Primorus Investments plc

("Primorus" or the "Company")

Revised Backstop arrangements for the Investment in Mustang Energy PLC

Primorus Investments plc (AIM: PRIM) provides an update in relation to its investment in Mustang Energy PLC ("MUST").

As announced by MUST on 17 January 2022, the notice period for the Backstop Arrangement was extended to 18 January 2022 to enable the parties more visibility as to the potential outcome of the VRFB-H litigation and more time to negotiate alternative arrangements.  Under the terms of the current Backstop Arrangement, Primorus would redeem its Convertible Loan Notes (CLN) and receive the full value of its investment (and interest) through the allocation of Bushveld Minerals PLC ("BMN") shares.

BMN, MUST, the other investors in the CLN and Primorus have been negotiating alternatives to the Backstop Arrangement.  This is to ensure Primorus can maintain an interest in this transaction, but on a risk adjusted basis.

The renegotiated Backstop agreement has been agreed as follows:

·      Primorus has transferred $1,000,000 of its $2,500,000 CLN instruments to certain existing CLN investors (the "Investors"), in return for Primorus receiving $1,000,000 in cash.  It has also transferred the associated warrants (representing 40% of the overall warrants based on 1 warrant for every two shares converted under the CLN) to subscribe for new ordinary shares in MUST to the Investors.

·      The interest accrued to date, $72,054.79 will also been settled, in cash, by the Investors.

·      The Backstop Date for the remaining CLN has been extended to 28 February 2022.

·      The terms of the Backstop have also been amended and, at Primorus' sole discretion, on 28 February 2022 it has the option to:

o  Convert its outstanding CLN into Mustang shares in accordance with the original agreement; or

o  Transfer the outstanding CLN plus interest accrued to BMN and, at BMN's sole discretion, BMN shall either repay the CLN (and accrued interest) to Primorus or enter into a Convertible Loan Note with Primorus on the terms set out below.  If Primorus selects to transfer the outstanding CLN to BMN, it will also transfer to BMN the balance of its warrants to subscribe for new ordinary shares in MUST.

BMN Convertible Loan Note (BCLN)

If BMN enacts the BCLN it shall be based on the key terms set out below:

·      An overall duration of 18 months with a maturity date of 14 July 2023;

·      It shall bear interest at the annual rate of 10%;

·      It shall allow Primorus to convert 1/6 of the total BCLN every three months into new ordinary shares in BMN and any unconverted BCLN shall roll over and be added onto the following three months allocation;

·      Primorus is only permitted to issue a single conversion notice in each of the three-month periods (effectively six conversion notices over the 18 month term) and BMN has the right to purchase, for cash, some or all of the shares that are proposed for conversion in accordance with the Payment Mechanism (stated below);

·      Upon conversion of any BCLN by Primorus and where the value of the conversion shares exceeds £250,000 in a single transaction or series of transactions within a three month period, Primorus must give written notice BMN allowing them five business days, following receipt of such notice, to arrange the sale of such shares to a purchaser of its choice at a price agreed with Primorus, failing which Primorus shall be free to dispose of any or all of such Shares as it sees fit.

·      The total number of shares to be allocated in BMN at the date of transfer (28 February 2022) will be calculated on the basis of the prior 20 day VWAP as stated on Bloomberg

·      BMN shall have the right to redeem all or part of the CLN at any time during its term by paying, in cash, the par value of the BCLN (plus accrued interest) to Primorus.  In addition, if the BMN share price is higher than the par value of the BCLN then BMN shall also pay the difference, in cash, between the two prices based on the prior 10 day VWAP commencing from the redemption date (referred to above as the "Payment Mechanism").

Primorus has agreed to the extension because it believes this will allow sufficient time for the litigation relating to the Enerox transaction to be finalised.  If the litigation is settled in favour of MUST then Primorus has retained the option to complete 60% of the originally intended investment.  If the litigation does not get settled in favour of MUST then Primorus has substantially protected itself from any downside. 

Primorus would like to thank BMN and the Investors for their support and willingness to amend the Backstop Arrangement, which ensures Primorus can maintain an interest in this transaction.

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors are responsible for the release of this announcement.

Forward Looking Statements

This announcement contains forward-looking statements relating to expected or anticipated future events and anticipated results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, competition for qualified staff, the regulatory process and actions, technical issues, new legislation, uncertainties resulting from potential delays or changes in plans, uncertainties resulting from working in a new political jurisdiction, uncertainties regarding the results of exploration, uncertainties regarding the timing and granting of prospecting rights, uncertainties regarding the Company's ability to execute and implement future plans, and the occurrence of unexpected events.  Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors.

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