TIDMPAL

RNS Number : 6636J

Equatorial Palm Oil plc

23 December 2020

23 December 2020

Equatorial Palm Oil plc

("EPO" or the "Company")

Proposed Acquisition of Capital Metals Limited ("CML") for GBP15.84 million

Placing and Subscription to raise GBP2.085 million

20:1 Share Consolidation

Publication of Admission Document

Notice of General Meeting

& Change of Name to Capital Metals plc

The Company is pleased to confirm it has conditionally raised GBP2,000,000 at a post consolidation price of 12p per share (0.6p pre-consolidation) ("Placing Price") through an oversubscribed Placing by its broker Brandon Hill Capital Ltd. In addition, a further GBP85,000 has been raised through a subscription with existing management at the Placing Price. Further details of the Placing and Subscription can be found below.

The Placing and the Subscription are intended to support the proposed acquisition of Capital Metals Limited for GBP15.84 million, which is being funded through the issue of new ordinary shares at the Placing Price. The Placing and Subscription in addition to current funds held by the Company provides sufficient working capital for the Company to significantly advance the Development Study and Work Programme of the Eastern Minerals Project in Sri Lanka (the "Project"), the principal asset of CML. The acquisition of CML is conditional upon approval by shareholders in a general meeting scheduled for 11 January 2021.

Asset Overview

The Project has an established JORC Resource of 17.2Mt, of which 84% is in the Measured and Indicated categories, with an average grade of 17.6% Total Heavy Minerals ("THM"), making it one of the highest grade deposits in the global peer group. Less than 5% of the Project area has been drilled to date and the JORC Resource is from surface to a depth of 3m. Exploration work has shown continuation beyond 3m and also returned grades in excess of 26% THM. Accordingly, the Company expects to be able to upgrade the size of the resource in due course. Additional adjoining exploration licences are also under application.

Given the very high grades and simplicity of processing, no blasting or chemicals are required, operating costs for development are expected to be low, whilst existing infrastructure, including a newly constructed port 32km away, is expected to ensure the CAPEX for development is low.

The Project has undergone extensive work over the last few years and permitting is at an advanced stage. The Environmental Impact Assessment ("EIA") is completed and the Company expects it to be released for public comment shortly. Based on detailed interaction with the relevant Sri Lankan authorities, the Company believes the EIA is likely to be granted in Q1 2021, with an industrial mining license subsequently issued soon thereafter.

Upon the issuance of an Industrial Mining License ("IML"), the Company will look to finalise ongoing discussions with potential offtake partners. The Company envisages a demand for its product, which will primarily consist of ilmenite, rutile, zircon and garnet. Any offtake agreements are expected to provide some form of prepayment or financing initiatives, thereby minimising any amounts required to be sourced by the Company to bring the Project into production. Construction is targeted to commence in Q4 2021, with first production in 2022.

CEO, Michael Frayne, commented:

"I am delighted with the positive reception this investment proposition received, evidenced by the success of the oversubscribed Placing. In addition, we have already received acceptances of the offer from over 98% of existing CML shareholders, and we have received overwhelming support from EPO shareholders to date.

Following approval at the upcoming General Meeting, we will look to move through the final key permitting stages and expect to provide an update in Q1 2021. The Eastern Minerals Project is one of the highest grade mineral sands deposits globally and also benefits from a low CAPEX requirement to production. These contribute to an attractive, high margin, development. As we progress in 2021, I look forward to publishing further detail on the expected economics and profitability of the Project, as well providing operational updates as we move towards the commencement of construction in H2 2021 and first production in 2022."

The following contains extracts from the Admission Document which has been posted to shareholders today; full details are set out in the Admission Document which is available on EPO's website www.epoil.co.uk .

"

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Publication of Admission Document                      23 December 2020 
 Latest time and date for receipt of CREST       10.00 a.m. on 7 January 
  voting intentions                                                 2021 
 Latest time and date for receipt of Forms       10.00 a.m. on 7 January 
  of Proxy                                                          2021 
 Time and date of the General Meeting           10.00 a.m. on 11 January 
                                                                    2021 
 Record Date for the Share Consolidation         6.00 p.m. on 11 January 
                                                                    2021 
 Change of Name effective                                12 January 2021 
 Issue of the Placing Shares, Subscription               12 January 2021 
  Shares and Consideration Shares 
  Readmission of the Enlarged Issued Ordinary    8.00 a.m. on 13 January 
  Share Capital to trading on AIM                                   2021 
 Completion of Acquisition                       8.00 a.m. on 13 January 
                                                                    2021 
 Expected date for New Ordinary Shares to be             13 January 2021 
  credited to CREST accounts 
 Despatch of de nitive certi cates for New            by 27 January 2021 
  Ordinary Shares 
 

All of the above timings refer to London time unless otherwise stated. All future times and/or dates referred to in this Admission Document are subject to change at the discretion of the Company and SPARK. All times are UK times unless otherwise speci ed

The Company's shares will remain suspended until 8.00 a.m on 13 January 2021.

   1.    INTRODUCTION 

As announced by the Company on 21 October 2020, it has reached conditional agreement with parties holding a majority of the shares ("CML Majority") of Capital Metals Limited ("CML") to acquire their shares in CML in exchange for shares in the Company. On that date, the Company also made the same offer to all of the remaining shareholders in CML ("CML Minority") which, if accepted, will result in the acquisition of up to 100 per cent. of the entire issued share capital of CML for an aggregate total consideration of GBP15.84 million at Admission, to be satis ed by the issue of up to 132,000,000 Consideration Shares at an issue price of 12 pence per Consideration Share (following a 20:1 share consolidation) to the CML Shareholders accepting the Offer ("CML Vendors"). As at the date of this document, CML Vendors (including the CML Majority) that have accepted the Offer hold in aggregate 98.3 per cent. of the issued share capital of CML.

The Company's shares have been suspended from trading since that date, with a closing mid-market price of 0.75 pence per Existing Ordinary Share.

The Company announces it has conditionally raised approximately GBP2 million by way of the Placing of the Placing Shares to further the Work Programme and produce the Development Study as outlined in paragraph 4 of this Part I. In addition, it has raised GBP85,000 under the Subscriptions.

This Admission Document sets out the details of, and reasons for, the Proposals.

The Acquisition, if completed, will constitute a reverse takeover by the Company under the AIM Rules and is, therefore, subject to the approval of Shareholders at the General Meeting on 11 January 2021, details of which are set out in paragraph 22 of this Admission Document.

In addition, Michael Frayne, Executive Chairman, is a director and shareholder of CML. As such, the Acquisition constitutes a related party transaction under AIM Rule 13. The Independent Directors of the Company have considered the terms of the Acquisition and recommend it to Shareholders. Further details are set out in paragraph 3 further below.

The Directors believe that it is appropriate, should the Acquisition be completed, having been approved by Shareholders at the General Meeting, that the name of the Company be changed to Capital Metals plc.

The purpose of the Admission Document is to provide Shareholders with further information regarding the matters described above and to seek Shareholders' approval of the Resolutions at the General Meeting. The notice of General Meeting is set out at the end of this Admission Document. The Proposals are conditional on, amongst other things, the passing of the Resolutions, Admission and acceptance being received from CML Shareholders holding more than 75 per cent. of the issued CML Shares (unless agreed otherwise by the Company and CML, with the approval of the Nominated Adviser). If the Resolutions are approved by Shareholders, it is expected that Admission will become effective and dealings in the Enlarged Issued Share Capital will commence on AIM on or around 13 January 2021. The General Meeting at which the Resolutions will be proposed has been convened for 10.00 a.m. on 11 January 2021 at the of ces of Hill Dickinson LLP at The Broadgate Tower, 20 Primrose Street, London EC2A 2EW.

You should read the whole of this Admission Document and not just rely upon the information contained in this letter. In particular, you should carefully consider the Risk Factors set out in Part II of this Admission Document. Your attention is also drawn to the information set out in Parts III to VIII of this Admission Document.

   2.    BACKGROUND TO AND REASONS FOR THE ACQUISITION 

As announced on 11 June 2020, the Company completed the disposal, by its wholly-owned subsidiary, Equatorial Biofuels (Guernsey) Limited, of the Company's 50 per cent. interest in Liberian Palm Developments Limited to major shareholder Kuala Lumpur Kepong Berhad ("KLK"). Consequently, the Company became an AIM Rule 15 cash shell and as such, is required to make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 within six months or otherwise seek to become an investing company pursuant to AIM Rule 8. As 6 months have lapsed since the Company became an AIM Rule 15 cash shell, the Company's suspension of trading shall continue until Admission.

Capital Metals Limited has previously sought a listing on a UK capital market and most recently in early 2020 was in a process to seek to join the Standard Segment of the Of cial List. Following discussions with the Company, once the Company had become a Rule 15 cash shell, it was agreed by the independent directors of the respective boards that a listing by way of a reverse takeover could be mutually bene cial for each party, if appropriate terms could be agreed.

The Independent Directors have reviewed the merits of the Acquisition and agreed its terms with CML.

   3.    PRINCIPAL TERMS OF THE ACQUISITION 

On 16 October 2020, the Company sent an offer letter to Capital Metals Limited communicating the offer from the Company to acquire the entire issued share capital of Capital Metals Limited (the "Offer"). Upon receipt of the Offer, CML sent offer letters to certain of its shareholders, comprising the CML Majority communicating the Offer. The CML Majority hold between them around 51.4 per cent. of the CML Shares. The Offer speci ed the following terms:

-- In consideration for the acquisition of the CML Shares, the Company proposed to issue 1.235 Consideration Shares for every 1 CML Share sold.

-- That completion of the Acquisition is conditional, amongst other things, on the passing of the Resolutions and the Placing and Admission becoming effective on or before 31 March 2021.

-- Completion of the Offer is also conditional on acceptances being received from the holders of CML Shares holding more than 75 per cent. of the issued CML Shares (unless otherwise agreed between CML and the Company, with the approval of the Nominated Adviser).

-- A CML Shareholder accepting the offer (a "CML Vendor") will be required to provide usual title and capacity warranties and the Company will also give title and capacity warranties to them.

-- If a CML Vendor wishes to accept the Offer they should return a signed acceptance form which is sent to them with the Offer Letter ("Acceptance Form"). Contained within the Offer Letter is a power of attorney pursuant to which a CML Shareholder will appoint Capital Metals Limited as their attorney to take all reasonable and necessary actions on their behalf in order to give effect to the Offer and to complete the transaction. This includes authority to execute a conditional sale and purchase agreement ("Acquisition Agreement") and all necessary instruments of transfer.

-- Save for the CML Vendors referenced in the bullet point below, all of the CML Vendors will undertake to the Company that they will not dispose of any interest they hold in the Consideration Shares for a period of 3 months following Admission.

-- CML Shares held by CML Vendors as a result of the conversion by them of bonds in CML into CML Shares shall not be subject to any lock-in restrictions (unless required pursuant to the AIM Rules) and certain other CML Vendors shall be subject to the lock-in restrictions referenced at paragraph 13 of this Part I as required by Rule 7 of the AIM Rules.

   --    The CML Directors recommended that all CML Shareholders accept the Offer. 

As at the date of this document, each of the CML Majority has accepted the Offer and returned an executed Acceptance Form and CML has entered into an Acquisition Agreement with the Company on their behalf pursuant to which their CML Shares shall be acquired by the Company, subject to satisfaction of the conditions. In addition, Capital Metals Limited sent Offer Letters to the remaining CML Shareholders (the "CML Minority"). As at the date of this document, CML Vendors (including the CML Majority) holding 98.3 per cent. of the issued share capital of CML have accepted the Offer.

In the event that the Offer is accepted by all CML Shareholders, the Company will acquire all of the issued CML Shares and will in turn issue 132,000,000 Consideration Shares to satisfy a total consideration of GBP15.84 million. In the event that the Offer is not accepted by all CML Shareholders, the number of Consideration Shares to be issued shall be reduced accordingly.

On the date falling two Business Days prior to the General Meeting, the Company and Capital Metals Limited (acting as attorney for the CML Minority that have accepted the Offer) will execute an Acquisition Agreement setting out the terms of the Acquisition as set out in the Offer Letter and Acceptance Forms, in particular containing the mechanics for completion of the Acquisition. Further details of the Acquisition Agreements are set out in the Admission Document.

In connection with the Acquisition, the CML Directors entered into a warranty deed pursuant to which they provided commercial warranties to the Company in connection with the assets and business of Capital Metals Limited (the "CML Warranty Deed").

Further details of the Offer Letters, the Acceptance Forms, the Acquisition Agreement and the CML Warranty Deed are set out in the Admission Document.

Acquisition of shares from minority holders

The BVI Business Companies Act 2004 (the BCA) provides a statutory process whereby the holder(s) of 90% plus of the votes of the issued shares (the Majority Shareholders) can squeeze out the holders of 10% or less (the Minority Shareholders). After the Company has received a direction from the Majority Shareholders to redeem the Minority Shareholders, the Company is obligated to carry out that redemption process (which begins with notifying the Minority Shareholders that they are being squeezed out and the price and manner of that squeeze out, the Squeeze Out Notice). Unless the squeeze-out is procedurally invalid, Minority Shareholders cannot prevent their shares being redeemed. However, they are entitled to dissent and dispute the price (the Redemption Price) being paid to them by the Company for their shares as the BCA does entitle them to receipt of fair value for their shares. Should the Minority Shareholders dispute the Redemption Price then, failing agreement between the Minority Shareholder and the company, a statutory appraisal process must be followed for purposes of the determination of the fair value of their shares (the Appraisal Process). During the Appraisal Process, the rights of the Minority Shareholders are restricted to (a) their right to receive fair value for the shares redeemed and (b) the right to institute proceedings to obtain relief on the ground that the squeeze-out is illegal.

Related Party Transaction

Michael Frayne is a director of CML and, together with his wife, has a 9.81 per cent. interest in CML Shares. He is also Executive Chairman of the Company.

Accordingly, the Acquisition constitutes a related party transaction under Rule 13 of the AIM Rules. Geoffrey Brown and Teh Kwan Wey, being the Independent Directors for the purposes of AIM Rule 13, having consulted with SPARK, the Company's Nominated Adviser, consider that the terms of the Acquisition are fair and reasonable insofar the Shareholders are concerned. In providing such advice to the Independent Directors, SPARK has taken into account the Independent Directors' commercial assessment.

   4.    INFORMATION ON THE ENLARGED GROUP 

Equatorial Palm Oil

Since 11 June 2020 Equatorial Palm Oil has been an AIM Rule 15 cash shell. It has no trading businesses, and as such, is required to make an acquisition, or acquisitions, which constitute a reverse takeover under AIM Rule 14 within six months from 11 June 2020. Its only subsidiary is Equatorial Biofuels (Guernsey) Limited, which the Company is in the process of liquidating at no loss to creditors, as it is no longer required.

Capital Metals Limited

History and Background

Capital Metals Limited is a company limited by shares, incorporated on 18 September 2015 in the British Virgin Islands under the name Lion Metals Limited. It subsequently changed its name to Capital Metals Limited on 25 September 2015. The principal legislation under which CML operates is the BVI Companies Act and the regulations made thereunder. CML acts as a holding company for one BVI subsidiary and four Sri Lankan subsidiaries. CML is the parent holding company which owns, directly or indirectly, 100 per cent. of its subsidiaries; Brighton Metals Limited (BVI) and Redgate Lanka Limited (Sri Lanka) which between them owns 100 per cent. of the Sri Lankan operating companies including Damsila Exports (Pvt) Limited ("DEL") and Eastern Minerals (Pvt) Limited ("EML") and also a dormant subsidiary named Keynes Investments (Pvt) Limited (Sri Lanka) (together with CML and its subsidiaries hereinafter referred to as the "CML Group").

The Eastern Minerals Project

In April 2016 CML (via its subsidiaries) acquired 100 per cent. of DEL and EML, the entities which have owned the exploration licenses that comprise the Eastern Minerals Project ("EMP" or "Project"). The EMP (originally called the Pottuvil or Oluvil Mineral Sands Project) is located in the Ampara District of the Eastern Province of Sri Lanka, approximately 220 km east of Colombo. The EMP comprises the Project Licenses which cover 84 sq. km. An additional nine applications have also been made in respect of new exploration licenses covering a further 623 sq. km. The EMP is divided into two sub-project areas:

-- the northern area (Eastern North), was held by DEL through exploration license EL168/R/4 which expired on 31 October 2020 (the "DEL License") and which is now subject to the IML Applications; and

-- the southern area (Eastern South) was (and, following renewal, will be) held by EML through exploration license EL199/R/4 (the "EML License").

Outstanding Consideration and CML Obligation to Allot Shares

Under the DEL Share Sale Agreement and the EML Share Sale Agreement certain deferred payments totalling $1,375,000 remain outstanding from BML to the DEL Vendors and EML Vendors respectively as follows:

-- the sum of $312,500 payable in cash is due to the DEL Vendors on completion of the Feasibility Study (by either DEL or EML);

-- the sum of $375,000 payable in cash is due to the DEL Vendors once commercial production commences pursuant to any IML granted over all or part of the DEL License area or the EML License area;

-- the sum of $312,500 payable in cash is due to the EML Vendors on completion of the Feasibility Study (by either DEL or EML); and

-- the sum of $375,000 payable in cash is due to the EML Vendors once commercial production commences pursuant to any IML granted over all or part of the EML License area or the DEL License area.

Further details of the DEL Share Sale Agreement and the EML Share Sale Agreement are set out in the Admission Document.

In addition, under the DEL Introduction Agreement and the EML Introduction Agreement, BML is required to pay an aggregate amount of $2,250,000 to RGD1 (or its nominees). These payments are to be satis ed by the issue of shares in CML as follows:

   --    in respect of the DEL Introduction Agreement: 

o the sum of $562,500 to be satis ed by the issue of CML shares on completion of the Feasibility Study (by either DEL or EML) ;

o the sum of $562,500 to be satis ed by the issue of CML shares once commercial production commences on any IML granted over all or part of the DEL License area or the EML License area; and

   --    in respect of the EML Introduction Agreement: 

o the sum of $562,500 to be satis ed by the issue of CML Shares on completion of the Feasibility Study (by either DEL or EML);

o the sum of $562,500 to be satis ed by the issue of CML shares once commercial production commences on any IML granted over all or part of the EML License area or the DEL License area.

When these shares are issued by CML, the Company's shareholding in CML will be diluted. The extent of this dilution cannot be determined at this stage as the issue price of the CML Shares will be at a price per share (i) at which CML Shares were issued in the latest private placement or fundraising prior to such payment date; or (ii) if a third party valuation of CML has been obtained by CML, the price per share determined by that valuation, whichever is higher.

Overview on Regulatory Regime in Sri Lanka

Under the Mines and Minerals Act a license is required for any person to explore for, mine, transport, process, store, trade in or export any mineral. The GSMB is the body empowered to issue such licenses.

An exploration license grants to the holder of the license the exclusive right to explore for all mineral categories authorized by the license. Each license speci es the limit of the land area and extent for which the license is granted, the mineral in respect of which the license is granted, the duration of the license and the conditions subject to which the license is granted.

An industrial mining license grants to the holder of the license the entitlement to explore for mine, wash, clean, mechanically break, sort, store, trade in those authorized minerals mined within the area speci ed in the license. Each IML/IML Application will be over land described by reference to a ground survey plan specifying the boundaries of the area to be covered by the license.

The deposit within the area covered by the Project Licenses consists of active coastal sand and older sand berms that form a continuous strip of sand with concentrations of heavy minerals and has been de ned over a strike length of 49 km by 1,643 shallow auger drill holes. The total heavy mineral ("THM") component of the mineral sand deposit consists of Valuable Heavy Minerals ("VHM"): ilmenite, leucoxene, altered ilmenite, rutile, zircon, garnet and sillimanite. The sand component is composed predominantly of quartz with a small percentage of feldspar.

The EML License was (and, when renewed, will be) held through a wholly-owned Sri Lankan private limited company, EML. In addition, the DEL License was also held through a wholly-owned Sri Lankan private limited company, DEL, which is also the applicant pursuant to the IML Applications.

DEL License

The DEL License was rst issued to DEL on 5 June 2010 and had previously been renewed on 6 July 2012, 17 September 2014, 1 November 2016 and 31 October 2018. The DEL License expired on 31 October 2020. The forms of application that are included in the regulations issued under the laws of Sri Lanka have been formulated to indicate that the fourth renewal of an exploration license is the nal application that may be made for renewal of an Exploration License. On 28 April 2014 DEL submitted its rst formal application for an Industrial Mining License ("IML") over 111.5221 hectares located within the DEL License area ("First IML Application") and such application is currently pending. In connection with this application, an environmental impact assessment ("EIA") report was submitted to GSMB on 26 September 2019. The EIA review and approval process was delayed earlier this year due to COVID-19 causing greatly reduced Government activity. The EIA report was resubmitted to the CCD in October 2020 and the Directors believe the report will be made available for its 30 business day consultation shortly.

In October 2020, DEL made a further 5 applications over land included in the DEL License area (the "Additional IML Applications").

The GSMB has represented to DEL that, following the expiry of an exploration license, the GSMB in practice, allows the former exploration license holder for a period of two years from the date of expiry:

-- Exclusive right over the former exploration license area to submit further IMLs should the former license holder wish to do so (in this case DEL, in respect of the DEL License area); and

-- Exclusivity over the former exploration license area by refraining from accepting applications for any new exploration licenses from third parties.

Such representations have also been made verbally by the Registrar of the GSMB to the Company's Sri Lankan counsel, however these practices are not provided for in any published guidelines, policy documents, regulations or statutes to support such representation.

Notwithstanding the representations given by the GSMB, upon expiry of the DEL License, DEL will not hold any exploration rights in respect of the area covered by the DEL License until such time as an IML is granted.

EML License

The EML License was rst issued to EML on 18 April 2012 and was renewed three times on 17 September 2014, 1 November 2016 and 31 October 2018 prior to its expiry on 31 October 2020. The fourth renewal was applied for in October 2020 and is expected to be granted soon. As a result of COVID-19, the government in Sri Lanka has been operating at reduced capacity causing a delay in this process and EML is working with the GSMB in order to obtain this renewal as soon as possible. Following expiry of the EML License, EML will not hold any exploration rights in respect of the area covered by the EML License until such time as a renewal is granted. EML has not yet applied for an IML in respect of the EML License, however the Board intends to make such application in the 24 months period following the date upon which the EML License is renewed.

Since September 2016, DEL and EML have made nine additional exploration license applications, covering an area of 623 sq. km., surrounding EL 168 and EL 199 both onshore (over 272km2) and offshore (over 351km2), to cover interpreted extensions to the mineral sands' deposits. The Company will consider the appropriate time to recommence the application process for these ELs.

The total EMP license package, including applications, is summarised below:

 
                                     Registered 
   Tenement number      Project       holder             Interest    Area km(2)            Status 
                           area 
                        Eastern 
 EL199/R/3 (or 4)         South              EML             100%            37       Exploration 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2017/199          North              DEL             100%            60       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2018/1101         North              DEL             100%            24       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2017/201          North              DEL             100%            79       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2017/202          South              EML             100%            79       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2017/203          South              EML             100%            83       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2017/207          North              DEL             100%            50       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2017/209          North              DEL             100%           100       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2017/208          North              DEL             100%            48       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 COM/EL/2017/210          South              EML             100%           100       Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 EL/168/R/4               North              DEL             100%         0.134   IML Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 EL/168/R/4               North              DEL             100%         0.052   IML Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 EL/168/R/4               North              DEL             100%         0.127   IML Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 EL/168/R/4               North              DEL             100%         0.048   IML Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 EL/168/R/4               North              DEL             100%         0.172   IML Application 
                     ==========  ===============  ===============  ============  ================ 
                        Eastern 
 EL/168/R/4               North              DEL             100%         1.115   IML Application 
                     ==========  ===============  ===============  ============  ================ 
 

History of Exploration and Technical Work

In 2014, DEL and EML (prior to the CML's ownership of these companies) entered into a memorandum of understanding with technical consultants RGD1 whereby RGD1 provided technical and commercial management, including preparation of a preliminary scoping study (the "Scoping Study"). Technical work undertaken on the Project from 2014 to April 2016 included various drilling programmes, Mineral Resource Estimates and the Scoping Study for the Project, after which Brighton Metals Limited (a CML wholly-owned company) acquired DEL and EML.

In June 2016, RGD1 (on behalf of DEL and EML) concluded the Scoping Study, including a Mineral Resource Estimate based on the drilling and sampling work to date. Preliminary assumptions for operating costs and recoveries that were assessed during the Scoping Study were in turn benchmarked against similar mineral sands projects. The Scoping Study reported above at a 5% total heavy metal ("THM") cut-off is 17.2 Mt at 17.6% THM with contained THM of in excess of 3 Mt. CML estimates the components of the THM assemblage is as follows:

 
 VHM Product    VHM %   VHM % of Insitu   2020 price   % of Value 
                  THM               Ore      US$/t 2 
 Ilmenite 1      47.1               8.3          230           51 
               ------  ----------------  -----------  ----------- 
 Zircon           5.0               0.9        1,250           20 
               ------  ----------------  -----------  ----------- 
 Rutile           3.4               0.6        1,100           14 
               ------  ----------------  -----------  ----------- 
 Garnet          22.7               4.0          200           15 
               ------  ----------------  -----------  ----------- 
 

[1] The ilmenite 2020 price US$/t is the estimate for ilmenite only and does not include the price for other Titanium Dioxide. The % THM of Insitu Orr and % of Value gures for ilmenite all include other Titanium Dioxide

2 Capital Metals Limited estimate

The EMP deposit has been de ned by 1,643 shallow auger drill holes totalling 2,621 metres of drilling. The drilling was completed over a number of programmes between 2012 and 2015, rstly by GSMB on behalf of DEL and EML, and then by RGD1. Further drilling conducted by CML in 2018 which con rmed that the resource extended at depth.

A bulk sampling program was undertaken by CML between December 2016 and July 2017 whereby a total of 42 undisturbed sand samples were taken from 14 pit locations across the project area. Three samples were taken from each pit in varying THM grade material (high, medium, and low grade). CML then commissioned detailed bulk sample metallurgical work at Mineral Technologies (a Downer Group company) on the sample areas for the design of process ow sheets from the results of the metallurgical evaluation. This sampling programme enabled CML to characterize product types and quality which have been used in discussions with potential off-takers.

JORC Code Estimate Resources

Optiro Pty Limited ("Optiro"), a mineral resource consulting and advisory group, has reviewed the documentation provided for the EMP resource model in June 2016. As part of this review, visual validation of the block model was carried out by examining cross-section and plan views of the drill hole data and the estimated block grades.

In Optiro's opinion, the Mineral Resource models developed for Eastern North and South provide a realistic estimation and classi cation of the global Mineral Resources as summarised below:

 
                                                                THM 
                        Classi cation     Tonnes              grade              Contained THM 
   Deposit                                  (Mt)                (%)              (kt) 
 Eastern North        Measured              3.16              21.9%                        691 
                 =====================  ========  =================  ========================= 
      Indicated                             3.04              18.3%                        555 
 =====================================  ========  =================  ========================= 
      Inferred                              0.71              19.9%                        141 
 =====================================  ========  =================  ========================= 
      Total                                 6.91              20.1%                      1,388 
 =====================================  ========  =================  ========================= 
 Eastern South        Measured              2.66              17.6%                        468 
                 =====================  ========  =================  ========================= 
      Indicated                             5.57              15.8%                        877 
 =====================================  ========  =================  ========================= 
      Inferred                              2.08              14.6%                        304 
 =====================================  ========  =================  ========================= 
      Total                                10.30              16.0%                      1,649 
 =====================================  ========  =================  ========================= 
 Total                Measured              5.82              19.9%                      1,159 
                 =====================  ========  =================  ========================= 
      Indicated                             8.60              16.6%                      1,432 
 =====================================  ========  =================  ========================= 
      Inferred                              2.79              16.0%                        446 
 =====================================  ========  =================  ========================= 
      Total                                17.21              17.6%                      3,037 
 =====================================  ========  =================  ========================= 
 

More detail is set out in the Competent Person's Report within the Admission Document.

Operations of the Enlarged Group

Summary of Work Programme

CML has prepared a Work Programme for 2021. The principal purpose of the Placing is to raise funds to undertake a Development Study and further its work programme (the "Work Programme"). The principal aims of the Work Programme are to obtain all necessary permits to allow for conversion of the IML Applications to IMLs and commence engineering and planning studies to facilitate nancing and off-take agreements.

The Work Programme can be broken down into four phases as outlined below (the Placing proceeds are suf cient for completion of Phases I and II.):

Phase I

The Enlarged Group's priority is to complete the Environmental Impact Assessment ("EIA") approval process with the Sri Lankan regulators, along with other technical activities and community awareness, in order to procure the IML resulting from the First IML Application. CML commissioned the compilation of the requisite (300 page) EIA report (the "EIA Report"), which was prepared by an independent and multi-disciplinary team of consultants and the EIA Report was based on the results of the GSMB submitted Technical Work Report together with required additional information gathered during the EIA eld study with assistance from CML, and submitted to the Coast Conservation and Coastal Resources Department ("CCD") for initial review. The EIA Report covered coastal geomorphology, water quality studies, air quality studies, ecological studies, archaeological studies and land use studies as well as detailed social and community engagement in the Project area. The Enlarged Group intends to continue this engagement throughout the Project and will ensure that there is ongoing consultation and awareness programmes available for

the community.

The EIA was lodged with the CCD in September 2019. The CCD, together with all the government agencies that are expected to directly or indirectly have oversight of the Project, has since carried out an inspection of the area within the EIA study. The CCD has compiled feedback from these agencies to be included in the EIA Report ahead of being submitted for a 30 day public consultation period and a 30 day technical review period, the purpose of which is to identify whether there are any further matters for CML to consider. Once any identi ed matters, if any, are resolved, the CCD can approve the EIA. An approved EIA is required by the GSMB in order to approve the First IML Application (for the DEL License) for the Project, which the Directors expect to receive by the end of Q1 2021.

Following Admission, the Enlarged Group intends to obtain land access agreements for the initial mining area at the Project. To this end, discussions with relevant land owners continue. On top of this, the Enlarged Group intends to complete an updated scoping and development study ("Development Study") to enhance their technical understanding prior to full commercial development of the Project. The Enlarged Group will appoint an independent consultancy to prepare the Development Study which will include an economic analysis of the parameters and returns for the Project. The Directors estimate that this study will take up to 6 months to complete.

CML has identi ed potential areas that could be drilled to increase the total resource.

Following approval of the First IML Application, the Enlarged Group will seek ancillary permits for construction of mining and processing facilities for the Project. Such ancillary permits relate to, but are not limited to, power and water, transport, port access and usage (including dredging approval), and waste disposal.

Phase II

Once the initial IML has been granted pursuant to the First IML Application in respect of part of the DEL License area, the Enlarged Group will have further discussions to agree off-take agreements with potential customers such as resource trading companies as well as end user consumers of mineral sands products such as pigment and ceramic producers. The Enlarged Group intends to provide samples to these potential customers to support the off-take discussions. They will also engage in further studies on the optimum process owsheet and the nal product quality of the ilmenite, rutile, zircon and garnet for marketing purposes.

The Company will also commence arrangements to source the necessary funding requirements (of up to $35 million (GBP26.2 million)) needed to take the Project to production in Phases III and IV. The Directors expect this will comprise a mixture of debt nance, equity and advance payments from off- take customer(s). The Directors believe that once the initial IML pursuant to the First IML Application is obtained, the Company will be in a stronger position to negotiate terms for off-take agreements and project nance. The Directors believe that being admitted to trading on AIM will provide a broader range of nancing options.

The Enlarged Group will further its discussion with the Sri Lanka Ports Authority ("SLPA") in order to locate some of the proposed processing plants (described in Phase III below) and use the facility as its point of shipping once mining commences. As the port has been underutilised for some time, it is expected that discussions with the SLPA will also include the Enlarged Group assisting with port upkeep.

Phase III

The Enlarged Group will use additional funds raised in Phase II to provide for the following:

i. Construction of the "wet" plant - this is used to separate the heavy minerals from the silica sands, to create a Heavy Mineral Concentrate ("HMC"). It will be located adjacent to the mine;

ii. Construction of the "dry" separation plant - this will be used to separate out the valuable HMC (comprising rutile, zircon, garnet, ilmenite) from non-valuable silica sands for restoration. It is proposed to be located at the local port (Oluvil); and

iii. to settle the rst tranche of deferred consideration, payable in connection with the acquisition of DEL and EML, which is triggered by the completion of the Feasibility Study. This amounts to $625,000 (further details are outlined in the Admission Document).

In addition, following completion of the Feasibility Study, an amount of $562,500, payable in shares in Capital Metals Limited, is due to be paid by CML under the DEL Introduction Agreement, as set out in paragraphs 13.18 and 13.19 of Part VIII of this document and an amount of $562,500, payable in shares in Capital Metals Limited, is due under the EML Introduction Agreement, which is set out in the Admission Document.

Phase IV

Commercial production will start once the Enlarged Group has obtained the IML, the ancillary permits and off-take agreements and the processing plants have been constructed and are operational. Further details regarding the EMP is set out in the Competent Person's Report in the Admission Document.

Commencing commercial production in respect of the DEL Licence area will trigger the second and last deferred payment of $375,000 under the DEL Share Sale Agreement and will trigger the second and last deferred payment $375,000 under the EML Share Sale Agreement.

Commencing commercial production will also trigger the second and last payment tranches of the DEL and EML Introduction Agreements. These amount in aggregate to US$1,125,000 (further details are outlined in the Admission Document).

Development Study & Economic Analysis

As mentioned in Phase II above, a Development Study is planned to be commissioned following Admission, which should take up to 6 months to complete.

Based on all technical work completed to date, the Directors' current expectations are that capex of approximately US$35m (GBP26.2 million) will be required to commence mining operations. This is based on constructing a "wet" plant sited adjacent to the mine site, and a dry mineral separation plant at the port, to render the Company capable of processing c1.65Mt per annum.

Based on the Scoping Study, the infrastructure in place, and the nature of the THM deposits (high resource grade and mineral assemblage value) within the Project License areas, the Board expects the Project to be a low capex, high margin operation.

The Enlarged Group's model for the Project yields a targeted IRR and cash ow margins in excess of 50%. This is a management target only, and is not intended to be a forecast.

Infrastructure

The Oluvil Port is a commercial and shery harbour located some 32 km from the proposed site of the wet plant for the DEL Licence area; the port was opened on 1 September 2013 under the Nagenahira Navodaya (Reawakening of the East) programme.

The Nagenahira Navodaya programme was launched to expedite the development activities in the region and priority was given for the Oluvil Port as economic infrastructure and a catalyst for the growth of the eastern region of Sri Lanka. The commercial (cargo) section comprises 330 m quay at 8 m depth (design depth of 11 m).

In addition to the commercial harbour the port also has other key infrastructure including:

   --    sealed roads to port from the coastal deposits 
   --    grid power 
   --    scheme water 
   --    of ce, workshop, storage facility and residential quarters 
   --    perimeter security wall and fencing. 

The commercial harbour has yet to be used and currently requires dredging of sand accumulations resulting from long-shore drift. The port offers more than adequate land and shipping capacity (8,000 to 10,000 t if harbour dredged to design depth of 11 m) for the Project's needs.

Mineral Sands' Products

Mineral sands' deposits will typically contain a variety of valuable heavy minerals. The identi ed valuable heavy minerals in the EMP are zircon, rutile, ilmenite (including sillimanite and leucoxene) and garnet.

Zircon

Zircon is a high value product used in the ceramic industry for glazes and as an opaci er on kitchen and bathroom tiles, dinnerware and decorative ceramics. Industrial ceramics containing zircon are used in refractory applications requiring heat and corrosion resistance. A growing application of zircon is in the zirconium chemicals industry with a major use in catalytic converters to control motor vehicle emissions.

Rutile and Ilmenite

The titanium ores of rutile and ilmenite are primarily sold as feedstocks for down-stream processing sectors including titanium dioxide ("TIO2") pigment or titanium metal. Rutile has a very high titanium dioxide content (490% TiO2) whilst in Ilmenite the grade is lower (40-60% TiO2). Depending on the metallurgical characteristics of the titanium ore, the downstream process route used to make pigment or metal may be synthetic rutile, slagging, sulphate or chloride pigment process.

Titanium dioxide pigment

Titanium dioxide pigment is a white pigment primarily used in the paint industry as it is non- toxic and has the ability to re ect and scatter all colours of light while absorbing ultraviolet light. It has replaced lead-based pigments in paints.

Titanium dioxide pigment is also used in the manufacture of certain plastics, paper, sunscreens, foodstuffs, cosmetics and toothpaste.

Titanium metal

Titanium metal is a light, inert and strong metal with a high melting point, which makes it ideal for use in heart pacemakers, arti cial limbs/joints, spectacle frames and watches. Titanium metal is also used in rockets, jet aircraft and sporting equipment and when formed into an alloy with metals such as iron, manganese and aluminium, it can be used in power stations, paper mills, oil re neries and desalination plants.

Garnet

Garnet sand is an excellent abrasive and a common, cost-effective replacement for silica sand in sand blasting. Mixed with high pressure water, garnet is used to cut steel and other materials in water jets. Garnet sand is also used for water ltration media.

Mineral Sands' Markets

The industry is relatively tight in terms of producers, with the three main producers (Rio Tinto, Tronox and Iluka Resources) ("Iluka") accounting for approximately two thirds of global production of zircon and Titanium dioxide ("TIO2") feedstock (ilmenite and rutile).

The consumption of TiO2 and zircon are closely linked to industrial and commercial applications with over half of the demand from the US and China. Therefore, the US and Chinese GDP and housing markets are key in uences of demand for mineral sands products. Global demand has been impacted by the slowdown in global industrial activity. The demand for pigment feedstock has grown, potentially due to increased DIY and commercial painting during the COVID-19 period. Demand however has fallen in other industries such as aircraft manufacturing.

In recent years, Iluka Resources noted that global supply of rutile and chloride ilmenite was in decline due to a lack of new projects to ll the supply gap which has been compounded by a reluctance to invest in new mining projects in recent years.

The zircon market is dominated by three mature Australian and South African operations representing approximately 63 per cent. of global output. At the beginning of 2020, zircon supply was also expected to remain in material de cit as the continuing industrialisation of China and India puts stress on the existing market while declining grades and volumes at the main sources of mined supply continue to fall. Reduced industrial global activity has eased overall zircon demand.

Pricing

Minerals sands' prices are decided by each buyer and producer typically through off-take arrangements. The commodities are not traded on any metals markets, therefore, pricing is more complex and will be determined by the quality of the material produced and the speci cation requirements of each buyer.

Zircon

Global demand for zircon is mostly driven by the ceramics sector, which will underpin growth for the foreseeable future and result in zircon prices moving broadly in line with global GDP.

After a decline in zircon prices between 2011 and 2016 to approximately US$810 per tonne, fears of supply bottlenecks led to a substantial recovery during 2017/18 with prices continuing to increase to over US$1,500 per tonne in late 2019. The decrease in global GDP due to COVID-19 has seen the zircon price ease in 2020 with Iluka noting a drop in their average sale price to US$1,354 per tonne. Future pricing will be linked to the global GDP post COVID-19.

(Source: Iluka Mineral sands industry info toolkit November 2019, and Iluka mid-year 2020 results presentation).

Garnet

References to garnet for the Project are to "industrial" garnet (as opposed to "hard rock garnet", which is analogous to precious stones.) Alluvial garnet grains (industrial garnet) (herein referred to as "garnet") which are rounded are more suitable for blasting treatments. Mixed with high pressure water, garnet is used to cut steel and other materials in water jets ("Water Jet Cutting"). There are various kinds of abrasive garnets which can be divided based on their origin. The largest current source of abrasive garnet is garnet-rich beach sand of which the main producers are Australia and India. The Optiro report states that the Sri Lankan garnets are considered analogous to the Indian garnet sands. Garnet sand is also used for water ltration media.

Globally, the garnet market is mainly driven by growing demand for Water Jet Cutting, which accounted for nearly 37.86% of total downstream consumption of garnet in 2018. The worldwide market for Garnet is expected to grow at a compared annual growth rate of roughly 5.7% over the next ve years, and will reach US$528.3 million in 2024, from US$400.3 million in 2019.

As there are many different type of speci cations for abrasive garnet the price can vary between from $130-$560/t.

Titanium Feedstock (ilmenite & rutile)

Despite the global disruption in 2020, titanium feedstock prices have remained strong, one reason being the sustained demand for ilmenite by Chinese pigment producers.

Ilmenite prices are typically set on long-term contracts and vary depending on their usage for either sulphate or chloride process feedstocks, with sulphate ilmenite being the predominant product by usage. After a few years of price softness between 2013 and 2014, ilmenite prices have strengthened considerably and average prices were estimated to be around US$165/t during 2017 and, with markets continuing to be driven by Chinese demand and increasing to approximately US$220/t in 2020.

Rutile prices have also strengthened during 2020, despite COVID-19, with Iluka achieving an average weighted price of US$1,246 per tonne in the rst half of 2020, up 7% from H2, 2019.

Overview of Sri Lanka

Country Overview

Sri Lanka, of cially the Democratic Socialist Republic of Sri Lanka, is an island country in the northern Indian Ocean off the southern coast of the Indian subcontinent in South Asia. Sri Lanka has maritime borders with India to the northwest and the Maldives to the southwest. The distance between the south-eastern tip of India and north-western Sri Lanka is only about 40 miles. Sri Lanka's total land area is approximately 25,330 square miles and it has a population of a little more than 21 million.

Sri Lanka is a republic and is governed by a semi-presidential system which is a mixture of a presidential and a parliamentary system. The nation's political capital is Sri Jayawardenapura Kotte and is a suburb of Colombo, the largest city and cultural capital of Sri Lanka.

Sri Lanka is a multi-ethnic and multi-religion island nation in the Indian Ocean, near the southern coast of India.

The country's largest ethnic group is the Sinhalese, who form about 74 per cent. of the population. The majority of the Sinhalese are Buddhists, with a Christian minority. The next largest ethnic group is composed of the Tamils who form 11 per cent. of the population, of whom the majority are Hindus. A civil con ict between the Government and the Tamil community, who sought an independent homeland for the island's Tamil minority, lasted more than 25 years and ended in May 2009, when Sinhalese government forces seized the last area controlled by Tamil Tiger rebels.

Presidential elections were held in Sri Lanka on 16 November 2019. The election was won with a clear majority by Gotabaya Rajapaksa of the SLPP party, who assumed of ce in January 2020. He replaced Maithripala Sirisena from the United National Party, who did not stand for re-election. Since the election, Mr Rajapaksa has named his brother, Mahinda Rajapaksa (the former President preceding Mr Sirisena), as the new Prime Minister. Given this change in Presidency, new parliamentary elections were held on 5 August 2020 and the incumbent SLPP party claimed a landslide victory, winning 145 seats out of a possible 225 seats.

Sri Lanka is endowed with a variety of mineral resources which are commercially extracted, including feldspar, clays, dolomite, graphite, limestone, mica, mineral sands and salt. Sri Lanka is known for its unique type of graphite, which is called vein graphite. In 2016 the Mineral Industry of Sri Lanka con rmed that, the mineral-processing industry produced cement, lead (secondary), iron and steel and the Company believes that this continues to be the case.

Regulatory Framework in Sri Lanka

The legal framework of Sri Lanka is based upon a mixture of laws from Rome, England, Holland, South India and old Ceylon.

The Sri Lankan judicial system has the Supreme Court as the apex court of the nation followed by the Court of Appeal, High Court, District Courts, Magistrates' Courts and Primary Courts. The Constitution of the Democratic Socialist Republic of Sri Lanka provided for an independent judiciary and guaranteed fundamental rights that allow for any aggrieved person to invoke the Supreme Court for any violation of their fundamental rights. The Constitution also provided for a Parliamentary

Commissioner for Administration (Ombudsman) who can investigate public grievances against government institutions and state of cers and give redress. It also introduced referendums on certain bills and on speci c issues of national importance.

The development of mineral resources is governed by the Mines & Minerals Act No.33 of 1992, the Mines & Minerals (Amended) Act No.66 of 2009 and the Mining (Licensing) Regulations No. 1 of 1993 (Gazette 794/23) and revisions thereafter. Under the Mines and Minerals Act, the GSMB issues Exploration, Mining, Trading and Transport Licenses.

An Exploration License grants the license holder the exclusive right to explore for all mineral categories authorised by the license. The Mining (License) Regulations (No 1 of 1993) Amendment dated 10 October 2005 (No. 1418/27) state that the minimum technical expenditure amount per square kilometre on an Exploration License is initially LKR 20,000/year increasing through subsequent years over the license duration.

There are two categories of Mining Licenses, namely artisanal ("AML") and industrial ("IML"). There is a procedural standard in place for the transition from an Exploration License to a Mining License should exploration activities be successful.

Applications for Exploration Licenses and Mining Licenses are processed in accordance with established procedure and practices of the GSMB. No speci c procedure is prescribed by the Mines and Minerals Act or any other statue. There is also no stipulated time frame within which the GSMB is required to make a determination on an application for a license. The GSMB is required by law to refer every application for an IML to other government agencies for clearance by such agencies before issuing an IML. Such government agencies may include in the clearance letters issued by them various conditions to be complied with by the applicant prior to the issue of the IML and / or during the continuation of the IML.

Some such government agencies to whom the GSMB is required to refer the applications for clearance could be the CCD, the Urban Development Authority, the Forest Department, the Department of Wild Life Conservation, the Department of Archaeology, the area Local Authority, and any other agencies which the GSMB considers it appropriate to refer the application to. For instance, if a facility for processing or any other activity is to be set up and that facility is to be established on lands falling within the purview of the Urban Development Authority, then such authority will stipulate various conditions to be satis ed prior to granting of the IML. Mineral Sand mining is conducted in the coastal zone as de ned in the Coast Conservation Act. Therefore the CCD always stipulates conditions to be satis ed prior to the issuance of an IML, which is why DEL is presently going through the approval process with the CCD.

The Mines and Minerals Act also provides that the holder of a license has the right to enter and possess any area of land speci ed in the license provided that where the owner or state organization of any such area of land is in possession of such area of land the holder of the license shall not exercise such rights except with the consent of such owner or state organization. Accordingly, DEL will require permits from certain state organizations to enter lands owned by them in order to carry on mining activities. In addition, a Local Trading Permit is required to be obtained from the Local authority of the area in which the mining activities are conducted. Such permit is renewable every year. Certain of the land subject to the IML Applications is privately held and DEL has entered into exploration agreements with landowners in order to carry on exploration activities pursuant to the DEL License. In order to conduct mining activities on those lands, DEL will need to enter into lease agreements with those landowners.

An Industrial Mining License grants to the license holder the entitlement to explore for mine, wash, clean, mechanically break, sort, store, trade in those authorized minerals mined within the area speci ed in the license and Industrial Mining License. The category of IML applied for by DEL would also grant to DEL, with special authorization of the GSMB, the entitlement to export those authorized minerals mined within the area speci ed in the license, subject to the terms and conditions imposed by the GSMB.

The holder of an IML (in the category applied for by DEL) should within a period of eighteen (18) months of granting of an IML commence commercial production. Where the holder of the IML is unable to commence commercial production within the speci ed time period, an extension to commence such commercial production may be negotiated with the GSMB. Failure to commence commercial production within the speci ed time period of 18 months or within such extended period as may be granted by the GSMB will result in termination of the IML.

A Trading License grants the non-exclusive right to purchase, store, process, trade in and with the special authorisation from the Director of the GSMB to export minerals in respect of which the license is issued.

All exploration, mining and trading licensees are required to obtain the special authorisation of the Director of the GSMB to export minerals in respect of which the license is issued.

A license to transport mineral-bearing substances or minerals is required for such quantity and period and for such minerals as may be speci ed in such license. All Exploration, Mining and Trading Licenses require a Transport License to transport mineral-bearing substances or minerals.

Transparency and environment

Sri Lanka has a comprehensive environmental legislative framework that includes a prescribed process and procedure for mining permitting and associated approvals based on an IEE and an EIA. CML is issued a Terms of Reference ("TOR") or Table of Contents for the assessments and all matters referred to in the IEE and/or EIA TOR must be addressed.

The TOR contains standard EIA Sections and Annexures addressing a description of the project; the mine and production plan; the existing environment and anticipated environmental impacts; monitoring programmes and mitigation plans; and conclusion and recommendations. The Annexures address any comments during community consultations and public awareness programmes, and all maps and plans.

A project EIA will be assessed at central government, provincial and private level and will need to encompass all aspects of the project.

Fiscal provisions

Mining royalties are levied by the Sri Lankan government through the GSMB at the rate of seven per cent. of revenue (for exported products) and the corporate tax rate is 14 per cent.

The Sri Lanka Export Development Board ("EDB") applies a CESS Export Levy on all exports on a per tonnage basis including currently 1,650 LKRs/t on ilmenite, 2,200 LKRs/t on rutile and 550 LKRs/t on zircon. With regard to garnet, CML is currently in discussion with the EDB and GSMB to seek clarity on what appears to be an incorrect rate of 24,200 LKRs/t. The EDB have suggested this may potentially be a typographical error (from LKR2,420) and CML continues to pursue the matter with these two authorities. At present, there are no other royalties payable relating to the Project.

   5.    DIRECTORS, PROPOSED DIRECTORS AND KEY MANAGEMENT 

Brief biographical details of the Existing Directors, Proposed Directors and senior management are set out below

   5.1          Existing Directors 

Michael Frayne - Executive Chairman (aged 53)

Michael holds a Bachelor of Commerce Degree majoring in accounting and nance, a Bachelor of Science Degree majoring in Geology and a Postgraduate Diploma in Applied Finance and Investment from the Securities Institute of Australia. He is a Chartered Accountant and a member of the Australian Institute of Mining and Metallurgy. Michael previously worked for Ernst & Young and consulted to a number of resource and commodity companies. Following this, he worked directly in the resource industry and spent time at Great Central Mines Ltd (now part of Newmont Ltd) and in the corporate team at Minara Resources Ltd (formerly Anaconda Nickel Ltd). Since 2002, Michael has provided corporate management and advice to resource, commodity and energy companies some of which are listed on AIM and the Australian Stock Exchange, with projects in Australia, Africa, Asia, North and South America. It is proposed that Michael moves to become Chief Executive following Admission.

Geoffrey Brown - Non-Executive Director (aged 80)

Geoffrey Brown has over 55 years' experience in the plantation sector. He joined Harrisons & Cros eld plc in Malaysia in 1962 where he was employed on various estates growing oil palm and rubber. He moved to Indonesia in 1976 and was made responsible for Harrisons & Cros eld's interests in that country. He was appointed Executive Chairman of London Sumatra Indonesia in 1982 and remained Managing Director of this large Indonesian plantation company until 1998. In 1990, he was appointed an Executive Director of Harrisons & Cros eld Plc, responsible for the plantation division. Harrisons & Cros eld Plc owned and managed plantations of rubber, oil palms, cocoa, coffee and tea in Indonesia, and oil palm and coffee in Papua New Guinea. He remained an Executive Director of Harrisons & Cros eld Plc until the company divested itself of its plantation interests in 1994. In 1999 and 2000, he co-ordinated the expansion of oil palm plantations belonging to the Musim Mas Group in Indonesia and then became a consultant specialising in plantation management. In 2006 he joined the Equatorial Palm Oil group of companies and was an Executive Director of the Company from 2008 until 2019 at which time he became a non-executive director.

Teh Kwan Wey - Non-Executive Director (aged 38)

Mr Teh Kwan Wey was appointed as a Non-Executive Director of the Company in September 2020. He is General Manager (Corporate) for KLK in Malaysia where he is responsible for in house corporate nance advisory and execution including acquisitions, divestments, fund raising and due diligence. Prior to this Mr Teh spent three years at Lazard in the London Financial Advisory team where he worked on a number of equity capital, M&A and LBO transactions for clients across Europe, North America, the Middle East and Asia. Mr Teh holds a Master of Engineering degree from Imperial College London.

   5.2          Proposed Directors 

On Admission, the following individuals will be appointed to the Board.

Gregory Martyr, Non-Executive Chairman (aged 56)

Greg is an experienced resource industry banker, advisor and corporate executive. He has over 30 years' experience in resources investment banking and corporate nance, as well as the management of international mining companies. He is also on the board of Euro Manganese Inc. and Carbon Dynamics Group P/L. From 2011 to 2016, Greg was a Managing Director with Standard Chartered Bank ultimately as the Global Head of Advisory, Mining and Metals. From 2005 until its 2011 acquisition by Standard Chartered Bank, he was a partner with Gryphon Partners, a boutique resource advisory rm and from 1994 to 2003, he was employed in several executive roles by Normandy Mining Ltd., including President, Americas. Prior to that he held positions with Deutsche Bank and Morgan Grenfell. Greg obtained a Bachelor of Economics and a Bachelor of Laws from the University of Sydney, Australia.

Anthony Samaha, Finance Director (aged 53)

Anthony Samaha is a Chartered Accountant who has over 25 years' experience in accounting and corporate nance, including resources development. Anthony worked for over 10 years with international accounting rms, including Ernst & Young, principally in corporate nance, gaining signi cant experience in valuations, IPOs, independent expert reports, and mergers and acquisitions. He has over 15 years' experience in the listing and management of AIM quoted companies, including the accounting and nancial management, fund raisings, project development and mergers and acquisitions. Anthony has been involved in acquisitions and resource projects in various regions of the world, including Australia, West Africa, North America, Kazakhstan and the People's Republic of China. He holds Bachelor of Commerce and Bachelor of Economics degrees from the University of Western Australia and is a Fellow of the Chartered Accountants Australia and New Zealand and an Associate of the Financial Services Institute of Australasia. He is currently an executive director of AIM-quoted Reabold Resources plc.

James Leahy, Non-Executive Director (aged 59)

Beginning his career at the London Metal Exchange ('LME'), Mr Leahy has spent the subsequent 34 years involved in stockbroking and commodities in a variety of roles, including research analyst, equity salesman and specialist corporate broker, which covered mining nance, origination and distribution. He has worked on a wide range of projects worldwide, ranging from industrial minerals, coal, iron ore, precious metals, copper, diamonds, lithium, uranium, plantations, forestry and palm oil. Lately, he has employed his corporate governance skills, having gained substantial experience as an independent director on the boards of several quoted and unquoted companies. In addition, Mr Leahy has direct experience in capital markets, having worked at James Capel, Credit Lyonnais, Nedbank, Canaccord and Mirabaud, where he gained invaluable experience with international institutional fund managers, hedge funds, private equity and sector specialist investors. Additionally, Mr Leahy has been involved in many IPOs, as well as primary and secondary placings, and the development of junior mining companies through to production. He is currently a director of the listed fund Geiger Counter Ltd, AIM-quoted Savannah Resources Plc and AEG Plc.

   5.3          Senior Management 

Details of key senior management within the Enlarged Group are set out below:

Sandy Barblett, General Manager - Commercial (aged 53)

Sandy Barblett has 25 years' experience in senior management roles with public companies including multi-nationals working in the UK, Australia, USA and Hong Kong. He has advised a number of companies in relation to general fund raising, admission onto public markets, strategy and management selection. He has a Bachelor of Business from Curtin University of Technology in Perth, Australia and a Bachelor of Laws from the University of Queensland; he previously worked for Minter Ellison as a solicitor. He is also a former director of AIM quoted Two Shields Investments plc (now called BrandShield Systems plc). Mr Barblett will leave the Company following Admission.

Iranga Dunuwille, Country Manager (aged 46)

Iranga Dunuwille is a member of the Chartered Institute of Management Accountants (UK) and holds an MBA from the University of Greenwich, London. Iranga has a broad range of nance experience over a twenty year career in Sri Lanka and London. Iranga commenced his career with Ernst & Young Sri Lanka & moved on to a large blue-chip conglomerate as an Accountant before then becoming a head of nance for a large manufacturer and exporter in Sri Lanka. In 2005 Iranga relocated to the UK and initially worked as a consultant focusing on regulatory compliance & AML before becoming a management accountant for a high-end shoe designer/manufacturer, Charlotte Olympia. Iranga relocated to Sri Lanka in 2016 and now manages all aspects of nance and administration functions of the Capital Metals group in Sri Lanka and is a director for the local subsidiary companies. He also acts as the Consultant CFO to one of the largest inbound tour operators in Sri Lanka.

Sam Quinn, Corporate Manager & proposed Company Secretary (aged 43)

Sam Quinn is a corporate lawyer with over 15 years' experience in the natural resources sector, in both legal counsel and executive management positions. Mr Quinn is currently a partner of Silvertree Partners, a London-based corporate services company dedicated to the natural resources sector and the Director of Corporate Finance and Legal Counsel for the Dragon Group, a London- based natural resources venture capital rm and, and holds various other positions in both listed and private natural resource companies. Prior to this, Mr Quinn worked as a corporate lawyer for Jackson McDonald Barristers & Solicitors in Perth, Western Australia and for Nabarro LLP in London. Mr Quinn graduated from the University of Western Australia in 1999 with a Bachelor of Laws and Bachelor of Arts and is a quali ed lawyer in Western Australia and in England & Wales. It is proposed that Sam will become the Company's Company Secretary upon Admission.

The Company has identi ed the need for a technical manager who will be responsible for all operational (i.e. mining, processing, environmental) aspects of the Project which includes the implementation of the Development Study. A suitable individual has been identi ed whom the Company hopes to appoint following Admission.

   6.            CURRENT TRADING AND FUTURE PROSPECTS OF THE ENLARGED GROUP 

Equatorial Palm Oil

In May 2020, Equatorial Palm Oil disposed of its 50% interest in Liberian Palm Developments Limited which constituted a fundamental change of business of the Company under Rule 15 of the AIM Rules which was approved by shareholders at a general meeting held on 9 June 2020.

Following the general meeting, Equatorial Palm Oil became an AIM Rule 15 cash shell. At that time the Company had available cash resources of approximately GBP800,000. On 8 September 2020, following Shareholders' approval, the Company announced it had raised GBP400,000 (before expenses) in order to allow the Board to seek and identify potential acquisition opportunities. As at 30 September 2020, the Company's most recent year end, the net asset value of the Company was GBP1.136 million, equating to 0.249 pence per share.

Capital Metals Limited

Capital Metals Limited's core focus is the development of the Eastern Minerals Project in an ef cient, sustainable and low-cost manner, by focusing on the establishment of a mining operation and associated mineral separation plant to produce mineral sands products for sale into the international markets. An Environmental Impact Assessment has been completed and lodged with the Sri Lankan authorities in September 2020, as outlined in paragraph 4 of this Part I.

   7.            FINANCIAL INFORMATION 

Historical nancial information on the Company and on Capital Metals Limited is set out in Parts IV and V of this Admission Document. An unaudited pro forma net assets statement showing the hypothetical net assets of the Enlarged Group after the Acquisition are also set out in the Admission Document.

The accounting reference date for the Enlarged Group will be March. Therefore, should the Resolutions be passed at the General Meeting, the Company intends to change its accounting reference date from 30 September to 31 March following Admission.

In the year ended 31 March 2020 CML made a loss before tax of US$1.024m on turnover of US$nil. Its net asset value at 31 March 2020 was US$0.85 million.

   8.            CHANGE OF NAME 

Subject to Shareholders' approval of Resolution 8 as a special resolution, the name of the Company will be changed to Capital Metals plc, to take effect shortly following Admission. The Directors believe that the proposed new name better encapsulates the Enlarged Group's new business activity. It is the Board's intention that the trading names of the Enlarged Group's subsidiaries will not change post Admission.

If the special resolution to approve the change of name of the Company is passed at the General Meeting, the Company's AIM symbol will be changed to CMET and its website address will be changed to www.capitalmetals.com following the Change of Name being registered at Companies House.

   9.            SHARE CONSOLIDATION 

It is proposed that, simultaneously with the other proposed Resolutions, the Ordinary Shares of

GBP0.0001 will be consolidated into new ordinary shares of GBP0.002 each on the basis of one New Ordinary Share for every 20 ordinary shares of GBP0.0001 each.

Where the Share Consolidation results in any Shareholder being entitled to a fraction of a new Ordinary Share, such fraction shall be aggregated and the Directors intend to sell (or appoint another person to sell) such aggregated fractions in the market and retain the net proceeds for the bene t of the Company.

Existing share certi cates (where shares are held in certi cated form) will cease to be valid following the Share Consolidation. New share certi cates in respect of the new Ordinary Shares will be issued on or around 27 January 2021. The new Ordinary Shares will be freely transferable, and application will be made for the new Ordinary Shares to be admitted to trading on AIM.

One consequence of the Share Consolidation is that Shareholders holding fewer than 20 Existing Ordinary Shares will receive no new Ordinary Shares. This consequence is illustrated in the table below:

 
 Number of Existing Ordinary Shares   Number of New Ordinary 
  currently held                       Shares held 
-----------------------------------  ----------------------- 
 19                                   - 
 20                                   1 
 200                                  10 
 2,000                                100 
 

To effect the Share Consolidation, it will be necessary to issue an additional 18 Existing Ordinary Shares so that the Company's issued ordinary share capital is exactly divisible by 20. These additional Ordinary Shares will be issued to the Registrar before the record date for the Share Consolidation. Since these additional shares would only represent a fraction of a New Ordinary Share, this fraction will be sold pursuant to the arrangements for fractional entitlements contained in the Articles.

   10.          PLACING AND SUBSCRIPTIONS 

Placing

The Company has conditionally raised approximately GBP2 million (before expenses) by the issue of the Placing Shares at the Placing Price.

Under the Placing Agreement, Brandon Hill have conditionally agreed to use reasonable endeavours to procure subscribers for the Placing Shares. The Placing Shares will rank pari passu with the Existing Ordinary Shares (following the Share Consolidation) and the Consideration Shares. The Placing is not underwritten or guaranteed.

Placees will receive one Placing Warrant for every 2 Placing Shares subscribed in the Placing. The Placing Warrants have an exercise price of 15.6 pence per share, being a 30 per cent. premium to the Placing Price, and an exercise period of 2 years from the date of Admission.

Following their issue, the Placing Shares will represent approximately 9.7 per cent. of the Enlarged Issued Share Capital.

Further details of the Placing Agreement are set out in paragraph 13.11 of Part VIII of the Admission Document.

The Placing is conditional on, amongst other things: (a) the Placing Agreement having become unconditional and not having been terminated in accordance with its terms; (b) the Acquisition Agreement not having been terminated or amended, and having become unconditional in all respects; (c) the passing of the Resolutions and (d) Admission having become effective by no later than 8.00 a.m. on 13 January 2021 or such later time being no later than 6.00 p.m. on 28 February January 2021, as the Company, SPARK and Brandon Hill may agree.

Subscriptions

The Company proposes to undertake the Subscriptions to raise approximately GBP85,000 by the issue of the Subscription Shares at the Placing Price. The terms of the Subscription are identical to those of the Placing. This includes the Subscribers receiving one Placing Warrant for every 2 Subscription Shares subscribed in the Subscription.

The Subscription Shares will rank pari passu with the Existing Ordinary Shares. Following their issue, the Subscription Shares will represent approximately 0.4 per cent. of the Enlarged Ordinary Share Capital.

Further details of the Subscription Agreements are set out in paragraph 13.16 of Part VIII of this document.

The Subscriptions are conditional on the Resolutions being passed at the General Meeting and Admission having become effective by no later than 8.00 a.m. on 13 January 2021.

   11.          USE OF PROCEEDS 

The Enlarged Group intends to use the net proceeds of the Placing for the following purposes:

-- to complete Phases I and II of the Work Programme, the principal aims of which are to obtain all necessary permits to allow for conversion of the DEL License to an IML and the commencement of engineering and planning studies to facilitate nancing and product off-take agreements for nal project construction and development;

-- to increase the number of staff and consultants required to implement the Work Programme, together with the building out the marketing and nance operations of the Enlarged Group;

   --    to repay CML legacy creditors; and 
   --    for general working capital purposes. 
   12.          ADMISSION TO TRADING ON AIM AND DEALINGS IN THE ENLARGED ISSUED SHARE CAPITAL 

If all of the Resolutions are passed at the General Meeting, application will be made for the Enlarged Issued Share Capital to be admitted to trading on AIM. It is expected that Admission will become effective and dealings in the New Ordinary Shares will commence on 13 January 2021. De nitive share certi cates in respect of the New Ordinary Shares will be despatched on or before 27 January 2021.

No application has been or will be made for the Warrants to be admitted to trading on AIM.

The Ordinary Shares are capable of being settled in CREST. CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certi cate and transferred otherwise than by a written instrument in accordance with the requirements of CREST. The Articles permit the hold and transfer of Ordinary Shares to be evidenced in uncerti cated form. Accordingly, settlements of transactions in Ordinary Shares may take place within the CREST system if the relevant shareholder so wishes. CREST is a voluntary system and Shareholders who wish to receive and retain share certi cated will be able to do so.

The Ordinary Shares currently have the ISIN GB00B2QBNL29. The Ordinary Shares will not be dealt with on any other recognised investment exchange and no application has been or is being made for the Ordinary Shares to be admitted to any other such exchange. Following the Share Consolidation the Company will have a new ISIN, which will be GB00BMF75608.

SPARK, has been retained as the Company's nominated adviser and Mirabaud and Brandon Hill as joint brokers respectively in relation to Admission. Further details of SPARK's and Brandon Hill's engagements are set out at paragraphs 13.15 and 13.17 respectively of Part VIII of this Admission Document.

   13.          LOCK-IN AND ORDERLY MARKET ARRANGEMENTS 

The Locked-in Parties (who will, in aggregate own 69,972,241 Ordinary Shares, being 40.6 per cent. of the Enlarged Issued Share Capital) have undertaken to the Company, SPARK and Brandon Hill that they will not dispose of any interest they hold in New Ordinary Shares for a period of 12 months following Admission and, for a further period of 12 months thereafter, they will only dispose of an interest in Ordinary Shares on an orderly market basis through the Company's then broker. Further details of the Lock-in Agreements are set out in paragraph 13.13 of Part VIII of the Admission Document.

In addition, it is a term of the Offer that each of the CML Vendors (other than the Locked-In Parties) shall be subject to a 3 month lock-in period where they will not dispose of any interest they hold in New Ordinary Shares for a period of 3 months following Admission without the Company's written approval. The only Consideration Shares that will not be subject to any lock-in provisions shall be those issued to CML Vendors in respect of CML Shares that were obtained pursuant to the conversion of bonds in CML prior to the Acquisition.

CML has not been independent and earning revenue for at least 2 years, therefore the Company, following Admission, is subject to the requirements of Rule 7 of the AIM Rules. All of the Directors and related parties, including substantial shareholders, have agreed, subject to the Lock-In agreement (as set out in paragraph 13.13 of Part VIII of the Admission Document) not to dispose of any interest in Ordinary Shares for a period of one year from Admission.

Relationship Agreement

The directors of CML, Sandy Barblett (through Stanton Investments Limited), Anthony Eastman (through Tournesol Consulting Limited) and Sam Quinn will hold 32,809,854 Ordinary Shares on Admission, representing approximately 19 per cent. of the Enlarged Issued Share Capital. These parties have undertaken to the Company, SPARK and Brandon Hill that, for so long as they are interested in Ordinary Shares carrying 15 per cent. or more of the Company's voting share capital, they will not act to unduly in uence the Company or its Board or otherwise interfere with the day-to- day management of the Company. Details of the Relationship Agreement are set out in paragraph 13.12 of Part VIII of the Admission Document.

   14.          SHARE OPTIONS AND WARRANTS 

The Company does not currently have any share options in issue at present.

Option Plan

The Company intends to grant options to subscribe for new Ordinary Shares from time to time to incentivise directors, employees, and consultants at the discretion of the Directors and subject to the approval of the Remuneration Committee. Options granted to subscribe for new Ordinary Shares in this manner will be over approximately 10 per cent. of the Company's issued share capital from time to time in line with market standard practices (the "Option Plan"). The terms of such options shall be determined at the time of grant including any relevant vesting and performance conditions.

New Options

The Company intends to grant the following options to current and proposed Directors and key management of the Company, subject to Admission (the "New Options"):

 
                                                      Number                         Expiry of  Exercise Price 
  Name of Option Holder                                of Options    Date of Grant      Option         (pence) 
                                                                                        Period 
================================================   ==============  ===============  ==========  ============== 
Michael Frayne 
 ................................................                       13 January  13 January 
 ....                                                   3,000,000             2021        2026              12 
Anthony Samaha 
 ................................................                       13 January  13 January 
 .                                                      1,500,000             2021        2026              12 
Gregory Martyr 
 ................................................                       13 January  13 January 
 ....                                                   1,500,000             2021        2026              12 
James Leahy 
 ................................................                       13 January  13 January 
 .......                                                1,500,000             2021        2026              12 
Teh Kwan 
 Wey.............................................                       13 January  13 January 
 ........                                                 500,000             2021        2026              12 
Geoffrey 
 Brown...........................................                        13January  13 January 
 .........                                                500,000             2021        2026              12 
Iranga 
 Dunuwille.......................................                        13January  13 January 
 ...........                                            1,500,000             2021        2026              12 
Roshan 
 Akther..........................................                        13January  13 January 
 ...........                                              500,000             2021        2026              12 
Rashmika Kothalawala                                                     13January  13 January 
 ........................................                 250,000             2021        2026              12 
Sam 
 Quinn...........................................                        13January  13 January 
 ................                                       1,000,000             2021        2026              12 
                                                   ============== 
                                                       11,750,000 
                                                   ============== 
 

The New Options will vest in three tranches:

   --    Tranche 1 - the rst one-third will vest on Admission 
   --    Tranche 2 - the second one-third will vest six months after Admission; and 
   --    Tranche 3 - the third one-third will vest 12 months after Admission. 

For Tranche 2 to be exercised, the Enlarged Group's volume weighted average share price ("VWAP") must have traded at a 50% premium to the Placing Price for ve consecutive days.

For Tranche 3 to be exercised, the Enlarged Group's VWAP must have traded at a 100% premium to the Placing Price for ve consecutive days.

Warrants

At present, there are Broker Warrants outstanding over 5 million Ordinary Shares (of 0.01 pence) with an exercise price of 0.4 pence per share. Following the Share Consolidation, this will be 250,000 Broker Warrants each with an exercise price of 8 pence per share.

In connection with the Acquisition, the Company has agreed, subject to Admission, to issue the following Bondholder Warrants at an exercise price of 15.6 pence (a 30% premium to the Issue Price) to CML Vendors that acquired their CML Shares pursuant to the conversion of their Bonds:

 
                                                              Number                                   Expiry of 
  CML Vendor                                                   of Warrants    Date of Grant             Exercise 
                                                                                                        Period 
=========================================================   ==============  ===============  =================== 
One Design & Skiff Sails Pty Ltd ATF                               666,666       13 January           13 January 
 I W Brown Superannuation Fund...                                                      2021                 2024 
Kemosabe Capital Pty                                               640,523       13 January           13 January 
Ltd......................................................                              2021                 2024 
...................... 
Magnus (Aust) Pty Ltd ATF                                          283,332     13 January             13 January 
.........................................................                         2021                      2024 
................. 
RAMK                                                               208,332       13 January      13 January 
Ltd......................................................                              2021          2024 
................................................ 
Robert                                                             208,332       13 January           13 January 
Millner..................................................                              2021                 2024 
.............................................. 
Bruce Warrington Holman                                            141,666       13 January           13 January 
.........................................................                              2021                 2024 
................... 
918                                                                141,666       13 January           13 January 
Investments..............................................                              2021                 2024 
.............................................. 
Holegata Pty Ltd, Holegata S/F A/C                                  83,333       13 January           13 January 
.........................................................                              2021                 2024 
... 
Carpadeum Pty                                                       49,998       13 January           13 January 
Ltd......................................................                              2021                 2024 
................................. 
                                                            ============== 
                                                                 2,423,848 
                                                            ============== 
 

In addition, Adviser Warrants over 833,333 Ordinary Shares will be issued to Brandon Hill in relation to the Placing, details of which are set out in paragraph 13.14 of Part VIII of the Admission Document. With effect from Admission, the following Adviser Warrants will be outstanding:

 
 Adviser         Number of   Date of Grant         Expiry of   Exercise Price 
                  Warrants                    Warrant Period          (pence) 
                ----------  --------------  ----------------  --------------- 
                                13 January        13 January 
 Brandon Hill      833,333            2021              2024               12 
 

In connection with the September Placing, the September Placees agreed to commit a further amount of GBP400,000 in the Placing and a condition of such commitment was that the September Placees would, at the time of the Placing and conditional on Admission, be issued Placing Warrants over 5,000,000 Ordinary Shares (after the Share Consolidation) with an exercise price of 8 pence per Ordinary Share. The following Placing Warrants will be issued to the following September Placees with effect from Admission:

 
  September Placee    Number of Warrants     Date of Grant   Expiry of Warrant   Exercise Price 
                                                                        Period          (pence) 
-------------------  -------------------  ----------------  ------------------  --------------- 
 Spreadex Limited              1,875,000   13 January 2021     13 January 2024                8 
 InterTrader 
  Limited                      2,500,000   13 January 2021     13 January 2024                8 
 Optiva                          625,000   13 January 2021     13 January 2024                8 
 

In aggregate, Placing Warrants over 8,687,499 shares will be issued to Placees (8,333,333) and Subscribers (354,166). These Placing Warrants have an exercise price of 15.6 pence per share and exercise period of 2 years from the date of Admission.

   15.          DIVID POLICY 

The Directors believe that the Enlarged Group should seek principally to generate capital growth for the shareholders of the Enlarged Group, but may recommend dividends at some future date, depending upon the generation of sustainable pro ts, if and when it becomes commercially prudent to do so, subject to having distributable reserves available for the purpose. There can be no assurance that the Enlarged Group will declare and pay, or have the ability to declare and pay, any dividends in the future.

   16.          CORPORATE GOVERNANCE AND INTERNAL CONTROLS 

The Directors recognise the importance of sound corporate governance and the Enlarged Group will adopt the QCA Code, as published by the Quoted Companies Alliance.

The Enlarged Group's purpose, business model and strategy are set out in paragraph 4 above. Key challenges in the execution of the business model and strategy are set out in the Risk Factors in Part II below.

The Board will be responsible for the management of the business of the Enlarged Group, setting the strategic direction of the Enlarged Group and establishing the policies of the Enlarged Group. It will be the Board's responsibility to oversee the nancial position of the Enlarged Group and monitor the business and affairs of the Enlarged Group on behalf of the Shareholders, to whom the Directors are accountable. The primary duty of the Board will be to act in the best interests of the Enlarged Group at all times. The Board will also address issues relating to internal control and the Enlarged Group's approach to risk management.

The Enlarged Group will hold board meetings monthly and whenever issues arise which require the urgent attention of the Board.

The Board believes that, following Admission, it will have an appropriate balance of sector, nancial and public markets skills and experience, an appropriate balance of personal qualities and capabilities and an appropriate balance between executive and non-executive directors.

Geoffrey Brown, James Leahy and Teh Kwan Wey are deemed to be independent non-executive directors. The non-executive directors will be expected to devote such time as may be necessary to ful l their roles. Brief biographical details of each of the Existing Directors and the Proposed Directors are set out in paragraph 5 above.

The Group has established a remuneration committee (the "Remuneration Committee"), an audit committee (the "Audit Committee") and a nomination committee (the "Nomination Committee") with formally delegated duties and responsibilities.

From Admission the Remuneration Committee will comprise James Leahy as Chairman and Greg Martyr, who will meet not less than twice each year. The committee is responsible for the review and recommendation of the scale and structure of remuneration for senior management, including any bonus arrangements or the award of share options with due regard to the interests of the Shareholders and the performance of the Enlarged Group.

From Admission the Audit Committee will comprise Greg Martyr as Chairman and Teh Kwan Wey, who will meet not less than three times a year. The committee is responsible for making recommendations to the Board on the appointment of auditors and the audit fee and for ensuring that the nancial performance of the Enlarged Group is properly monitored and reported. In addition, the Audit Committee will receive and review reports from management and the auditors relating to the interim report, the annual report and accounts and the internal control systems of the Enlarged Group.

From Admission the Nomination Committee will comprise Geoffrey Brown as Chairman and James Leahy, who will meet not less than once a year. The committee will lead the process for board appointments and make recommendations to the Board. The Nomination Committee shall evaluate the balance of skills, experience, independence, and knowledge on the board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment.

The Enlarged Group will seek to engage with Shareholders to understand the needs and expectations of all elements of the company's Shareholder base. Michael Frayne will have speci c responsibility on the Board for Shareholder liaison.

The Board believes that its stakeholders (other than Shareholders) are its employees, its customers and the consumers who are protected from online fraud due to its activities. In order to understand their needs, interests and expectations the Enlarged Group will work directly and closely with customers, staff and other consumer organisations to enhance its products to obtain the best results to prevent online fraud and security breaches.

The Board regularly reviews the effectiveness of its performance as a unit, as well as that of its committees and the individual directors and will monitor and promote a healthy corporate culture.

   17.          SHARE DEALING POLICY 

The Group has adopted and operates a share dealing code governing the share dealings of the directors of the Company and applicable employees with a view to ensuring compliance with the AIM Rules.

   18.          BRIBERY ACT 2010 

The government of the United Kingdom has issued guidelines setting out appropriate procedures for companies to follow to ensure that they are compliant with the UK Bribery Act 2010 which came into force with effect from 1 July 2011. The Company has implemented an anti-bribery policy as adopted by the Board and also implemented appropriate procedures to ensure that the Directors, employees and consultants comply with the terms of the legislation.

   19.          RISK FACTORS 

Shareholders and other prospective investors in the Company should be aware that an investment in the Company involves a high degree of risk. Your attention is drawn to the risk factors set out in Part II of the Admission Document.

   20.          TAXATION 

General information relating to United Kingdom taxation is set out in Part VII of this Admission Document. If you are in any doubt as to your tax position, you should contact your professional adviser immediately.

Investors subject to tax in other jurisdictions are strongly urged to contact their tax advisers about the tax consequences of holding Ordinary Shares.

   21.          FURTHER INFORMATION 

Shareholders should read the whole of the Admission Document which provides information on the Company, the Acquisition and the Placing and not rely on summaries or individual parts only. Your attention is drawn, in particular, to the Risk Factors set out in Part II of the Admission Document and the additional information set out in Part VIII of the Admission Document.

   22.          GENERAL MEETING 

Set out at the end of this Admission Document is a notice convening the General Meeting to be held on 11 January 2021 at 10.00 a.m. at the of ces of Hill Dickinson at The Broadgate Tower, 20 Primrose Street, London EC2A 2EW, at which the following Resolutions will be proposed:

Resolution 1: to approve the Acquisition;

Resolution 2: to appoint Gregory Martyr as a Director of the Company; Resolution 3: to appoint Anthony Samaha as a Director of the Company; Resolution 4: to appoint James Leahy as a Director of the Company;

Resolution 5: to authorise the Directors to allot the New Ordinary Shares and options pursuant to the Share Option Plan;

Resolution 6: to consolidate every 20 Existing Ordinary Shares into one New Ordinary Share;

Resolution 7: to dis-apply statutory pre-emption provisions to allow the Directors in certain circumstances to allot New Ordinary Shares in connection with the Proposals and the Share Option Plan for cash other than on a pre-emptive basis; and

Resolution 8: to approve the Change of Name.

Resolutions 1 to 6 will be proposed as ordinary resolutions and Resolutions 7 to 8 will be proposed as special resolutions.

   23.          ACTION TO BE TAKEN 

A Form of Proxy has been sent out to Shareholders in connection with the General Meeting. Please note that arrangements for this General Meeting are different from previous general meetings given that we expect signi cant restrictions on personal movement to still be in place due to COVID-19. The Board requests that no Shareholders attend the meeting. Any Shareholders that do attend will be refused entry. Only those who are required to form the quorum will attend in person and those Shareholders will constitute the minimum quorum for the meeting to take place. Shareholders are asked to complete the Form of Proxy in accordance with the instructions printed on it so as to be received by the Company's registrars, Share Registrars Limited, as soon as possible but in any event not later than 10.00 a.m on 7 January 2021.

   24.          RECOMMATIONS 

Michael Frayne is not regarded as an Independent Director as he is a Shareholder of Capital Metals Limited. Both the other Existing Directors are regarded as independent.

In respect of Resolution 1, the Independent Directors, having consulted with its nominated adviser, SPARK, consider that the terms of the Acquisition are fair and reasonable insofar as shareholders are concerned, and accordingly recommend that the Independent Shareholders vote in favour of the Acquisition. The Independent Directors intend to vote in favour of this Resolution in respect of 528,957 Existing Ordinary Shares bene cially owned by them, in aggregate, representing approximately 0.12 per cent. of the Existing Ordinary Shares. In providing advice to the Directors, SPARK has taken into account their commercial assessments.

In addition, the Existing Directors consider that Resolutions 2 to 8 to be proposed at the General Meeting are in the best interests of the Company and its Shareholders as a whole and accordingly, the Existing Directors unanimously recommend that each Shareholder votes in favour of each of the Resolutions. All of the Existing Directors intend to vote in favour of these Resolutions in respect of the 2,693,957 Existing Ordinary Shares bene cially owned by them in aggregate, representing approximately 0.59 per cent. of the Existing Ordinary Shares.

Details of service contracts of Proposed Directors

Under an executive service agreement dated 23 December 2020 between the Company and Mr Michael Frayne, from and subject to Admission, Mr Frayne is employed as Chief Executive Officer of the Company and is paid a salary of GBP150,000 per annum (plus expenses reasonably incurred by him in the course of his duties). Mr Frayne is required to devote such time, attention and ability as is needed to enable him to carry out his duties to the Company as Chief Executive Officer. His appointment shall (unless terminated earlier due to poor performance or gross misconduct or other material breach of duties) continue unless and until terminated by either party on six (6) months' notice in writing. Mr Frayne's service agreement contains non-compete, non-solicitation and no-conflict restrictions on Mr Frayne commensurate with his position as Chief Executive Officer.

Under an executive service agreement dated 23 December 2020 between the Company and Mr Anthony Samaha, from and subject to Admission, Mr Samaha will be employed as Finance Director of the Company and will be paid a salary of GBP50,000 per annum (plus expenses reasonably incurred by him in the course of his duties). Mr Samaha is required to devote such time, attention and ability as is needed to enable him to carry out his duties to the Company as Finance Director. His appointment shall (unless terminated earlier due to poor performance or gross misconduct or other material breach of duties) continue unless and until terminated by either party on (3) months' notice in writing. Mr Samaha's service agreement contains non-compete, non-solicitation and no-conflict restrictions on Mr Samaha commensurate with his position as Finance Director.

Mr Gregory Martyr entered into a letter of appointment with the Company on 23 December 2020 to act as a non-executive chairman of the Company from and subject to Admission. Mr Martyr's appointment will commence on the Admission Date and is terminable at any time on three months' written notice on either side. Mr Martyr is entitled to a fee of GBP38,400 per annum and is required to devote such of his time, attention and ability to his duties as may be necessary or desirable for the proper and effective discharge of all of his functions and responsibilities.

Mr Geoffrey Brown entered into a letter of appointment with the Company on 23 December 2020 to act as a non-executive director of the Company from and subject to Admission. Mr Brown was first appointed as a executive director of the Company on 6 March 2008 and subject to Admission, his appointment shall be terminable at any time on three months' written notice on either side. Mr Brown is entitled to a fee of GBP15,000 per annum and is required to devote such of his time, attention and ability to his duties as may be necessary or desirable for the proper and effective discharge of all of his functions and responsibilities.

Mr James Leahy entered into a letter of appointment with the Company on 23 December 2020 to act as a non-executive director of the Company from and subject to Admission. Mr Leahy's appointment will commence on the date of Admission and is terminable at any time on three months' written notice on either side. Mr Leahy is entitled to a fee of GBP24,000 per annum and is required to devote such of his time, attention and ability to his duties as may be necessary or desirable for the proper and effective discharge of all of his functions

and responsibilities.

Mr Teh Kwan Wey entered into a letter of appointment with the Company on 3 September 2020 to act as a non-executive director of the Company. Mr Teh's appointment commenced on 3 September 2020 and, subject to Admission, is terminable at any time on one months' written notice on either side. Mr Teh is entitled to a fee of GBP15,000 per annum and is required to devote such of his time, attention and ability to his duties as may be necessary or desirable for the proper and effective discharge of all of his functions and responsibilities.

De nitions

Except where the context otherwise requires, the following de nitions shall apply throughout this Admission Document:

 
 1985 Act                               The UK Companies Act 1985; 
 Acceptance Form                        the acceptance form appended to 
                                         the Offer Letter pursuant to which 
                                         CML Vendors have, and will, agree 
                                         to the terms of the Offer and appoint 
                                         Capital Metals Limited as their 
                                         attorney to do all things reasonably 
                                         required to complete the Acquisition; 
 Act, 2006 Act or the Companies         The Companies Act 2006, as amended; 
  Act 
 Acquisition                            the proposed acquisition by the 
                                         Company of the entire issued share 
                                         capital of Capital Metals Limited, 
                                         pursuant to the terms of the Acquisition 
                                         Agreement; 
 Acquisition Agreement(s)               the form of conditional share purchase 
                                         agreement to be entered into with 
                                         the CML Majority and the CML Minority 
                                         in relation to the Acquisition; 
 Additional IML Applications            the IML applications submitted 
                                         by DEL to the GSMB in October 2020 
                                         over land located within the DEL 
                                         License area, details of which 
                                         are included in paragraph 4 of 
                                         Part I of this document; 
 Admission                              the admission of the Enlarged Issued 
                                         Share Capital to trading on AIM 
                                         becoming effective in accordance 
                                         with Rule 6 of the AIM Rules; 
 Admission Document                     this document; 
 Adviser Warrants                       warrants over 833,333 Ordinary 
                                         Shares, with an exercise price 
                                         of 12 pence per share which have 
                                         been issued to Brandon Hill, as 
                                         set out in paragraph 13.14 of Part 
                                         VIII of this Admission Document; 
 AIM                                    the market of that name operated 
                                         by the London Stock Exchange; 
 AIM Rules                              the AIM Rules for Companies published 
                                         by the London Stock Exchange, as 
                                         amended from time to time; 
 AIM Rules for Nominated Advisers       the AIM Rules for Nominated Advisers 
                                         published by the London Stock Exchange, 
                                         as amended from time to time; 
 Articles                               the articles of association of 
                                         the Company as adopted from time 
                                         to time; 
 Authorisations                         any consent, authorisation, registration, 
                                         ling, lodgement, noti cation, agreement, 
                                         certi cate, commission, lease, 
                                         licence, permit, approval or exemption 
                                         from, by or with a Governmental 
                                         Agency; 
 BML                                    Brighton Metals Limited, a wholly-owned 
                                         subsidiary of CML; 
 Board                                  the Directors whose names are set 
                                         out on page 8 of this Admission 
                                         Document; 
 Bondholder Warrants                    warrants to subscribe for Ordinary 
                                         Shares issued to certain CML Vendors, 
                                         details of which are set out in 
                                         paragraphs 12.2 and 13.10 of Part 
                                         VIII of this document; 
 Broker Warrants                        the existing warrants to subscribe 
                                         for 5,000,000 Ordinary Shares (prior 
                                         to the Share Consolidation) at 
                                         an exercise price of 0.4 pence 
                                         (prior to the Share Consolidation) 
                                         per share; 
 BVI Business Companies Act             the BVI Business Companies Act 
                                         2004 (as amended), being the principal 
                                         statute of the British Virgin Islands 
                                         (BVI) relating to BVI law; 
 Business Day                           a day (other than Saturday, Sunday 
                                         or a public holiday), on which 
                                         clearing banks in the City of London 
                                         are generally open for business; 
 Capital Meta ls plc                    Capi tal Metals plc, the En larged 
                                         Group ' s propo sed ne w nam e; 
 Capital Metals Limited or CML          Capital Metals Limited, a company 
                                         registered in the British Virgin 
                                         Islands; 
 CCD                                    the Coast Conservation and Coastal 
                                         Resources Management Department 
                                         in Sri Lanka; 
 certi cated or in certi cated          a share or other security not recorded 
  form                                   on the relevant register of the 
                                         relevant company as being in uncerti 
                                         cated form in CREST; 
 Change of Name                         the proposed change of name of 
                                         the Company to Capital Metals plc, 
                                         further details of which are set 
                                         out in paragraph 8 of Part I of 
                                         this Admission Document; 
 CML Majority                           Roman Resources Management Pty 
                                         Ltd, Michael Frayne, Adelise Services 
                                         Limited, Stanton Investments Limited, 
                                         Bart Properties Pty Ltd ATF The 
                                         Scott Flynn Family Trust, Hogans 
                                         Bluff Capital Pty, Anthony Samaha, 
                                         Sam Quinn, Tournesol Consulting 
                                         and others being CML Shareholders 
                                         holding in aggregate 51.4 per cent. 
                                         of all CML Shares to which Offer 
                                         Letters have been sent and from 
                                         whom Acceptance Forms have been 
                                         received in relation to the Acquisition; 
 CML Minority                           all CML Shareholders other than 
                                         the CML Majority; 
 CML Shareholders                       the holders of CML Shares; 
 CML Shares                             shares of no-par value in Capital 
                                         Metals Limited, of which there 
                                         are 106,861,663 as at the date 
                                         of this Admission Document; 
 CML Vendors                            CML Shareholders that have returned, 
                                         and which do return, Acceptance 
                                         Forms to CML following receipt 
                                         of an Offer Letter in relation 
                                         to the Acquisition and who have 
                                         therefore agreed to sell their 
                                         CML Shares to the Company pursuant 
                                         to the Acquisition; 
 Company or Equatorial Palm Oil         Equatorial Palm Oil plc, a company 
                                         incorporated and registered in 
                                         England and Wales, with registered 
                                         number 5555087, whose registered 
                                         of ce is at 6th Floor, 60 Gracechurch 
                                         Street, London; 
 Consideration Shares                   up to 132,000,000 Ordinary Shares 
                                         to be issued to the Sellers pursuant 
                                         to the Acquisition Agreement; 
 CREST                                  the computerised settlement system 
                                         (as de ned in the CREST Regulations) 
                                         operated by Euroclear which facilitates 
                                         the transfer of title to shares; 
 CREST Regulations                      the Uncerti cated Securities Regulations 
                                         2001 (SI 2001/3755) as amended 
                                         from time to time, and any applicable 
                                         rules made under those regulations; 
 Deferred Shares                        deferred shares of 0.99 pence each 
                                         in the capital of the Company; 
 DEL                                    Damsila Exports (Private) Limited, 
                                         a private company incorporated 
                                         in Sri Lanka which is an indirect 
                                         wholly-owned subsidiary of CML 
                                         which holds the DEL License; 
 DEL Introduction Agreement             the introduction agreement entered 
                                         into by BML with RGD1 in relation 
                                         to the introduction of the DEL 
                                         Vendors to BML, as described in 
                                         paragraphs 13.18 and 13.19 of Part 
                                         VIII of this document; 
 DEL License                            Exploration License with the number 
                                         EL/168/R/4; 
 DEL Share Sale Agreement               the share sale agreement pursuant 
                                         to which CML acquired its interests 
                                         in DEL, a summary of which is included 
                                         at paragraphs 13.20 and 13.21 of 
                                         Part VIII of this Admission Document; 
 DEL Vendors                            Damsila Kumuduni Dalpatadu, Kosmapatabendige 
                                         Sarath Palitha Dalpatadu, Kosmapatabendige 
                                         Radike Samantha Dalpatadu and Kosmapatabendige 
                                         Sandun Lakmika Dalpatadu, the parties 
                                         that sold DEL to BML in accordance 
                                         with the DEL Share Sale Agreement; 
 Development Study                      a report which outlines the strategy 
                                         to develop and operate the Eastern 
                                         Minerals Project based on all the 
                                         technical studies completed to 
                                         date and will include an economic 
                                         analysis; 
 Directors                              the Existing Directors and/or the 
                                         Proposed Directors, as the context 
                                         requires; 
 Disclosure Guidance and Transparency   the Disclosure Guidance and Transparency 
  Rules                                  Rules sourcebook made by the FCA 
                                         pursuant to Part VI of the Listing 
                                         Rules made by the FCA under FSMA; 
 EBGL                                   Equatorial Biofuels (Guernsey) 
                                         Limited; 
 EEA                                    the European Economic Area; 
 EIA                                    Environmental Impact Assessment; 
 EML                                    Eastern Minerals (Private) Limited, 
                                         a private company incorporated 
                                         in Sri Lanka which is an indirect 
                                         wholly-owned subsidiary of CML 
                                         which holds the EML License; 
 EML Introduction Agreement             the introduction agreement entered 
                                         into by BML with RGD1 in relation 
                                         to the introduction of the EML 
                                         Vendors to BML, as described in 
                                         paragraphs 13.22 and 13.23 of Part 
                                         VIII of this Admission Document; 
 EML License                            Exploration License with the number 
                                         EL/199/R/3 (or 4); 
 EML Share Sale Agreement               the share sale agreement pursuant 
                                         to which CML acquired its interests 
                                         in EML, a summary of which is included 
                                         at paragraphs 13.24 and 13.25 of 
                                         Part VIII of this Admission Document; 
 EML Vendors                            Damsila Kumuduni Dalpatadu and 
                                         Kosmapatabendige Sarath Palitha 
                                         Dalpatadu, the parties that sold 
                                         EML to BML in accordance with the 
                                         EML Share Sale Agreement; 
 EMP or Project                         Eastern Minerals Project; 
 Enlarged Group                         the Company and its Group as it 
                                         will be constituted following completion 
                                         of the Acquisition; 
 Enlarged Issued Ordinary Share         the issued ordinary share capital 
  Capital                                of the Company upon Admission comprising 
                                         the New Ordinary Shares; 
 EU                                     the European Union; 
 Euroclear                              Euroclear UK & Ireland Limited, 
                                         the operator of CREST; 
 Existing Directors                     the directors listed on page 8 
                                         of this Admission Document; 
 Existing Ordinary Shares               the 456,277,502 Ordinary Shares 
                                         in issue as at the date of this 
                                         Admission Document; 
 Existing Warrants                      the Broker Warrants; 
 Exploration License or EL              an Exploration License that grants 
                                         the holder thereof the exclusive 
                                         right to explore for all mineral 
                                         categories authorised by the license 
                                         granted; 
 FCA                                    the Financial Conduct Authority; 
 Feasibility Study                      namely all necessary studies undertaken 
                                         (including without limitation as 
                                         to mine plan, engineering and environmental 
                                         matters); all Authorisations required 
                                         including government, community 
                                         and landowner consents obtained; 
                                         and the conversion of all or any 
                                         part of the exploration licences 
                                         EL/199/ R/3 (or 4) and EL/168/R/4 
                                         to Industrial Mining Licences; 
 First IML Application                  the rst IML application submitted 
                                         by DEL to the GSMB on 28 April 
                                         2014, details of which are included 
                                         in paragraph 4 of Part I of this 
                                         document; 
 FPO                                    the Financial Services and Markets 
                                         Act 2000 (Financial Promotion) 
                                         Order 2005, as amended; 
 FSMA                                   the Financial Services and Markets 
                                         Act 2000, as amended, including 
                                         any regulations made pursuant there 
                                         to; 
 GBP or GBP or pence or p               pounds sterling and pence, the 
                                         lawful currency from time to time 
                                         of the United Kingdom; 
 General Meeting                        the general meeting of the Company 
                                         to be held on 11 January 2021 at 
                                         which the Resolutions will be proposed; 
 Group                                  the Company including its subsidiary 
                                         undertakings; 
 GSMB                                   the Geographical Survey and Mines 
                                         Bureau of Sri Lanka under the Mines 
                                         and Minerals Act of Sri Lanka; 
 HMRC                                   Her Majesty's Re venue and Customs; 
 Independent Directors                  Geoffrey Brown and Teh Kwan Wey; 
 IFRS                                   international nancial reporting 
                                         standards; 
 Industrial Mining License or           a license which grants exclusive 
  IML                                    right to explore for, mine, process 
                                         and trade in all minerals mined 
                                         within the area of a speci ed license; 
 IML Applications                       the First IML Application and the 
                                         Additional IML Applications; 
 ISIN                                   international security identi cation 
                                         number; 
 KLK                                    Kuala Lumpur Kepong Berhad, currently 
                                         a substantial shareholder in the 
                                         Company; 
 LEI code                               legal entity identi er code; 
 Lock-in Agreement(s)                   the lock-in and orderly marketing 
                                         agreement(s) dated 23 December 
                                         2020 and made between the Company, 
                                         and the Locked-in Parties, details 
                                         of which are set out in paragraph 
                                         13.13 of Part VIII of this Admission 
                                         Document; 
 Locked-in Parties                      Hogans Bluffs Capital Pty Limited, 
                                         Anthony Samaha, Michael Frayne, 
                                         Kate Frayne, Chulu Holdings Pty 
                                         Ltd ATF The Chulu Trust, Adelise 
                                         Services Limited, Stanton Investments 
                                         Limited, Brent Holdings Limited 
                                         and Roman Resources Management 
                                         Pty Limited; 
 London Stock Exchange                  London Stock Exchange plc; 
 Market Abuse Regulation                the EU Market Abuse Regulation 
                                         (No. 596/2014); 
 Mines and Minerals Act                 the Mines & Minerals Act No. 33 
                                         of 1992 as amended which is an 
                                         Act to provide for the establishment 
                                         of the Geological Survey and Mines 
                                         Bureau to regulate the exploration 
                                         for, mining, transportation, processing, 
                                         trading in or export of minerals, 
                                         for the transfer to such Bureau 
                                         of the functions of the Department 
                                         of Geological Survey; for the repeal 
                                         of the Salt Ordinance (Chapter 
                                         211), the Radio Active Minerals 
                                         Act, No. 46 of 1968 and the Mines 
                                         and Minerals Law, No. 4 of 1973; 
                                         and to provide for matters connected 
                                         therewith or incidental thereto; 
 New Options                            the new options in respect of Ordinary 
                                         Shares to be granted by the Company 
                                         with effect from Admission, particulars 
                                         of which are set out in paragraph 
                                         12.1 of Part VIII of this Admission 
                                         Document; 
 New Ordinary Shares                    the new Ordinary Shares of 0.20 
                                         pence each, comprising the Existing 
                                         Ordinary Shares following the Share 
                                         Consolidation, the Consideration 
                                         Shares, the Subscription Shares 
                                         and the Placing Shares; 
 Nominated Adviser Agreements           the agreements dated 26 June 2020 
                                         between (1) the Company and (2) 
                                         SPARK, further details of which 
                                         are set out in paragraph 13.15 
                                         of Part VIII of this Admission 
                                         Document; 
 Offer                                  the offer communicated, and to 
                                         be communicated, to all holders 
                                         of CML Shares to acquire their 
                                         interests in CML, in consideration 
                                         for which the Consideration Shares 
                                         will be issued; 
 Offer Letter(s)                        the offer letter(s) sent to CML 
                                         Majority, and to be sent to the 
                                         CML Minority, communicating the 
                                         Offer of the Company to acquire 
                                         their CML Shares; 
 Ordinary Shares                        ordinary shares of 0.01 pence each 
                                         in the capital of the Company, 
                                         or, following the Share Consolidation, 
                                         ordinary shares of 0.20 pence each 
                                         in the capital of the Company; 
 Placees                                proposed subscribers for Placing 
                                         Shares at the Placing Price in 
                                         the Placing; 
 Placing                                the proposed conditional placing 
                                         of the Placing Shares at the Placing 
                                         Price with Placees pursuant to 
                                         the Placing Agreement; 
 Placing Agreement                      the conditional agreement dated 
                                         21 December 2020 between (1) the 
                                         Company, (2) SPARK, (3) Brandon 
                                         Hill and (4) the Directors relating 
                                         to the Placing, further details 
                                         of which are set out in paragraph 
                                         13.11 of Part VIII of this Admission 
                                         Document; 
 Placing Price or Issue Price           12 pence per Placing Share; 
 Placing Shares                         the 16,666,666 New Ordinary Shares 
                                         to be issued pursuant to the Placing; 
 Placing Warrants                       warrants over (i) 5,000,000 Ordinary 
                                         Shares with an exercise price of 
                                         8 pence per share issued to the 
                                         September Placees, and (ii) 8,687,499 
                                         Ordinary Shares with an exercise 
                                         price of 15.6 pence per share (being 
                                         a 30 per cent. premium to the Placing 
                                         Price) to be issued to the Placees 
                                         and Subscribers details of which 
                                         are set out in paragraph 13.14 
                                         of Part VIII of this document; 
 Project Licenses                       the DEL License and the EML License; 
 Proposals                              the Acquisition, the Change of 
                                         Name, the Share Consolidation and 
                                         the Placing; 
 Proposed Directors                     Mr Gregory Martyr, Mr James Leahy 
                                         and Mr Anthony Samaha; 
 Prospectus Regulation Rules            the Prospectus Rules of the FCA 
                                         made in accordance with the Prospectus 
                                         Regulation; 
 QCA Code                               the Corporate Governance Code for 
                                         Small and Mid-Size Quoted Companies, 
                                         as published by the Quoted Companies 
                                         Alliance; 
 Record Date                            the record date for the Share Consolidation, 
                                         being 6.00 p.m. on 11 January 2021; 
 Registrar                              Share Registrars Limited of The 
                                         Courtyard, 17 West Street, Surrey 
                                         GU9 7DR; 
 Relationship Agreement                 the agreement dated 23 December 
                                         2020 between (1) the Company, (2) 
                                         SPARK and (3) various Shareholders, 
                                         (further details of which are set 
                                         out in paragraph 13.12 of Part 
                                         VIII of this Admission Document); 
 Resolutions                            the resolutions proposed at the 
                                         General Meeting; 
 RGD1                                   RGD1 Resources Limited (a company 
                                         incorporated in Hong Kong (CIN 
                                         1434714) of 3908 Two Exchange Square, 
                                         8 Connaught Place, Central, Hong 
                                         Kong SAR China); 
 SEDOL                                  the Stock Exchange Daily Of cial 
                                         List Identi cation Number; 
 Sellers                                the selling shareholders of Capital 
                                         Metals Limited; 
 September Placee                       a placee that subscribed for Ordinary 
                                         Shares pursuant to the September 
                                         Placing, details of which are set 
                                         out in paragraph 12.2 of Part VIII 
                                         of this document; 
 September Placing                      the placing completed by the Company 
                                         in September 2020 to raise a gross 
                                         amount of GBP400,000; 
 Share Consolidation                    the proposed consolidation of the 
                                         Company 's ordinary share capital 
                                         pursuant to which each 20 Existing 
                                         Ordinary Shares of 0.01 pence are 
                                         consolidated into 1 New Ordinary 
                                         Share of 0.20 pence each; 
 Shareholders                           holders of Ordinary Shares in the 
                                         Company from time to time; 
 Share Option Plan                      the option plan intended to be 
                                         adopted by the Company following 
                                         Admission as summarised in paragraph 
                                         12.1 of Part VIII of this document; 
 Subscribers                            the parties who have con rmed their 
                                         agreement to participate in the 
                                         Subscription via the Subscription 
                                         Agreements; 
 Subscription Agreements                the conditional agreements dated 
                                         23 December 2020, details of which 
                                         are set out in paragraph 13.16 
                                         of Part VIII of this Admission 
                                         Document; 
 Subscription(s)                        the conditional subscriptions for 
                                         the Subscription Shares by the 
                                         Subscribers; 
 Subscription Shares                    the 708,333 New Ordinary Shares 
                                         to be allotted and issued by the 
                                         Company to the Subscribers at the 
                                         Placing Price pursuant to the Subscription; 
 UDA                                    Urban Development Authority; 
 Uncertificated or in uncertificated    a share or other security recorded 
  form                                   on the relevant register of the 
                                         relevant company concerned as being 
                                         held in uncerti cated form in CREST 
                                         and title to which, by virtue of 
                                         the CREST Regulations, may be transferred 
                                         by means of CREST; 
 United Kingdom or UK                   the United Kingdom of Great Britain 
                                         and Northern Ireland; 
 USA or US or Unites States             the United States of America, its 
                                         territories and possessions, any 
                                         state of the United States of America 
                                         and the District of Columbia; 
 VAT                                    value added tax; and 
 Warrants                               together the Existing Warrants, 
                                         the Bondholder Warrants, the Placing 
                                         Warrants and the Adviser Warrants. 
 

ADMISSION AND PLACING STATISTICS

 
 Number of Existing Ordinary 
  Shares in issue at the date 
  of this Admission Document                  456,277,502 
 Number of new Ordinary Shares 
  to issue ahead of the Share 
  Consolidation                                        18 
 Number of New Ordinary Shares 
  in issue following the Share 
  Consolidation                                22,813,876 
 Number of Placing Shares to 
  be issued by the Company                     16,666,666 
 Number of Subscription Shares 
  to be issued by the Company                     708,333 
 Number of Consideration Shares 
  to be issued by the Company                 132,000,000 
 Enlarged Issued Share Capital 
  on Admission                                172,188,875 
 Fully diluted share capital**                201,133,555 
 Placing Shares, Subscription              86.7 per cent. 
  Shares and Consideration Shares 
  as a percentage of the Enlarged 
  Issued Share Capital 
 Placing Price per Share                         12 pence 
 Market capitalisation of the             GBP20.6 million 
  Company at the Placing Price 
 Gross proceeds of the Placing           GBP2.085 million 
  and Subscription 
 Estimated net proceeds of the           GBP1.525 million 
  Placing and Subscription 
 AIM symbol*                                         CMET 
 ISIN                                        GB00BMF75608 
 SEDOL Code                                       BMF7560 
 LEI Code                            213800RR4MW1ETEMS859 
 

assuming 100 per cent. of CML Shares are acquired in the Offer

* the new AIM symbol shall become effective only if the Resolutions are passed at the General Meeting, prior to which it will remain as PAL

** assuming exercise of all existing options and warrants, and those proposed to be issued in relation to the Proposals

the new ISIN/SEDOL codes only become effective if the resolution to approve the Share Consolidation is passed at the General Meeting, otherwise they will remain as GB00B2QBNL29 / B2QBNL2"

For further information, please visit www.epoil.co.uk or contact:

 
 Equatorial Palm Oil plc 
  Michael Frayne (Executive Chairman)               + 44 (0) 20 7317 6800 
 SPARK Advisory Partners (Nominated 
  Adviser) 
  Neil Baldwin                                      +44 (0) 20 3368 3554 
 Brandon Hill Capital Limited 
  (Broker to the Placing) 
  Jonathan Evans/Oliver Stansfield                  +44 (0) 20 3463 5000 
 

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December 23, 2020 04:30 ET (09:30 GMT)

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