GREENX METALS LIMITED

NEWS RELEASE 28 July 2022

Quarterly Activities Report June 2022

Highlights

GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or the Company) is pleased to present its Quarterly Activities Report for the period during and subsequent to 30 June 2022.

FIELD PROGRAM TO COMMENCE AT ARC PROJECT IN GREENLAND

Subsequent to the quarter, GreenX announced the receipt of all the permits for the proposed 2022 field program at the Arctic Rift Copper Project (ARC or ARC Project), which will commence in the coming weeks. Five geological teams will be deployed in the field supported by All-Terrain-Vehicles. The field team and field equipment will be deployed by ship from Iceland and will access the ARC project via Independence Fjord.

Historical programs and latest analysis have identified a number "walk-up" native copper and copper sulphide targets that will be the priority for the upcoming field program including Discovery Zone, Neergaard Dal and the Knuth Fault. The field campaign is based on a program of sampling, mapping, portable core-drilling and geophysics including seismic, electro-magnetic and radiometrics. Portable XRF will be used in the field and the field team will have access to satellite internet for real time uploading of field results. The field program will be led in the field by Dr Jonathan Bell.

GreenX expects strong news flow over the upcoming quarters from the field program and results from ongoing analysis of historical data.

About ARC

ARC is an exploration joint venture between GreenX and Greenfields Exploration Limited (GEX). GreenX can earn 80% of ARC by spending A$10 million by October 2026. ARC is targeting large scale copper in multiple settings across a 5,774 km² Special Exploration Licence in eastern North Greenland. The area has been historically underexplored yet is prospective for copper, forming part of the newly identified Kiffaanngissuseq metallogenic province.

GreenX and GEX consider the observed geological setting and features of ARC to be indicative of an extensive mineral system capable of hosting world-class copper deposits. The large scale of the mineral system, widespread copper anomalism, combined with dual mineralising events are analogous to the largest copper systems known worldwide. Accordingly, GreenX considers that ARC has the potential to be a globally significant metallogenic province.

Historical field programs identified widespread copper-silver occurrences at surface:

·     geochemical sampling found that 80% of stream sediment samples contain native copper

·     native copper is found in situ or as float, with individual clasts of native copper weighing up to 1 kg+

·     high grade copper sulphides, grading up to 2.15% Cu and 35.5g/t Ag over 4.5m true width, are known from trench sampling of fault zones within sediments (see GreenX announcement dated 20 January 2022 entitled "New Copper Targets Identified at ARC")

·     assay results from individual samples are much higher grade, including: 

Very high-grade copper mineralisation identified at ARC is associated with the Minik Anomaly, a coincident magnetic-electromagnetic-gravity feature in an area where there is a change in oxidation state and widespread native copper in stream sediments. These features are presented as the footprint of a large-scale hydrothermal system. The frequency and size of the native copper clasts, and the high grade of the copper-silver sulphides that are exposed at the surface, bode well for the prospectivity of copper deposits and will be a will be a key focus of the first field campaign.

There are multiple targets and favourable geological settings considered to be prospective within the ARC project area, including the following.

·     The highly anomalous basalt is a high priority target that has not previously been the focus of commercial exploration.  These basalts are the source of the native copper.

·     The sulphide mineralised faults passing through these basalts into the overlying sediments have been subject to first pass exploration and shown to be rich in copper and silver. The high-grade sulphides in these faults will be the focus of further exploration.

·     The permeable coarse-grained sandstone within the Jyske Ås Fm has high grade copper that is effectively unexplored. This stratiform mineralisation adds the potential for significant lateral extension of the known mineralisation exposed in the faults of the Discovery Zone. 

As such, the extensive ARC mineral system is known to be prospective for basalt, fault, and sedimentary rock-hosted ('sediment-hosted') mineralisation that despite the attractive grades, is virtually unexplored.

CORPORATE

Financial Position

During the quarter, the Company completed the sales of land and buildings, previously held for sale, owned by the Company in Poland for the total receipt of A$1.9 million (before costs).

As at 30 June 2022, GreenX had A$6.1 million cash available plus A$8.3 million available to pursue its dispute against the Republic of Poland.

DISPUTE WITH POLISH GOVERNMENT

Subsequent to the quarter end, the Company reported that as part of the ongoing international arbitration claims (Claim) against the Republic of Poland under both the Energy Charter Treaty (ECT) and the Australia-Poland Bilateral Investment Treaty (BIT) (together the Treaties), GreenX had filed its Statement of Reply in the BIT arbitration.

This is the final material filing that GreenX will make for the BIT arbitration, with the next steps being for Poland to lodge their final filing (the Rejoinder) followed by a hearing to be conducted in front of the Tribunal.

Based upon revised external expert reports in response to Poland's Statement of Defence, GreenX is now seeking compensation in the amount of £737 million (equivalent to A$1.3 billion or PLN 4.0 billion).

Details of the Claim

The Company's international arbitration claims (Claim) against the Republic of Poland is being prosecuted through an established and enforceable legal framework, with GreenX and Poland agreeing to apply the United Nations Commission on International Trade Law Rules (UNCITRAL) rules to the proceedings.

Both the BIT and ECT claim Tribunals have been constituted, with both Claims being registered with the Permanent Court of Arbitration in the Hague. The BIT and ECT claim proceedings proceed at pace, with the Company now having filed a revised claim for damages against Poland with the Tribunal in the amount of £737 million (A$1.3 billion/PLN4.0 billion), which includes a revised assessment of the value of GreenX's lost profits and damages related to both the Jan Karski and Debiensko mines, and accrued interest related to any damages. The Claim for damages has been assessed by external quantum experts appointed by GreenX specifically for the purposes of the Claim.

In July 2020, the Company announced it had executed the LFA for US$12.3 million with Litigation Capital Management (LCM). The facility is currently being drawn down to cover legal, tribunal and external expert costs as well as defined operating expenses associated with the Claim.

In September 2020, GreenX announced that it had formally commenced with the Claim by serving the Notices of Arbitration against the Republic of Poland. In June 2021, GreenX announced that it had formally lodged its Statement of Claim in the BIT arbitration, including the first assessed claim for compensation. The Company's Statement of Reply, the last material filing to be made by the Company for the BIT arbitration proceedings, has now been filed. The Statement of Reply addresses various points raised by the Republic of Poland in their Statement of Defence. The Statement of Reply also contains a re-evaluation of the claim for damages based on responses to Poland's Statement of Claim.

GreenX's dispute alleges that the Republic of Poland has breached its obligations under the applicable Treaties through its actions to block the development of the Company's Jan Karski and Debiensko mines in Poland which effectively deprives GreenX of the entire value of its investments in Poland.

In February 2019, GreenX formally notified the Polish Government that there exists an investment dispute between GreenX and the Polish Government. GreenX's notification called for prompt negotiations with the Government to amicably resolve the dispute and indicated GreenX's right to submit the dispute to international arbitration in the event of the dispute not being resolved amicably. As of the date of this report, no amicable resolution of the dispute has occurred, since the Polish Government has declined to participate in discussions related to the dispute and accordingly the Company has formally proceeded with its Claim as discussed above.

GreenX's investment dispute with the Republic of Poland is not unique, with international media widely reporting that the political environment and investment climate in Poland has deteriorated since the change in Government in 2015. As a result, there are a significant number of International Arbitration claims being bought against Poland in the natural resources and energy sectors with damages claims ranging from US$120 million to over US$1.3 billion and includes Lumina Copper (Copper) and InvEnergy (wind farms).

-ENDS-

Forward Looking Statements

This release may include forward-looking statements. These forward-looking statements are based on GreenX's expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of GreenX, which could cause actual results to differ materially from such statements. GreenX makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

Competent Persons Statement

The information in this announcement that relates to Exploration Results for ARC is extracted from the ASX announcements dated 6 October 2021 and 22 January 2022 which are available to view at www.greenxmetals.com. GreenX confirms that (a) it is not aware of any new information or data that materially affects the information included in the original announcements; (b) all material assumptions and technical parameters underpinning the content in the relevant announcements continue to apply and have not materially changed; and (c) the form and context in which the Competent Person's findings are presented have not been materially modified from the original announcements.

To view this announcement in full, including all figures and illustrations, please refer to www.greenxmetals.com.

APPENDIX 1: TENEMENT INFORMATION

As at 30 June 2022, the Company has an interest in the following tenements:

Notes:

¹        In October 2021, the Company announced that it had entered into an Earn-In Agreement (EIA) with GEX to acquire an interest of up to 80% in ARC. As at the date of this announcement, the Company held no beneficial interest in ARC, other than through the EIA.

²        GreenX formally commenced international arbitration claims against the Republic of Poland under both the ECT and the BIT in 2021. GreenX alleges that the Republic of Poland has breached its obligations under the Treaties through its actions to block the development of the Company's Jan Karski and Debiensko mines in Poland.

Appendix 2: Related Party Payments

During the quarter ended 30 June 2022, the Company made payments of $204,000 to related parties and their associates. These payments relate to existing remuneration arrangements (director fees, consulting fees and superannuation of ($164,000) and the provision of a serviced office and company secretarial and administration services ($40,000).

Appendix 3: Exploration and Mining Expenditure

During the quarter ended 30 June 2022, the Company made the following payments in relation to exploration activities:

There were no mining or production activities and expenses incurred during the quarter ended 30 June 2022.

Appendix 5B

Mining exploration entity or oil and gas exploration entity
quarterly cash flow report

Compliance statement

1        This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2        This statement gives a true and fair view of the matters disclosed.

Date:                28 July 2022

Authorised by:  Company Secretary

(Name of body or officer authorising release - see note 4)

Notes

1.          This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2.          If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3.          Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4.          If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5.          If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.