AVL and TMT Agree A$217 Million Merger

AVL (ASX:AVL) and TMT are pleased to announce that they have entered into a binding Scheme Implementation Deed (SID), under which the two companies propose to merge via a scheme of arrangement, subject to the satisfaction of certain conditions.

HIGHLIGHTS

Australian Vanadium Limited (ASX:AVL) (AVL) and Technology Metals Australia Limited (ASX:TMT) (TMT) have agreed to merge via a proposed Scheme of Arrangement (Scheme), under which AVL will acquire 100% of the TMT Shares on issue.The consolidation of two adjoining projects across one orebody provides a unique opportunity to realise operational and corporate synergies by creating a single integrated project. The combined group will become the leading Australian vanadium developer with a world-class asset of scale, located in a Tier-1 mining jurisdiction.TMT Shareholders will receive 12.00 AVL Shares for every TMT Share held on the Scheme record date. This implies an offer price of A$0.324 per TMT Share based on AVL’s last close price of A$0.027.The offer represents a premium of:9.8% to TMT’s last close price (based on AVL and TMT’s last closing prices of A$0.027/sh and A$0.295/sh respectively);26.7% to TMT’s 30-day VWAP (based on AVL’s 30-day VWAP of A$0.029).1The Scheme is unanimously recommended by the TMT Board and each director of TMT intends to vote all TMT Shares they control in favour of the Scheme, in the absence of a Superior Proposal2 and subject to an Independent Expert opining (and continuing to opine) that the Scheme is in the best interests of the TMT Shareholders.In the absence of a superior proposal (as assessed by Resource Capital Fund VII LP (RCF)) and subject to an Independent Expert opining (and continuing to opine) that the Scheme is in the best interests of TMT Shareholders, TMT’s largest shareholder, RCF, has confirmed its intention to vote its ~18.0% shareholding in TMT in favour of the Scheme.AVL Board to be complemented with the addition of Ms Jo Gaines as a Non-Executive Director. Mr Ian Prentice to join AVL’s executive management team and will be initially focused on the integration of the two adjoining projects.AVL to conduct an institutional placement (Placement) to raise A$15 million (with the ability to take oversubscriptions to increase the Placement to A$20 million) to fund ongoing project and corporate initiatives during the transaction period. RCF has committed to subscribe for A$15 million of the Placement with allocations subject to the outcome of the bookbuild process.If the Scheme is approved and implemented, existing AVL shareholders will hold ~58% of the combined group and existing TMT Shareholders will hold ~42% of the combined group (prior to any dilution associated with the proposed Placement).3The combined group will continue to trade as Australian Vanadium Limited on the ASX.

Under the terms of the Scheme, each shareholder of TMT (TMT Shareholder) will receive 12.00 AVL fully paid ordinary shares (AVL Shares) for every fully paid ordinary TMT share (TMT Share) held at the Scheme record date (Offer). If the Scheme is approved and implemented, existing AVL shareholders will hold ~58% of the combined group and existing TMT Shareholders will hold ~42% of the combined group (prior to any dilution associated with the proposed Placement).

Graham Arvidson, Chief Executive Officer of AVL, comments:

“The combination of Australian Vanadium and Technology Metals Australia is transformational for both companies and marks a significant milestone in both management teams’ efforts to develop their respective projects. The logical consolidation of two adjoining projects on the same orebody will unlock material synergies for both sets of shareholders. If successful, the transaction will create the leading ASX listed vanadium developer and a world-class asset of scale located in a Tier-1 mining jurisdiction.

AVL’s institutional placement ensures that the combined group will be well-funded to progress integration and the go-forward development strategy. It is our opinion that RCF’s strong support for the placement highlights their long-term backing of the combined business as well as a broader view on the strengthening vanadium thematic. The transaction will leverage the best of both organisations, including best in class technical work, assets and people, and will result in AVL becoming the leading force in the Australian vanadium sector.”

Ian Prentice, Managing Director of TMT, comments:

“We are excited to be proposing the consolidation of the Gabanintha vanadium orebody, arguably one of the best undeveloped vanadium resources in the world, to create the leading vanadium development company and enabling our dedicated shareholder base to maintain material exposure to what we believe will be the world’s next primary vanadium producer.

This all comes at a pivotal time for the global vanadium industry as vanadium flow batteries are established as a critical player in the long duration energy storage market, a key requirement for the world’s transition to net zero and a cleaner future.

We very much appreciate our major shareholder RCF’s demonstrable support for the vanadium thematic and the development of this world class asset.”

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