The Offer

Company Overview

The Company is a Canadian exploration and development company with a focus on creating a gold platform in West Africa. The Kobada Gold Project, which houses a sizeable Mineral Resource and is the subject of exploration and development efforts, is the company's main project. The Kobada Project has not yet received funding, had a permit, been built, or mined. The Kobada Project is described in the Feasibility Study as being mostly a free-dig operation, requiring little blasting, and processing ore using a tried-and-true gravity plus CIL plant with recoveries of over 95% in both oxides and sulphides. The Kobada Project's very appealing economics is highlighted by its ability to generate sizeable free cash flows after taxes and modest capital investment.

Key Highlights

Primary Offering: An offer to purchase 27,500,000 CHESS Depositary Interests in the Company is made in this prospectus (CDIs) over fully paid common shares in the company's capital (Shares) at a price of AUD 0.20 per CDI to raise. With the ability to accept oversubscriptions of up to an additional 5,000,000 CDIs at AUD 5,500,000 (before related charges), a price of AUD 0.20 for each CDI with the purpose of raising a further AUD 1,000,000 (before related expenses) (Offer). The CDIs consist of 1 CDI given for every 1 share.

Use of proceeds:

Dividend policy: The Company does not anticipate paying dividends any time soon since its main priority will be using cash on hand to fund exploratory efforts at the Kobada Project. The Directors will ultimately decide whether 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, the company's operating performance and financial condition, anticipated future capital needs, general business conditions, and other relevant factors. Regarding the payment of dividends or the possibility that such payouts may attach franking credits, no guarantees are made.

Financial Highlights:

• Pre - revenues: The company is yet to start earning revenues from the explorations.
• Decreased net loss for the year ended December 31, 2021: The company improved its net losses from USD 9.94 million in FY20 to USD 4.48 million in FY21, while the net loss for the current year till June 30, 2022, was USD 1.66 million.
• Negative FX translation impact for the year ended December 31, 2021: The company incurred losses of USD 35,556 for the FY21 in the FX translation compared to a profit of USD 170,904 in FY20. Similarly for the current year till June 30, 2022, the FX translation differences are positive 6,547.

Key Management Highlights

Risk Associated (High)

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

• Foreign jurisdictions: The Company's registered office is situated in Canada, however none of the Company's assets are there. It could be challenging or impossible to serve or give notice of the start of legal proceedings to foreign governments, individuals, or corporations. Even if executed, judgments rendered in Canadian courts based on the civil responsibility provisions available under Canadian legislation may not be practicable to enforce against such persons.
• Financing requirements: The Company's holdings may need significant additional funding for exploration, development, and ongoing operations. Failure to get adequate funding might cause exploration, development, or production on some or all the company's holdings to be delayed or permanently put off, or even result in the loss of a property stake.
• Mali Government interest in the Kobada Project: The Kobada Project's operational corporation, MaliCo, is the holder of the licenses, and under Malian legislation, the Mali Government is entitled to a free carrying 10% ownership stake in MaliCo as well as the opportunity to purchase an additional 10% equity holding under the MaliCo Option. The Mali Government has not yet acquired its first 10% free carrying interest in MaliCo as of the date of this Prospectus. The Mali Government's decision to execute the MaliCo Option is yet unknown to the Company. The MaliCo Option will result in a diluting of the Company's rights in the Kobada Project if the Mali Government exercises it.

Conclusion

TRE’s performance over the past year shows decreased expenses in FY21 compared to H1FY20, resulting in reduced operating losses and net losses for the company. The company had a net loss of USD 1.66 million and a diluted loss per share of USD 0.01 for the first half of FY22, with currently no revenues. Currently, not just Australia but all the global markets are experiencing a major correction in the valuations due to rising interest rates by the central banks. With such bearish sentiments in the market as well as the pre-revenue profile of the company, a listing gain would be difficult.

Hence, given the financial performance of the company in the six months ending June 30, 2022, decreasing net losses, pre-revenue, associated risks, and current financial market volatility, “Toubani Resources Inc” IPO seems “Neutral" at the IPO price.

Disclaimer

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