Announcement PDF Estrella Resources Limited ACN 151 155 207 NOTICE OF ANNUAL GENERAL MEETING AND EXPLANATORY MEMORANDUM Thursday, 25 November 2021 9:00am (WST) Mining Corporate Boardroom Level 11, 216 St Georges Terrace Perth WA 6000 The Annual Report is available online at www.estrellaresources.com.au. This Notice of Annual General Meeting and Explanatory Memorandum should be read in its entirety. If Shareholders are in doubt as to how to vote, they should seek advice from their accountant, solicitor or other professional adviser without delay. Should you wish to discuss any matter please do not hesitate to contact the Company by telephone on +61 08 9481 0389. NOTICE OF MEETING Notice is given that the Annual General Meeting of Shareholders of Estrella Resources Limited ACN 151 155 207 (Company) will be held at Level 11, 216 St Georges Terrace Perth WA on Thursday, 25 November 2021 commencing at 9:00am (WST). The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of this Notice. 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 as Shareholders at 4:00pm (WST) on Tuesday, 23 November 2021. Terms and abbreviations used in this Notice and Explanatory Memorandum are defined in Schedule 1. AGENDA Annual Report To table and consider the Annual Report of the Company and its controlled entities for the financial year ended 30 June 2021, which includes the Financial Report, the Directors’ Report and the Auditor’s Report. 1. 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, the Remuneration Report that forms part of the Directors’ Report for the financial year ended 30 June 2021 be adopted by the Shareholders on the terms and conditions in the Explanatory Memorandum.” Please note that a vote on this Resolution is advisory only and does not bind the Directors or the Company. Voting Prohibition In accordance with section 250R of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by, or on behalf of, a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such member. However, a vote may be cast by such person if: (a) the person is acting as a proxy and the Proxy Form specifies how the proxy is to vote, and the vote is not cast on behalf of a person who is otherwise excluded from voting on this Resolution as described above; or (b) the person is the Chair voting an undirected proxy which expressly authorises the Chair to vote on a resolution connected with the remuneration of a member of the Key Management Personnel. 2. Resolution 2 – Re-election of Director – Stephen Brockhurst To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution: “That, for the purposes of clause 14.2 of the Constitution and for all other purposes, Stephen Brockhurst, a Director, who retires by rotation, and being eligible, is re-election as a Director.” 1 3. Resolution 3 – Election of Director – Neil Hutchison 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 14.4 of the Constitution, ASX Listing Rule 14.4 and for all other purposes, Neil Hutchison, a Director who was appointed as an additional Director on 18 November 2020, and being eligible, is re-elected as a Director.” 4. Resolution 4 – Ratification of prior issue of Underwriter Options to Henslow Pty Ltd – Listing Rule 7.1 To consider, and if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution: “That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 5,000,000 Underwriter Options issued pursuant to the Company’s capacity under Listing Rule 7.1 to Henslow Pty Ltd on the terms and conditions set out in the Explanatory Statement.” Voting Exclusion The Company will disregard any votes cast in favour of this Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved (namely Henslow Pty Ltd) 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 directions given to the proxy or attorney to vote on the Resolution in that way; (b) the Chair of the meeting 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. 5. Resolution 5 – Ratification of prior issue of Advisor Options to Henslow Pty Ltd – Listing Rule 7.1 To consider, and if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution: “That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 10,000,000 Advisor Options issued pursuant to the Company’s capacity under Listing Rule 7.1 to Henslow Pty Ltd on the terms and conditions set out in the Explanatory Statement.” Voting Exclusion The Company will disregard any votes cast in favour of this Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved (namely Henslow Pty Ltd) 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 directions given to the proxy or attorney to vote on the Resolution in that way; (b) the Chair of the meeting 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. 2 6. Resolution 6 – Approval of 10% Placement Facility To consider and, if thought fit, to pass with or without amendment, the following resolution as a special resolution: “That, pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities up 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 on terms and conditions in the Explanatory Memorandum.” Voting Exclusion The Company will disregard any votes cast in favour of this Resolution by or on behalf of: (a) if at the time the approval is sought, the Company is proposing to make an issue of equity securities under rule 7.1A.2, any person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company); or (b) any Associate of that person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company). However, this does not apply to a vote case 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 directions given to the proxy or attorney to vote on the Resolution in that way; (b) the Chair of the meeting 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. Dated 20 October 2021 BY ORDER OF THE BOARD Stephen Brockhurst Director 3 EXPLANATORY MEMORANDUM 1. Introduction This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the Meeting to be held at Level 11, 216 St Georges Terrace, Perth WA on Thursday, 25 November 2021 commencing at 10:00am (WST). This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions in the Notice. A Proxy Form is located at the end of the Explanatory Memorandum. 2. Action to be taken by Shareholders Shareholders should read the Notice and this Explanatory Memorandum carefully before deciding how to vote on the Resolutions. 2.1 Proxies A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a proxy) to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions thereon. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person. Please note that: (a) a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy; (b) a proxy need not be a member of the Company; and (c) a member of the Company 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, but where the proportion or number is not specified, each proxy may exercise half of the votes. Shareholders and their proxies should be aware that: (a) If proxy holders vote, they must cast all directed proxies as they are directed to; and (b) Any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed. Further details are set out below. Proxy vote if appointment specifies way to vote Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does: (a) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); 4 (b) if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; (c) if the proxy is the Chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and (d) if the proxy is not the Chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed). Transfer of non-chair proxy to Chair in certain circumstances Section 250BC of the Corporations Act provides that, if: (a) an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and (b) the appointed proxy is not the Chair of the meeting; and (c) at the meeting, a poll is duly demanded on the resolution; and (d) either of the following applies: (i) the proxy is not recorded as attending the meeting; or (ii) the proxy does not vote on the resolution, the Chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting. The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms. 2.2 Voting Prohibition by Proxy Holders In accordance with section 250R of the Corporations Act, a vote on Resolution 1 must not be cast (in any capacity) by, or on behalf of: (a) a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report; or (b) a Closely Related Party of such member. However, a person described above may cast a vote on Resolution 1 as proxy if the vote is not cast behalf of a person described in subparagraphs (a) or (b) above and either: (a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on Resolution; or (b) the person is the Chair and the appointment of the Chair as proxy: (i) does not specify the way the proxy is to vote on Resolution 1; and (ii) expressly authorises the Chair to exercise the proxy even if Resolution 1 is connected directly or indirectly with the remuneration of Key Management Personnel. 5 2.3 Corporate Representatives A corporation may appoint an individual as a representative to exercise its powers as Shareholder or as a Shareholder’s proxy. The representative must bring to the Meeting evidence of his or her appointment, including any authority under which it is signed, unless it has been previously given to the Company’s share registry. 2.4 Submit your Proxy Vote Online Vote online at https://investor.automic.com.au/#/loginsah, and simply follow the instructions on the enclosed proxy form. Or alternatively: 2.5 Submit your Proxy Vote by Paper If you do not wish to vote online, then it is necessary to complete in accordance with the detailed instructions set out on the enclosed Proxy Form. The return of your completed form (ONLY if you do NOT vote online) can be done by one of the following ways: 2.6 BY MAIL IN PERSON BY EMAIL Automic GPO Box 5193 Sydney NSW 2001 Automic Level 5, 126 Phillip Street Sydney NSW 2000 meetings@automicgroup.com.au Voting in Person To vote in person, Shareholders are able to attend the Meeting at the time, date and place set out above. In light of on the status of the evolving COVID-19 situation and easing of Government restrictions on public gatherings in place at the time of the Notice and the number of Shareholders that normally attend Shareholder meetings for the Company, the Directors have made a decision that Shareholders will be able to physically attend the Meeting in person and accordingly, have arranged an appropriate meeting venue. If the Government restrictions and corresponding decision of the Director’s changes prior to the Meeting, the Directors will update Shareholders via the Company’s ASX platform. Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 08 9481 0389 3. Annual Report There is no requirement for Shareholders to approve the Annual Report. Shareholders will be offered the following opportunities: (a) discuss the Annual Report which is available online at www.estrellaresources.com.au; (b) ask questions or make comment on the management of the Company; (c) ask the auditor questions about the conduct of the audit and the preparation and content of the Auditor’s Report. In addition to taking questions at the Meeting, written questions to the Chair about the management of the Company, or to the Company’s auditor about: 6 (a) the preparation and the content of the Auditor’s Report; and (b) the conduct of the audit; (c) accounting policies by the Company in relation to the preparation of the financial statements; and (d) the independence of the auditor in relation to the conduct of the audit, may be submitted no later than 5 Business Days before the Meeting to the Company Secretary at the Company’s registered office. 4. Resolution 1 – Remuneration Report Section 250R(2) of the Corporations Act provides that the Company is required to put the Remuneration Report to the vote of Shareholders. The Directors’ Report contains the Remuneration Report which sets out the remuneration policy for the Company and reports the remuneration arrangements in place for the executive Directors, specified executives and non-executive Directors. Section 250R(3) of Corporations Act provides that Resolution 1 is advisory only and does not bind the Directors of the Company of itself, a failure of Shareholders to pass Resolution 1 will not require the Directors to alter any of the arrangements in the Remuneration Report. However, the Corporations Act also gives Shareholders the opportunity to remove the Board if the Remuneration Report receives a ‘no’ vote of 25% or more at two consecutive annual general meetings (Two Strikes Rule). Under the Two Strikes Rule, where a resolution on the Remuneration Report receives a ‘no’ vote of 25% or more at two consecutive annual general meetings, the Company will be required to put to Shareholders at the second annual general meeting a resolution on whether another meeting should be held (within 90 days) at which all Directors (other than the managing director) who were in office at the date of approval of the applicable Directors’ Report will cease to hold office immediately before that further meeting but may stand for reelection. 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, a further resolution relating to the Two Strikes Rule is not relevant for this Annual General Meeting. The Chair will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on the Remuneration Report. The Chair intends to exercise all undirected proxies in favour of Resolution 1. If the Chair of the Meeting is appointed as your proxy and you have not specified the way the Chair is to vote on Resolution 1, by signing and returning the Proxy Form, the Shareholder is considered to have provided the Chair with an express authorisation for the Chair to vote the proxy in accordance with the Chair’s intention. 5. Resolution 2 – Re-election of Director – Resolution 2 – Reelection of Director – Stephen Brockhurst 5.1 General The Constitution sets out the requirements for determining which Directors are to retire by rotation at an annual general meeting. 7 Mr Brockhurst, who has served as a Director since 3 April 2017 and was last re-elected on 19 November 2019, retires by rotation and seeks re-election. 5.2 Qualifications and other material directorships Mr Brockhurst is the founding Director of Mining Corporate Pty Ltd and has over 15 years’ experience in the finance and corporate advisory industry and has been responsible for the preparation of the due diligence process and prospectuses on a number of initial public offers. His experience includes corporate and capital structuring, corporate advisory and company secretarial services, capital raising, ASX and ASIC compliance requirements. Mr Brockhurst has served on the board and acted as Company Secretary for numerous ASX listed and private companies. He is currently a Director of Locksley Resources Limited and Nelson Resources Limited. 5.3 Independence If re-elected the board considers Mr Brockhurst will be an independent director. 5.4 Board recommendation The Board (excluding Mr Brockhurst) supports the re-election of Mr Brockhurst and recommends that Shareholders vote in favour of Resolution 2. The Chair intends to vote undirected proxies in favour of Resolution 2. 6. Resolution 3 – Election of Director – Neil Hutchison 6.1 General The Constitution allows the Directors to appoint at any time a person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution. Pursuant to the Constitution and ASX Listing Rule 14.4, any Director so appointed holds office only until the next following annual general meeting and is then eligible for election by Shareholders but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at that meeting. Mr Neil Hutchison, having been appointed by other Directors on 18 November 2020 in accordance with the Constitution, will retire in accordance with the Constitution and ASX Listing Rule 14.4 and being eligible, seeks election from Shareholders. 6.2 Qualifications and other material directorships Mr Hutchison is a geologist with over 30 years’ experience in conducting regional and minesite exploration, target generation, resource drill out, project reviews and evaluations. Mr Hutchison has extensive nickel experience having been the General Manager for Geology at Poseidon Nickel for 11 years as well as the Exploration Superintendent at Jubilee Mines Cosmos Nickel Project for 5 years. Mr Hutchison is also a Non-Executive Director at Kairos Minerals. 6.3 Independence If elected the board does not consider Mr Hutchison will be an independent director. 8 6.4 Board recommendation The Board (excluding Mr Hutchison) supports the re-election of Mr Hutchison and recommends that Shareholders vote in favour of Resolution 3. The Chair intends to vote undirected proxies in favour of Resolution 3. 7. Resolution 4 – Ratification of prior issue of Underwriter Options to Henslow Pty Ltd – Listing Rule 7.1 7.1 Background On 2 June 2021, the Company announced that it had entered into an option exercise underwriting agreement with Henslow Pty Ltd (Henslow) to fully underwrite the exercise of listed Options which were exercisable at $0.05 and due to expire on 27 June 2021 (Underwriting Agreement). A summary of the material terms and conditions of the Underwriting Agreement are set out below: (a) (b) The Company and the Underwriter agreed as follows: (i) Henslow to fully underwrite 225,812,246 Options (being the number of Options on issue which remained unexercised as at the date of the Underwriting Agreement), representing an underwriting amount of $11,290,612 (Underwritten Amount); (ii) Company to pay Henslow a 2% selling and management fee on the Underwritten Amount and an underwriting fee of 4% of the Underwritten Amount, representing a total of $677,437 (ex GST); (iii) Company to issue Henslow (or their nominees) 5,000,000 new unlisted Options with an exercise price of $0.05 and expiry date of 1 June 2022 (Underwriter Options); (iv) Henslow may procure such persons to sub-underwrite at its sole and absolute discretion; and (v) the obligation of Henslow to subscriber for Shares (Shortfall Shares) on exercise of Options which remained unexercised as at 27 June 2021 (Expiry Date) at $0.05 per Shortfall Shares was subject to and conditional upon a number of conditions precedent, including (but not limited to) the Company providing Henslow a shortfall notice outlining the number of outstanding Options as at the Expiry Date and a certificate confirming (among other things) that no termination event has occurred (as outlined below) and the representations and warranties given by the Company are true and correct (Certificate), as at the date of the Certificate. The Underwriting Agreement also contains a number of indemnities, representations and warranties from the Company to the Underwriter, and termination events, that are considered standard for an agreement of this type. On 2 July 2021, the Company announced that a total of 144,668,333 Options remained unexercised as at 27 June 2021. On 6 July 2021, the Company announced that it raised approximately $11,200,000 through the exercise of Options and issue of the Shortfall Shares pursuant to the Underwriting Agreement. 9 Resolutions 4 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the prior issue of the Underwriter Options issued to Henslow in accordance with the Underwriting Agreement. 7.2 ASX Listing Rules 7.1 and 7.4 Broadly speaking, and subject to a number of exceptions which are contained in Listing Rule 7.2 (which do not apply in the circumstance of this Resolution), 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 securities it had on issue at the start of that period. The Underwriter Options do not fit within any of the exceptions in Listing Rule 7.2 and, as it has not yet been approved by the Company’s Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval under Listing Rule 7.1 for the 12 month period following the issue date. Listing Rule 7.4 allows the shareholders of a listed company to approve an issue of equity securities after it has been made or agreed to be made. If they do, the issue is taken to have been approved under Listing Rule 7.1 and so does not reduce the company’s capacity to issue further equity securities without shareholder approval under that rule. The Company wishes to retain as much flexibility as possible to issue additional equity securities into the future without having to obtain Shareholder approval for such issues under Listing Rule 7.1. To this end, Resolution 4 seeks Shareholder approval of the issue of the Underwriter Options under and for the purposes of Listing Rule 7.4. 7.3 Technical information required by ASX Listing Rule 14.1A If Resolution 4 is passed, the Underwriter Options will be excluded in calculating the Company’s 15% limit in Listing Rule 7.1, effectively increasing the number of equity securities it can issue without Shareholder approval over the 12 month period following the issue date. If Resolution 4 is not passed, the Underwriter Options will be included in calculating the Company’s 15% limit in Listing Rule 7.1, effectively decreasing the number of equity securities it can issue without Shareholder approval over the 12 month period following the issue date. 7.4 Technical information required by ASX Listing Rule 7.5 Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to Resolution 4: (a) the Underwriter Options were issued to Henslow Pty Ltd; (b) a total of 5,000,000 Underwriter Options were issued pursuant to the Company’s placement capacity under Listing Rule 7.1; (c) the Underwriter Options were issued on the terms and conditions set out in Schedule 2; (d) the Underwriter Options were issued on 6 July 2021; (e) the Underwriter Options were issued at nil issue price, in consideration for services provided by Henslow Pty Ltd in accordance with the Underwriting Agreement. The Company has not and will not receive any other consideration for the issue of the Underwriter Options (other than in respect of funds received on exercise of the Underwriter Options); 10 (f) the purpose of the issue of the Underwriter Options was to satisfy the Company’s obligations under the Underwriting Agreement; (g) the Underwriter Options were issued in accordance with the Underwriting Agreement. A summary of the material terms of the Underwriting Agreement is set out in Section 7.1; and (h) a voting exclusion statement is set out in the Notice in respect of Resolution 4. The Directors of the Company believe Resolution 4 is in the best interest of the Company and its Shareholders and unanimously recommend that the Shareholders vote in favour of Resolution 4. 8. Resolution 5 – Ratification of prior issue of Advisor Options to Henslow Pty Ltd – Listing Rule 7.1 8.1 Background On 1 July 2021, the Company issued 10,000,000 unlisted Options exercisable at $0.10 on or before 30 June 2022 (Advisor Options) to Henslow pursuant to a corporate advisory agreement between the Company and Henslow dated 1 July 2021 (Corporate Advisory Agreement). A summary of the material terms and conditions of the Corporate Advisory Agreement are set out below: (a) (Services): The scope of corporate advisory services to be provided by Henslow to the Company are as follows: (i) (ii) (iii) develop an investor education program encompassing: (A) non-deal roadshow(s) and site visit(s); (B) results presentation and management roadshows throughout reporting periods with target domestic and international institutional investors, high net wealth investors and other brokers; (C) enhanced investor communications through investor presentation and market updates; (D) webinar (virtual site visit) introducing key management and the key business attributes to investors; assistance with: (A) the preparation of key marketing documents and announcements; (B) ensuring that the Company’s key investment merits are clearly communicate