Metalnrg Plc Regulatory News (MNRG)

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 24th December 2020

MetalNRG plc

(The "Company" or "MetalNRG")

UPDATE ON THE LAKE VICTORIA GOLD PLANNED ACQUISITION

MetalNRG plc (LON:MNRG), the natural resource investing and exploration company, provides further details relating to the planned acquisition of Lake Victoria Gold Ltd ("LVG") (announced 20th October 2020).

LVG is the operator of the Imwelo Project in Tanzania which has a JORC (2012)1 compliant Total Resource of 4.73Mt @ 1.92g/t gold2 based on Resource drilling completed in 2016 and a Mineral Resource Estimate in 2017, for a total of 291,600 oz resources. In addition, an open-pit mining Pre-Feasibility Study ("PFS") and underground mining Scoping Study was completed by Measured Group Pty Ltd ("MG") for the Imwelo Project in June 2017 (the "Pre-Feasibility and Scoping Study Report" or "2017 PFS")3.

The 2017 PFS considered a conventional drill and blast, load and haul open-pit mining operation based on mining open-pit Reserves of 1.362Mt at 2.22g/t Au for a total 87.66koz gold recovered over 4 years, based on a gold price of US$1,250/oz. The scoping study considered a transition from open-pit mining to underground mining.

One of the areas the PFS relies on includes resources from PML 2637, which LVG has an option agreement to acquire for US$ 50,000 on. The counter party to LVG for the option agreement has died and the family members who inherited the option agreement have been contacted and negotiations are underway to agree similar terms, however this will take some time. As a result, both parties have agreed to remove all reference to the Mineral Resources associated with PM 2637 from the proposed transaction, this amounts to a 90,000 oz reduction in contained gold and enter into a variation agreement (the "Variation Agreement") to the Bid Implementation agreement that was signed on 19th October 2020.

The Variation Agreement outlines the varied terms of the Bid Implementation Agreement that the two companies have signed up to, under which the total number of MetalNRG shares as potential consideration will remain at 750,037,391, but will be transferred in two tranches and MetalNRG will withhold 34,092,609 MetalNRG shares for a period of 6 months from the total possible consideration.

The 1st tranche of MetalNRG shares is transferable upon acceptance, by the LVG shareholders, of the proposed bid and the transfer of 100% of the LVG shares to MetalNRG, the 2nd tranche of MetalNRG shares is transferable upon completion and the successful update of the PFS and achieving specific milestones with regards to NPV of the project.

The terms of the Variation Agreement are as follows:

· Upon acceptance of the transaction, by LVG shareholders and the transfer of 100% of the LVG shares to MetalNRG, MetalNRG will release 500,024,927 MetalNRG shares to LVG shareholders as the 1st tranche transfer. The value of each MetalNRG share is £0.008.

· The parties have agreed that a 2nd tranche of MetalNRG shares will be released post revision of the PFS by the Measured Group and MetalNRG releasing an RNS with the update to market of the results of the revised 2021 PFS outlining the net present value ("NPV") of the project.

· The 2nd tranche of MetalNRG shares, to be issued in a direct ratio related to the 2017 NPV and the revised 2021 PFS NPV to be completed in early 2021.The maximum amount of MetalNRG shares that can be transferred in the 2nd tranche is 215,919,855 at a price which cannot be below £0.008 and which can be higher if the then MetalNRG share price closes higher on the day before the announcement to market is made.

· It is further agreed that LVG investors will be allocated one MetalNRG Board position as opposed to the two Board positions originally anticipated on acceptance of the transaction by LVG shareholders. A second Board appointment for a Non-Executive Director representing LVG shareholders will be allocated upon completion of the 2021 PFS.

· MetalNRG is committed to working towards achieving production from the LVG assets within a 10-to-12-month period from the closure of the transaction with LVG.

As a result of the changes outlined above, we are working towards a revised timetable and plan to submit an updated Prospectus to the Financial Conduct Authority by the end of the first working week in January 2021.

Rolf Gerritsen, CEO of MetalNRG commented:

 "We continue to be satisfied that the business opportunity from the LVG transaction remains valid for MetalNRG and that the questions around the option agreement on PML 2637 will be resolved in the New Year. We are pleased that the LVG Board has recognised the situation and worked with us to find a suitable commercial solution to the changes and look forward to working with LVG on completion."

Competent Person Statement

Technical information in this announcement has been reviewed by Christian Schaffalitzky, the Company's Non-Executive Director. Christian has over 40 years' experience in the industry, having worked as a geological consultant and minerals exploration specialist for CSA Global which he founded, as well as listed mining companies and is currently Chairman of Eurasia Mining plc. He holds a BA Moderatorship in Geology from Trinity College Dublin (equivalent to BSc. Hons), is a European Geologist, a Fellow of the Institute of Materials, Minerals & Mining and a Chartered Engineer.

The person who arranged for the release of this information is Rolf Gerritsen, the Company's Chief Executive Officer.

References:

1. Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 edition.

2. Source: Measured Group Pty Ltd, Geology and Resource Estimate Report, Imwelo Project, Tanzania, Lake Victoria Gold Ltd, dated August 2020. Total tonnages rounded. Measured Resources: 414,000t @ 3.15g/t Au; Indicated Resources:1,530,300t @ 1.95g/t Au; and Indicated Resources: 2,781,500t @ 1.56g/t Au.

3. Source: Measured Group Pty Ltd, Lake Victoria Gold Ltd Imwelo Project, Pre-Feasibility and Scoping Study Report, report number MG159_Report_01, dated June 2017.

For further information, please contact: