Ann: Quarterly Cashflow Report, page-81

Vector Resources Limited Page 11
5. APPROVAL TO ISSUE MEDEA NATURAL RESOURCES SHARES Resolution 4
5.1 Background
The Company has engaged Medea Natural Resources Limited (Medea Natural
Resources), a capital advisory and structuring firm with its registered office in
London, United Kingdom. Medea Natural Resources will undertake structuring work
for the Company on all debt and structured finance options for the proposed
development of the Adidi-Kanga Gold Project, as well as other potential
opportunities. The Company is seeking approval to issue 10,000,000 Shares as a
signing and commencement fee (Medea Natural Resources Shares). This payment
is in lieu of any monthly or ongoing retainer arrangement that is typical for these
engagements
The Company considers that the fees payable for the services rendered under the
engagement of Medea Natural Resources would typically range between
GBP180,000 to GBP225,000, based on a monthly retainer of between GBP20,000
and GBP25,000 and an expectation the engagement would extend for a minimum
of 9 months. Accordingly, this would result in an issue price if converted of between
A$0.32 and A$0.039 per share issued and based on a AUD/GBP exchange rate of
0.565.
Medea Natural Resources is not a Related Party of the Company.
5.2 Listing Rules information requirements
Listing Rule 7.1 provides, in summary, that a listed company may not issue equity
securities in any 12-month period which exceeds 15% of the number of issued
securities of the company held at the beginning of the 12-month period, except with
the prior approval of Shareholders of the company in general meeting of the precise
terms and conditions of the proposed issue.
The effect of Resolution 4 if passed, will be that the issue of Shares will be exempt
from the 15% limit under Listing Rule 7.1.
Approval of Resolution 4 will allow the Company to issue the Medea Natural
Resources Shares, and provide the Company with flexibility during the next 12-
month period to issue further equity securities in order to raise further capital if
required.
In accordance with Listing Rule 7.3, the following details are provided in relation to
Resolution 4:
(a) The maximum number of Shares to be issued pursuant to Resolution 4 is
10,000,000 Shares.
(b) The Medea Natural Resources Shares will be issued following receipt of
approval from Shareholders to issue the Shares under this Resolution. The
Company will issue the Shares no later than 20 business days after the
Meeting and will be issued progressively.
(c) The Medea Natural Resource Shares will be issued to Medea Natural
Resources or its nominees in consideration for Medea Natural Resources
entering into the debt and structured finance engagement and for the future
services to be provided under that engagement. Accordingly, the Medea
Natural Resources Shares will be issued for nil cash consideration and no
funds will be raised through the issue of the Shares.