Vital Metals: Completion of Tranche 1 Shenghe Subscription and Reinstatement to Official Quotation

18 December 2023

December 18, 2023

Highlights:

  • Vital Metals Limited (Vital or Company) completes the issue of 588,917,200 shares to Shenghe Resources (Singapore) Pte Ltd, a wholly-owned subsidiary of Shenghe Resources Holding Co., Ltd. (Shenghe) at a subscription price of A$0.01 per share to raise approximately A$5.9 million (Tranche 1 Subscription).
  • Shenghe joins Vital’s register as a cornerstone investor with a 9.9% strategic position in the Company.
  • Vital will sell its stockpiled rare earth material to Shenghe for approximately A$2.6 million (Stockpile Sale Agreement)1.
  • Vital is now funded to deliver into key milestones in 2024, including:
    • Mineral Resource Estimate update for Nechalacho Rare Earth Project;
    • Scoping Study for Tardiff to focus on potential processing scale and scalability together with product saleability and margin, informed by learnings and experience of Vital’s strategic partner and shareholder, Shenghe;
    • Reinterpretation of historical lithium exploration and testing known occurrences of pegmatite outcrops across the Nechalacho Project; and
    • Permitting and integration studies with respect to integration throughout the broader rare earths supply chain.
  • Vital fully paid ordinary shares (ASX:VML) to be reinstated to official quotation on ASX and recommencement of trading to occur upon market open today.

Vital Metals Limited (ASX: VML) (“Vital”, “Vital Metals” or “the Company”) is pleased to announce that the Company’s ordinary shares will recommence trading on ASX today following completion of the Tranche 1 Subscription with Shenghe. The A$5.9 million raised from Shenghe will enable the Company to progress development of the large-scale Tardiff deposit at its Nechalacho Project in Northwest Territories, Canada.

Vital Chairman Richard Crookes said:

“The Board is very pleased that the Company’s shares have recommenced trading on the ASX following completion of Tranche 1 of the Shenghe Subscription. We are appreciative of the strong vote of support shown by Shenghe in the Company’s projects. The A$5.9 million in funding provides the Company with the capital to continue to progress development of the world class Tardiff deposit, and we look forward to exploring the potential of the Wigu Hill Project in collaboration with Shenghe.”

Completion of Tranche 1 Subscription

Vital is pleased to announce that following receipt by Shenghe of overseas direct investment approval (ODI) in China, all conditions precedent to the Tranche 1 Subscription under the subscription agreement with Shenghe (refer to the Company’s ASX release dated 27 October 2023) have been satisfied and the Company has completed the issue and allotment of 588,917,200 ordinary Vital shares to Shenghe raising approximately A$5.9 million (before costs).

The Company has also received confirmation from ASX that its ordinary shares (ASX:VML) have been reinstated to official quotation and will recommence trading upon market open today.

The issue price of the Tranche 1 Subscription of A$0.01 per share is the same as the last traded price of Vital shares on 20 July 2023 and the Tranche 1 Subscription was completed using the utilising the Company’s available placement capacity under ASX Listing Rule 7.1A (530.6m) and Listing Rule 7.1 (58.4m).

Shenghe has the right to nominate one person for appointment as a non-executive director to the Vital Board of Directors.

Further details regarding the subscription agreement between Vital and Shenghe are set out in the Vital’s ASX announcement dated 27 October 2023.

Stockpile Sale

Vital has agreed to sell stockpiled rare earth material to Shenghe for approximately A$2.6 million (Stockpile Sale)2.

The stockpiled rare earth material was derived from mining at Nechalacho’s North T deposit and intended for treatment at the Saskatoon Facility being constructed by Vital’s subsidiary, Vital Metals Canada Limited (VMCL). However, Vital placed VMCL into bankruptcy in September 2023 prior to the completion of the construction of the Saskatoon Facility.

Vital expects to complete the Stockpile Sale by early 2024. Shenghe has no preferential rights over future production from Nechalacho.

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