Too much for my brain on a Monday morn.
Anyone want to translate?
"Brightstar Resources Ltd. (ASX: BTR) (Brightstar or the Company) announces the
signing a Royalty Call Option Deed and two Settlement Deeds in relation to an
outstanding liability for a long-term loan and amounts owed to its former Company
Secretary.
Settlement under the documents is to be subject to shareholder approvals as
required under the ASX Listing Rules and, if required, the Corporations Act, and
Brightstar will seek these approvals as soon as practicable. Brightstar envisages this
to be at its 2021 AGM.
Each of the below deeds were executed by Brightstar on 27 September 2021.
Call Option Deed
The parties to the Call Option Deed are:
i. Brightstar;
ii. Desert Exploration Pty Ltd ACN 065 110 698 (Desert Exploration), a
subsidiary of Brightstar; and
iii. Stone Resources (HK) Limited a company incorporated in Hong Kong
(SRHK), a related entity of Director Mr Yongji Duan.
SRHK is the payee of a 3% net smelter royalty (NSR) over a substantial portion of
Brightstar’s tenement holdings, which was granted as part of the consideration
given to SRHK under the Debt and Equity Compromise Agreement (DECA). Details
of the DECA were previously announced on ASX on 25 March 2020 along with
subsequent amendments and variations.
Under the Call Option Deed, SRHK has agreed to grant Brightstar or its nominee an
option to purchase the NSR (Call Option).
An option fee, in cash and/or shares at Brightstar’s discretion, equal to
AUD$300,000 is payable to SRHK on the settlement date. The grant of the Call
Option is subject to shareholder approval if required, including under Chapter 10
of the ASX Listing Rules, any share based payments are calculated by reference to
a 10 day VWAP for the days preceding the execution date of the deed.
The option period commences when the Call Option Deed is settled (being the
payment of the option fee), which is expected to occur seven days after the date of
Brightstar’s 2021 AGM, however this may be as late as 31 March 2022 depending
upon the nature of the shareholder approvals required.
2
The option period expires 5 calendar years after the settlement date.
The exercise price of this Call Option is US$25,000,000. If exercised, Brightstar can
elect to pay the exercise price in cash and/or shares. The exercise is subject to any
required shareholder approvals at the time of exercise.
SRHK has no rights to compel or demand exercise of the Call Option granted under
the Call Option Deed.
The Call Option may be exercised for the purchase of part of the NSR and the
purchase price will be adjusted pro-rata. If the Call Option is exercised for the
purchase of part of the NSR, within the Option Period, Brightstar may exercise the
Call Option one further time for the purchase of part or all of the remainder of the
NSR.
Settlement Deed – SRHK, Duan, Cortex
The parties to the Settlement Deed are:
i. Brightstar;
ii. SRHK;
iii. Great Cortex International Limited, a company incorporated in the British
Virgin Islands (Cortex); and
iv. Yongji Duan (Duan).
Cortex Settlement
As set out in previous Annual Reports, Cortex provided a loan of AUD$630,000
(Loan) which has been accruing interest at 9.31% per annum since February 2012.
Under this Settlement Deed, Brightstar has agreed to pay AUD $630,000 in cash on
or before 18 November 2023. Subject to payment of the AUD $630,000 on or before
18 November 2023, Brightstar and Cortex will terminate the original loan agreement
which was executed in September 2012 and all liabilities under that loan agreement
will be deemed to have been discharged.
It has been agreed that all interest payments accrued under the Loan are forgiven
and not payable provided Brightstar meets its obligations under this Settlement
Deed.
Duan Settlement
The Duan Settlement Deed deals with claims made by the parties relating to
expenditure and reimbursement. It has been agreed that execution of the Duan
Settlement Deed will be in full and final settlement of all these matters including
outstanding remuneration (Released Matters).
In consideration of mutual releases and in full and final settlement of the Released
Matters, Mr Duan has agreed to step down as Chairman of Brightstar on and from
the settlement date (which is the same settlement date as under the Call Option
Deed above) and remain on the Board as a Non-Executive Director.
3
Outstanding remuneration payable to Mr Duan for the period from 1 July 2019 to
31 August 2021 totalling $63,217.87 will be settled in cash and/or shares at
Brightstar’s election on that settlement date. Any share based payments are
calculated by reference to a 10 day VWAP for the days preceding the execution date
of the deed.
Non-executive director Mr Josh Hunt has agreed to act as Chairman on an interim
basis.
SRHK Settlement
SRHK is a party to the Settlement Deed as a related entity of Mr Duan and due to
the fact that Brightstar has entered into the Call Option Deed with SRHK as
described above.
Settlement Deed – Lau
The parties to the Settlement Deed are:
i. Brightstar; and
ii. Tony Lau (Lau).
The Company had been in negotiations with Mr Lau concerning alleged outstanding
remuneration and reimbursement expenses during his time as company secretary
from 29 April 2014 to 19 July 2021.
The parties have agreed to pay a total of AUD$300,000 to Mr Lau as payment for
services performed by Mr Lau during his tenure as company secretary of Brightstar,
and in full and final settlement of all claims made by Mr Lau and Brightstar.
Brightstar can elect to make the payment in cash and/or shares at Brightstar’s
election. Any share based payments are calculated by reference to a 10 day VWAP
for the days preceding the execution date of the deed. The settlement date is within
7 days of Brightstar’s 2021 AGM or 7 December 2021, whichever is the earlier.
Brightstar Resources Managing Director Bill Hobba commented:
“The Settlement Deeds close off all outstanding issues. If exploration is successful,
the Call Option, if exercised, will work as a cap on the NSR royalty liability which will
benefit all shareholders of Brightstar and provide certainty moving forward.”
This ASX announcement has been approved by the Managing Director on behalf of
the board of Brightstar.
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