Convertible Loan & Proposed Equity Fundraise

31 January 2025

Metals One Plc

("Metals One" or the "Company")

Convertible Loan,

Proposed Equity Fundraise

&

Share Consolidation

Metals One (AIM: MET1), which is advancing strategic minerals projects in Finland and Norway, announces that it has entered into a convertible loan note instrument ("CLN") and, conditionally, as set out below, an equity fundraise pursuant to a warrant instrument ("Equity Fundraise") to raise up to £5.0 million in gross proceeds in aggregate (net £3.0 million after associated costs as detailed below) with a syndicate of investors in two stages. The Company also intends to conduct a retail offer (or similar) ("Retail Offer") to existing shareholders for up to a further £100,000.

At the same time the Company has undertaken to seek shareholder approval for a 10:1 share consolidation. References to the terms of the Equity Fundraise relate to a post-share consolidation share price.

Key Points:

·    Stage 1 - CLN delivers £600,000 gross proceeds of interest-free working capital in the immediate term for licence commitments and working capital while the parties conclude the Equity Fundraise

·    Stage 2 - Equity Fundraise delivers £4.4 million gross proceeds via a warrant instrument (explained below), putting the Company in a strong financial position from which to advance its current projects and diversify its commodity base and geographic footprint through opportunistic acquisitions

·    Retail Offer for up to a further £100,000 to enable existing shareholders to participate on equivalent pricing terms as the Equity Fundraise

Alastair Clayton, Non-Executive Chairman, commented:

"Capital for junior resource exploration companies is scarce at the moment - especially for nickel projects. We have exceptional exposure to a future rebound in the nickel market with our Finland Black Schist Project but, faced with the inevitable prospect of heavy dilution through hand-to-mouth fundraisings to keep the project moving forward, we have sourced an alternative in the CLN, to meet the Company's immediate cash needs, and the larger Equity Fundraise, to put to shareholders which we believe offers the best prospect of recovering value.  

We recognise this financing results in significant dilution for shareholders. The board includes the Company's founders and project vendors who have all been disappointed with the lack of liquidity since our IPO in 2023. This financing package secures the future of the Company's existing projects, while allowing it to potentially diversify its exposure to a wider basket of commodities with a war chest for opportunistic acquisitions. Importantly, it also introduces a new source of future capital and enthusiasm to our register."

Stage 1: Convertible Loan Note Instrument

Pursuant to Stage 1, Metals One has entered into an interest-free CLN with a principal amount of £600,000. The subscriber under the CLN is Big Sky Management Limited, a company controlled by Canadian based corporate financier Eric Boehnke. The CLN is intended as a working capital bridge until completion of the financing under the Equity Fundraise. Upon shareholder approval and completion of the Equity Fundraise, the CLN will convert on the same terms as the Equity Fundraise at Stage 2 detailed below. In the unlikely event the Equity Fundraise does not complete within 90 days, the notes under the CLN become repayable in cash or convertible (at the Company's election) into shares at a 20% discount to the closing share price on the trading day immediately preceding the date of conversion. Further details on the conditions and restrictions under the CLN are included below and will be included in the notice of general meeting.

The net proceeds from the CLN will be used to meet near term licence commitments in Finland and for ongoing working capital.

Stage 2: Equity Fundraise

Pursuant to Stage 2, the Company has entered into a warrant instrument and has received conditional subscription letters from investors introduced by MavDB Consulting LLC ("MavDB") totalling £4.4 million. The Equity Fundraise is conditional upon, amongst other matters, shareholder approval at a general meeting. A further announcement with details in respect of the general meeting will be notified in due course. The material terms of the Equity Fundraise are set out below.

·    The Equity Fundraise is structured as prepaid warrants and ordinary, standard cash warrants. Each warrant, on exercise, entitles each subscriber to one new fully paid ordinary share in the capital of the Company.

·    In return for their prepayment of an aggregate of £4.4 million (excluding the CLN), each subscriber under the Equity Fundraise is entitled to receive prepaid warrants ("Prepaid Warrants") in the Company exercisable at a fixed price of 2p per warrant along with two attaching cash warrants ("Cash Warrants"), also exercisable at 2p per warrant (the Prepaid Warrants and the Cash Warrants together the "Warrants") as set out in the schedule in the Appendix below. The Cash Warrants are exercisable for a period of six months from the date of grant and, if exercised, would bring in substantial additional proceeds to the Company (see Appendix).

·    The Equity Fundraise is conditional on the following conditions being satisfied on or before 30 April 2025:

(i)            The Company convening a general meeting within 21 business days of the date of the warrant instrument to approve:

a.    share authorities to enable the full and unconditional exercise of the Warrants (subject to the relevant terms of the warrant instrument); and

b.    a share capital reorganisation by consolidating every ten ordinary shares into 1 new ordinary share.

(ii)           The entry into a 24-month consulting agreement, in agreed form, by the Company and MavDB for business development and support services totalling £2 million, which is being deducted from the proceeds of the CLN and the Equity Fundraise.

(iii)          The entry into of a relationship agreement, in agreed form, between the Company and each of the investors.

The Equity Fundraise is expected to operate as follows: the five investors introduced by MavDB (the "Investors") will, subject to the conditions described below having been satisfied, pay the subscription price for the Prepaid Warrants as a pre-payment (at which time the Company receives the £4.4 million in cash); however, the Prepaid Warrants shall remain unexercised until such time as the Investors provide an exercise notice to the Company. The Investors expect that, having invested sufficient capital to advance the business strategy, the Company's share price and liquidity will improve significantly. Accordingly, the Investors then expect to see demand for the Company's shares and be able to exercise their Warrants (within the agreed ownership thresholds detailed in the Appendix) and trade their shares.

Further details on the conditions and restrictions under of the Equity Fundraise are included in the Appendix below.

In conjunction with the Equity Fundraise, Metals One intends to facilitate a Retail Offer of up to £100,000 in order that existing shareholders may participate on equivalent pricing terms as the Equity Fundraise, being 2p per share (post-consolidation), representing a discount of approximately 53% to the closing share price on 30 January 2025 of 0.43p (equivalent to 4.3p post-consolidation), being the last practicable date prior to the date of this announcement. Further details of the Retail Offer will be announced in due course.

The proceeds of the CLN and Equity Fundraise are sufficient to cover the Company's existing project commitments and work programmes, as well as general working capital, for at least the next 18 months, while providing additional capital for acquisitions.

Enquiries:

About Metals One

Metals One is developing strategic metals projects in Finland (Black Schist Project) and Norway (Råna Project). Metals One is aiming to help meet the significant demand for strategic minerals by defining resources on the doorstep of Europe's major electric vehicle OEMs and battery manufacturers. Metals One's Black Schist Project in Finland, totalling 706 km² across three licence areas, has a total Inferred Resource of 57.1 Mt nickel-copper-cobalt-zinc and is located adjacent to one of Europe's largest strategic minerals producers, Terrafame. Metals One's fully carried Råna Project in Norway covers 18.14 km² across three contiguous exploration licences, with significant opportunity for exploration of the Råna intrusion, and proven potential for massive sulphide nickel-cobalt-copper mineralisation.

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Market Abuse Regulation (MAR) Disclosure

The information set out below is provided in accordance with the requirements of Article 19(3) of the Market Abuse Regulations (EU) No. 596/2014 which forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR').

Nominated Adviser

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.

APPENDIX

Additional Key Terms of the CLN

·    As stated above, in the unlikely event the Equity Fundraise does not complete within 90 days, the notes under the CLN become repayable in cash or convertible (at the Company's election) into shares at a 20% discount to the closing share price on the trading day immediately preceding the conversion date.

·    The CLN is unsecured and interest free.

·    No Investor is permitted to exercise notes to the extent that, as a result of such exercise, the Investor will own or control more than 2.99% of the issued ordinary shares of the Company.

·    No Investor is permitted to exercise notes (in whole or in part) held by it to the extent that, as a result of such exercise, the Investor (together with persons "acting in concert" with it, as such term is applied for the purposes of the City Code on Takeovers and Mergers) will own or control more than 29.99% of the issued ordinary shares of the Company.

·    The Company is subject to a 90-day standstill from the date of the CLN on general equity issuances, subject to carve outs in respect of, amongst other things, issues in connection with existing options and warrants and issues to the Company's employee benefit trust.

·    For a period of 180 days from the date of the CLN, each Investor has a right to participate in further fundraisings by the Company up to a maximum aggregate value of £5 million.

·    The CLN includes standard terms relating to events of default, warranties by the Company to the Investor, change of control provisions and negative covenants.

Additional Key Terms of the Equity Fundraise

·    The Company is subject to a six month standstill from the date of the warrant instrument on general equity issuances, subject to carve outs in respect of, amongst other things, issues in connection with existing options and warrants, issues to the Company's employee benefit trust and the Company undertaking an open offer or similar structure to existing shareholders as described above.

·    No Investor is permitted to exercise warrants to the extent that, as a result of such exercise, such Investor will own or control more than 2.99% of the issued ordinary shares of the Company.

·    No Investor is permitted to exercise warrants (in whole or in part) held by it to the extent that, as a result of such exercise, such Investor (together with persons "acting in concert" with it, as such term is applied for the purposes of the City Code on Takeovers and Mergers) will own or control more than 29.99% of the issued ordinary shares of the Company.

Illustrative Schedule of Warrant Instrument and Retail Offer Shares