Western Areas : Enters Scheme Implementation Deed with IGO

ASX RELEASE

16 December 2021

WESTERN AREAS ENTERS INTO SCHEME IMPLEMENTATION DEED WITH IGO

FOR ALL-CASH A$3.36 PER SHARE TRANSACTION

Highlights
only	• Western Areas has entered into a Scheme Implementation Deed with IGO under which a wholly
use	owned subsidiary of IGO will acquire 100% of the share capital of Western Areas by way of a
scheme of arrangement
• Under the terms of the Scheme, Western Areas shareholders will receive A$3.36 per Western Areas
share in cash which represents a 35.5% premium to Western Areas' undisturbed share price of
A$2.48 per Western Areas share on 18 August 2021 (the day before discussions were announced)
• The Western Areas Board unanimously recommends that Western Areas shareholders (other than
Excluded Shareholders)1 vote in favour of the Scheme, in the absence of a superior proposal and
subject to an independent expert concluding (and continuing to conclude) that the Scheme is in the
best interests of Western Areas shareholders
	• The Scheme is subject to various conditions including approval by Western Areas shareholders at a
	Scheme Meeting proposed to be held in April 2022
Overview of the Scheme
personal

Western Areas Limited ("Western Areas") announces that it has entered into a Scheme Implementation Deed ("SID") with IGO Limited ("IGO") under which a wholly owned subsidiary of IGO, IGO Nickel Holdings Pty Ltd ("IGO Nickel"), will acquire 100% of the share capital of Western Areas by way of scheme of arrangement.

If the Scheme is implemented, each Western Areas shareholder on the Scheme Record Date will receive a cash amount of A$3.36 per Western Areas share ("Scheme Consideration").

The Scheme Consideration implies an equity value on a 100% fully diluted basis of approximately A$1,096 million2, and represents:

• A 35.5% premium to Western Areas' undisturbed closing share price of A$2.48 per Western Areas share on
  18 August 2021, the day prior to Western Areas announcing it was in preliminary discussions with IGO regarding a potential change in control transaction;
• a 36.5% premium to Western Areas 30-day volume weighted average price of Western Areas shares prior to 18 August 2021 of A$2.46; and
• a 39.6% premium to Western Areas 90-day volume weighted average price of Western Areas shares prior to 18 August 2021 of A$2.41.

ForWestern Areas Board unanimously recommends the Scheme

The Directors of Western Areas unanimously recommend that Western Areas shareholders (other than Excluded Shareholders) vote in favour of the Scheme at the Scheme meeting, in the absence of a Superior Proposal and subject to an independent expert concluding in the Independent Expert's Report (and continuing to conclude) that the Scheme is in the best interests of Western Areas shareholders. Subject to those same qualifications, each member of the Western Areas Board intends to vote, or cause to be voted, all Western Areas shares held or controlled by them in favour of the Scheme.

1. "Excluded Shareholder" is defined in the SID to be any member of the IGO Group who is or becomes a Western Areas shareholder or any person who holds any Western Areas shares on behalf of, or for the benefit of, any member of the IGO Group and does not hold Western Areas shares on behalf of, or for the benefit of, any other person. As at the date of the SID, there are no "Excluded Shareholders".
2. Total diluted shares of 326,234,795 includes 4,591,640 unvested performance rights.

WESTERN AREAS LIMITED ASX: WSA

www.westernareas.com.au

ABN 68 091 049 357

Page 1 of 3

NEWS RELEASE

Western Areas Chairman, Mr Ian Macliver, said, "With the objective of maximising value for Western Areas shareholders, the Board allowed IGO to undertake due diligence to support the submission of a binding change of control proposal. The Scheme announced today provides Western Areas shareholders with an opportunity to realise

onlyA$3.36 per Western Areas share in immediate value that reflects the quality of Western Areas' long life nickel assets

and exploration portfolio. This accelerates realisation of this value now versus operating the assets over the longer term. The Scheme provides certainty for Western Areas shareholders today at a compelling premium in cash to the recent, undisturbed, trading prices for Western Areas shares."

Major shareholder support

As disclosed in IGO's announcement today, Perpetual Limited ("Perpetual") (which currently owns 14.7% of the Western Areas shares) has confirmed to IGO that, if the Scheme proceeds, it intends to vote all of the shares in Western Areas that it holds (directly or indirectly) at the time of the Scheme meeting in favour of the scheme, in the absence of a superior proposal or offer to acquire any of the Shares held by Perpetual, and subject to Perpetual continuing to consider the Scheme to be in the best interests of its member. For the avoidance of doubt, Perpetual has confirmed to IGO that this intention statement:

use	• does not prohibit Perpetual from selling any of its Western Areas shares, in its absolute discretion, prior to
the Scheme meeting;
	• is only valid until 6 months after the date of this announcement or earlier if IGO decides not to pursue the
	Scheme; and
	• will be subject to Regulatory Guide 25 (RG25) published by the Australian Securities and Investments
	Commission.
personalFull details of the conditions of the Scheme and other agreed terms are set out in the SID, a copy of which is attached

Details of the Scheme Implementation Deed

The Scheme is subject to certain customary conditions including approval of Western Areas shareholders (other than Excluded Shareholder) and the Supreme Court of Western Australia; the Independent Expert concluding the Scheme is in the best interests of Western Areas shareholders (and not changing that conclusion) and other customary conditions.

The Scheme is not subject to any financing or due diligence conditions. IGO Nickel intends to fund the transaction through a combination of a new A$900 million senior-secured debt facility underwritten by ANZ, CBA and NAB and the utilisation of IGO's existing cash reserves of A$552 million3.

The SID contains customary exclusivity obligations, including no shop, no talk, and notification obligations, as well as a matching right in favour of IGO in respect of any Superior Proposal received by Western Areas. The SID also details circumstances under which Western Areas may be required to pay a break fee to IGO and circumstances where IGO may be required to pay Western Areas a reverse break fee, both equivalent to approximately A$10.96 million, depending on the circumstances.

to this ASX announcement.

ForTimetable and next steps

Western Areas shareholders do not need to take any action at this time.

A scheme booklet containing important information in relation to the Scheme and the Scheme Meeting, including the reasons for the Western Areas Board's unanimous recommendation, and the Independent Expert's Report, is expected to be sent to Western Areas shareholders in March 2022. The Scheme is subject to (among other things) approval by Western Areas shareholders at the Scheme Meeting, which is anticipated to be held in April 2022.

An indicative timetable is set out below:

3 Unaudited IGO cash balance as at 30 September 2021

WESTERN AREAS LIMITED ASX: WSA

www.westernareas.com.au

ABN 68 091 049 357

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NEWS RELEASE

		Action	Estimated Date
only
First Court Hearing	March 2022
Dispatch scheme booklet to Western Areas shareholders	March 2022
		Scheme Meeting	April 2022
		Second Court Hearing	April 2022
		Effective Date	April 2022
		Scheme Record Date	April 2022
		Implementation Date	April 2022
use
		Note: This timetable is indicative and subject to change.

Advisers

Western Areas' financial advisers are Rothschild & Co and Goldman Sachs and its legal adviser is Ashurst.

personal	-ENDS-
The release has been authorised by the officers below. For further details, please contact:
Dan Lougher	Joseph Belladonna
Managing Director - Western Areas Ltd	Chief Financial Officer - Western Areas Ltd
Telephone [phone]	Telephone [phone]
Email:[e-mail]	Email:[e-mail]
Shane Murphy
FTI Consulting
Telephone [phone]
Email:[e-mail]	Or visit:www.westernareas.com.au

About Western Areas(www.westernareas.com.au)

Western Areas is an Australian-based mining and exploration company that aims to be a sustainable and profitable, nickel-focused, base metal miner. It has a portfolio of operational and emerging nickel mines with targeted production of over 15,000 tonnes per annum of nickel in concentrate, for in excess of 10 years.

The Company has been listed on the Australian Securities Exchange (ASX) under the ticker symbol WSA since July 2000. It owns a 100% interest in both the Forrestania Nickel Operation (Forrestania) and the Cosmos Nickel Operation For(Cosmos), both located in Western Australia. Western Areas' primary growth asset is the long-life Odysseus mine, at the Cosmos Nickel Operation. Odysseus is fully funded and due to produce its first ore in FY22 and commence nickel concentrate production during FY23. Odysseus remains one of the few long dated supplies of nickel sulphide to enter the market in the coming years, as the electric vehicle market continues to drive nickel demand for delivery into the

EV battery supply chain.

Western Areas' current primary nickel producing asset is Forrestania, located 400km east of Perth. The Company currently produces over 16,000 tonnes of nickel in concentrate per annum from Forrestania's Flying Fox and Spotted Quoll underground mines.

The nickel ore is processed at the Cosmic Boy Concentrator (CBC) and sold into offtake agreements with BHP Billiton Nickel West, for a minimum 10,000tpa of nickel, and the Jinchuan Group, China's largest nickel cathode producer, for the balance.

WESTERN AREAS LIMITED ASX: WSA

www.westernareas.com.au

ABN 68 091 049 357

Page 3 of 3

For personal use only

Deed

Scheme Implementation

Deed

IGO Nickel Holdings Pty Ltd

Western Areas Limited

QV1 Building 250 St Georges Terrace Perth WA 6000 Australia	T [phone] F [phone]
GPO Box U1942 Perth WA 6845 Australia	herbertsmithfreehills.com DX 104 Perth

For personal use only

		Contents
	Table of contents
1	Definitions and interpretation	2
	1.1	Definitions ............................................................................................................	2
	1.2	Interpretation........................................................................................................	2
	1.3	Deed components................................................................................................	2
2	Agreement to proceed with the Transaction	2
3	Conditions Precedent and pre-implementation steps	2
	3.1	Conditions Precedent ..........................................................................................	2
	3.2	Satisfaction of Conditions Precedent...................................................................	3
	3.3	Waiver of Conditions Precedent ..........................................................................	4
	3.4	Termination on failure of Condition Precedent ....................................................	4
	3.5	Certain notices relating to Conditions Precedent ................................................	6
4	Transaction steps	6
	4.1	Scheme................................................................................................................	6
	4.2	No amendment to the Scheme without consent..................................................	6
	4.3	Scheme Consideration ........................................................................................	6
	4.4	Western Areas Share information........................................................................	7
	4.5	Western Areas Performance Rights ....................................................................	7
	4.6	Performance Plan Shares and Share Plan Shares .............................................	8
5	Implementation	8
	5.1	Timetable .............................................................................................................	8
	5.2	Western Areas' obligations ..................................................................................	9
	5.3	IGO Nickel's obligations.....................................................................................	12
	5.4	Conduct of business ..........................................................................................	14
	5.5	Appointment of directors....................................................................................	15
	5.6	Western Areas Board recommendation ............................................................	16
	5.7	Conduct of Court proceedings ...........................................................................	17
	5.8	Scheme Booklet content and responsibility statements ....................................	17
6	Integration	18
	6.1	Access to information ........................................................................................	18
	6.2	Integration Committee .......................................................................................	19
	6.3	Odysseus Technical Committee ........................................................................	20
7	Representations and warranties	21
	7.1	IGO Nickel's representations and warranties ....................................................	21
	7.2	IGO Nickel's indemnity ......................................................................................	21
	7.3	Western Areas' representations and warranties................................................	21
	7.4	Western Areas' indemnity..................................................................................	21
	7.5	Qualifications of IGO Nickel's representations, warranties and indemnities .....	21

7.6 Qualifications of Western Areas' representations, warranties and indemnities 21

7.7	Survival of representations and warranties .......................................................	22
7.8	Survival of indemnities .......................................................................................	22
7.9	Timing of representations and warranties .........................................................	22
7.10	No representation or reliance ............................................................................	22

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Contents 1