Dr. Matthew James reports

ORION RESOURCE PARTNERS TO SUPPORT EURO MANGANESE WITH US$100 MILLION FUNDING TOWARDS THE DEVELOPMENT OF THE CHVALETICE MANGANESE PROJECT

Euro Manganese Inc. has signed definitive agreements with OMRF (BK) LLC (Orion), which is managed by the Orion Resource Partners Group, for $100-million (U.S.) in non-dilutive financing to advance the development of the Chvaletice manganese project in the Czech Republic.

Highlights:

• The $100-million (U.S.) financing is split into two $50-million (U.S.) components:
  • A $50-million (U.S.) loan facility, convertible into a 1.29-per-cent-to-1.65-per-cent royalty on project revenues, with $20-million (U.S.) to be received upon closing and an additional $30-million (U.S.) received upon meeting milestones that have been developed together with Orion to match Euro Manganese's plans on a final investment decision (FID);
  • Receipt of $50-million (U.S.) in exchange for a 1.93-per-cent-to-2.47-per-cent royalty on project revenues following FID by the company's board of directors and other conditions precedents typical for this type of financing.
• The royalties in both agreements have an embedded sliding-scale mechanism. The royalties will be calculated on a quarterly basis and the sliding-scale rate is dependent on the high-purity manganese products prices achieved during the respective quarter. As the realized price increases from a lower price forecast to a higher price forecast, the royalty rates decrease from the higher royalty rate down to the lower royalty rate.
• All aspects of the financing package were structured to meet project finance bankability requirements. Both the convertible loan facility and the royalty financing sit alongside, and reduce, the project finance debt and equity required for the full project financing.
• Closing is expected prior to month-end, and proceeds from the financing package will finance development activities related to the advancement of the project, including G&A (general and administrative) expenses related to the project, which, as the only manganese resource in the European Union, is of strategic importance to domestic electric-vehicle battery supply chains and the energy transition.
• In connection with the financing package, Orion has an offtake option of between 20 per cent and 22.5 per cent of the project's high-purity manganese total production for a term of 10 years from first delivery, matching the commercial terms of the company's sales.

Dr. Matthew James, president and chief executive officer of Euro Manganese, commented: "This is a transformative transaction for Euro Manganese, providing a funding package that facilitates the best possible pathway to a final investment decision and representing a collaboration between Euro Manganese, Orion and Stifel. The non-dilutive tranche structure minimizes cost of funds and reduces future project financing requirements. This further validates the robust nature of the Chvaletice project and our team's ability to deliver this strategic battery raw material project for Europe to the highest of standards."

Stifel Nicolaus Europe Ltd. is acting as financial adviser to the company, and Norton Rose Fulbright LLP is acting as legal counsel to the company. In connection with the financing package, the company has agreed to pay a cash placement fee equal to 2.5 per cent, due and payable to Stifel on the date of closing of each portion of the convertible loan facility, and on the closing of the royalty financing.

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.

We seek Safe Harbor.