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• Strategic review process completed targeting the funding and development of anode production from a dedicated Active Anode Materials Plant in Norway

• The review process concluded that creating a pure-play, integrated, battery anode material company concentrated on European "Sustainable Anode" development made strategic, value accretive, operational sense

• The Company plans to demerge its Norwegian Graphite Assets into a separate entity to be newly incorporated in Norway, branded as Ascent Graphite

• The recent results from the purification program with CSIRO provides a strong foundation to advance and de-risk the development of the AAMP in Norway, supporting the key findings from the Review

The Board of Mineral Commodities Ltd ("MRC" or "the Company") has completed a strategic review process ("Review") to optimise the Company's corporate and capital structure to fund future growth and accelerate shareholder value, targeting the development of anode production from a dedicated Active Anode Materials Plant ("AAMP") in Norway. 

The Company plans to transition its existing European graphite production to downstream anode production for the electric vehicle and energy storage markets. The Company's Skaland Graphite mine has been in operation for over 100 years and is the highest-grade operating flake graphite mine in the world. The transition will require a step-change in investment over the next 18 months to support demonstration-scale activities for the production and qualification of anode materials and delivery of higher quality concentrates from Skaland from an expanded production base. The timing of these activities is driven by the significant growth of battery cell manufacturing capacity in Europe. 

The Company’s work on the Review commenced in April 2021 and considered the various possibilities for unlocking value and accessing funding for the Skaland Graphite Operation and the Company's downstream development plans in Norway ("Norwegian Graphite Assets"), including the demerger of these assets into a newly incorporated Norwegian entity. 

Driven in part by the Company's progress developing an environmentally sustainable purification process1 , the Review considered a range of options, including MRC's corporate and capital structure, future capital requirements, dilutionary effects on equity value, and the structural separation by way of a demerger. Business plans, management structures, and cost and tax implications were also examined as part of the Review. 

The Review found that demerging the Company's Norwegian Graphite Assets made strategic, value accretive, operational sense. 

A summary of the key findings include: 

• As a combined entity, assigning value to the Company's current asset portfolio mix, consisting of the Tormin mineral sands operations and graphite assets in Norway and Australia, is more complex than for our peers who operate a single commodityfocused business strategy. This is compounded by the downstream processing and marketing requirements of the anode graphite business in comparison to conventional mining and processing 

• The market currently undervalues MRC's graphite assets. Separation should address this as the Norwegian Graphite Assets are well placed as a credible emerging participant in the European battery anode market. Globally, battery material companies are achieving high valuations at present. Sentiment towards companies executing strategies focused on the battery cell manufacturing and the battery materials sector is extremely positive, with very buoyant market conditions for equity funding 

• A pure-play, integrated, battery anode material company concentrated on European "Sustainable Anode" development based in Norway, is attractive to clean energy, and sustainability mandated investors, as well as for industry and strategic battery market focused partners interested in the Company’s business strategy for the Norwegian Graphite Assets 

• New management with complementary skill sets can focus on this specialised industry and its specific needs

 

The Company considers that the recent results from the purification program with CSIRO, Australia’s national science agency, provide a strong foundation to advance and de-risk the development of the AAMP in Norway. 

The Company plans to separate the Norwegian Graphite Assets into entity to be newly incorporated in Norway, branded as Ascent Graphite ("Ascent Graphite") with a Norway/European facing, independent Board and operating structure to provide an optimal platform to attract funding and increase value. 

Chairman David Baker said, "MRC's Norwegian graphite assets are of leading quality: located within a Tier 1 jurisdiction, with a rapid increase in battery demand. Our value generation is characterised by well-advanced studies and development plans, including for vertical integration. Skaland, as a permitted, operating mine in Norway with its highgrade ore and hydropower electricity, is ideally positioned to supply anode materials to Europe and the demerger will assist in accelerating this process." 

Ascent Graphite 

Initially, Ascent Graphite will seek funding via an equity issue to investors as part of a planned capital raising. The Company is also considering an initial listing of Ascent Graphite on a European Stock Exchange, although no definitive plans have been agreed for this. In the near term, MRC intends to retain a significant equity holding in Ascent Graphite to capitalise on any value creation resulting from the demerger. 

After a number of targeted value milestones are achieved, Ascent Graphite may seek an expanded listing on additional exchanges in the US, UK or Europe, at which point MRC shareholders may be given the opportunity to directly participate in the demerged entity via an in-specie distribution of the Company's shares in Ascent Graphite. 

The Company has appointed Bacchus Capital Advisers Ltd and Clarksons Platou Securities AS as advisors to the demerger and planned capital raising to support Ascent Graphite's business development strategy. 

MRC has advanced the necessary preparatory workflows as part of the demerger process, including regulatory approvals in Australia and Norway. The ASX has provided preliminary advice that the Company will likely require shareholder approval under ASX Listing Rule 11.4. The Company will provide further updates regarding the proposed demerger and approvals process as key milestones are achieved.