13 December 2022

Caerus Mineral Resources PLC

('Caerus' or the 'Company')

Potential RIWAQ Acquisition

Caerus Mineral Resources (Caerus or the Company) the exploration and resource development company focused on developing mineral resources to support the global 'Clean Energy' initiative is pleased to announce it has entered into an exclusive option agreement with EV Metals Group Plc ("EVM") to acquire 90% of RIWAQ Al Mawarid for Mining ("RIWAQ").

RIWAQ is a special purpose subsidiary of EVM focused on the development of the Saudi supply chain through the production of critical raw materials from the exploration, mining and processing of minerals and metals in the Kingdom of Saudi Arabia ("KSA"). This is a key strategic objective and undertaking of EVM in the agreement between EVM and the National Industrial Development Centre for the development of the Battery Chemicals Complex of EVM in KSA.

This agreement is reflective of Caerus' evolved strategy to invest in larger-scale opportunities aligned with, and gained through, the EVM partnership. This reflects the Company's evolution from developing a single project into a company looking to be a part of the European critical minerals supply chain.

Caerus will pay a fully refundable GBP 500,000 deposit in return for an extendable three-month due diligence period of RIWAQ's portfolio. The final transaction value is dependent on the Company's assessment of the RIWAQ Licenses and a final negotiation stage.

RIWAQ is developing a strategically valuable portfolio of critical minerals projects comprising applications for and granted exploration licences covering areas with potential for minerals containing critical metals such as nickel, cobalt, copper, platinum group metals and rare earth elements. Caerus considers the KSA to be one of the best new frontiers for exploration of transition metals and RIWAQ's KSA portfolio to be one of significant and strategic value.

Portfolio Background

RIWAQ's portfolio consists of 11 granted exploration licenses alongside 142 licence applications which are under processing. The granted licenses encompass 1,093 km² in an area prospective for lithium pegmatites known as Balthaga. The remaining applications cover 11,350km² and include ground prospective for nickel, cobalt, copper and platinum group metals hosted in sulphide, volcanic hosted massive sulphide, and porphyry type deposits. There are also several applications for rare earth element granite systems.

Kingdom of Saudi Arabia potential

The geology of Saudi Arabia is split between ancient, Precambrian aged, igneous and metamorphic rocks in the west and sedimentary rocks on the eastern side. The Precambrian rocks are part of the Arabian-Nubian Shield ("ANS"), a geological region well known for hosting numerous base metal, gold, rare metal and industrial mineral deposits.

In the context of acknowledged resource-rich regions with mining potential, the KSA is largely undeveloped. This is expected to change due to new mining investment laws, a streamlined license application process and much improved data sharing. Important changes include up to 100% foreign ownership, 20% corporation tax, attractive loans for industrial projects from the Saudi Industrial Development Fund, and no restrictions on the repatriation of capital.

EVM has been operating in the Kingdom since 2018 and has established offices in Jeddah and Al Khobar.

Commenting Chris Lambert, Chairman, stated:

We are delighted to announce this agreement. It is entirely in line with our evolved strategy to invest in larger scale opportunities. We are moving to a world powered by critical minerals for energy storage, EV batteries and alternative renewable energy sources. Whilst Caerus is set to undertake a comprehensive review of the licenses, we believe they hold considerable value for the energy revolution and the opportunity for long-term development.

With Vision 2030, Saudi Arabia has made clear its intentions regarding the development of its mining sector - namely it is a vital industry pillar for development. The country's recent changes to its mining investment regulations underpin this ambition, ensuring a supportive regulatory backdrop for the development of the kingdom's significant mineral resources. We look forward to starting our review of the licenses and keeping the market appraised of our progress.

Memorandum of Understanding

The MOU is between Caerus and EVM, the 90% owner of RIWAQ. The acquisition of interests in RIWAQ by Caerus is subject to any regulatory approvals in KSA including those under the Mining Investment Law. The MOU includes the following conditions:

Exclusivity and Option

Caerus will pay a GBP500,000 fully refundable deposit to gain exclusivity with EVM for negotiations concerning the 90% acquisition of RIWAQ. The refundable deposit provides Caerus with the option to acquire 90% of RIWAQ, exercisable on or before 31 April 2023.

Due Diligence

Caerus and EVM agree to share information through the Due Diligence exercise relating to the RIWAQ Portfolio in order to enable Caerus to make a decision on its involvement in or acquisition of RIWAQ. 

Refundable Deposit

Should Caerus elect not to proceed with the purchase of 90% of RIWAQ, EVM will return the GBP500,000 Refundable Deposit to Caerus within 10 days of receipt of written notice from Caerus that it elects not to proceed.

Related Parties

EVM is a significant shareholder of the Company holding as at the date of this announcement approximately 16.34 per cent. of the voting rights of the Company.

Mr Russell Thomson is a statutory director of EVM and Mr Dominic Traynor is corporate secretary to EVM. Mr Thomson and Mr Traynor did not form part of the quorum and did not vote on the proposal to approve the terms of the MOU. The independent directors of the Company have determined that the terms of the MOU are fair and reasonable and in the best interest of its shareholders other than EVM.

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