RMP.L Regulatory News (RMP)

25 March 2021

HIGHLIGHTS

· Red Emperor Resources NL ("Red Emperor" or the "Company") intends to acquire Great Northern Palladium Pty Ltd ("GNP") which owns 80%, and holds an option over the remaining 20%, of Panton Sill Pty Ltd, the holder of the Panton Platinum Group Metals ("PGM") Project ("Panton PGM Project") in the Kimberley region of Western Australia (the "Proposed Acquisition")

· All equity consideration of A$17.5m (shares and options) to be paid to GNP's shareholders

· Pre-existing Independent JORC(2012) Mineral Resource Estimate ("MRE") of:

o 14.3Mt @ 2.39g/t Pd, 2.19g/t Pt, 0.27% Ni for 2.06Moz Pd/Pt (refer to Table One for more details)

· Former Stillwater Mining Company Managing Director Mick McMullen to be appointed as a strategic adviser and experienced company director, Justin Tremain, to join the Board, both on completion of the Proposed Acquisition

· MRE outcrops at surface and remains OPEN, along strike and at depth

· MRE covers approximately 3.5 kilometres of the circa 12 kilometres of mapped outcropping PGM-bearing chromite reefs (remaining 8.5km relatively untested). No significant exploration performed for almost 20 years

· Located in 'Tier One' mining jurisdiction of Western Australia

· Panton benefits from having a higher palladium grade relative to platinum grade, at a time of record palladium prices (c.US$2,400/ounce)

· Historic studies on the Panton PGM Project undertaken when prevailing palladium prices were much lower

· Step-out drilling to test for extensions to the MRE to commence upon completion of the Proposed Acquisition, along with metallurgical and mining studies

· Located on granted mining leases with excellent infrastructure including nearby (c.1 kilometre away) sealed highway and an existing exploration decline

· A$10M equity raising to be undertaken at a price of A$0.10 per share on a post consolidated basis (14:100 consolidation) to provide strong financial position from which to advance the Panton PGM Project

· Enterprise value of approximately A$26M at the fund raising price with cash of approximately A$9M upon successful completion of the Proposed Acquisition and associated fundraising

· The Company will seek shareholder approval for the Proposed Acquisition under ASX Listing Rule 11.1.2 and re-comply with Chapters 1 and 2 of the ASX Listing Rules

· The Proposed Acquisition constitutes a reverse takeover transaction under the AIM Rules for Companies ("AIM Rules") thereby also requiring, inter alia, shareholder approval pursuant to AIM Rule 14 and publication of an AIM Admission Document. In light of certain differences between the ASX Listing Rules and the AIM Rules and the chronology, processes and requirements of the two exchanges, the Company is currently evaluating structuring options with its Nominated Adviser with respect to the enlarged group's dual listing on AIM

Red Emperor Resources NL (ASX: RMP) ("Red Emperor" or the "Company") is pleased to announce that it has entered into Heads of Agreement ("HoA") with the major shareholders of Great Northern Palladium Pty Ltd (ACN 645 861 196) ("GNP") to acquire 100% of the issued share capital of GNP (the "Proposed Acquisition") for all share consideration and the issue of certain options as detailed further below.

GNP holds 80% of the issued share capital of Panton Sill Pty Ltd (ACN 157 842 530) ("Panton Sill"). Panton Sill holds the granted mining leases that cover the Panton PGM Project ("Panton PGM Project" or "Panton") located approximately 60 kilometres north of Halls Creek in the East Kimberley region of Western Australia. The remaining 20% of Panton Sill is held by Panoramic Resources Limited (ASX: PAN) ("Panoramic"). Panoramic has granted an option to GNP for it to acquire the remaining 20% interest in Panton Sill ("Panton Option"), as detailed further below. Upon completion of the Proposed Acquisition, Red Emperor intends to exercise the Panton Option such that it would become the ultimate 100% owner of the Panton PGM Project.

If completed, the Proposed Acquisition will result in Red Emperor changing the nature of its activities from oil and gas exploration to mineral exploration and development. Accordingly, in order to effect the Proposed Acquisition, the Company will, inter alia, be required to re-comply with the requirements of Chapters 1 and 2 of the ASX Listing Rules. This will include the Company seeking shareholder approval for a proposed share consolidation and capital raising pursuant to a prospectus under the ASX Listing Rules. Due to its size and nature, the Proposed Acquisition also constitutes a reverse takeover under the AIM Rules for Companies ("AIM Rules"), requiring, inter alia, publication of an AIM Admission Document and shareholder approval pursuant to AIM Rule 14. In light of certain differences between the ASX Listing Rules and the AIM Rules and the chronology, processes and requirements of the two stock exchanges, the Company is currently evaluating structuring options with its Nominated Adviser with respect to the enlarged group's dual listing on AIM.

The Company also intends to seek shareholder approval for a change of company name to reflect its new direction. Further details of the consolidation and proposed capital raising are set out below.

Panton PGM Project, Western Australia

Location

The Panton PGM Project is located 60 kilometres north of Halls Creek and just 1 kilometre off the Great Northern Highway, in the East Kimberley Region of Western Australia (refer to Figure One). The Great Northern Highway also provides direct access to the Port of Wyndham.

The Panton PGM Project is held under three granted Mining Leases (M80/103, M80/104 and M80/105) covering an area of approximately 23km2.

Figure One | Project Location

The image can be viewed at the following weblink: http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf

Mineral Resource Estimate

Past exploration and drilling, predominantly undertaken by Platinum Australia Ltd ("Platinum Australia") in the early 2000s, resulted in the delineation of a Mineral Resource Estimate ("MRE") for the deposit undertaken by Cube Consulting Pty Ltd ("Cube") in April 2003. In August 2015, Cube reviewed and re-reported its 2003 MRE model to report the MRE in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves 2012 ("JORC 2012"). The focus of the JORC 2012 MRE was on two of the chromite layers known as the Top (101) and Middle (201) Reefs, domained into the A, B, C and D blocks (refer to Figure Two):

Table One | JORC 2012 Mineral Resource Estimate by Cube (August 2015)

The MRE was based on previous drilling at Panton comprising historical diamond drilling (30 holes or 9,524 metres completed prior to 2001), reverse circulation ("RC") (29 holes for 2,366 metres) and more recent diamond drilling (166 holes for 34,410 metres) completed by Platinum Australia. The MRE also included surface trenching and underground channel samples (1,391 metres) conducted by Platinum Australia between 2001 and 2003 in an exploration decline which accessed the upper chromite reef.

No significant exploration has been conducted on the Panton PGM Project for almost 20 years.

The modelled chromite reefs have an unfolded strike length of approximately 3.5 kilometres. Historical drilling has been focused on the A, B, C and D chromite reefs and an approximate 8.5 kilometres of mapped PGM-bearing chromite reefs remain largely untested by drilling.

Figure Two | Resource Wireframes showing the Panton 101 and 201 reef system

The image can be viewed at the following weblink: http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf

The Panton mineralisation occurs within a layered, differentiated mafic-ultramafic intrusion referred to as the Panton intrusive. High-grade PGM mineralisation is hosted within two stratiform chromite reefs, the Top (101) and Middle (201) reefs, within the ultramafic sequence. The Panton deposit is analogous to the chromite reefs in the Bushveld Complex of South Africa which are the world's largest source of PGMs. However, a key point of difference of Panton is the higher palladium grade relative to platinum grade. Historically, this has been a disadvantage to the Panton PGM Project given that palladium prices have historically been significantly below platinum prices. Presently, the palladium price is approximately twice the platinum price.

Project History

The Panton deposit was discovered by the Geological Survey of Western Australia from surface mapping conducted in the mid-1960s. Pickland Mather and Co. drilled the first hole to test the mafic-ultramafic complex in 1970, followed by Minsaco Resources which drilled 30 diamond holes between 1976 and 1987. In 1989, Pancontinental Mining Limited and Degussa Exploration drilled a further 32 drill holes and defined a non-JORC compliant resource. Platinum Australia acquired the project in 2000 and conducted the majority of the drilling, comprising 166 holes for 34,410 metres, leading to the delineation of a maiden JORC Mineral Resource Estimate. In late 2006, Sally Malay Mining Limited (now Panoramic) entered into a joint venture arrangement with Platinum Australia seeking to develop the Panton PGM Project.

Figure Three | Exploration Portal and Decline Access

The image can be viewed at the following weblink: http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf

A feasibility study was completed by Platinum Australia in 2003 and reviewed in March 2012 which assumed metal prices of A$890/ounce and A$2,000/ounce for palladium and platinum respectively compared to today's prices of approximately A$3,100/ounce and A$1,500/ounce respectively.

Panoramic subsequently purchased the Panton PGM Project from Platinum Australia in May 2012 and conducted a wide range of metallurgical test work programmes on the Panton ore.

Geology

The Panton Complex is a layered mafic-ultramafic intrusion which is a 10km long and 2.5km wide, south-west plunging synclinal layered intrusion situated within the Central Zone of the Halls Creek Orogen of Western Australia (refer to Figures One and Five). The Panton Complex displays many geological similarities to the Bushveld Complex in South Africa on a smaller scale.

The lower 750 metres of the Panton intrusion comprises a massive variable olivine orthocumulate ultramafic intrusive phase, primarily dunite, with various other phases recognised including wehrlite, lherzolite and harzburgite. Various stratiform reefs of PGM-bearing cumulate chromitite-magnetite occur in the lower ultramafic phase at Panton. Horizons vary in thickness from 0.2 metres to 8 metres in thickness and multiple stacked reefs are common. The majority of historic drilling has been focused on the ultramafic-hosted chromite reefs of the A, B and C zones in the northern part of the Panton Complex (refer to Figures Two and Five). These reefs are interpreted to be very similar to the 'Plat-reef style' mineralisation that occurs at the ultramafic base of the Bushveld Complex (refer to Figure Four).

The top 900 metres of the Panton intrusion comprises mainly layered mafic phases that vary from gabbro, gabbronorite, norite then transitions upward to anorthosite and leucogabbro through to a ferrogabbro or magnetite-bearing gabbro at the top of the sequence (refer to Figure Five). PGM-bearing stratiform reefs are known to occur within the upper layered mafic sequences however these reefs have received much less exploration attention. These upper chromite-reefs are interpreted to occur in a similar geological setting to the 'Merensky-style' chromite reefs that occur primarily at the top of the anorthosite package known as the 'Upper Critical Zone' in the Bushveld Complex (refer to Figure Four). The Merensky Reefs of the Bushveld Complex have been the principal source of mined PGMs to date. Interestingly, more recently in the Bushveld, much thicker zones of the Merensky Reef have been mined that are known as 'potholes'. The formation of these extremely rich 'pot-holes' are poorly understood but are extremely important from an economic perspective.

Figure Four | North-South Oriented Cross section of the Bushveld Layered Mafic-Ultramafic Complex

The image can be viewed at the following weblink: http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf

The Panton Complex has been folded into a syncline such that the shallowest chromite reefs occur around the outer edges and become deeper towards the centre of the complex (refer to Figure Five). The syncline axis is interpreted to plunge toward the southwest. In addition to folding, the Panton Complex has been subject to several stages of faulting, many of which offset the chromite reefs including a major north-south oriented fault that offsets the C zone to the south which is now known as the D zone (refer to Figure Five).

Figure Five | Panton PGM Project's Geology and Mapped Outcropping PGM-bearing Chromite Reefs

The image can be viewed at the following weblink: http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf

Sampling and Sub-sampling Techniques

Diamond drill core, Reverse Circulation (RC) chips and surface trench channel sampling are the three primary sample types. A relatively small number of samples were from decline, wall and face sampling undertaken in an exploration decline. Diamond core is the predominant sample type (HQ, HQ3, NQ and NQ2 sizes) and was orientated, geologically logged and sampled to lithological contacts or changes in the nature of mineralisation. Nominal sample lengths of 1.0m with a minimum sample length of 0.25m. NQ and NQ2 core was half core sampled. HQ and HQ3 core was quarter core sampled. RC chips sampled at 1m or 0.5m intervals. Trench channel chip sampling was undertaken from the base or as close to the base of the trench as possible. Each trench was sampled continuously over the entire length. Sample lengths varied from 0.15m to 2m. Sample boundaries were based on geological contacts and changes in the nature of mineralisation. Decline sampling, wall and face sampling was undertaken on geologically marked up channels approximately 1.5m from the floor. Sampled intervals varied from 0.25 to 0.5m across the full width of mineralisation.

Resource Classification

Resource blocks have been classified as Measured, Indicated or Inferred on the basis of a range of criteria. The key criteria considered were geological continuity and confidence in reef volume; data spacing and distribution; appropriateness of the modelling technique; and estimation quality parameters such as search strategy, number of informing composite data, average distance from informing composites and kriging variance.

Data spacing within the most densely drilled area of the project ranges from 25x25 to 50x100 metres.

Measured Resources are defined where geological continuity risk is considered low, confidence in metal continuity is considered high due to the data spacing; and where the estimation quality is high as indicated by a low estimation block variance (within the first 30th percentile). Generally, the Measured part of the Mineral Resource blocks has been estimated using 10 or more composite data at an average distance of less than 200 metres (within the modelled range of most variograms).

Indicated Resources are defined where geological and metal continuity risk is considered moderate to low. Generally, the Indicated part of the Mineral Resource blocks has been estimated using 6 or more composite data at an average distance of less than 300 metres (within the modelled range of some of the variograms).

Inferred Resources are defined by that area of the Mineral Resource where there is moderate confidence in the continuity of the geological model and metal where drill spacing is wider than 200m by 200m.

Sample Analysis

The standard assaying techniques used were lead or nickel collection fire assay with a Mass Spectrometry (MS) finish for Au, Pd, Pt and peroxide fusion using HCl acid to dissolve the melt with an Optical Emission Spectrometry (OES) finish for As, Co, Cr, Cu, Ni and S. These methods are considered total digestion methods. A fire assay nickel sulphide collection technique was preferred (for samples containing chromite) to lead collection as it is efficient in collecting all PGEs and gold from a sample.

Estimation Methodology

The estimation methodology used was Ordinary Kriging.

Variogram ranges and search distances were defined in the vertical plane, with ranges for all attributes estimated significantly exceeding the data spacing in all domains.

A search radius was optimised for each domain based on the special statistics of the variogram model. The search orientation and anisotropy were based on the modelled variogram for each domain.

Estimation block size used was 50m x 50m in long section projection.

No assumptions of specific selective mining units were made as it was assumed that full seam width mining would be undertaken.

The mineralised domain acted as a hard boundary to control the Mineral Resource volume and estimate.

Block model validation was undertaken using the comparison of block model estimate to drill hole data composites of horizontal width and density weighted mean grades.

A validation estimate was undertaken using inverse distance squared and compared to the OK estimate.

Cut-off Grade

No low-grade cut-off was used for reporting. The mineralisation was defined using a combination of geological information and grade criteria and the reported estimated grades represent a total metal content of mineralised material - all of which was expected to be mined, without selectivity due to the thin vein nature and high value of the mineralisation.

Mining and Other Material Modifying Factors

Mining of the deposit is envisaged to be by open pit and underground methods. An assumption of non-selective total vein width mining was made in the estimation, no other mining factors were considered during the interpretation and 2D modelling of the mineralisation however mining dilution and mining loss are likely to be material factors in a combination of small open pit and underground exploitation. Minimum mining widths were not considered during the interpretation and 2D modelling of the mineralisation. No assumptions were made regarding environmental restrictions.

Metallurgy

Platinum Australia's feasibility study was based on a proposed processing plant incorporating standard crushing-grinding-floatation to produce a low grade concentrate which was then to be treated onsite though a patented Calcine-Leach-Metals Recovery process developed by Platinum Australia and Lonmin Plc.

Following acquisition of the project in 2012, Panoramic conducted a variety of metallurgical test work on Panton ore in order to establish the best processing strategies for the deposit. The test work comprised the following work programmes:

· Various laboratory flotation test work programmes at various grind sizes;

· Ore sorting test work to selectively remove waste rock;

· Magnetic separation processes; and

· QEMScan analysis for the identification of ore minerals.

Red Emperor intends to appoint a metallurgical and processing consultant with experience in PGMs to assess in detail the results of the previous test work and provide recommendations for further work in order to define the most effective technique for the extraction of PGMs from the Panton ore.

Tenure

The Panton PGM Project is located on three granted Mining Leases. Panton Sill is the registered holder of a 100% interest in each of the Mining Leases:

There are two historical royalty holders pursuant to agreements entered into by former owners of the Panton PGM Project unrelated to Red Emperor or GNP. A 0.5% net smelter return royalty is payable to Elemental Royalties Australia Pty Ltd in respect of any future production of chrome, cobalt, copper, gold, iridium, palladium, platinum, nickel, rhodium and ruthenium and a 2% net smelter return royalty is payable to Maverix Metals (Australia) Pty Ltd on any PGMs produced from the mining licences.

The three Mining Leases were granted pre-Native Title Act in Australia and hence are free of native title claim.

The previous owners of the Panton PGM Project have undertaken a substantial amount of work understanding the baseline conditions for flora, fauna, hydrology and waste characterisation. Such historic work will require updating but studies to date have not identified anything considered to be detrimental to obtaining future environmental approvals.

Further Details of the Proposed Acquisition

Background

The Proposed Acquisition involves the acquisition of GNP by Red Emperor. GNP was incorporated on 12 November 2020 for the purpose of acquiring the Panton PGM Project from Panoramic.

GNP acquired 80% of the issued securities of Panton Sill by way of a share sale and purchase agreement between GNP and Panoramic dated 6 December 2020 involving cash consideration of A$12M which settled on 17 December 2020. GNP's acquisition was funded by way of an A$12.5M equity raising from sophisticated and professional investors between 30 November 2020 and 7 December 2020.

Panoramic granted GNP an option until 17 June 2021 to acquire the remaining 20% of the issued capital of Panton Sill for additional consideration of A$3M. Subject to completing the proposed Capital Raising and re-compliance with Chapters 1 and 2 of the ASX Listing Rules, Red Emperor intends to procure GNP to exercise this option such that it and the enlarged group will then control 100% of the Panton PGM Project. It is currently intended that the Proposed Acquisition be completed during the option period and that exercise of the option is funded by Red Emperor.

AIM Rule Considerations

Red Emperor is also currently quoted on AIM. Due to its size and nature, the Proposed Acquisition constitutes a reverse takeover transaction under AIM Rule 14 thereby requiring the Company to, inter alia, produce and publish an AIM Admission Document and obtain shareholder approval for the Proposed Acquisition for the purposes of re-admitting the enlarged group to trading on AIM. In light of certain differences between the ASX Listing Rules and the AIM Rules and the chronology, processes and requirements of the two stock exchanges, the Company is currently evaluating structuring options with its Nominated Adviser with respect to the enlarged group's dual listing on AIM.

Terms of the Proposed Acquisition

Red Emperor entered into a binding HoA with the major shareholders of GNP on or about 25 January 2021 in relation to the proposed acquisition of the issued capital of GNP.

A summary of the material terms of the HoA is set out below:

(a) The major shareholders of GNP agreed to grant irrevocably to Red Emperor an exclusive and binding option exercisable until 30 June 2021 to acquire their GNP shares on the terms and conditions in the HoA. The major shareholders of GNP also agreed to procure that the remaining shareholders of GNP enter into sale agreements with Red Emperor in respect of their respective GNP shares.

(b) Subject to satisfaction (or waiver) of the Conditions Precedent (below), Red Emperor agreed to purchase, and the major shareholders of GNP agreed to sell, the GNP shares held by the major shareholders on the terms and conditions of the HoA.

(c) The option is exercisable by Red Emperor at any time commencing on the date of satisfaction (or waiver) of the Conditions Precedent and ending on 30 June 2021 (or such other date as the parties may agree in writing).

(d) Exercise of the option is subject to and conditional on the satisfaction (or waiver) of the following conditions precedent:

(i) Completion of due diligence by Red Emperor on GNP and its assets, including Panton Sill and the Mining Licences, to the satisfaction of Red Emperor in its sole discretion on or before lodgement with ASIC of the prospectus for the Capital Raising;

(ii) Red Emperor receiving valid applications for not less than A$7.5M pursuant to the Capital Raising for the issue of Red Emperor Shares at an issue price of 1.4 cents (pre-Consolidation) or such other terms as agreed between Red Emperor and GNP;

(iii) Red Emperor obtaining all necessary shareholder approvals pursuant to the ASX Listing Rules and the Corporations Act 2001 or any other law, including approval for the Consolidation, and for the issue of the Consideration Securities under Listing Rule 7.1 and under Listing Rule 11.1.2 to lawfully complete the matters set out in the HoA;

(iv) the Company obtaining all necessary regulatory approvals pursuant to the ASX Listing Rules, the Corporations Act and any other law to complete the matters set out in the HoA, including receipt of conditional approval for reinstatement of the Company's securities on ASX subject to compliance with Chapters 1 and 2 of the Listing Rules on terms and conditions reasonably acceptable to the Company;

(v) the Company satisfying all necessary regulatory requirements of the AIM Rules for Companies on the London Stock Exchange and its Nominated Adviser to complete the matters set out in the HoA;

(vi) the Company making separate offers under a short form agreement to each GNP shareholder (other than the major GNP shareholders) and each of those other GNP shareholders agreeing with the Company:

A. to sell their respective GNP shares to the Company pursuant to those offers;

B. to submit to any ASX-imposed escrow on the Consideration Securities; and

C. that on and from the issue of the Consideration Securities they have no claims against GNP or the Company in relation to any acts or omissions prior to settlement and any other release customary;

(vii) there being no material adverse change in the circumstances of GNP and Panton Sill and none of the warranties given by GNP and the major GNP shareholders becoming untrue, incorrect or misleading, each prior to the date of satisfaction (or waiver) of all other Conditions.

(together, the "Conditions Precedent").

If the Conditions Precedent are not satisfied (or waived in accordance with the HoA) by the End Date of 30 June 2021, any party may terminate the HoA by giving notice.

(e) (Consideration): Subject to valid exercise of the option, Red Emperor has agreed to issue an aggregate number of Red Emperor Shares ("Consideration Shares") equal to A$17.5M, based on a deemed issue price equal to the issue price under the Capital Raising, together with 1 option to acquire a Red Emperor Share exercisable at a price equal to the Capital Raising issue price on or before 3 years from the date of issue ("Consideration Options") for every 2 Consideration Shares issued, in consideration for the acquisition of all GNP shares. The total consideration for the GNP shares is to be apportioned pro rata to each GNP shareholder according to their shareholding in GNP at Settlement.

(f) (Settlement): Following exercise of the option under the HoA, settlement of the Acquisition will occur on that date which is 5 business days after the date that notice of exercise of the option is given (or such other date as agreed between the parties in writing).

The HoA otherwise contain representations, warranties and conditions considered standard for agreements of this nature.

Proposed Corporate Structure

A group structure diagram for Red Emperor upon successful completion of the Proposed Acquisition is set out below, assuming that the Panton Option is also exercised:

Figure Six | Group structure diagram for Red Emperor upon successful completion of the Proposed Acquisition

The image can be viewed at the following weblink: http://www.rns-pdf.londonstockexchange.com/rns/4657T_1-2021-3-25.pdf

Note: A number of dormant wholly-owned subsidiaries have been omitted.

Proposed Share Consolidation

In order to satisfy the requirements of Chapters 1 and 2 of the ASX Listing Rules, the Company proposes to undertake a 14:100 consolidation of its issued capital (the "Consolidation"). Unless otherwise stated, figures in this announcement are stated on a post-Consolidation basis.

Proposed Capital Raising

To assist the Company to re-comply with Chapters 1 and 2 of the ASX Listing Rules and to support the proposed rapid advancement of the Panton PGM Project post acquisition, including an aggressive step-out drilling programme, the Company intends, subject to shareholder approval, to conduct a capital raising of A$10M through the issue of 100,000,000 Shares (post-Consolidation) at an issue price of A$0.10 per share (the "Capital Raising").

The Capital Raising will be conducted pursuant to a prospectus to be lodged by the Company with the Australian Securities and Investments Commission ("ASIC") (the "Prospectus").

As at the date of this announcement, the Capital Raising is not proposed to be underwritten.

The Company intends to appoint 708 Capital Pty Ltd as Lead Manager to the Capital Raising and will pay the Lead Manager a fee of 6% of the amount of the Capital Raising.

In addition, the Company will issue, subject to Shareholder approval, a total of 6,000,000 options exercisable at A$0.12 on or before the date 3 years after the date of issue to the Company's Nominated Adviser ("NOMAD") (the "Adviser Options").

The Directors and Proposed Director of the Company intend to invest in the Capital Raising. Their participation in the Capital Raising will be subject to, inter alia, Shareholder approval under ASX Listing Rule 10.11.

Proposed Use of Funds

The Company intends to apply the funds raised under the Capital Raising, together with its existing cash reserves, over the first two years following re-admission of the Company to the Official List of the ASX as follows:

Note:

1. As reported in the Company's Half Year Report announced on 5 March 2021.

The above table is a statement of current intentions as of the date of this announcement. As with any budget, intervening events and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the manner in which the funds are ultimately applied on this basis.

Unaudited Pro-forma Consolidated Statement of Financial Position

The effect of the Proposed Acquisition on the Company's consolidated statement of financial position is set out in Appendix One assuming a successful Capital Raising.

The principal effects on the Company's consolidated statement of financial position will be:

(a) current assets will increase by approximately A$7,627,904, comprising the anticipated net proceeds of the Capital Raising (after payment of the estimated costs of the Offer and transaction, but before the proposed payment of the Panton Option consideration);

(b) non-current assets will increase by approximately A$17,700,000 being the value of:

(c) total equity interests will increase by an amount equal to the aggregate of subparagraphs (a) and (b) above.

Effect of the Proposed Acquisition on the Company's Annual Expenditure

The Company expects that its expenditure on the Panton PGM Project following completion of the Proposed Acquisition will be as set out in the Uses of Funds section above.

Revenue forecasts relating to mineral exploration companies are uncertain, and accordingly the Company is unable to provide investors with reliable revenue, profit, or cash flow projections or forecasts. The enlarged group will not have any revenue generating assets on completion of the Proposed Acquisition.

Pro-forma Capital Structure

The indicative share capital structure of the Company following completion of the Proposed Acquisition, based on the current securities on issue and including the proposed Capital Raising, will be as follows (subject to rounding following the Consolidation):

Notes:

1. The number of existing unlisted Options, and the effect that the Consolidation will have on the terms of the existing unlisted Options, is as set out in the tables below.

Pre-Consolidation

Post-Consolidation

2. Assuming the issue of all available shares under the proposed Capital Raising and an issue price per share under the Capital Raising of A$0.10 (post-Consolidation).

3. The Options to be issued pursuant to the terms of the Proposed Acquisition to GNP's shareholders will be exercisable at a price of A$0.10 on or before the date 3 years after their date of issue.

4. The Adviser Options to be issued to the NOMAD will be exercisable at a price of A$0.12 on or before the date 3 years after their date of issue.

5. The Performance Rights to be issued (subject to receiving, inter alia, Shareholder approval and ASX confirmation that the terms and conditions of the Performance Rights are appropriate and equitable under Listing Rule 6.1) to the Directors and Proposed Director will be in three equal tranches and expire 3 years after their date of issue. The tranches of Performance Rights will vest upon achievement of the following share price hurdles:

· Tranche A: 20 day VWAP of A$0.15 per share or above.

· Tranche B: 20 day VWAP of A$0.20 per share or above.

· Tranche C: 20 day VWAP of A$0.25 per share or above.

Controlling Shareholder Issues

No person will acquire control of, or voting power over 20% or more in, the Company as a result of the Proposed Acquisition and Capital Raising.

Proposed Strategic Adviser

Mr Mick McMullen

Upon completion of the Proposed Acquisition, the Company intends to appoint Mr McMullen as a strategic adviser to the Board.

Mr McMullen qualified as a Geologist at Newcastle University in 1992 and holds a B.Sc. in Geology from Newcastle University. He has over 28 years' experience in the exploration, development, financing and operation of mining projects across Australia, Africa, Asia, Europe, North and South America. His expertise covers both upstream and downstream areas as well as metals trading and equity and debt capital markets in Australia, UK, South Africa, Canada and the USA. His specific mining experience covers small and large open pit and underground mines across many different cultures. He also has a strong track record in mergers and acquisitions and asset restructuring.

Most recently, Mr McMullen became an Executive Director at Venturex Resources Limited, a copper-zinc developer in the Pilbara region. He previously served as the CEO and President of Detour Gold, a 600,000 oz p.a. gold producer in Canada. During his tenure Mr McMullen and his team took the market capitalisation of Detour Gold from C$2Bn to C$4.5Bn over a 9 month period leading to its eventual sale. Prior to Detour, he was the CEO and President of Stillwater Mining Company from December 2013 until June 2017. Stillwater is a 600,000 oz p.a. PGM producer that also has its own smelter and base metal refinery. During his tenure at Stillwater, Mr McMullen and his team grew the auto catalyst recycling business to be the largest in the world by a significant margin, with around 1.4Moz p.a. of PGM being recycled.

During his time at Stillwater, he also oversaw an increase in its equity value from US$1.1Bn to US$2.2Bn against a 10 per cent. fall in PGM prices over the same period. Stillwater was sold in an all cash transaction valued at US$2.7Bn.

He has founded and recapitalised numerous mining and exploration companies globally (including GT Gold, being sold to Newmont for C$400m) and runs a family office for investment purposes. He is also a former executive board member of the National Mining Association of the United States, a Board Member of the World Council, a current Member of the AusIMM and a Senior Adviser to Black Mountain Metals, a private company that holds nickel assets in Western Australia.

Board of Directors

The composition of the Board following the Proposed Acquisition is currently intended to be as follows.

Existing Directors

Greg Bandy, Executive Chairman

Mr Bandy is currently Managing Director of the Company.

Aaron Bertolatti, Finance Director

Mr Bertolatti is currently a Director and Company Secretary.

Messrs Bandy and Bertolatti will continue as directors following the Proposed Acquisition. It is intended that Mr Jason Bontempo (Non-Executive Director) will resign and Mr Justin Tremain will be appointed as a Non-Executive Director.

Proposed Director

Justin Tremain, Proposed Non-Executive Director

Mr Tremain is an experienced company director with extensive expertise across the mineral resources sector. His experience covers equity capital markets and promotion, resource project acquisition, exploration and resource delineation, feasibility studies and project development financing. 

He is currently Managing Director of West African gold explorer Manas Resources Ltd where he was appointed in December 2020 to reinvigorate and grow the company. He is also Non-Executive Director of Caspin Resources Ltd, a successful IPO that listed on the ASX in November 2020.

Prior to becoming involved in the management of ASX listed resource companies from early 2010, Justin had over 10 years investment banking experience in the metals and mining sector with NM Rothschild & Sons, Investec and Macquarie Bank. 

He was previously the Managing Director of Exore Resources Ltd ("Exore"). He joined Exore in January 2018 as a 'shell company' and identified and led the acquisition of a gold exploration portfolio in Cote d'Ivoire, West Africa. Exore acquired the Cote d'Ivoire portfolio for circa A$3.5 million in October 2018 and undertook an immediate, aggressive exploration programme that resulted in the discovery and delineation of a maiden JORC Resource. Less than 2 years from acquiring the Cote d'Ivoire projects, Exore was acquired by Perseus Mining Ltd in September 2020 for a value of circa A$80 million by way of a Scheme of Arrangement.

Prior to Exore, Mr Tremain founded Renaissance Minerals Ltd ("Renaissance") in June 2010 and served as its Managing Director until its takeover by Emerald Resources NL ("Emerald") in November 2016. During his tenure, Justin was responsible for growing Renaissance from a grass roots Western Australian gold explorer into a gold development company in the frontier jurisdiction of Cambodia. The company delineated a JORC Resource of over 1Moz at the Okvau Gold Deposit in Cambodia and completed feasibility studies for the development of the project before Renaissance was acquired by Emerald. Upon completion of the Emerald takeover, Justin joined the Board of Emerald as Executive Director and remained in that role until January 2018. 

Justin also founded Berkut Minerals Ltd (now Carnaby Resources Ltd) which was listed on the ASX in 2018 and he served as its Chairman and Non-Executive Director until March 2020. He has also previously served as Non-Executive Director of Fin Resources Ltd and Odin Metals Ltd, both until July 2020.

The composition of the Board will be reviewed further during the course of the transaction and additional appointments considered as appropriate.

Indicative Timetable

An indicative timetable for the Proposed Acquisition and associated events under the ASX Listing Rules is set out below:

The above timetable is indicative only and has not been endorsed by ASX. Actual dates will be subject to the Corporations Act 2001 (Cth) and the ASX Listing Rules, and the Company reserves the right to vary any and all of the above dates without notice. 

Activities and business model on completion of the Proposed Acquisition

The Company will be a mineral exploration company following completion of the Proposed Acquisition. Its proposed activities following completion will therefore be to undertake exploration and development of the Panton PGM Project.

The Company intends to allocate net funds raised from the proposed Capital Raising, together with the Company's existing cash reserves as set out in the 'Use of Funds' section above.

Key Risks

The key risks of the Proposed Acquisition and following completion of the Proposed Acquisition are as follows. The key risks are of a customary nature for mineral exploration development companies. Further details of key risks will be included in the Company's Notice of Meeting and Prospectus.

(a) Risks relating to the change in nature and scale of activities

(b) Risks in respect of the Panton PGM Project

(c) General risks

The above list of risk factors should not be taken as being exhaustive of the risks faced by the Company or investors in the Company. The above risk factors, and others not specifically mentioned may in the future materially affect the financial performance of the enlarged group and the value of securities in the Company. Securities in the Company carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those securities. Any investment in the Company is highly speculative.

The key dependencies influencing the viability of the Proposed Acquisition are the Company's capacity to:

(a) re-comply with Chapters 1 and 2 of the ASX Listing Rules and complete the Capital Raising to enable re-admission to quotation of the Company's securities on the ASX; and

(b) meet its objectives and implement the strategy detailed in this announcement.

Recent Issues of Securities

Red Emperor has not issued any equity securities in the last two years.

GNP was incorporated on 12 November 2020 for the purpose of acquiring the Panton PGM Project from Panoramic.

GNP raised a total of A$12,500,000 from sophisticated and professional investors by an issue of new GNP shares at A$1.00 each. This fundraising took place between 30 November 2020 and 7 December 2020.

Financial Accounts

Copies of the audited accounts of the Company for its financial year ended 30 June 2020 and auditor reviewed (but unaudited) accounts for the half year ended 31 December 2020 are available on the Company's website at https://redemperorresources.com.

GNP is a recently formed company (incorporated on 12 November 2020) and has not yet produced any financial statements. Such accounts will be produced and audited in conjunction with the preparation of the Prospectus for the Capital Raising, including the Independent Limited Assurance Report required under the ASX Listing Rules.

Re-compliance with ASX Listing Rules Chapters 1 and 2 and AIM Rule Considerations

Since the Proposed Acquisition will result in a significant change to the nature and scale of the Company's activities, the Proposed Acquisition will require the Company's shareholders' approval under ASX Listing Rule 11.1.2 and will also require the Company to re-comply with Chapters 1 and 2 of the ASX Listing Rules in accordance with ASX Listing Rule 11.1.3.

Due to its size and nature, the Proposed Acquisition also constitutes a reverse takeover under the AIM Rules, requiring, inter alia, publication of an AIM Admission Document and shareholder approval pursuant to AIM Rule 14. In light of certain differences between the ASX Listing Rules and the AIM Rules and the chronology, processes and requirements of the two stock exchanges, the Company is currently evaluating structuring options with its Nominated Adviser with respect to the enlarged group's dual listing on AIM.

Shareholder Approvals

A notice of meeting seeking shareholder approval for the resolutions required to give effect to the Proposed Acquisition will be sent to the Company's shareholders in due course. It is currently expected that the Company will convene a general meeting to be held in May 2021 to facilitate Shareholder approval for matters in respect of the Proposed Acquisition pursuant to the ASX Listing Rules. Such approvals will include:

(a) the change in nature and scale of the Company's activities;

(b) the Consolidation of the Company's capital;

(c) the issue of the Consideration Securities to the GNP Vendors;

(d) the issue of shares in connection with the Capital Raising;

(e) the issue of Options to the NOMAD;

(f) approval for Related Parties' participation in the Capital Raising;

(g) the issue of Performance Rights to the Directors and the Proposed Director; and

(h) election of the Proposed Director.

The Company's securities are currently suspended from quotation on ASX and, subject to shareholder approval being obtained, will remain suspended until the Company has re-complied with Chapters 1 and 2 of the ASX Listing Rules and the Proposed Acquisition has been completed. The Company's ordinary shares will also remain suspended from trading on AIM until the Proposed Acquisition has been approved by shareholders pursuant to the AIM Rules and successfully completed or an alternative re-admission transaction is concluded.

Regulatory Approvals and waivers

The Company has obtained the following waivers and confirmations from ASX:

(a) a waiver from ASX Listing Rule 2.1 (Condition 2) to enable it to issue shares at a price of A$0.10 per share;

(b) a waiver from ASX Listing Rule 1.1 (Condition 12) to enable it to have Options in issue with an exercise price below A$0.20 per share.

The terms and conditions of the waivers are included in Appendix Three to this announcement.

The Company intends to seek a waiver from ASX Listing Rule 10.13.5 to enable it to seek shareholder approval to issue any equity securities to be issued to Related Parties in conjunction with the Acquisition (i.e. the proposed Performance Rights, and any participation in the Capital Raising by related parties approved by Shareholders) later than one month after the date of the general meeting.

The Company expects that ASX will treat the Consideration Securities to be issued to the GNP shareholders as restricted securities in accordance with Chapter 9 of the ASX Listing Rules. The Company intends to make an application for cash formula relief in respect of Shares issued to GNP shareholders who were seed capitalists of GNP.

Fees paid or payable in connection with finding, arranging or facilitating the Proposed Acquisition

Other than as disclosed in this announcement, there are no fees payable to any person in connection with finding, arranging, or facilitating the Proposed Acquisition or Capital Raising.

The Company currently expects to pay fees to the following advisers in connection with its Capital Raising and re-admission to ASX and AIM.

The consideration payable to the GNP shareholders under the HoA is set out above. The Company proposes to seek Shareholder approval for the issue of Performance Rights to the Directors and Proposed Director as set out above, but such proposed issues are not in connection with finding, arranging or facilitating the Proposed Acquisition.

Regulatory requirements generally

The Company notes that pursuant to the ASX Listing Rules:

(a) the Proposed Acquisition requires shareholder approval and therefore may not proceed if such approval is not forthcoming;

(b) the Company is required, inter alia, to re-comply with ASX's requirements for admission and quotation and therefore the Proposed Acquisition may not proceed if those requirements are not met; and

(c) ASX has an absolute discretion in deciding whether or not to re-admit the Company to the Official List and to quote its securities and therefore the Proposed Acquisition may not proceed if ASX exercises that discretion.

Investors should take account of these uncertainties in deciding whether or not to buy or sell the Company's securities.

Furthermore, the Company:

a) notes that ASX takes no responsibility for the contents of this announcement; and

b) confirms that it is in compliance with its continuous disclosure obligations under ASX Listing Rule 3.1.

Due to its size and nature, the Proposed Acquisition also constitutes a reverse takeover under the AIM Rules, requiring, inter alia, publication of an AIM Admission Document and shareholder approval pursuant to AIM Rule 14. In light of certain differences between the ASX Listing Rules and the AIM Rules and the chronology, processes and requirements of the two stock exchanges, the Company is currently evaluating structuring options with its Nominated Adviser with respect to the enlarged group's dual listing on AIM.  

Due diligence

The Company has undertaken appropriate enquiries and will undertake further due diligence into the assets and liabilities, financial position and performance, profits and losses, and prospects of GNP to enable the Board to be satisfied that the Proposed Acquisition is in the interests of the Company and its shareholders.

For further information, please visit www.redemperorresources.com or contact:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018.

The information in this announcement that relates to Mineral Resources is based on information prepared by Patrick Adams. Patrick Adams is a fellow of the Australian Institute of Mining and Metallurgy. Patrick Adams is an employee of Cube Consulting Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Patrick Adams consents to the inclusion in this announcement of the matters based on their information in the form and context in which it appears.

Cube Consulting originally prepared the Resource Estimate in respect of the Panton PGM Project when it was owned by Platinum Australia Limited in 2003 and subsequently reviewed and re-reported a Resource Estinmate when it was held by Panoramic Resources Limited in 2015. Panoramic sold 80% of the entity holding the Panton PGM Project to GNP in 2020, and GNP is intended to be acquired by Red Emperor Resources NL. Cube Consulting does not have any direct or indirect financial interest in the outcome of either of those transactions.

Appendix One | Pro Forma Financial Information

RED EMPEROR RESOURCES NL

CONSOLIDATED HISTORICAL AND PRO FORMA STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2020

NOTES:

The Proposed Acquisition has been considered under AASB 3 Business Combinations and although a company is being acquired as part of the transaction, it is determined that no business is being acquired and accordingly the transaction has been accounted for as an asset acquisition. The only material assets of the company are exploration assets.

5. Performance rights to be issued to the Directors and Proposed Director

The performance rights intended to be issued to the Directors and Proposed Directors have been valued using a barrier up-and-in trinomial option pricing model with a Parisian barrier adjustment.

6. Cash costs relating to the Proposed Acquisition and Capital Raising - Australia

7. Cash costs relating to the Proposed Acquisition and Capital Raising - UK

Appendix Two | Table One JORC Code, 2012 Edition

Section 1: Sampling Techniques and Data

Section 2: Reporting of Exploration Results

Section 3: Estimation and Reporting of Mineral Resources

Appendix Three | ASX Listing Rules Waivers

In accordance with the procedures set out in ASX Listing Rules Guidance Note 12, the Company announces the outcome of its application to ASX for waivers of Listing Rules 1.1 condition 12 and 2.1 condition 2.

Waiver from Listing Rule 2.1 condition 2

1. Based solely on the information provided, ASX Limited (ASX) grants Red Emperor Resources NL (the Company) in connection with the acquisition of the issued capital of Great Northern Palladium Pty Ltd (Proposed Transaction) and, pursuant to a capital raising under a prospectus, the issue of 100,000,000 fully paid ordinary shares in the capital of the Company (Capital Raising Shares) at an issue price of $0.10 each (Offer Price) (Capital Raising), a waiver from listing rule 2.1 condition 2 to the extent necessary to permit the Company to issue the Capital Raising Shares at an issue price of less than $0.20 per Capital Raising Share, subject to the following conditions.

1.1 The issue price of the Capital Raising Shares is not less than $0.02 per share.

1.2 The terms of this waiver are disclosed to the market and, along with the terms and conditions of the Capital Raising Shares, are clearly disclosed in the notice of meeting pursuant to which the Company will seek the approval required under Listing Rule 11.1.2 for the Proposed Transaction and in the prospectus to be issued in respect of the Capital Raising.

1.3 The Company completes a consolidation of its capital structure in conjunction with the Proposed Transaction such that its securities are consolidated at a ratio that will be sufficient, based on the lowest price at which the Company's securities traded over the 20 trading days prior to the suspension of the Company's securities from official quotation, to achieve a market value for its securities of not less the Offer Price.

2. Resolution 1 only applies to 11 June 2021 and is subject to any amendments to the Listing Rules or change in the interpretation of the Listing Rules and policies of ASX.

3. ASX has considered Listing Rule 2.1 condition 2 only and makes no statement as to the Company's compliance with other listing rules.

Waiver from Listing Rule 1.1 condition 12

1. Based solely on the information provided, ASX Limited (ASX) grants Red Emperor Resources NL (the Company) in connection with the acquisition of the issued capital of Great Northern Palladium Pty Ltd (GNP) (Proposed Transaction) and, pursuant to a capital raising under a prospectus, the issue of 100,000,000 fully paid ordinary shares in the capital of the Company (Capital Raising Shares) at an issue price of $0.10 each (Capital Raising), a waiver from listing rule 1.1 condition 12 to the extent necessary to permit the Company to:

1.1. issue 87,500,000 free attaching options on a 1:2 basis to the consideration shares to the vendors of the issued capital of GNP, exercisable at $0.10 each on or before the date that is 3 years from the date of issue (New Options);

1.2 issue 6,000,000 options to the Company's nominated adviser on AIM, exercisable at $0.12 each on or before the date that is 3 years from the date of issue (Adviser Options); and

1.3 have 6,000,000 options (on a pre-consolidation basis) (Existing Options) on issue

with an exercise price of less than $0.20, subject to the following conditions:

1.4 The exercise price of the New Options, Adviser Options and Existing Options is not less than $0.02 each;

1.5 The terms of this waiver are disclosed to the market and, along with the terms and conditions of the New Options, Adviser Options and Existing Options, are clearly disclosed in the notice of meeting pursuant to which the Company will seek the approval required under listing rule 11.1.2 for the Proposed Transaction and in the prospectus to be issued in respect of the Capital Raising; and

1.6 The Company's shareholders approve the exercise price of the New Options and Adviser Options in conjunction with the approval obtained under listing rule 11.1.2 for the Proposed Transaction.

2. Resolution 1 only applies to 11 June 2021 and is subject to any amendments to the Listing Rules or change in the interpretation of the Listing Rules and policies of ASX.

3. ASX has considered Listing Rule 1.1 condition 12 only and makes no statement as to the Company's compliance with other Listing rules.