Emperor Mines Limited ACN 007 508 787, in the matter of Emperor Mines Limited ACN 007 508 787 [2008] FCA 535

FEDERAL COURT OF AUSTRALIA

Emperor Mines Limited ACN 007 508 787, in the matter of Emperor Mines Limited ACN 007 508 787 [2008] FCA 535

IN THE MATTER OF EMPEROR MINES LIMITED ACN 007 508 787 EMPORER MINES LIMITED ACN 007 508 787 QUD 394 OF 2007

DOWSETT J

10 MARCH 2008

BRISBANE IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QUD 394 OF 2007

IN THE MATTER OF EMPEROR MINES LIMITED ACN 007 508 787 EMPEROR MINES LIMITED ACN 007 508 787

Applicant

JUDGE: DOWSETT J

DATE: 10 MARCH 2008

PLACE: BRISBANE

REASONS FOR JUDGMENT 1 The applicant, Emperor Mines Limited, is a public company incorporated in Australia. It is registered in New South Wales, and is a company limited by shares. The shares are quoted on the official list of the Australian Stock Exchange. It is proposed that Emperor enter into a scheme of arrangement with its shareholders, and a company called Intrepid Mines Limited, a public company incorporated in Australia and registered in Western Australia, also a company limited by shares, which shares are quoted on the official list of the Australian Stock Exchange and the Toronto Stock Exchange. 2 In effect, the proposal is that Emperor Mines become a subsidiary of Intrepid. To facilitate that outcome, it is proposed that Emperor's shareholders receive one Intrepid share for each 4.25 Emperor shares presently held. The Intrepid shares will rank equally in all respects with existing shares in that company. 3 On 19 December 2007, I made orders to facilitate the holding of an appropriate meeting. At the relevant meeting, a total of 489,720,642 votes, representing 97.93 per cent of the votes cast, were cast in support of a resolution approving the scheme, and 10,338,228 votes, representing 2.07 per cent of the votes cast, were cast against the resolution. At that time, there were 1,046,005,621 issued shares. 4 The considerations relevant to the Court's decision to approve a scheme of this kind are well established. The first is that the relevant requirements of the legislation be met. The second is that the majority of shareholders (and option holders) voting in favour of the scheme acted in good faith and not in pursuit of some illegitimate purpose. The third is that the proposal is sufficiently fair and reasonable that an intelligent and honest shareholder (or option holder), acting alone, might approve it. 5 The evidence demonstrates that the requirements of the law have been met. There is no reason to doubt that the members who voted in favour of the scheme at the meeting did so in good faith and for a proper purpose, having regard to their interests as shareholders. The only question that remains is whether a shareholder, acting reasonably in his or her own interests, could approve it. Again there is no reason to doubt that such is the case. The material indicates that a relevant expert, Grant Thornton Corporate Finance - presumably a merchant banker - has examined the proposal and the affairs of the corporations in some detail, concluding that the proposed exchange ratio is reasonable in the circumstances. In determining whether or not to support the proposal, the informed shareholder would have acted substantially in reliance upon that opinion. There is no reason to believe that the opinion was other than honestly and competently given. The decision is very much a commercial one, to be made with substantial regard to self-interest. I see no reason to doubt that a shareholder, properly informed and acting with due regard to such interest, could have approved the proposal. 6 I approve the scheme in terms of the draft. The second order in the proposed draft is that compliance with section 411(11) be dispensed with. In the circumstances of this case, that seems appropriate. There will be orders in terms of the draft. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.