Dr. Matthew James reports

EURO MANGANESE REPORTS SECOND FISCAL QUARTER 2023 FINANCIAL RESULTS AND PROJECT DEVELOPMENTS

Euro Manganese Inc. has released key developments during the second fiscal quarter and to date. The company has filed its March 31, 2023, second fiscal quarter financial statements and management's discussion and analysis. Euro Manganese reports to a fiscal year-end of Sept. 30.

Key developments during and subsequent to the quarter:

• Production of 99.9-per-cent-pure high-purity electrolytic manganese metal from Chvaletice demonstration plant significantly derisks the process flow sheet. External laboratory testing confirmed that the first sample of high-purity electrolytic manganese metal (HPEMM) has met the demonstration plant target specifications. High-purity manganese sulphate monohydrate (HPMSM) is currently under production in the final crystallization module, and samples will be sent for testing in the coming weeks. After confirmation from external labs of product meeting specifications, expected to be the end of June, deliveries of HPEMM and HPMSM samples are expected to commence. Customer deliveries of the company's demonstration plant products, however, are not expected to be required for completion of offtake contracts.
• Demonstration plant contractual guarantee testing is under way. Contract guarantee testing is expected to be complete by the end of May, 2023. Thereafter, evaluation of the results from external labs will confirm performance standards of the plant.
• Offtake term sheet announced with Verkor: The term sheet defines minimum tonnages and a pricing mechanism based on an index-adjusted western benchmark price for HPMSM that also correlates to the carbon footprint of Chvaletice HPMSM. Offtake tonnages are equivalent to a percentage of Chvaletice's annual HPMSM production on a take-or-pay basis for an initial tenure of eight years with potential for renewal.
• More than 150,000 tonnes of Chvaletice HPMSM (100 per cent of annual production capacity) under discussion as part of offtake tender process: Discussions are progressing well with potential customers across the battery supply chain, including cathode active material (CAM) and the precursor product (pCAM) producers, battery makers, and automobile manufacturers. Multiple parties are at various stages in the offtake process. Approximately 75 per cent of offtake capacity (more than 115,000 tonnes per year) is moving through the offtake process (term sheet negotiations with one term sheet signed), with approximately 30,000 tpy mid-process (memorandum of understanding or conversations significantly progressed) and approximately 20,000 tpy under earlier stages of discussion. Several larger potential customers are yet to provide an allocation of tonnage to the company; however, they have expressed an expectation to do so in the near future. The company is targeting 80 per cent of production capacity under offtake contract to support project finance.
• Strategic partner conversations initiated: As part of the company's strategy for raising financing for the Chvaletice project, BMO Capital Markets has been engaged to assist the company in securing a strategic partner to invest at the project level in combination with an offtake agreement. BMO is currently initiating discussions with key automotive original equipment manufacturers.
• Selection of engineering, procurement and construction management contractor under way for development of the Chvaletice processing plant: The company evaluated five bids from Tier 1 engineering, procurement and construction management firms and is now finalizing selection of the preferred EPCM firm. On appointment, the EPCM contractor will focus on advancing basic engineering design, procurement of long-lead process equipment and construction permitting.
• Battery-grade manganese identified as a strategic raw material under the proposed European Critical Raw Materials Act (CRMA): potential for the Chvaletice project to be recognized as a strategic project, which would qualify it for priority permitting and support for funding access and facilitation of offtake agreements: Additionally, to reduce the European Union's reliance on a single supply country for certain raw materials, the CRMA would require that by 2030, no more than 65 per cent of any strategic raw materials come from a single third country. Europe currently relies on imports of high-purity manganese to meet 90 per cent of its demand. The company's Chvaletice project expects to deliver almost 50,000 t of high-purity manganese metal per year when in full production, meeting approximately 25 per cent of European demand and helping the EU reduce its trade reliance on this strategic raw material.
• U.S. Department of Treasury clarification on eligibility for electric vehicle tax subsidies under the Inflationary Reduction Act (IRA) positive for Euro Manganese: The company's high-purity manganese products are well positioned to benefit from the March, 2023, clarification that EV batteries containing critical raw materials that are extracted, processed or recycled within a foreign entity of concern render an EV ineligible for IRA tax subsidies.
• Hosted site tour for Canadian ambassador to the Czech Republic and various municipal officials: The Canadian ambassador to the Czech Republic, Ayesha Rekhi, visited the Chvaletice project site in March alongside other embassy officials, mayors from both the Chvaletice and Trnavka villages, and representatives from the Pardubice district and CzechInvest. The group saw the local project office, the demonstration plant and the historic tailings area. The Czech and Canadian governments continue to be supportive of the Chvaletice project.
• Scoping study completed for the Becancour dissolution plant: The scoping study evaluated the development of an HPEMM dissolution plant to produce an HPMSM powder and/or a high-purity manganese sulphate solution. Based on the positive outcome of the scoping study results, the company is preparing a request for proposals for a feasibility study for the Becancour dissolution plant.

Financial position:

• Cash and cash equivalents of approximately $13.8-million as at end of fiscal Q2 (March 31, 2023); compared with $18.3-million at fiscal first quarter (Dec. 31, 2022). The reduction in cash position is mainly attributable to: expenses related to project advancement, including for commissioning of the demonstration plant; certain milestone deposits for land at the tailings area; submission of the final environmental and social impact assessment; and administrative expenses related to project financing efforts and the corporate office. Additional expenses were also incurred for the evaluation of a potential dissolution plant at the Port of Becancour in Quebec.
• Sufficient financing for delivery of near-term project milestones, including completion of permitting for construction of the Chvaletice project, commissioning of the demonstration plant and its operation on a batch basis: Additional financing will be required for execution of the EPCM services for the project and for future payments for land acquisitions, as well as for future construction of infrastructure and facilities for the project, and to advance the company's North American strategy.

Dr. Matthew James, president and chief executive officer of Euro Manganese, commented: "We delivered on a number of fronts during the second fiscal quarter and to date. Production of high-purity manganese metal from the Chvaletice demonstration plant was a significant milestone and derisks our process flow sheet. Equally, the offtake term sheet with Verkor established a great precedent as we advance offtake discussions with potential customers.

"Recent EU and U.S. regulation related to onshoring supply chains have triggered a positive response in dynamics with offtakers. Potential customers are reaching out to the company pro-actively and are motivated to advance through the offtake process. Moreover, there is a growing acknowledgment of price premiums for western extracted and processed products, including its high-purity manganese. This has resulted in more than 100 per cent of its annual Chvaletice production being under discussion as part of its offtake tender process. That is significant as it is targeting 80 per cent of production capacity under contract to support project finance. Euro Manganese is very well positioned to offer a local, secure source of supply for the EV market."

Fiscal Q2 conference call details

Euro Manganese will host two separate conference calls to serve stakeholders in their respective time zones. Content of both calls will be the same. Replays and transcripts of both calls will be available on Euro Manganese's website.

        CALL NO. 1 FOR NORTH AMERICAN AND UNITED KINGDOM/EUROPEAN AUDIENCES

                North America                     U.K./Europe                        

Date            Monday, May 15, 2023              Monday, May 15, 2023             
Time            8:30 a.m. PDT/11:30 a.m. EDT      4:30 p.m. British Summer Time/
                                                  5:30 p.m. Central European Summer Time        

       CALL NO. 2 FOR AUSTRALIAN AND U.K./EUROPEAN AUDIENCES      

              Australia                          U.K./Europe                       

Date          Tuesday, May 16, 2023              Tuesday, May 16, 2023           
Time          4 p.m. Australian Eastern          7 a.m. BST/8 a.m. CEST        
              Standard Time/          
              2 p.m. Australian Western 
              Standard Time                 

About Euro Manganese Inc.

Euro Manganese is a battery material company focused on becoming a leading producer of high-purity manganese for the electric vehicle industry. The company is advancing development of the Chvaletice manganese project in the Czech Republic and exploring an early-stage opportunity to produce battery-grade manganese products in Becancour, Que.

The Chvaletice project is a unique waste-to-value recycling and remediation opportunity involving reprocessing old tailings from a decommissioned mine. It is also the only sizable resource of manganese in the European Union, strategically positioning the company to provide battery supply chains with critical raw materials to support the global shift to a circular, low-carbon economy.

Euro Manganese is dual listed on the TSX Venture Exchange and the Australian Securities Exchange, and is also traded on the OTCQX.

Qualified person statement

The technical information in this news release was prepared under the supervision of Andrea Zaradic, PEng, a qualified person under National Instrument 43-101 (Standards of Disclosure for Mineral Projects). Ms. Zaradic has reviewed and approved the information in this news release, for which she is responsible, and has consented to the inclusion of the matters in this news release based on the information in the form and context in which it appears.

We seek Safe Harbor.