SLV Sylvania

TIDMSLV

RNS Number : 4213Y

Sylvania Resources Ltd

22 December 2010

Policy for Trading in Company Securities

SYLVANIA RESOURCES LIMITED ("COMPANY")

The Company is a public company incorporated in Australia and its securities are listed on both the Australian Securities Exchange ("ASX") and on the Alternative Investment Market of the London Stock Exchange ("AIM").

This Policy provides an overview of the restrictions on trading in the Company's securities under Australian law. It also sets out the specific restrictions imposed by the AIM Rules and the Model Code for Securities Dealings (the 'Model Code') contained in Appendix to Chapter 9 of the Listing Rules published by the United Kingdom Listing Authority.

Directors, officers and employees1 (together "Restricted Persons") who wish to trade in Company securities must first have regard to the statutory provisions of the Corporations Act 2001 (Cth) dealing with insider trading.

Restricted Persons must also have regard to the statutory provisions regulating insider trading on any other exchange on which the Company is listed, including AIM

Insider trading is the practice of dealing in a company's securities (which includes shares and options) by a person in possession of information generally not available, but if it were generally available would, or would be likely to influence a person's decision to transact in the company's securities ("Inside Information"). It may also include the passing on of this information to another or procuring another person to deal in the securities. Legally, insider trading is an offence which carries severe penalties, including imprisonment.

Insider Trading Prohibition

In summary, Restricted Persons of the Company must not, whether in their own capacity or as an agent for another, subscribe for, purchase or sell or enter into an agreement to subscribe for, purchase or sell, any securities in the Company, or procure another person to do so:

1. if that director, officer or employee possesses information that a reasonable person would expect to have a material effect on the price or value of the securities or influence a person's decision to buy or sell the securities in the Company if the information was generally available;

2. if the director, officer or employee knows or ought reasonably to know, that:

(a) the information is not generally available; and

(b) if it were generally available, it might have a material effect on the price or value of the securities in the Company or influence a person's decision to buy or sell the securities in the Company.

Further, Restricted Persons must not either directly or indirectly pass on this kind of information to another person if they know, or ought reasonably to know, that this other person is likely to deal in the securities of the Company or procure another person to do so.

Examples of information which, if made available to the market, may depending on the circumstances be likely to have a material impact on the price of the Company's securities are set out in the Appendix.

Prohibited Transactions

Restricted Persons must not enter into transactions or arrangements which operate to limit the economic risk of their security holding in the Company without first seeking and obtaining prior written clearance from the Chair.

Restricted Persons must not enter into agreements that provide lenders with rights over their interests in securities in the Company without first seeking and obtaining prior written clearance from the appropriate Approving Officer. Restricted Persons are prohibited from entering into transactions or arrangements which limit the economic risk of participating in unvested entitlements.

Close Period

In addition to the prohibitions on insider trading set out in the Corporations Act, in accordance with the AIM Rules and the Model Code, the Company requires that Restricted Persons do not deal in any of its securities during a Close Period.

A Close Period means any of the following:

-- the period of two months preceding the publication of the Company's annual results or, if shorter, the period from its financial year end up to and including 24 hours after the time of publication;

-- the period of two months preceding the publication of the Company's half-yearly report or, if shorter, the period from the relevant financial period up to and including 24 hours after the time of publication;

-- the period of one month immediately preceding the announcement of its quarterly results or, if shorter, the period from the relevant financial period end up to and including 24 hours after the time of the announcement;

-- any other period in which the Company is in possession of unpublished price sensitive information or any time it has become reasonably probable that such information will be required by the AIM Rules to be announced.

Please note that even if it is outside of a Close Period, Restricted Persons must not trade in the Company's securities if they are in possession of Inside Information.

Circumstances when trading may be permitted subject to prior written clearance

A person may trade in the Company's securities inside a Close Period, subject to obtaining prior written clearance in accordance with the procedure described below, in the following circumstances:

-- If the Approving Officer (as defined below) is satisfied that the person seeking the clearance does not possess unpublished price sensitive information about the Company and the sale of the securities is necessary to alleviate severe personal hardship however, the permission of either the London Stock Exchange or the Financial Services Authority of the United Kingdom (the "FSA") is also required in this circumstance; or

-- Where a Restricted Person has entered into a binding commitment prior to the Company being in a Close Period where it was not reasonably foreseeable at the time the commitment was made that a Close Period was likely; and either the London Stock Exchange or the FSA was notified of the commitment at the time it was made.

Procedure for obtaining clearance prior to trading

Restricted Persons must not trade in the Company's securities during a Close Period unless the Restricted Person obtains prior written clearance from:

1. in the case of employees, the Chief Executive Officer or in his absence, the Company Secretary;

2. in the case of a director or officer, the Chair or in his absence, the Chief Executive Officer;

3. in the case of the Chief Executive Officer, the Chair;

4. in the case of the Chair, the Chair of the Audit Committee,

(each, an "Approving Officer").

A request for prior written clearance under this policy should be made in writing using the form attached to this policy entitled 'Request for Prior Written Clearance to Trade in Company securities' and given to the Approving Officer. The request may be submitted in person, by mail, by email or by facsimile.

Any written clearance granted under this policy will be valid for the period of 5 business days from the time which it is given or such other period as may determined by the Approving Officer. The expiry time of the clearance will be stated in the clearance granted. Written clearance under this policy may be given in person, by mail, by email or by facsimile.

Prior written clearance cannot be granted by an Approving Officer without first obtaining the permission of the either the FSA or the London Stock Exchange where clearance is sought to sell securities to alleviate severe personal hardship.

Trading which is not subject to this policy

The following trading by Restricted Persons is excluded from this policy:

1. Undertakings or elections to take up entitlements under a rights issue or other pre-emptive offer (including an offer of shares in lieu of a cash dividend).

2. The take up of entitlements under a rights issue or other pre-emptive offer (including an offer of shares in lieu of a cash dividend).

3. Allowing entitlements to lapse under a rights issue or other pre-emptive offer (including an offer of shares in lieu of a cash dividend).

4. The sale of sufficient entitlements nil-paid to allow take up of the balance of the entitlements under a rights issue.

5. Undertakings to accept, or the acceptance of, a takeover offer.

6. Trading in exceptional circumstances:

1) A Restricted Person, who is not in possession of Inside Information in relation to the Company, may be given clearance to deal if he is in severe financial difficulty or there are other exceptional circumstances. Clearance may be given for this person to sell (but not purchase) securities of the Company when he would otherwise be prohibited by the Model Code from doing so. The determination of whether the person in question is in severe financial difficulty or whether there are other exceptional circumstances can only be made by the Approving Officers.

2) A person may be in severe financial difficulty if he has a pressing financial commitment that cannot be satisfied otherwise than by selling the relevant securities of the Company. A liability of this person to pay tax would not normally constitute severe financial difficulty unless the person has no other means of satisfying the liability. A circumstance will be considered exceptional if the person in question is required by a court order to transfer or sell the securities of the Company or there is some other overriding legal requirement for him to do so.

3) The Financial Services Authority or the London Stock Exchange will be consulted at an early stage regarding any application by a Restricted Person to deal in exceptional circumstances.

7. Awards of securities and options:

Provided that a derogation from AIM Rule 21 "Restrictions on deals" is first sought and obtained from AIM Regulation:

1) The grant of options by the board of directors under an employees' share scheme to individuals who are not Restricted Persons may be permitted during a Close Period if the grant of options could not reasonably be made at another time and failure to make the grant would be likely to indicate that the Company was in a Close Period.

2) The award by the Company of securities, the grant of options and the grant of rights (or other interests) to acquire securities of the Company to Restricted Persons is permitted in a Close Period if:

(i) the award or grant is made under the terms of an employees' share scheme and the scheme was not introduced or amended during the relevant Prohibited Period; and

(ii) either:

1) the terms of the employees' share scheme set out the timing of the award or grant and these terms have either previously been approved by shareholders or summarised or described in a document sent to shareholders; or

2) the timing of the award or grant is in accordance with the timing of previous awards or grants under the scheme; and

(iii) the terms of the employees' share scheme set out the amount or value of the award or grant or the basis on which the amount or value of the award or grant is calculated and do not allow the exercise of discretion; and

(iv) the failure to make the award or grant would be likely to indicate that the Company is in a Close Period.

8. Exercise of options:

Provided that a derogation from AIM Rule 21 "Restrictions on deals" is first sought and obtained from AIM Regulation:

1) Where the Company has been in an exceptionally long Close Period or the Company has had a number of consecutive Close Periods, clearance may be given to allow the exercise of an option or right under an employees' share scheme, or the conversion of a convertible security, where the final date for the exercise of the option or right, or conversion of the security, falls during a Close Period and the Restricted Person could not reasonably have been expected to exercise it at a time when he was free to deal.

2) Where the exercise or conversion is permitted under the above paragraph, clearance may not be given for the sale of the securities of the Company acquired by this exercise or conversion including the sale of sufficient securities of the Company to fund the costs of the exercise or conversion and/or any tax liability arising from the exercise or conversion unless a binding undertaking to do so was entered into when the Company was not in a Close Period.

9. Qualification shares:

Clearance may be given to allow a director to acquire qualification shares where, under the Company's constitution, the final date for acquiring the qualification shares falls during a Close Period and the director could not reasonably have been expected to acquire those shares at another time.

10. Saving schemes:

A Restricted Person may enter into a scheme under which only the securities of the Company are purchased pursuant to a regular standing order or direct debit or by regular deduction from the person's salary, or where the securities are acquired by way of a standing election to re-invest dividends or other distributions received, or are acquired as part payment of the person's remuneration without regard to the provisions of the Model Code, if the following provisions are complied with:

1) the Restricted Person does not enter into the scheme during a Close Period, unless the scheme involves the part payment of remuneration in the form of securities of the Company and is entered into upon the commencement of the person's employment or in the case of a non-executive director his appointment to the board;

2) the Restricted Person does not carry out the purchase of the securities of the Company under the scheme during a Close Period, unless the Restricted Person entered into the scheme at a time when the Company was not in a Close Period and that person is irrevocably bound under the terms of the scheme to carry out a purchase of securities of the Company (which may include the first purchase under the scheme) at a fixed point in time which falls in a Close Period;

3) the Restricted Person does not cancel or vary the terms of his participation, or carry out sales of securities of the Company within the scheme during a Close Period; and

4) before entering into the scheme, cancelling the scheme or varying the terms of his participation or carrying out sales of the securities of the Company within the scheme, the Restricted Person obtains clearance in accordance with this Notice.

11. Acting as a trustee:

1) Where a Restricted Person is acting as a trustee, dealing in the securities of the Company by that trust is permitted during a Close Period where:

(i) the Restricted Person is not a beneficiary of the trust; and

(ii) the decision to deal is taken by the other trustees or by investment managers on behalf of the trustees independently of the Restricted Person.

2) The other trustees or investment managers acting on behalf of the trustees can be assumed to have acted independently where the decision to deal:

(i) was taken without consultation with, or other involvement of, the Restricted Person; or

(ii) was delegated to a committee of which the Restricted Person is not a member.

Trading in derivative products

The prohibitions on trading in the Company's securities imposed by the Company and set out in this policy extend to trading in financial products issued or created over or in respect of the Company's securities.

Notification

Directors must disclose details of changes in securities of the Company they hold (directly or indirectly) to the company secretary as soon as reasonably possible after the date of the change but in any event:

1. no later than 3 business days after the change; or

2. if you begin to have or cease to have a substantial shareholding or there is a change in your substantial holding, the business day after the change.

Directors are referred to the Company's Director's Disclosure Obligations document and Director's Declaration of Interest Form. The company secretary is to maintain a register of notifications and acknowledgements given in relation to trading in the Company's securities. The company secretary must report all notifications of dealings in the Company's securities to the next board meeting of the Company.

Directors are reminded that it is their obligation under section 205G of the Corporations Act to notify the market operator within 14 days after any change in a director's interest.

Breaches

Breach of the insider trading prohibition could exposure you to criminal and civil liability. Breach of insider trading law or this Policy will be regarded by the Company as serious misconduct which may lead to disciplinary action and/or dismissal.

This policy does not contain an exhaustive analysis of the restrictions imposed on, and the very serious legal ramifications of, insider trading. Restricted Persons who wish to obtain further advice in this matter, are encouraged to contact the company secretary.

This Policy also applies to the Company's related entities.

ASX Listing Rule Requirements

It is a requirement for admission to the official list of ASX, and an on-going requirement for listing, that the Company has a policy for trading in company securities.

The Company will give a copy of this policy to ASX for release to the market. The Company will also give any amended version of this policy to ASX when it makes a change to: the periods within which Restricted Persons are prohibited from trading in the Company's securities; the trading that is excluded from the operation of the policy; or the exceptional circumstances in which Restricted Persons may be permitted to trade during a Close Period, within five business days of the amendments taking effect. The Company will also give this policy to ASX immediately on request by ASX.

1 In this policy references to directors, officers and employees includes all Connected Persons of the directors, officers and employees. "Connected Persons" means a spouse or partner, child under 18 years, any trust in which the director, officer or employee is a trustee or beneficiary or any company over which they have control of more than 20% of its equity or voting rights in general meeting. Further, all references to officers includes a reference to 'key management personnel' as defined in AASB Standard 124 Related Party Disclosure, being those persons having authority and responsibility for planning, directing and controlling the activities of the company, directly or indirectly, including any director (whether executive or otherwise) of the entity.

Appendix

Examples of information which, if made available to the market, may depending on the circumstances be likely to have a material impact on the price of the Company's securities include, but are not limited to:

-- prospective financial information;

-- entry into or termination of a material contract, such as a major supply contract or a joint venture;

-- a material acquisition or sale of assets by the Company;

-- an actual or proposed takeover or merger;

-- a material claim against the Company or other unexpected liability, for example the threat of material litigation against the Company;

-- any actual or proposed change to the Company's capital structure, for example a share issue;

-- a change in dividend policy;

-- drilling results;

-- significant litigation and disputes; and

-- cashflow information

This information is provided by RNS

The company news service from the London Stock Exchange

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