Announcement PDF Monday, 27 September 2021 DESPATCH OF SHARE PURCHASE PLAN DOCUMENTATION Hillgrove Resources Limited (ABN 73 004 297 116) (ASX: HGO) (Hillgrove) confirms that despatch to Eligible Shareholders of the Share Purchase Plan Booklet and accompanying personalised Application Form (SPP Offer), as announced to the ASX on 22 September 2021, will occur today. The SPP Offer opens today, Monday 27 September 2021, and is expected to close at 5:00pm (Sydney time) on Thursday 14 October 2021. A copy of the SPP Offer Booklet is attached. Further information If you have questions relating to the Entitlement Offer, please call Hillgrove's share registry, Boardroom Pty Limited, on 1300 737 760 (within Australia) or +61 2 9290 9600 (outside Australia) from 9.00am to 5.00pm (Sydney time), Monday to Friday. If you have any further questions, you should contact your stockbroker, accountant or other professional adviser. For more information contact: Mr Lachlan Wallace CEO & Managing Director Tel: +61 (0)8 7070 1698 Mr Joe Sutanto CCO & Company Secretary Tel: +61 (0)8 7070 1698 NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES This announcement has been prepared for publication in Australia and may not be released to US wire services or distributed in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. Any securities described in this announcement have not been, and will not be registered, under the US Securities Act of 1993, as amended (the “Securities Act”) and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the Securities Act and applicable US state securities laws. IIII HILLGROVE RESOURCES LIMITED ACN 004 297 116 5-7 King William Road, Unley, SA, 5061, Australia www.hillgroveresources.com.au T +61 8 7070 1698 Hillgrove Resources Limited ACN 004 297 116 Share Purchase Plan Booklet Eligible Shareholders have the opportunity to participate in the Offer by applying for up to $30,000 worth of Shares without incurring brokerage, commissions, stamp duty or other transaction costs. Details of the Offer and how to participate are set out in these Terms and Conditions. Shares issued under the Offer will rank equally in all respects with all other Shares on issue as at the date of issue and will carry the same voting rights, dividend rights and other entitlements as those Shares. This Share Purchase Plan Booklet is dated 27 September 2021. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Important Information This document is intended for use only in connection with the Offer to Shareholders in Australia and New Zealand. No action has been taken to permit an offering of Shares in any jurisdiction outside of Australia and New Zealand. The distribution of this document may be restricted by law and persons (including Custodians, trustees and nominees) who come into possession of this document should observe any such restrictions. The Shares under the Offer are not being offered or sold to the public within New Zealand other than to existing Shareholders of the Company with registered addresses in New Zealand to whom the Offer is being made in reliance on the Financial Markets Conduct Act 2013 (NZ) and the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016 (NZ). This document has not been registered, filed with or approved by any New Zealand regulatory authority. This document is not a product disclosure statement under New Zealand law and is not required to, and may not, contain all the information that a product disclosure statement under New Zealand law is required to contain. This document does not constitute an offer to sell, or the solicitation of an offer to buy, securities in the United States. The Shares have not been and will not be registered under the US Securities Act, or the securities laws of any state or other jurisdiction of the United States and may not be directly or indirectly, offered, sold or resold to: (a) a U.S. Person or a person acting for the account or benefit of a U.S. Person; or (b) a person within the United States or a person acting for the account or benefit of a person within the United States. Because of these legal restrictions, and consistent with the representations contained in these Terms and Conditions and the Application Form, you must not: (c) send copies of these Terms and Conditions or any other material relating to the Offer to any person in the United States or who is, or is acting for the account or benefit of, U.S. Persons; or (d) submit an Application Form or make payment by BPAY® or otherwise for Shares for any person in the United States or who is, or is acting for the account or benefit of, U.S. Persons. Hillgrove Resources is not licensed to provide financial product advice in relation to the Shares issued under the Plan or any other financial products. No cooling off regime applies in respect of the acquisition of Shares under the Plan (whether the regime is provided for by law or otherwise). Eligible Shareholders should obtain their own advice on whether or not to participate in the Plan. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Letter from the Chairman 27 September 2021 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS Dear Shareholder Hillgrove Resources Limited Share Purchase Plan I am pleased to invite you to participate in the offer of fully paid ordinary shares (Shares) in Hillgrove Resources Limited ACN 004 297 116 (Hillgrove, HGO or Company) under the share purchase plan established by Hillgrove (Offer or Plan). The Company is seeking to raise, in total, a maximum of $2,000,000 under the Offer, which is not underwritten, but the Company reserves the right to increase this maximum based on overall applications received. Overview of the Offer The Offer provides you, as an Eligible Shareholder of Hillgrove (subject to certain conditions), with the opportunity to acquire a minimum of $1,000 and up to, in aggregate, $30,000 of Shares in Hillgrove at an issue price of $0.052 per Share (Issue Price) free from any brokerage or transaction costs. The Issue Price is the same as the issue price applicable to the placement to institutional and sophisticated investors to raise approximately $10.0 million (Placement), which was completed by Hillgrove on 21 September 2021 and announced on the ASX on 22 September 2021. The Issue Price represents an 16.3% discount to the volume weighted average price of Shares traded on ASX over the 5 trading days up to, and including, 17 September 2021, which was the last day of trading of Shares on ASX prior to Hillgrove's announcement of the Offer. Hillgrove is seeking to raise, in total, a maximum of $2,000,000 under the Offer. The directors have reserved the right to accept oversubscriptions under the Plan to ensure all Eligible Shareholders have a reasonable opportunity to participate in the SPP. Similarly, the Company reserves the right to either increase the maximum or scale back applications in its sole and absolute discretion. Should any scale back be necessary, the Company intends that any scale back arrangements will be made having regard number of factors such as the size of your shareholding at the Record Date, the extent to which you have sold or purchased Shares since the Record Date, whether you have multiple registered holdings, and the total applications received from Eligible Shareholders. If applications are scaled back, excess funds will be returned to applicants without interest. Participation in the Offer is optional and is open to Eligible Shareholders who, as at the Record Date (7:00pm (Sydney time) on Tuesday, 21 September 2021) were registered as holders of fully paid ordinary shares in Hillgrove and whose address on the share register is in Australia or New Zealand. If an Eligible Shareholder holds shares as a Custodian the Offer is also being made to the Custodian and, subject to certain conditions, the Custodian has the discretion to extend the Offer to the relevant beneficiaries. Use of Funds The Offer is being undertaken in conjunction with, and supplemental to, the Placement. In addition to funding the costs of the Offer and Placement, the proceeds of the Offer (along with the Placement) will be applied principally to: Hillgrove Resources Limited | Share Purchase Plan Page 3 • Conduct a drilling program at Kanmantoo targeting extensions to the current resource and infill drilling to increase confidence ahead of a final investment decision (FID) to recommence mining; Support development of the underground decline and drill platforms in conjunction with the $2 million grant from the SA Government; Study and resource definition costs ahead of FID decision in 2022; and General working capital. • • • Timing The Offer will be undertaken in accordance with the timetable below. However, Hillgrove reserves the right to vary the dates and times set out below in its complete discretion, subject to the Corporations Act and other applicable laws. Event Date Record Date (the business day prior to Hillgrove's announcement of the Plan) 7.00pm on Tuesday, 21 September 2021 Opening Date and time 9.00am on Monday, 27 September 2021 Closing Date and time 5.00pm on Thursday, 14 October 2021 Allotment Date (i.e. the date of issue of Shares under the Offer) Thursday, 21 October 2021 Date on which Shares issued under the Offer are expected to commence trading on ASX Friday, 22 October 2021 Despatch of holding statements in respect of Shares issued under the Offer Friday, 22 October 2021 To participate in the Offer, you should either: (a) pay via BPAY® online or by telephone (for Shareholders with an eligible Australian bank account only), which is recommended in light of likely delays to postal services caused by the COVID-19 pandemic. You do not need to return the Application Form enclosed with this document if you choose this option; or (b) complete and return your enclosed Application Form in accordance with the details on the Application Form, together with your cheque, bank draft or money order drawn on an Australian bank in Australian dollars. Further information In accordance with the following terms and conditions (Terms and Conditions), the Offer is nonrenounceable and Shares in Hillgrove may be issued under the Offer only to the Eligible Shareholder. In deciding whether to participate in the Offer, you should seek your own independent financial, legal and taxation advice in respect of the Offer. No cooling off regime applies to the acquisition of Shares under the Offer. On behalf of the Board, I thank you for your continued support of Hillgrove and I invite you to consider participating in the Offer. Yours faithfully Derek Carter Chairman Hillgrove Resources Limited Hillgrove Resources Limited | Share Purchase Plan Page 4 TERMS AND CONDITIONS OF THE PLAN Establishment The Plan is established under ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 and in accordance with ASIC Regulatory Guide 125 and the ASX Listing Rules. ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 grants relief from the requirement to prepare a prospectus for the offer of Shares under the Plan, subject to the satisfaction of certain conditions. 2. Participation The Board may make offers under the Plan to all persons who, as at the Record Date, are Eligible Shareholders. You are an Eligible Shareholder if you were a registered holder of Shares at the Record Date (7.00pm (Sydney time) on Tuesday, 21 September 2021) and had a registered address in Australia or New Zealand (as shown on Hillgrove's share register) unless: (a) you hold shares on behalf of another person who resides outside Australia or New Zealand in which case you will not be eligible to participate in respect of the Shares of that person; or (b) you are, or are acting for the account or benefit of, a U.S. Person as defined in Regulation S under the US Securities Act of 1933 (as amended) (U.S. Person). Hillgrove has determined that it is not practical for a holder of Shares with a registered address (as shown on Hillgrove share register) in any jurisdiction other than Australia or New Zealand, to participate in the Offer. No Offer is made to persons who are not Eligible Shareholders. Participation in the Offer by Eligible Shareholders is optional and is subject to these Terms and Conditions. 3. Offer 3.1 Nature of offer The Offer is non-renounceable and Shares may be issued under the Plan only to an Eligible Shareholder. The Offer will be made on these Terms and Conditions to each Eligible Shareholder. All Eligible Shareholders will receive the same offer, irrespective of the number of Shares which they hold on the Record Date. 3.2 Plan participation rules The following rules apply to participation by Eligible Shareholders. Single holders Unless a holder is a Custodian, each Eligible Shareholder is entitled to apply under the Offer for up to a maximum amount of $30,000 worth of Shares (irrespective of whether the holder receives multiple Offer documents, for example, due to multiple registered sole or joint holdings), subject to the holder certifying that the total of the application price for the following does not exceed $30,000: (a) the Shares the subject of the application; (b) any other Shares applied for by the holder under the Plan or any similar arrangement in the 12 months before the application; Hillgrove Resources Limited | Share Purchase Plan Page 5 (c) any other Shares which the holder has instructed a Custodian to acquire on their behalf under the Plan; and (d) any other Shares issued to a Custodian under an arrangement similar to the Plan in the 12 months before the application as a result of an instruction given by the holder to the Custodian or another Custodian which resulted in the holder holding beneficial interests in the Shares. By completing and submitting an application for Shares under the Offer, a holder certifies the above. Joint holders Unless a holder is a Custodian, if an Eligible Shareholder is recorded with one or more other persons as a joint holder of Shares, that joint holding is considered to be a single registered holding for the purpose of the Plan and certifications or representations given by a joint holder are taken to have been given by all joint holders. Joint holders are only entitled to participate in the Offer in respect of that single holding. If the same joint holders receive more than one Offer document due to multiple identical holdings, the joint holders may only apply for one maximum amount of $30,000 worth of Shares. Custodians If an Eligible Shareholder holds Shares as a Custodian, the Offer is made to the Custodian and, subject to certain conditions, the Custodian has the discretion to extend the Offer to the Beneficiaries. The Custodian may apply for up to a maximum amount of $30,000 worth of Shares in respect of each Beneficiary. However, Hillgrove will not allocate Shares under the Offer to the Custodian unless the Custodian certifies the matters set out in a Custodian Certificate. Custodians wishing to participate in the Offer on behalf of one or more Beneficiaries should contact Boardroom on 1300 737 760 (within Australia) or +61 2 9290 9600 (outside of Australia) or at corporateactions@boardroomlimited.com.au to obtain further information on how to apply and how to obtain a Custodian Certificate. If a Custodian holds Shares jointly on behalf of two or more Beneficiaries, the $30,000 limit applies jointly in relation to those Beneficiaries as if the Custodian held the Shares on behalf of a single person. A Custodian must not participate in the Plan if their participation in the Plan would breach ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547. 3.3 Other terms The Offer opens at 9.00am (Sydney time) on Monday, 27 September 2021. Under the Offer you may apply for Shares up to a maximum value of $30,000 and you must apply for a minimum value of $1,000 worth of Shares. The Offer will be made subject to any other terms and conditions that the Board considers reasonable and appropriate. 4. Issue Price Shares will be issued under the Offer at an issue price of $0.052 per Share (Issue Price). The Issue Price is the same as the issue price applicable to the placement to institutional and sophisticated investors to raise approximately $10.0 million, which was completed by Hillgrove on 21 September 2021 and announced on ASX on Wednesday, 22 September 2021. The Issue Price represents a 16.3% discount to the volume weighted average price of Shares traded on ASX over the 5 trading days up to, and including, Friday, 17 September 2021 which was the last day of trading of Shares on ASX prior to Hillgrove's announcement of the Offer. Hillgrove Resources Limited | Share Purchase Plan Page 6 5. Risks Associated with the Offer Shareholders should note that there is a risk that the market price of Shares may change between the date of the Offer and the date on which Shares are issued under the Plan. This means it is possible that, between the time you make your application and the date on which Shares are issued under the Plan, you may be able to buy Shares at a lower price than the Issue Price. No coolingoff regime applies in relation to the application for or acquisition of Shares under the Plan. There are also a number of other risks associated with an investment in Shares under the Offer. Further details about these risks and Hillgrove generally are included in the 'Risks' section of Hillgrove's investor presentation released to the ASX on Wednesday, 22 September 2021, which you are encouraged to read. Hillgrove is a disclosing entity for the purposes of the Corporations Act and, as a result, is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules. Hillgrove recommends that you monitor the Share price and any announcements, which can be found on Hillgrove's website at https://www.hillgroveresources.com.au/announcements or in the financial pages of major Australian metropolitan newspapers, or on ASX's website at www.asx.com.au. 6. Costs of Participation No brokerage, commissions, stamp duty or other transaction costs will be payable by Eligible Shareholders in respect of the application for, and issue of, Shares under the Plan. 7. Acceptance of Offers 7.1 Payment method If you wish to participate in the Offer, you need to do one of the following: Option 1 – Payment by BPAY® We strongly recommend you to apply by paying through BPAY if possible. This is the fastest and easiest way to apply and is recommended in light of potential delays to postal services caused by the COVID-19 pandemic. You do not need to return the Application Form enclosed with this document if you choose this option. For Eligible Shareholders with an Australian bank account, you may apply for Shares under the Offer by making a BPAY® payment on the internet or by telephone by using the personalised customer reference number shown on your Application Form which is required to identify your holding. If you are paying for Shares via BPAY® you do not need to return your Application Form, but are taken to make the certifications and representations described in these Terms and Conditions and the Application Form. However, Custodians applying for Beneficiaries must still complete and return a Custodian Certificate. Payment must be received by no later than the Closing Date. You should be aware that your own financial institution may implement earlier cut-off times with regard to electronic payment, and you should therefore take this into consideration when making payment. It is your responsibility to ensure that funds submitted through BPAY® are received by the Closing Date. Option 2 – Payment by cheque, bank draft or money order If you are paying for Shares by cheque, bank draft or money order, please complete and return your Application Form, together with your cheque, bank draft or money order, by no later than the Closing Date (5.00pm (Sydney time) on Wednesday, 14 October 2021), to: Hillgrove Resources Limited c/- Boardroom Pty Limited Hillgrove Resources Limited | Share Purchase Plan Page 7 GPO Box 3993 SYDNEY, NSW 2001 Australia Cheques, bank drafts and money orders must be made payable in Australian dollars to 'Hillgrove Resources Limited', crossed 'Not Negotiable' and must be drawn on an Australian bank. Cash is not accepted. Payment will be processed on the day of receipt and as such, sufficient cleared funds must be held in your account, as cheques, bank drafts and money orders received may not be re-presented and may result in your application being rejected. Shareholders in New Zealand will need to affix the appropriate postage to the reply envelope. 7.2 Further information For the avoidance of doubt, applications must be received by the Closing Date. Applications received after that time will not be accepted. Eligible Shareholders may apply for Shares under the Offer in parcels valued at $1,000, $2,500, $5,000, $10,000, $15,000, $20,000 or $30,000. In the absence of a scale back in accordance with section 8 below, Hillgrove will divide the application money of an Eligible Shareholder by the Issue Price in order to determine the number of Shares for which they have applied (rounded down to nearest whole number of Shares). If Hillgrove receives an amount that does not equal one of the amounts specified above, the Company may either: (a) reject the application and refund in full the application money (without interest) to the Eligible Shareholder; or (b) apply the dollar amount of the payment to the highest designated parcel that is less than the amount of the payment and refund the excess application money (without interest) to the Eligible Shareholder. If you have more than one holding of Shares and consequently receive more than one Application Form, when applying for Shares in respect of one of those shareholdings you must only use the customer reference number specific to that shareholding as set out in the relevant Application Form. Do not use the same customer reference number for more than one of your shareholdings. This can result in your application monies being applied to your application in respect of only one of your shareholdings (with the result that any application in respect of your remaining shareholdings will not be recognised as valid). If one or more Application Forms are received under the Plan from an Eligible Shareholder in relation to Shares with a value greater than $30,000 in any 12 month period, the Shareholder will be issued with the maximum number of Shares permitted by the Plan and the terms of the Offer. Any excess subscription monies will be refunded to the Eligible Shareholder (without interest) as soon as reasonably practicable following allocation. If an Eligible Shareholder subscribes for an amount which is not exactly divisible by the Issue Price, in calculating the number of Shares to be issued, all fractional entitlements will be rounded down to the nearest whole number of Shares. Hillgrove will not refund any resulting small excess in subscription monies (i.e. $5 or less) which will be deemed to form part of the aggregate issue price for the Shares. Payments must be made in Australian dollars. The minimum application for Shares under the Offer is $1,000. Applications and payments may not be withdrawn or revoked. Hillgrove Resources Limited | Share Purchase Plan Page 8 7.3 Board discretion Despite any other provision of these Terms and Conditions, the Board may, at its sole and absolute discretion, accept, reject, correct or amend your application under the Offer, including, without limitation, if: 8. (a) the Board decides to accept oversubscriptions under the Plan to ensure all Eligible Shareholders have a reasonable opportunity to participate in the Plan; (b) the Company considers that the application (whether alone or in conjunction with other applications) does not comply, or it is not reasonably satisfied that the application (whether alone or in conjunction with other applications) complies, with the requirements of ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 or any other requirements in the ASX Listing Rules or the Act; (c) the Application Form is incomplete, incorrectly completed or accompanied by a cheque, bank draft or money order which is not paid in full on first presentation; (d) an application is received after the Closing Date; (e) an application is made by a Custodian and does not include the required Custodian Certificate; (f) the BPAY® payment received in respect of your application is for less than the full, requisite amount; or (g) the Board is not reasonably satisfied that you are an Eligible Shareholder. Oversubscription or Scale Back The amount that each Eligible Shareholder can apply for under the Plan is capped at $30,000. The SPP aims to raise a maximum of $2,000,000, subject to the Board's discretion to increase this maximum amount in its sole and absolute discretion. Subject to complying with applicable laws and ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547, Hillgrove reserves the right to close the Offer early or to scale back applications in its sole and absolute discretion. The aggregate maximum number of Shares that will be issued under the Plan will not exceed the lesser of: (a) 30% of the Shares already on issue (being the applicable maximum specified in Exception 5 in ASX Listing Rule 7.2); and (b) the number such that the total amount raised by the issue of the Shares under the Offer equals $2,000,000, subject to the Board's discretion to increase this amount in its sole and absolute discretion. If applications from Eligible Shareholders for participation in the Plan in aggregate exceed this limit or any lower limit determined by the Board, the Board has reserved the right to accept oversubscriptions under the Plan to ensure all Eligible Shareholders have a reasonable opportunity to participate in the Plan. If the Board elects to accept oversubscriptions under the Plan to ensure all Eligible Shareholders have a reasonable opportunity to participate, it is the Board's intention that any oversubscription arrangements will be made having regard to the pro-rata shareholdings of Eligible Shareholders as at the Record Date who apply for Shares under the Plan. Similarly, the Board retains the discretion to scale back applications to the extent and in the manner that the Board considers appropriate. Should any scale back be necessary, it is the Company's intention that any scale back arrangements will be made having regard to a number of factors such as the size of your shareholding at the Record Date, the extent to which you have sold or purchased Shares since the Record Date, whether you have multiple registered holdings and the total applications received from Eligible Shareholders. Hillgrove Resources Limited | Share Purchase Plan Page 9 If there is a scale back, Eligible Shareholders may receive less Shares than the number of Shares for which they applied. If a scale back produces a fractional number of Shares when applied to a particular parcel, the number of Shares allocated to an Eligible Shareholder will be rounded down to the nearest whole number of Shares. In the event of a scale back, the difference between the application monies received, and the number of Shares allocated under the Offer multiplied by the Issue Price, will be refunded to you, without interest, as soon as reasonably practicable following allocation. 9. Issue of Shares Hillgrove intends to issue Shares under the Offer on the Allotment Date Thursday, 21 October 2021. All Shares issued under the Plan will rank equally in all respects with all other Shares on issue as at the date of issue and will carry the same voting rights, dividend rights and other entitlements as those Shares. Hillgrove will apply for Shares issued under the Plan to be quoted on ASX. It is expected that they will be quoted on ASX shortly after the Allotment Date. Hillgrove will, within the period required by the ASX Listing Rules, send Eligible Shareholders, whose application has been accepted by the Board, a holding statement in respect of any Shares issued to them under the Plan. 10. Acknowledgements If you apply to participate in the Offer by submitting a BPAY® payment or completing and returning the Application Form, you will be deemed to have represented on behalf of each person on whose account you are acting that: (a) you acknowledge that you are, and each person on whose account you are acting is, an Eligible Shareholder; (b) you agree that your application is made on, and you agree to be bound by, these Terms and Conditions and the terms and conditions set out in the Application Form and Hillgrove's constitution; (c) you declare that all details and statements in your Application Form are true and complete and not misleading; (d) your application is irrevocable and unconditional; (e) the Company may in its sole and absolute discretion scale back any application and/or participation in the Plan to the extent and in the manner it deems appropriate, including by having regard to the pro rata shareholding of Eligible Shareholders who apply for Shares under the Plan; (f) if there is a scale back you may receive less than the number of Shares for which you have applied; (g) if your application results in a fractional number of Shares, the number of Shares you will be allotted (subject to the other terms of the Offer, including in relation to any scale back) will be rounded down to the nearest whole number of Shares; (