Results of PEA for Finland - Black Schist Project

31 January 2025

Metals One Plc

("Metals One" or the "Company")

Results of PEA for Finland - Black Schist Ni-Cu-Co-Zn Project

Application for Strategic Project Status under European Critical Raw Materials Act in Q1 2025

Metals One (AIM: MET1), which is advancing strategic minerals projects in Finland and Norway, announces the outcome of a Preliminary Economic Assessment ("PEA") for the Finland - Black Schist Ni-Cu-Co-Zn Project (the "Project"). The PEA was undertaken by Wardell Armstrong International ("WAI"), part of Wardell Armstrong LLP, a long-established, independent British engineering and environmental consultancy, and provides the Company with an initial assessment of which deposits may warrant focus as it looks to develop its various Black Schist projects. The material findings of the PEA are summarised in this announcement.

Summary

·    Rautavaara (R1) deposit is considered the key economic driver for now

·   While the PEA applies NPV₈ and NPV₁₀ calculations, due to the favourable jurisdiction, WAI deems it appropriate to also consider the financials at NPV₅

·   As illustrated by the Upside Case below, Project returns are leveraged to rising long-term nickel price assumptions

·    Further upside may exist as the Company adds resources to the modelled 57.1Mt in the PEA

·    Company intends to apply for Strategic Project Status under the European Critical Raw Materials Act within Q1 2025

See Metal Price Inputs below for price assumptions used in the PEA.

Jonathan Owen, CEO of Metals One, commented:

"The PEA demonstrates that although it was undertaken at a time of weak nickel prices and inflated input costs, the Project is highly leveraged to rising commodity prices. Considering demand for battery-grade nickel is forecast to triple by 2030 and that producing the metal domestically within the EU becomes an ever more critical goal, we are evidently sitting on valuable assets with compelling leverage to a rising nickel price. For now, however, capital availability for nickel projects remains tough.

Our next move is to apply to the European Commission for designation of the Project as "Strategic", as defined by the European Critical Raw Materials Act, within the first quarter of 2025, before assessing the future work programme."

Alastair Clayton, Chairman of Metals One, commented:

"The PEA delivers excellent optionality against a realistic background of depressed nickel pricing and global cost inflation. China-financed Indonesian nickel over-production has led to a global glut, forcing the shuttering of many high-cost historical producers in Australia and Canada. We believe our Finnish projects have the potential to replace this shuttered western production as the global nickel supply chain rebalances over time, driven by the growing criticality of locally sourced, ethically mined nickel to support the energy transition. We continue to assess projects where we can provide returns for shareholders based on targeted exploration and investment rigour."

Introduction

The Project includes the Rautavaara ("R1") and Paltamo ("P5") deposits which are located in the Northern Savonia (Rautavaara) and Kainuu (Paltamo) regions of eastern Finland. The regional mining and processing centre at Sotkamo lies between the two project areas approximately 90km north of Rautavaara and 50km south of Paltamo.

The Project lies within the Paleoproterozoic Kainuu Schist Belt, a 200km long geological formation of economic importance. The Project is believed to belong to the Talvivaara-style shale-hosted nickel-zinc-copper-cobalt type of deposits. It is characterised by sulphidic Ni-Zn-Cu-Co deposits hosted by highly sulphidic-graphitic muds and turbiditic wackes, which have undergone high-grade metamorphism.

Two main targets exist within the Project, R1 at Rautavaara and P5 at Paltamo, both of which have been drill tested to reveal significant Talvivaara-style mineralisation. Minimal exploration has been completed outside of these two prospects, with little work completed across the Project in over a decade meaning much of the licence can be considered unexplored.

The Project is situated adjacent to Europe's largest operating nickel mine, operated by Terrafame, and has an Inferred Mineral Resource of 57.1 Mt of Terrafame's type of mineralised material at a grade of 0.18% Ni (105.8kt), 0.09% Cu (51.9kt), 0.01% Co (6.9kt) and 0.35% Zn (276.0kt).

Further upside may exist as the Company adds resources to the modelled 57.1Mt in the PEA.

The PEA has been prepared in accordance with Canadian National Instrument 43-101.

The figurers quoted as extracted from the PEA are preliminary in nature and should not be considered a guide to the future value of the Project.

Market Studies

The product from the Project will be a bulk sulphide concentrate, within which nickel is the key economic driver. Nickel sulphides, by contrast to nickel laterites, are generally both easier and cheaper to extract, and are amenable to bio heap leaching.

In 2023, global nickel production was reported to be over 3.3 Mt, an increase of over 10% from 2022, of which Indonesia and the Philippines account for over 60%. By contrast, negligible amounts of nickel are currently produced in Europe. Although nickel does not currently qualify as a critical raw material in the EU, the US Geological Survey added nickel (and zinc) to the critical minerals list in 2022, meaning that the metal is now considered to be essential to the economic security of the US. Despite not qualifying for the EU list, analysis still identified nickel to be of material economic importance to the EU and, since the start of Q2 2022, Indonesia (the largest global producer) has banned the export of unprocessed nickel ores to ensure that ores are processed domestically as opposed to being exported and processed offshore. Given these relatively recent developments in the nickel market, producing the metal domestically within the EU becomes an ever more critical goal.

In terms of applications, nickel has a significant amount of end-user sectors, and it is estimated that there are over 300,000 products and processes that utilise the metal.

Application for Strategic Project Status Under European Critical Raw Materials Act 

Demand for battery-grade nickel is forecast to triple by 2030^**. The PEA highlights the opportunity for the Company's Black Schist Project to make a meaningful contribution to the security of the EU's supply of this strategic material. The Company intends to apply to the European Commission for designation of the Project as "Strategic", as defined by the European Critical Raw Materials Act, within the first quarter of 2025. Strategic Project Status provides several key advantages that can significantly aid in the Project's development and long-term success, including but not limited to: enhanced access to project financing, including eligibility for funding from EU programmes; streamlined permitting processes; reducing bureaucratic obstacles; and priority consideration in national and EU-level planning and support policies.

Economic Analysis

The economic analysis uses a Discounted Cash Flow approach on a post-tax, unleveraged, real-terms basis, to determine the NPV, Internal Rate of Return ("IRR") and payback period, amongst other key financial performance indicators.

The financial analysis has been prepared on the basis of the project with no consideration of financing scenarios. The cost estimates have been made with reference to general benchmarks within the industry and using Cost Mine, as opposed to individual project specific costings.

Given its stable economy and other factors pertinent to the mining industry, Finland is considered an investable country and WAI considers it appropriate to include in the PEA a discount rate of 5% alongside calculations for 8% and 10% discount rates, as summarised in Table 1.

Table 1: Economic Analysis  

Metal Price Inputs

WAI has used flat (real) pricing in the financial analysis as shown in Table 2. The Ni price has been derived from a three-year trailing average, as required by NI 43-101 for the primary commodity, which the Company notes is considerably above the prevailing Ni spot price of approximately US$15,500/t, whilst Zn, Cu and Co have been based on the London Metal Exchange spot price at the time of the model's construction.

Table 2: Metal Price Inputs

The Upside Case assumes a 20% commodity price increase on WAI's price inputs.

Sensitivity Analysis - Upside

Rautavaara (R1)

When a discount rate of 5% is applied to post-tax cash flows, on average, each 10% change in metal prices (and therefore grade and recovery) results in a US$76.89M change in NPV₅, while each 10% variation in operating costs results in a US$47.56M change and each 10% variation in capital costs results in a US$23.64M change.

Figure 1: Sensitivity Analysis - Rautavaara R1 (NPV₅)

Paltamo (P5)

On average, when a discount rate of 5% is applied to post-tax cash flows, each 10% change in metal prices (and therefore grade and recovery) results in a US$79.94M change in NPV₅, while each 10% variation in operating costs results in a US$53.92M change and each 10% variation in capital costs results in a US$24.56M change.

Figure 2: Sensitivity Analysis - Paltamo P5 (NPV₅)

^**https://source.benchmarkminerals.com/article/battery-nickel-demand-set-to-triple-by-2030

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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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Qualified Person Statement

Craig Moulton is an Independent Non-Executive Director of the Company and the Qualified Person who reviewed and approved the technical disclosures in this news release. Mr Moulton has over 30 years' experience in the mining industry, having worked for Rio Tinto, Cliffs and Wood Mackenzie, and is a trained Geologist and Mineral Economist. Mr Moulton holds a BSc (Hons) in Geology and a MSc in Mineral Economics and is a qualified person under the AIM Rules. Mr Moulton consents to the inclusion of the technical information in this release and context in which it appears.

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.

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