Critical Min Regulatory News (CMRS)

7 December 2022

Caerus Mineral Resources PLC

('Caerus' or the 'Company')

Sale of Cyprus Assets

Caerus Mineral Resources plc (LON:CMRS) is pleased to announce it has entered into a binding heads of agreement (the "Heads") with PM Ploutonic Metals Ltd ("Ploutonic") and Indo-European Mining PR Ltd ("Indo"), pursuant to which Caerus will transfer its Cyprus assets to Ploutonic and Indo (together, the "Purchasers"). The transaction marks the end of the Company's direct involvement in Cyprus and reflects its broader strategy to seek larger development opportunities in the battery metals sector that is aligned to or derived from its partnership with EV Metals (EVM).

Terms of the Agreement

Pursuant to the Heads, Caerus will sell and the Purchasers will buy the entire issued share capital (the "Cyprus Shares") of each of New Cyprus Copper PA Ltd (NCC) and GC Gold Mines (Cyprus) Limited (together, the "Cyprus Companies"), in addition to intercompany loans due from the Cyprus Companies to Caerus.

Caerus will transfer the Cyprus Shares and intercompany loans to an SPV newly formed by the Purchasers (the "SPV") on or just after completion.

The Purchasers will pay US$528,001 in cash to Caerus in the following manner:

(1) US$100,000 in cash (the "First Payment") payable by Ploutonic or Indo on or just after the signing of a formal agreement restating the terms of the Heads (the "Formal Agreement");

(2) US$1 in cash (the "Second Payment") payable ten days after the date of the First Payment to effect the transfer of the Cyprus Companies; and

(3) US$428,000 payable by either the SPV or Ploutonic or Indo in cash within ninety days of the Second Payment.

Troulli Resource Expansion Payment

The new owners plan to expand the Troulli resource along strike to Kokkinopetra, potentially connecting the two deposits and defining sufficient resources to build a mine. In the event that the SPV produces a new JORC or NI 43-101 compliant mineral resources estimate, demonstrating 7.75 million tonnes or more at a 0.5% copper equivalent (CuEq*) cut-off grade or higher, the SPV will pay Caerus an additional US$432,000 in cash. Caerus may procure a second independent resource estimate of the Troulli project if it deems it necessary.

Commenting Chris Lambert, Chairman, stated:

The successful sale of the Company's Cyprus portfolio follows the new management's extensive review of the business and is an important milestone in Caerus' evolution. The transaction secures funds for the Company and removes legal exposure to BMG Resources Limited and its disputed A$2m put option. As announced in November, the sale follows the important steps taken by the board to implement enhanced corporate governance within the Company. This has led to the recovery of value for shareholders via the settlement with previous directors that saw the return of 4.9m Company shares, the cancellation of 10.9m warrants and a one-off payment.

Critically the Company and its management are now able to wholly focus on executing Caerus' evolved strategy to invest in larger scale opportunities aligned with, and gained through, the EVM partnership. In this regard we are in advanced discussions regarding several development opportunities and look forward to updating the market in the coming weeks

Conditions precedent

The Heads are subject to the following conditions precedent:

(1) completion by Caerus to its satisfaction (in its sole discretion) of all necessary due diligence investigations in respect of the SPV (as appropriate for the transaction) on or before December 16, 2022;

(2) completion by the Purchasers to their satisfaction (in their sole discretion) of all necessary due diligence investigations in respect of the Cyprus Companies on or before December 16, 2022;

(3) execution of the Formal Agreement as may be necessary which shall be consistent with, but may be more expansive and precise than, the Heads; and

(4) receipt of all necessary government, regulatory, shareholder and third-party approvals, in respect of the transaction and contemplated in the Heads.

If the conditions are not satisfied (or waived, partially or completely in writing) before December 31, 2022 or such later date(s) as agreed by the parties, the agreement constituted by the Heads may be terminated by either party by notice in writing to the other party upon which each party will be released from their obligations under the Heads, except as otherwise provided under the Heads. The parties will use their best efforts to ensure that the conditions are satisfied.

Customary warranties for an agreement of this type are being provided.

Related Parties

Ploutonic and Indo are significant shareholders of the Company holding as at the date of this announcement 9.42% and 6.93% per cent. respectively of the voting rights of the Company. The beneficial owner of Ploutonic is Andrew Daniels, a previous Non-Executive Director of the Company, and the beneficial owner of Indo is Pierre Richard. The independent directors of the Company have determined that the terms of the proposed transaction are fair and reasonable and in the best interest of its shareholders.

* CuEq (%) is to be calculated as = Cu(%) x 0.871 + Au(g/t) x 0.65

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