Sherwin Iron : Offer Document for Pro-Rata Entitlement Rights Issue

Sherwin Iron Limited ACN: 009 075 861

Suite 4, 4 Shepherd St, Darwin NT 0800

Phone: (08) 8941 4355 Fax: (08) 8941 4355

OFFER DOCUMENT FOR PRO-RATA ENTITLEMENT RIGHTS ISSUE

For a pro rata non-renounceable rights issue offer of 1 New Share for every

1 Existing Share at an Issue Price of A$0.05 per New Share to raise up to

$35.91 million (before expenses).

Applications under the Rights Issue must be lodged by 5.00pm (Sydney Time)

on 4 July 2014.

This Offer Document is provided for information purposes and is not a prospectus or other form of disclosure document. It does not contain all of the information that an investor may require to make an investment decision and it does not contain all of the information which would otherwise be required by Australian law or any other law to be disclosed in a prospectus.

This is an important document that requires your immediate attention. You should read this document in its entirety before making any investment decisions.

If you are unsure as to how to deal with this Offer, you should seek independent financial, taxation or other professional advice.

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Key Statistics

Key Dates

The following are key indicative dates relating to the Offer that you need to be aware of:

Note: This timetable is indicative only and subject to change. Subject to the Corporations Act and ASX Listing Rules, Sherwin Iron reserves the right to vary the dates and times in connection with the Rights Issue, including the Closing Date, without prior notice.
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Important Notice

This Offer Document is for a rights issue of continuously quoted securities (as defined in the Corporations Act) of Sherwin Iron and is provided for information purposes. The Offer Document is not a prospectus or other form of disclosure document. It does not contain all of the information that an investor may require to make an investment decision and it does not contain all of the information which would otherwise be required by Australian law or any other law to be disclosed in a prospectus. The information in this Offer Document is not intended to be comprehensive and should be read in conjunction with the more detailed information released by Sherwin Iron under its continuous disclosure obligations.
This Offer Document is dated 17 June 2014.
This is an important document
It is important that you carefully read this Offer Document in its entirety before deciding to invest in Sherwin Iron and, in particular, that you consider the risk factors that could affect the financial performance of Sherwin Iron. In addition to the general risks applicable to all investments in listed companies, there are specific risks associated with an investment in Sherwin Iron. These risks are discussed in section 1.12 of this Offer Document. You should carefully consider these factors in light of your personal circumstances (including financial and taxation issues) and seek professional advice from your accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest.
Disclaimer
No person is authorised to give any information or to make any representation in connection with the
Offer that is not contained in this Offer Document. Any information or representation not contained in this Offer Document may not be relied on as having been authorised by Sherwin Iron in connection with the Offer. Neither Sherwin Iron nor any other person warrants the future performance of Sherwin Iron or any return on any investment made under this Offer Document, except as required by law and then only to
the extent so required.
Foreign Shareholders
This Offer Document contains an Offer only to persons (including individuals and corporate entities) with registered addresses in Australia or New Zealand. The Offer is not extended to, and no New Shares are offered or will be issued to, persons with registered addresses outside of Australia or New Zealand. Sherwin Iron considers it unreasonable to extend the Offer to any Shareholders with registered addresses in jurisdictions outside Australia and New Zealand having regard to the fact that at the date of this Offer Document, there are no such Shareholders and, if at the Record Date, there were any such Shareholders, the small number and value of the New Shares that would be offered in such jurisdictions and the cost of complying with the legal and regulatory requirements in those jurisdictions.
Foreign jurisdictions and restrictions on the distribution of this Offer Document
This Offer Document and accompanying Entitlement and Acceptance Form do not, and are not intended to, constitute an offer of New Shares in any place outside Australia or New Zealand. The distribution of this Offer Document and the accompanying Entitlement and Acceptance Form outside of Australia or New Zealand may be restricted by law and persons who come into possession of this Offer Document and the accompanying Entitlement and Acceptance Form should seek advice on and observe those
restrictions. Any failure to comply with those restrictions may constitute a violation of applicable securities laws. Neither this Offer Document nor the accompanying Entitlement and Acceptance Form may be sent or passed to persons outside Australia or New Zealand or otherwise distributed outside Australia or
New Zealand.
In particular, the Offer has not been, and will not be, registered under the US Securities Act or the securities laws of any state of the United States and is not being made in the United States or to persons resident in the United States. Without limitation, neither this Offer Document nor the accompanying Entitlement and Acceptance Form may be sent to investors in the United States or otherwise distributed in the United States.
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The New Shares being offered to residents of New Zealand under this Offer Document are offered in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). This Offer Document is not an investment statement or prospectus under New Zealand law and may not contain all the information that an investment statement or prospectus under New Zealand law is required to contain.
Privacy
Sherwin Iron collects information about each applicant provided on an Entitlement and Acceptance Form for the purposes of processing the application and, if the application is successful, to administer the applicant's security holding in the Company.
By submitting an Entitlement and Acceptance Form, each applicant agrees that the Company may use the information provided by an applicant on the Entitlement and Acceptance Form for the purposes set out in this section and may disclose it for those purposes to the share registry, the Company's related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to ASX and regulatory authorities.
If you do not provide the information required on the Entitlement and Acceptance Form, the Company may not be able to accept or process your application. An applicant has a right to gain access to the information that the Company holds about that person subject to certain exemptions under law. A fee may be charged for access. Requests for access to such information must be made in writing to the Company's registered office.
Defined terms and abbreviations
Terms and abbreviations used in this Offer Document are defined in section 3 of this Offer Document.
Application for New Shares
If you wish to apply for New Shares, you must complete and return the personalised Entitlement and Acceptance Form which accompanies this Offer Document by the Closing Date. If you have not received a personalised Entitlement and Acceptance Form, please contact the Sherwin Iron Limited Offer Information Line on 0411713555 between 8.30am to 5.00pm (Sydney Time) Monday to Friday during the Offer Period.
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Letter to Shareholders

17 June 2014
Dear Shareholder
On behalf of the Board of Sherwin Iron Limited, I am pleased to provide you with the entitlement to participate in the pro-rata non-renounceable Rights Issue to issue up to 718,228,908 new shares (assuming no existing options are exercised) at an issue price of A$0.05 cents per share to raise approximately $35.91 million.
Under the Rights Issue, Eligible Shareholders have an entitlement to subscribe for 1 New Share for every 1 Existing Share held at the Record Date at an issue price of A$0.05 per share.
The funds raised will permit the Company to further develop its Roper River iron ore project, in particular, to complete approvals, to develop the extensive infrastructure required to meet maximum profitability and to repay debt.
The Rights Issue is not underwritten.
All shareholders with a registered address in Australia and New Zealand as at the Record Date are eligible to participate in the Rights Issue.
How to Take Up the Offer
Eligible Shareholders should read and refer to the instructions and information contained within the Offer Document in its entirety and have regard to the timetable at page 2 for the timing of specific actions. A personalised Entitlement and Acceptance Form accompanies the Offer Document. You should read and refer to the instructions and information in their entirety and have regard to the timing in that letter for specific actions.
If you are unsure about any aspects of the Offer or its merits, we would encourage you to consult your financial adviser.
We commend the Rights Issue to you and recommend your participation. Yours sincerely
Mr Rodney Illingworth
Executive Chairman
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1. DETAILS OF THE RIGHTS ISSUE
1.1 The Offer
Sherwin Iron is making a non-renounceable pro rata entitlements rights issue to Shareholders on the basis of 1 New Share for every 1 Existing Share held as at the Record Date (7pm Sydney Time 16 June 2014). Rights Issue shares will be offered at an issue price of A0.05 cents per share. As a non-renounceable offer, Shareholders may not sell or otherwise dispose of their rights to apply for New Shares under the Offer.
Sherwin Iron currently has on issue 718,228,908 Shares and expects that the maximum number of New Shares which may be issued under the Rights Issue to be 718,228,908 to raise $35,911,445 (before costs of issue) based on the current capital structure of the Company.
Where the determination of the entitlement of any Eligible Shareholder results in a fraction of a Rights
Issue share, such fraction will be rounded up to the nearest whole share.
1.2 Eligible Shareholders
The Rights Issue is non-renounceable and is available to all Eligible Shareholders who are Shareholders with a registered address in Australia or New Zealand and who are registered as holders of Shares as at the Record Date (as detailed in the timetable on page 2). Shareholders as at the Record Date with a registered address outside of Australia or New Zealand will not be eligible to participate in the Rights Issue.
1.3 Purpose of Rights Issue
The funds raised will permit the Company to further develop its Roper River iron ore project, in particular, to complete approvals, to develop the extensive infrastructure required to meet maximum profitability and to repay debt.
1.4 No Underwriting
The Rights Issue is not underwritten.
1.5 Entitlements
Only Eligible Shareholders may apply for New Shares under the Offer. The number of New Shares to which an Eligible Shareholder is entitled is shown on the personalised Entitlement and Acceptance Form.
Applicants are encouraged to apply for New Shares as early as possible. To apply for the Shares under the Offer, Eligible Shareholders must complete the personalised Entitlement and Acceptance Form accompanying this Offer Document and lodge it together with payment for the Shares by no later than the Closing Date. Please refer to Section 2 of this Offer Document for further information regarding acceptance of the Offer.
1.6 Closing Date
Sherwin Iron will accept applications from the Opening Date until 5.00pm (Sydney time) on 4 July 2014 or such other date as the Directors in their absolute discretion may determine, subject to the requirements of the Corporations Act 2001 and the ASX Listing Rules.
1.7 Issue of New Shares
New Shares under the Rights Issue are expected to be issued by 10 July 2014 (subject to variation at the discretion of the Company). Sherwin Iron expects to dispatch holding statements for the New Shares by
11 July 2014. The New Shares will be fully paid and, upon issue, rank equally with existing Shares in
Sherwin Iron.
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1.8 ASX Quotation
Application for official quotation by ASX of the New Shares offered under this Offer Document has been made. If permission for quotation is not granted by ASX, the shares will not be allotted and Application Monies will be refunded (without interest) as soon as practicable.
1.9 Foreign Shareholders
This Offer Document does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer. The Offer is not being extended (and accordingly Entitlement and Acceptance Forms will not be sent), and New Shares will not be issued or allotted, to any Shareholders with registered addresses outside of Australia and New Zealand.
Shareholders with a registered address in Australia or New Zealand who hold Shares on behalf of persons who are not resident in Australia or New Zealand are responsible for ensuring that taking up the New Shares under the Offer does not breach securities laws in the relevant overseas jurisdictions.
Laws may restrict the distribution of this Offer Document and the accompanying Entitlement and Acceptance Form outside of Australia and New Zealand and persons who come into possession of this Offer Document and the accompanying Entitlement and Acceptance Form should seek advice on and observe those restrictions. Any failure to comply with those restrictions may constitute a violation of applicable securities laws.
1.10 Shortfall Shares
Subject to the Corporations Act and the requirements of the ASX Listing Rules, the Directors have reserved the right to place some or all of any Shortfall arising from Eligible Shareholders applying for less than their Entitlement under the Offer, at their discretion within 2 months of the Opening Date of the Offer. The Directors may, at their discretion, place the Shortfall with Eligible Shareholders or other investors, subject to the Corporations Act and ASX Listing Rules, and may make this offer pursuant to this Offer Document.
The issue of any Shares comprising the Shortfall will be at the discretion of the Directors.
Eligible Shareholders may apply for additional New Shares forming part of the Shortfall, provided that they take up their full Entitlement indicated on the Entitlement and Acceptance Form. The allocation of these New Shares will be limited to any Shortfall and at the discretion of the Directors, subject to the Corporations Act and ASX Listing Rules. Accordingly, Eligible Shareholders who wish to apply for additional New
Shares may receive fewer additional New Shares than that number for which they applied.
In that event, any surplus application money received will be returned in full (without interest) as soon as practicable after the closing of the Offer.
Eligible Shareholders wishing to apply for additional New Shares should do so in accordance with the instructions on the Entitlement and Acceptance Form.
1.11 Effect of the Offer on Control of the Company
The principal effect of the Rights Issue on Sherwin Iron's capital structure will be to increase the total number of issued Shares. Citizen International Investments Pte Limited, Citizen International Investments Limited and Jerry Ren (who are related to each other and referred to as the "Citizen
Shareholders") hold or control approximately 78% of the issued shares. The effect of the Rights Issue on control of the Company will be as follows:
a) if all Shareholders as at the Record Date take up their full Entitlements under the Rights Issue, the Rights Issue will have no effect on the control of Sherwin.
b) if Shareholders take up only some of their entitlements under the Rights Issue, then the Rights Issue will have an effect on control of Sherwin because the Shortfall will be available to Eligible Shareholders who take up their full Entitlements and apply for additional New Shares.
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c) If the Citizen Shareholders take up all of their Entitlements under the Rights Issue and no other shareholders take up their entitlements (and there are no Shortfall Shares taken up), then the interest of Citizen Shareholders will increase from 78.17% to 87.7%.
d) If the Citizen Shareholders do not take up any of their Entitlements under the Rights Issue and other shareholders take up their Entitlements including all of the Shortfall Shares, then the interest of Citizen Shareholders will decrease from 78.17% to 39.09%.
e) There may be a material consequence on the control of the Company if the Citizen Shareholders of the Company do not take up any or less than their Entitlements, and other shareholders take up their Entitlement as well as subscribing for the Shortfall.
1.12 Risks
An investment in New Shares should be regarded as speculative. Any investment in Sherwin Iron involves general risks associated with an investment in shares quoted by ASX. There are also a number of other risk factors, both specific to Sherwin Iron and of a general nature, which may affect the future operating and financial performance of Sherwin Iron and the value of an investment in Sherwin Iron.
Eligible Shareholders should consider these risk factors and should consult their stockbroker, accountant, lawyer or other professional adviser before deciding whether to subscribe for New Shares under the Offer.
The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed:
Economic conditions
Adverse changes in economic conditions such as interest rates, exchange rates, inflation, government policy, international economic conditions and employment rates amongst others are outside the Company's control and have the potential to have an adverse impact on the Company and its operations.
Stock Market Fluctuations
There are risks associated with any investment in a company listed on the ASX. The value of Shares may rise above or fall below the current share price depending on the financial and operating performance of the Company and external factors over which the Company and Directors have no control.
These factors include:
- Economic conditions in Australia and overseas which may have a negative impact on equity capital markets;
- Changing investor sentiment in the local and international stock markets;
- Changes in domestic or international fiscal, monetary, regulatory and other government policies;
and
- Developments in general conditions in the markets in which the Company proposes to operate and which may impact on the future value and pricing of shares.
Regulatory and Sovereign Risks
The Company is exposed to any changes in the regulatory conditions and sovereign risks under which it operates in Australia. Such changes can include for instance, changes in:
- Title and tenure;
- Taxation laws and policies;
- Accounting laws, policies, standards and practices; and
- Environmental laws and regulations that may impact upon the operation and processes of the Company
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Company Specific Risks
1. Iron Ore Prices
Iron ore prices significantly impact on the values of exploration properties, profitability and leases held by the company. Continued low iron ore prices may have a materially adverse effect on the Company's share price.
2. Environmental Risks
Extensive national environmental laws and regulations in Australia will affect the operations of the Company. The laws and regulations set various standards which regulate certain aspects of health and environmental quality, provide penalties or other remedies for any violation of standards and, in certain circumstances, impose obligations to undertake remedial action in current locations where operations are conducted.
3. Reliance on key personnel
The responsibility for overseeing day to day operations and the strategic management of the Company is concentrated amongst a small number of key employees. While it is not currently anticipated, one or any number of these key employees may cease employment with the Company. The loss of any such key employees of the Company could have the potential to have a detrimental impact on the Company until the skills that are lost are adequately replaced.
A change in the individuals which make up the Board of the Company could have the potential to have a detrimental impact on the Company.
4. Resource estimates
The Company has made estimates of its resources based on relevant reporting codes, where required, and judgments based on knowledge, skills and industry experience. However, there is no guarantee that estimates will prove to be accurate. Actual mining results, if any, may materially differ from forecasts and estimates due to further findings and results not previously known or fluctuations in operating costs, exchange rates and metal prices.
5. Production estimates
Actual future production may vary materially from targets and projections of future production for a variety of reasons. There is greater risk that actual production will vary from estimates of production made for properties under exploration or not yet in production or from operations that are to be expanded.
6. Uncertainty of development of projects and exploration
Development activities and exploration are highly speculative, involve many risks and may be unsuccessful. The Company's ability to sustain or increase its levels of production in the long term is dependent on the success of exploration and development projects. As a result of the uncertainties involved in these activities, the development of projects may not occur which would adversely affect the Company's results of operations and its financial condition.
7. Acquisition Risks
The Company may seek potential acquisitions or new investments in iron ore activities. Any acquisitions or investments would be subject to risks normally associated with such transactions.
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2. REQUIRED ACTIONS
2.1 Entitlements
Entitlements to participate in the Offer will be determined as at the Record Date. The number of
New Shares to which an Eligible Shareholder is entitled is shown on the personalised Entitlement and Acceptance Form. Before taking any action in relation to the Offer, you should read this Offer Document in its entirety, and seek professional advice from your accountant, stockbroker, lawyer or other
professional adviser.
2.2 Acceptance of Offer
If you are an Eligible Shareholder, you may:
- take up all or part of your Entitlement in accordance with this Offer Document;
- take up all of your Entitlement in accordance with this Offer Document and also apply for additional New Shares; or
- decline to exercise any or all of your entitlement. If you wish to take up part or all of your Entitlement:
(a) complete the personalised Entitlement and Acceptance Form accompanying this Offer
Document in accordance with the instructions set out on the form, indicating the total number of New Shares which you wish to apply for. If you have not received a personalised Entitlement and Acceptance Form please call the Sherwin Iron Limited Offer Information Line on 0411713555
between 8.30am to 5.00pm (Sydney Time) Monday to Friday during the Offer Period; and
(b) return the completed Entitlement and Acceptance Form together with cheque payment in accordance with section 2.3 below, using the enclosed reply paid envelope to the following address so that it is received by no later than 5.00pm (Sydney time) on the Closing Date:
By mail
Sherwin Iron Limited
C/- Computershare Investor Services Pty Limited
GPO Box 505
Melbourne VIC 3001
Australia
Completed Entitlement and Acceptance Forms and Application Monies will not be accepted at the Company's registered office. A reply paid envelope is enclosed for your convenience. If mailed in Australia, no postage stamp is required. If mailed from New Zealand, correct postage must be affixed. Eligible Shareholders in New Zealand should ensure that their Entitlement and Acceptance Form and Application Monies are mailed early to ensure they arrive at the postal address specified above by the Closing Date.
If you do not want to take up any of your Entitlement under the Offer, then you do not need to take any action. If you do nothing, your Entitlement will lapse. You will receive no payment for Entitlements not taken up or sold. Although you will continue to own the same number of Shares, your percentage shareholding in the Company will be diluted.
If you have any questions about the Rights Issue or how to complete your Entitlement and Acceptance
Form, please contact the Sherwin Iron Limited Offer Information Line on 0411713555 between 8.30am to
5.00pm (Sydney Time) Monday to Friday during the Offer Period.
2.3 Payment
The Issue Price of A$0.05 per New Share is payable in full on exercise of your Entitlement. Payments must be received by the Closing Date.
Shareholders should be aware of the time required to process payments by cheque and BPAY® in choosing the appropriate Application and payment method.
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Payment will only be accepted in Australian currency and must be:
• by cheque, money order or bank draft drawn on an Australian financial institution, made payable to "Sherwin Iron Rights Issue" and crossed "Not Negotiable", or
• through the BPAY® facility according to the instructions set out on the Entitlement and
Acceptance Form.
Cash will not be accepted. Receipts for payment will not be issued. If you provide insufficient funds to meet the Application Monies due to take up all or part of your Entitlement, you may be taken by the Company to have applied for such lower number of shares as your cleared Application Monies will pay for, or your Application may be rejected. Any overpayment of more than your Entitlement multiplied by the Issue Price of A$0.05 will be deemed an application for additional New Shares.
Australian Eligible Shareholders may pay through BPAY®
Payment by BPAY® should be made in accordance with the instructions set out in the Entitlement and Acceptance Form using the Customer Reference Number shown on that Form and must be received by the Share Registry by no later than 5.00pm (Sydney time) on the Closing Date. Applicants should be aware that their own financial institution may implement earlier cut-off times with regard to electronic payment. Applicants should therefore take this into consideration when making payment. It is the
responsibility of the Applicant to ensure that funds submitted through BPAY® are received by this time. The Customer Reference Number is used to identify your holding. If you have multiple holdings you will
also have multiple Customer Reference Numbers. You must use the Customer Reference Number shown on each Entitlement and Acceptance Form to pay for each holding separately. If you pay by BPAY® and do not pay for your full Entitlement, your remaining Entitlements will lapse. Your completed BPAY® acceptance, once paid, cannot be withdrawn.
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3. GLOSSARY
Terms and abbreviations used in this Offer Document have the following meaning:

$ Australian dollars (and references to cents are to Australian cents) unless otherwise indicated

Application Monies Monies payable by Eligible Shareholders in respect of the New Shares applied for under this Offer Document

ASIC Australian Securities and Investments Commission

ASX ASX Limited ABN 98 008 624 691

ASX Listing Rules The official listing rules of ASX as waived or modified from time to time

Board The board of directors of Sherwin Iron

Business Day The meaning ascribed to it in Chapter 19 of the ASX Listing Rules

Citizen Shareholders Citizen International Investments Pte Limited, Citizen International
Investments Limited and Jerry Ren

Closing Date 5:00pm (Sydney time) on 4 July 2014 or such other date as may be determined by the Directors

Company or
Sherwin Iron
Sherwin Iron Limited ACN 009 075 861 and (where applicable) its controlled entities.

Corporations Act Corporations Act 2001 (Cth)

Director A director of Sherwin Iron

Eligible Shareholder A Shareholder as at the Record Date, other than a Foreign Shareholder

Entitlement The entitlement of an Eligible Shareholder to apply for one New Share for every 1 Existing Share held as at the Record Date

Entitlement and
Acceptance Form
The entitlement and acceptance form that accompanies this Offer
Document

Existing Share A fully paid ordinary share in the capital of Sherwin Iron

Foreign Shareholders Shareholders with registered addresses outside Australia or New Zealand

Issue Price 5 cents per New Share

New Share A Share to be issued under this Offer Document Offer Offer of New Shares under this Offer Document Offer Document This offer document dated 17 June 2014
Offer Period The period from the Opening Date until the Closing Date for the Offer

Record date 7:00pm (Sydney time) on 16 June 2014

Rights Issue The offer of New Shares to Eligible Shareholders under this Offer Document

Shareholder A person who holds Shares

Share Registry Computershare Investor Services Pty Limited (ABN 48 078 279 277)

Shares Fully paid ordinary shares in the capital of Sherwin Iron

Shortfall Those New Shares not subscribed for by way of an application pursuant to this Offer Document by 5.00 pm (Sydney time) on the Closing Date

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