Class Ruling CR 2021/34

What this ruling is about: 1. This Ruling sets out the tax consequences of the demerger of Norwest Minerals Limited (NWM) by Australian Mines Limited (AUZ) which was implemented on 31 March 2021 (Implementation Date). 2. Full details of this demerger are set out in paragraphs 20 to 36 of this Ruling. 3. All legislative references in this Ruling are to provisions of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997, unless otherwise indicated. Who this Ruling applies to 4. This Ruling applies to you if you held shares in AUZ and you: 5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 in relation to the scheme outlined in paragraphs 20 to 36 of this Ruling. Note: Division 230 will not apply to individuals, unless they have made an election for it to apply. When this Ruling applies 6. This Ruling applies from 1 July 2020 to 30 June 2021. Demerger 7. A demerger, as defined in section 125-70, happened to the AUZ demerger group, which included AUZ and NWM. CGT event G1 8. CGT event G1 happens when you received, or were taken to have received, the NWM shares (section 104-135). 9. You make a capital gain from CGT event G1 happening if the cost base of your AUZ share is less than 0.047 cents. If so, the capital gain is equal to the amount of the difference (subsection 104-135(3)). 10. No capital loss can be made from CGT event G1 (note to subsection 104-135(3)). Australian resident shareholders Demerger roll-over 11. If you are an Australian resident, you can choose to obtain demerger roll-over for your AUZ shares (subsection 125-55(1)). Choosing demerger roll-over 12. If you chose demerger roll-over for your AUZ shares: Not choosing demerger roll-over 13. If you did not choose demerger roll-over for your AUZ shares: Apportioning the cost base of your Australian Mines Limited and Norwest Minerals Limited shares 14. The apportionment of the total of the cost bases of your AUZ shares among those shares, and the corresponding AUZ shares you received under the demerger, must be done on a reasonable basis, having regard to the market values of your AUZ shares and NWM shares just after the demerger, or an anticipated reasonable approximation of those market values (subsections 125-80(2) and (3)). 15. The Commissioner accepts that a reasonable apportionment is to attribute: Norwest Minerals Limited shares not included in assessable income 16. The value of the NWM shares you received, or were taken to have received, under the demerger is not included in your assessable income under subsection 44(1). Foreign resident shareholders 17. If you are not a resident of Australia (as defined in subsection 6(1)), any capital gain or capital loss from CGT event G1 happening to your AUZ shares in relation to the in specie distribution is disregarded (section 855-10). Anti-avoidance provisions do not apply 18. The Commissioner will not make a determination under subsection 45A(2) that section 45C applies. This is because the circumstances of the demerger do not indicate that there was a streaming of capital benefits to some shareholders and dividends to other shareholders. 19. As paragraph 45B(2)(c) is not satisfied, the Commissioner will not make a determination under either: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. Australian Mines Limited 21. AUZ is an Australian-resident public company listed on the Australian Securities Exchange (ASX). It is an explorer and developer of battery materials. 22. As at 30 June 2020, AUZ had: 23. As at 19 February 2021, AUZ had 3,961,453,850 shares on issue. 24. Approximately 5.41% of AUZ shares are held by foreign-resident shareholders. 25. No foreign-resident shareholder held a non-portfolio interest (within the meaning of section 960-195) in AUZ throughout a 12-month period in the 24 months immediately before the Implementation Date. 26. AUZ's share capital account is not tainted within the meaning of Division 197. 27. AUZ has not paid any dividends to its shareholders since its inception. Norwest Minerals Limited 28. NWM was incorporated on 21 November 2017. It is a gold and base metals exploration company. 29. Prior to the Implementation Date, AUZ held 20.04% of the NWM shares (or 21,000,000 NWM shares) on issue. The remaining NWM shares (79.96%) were widely owned with no shareholders holding greater than 10% ownership interest in NWM. The in specie distribution 30. On 23 March 2021, shareholders of AUZ approved a reduction of AUZ's share capital under sections 256B and 256C of the Corporations Act 2001. The share capital reduction was effected by way of an in specie distribution of the NWM shares to the AUZ shareholders. 31. AUZ shares which were acquired after 26 March 2021 were not entitled to participate in the in specie distribution. 32. On the Implementation Date, each AUZ shareholder received one NWM share for every 189 AUZ shares held on the Record Date. 33. AUZ accounted for the demerger by debiting its: Reasons for demerger 34. The directors of AUZ formed the view that the demerger would allow: Other matters 35. All shares in AUZ and NWM were issued after 20 September 1985. 36. For the purposes of the Cost base / reduced cost base apportionment under subsections 125-80(2) and (3), a reasonable approximation of the market values of an AUZ share and an NWM share just after the demerger was calculated as follows: Commissioner of Taxation 12 May 2021 37. This paragraph sets out the details of the provisions ruled upon or referenced in this Ruling. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft

Class of entities or scheme: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Australian Mines Limited: 21. AUZ is an Australian-resident public company listed on the Australian Securities Exchange (ASX). It is an explorer and developer of battery materials. 22. As at 30 June 2020, AUZ had: 23. As at 19 February 2021, AUZ had 3,961,453,850 shares on issue. 24. Approximately 5.41% of AUZ shares are held by foreign-resident shareholders. 25. No foreign-resident shareholder held a non-portfolio interest (within the meaning of section 960-195) in AUZ throughout a 12-month period in the 24 months immediately before the Implementation Date. 26. AUZ's share capital account is not tainted within the meaning of Division 197. 27. AUZ has not paid any dividends to its shareholders since its inception. | Norwest Minerals Limited: 28. NWM was incorporated on 21 November 2017. It is a gold and base metals exploration company. 29. Prior to the Implementation Date, AUZ held 20.04% of the NWM shares (or 21,000,000 NWM shares) on issue. The remaining NWM shares (79.96%) were widely owned with no shareholders holding greater than 10% ownership interest in NWM. | The in specie distribution: 30. On 23 March 2021, shareholders of AUZ approved a reduction of AUZ's share capital under sections 256B and 256C of the Corporations Act 2001. The share capital reduction was effected by way of an in specie distribution of the NWM shares to the AUZ shareholders. 31. AUZ shares which were acquired after 26 March 2021 were not entitled to participate in the in specie distribution. 32. On the Implementation Date, each AUZ shareholder received one NWM share for every 189 AUZ shares held on the Record Date. 33. AUZ accounted for the demerger by debiting its: | Reasons for demerger: 34. The directors of AUZ formed the view that the demerger would allow: | Other matters: 35. All shares in AUZ and NWM were issued after 20 September 1985. 36. For the purposes of the Cost base / reduced cost base apportionment under subsections 125-80(2) and (3), a reasonable approximation of the market values of an AUZ share and an NWM share just after the demerger was calculated as follows: Commissioner of Taxation 12 May 2021

Ruling: 1. This Ruling sets out the tax consequences of the demerger of Norwest Minerals Limited (NWM) by Australian Mines Limited (AUZ) which was implemented on 31 March 2021 (Implementation Date). 2. Full details of this demerger are set out in paragraphs 20 to 36 of this Ruling. 3. All legislative references in this Ruling are to provisions of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997, unless otherwise indicated. | Who this Ruling applies to: 4. This Ruling applies to you if you held shares in AUZ and you: 5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 in relation to the scheme outlined in paragraphs 20 to 36 of this Ruling. Note: Division 230 will not apply to individuals, unless they have made an election for it to apply. | When this Ruling applies: 6. This Ruling applies from 1 July 2020 to 30 June 2021. | Demerger: 7. A demerger, as defined in section 125-70, happened to the AUZ demerger group, which included AUZ and NWM. | CGT event G1: 8. CGT event G1 happens when you received, or were taken to have received, the NWM shares (section 104-135). 9. You make a capital gain from CGT event G1 happening if the cost base of your AUZ share is less than 0.047 cents. If so, the capital gain is equal to the amount of the difference (subsection 104-135(3)). 10. No capital loss can be made from CGT event G1 (note to subsection 104-135(3)). | Demerger roll-over: 11. If you are an Australian resident, you can choose to obtain demerger roll-over for your AUZ shares (subsection 125-55(1)). Choosing demerger roll-over 12. If you chose demerger roll-over for your AUZ shares: Not choosing demerger roll-over 13. If you did not choose demerger roll-over for your AUZ shares: | Apportioning the cost base of your Australian Mines Limited and Norwest Minerals Limited shares: 14. The apportionment of the total of the cost bases of your AUZ shares among those shares, and the corresponding AUZ shares you received under the demerger, must be done on a reasonable basis, having regard to the market values of your AUZ shares and NWM shares just after the demerger, or an anticipated reasonable approximation of those market values (subsections 125-80(2) and (3)). 15. The Commissioner accepts that a reasonable apportionment is to attribute: | Norwest Minerals Limited shares not included in assessable income: 16. The value of the NWM shares you received, or were taken to have received, under the demerger is not included in your assessable income under subsection 44(1). | Foreign resident shareholders: 17. If you are not a resident of Australia (as defined in subsection 6(1)), any capital gain or capital loss from CGT event G1 happening to your AUZ shares in relation to the in specie distribution is disregarded (section 855-10). | Anti-avoidance provisions do not apply: 18. The Commissioner will not make a determination under subsection 45A(2) that section 45C applies. This is because the circumstances of the demerger do not indicate that there was a streaming of capital benefits to some shareholders and dividends to other shareholders. 19. As paragraph 45B(2)(c) is not satisfied, the Commissioner will not make a determination under either: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Australian Mines Limited: 21. AUZ is an Australian-resident public company listed on the Australian Securities Exchange (ASX). It is an explorer and developer of battery materials. 22. As at 30 June 2020, AUZ had: 23. As at 19 February 2021, AUZ had 3,961,453,850 shares on issue. 24. Approximately 5.41% of AUZ shares are held by foreign-resident shareholders. 25. No foreign-resident shareholder held a non-portfolio interest (within the meaning of section 960-195) in AUZ throughout a 12-month period in the 24 months immediately before the Implementation Date. 26. AUZ's share capital account is not tainted within the meaning of Division 197. 27. AUZ has not paid any dividends to its shareholders since its inception. | Norwest Minerals Limited: 28. NWM was incorporated on 21 November 2017. It is a gold and base metals exploration company. 29. Prior to the Implementation Date, AUZ held 20.04% of the NWM shares (or 21,000,000 NWM shares) on issue. The remaining NWM shares (79.96%) were widely owned with no shareholders holding greater than 10% ownership interest in NWM. | The in specie distribution: 30. On 23 March 2021, shareholders of AUZ approved a reduction of AUZ's share capital under sections 256B and 256C of the Corporations Act 2001. The share capital reduction was effected by way of an in specie distribution of the NWM shares to the AUZ shareholders. 31. AUZ shares which were acquired after 26 March 2021 were not entitled to participate in the in specie distribution. 32. On the Implementation Date, each AUZ shareholder received one NWM share for every 189 AUZ shares held on the Record Date. 33. AUZ accounted for the demerger by debiting its: | Reasons for demerger: 34. The directors of AUZ formed the view that the demerger would allow: | Other matters: 35. All shares in AUZ and NWM were issued after 20 September 1985. 36. For the purposes of the Cost base / reduced cost base apportionment under subsections 125-80(2) and (3), a reasonable approximation of the market values of an AUZ share and an NWM share just after the demerger was calculated as follows: Commissioner of Taxation 12 May 2021 37. This paragraph sets out the details of the provisions ruled upon or referenced in this Ruling. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft




What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.


Legislative references: TAA 1953 Corporations Act 2001 256B Corporations Act 2001 256C