Announcement PDF PROSPECTUS DY6 Metals Ltd ACN 663 592 318 THE OFFERS COMPRISE: (a) an initial public offering of a minimum of 25,000,000 Shares and a maximum of 35,000,000 Shares to be issued at a price of $0.20 per Share to raise a minimum of $5,000,000 and a maximum of $7,000,000 (before costs) (Capital Raising Offer); and (b) an offer of 3,000,000 Options to be issued to the Lead Manager (or its nominees) as part consideration for the provision of lead manager and bookrunner services provided to the Company (Lead Manager Offer), (together, the Offers). It is proposed that the Offers will close at 5:00pm (WST) on the Closing Date. The Company reserves the right to close the Offers earlier or to extend this date without notice. Applications must be received before that time. IMPORTANT NOTICE This is an important document and requires your immediate attention. It should be read in its entirety. Please consult your professional adviser(s) if you have any questions about this Prospectus. Investment in the Securities offered pursuant to this Prospectus should be regarded as highly speculative in nature, and investors should be aware that they may lose some or all of their investment. Refer to Section 3 for a summary of the key risks associated with an investment in the Securities. Lead Manager: CONTENTS Important Information Corporate Directory Letter from the Chairman Key details of the Offers Indicative Timetable Investment Overview ii v vi viii ix x 1. 2. 3. 4. 5. 1 16 22 36 6. 7. 8. 9. Details of the Offers Company Overview Risk Factors Financial Information Board, Management and Corporate Governance Material Contracts Additional information Authorisation Glossary of Terms 54 69 76 97 98 Important Information The Offers This Prospectus is issued by DY6 Metals Ltd (ACN 663 592 318) (Company) for the purpose of Chapter 6D of the Corporations Act 2001 (Cth) (Corporations Act). The offers in this Prospectus comprise: (i) an initial public offering of a minimum of 25,000,000 Shares and a maximum of 35,000,000 Shares to be issued at a price of $0.20 per Share to raise a minimum of $5,000,000 and a maximum of $7,000,000 (before costs) (Capital Raising Offer); and (ii) an offer of 3,000,000 Options to be issued to the Lead Manager (or its nominees) as part consideration for the provision of lead manager and bookrunner services provided to the Company (Lead Manager Offer). Lodgement and listing This Prospectus is dated, and was lodged with ASIC on, 3 April 2023 (Prospectus Date). Neither ASIC nor ASX (or their respective officers) take any responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. Application will be made to ASX within seven days of the Prospectus Date for Official Quotation of the Shares the subject of the Capital Raising Offer. Expiry Date This Prospectus expires on the date which is 13 months after the Prospectus Date (Expiry Date). No Securities will be issued on the basis of this Prospectus after the Expiry Date. Not investment advice The information in this Prospectus is not investment or financial product advice and does not take account your investment objectives, financial situation or particular needs. It is important that you read this Prospectus carefully and in its entirety before deciding whether to invest in the Company. In particular, you should consider the risk factors that could affect the performance of the Company. You should carefully consider these risks in light of your personal circumstances (including financial and tax issues) and seek professional guidance from your stockbroker, solicitor, accountant or other professional adviser before deciding whether to invest in the Company. See Section 3 for the key risks relating to an investment in the Company, noting there may be other risks relevant to your personal circumstances. Except as required by law, and only to the extent required, no person named in this Prospectus, nor any other person, warrants or guarantees the performance of the Company, the repayment of capital by the Company or any return on investment in the Securities made pursuant to this Prospectus. No person is authorised to give any information or to make any representation in connection with the Offers, other than as is contained in this Prospectus. Any information or representation not contained in this Prospectus should not be relied on as having been made or authorised by the Company, the Directors, the Lead Manager or any other person in connection with the Offers. Sanlam Private Wealth Pty Ltd (Sanlam) will act as Lead Manager to the Capital Raising Offer. To the maximum extent permitted by law, the Lead Manager and its affiliates, officers, employees and advisers expressly disclaim all liabilities in respect of, make no representations regarding, and take no responsibility for, any part of this Prospectus other than references to their name and make no representation or warranty as to the currency, accuracy, reliability or completeness of this Prospectus. The Company, the Share Registry and the Lead Manager disclaim all liability, whether in negligence or otherwise, to persons who trade Shares before receiving their holding statement. Exposure Period The Corporations Act prohibits the Company from processing Applications in the seven-day period after the Prospectus Date (Exposure Period). The Exposure Period may be extended by ASIC by up to a further seven days. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. You should be aware that this examination may result in the identification of deficiencies in this Prospectus. In such circumstances, any Application that has been received may need to be dealt with in accordance with section 724 of the Corporations Act. Applications under this Prospectus will not be processed by the Company until after the Exposure Period. No preference will be conferred upon Applications received during the Exposure Period. No cooling-off rights Cooling-off rights do not apply to an investment in Securities issued under this Prospectus. This means that, in most circumstances, you cannot withdraw your Application once it has been accepted. Conditional Offers The Offers contained in this Prospectus are conditional on certain events occurring. If these events do not occur, the Offers will not proceed and Applicants will be refunded their Application Monies (without interest). See Section 1.5 for further details on the conditions attaching to the Offers. Electronic Prospectus and Application Forms During the Exposure Period, an electronic version of this Prospectus (without an Application Form) will be available at www.dy6metals.com to only persons in Australia and Hong Kong. Application Forms will not be made available until after the Exposure Period has expired. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be a resident in Australia or Hong Kong and must only access this Prospectus from within Australia or Hong Kong. The Prospectus is not available to persons in other jurisdictions in which it may not be lawful to make such an invitation or offer to apply for Securities. If you access the electronic version of this Prospectus, you should ensure that you download and read the Prospectus in its entirety. Persons having received a copy of this Prospectus in its electronic form may obtain an additional paper copy of this Prospectus and the Application Form (free of charge) from the Company’s registered office during the offer period by contacting the Company as detailed in the Corporate Directory. Applications will only be accepted on the Application Form attached to, or accompanying, this Prospectus. The Corporations Act prohibits any person from passing on to another person the Application Form unless it is attached to a paper copy. Prospective investors wishing to subscribe for Securities under the Offers should complete the relevant Application Form. If you do not provide the information required on Page ii Notice to foreign investors Mr Siwela consents to the inclusion of the matters based on his information in the form and context in which it appears in this Prospectus and has not withdrawn his consent before lodgement of this Prospectus with ASIC. No action has been taken to register or qualify the Securities the subject of this Prospectus or the Offers, or otherwise to permit the offering of the Securities, in any jurisdiction outside Australia and Hong Kong (to the extent specified below). All information in this Prospectus that relates to Exploration Targets, Exploration Results, Mineral Resources and Ore Reserves has been prepared and reported in accordance with the JORC Code. the Application Form, the Company may not be able to accept or process your Application. The distribution of this Prospectus in jurisdictions outside of Australia and Hong Kong (including electronically) may be restricted by law and persons who come into possession of this Prospectus outside of Australia and Hong Kong should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would be unlawful to make such an offer. Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the SFO). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the Shares have not been and will not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO and any rules made under that ordinance). No advertisement, invitation or document relating to the Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors. No person allotted Shares may sell, or offer to sell, such securities in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such securities. The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should obtain independent professional advice. Competent Persons Statement The information in this Prospectus that relates to Exploration Targets and Exploration Results is based on, and fairly represents, information and supporting documentation prepared by Sifiso Siwela, a Competent Person who is a fellow of GSSA and a professional geologist registered with SACNASP. Mr Siwela is employed by ERM Australia Consultants Pty Ltd trading as CSA Global (CSA Global). Mr Siwela has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Taxation The acquisition and disposal of Securities will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Securities from a taxation viewpoint and generally. The Company does not propose to give any taxation advice and, to the maximum extent permitted by law, the Company, its Directors and other officers and each of their respective advisers accept no responsibility or liability for any taxation consequences of subscribing for Securities under this Prospectus. You should consult your own professional tax advisers in regard to tax implications of the Offers. Using this Prospectus Persons wishing to subscribe for Securities offered by this Prospectus should read this Prospectus in its entirety in order to make an informed assessment of the assets and liabilities, financial position and performance, profits and losses, and prospects of the Company and the rights and liabilities attaching to the Securities offered pursuant to this Prospectus. If persons considering subscribing for Securities offered pursuant to this Prospectus have any questions, they should consult their stockbroker, solicitor, accountant or other professional adviser for advice. Statements of past performance This Prospectus includes information regarding the past performance of the Company. Investors should be aware that past performance should not be relied upon as being indicative of future performance. Forward-looking statements This Prospectus contains forward-looking statements which are identified by words such as ‘believes’, ‘estimates’, ‘expects’, ‘targets’, ‘intends’, ‘may’, ‘will’, ‘would’, ‘could’, or ‘should’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the Prospectus Date, are expected to take place. The Company does not undertake to, and does not intend to, update or revise any forward-looking statements, or publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law. Any forward-looking statements are subject to various risks that could cause the Company’s actual results to differ materially from the results expressed or anticipated in these statements. Forward-looking statements should be read in conjunction with, and are qualified by reference to, the risk factors as set out in Section 3. Such forwardlooking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, Page iii many of which are beyond the control of the Company, the Directors and the Company’s management. The Company, the Directors, the Company’s management and the Lead Manager cannot and do not give assurances that the results, performance or achievements expressed or implied in the forward-looking statements contained in this Prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. Photographs and diagrams Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person shown endorses this Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in charts, graphs and tables is based on information available at the Prospectus Date. Disclaimer Except as required by law, and only to the extent so required, none of the Company, the Directors, the Company’s management, the Lead Manager or any other person warrants or guarantees the future performance of the Company, or any return on any investment made pursuant to this Prospectus. Company website Any references to documents included on the Company’s website at www.dy6metals.com are for convenience only, and none of the documents or other information available on the Company’s website is incorporated into this Prospectus by reference. Miscellaneous All financial amounts contained in this Prospectus are expressed as Australian currency unless otherwise stated. Conversions may not reconcile due to rounding. All references to ‘$’ are references to Australian dollars. All references to time in this Prospectus are references to WST, being the time in Perth, Western Australia, unless otherwise stated. Defined terms and abbreviations used in this Prospectus are detailed in the glossary in Section 9. Page iv Corporate Directory Directors Mr Daniel Smith Mr Myles Campion Mr John Kay Dr Nannan He Non-Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director Company Secretary Mr John Kay Registered and Principal Office Share Registry* Level 8, 99 St Georges Tce Perth WA 6000 Phone: +61 8 9486 4036 Email: info@dy6metals.com Website: www.dy6metals.com Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth WA 6000, Australia Registry Information line: 1300 850 505 (within Australia); or +61 3 9415 4000 (outside Australia) Legal - Australia Lead Manager HWL Ebsworth Lawyers Level 20, 240 St Georges Terrace Perth WA 6000 Sanlam Private Wealth Pty Ltd Level 2, 33 York Street Sydney NSW 2000 AFSL: 337927 Legal - Malawi Corporate Advisor Messrs. William Faulkner William Faulkner House Area 15/175 Ntcheu Street P.O. Box 30636 Lilongwe 3, Malawi Minerva Corporate Pty Ltd Level 8, 99 St Georges Terrace Perth WA 6000 Auditor* Investigating Accountant Moore Audit Australia (WA) Level 15, Exchange Tower 2 The Esplanade Perth, WA 6000 Moore Australia Corporate Finance (WA) Pty Ltd Level 15, Exchange Tower 2 The Esplanade Perth, WA 6000 Independent Geologist Proposed Stock Exchange Listing ERM Australia Consultants Pty Ltd trading as CSA Global Level 3, 1-5 Havelock Street West Perth, WA 6005 Australian Securities Exchange (ASX) ASX Code: DY6 * These entities are included for information purposes only. They have not been involved in the preparation of this Prospectus. Page v Letter from the Chairman Dear Investor On behalf of the Board of DY6 Metals Ltd (Company), I am pleased to present this Prospectus and to invite you to become a Shareholder in the Company. The Company is a mineral exploration and development company with a focus on heavy rare earth and critical metal projects in Malawi, including the acquisition of attractive exploration and development resource projects. The Company has the right to acquire 100% of three highly prospective heavy rare earth and critical metal exploration projects in Southern Malawi, being: (a) Machinga – prospective for Heavy Rare Earth Elements (HREE) and Niobium (Nb), Tantalum (Ta) and Zirconium (Zr); (b) Salambidwe – prospective for HREE and Nb-Ta; and (c) Ngala Hill – prospective for Palladium (Pd) rich Platinum Group Elements (PGEs), Copper (Cu) and Nickel (Ni). The Company has secured a total of $2.5m in IPO commitments from two strategic cornerstone investors: (a) Zhenshi Group (HK) Heshi Composite Materials Co., Limited, a Hong Kong based investment group with businesses spanning multiple industries, including composite materials production, trading and logistics, special steel production, mineral development and financial investments, has agreed to subscribe for $1,500,000 worth of Shares under the Capital Raising Offer; and (b) Zhung Nam New Material Company Limited, a Hong Kong based investment group that focusses on the mining, beneficiation, processing and sale of heavy mineral sands and rare earths, has agreed to subscribe for $1,000,000 worth of Shares under the Capital Raising Offer. The Company believes this demonstrates confidence in the quality of DY6’s rare earth and critical metals exploration portfolio and management team. The purpose of this Prospectus is to issue a minimum of 25,000,000 Shares and a maximum of 35,000,000 Shares to be issued at a price of $0.20 per Share to raise a minimum of $5,000,000 and a maximum of $7,000,000 (before costs). This Prospectus also incorporates a secondary offer to the Lead Manager (or its nominees) to subscribe for 3,000,000 Options (see section 1.2 for further details). The proceeds from the Capital Raising Offer will be utilised to enable the Company to systematically explore across its Projects, pay corporate and administration costs, fund future acquisition costs and general working capital and pay the costs of the Offers. This Prospectus contains detailed information about the Offers and the current and proposed operations of the Company, as well as the risks pertaining to an investment in the Company. Potential investors in the Company should carefully consider those risks (detailed in Section 3). Before deciding on whether to invest in the Company, you should read this Prospectus carefully and consult with your accountant, financial adviser, stockbroker, lawyer or other professional adviser. Page vi We look forward to welcoming you as a Shareholder and sharing in what we believe are exciting and prospective times ahead for the Company, should you decide to take up Securities pursuant to the Offers. Yours faithfully Daniel Smith Non-Executive Chairman Page vii Key details of the Offers Key details of the Offers(1) Shares Options Minimum Subscription Maximum Subscription Existing Securities on issue 12,500,000 12,500,000 Total number of Shares to be issued under the Capital Raising Offer 25,000,000 Total number of Options to be issued to the Lead Manager Performance Rights(4) Minimum Subscription Maximum Subscription 6,000,0002 1,500,000 1,500,000 35,000,000 - - - - - 3,000,0003 - - Total number of Securities to be issued to the Vendors 8,000,000 8,000,000 - 3,000,000 3,000,000 Total Securities on issue on completion of the Offers(5) 45,500,000 55,500,000 9,000,000 4,500,000 4,500,000 Fully diluted capital structure on completion of the Offers(6) 59,000,000 69,000,000 Notes: 1. 2. 3. 4. 5. 6. Please refer to Section 1.7 for further details relating to the current and proposed capital structure of the Company. See Section 7.2 for the terms and conditions of the Options. See Section 7.3 for terms of the Lead Manager Options. Also see Section 1.8 for further details of the fees payable to the Lead Manager. See Section 7.4 for the terms of the Performance Rights. Assuming no further Shares are issued and none of the Options or Performance Rights are exercised. Assuming all Options and Performance Rights are issued and exercised, and no other Shares or convertible Securities are issued and exercised. Page viii Indicative Timetable Event Date Lodgement of Prospectus with ASIC 3 April 2023 Opening Date for the Offers 11 April 2023 Closing Date for the Offers 10 May 2023 Issue Date under the Offers 5 June 2023 Expected dispatch of holding statements 7 June 2023 Expected date for Official Quotation on ASX 8 June 2023 Note: The dates shown in the table above are indicative only and may vary subject to the Corporations Act, the Listing Rules and other applicable laws. The Company, in consultation with the Lead Manager, reserves the right to vary the dates and times of the Offers (including, to vary the Opening Date and Closing Date, to accept late Applications, either generally or in particular cases, or to cancel or withdraw the Offers before Completion) in each case without notifying any recipient of this Prospectus or any Applicants, which may have a consequential effect on other dates. If the Offers are cancelled or withdrawn before the allotment of Securities, then all Application Monies will be refunded in full (without interest) as soon as possible in accordance with the requirements of the Corporations Act. Applicants are therefore encouraged to lodge their Application Form and deposit the Application Monies as soon as possible after the Opening Date if they wish to invest in the Company. The admission of the Company to the Official List of the ASX and the commencement of quotation of the Shares are subject to confirmation from the ASX. Page ix Investment Overview This Section is not intended to provide full information for investors intending to apply for Securities offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety. The Securities offered pursuant to this Prospectus carry no guarantee in respect of return of capital, return on investment, payment of dividends or the future value of the Securities. Topic Summary More information The Company, its business model and strategy Who is the issuer DY6 Metals Ltd (ACN 663 592 318) (Company). of the Prospectus? Who is the Company and what does it do? The Company is an early-stage mineral exploration and development company focused on heavy rare earths and critical metal discoveries in Malawi. The Company was only recently incorporated in November 2022. Section 2 Sections 2.1 and 6.1 Pursuant to the Option Agreement, Company has the right to acquire 100% of three highly prospective heavy rare earth and critical metal projects in Southern Malawi, being: (a) Machinga – prospective for Heavy Rare Earth Elements (HREE) and Niobium (Nb), Tantalum (Ta) and Zirconium (Zr); (b) Salambidwe – prospective for HREE and Nb-Ta; and (c) Ngala Hill – prospective for Palladium (Pd) rich Platinum Group Elements (PGEs), Copper (Cu) and Nickel (Ni), (together, the Projects). What is the Company’s business model, growth strategy and key objectives? Following Admission, the Company's primary focus is to increase Section 2.3(b) Shareholder wealth through the exploration, development and acquisition of mineral resource projects. The primary focus will be on undertaking exploration and evaluation of the Projects described in this Prospectus. Funds raised through this prospectus will be applied to exploration of minerals on the Projects, in particular to: (a) further compilation and assessment of historical data; (b) surface geophysical sampling surveys; and (c) implementation of both diamond and RC core drilling programs. Although the Company’s immediate focus will be on the existing Projects, as with most exploration entities, it will pursue and assess other new business opportunities in the resource sector over time which complement its business. These new business opportunities may take the form of direct project acquisitions, joint ventures, farm-ins, acquisition of tenements/permits, and/or direct equity participation. The Board will assess the suitability of investment opportunities by utilising its experience in evaluating projects. There are uncertainties in the process of identifying and Page x Topic Summary More information acquiring new and suitable projects. The Company confirms that it is not currently considering other acquisitions and that future acquisitions are likely to be in the mineral resource sector. Section 2.5 Where does the The Company's business activities, being mineral exploration and development, are in Southern Malawi. See Section 2.5 and the Independent and Annexure Company B operate and what Geologist’s Report at Annexure B for project specific location details. are its main business activities? How does the Company propose to achieve its objectives? Section 2.3(b) Following Admission, the Company's primary focus is to increase Shareholder wealth through the exploration, development and acquisition of mineral resource projects. The primary focus will be on undertaking exploration and evaluation of the Projects described in this Prospectus. Funds raised through this prospectus will be applied to exploration of minerals on the Projects, in particular to: (a) further compilation and assessment of historical data; (b) surface geophysical surveys; and (c) implementation of reverse circulation and diamond core drilling programs. Although the Company’s immediate focus will be on the existing Projects, as with most exploration entities, it will pursue and assess other new business opportunities in the resources sector over time which complement its business. These new business opportunities may take the form of direct project acquisitions, joint ventures, farm-ins, acquisition of tenements/permits, and/or direct equity participation. The Board will assess the suitability of investment opportunities by utilising its experience in evaluating projects. There are uncertainties in the process of identifying and acquiring new and suitable projects. The Company confirms that it is not currently considering other acquisitions and that future acquisitions are likely to be in the mineral resource sector. What are the key The significant dependencies impacting the Company's business model are: Section 2.3(c) dependencies of (a) the maintenance (including renewal) of the tenements in which the the Company’s Company has or acquires an interest; business model? (b) tenure access and the grant of current or future licence applications; (c) commodity price volatility and exchange rate risk; (d) the ability to meet resource and reserves and exploration targets; (e) the accuracy of historical data pertaining to exploration targets, resource and reserve estimates in relation to the Projects and any future acquired interests; (f) the ability to raise further funds to satisfy expenditure requirements, exploration and operating costs; and Page xi Topic Summary (g) More information minimising environmental impact and complying with health and safety requirements. Section 2.7 Will the Company The Company has no operating revenue and is unlikely to generate any