RE EMMERSON RESOURCES LTD; EX PARTE EMMERSON RESOURCES LTD [2026] WASC 223

[2026] WASC 223 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS CITATION : RE EMMERSON RESOURCES LTD; EX PARTE EMMERSON RESOURCES LTD [2026] WASC 223 CORAM : HILL J HEARD : 8 MAY 2026 DELIVERED : 8 MAY 2026 PUBLISHED : 3 JUNE 2026 FILE NO/S : COR 44 of 2026 MATTER : IN THE MATTER OF EMMERSON RESOURCES LTD EX PARTE EMMERSON RESOURCES LTD Plaintiff TENNANT CONSOLIDATED MINING GROUP PTY LTD Interested Party Catchwords: Corporations law - Scheme of arrangement - Application for orders convening scheme meeting under s 411(1) of the Corporations Act 2001 (Cth) - Whether requirements to order scheme meeting is satisfied - Orders made convening scheme meeting -- 1 of 16 -- [2026] WASC 223 Page 2 Legislation: Corporations Act 2001 (Cth) s 411, s 412, s 1319 Result: Orders made convening scheme meeting Category: B Representation: Counsel: Plaintiff : J R C Sippe Interested Party : K Sleiman Solicitors: Plaintiff : Thomson Geer Interested Party : Corrs Chambers Westgarth Case(s) referred to in decision(s): Re Amcom Telecommunications Ltd [2015] FCA 341 Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 Re Azure Minerals Ltd [2024] WASC 58 Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 Re Kangaroo Resources Ltd [2018] WASC 327 Re Nzuri Copper Ltd [2019] WASC 189 Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 Re Pacific Energy Limited [2019] WASC 443 Re SRG Ltd [2018] FCA 1092 Re Wesfarmers Ltd [2018] WASC 308 -- 2 of 16 -- [2026] WASC 223 HILL J Page 3 HILL J: 1 Emmerson Resources Limited (Emmerson) is a public company listed on the Australian Securities Exchange (ASX).1 On 8 March 2026, Emmerson entered a scheme implementation deed with Pan African Resources plc (Pan African), which was amended on 21 April 2026 (SID), after Pan African nominated its wholly owned subsidiary, Tennant Consolidated Mining Group Pty Ltd (TCMG) to be the acquirer of Emmerson's shares.2 Under the proposed scheme of arrangement (Scheme), TCMG will acquire all issued shares in Emmerson, Emmerson will become a wholly owned subsidiary of TCMG and be delisted from the ASX. 2 On 8 May 2026, the originating process (which was filed 21 April 2026) came before me for the first court hearing. On that date, I ordered that a meeting of Emmerson's shareholders (Scheme Meeting) be convened to consider and vote on the proposed Scheme. Orders were also made approving the distribution of a Scheme booklet, and for the conduct of the Scheme Meeting. In making those orders, I stated I would subsequently publish written reasons for the orders I made. These are those reasons. Nature of proposed schemes 3 Emmerson is a minerals exploration company focused on the exploration and development of gold resources.3 As at 29 April 2026, Emmerson had on issue: (a) 665,497,457 shares (Shares); (b) 18,000,000 unlisted options to acquire Shares (Options); (c) 8,000,000 unlisted performance rights (Performance Rights). 4 Pan African is a public company incorporated in England and Wales and listed on the London Stock Exchange and Johannesburg Stock Exchange (JSE). It is a mid-tier gold producer, with a mixture of assets in South Africa and Australia consisting of both underground mines and surface mining/tailings retreatment operations.4 1 Affidavit of Michael John Dunbar filed 29 April 2026 [6] - [12]. 2 Affidavit of Michael John Dunbar filed 29 April 2026 [14] - [15]. 3 Affidavit of Michael John Dunbar filed 29 April 2026 [9]. 4 Affidavit of Marileen Kok filed 6 May 2026 [9] - [10]. -- 3 of 16 -- [2026] WASC 223 HILL J Page 4 5 Under the proposed Scheme, shareholders will receive 0.1493 new Pan African CHESS Depository Interests (CDIs) for every Share held on the record date (Scheme Consideration).5 The shares which are to be issued by Pan African will be held by CHESS Depository Nominees (CDN), a wholly owned subsidiary of ASX. A condition precedent of the proposed Scheme is that the new Pan African CDIs be admitted to official quotation for trading on the ASX.6 6 In order to address specific requirements of the JSE, the maximum number of shares that can be issued by Pan African is 103,241,276 shares.7 This, based on Emmerson's fully diluted share capital multiplied by the exchange ratio and accounting for the effects of rounding, is sufficient to enable Pan African to meet its obligations under the proposed Scheme.8 7 Under the terms of the SID, Emmerson is required to ensure that, prior to the Record Date, all Options are exercised in accordance with their terms and Shares are issued, which will then be acquired by Pan African under the proposed Scheme.9 As at 29 April 2026, Emmerson has entered into Option Cancellation Deeds with each Optionholder pursuant to which each Optionholder has agreed to either exercise the Options prior to the effective date of the Scheme or, if this has not occurred, for the Options to be cancelled for no consideration.10 8 In relation to the Performance Rights, it is proposed that prior to the Record Date, all Performance Rights will automatically vest in accordance with their terms and convert to Shares, which will then be acquired on the terms of the proposed Scheme.11 9 Shareholders whose entitlement to Scheme Consideration would be less than $500 of new Pan African CDIs (defined as Small Parcel Shareholders) will not receive the Scheme Consideration unless a valid opt-in notice is received two business days prior to the Record Date. For Small Parcel Shareholders and Ineligible Foreign Shareholders (as defined in SID), the CDIs which these shareholders would have 5 Affidavit of Michael John Dunbar filed 29 April 2026 [18]. 6 SID cl 3 and Schedule 1, item 12. 7 Affidavit of Michael John Dunbar filed 29 April 2026 [18]. 8 Affidavit of Michael John Dunbar filed 29 April 2026 [18]; Scheme booklet [3.2]. 9 SID cl 4.7. 10 Affidavit of Michael John Dunbar filed 6 May 2026 [43]. 11 SID cl 4.8. -- 4 of 16 -- [2026] WASC 223 HILL J Page 5 received will be issued to a sale agent and sold under a standard sale facility, with the net proceeds remitted to them.12 10 Emmerson's directors have unanimously recommended that in the absence of a superior proposal, Shareholders vote in favour of the Scheme. 11 Emmerson engaged BDO Corporate Finance Australia Pty Ltd (BDO) as an independent expert to provide an opinion on the proposed Scheme. BDO has concluded that, in the absence of a superior proposal, the Scheme is fair and reasonable and in the best interests of Shareholders. The basis of that conclusion, including the valuation and methodology used by BDO, are set out in the Independent Expert Report. 12 The proposed Scheme will not be implemented unless and until a number of conditions precedent, as set out in the SID,13 and summarised in the Scheme booklet,14 are satisfied or waived. The SID also sets out the agreed procedures for the implementation of the proposed Scheme. The obligations of TCMG and Pan African under the Scheme are supported by a deed poll which has been executed by both Pan African and TCMG (Deed Poll).15 Legal principles 13 Pursuant to s 411 of the Act, a scheme of arrangement can be used to re-organise a company which is binding on members and creditors 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. 14 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. 12 Scheme cl 6.8. 13 SID cl 3, Schedule 1, items 11 and 12. 14 Scheme booklet [11.6(a)]. 15 Affidavit of Marileen Kok filed 21 April 2026, 'MK-7'. -- 5 of 16 -- [2026] WASC 223 HILL J Page 6 Third, assuming the first two stages have occurred, the court approves the proposed scheme.16 15 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:17 (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 information18 and provides proper disclosure;19 (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;20 (f) the procedural requirements of the Act and the Supreme Court (Corporations) (WA) Rules 2004 (WA) 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. 16 Any issue about classes of members is usually determined at the first hearing.21 This is so that costs and court time are not wasted which would otherwise occur if this issue was left to the second court hearing.22 17 The standard of review that is undertaken by the court at the first court hearing is whether the proposed scheme is not inappropriate and is one that sensible businesspeople might consider is of benefit to its 16 Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 [7]. 17 Re SRG Ltd [2018] FCA 1092 [11]; Re Wesfarmers Ltd [2018] WASC 308 [60]. 18 Corporations Act 2001 (Cth) s 412(1)(a)(ii); Corporations Regulations 2001 (Cth) reg 5.1.01, sch 8 cl 8301 - 8310. 19 Corporations Act 2001 (Cth) s 412(1)(a)(i). 20 Corporations Act 2001 (Cth) s 411(2)(b). 21 Re CSR Ltd [73] (Finkelstein J). 22 Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 [20]. -- 6 of 16 -- [2026] WASC 223 HILL J Page 7 members.23 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.24 Should orders be made for the convening of the Meetings and the dispatch of the Scheme booklet? 18 At the first court hearing, Emmerson relied on five affidavits, being: (a) two affidavits of Hendrik Christoffel van Aswegen, a partner of Thompson Geer, Emmerson's solicitors, filed 21 April and 7 May 2026; (b) an affidavit of Michael John Dunbar, the managing director of Emmerson, filed 29 April 2026; (c) an affidavit of Scott Douglas Gibson filed 29 April 2026, a partner of Thompson Geer and the proposed chairperson of the Scheme meeting, filed 29 April 2026; and (d) an affidavit of Marileen Kok, the financial director of Pan African, filed 6 May 2026. 19 These affidavits prove the formal matters that Emmerson is required to establish. 20 As a company, Emmerson is a pt 5.1 body. The proposed Scheme is arrangement or compromise contemplated by s 411(1) of the Act as it is a standard members' scheme for the merger of the companies in question. 21 On the evidence before me, there was nothing to suggest that the Schemes were not properly proposed nor that any class issues arise. 22 There are a number of conditions precedent to the Scheme. Neither Emmerson nor Pan African has any basis to believe that any of the conditions precedent will not be satisfied prior to implementation of the Scheme.25 23 Re Amcom Telecommunications Ltd [2015] FCA 341 [10]. 24 Re SRG Ltd [12]; Re Wesfarmers Ltd [72] - [76]. 25 Affidavit of Michael John Dunbar filed 29 April 2026 [95]; Affidavit of Marileen Kok filed 21 April 2026 [37]. -- 7 of 16 -- [2026] WASC 223 HILL J Page 8 Disclosure and Scheme booklet 23 I was provided with a copy of the draft Scheme booklet (as well as an updated Scheme booklet following its review by ASIC)26 and am satisfied that there will be proper disclosure as to the effect of the proposed Scheme and the material considerations for Shareholders. 24 There is evidence before me as to the due diligence and verification processes undertaken by Emmerson27 and Pan African.28 I accept that Emmerson and Pan African have undertaken processes to verify the accuracy of statements attributable to each of them in the draft Scheme booklet and to ensure the Scheme booklet does not omit any material information. 25 Based on the checklist provided by counsel for Emmerson,29 I was and am satisfied the draft Scheme booklet contained the prescribed information in accordance with s 411(3) and s 412 of the Act and reg 5.01 and sch 8 of the Corporations Regulations 2001 (Cth). 26 In written and oral submissions, counsel for Emmerson drew my attention to some specific matters which are addressed below. Performance risk 27 On the evidence before the court, I was and am satisfied that the Shareholders are adequately protected from any performance risk. 28 Under the terms of the Scheme:30 (a) on the Implementation Date, Pan African is required to issue and allot the Scheme Consideration (new shares to CDN and CDIs to each shareholder of Emmerson) to Shareholders and, for Ineligible Foreign Securityholders, to their sale agent; (b) on the Implementation Date, the name and address of CDN is entered into Pan African's share register and the name and address of each Shareholder entered into records maintained by Pan African as the holder of the CDIs; 26 Affidavit of Michael John Dunbar filed 29 April 2026 'MJD-06'; Affidavit of Hendrik van Aswegen filed 7 May 2026, 'HVA-07'. 27 Affidavit of Michael John Dunbar filed 29 April 2026 [56] - [78]. 28 Affidavit of Marileen Kok filed 6 May 2026 [20] - [35]. 29 Plaintiff's submissions filed 6 May 2026, Annexure A. 30 Scheme cl 5.2 - 5.4, 6.3 - cl 6.8. -- 8 of 16 -- [2026] WASC 223 HILL J Page 9 (c) transfer and registration of the Shares to TCMG is subject to provision of the Scheme Consideration; (d) beneficial title in the Shares does not pass unless the Scheme Consideration has been issued in accordance with the Scheme. 29 These arrangements are supported by the Deed Poll, which can be enforced by Emmerson and its directors on behalf of any Shareholder. Exclusivity provisions and exclusivity fee 30 The SID contains exclusivity provisions which include, where usual, fiduciary carve outs.31 If these provisions are breached, Emmerson will be obliged to pay a reimbursement fee of $3.11 million (Break Fee). 31 In considering whether the exclusivity provisions impact on completion of the transaction and the duties of directors, the court has regard to:32 (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. 32 In this case, the exclusivity period is, at most, eight months from the date of the SID (unless extended by agreement). The exclusivity provisions are subject to the appropriate fiduciary carve-outs. 33 The amount of the Break Fee payable from Emmerson to Pan-African is approximately 1% of the equity value of Emmerson as at 8 March 2026.33 This is within the generally accepted commercial parameters and in accordance with 'Guidance Note 7' of the Takeovers Panel. The Break Fee is intended to compensate Pan-African for its costs if the Scheme does not proceed and is not payable in the event that Shareholders do not approve the Scheme. In my view, the amounts 31 SID cl 12.8. 32 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]. 33 Affidavit of Michael John Dunbar filed 29 April 2026 [54]. -- 9 of 16 -- [2026] WASC 223 HILL J Page 10 of the Break Fee is unlikely to influence Shareholders on their decision to vote on the Scheme. 34 Importantly, the exclusivity arrangements and Break Fee are disclosed in the Scheme booklet. Directors' benefits and recommendations 35 The directors of Emmerson have unanimously recommended that, in the absence of a superior proposal, and subject to BDO continuing to conclude the Scheme is in the best interests of Shareholders, Shareholders vote in favour of the Scheme. 36 Counsel for Emmerson drew my attention to various interests of the directors. First, each of the directors have interests in unvested Performance Rights and two are Optionholders. These securities will either convert to Shares prior to the Record Date or (in the case of the Options) potentially be cancelled. Second, if the Scheme is implemented, it is anticipated that Mr Dunbar's employment will be terminated and he will be entitled to receive a payment in lieu of notice as well as a lump sum payment of $225,000. 37 For the following reasons, I accept it is appropriate for the directors to make a recommendation in respect of the Scheme. 38 First, the consideration that each director will receive for any Shares held at the Record Date is the same consideration that every other Shareholder will receive. 39 Second, the payments to Mr Dunbar arise under his employment agreement with Emmerson. While the lump sum payment is payable on a change of control, I accept it is not being paid to him as a collateral benefit and is not class creating. 40 Third, and importantly, the Scheme booklet sets out in detail each of the directors' interests and benefits they will receive under the Scheme.34 These interests are fully disclosed to Shareholders, who can assess the recommendations made by independent directors in the context of that disclosure. 34 Scheme booklet [1.3(a)], [12.2]. -- 10 of 16 -- [2026] WASC 223 HILL J Page 11 Shareholder voting intention statements 41 Three shareholders holding approximately 31% of the Shares have confirmed they intend to vote in favour of the proposed Scheme, in the absence of a superior proposal and subject to BDO continuing to conclude the Scheme is in the best interests of Shareholders.35 42 I was and am satisfied that these statements are appropriately disclosed in the Scheme booklet,36 consistent with the Takeovers Panel's 'Guidance Note 23' and previous authorities.37 Loan facility agreement 43 On 8 March 2026, Emmerson entered into a binding term sheet with Pan African whereby Pan African agreed to provide Emmerson with an unsecured loan of the higher of $5 million and the aggregate amount of any cash call made under its joint venture with TCMG. The repayment date of the facility is no later than four months after the proposed Scheme is either implemented or the SID is terminated (except for breach by Emmerson in which case it is repayable within one month). An interest rate of 7% per annum is payable on any amount drawn down. 44 In considering agreements where a bidder has provided a loan to the target, the court considers whether it operates as a lock-up device or is a break fee that might prevent securityholders freely considering the proposed scheme or schemes.38 45 In this case, I was and am satisfied that the facility agreement (particularly in terms of the quantum of the loan and the obligations for repayment) are not a lock-up device that would have a coercive effect on the Shareholders and prevent them from considering the merits of the proposed Scheme. The terms of the agreement is disclosed in the Scheme booklet,39 and is, in my view, a matter for Shareholders to consider in determining how to vote at the Scheme meeting. 35 Affidavit of Michael John Dunbar filed 29 April 2026 [9]. 36 Scheme booklet [1.3(a)]. 37 See Re Azure Minerals Ltd [2024] WASC 58 [66]. 38 Re Nzuri Copper Ltd [2019] WASC 189 [67] - [68]. 39 Scheme booklet [5.12(a)]. -- 11 of 16 -- [2026] WASC 223 HILL J Page 12 Deemed warranties and no encumbrances 46 Emmerson drew my attention to the deemed warranty and no encumbrance provisions in the proposed Scheme.40 These clauses are not unusual and are acceptable provided there is adequate disclosure. 47 These provisions are drawn to the attention of Shareholders in the Scheme booklet.41 I was and am satisfied that adequate disclosure has been given of these clauses. Proposed Shareholder communications 48 Emmerson drew my attention to the fact it has engaged Automic Pty Ltd (Automic) to operate both an inbound telephone line as well as outbound telephone communications.42 A script will be provided to all staff who communicate with Shareholders. Automic has been instructed that the information provided must be consistent with and reflect the information in the Scheme booklet.43 Dispatch of the Scheme booklet 49 Emmerson sought orders pursuant to s 1319 of the Act for the dispatch of the Scheme booklet and related materials by email and post. 50 I was and am satisfied that the orders proposed for the dispatch of the Scheme booklet are appropriate. Conclusion and orders 51 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 Scheme was fit for consideration by Emmerson's shareholders. 52 On this basis, at the conclusion of the hearing on 8 May 2026, I made orders in terms of Annexure 'A' to this judgment in respect of the Scheme. 40 Scheme cl 5.5. 41 Scheme booklet [1.5(d)]. 42 Affidavit of Michael John Dunbar filed 29 April 2026 [87] - [91]. 43 Affidavit of Michael John Dunbar filed 29 April 2026 [90]. -- 12 of 16 -- [2026] WASC 223 HILL J Page 13 Annexure 'A' -- 13 of 16 -- [2026] WASC 223 HILL J Page 14 -- 14 of 16 -- [2026] WASC 223 HILL J Page 15 -- 15 of 16 -- [2026] WASC 223 HILL J Page 16 I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. VA Associate to the Hon Justice Hill 3 JUNE 2026 -- 16 of 16 --