RE MAGNETIC RESOURCES NL; EX PARTE MAGNETIC RESOURCES NL [2026] WASC 176

[2026] WASC 176 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS CITATION : RE MAGNETIC RESOURCES NL; EX PARTE MAGNETIC RESOURCES NL [2026] WASC 176 CORAM : HILL J HEARD : 28 APRIL 2026 DELIVERED : 28 APRIL 2026 PUBLISHED : 6 MAY 2026 FILE NO/S : COR 33 of 2026 MATTER : IN THE MATTER OF MAGNETIC RESOURCES NL EX PARTE MAGNETIC RESOURCES NL Plaintiff GENESIS MINERALS 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 are satisfied - Orders made convening scheme meeting -- 1 of 23 -- [2026] WASC 176 Page 2 Legislation: Corporations Act 2001 (Cth) s 411, s 412, s 1319 Corporations Regulations 2001 (Cth) sch 8 Supreme Court (Corporations) (WA) Rules 2004 (WA) r 3.2 Result: Orders made convening scheme meeting Category: B Representation: Counsel: Plaintiff : J R C Sippe Interested Party : A J Papamatheos SC & E Fearis Solicitors: Plaintiff : Hamilton Locke Interested Party : Broadstream Advisory -- 2 of 23 -- [2026] WASC 176 Page 3 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 Atlantic Gold NL [2014] FCA 697 Re Azure Minerals Ltd [2024] WASC 58 Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 Re Foster's Group Ltd (No 2) [2011] VSC 547 Re Hills Motorway Limited [2002] NSWSC 897 Re Kangaroo Resources Ltd [2018] WASC 327 Re Mosaic Oil NL [2010] FCA 985 Re NSX Ltd [2025] FCA 1133 Re Pacific Energy Ltd [2019] WASC 443 Re Professional Golfers Association of Australia Ltd [2007] FCA 1571 Re SRG Ltd [2018] FCA 1092 Re Viridian Financial Group Ltd [2025] FCA 997 Re Wattyl Ltd [2010] FCA 854 Re Wesfarmers Ltd [2018] WASC 308 -- 3 of 23 -- [2026] WASC 176 HILL J Page 4 HILL J: 1 Magnetic Resources NL (Magnetic) is an Australian public company listed on the Australian Securities Exchange (ASX).1 On 16 February 2026, Magnetic announced it had entered into a scheme implementation deed (SID) with Genesis Minerals Limited (Genesis) in respect of a proposed scheme of arrangement in relation to Magnetic's ordinary and contributing shares (Scheme).2 2 Under the Scheme, it is proposed that Genesis with acquire all ordinary and contributing shares (Shares) in Magnetic. If the Scheme is implemented, Magnetic will become a wholly-owned subsidiary of Genesis and be delisted from the ASX. 3 The originating process dated 20 March 2026 came before me for the first court hearing on 28 April 2026. On that date, Magnetic sought orders pursuant to s 411 and s 1319 of the Corporations Act 2001 (Cth) (Act) for the convening of a meeting of its members to consider the proposed Scheme. At the conclusion of the hearing, I made orders to convene a meeting of Magnetic's shareholders to consider and vote on the proposed Scheme (Scheme Meeting). Orders were also made approving the distribution of a Scheme booklet to Magnetic's Shareholders, as well as ancillary orders for the convening and conduct of the Scheme Meeting under s 1319 of the Act, including that it be held as a hybrid meeting. 4 In making these orders, I stated that I would subsequently publish written reasons for my orders. These are those reasons. Nature of proposed Scheme 5 Magnetic is a publicly listed mineral exploration company focussed on the development of its Lady Julie Gold Project, located in the Laverton region of Western Australia.3 As at 22 April 2026, Magnetic had the following securities on issue: (a) 295,454,516 fully paid ordinary shares (Ordinary Shares); (b) 20,418,862 contributing shares, which are separately quoted for trading on the ASX, and paid up to nil and unpaid as to $0.20 1 Affidavit of Christopher Paul Hood filed 20 March 2026 [5]. 2 Affidavit of Christopher Paul Hood filed 20 March 2026 [8], 'CPH-3'. 3 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [7]. -- 4 of 23 -- [2026] WASC 176 HILL J Page 5 (Contributing Shares). On payment of the unpaid amount in full, a Contributing Share becomes an Ordinary Share;4 (c) 3,750,000 unlisted options expiring 6 December 2026 (Options); and (d) 5,000,000 performance rights (Performance Rights).5 6 Genesis is a listed public company and gold producer and developer with operations focussed in the Leonora and Laverton regions of Western Australia.6 7 The Scheme Consideration has been set by reference to an implied value of $2.00 as at the date of signing of the SID.7 If the Scheme is implemented, in exchange for their Shares held at the Record Date, and unless an election is made, Shareholders will receive the Default Consideration. The Default Consideration for every Ordinary Share is approximately 70% of the consideration in cash and 30% in scrip and equates to $1.40 cash and 0.0873 new ordinary shares in Genesis; and for every Contributing Share, $1.20 cash and 0.0873 new ordinary shares in Genesis.8 8 Shareholders can elect to receive either the Maximum Cash Consideration or Maximum Scrip Consideration, both of which are subject to a scaleback mechanism. The Maximum Cash Consideration for every Ordinary Share is $2.00 cash; and for every Contributing Share, it is $1.80 cash. The Maximum Scrip Consideration for every Ordinary Share is 0.2911 new ordinary shares in Genesis; and for every Contributing Share, 0.2620 new ordinary shares in Genesis. 9 The scaleback mechanisms provide for a cap on the amount of cash or new Genesis shares that Genesis is required to pay or issue under the Scheme. The Scheme booklet sets out in some detail how the scaleback mechanisms work and includes illustrative examples of the elections that can be made under the Scheme.9 4 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [20]. 5 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [18]; Scheme booklet [5.4(a)]. 6 Scheme booklet, [6.1]. 7 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [30]. 8 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [46]; Scheme booklet [4.1], [4.4]. 9 Scheme booklet [4.4]. -- 5 of 23 -- [2026] WASC 176 HILL J Page 6 10 As soon as reasonably practicable after 26 May 2026, Magnetic will announce the outcome of the election process by its Shareholders, prior to the Scheme meeting on 3 June 2026.10 11 In relation to the Options, Magnetic is required to procure that each optionholder enter into an option cancellation deed for the cancellation of the options in return for $0.47 in cash per Option, subject to the Scheme becoming effective.11 12 It is proposed that, prior to the Record Date, all Performance Rights will vest in accordance with their terms and convert into Ordinary Shares.12 13 Shareholders whose entitlement to the Scheme Consideration would be less than $500 of new Genesis shares based on the closing price on the Record Date (defined as Unmarketable Parcel Shareholders) will be deemed to have elected to receive Maximum Cash Consideration unless they elect to receive the Default Consideration or Maximum Scrip Consideration.13 14 Shareholders with an address outside of Australia, New Zealand, Malaysia, Singapore, and the United Arab Emirates (Ineligible Foreign Holders) are deemed to have automatically elected to receive Maximum Cash Consideration (and will not be subject to the Cash Scaleback Mechanism).14 15 Magnetic's directors have unanimously recommended that Shareholders vote in favour of the Scheme, in the absence of a superior proposal.15 16 Magnetic retained an independent expert, BDO Corporate Finance Australia Pty Ltd (BDO), to provide an opinion on the proposed Scheme (IER). BDO retained an independent technical specialist, SRK Consulting Pty Ltd (SRK), to provide it with a technical assessment and valuation of Magnetic's mineral assets (Technical Report).16 BDO 10 Affidavit of Jeremy Isidro O'Hara filed 24 April 2026 [20], 'JIO-6'. 11 SID, cl 4.5. 12 SID, cl 4.6. 13 Scheme, cl 5.5. 14 Scheme, cl 5.5. 15 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [63]. 16 IER, Appendix 5. -- 6 of 23 -- [2026] WASC 176 HILL J Page 7 concluded that, in the absence of a superior proposal, the Scheme is fair and reasonable.17 17 The Scheme will not be implemented unless and until a number of conditions precedent are satisfied or waived. The conditions precedent which are required to be satisfied or waived are contained in the SID,18 and summarised in the Scheme Booklet.19 18 Genesis' obligations under the Scheme are supported by a deed poll (Deed Poll).20 Legal principles in respect of the Scheme 19 Pursuant to s 411 of the Act, a scheme of arrangement can be used to re-organise a company in a manner which will be binding on its members, provided that: (a) the arrangement is agreed by the requisite majorities as 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. 20 There are three stages to an application under s 411 of the Act. First, the court approves the convening of a scheme meeting and the draft explanatory statement to be sent to the scheme members. 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.21 21 There are well-established principles which apply to the first stage of proceedings. The court will order the convening of the scheme meeting and approve the dispatch of the scheme booklet if it is satisfied that:22 (a) there is a pt 5.1 body; (b) there is a compromise or arrangement within the meaning of s 411 of the Act; 17 Affidavit of Jeremy Isidro O'Hara filed 24 April 2026, 'JO1-7', page 2. 18 SID, sch 2. 19 Scheme booklet [9.6(d)]. 20 Affidavit of Joanne Tracey Steer filed 23 April 2026 [29], 'JTS-5'. 21 Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 [7]. 22 Re SRG Ltd [2018] FCA 1092 [11]; Re Wesfarmers Ltd [2018] WASC 308 [60]. -- 7 of 23 -- [2026] WASC 176 HILL J Page 8 (c) the proposed scheme booklet contains the prescribed information23 and provides proper disclosure;24 (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;25 (f) the procedural requirements of the Act and the Supreme Court (Corporations) (WA) Rules 2004 (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. 22 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 members.26 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.27 Should orders be made for the convening of the meeting to consider the proposed Scheme? 23 At the first court hearing, Magnetic relied on five affidavits, being: (a) an affidavit of Christopher Paul Hood, a partner of Hamilton Locke, the solicitors acting for Magnetic, filed 20 March 2026; (b) an affidavit of Benjamin Patrick Donovan, a non-executive director and company secretary of Magnetic, filed 22 April 2026; (c) an affidavit of Joanne Tracey Steer, general counsel and joint company secretary of Genesis, filed 23 April 2026; and 23 Corporations Act 2001 (Cth) s 412(1)(a)(ii); Corporations Regulations 2001 (Cth) reg 5.1.01, sch 8 cl 8301 - 8310. 24 Corporations Act 2001 (Cth) s 412(1)(a)(i). 25 Corporations Act 2001 (Cth) s 411(2)(b). 26 Re Amcom Telecommunications Ltd [2015] FCA 341 [10]. 27 Re SRG Ltd [12]; Re Wesfarmers Ltd [72] - [76]. -- 8 of 23 -- [2026] WASC 176 HILL J Page 9 (d) two affidavits of Jeremy Isidro O'Hara, a legal practitioner at Hamilton Locke, filed 24 and 28 April 2026. 24 These affidavits prove the formal matters Magnetic is required to establish. 25 On the materials before me on 28 April 2026, there was nothing to suggest the Scheme was not properly proposed. 26 Neither Magnetic nor Genesis were aware of any reason that the conditions precedent to the Scheme would not be satisfied or waived prior to the Implementation Date.28 Disclosure and Scheme booklet 27 Prior to the first court hearing, I was provided with a copy of the draft Scheme booklet (as well as an updated version following ASIC's review and comment).29 I am satisfied that there will be proper disclosure as to the effect of the proposed Scheme and the material considerations for Shareholders of Magnetic in the updated Scheme Booklet. 28 There was evidence before me as to the due diligence and verification process undertaken by both Magnetic and Genesis.30 On the basis of this evidence, I accept that Magnetic and Genesis 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. 29 Based on the checklist provided by counsel for Magnetic,31 I was and am 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). 30 In written and oral submissions, counsel for Magnetic addressed some specific matters in relation to the Scheme, as set out below. 28 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [45]; Affidavit of Joanne Tracey Streer filed 23 April 2026 [31]. 29 Affidavit of Benjamin Patrick Donovan filed 22 April 2026, 'BPD-1'; Affidavit of Jeremy Isidro O'Hara filed 24 April 2026, 'JIO-2'. 30 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [94] - [100]; Affidavit of Joanne Tracey Steer filed 23 April 2026 [13] - [28], 'JTS-2' - 'JTS4'; Affidavit of Jeremy Isidro O'Hara filed 24 April 2026 [11] - [19], 'JIO-3' - 'JIO-5'. 31 Plaintiff's submissions filed 24 April 2026, 'Appendix A', pages 21 - 24. -- 9 of 23 -- [2026] WASC 176 HILL J Page 10 Class issues and voting rights 31 In relation to class issues, counsel for Magnetic submitted the holders of Ordinary Shares and the holders of Contributing Shares should form a single class. 32 For the following reasons, I accept that no class issue arises in this case. 33 The Ordinary Shares and Contributing Shares rank equally in all respects, save for three differences. First, Contributing Shares are subject to a call for the unpaid amount of $0.20 per share. Second, Contributing Shareholders have voting rights on a poll in proportion to the amount paid up on the shares, which in this case is nil. Third, Contributing Shareholders have the right to participate in bonus issues in proportion to the amount paid up on the shares, which is also nil.32 While these are important differences in rights, they do not of themselves result in the creation of a separate class. The question is whether the interests of these shareholders are so different as to make it impossible for them to consult together.33 34 In my view, the differences between the shares do not make it impossible for Ordinary Shareholders and Contributing Shareholders to consult together with a view to their common interest. This is because these differences are outweighed by the common interests of all Shareholders. These common interests are that under the proposed Scheme, all Shareholders will give up their Shares (and any rights attached to the shares) in return for a combination of cash and new shares in Genesis which will be issued (subject to any election made by any shareholder) in the same proportion relative to their current shareholding in Magnetic. That is, under the proposed Scheme, Ordinary Shareholders and Contributing Shareholders will receive identical treatment. The difference in consideration represents the unpaid amount of the Contributing Shares. 35 This approach is consistent with previous authorities which have held that holders of fully paid and partly paid shares form a single class in respect of members' schemes.34 32 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [20] – [25]. 33 Re Hills Motorway Limited [2002] NSWSC 897 [12]. 34 Re Wattyl Ltd [2010] FCA 854 [11] - [17]; Re Mosaic Oil NL [2010] FCA 985 [10] - [11]; Re Foster's Group Ltd (No 2) [2011] VSC 547 [18] - [37]; Re Atlantic Gold NL [2014] FCA 697 [16] - [24]; Re Viridian Financial Group Ltd [2025] FCA 997 [59] - [67]; Re NSX Ltd [2025] FCA 1133 [27] - [37]. -- 10 of 23 -- [2026] WASC 176 HILL J Page 11 36 In relation to the voting rights of Contributing Shareholders, courts have previously accepted that in the case of partly paid shares, it is appropriate that the company's constitution be followed and for the voting rights of the holders of the partly paid shares to be equivalent to the proportion of the amount paid on the total amount payable.35 In this case, no amount has been partly paid for the Contributing Shares and these shares do not carry any voting rights. This is consistent with how Magnetic has treated Contributing Shareholders at previous general meetings. 37 Counsel for Magnetic submitted that the Contributing Shareholders should be entitled to vote on the proposed Scheme. This is because if the Scheme is implemented the Contributing Shareholders will be giving up their shares and should have a say in whether this occurs. In their submission, allowing these shareholders to vote would be consistent with the requirement in s 411(4)(a)(ii) requiring all members at a meeting convened under that section to have a vote on the proposed compromise or arrangement, even if these shareholders would not be entitled to vote at a general meeting of the company.36 38 I accept this submission. Where the rights of a class of shareholders are proposed to be acquired under a proposed scheme, I consider this class of shareholders should have a right to vote on the scheme. In my view this is consistent with the requirement in s 411(4)(a)(ii) which requires a resolution in favour of the arrangements to be passed by a majority of members 'in that class'. If Contributing Shareholders are not entitled to vote, this statutory requirement will not be met. 39 I also note that at ASIC's request, Magnetic has agreed to 'tag' the votes of the Contributing Shareholders for the purposes of the Scheme Meeting. Director benefits and recommendations 40 The directors of Magnetic have unanimously recommended that, in the absence of a superior proposal, Shareholders vote in favour of the Scheme. 41 Each of Magnetic's directors has interests in the Shares, Options and Performance Rights.37 In addition, two directors, Mr Donovan and 35 Re Wattyl Ltd [14]; Re Foster's Group Ltd (No 2) [23]. 36 Re Professional Golfers Association of Australia Ltd [2007] FCA 1571 [26] - [27]. 37 Scheme booklet [11]. -- 11 of 23 -- [2026] WASC 176 HILL J Page 12 Mr Sakalidis (subject to the Scheme becoming effective) will receive a one-off payment relating to the additional work they have undertaken in negotiating the SID and implementing the Scheme.38 42 Notwithstanding these interests, each Magnetic director considers it is appropriate to make a recommendation in relation to the Scheme.39 43 For the following reasons, I accept that it is appropriate for each of the Magnetic directors to make a recommendation in respect of the Scheme. 44 First, the consideration each of the Magnetic directors will receive for their Shares and Options is the same consideration that every other Shareholder and optionholder of Magnetic will receive. 45 Second, the exertion payments are intended to compensate these directors for the additional work they have undertaken in negotiating the SID and implementing the Scheme. The amounts that are proposed to be paid are relatively modest. 46 Finally, and importantly, the Scheme booklet gives full disclosure of each of the directors' interests in the Scheme.40 Shareholder undertakings 47 The draft Scheme booklet discloses that on 13 February 2026, three Shareholders being Chim Seng Oan, Target Range Pty Ltd and Alcock Superannuation Fund Pty Ltd as trustee for the Alcock Super Fund (holding an aggregate of 19.64% of the Shares) provided undertakings by way of deed polls in favour of Genesis and its related bodies corporate. Each of these Shareholders undertook to vote their Shares in favour of the Scheme and against any competing transaction; not to dispose of or encumber their Shares without Genesis' prior written consent; and not to acquire any additional Magnetic securities or interests in additional Magnetic securities.41 Copies of the undertaking were released to the ASX on 16 February 2026 as annexures to Genesis' Notice of initial substantial holder in Magnetic.42 48 The Voting Undertakings automatically terminate with immediate effect if one of a number of events occur. These include: 38 Scheme booklet [11]. 39 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [74] - [75]. 40 Scheme booklet, [3.3], [11.1] - [11.6]. 41 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [76] - [80]. 42 Affidavit of Joanne Tracey Steer filed 23 April 2026, 'JTS-6'. -- 12 of 23 -- [2026] WASC 176 HILL J Page 13 (a) Genesis giving notice in writing to the relevant Shareholder terminating the undertaking; (b) the SID validly terminating in accordance with its terms; or (c) the Scheme is not implemented prior to the End Date. 49 In addition, each of these shareholders may terminate the Undertaking with immediate effect by giving written notice to Genesis if: (a) there is a Superior Proposal that remains a Superior Proposal after giving effect to any matching rights available to Genesis under the SID; or (b) BDO concludes (including as a result of a change in recommendation) that the Scheme is not in the best interests of Magnetic's Shareholders. 50 Genesis confirmed that no benefit or inducement separate to the Scheme Consideration has been given or offered to these Shareholders for or in relation to the Voting Undertakings.43 51 At the first court hearing, I raised with counsel for Magnetic the discrepancy in the disclosure as to the basis for Genesis' relevant interest in Magnetic (which was said to arise from deed polls entered into with Target Range Pty Ltd) and the disclosure in relation to the voting intention statements. Counsel for Magnetic confirmed that the disclosure in relation to the voting intention statements (given by way of deed polls) was correct and that Genesis' relevant interest in Magnetic arose as a consequence of these deed polls. 52 Magnetic agreed to amend the disclosure in the Scheme booklet to clarify these matters. Subject to these amendments, I was and am satisfied that the undertakings are appropriately disclosed in the Scheme booklet,44 and are consistent with both the Takeovers Panel Guidance Note 23: Shareholder Intention Statements, and previous authorities.45 43 Affidavit of Joanne Tracey Steer filed 23 April 2026 [37]. 44 Scheme booklet [9.7]. 45 See Re Azure Minerals Ltd [2024] WASC 58 [66]. -- 13 of 23 -- [2026] WASC 176 HILL J Page 14 Performance risk 53 On the evidence before the court, I was and am satisfied that Shareholders are adequately protected against any performance risk. 54 Under the terms of the Scheme:46 (a) on the business day prior to the implementation date of the Scheme, Genesis must deposit the aggregate Cash Consideration into an Australian dollar trust account with an ADI operated by Magnetic as trustee for the Shareholders, and issue new Genesis Shares to Shareholders who are entitled to receive those shares; (b) transfer of the Shares to Genesis is subject to the provision of the Scheme Consideration; (c) beneficial title does not pass unless the Scheme Consideration has been issued; and (d) Magnetic has undertaken to enforce its Shareholders' rights against Genesis in the event Genesis fails to provide the Scheme Consideration. 55 These arrangements are supported by the Deed Poll. By the Deed Poll, Genesis covenants in favour of each Magnetic Shareholder that it will perform all actions attributed to it under the Scheme and acknowledges the Deed Poll may be relied on and enforced by any Shareholder in accordance with its terms. Exclusivity provisions and break fees 56 The SID contains the customary lock up devices (including, where usual, the fiduciary carve-out).47 In certain circumstances, Magnetic and Genesis may be liable to pay a break fee of $6,390,000 (Break Fee).48 57 In considering whether the exclusivity provisions impact on completion of the transaction and the duties of Magnetic's directors, the court has regard to:49 46 Scheme, cl 5.8, cl 9.5. 47 SID, cl 9. 48 SID, cl 10; Scheme booklet [9.6(b)]. 49 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 Ltd [2019] WASC 443 [58]. -- 14 of 23 -- [2026] WASC 176 HILL J Page 15 (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. 58 In this case, the exclusivity period is, at most, a period of approximately just over six months.50 59 Mr Donovan has explained the commercial justification for the exclusivity provisions and the Break Fee.51 I accept his evidence that the inclusion of these provisions in the SID followed arm's-length commercial negotiations in which all parties were separately advised and represented by external legal and financial advisers. 60 The amount of the Break Fee is less than 1% of the equity value of Magnetic based on the implied value of Magnetic's securities on the date the SID was entered into, which is within generally accepted commercial parameters. The Break Fee is intended to compensate the parties for their costs if the Scheme does not proceed. The Break Fee is payable by both parties in certain circumstances and is not payable if Shareholders of Magnetic do not vote in favour of the Scheme. In my view, the amount of the Break Fee is unlikely to influence Magnetic's Shareholders in their decision to vote on the Scheme. 61 Importantly, the exclusivity arrangements and Break Fee are prominently disclosed in the Scheme booklet.52 Magnetic's constitution 62 Magnetic adopted a new constitution at its annual general meeting on 30 November 2020. Due to an inadvertent oversight, its constitution is inconsistent with the requirements of a no liability company. If the Scheme is implemented, Genesis intends to promptly cause Magnetic to adopt a revised constitution that is consistent with the requirements for a no liability company or to convert Magnetic to a proprietary limited 50 SID, cl 1 ('End Date'; 'Exclusivity Period'). 51 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [86] - [88]. 52 Scheme booklet [1.6(c)], [9.6]. -- 15 of 23 -- [2026] WASC 176 HILL J Page 16 company. If the Scheme is not implemented, Magnetic intends to convene a general meeting of its shareholders to address this issue. 63 I am satisfied that the draft Scheme booklet makes appropriate disclosure of this matter, as well as Magnetic and Genesis' plans to rectify this issue.53 Deemed warranties 64 Magnetic also drew my attention to the deemed warranty provisions in the proposed Scheme. Deemed warranty clauses are not unusual and are accepted provided there is adequate disclosure that they are conditions. 65 These provisions are drawn to the attention of Shareholders in the Scheme Booklet.54 I was and am satisfied that adequate disclosure has been given of this clause. Dispatch of the Scheme booklet 66 Magnetic sought orders pursuant to s 1319 of the Act for electronic dispatch of the Scheme Booklet and applicable proxy forms by email to Shareholders who have nominated to receive communications electronically (Email Shareholders). In respect of its Shareholders who have nominated to receive communications in hardcopy, hardcopy documents will be dispatched by post. 67 Shareholders who have not made any election will be sent an email and/or letter with details of the website from which the Scheme booklet can be accessed, together with a copy of the applicable proxy form. 68 I was and am satisfied that the proposed orders for dispatch of the Scheme booklet are appropriate. Outbound communications 69 Magnetic drew my attention to the steps it proposes to take in relation to Shareholder communications, including that it had engaged Automic Pty Ltd (Automic) to operate an inbound information line, as well as an outbound communications campaign.55 Automic has been 53 Scheme booklet [7.3(h)], [5.8], [5.9]. 54 Scheme booklet [1.6(d)], [9.12]. 55 Affidavit of Benjamin Patrick Donovan filed 22 April 2026 [114] - [118]. -- 16 of 23 -- [2026] WASC 176 HILL J Page 17 instructed that information provided to Shareholders must be consistent with the disclosure in the Scheme booklet. Shareholder objection 70 Shortly prior to the first court hearing, a letter from a Shareholder regarding the Scheme was bought to my attention.56 A copy of this letter was provided to counsel for Magnetic shortly prior to the hearing and its contents addressed at the hearing. 71 For the following reasons, I did not consider that this letter should prevent orders being made for the convening of the Scheme meeting and the dispatch of the Scheme booklet, given the standard of review required at the first court hearing as summarised at [22]. 72 First, a number of the issues raised in the letter expressed concerns about the disclosure to be made in the Scheme booklet in the absence of having been provided with a copy of the Scheme booklet. In particular, the letter expressed concerns as to whether the Scheme booklet and IER addressed recent events including the significant increase in the gold price since the date of the feasibility study in July 2025, and the expansion of the resource at Lady Julie. As counsel for Magnetic drew to my attention, both the IER and the Technical Report adopted a gold price significantly higher than that used in Magnetic's feasibility study,57 and referred to recent announcements by Magnetic as to the resource expansion and optimisation work in reaching their conclusion as to the value of Magnetic.58 73 Second, the letter proceeded on the incorrect assumption that Genesis had acquired 19.64% of the Shares. In fact, Genesis acquired a relevant interest in 19.64% of the Shares by reason of entry into the voting intention statements with three shareholders as addressed above. 74 Third, the letter expressed a view on the value of Genesis shares without having had the benefit of considering the IER and the Technical Report or the basis for the conclusions expressed in these reports. 75 Fourth, and in any event, many of the matters raised in the letter concern the issue as to whether the Scheme is fair. This is an issue to be considered at the second court hearing. 56 MFI A. 57 Affidavit of Jeremy Isidro O'Hara filed 24 April 2026 'JIO-7', pages 713 - 714. 58 Affidavit of Jeremy Isidro O'Hara filed 24 April 2026 'JIO-1', pages 201, 316, 329, 339. -- 17 of 23 -- [2026] WASC 176 HILL J Page 18 76 The authors of this letter are overseas Shareholders of Magnetic. Initially, Magnetic proposed that the Scheme meeting be held as an in-person meeting only. While that enables interstate and overseas shareholders to vote at the Scheme meeting, it does not allow for their full participation, such as the ability to ask questions of the Chair or to speak on the proposed motion. In this case, given the matters raised by these Shareholders, I considered the Scheme meeting should be a hybrid meeting to enable all Shareholders to fully participate in the Scheme meeting if they choose to do so. For this reason, I ordered the Scheme meeting be held as a hybrid meeting. Conclusion and orders 77 At the first hearing, 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 Magnetic's members. 78 For these reasons, at the conclusion of the hearing on 17 April 2025, I made orders in terms of Annexure 'A' of this judgment in respect of the Scheme. -- 18 of 23 -- [2026] WASC 176 HILL J Page 19 Annexure 'A' -- 19 of 23 -- [2026] WASC 176 HILL J Page 20 -- 20 of 23 -- [2026] WASC 176 HILL J Page 21 -- 21 of 23 -- [2026] WASC 176 HILL J Page 22 -- 22 of 23 -- [2026] WASC 176 HILL J Page 23 I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. KS Associate to the Hon Justice Hill 6 MAY 2026 -- 23 of 23 --