paid ordinary shares in the Company at an exercise price of $0.10 each and expiring 13 November 2019, on the terms and conditions set out in the Explanatory Memorandum and Annexure A.” Note: Quotation of the options on the ASX will not be sought. Voting Exclusion Statement: The Company will disregard any votes cast on Resolution 4 (Issue of Options to a Director) by Mr Thomson, or his nominee, and by an associate of Mr Thomson, or his nominee, excluded from voting as provided for in Australian Securities Exchange Listing Rule 14.11. However, the Company need not disregard a vote if:   It is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or It is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. 3 Resolution 5: Approve Issue of Options to a Non‐executive Director ‐ Mr Julian Bavin “That, for the purposes of Listing Rule 10.11 of the Australian Securities Exchange Listing Rules and for all other purposes, approval is hereby given for the grant, issue and allotment of 1,000,000 options over ordinary shares in the Company to Non‐executive Director, Mr Julian Bavin, or his nominee, to acquire 1,000,000 fully paid ordinary shares in the Company at an exercise price of $0.10 each and expiring 13 November 2019, on the terms and conditions set out in the Explanatory Memorandum and Annexure A.” Note: Quotation of the options on the ASX will not be sought. Voting Exclusion Statement: The Company will disregard any votes cast on Resolution 5 (Issue of Options to a Director) by Mr Bavin, or his nominee, and by an associate of Mr Bavin, or his nominee, excluded from voting as provided for in Australian Securities Exchange Listing Rule 14.11. However, the Company need not disregard a vote if:   It is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or It is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. 4 Resolution 6: Approve Issue of Options to the Managing Director – Dr Jason Berton “That, for the purposes of Listing Rule 10.11 of the Australian Securities Exchange Listing Rules and for all other purposes, approval is hereby given for the grant, issue and allotment of 3,000,000 options over ordinary shares in the Company to the Managing Director, Dr Jason Berton, or his nominee, to acquire 3,000,000 fully paid ordinary shares in the Company at an exercise price of $0.10 each and expiring 13 November 2019, on the terms and conditions set out in the Explanatory Memorandum and Annexure A.” Note: Quotation of the options on the ASX will not be sought. Voting Exclusion Statement: The Company will disregard any votes cast on Resolution 6 (Issue of Options to a Director) by Dr Berton, or his nominee, and by an associate of Dr Berton, or his nominee, excluded from voting as provided for in Australian Securities Exchange Listing Rule 14.11. However, the Company need not disregard a vote if:  It is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or  It is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. Resolution 7: Ratification of Share placement – Capital Raising “That, for the purposes of Listing Rule 7.4 and for all other purposes, the Shareholders approve and ratify the prior allotment and issue of 11,132,271 Shares to selected sophisticated and professional investors on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.” Voting Exclusion Statement: In accordance with Listing Rule 14.11, the Company will disregard any votes cast on Resolution 7 by any person who participated in the issue of the Shares, or any associate of such a person. However, in accordance with the Listing Rules, the Company need not disregard a vote if:  it is cast by a person as a proxy for a Shareholder who is entitled to vote, in accordance with the directions on the proxy form; or  if it is cast by the Chairman of the Meeting as proxy for a Shareholder who is entitled to vote, in accordance with the directions on the proxy form. 5 Resolution 8: Approval to Issue, or Ratification of the Issue of Shares – Payment for Provision of Drilling Services “That, for the purposes of Listing Rule 7.1 and Listing Rule 7.4 and for all other purposes, the Shareholders approve the allotment and issue of Shares to the value of A$275,000 to or as directed by Capital Drilling Limited for the provision of drilling services, at a price per Share not less than the volume weighted average price for Shares trading on the ASX over 30 days prior to the issue of issue of the Shares (the Capital Shares), or in the event the Capital Shares have been issued prior to the date of the meeting, ratification of the allotment and issue of the Capital Shares on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.” Voting Exclusion Statement: In accordance with Listing Rule 14.11, the Company will disregard any votes cast on Resolution 8 by any person who participated in the issue of the Capital Shares, or any associate of such a person. However, in accordance with the Listing Rules, the Company need not disregard a vote if:  it is cast by a person as a proxy for a Shareholder who is entitled to vote, in accordance with the directions on the proxy form; or  if it is cast by the Chairman of the Meeting as proxy for a Shareholder who is entitled to vote, in accordance with the directions on the proxy form. Resolution 9: Approval to Issue, or Ratification of the Issue of Shares – Acquisition of SQM Buy‐ back Rights Over the Antucoya West Project “That, for the purposes of Listing Rule 7.1 and Listing Rule 7.4 and for all other purposes, the Shareholders approve the allotment and issue of Shares equivalent to 4.9% of the Estrella shares on issue (after the share issue) to or as directed by Sociedad Quimica y Minera de Chile S.A. (SQM) in consideration of the cancellation of SQM’s buy‐back rights over the Antucoya West Project, Chile. (the SQM shares). The SQM shares will be issued at a price per Share equivalent to the volume weighted average price for Shares trading on the ASX over 90 days prior to the issue of the Shares, and in the event the SQM Shares have been issued prior to the date of the meeting, ratification of the allotment and issue of the SQM Shares on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.” Voting Exclusion Statement: In accordance with Listing Rule 14.11, the Company will disregard any votes cast on Resolution 9 by any person who participated in the issue of the SQM Shares, or any associate of such a person. However, in accordance with the Listing Rules, the Company need not disregard a vote if:  it is cast by a person as a proxy for a Shareholder who is entitled to vote, in accordance with the directions on the proxy form; or  if it is cast by the Chairman of the Meeting as proxy for a Shareholder who is entitled to vote, in accordance with the directions on the proxy form. 6 SPECIAL RESOLUTION To consider and, if thought fit, to pass the following Resolution 10 as a special resolution. Resolution 10: Approval for Additional Placement Capacity “That, pursuant to and in accordance with ASX Listing 7.1A, and for all other purposes, Shareholders approve the issue of Equity Securities up to 10% of the issued ordinary capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions in the Explanatory Memorandum.” Voting Exclusion Statement: The Company will disregard any votes cast on Resolution 10 by a person (and any associates of such a person) who may participate in the 10% Placement Facility and a person who might obtain a benefit, except solely in the capacity of a holder of Shares, if this Resolution is passed. However, the Company will not disregard a vote if:  it is cast by a person as a proxy for a Shareholder who is entitled to vote, in accordance with the directions on the proxy form; or  if it is cast by the Chairman of the Meeting as proxy for a Shareholder who is entitled to vote, in accordance with the directions on the proxy form. 7 ITEM 4: OTHER BUSINESS To transact any other business brought forward in accordance with the Company’s Constitution. Further information in relation to these resolutions is set out in the Explanatory Memorandum below. PROXIES To be effective, the proxy form and the power of attorney or other authority (if any) under which each is signed (or a copy of that power or authority certified in a manner acceptable to the Directors of the Company) must be received at least 48 hours prior to the meeting (i.e. not later than 11.00 a.m. AEDT on Tuesday 11th November 2014), or to any adjourned meeting, at the Company’s Share Registrars being: Boardroom Pty Limited Hand Delivery: Level 7, 207 Kent Street Sydney NSW 2000 By Mail: GPO Box 3993 Sydney NSW 2001 By Facsimile: (02) 9290 9655 A member entitled to attend and vote is entitled to appoint not more than two persons as his/her proxy to attend and vote instead of the member. A proxy need not be a member of the Company. If more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the member’s voting rights. Unless under Power of Attorney (which should have been noted by the Company) a proxy form by a corporation should be executed under its common seal or in accordance with the Corporations Act. Dated at Sydney this 13th day of October, 2014 BY ORDER OF THE BOARD Heath L Roberts Company Secretary 8 EXPLANATORY MEMORANDUM These explanatory notes set out information in connection with the business to be considered at the Estrella Resources Limited 2014 Annual General Meeting. ORDINARY BUSINESS The following items of ordinary business will be considered at the meeting. ITEM 1: TO RECEIVE THE CONSOLIDATED FINANCIAL REPORT This item of business relates to the receipt and adoption of the Company’s Financial Report for the period ended 30 June 2014 and to the receipt of the Directors’ and Auditor’s Reports. These documents will be tabled by the Chairman of the meeting and do not require a formal resolution. ITEM 2: Resolution 1: Adoption of Remuneration Report The Corporations Act (“the Act”) requires that a resolution be put to the members to adopt the Remuneration Report as disclosed in the Director’s Report. The vote on this resolution is advisory only and non‐binding. The resolution gives the members the opportunity to ask questions or make comments concerning the Remuneration Report during the meeting. The Remuneration Report is set out on pages 39 to 47 of the Company’s Annual Report for the year ending 30 June 2014 which was lodged with the ASX on 30 September 2014. The Remuneration Report sets out the Company’s remuneration policy and reports on the remuneration arrangements in place for the Directors and key executives of the Company. Section 250R (2) of the Act stipulates that the Company must propose a resolution to the Shareholders that the Remuneration Report be adopted. The outcome of the resolution is advisory only and does not bind the Directors or the Company. The Directors will consider the outcome of the vote and comments made by Shareholders on the Remuneration Report at the meeting at which the Directors review the Company’s remuneration policies. At the Meeting, the Chairman must allow a reasonable opportunity for the Shareholders at the Meeting, as a whole, to ask questions about or make comments on the management of the Company or the Remuneration Report. 9 Under recent amendments to the Act: • the Company is required to disregard any votes cast on this Resolution by any member of the “Key Management Personnel” (“KMP”) of the Company and their closely related parties, except as directed by any proxies; and • a ‘two‐strike’ process in relation to the advisory and non‐binding vote on the remuneration report has been introduced. Under the two‐strike process if, at two consecutive AGMs, at least 25% of votes cast on a resolution that the remuneration report be adopted are against the adoption of the report, at the second of these AGMs, there must be put to the vote a resolution that another meeting be held within 90 days at which all Directors (except the Managing Director) who were Directors when the 25% ‘no’ vote was passed must stand for re‐election. KMP are those having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, and include Directors. “Closely related parties” include certain family members and dependents of KMP and companies they control. 2013 AGM result At the 2013 AGM, the Company did not receive a ‘strike’ in respect of the Remuneration Report. No votes cast on the resolution considering the Remuneration Report were cast against the adoption of the report. It follows that, if the Company receives a ‘strike’ at the Meeting, this would be the ‘first strike’ for the purposes of section 250U of the Act. Chairman as proxy It is very important that the Shareholders appointing the Chairman as their proxy clearly indicate on the attached proxy form the way the Chairman must vote their proxy on Resolution 1. Otherwise, if the Chairman is appointed as a proxy for a person who is permitted to vote on this Resolution 1 and the Shareholder does not indicate on their proxy form the way the Chairman must vote, the Chairman will vote that proxy in favour of Resolution 1. Please see the proxy form attached to the Notice for further information. Recommendation Noting that each Director of the Company has a personal interest in their own remuneration the subject of this Resolution, the Board does not consider it appropriate to make a recommendation to Shareholders in relation to voting on this Resolution. 10 Resolution 2: Re‐election of a Director – Mr Julian Bavin Julian Bavin was appointed as a Director of the Company with effect from 6 March 2012 and was re‐ elected at the Company’s 2013 AGM. However, as Mr Robert Thomson will be standing for re‐ election pursuant to Resolution 3 below, having been appointed since the last AGM, one director must still stand for re‐election, and Mr Bavin, being eligible, offers himself for re‐election. Julian Bavin is an independent director of Estrella who was educated at the University of Leicester, the Royal School of Mines and London Business School. He has 30 years of technical, operational and commercial experience in mineral exploration gained from work in a wide range of commodities, jurisdictions and cultures most of which was spent with the Rio Tinto Group in South America, Australia, Indonesia and Europe. From 2001 to 2009 he was responsible for the Rio Tinto exploration in South America and the teams which identified the potential in a range of projects now in various stages of feasibility including the PRC potash and Altar copper/gold projects in Argentina, the Mina Justa, Constancia and La Granja copper projects in Peru, and the Amargosa bauxite project in Brazil. Mr Bavin is also a Director and CEO of Pan Global Resources and a non‐executive Director of Exeter Resource Corporation and Prism Resources. Mr Bavin holds a Bachelor of Science and a Masters of Science and is a Fellow of the SEG. Recommendation The Directors unanimously recommend that shareholders vote in favour of Mr Bavin’s re‐election as a Director of the Company. Resolution 3: Re‐election of a Director – Mr Robert Thomson Robert Thomson was appointed as a Director of the Company with effect from 13 March 2014, to fill a casual vacancy on the Board and is the Non Executive Chairman of the Company. Pursuant to clause 15.1 (c) of the Company’s Constitution Mr Thomson must not hold office (without re‐election) past the next Annual General Meeting, being the first since his appointment. Accordingly, Mr Thomson, being eligible, offers himself for re‐election. Mr Thomson is a Sydney based mining engineer with extensive hands on mining experience, as well as significant corporate and board experience. During his career, Mr. Thomson has taken various projects from early stage exploration, through project feasibility and ultimately to successful operations. Mr Thomson’s career in the resource sector spans over three decades, having previously worked in senior project and executive roles with Climax Mining, Oxiana, Finders Resources and Kingsgate. Robert has a B.E (Mining) from the University of Queensland, MBA from the University of Wollongong and is a Fellow of the AusIMM and Member of the AICD. Mr Thomson has played a key role in: 11      Development of the Wetar copper project in Indonesia including the successful completion of the BFS. Revitalisation and development of the Didipio copper/gold porphyry in the Philippines followed by a $A300 million merger into Oceania Gold. Development of the Sepon Gold Project in Laos. Completion of the Chatree Gold Project BFS, construction and operations start‐up in Thailand. Development of an SX‐EW mine development in NSW, which during operations produced the lowest cost copper in Australia. Recommendation The Directors unanimously recommend that shareholders vote in favour of Mr Thomson’s re‐election as a Director of the Company. SPECIAL BUSINESS The following items of special business will be considered at the meeting. ITEM 3: Resolutions 4 to 6: Issue of Options to Directors Resolutions 4 to 6 inclusive are to consider the issue of options to the Company’s Directors involved in the operation and management of the business. Pursuant to and in accordance with ASX Listing Rule 10.13 the following information is provided in relation to Resolutions 4 to 6:     The maximum number of options to be issued is 5,500,000; The exercise price per option is A$0.10 being a 100% increase above the current market price per Estrella Share of A$0.05 as at the date hereof; The options will be issued and allotted within one month of shareholder approval being on or before 13 December 2014; and No funds will be raised from the issue of the options, however upon exercise of the options the funds raised will be used for exploration and working capital purposes. As provided in Exception 14 to Listing Rule 7.2, if shareholder approval is given under Listing Rule 10.11 approval is not required under Listing Rule 7.1. The options are subject to the terms contained within Annexure A. 12 Resolution 7 Ratification of Share placement – Capital Raising Background On 30 April this year, the Company completed a placement to selected sophisticated and professional investors (as defined in section 708 of the Corporations Act) to raise A$1,225,000 through the issue of 11,132,271 Shares. The sophisticated and professional investors who have been issued Shares as part of this Placement are not related parties of the Company. The prior approval of Shareholders was not required in respect of the Placement as it did not exceed the 15% Restriction imposed upon listed companies by Listing Rule 7.1. Listing Rule 7.4 provides that if the Placement is ratified by Shareholders, the Company will again have the flexibility to issue further securities without Shareholder approval within the 15% Restriction over the next 12 month period. The Board believes that it is in the best interests of the Company to maintain the ability to issue up to its full placement capacity so that the Company retains financial flexibility and can take advantage of opportunities that may arise. Information for Shareholders in accordance with Listing Rule 7.4 The following information is provided in relation to Resolution 7 in accordance with Listing Rule 7.5: Number of securities allotted: The Placement consisted of the issue and allotment of 11,132,271 Shares. Issue price: Each Share was issued at a price of A$0.11. Term of the securities: The Shares issued under the Placement rank equally with the existing Shares on issue. Allottees: The Shares were issued to selected sophisticated and professional investors, as defined in section 708 of the Act, who are not related parties of the Company. Intended use of funds: The Company intends to and has used the funds raised primarily for the exploration of various prospects within Project Altair and also for general working capital purposes. Recommendation The Board unanimously recommends that the Shareholders approve Resolution 7 as each Director intends to do with regard to their own shareholdings in the Company. 13 Resolution 8 Approval to Issue, or Ratification of the Issue of Shares – Payment for Provision of Drilling Services Background The Company anticipates entering into a drilling contract with Capital Drilling Limited (Capital) for the provision by Capital of drilling services at the Colupo Project in Chile. The drilling programme is anticipated to commence around 1 November 2014, be completed around 30 November 2014, and will comprise approximately 1,500m of reverse circulation drilling. In order to preserve the Company’s cash, Estrella proposed and Capital agreed to accept remuneration for its services through the issue of Estrella shares (the Capital Shares). The drilling programme, which has a fixed price quote of up to but not exceeding $275,000, will be satisfied by the issue of Estrella shares after the date of issue of this Notice of Meeting, however it is not certain whether the share issue will occur prior to the Estrella 2014 AGM to be held on 13 November 2014. In any case, however, the Estrella shares to be issued to or as directed by Capital will be issued at a price not less than the daily volume weighted average price of Estrella Shares trading on the ASX over the 30 days prior to the date of issue. The Shares will not be issued to any related party of the Company. Approval of Shareholders is not required in respect of the share issue as it does not exceed the 15% restriction imposed upon ASX listed companies by Listing Rule 7.1. Listing Rule 7.4 provides that if the share issue is ratified by Shareholders, the Company will again have the flexibility to issue further securities without Shareholder approval within the 15% Restriction limit over the next 12 month period. The effect of Resolution 8 is therefore to:   Allow Estrella to issue the Capital Shares during the three month period after the meeting, without using the Company’s 15% annual placement capacity, pursuant to ASX Listing Rule 7.1; or Should the Capital Shares have been issued pursuant to ASX Listing Rule 7.1 prior to the meeting, refresh the Company’s ability, to the extent of the Capital Shares, to issue further shares during the next twelve months pursuant to ASX Listing Rule 7.1, without the need to obtain further shareholder approval (subject to the ASX Listing Rules and the Corporations Act). If Resolution 8 is not passed, the Capital Shares will be counted towards the 15% limit pursuant to Listing Rule 7.1 for a period of twelve months from the date of issue. The Board believes that it is in the best interests of the Company to maintain the ability to issue up to its full placement capacity so that the Company retains financial flexibility and can take advantage of opportunities that may arise. 14 Information for Shareholders in accordance with Listing Rules 7.1 and 7.4 The following information is provided in relation to Resolution 8 in accordance with Listing Rules 7.1 and 7.5: Number of securities to be allotted and issued: The share issue consists of the allotment and issue of up to $275,000 in value of Estrella shares at a price not less than the daily volume weighted average price of Estrella Shares trading on the ASX over the 30 days prior to the date of issue. Issue price: The issue price for the Estrella shares shall be not less than the volume weighted average price of Estrella shares trading on the ASX over the 30 days prior to the date of issue of the shares. Term of the securities: The shares rank equally with the existing shares on issue. Allottees: The shares will be issued to or as directed by Capital, and in no case a related party of the Company. Intended use of funds: The share issue will not directly raise funds, however is in effect the consideration for the provision of drilling services as outlined above. Recommendation The Board unanimously recommends that the Shareholders approve Resolution 8 as each Director intends to do with regard to their own shareholdings in the Company. Resolution 9 Approval to Issue, or Ratification of the Issue of Shares – Acquisition of SQM Buy‐back Rights Over the Antucoya West Project Background The Company’s wholly owned subsidiary Estrella Resources (Chile) SpA. and Sociedad Quimica y Minera de Chile S.A. (SQM) are parties to an option agreement whereby Estrella may, on meeting certain payment obligations and performing minimum work commitments, acquire 100% interest in the metals (a term defined in the relevant option agreement) contained in certain SQM exploration tenements located in northern Chile (the Initial Option Agreement). Estrella has disclosed extensively in previous ASX releases regarding the Initial Option Agreement and the results of exploration carried out by it on the relevant exploration tenements. A term of the Initial Option Agreement allows SQM to effectively ‘claw‐back’ 49% interest in any metals discovered in the relevant exploration tenements by refunding to Estrella certain costs incurred by it in exploration on those tenements. 15 SQM’s ability to ‘claw‐back’ a significant proportion of the interest in any metals discovered in the relevant exploration licences is not considered conducive to Estrella’s best advancement of the projects moving forward and Estrella has successfully negotiated to cancel the SQM ‘claw‐back’ entitlement, as it applies to certain of the relevant tenements, by the issue to SQM of Estrella shares subject of this resolution 9. Estrella and SQM are in the process of finalising a Memorandum of Understanding, that will then be co