The Offer

Company Overview

On November 12, 2021, Innogy Ltd, an unlisted Australian public company, was established with the goal of acquiring and developing nickel, other battery cathode minerals including lithium and cobalt, and gold properties in Tanzania. The Business is a fully owned subsidiary of EcoGraf, which is currently listed on the ASX under the ASX code EGR. Since its inception, the Company has amassed a sizable nickel, lithium, cobalt, and gold tenement package in Tanzania totaling 5,300 km2, of which 4,700 km2 is nickel-prospective (comprising around 2,300 km2 of awarded tenure and 3,000 km2 of awaiting tenure).

Key Highlights

Primary Offering: To fund up to AUD 8,000,000, (before costs) the Offer comprises the initial public offering of up to 40,000,000 Shares at an issue price of AUD 0.20 each Share. The Offer consists of two parts: (a) the Priority Offer to Eligible EcoGraf Shareholders; and (b) the General Offer, under which any Shares left over after the Priority Offer has been made might be assigned to any other applicant. The Offer requires a minimum subscription of AUD 5,000,000 (25,000,000 Shares). This Prospectus also contains an ancillary offer of up to 900,000 Lead Manager Shares and 1,000,000 Lead Manager Options to Canaccord (or its nominees).

Use of proceeds:

Dividend policy: The exploration and appraisal of the company's projects are expected to cost significantly, according to the company. At least the first two years from the date of this Prospectus are anticipated to be dominated by these operations as well as the potential purchase of interests in other projects.

Considering this, the Corporation does not anticipate issuing any dividends in the near to medium term.

The Directors will ultimately decide whether or not to pay dividends on behalf of the Company, and their decision will be based on a variety of factors, including the availability of distributable earnings, operating performance, financial health, anticipated future capital needs, general economic conditions, and other relevant factors.

Commodity Analysis:

Nickel: Pressured by growing global output and worries about consistently poor demand, nickel futures were trading close to a five-month low of USD 22,000 on March 22nd. The price of a tonne of nickel was trading at USD 23,000. According to the most recent figures from the International Nickel Study Group, Indonesian output continues to rise, driving a huge 22% increase in worldwide nickel production in January. The agency also stated that mined nickel output will probably reach 3.2 million tonnes annually at the present rate. With approximately 50% of the world's supply coming from Indonesia, production increased by about 50% from the previous year to 1.58 million tonnes in 2022, causing a glut on the nickel market worldwide.

Lithium: Late in March, lithium carbonate prices in China fell by 55% year-to-date to CNY 260,000 a tonne, the lowest level in 15 months, as increased production and a decline in demand bolstered predictions of a supply glut this year. In 2022, China stopped providing financial incentives for the new energy car industry and began rewarding buyers of new electric vehicles with cash awards, which slowed the need for battery supplies. Battery makers had unsustainable large inventories due to the overproduction of batteries towards the end of 2022 to profit from subsidies, which led to the sale of goods at severe discounts with drastic capacity reductions across the whole supply chain.

Gold: Investors bet that interest rates have likely achieved or are close to their top in current tightening cycle, which led to gold stabilizing at USD 1,980 an ounce on Friday and indicating that it will rise more than 8% in March. The reduction of global inflationary pressures and major central banks' attempts to avert a more serious banking crisis were the main drivers of such expectations. This month, demand for safe haven assets like gold was boosted by the recent banking instability that was brought on by the failure of two regional institutions in the US.

Financial Highlights (Expressed in AUD):

• Pre-revenue company: Throughout the time frame from 12 November 2021 to 31 December 2022, no revenue was generated. If the Company cannot demonstrate that minerals exist at the Projects, that they can be mined and sold, and that they are commercially recoverable, it will not be able to generate any revenue. The Company may generate income via the sale of its assets and/or the collection of royalties from the Projects.
• Current profitability and liquidity condition: Due to pre-revenue status and decreased exploration & evaluation and consultation expenses led to decreased total comprehensive loss for the half-year ended 31 December 2022.

Key Management Highlights

Risk Associated (High)

Investment in the IPO of “IOG” is exposed to a variety of risks such as:

• Limited Operational history: The Business was founded on November 12, 2021, and has no prior operational experience as well as scant prior financial success. The region of land that is the subject of the Projects has only seen a small amount of exploration, and Shareholders should be aware that mineral exploration and development are high-risk endeavors. There is no guarantee that the Company will become commercially viable because of the Projects' successful exploration and/or development.
• Conflicts of Interest: As was already mentioned, EcoGraf is the only shareholder now and will continue to control a sizable portion of the shares after the offers are accepted. Howard Rae is the Chief Financial Officer, joint company secretary, and a previous director of EcoGraf. Directors Robert Pett and Andrew Spinks are also directors of EcoGraf. Although the Directors have been informed of their fiduciary obligations to the Company, there may be actual or potential conflicts of interest between these individuals, and circumstances may arise where their obligations to, or interests in, other companies, including EcoGraf, could conflict with their efforts on behalf of the Company..
• Environmental and Other Regulatory risks: Tanzania has severe rules governing the environment. According to section 81 of the Environmental Management Act, 2004, Chapter 191 of Tanzanian legislation, all activities—from exploration to development and mining—must comply with the rules for environmental protection. Environmental effects are anticipated from Company operations, particularly during advanced exploration and potential mining construction. In order to minimize environmental damage and risk of liability, including personal criminal liability under section 184 of the Environmental Management Act, it is in the company's best interest to conduct its operations in accordance with the highest standards of environmental obligations, including compliance with all environmental laws.

Conclusion

The Firm is a mining exploration company; however, it’s a pre-revenue stage company. So, the Corporation won't be able to make money until it can show that minerals are located at the Projects, that they can be mined and sold, if any, and that they are commercially recoverable. The Corporation may make money by selling its property and/or by obtaining royalties from the Projects. As a result, it is important to understand that the Company's ability to profit from its operations depends on a number of uncertain future events as well as the high volatility of the prices of the underlying commodities.

Hence, given the financial performance of the company for the period ending December 31, 2022, incurred net losses, and associated risks “Innogy Limited (IOG)” IPO seems “Neutral" at the IPO price.