Announcement PDF DLA Piper Australia Whadjuk Country Level 21 240 St Georges Terrace Perth WA 6000 PO Box Z5470 Perth WA 6831 Australia T: +61 8 6467 6000 F: +61 8 6467 6001 dlapiper.com Market Announcements Office ASX Limited Level 4, Central Park 152-158 St Georges Terrace PERTH WA 6000 Your reference By online lodgement 9 June 2023 Our reference CMC/CMC/11004803/2 AUM/1228525828.2 FOR IMMEDIATE RELEASE TO THE MARKET Dear Sir/Madam Takeover bid by Westgold Resources Limited for Musgave Minerals Limited – bidder’s statement We act for Westgold Resources Limited ACN 009 260 306 (ASX:WGX) (Westgold) in relation to its offmarket takeover bid to acquire all of the fully paid ordinary shares in Musgrave Minerals Limited ACN 143 890 671 (ASX:MGV) (Musgrave) that Westgold does not already own (Offer). In accordance with item 5 of section 633(1) of the Corporations Act 2001 (Cth) (Corporations Act) and on behalf of Westgold, we enclose a copy of Westgold’s bidder’s statement in relation to its Offer, which has been lodged today with the Australian Securities and Investments Commission and sent to Musgrave. Westgold gives notice pursuant to sections 633(2) and 633(4)(a) of the Corporations Act that 5.00pm (Perth time) on Sunday, 11 June 2023 is the date set in accordance with section 633(2), as the time and date for determining persons to whom information is to be sent in accordance with items 6 and 12 of section 633(1) of the Corporations Act. Yours sincerely James Nicholls Partner T: +61 86467 6087 james.nicholls@dlapiper.com Matthew Watkins Partner T: +61 86467 6097 matthew.watkins@dlapiper.com DLA Piper Australia DLA Piper Australia DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. A list of offices and regulatory information can be found at dlapiper.com This document contains important information and requires your immediate attention. If you are in any doubt as to how to deal with this document, you should consult your legal, financial or other professional adviser immediately. Bidder’s Statement Accept the Offer by Westgold Resources Limited ACN 009 260 306 to purchase all of your ordinary shares in Musgrave Minerals Limited ACN 143 890 671 for 1 Westgold Share for every 5.37 of Your Musgrave Shares If you have any questions about the Offer or this document or about how to accept the Offer, please call Westgold Offer Information Line on +1300 918 437 (local call cost for callers within Australia). The Offer will close at 5.00pm (Perth time) on [●] 2023, unless extended or withdrawn. Table of contents 1. Summary of the Offer .................................................................................................................13 2. Information on Westgold ............................................................................................................17 3. Information on Westgold’s securities .........................................................................................30 4. Information on Musgrave ...........................................................................................................36 5. Information on Musgrave securities ...........................................................................................42 6. Intentions of Westgold ................................................................................................................45 7. Information on the Combined Group ..........................................................................................51 8. Offer Consideration ....................................................................................................................59 9. Risk factors .................................................................................................................................60 10. Tax considerations .....................................................................................................................71 11. Additional Information ................................................................................................................76 12. Definitions and interpretations....................................................................................................81 13. Approval of Bidder’s Statement..................................................................................................92 Schedule 1 Terms and Conditions of the Offer 93 Company directory 107 Attachment A - Westgold ASX Announcements 108 Important dates Bidder’s Statement lodged with ASIC and ASX 9 June 2023 Date of Offer (Offer opens) [●] 2023 Date for notice on the status of Conditions [●] 2023 Offer closes (unless extended or withdrawn) 5.00pm (Perth time) on [●] 2023 These dates may vary as permitted under the Corporations Act. Any changes to the above timetable will be notified on Westgold’s website at www.westgold.com.au. Key contacts Share Registry Offer Information Line* Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth WA 6000 Telephone: 1300 850 505 1300 918 437 (from within Australia) or +61 3 9415 4393 (from outside Australia) between 8.30am and 5pm (AEST), Monday to Friday. *Calls to these numbers may be recorded How to accept the offer Acceptances must be received before the end of the Offer Period (subject to the terms of the Offer). For Issuer Sponsored Holdings of Shares (Securityholder Reference Number beginning with 'I') To accept the Offer, complete the enclosed Acceptance Form in accordance with the instructions on it and return it in the enclosed envelope or to the address on the Acceptance Form. For CHESS Holdings of Shares (Holder Identification Number beginning with 'X') To accept the Offer, either contact your Controlling Participant (usually your broker) and instruct them to accept the Offer on your behalf or complete the enclosed Acceptance Form in accordance with the instructions on it and return it in the enclosed envelope or to the address on the Acceptance Form. 1 Important notices Bidder’s Statement relating to an offer from Westgold Resources Limited (ACN 009 260 306), to acquire all of the ordinary shares in Musgrave Minerals Limited (ACN 143 890 671). This document is the Bidder’s Statement given by the bidder under Part 6.5 of Chapter 6 of the Corporations Act and in compliance with the requirements of sections 636 and 637 of the Corporations Act, in relation to the Offer contained in Schedule 1 of this Bidder’s Statement. This document contains the formal terms of the Offer by Westgold and other information relevant to your decision whether to accept the Offer. Australian Securities and Investments Commission A copy of this Bidder’s Statement was lodged with the Australian Securities and Investments Commission on 9 June 2023. Neither ASIC nor any of its officers takes any responsibility for the content of this Bidder’s Statement. Date of the Offer This Bidder’s Statement is dated 9 June 2023. It includes an Offer dated [●] 2023 in paragraph 1.7 of Schedule 1 of this document. Investment decisions This Bidder's Statement does not constitute financial product advice or investment advice (nor tax, accounting or legal advice) and has been prepared without reference to your individual investment objectives, financial situation or other circumstances. Any acceptance of the Offer will be subject to investment and other known and unknown risks, some of which are beyond the control of Westgold. These risks, together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of shares in Westgold and Musgrave in the future. When making any investment decision, investors should make their own enquires and investigations regarding all information in this Bidder's Statement, including but not limited to the assumptions, uncertainties and contingencies which may affect future operations of Westgold and Musgrave, and the impact that different future outcomes may have on Westgold and Musgrave. Further information in relation to these risks and uncertainties, including the key risks of the Offer are summarised in Section 9. This Bidder's Statement should not be relied upon as the sole basis for any decision as to whether or not to accept the Offer and Westgold recommends that you seek independent financial, legal, taxation and other professional advice before making any such investment decision. Privacy Westgold has obtained your information from the Musgrave Register for the purpose of making the Offer and, if accepted, administering holdings of Westgold Shares. The Corporations Act requires the names and addresses of Westgold Shareholders to be held in a public register. Your information may be disclosed to Westgold’s related bodies corporate and external service providers. It may also be required to be disclosed to regulators such as ASIC. The registered address of Westgold is Level 6, 200 St Georges Terrace, Perth, Western Australia, 6000. Defined terms and interpretation Unless otherwise noted, terms used in this Bidder’s Statement and Offer are defined in Section 12.1 below. That Section also sets out certain rules of interpretation that apply to this Bidder’s Statement. Notice to persons outside Australia It is your sole responsibility to satisfy yourself that you are permitted by any foreign law applicable to you to accept the Offer. You should note that the Offer has been conducted in accordance with the laws enforced in Australia and the ASX Listing Rules. The disclosure requirements in relation to the Offer applicable in Australia may differ from those applying in your jurisdiction. Foreign shareholders may have difficulties in enforcing their rights and any claims they may have arising under the laws of their jurisdiction. It may also be difficult to compel the bidder to subject itself to a foreign court’s judgment. This Bidder’s Statement does not constitute an offer to sell, nor the solicitation of an offer to buy, any Musgrave Shares in any jurisdiction other than Australia and its external territories and New Zealand, unless Westgold determines to the contrary. The distribution of this Bidder’s Statement in jurisdictions outside Australia and its external territories and New Zealand may be restricted by law or regulation. Accordingly, persons who come into possession of it should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. No action has been taken to register this Bidder’s Statement or qualify Westgold or to otherwise permit a public offering of Westgold Shares outside Australia. Investors resident in places other than Australia and its external territories and New Zealand should note that the Offer is being proposed and will be conducted in accordance with the laws in force in Australia and with the ASX Listing Rules. The disclosure requirements in relation to the Offer in 2 Australia will differ from those applying in other jurisdictions. The financial statements included in this Bidder’s Statement have been prepared in accordance with generally accepted accounting principles in Australia that will differ from those in other jurisdictions. The securities referred to in this Bidder’s Statement have not been and will not be registered under the US Securities Act of 1933 (Securities Act), as amended, or other securities laws of any jurisdiction of the US and therefore may not be offered or sold in the US without registration or an applicable exemption from the registration requirements of the Securities Act. This Bidder’s Statement does not constitute an offer to issue or to sell or the solicitation of any offer to buy any such securities or any securities to be issued in exchange for such securities in any jurisdiction in which the issue of shares under the Offer would be unlawful. Small Parcel Holders Following acceptance of the Offer, if the total number of Westgold Shares you are entitled to receive as consideration under the Offer is a Small Parcel, you will receive a cash amount for Your Musgrave Shares, calculated in accordance with Section 11.4 as if you were an Ineligible Foreign Shareholder. Forward looking statements Certain statements in this Bidder's Statement relate to the future. Such forward looking statements are not based on historical facts, but rather reflect the current assumptions and expectations of Westgold concerning future events and circumstances, including the operations of Westgold and Musgrave and the economic and regulatory environment in which Westgold and Musgrave will operate in the future. Often, but not always, forward looking statements can be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements in this Bidder's Statement regarding intent, belief, expectations, plans, strategies and objectives of management, indications of and guidance on synergies, future earnings or financial position or performance, future acquisitions, anticipated production or construction commencement dates, costs or production outputs for each of Westgold and Musgrave (based on, among other things, their respective estimates of their production for the periods specifically referred to in this Bidder's Statement), the outcome and effects of the Offer (including expected benefits to Westgold and Musgrave Shareholders) and the future operations of Westgold and Musgrave. To the extent that this Bidder's Statement contains forward looking information, the forward-looking information is subject to a number of risks, including those generally associated with the mining industry. Any such forward looking statement inherently involves known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements to be materially greater or less than estimated. These may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development (including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves), political and social risks, changes to the regulatory framework within which Westgold and Musgrave operate or may in the future operate, environmental conditions including extreme weather conditions, geological and geotechnical events, and other environmental issues, the recruitment and retention of key personnel, industrial relations issues, litigation and outbreaks of disease or pandemics (including the continuation of the global COVID-19 pandemic). Further information in relation these risks and uncertainties, including the key risks of the Offer are summarised in Section 9. All forward looking statements should be read in light of such risks and uncertainties. None of Westgold, its respective officers, employees and advisers nor any other person named in this Bidder's Statement, makes any representation or warranty that any outcome, performance, or result expressed in or implied by any forward looking statement in this Bidder's Statement will actually occur. You should treat all forward looking statements with caution and not place undue reliance on them. Any forward looking statements in this Bidder's Statement reflect the assumptions and expectations of Westgold as at the Announcement Date. Except as required by law, Westgold and its respective officers, employees and advisers, and any person named in this Bidder's Statement with their consent, and any person involved in the preparation of this Bidder's Statement, disclaim any obligation to revise or update any forward looking statements after the Announcement Date to reflect any change in the assumptions or expectations on which those statements are based. Disclaimer as to Musgrave and Combined Group Information Information in this document about Musgrave has been prepared based on publicly available information. Westgold has not independently verified such information. Accordingly, subject to the Corporations Act, Westgold does not make any representation or gives any express or implied warranty as to the accuracy or completeness of such information. Further information relating to Musgrave’s business may be included in the Target’s Statement which Musgrave must provide to its shareholders in response to this Bidder's Statement. 3 The information on the Combined Group contained in this Bidder’s Statement, to the extent that it incorporates or reflects information on Musgrave, has also been prepared using publicly available information. Accordingly, information in relation to the Combined Group is subject to the foregoing disclaimer to that extent. presented by other entities, nor should it be construed as an alternative to other financial measures determined in accordance with the Australian Accounting Standards. You are cautioned, therefore, not to place undue reliance on any non-IFRS financial information and ratios (if any) included in this Bidder’s Statement. Value of Westgold Shares Diagrams, maps and data in charts, graphs and tables As you are being offered Westgold Shares as consideration for Your Musgrave Shares, the implied value of the Offer will vary with the market price of Westgold Shares. Further information on the implied value of the Offer is contained in Section 11.5(c) of this Bidder's Statement. Diagrams and maps appearing in this Bidder's Statement are illustrative only and may not be drawn to scale. Unless otherwise indicated, all data contained in charts, graphs and tables is based on information current at the Announcement Date. No guarantee of capital or investment returns References to currency Except as required by law, and only to the extent required, no person named in this Bidder's Statement nor any other person, warrants or guarantees Westgold's performance with or without the acquisition of Musgrave or the repayment of capital or any return on investment made pursuant to this Bidder's Statement. Unless otherwise indicated, all references to $, A$, dollars or cents in this Bidder's Statement are to Australian currency. Acceptance of the Offer is not a deposit with or other liability of Westgold or any other related party or associate of Westgold. The Offer Consideration to be received under the Offer is subject to investment risk including loss of income or principal invested. Neither Westgold nor any of its related parties or associates, gives any guarantee or assurance as to the performance of the new Westgold Shares, any particular rate of return on the new Westgold Shares or the repayment of any capital or principal. References to time Unless otherwise indicated, all references to time in this Bidder's Statement are to the time in Perth, Australia. Further questions If you have further questions in relation to the Offer or how to accept them, please call the Offer Information Line on 1300 918 437 from within Australia (toll-free) or +61 3 9415 4393 from outside Australia (charges apply) between 8:30am and 5:00pm (AEST) Monday to Friday. Non-IFRS information This Bidder’s Statement references certain terms commonly used in the mining industry that are not prescribed in the IFRS, including “AISC”, and that constitute ‘non-IFRS financial information’ under Regulatory Guide 230 Disclosing non-IFRS financial information published by ASIC. C1 represents the cost for mining, processing and administration after accounting for movements in inventory (predominantly ore stockpiles). It includes net proceeds from by-product credits, but excludes the cost of royalties and capital costs for exploration, mine development and plant and equipment. AISC is made up of the C1 plus royalty expense, sustaining capital expense and general corporate and administration expenses. AIC is made up of the AISC plus growth (major project) capital and discovery expenditure. Westgold believes this non-IFRS financial information provides useful information to users in measuring the financial performance and condition of Westgold. The non-IFRS financial information does not have a standardised meaning prescribed by the Australian Accounting Standards and, therefore, may not be comparable to similarly titled measures 4 Letter to Musgrave Shareholders Dear Musgrave Shareholder We are pleased to enclose an Offer from Westgold Resources Limited ACN 009 260 306 to acquire all of your ordinary shares in Musgrave Minerals Limited ACN 143 890 671. Offer overview The Offer provides Musgrave Shareholders the opportunity to see their gold assets developed by a well-funded, debt free and experienced gold miner in a timely and capital efficient manner. It provides an immediate and attractive premium that sidesteps the high risk, dilutive and arduous process of approval, finance, construction and start-up of a small, stand-alone processing facility in a region already well serviced with processing infrastructure. Westgold is offering you 1 Westgold Share for every 5.37 of your Musgrave Shares. As at 2 June 2023 (being Westgold’s share price at the time of Westgold’s proposal and before the loss of confidentiality affected Musgrave’s share price and volumes), the implied value of the Offer Consideration was $177.3 million or $0.30 per Musgrave Share (based on the closing price of Westgold Shares on 2 June 2023 of $1.611). The Offer represents a highly attractive premium of:2  30.5% to the 5-day VWAP of Musgrave Shares of $0.229 on 2 June 2023;  33.0% to the 30-day VWAP of Musgrave Shares of $0.225 on 2 June 2023; and  41.3% to the 180-day VWAP of Musgrave Shares of $0.212 on 2 June 2023. Offer rationale and key benefits Westgold is a leading Western Australian gold mining company with a current market capitalisation of approximately $763 million3, cash and liquid assets of $168 million and nil debt as at 31 March 2023. Westgold is the dominant gold producer in the Murchison region with annual Group production of approximately 240-260koz with 200koz of gold from its Cue and Meekatharra gold operations.4 This strategic position is bookended by our 1.4Mtpa Tuckabianna processing hub and 1.8Mtpa Bluebird processing hub which are situated only 40km and 120km to the north of the Musgrave Cue gold project respectively. 1 The implied valuation will change from time to time in accordance with fluctuations in the price of Westgold Shares. 2 Other than where specified, VWAPs are calculated for the period up to and including 2 June 2023 (being Musgrave’s share price at the time of Westgold’s proposal and before the loss of confidentiality affected Musgrave’s share price and trading volumes). 3 Based on Westgold’s closing price of $1.61 as at 2 June 2023. 4 The information in relation to the production guidance is extracted from the Westgold announcement “Westgold delivers FY22 and releases guidance for FY23” dated 26 August 2022. Westgold confirms that all material assumptions underpinning the production target, or the forecast financial information derived from the production target, in the announcement continue to apply and have not materially changed. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised. The stated production target is based on Westgold’s current expectations of future results or events and should not be solely relied upon by investors when making investment decisions. Further evaluation work and appropriate studies are required to establish sufficient confidence that this target will be met. 5 The combination of Westgold and Musgrave represents a logical, pragmatic regional consolidation of Musgrave’s Cue gold project with Westgold’s existing processing infrastructure. Combining these assets will:  Provide a rapid, lower risk and capital efficient means Musgrave Shareholders seeing the Cue Gold Project developed.  Materially reduce the capital burden timing and complexity associated with Musgrave seeking to independently approve, finance, construct, equip, resource and operate a stand-alone processing hub within close proximity of two existing, fully operational processing hubs.  Remove inefficient duplication of processing infrastructure, and pre-production capital costs of $121 million. These savings can be applied to value-adding activities such as mine development and exploration drilling.  Expedite the benefits and increase the certainty of employment, commercial opportunities and royalties that will flow to local communities.  Improve the ESG metrics for all stakeholders due to a smaller development footprint that will reduce environmental and social impact. By accepting the Offer, you will become a Westgold Shareholder and continue to have exposure to the future potential upside associated with combined groups assets whilst becoming part of an established, well-funded and debt free Western Australian gold miner. Next steps and how to ACCEPT Detailed information about the Offer is set out in this Bidder’s Statement. I encourage you to carefully read this Bidder’s Statement in its entirety and consider the merits of this Offer. The Offer is subject to a limited number of conditions which are set out in this document, including Westgold having received valid acceptances for at least 50.1% of Musgrave Shares at or before the end of the Offer Period, unless such conditions are waived. The Offer is scheduled to close at 5.00pm (Perth time) on [●] 2023, unless extended. To accept the Offer, please follow the instructions set out in this document and on the accompanying Acceptance Form. I strongly encourage you to ACCEPT the Offer as soon as possible. If you have any questions in relation to the Offer, please contact the Offer Information Line on 1300 918 437 (if in Australia) or +61 3 9415 4393 (if outside Australia) between 8:30am and 5:00pm (AEST), Monday to Friday. We look forward to receiving your acceptance and to welcoming you as a Westgold Shareholder. Yours sincerely Hon. Cheryl Edwardes AM Non-Executive Chair Westgold Resources Limited 6 Reasons why you should ACCEPT the Offer The Offer provides significant benefits to you as a Musgrave Shareholder. The key reasons why you should accept the Offer are as follows: 1. The Offer represents a highly attractive premium and value for your Musgrave Shares 2. The Offer is underpinned by the strong strategic rationale based on logical regional consolidation 3. The all-scrip Offer provides Musgrave Shareholders with an opportunity to own shares in Westgold, a well-funded, debt free, established gold producer, with significantly greater liquidity, market relevance while retaining exposure to the future development of the Musgrave assets 4. The Offer significantly reduces the capital burden and approval, financing, construction, project development and operating risks associated with being a Musgrave Shareholder 5. You may receive CGT rollover relief for the Offer Consideration 6. You may not incur brokerage or stamp duty in accepting the Offer 7. Should you not accept the Offer and the Offer lapses, then the Musgrave Share price may drop to pre-Offer levels or below with a reduced level of trading liquidity 8. If you do not accept the Offer, you may become a minority Musgrave Shareholder _________________________________________________________________________________ 1. The Offer represents a highly attractive premium and value for your Musgrave Shares By accepting the Offer you will receive 1 Westgold share for every 5.37 Musgrave Shares you own. The recent trading price of Westgold shares was $1.61 on 2 June 2023 (being Westgold’s share price at the time of Westgold’s proposal and before the loss of confidentiality affected Musgrave’s share price and volumes). The Offer represents a highly attractive premium of:  30.5% to the 5-day VWAP of Musgrave Shares of $0.229 on 2 June 2023;  33.0% to the 30-day VWAP of Musgrave Shares of $0.225 on 2 June 2023; and  41.3% to the 180-day VWAP of Musgrave Shares of $0.212 on 2 June 2023.5 5 VWAPs are calculated for the period up to and including 2 June 2023 (being the last undisturbed trading day of Westgold Shares and Musgrave Shares). 7 The graph below compares the value of the Offer relative to the historical volume weighted average trading prices of Musgrave Shares on the ASX, up to 2 June 2023 (being $0.240). The graph below shows the $0.30 implied Offer value of the Offer Consideration relative to the historical trading prices of Musgrave Shares on the ASX, up to 2 June 2023. The all-scrip Offer provides you attractive ongoing equity ownership and full exposure to the benefits of being a shareholder in the larger Combined Group. To receive this attractive value for your Musgrave Shares, you should ACCEPT the Offer. 8 2. The Offer is underpinned by the strong strategic rationale based on logical regional consolidation The combination of Westgold and Musgrave represents a logical regional consolidation of Westgold’s substantial Murchison gold operations (MGO), which hosts the 1.4Mtpa Tuckabianna and 1.8Mtpa Bluebird mining and processing infrastructure, with Musgrave’s Cue gold project resources. The Tuckabianna and Bluebird processing facilities are located approximately 40km and 120km north from Musgrave’s Cue gold project respectively. The proximity of Westgold’s Tuckabianna and Bluebird processing facilities to Musgrave’s Cue gold project creates an opportunity for numerous synergies to be