Erris Resources PLC (ERIS.L) Acquisition Update & Restoration of Trading on AIM

Proposed acquisition of 50 per cent. interest in Deutsche Lithium GmbH

Placing of 75,000,000 new Ordinary Shares at 5p per share

Divestment of Loch Tay Gold Project

Change of name to Zinnwald Lithium plc

Approval of a waiver under Rule 9 of the City Code on Takeovers and Mergers

Notice of General Meeting &

Restoration of trading on AIM

Erris Resources, the European focused mineral exploration company, is pleased to announce that, further to the announcement dated 30 September 2020, terms have been agreed to acquire 50 per cent. of the issued share capital of Deutsche Lithium GmbH (“Deutsche Lithium”) from Bacanora Lithium plc (“Bacanora”); the principal asset of Deutsche Lithium is the Zinnwald Lithium Project (“Zinnwald” or the “Project”) in Germany of which it has joint operational control (the “Acquisition”). Accordingly, the Admission Document is now published on the Company’s website https://www.errisresources.com/ and trading in the Company’s shares on AIM will resume at 7.30 a.m. today.

OVERVIEW

Zinnwald – the potential to be one of Europe’s advanced battery-grade lithium projects

· Late-stage lithium project with attractive economics and a mining licence already in place

o A September 2020 Feasibility Study on the Project estimated a pre-tax, discounted at 8%, NPV of approximately €428 million; an Internal Rate of Return (‘IRR’) of 27.4%; and an average LOM (life of mine) annual EBITDA of €58.5 million

o Located in the heart of Europe’s chemical and automotive industries

New Corporate Strategy – to become an important supplier to Europe’s fast-growing lithium sector

o Upon completion of the Acquisition, the Company’s new strategy will be to advance Zinnwald towards construction and operation of the mine

o The Company will trade under the name of Zinnwald Lithium plc and its new ticker symbol will be ZNWD

o The Loch Tay Gold Project is to be spun out to the Existing Shareholders while future funding partners will be sought for Irish and Swedish projects

o European lithium battery capacity to increase significantly by 2030

o Several countries phasing out sales of fossil fuel vehicles

Terms of Acquisition

o Acquisition satisfied via the issue of 90,619,170 Erris Resources shares to Bacanora and a net profit royalty

Corporate

· Raised £3.75 million (before expenses) by way of a Placing to advance Zinnwald and for general working capital purposes

· Board changes to support new strategy

o Anton du Plessis has become CEO and Jeremy Martin has become Chairman, both with immediate effect

o Peter Secker (CEO of Bacanora) to join the Board from Admission

· General Meeting to approve the Resolutions in relation to, inter alia, the Acquisition, waiver of obligations of the Concert Party to make a mandatory offer for the Company pursuant to Rule 9 of the City Code on Takeovers and Mergers and the Placing, will be held on 26 October 2020

Erris Resources CEO, Anton du Plessis, commented: “Located in heart of Europe’s chemical and automotive industries, the Zinnwald Lithium Project represents a compelling opportunity for investors to gain exposure to the fast-growing European lithium market, so we are very excited to be moving forward with the transaction.

” Given its mine life of 30 years equates to < 50% of the current identified mineral resource, the Project’s potential upside is significant. Notably, the DFS (Feasibility Study) has suggested a project NPV (100%) of €428 million; an IRR of 27%; and average LOM annual EBITDA of €58.5 million, based on producing 7,285 tpa lithium carbonate equivalent, while construction Capex of €159 million (gross) is low. With an approved mining licence and the permitting process advanced, our aim is to fast-track the Project to production utilising our experienced project management team based in Germany, consisting of world-leading scientists, engineers and geologists.”

Full update link https://www.share-talk.co.uk/announcements/rns/erris-resources-plc/acquisition-update-restoration-of-trading-on-aim/202010080700044408B


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