Keras Resources Regulatory News (KRS)

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

18 May 2023

Keras Resources plc ('Keras' or the 'Company')

Nayéga Agreement & Strategic Update

Keras Resources plc (AIM: KRS) is pleased to announce that it has agreed with the Republic of Togo (the "State") on 17 May 2023 ("Agreement") on a way forward for the Nayéga Manganese project ("Nayéga") in Northern Togo.

TRANSACTION OVERVIEW

· Keras and the State have agreed that Nayéga is a Togolese strategic asset and the exploitation permit will be awarded to Société Togolaise de Manganèse, a Togolese incorporated company 100% owned by the State ("STM") and Keras will no longer pursue the Nayéga exploitation permit;

· The Company will transfer all its intellectual knowledge on Nayéga to the State and provide advisory and brokerage services to fast track the development of Nayéga;

· In addition Keras will initialise the process to liquidate its interest in SGM, the company through which Keras holds its interest in Nayéga;

· The State will pay Keras a cash consideration of US$1.7m (one million seven hundred thousand United States dollars) ("Cash Payment") on 17 July 2023 and thereafter;

o  Keras will be paid an advisory fee of 1.5% (one and a half percent) of gross revenue generated from the Nayéga mine for the provision of advisory services for 3 (three) years ; and

o  Keras will be paid 6.0% (six percent) of gross revenue generated from the Nayéga mine for the provision of brokerage services for the lesser of 3.5 (three and a half) years or 900,000 (nine hundred thousand) tonnes of beneficiated manganese ore produced and sold from Nayéga.

STRATEGIC OVERVIEW

· Keras has now completed its transition into a fully focussed North American business targeting the robust organic fertiliser market through Diamond Creek, the Company's high-grade organic rock phosphate mine located in Utah, wholly owned through Falcon Isle Resources LLC ("Falcon Isle");

· The Cash Payment, after costs, will be used to fund the second US$800,000 tranche for the acquisition of Falcon Isle in July 2022, and for general working capital. The ongoing advisory and brokerage fees will significantly augment the already cashflow-positive Diamond Creek mine. The Company is now fully funded to fast-track the following projects in Utah:

o  Start the exploration programme to prove up a NI 43-101 compliant mineral resource;

o Conversion of the current mining permit to a large-scale mining permit which will create significant flexibility in medium to long term mining operations;

o Completion of the build of the Granulator Plant; and

o Research into the development of liquid organic products from our existing product streams in order to access markets not already served.

Graham Stacey, CEO of Keras, commented, "This transaction not only finalises Keras's transition into a fully focussed high grade organic fertiliser producer in the United States but draws a line through the uncertainty related to the Nayéga asset.

This Agreement is a reflection of the constructive relationship we have with the State and sets a very clear picture of how the asset will now be developed to the benefit all stakeholders and rewards Keras for its investment to date.

The upfront Cash Payment due on 17 July 2023 and ongoing cashflows associated with this Agreement underpins the already robust Diamond Creek mine economics which Keras will continue to develop  into the premier organic phosphate producer in the US."

AIM Rule disclosures

The unaudited loss for the year ended 31 December 2022 attributable to the assets being disposed of was £75,000.

The unaudited estimated carrying value of the assets being disposed of was approximately £1.5 million.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Graham Stacey, Chief Executive Officer. This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following:

Notes:

Keras Resources (AIM: KRS) wholly owns the Diamond Creek organic phosphate mine in Utah, US. Diamond Creek is one of the highest-grade organic phosphate deposits in the US and is a fully integrated mine to market operation with in-house mining and processing facilities. The operation produces a variety of organic phosphate products that can be tailored to customer organic fertiliser requirements.

The Company is focused on continuing to build market share in the fast-growing US organic fertiliser market and build Diamond Creek into the premier organic phosphate producer in the US.