Reasons
to Reject
1. Fox undervalues Hannans
2. Fox has significant debt and no income
3. Fox has no strategy for Hannans
4. Fox has no synergies with Hannans
Reject
the offer for your Hannans Reward ltd shares
You can Reject
the offer by
ignoring all
correspondence
from Fox Resources ltd
Register your email address at
www.hannansreward.com to receive ASX releases fast
TARGET’S STATEMENT Prepared by Hannans Reward Limited (ABN 52 099 862 129) in relation to the unsolicited
off-market takeover bid by Fox Resources Limited (ABN 44 079 902 499) to acquire your Shares in Hannans Reward Limited
Target’s Statement
Prepared by
Hannans Reward Limited
ABN 52 099 862 129
in relation to the unsolicited off-market takeover bid by
Fox Resources Limited
ABN 44 079 902 499
to acquire your Shares in Hannans Reward Limited
The Directors of Hannans Reward Limited
recommend that you
Reject
the Offer from Fox Resources Limited.
Legal Advisers
Corporate Advisers
IMPORTANT INFORMATION
This document is important and should be read in its entirety. If you do not understand
this document or you are in doubt as to how to act you should consult your lawyer,
accountant, stockbroker or other professional advisor.
Tabl e Of C o n t e n t s
1.
Letter from the Chairman............................................................ 4
2.
Reasons to reject the Fox Offer .................................................. 6
3.
Hannans Reward – Snapshot View.............................................10
4.
Frequently asked questions.. ......................................................12
5.
Information about Hannans Reward Ltd......................................14
6.
Expanded reasons to reject.. ......................................................18
7.
Recommendation of Hannans Reward Directors..........................24
8.
Your choices as a Hannans Reward shareholder.. ........................25
9.
Important information concerning the offer..................................26
10. Additional information ...............................................................27
11. Definitions & interpretations.. ......................................................32
12. Corporate directory...................................................................34
13. Authorisation.. ...........................................................................35
IMPORTANT INFORMATION
This Target’s Statement is dated
29 May 2009 and is given under
section 638 of the Corporations Act
by Hannans Reward Limited (Hannans
or Hannans Reward) in response to
Fox Resources Limited’s (Fox) Bidders
Statement dated 1 May 2009 and
served on Hannans Reward by Fox
on that date.
NATURE OF THIS DOCUMENT
This document is the Target’s
Statement issued by Hannans under
Part 6.5 Division 3 of the Corporations
Act in response to Fox’s Bidders
Statement.
ASIC
A copy of this Target’s Statement has
been lodged with the ASIC. Neither
the ASIC nor any of its officers take
any responsibility for the content of this
Target’s Statement.
INVESTMENT DECISION
The recommendations of the Hannans
Reward directors contained in this
Target’s Statement do not take into
account the individual investment
objectives, financial situation or
particular needs of each Hannans
Reward Shareholder. You may wish to
seek independent professional advice
before making a decision as to whether
or not to accept the Offer.
DISCLAIMER AS TO FORWARD LOOKING STATEMENTS
Some of the statements appearing in this Target’s Statement may be in the nature of forward looking
statements. You should be aware that such statements are only predictions and are subject to inherent risks
and uncertainties. Those risks and uncertainties include factors and risks specific to the industry in which
Hannans Reward operates as well as general economic conditions, prevailing exchange rates and interest
rates and conditions in the financial markets. Actual events or results may differ materially from the events
and results expressed or implied in any forward looking statement. None of Hannans Reward, Hannans
Reward’s officers, any persons named in this Target’s Statement with their consent or any person involved in
the preparation of this Target’s Statement, makes any representation or warranty (express or implied) as to
the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed
or implied in any forward looking statement, except to the extent required by law. You are cautioned not
to place undue reliance on any forward looking statement. The forward looking statements in this Target’s
Statement reflect the views held only as at the date of this Target’s Statement.
Reject the offer by ignoring all correspondence from Fox
1
SUMMARY O F O FFE R
• Fox is offering half (0.5) a Fox Share for every
one (1) of your Hannans Reward Shares (Offer),
alternatively this can be expressed as offering
only one (1) Fox Share for every two (2) of your
Hannans Reward Shares
• Hannans Reward directors recommend that
you REJECT the Offer. This can be achieved
by IGNORING ALL CORRESPONDENCE
FROM FOX
• Unless extended or withdrawn beforehand,
the Offer will expire AT 5PM (Perth time) on
10 July 2009
2 Reject the offer by ignoring all correspondence from Fox
Reasons
to Reject
1. Fox undervalues Hannans
2. Fox has significant debt and
no income
3. Fox has no strategy for Hannans
4. Fox has no synergies with
Hannans
Reject the offer by ignoring all correspondence from Fox
3
1. Letter from the Chairman
Dear Hannans Shareholder
As a Board we unanimously recommend that you REJECT the Offer from Fox
by IGNORING ALL correspondence from Fox.
Hannans directors have serious concerns about the merits of the Fox offer.
Hannans Directors do not intend accepting the current offer in relation to their
personal shareholdings which account for approximately 16% of Hannans.
Fox undervalues Hannans
At no time in the 10, 30, 60, 90 or 180 day trading periods up to the period ending
20 May 2009 has the Fox offer represented a premium to volume weighted average
trading price of Hannans shares.
On the date Fox lodged its intention to make a takeover offer, Fox valued your
Hannans shares at 6.5 cents per share. Hannans shares have traded at a volume
weighted average price of 11 cents for the last 30 trading days up to 26 May 2009.
Fox is not offering any cash but only Fox shares therefore it is important that you
research Fox fully before deciding to accept its shares.
Fox has significant debt and no income
Fox has serious financial challenges that have lead two separate independent
Fox auditors to express significant uncertainty whether Fox will continue as
a going concern without additional capital raisings or asset sales.
An analysis of Fox’s financial statements by Hannans’ indicates that Fox is likely
to have approximately $12 million in cash outflows within the next twelve months.
Fox recorded in excess of $4 million in administration costs in the 2008 financial
year and is expected to record a similar figure for the 2009 financial year.
This is a significant cash outflow for a company with no income and no mining
activities. Furthermore Fox had in excess of $3.5 million in Trade Payables as
at 31 December 2008.
Fox must continue to raise money or sell assets to pay down its debts and fund its
operating expenses. If funded by capital raisings this may result in further dilution to
existing Fox shareholders without adding any value to Fox’s projects.
Fox has no strategy for the Hannans assets
Fox’s Bidder’s Statement sent to Hannans shareholders states its intentions for
Hannans include a broad based review of the projects to assess their potential
and to continue the business in substantially the same manner as it is currently
being conducted. Hannans shareholders have not been given any guidance as
to how Fox management intend to add value to the Hannans assets.
4 Reject the offer by ignoring all correspondence from Fox
Fox has no synergies with Hannans
Fox has no projects anywhere near Hannans and as such Fox has no geological
or geographical synergies with Hannans.
The Fox Board includes directors who sit on the Boards of multiple ASX listed
companies all exploring, developing or mining minerals in Australia. This results
in potential conflicts of interests.
Hannans directors are only directors of one ASX listed West Australian focussed
mineral exploration company and accordingly are solely focussed on achieving
the best outcome for Hannans shareholders.
Conclusion
I would like to thank Hannans shareholders who have supported Hannans during
this recent period including voting at the recent general meeting of shareholders.
I would also like to acknowledge the interested persons that have contacted
Hannans to offer their support, encouragement and perspective on the challenges
arising from this unsolicited, opportunistic and underwhelming offer from Fox.
In relation to Hannans future exploration activities we all look forward to the
gold and base metals drilling programmes scheduled to take place at Forrestania,
Lake Johnston, Queen Victoria Rocks, Jigalong and Sunday during the period June
to August 2009.
The Hannans Board recommends that you read this document in detail in order
to fully understand the offer that has been made to you.
In closing I would like to reiterate that the Hannans Board can see no compelling
reason to swap every one of your Hannans shares for half of a Fox share.
If you have any questions you are welcome to contact either the Managing Director
Mr Damian Hicks or me.
Yours sincerely,
Richard Scallan
Chairman
Hannans Reward Ltd
26 May 2009
Reject the offer by ignoring all correspondence from Fox
5
2. Reasons to Reject
1. Fox u nd erva lues H a n n a n s
Summary
• No premium to the Hannans share
price when calculated on either a
10, 30, 60, 90 or 180 trading day
weighted average basis up to
20 May 2009
• Non-cash offer and Fox currently
has no financial capacity to offer cash
• The risks of owning Fox shares
must be assessed
• Low valuation by Fox for Hannans
entire West Australian exploration
portfolio – Forrestania nickel & gold,
Lake Johnston nickel & gold, QVR
nickel & gold, Sunday gold and
Jigalong iron, manganese, gold,
base metals and uranium
• At Hannans’ Forrestania Project,
applications for forfeiture lodged by
Hannans against ground registered
in the name of St Barbara Ltd where
nickel rights are owned by Kagara Ltd
may substantially increase Hannans
exposure to significant nickel and gold
potential; Hannans has scheduled
drill testing of three nickel targets in
June/July 2009
• At Hannans’ QVR Project, Hannans
joint venture partner is Vale, the
world’s second largest diversified
mining company; Vale anticipates drill
testing nickel targets in July / August
2009; very importantly a change of
control in Hannans will result in Vale
having the right to aquire for fair value
100% of the QVR project
• At Hannans’ Lake Johnston Project,
30km south east of Russian mining
giant Norilsk’s nickel mines, Hannans
has scheduled drill testing of gold
targets in July 2009
• At Hannans’ Sunday Project, joint
venture partner Triton Gold (formerly
Australian Mineral Fields Ltd) has
scheduled drill testing of gold targets
in July 2009
• At Jigalong, Hannans is assessing
the economic potential of surface
manganese and consolidation of the
iron project with other East Pilbara iron
resources; Hannans will recommence
exploration drilling for gold, base
metals and uranium in June 2009.
EXPANDED REASONS TO REJECT THE OFFER COMMENCE ON PAGE 18
6 Reject the offer by ignoring all correspondence from Fox
2. Fox has s i g ni f i can t d e b t a n d n o in come
Summary
• Two separate independent Fox
auditors have expressed significant
uncertainty whether Fox will continue
as a going concern without additional
capital raisings or asset sales
• Fox operated an unprofitable business
during the recent minerals boom and
all time high commodity prices
• Fox delivered ore to its Chinese
off-take partner during the boom but
did not generate any profits for its
shareholders
• Fox has no income from its Radio Hill
mine as it has been placed on care
and maintenance
• Hannans forecasts that Fox has
approximately $12 million of cash
outflows within the next twelve
months and $3.5 million of cash
• Future Fox capital raisings are likely
to be directed toward debt repayment
and administration costs that will
add minimal value to the Fox mineral
assets
• Fox debt included approximately
$5.5 million of hire purchase loan
agreements as at 31 December 2008
• Hannans estimates that the annual
cash outflow required to maintain
Fox’s current business is $7 million
• Fox spends approximately $4 million
on ‘Administration Costs’ each year
which is significant whilst Fox does
not have any income
• Hannans shareholders should
be aware that despite these
financial pressures Fox believes it
is “maintaining a prudent financial
management strategy”
• Hannans has been well managed
financially
• Hannans has no debt and can pay its
expenses as and when they fall due
• Hannans recently received
overwhelming support from
shareholders to complete a share
placement to further strengthen
Hannans’ balance sheet
• Fox debt included approximately $3.5
million owing to trade payables as at
31 December 2008
EXPANDED REASONS TO REJECT THE OFFER COMMENCE ON PAGE 19
Reject the offer by ignoring all correspondence from Fox
7
D i rectors ’ R eport
2. Reasons to Reject
3. Fox has no strategy for
H anna n s
Summary
• Fox has not indicated in its Bidder’s
Statement how it will add value to the
Hannans assets
• Fox admits in its Bidder’s Statement
it will conduct Hannans’ business in
substantially the same manner as it is
currently being managed by Hannans
• Hannans shareholders could
reasonably have expected Fox to
outline its detailed plans for the
Hannans assets in its Bidder’s
Statement, but this has not occurred
• Hannans shareholders overwhelmingly
support the strategy of Hannans
current Management
EXPANDED REASONS TO REJECT THE OFFER COMMENCE ON PAGE 21
8 Reject the offer by ignoring all correspondence from Fox
4.Fox has n o sy n erg ies w ith
H anna ns
Summary
• Fox directors sit on Boards of a
number of ASX listed West Australian
mineral resources companies
• Perceptions of conflicts of interest
exist in relation to the Fox Board
• Fox has experienced a high turnover
of key staff in recent years and has
changed its independent auditor
• Fox has continually changed its
operating strategy
• Fox does not share any project
boundaries with Hannans and
therefore Fox and Hannans do not
share any geological or geographical
synergies
EXPANDED REASONS TO REJECT THE OFFER COMMENCE ON PAGE 22
Reject the offer by ignoring all correspondence from Fox
9
3. Hannans Reward – Snapshot View
THE VISION & STRATEGY
PEOPLE YOU RELY ON
Hannans’ mission is to develop a company that has a
material interest in a portfolio of mineral projects that are
being rapidly progressed whether they are exploration,
development or production assets.
The current Board, Management and Consultants have
the resources industry experience to deliver the Strategy
The majority of Hannans Shareholders voted at a general
meeting held in April 2009 to maintain the current vision
and strategy
The current directors are directors of only one ASX listed
exploration company, Hannans Reward Ltd and are
therefore focussed only on the best interests of Hannans
shareholders
The current directors have never decreased their
beneficial interest in Hannans shares and have acquired
additional shares on-market, through share purchase
plans and rights issues
10 Reject the offer by ignoring all correspondence from Fox
PROJECTS FOR THE FUTURE
FINANCIAL SITUATION
EXPLORATION ACTIVITY
Hannans has exposure to a diverse
range of commodities – iron,
manganese, gold, nickel and uranium.
$1.5 million cash at bank at
31 March 2009
Reverse circulation (RC)
exploration drilling for
Forrestania, Lake Johnston,
Queen Victoria Rocks and
Sunday is scheduled to
commence in July 2009
Hannans shareholders have excellent
exposure to a Western Australian
portfolio of highly prospective, well
located exploration projects
No debt
Aircore drilling for manganese,
base metals and uranium is
scheduled to commence at
Jigalong in June 2009
Simple clean capital structure with 90
million shares on issue
Soil sampling for gold and
nickel recently completed at
Forrestania and in progress at
Lake Johnston
Shareholder approval to issue up to 50
million shares received on 30 April 2009
Reject the offer by ignoring all correspondence from Fox 11
4.Frequently asked questions
What is the Bidder’s Statement?
The Bidder’s Statement is a document issued by Fox containing the
detailed terms of Fox’s Offer. Fox lodged its Bidder’s Statement with
ASX, ASIC and Hannans Reward on 1 May 2009. Copies are available
on the ASX website.
What is this document?
This document is a Target’s Statement, which details Hannans Reward’s
formal response to the Fox Offer which you would have received in the
form of a Bidder’s Statement.
Who is Fox?
Fox is a nickel/copper focussed metals developer. Refer to Section 2 of
the Bidder’s Statement for further details on Fox.
What is the Fox Offer for my Hannans
Reward Shares?
The Offer price is 0.5 Fox Shares for each Hannans Reward Share
(which is effectively the same as an offer of one (1) Fox share for every
two (2) of your Hannans Reward Shares.
What choices do I have as a Hannans
Reward Shareholder?
As a Shareholder you can:
(i)
REJECT the Offer by doing nothing. Your Directors recommend that
you REJECT the Offer;
(ii) SELL some or all of your Hannans Reward Shares on market (unless
you have previously accepted the Fox Offer and have not validly
withdrawn your acceptance); or
(iii) ACCEPT the Offer for all of the Hannans Reward Shares that you
own.
What should I do?
Your Directors unanimously recommend that you REJECT the Fox Offer.
To REJECT the Offer, you should simply ignore all documents sent to
you by Fox.
What do the Directors of Hannans Reward
recommend?
Your Directors recommend that you REJECT the Fox Offer.
How do I reject the Offer?
To REJECT the Offer, you should do nothing and disregard all
documents from Fox.
What do the Directors of Hannans Reward
intend to do with their Hannans Reward
Shares?
12 Reject the offer by ignoring all correspondence from Fox
Further details of the reasons for the Directors’ unanimous
recommendation that you REJECT the Offer are set out in the Section 2
of this Target’s Statement headed “Reasons to REJECT the Offer.”
Each Director of Hannans Reward intends to REJECT the Fox Offer in
respect of the Hannans Reward Shares they own or control.
If I accept the Offer now, can I
withdraw my acceptance at a
later time?
Under the terms of the Offer you cannot withdraw your acceptance unless a
withdrawal right arises under the Corporations Act. Such a withdrawal right
will arise if, after you have accepted the Offer, Fox varies the Offer in a way that
postpones for more than one month from the time when Fox has to pay you
under the Offer (for example if Fox extends the Offer for more than 1 month
while the Offer remains conditional).
Can I be forced to sell my Hannans
Reward Shares?
You cannot be forced to sell your Hannans Reward Shares unless Fox proceeds
to compulsory acquisition of your Hannans Reward Shares. Fox will need
to acquire at least 90% of Hannans Reward’s Shares in order to exercise
compulsory acquisition rights.
If Fox acquires more than 90% of Hannans Reward’s Shares, then you will be
paid the same consideration as is payable by Fox under the Offer.
See Section 9.7 of this document for further details.
Is Fox’s Offer conditional?
Yes, the conditions of the Offer (the Defeating Conditions) are set out in section
10.12 of the Bidder’s Statement. These conditions include:
(i)
that at the end of the Offer Period Fox has a relevant interest in more than
90% of the Hannans Reward Shares on issue;
(ii)
a condition relating to other regulatory approvals;
(iii) that no prescribed occurrence occurs during the period from 1 May 2009
to the end of the Offer Period; and
(iv) conditions relating to changes in the business, assets, liabilities, financial
position, performance, profitability or prospects of Hannans Reward.
Is the Offer subject to any minimum
acceptance levels?
Yes, as mentioned above, at the end of the Offer Period Fox must have a
relevant interest in more than 90% of the Hannans Reward Shares on issue.
What are the tax implications of
accepting Fox’s Offer?
A general summary of the tax consequences of the Offer is set out in Section 8
of the Bidders Statement. We advise that you consult your financial, tax or other
professional adviser on the tax implications of accepting the Offer.
I am an overseas Shareholder;
how does the Offer affect me?
Certain foreign holders of Hannans Reward Shares will not be entitled to receive
Fox Shares on accepting the Offer. These foreign shareholders who accept the
Offer will be paid the net cash sale proceeds of Fox Shares which they would
otherwise have received. The foreign shareholders to which this apples are
holders of Hannans Reward Shares whose address as shown in the acceptance
register that Fox maintains is in a jurisdiction other than Australia and its external
territories or New Zealand.
Is there a phone number that I can
call if I have any further queries
regarding the Offer?
If you have any questions about Fox’s Offer, please call Hannans Reward’s
Managing Director, Damian Hicks on (08) 9324 3388.
Reject the offer by ignoring all correspondence from Fox 13
5. Information about
Hannans Reward Ltd
BUSINESS OVERVIEW
Hannans Reward Ltd listed on the ASX on 5 December 2003.
Hannans Reward’s assets include exploration projects targeting gold, nickel, iron, manganese and uranium.
PROJECTS
Forrestania Nickel & Gold Project,
east of Hyden, Western Australia
Hannans’ Forrestania project adjoins
Western Areas NL’s world-class
Forrestania nickel project. The Chairman
and second largest shareholder of Fox
(soon to be the largest shareholder after
the conversion of debt to equity) is also
the Chairman and largest shareholder of
Western Areas NL.
The Forrestania greenstone belt is
proving to be one of Australia’s highest
grade nickel sulphide belts and is
world-renowned for its high grade nickel
sulphide mines and deposits. Hannans
shareholders have exposure to this belt
through Hannans’ Forrestania nickel
& gold project where its exploration
activities have identified rock types
capable of hosting nickel sulphides
and gold. Part of this project is owned
100% by Hannans and part is held in
joint venture with Cullen Resources Ltd
(ASX: CUL) where Hannans owns 80%.
The recent discovery of the Spotted
Quoll high grade nickel sulphide deposit
by Western Areas NL highlights the fact
that the opportunity remains for the
discovery of high grade close–to-surface
nickel sulphide deposits within the
Forrestania region.
Hannans shareholders should be aware
that a conflict of interest may exist the in
relation to Hannans’ Forrestania project
and Fox’s future intentions for the
Forrestania project.
In addition to exploring at Forrestania
Hannans is actively seeking to secure
additional prospective ground in the
Forrestania region. It has achieved
this by acquiring ground, applying
for vacant ground and applying for
forfeiture on ground that has not
been actively explored.
In June 2008 Hannans commenced
proceedings in the Warden’s Court of
Western Australia seeking forfeiture of
prospecting, exploration and mining
tenements at Forrestania registered in
the name of St Barbara Ltd (ASX: SBM)
on the basis that St Barbara Ltd had a
history of failing to meet the tenements’
minimum exploration expenditure
commitments. Nickel rights on
tenements the subject of the forfeiture
actions are owned by a subsidiary of
Kagara Ltd (ASX: KZL). The ground the
subject of the application for forfeiture
adjoins Hannans joint venture ground
and is considered prospective for nickel
sulphides and gold.
14 Reject the offer by ignoring all correspondence from Fox
There is inherent uncertainty as to
the outcomes of the applications for
forfeiture by Hannans. No expectations
should be created as to whether or not
Hannans will be entitled to apply for
new tenements over part or all of the
ground the subject of the applications
for forfeiture. The time frame for an
outcome on these actions is also
uncertain.
In the event that Hannans becomes
entitled to apply for all or part of the
relevant ground Hannans will become
one of the major explorers in Australia’s
richest nickel sulphide belt giving
Hannans shareholders exposure to
additional nickel sulphide ground.
Reject the offer by ignoring all correspondence from Fox 15
5. Information about Hannans Reward Ltd (cont)
Queen Victoria Rocks nickel & gold
project, south-west of Coolgardie,
Western Australia
Hannans’ Queen Victoria Rocks nickel
sulphide project is currently being
explored in joint venture by giant South
American company Comphania Vale do
Rio Doce (Vale).
By way of background, Vale is the
second largest diversified metals and
mining company in the world and is
the world’s largest producer of iron ore
and pellets, key raw materials for the
steel industry, and one of the largest
producers of nickel. Vale also produces
copper, manganese, ferroalloys, bauxite,
alumina, aluminium, coal, cobalt,
platinum group metals, among other
raw materials important to the global
industrial sector.
Historical exploration by Hannans
at QVR identified a number of areas
that have potential to host nickel
sulphides. Vale is building on the work
completed by Hannans and anticipates
commencing reverse circulation drilling
for nickel sulphides in August 2009.
Vale is required to spend $500,000 per
year exploring QVR to maintain their
involvement in the project. Hannans is
free-carried through to a decision to
mine at which point Hannans will need
to contribute to the project costs in
order to maintain its 25% equity interest.
Vale may withdraw at any time on an
annual basis after meeting their annual
financial commitment.
An important term of the joint venture
agreement with Vale is that if there is
a ‘change in control’ of Hannans then
Vale will have the right to acquire 100%
of QVR at an independently assessed
fair value. The insertion of this clause
in the joint venture negotiations was a
condition of Vale proceeding with the
final agreement. It would be extremely
disappointing and value destroying
for Hannans shareholders to forgo
the benefit of Vale’s future exploration
activities by agreeing to a change of
control through the Fox offer.
Lake Johnston, nickel & gold project,
west of Norseman, Western Australia
The Lake Johnston Project, located
20km south-east of the Emily Ann
and Maggie Hays nickel sulphide
mines owned by Russian mining giant
Norilsk, has evolved into a major
multi-commodity exploration project
following exploration by Hannans, the
application for substantial additional
ground and recent aboriginal heritage
approvals. Hannans is exploring Lake
Johnston for nickel sulphides, gold and
copper-molybdenum gold styles of
mineralisation.
Hannans is actively exploring within
this proven nickel sulphide belt.
Should Russian giant Norilsk sell or
joint venture its Lake Johnston nickel
project, Hannans is well placed to take
advantage of opportunities that may
follow.
The Hannans Exploration Team believes
Lake Johnston has the greatest gold
potential in the Hannans portfolio and
accordingly Hannans is scheduled to
commence reverse circulation drilling
of gold targets in July 2009. These
strong gold targets were generated
through prospecting, soil sampling and
aeromagnetic interpretations. No drilling
has occurred in this part of the Lake
Johnston Project.
Jigalong iron, manganese, base
metals and uranium project, located
east of Newman, Western Australia
The Jigalong Project is large (approx
2,000km2) and is positioned between
major resources companies exploring
for iron and manganese. Consolidation
within the East Pilbara region is
expected to occur as the major players
seek to expand their landholdings to
secure the most prospective ground.
Companies on Hannans’ western
boundaries are primarily interested in
iron, whilst companies on the eastern
boundary are primarily interested in
manganese – the Jigalong project has
both iron and manganese.
The East Pilbara is rapidly becoming
home to major mining companies
including BHP Billiton, Rio Tinto,
16 Reject the offer by ignoring all correspondence from Fox
Cleveland Cliffs (through its shareholding
in AusQuest Ltd), Fortescue Metals
Group, Hancock Prospecting and Atlas
Iron (through its shareholding in Warwick
Resources Ltd). Hannans Reward
through its interest in the Jigalong
Project is centrally located within this
province and remains one of the few
ASX listed exploration companies not
aligned with a major mining company.
This is considered to be a positive
outcome because shareholders remain
fully leveraged to future exploration
discovery and corporate activity.
From a pure iron perspective, the
Jigalong Project is squeezed between
two separate iron projects owned by
FerrAus Ltd, which have reported iron
targets of 315 million tonnes hematite
DSO. Hannans accepts that the iron
mineralisation within the Jigalong project
must be consolidated with other iron
deposits in the East Pilbara in order
to bring forward iron ore development
and mining scenarios. A number of
companies have expressed interest
in the iron at Jigalong and Hannans is
assessing the options currently being
presented.
The possibility of Jigalong hosting
a diverse range of minerals is also
considered probable considering
that the edge of the Sylvania
Dome (granitoid) hosts iron (BHPB,
Warwick Resources, FerrAus), gold
(Independence Group) and copperlead-zinc (Prairie Downs). The Jigalong
Project wraps around the eastern edge
of the Sylvania Dome.
In the future Hannans intends to
allocate significantly more resources
to exploration for gold, base metals
and uranium due to encouraging early
stage exploration results achieved by
Hannans.
Sunday gold project, located east
of Leonora, Western Australia
The Sunday gold project is currently
being explored by highly credentialed
joint venture partner Triton Gold Ltd
(formerly Australian Mineral Fields Ltd.)
Triton Gold anticipate commencing
reverse circulation drill testing of a
number of gold targets in July 2009.
H an n a n s Re war d Lt d – Board of Di rectors
Mr Richard Scallan,
Independent Non-Executive
Chairman
(Appointed Director on 23 May 2002)
Mr Scallan is a Mining Engineer with 47
years experience in underground and
open cut mining in both South Africa
and Australia. Mr Scallan was employed
by the Anglo American Corporation
of South Africa Limited for 26 years
before immigrating to Australia and
joining Goldfields Limited in 1981 and
has managed deep level gold, uranium,
nickel, copper, chrome, platinum,
mineral sands and tin mines.
During the past 3 years Mr Scallan has
not served as a Director of any other
ASX listed companies.
Within the last 10 years Mr Scallan has
held positions as General Manager,
Kundana Gold Pty Ltd and Paddington
Gold Pty Ltd (both owned by Goldfields
Limited) in Kalgoorlie, Western Australia
and General Manager, RGC Limited
– Renison Tin Division in Zeehan,
Tasmania.
Mr Damian Hicks, Managing Director
(Appointed Director on 11 March 2002)
Mr Hicks was a founding Director of
Hannans Reward Limited and appointed
to the position of Managing Director
on 5 April 2007. He formerly held the
position of Executive Director and
Company Secretary.
Prior to incorporation of the Company,
Mr Hicks was a business analyst for
three years, worked with law firms for
five years and an international chartered
accounting firm for one year.
Mr Hicks holds a Bachelor of
Commerce (Accounting and Finance)
from the University of Western Australia,
is admitted as a Barrister and Solicitor
of the Supreme Court of Western
Australia, holds a Graduate Diploma
in Applied Finance & Investment from
FINSIA (formerly the Securities Institute
of Australia), a Graduate Diploma in
Company Secretarial Practice from
Chartered Secretaries in Australia and
is a Graduate Member of the Australian
Institute of Company Directors.
Mr William Hicks, Non-Executive
Director (Appointed Director on 11
March 2002)
Mr Hicks was a founding Director of
Hannans Reward Ltd and has been
actively involved in the progress and
development of a number of wellknown exploration companies. He
was a director and secretary of
Spargo’s Reward Gold Mines NL and
was instrumental in the listing on the
ASX of both Central Kalgoorlie Gold
Mines NL and Maritana Gold NL.
Mr Hicks is a Fellow of the Australian
Institute of Company Directors and a
Pharmaceutical Chemist.
During the past 3 years Mr Hicks has
not served as a Director of any other
ASX listed companies.
During the past 3 years Mr Hicks has
not served as a Director of any other
ASX listed companies. Mr Hicks is a
Non-Executive Director of unlisted funds
management company, Growth Equities
Pty Ltd (www.growthequities.com.au).
Reject the offer by ignoring all correspondence from Fox 17
6. Expanded Reasons to Reject
1. Fox undervalues Hannans
Share Price
The 10 trading day volume weighted
average price of Fox to 20 May 2009
was $0.14. The volume weighted
average price of Hannans during the
same period is $0.12.
On this basis Fox is offering Hannans
shareholders 58% less than their shares
have traded in that period.
The Fox offer has never represented a
premium to the 10, 30, 60, 90 or 180
trading day volume weighted average
price to 20 May 2009 for Hannans
shareholders.
Fox has the potential to increase its offer
to Hannans shareholders by offering
more Fox shares. Whilst there is no
indication that Fox will do this, the risks
associated with Fox’s financial position
will remain.
Value of Hannans Projects
The Hannans Board suggests that a
high level assessment of the Hannans
exploration portfolio may indicate
substantially higher values could be
attributed to the portfolio particularly
as Australia and the world begin to
emerge from the current recessionary
environment.
As a Hannans shareholder you remain
fully leveraged to exploration success
at Forrestania, Queen Victoria Rocks,
Lake Johnston, Jigalong and Sunday.
Hannans shareholders who accept the
Fox Offer will significantly dilute their
exposure to these assets.
Share values in the above graph are
based on the volume weighted average
price (VWAP) for the various periods to
20 May 2009. The “Fox Offer Price” is
based on 0.5 of the recorded VWAP
in Fox’s shares based on Hannans
shareholders receiving 0.5 Fox
shares for one Hannans share.
The term “volume weighted average”
is calculated by adding up the dollars
traded for every transaction (price
multiplied by number of shares traded)
and then dividing by the total shares
traded for the day, is considered the
most accurate “average” for share
price calculation.
Shares Only
Fox are not offering cash to Hannans
shareholders only shares in Fox.
Therefore all of the risks associated with
Fox must be considered when deciding
whether to convert your Hannans shares
into Fox shares.
Hannans shareholders are therefore
encouraged to consider all of the
Reasons to Reject when assessing
the Fox offer.
Fox is not in a position to offer
Hannans shareholders any cash
as part of its offer.
18 Reject the offer by ignoring all correspondence from Fox
The nature of exploration is such
that long lead times can precede an
economic discovery but if it occurs
the company’s share price is generally
re-rated upwards. The Hannans Board
believes the excellent exploration work
completed by its Team of employees,
consultants and joint venture partners
will ultimately lead to the re-rating of
Hannans.
It is the opinion of the Hannans Board
that the full value of the Hannans
portfolio is not currently reflected in the
Hannans share price. More details of
the portfolio are contained in section 5.
2. Fox has significant debt and no income
Fox’s Cash Flow Forecasts
Debt Cash Flows
Hannans has forecast Fox’s major cash
flow drivers going forward (assuming
no fundamental changes to the present
state of Fox’s operations) as being:
To forecast the cash out flows
associated with Fox’s debt, Hannans
has considered the debt on Fox’s
balance sheet. Fox has three major
sources of the debt and liabilities which
total approximately $12 million:
• Operating cash flows primarily
involving administration costs
• Commitments on tenements
• Commitments on debt repayments
It should be understood that the
following figures and analysis is based
on cash flow forecasts only that have
been extrapolated from publicly available
information provided by Fox to ASX.
Operating Cash Flows
Hannans has used Fox’s March 2009
Appendix 5B as the best indicator
of operating revenues and costs
going forward. On this basis, the
primary operating expenses of Fox
are in relation to administration costs.
Administration costs were $970,000 for
the March 2009 quarter (extrapolated
to $3.88 million per an annum). This is
comparable to the administration cost
incurred by Fox for the 30 June 2008
financial year in which the administration
cost was $4.36 million. A cash flow
forecast of $4 million per an annum is
therefore considered reasonable for the
operating costs of Fox going forward.
Commitments on Tenements and
Corresponding Cash Flows
Hannans has forecast that Fox will
spend $1.5 million per annum on
exploration costs going forward to
satisfy the minimum expenditure
requirements on its tenement portfolio.
• The major component of the debt
relates to hire purchase lease
arrangements totalling $5,532,886
which Fox has secured against
property, plant and equipment;
• Terry Streeter through his private
company Jungle Creek Pty Ltd has
loans to Fox of $3,008,000 (as noted
in the Bidder’s Statement, 50 percent
of the Terry Streeter/Jungle Creek
Loans can be converted into shares
and the other 50 percent of the loans
deferred to December 2009); and
• Fox has $3,593,990 of trade payables
presumably owing to employees,
contractors and suppliers.
It is evident from the analysis above
that Fox has a significant solvency
risk within the next year. Fox is likely
to have difficulty in paying its debts as
and when they fall due unless further
funding (equity raisings, assets sales
or additional debt) can be sought to
address the current debt related issues
on the balance sheet.
Hannans has split the debt repayments
into two categories, being recurring
and non-recurring debt out flows. The
loans and associated interest to Terry
Streeter are classified as non-recurring.
The hire purchase loans are classified
as a recurring cash outflow. Hannans
estimates that the hire purchase loans
are a recurring expense of approximately
$1.5 million a year comprising principal
repayments and interest.
In summary Hannans forecasts
Fox’s annual cash outflows to be
approximately $7 million. This comprises
operating cash outflows of $4 million,
exploration expenditure commitments
of $1.5 million and hire purchase loans
of $1.5 million.
In addition Fox has debts and liabilities
that are required to be repaid within one
year including:
• Loans owing to Terry Streeter of
$1,504,000; and
• Trade Payables of $3,593,990 as at
31 December 2008.
In summary, Fox has a total cash
flow requirement within one year of
approximately $12 million comprising
Operational Cash Outflows of $7
million and total debt levels repayable
within one year of approximately $5
million. Fox’s current estimated cash is
approximately $3.5 million representing
a negative differential of $8.5 million
It is interesting to note that Fox’s offtake partner and its major shareholder
Jinchuan Group Ltd did not participate
in the May 2009 capital raising priced
at 13 cents per share even though it
subscribed for $17.8 million of shares
at 95 cents per share in April 2008.
Fox estimated it would spend
$2,000,000 on exploration expenditure
in the January to March 2009 quarter
however it only spent $210,000.
Fox is likely to require further capital
injections through debt or equity raisings
within one year based on this analysis.
Further capital raisings may dilute the
shareholders interest in Fox further and
further debt placements will increase the
associated interest payments of Fox and
compound Fox’s debt problems.
It should be noted that this financial
analysis does not take into account
the funding requirements to operate
Hannans if Fox is successful in its
takeover.
Reject the offer by ignoring all correspondence from Fox 19
6. Expanded Reasons to Reject (cont)
2. Fox has significant debt and no income (cont)
Hannans - Prudent Financial Management
Hannans has exhibited sound financial management practices since incorporation balancing the risks of funding exploration
expenditure with developing a sustainable long term exploration commitment through the economic cycle.
The following table summarises Hannans financial management history over the last five years.
5 Year Summary of Hannans Reward Ltd’s Financial Information
Hannans has adopted conservative accounting
policies including writing off 100% of
exploration expenditure as it is incurred, in
doing so recognising that cash is the most
realisable asset on an exploration company’s
balance sheet.
20091
Cash and cash equivalents
2008
1,154,000
Balance of exploration expenditure at beginning
of the year
Exploration Expenditure Expensed
2007
2006
2005
2,943,188
4,502,168
2,674,406
1,040,600
-
-
-
1,624,528
(1,737,000)
(1,848,686)
(1,795,653)
(884,206)
(317,822)
(612,000)
(931,000)
(952,000)
(762,000)
(505,000)
Administration Expenditure
Acquisitions / Options Capitalised
-
-
-
-
125,000
Less exploration expenditure written off
-
-
-
-
(2,067,350)
Balance of capitalised exploration expenditure
-
-
-
-
-
90,324,979
84,528,597
79,983,929
67,814,233
33,016,503
9,717,867
9,717,867
5,250,000
4,750,000
18,248,494
$0.122
$0.25
$0.61
$0.15
$0.09
10,838,997
21,132,149
48,790,197
10,172,135
2,971,485
No of issued shares
No of options
Share price
Market capitalisation (Undiluted)
1. Projected amounts for the 12 months ending 30 June 2009
2. Volume Weighted Average Price for 10 trading days to 20 May 2009
Hannans Reward Ltd Capital Raising History
Year of capital raising
Number of Shares Issued
Amount raised
Seed Capital 2002
11,350,003
500,003
Initial Public Offering 2003
21,566,500
4,280,300
2005
34,433,202
3,448,320
2006
664,528
97,000
2007
11,969,696
4,500,000
2008
10,341,050
1,964,409
Total
90,324,979
14,790,032
20 Reject the offer by ignoring all correspondence from Fox
3. Fox has no strategy for Hannans
Fox has no strategy and no plan for
Hannans
Fox’s Bidder’s Statement did not outline
any strategy to increase the value of the
Hannans exploration portfolio.
In fact Fox stated that after a general
review of the potential of the exploration
projects, “the business of Hannans
Reward will otherwise be conducted in
substantially the same manner as it is
presently being conducted”.
Hannans shareholders could reasonably
have expected Fox to have made an
assessment of Hannans exploration
projects prior to commencing a takeover
process. Furthermore it could have been
expected that Fox would have explained
in detail how each of the projects will be
improved under Fox’s management.
Hannans shareholders
overwhelmingly support Hannans
Strategy
Hannans has remained committed to
its stated mission of developing a
company that has a material interest
in a portfolio of mineral projects that
are being rapidly progressed whether
they are exploration, development or
production assets.
Hannans shareholders have acquired
Hannans shares in the knowledge
that they were acquiring a speculative
exploration company that over time
would work towards achieving its stated
mission.
On 30 April 2009, Hannans shareholders
voted overwhelmingly to support the
strategy put forward by the existing
Hannans management. 80% of the
shares that were voted at the general
meeting voted in favour of the proposed
share placement. This represented
approximately 50% of all the Hannans
shares on issue.
Reject the offer by ignoring all correspondence from Fox 21
6. Expanded Reasons to Reject (cont)
4. Fox has no synergies with Hannans
Fox Directors – Multiple Directorships
& Potential Conflicts of Interest
Key members of the Fox Board sit on
Boards of a number of West Australian
resources companies. Perceptions of
conflicts of interest will always exist
when this is the case.
The Chairman of Fox and Fox’s second
largest shareholder is Mr Terry Streeter.
Mr Streeter is also a director and major
shareholder of both ASX listed mineral
resources companies Western Areas
NL (Hannans’ neighbour at Forrestania)
and Midas Resources Ltd. The
independent non-executive director
of Fox is Mr Geoff Clifford. Mr Clifford
is also Chairman of ASX listed resources
companies Atlas Iron Ltd and a director
of Glengarry Resources Ltd. Another
director of Fox is a representative of
large Chinese company Jinchuan Group
Limited. Jinchuan has secured all of the
off-take from Fox and has been very
active in recent years securing off-take
from a number of Australian and global
minerals companies.
Hannans shareholders who accept
the Fox Offer will have a Board that
represents a number of ASX listed
companies with minerals focus in
Western Australia that may reduce their
focus on achieving the best outcomes
for any one particular shareholder group.
In the context of this takeover offer
from Fox cross-directorships do raise
the potential for conflicts of interest
that, if not appropriately managed by
the respective companies could have
an impact on the financial outcomes
achieved by Hannans shareholders.
It is highly unlikely that any project
synergies could be achieved through
a successful takeover of Hannans
because Hannans and Fox do not share
any project boundaries anywhere within
Western Australia.
Fox does not share any project
boundaries with Hannans
Hannans shares boundaries with the following ASX listed minerals companies
Project
Neighbour
Forrestania
Western Areas NL (major shareholder & Chairman
is also Fox major shareholder and Chairman)
Kagara Ltd
St Barbara Ltd
Jigalong
FerrAus Ltd
AusQuest Ltd
Warwick Resources Ltd (major shareholder is Atlas Iron Ltd; a Fox
director is also Chairman of Atlas Iron Ltd)
FMG Ltd
Queen Victoria Rocks
Mincor Ltd
Lake Johnston
Norilsk
Pioneer Nickel Ltd
White Cliff Nickel Ltd
22 Reject the offer by ignoring all correspondence from Fox
Hannans shareholders who accept the
Fox offer will substantially dilute their
ownership of the Hannans assets and
hence will no longer be as leveraged to
any future exploration success.
Fox has experienced a high turnover
of key staff
Fox changed its independent auditor
in 2008. That particular auditor had
expressed uncertainty as to Fox’s ability
to continue as a going concern without
additional capital raisings or asset sales.
Fox’s current auditors have expressed
the same opinion.
The following key Fox staff have
resigned:
• Mrs Jessica Brown resigned as
Company Secretary in May 2009
• Mr Luke Marshall resigned as
Exploration Manager in September
2008
• Mr Don Harper resigned as Managing
Director in August 2008
• Mr Antill resigned as Mining Manager
in June 2008
• Mr Ruwoko resigned as Resident
Manager in May 2008
• Ms Mckie resigned as Exploration
Manager in April 2008
• Mr Jack Andreazza resigned as Chief
Operating Officer in January 2008
• Mr Elvio Ruggerio resigned as
Financial Controller in July 2007
• Mr Ed Mead resigned as Exploration
Manager in February 2007
Resignation of ex-Hannans directors
After receipt of the indication to
lodge an off-market takeover bid for
Hannans by Fox, Hannans have been
advised that Mr Frank Cannavo and
Mr Terry Grammer were integrally
involved in the pre and post takeover
offer activities of Fox. Despite written
request by Hannans, neither
Mr Cannavo nor Mr Grammer has
disclosed their involvement with respect
to the bid whilst they were Directors of
Hannans. Hannans reserves its rights in
relation to their conduct.
As advised to ASX on 24 March 2009,
six days after the announcement of
Fox’s intention to make a takeover bid
was lodged, Mr Cannavo resigned from
the Hannans Board. Hannans’ Chairman
Mr Richard Scallan requested the
immediate resignation of Mr Grammer
which was subsequently received.
Mr Grammer has given pre-bid
acceptance to Fox in relation to
all of his holdings in Hannans.
Fox’s Operating Strategy
Fox has oscillated between being an
explorer, developer and miner.
During the period of the recent minerals
commodities boom Fox was a mining
company that raised substantial equity
and acquired significant mining plant
and equipment. Fox’s mining activities
resulted in the delivery of nickel and
copper to its off-take partner, large
Chinese company Jinchuan Group Ltd
but it did not result in any operating
profit (on sales of $80 million) or any
dividends to its shareholders.
As a result of recent commodities
price falls, Fox has placed its mining
infrastructure and accommodation
facilities on care and maintenance.
Until recently Fox had stated that it
would refocus on exploration and aim
to prove up 5 years of resources before
recommencing mining. Fox has also
stated that it would be become a major
supplier of construction material.
Reject the offer by ignoring all correspondence from Fox 23
7. Recommendation of
Hannans Reward Directors
7.1 Summary of the Offer
Fox is offering half (0.5) a Fox Share for
every one (1) Hannans Reward Shares
you own. Based on the closing price of
Fox Shares on ASX on 25 May 2009 of
$0.13, the value of the Offer is $0.065
cents per Hannans Reward Share.
7.2 Directors’ Recommendation
Your directors unanimously recommend
that you REJECT the Offer.
In making this recommendation, your
directors have considered the merits of
the Offer and weighed up the factors for
and against acceptance.
The key considerations in favour of
rejecting the Offer are discussed in
section 2 “Reasons to REJECT the
offer” and section 6 “Expanded reasons
to REJECT”.
7.3 Directors’ Intentions in relation to
the Offer
Each Hannans Reward director who has
a relevant interest in Hannans Reward
Shares intends, to reject the Offer in
respect of those shares.
The interests of each Hannans Reward
Director in Hannans Reward Shares
are set out in Section 10 of this Target’s
Statement.
7.4 Risk of holding Fox Shares
Shareholders will receive Fox Shares as
consideration for their Hannans Reward
Shares. There are risks associated with
holding Fox Shares. Section 7 of
the Bidder’s Statement sets out the
risks associated with becoming a Fox
Shareholder.
In particular, Shareholders should note
that the price of the Fox Shares may
rise and fall, impacting on the value of
the Offer.
The price quoted for Fox or Hannans
Reward Shares on a particular date
is not necessarily the price that
Shareholders will realise when such
shares are sold.
7.5 The Offer is conditional
The Offer is subject to a number of
conditions which are summarised in
section 9 of this Target’s Statement,
including a minimum acceptance
condition of 90% and prescribed
occurrences. As at the date of this
Target’s Statement, the Directors are
aware of the following matters which
would lead to the non-satisfaction of any
of the following conditions of the Offer:
(a) The Offer is subject to a 90%
minimum acceptance condition,
however the Directors account for
approximately 16% of the issued
shares in Hannans Reward. As stated
in section 7.3, each Hannans Reward
director intends, in the absence of
a higher offer, to reject the Offer in
respect of those shares. Accordingly,
this condition cannot be satisfied;
and
24 Reject the offer by ignoring all correspondence from Fox
(b) Hannans Reward recently sought
and obtained shareholder approval
to conduct a placement. The Offer is
subject to a condition that Hannans
Reward not issue any shares.
Accordingly, upon Hannans Reward
issuing the shares the subject of the
placement, the condition will not be
satisfied.
7.6 Inability to accept higher offer
If the Offer becomes unconditional,
Shareholders who have accepted the
Offer will be precluded from accepting a
higher offer from a third party should one
emerge during the Offer Period, except
in limited circumstances provided in the
Corporations Act. At the date of this
Target’s Statement, the Directors are not
aware of any proposal by a third party to
make a higher bid.
7.7 The key considerations in favour
of accepting the Offer are as follows:
The Board of Directors of Hannans
Reward can see no benefits in accepting
the Offer, except that a Hannans Reward
Shareholder may obtain some increased
liquidity for their investment (albeit at a
significant cost).
7.8 Further Developments
Should there be any developments
during the Offer Period (for example,
the emergence of a higher offer from
Fox or another bidder) which would
alter the Hannans Reward directors’
recommendation in relation to the Offer,
Shareholders will be notified through a
supplementary Target’s Statement.
8. Your Choices as a
Hannans Reward Shareholder
Shareholders should seek professional
advice if they are unsure as to whether
acceptance of the Offer is in their best
interests, taking into account their
individual circumstances.
Subject to the conditions of the Offer
being satisfied (including the 90%
minimum acceptance condition), you will
receive one (1) Fox Share for every two
(2) of your Hannans Reward Shares.
The Bidder’s Statement contains
important information which
Shareholders are urged to read
carefully. Shareholders should note that
Hannans Reward has not undertaken
investigations to verify the accuracy
or completeness of the information
contained in the Bidder’s Statement
and neither Hannans Reward nor
its directors or advisers makes any
representation as to the accuracy or
completeness of information contained
in the Bidder’s Statement. To the fullest
extent permitted by law, each of those
parties disclaims liability to any person
who acts in reliance on that information.
You should be aware that once you
accept an Offer your acceptance cannot
be withdrawn except in the limited
circumstances provided for under the
Corporations Act. You should consider
the timing of any acceptance of the
Offer in light of the fact that a higher bid
by another party may emerge which you
would be precluded from accepting if
you had already accepted an Offer. As
at the date of this Target’s Statement,
Hannans Reward directors are not
aware of a proposal by anyone to make
a higher bid.
Shareholders who would like further
information on Hannans Reward or
Fox before making a decision about
the Offer are encouraged to exercise
their right under the Corporations Act
to obtain from the ASIC copies of all
documents lodged by Hannans Reward
and/or Fox with the ASIC or ASX.
Alternatively, they can visit the websites
of Hannans Reward and Fox located
at www.hannansreward.com and
www.foxresources.com.au.
During the Offer Period, Shareholders
have the following choices:
(a) REJECT THE OFFER
If you wish to retain your Hannans
Reward Shares, you need take no
action in relation to the Offer.
OR
(b) ACCEPT THE OFFER
If you wish to accept the Offer, you
should follow the instructions set out in
the Bidder’s Statement.
OR
(iv) you would not be eligible for any
applicable CGT rollover relief (see
Section 8 of the Bidder’s Statement)
in respect of the consideration
received under the Offer represented
by Fox Shares;
(v) you will not benefit from any price
increase which may be offered by
Fox; and
(vi) except in the limited circumstances
provided for under the Corporations
Act, you will be prevented from
accepting an offer from another
Bidder should one emerge during the
Offer Period.
You should note that Fox, as at the date
of this Target’s Statement, has given no
indication that it intends to increase its
offer price.
(c) SELL YOUR HANNANS REWARD
SHARES ON ASX
You can sell your Hannans Reward
Shares on ASX. The price you will
receive will depend on the prevailing
market price of Hannans Reward Shares
at the time of sale. You should be
aware that the market price of Hannans
Reward Shares may rise or fall during
the Offer Period. You should also note
that if you sell your Hannans Reward
Shares on ASX:
(i) you will receive payment earlier than
if you accept Fox’s Offer (typically,
3 business days after the sale, as
opposed to one month after the later
of acceptance of the Offer or the date
the Offer becomes unconditional);
(ii) a sale on ASX provides certainty,
whereas a sale to Fox by accepting
the Offer will be subject to the
conditions of the Offer being fulfilled;
(iii) you are likely to pay brokerage on
the sale;
Reject the offer by ignoring all correspondence from Fox 25
9. Important information
concerning the offer
9.1 The Offer
Fox has offered to acquire all of your
Shares, including all rights attaching to
the Shares, for an Offer price of half (0.5)
a Fox Share for every one (1) of your
Hannans Reward Shares.
Full terms and conditions of the Offer
are set out in Section 10 of the Bidder’s
Statement.
9.2 Conditions to the Offer
The Offer and the contract resulting
from acceptance of it are subject to
the fulfilment of a number of conditions
set out in Section 10 of the Bidder’s
Statement. In summary, the conditions
include:
(a) Minimum acceptance: Fox and its
associates have relevant interests
in at least 90% by number of the
Hannans Reward Shares.
(b) Prescribed occurrence: during the
period beginning on the date of the
Bidder’s Statement and ending on
the closing date for the Offer, no
prescribed event occurs.
(e) Restriction on others acquiring shares
in Hannans Reward: during the Offer
period, no person other than the Fox
or an associate of the Fox (as defined
in section 12(2) of the Corporations
Act gains 10% or more of the voting
power in Hannans Reward.
9.3 Offer Period
The Offer is open for acceptance from
18 May 2009 until 5.00pm (Perth time)
on 10 July 2009, unless it is withdrawn
or the Offer Period is extended, in
accordance with the Corporations Act.
If you choose to accept the Offer, then
your acceptance must be received by
Fox Resources before the end of the
Offer Period.
9.4 Extension of the Offer Period
While the Offer remains subject to
conditions, it may be extended only
before Fox gives notice regarding the
status of the conditions. If the Offer
becomes unconditional (i.e. if all the
conditions are satisfied or waived) it
may be extended at any time before the
expiry of the Offer Period.
(c) No material change: no event
occurs which would be likely to
have a material adverse effect on
the business, financial or operating
position, profitability or prospects
of Hannans Reward and Hannans
Reward does not announce any
material merger, acquisition, disposal
or new commitments during
the period commencing on the
announcement date (1 May 2009)
and ending at the end of the Offer
Period.
In addition, there will be an automatic
extension of the Offer Period if, within
the last seven days of the Offer Period:
(d) No force majeure event: during
the offer period no force majeure
event affects or is likely to affect
the assets, liabilities, financial
position, performance, profitability
or prospects of Hannans Reward
or any of its subsidiaries.
9.5 Withdrawal of the Offer
(a) Fox improves the consideration
payable under the Offer; or
(b) the voting power of Fox in Hannans
Reward increases to more than 50%.
If either of these two events occurs,
the Offer Period will be automatically
extended so that it ends 14 days after
the relevant event occurs.
Fox may not withdraw the Offer in
respect of your Hannans Reward
Shares if you have already accepted it.
Before you accept the Offer, Fox may
withdraw the Offer in respect of your
Hannans Reward Shares if it obtains
the written consent of ASIC and subject
to the conditions (if any) specified in
such consent.
26 Reject the offer by ignoring all correspondence from Fox
9.6 Lapse of the Offer
The Offer will lapse if the conditions
to the Offer are not fulfilled or waived
by the end of the Offer Period. If the
Offer lapses, all contracts resulting
from acceptance of the Offer will
become void.
9.7 Compulsory acquisition
Fox will be entitled to acquire
compulsorily any outstanding Shares for
which it has not received acceptances
on the same terms as the Offer if, during
or at the end of the Offer Period, it
(together with its associates):
(a) has a relevant interest in at least 90%
(by number) of Hannans Reward
Shares; and
(b) has acquired at least 75% (by
number) of Shares for which it has
made an Offer (that is, all Shares
other than any which it already holds,
including Shares that come in to the
Offer upon exercise of any Options).
If these thresholds are met, Fox will have
one month from the end of the Offer
Period within which to give compulsory
acquisition notices to Shareholders
who have not accepted the Offer, but it
may choose to commence compulsory
acquisition as soon as the thresholds
are satisfied. Shareholders have
statutory rights to challenge compulsory
acquisition, but this will require the
relevant Shareholder to establish to the
satisfaction of a court that the terms
of the Offer do not represent fair value
for Shares. Shareholders should be
aware that, if their Shares are acquired
compulsorily, they are not likely to
receive any payment until at least one
month after the compulsory acquisition
notices are sent.
10. Additional information
10.1 Taxation Consequences
Your acceptance of the Offer is likely to have taxation consequences. Section 8 of the Bidder’s Statement provides a general
discussion of the Australian income and capital gains tax (CGT) consequences for Hannans Reward Shareholders should they
accept the Offer and the Offer becomes unconditional.
The Australian taxation consequences of accepting the Offer for Hannans Reward Shareholders will depend on their particular
circumstances. Hannans Reward Shareholders should seek their own taxation advice which takes into account their particular
circumstances.
Hannans Reward Shareholders should not rely on Section 8 of the Bidder’s Statement, nor rely on this Section of this Target’s
Statement, in making a decision as to whether or not to accept Fox’s Offer for their Hannans Reward Shares.
10.2 Directors’ Interests in Hannans Reward
As at the date of this Target’s Statement, the directors of Hannans Reward have relevant interests in the following Hannans
Reward Shares and Options:
Name of Director
Hannans Reward Shares
Hannans Reward Options
2,586,755
4,500,000
Nil
250,000
11,987,226
250,000
Damian Hicks
Richard Scallan
William Hicks
10.3 Directors’ Intentions with respect
to their own Hannans Reward Shares
Each of the directors of Hannans
Reward intends, to REJECT the Offer
for all of the Hannans Reward Shares in
which he has a relevant interest.
10.4 Directors’ recent dealings in
Hannans Reward
Apart from Mr William Hicks who
purchased 364,879 shares on 28
April 2009 for $43,412.95, no other
Director has acquired or disposed of
any securities in Hannans Reward in the
period of four (4) months immediately
preceding the date on which the
Bidder’s Statement was served on
Hannans Reward (being 1 May 2009).
10.5 Director’s interests in Fox
As at the date of this Target’s Statement
none of the directors of Hannans
Reward have relevant interests in Fox.
10.7 No Benefits to Directors
No benefit (other than a benefit
permitted under sections 200E or 200F
of the Corporations Act) is proposed to
be given to a Hannans Reward director
(or anyone else) in connection with the
director’s retirement as a director or
executive of Hannans Reward.
10.8 Other Agreements or
Arrangements with Hannans Reward
Directors
There is no other agreement or
arrangement made between a director
of Hannans Reward and any other
person in connection with or conditional
upon the outcome of the Offer.
10.9 Interests of Hannans Reward
Directors in Contracts with Fox
10.6 Recent dealings in Fox
There has been no acquisitions or
disposals of securities in Fox by
Hannans Reward, any associate of
Hannans Reward or the Directors in the
period of four (4) months immediately
preceding the date on which the
Bidder’s Statement was served on
Hannans Reward (being 1 May 2009).
No current director of Hannans Reward
has any interest in any contract entered
into by Fox.
Reject the offer by ignoring all correspondence from Fox 27
10. Additional information (cont)
10.10 Material litigation
10.11 Issued capital
In June 2008 Hannans commenced
proceedings in the Warden’s Court of
Western Australia seeking forfeiture of
prospecting, exploration and mining
tenements at Forrestania registered
in the name of St Barbara Ltd (ASX:
SBM) on the basis that St Barbara Ltd
had a long history of failing to meet
the tenements’ minimum exploration
expenditure commitments. Nickel
rights on tenements the subject of
the forfeiture actions are owned by a
subsidiary of Kagara Ltd (ASX: KZL). The
ground the subject of the application for
forfeiture adjoins Hannans joint venture
ground and is considered prospective
for nickel sulphides and gold.
As at the date of this Target’s Statement,
Hannans Reward’s issued capital
consists of:
There is inherent uncertainty as to
the outcomes of the applications by
Hannans. No expectations should
be created as to whether or not
Hannans will be entitled to apply for
new tenements over part or all of the
ground the subject of the applications
for forfeiture. The time frame for an
outcome on these actions is also
uncertain.
.
(a) 90,324,979 fully paid ordinary shares;
(b) 3,000,000 ($0.20) Options
exercisable on or before
31 March 2010;
(c) 500,000 ($0.20) Options exercisable
on or before 30 April 2010;
(d) 500,000 ($0.50) Options exercisable
on or before 31 December 2010;
(e) 1,717,867 ($0.40) Options
exercisable on or before
31 December 2010;
(f) 2,250,000 ($0.80) Options exercisable
on or before 30 June 2011;
(g) 1,000,000 ($0.80) Options
exercisable on or before
30 June 2012; and
(h) 1,000,000 ($0.80) Options
exercisable on or before
30 June 2013.
10.12 Overseas Shareholders
Any Hannans Reward Shareholder whose address (as recorded in the register of
members of Hannans Reward provided by Hannans Reward to Fox) is in a place
outside Australia or New Zealand will not be issued with Fox Shares under the Offer.
Instead, the relevant Fox Shares (that would otherwise be transferred to such foreign
holders) will be allotted to a nominee approved by ASIC who will sell the Fox Shares
and will distribute to each of those foreign holders their proportion of the proceeds
of sale net of expenses.
Refer to section 10.2 of the Bidder’s Statement for further information
10.13 Substantial Shareholders
Hannans Reward has the following substantial shareholders:
Number of Shares
Percentage of Issued
Capital
William Hicks
11,987,226
13.3%
Craton Capital
6,946,000
7.7%
Name
28 Reject the offer by ignoring all correspondence from Fox
10.14 No other Material Information
There is no other information that
Shareholders or their professional
advisers would reasonably require
to make an informed assessment
whether to accept the Offer, being
information which:
(a) it is reasonable for Shareholders and
their professional advisers to expect
to find in this Target’s Statement; and
(b) is known to any of Hannans Reward
directors.
In deciding what information should
be included in this Target’s Statement,
Hannans Reward Directors have had
regard to, amongst other things, the
matters which Shareholders (or their
professional advisers) may reasonably
be expected to know, including
information contained in documents
previously sent to Shareholders and
information available from public
sources such as the ASX, the ASIC
or the Hannans Reward website at
www.hannansreward.com.
10.15 Consents
The Directors have assumed, for the
purposes of preparing this Target’s
Statement, that the information in Fox’s
Bidder’s Statement is accurate (unless
expressly indicated otherwise in this
Target’s Statement). However, the
Directors do not take any responsibility
for the contents of Fox’s Bidder’s
Statement and are not to be taken
as endorsing, in any way, any of the
statements contained in them (unless
expressly indicated otherwise in this
Target’s Statement).
As permitted by ASIC Class Order
01/1543, this Target’s Statement
contains statements which are made,
or based on statements made, in
documents lodged by Fox with ASIC
or given to ASX, or announced on the
Company Announcements Platform
of ASX, by Fox. Pursuant to the Class
Order, the consent of Fox is not required
for the inclusion of such statements in
this Target’s Statement. Any Hannans
Reward shareholder who would like
to receive a copy of any of those
documents may obtain a copy (free
of charge) during the Offer Period by
contacting Hannans Reward.
In addition, as permitted by ASIC Class
Order 03/635, this Target’s Statement
may include or be accompanied by
certain statements:
• fairly representing a statement made
by an official person and;
• from a public official document
or a published book, journal or
comparable publication.
Steinepreis Paganin has given, and not
withdrawn prior to the lodgement of this
Target’s Statement with ASIC, its written
consent to be named in this Target’s
Statement as legal advisor to Hannans
Reward in the form and context so
named. Steinepreis Paganin takes no
responsibility for any part of this Target’s
Statement other than any reference to
its name. Patersons Securities Limited
has relevant interest in 90,652 Hannans
Reward shares.
Statement other than any reference to
its name.
Competent Persons Statement
The information in this document
that relates to exploration results is
based on information compiled by
Mrs Amanda Arrowsmith, Exploration
Manager, Hannans Reward Ltd who
is a Member of the Australian Institute
of Geoscientists. Mrs Arrowsmith is a
full-time employee of Hannans Reward
Ltd. Mrs Arrowsmith has sufficient
experience, which is relevant to the style
of mineralisation and types of deposits
under consideration and to the activity
which has been undertaken to qualify
as a Competent Person as defined
by the 2004 edition of the “Australian
Code for the Reporting of Exploration
Results, Mineral Resources and Ore
Reserves”. Mrs Arrowsmith consents to
the inclusion in the report of the matters
based on the information in the form
and context in which it appears.
Patersons Securities Limited has
given, and not withdrawn prior to the
lodgement of this Target’s Statement
with ASIC, its written consent to be
named in this Target’s Statement as
corporate advisor to Hannans Reward
in the form and context so named.
Patersons Securities Limited takes no
responsibility for any part of this Target’s
Statement other than any reference to
its name.
Computershare Investor Services Pty
Limited has given, and not withdrawn
prior to the lodgement of this Target’s
Statement with the ASIC, its written
consent to be named in this Target’s
Statement as the share registry to
Hannans Reward in the form and
context so named. Computershare
Investor Services Pty Limited takes no
responsibility for any part of this Target’s
Reject the offer by ignoring all correspondence from Fox 29
10. Additional information (cont)
10.16. RISK FACTORS
Market Conditions
Holding Shares in Hannans Reward is
also subject to certain risks. There are
many factors which may impact the
future performance of Hannans Reward
and its business. These risks include
risks specific to Hannans Reward
and the industry in which it operates,
as well as general risks. Your Board
recommends that you carefully
consider the following risks before
making a decision.
The market price of the Shares can
fall as well as rise and may be subject
to varied and unpredictable influences
on the market for equities in general
and resource exploration stocks in
particular. Neither the Company nor the
Directors warrant the future performance
of the Company or any return on an
investment in the Company.
The main risks include, but are not
limited to, the following. This list is not
exhaustive and Hannans Shareholders
should examine the contents of this
Target’s Statement and consult their
professional advisers before deciding
whether to retain their Hannans
Reward Shares.
The mineral tenements of the Company
are at various stages of exploration,
and potential investors should
understand that mineral exploration and
development are high-risk undertakings.
Economic Risks
General economic conditions,
movements in interest and inflation
rates and currency exchange rates
may have an adverse effect on the
Company’s exploration, development
and production activities, as well as on
its ability to fund those activities.
Exploration Success
There can be no assurance that
exploration of the tenements, or any
other tenements that may be acquired
in the future, will result in the discovery
of an economic ore deposit. Even if an
encouraging mineralisation is identified,
there is no guarantee that it can be
economically exploited.
(b) interest rates and inflation rates;
Exploration costs are based on
certain assumptions with respect to
the method and timing of exploration.
By their nature, these estimates and
assumptions are subject to significant
uncertainties and, accordingly, the
actual costs may materially differ from
these estimates and assumptions.
Accordingly, no assurance can be
given that the cost estimates and the
underlying assumptions will be realised
in practice, which may materially and
adversely affect the Company’s viability.
(c) currency fluctuations;
Operating Risks
(d) changes in investor sentiment
toward particular market sectors;
The operations of the Company may
be affected by various factors, including
failure to locate or identify mineral
deposits; failure to achieve predicted
grades in exploration and mining;
operational and technical difficulties
encountered in mining; difficulties in
commissioning and operating plant and
equipment; mechanical failure or plant
breakdown; unanticipated metallurgical
problems which may affect extraction
Furthermore, share market conditions
may affect the value of the Company’s
quoted securities regardless of the
Company’s operating performance.
Share market conditions are affected
by many factors such as:
(a) general economic outlook;
(e) the demand for, and supply of,
capital; and
(f) terrorism or other hostilities.
30 Reject the offer by ignoring all correspondence from Fox
costs; adverse weather conditions;
industrial and environmental accidents;
industrial disputes; and unexpected
shortages or increases in the costs
of consumables, spare parts, plant
and equipment.
No assurances can be given that the
Company will achieve commercial
viability through the successful
exploration and/or mining of its
tenement interests. Until the
Company is able to realise value
from its projects, it is likely to incur
ongoing operating losses.
Resource Estimates
Resource estimates are expressions
of judgement based on knowledge,
experience and industry practice.
Estimates which were valid when
originally calculated may alter
significantly when new information
or techniques become available. In
addition, by their very nature, resource
estimates are imprecise and depend to
some extent on interpretations, which
may prove to be inaccurate. As further
information becomes available through
additional fieldwork and analysis, the
estimates are likely to change. This may
result in alterations to development
and mining plans which may, in turn,
adversely affect the Company’s
operations.
Commodity Price Volatility and
Exchange Rate Risks
If the Company achieves success
leading to mineral production, the
revenue it will derive through the sale
of commodities exposes the potential
income of the Company to commodity
price and exchange rate risks.
Commodity prices fluctuate and are
affected by many factors beyond the
control of the Company. Such factors
include supply and demand fluctuations
for precious and base metals,
technological advancements, forward
selling activities and other macroeconomic factors.
Furthermore, international prices of
various commodities are denominated
in United States dollars, whereas
the income and expenditure of the
Company are and will be taken into
account in Australian currency, exposing
the Company to the fluctuations
and volatility of the rate of exchange
between the United States dollar and
the Australian dollar as determined in
international markets.
Environmental Risks
The operations and proposed activities
of the Company are subject to State
and Federal laws and regulation
concerning the environment. As with
most exploration projects and mining
operations, the Company’s activities
are expected to have an impact on the
environment, particularly if advanced
exploration or mine development
proceeds. It is the Company’s intention
to conduct its activities to the highest
standard of environmental obligation,
including compliance with
all environmental laws.
In this regard, the Department of Mining
and Petroleum in Western Australia from
time to time reviews the environmental
bonds that are placed on tenements.
The Directors are not in a position to
state whether a review is imminent or
whether the outcome of such a review
would be detrimental to the funding
needs of the Company.
Title Risks and Native Title
Interests in tenements in Australia
are governed by the respective State
legislation and are evidenced by the
granting of licences or leases. Each
licence or lease is for a specific term
and carries with it annual expenditure
and reporting commitments, as well as
other conditions requiring compliance.
Consequently, the Company could
lose title to or its interest in tenements
if licence conditions are not met or if
insufficient funds are available to meet
expenditure commitments.
It is also possible that, in relation to
tenements which the Company has an
interest in or will in the future acquire
such an interest, there may be areas
over which legitimate common law
native title rights of Aboriginal Australians
exist. If native title rights do exist, the
ability of the Company to gain access
to tenements (through obtaining consent
of any relevant landowner), or to
progress from the exploration phase to
the development and mining phases of
operations may be adversely affected.
The Directors will closely monitor the
potential effect of native title claims
involving tenements in which the
Company has or may have an interest.
Additional Requirements for Capital
The Company’s capital requirements
depend on numerous factors.
Depending on the Company’s ability to
generate income from its operations, the
Company may require further financing
in addition to amounts raised under the
capital raising. Any additional equity
financing will dilute shareholdings, and
debt financing, if available, may involve
restrictions on financing and operating
activities. If the Company is unable to
obtain additional financing as needed,
it may be required to reduce the scope
of its operations and scale back its
exploration programmes as the case
may be.
Reliance on Key Management
The responsibility of overseeing the
day-to-day operations and the strategic
management of the Company depends
substantially on its senior management
and its key personnel. There can be no
assurance given that there will be no
detrimental impact on the Company if
one or more of these employees cease
their employment.
Reject the offer by ignoring all correspondence from Fox 31
11. Definitions and Interpretations
11.1 Definitions
In this Target’s Statement, unless the context otherwise requires:
AMF means Australian Mineral Fields Ltd (ACN 126 042 215).
ASIC means Australian Securities and Investment Commission.
ASX means ASX Limited (ACN 008 624 691).
Atlas Iron means Atlas Iron Ltd (ACN 110 396 168).
AusQuest means AusQuest Limited (ABN 35 091 542 451).
Bidders Statement means the bidder’s statement of Fox Resources Limited.
Board means the board of directors of the Company.
Corporations Act means the Corporations Act 2001 (Cth.).
FerrAus means FerrAus Ltd (ABN 86 097 422 529).
FMG means Fortescue Metals Group Ltd (ABN 57 002 594 872).
Fox means Fox Resources Limited (ABN 44 079 902 499).
Fox Share means a fully paid ordinary share in Fox.
Hannans or Hannans Reward or Company means Hannans Reward Limited (ABN 52 099 862 129).
Hannans Share or Hannans Reward Share means a fully paid ordinary share in Hannans Reward.
Kagara means Kagara Ltd (ABN 36 008 988 583).
Mincor means Mincor Resources Ltd (ABN 42 072 745 692).
Offer or Fox Offer means the Offer.
Offer Period means the period during which the Offers will remain open for acceptance.
Option means an option to acquire a Hannans Reward Share.
Norilsk means Norilsk Nickel (Russia).
Pioneer Nickel means Pioneer Nickel Ltd (44 103 423 981).
Shareholder or Hannans Reward Shareholder means a holder of one or more Hannans Reward Shares.
St Barbara means St Barbara Limited (ABN 36 009 165 066).
Target’s Statement means this target’s statement.
Vale means Vale Inco wholly owned subsidiary of Companhia Vale do Rio Doce (Brazil).
VWAP means in relation to shares, the volume weighted average sale price of those shares on ASX.
Warwick Resources means Warwick Resources Ltd (ACN 063 506 963).
Western Areas NL means Western Areas NL (ABN 68 091 049 357).
White Cliff Nickel means White Cliff Nickel Ltd (ABN 22 126 299 125).
$ means Australian dollars.
32 Reject the offer by ignoring all correspondence from Fox
11.2 Interpretations
In this Target’s Statement, unless the context otherwise requires:
(a) Words and phrases have the same meaning (if any) as is given to them by the Corporations Act.
(b) Words importing one gender include the other genders. Words (including defined terms) importing
the plural include the singular and vice versa.
(c) A reference to a person includes a reference to a corporation.
(d) Headings are for ease of reference only and do not affect the interpretation of this Target’s Statement.
(e) References to Sections are to sections of this Target’s Statement.
(f) All references to time in this Target’s Statement are to Australian Western Standard Time (WST).
Reject the offer by ignoring all correspondence from Fox 33
12. Corporate Directory
D i rectors
Registere d O ff i ce
Share R egi stry
Richard Scallan
Chairman
Ground Floor
Computershare Investor
28 Ord Street
Services Pty Limited
WEST PERTH WA 6005
Level 2, Reserve Bank Building
Telephone: (08) 9324 3388
45 St Georges Terrace
Facsimile: (08) 9324 3366
PERTH WA 6000
Web: www.hannansreward.com
Telephone: 1300 787 272
Damian Hicks
Managing Director
William Hicks
Non-Executive Director
Email: [email protected]
Postal address
P.O. Box 1227
M A N AG E M E NT
West Perth WA 6872
Ian Gregory
Company Secretary
Soli ci tors
Steinepreis Paganin
Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Street
Michael Craig
Finance and Compliance
Amanda Arrowsmith
Exploration Manager
PERTH WA 6000
Corporate Advi sor
Patersons Securities Limited
Level 23 Exchange Plaza
2 The Esplanade
PERTH, WA, 6000
34 Reject the offer by ignoring all correspondence from Fox
13. Authorisation
This Target’s Statement has been approved by a resolution passed by the Directors
of Hannans Reward. All Hannans Reward Directors voted in favour of that resolution.
Damian Hicks
Managing Director
Hannans Reward Limited
29 May 2009
Reject the offer by ignoring all correspondence from Fox 35
Reasons
to Reject
1. Fox undervalues Hannans
2. Fox has significant debt and no income
3. Fox has no strategy for Hannans
4. Fox has no synergies with Hannans
Reject
the offer for your Hannans Reward ltd shares
You can Reject
the offer by
ignoring all
correspondence
from Fox Resources ltd
Register your email address at
www.hannansreward.com to receive ASX releases fast
TARGET’S STATEMENT Prepared by Hannans Reward Limited (ABN 52 099 862 129) in relation to the unsolicited
off-market takeover bid by Fox Resources Limited (ABN 44 079 902 499) to acquire your Shares in Hannans Reward Limited