Aterian : Annual Report and Accounts Dec 2023

Aterian PLC

STRATEGIC REPORT

YEAR ENDED 31 DECEMBER 2023

Dear Shareholder,

2023 was another milestone year for the Company, setting out a clear roadmap for how we intend to grow the Company.

After successfully acquiring our Moroccan portfolio in late 2022, we entered an earn-in joint venture with Rio Tinto Mining and Exploration ("Rio Tinto") for our HCK lithium-tantalum project in Rwanda in August 2023. Under this Agreement, Rio Tinto has the right to earn in on our two other projects in Rwanda when the pending licence applications are granted. We expanded our portfolio in Morocco with the award of two additional copper exploration projects, with extensions granted to three existing projects. The Company reported regular updates on the positive results from our key projects in Morocco during the year. In January 2023, the International Tin Supply Chain Initiative ("ITSCI"), a programme for responsible mineral supply chains, approved our application in Rwanda and granted Membership Status to the Company.

Our strategy focuses on responsibly exploring and mining critical minerals and metals across Africa, a region vital for a successful energy transition. The renewable energy, automotive, and electronic manufacturing sectors are currently driving the need to develop secure supply chains of critical and strategic metals. We firmly believe the long-term market fundamentals for copper are excellent and linked specifically to the anticipated growing demand for renewable energy and related transportation electrification globally.

We continue to work towards becoming an ethical, integrated exploration, development, and trading company across multiple mineral assets and jurisdictions.

Business Review and Future Developments

Rwanda Exploration

Aterian signed a definitive Earn-In Investment and Joint Venture Agreement with Rio Tinto and Kinunga Mining Ltd ("Kinunga"), our 70% held Rwanda subsidiary. The Agreement is for the exploration and development of lithium and by-products at its HCK Joint Venture project which holds the HCK licence in the Republic of Rwanda. Rio Tinto has the option to invest US$7.5 million in two stages to earn up to a 75% interest in the HCK licence to explore for minerals vital for a successful energy transition to renewable energy. For accounting purposes, the Agreement has been treated as a farm-out arrangement.

The Stage 1 exploration expenditure commitment is US$3 million over a period of up to two years to earn a 51% interest in the licence, with Stage 2 exploration expenditures of US$4.5 million over a follow- on period of up to three years to earn a further 24% interest in the licence, taking Rio Tinto's interest in the licence to 75%. As part of the agreement, Rio Tinto agreed to pay the Company a cash consideration of US$300,000 over the two stages and has granted a 2% Net Smelter Return ("NSR") over the HCK Project (capped at US$50 million). Rio Tinto has the option to add Aterian's two other Rwandan projects (Musasa and Dynasty Projects), pending licence approval with the authorities.

Morocco Exploration

In 2023, we increased the Moroccan exploration portfolio by adding two new projects, Akka and West Tazalaght. Both projects were identified as prospective for sedimentary-hosted copper mineralisation and expanded the asset base in Morocco to 17 projects covering 897 km2, an increase of 17% in our total land holding.

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Aterian PLC

STRATEGIC REPORT (continued)

YEAR ENDED 31 DECEMBER 2023

We have continued exploring our key projects at Agdz, Tata, Azrar and Jebilet Est, with positive assay data being returned from all these projects. The sedimentary-hosted copper on the Tata project looks highly encouraging, with visible copper mineralisation and good copper grades reported from a strike length of 18 km, with an estimated 26 km remaining to be tested.

The increase in total land area and the expansion of the copper project portfolio demonstrates our strong belief that Morocco represents an exciting mining destination, particularly for critical minerals vital for a successful energy transition.

Financial Review

During the period under review, the Group made a loss before taxation of £1,062,000 (2022: loss £4,383,000).

The reduction in losses for the year is in large part due to the absence of the need for impairment charges which in 2022 amounted to £3,045,000 in respect of goodwill and wash plant assets at the Musasa project.

Administration costs increased from £996,000 in 2022 to £1,471,000 in 2023, reflecting a full year of having the Moroccan projects under the Group's ownership with a consequent increase in legal and professional costs, and management of the increased portfolio. Directors' remuneration increased from £50,000 to £224,000 following the signing of new service agreements in October 2022.

Share-based payment charges fell from £335,000 in 2022 to £1,000 in 2023 after the one-off costs associated with the acquisition of Aterian Resources Limited. Accordingly, these savings will not be repeated in 2024.

The losses for the year have been funded by new capital issues, in particular £1,000,000 from Directors, management, existing shareholders and new investors through the issue of new shares.

The Group has also sold certain of its wash plant assets at Musasa in August 2023 for a total of US$400,000 (approximately £320,000), proceeds from which are being settled over a 12-month period.

Our definitive Earn-In Investment and Joint Venture Agreement signed with Rio Tinto in August 2023 for the exploration and development of lithium and by-products on the HCK Joint Venture project is now well underway, with Rio Tinto fully funding the exploration work and managing the project.

Loss per share for the year was 0.11 pence against 0.76 pence in 2022.

Notwithstanding the progress made in 2023, the Group needs to raise further capital to undertake its exploration programme and to develop a mineral concentrate trading business operating out of Rwanda. This is a key focus of management for the first half of 2024. At the year-end, cash balances were £73,000 although the Group has the benefit of a working capital facility made available by the Chairman.

Strategy

Aterian is a critical metal exploration and development company focused on African mineral resource investment opportunities. Our objective is to create and build an integrated critical mineral exploration, development, and trading company to meet the expected shortfall in the supply of "green" metals required to satisfy the global demand for renewable energy sources and decarbonisation targets. We will continue to review and evaluate new strategic opportunities to support us in meeting this objective.

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Aterian PLC

STRATEGIC REPORT (continued)

YEAR ENDED 31 DECEMBER 2023

Strategic Plan

Aterian's strategy aims to develop critical metal exploration assets in Africa and to develop a mineral concentrate trading business operating out of Rwanda.

The Company holds 17 projects covering 897 km2 in Morocco, focusing on copper and base metals. These projects target potentially large-scale occurrences of essential critical metals with good long-term market fundamentals, such as copper, and may attract partnership opportunities. In Rwanda, the Company intends to conduct lithium-tantalum mineral exploration, develop near-term projects into production units, and partner with operating small-scale mining companies to improve production and recovery rates while establishing a metal trading business to market mineral concentrates to international buyers and off-talers. The trading revenues will support and fund further exploration across the asset base.

The Aterian strategic plan incorporates a business model based on stakeholder interests, business or commercial planning, and growth. Effectively combining the interests of all stakeholders allows us to competently execute plans promoting the company's best commercial interests and allowing for future growth.

Group Overview

Operational Statement, 2023

Introduction

In Rwanda, Aterian, through its 100% owned Rwanda-registered subsidiary, Eastinco Limited, is actively engaged in mineral exploration and developing its portfolio of critical metals, focusing on lithium, tantalum, niobium, and tin. Eastinco Limited holds a metal trading licence issued by the authorities in Rwanda, which will allow the Company to trade metals and mineral concentrates from any internal supply and third-party producers and suppliers. Eastinco Limited currently holds three partnerships in Rwanda.

The Company currently holds 17 exploration projects, covering 897 km2 in Morocco. The projects are held by two 100% owned Moroccan subsidiary companies and are primarily focused on the exploration and development of copper and other base metals.

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Aterian PLC

STRATEGIC REPORT (continued)

YEAR ENDED 31 DECEMBER 2023

Rwanda Partnerships

HCK Joint Venture

Aterian holds a Joint Venture Agreement and Operating Agreement ("Agreement") with HCK Mining Limited, a private non-related Rwanda registered entity. Aterian retains 70% of the joint venture company, Kinunga Mining Ltd the holder of a 2,750 hectare exploration licence in southern Rwanda..

Aterian signed a definitive Earn-In Investment and Joint Venture Agreement with Rio Tinto and Kinunga Mining Ltd. The Agreement is for the exploration and development of lithium and by-products on the HCK Joint Venture project, with Rio Tinto fully funding the exploration work and managing the project.

Musasa Joint Venture

This is a Joint Venture and Operating Agreement ("Agreement") with the Kuaka Cooperative ("Kuaka"), the holder of a small-scale mining licence in western Rwanda. An application for a new, larger 400- hectare exploration licence in the name of the joint venture company, Musasa Mining Limited, is pending approval with the Rwanda Government. Aterian will retain an 85% interest in the joint venture company holding the new licence, with the right to purchase 100% of the Ta-Nb-Sn from any future production.

Dynasty Construction Joint Venture

Aterian entered a Joint Venture and Operating Agreement ("Agreement") with Dynasty Construction Ltd, a private non-related Rwanda registered entity holding a 400-hectare exploration licence holder in the Huye District of southern Rwanda. A renewal of the exploration licence is pending approval with the Rwanda Government. Aterian holds a 50% interest in the proposed joint venture company, with Aterian and Dynasty to provide future capital expenditure in proportion with their shareholding at the time of any potential future mine build.

Project Review - Rwanda

HCK Joint Venture

The licence is located approximately 65 km southwest of Kigali and 20 km northwest of Huye, within the Southern Province, straddling the Nyanza and Huye District boundaries, and shares a common border with the neighbouring Dynasty joint venture licence.

The HCK and Dynasty licences are underlain by schists and minor intrusive bodies of the Palaeoproterozoic granitic-metamorphic Butare Complex, which occurs west of the Gitarama granitic massif. The Complex is surrounded by low-grade metasedimentary terrains and is bordered to the north by a major NW-SEleft-lateral shear zone, the Mwogo Structure.

Prospecting over the HCK licence has identified 19 zones of potentially lithium-tantalum-niobium hosting pegmatite, frequently with multiple pegmatite dykes observed at most zones. 23 target pegmatite zones have been discovered on the combined HCK and Dynasty projects, making this a strong lithium exploration play.

Before concluding the Rio Tinto earn-in joint venture, fieldwork focussed on the HCK-1 prospect, which follows a prominent northwest-trending ridgeline. Field observations indicate the strike of the HCK-1 target extends for at least 2,500 m. The width of the target zone is uncertain, but in several locations along NE-SW orientated cross-section profiles, pegmatite is intersected over a horizontal distance of c.100 m.

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Aterian PLC

STRATEGIC REPORT (continued)

YEAR ENDED 31 DECEMBER 2023

An aerial drone survey was flown over the entire licence to provide detailed imagery, topographic data, and a map of the previously mined artisanal workings. A ground-basedmulti-method geophysical survey covering an area of 2.36 km2 over the HCK-1 target was undertaken. The survey, comprising magnetometry, induced polarisation ("IP"), and electrical IP tomography ("IPT"), was designed to provide information on the main geological controlling structures for the emplacement of the pegmatite bodies, the depth of weathering and recommended targets for detailed follow-up.

An independent pegmatite fertility analysis of the multi-element geochemistry from samples collected over the project was completed. The study involved an analysis of the data by assessing various metal ratios and metal associations to predict the lithium prospectivity of the pegmatites occurring on the licence. The study indicated that the HCK-1 pegmatite has encouraging evidence for lithium-tantalum enrichment, even though the tantalum grades generally seem to be < 200 ppm. However, the tantalum grades are not unexpected given the irregular metal distribution within these weathered and kaolinised pegmatites and the samples collected from the near-surface environment. Given the deep tropical weathering, the enrichment of lithium (16 samples > 150 ppm) is seen as encouraging for locating lithium pegmatites at depth (below the weathering zone).

Since Rio Tinto's operations commenced in August 2023, licence-wide geological surface mapping has been completed, capturing lithology and structural data. Additional infill mapping was completed over multiple targets within the licence, including HCK-1,HCK-2, the southeast area, and Buranga. A reinterpretation of the Aterian geochemical soil samples collected from a 400 x 200m wide-spaced sampling campaign has identified several new anomalies (Li-Cs-Ta-Sn). A ground-based magnetic survey over the whole licence was completed in November at 100m line spacing, totalling 253 line-km. Initial orientation ground-based radiometric survey lines over HCK-1 have shown this to aid in identifying covered (blind to surface) pegmatites. The trial has been extended to a 156 line-km survey west of the Mwogo River, with the eastern bank completed in early 2024.

Participation in local community projects, including donating and planting 3,000 tree saplings over the project took place during the year.

Musasa Joint Venture

The Musasa (Li)-Ta-Nb-Sn project is located near Lake Kivu within the Western Province of Rwanda and 80 km west of Kigali.

No work was undertaken on the project with the licence application for a new 400-hectare exploration licence pending approval from the Rwanda Mines, Petroleum and Gas Board ("RMB").

Dynasty Joint Venture

No work was undertaken on this project during the reporting period, with the licence renewal pending with the RMB. The licence is 18 km northwest of Huye in the Southern Province of Rwanda.

Project Review - Morocco

As of the year end, the Company held 60 licences over 17 separate project areas, covering 897 km2. The licences are 100% owned by two wholly-owned Moroccan subsidiary companies.

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Aterian PLC

STRATEGIC REPORT (continued)

YEAR ENDED 31 DECEMBER 2023

Of the 17 projects, the Company focuses on four key copper projects: Agdz, Tata, Azrar and Jebilet Est. The Agdz, Tata, and Azrar projects are all in the Anti-Atlas Mountains, with Jebilet Est located 35 km northeast of Marrakech in the western Meseta.

Agdz Project

The Agdz Project, covering 34.5 km2, lies within the Souss-Massa-Drâa region of the Anti-Atlas Mountains of central Morocco, approximately 350 km south of the capital, Rabat, and about 35 km east of the city of Ouarzazate. The 'Noor 1' solar power station, the world's largest concentrated solar power plant with a planned output of 580 MW, is located approximately 40 km northwest of Agdz.

The project lies approximately 14 km southwest of Managem Group's Bouskour copper-silver mine (non- compliant Resource of 53 Mt at 0.8 % Cu and 9 g/t Ag, of which 21 Mt contain a higher grade of 1.3% Cu), with the world-class Imiter silver mine (reported to contain 189 million ounces of silver (resource + reserve) - Managem 2019 Annual Report) located 80 km to the northeast.

The lithological package at Agdz broadly consists of mostly felsic-intermediatevolcano-sedimentary rocks of the Ouarzazate Supergroup with large granodiorite plutons in the north and locally conglomeratic metasedimentary sequences in the south. The units are bisected by sub-parallel NE and NW striking brittle faults and alteration zones, several of which have been historically mined for copper.

Five prospects, namely Makarn, Makarn North, Amzwaro, Minière and Daoud, have been defined on the project based on rock chip sampling (the best of which returned grades of up to 26.5 % Cu, 448 g/t Ag, and 3.74 g/t Au), geological mapping and geophysics. The best rock chip samples from hydrothermal manganese workings have returned rock chip grades over 10% Mn.

Agdz hosts five significant Cu-Ag prospects covering an area of approximately 8 km2

• The 2.80 km long Makarn - Makarn North prospect, with results up to 8.00 % Cu and 448 g/t Ag.
• The 2.00 km long Amzwaro prospect, with results up to 4.82 % Cu and 189 g/t Ag.
• The 0.15 km long Minière prospect, with results up to 13.05 % Cu and 12 g/t Ag.
• The 0.70 km long Daoud prospect, with results up to 2.71 % Cu, 152 g/t Ag.

300 m of reconnaissance trenching has been completed in 13 trenches across two of the five prospects. Results include 14.12 m at 0.65% Cu and 36.54 g/t Ag and 13.7 m at 0.36% Cu and 13.26 g/t Ag.

A 137 line-km IP gradient array survey was completed over an area of 14 km2 supported by 12 High- Resolution IP ("HIRIP") profiles to acquire 2-D resistivity and chargeability depth sections to depths of c.250 m. During the year, field teams undertook additional geological mapping, and a re-interpretation of the previous geophysical data was completed. This work confirmed the structural control on mineralisation with the Agdz prospect occurring in an inferred dilation jog or possible 'horse-tails' structural setting. Planning is underway to initiate a maiden scout drilling programme to test several geophysical anomalies and observations from trenching and mapping.

Tata Project

The Tata Project covers 154.4 km2 and comprises ten license blocks. The project is located within the western Anti-Atlas Mountains, a region considered highly prospective for sedimentary-hosted copper mineralisation.

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Aterian PLC

STRATEGIC REPORT (continued)

YEAR ENDED 31 DECEMBER 2023

Tata lies 30 km south of the Company's Azrar copper-silver project, approximately 465 km south of the capital Rabat, and 165 km southeast of the port city of Agadir. The Tizert copper-silver project (estimated non-compliant resource of 57 Mt grading 1.03 % Cu and 23 g/t Ag) currently under development by Managem Group is located 50 km to the northwest.

Sedimentary-hosted copper in the Anti-Atlas is hosted in sediments of the Late Ediacaran to early Cambrian-aged Adoudou Formation, which is found within the project along the margins of the Paleoproterozoic Tagragra de Tata Inlier. Exploration work on the project has identified copper mineralisation hosted within the Adoudounian sediments and the lower limestone and dolomitic units of the overlying Tata Group.

Fieldwork during the year traced out visible copper mineralisation on the surface for a horizontal strike distance of 18 km. It is predicted from mapping that a further 26 km of strike is considered prospective for copper and will be explored in later programmes. The maximum sample grade reported is 7.02 % Cu from bedding parallel disseminated mineralisation in siltstones within the lower Adoudou Formation. 250 m along the strike east of this sample, an outcrop of fractured dolomite with mm-scale quartz- carbonate veinlets hosting disseminated copper oxide reported 1.62 % Cu. A dolomite float sample collected adjacent to the contact between Adoudounian sediments and the Proterozoic inlier reported

2.05 % Cu. Other results include 0.95 % Cu from a 4 m thick dolomitic sequence and 0.87 % Cu from an 8 m thick sequence of dolomite and marl. Published historical geological maps (2002) indicate anomalous copper and gold were identified along the northern margin of the inlier (although the grades and location coordinates from the historical sampling are not available at this time).

More recently, geological mapping and sampling focused on traversing the stratigraphy perpendicular to the overall strike of the bedding from the basal contact with the underlying Proterozoic inlier. The objective was to understand better the sedimentary package, the preferential horizons for copper mineralisation, and the overall geological setting regarding the historical basin architecture and the associated impact on trap sites for the ancient metal-carrying brine.

Sedimentary-hosted copper is typically found within the western Anti-Atlas in the Basal Series and Lower Limestone units of the Adoudou Formation. The results from fieldwork correlate stratigraphically with this observation made on other nearby copper occurrences; however, copper mineralisation has also been reported from the younger, overlying sediments of the Cambrian-aged Tata Group.

Azrar Project

The Azrar Project, which was recently expanded following the granting of two new licences, now covers

99.3 km2. It is located within the western Anti-Atlas Mountains and lies 30 km north of the Company's Tata copper project.

Multiple styles of copper mineralisation and gold have been discovered in the recently awarded expansion areas. The mineralisation on the project is hosted in fault-related breccia zones, late-stage quartz veins, and within carbonate and siltstone sedimentary sequences of the Adoudou Formation. Several abandoned artisanal workings have been identified across the Project, with host rocks comparable to the nearby Managem-owned Tizert copper project.

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