Critical Metals Regulatory News (CRTM)

Critical Metals plc / EPIC: CRTM / Market: Main Market / Sector: Closed End Investments

4 August 2022

Critical Metals plc

("Critical Metals" or the "Company")

Update re Proposed Acquisition of DRC Copper/Cobalt Project

Critical Metals plc, a mining investment company established to acquire mining opportunities in the critical and strategic metals sector, is pleased to provide a further update on its proposed acquisition of a majority interest in the copper/cobalt project located within Small Scale Mining License PEPM 14784 (the "Mining Licence") in the Democratic Republic of Congo (the "Molulu Project") announced on 20 May 2021.

Further to the Company's announcement of 24 March 2022, on 2 August 2022 Critical Metals has entered into an investment agreement with its wholly owned subsidiary, Critical Metals Mauritius Ltd ("CRTM Mauritius"), Madini Occidental Ltd ("MO") and MO's shareholders Russell Fryer and Madini Minerals ("MO Investment Agreement") pursuant to which, subject to a number of conditions (inter alia the publication by the Company of a prospectus approved by the Financial Conduct Authority ("FCA")) CRTM Mauritius agreed to acquire a 57% interest in MO for a price equal to US$750,000 less costs of MO that had been paid by the Company or CRTM Mauritius prior to the closing of the MO Investment Agreement ("MO Closing"). The MO Closing will take place once all the conditions set out in the MO Investment Agreement have been satisfied and immediately prior to readmission of the Company's shares to listing on the standard segment of the Official List of the FCA and to trading on the London Stock Exchange plc's Main Market (the "Re-Admission"). Pursuant to the MO Investment Agreement, CRTM Mauriitus had agreed to: (i) pay a success fee of US$300,005 to MO after signing of the MO Investment Agreement (the "Success Fee"); (ii) make available a loan of up to US$200,000 to fund an exploration drilling program at the Molulu Project following Re-Admission (the "Drill Loan"); and (iii) make available a loan of pre-acquisition costs following the closing of the MO Investment Agreement (the "Post-Closing Loan"). Each party to the MO Investment Agreement provided standard capacity warranties and the minority shareholders provided warranties in respect of their existing ordinary shares in MO and the validity and good standing of the Mining Licence.

CRTM Mauritius had also entered into a facility agreement with MO containing the terms of the Drill Loan and the Post-Closing Loan. In addition, CRTM Mauritius, MO, Russell Fryer and Madini Minerals entered into a shareholders' agreement to govern their relationship after the MO Closing.

On 21 October 2021, CRTM Mauritius subscribed for US$140,000 of loan notes issued by MO pursuant to a convertible loan note instrument ("MO CLN Instrument"). US$100,000 of these sums were returned to CRTM Mauritius and related notes cancelled. On 2 August 2022, following CRTM Mauritius' agreement, MO amended and restated the MO CLN Instrument to inter alia amend the long stop date.

A condition for the advancement of the Success Fee was that it was immediately advanced to Miniere Shaba SARLU (to be renamed MO RDC SARLU) ("Miniere Shaba") as a loan ("Closing Loan") and Miniere Shaba to use such sums to settle the Consideration (as defined below). On 2 August 2022, MO entered into a facility agreement with Miniere Shaba, capturing the terms of the existing debt between these companies and the terms of the Closing Loan and any further sums advanced from MO to Miniere Shaba, which would include the sums received under the Drill Loan ("MO Facility Agreement").

As MO owes large sums to Ongeza Mining Limited ("Ongeza") and Baobab Asset Management LLC ("Baobab"), which MO is currently unable to repay, CRTM Mauritius, Miniere Shaba SARL, Madini Minerals, the Company, Ongeza, Russell Fryer and Baobab entered into an intercreditor agreement on 2 August 2022 pursuant to which a standstill was agreed along with an order of repayment.

On 2 August 2022, MO also entered into an operating agreement with Ongeza. Ongeza is a subsidiary of Madini Minerals. Subject to Re-Admission, MO has appointed Ongeza to perform certain project management services in connection with the Molulu Project.

On 2 August 2022, MO acquired through Minière Shaba an interest in 70 percent of the shares of Amani Minerals Katanga SARL ("AMK"), the Congolese vehicle holding the Mining Licence, for a consideration of US$ 300,000 ("Consideration"). The remaining 30 percent of AMK is held by its founding shareholders, being Congolese individuals. On the same day, AMK was recapitalized to bring its share capital to US$ 20,000, before being transformed into a company limited by shares (société anonyme or SA). All those operations are now in the process of being registered with the Congolese One-Stop-Shop for the Creation of Enterprises (Guichet Unique de Création d'Entreprises), which should be completed in the next few days.

A pledge over the shares of AMK held by Minière Shaba to the benefit of MO was entered into on 3 August 2022. This pledge will secure the intercompany debt of Minière Shaba towards MO, existing pursuant to the MO Facility Agreement.

Further details regarding the agreements set out above are expected to be set out in a prospectus which is anticipated to be published in the coming weeks.

Progress towards Re-Admission continues and the Company expects to be in a position to update shareholders again in the near future.

Related Party Transaction

For the purposes of Chapter 11 of the Listing Rules, MO is a related party of the Company due to the fact that Russell Fryer, CEO of Critical Metals, is a director of MO and he currently holds a 50% equity interest in MO pursuant to an investment of US$200,000 in 2018 and is beneficially interested in an outstanding unsecured loan to MO of US$800,000 from Baobab which accrues interest at 6 per cent. Per annum. The independent directors of the Company in respect of the agreements entered into on 2 August 2022 set out above (the "Agreements"), being Anthony Eastman and Marcus Edwards-Jones, have approved the Company entering into the Agreements.

**ENDS**

For further information on the Company please visit www.criticalmetals.co.uk or contact:

About Critical Metals

Critical Metals was formed as an investment company and intends to make equity investments into operators or near-term production operators within the natural resources development and production sector in the continent of Africa. It is envisaged that such acquisition or acquisitions will trigger a reverse takeover in accordance with the listing rules. The Company intends to search initially for acquisition opportunities in the natural resources sector on known deposits and more specifically minerals that are perceived to have strategic importance to future economic growth. Commodities such as antimony, beryllium, cobalt, copper, fluorspar, gold, rare earth elements, tin, tungsten, titanium, and vanadium have been identified by several governments as "critical minerals" and so guaranteeing supplies is seen as a strategic necessity. The Company therefore believes that the market conditions for these minerals will remain strong in the short-to-long term.

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.