Alien Metals Regulatory News (UFO)

Trading Symbols

AIM: UFO

FWB: I3A1

24 August 2022

Alien Metals Ltd

("Alien" or "the Company")

Revised agreement for Alien to acquire 90% of Hamersley Iron Ore Project

Alien Metals Ltd (LSE AIM:UFO), a global minerals exploration and development company, is pleased to advise that it has executed a binding put and call option agreement ("Option Agreement") with Windfield Metals Pty Ltd ("Windfield") granting the Company the option to acquire an additional 39% interest in the Hancock and Brockman DSO iron ore projects ("Projects"). This arrangement replaces the agreement announced on 20 May 2021, whereby Alien and Windfield had agreed for Alien to acquire 80% of Windfield, which holds the other 49% of the Projects, thereby giving Alien an indirect 90% interest.

Alien currently has a 51% direct interest in the Projects, with the remaining 49% held by Windfield. The parties have been in ongoing discussions regarding Alien increasing its interests in the Projects. Pursuant to the Option Agreement with Windfield, Alien can acquire an additional 39% interest in the Projects from Windfield, thereby increasing Alien's direct holding to 90% ("Option"). To exercise the Option, Alien will pay total consideration of £1,794,104, which consists of a cash payment of £60,000 and the issue of 260,000,000 ordinary shares at a deemed issue price of £0.0067 pence per share (being the 20-day volume average weighted price of Alien shares on the day that is 20 business days immediately prior to the execution of the Option Agreement) and the issue of 100,000,000 share warrants exercisable at 1 pence each. Alien has an 18-month period to exercise the Option, although the Company intends to action earlier. Such exercise is conditional on Alien receiving approval to issue the consideration shares and the parties entering into a deed of assignment and assumption in relation to the Hancock project native title Heritage Agreement.

Dan Smith, Non-Executive Chairman of Alien Metals, commented: "The execution of the revised binding option agreement with Windfield is a key milestone in the development of both the Hancock and Brockman iron ore projects, as we can now drive both forward knowing the Company has de-risked the projects with the ability to move to a 90% project interest.

"The Iron Ore Company of Australia ("IOCA") team is fully focussed on getting the Hancock project into production in the first half of 2023, while exploration work on the highly prospective Brockman and Vivash projects remains ongoing.

"The Company looks forward to updating investors on the development of Hancock in coming weeks".

Figure 1: Location of Hamersley Iron Ore Project Tenements, Western Australia

Hancock:

Hancock hosts a JORC compliant inferred Mineral Resource of 10.4Mt @ 60.4% Fe (Announcement: 22 September 2021), and as announced earlier this year, the project hosts significant potential to find more DSO grade material on the tenement across ridges F, G & H (announcement: 30 March 2022).

Table 1: Mineral Resource Statement, Hancock Iron Ore Project, Alien Metals, September 2021 Gross Basis

Table 2: Mineral Resource Statement, Hancock Iron Ore Project, Alien Metals, September 2021 Gross and Net Attributable at 51%

Hosting direct shipping (DSO) grade iron ore with low impurities, the Company is confident that future production from Hancock will be a highly sought-after product. As such, the IOCA team is driving development plans forward on all fronts.

Figure 2: Location and results of rock chip sampling program, Hancock Iron Ore Project, Western Australia, March 2022

The Company is continuing with metallurgical work, as well as offtake & marketing strategies and discussions at Hancock. Additionally, compliant tender requests from third-party contractors to support the Hancock mining project (along with continued field work) remain ongoing.

KEY TERMS OF THE OPTION AGREEMENT:

1. Under the terms of the Option Agreement, Alien can acquire an additional 39% interest in the Projects from Windfield Metals Pty Ltd (Windfield) through paying the following consideration to Windfield:

a. £60,000 cash payable on signing of the Option Agreement;

b. 260,000,000 UFO shares issued at a deemed price of £0.0067 pence each (Deemed Issue Price) on exercise of the option; and

c. 100,000,000 share purchase warrants, exercisable at 1 pence each before 31 December 2025,

together, the Upfront Consideration,

2. Alien will free-carry Windfield's remaining 10% shareholding in the Projects until completion of a Bankable Feasibility Study on either the Brockman or Hancock Ranges projects.

3. The Option Agreement is subject to various standard conditions precedent and contains standard warranties on both Alien and Windfield.

4. If, within 60 months of executing the Option Agreement, Alien disposes of its interest in the Projects, the Company will pay Windfield a performance payment in addition to the Upfront Consideration (Performance Payment).

5. The Performance Payment is calculated by:

a. In the event of a Tenement Sale: 50% of the value uplift attributable to the Projects;

b. In the event of an IPO/Spin-out event on a recognised stock exchange: 50% of the value uplift attributable to the Projects; or

c. In the event a decision to mine is made: 50% of the project valuation uplift attributable to the Projects.

In each case, the uplift payments are reduced by 50% of the incurred project expenditure. 

As part of the transaction Alien has agreed to transfer its interest in the Projects to its wholly owned subsidiary, IOCA, which will become the manager of the Projects.

In the 12 months to 31 December 2021 the Projects incurred costs of US$1.5m with Alien funding 100% of the projects and as such 100% of the costs are reflected in the accounts. The carried value of the Hamersley Project as at 31 Dec 2021, being the last audited financial statements, was US$2,025,320.

For further information please visit the Company's website at www.alienmetals.uk, or contact:

Alien Metals Limited

Dan Smith, Non-executive Chairman

Email: dsmith@alienmetals.uk

Bill Brodie Good, CEO

Tel: +44 20 3811 2144

Beaumont Cornish Limited (Nomad)

James Biddle / Roland Cornish

www.beaumontcornish.com

Tel: +44 (0) 207 628 3396

Turner Pope Investments (TPI) Limited (Joint Broker)

Andrew Thacker / James Pope

Tel: +44 (0) 20 3657 0050

WH Ireland Ltd (Joint Broker)

Harry Ansell / Katy Mitchell

Tel +44 (0) 207 220 1666

Yellow Jersey PR (Financial PR)

Sarah Hollins / James Lingfield

alienmetals@yellowjerseypr.com

Tel: +44 (0) 20 3004 9512

Notes to Editors

Alien Metals Ltd is a mining exploration and development company listed on the AIM market of the London Stock Exchange (LSE: UFO). The Company's focus is on precious and base metal commodities, with its operations located in proven mining jurisdictions and it has embarked upon an acquisition-led strategy headed by a high-quality geological team to build a strong portfolio of diversified assets. In 2019, the Company acquired 51% of the Brockman and Hancock Ranges high-grade (Direct Shipping Ore) iron ore projects, with an option to move to a 90% interest in the Hamersley Iron Ore Project. The Company also acquired 100% the Vivash Gorge Iron Ore Project from Zenith Minerals in May 2022.

The Company acquired 100% of the Elizabeth Hill Silver Project, which consists of the Elizabeth Hill Historic Silver Mine Mining Lease and the 115km2 exploration tenement around the mine. The Company also holds two silver projects, San Celso and Los Campos, located in Zacatecas State, Mexico, Mexico's largest silver producing state, which produced over 190m Oz of silver in 2018 alone, accounting for 45% of the total silver production of Mexico for that year. The Company also holds a Copper Gold project in the same region, Donovan 2.

In March 2022 the Company acquired 100% of the former joint venture interest in the Munni Munni Platinum Group Metals and Gold Project in the West Pilbara, Western Australia, one of Australia's major underexplored PGE and base metals projects. Munni Munni holds a historic deposit containing 2.2Moz PGM3: Palladium, Platinum, Gold, Rhodium.

Glossary

Mineral Resource - A concentration or occurrence of solid or liquid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

DSO - Direct Shipping Ore

Deleterious Elements - Elements that can be detrimental to the overall product, such as

Phosphorus.

Green Iron Ore - High Grade > 60% Iron Ore needing lease processing for manufacture of steel

Fe - Iron

Al - Aluminium

Ca - Calcium

K - Potassium

Mg - Magnesium

Mn - Manganese

Na - Sodium

P - Phosphorus

S - Sulphur

Si2O3 - Silica

Mt - Million Tonnes

BIF - Banded Iron Formation