Technology Minerals #TM1 – Recyclus – Proposed Acquisition

Technology Minerals Plc (LSE: TM1), the first listed UK company to focus on creating a sustainable circular economy for battery metals, is pleased to announce that it has signed binding Heads of Terms (“HoTs”) to acquire the remaining issued share capital of Recyclus Group Limited (“Recyclus”) for new shares in the Company (the “Proposed Transaction”). The Company currently holds 48.35% of the issued share capital of Recyclus.

Subject to the completion of due diligence, which is imminent, the Proposed Transaction will be satisfied by the allotment and issue to the shareholders of Recyclus on completion of 921,544,596 new ordinary shares of £0.001 each in the capital of the Company (“Consideration Shares”). For this purpose, the value of each Consideration Share will be 4.32 pence. The Consideration Shares will be allotted to the Sellers in proportion to their respective holdings of Recyclus shares.  Post-acquisition, Recyclus will be accounted for on a consolidated basis.

Overview

· Recyclus is the UK’s first industrial-scale lithium-ion (“Li-ion”) battery recycler leveraging sustainable, next generation, recycling technologies.

· Recyclus is well positioned to take advantage of the growing demand for Li-ion and lead-acid batteries through retrieval, recycling, and repurposing of used batteries.

· The combination of the two businesses offers a differentiated, IP protected exposure to battery processing, aligning the enlarged business with the energy transition taking place and the circular economy.

· The primary revenue stream is expected to be direct sales of recovered materials, driving a cashflow and value chain lock-in to support leadership positioning. Other revenue generating opportunities include finite material extraction and battery reuse.

· The Directors believe there is an estimated US$6bn opportunity from lithium battery recoverable materials by 2030, and US$45bn second-life battery applications market.

· Recyclus plans to open ten battery recycling plants, five Li-ion and five lead-acid, over the next six years, with the first two expected to open in the UK once final EA approval comes through.

· Recyclus’ first Li-ion recycling plant is located in Wolverhampton, West Midlands, and is capable of recycling 8,300 tonnes of Li-ion per year. Using UK manufactured technology and physical separation processes, Recyclus is able to accept the five key lithium-ion chemistries, for recycling and processing into ‘black mass’.

· The first lead-acid plant, located in Tipton, West Midlands, is capable of recycling 16,000 tonnes in the first full year of production. The Environment Agency has awarded Recyclus an environmental permit at the Tipton plant, allowing for on-site treatment and processing of lead-acid batteries, providing the critical legal foundation to complete the sub-licences and enable full scale automated operations to commence.

· In addition, Recyclus recently received a UN-standard certification for its industry-leading Halo battery boxes for the transportation of Li-ion batteries, opening a new revenue stream in domestic and international markets.

· The Proposed Transaction, if completed, will result in the shareholders of Recyclus having a significant minority interest in the enlarged group.

Recyclus summary of operations and rationale for the Proposed Transaction

Recyclus provides a national recycling initiative that supports the transition to carbon neutrality. Recyclus’ battery recycling capacity will prove essential in the shift from fossil fuels to electric transportation. Through its strategic support, Recyclus is an integral component to the recycling of Li-ion and lead-acid batteries and is a significant contributor towards the circular economy of battery metals.

• The acquisition strengthens Technology Minerals’ balance sheet and provides early cashflow from recycling operations controlled by Technology Minerals.

• Recyclus has developed a proprietary Li-ion battery processing plant and has a patent application in progress for de-sulphurising lead paste.

• With battery recycling expertise ahead of competitors which provides Technology Minerals with first mover advantage in the UK.

• Positions Technology Minerals to expand recycling operations in Europe and the USA.

Recyclus Group Structure

Recyclus Group Limited

Recyclus is focusing on the delivery of national end-to-end recycling of Li-ion and lead-acid batteries, to drive the move towards electrification, and more environmentally friendly consumption. Recyclus has two subsidiaries, Libatt Recycling Ltd and Halo Battery Recycling Ltd.

Libatt Recycling Ltd

LiBatt, a Recyclus group company, is the UK’s first industrial-scale Li-ion battery recycler. LiBatt’s ambition is to support the circular economy, increase efficiencies, and reduce the carbon footprint within the Li-ion battery industry.

Halo Battery Recycling Ltd

Halo, a Recyclus group company, is committed to increasing efficiencies within the lead-acid recycling industry, to enable resources to be kept in use for longer to minimise waste and reduce environmental impacts of spent batteries. As part of the Recyclus group service, Halo manufacture cutting-edge, ADR compliant storage and transportation boxes for the safe and secure movement of hazardous spent Li-ion batteries.

James Cable, Chief Financial Officer of Technology Minerals, said: “The acquisition of Recyclus marks an important strategic move for the business with the potential to deliver significant shareholder value to both sets of shareholders. The combination of the two businesses offers a differentiated, IP protected exposure to battery processing, aligning the enlarged business with the energy transition taking place and the circular economy. Our plan is to expand its commercial footprint in the UK and also the EU and US markets where we see the prospect for growth in line with the exponential growth in the electric vehicle markets and other battery-based sectors.

We are excited by the opportunity to acquire Recyclus, taking a significant step in the next stage of Technology Minerals’ development and its circular economy strategy for battery metals. Our confidence in Recyclus is clear from our 48.35% stake in the business and this transaction is a logical progression that aligns perfectly with our twin-track strategy to create a circular economy for battery metals through both the raw material supply, and the reprocessing and re-use of end-of-life batteries.

We believe the industrial scale opportunity for Recyclus is immense as the world transitions from fossil fuels to electrification. Recyclus aims to become a leading player in the recycling of Li-ion and lead-acid batteries to help overcome a critical lack of domestic industrial scale recycling. The business is well placed to ramp up its growth with cutting-edge technology, a first mover advantage, and two plants ready to come online when final approval from the Environment Agency comes through, with eight more planned over the next six years to meet the bourgeoning demand.”

Further details on the Proposed Transaction

The Company and Recyclus have agreed to proceed as quickly as possible with the Proposed Transaction and to negotiate in good faith with a view to signing and exchanging a detailed and legally binding share purchase agreement incorporating all the terms of the Proposed Transaction as soon as practicable.

Upon completion, a listing application will be made for the 921,544,596 Consideration Shares, which will rank pari passu in all respects with the existing ordinary shares of the Company, to be admitted to the Standard List segment of the Official List and to trading on the main market of the London Stock Exchange plc (“Listing”). Upon Listing, the total number of issued shares and the total number of voting rights in the Company will be 2,192,968,189.

Expected Timetable and Conditions

The Proposed Transaction is subject, inter alia, to the completion of due diligence, documentation and compliance with all regulatory requirements, including the Listing and Prospectus Rules (the “Conditions”). The Company will update shareholders as to progress made in relation to the Proposed Transaction, as and when appropriate.

The Proposed Acquisition is subject to formal shareholder approval by the Company’s shareholders at a General Meeting to be held in due course, as well as the successful listing of the Consideration Shares onto the Standard List segment of the Official List and to trading on the main market of the London Stock Exchange plc. The Company currently expects the Proposed Transaction to complete at the December AGM.

The UK MAR offers, by way of exception to the immediate disclosure of inside information, the possibility on a case-by-case basis to delay such disclosure under certain conditions. In accordance with Article 17(4) of UK MAR, any issuer may thus delay, under its own responsibility, the public disclosure of inside information so as not to prejudice its legitimate interests provided that such omission is not likely to mislead the public and the issuer is able to ensure the confidentiality of the information. The Company relied on Article 17(4) of UK MAR and delayed the release of information in respect of the negotiation of the Heads of Terms. In the opinion of the board of directors of the Company, the delay of the publication of information on the decision to commence negotiations on the Proposed Transaction was in the Company’s legitimate interest as its disclosure was likely to affect the outcome of those negotiations or their normal pattern. The decision to commence negotiations only showed the intention and the final success of those negotiations depended on many factors. In the opinion of the board of directors of the Company, the delay was not likely to mislead the public and they could ensure the confidentiality of the information.

Appointment of Broker

The Company is pleased to announce the appointment of Oberon Capital (a trading name of Oberon Investments Limited) as its joint broker with immediate effect.

Recyclus Financial Information

Financial information for Recyclus is located in the Appendix below. While the financials are not audited, the Company does not expect any material changes to the information provided.

Related Party Transactions

Robin Brundle, Executive Chairman, and Alexander Stanbury, Chief Executive Officer, each hold shares in Recyclus and Lester Kemp, Chief Operating Officer holds share options in Recyclus; therefore, the Proposed Transaction is a related party transaction under Disclosure and Transparency Rule 7 (‘RTP’). The Board has established procedures to ensure that RTPs are approved by independent board members. Accordingly, the directors of the Company, other than Robin Brundle, Alexander Stanbury and Lester Kemp (the “Independent Directors”) have approved the Proposed Transaction and have appointed a committee comprising three Independent Directors to oversee the Proposed Transaction. 

Enquiries:

Technology Minerals Plc 

Technology Minerals is developing the UK’s first listed, sustainable circular economy for battery metals, using cutting-edge technology to recycle, recover, and re-use battery technologies for a renewable energy future. Technology Minerals is focused on extracting raw materials required for Li-ion batteries, whilst solving the ecological issue of spent batteries by recycling them for re-use by battery manufacturers. With the increasing global demand for battery metals to supply electrification, the group will explore, mine, and recycle metals from spent batteries. Further information on Technology Minerals is available at www.technologyminerals.co.uk. 

Recyclus Group Limited 

The demand for the raw materials used in battery manufacturing is anticipated to substantially increase . Recyclus provides a national recycling initiative that supports the transition to carbon neutrality. Recyclus’ battery recycling capacity will prove essential in the shift from fossil fuels to electric transportation. Through its strategic support, Recyclus is an integral component to the recycling of Li-ion and lead-acid batteries and is a significant contributor towards the circular economy of battery metals. Further information on Recyclus is available at www.recyclusgroup.com. 

The Directors of the Company accept responsibility for this announcement. 

FORWARD-LOOKING STATEMENTS 

This announcement contains forward-looking statements which reflect the Company’s or, as appropriate, the Directors’ current views, interpretations, beliefs or expectations with respect to the Company’s financial performance, business strategy and plans and objectives of management for future operations. These statements include forward-looking statements both with respect to the Company and the sector and industry in which the Company proposes to operate. Statements which include the words “expects”, “intends”, “plans”, “believes”, “projects”, “anticipates”, “will”, “targets”, “aims”, “may”, “would”, “could”, “continue”, “estimate”, “future”, “opportunity”, “potential” or, in each case, their negatives, and similar statements of a future or forward-looking nature identify forward-looking statements. 

All forward-looking statements address matters that involve risks and uncertainties because they relate to events that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Accordingly, there are or will be important factors that could cause the Company’s actual results, prospects and performance to differ materially from those indicated in these statements. In addition, even if the Company’s actual results, prospects and performance are consistent with the forward-looking statements contained in this announcement, those results may not be indicative of results in subsequent periods. 

These forward-looking statements speak only as of the date of this announcement. Subject to any obligations under the Prospectus Rules, the Market Abuse Regulation, the Listing Rules and the Disclosure and Transparency Rules and except as required by the FCA, the London Stock Exchange, the City Code or applicable law and regulations, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the Company or individuals acting on behalf of the Company are expressly qualified in their entirety by this paragraph. 

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.