THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

27 November 2024

MetalNRG plc

(the "Company" or "MetalNRG")

Update re Acquisition of CMO

MetalNRG plc (LON:MNRG), the natural resources company, is pleased to provide an update regarding the progress of its agreement to acquire the entire issued share capital of Compagnie Minière de l'Oumejrane S.A. ("CMO") from Managem S.A. ("Managem" ) (the "Acquisition"), as announced on 17 October 2024.

Highlights

·    The Company, working closely with Managem, is making significant positive progress towards the completion of the Acquisition, with a number of conditions precedent cleared.

·    A term sheet has been entered into with a strategic investor to provide, by way of an equity subscription, subject to customary conditions precedent, the remaining US$5 million of the initial US$30 million consideration for the Acquisition (the "Subscription Term Sheet").  As announced on 17 October 2024, a fund managed by Orion Resource Partners ("Orion") is providing a US$25 million convertible loan note to MetalNRG to enable completion of the Acquisition.

·    A Competent Person's Report (the "CPR") has been prepared by Mining Plus Pty Ltd ("Mining Plus") for the Company on the Oumejrane copper mine owned by CMO (the "Oumejrane Mine").  An executive summary of the CPR (the "Executive Summary") is available to view, subject to investor affirmation of customary disclaimers, on the Company's website at:

https://www.metalnrg.com/investors/shareholder-documents

·   Alongside progressing the required workstreams to complete the Acquisition, the Company has been developing its 100-day plan and optimisation strategy for the Oumejrane Mine, and all aspects of CMO, post-completion of the Acquisition.  Further details of the optimisation strategy is set out below.

Further information on CMO, the Oumejrane Mine and the CPR

The CPR has been prepared in accordance with the reporting requirements of JORC 2012 by Mining Plus, for Metal NRG (to be renamed Atlas Metals Group plc) and describes the assets of CMO, chiefly the Oumjerane Mine in the Eastern Atlas region of Morocco.  CMO was created in 2011 and is 100% owned by Managem group, an African mining company based in Morocco.

The operation consists of four operating underground mines, two active open pit mines, and a process plant that has successfully produced 21% grade Copper concentrates since 2014.  In addition, CMO owns four exploitation licences.

The CPR provides information on the Oumjerane Mine currently in operation, including: a review of the mineral inventory and mineable inventory as at 1 August 2024; recommendations for attaining JORC Code (2012) compliance; and recommendations on the approaches taken to prepare the Mineral Resource estimates and the mineable inventory.

Based on recommendations from the CPR, and taking into account other needs defined for the CMO business, the Company intends to implement a number of strategic initiatives from completion of the Acquisition in order to increase production, improve mining efficiencies, and consequently enhance the returns available from the CMO asset.  These are expected to include:

·    ESG initiatives: a comprehensive gap analysis across all aspects of ESG including health and safety, occupational health, environmental impact plan, water strategy, stakeholder mapping and engagement, and mine closure plan;

·    Tailings management: TSF1 life extension and feasibility study for TSF2;

·    Orebody knowledge: improved Reserve and Resource reporting, resource drilling and reserve conversion, including further geometallurgical studies;

·    Mining improvements: updating of mine planning systems, geotechnical studies, hydrogeological studies and accelerated dewatering;

·    Exploration: near-mine Life of Mine (LOM) extension drilling and regional exploration programme;

·    Processing enhancements: comprehensive review of comminution and flotation circuits, orebody variability testing, metallurgical testing, recovery and concentrate grade improvements, capacity expansion study; and

·    Equipment management: purchase of new equipment (mining fleet and processing plant) and increased maintenance spend.

The Company along with its funders and advisers have progressed an extensive due diligence process on the Oumejrane Mine and CMO, in conjunction with the CPR prepared by Mining Plus.  This comprehensive evaluation has included on-site visits, involving participants from commercial and technical teams of Orion, alongside external consultants.

As noted in the Company's announcement of 17 October 2024 ("Acquisition Announcement"), Orion had entered into a US$25 million convertible loan note ("CLN") with MetalNRG. 

As announced today, MetalNRG has now also entered into a Subscription Term Sheet with a strategic investor to provide the additional US$5 million required to complete the Acquisition.  The closing of the CLN and the provision of the US$5 million strategic investment remains subject to due diligence and the satisfaction of the conditions precedent set forth in the respective documentation.

The Acquisition is conditional on, inter alia, the grant of certain customary regulatory approvals in Morocco, MetalNRG shareholder approval at the general meeting to be held on 5 December 2024, the publication of the associated prospectus (containing the final long-form version of the CPR) (the "Prospectus"), and admission of the Company's enlarged share capital to listing on the equity shares (commercial companies) category of the Official List of the Financial Conduct Authority and to trading on the main market for listed securities of London Stock Exchange plc ("Admission").

As noted in the Company's circular of 11 November 2024, in order to implement the Acquisition, the Company needs to raise new equity capital and intends to conduct a placing to raise this new equity capital from investors in connection with the closing of the Acquisition (the "Placing").  The Company is proposing to raise up to £15 million pursuant to the Placing, which will be conditional on Admission.  The effect upon MetalNRG shareholders of the Acquisition, the fundraise conducted in association with the Acquisition (including the Placing), the conversion of the current convertible loan notes in the Company, the exercise of warrants, the issue of fee shares and the potential future conversion of the Orion convertible loan note is estimated to result in the current MetalNRG shareholders aggregate percentage interests in the enlarged share capital of the Company being diluted to not less than 38% of the whole.

As noted in the Acquisition Announcement, the parties intend to proceed as quickly as possible with the Acquisition, however, there can be no certainty that the Acquisition will be successfully completed.  Further announcements will be made in due course, as appropriate, as the Company progresses completion of the Acquisition.

Christopher Chadwick, Chief Executive Officer of MetalNRG, commented: "We are making very good progress with the process to complete the CMO acquisition and are delighted to have reached agreement with a strategic investor to provide the remaining US$5 million required for the initial consideration.  This is in addition to the US$25 million that Orion has already committed.  We are progressing the FCA prospectus review process and will be holding a general meeting of the Company on 5 December 2024 to seek shareholder approval of the necessary resolutions to implement the Acquisition.  In parallel, we are developing our plans for CMO post completion of the Acquisition.  These are exciting times for MetalNRG as we progress our plans to become Atlas Metals Group and the owner of a producing, cash generative operation in Morocco.  I look forward to providing further updates as matters progress."

For the purposes of UK MAR, the person responsible for arranging release of this announcement on behalf of MetalNRG is Christopher Chadwick, Chief Executive Officer.

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