Proposed Disposal of Zebediela & Notice of AGM

3 March 2021

URU Metals Limited

("URU" or "the Company")

Proposed Disposal of the Company's Zebediela Nickel Project

& Notice of Annual General Meeting

URU Metals Limited (AIM: URU), announces that its Annual General Meeting ("AGM") will be held at 10.00 a.m. EST/ 3.00pm GMT at the offices of URU Metals Limited at 4 King Street, West Suite 401 M5H 1B6 Toronto, ON, Canada on 1 April 2021. The Notice of AGM is being published today on the Company's website at www.urumetals.com/investor-relations/circulars-and-publications and will be posted to shareholders on 5 March 2021.

The Company announced on 13 January 2021 that it has entered into a letter of intent, dated 7 January 2021 ("LOI"), with Blue Rhino Capital Corp ("BRC"), a company listed on the TSX Venture Exchange ("TSXV") whereby BRC proposed to acquire all of the issued and outstanding share capital of Zebediela Nickel Company (Pty) Ltd. ("ZEB"), which controls the Company's Zebediela Nickel Project in South Africa (the "Zebediela Project" or the "Project").   Following a period of due diligence the Company and BRC entered a Sale Agreement on 2 March 2021 pursuant to which the Company agreed to sell its holding in ZEB to BRC in exchange for the Consideration Shares ("Disposal") which at completion of the Disposal ("Completion") represent approximately 79.85% of the issued share capital BRC.  As part of the transaction BRC will carry out a 2.3-1 stock Consolidation ("Consolidation"), and will also carry out a non-brokered private placement to raise CND $2,300,000 ("Fundraise").  At the anticipated issue price of the Consideration Shares this values ZEB at CND $ 10M prior to completion of the Fundraise.

ZEB's local partner in the Project is entitled to a gross 1.5% royalty on all revenue generated from the Project (the "Royalty").  URU currently has a right to acquire 1% of this Royalty for 2 Million USD within 24 months of a mining right being granted in respect of the Project.  URU has agreed to cede, assign, transfer and make over to BRC at Completion this right.  URU will retain its 1.0 % royalty in respect of the Project. 

The Disposal constitutes a fundamental change of business of the Company under Rule 15 of the AIM Rules for Companies.  Accordingly, completion of the Disposal is conditional, inter alia, on the approval of Shareholders at a general meeting of the Company, notice of which is set out on page 13 of the Circular to be sent to shareholders on 5 March 2021  and also available on the Company's website.

Following the Disposal the Company will not be regarded as an investing company (as defined in the AIM Rules) as the Company will retain majority ownership of BRC and will be the technical operator of the Project. In addition the Company is actively pursuing other exploration projects and its subsidiary has recently made an application to the Department of Mineral Resources of South Africa for mining prospecting rights on 247.28 hectares of various portions of land neighbouring the Zebediela Project.

Information relating to the Buyer

BRC is a capital pool company within the meaning of the policies of the TSXV that has not commenced commercial operations and has no assets other than cash. The current directors and officers of BRC consists of Anton Drescher (Director, President, Chief Executive Officer and Corporate Secretary), Raphael Danon (Director), David Cross (Chief Financial Officer) and David Brett (Director).  Under the Sale Agreement at Completion BRC has agreed to procure that BRC's directors and officers (other than Anton Drescher) will resign and be replaced by nominees of the Company. These nominees will include Jay Vieira who is a director of the Company. The names and backgrounds of all persons who are expected to be appointed as officers and directors of BRC are detailed below.

BRC currently has 5,400,000 common shares issued and outstanding, as well as 200,000 incentive stock options and 200,000 broker warrants to acquire common shares, each exercisable at CND 0.10 per share.

Following the Consolidation, BRC will have approximately 2,347,826 shares outstanding, and 86,957 incentive stock options and 86,957 broker warrants, each exercisable at CND 0.23 per share.

Following Completion BRC is expected to have 51,347,826 common shares in issue and that BRC will be listed as a Tier 2 Mining issuer on the TSXV and will be involved in the exploration and development of the Project.  The Transaction is intended to constitute BRC's "qualifying transaction" pursuant to Policy 2.4 - Capital Pool Companies of the TSXV.

CV of Directors' of BRC at Completion

Anton Drescher (Director)

Mr. Drescher is an existing director of BRC and has been a Certified Public Accountant, Certified Management Accountant since 1981. Mr. Drescher is currently involved with several public companies including as: a director (since 1991) of International Tower Hill Mines Ltd., a public mining company listed on the TSX and the NYSE-MRT; a director (since 1996) and Chief Financial Officer (since 2012) of Xiana Mining Inc., a public mineral exploration company listed on the TSXV; a director (since 2007) and the Chief Financial Officer of Oculus VisionTech Inc., a public company involved in watermarking of film and data listed on the TSXV and the OTC Bulletin Board; a director (since 2014) of CENTR Brands Corp., a public company listed on the CSE.  Mr. Drescher is also the President (since 1979) of Westpoint Management Consultants Limited, a private company engaged in tax and accounting consulting for business reorganizations, and the President (since 1998) of Harbour Pacific Capital Corp., a private company involved in regulatory filings for businesses in Canada.

Wayne Isaacs (CEO and Director)

Mr. Isaacs has a thirty-year career on Bay Street specializing in the resource sector both as a corporate executive of resource companies and as an investment banker. This extensive experience has allowed him to successfully seek out and engage and acquire significant resource assets and financing to support exploration, development and mining activities for his operating and investee companies. Mr. Isaacs has been involved as principal in 30 listed companies and has served as a director and / or senior officer of over 35 listed companies. He was the President and Director of Forsys Metals Corp. from 2003 to 2007, a TSX listed company with uranium properties in Namibia, Africa which he managed from start up to in excess of $750 million in market capitalization raising over $70 million to advance its uranium property from the exploration stage to the production decision stage. Mr. Isaacs is currently a Director of AM Resources Corp. (TSX.V: AMR), a mining company engaged in the exploration of coal, hydrocarbons and gold mining sites located in Colombia. He is a graduate of the University of Western Ontario and has held numerous securities certifications and licenses.

Tom Panoulias (Director) 

Mr. Panoulias is a capital markets professional with over fifteen years of experience.  He has previously worked at Echelon Wealth Partners, Fraser Mackenzie, and Dundee Capital Markets, raising over one billion dollars for issuers in the mining sector and advising senior management teams on numerous merger and acquisition transactions. Prior to entering capital markets, Mr. Panoulias held senior roles at Kinross Gold Corporation and TVX Gold Inc. in corporate development, responsible for managing various acquisition and divestiture activities. He currently is the Vice President of Corporate Development for Freeman Gold Corp. and a director of Bonavista Resources Corp.  Mr. Panoulias holds an Honours Bachelor of Commerce degree from the University of Toronto and is a member of the Canadian Institution of Mining and Metallurgy and the Toronto Society of Financial Analysts.

Greg McKenzie (Director)

Mr. McKenzie (JD, MBA) is a former senior investment banker with more than twenty years of experience in financing, M&A, financial advisory, valuation, and strategic advice to mid-cap companies. Mr. McKenzie has held positions with Morgan Stanley, CIBC World Markets and Haywood Securities, and has been involved in transactions valued in excess of $18 billion. In addition to his capital market experience Mr. McKenzie previously practiced corporate law with a leading Canadian securities and M&A law firm.  He is currently the President & CEO of Golden Tag Resources, a Mexican Silver Exploration and Development Company.

Jay Vieira (Director)

Mr Vieira is the Non-executive Chairman of URU and former Vice President, Corporate and Legal Affairs at Distinct Infrastructure Group Inc.  Previously, from 2006 to 2016, he was a partner with the law firm of Fogler, Rubinoff LLP, Toronto, Ontario, where he focussed on securities and corporate finance. Mr. Vieira is a member of the Canadian and Ontario bar associations and the Law Society of Upper Canada.  He was admitted to the Ontario bar in 1999 after obtaining his LL.B. from the University of Windsor Law School. Mr. Vieira also holds a B.A. (Hons.) in Humanities from McMaster University.

Martin Vydra (Strategic Advisor to the Board)

Mr. Vydra President of Giga Metals joined following a thirty-one year career with Sherritt International Corporation, a leader in the mining, processing and refining of lateritic nickel and cobalt with operations in Canada, Cuba and Madagascar. Martin is widely recognized as an expert in nickel and cobalt extraction, processing and refining including the development and application of advanced technologies to maximize the recovery of valuable metals such as nickel and cobalt from a variety of feeds.  While at Sherritt, Martin's technical accomplishments spanned four continents and over 20 operations including postings in Australia where he was integrated in Murrin Murrin's refinery start up; Finland for the design of Harjavalta's nickel reduction circuit; and, in Chile where he oversaw the design, construction and commissioning of a major pressure oxidation operation. Most recently, Martin served as Sherritt's Senior Vice President, Commercial and Technologies, where he had oversight for the sales and marketing of nickel and cobalt, and marketing and commercialization of Sherritt's proprietary technologies.  Mr. Vydra also currently works for Conic Metals Corp in a strategic capacity.

Justin Cochrane (Advisor to the Board)

Mr. Cochrane, President and CEO of Conic Metals Corp., has 20 years of royalty and stream financing, M&A and corporate finance experience. Prior to Conic Metals, he served as President & COO of Cobalt 27 Capital Corp. and before that as Executive Vice President and Head of Corporate Development for Sandstorm Gold Ltd.  Mr. Cochrane's expertise is in the structuring, negotiation, execution and funding of royalty and stream financing contracts around the world, across dozens of projects, totalling over $2 billion.  Prior to Sandstorm, he spent nine years in investment banking and equity capital markets with National Bank Financial where he covered the resource, clean-tech and energy technology sectors. In addition, Mr. Cochrane is currently a board member of Nevada Copper Corp.

David Cross (Chief Financial Officer and Corporate Secretary)

Mr. Cross, a Certified Public Accountant, Certified Management Accountant, started his accounting career at a Chartered Accountant firm in 1997.  Currently he is a partner of Cross Davis & Company LLP, an accounting firm founded in 2010, which is focused on providing accounting and management services for publicly traded companies.  Mr. Cross also serves as the Chief Financial Officer and director of several publicly listed companies.  Mr Cross will not be a director of BRC.

The Zebediela Project

The Zebediela Nickel Project extends over three separate adjacent prospecting rights in the Limpopo Province of South Africa. All three rights are held by LPU, which in turn is 100% owned by UML.  ZEB owns 74% of the issued share capital of UML.   The Zebediela Nickel Project is located on the Northern Limb of the Bushveld Complex.  The Bushveld Complex is thought to be the world's largest repository of PGEs, chrome, and vanadium. The project is immediately adjacent to, and up-dip from, Ivanhoe Mines Platreef Project, and about 15 km along strike from Anglo American Platinum's flagship Mogalakwena Mining Complex, which Anglo American Platinum claim is the highest margin PGM producer in the industry. A November 2020 feasibility study on Ivanhoe Mines' Platreef Project concluded it could have production of 4.4 Mtpa of PGM with previous studies for the same project indicating 0.34% nickel, 0.17% copper and 4.40 g/t 3PGE+Au (platinum + palladium + rhodium + gold) at the project (Ivanhoe Mines Updated DFS, 2020).  In its annual results to December 2019 Anglo American Platinum reported that Mogalakwena had ore reserves of 1195.3 Mt, plus an additional 60.8 Mt on the primary stockpiles (Ore Reserves and mineral Resources Report, 2019).

In March 2012 an assessment of the nickel mineralization in the Lower Zone Uitloop II body was completed by MSA Geoservices (Proprietary) Limited as part of a Preliminary Economic Assessment of the Project.  This NI 43-101 compliant report concluded that the Project contained an Indicated Resource of 485.4 million tonnes averaging 0.245% nickel to be stated, with an additional Inferred Resources of 1,115.1 million tonnes at 0.248% nickel.  The directors believe this level of resource would rank the Project amongst the top ten largest nickel sulphide resources globally.

BRC has recently concluded a NI43-101 compliant report on the Zebediela Project which is available on the Company's website or via the following link http://www.rns-pdf.londonstockexchange.com/rns/9390Q_1-2021-3-2.pdf

This report identifies the prospective targets (including a new target) and makes recommendations for the development of the Project.  The report identifies three targets which are as follows:

·    Target Type 1 (Lower Zone): A low-grade, disseminated nickel sulphides mineralization within the Lower Zone Uitloop I body, which also contains significant iron minerals in the form of magnetite which is also a potential by-product and further low-grade, disseminated nickel sulphides associated with the Lower Zone Uitloop II hosted mostly in a thick package of alternating dunite, serpentinized dunite, serpentinite, pyroxenite and harzburgite.

·    Target Type 2: referred to as Platreef/Critical Zone mineralization, this type is characterized by two styles, Platreef stratabound and contact-style. Platreef stratabound mineralized zones contain Ni-Cu-PGE mineralization hosted by disseminated and/or bleb sulphides in a stratigraphic unit up to 150 m thick. Contact-style Ni-Cu-PGE mineralization is intimately associated with the footwall contact of the intrusion. Both styles of mineralization have been intercepted in historical and current boreholes on the Zebediela Project.

·    Target Type 3: comprises nickel-rich massive-sulphide bodies which may be located within the ultramafic lithologies close to, or on the footwall contact, or injected up to several hundred metres into the granitic rocks of the footwall.

The New NI 43-101 recommends a two phase program, totalling US$950,000 (C$1.2M) as follows:

·    Phase 1 - obtain Mining Right and complete associated environmental authorisation process in order to secure long term title across the three prospecting rights that make up the Project; and

·    Phase 2 - a six hole diamond drilling program totalling approximately 3,600 m targeting the newly discovered Platreef style mineralization (Target 2 above) with the aim of proving the strike and dip extent of the mineralization, and for resource definition drilling and producing an outline maiden PGE resources.

Following Completion, BRC will retain ownership of the Project and become with URU continuing as operator of the Zebediela Project and therefore will conduct the work programme set out above.

There are no profits or losses attributable to ZEB, as it is a holding company for the Project.

Background to and Reasons for the directors recommending the Disposal

The Company's current market capitalisation is just over £4.4m.  Over the 12 months the Company has been valued as high as approximately £5 million GBP and as low as £700,000.  The Board believes that this valuation does not reflect the current value of the Project or the potential exploration upside.  This is partly due to the lower trading volumes in the Company's shares, which prevents shareholders from trading in meaningful volumes or with any frequency. The Company has seen projects it believes to be similar achieve much higher valuations when owned by TSXV listed entities.  The Board believe by selling the Project to a TSXV company it will be able to obtain a higher valuation of the shares it holds in that vehicle than the current value placed on the Company on the AIM Market.

Furthermore there are large number of Africa focused mining and exploration companies that are listed on the TSX or the TSXV and, therefore there is a listed peer group to provide comparators to BRC.

Summary of the Sale Agreement

Under the Sale Agreement the Company has agreed to sale and BRC have agreed to buy the entire issued and outstanding share capital of Zebediela Nickel Company (Pty) Ltd. ("ZEB") in consideration for which BRC will issue to the Company the Consideration Shares.  Completion of the Disposal is subject to a number of conditions inter alia:

·     the completion of the Concurrent Financing of CND $2,000,000 by BRC;

·     the completion of the Consolidation;

·     receipt of all required shareholder, regulatory and third-party consents, including approval of the TSXV and the shareholders of the Company; and

·     satisfaction of other customary closing conditions.

Pursuant to the terms of the Sale Agreement URU has agreed to transfer its rights to buy out the Royalty to BRC.  The Company has also provided certain warranties to BRC in respect of ZEB and the Project.

Interests of the Directors in BRC

It is the expectation of BRC that Mr John Zorbas will invest CAD 75,000 in the proposed Concurrent Financing by BRC to show his support for the continued development of the Project, and the valuation of the transaction agreed between the Company and BRC. Details regarding the participation of Mr Zorbas, and other directors, remain to be confirmed and will be notified to Shareholders.

The Company's operations following the Disposal

On completion of the Disposal, the Board anticipates that the Company will have a cash balance of approximately CAD $60,000. The Company intends to use the funds available to it following the Disposal to provide working capital for the day-to-day business of the Company and to develop its other projects, which include the application for mining prospecting rights in land neighbouring the Zebediela Project.

Assuming that the Transaction is completed, URU will have an interest in 41,000,000 common shares of BRC, representing approximately 79.85% of the issued common share capital of BRC.

Shareholders should note that, should the Transaction proceed, the disposal of ZEB is deemed to be a fundamental change of change of business pursuant to Rule 15 of the AIM Rules for Companies. Accordingly, at the AGM shareholders of URU will be asked to consent to the disposal of ZEB.  For the avoidance of doubt, URU will not become an AIM Rule 15 company as a consequence of the Transaction.

URU intends to retain ownership of the common shares of BRC for the foreseeable future and these shares will be subject to an escrow period under the rules of the TSXV. The Company will review strategic options for the block of shares held by the Company as the Project develops. This may include a sale of some or all of the shares by the Company, or a distribution of shares to Shareholders of the Company by dividend in specie or demerger. 

Board Recommendation

The Board considers the proposed Disposal of the Zebediela Project to be in the best interests of the Shareholders and recommends Shareholders vote to approve the proposed Disposal at the AGM. For the reasons set out in the Circular being sent to shareholders (and available via the Company's website)and following the process undertaken by the Board, the Board is of the view that the Disposal is in the best interests of Shareholders.

Accordingly, the Board unanimously considers each of the Resolutions to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board and its management recommends that Shareholders vote in favour of the Resolutions to be proposed at the Meeting of Shareholders as they intend to do in respect of their own holdings.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS ⁽¹⁾

(1) All times shown in this document are Toronto Eastern Standard Time / London GMT times unless otherwise stated. The dates and times given are indicative only and are based the Company's current expectations and may be subject to change. If any of the times and/or dates above change, the revised times and/or dates will be notified to Shareholders by announcement through the Regulatory News Service of the London Stock Exchange.

This announcement should be read in conjunction with the full text of the Circular to be posted to Shareholders on 05 March 2021, copies of which are available on the Company's website www.urumetals.com/investor-relations/circulars-and-publications.  The same definitions apply throughout this announcement as are applied in the Circular

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For further information, please contact:

URU Metals Limited

John Zorbas

(Chief Executive Officer)

 +1 416 504 3978

SP Angel Corporate Finance LLP

(Nominated Adviser and Broker)

Ewan Leggat / Charlie Bouverat

+ 44 (0) 203 470 0470