Key Highlights

  • Havilah will return about $44.6 million to shareholders in Sandfire Resources shares.
  • The payout is a fully Franked Dividend of about $26.6 million, or 7.514 cents per share.
  • A proposed Capital reduction of about $18.0 million adds 5.085 cents per share.
  • The Sandfire shares come from upfront consideration received under the Kalkaroo transaction.

Havilah Resources Limited (ASX:HAV) is in focus on the ASX today after the South Australian explorer announced plans to return about $44.6 million to eligible shareholders. The distribution will be made through a fully franked dividend and a proposed capital reduction, and rather than cash, shareholders will receive shares in Sandfire Resources Limited (ASX:SFR). Havilah obtained those Sandfire shares as non-refundable upfront consideration under its Kalkaroo earn-in agreement with Sandfire. The dividend component has been resolved by the Board, while the capital reduction needs Shareholder approval at the Annual General Meeting on 17 December 2026. The Record Date for both parts is 31 December 2026.

How the $44.6 million distribution is structured

According to Havilah's announcement on 11 November 2026, the total distribution of approximately $44.6 million has two parts.

The first is a fully franked dividend of approximately $26.6 million, equal to 7.514 cents per Havilah share. The Board has resolved to pay this dividend. Havilah said the dividend is expected to proceed whether or not shareholders approve the capital reduction, subject to the Board's discretion and applicable legal requirements.

The second is a proposed equal capital reduction of approximately $18.0 million, equal to 5.085 cents per Havilah share. Because it is a reduction of share capital, it requires shareholder approval, which will be sought by ordinary resolution at the AGM.

Both parts will be paid by way of a pro rata in-specie distribution. An in-specie distribution is one made in Assets rather than money, meaning eligible shareholders will receive Sandfire shares from Havilah's holding in proportion to the number of Havilah shares they own. Havilah's total number of ordinary shares on issue will not change as a result of the distribution. Shareholders keep their existing Havilah shares and, if eligible, also become holders of Sandfire shares.

Where the Sandfire shares came from

The Sandfire shares represent the non-refundable Stage 1 upfront consideration Havilah received under the earn-in agreement covering its Kalkaroo copper project in South Australia. Under that arrangement, Sandfire can earn a majority interest in the project, with Havilah retaining a 20% Equity interest.

Chairman Simon Gray said the distribution "enables Havilah to return a significant portion of the value realised" from the Kalkaroo transaction's Stage 1 consideration to shareholders in a tax effective manner.

Havilah said the move is consistent with its strategy of monetising advanced mineral projects while keeping an equity interest in them. The company plans to continue exploring across its tenements in the Curnamona Province, the geological region that straddles the South Australia and New South Wales border.

How many Sandfire shares shareholders could receive

The exact number of Sandfire shares to be distributed has not yet been fixed. Havilah said it will be calculated using the five-trading-day volume-weighted average price of Sandfire shares immediately before the record date.

For the capital reduction component, Havilah has provided an estimate. On its working assumptions, the company expects to distribute about 891,947 Sandfire shares, equal to approximately one Sandfire share for every 396 Havilah shares held at the record date. The final ratio will depend on Sandfire's trading over the days leading up to the record date. Fractional entitlements will be rounded down or disregarded, so some shareholders with small holdings may receive fewer shares than a straight calculation suggests.

Havilah also noted that if the capital reduction goes ahead, the exercise price of its unlisted Director Options will fall by an estimated $0.05085 per option, in line with the per-share capital return.

Key dates for shareholders

Havilah has set out an indicative timetable. The Notice of Meeting and Explanatory Memorandum, which will explain the capital reduction in detail, is due to be released on the ASX on 13 November 2026. Shareholders will vote on the capital reduction at the AGM on Thursday 17 December 2026.

If approved, the capital reduction becomes effective on 24 December 2026. Havilah shares are expected to begin trading on an ex return of capital basis on 30 December 2026, ahead of the record date of 31 December 2026. Shareholders on the register at the record date will be eligible to receive Sandfire shares. The distribution of Sandfire shares, and the dispatch of holding statements, is scheduled to begin on 8 January 2027.

The ex date matters because shares bought on or after 30 December 2026 will not carry the entitlement to the capital return. These dates are indicative and could change, so shareholders should refer to the Notice of Meeting and any later Havilah announcements for the final timetable.

Tax treatment and the class ruling

Because the distribution is made in shares rather than cash, the tax outcome is an important consideration for shareholders. Havilah said it is applying to the Commissioner of Taxation for a binding class ruling on the tax consequences for shareholders.

A class ruling sets out how the Commissioner will treat a specific transaction for a defined group of taxpayers, giving shareholders greater certainty about issues such as the treatment of the franked dividend and the capital reduction. Havilah has not yet released the outcome of that application, and further detail is likely to appear in the Notice of Meeting. Shareholders may wish to seek independent tax advice suited to their own circumstances.

Key Takeaways

Havilah Resources plans to distribute approximately $44.6 million in Sandfire Resources shares to eligible shareholders, made up of a fully franked dividend of about $26.6 million, or 7.514 cents per share, and a proposed capital reduction of about $18.0 million, or 5.085 cents per share. The Sandfire shares come from the non-refundable Stage 1 consideration under the Kalkaroo earn-in agreement, and Havilah keeps a 20% interest in the project.

The dividend is expected to proceed regardless of the AGM vote on 17 December 2026, while the capital reduction depends on shareholder approval. The record date is 31 December 2026, distributions are due to begin on 8 January 2027, and Havilah is seeking a binding class ruling on the tax treatment.