RE AURUMIN LTD; EX PARTE AURUMIN LTD [2025] WASC 440 (8 October 2025)

(a) 509,389,176 fully paid ordinary shares (Shares); and

(b) 118,059,783 options to acquire fully paid ordinary shares (Options).

1. Brightstar is also an ASX listed gold mining company focused on the exploration and development of gold projects in Western Australia. It owns the Laverton, Menzies, and Sandstone gold projects.[6]
2. If the Schemes are implemented:

(a) Shareholders will receive one new Brightstar share for every four Shares held at the Record Date (Share Scheme Consideration);[7]

(b) all Options will be cancelled, and Optionholders will receive one new Brightstar option for every four Options held at the Record Date (Option Scheme Consideration)

1. Any Shareholder who, based on their Shareholding on the Record Date, would be entitled to receive less than a marketable parcel of Brightstar shares[9] on the implementation of the Schemes is a Small Shareholder. Small Shareholders who do not opt-in to receive Brightstar shares on or before the Record Date are treated as a Non-electing Small Shareholder. Shareholders whose address is outside of Australia or New Zealand (Ineligible Foreign Shareholders) as well as Non-electing Small Shareholders are ineligible to receive Brightstar shares under the Schemes. The shares that would have otherwise been issued to Ineligible Foreign Shareholders and Non-electing Small Shareholders will be issued to a sale agent on their behalf and sold on the ASX. The sale proceeds will be remitted to Brightstar, who will subsequently make the relevant pro-rata payment to these shareholders.[10]
2. Aurumin's directors have unanimously recommended that, in the absence of a superior proposal, Shareholders and Optionholders (together, Securityholders) vote in favour of the Schemes.[11]
3. Aurumin retained an independent expert, BDO Corporate Finance Pty Ltd (BDO), to provide an opinion on the proposed Schemes. BDO concluded that, in the absence of a superior proposal, the proposed Schemes are fair and reasonable and are in the best interests of Securityholders.[12] The basis for this conclusion, including the valuation and methodology used by BDO, are set out in the Independent Expert Report (IER).
4. The Schemes will not be implemented unless and until a number of conditions precedent, as set out in the SID, are satisfied or waived.[13]
5. The SID between Aurumin and Brightstar also sets out the agreed procedures for the implementation of the proposed Schemes. The obligations of Brightstar under the Schemes are supported by a Share Scheme Deed Poll[14] and an Option Scheme Deed Poll[15] which have been executed by Brightstar (Deed Polls).[16]

1. Pursuant to s 411 of the Act, a scheme of arrangement can be used to re-organise a company which is binding on members where:

(a) the arrangement is agreed by the requisite majorities prescribed by s 411(4)(a) of the Act, namely, 75% of shareholders by value and 50% by number; and

(b) the court approves the arrangement pursuant to s 411(4)(b) of the Act.

1. There are three stages to an application under s 411 of the Act. First, the court approves the convening of a scheme meeting. Second, the members vote on the proposed scheme at the scheme meeting. Third, assuming the first two stages have occurred, the court approves the proposed scheme.[17]
2. There are well‑established principles that apply to each stage. In relation to the first court hearing, the court will order the scheme meeting to be convened if it is satisfied that:[18]

(a) there is a pt 5.1 body;

(b) there is a compromise or arrangement within the meaning of s 411 of the Act;

(c) the proposed scheme booklet contains the prescribed information[19] and provides proper disclosure;[20]

(d) the scheme is bona fide and properly proposed;

(e) the Australian Securities and Investments Commission (ASIC) has had at least 14 days' notice of the proposed hearing date and a reasonable opportunity to examine the terms of the scheme and the scheme booklet and make submissions;[21]

(f) the procedural requirements of the Act and the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules) have been met; and

(g) the scheme is of such a nature that, if it receives the necessary statutory majority at the scheme meeting, the court will be likely to approve it.

1. The standard of review that is undertaken by the court at the first hearing is whether the proposed scheme is not inappropriate and is one that sensible businesspeople might consider is of benefit to its members.[22] If the proposed arrangement is one that appears fit for consideration by a meeting of members and is a commercial proposition likely to gain the court's approval if passed by the necessary majority, leave should be given to convene the meeting.[23]

Should orders be made for the convening of the Meetings and the dispatch of the Scheme booklet?

1. At the first court hearing, Aurumin relied on five affidavits, being:

(a) two affidavits of Brynmor Phillip Hardcastle, a partner of Allens, the solicitors for Aurumin, filed 18 September 2025 and 6 October 2025;

(b) an affidavit of Mark James Rowbottam, Aurumin's executive manager of corporate development, filed 3 October 2025;

(c) an affidavit of Alexander Bevington Rovira, Brightstar's managing director, filed 30 September 2025; and

(d) an affidavit of Emily Jane May, filed 7 October 2025.

1. These affidavits prove the formal matters that Aurumin is required to establish.
2. On the materials before me, there was nothing to suggest that the Schemes were not properly proposed.
3. There are a number of conditions precedent to the Schemes. Neither Aurumin nor Brightstar has any basis to believe that any of these conditions precedent will not be satisfied or waived prior to implementation of the Schemes.[24]

1. I was provided with a copy of the initial Scheme booklet that was lodged with ASIC, as well as copies of the amended and final Scheme booklet which incorporated changes addressing ASIC's comments as well as the completion of various corporate transactions.[25]
2. I was and am satisfied that there will be proper disclosure as to the effect of the proposed Scheme and the material considerations for Securityholders.
3. There is evidence before me as to the due diligence and verification process undertaken by both Aurumin and Brightstar.[26] I accept that Aurumin and Brightstar have undertaken processes to verify the accuracy of statements attributable to each of them in the Scheme booklet and to ensure that the Scheme booklet does not omit any material information.
4. Based on the checklist provided by counsel for Aurumin,[27] I was satisfied the Scheme booklet contained the prescribed information in accordance with s 412(1)(a)(ii) of the Act and sch 8 of the Corporations Regulations 2001 (Cth).

1. Aurumin drew my attention to a letter which amended certain terms of the SID. These amendments, among other things, enabled Aurumin to complete certain transactions.[28] The effect of these amendments is disclosed in the Scheme booklet.[29]

1. On the evidence before the court, I was and am satisfied that the Securityholders are adequately protected against any performance risk.
2. Under the terms of the Schemes:[30]

(a) Brightstar is required to issue and allot new shares as part of the Share Scheme Consideration to each Shareholder (except for Ineligible Foreign Shareholders and Non-electing Small Shareholders) and Option Scheme Consideration to each Optionholder, and procure the entry of the name and address of each in its share register;

(b) transfer of the Shares to Brightstar and/or cancellation of the Options is subject to provision of the Share Scheme Consideration and/or Option Scheme Consideration, and

(c) beneficial title does not pass unless the Share Scheme Consideration and/or Option Scheme Consideration has been paid.

1. These arrangements are supported by the Deed Polls, which can be enforced by any Shareholder and/or Optionholder.[31]

1. The SID contains the customary lock-up devices (including, where usual, the fiduciary carve-out).[32] If these provisions are breached, Aurumin will be obliged to pay a reimbursement fee of $600,000 (Break Fee) to Brightstar. Under the terms of the SID, a reverse break fee of $600,000 (Reverse Break Fee) also may be payable by Brightstar to Aurumin if Brightstar fails to pay or procure the payment of the Consideration (together, Break Fees).[33]
2. In considering whether the exclusivity provisions impact on completion of the transaction and the duties of directors, the court has regard to: [34]

(a) the period of the exclusivity, which should be no more than a reasonable period and capable of precise ascertainment;

(b) whether the provisions are subject to an overriding obligation that the directors do not breach their fiduciary duties or are otherwise unlawful; and

(c) whether there is adequate prominence given to these provisions in the Scheme booklet.

1. In this case, the exclusivity period is, at most, a period of approximately six months. The exclusivity provisions are subject to appropriate fiduciary carve-outs.
2. During the commercial negotiations of the SID, all parties were separately advised, and the commercial justification for the exclusivity provisions have been explained.[35]
3. The amount of the Break Fees are each less than 1% of equity value of Aurumin, based on the value of the equity value of Aurumin on or about 18 July 2025, being the last day of trading of Shares and Options on the ASX prior to the announcement of the Schemes. This is within generally accepted commercial parameters and in accordance with 'Guidance Note 7 - Lock-up devices' of the Takeovers Panel. The Break Fee is intended to compensate Brightstar for its costs if the Schemes do not proceed, and the Reverse Break Fee is intended to compensate Aurumin for its costs if Brightstar fails to procure the payment of the Consideration.[36] The Break Fees are not payable if Securityholders do not vote in favour of the Schemes. In my view, the amounts of the Break Fees are unlikely to influence Securityholders on their decision to vote on the Schemes.
4. Importantly, the exclusivity arrangements and Break Fees are disclosed in the Scheme booklet.[37]

1. Aurumin's directors have recommended that, in the absence of a superior proposal, and subject to BDO continuing to conclude that the Schemes are in the best interests of Securityholders, Securityholders vote in favour of the Schemes.[38] Aurumin also drew my attention to four matters. First, each of the directors have interests in Shares and/or Options.[39] Second, each will be paid a one-off special exertion payment (between $24,000 - $60,000)[40] for additional work done in negotiating the SID and Schemes.[41] Third, in the event that the Schemes are implemented, on Mr Raihani losing office as managing director, he will receive three months' notice or a termination payment of approximately $45,000.[42] Finally, one of Aurumin's directors, Piers Lewis, holds a beneficial interest in 2,197 ordinary shares in Brightstar through a self‑managed super fund.[43]
2. For the following reasons, I accept that, notwithstanding these matters, it is appropriate for each of the directors to make a recommendation in respect of the Scheme.
3. First, the consideration that each director will receive for their Shares and/or Options is the same consideration that every other Securityholder of Aurumin will receive.
4. Second, the exertion payments made to Aurumin's directors are relatively minor. These payments are intended to compensate the directors for the additional work required to negotiate the SID and implement the Schemes. These amounts will be paid regardless of whether the Schemes are implemented and are not being paid as incentives to promote the Schemes or to ensure the directors' support of the Schemes.
5. Third, any payment made to Mr Raihani associated with the termination of his employment is payable pursuant to separate contractual arrangements that were entered into well prior to the date of entry into the SID.
6. Finally, and importantly, the Scheme booklet sets out in detail each of the directors' interests and benefits that they will receive under the Schemes. These interests are fully disclosed to Securityholders, who can assess the recommendations made by the directors in the context of that disclosure.

1. Aurumin has received voting intention statements from three of its major Securityholders, who, as at 6 October 2025, collectively held 21.44% of the Shares and 58.29% of the Options on issue.[44] These Securityholders have confirmed they intend to vote in favour of the proposed Schemes, in the absence of a superior proposal and subject to BDO continuing to conclude that (each of) the Schemes are in the best interests of Securityholders.[45]
2. I was and am satisfied that these statements are appropriately disclosed in the Scheme booklet, consistent with both the Takeovers Panel Guidance Note 23: Shareholder Intention Statements, and previous authorities.[46]

1. The proposed Schemes contain deemed warranty and no encumbrance provisions.[47] These clauses are not unusual and are acceptable provided there is adequate disclosure.
2. These provisions are drawn to the attention of Securityholders in the Scheme booklet.[48] I was and am satisfied that adequate disclosure has been given of these clauses.

1. Aurumin drew my attention to the steps it proposes to take in terms of Securityholder communications, which is proposed to include inbound telephone communications.
2. I was provided with a draft script of the proposed telephone communications.[49] These communications are consistent with the disclosure in the Scheme booklet, in respect of which approval is sought.

1. Aurumin sought orders pursuant to s 1319 of the Act for electronic dispatch of the Scheme booklet and applicable proxy forms by email to Securityholders who have nominated to receive communications electronically (Email Recipients). In respect of Securityholders who have nominated to receive communications in hardcopy, hardcopy documents will be dispatched by post.
2. Securityholders who have not made any election, as well as those Email Recipients in respect of whom notice is received that electronic delivery was ineffective, will be sent a letter with details of the website from which the Scheme booklet can be accessed, together with a copy of the applicable proxy form.
3. I was and am satisfied that the proposed orders for dispatch of the Scheme booklet are appropriate.

1. At the first hearing before me, I was satisfied that the substantive and procedural requirements under s 411(1) and s 1319 of the Act had been satisfied and that the proposed Schemes were fit for consideration by Aurumin's Securityholders.
2. On this basis, at the conclusion of the hearing on 8 October 2025, I made orders in terms of Annexure 'A' to this judgment in respect of the Schemes.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Affidavit of Brynmor Phillip Hardcastle filed 18 September 2025 [10].

[2] Affidavit of Brynmor Phillip Hardcastle filed 18 September 2025, 'BPH-1'.

[4] Affidavit of Mark James Rowbottom filed 3 October 2025 [6].

[5] Affidavit of Mark James Rowbottom filed 3 October 2025 [11].

[7] Share Scheme, cl 4.4, cl 1.1 (definition of 'Share Scheme Consideration').

[8] Option Scheme, cl 4.3, cl 1.1 (definition of 'Option Scheme Consideration').

[9] Less than $500 worth based on the last traded price of Brightstar shares on the ASX on the trading day prior to the Record Date.

[10] Share Scheme, cl 5.1 & cl 5.8; Scheme booklet [3.14].

[11] Affidavit of Mark James Rowbottom filed 3 October 2025, 'MJR-18', pages 481 - 483.

[14] Affidavit of Mark James Rowbottom filed 3 October 2025, 'MJR-18', App 2, page 1063.

[15] Affidavit of Mark James Rowbottom filed 3 October 2025, 'MJR-18', App 6, page 1105.

[16] Affidavit of Alexander Bevington Rovira filed 30 September 2025, 'ABR-05' - 'ABR-06'.

[17] Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 [7].

[18] Re SRG Ltd [2018] FCA 1092 [11]; Re Wesfarmers Ltd [2018] WASC 308 [60].

[19] Corporations Act 2001 (Cth) s 412(1)(a)(ii); Corporations Regulations 2001 (Cth) reg 5.1.01, sch 8 cl 8301 ‑ 8310.

[20] Corporations Act 2001 (Cth) s 412(1)(a)(i).

[21] Corporations Act 2001 (Cth) s 411(2)(b).

[22] Re Amcom Telecommunications Ltd [2015] FCA 341 [10].

[23] Re SRG Ltd [12]; Re Wesfarmers Ltd [72] - [76].

[24] Affidavit of Mark James Rowbottom filed 3 October 2025 [62] - [64]; Affidavit of Alexander Bevington Rovira filed 30 September 2025 [32] - [33].

[25] Affidavit of Brynmor Phillip Hardcastle filed 6 October 2025, 'BPH-7' - 'BPH-8'; Affidavit of Emily Jane May filed 7 October 2025, 'EJM-2'.

[26] Affidavit of Mark James Rowbottom filed 3 October 2025 [88] - [101], 'MJR-16' - 'MJR-21'; Affidavit of Alexander Bevington Rovira filed 30 September 2025 [12] - [27], 'ABR-02' - 'ABR-04'; Affidavit of Brynmor Phillip Hardcastle filed 6 October 2025 [12] - [20], 'BPH-7' - 'BPH-8'.

[27] Plaintiff's submissions filed 6 October 2025, App B.

[28] Affidavit of Mark James Rowbottom filed 3 October 2025 [30]; Affidavit of Alexander Bevington Rovira filed 30 September 2025, 'ABR-01'.

[30] Share Scheme, cl 4 & cl 5.2; Option Scheme, cl 4 & cl 5.2.

[31] Affidavit of Alexander Bevington Rovira filed 30 September 2025, 'ABR-05' - 'ABR-06'.

[34] Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 [29] - [35]; Re Kangaroo Resources Ltd [2018] WASC 327 [57] - [61]; Re Pacific Energy Limited [2019] WASC 443 [58].

[35] Affidavit of Mark James Rowbottom filed 3 October 2025 [51] - [61]; Affidavit of Alexander Bevington Rovira filed 30 September 2025 [5].

[37] Scheme booklet, cl 10.9(e) - 10.9(f).

[38] Affidavit of Mark James Rowbottom filed 3 October 2025, 'MJR-7', pages 481 - 483.

[39] Affidavit of Mark James Rowbottom filed 3 October 2025 [47].

[40] The special exertion payments are $30,000 (Piers Lewis), $60,000 (Daniel Raihani), and $24,000 (John Ingram).

[41] Affidavit of Mark James Rowbottom filed 3 October 2025 [49]; Scheme booklet [10.7(a)].

[43] Affidavit of Mark James Rowbottom filed 3 October 2025 [48]; Scheme booklet [10.4].

[45] Affidavit of Mark James Rowbottom filed 3 October 2025 [72] - [74]; Affidavit of Brynmor Phillip Hardcastle filed 6 October 2025 [8] - [9].

[46] See, eg, Re Azure Minerals Ltd [2024] WASC 58 [66].

[47] Share Scheme, cl 6.5(a); Option Scheme, cl 6.5(b).

[49] Affidavit of Brynmor Phillip Hardcastle filed 6 October 2025 [11], 'BPH-6'.