PERTH - Reward Minerals Limited (ASX: RWD) (Reward or the Company) is pleased to announce that it has entered into a binding share sale agreement (Share Sale Agreement) with the Receivers and Managers (Receivers) of Kalium Lakes Limited (Administrators appointed) (Receivers and Managers appointed) (ASX: KLL) ACN 613 656 643 (Kalium) to acquire the Beyondie Sulphate of Potash (SOP) Project (Beyondie Project) on a debt-free basis, free of encumbrances for total consideration of A$20 million, comprising a A$250,000 exclusivity payment previously made, upfront cash consideration of $14.75 million and deferred cash consideration of $5 million by 30 June 2025.

Commenting on the Share Sale Agreement, Reward Executive Director, Dr Michael Ruane said: 'Reward is pleased to have progressed the potential acquisition of the Beyondie SOP project on a debt-free basis, free of encumbrances to the execution of the Share Sale Agreement stage. Assuming that the proposed DOCA with Creditors, Shareholder Approval and Capital Raising are completed, the Reward team are keen to move quickly on evaluation of the plant and flowsheet modifications and costs for potentially recommissioning the Beyondie Project. The evaluation will also cover the incorporation of the Reward Process into the existing project layout and also for SOP recovery operations at other SOP resource sites.'

Share Sale Agreement

Reward has entered into the Share Sale Agreement for the acquisition of 100% of the issued share capital of Kalium Lakes Infrastructure Pty Ltd (KLI) and Kalium Lakes Potash Pty Ltd (KLP) (together, the Target Entities), on a debt-free basis, free of encumbrances. KLP is the employing entity for the Beyondie Project, with the majority of suppliers contracted through KLP. KLI holds the non-process infrastructure assets for the Beyondie Project

DOCA Proposal

As a key condition to completion of the Share Sale Agreement, DOCAs for each of KLP and KLI must be approved by creditors of KLP and KLI (with meetings of creditors scheduled to be held on 6 December 2023). The DOCA Proposal submitted by Reward contains customary terms for a document of its nature, and provides that: all KLP and KLI unsecured creditor claims and debts will be compromised through effectuation of the DOCAs and the establishment of separate Creditors Trusts, which will act as the vehicle to distribute any DOCA funds to the creditors of KLP and KLI; funds will be allocated from the consideration payable under the Share Sale Agreement to satisfy the costs of the administration of KLI and KLP and enable a dividend to be paid to priority employee creditors in full and to unsecured creditors of KLP and KLI; KLP and KLI will continue under the ownership of Reward (subject to completion of the Share Sale Agreement); priority employee claims will be paid 100 cents in the dollar and under each DOCA, they are afforded a priority claim over unsecured creditors; a combined fund of up to $250k will be available to meet the claims of unsecured creditors of KLP and KLI (estimated to represent a dividend of approximately 5 cents in the dollar) and the existing unsecured founder royalty of 1.9% of gross revenue from all products extracted from the relevant mining tenements that comprise the Beyondie Project will be extinguished by the DOCA or reduced on such terms to be agreed between Reward and the relevant royalty holders for the purposes of preventing any termination right described in item 7(b) of the Schedule that Kalium might otherwise have under the Share Sale Agreement.

Tyson Loan

As part of the transaction, Tyson Resources Pty Ltd (Tyson Resources), an entity associated with Executive Director, Michael Ruane, has provided $8.750 million of loan funding to Kalium towards prepayment of a postadministration secured debt outstanding from Kalium to a third-party lender (Tyson Loan). The Tyson Loan is secured over the present and after acquired property of Kalium, KLP and KLI (but ranking behind the third-party lender debt), and will only receive interest should the Share Sale Agreement not complete due to the DOCAs not being approved or breach by Kalium or the Receivers (at a rate of 12.5% per annum from 1 January 2024). The Tyson Loan (including attaching interest and security interests) will be repaid and discharged on completion of the Share Sale Agreement. There is no recourse against Reward in relation to the Tyson Loan.

Next Steps Reward's pathway to complete the Share Sale Agreement and acquire the Beyondie Project requires: approval of each DOCA at a meeting of KLP and KLI creditors on 6 December 2023, shareholder approval pursuant to ASX Listing Rule 11.1.2 at a general meeting expected to be convened in early January 2024. The Company expects to dispatch a notice of meeting in respect of this general meeting during the week ending 8 December 2023 (Notice of Meeting) and completion of a A$22.785 million (before costs) equity capital raising by Reward (Capital Raising). Details of the capital raising (including pricing and structure) will be determined prior to dispatch of the Notice of Meeting to shareholders. The intended use of funds raised from the Capital Raising during the 12 months following completion of the Share Sale Agreement is set out in the Company's announcement dated 16 November 2023 and effectuation of the DOCAs and completion of the Share Sale Agreement in accordance with their terms by 30 January 2024 (or such later date agreed by the parties).

Upon completion of the Share Sale Agreement, Reward intends to maintain the Beyondie Project on care and maintenance for a period of 12 months whilst Reward works to assess the shortcomings of the operation at the Beyondie Project and establish potential solutions to the remaining problems identified at the Beyondie Project. In this regard, Reward notes that the Beyondie Project is already in care and maintenance. A key component to Reward's activities following completion of the Proposed Transaction will be to work to incorporate the Reward Process into the Beyondie Project brine supply/pond system and plant flow sheet. This will be a low-cost R&D program designed to utilise existing plant and infrastructure at the Beyondie Project. Following such work, Reward will be in a position to notify shareholders of the prospects of the viability of the Beyondie Project processing plant returning to revenue generation and any additional capital expenditure required

Contact:

Michael Ruane Lorry

Email: lorry.hughes@rewardminerals.com

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