The Offer

Company Overview

With a focus on lithium, nickel, gold, and base metal exploration, Lightning Minerals was established in 2021 to conduct the purchase and development of mineral properties in Western Australia. The Company now has a clear grip on two important mineral fields in Western Australia thanks to the acquisition of what the Board considers to be a highly potential suite of tenements, consisting of four project areas, or other applications. The mineral assets of the company include ten exploration licenses that have been issued and three exploration license applications in four project locations. It should be noted that these mineral assets are prospective in nature and do not now contain any mineral reserves or reserves as such terms are defined by the JORC Code.

Key Highlights

Primary Offering: To help the Company, achieve its commercial and mining exploration goals, the prospectus aims to raise between AUD 4,500,000 and AUD 7,000,000, before costs, in response to the Offer. The firm shall issue a least amount of 22,500,000 shares and a ceiling of 35,000,000 shares at the offer price of AUD 0.20 to raise this capital.

Options on the issue in the company:

The Company has granted 5,200,000 options to purchase shares, each of which has a 5-year expiration date and is exercisable at AUD 0.25, as of the date of this prospectus. The Company's CEO and Directors are the owners of these Options. In accordance with the Lead Manager Mandate, the Company will additionally provide the Lead Manager (or its nominees) between 3,800,000 and 5,000,000 options upon the conclusion of the offer (depending on the minimum and maximum subscriptions). Such Options should have a 4-year expiration date and be exercisable at AUD 0.25.

Terms of Key acquisitions:

Dundas Project from FMG Resources Pty Ltd  

In exchange for the issuance of 1,500,000 Shares, a cash payment of AUD 50,000 paid on July 11, 2022, a deferred cash payment of AUD 150,000 due upon completion, and a 1% Net Smelter Royalty on any products obtained from the Dundas Project.

The Mailman Hill Project and the Mt Bartle Project from Bruce Legendre

In return, the company will issue 1,000,000 shares, make an initial cash payment made of AUD 20,000 (exclusive of GST) on May 12, a deferred cash payment of AUD 70,000 (exclusive of GST) due on May 20, 2023, and pay a 1% Net Smelter Royalty on any products derived from the Mailman Hill Project and the Mt. Bartle Project.

Mount Jewell Project from Simon James Buswell-Smith

In exchange, 400,000 shares will be issued, a cash payment of AUD 20,000 (excluding of GST) was made on May 20, 2022, and a 1.5% Net Smelter Royalty will be paid on any products resulting from the Mount Jewell Project.

Use of proceeds:

Dividend policy: The Board expects to incur considerable costs in the assessment and development of the Tenement Assets. At least the first two years after admission are anticipated to be dominated by these activities. Considering this, the Company does not anticipate declaring any dividends during that time. Any future decision regarding the payment of dividends by the Company will be made solely at the discretion of the Directors and will be based on the availability of distributable earnings, operating results, the company's financial situation, upcoming capital needs, general business conditions, and other factors the Directors deem relevant. The Company is unable to guarantee the payment of dividends or the attachment of franking credits to dividends.

Financial Highlights (Expressed in USD):

• Pre-revenue company: Throughout the time frame of 13 December 2021 to 30 June 2022, no more income was produced. After the capital raising, it is expected that interest will be generated on cash holdings.
• Expenses for the firm: Professional services fees and exploration and assessment costs incurred during the acquisition of the tenements make up most of the expenditure. The Company has only recently started operations, except for these transactions. This led to a net loss for the company.
• Liquidity & Capital Resources: The Company's cash flow operations during the period were confined to corporate administrative and setup costs, payments for the purchase of exploratory tenements, and the raising of money through the issuance of 4,500,000 shares costing AUD 431,250. The company had cash on hand on June 30, 2022, of AUD 334,865.

Key Management Highlights

Risk Associated (High)

Investment in the IPO of “L1M” is exposed to a variety of risks such as:

• Mineral Resources & Mineral Prices: Investment in an exploration firm is speculative and dangerous by nature. There is no guarantee that the Company will find mineral deposits that can be extracted profitably. If mineral resources and reserves are found on the Tenement Assets, the fluctuating price of minerals might affect a mining project's capacity to be profitable.
• Key Personnel & Infrastructure Risk: Key employees are extremely important to the company. A loss of important employees might seriously impede the company's growth and activity. Activities including mining, processing, growth, and exploration depend to varying degrees on suitable infrastructure. Weather events that are unusual or uncommon, government intervention with the upkeep or provision of such infrastructure, or other factors might have a negative impact on the company's operations.
• Additional Capital Requirements & No JORC Code Compliant Resource: If new funds are not raised, the Company may have to decrease the scope of its operations or cut back its activities to cover exploration expenditures and pursue its business plan. There hasn't been enough exploration done to identify a JORC Code-compliant Mineral Resource for the Tenement Assets, which are now in the exploration and resource definition stage. There is no assurance that the Tenement Assets will yield any resources that can be profitably exploited because of exploration.

Conclusion

L1M’s performance over the given financials showed no revenue and net loss for the period ended 30 June 2022, due to being a pre-revenue firm, and incurred operational expenses, the company ended the period with a net loss amounting to AUD 58,533. The Firm's financial forecast is unknown because it is an exploratory company. The Company's mining exploration efforts are unlikely to result in immediate financial gain. The Company is anticipated to continue to experience operating losses up until it can realize value from the Tenement Assets or from future mining operations carried out on the Tenement Assets. Although it is anticipated that L1M will have opportunities to expand using IPO funds, the success of the company's entire operation is dependent on the outcome of the results of the exploration of the Tenement Assets.

Hence, given the financial performance of the company for the period ending June 30, 2022, incurred net losses, and associated risks “Lightning Minerals Ltd. (L1M)” IPO seems “Neutral" at the IPO price.