Orion US$25m Funding Package Update - Replacement

15 August 2023

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information will be in the public domain.

The following amendments have been made to the "Orion US$25 Million Funding Package Update" announcement released on 15 August 2023 at 7:00 am under RNS No 3523J.

Under the "Warrants" heading below, the wording:

"the Company will issue OMF Limited with warrants to subscribe for up to US$20m of ordinary shares in Andrada at a price of 9.45p. ("Orion Warrants")."

Now reads:

"the Company will issue OMF Limited with warrants to subscribe for circa 15,000,000 - 20,000,000 ordinary shares in Andrada depending on the exchange rate at the time of issuance, which warrants can be exercised at a price of 9.45p. ("Orion Warrants"). The number of warrants allocated is based on 2 warrants for every equivalent pound sterling in relation to the US$10 million Convertible Loan Note instrument."

All other details remain unchanged.

The full amended text is shown below:

Andrada Mining Limited

("Andrada" or "the Company")

Orion US$25 Million Funding Package Update

Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the African technology metals mining company with a portfolio of mining and exploration assets in Namibia, is pleased to provide an update on the previously proposed Funding Package with funds managed by Orion Resource Partners ("Orion") announced on 15 September 2022. On 11 August 2023, Andrada signed binding documentation for an updated, conditional US$25 million funding package with Orion.

HIGHLIGHTS

·   US$25 million financing agreements signed ("Orion Financing") detailed below:

o US$2.5 million (c£2.0 million) equity at 6.39p and US$10 million (c£7.9 million) Convertible Loan Note ("the Note") being for the general purposes of accelerating Andrada's overall strategy of achieving commercial production of its lithium, tin, and tantalum revenue streams.

o US$12.5 million unsecured tin royalty for the sole purpose of increasing Andrada's tin production as it ramps up its capital programmes over the next 2 years.

·    The Company will issue Orion with warrants equivalent to double the GBP value of the US$10 million Convertible Loan Note based on the USD/GBP closing rate at market close on the Orion Issuance Date. Each warrant will enable Orion to subscribe for one ordinary share in the Company (the "Orion Warrants").

·    Financing conditional on satisfaction of requirements customary with transactions of this nature and shareholder approval of certain resolutions at the Company's Annual General Meeting (before 29 September 2023).

·    Funding expected to be completed around the end of September 2023.

Anthony Viljoen, Chief Executive Officer, commented:

"The signing of the Orion financing agreement will provide sufficient capital to complete our expansion programmes at our flagship Uis operation.  Finalising this funding will expedite our lithium implementation programme, expand our tin production, and concurrently bring a highly respected new investor onto our register. This will be another major step towards our goal of becoming a multi-technology metals producer. Additionally, the conclusion of the Development Bank of Namibia c.US$5.8 million debt facility will further provide considerable strength to the Company's balance sheet.

Orion is a renowned mining investment fund with a long track record of enhancing shareholder value, and we believe the proposed investment terms strongly endorse Andrada's corporate and broader multi-commodity development strategy. Orion also has the depth to provide debt financing for Phase 2 of the business growth. We look forward to building a successful partnership with Orion in conjunction with all our funding partners going forward."

Philip Clegg, Managing Partner of Orion, commented:

"We are very pleased to have executed definitive documents with Andrada. We regard Andrada as a high-quality investment opportunity presenting extensive optionality, with a series of value-creative projects across multiple future-facing commodities. We are excited to begin our partnership with Anthony and his team."

DETAILS OF THE ORION FINANCING

The financing is subject to the fulfilment of the following outstanding conditions precedent:

·    shareholder approval at the upcoming Annual General Meeting;

·    the Company's lender banks' consent; 

·    exchange control approval to remit funds into Namibia; and

·    Admission of the Subscription Shares (as defined below) to trading on AIM.

The final agreed deal terms of the US$25 million funding package are as follows;

Equity Subscription

·    Andrada, Orion Mine Finance Fund III LP ("Orion LP") and OMF Fund III (F) Limited ("OMF Limited") have today entered into a subscription agreement (the "Subscription Agreement"), pursuant to which Orion LP has agreed, subject to the conditions set out above, to subscribe for 30,821,596 ordinary shares in the Company, at a price of 6.39p (the "Subscription Shares") (the "Subscription Price"), being a total investment of c£2.0 million (US$2.5 million ). The price is 90% of the Company's 10 - day Volume Weighted Average Price ("VWAP") of 7.1p, calculated as at 11 August 2023, being the last practicable date prior to the date of this announcement.

·    Application for Admission of the Subscription Shares will be made and, subject to the satisfaction of the conditions above, trading in the Subscription Shares is anticipated to occur shortly after the Company's Annual General Meeting. A further update will be provided at that time.

·    Following the issue of the Subscription Shares, Orion LP's interest in the Company will be 30,821,596 Ordinary Shares representing 1.96% of the then enlarged share capital of the Company.

Convertible Loan Note

·    As also set out in the Subscription Agreement, OMF Limited has conditionally agreed to make available to Andrada up to US$10 million (c£7.9 million) by way of an unsecured Loan Note (the "Note"). The Loan can only be drawn down in full, and not in part. Interest accrues on the Note at a rate of 12% per annum.

·    The Note has a four-year term from the date that the Subscription Shares commence trading on AIM, anticipated to be end of September 2023 (the "Redemption Date").

·    The Note is convertible at any time prior to the Redemption Date in tranches of US$100k. The conversion price for the Note at the election of the holder is fixed at 9.45p, being the conversion price of the Loan Notes issued by the Company on 18 July 2023 (see announcement of the same date) ("Conversion Price").

·    If, after 12 months from the date of drawdown, the 20-day VWAP of the Company's shares is trading at 200% or more of the Conversion Price the Company may request the immediate conversion of the outstanding Note.

Warrants

·    On drawdown of the Note, the Company will issue OMF Limited with warrants to subscribe for circa 15,000,000 - 20,000,000 ordinary shares in Andrada depending on the exchange rate at the time of issuance, which warrants can be exercised at a price of 9.45p. ("Orion Warrants") The number of warrants allocated is based on 2 warrants for every equivalent pound sterling in relation to the US$10 million Convertible Loan Note instrument. The exact GBP (sterling) value of the warrant package will be determined by reference to the USD/GBP closing exchange rate at market close on the date that the Subscription Shares commence trading on AIM.

·    Each warrant will enable OMF Limited to subscribe for one Ordinary Share at a subscription price of 9.45p.

·    The Orion Warrants are exercisable at any time from the date of issue for a period of two years.

Assuming full conversion of the Note at 9.45p, the issue of the Subscription Shares at 6.39p, and exercise of all the Orion Warrants (using estimated warrant numbers, based on the prevailing exchange rate) Orion's interest in Andrada would be c.7.8% of the then enlarged issued share capital.

Royalty

·    The Company has today entered into a Royalty Agreement with Uis Tin Mining Proprietary Limited ("Uis"); OMF Limited; Greenhills Resources Limited and Andrada Mining (Namibia) (Proprietary) Limited pursuant to which Uis, the subsidiary of the Company, grants to OMF Limited up to US$12.5 million unsecured gross royalty over tin production, which is drawn down at staggered rates based on increasing contained tin gross revenue produced at the Uis Mine.

·    A base rate of 5.13% at the current production run rate with a 15-month fixed commitment from drawdown to allow the proceeds to be converted into additional production. If the increased production has not been achieved within 15 months, then the rate temporarily increases to 9.63% until the increased production is achieved, with a linear decrease from this rate to 5.13% from 1000 tpa to 1599 tpa.

·    At an annualised contained tin production between 1,600 tpa to 2,000 tpa the rate will further reduce from 4.50% to 3.61%, ultimately reducing to 0.86% with the Phase 2 expansion.

·    Once the royalty has been paid against 95,500 tonnes, the rate then further reduces by 75% in respect of the first 9,800 tonnes, or 87.5% in respect of the production in excess of 9,800 tonnes for the remainder of that year. The 75% rate reduction for the first 9,800 tonnes in a year and by 87.5% for amounts in excess of 9.800 tonnes in that year then applies separately for each subsequent year.

Update of Financing with Development Bank of Namibia ("DBN")

Further to the announcement on 26 June 2023, the inter-creditor agreements between DBN and Standard Bank have been concluded and the completion of the DBN financing is now only subject to the finalisation of the associated security package. The Directors currently expect the completion and associated drawdown to occur during August 2023. Further updates will be provided in due course.

General Meeting

The main minerals in these mining licences are tin, lithium and tantalum. Additionally, the Company has an exploration licence EL5445 (Brandberg West) on which the main minerals are tin, copper and tungsten. The Company has set a mineral resource target of 200 Mt to be delineated within the next 5 years. The substantial mineral resource potential allows the Company to consider economies of scale.

Andrada is managed by a board of directors with extensive industry knowledge and a management team with deep commercial and technical skills. Furthermore, the Company is committed to the sustainable development of its operations and the growth of its business. This is demonstrated by how the leadership team places significant emphasis on creating value for the wider community, investors, and other key stakeholders. Andrada has established an environmental, social and governance system which has been implemented at all levels of the Company and aligns with international standards.