Dr. Matthew James reports

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

Euro Manganese Inc. has released key developments during the third fiscal quarter and to date. The company has now filed its June 30, 2023, third 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

Chvaletice project, Czech Republic:

• Award of EPCM (engineering, procurement and construction management) contract to Wood for development of the Chvaletice processing plant: The company selected Wood Australia as its EPCM partner following a rigorous selection process. The contract has two phases, with an approval stage gate between each phase. Phase 1 includes front-end engineering design (FEED) and is anticipated to take approximately 12 months. Phase 2 is the EPCM phase, which includes detailed design, procurement, construction and commissioning. A final investment decision (FID) is to be made prior to commencement of phase 2. Receipt of FID from the board requires securing outstanding permits and project finance (debt and equity).
• Revised ESIA (environmental social impact assessment) to be resubmitted; no anticipated effect on timeline to FID: Work to address the comments received related to noise abatement are progressing well. The company anticipates the issuance of a positive decision on the revised ESIA before the end of 2023.
• Preparation of other key permits progressing well: Documentation for the land planning permit is substantially complete and will be finalized upon receipt of the conditions in the approved ESIA. The land planning permit will be submitted on approval of the ESIA. The construction permit is a deliverable of the FEED phase of engineering and is expected to be submitted in mid-2024.
• Production of 99.9-per-cent-pure HPEMM 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) met the demonstration plant target specifications.
• Production of on-spec high-purity manganese sulphate monohydrate (HPMSM) due in the near term: Corrosion inside the crystallizer due to a manufacturing fault has resulted in delayed production of on-spec HPMSM material. This issue has been addressed and production of HPMSM is expected to be recommenced in the coming weeks. Samples will then be sent to external labs for assaying.

Off-take process:

• Off-take funnel remains full with 200,000 tonnes of Chvaletice HPMSM (over 100 per cent of annual production capacity) now under discussion. Parties are moving through the sales funnel and new off-takers have entered the process. 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 off-take contract to support project finance.

Becancour facility, Quebec, Canada:

• Scoping study highlights released for the Becancour dissolution plant: The scoping study delivered strong preliminary project economics, with a posttax net present value (NPV) of $190-million (Canadian) using a discount rate of 8 per cent, a posttax internal rate of return (IRR) of 26 per cent and a payback period of approximately four years. The economic analysis has a margin of error of minus 30 per cent/plus 50 per cent, and was run on an unlevered and constant-dollar basis with no inflation or government grants considered. Initial capital is estimated at $110.8-million (Canadian), including contingencies of $15.1-million (Canadian). A key aspect of the dissolution plant is a short build time of two years for engineering/construction. Plant production capacity is estimated to be 48,500 tonnes per annum (tpa) of HPMSM, assuming sufficient supply of HPEMM feedstock. This could meet up to 20 per cent of projected North American 2027 demand for HPMSM, according to forecasts by CPM Group. There is no current processing capacity or production of battery-grade manganese in North America.
• MOU (memorandum of understanding) signed with Manganese Metal Company (MMC) for supply of HPEMM: The MOU provides feedstock optionality for the Becancour plant, allowing it to be fed with HPEMM from MMC and/or with HPEMM from the company's Chvaletice manganese project (CMP) in the Czech Republic. This enables the potential for the Becancour plant to supply the North American market as early as mid-2026, thus bringing forward cash flows for the company.
• WSP selected to complete Becancour dissolution plant feasibility study: The feasibility study will further define project design, costs, economics and customer off-take opportunities. The study is expected to be complete in mid-2024, subject to financing. Permitting is expected to advance in parallel with the study to facilitate the path to production.
• Co-operation agreement signed with the Grand Conseil de la Nation Waban-Aki (W8banaki): The agreement defines how the company and the W8banaki intend to communicate openly and regularly, and to work together for the mutually acceptable development of the Becancour project, especially during the evaluation and planning phases.

Financial position:

• Cash and cash equivalents of approximately $10.9-million (Canadian) as at end of fiscal Q3 (June 30, 2023), compared with $13.8-million at fiscal Q2 (March 31, 2023): The reduction in cash position is mainly attributable to: expenses related to project advancement, including award of the EPCM contract; commissioning of the demonstration plant; certain land rental payments; amendments to the ESIA; and administrative expenses related to project financing efforts and the corporate office. Additional expenses were incurred for site due diligence and completion of the Becancour plant scoping study, evaluating the construction and operation of a dissolution plant at the port of Becancour in Quebec.
• Sufficient financing for delivery of near-term project milestones, including advancing permitting for the Chvaletice project, completing commissioning of the demonstration plant and its initial operation, and for general and administration expenses for the next 12 months: Additional financing will be required for execution of the EPCM services for the project, certain scheduled payments for land acquisitions, future operation of the demonstration plant, as well as construction of future infrastructure and facilities for the Chvaletice project, and to advance the company's North American strategy, including the Becancour plant feasibility study.

Dr. Matthew James, president and chief executive officer of Euro Manganese, commented:

"We continued to advance the Chvaletice manganese project during the third fiscal quarter and to date. Production of on-spec high-purity manganese metal from the Chvaletice demonstration plant was a significant milestone. Additionally, the appointment of Wood as our EPCM partner signals our commitment to building a world-class facility in the Czech Republic to produce high-purity manganese, an essential component in lithium-ion batteries for electric vehicles. We remain focused on producing on-spec high-purity manganese sulphate from our on-site demonstration plant, which would further derisk our process flowsheet and demonstrate our capacity to produce battery-grade manganese products at scale.

"Developments at our Becancour project subsequent to the quarter make this opportunity increasingly attractive for the company and its stakeholders. The positive scoping study delivered strong preliminary project economics for modest initial capital and estimated a short, two-year build time. We now intend to proceed with a feasibility study to further refine plant design, costs and economics. Our MOU with MMC provides us with feedstock flexibility and enables us to potentially operate Becancour as a stand-alone project. More importantly, it outlines a path to bring company production and cash flow forward by at least a year, in advance of our Chvaletice manganese project in the Czech Republic. I am very excited about the potential significant value that Becancour could deliver for our stakeholders."

Fiscal Q3 conference call details

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

About Euro Manganese Inc.

Euro Manganese is a battery materials 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 for Chvaletice manganese project

The technical information regarding the Chvaletice manganese project 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 regarding production of HPEMM from the demonstration plant and production of on-spec HPMSM, 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.