Company Announcements

METALS EXPLORATION PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024

Metals Exploration plc (AIM: MTL) ("Metals Exploration", the "Company" or, together with its subsidiaries the "Group"), a gold producer in the Philippines, announces its unaudited interim results for the six months ended 30 June 2024. The results will be made available on the Company's website at www.metalsexploration.com.

Highlights

·      H1 2024 profit before tax of US$58.4 million (H1 2023: US$37.0 million);

·      H1 2024 earnings before tax, interest, depreciation, amortization and impairment charges US$47.1 million (H1 2023: US$43.0 million)

·      H1 2024 gold production of 42,535 ounces (H1 2023: 45,533 ounces);

·      H1 2024 gold recoveries of 89.6% (H1 2023: 89.8%);

·      H1 2024 positive free cash flow of US$46.4 million (H1 2023: US$41.9 million);

·      Over 23 million man-hours since the last reported lost-time injury;

·      Announcement of off-market buy-back of Runruno Holdings Limited's 18.6% shareholding - to be completed by the end of Q3 2024;

·      Debt free status confirmed with all debt disputes resolved and cash on hand of US$6.6 million as at 30 June 2024; and

·      Acquisition of the YMC group interest completed post period-end.

Production Summary

Corporate

Buy-back of RHL shares

On 20 June 2024 the Company agreed to purchase the entire shareholding of Runruno Holdings Limited ("RHL"), being 393,513,302 ordinary shares of £0.0001 each in the capital of the Company ("Ordinary Shares") (the "RHL Shares") over three tranches and at a price of 5 pence per share, by means of an off-market buy back (the "Buy Back"). At a General Meeting of shareholders on 23 August 2024 the Buy Back of RHL's 18.6% interest in the Company was approved.

The Buy Back price of 5 pence per share was agreed by the Company and RHL at a date during negotiations of the Buy Back, based on the 30-day trailing volume weighted average market price at that date. The tranches of the Buy Back are:

·      203,640,000 RHL Shares acquired on 2 September 2024;

·      94,936,651 RHL Shares acquired on 2 September 2024; and

·      94,936,651 RHL Shares to be acquired by no later than 30 September 2024.

The aggregate consideration for the Buy Back is £19,675,665. All shares acquired from RHL will initially be held in treasury, until either cancelled or re-issued. Shares held in treasury have no voting rights. Following completion of the first tranche of the Buy Back, the relationship agreement with RHL was terminated.

Production fee and termination of Revolving Credit Facility ("RCF")

In conjunction with entering into the Buy Back agreement, the Group agreed to a production fee agreement with RHL. The Group has agreed to pay RHL a production fee of US$164 per ounce of gold produced at the Runruno contract area on any production that exceeds 204,269 ounces of gold from 1 May 2024 (being approximately 105% of the current forecast gold production from such date, based upon the Group's life of mine plan for the Runruno mine). Any such production fee due would be paid quarterly in arrears. Following completion of the first tranche of the Buy Back, the RCF was terminated with no early termination fee payable to either RHL or MTL Luxembourg S.a.r.l ("MTL Lux").

Debt settlement

The Company completed various agreements with its lenders, also in June 2024, that resolved all debt disputes including the payment of the final agreed principal/interest and applicable lender legal fees for both the senior and mezzanine debt, confirming that the Group is now debt free.

YMC Acquisition

At the General Meeting on 23 August 2024, shareholders also approved the completion of a share purchase agreement, to acquire a controlling interest in the Yamang Mineral Corporation group (the "YMC Group"). The aggregate consideration payable by the Company to the YMC Group shareholders was US$1.6 million in cash and the issue of options to subscribe for up to 41 million new Ordinary Shares at an exercise price equal to nominal value. This acquisition was completed on 27 August 2024. Refer to the announcement dated 28 August 2024.

Additional Option Issue

At the Annual General Meeting, shareholders approved the issue of 6.6 million options to subscribe for new Ordinary Shares at an exercise price equal to nominal value, to the independent non-executive chairman.

Exercise of Options

During H1 2024, the Company issued 19,800,000 new Ordinary Shares at an issue price of £0.0001 to certain non-executive directors/ex-directors following the exercise of options.

Review of Runruno Gold Mine Operations

Safety and health

The outstanding safety record at Runruno continues with in excess of 23 million man-hours with no lost time incidents occurring since the last lost time incident in December 2016. This is something the Company is incredibly proud of, and all employees and contractors are to be congratulated on this ongoing achievement.

Finance

Gold sales were 41,589 oz for revenues of US$91.1 million (H1 2023 46,186 oz for revenues of US$89.6 million) at an average price of US$2,190 per oz (H1 2023 US$1,939 per oz), resulting in positive free cash flow of US$46.4 million (H1 2023: US$41.9 million).

During H1 2024, the Group resolved all debt related disputes confirming that the Group is debt free. Total debt repayments made during H1 2024 were US$27.2 million (H1 2023: US$35.0 million).

Mining

Mining production of ore and waste was slightly down at 6.0Mt for H1 2024 (H1 2023: 6.2Mt). Total ore mined was slightly higher at 1.2Mt (H1 2023: 0.8Mt), at a lower grade of 1.37g/t (H1 2023: 1.59g/t).

Process plant

Stable operations were delivered during H1 2024, leading to gold production of 42,535 ounces (H1 2023: 45,533 ounces). Throughput for H1 2024 was on budget at 1.10Mt (H1 2023: 1.07Mt) with a lower head grade of 1.34g/t (H1 2023: 1.48g/t) resulting in slightly lower levels of production

Efforts to gain marginal gold recovery improvements continue with an excellent average overall gold recovery rate of 89.6% achieved (H1 2023: 89.8%).

Unplanned process plant downtime during H1 2024 did not materially interrupt production and consisted mainly of power interruptions, pump changeovers as well as repairs to the return discharge line ("RDL") and final tails line, conveyor belts, rollers and trommel panel screens.

Residual Storage Impoundment ("RSI")

The RSI is operating to design with an excellent environmental performance record. Stage 6 RSI lift was completed in H1 2024, and the dam water freeboard remained well within design limits.

Construction of the RSI final in-rock spillway continues, albeit slightly behind schedule. The day-to-day performance of the RSI, including the construction of the final in-rock spillway, is continuously monitored by an independent international consulting group.

Community & Government Relations

Productive relations with both the community and the Philippine government continue.

YMC Group Update

As noted above, the acquisition of the YMC Group was completed on 27 August 2024. The YMC Group holds a majority and controlling interest in a highly prospective exploration licence covering 16,200 hectares on Luzon, Philippines, approximately 200km north of the Company's Runruno mine, in the Cordillera region, which is a prolific gold belt in the Philippines, with proven mineral endowment, having produced over 40Moz of gold historically. The Company has undertaken initial geophysics and geochemistry activities over this project area (known as the Abra project) as a prelude to designing an exploration drill programme. It is expected that drilling of initial targets will commence in Q4 2024.

Darren Bowden, CEO of Metals Exploration, commented:

"The first half of 2024 has been transformational for the Company. Operationally Runruno has continued to perform strongly whilst the corporate actions taken will provide a platform for the future growth of the Company.

"In January the Company announced the acquisition the YMC Group, which completed in August, and which the Company believes holds some highly prospective exploration acreage; with our first drill campaign of this prospect expected in Q4 2024.  In addition to this, the strong performance at Runruno has enabled the Company to gain debt free status, resolving all debt disputes.  This is a very significant achievement considering the historical debt levels of the recent past.  This accomplishment will ensure that the Company has more than ample firepower to progress the Company's assets whilst continuing to seek further appropriate acquisition opportunities. The final piece of the jigsaw in the first half of the year, again approved in August, was the off-market buy-back of RHL's shareholding (to be completed by the end of September 2024); removing a number of corporate and operational restrictions that have previously been placed on the team and will ensure management has the opportunity to deliver the Company's growth strategy.

"The Company enters the second half of the year in an incredibly strong position, and is greatly looking forward to commencing initial drilling at YMC and providing further updates across all our operations."

For further information please visit or contact www.metalsexploration.com