20170405 Takeover Offer for Kula Gold Limited V1.0 final · announce its intention to make an...

TakeoverOfferforKulaGoldLimitedTheBoardofGeopacific Resources Limited (ASX:GPR) (Geopacific) is pleased toannounceitsintentiontomakeanoff-markettakeoveroffer(theOffer)toacquirealloftheordinarysharesofKulaGoldLimited(ASX:KGD)(Kula).Pre-bidacceptanceoftheOfferhasbeensecuredfromFranklinAdvisers,Inc.,asinvestmentmanageronbehalfofcertainfundsandaccounts,whichholds17%ofKula’sissuedcapital.

OfferGeopacific’sOfferis1Geopacificshareforevery1.4723Kulashares.

TheOfferallowsKulashareholderstocontinuetheireconomicparticipationinthesuccessfuldevelopmentoftheWoodlarkGoldProject(Woodlark)byexchangingsharesinKulaforsharesinGeopacific.

TheOfferisequivalenttoapproximately$0.028perKulaSharecomparedtotheclosingpriceofKulasharesyesterday1of$0.02,andrepresents:

• A25%premiumbasedona5dayvwap2

• A77.5%premiumtothecurrentKulaRightsIssuepriceof$0.0153

TheOfferextendstoanysharessubscribedforunderKula’sRightsIssue.

TheOffer issubjecttoa limitednumberofconditionsassetout inAnnexureA,includinga90%minimumacceptanceoftheOffer.

FurtherdetailsoftheOfferwillbesetout inaBidder’sStatementwhichwillbesenttoKula’sshareholdersshortly.TheBidder’sStatementwillalsosetouthowtoaccepttheOffer,providefurtherinformationaboutGeopacificandsetoutthereasonswhyKula’sshareholdersshouldaccepttheOffer.GeopacificisnotmakinganoffertoacquireanyoftheoptionsissuedbyKula,thoughitwilloffertoacquireanysharesissuedasaresultoftheexerciseofanoption.

WhyGeopacificismakingtheOffertoKula’sShareholdersGeopacific has a strong management team with significant experience indevelopingmineralprojectsfromtheexplorationstageintoproduction.

Kula’sshareholdersareawarethatinJulylastyeartheBoardofKulaannouncedthat Geopacific had been chosen to advance Woodlark in a joint venture (JV)transaction.TheJVtransactionallowsGeopacifictoearnuptoan80%interestinKula’s subsidiary companyWoodlarkMining Limited, which holds allWoodlarkassets,bymeetingmilestonesoveraperiodofuptofouryears.

The first stageofGeopacific advancing thisplan involvedGeopacific conductingdue diligence onWoodlark and preparing a development plan. This stagewascompleted in October 2016 and Geopacific is progressing towards the nextmilestone,advancingWoodlarkwitheconomicstudiesandadevelopmentdrillingprogramme.

1Geopacific’sclosingpriceof$0.042andKula’sclosingpriceof$0.020on4April20172Volumeweightedaverageprice(vwap)from29March2017to4April2017,sourcedfromIRESS3KulaRightsIssueannounced20March2017

5April2017GEOPACIFICRESOURCESLIMITEDACN003208393ASXCode:GPRinfo@geopacific.com.auwww.geopacific.com.auAUSTRALIANOFFICELevel1,278StirlingHighwayClaremont,WA6010.POBox439,Claremont,WA6910.T+61861431823FIJIOFFICEPOBox9975NadiAirportNadiT+6796727150F+6796727152DIRECTORSChairman:MilanJerkovicManagingDirector:RonHeeksExecutiveDirector:PhilippaLeggatNon-ExecDirector:MarkBojanjacNon-ExecDirector:IanClyneCOMPANYSECRETARYMatthewSmithPROJECTSPAPUANEWGUINEA:WoodlarkIslandGoldCAMBODIA:KouSaCopperFIJI:NabilaGoldRakirakiGoldSabetoGold-CopperVudaGold-CopperCakaudroveGold-Silver

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Havingsuccessfullyadvancedtothispoint,GeopacificbelievesthereiscompellingcommerciallogicinbringingtheownershipoftheWoodlarkGoldProjectunderasinglemanagementstructure.

Geopacificbelievesthecurrentdualownershipstructurecausesinefficienciesforbothsetsofshareholdersbyprohibiting shareholders of either company having an unimpeded ownership interest in Woodlark. Thisdiminishes the investment value to current and potential investors. The dual structure also duplicatesgovernance, management and reporting structures, causing excess leakage of funds from developmentactivities.

BenefitsoftheOfferGeopacific ismaking theOffer toKula shareholdersas itbelieves that combiningWoodlarkundera singleownershipstructureisintheinterestsoftheshareholdersofbothcompanies.

GeopacificbelievesthatsuccessfulcompletionoftheOfferwill:

• enhance the investment value to existing and potential investors and financiers by consolidatingownershipinasinglecompany.

• Eliminate:

• complexandoverlappingcontractualinter-relationshipsbetweenGeopacificandKula;

• duplicationofgovernance,managementandreportingstructures;and

• duplicationofASXlistingfeesandrelatedcomplianceexpenses.

• AllowGeopacificastheownerofWoodlark,togivefullandproperrepresentationtootherimportantstakeholdersincluding:

• thePapuaNewGuineaGovernment;

• theMilneBayProvincialGovernment;and

• theWoodlarklandowners.

FurtherdetailswillbesetoutintheBidder’sStatementwhichwillbeforwardedtoallKulaShareholders.

Pre-bidAcceptanceGeopacificispleasedtoadvisethatFranklinAdvisers,Inc.,asinvestmentmanageronbehalfofcertainfundsandaccounts,aninternationalinvestmentfundmanagerandsubstantialKulaShareholder,hasenteredintoa“Pre-bid Acceptance Agreement”with Geopacific under which it has agreed to sell the approximate 17%interestitmanagesinKulaintotheGeopacificOffer.AcopyofthePre-bidAcceptanceAgreementisattachedunderAppendixB.

GeopacificManagingDirector,RonHeekscommented

“GeopacificandKulaexistforthesameultimateobjectiveofadvancingtheWoodlarkGoldProjecttodevelopment.However,thecurrentdualownershipstructureisinefficient,expensiveandacombined,singleentity is likelytobesignificantlymoreattractivefor investorsandfinanciers.SimplifyingthisstructureisthenextlogicalstepinadvancingtheProjectforthebenefitoftheshareholdersofbothcompanies.”

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CONTACT

ForfurtherinformationonthisupdateortheCompanygenerally,pleasevisitourwebsiteatwww.geopacific.com.auorcontact:

Mr.RonHeeks

ManagingDirector

Ms.PhilippaLeggat

ExecutiveDirectorCorporate

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AnnexureAOfferConditions

TheOfferandanycontractarisingfromtheacceptanceoftheOfferissubjecttofulfilmentorwaiverofthefollowingconditionsbeforetheendoftheOfferPeriod.

1.1 MinimumAcceptance

During,orattheendof,theOfferPeriod,thenumberofKulaSharesinwhichGeopacificandanyAssociateofGeopacifictogetherhaveRelevantInterests in isat least90%(bynumber)ofallKulaSharesonissue.

1.2 Noregulatoryaction

BetweentheAnnouncementDateandtheendoftheOfferPeriod(eachinclusive):

(a) there is not in effect any preliminary or final decision, order or decree issued by anyGovernmentAgency;

(b) noactionor investigation isannounced,commencedor threatenedbyanyGovernmentAgency;and

(c) no application is made to any Government Agency (other than by Geopacific or anyAssociateofGeopacific),

inconsequenceoforinconnectionwiththeOffer(otherthananapplicationto,oradecisionororderof, ASIC or the Takeovers Panel in exercise of the powers and discretions conferred by theCorporationsAct)whichrestrains,prohibitsorimpedes,orthreatenstorestrain,prohibitorimpede,or materially impact upon, the making of the Offers and the completion of any transactioncontemplatedbytheBidder’sStatementorwhichrequiresthedivestiturebyGeopacificofanyKulaSharesoranymaterialassetsofGeopacificoranyofitsSubsidiaries.

1.3 Materialadversechange

(a) BetweentheAnnouncementDateandtheendoftheOfferPeriod(eachinclusive)noneofthefollowingoccurs(whetherornotbecomingpublic):

(i) anEvent(includingadecisionofaGovernmentAgencyorachangeinlaw)occursorwillorisreasonablylikelytooccur;

(ii) informationisdisclosedorannouncedbyKulaconcerninganyEvent;or

(iii) informationconcerninganyeventbecomesknowntoGeopacific(whetherornotbecomingpublic),

(eachof(1),(2)and(3)aSpecifiedEvent)which,whetherindividuallyorwhenaggregatedwithallsuchEvents(includingadecisionofaGovernmentAgencyorachangeinlaw)ofalikekindthathaveoccurredorarereasonablylikelytooccur,hashadorwouldbeconsideredreasonablylikelytohave:

(iii) amaterial adverse effect on the business, assets, liabilities, financial or tradingposition,profitabilityorprospects(MaterialAdverseEffect)oftheKulaGrouptakenasawhole;or

(iv) withoutlimitingthegeneralityofthepreviousclause;

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(A) theeffectofadiminutioninthevalueoftheconsolidatednetassetsoftheKulaGroup,takenasawhole,byatleastA$2.5millionagainstwhatitwouldreasonablyhavebeenexpectedtohavebeenbutforsuchSpecifiedEvent;or

(B) theeffectof impairing, terminatingorotherwiseadverselyaffectingorchanging any Tenements or any Authorisation in connection with anyTenements.

(b) ASpecifiedEventshallnotincludeanEvent:

(i) fully and fairly disclosed by Kula on the ASX within 6 months prior to theAnnouncementDate;

(ii) relatingtothestateofsecuritiesmarketsingeneral;or

(iii) resultingfromanychangesinthegoldminingindustryingeneral.

(c) Inthisparagraph,Eventmeansanyevent,change,condition,matterorthing.

1.4 Prescribedoccurrences

BetweentheAnnouncementDateandthedatethat is3BusinessDaysaftertheendoftheOfferPeriod(eachinclusive),noneofthefollowingprescribedoccurrences(beingtheoccurrenceslistedinsection652CoftheCorporationsAct)happen:

(a) KulaconvertingalloranyoftheKulaSharesintoalargerorsmallernumberofsharesundersection254HoftheCorporationsAct;

(b) KulaoranyofitsSubsidiariesresolvingtoreduceitssharecapitalinanyway;

(c) KulaoranyofitsSubsidiariesenteringintoabuybackagreementorresolvingtoapprovethetermsofabuybackagreementundersection257C(1)or257D(1)oftheCorporationsAct;

(d) KulaoranyofitsSubsidiaries:

(i) issuingKulaShares(otherthanKulaSharesissuedasaresultoftheexerciseofKulaOptions);

(ii) grantinganoptionoverKulaShares;or

(iii) agreeingtomakesuchanissueorgrantsuchanoption;

(e) KulaoranyofitsSubsidiariesissuing,oragreeingtoissue,convertiblenotes;

(f) KulaoranyofitsSubsidiariesdisposingoragreeingtodispose,ofthewhole,orasubstantialpart,ofitsbusinessorproperty;

(g) KulaoranyofitsSubsidiariesgranting,oragreeingtogrant,aSecurityInterestinthewhole,orasubstantialpart,ofitsbusinessorproperty;

(h) KulaoranyofitsSubsidiariesresolvingthatitbewoundup;

(i) theappointmentofaliquidatororprovisionalliquidatorofKulaoranyofitsSubsidiaries;

(j) themakingofanorderbyacourtforthewindingupofKulaoranyofitsSubsidiaries;

(k) anadministratorofKulaoranyofitsSubsidiariesbeingappointedundersection436A,436Bor436CoftheCorporationsAct;

(l) KulaoranyofitsSubsidiariesexecutingadeedofcompanyarrangement;or

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(m) the appointment of a receiver, receiver andmanager, other controller (as defined in theCorporationsAct) or similar official in relation to thewhole, or a substantial part, of thepropertyofKulaoranyofitsSubsidiaries.

1.5 Nolitigationonfootorpending

Between the Announcement Date and the end of theOffer Period (each inclusive), no litigationagainstanyKulaGroupMemberwhichmayreasonablyresultinajudgementofA$2.5millionormoreis commenced, is threatened to be commenced, is announced, or ismade known to Geopacific(whetherornotbecomingpublic)orKula,otherthanthatwhichis inthepublicdomainasattheAnnouncementDate.

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DefinedTerms

AnnouncementDatemeansthedateoftheannouncementoftheOfferbyGeopacificontheASX,beingonorabout5April2017.

ASICmeanstheAustralianSecuritiesandInvestmentsCommission.

Associate has the meaning set out in section 12 of the Corporations Act as if subsection 12(1) of theCorporationsActincludedareferencetothisdocumentandKulawasthedesignatedbody.

ASXmeansASXLimited(ABN98008624691)and,wherethecontextrequires,thefinancialmarketthatitoperates.

Authorisationmeansanyapproval,licence,consent,authorityorpermit.

Bidder’s Statementmeans the statement of Geopacific under Part 6.5 Division 2 of the Corporations ActrelatingtotheOffer.

BusinessDaymeansadaythatisnotaSaturday,SundayorpublicholidayorbankholidayinPerth.

CorporationsActmeanCorporationsAct2001(Cth).

GeopacificmeansGeopacifcResourcesLimited(ABN57003208393).

GeopacificSharemeansafullypaidordinaryshareinthecapitalofGeopacific.

Government Agency means any foreign or Australian government or governmental, semi-governmental,administrative, fiscalor judicialbody,department,commission,authority, tribunal,agencyorentityoranyministeroftheCrowninrightoftheCommonwealthofAustraliaoranyState,andanyotherfederal,state,provincial,orlocalgovernment,whetherforeignorAustralian.

KulameansKulaGoldLimited(ABN83126741259).

KulaGroupmeansKulaandeachofitsSubsidiariesandKulaGroupMembermeansanymemberoftheKulaGroup.

KulaOptionmeansanoption,issuedbyKula,toacquireaKulaShare.

KulaSharemeansafullypaidordinaryshareinthecapitalofKula.

OffermeanstheofferforKulaSharesbyGeopacifconthebasisof1GeopacificShareforevery1.4723KulaShares.

OfferPeriodmeanstheperiodduringwhichtheOfferisopenforacceptanceinaccordancewiththeBidder’sStatement.

RelevantInteresthasthemeaninggiveninsections608and609oftheCorporationsAct.

SecurityInterestmeansaninterestorpower:

(a) reservedinoroveraninterestinanyasset;or

(b) createdorotherwisearisinginoroveranyinterestinanyassetunderasecurityagreement,abillofsale,mortgage,charge,lien,pledge,trustorpower,

bywayof,orhavingsimilarcommercialeffect to, security for thepaymentofadebt,anyothermonetaryobligationortheperformanceofanyotherobligation,andincludes,butisnotlimitedto:

(c) anyagreementtograntorcreateanyoftheabove;and

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(d) asecurityinterestwithinthemeaningofsection12(1)ofthePersonalPropertySecuritiesAct2009(Cth).

SubsidiaryhasthemeaninggiveninDivision6ofPart1.2oftheCorporationsAct.

TakeoverBidmeanstheoff-markettakeoverbidconstitutedbythedispatchoftheOfferinaccordancewiththeCorporationsAct.

TakeoversPanelmeanstheAustralianTakeoversPanel.

TenementsmeansanyandalltenementsthatKulaoritsSubsidiarieshaveadirectorindirectinterestinfromtime to time (including as holder, owner, operator or joint venturer), including any tenement that is asuccessor,renewal,modification,extensionorsubstituteforthewholeorpartofanysuchtenement.

ThirdPartymeansapersonotherthanGeopacificanditsAssociates.

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AnnexureBPre-bidAcceptanceAgreement

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