Australian Vanadium : Placement & SPP to Raise up to $27.5M

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ASX ANNOUNCEMENT

20TH MAY 2022

Not for release to US wire services or distribution in the United States

PLACEMENT & SPP TO RAISE UP TO $27.5M

KEY POINTS

• Placement to institutional, professional and sophisticated investors raises $20m at an issue price of $0.047 per share
• Planned share purchase plan to eligible shareholders to raise up to an additional $7.5m at the same issue price as the placement
• Funds to be used predominantly to finance ongoing work at the Australian Vanadium Project and develop key downstream markets ahead of finalising debt financing and a Final Investment Decision

Australian Vanadium Limited (ASX: AVL, "the Company" or "AVL") is pleased to announce that it has received firm commitments from existing and new institutional, professional and sophisticated investors to subscribe for approximately 425.5 million new fully paid ordinary shares in the Company (Shares) at a price of $0.047 each, to raise $20 million before costs (Placement).

The Placement is being undertaken in conjunction with a Share Purchase Plan (SPP) which will give existing eligible shareholders with a registered address in Australia or New Zealand the opportunity to subscribe for new Shares to raise up to an additional $7.5 million (before costs).

Funds raised under the Placement and SPP will be used to finance ongoing work at the Company's Australian Vanadium Project and to develop key downstream markets ahead of finalising debt financing and a Final Investment Decision, with funds specifically applied towards:1

Description		Amount
Australian Vanadium Project development		$15.5M
Electrolyte plant engineering and construction, standalone power system and		$4M
residential VRFB
VSUN Energy business development		$2M
Ultra-high purity vanadium integration		$2M
Working capital (including costs)		$4M
Total		$27.5M

Managing Director, Vincent Algar comments, "We are extremely pleased with the overwhelming support we have received for this capital raising. The capital raising saw new institutional and sophisticated investors join the register, as well as receiving strong participation from AVL's existing shareholders. We are also pleased to provide an opportunity for our valued retail investors to participate in the capital raising through the offer of the SPP. The funds raised through the Placement and the SPP will ensure that the Company remains well funded while we implement the next phases of the development program for the Australian Vanadium Project."

1 Assumes the SPP raises the target amount of $7.5 million

Australian Vanadium Limited	Phone: [phone]	ASX: AVL
Level 1, 85 Havelock Street	Fax: [phone]	FRA: JT7.F
West Perth, WA 6005	Email: [e-mail]	OTC: ATVVF
		ABN: 90 116 221 740

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PLACEMENT DETAILS

AVL has undertaken a non-underwritten single tranche Placement of approximately 425.5 million new Shares to raise $20 million (before costs). New Shares will be issued at an offer price of $0.047 per Share, which represents a:

• 17.5% discount to the last closing price of AVL Shares on ASX of $0.057 on 17 May 2022 (being the last day on which AVL Shares traded before this announcement)
• 17.4% discount to the 5-day volume weighted average price (VWAP)
• 22.2% discount to the 15-day VWAP

The issue of Shares under the Placement is not subject to AVL shareholder approval as the issuance will comprise 79,000,000 Shares under the Company's ASX Listing Rule 7.1 issue capacity and 346,531,915 Shares under the Company's ASX Listing Rule 7.1A issue capacity.

SPP DETAILS

The non-underwritten SPP aims to raise up to an additional $7.5 million2 (before costs) and will enable all AVL shareholders with a registered address in Australia or New Zealand as at 5.00pm (Perth time) on the Record Date of Thursday 19th May 2022 (Eligible Shareholders) the opportunity to apply for new Shares at the same offer price as the Placement.

Eligible Shareholders will be offered the opportunity under the SPP to apply for up to $30,000 worth of new Shares (subject to a scale back policy which will be set out in the SPP Offer Booklet), irrespective of the size of their shareholding, and without incurring brokerage or transaction costs.

New Shares issued under the SPP will rank equally with AVL's existing Shares on issue. The terms and conditions of the SPP will be set out in a SPP Offer Booklet (and accompanying Application Form) that will be released on ASX and provided to Eligible Shareholders in accordance with the timetable.

Applications must be made and payment must be received by 5.00pm (Perth time) on Thursday 16th June 2022. Payment instructions will be included in the SPP Offer Booklet and on the Application Form.

Canaccord Genuity (Australia) Limited is acting as Lead Manager to the Placement and the SPP.

INDICATIVE TIMETABLE

An indicative timetable of key dates in relation to the Placement and SPP is detailed below.

Event	Indicative Date (2022)
SPP Record Date	5.00pm on Thursday, 19 May
Announcement of Placement and SPP	Friday, 20 May
Dispatch SPP Offer Documents and SPP Opens	Thursday 26 May
Settlement of Placement Shares	Friday, 27	May
Allotment of Placement Shares	Monday, 30	May
SPP Closes	5.00pm on Thursday, 16 June
Announcement of SPP Results	Wednesday, 22 June
Issue of SPP Shares	Thursday, 23 June

Note: The timetable above is indicative only and may be subject to change. All times and dates refer to Perth time. AVL reserves the right to amend any or all of these dates and times without notice or cancel the SPP at any time before new Shares are issued, subject to the Corporations Act 2001 (Cth), the ASX Listing Rules and other applicable laws. The Company encourages Eligible Shareholders who wish to participate in the SPP to act promptly in submitting their applications.

2 AVL may decide to accept applications (in whole or in part) that result in the SPP raising more than this target amount at its absolute discretion, subject to the limits prescribed in the ASX Listing Rules.

ASX: AVL | australianvanadium.com.au

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FURTHER INFORMATION

Further details of the Placement and SPP are set out in the Investor Presentation which has also been lodged on the ASX today. The Investor Presentation contains important information including key risks and foreign offer restrictions in respect of the Placement and SPP. For other questions, investors should consult their broker, solicitor, accountant, tax adviser, financial adviser, or other professional adviser.

All dollar amounts in this announcement are in Australian dollars unless otherwise indicated.

For further information regarding AVL please visit www.australianvanadium.com.au

Vincent Algar, Managing Director

[phone]

This announcement has been produced in accordance with the Company's published continuous disclosure policy and has been approved by the Board.

ASX: AVL | australianvanadium.com.au

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ABOUT AUSTRALIAN VANADIUM LTD

AVL is a resource company focused on vanadium, seeking to offer investors a unique exposure to all aspects of the vanadium value chain - from resource through to steel and energy storage opportunities. AVL is advancing the development of its world-class Australian Vanadium Project at Gabanintha. The Australian Vanadium Project is one of the most advanced vanadium projects being developed globally, with 239Mt at 0.73% vanadium pentoxide (V₂O₅), containing a high-grade zone of 95.6Mt at 1.07% V2O5 and an Ore Reserve of 30.9Mt at 1.09% V2O5 comprised of a Proved Reserve of 5Mt at 1.11% V2O5 and a Probable Reserve of 20.4Mt at 1.07% V2O5, reported in compliance with the JORC Code 2012 (see ASX announcement dated 1st November 2021 'Mineral Resource Update at the Australian Vanadium Project' and ASX announcement dated 6th April 2022 'Bankable Feasibility Study for the Australian Vanadium Project').

VSUN Energy is AVL's 100% owned subsidiary which is focused on developing the market for vanadium redox flow batteries for energy storage. The companies are also working together to produce and supply vanadium electrolyte for the batteries.

ASX: AVL | australianvanadium.com.au

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APPENDIX 1

The Australian Vanadium Project - Mineral Resource estimate by domain and resource classification using a nominal 0.4% V2O5 wireframed cut-off for low-grade and nominal 0.7% V2O5 wireframed cutoff for high-grade (total numbers may not add up due to rounding).

Zone	Category	Mt	V2O5 %	Fe %	TiO2 %	SiO2 %	Al2O3 %	LOI %
	Measured	11.3	1.14	43.8	13.0	9.2	7.5	3.7
HG	Indicated	27.5	1.10	45.4	12.5	8.5	6.5	2.9
	Inferred	56.8	1.04	44.6	11.9	9.4	6.9	3.3

			Subtotal	95.6	1.07	44.7	12.2	9.1	6.8	3.2
	LG		Indicated	54.9	0.50	24.9	6.8	27.6	17.1	7.9
		Inferred	73.6	0.48	25.0	6.4	28.7	15.4	6.6

	Subtotal	128.5	0.49	24.9	6.6	28.2	16.1	7.2
Transported	Inferred	14.9	0.66	29.0	7.8	24.5	15.1	7.8
	Subtotal	14.9	0.66	29.0	7.8	24.5	15.1	7.8
	Measured	11.3	1.14	43.8	13.0	9.2	7.5	3.7
Total	Indicated	82.4	0.70	31.7	8.7	21.2	13.5	6.2
	Inferred	145.3	0.71	33.0	8.7	20.7	12.0	5.4
	Subtotal	239.0	0.73	33.1	8.9	20.4	12.3	5.6

The Australian Vanadium Project - Ore Reserve Statement as at April 2022, at a cut-off grade of 0.7% V2O5.

	Ore			Mt			V2O5%			Fe%			TiO2%				SiO2%				LOI%			V2O5			Ore			Mt
	Reserve																	production kt			Reserve
	Proved	10.5		1.11		61.6		12.8		9.5		3.7		70.9			Waste	238.5
	Probable	20.4		1.07		63.4		12.2		9.2		3.0		152.9			Total	269.4
									Material
	Total Ore			30.9			1.09			62.8			12.4				9.3				3.2			223.8			Strip Ratio	7.7

ASX: AVL | australianvanadium.com.au

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