Ookami : Rutile & Heavy Mineral Sands Project Acquisition & Raising

ASX Announcement

22 April 2022

Acquisition of Cameroonian Rutile and Heavy

Mineral Sands Project, Capital Raising and

Technical Director Appointment

• ▪ Ookami has entered into an agreement under which it will have the right to acquire up to an 85% interest in a Rutile and Mineral Sands Project in Cameroon.

• ▪ ~$2 million capital raising via a ~A$1.35 million placement and a ~A$683,000 fully underwritten entitlement offer.

• ▪ Post transaction settlement Ookami will have ~$A6,000,000 in cash reserves and be well funded to advance its portfolio of projects and to assess complementary business development opportunities.

• ▪ Andrew Law to be appointed as an independent technical Director and Joseph van den Elsen to transition to a Non-executive Director role.

Ookami Limited (ASX: OOK) (Ookami or the Company) is pleased to announce that it has entered into a share sale agreement to acquire 100% of the issued share capital of African Mining Corporation Pty Ltd (AMC) (Transaction). AMC has the right to earn up to an 85% equity interest in three Cameroonian incorporated entities, Heritage Mining Ltd, Mungo Resources Ltd and Elephant Mining Ltd (together, the Cameroonian Companies), which have applied for six mineral exploration permits in southern Cameroon (Permits). These Permits cover a total area of approximately 2,600km2 and are considered prospective for Rutile and Heavy Mineral Sands (HMS) (Transaction).

In connection with the Transaction, the Company has received firm commitments for a placement to institutional, professional and sophisticated investors to raise ~A$1.35 million (before costs) and will also undertake a fully underwritten pro rata non-renounceable entitlement offer to existing shareholders to raise an additional ~A$683,000 (before costs) (together, the Capital Raising). Funds raised from the Capital Raising will be used to fund exploration at the Permits and working capital purposes.

To support the Company's activities, the Company is pleased to also announce the appointment of Andrew Law to the Board as an Independent Technical Director. Andrew has over 35 years' experience in the mining and resources industry in Australia, Africa and South America and has extensive technical and management experience including large mineral sands dry mining and dredging environments.

Joseph van den Elsen, the Company's Managing Director, will transition to a Non-Executive Director role.

Ookami Chairman, Mr John Ciganek said, "since reinstatement in July 2021, the Company has focussed on the Messok East Project in Cameroon and reviewed numerous opportunities to expand Ookami's exploration footprint in the country. The acquisition of the interest in the Permits in Cameroon provides the Company with an entry into a known rutile district. An initial reconnaissance review over the Permit areas has identified rutile and heavy mineral sands occurrences within the Permit areas.

The appointment of Andrew Law as Technical Director provides the Company with access to his extensive expertise on rutile and HMS exploration and processing as well as operating in Africa."

BACKGROUND ON THE PERMITS

The six Permits are under valid application and are located in the Centre region of Cameroon, approximately 160km to the north east of the capital city, Yaounde (refer to Figure 1). Initial due diligence reconnaissance over a sample of the application areas has identified HMS and rutile occurrences within the permit application areas.

Figure 1: Permit area and location

The Permits border, or are nearby to, permits applied for by French company Eramet SA (Eramet). Over the past three years, Eramet has applied for approximately 5,000km2 of rutile and HMS permits in the Centre Region of Cameroon. In addition to its permits in Cameroon, Eramet currently operate the Grand Cote Operations mineral sands mine in Senegal and are the fourth largest producer of Zircon and Titanium feedstock's globally. In addition, Eramet is the largest global ferronickel producer and second largest global manganese producer.

TRANSACTION AGREEMENTS

Share Sale Agreement

The Company has entered into a share sale agreement with the vendors of AMC (Vendors) (refer to Schedule 1) pursuant to which the Company has agreed to acquire 100% of the issued share capital of AMC (Share Sale Agreement) in consideration for the issue of 5,555,556 new fully paid ordinary shares in the Company (Consideration Shares).

Completion of the Share Sale Agreement is conditional upon the satisfaction and/or waiver of the following conditions precedent:

•

all authorisations required to give effect to the transactions contemplated by the Share Sale Agreement being obtained or otherwise satisfied and remaining in full force and effect;

•

AMC, the Cameroonian Companies and the shareholders of the Cameroonian Companies executing a replacement Earn-in and Joint Venture Agreement (now executed, see further below);

•

•

•

the Company obtaining all necessary shareholder approvals required to complete the Transaction; four of the Permits being granted and all authorisations in respect to those four Permits being received; the Company undertaking an equity capital raising and receiving valid applications to raise a minimum of A$1,350,000 (before costs) via the issue fully paid ordinary shares in the Company (Shares); and

•

there be no material breaches of the Share Sale Agreement and no material adverse changes prior to completion.

If the conditions in respect to the Share Sale Agreement are not satisfied and/or waived by 31 August 2022, the Share Sale Agreement may be terminated by either party by written notice to the other party.

The Share Sale Agreement is otherwise subject to customary terms and conditions for a transaction of this nature, including pre-completion obligations, warranties and representations by the parties.

Earn-in and Joint Venture Agreement

AMC is a party to an earn-in and joint venture agreement pursuant to which AMC has an option to earn up to an 85% interest in the Cameroonian Companies, who have applied for the Permits (Earn-in and Joint Venture Agreement). As noted above, completion of the Share Sale Agreement was conditional on AMC, the Cameroonian Companies and the shareholders of the Cameroonian Companies entering into a replacement Earn-in and Joint Venture Agreement. This Earn-in and Joint Venture Agreement has now been entered into between AMC and the Cameroonian Companies on the key terms detailed below.

AMC will earn its interest in the Cameroonian Companies by:

•

spending US$500,000 on the Permits within 12 months of the satisfaction and/or waiver of the conditions to earn a 75% interest (First Earn-in Milestone);

•

•

spending a further US$2,500,000 on the Permits within 24 months of the satisfaction of the First Earn-in Milestone to earn a further 5% interest (taking the total interest to 80%) (Second Earn-in Milestone); and spending a further US$2,500,000 on the Permits within 36 months of the satisfaction of the Second Earn-in Milestone to earn a further 5% interest (taking the total interest to 85%) (Third Earn-in Milestone).

Upon achieving the First Earn-in Milestone, AMC will have the right to appoint two directors to each of the Cameroonian Companies.

AMC will also pay US$100,000 to the other shareholders of the Cameroonian Companies (Other Shareholders) as a reimbursement fee for past expenditures on the Permits.

Following the Third Earn-in Milestone Date or AMC providing notice to the Other Shareholders that AMC will no longer sole fund expenditure on the Permits, AMC and the Other Shareholders will enter into an incorporated joint venture which will fully own the Cameroonian Companies and the Permits (Joint Venture Commencement Date).

Post the Joint Venture Commencement Date, AMC and the Other Shareholders must contribute to the joint venture on a pro rata basis or be diluted.

In connection with the Earn-in and Joint Venture Agreement, the Other Shareholders will receive a 1.25% net smelter royalty from all products from the Permits.

CAPITAL RAISING

Placement

The Company has received firm commitments from institutional, professional and sophisticated investors to subscribe for 7,500,000 new Shares (New Shares) at an issue price of $0.18 per New Share to raise approximately A$1.35 million (before costs).

The issue price of A$0.18 per New Share represents a:

• • 2.70% discount to the last closing price of A$0.185 on 19 April 2022; and

•

7.2% discount to the five-day weighted average price of A$0.193 on 19 April 2022.

The New Shares under the Placement will be issued to institutional, professional and sophisticated investors identified by the Company and the joint lead managers, CPS Capital Group (CPS) and Inyati Capital (Inyati) (together, the Joint Lead Managers). None of the participants are related parties, key management personnel or an adviser of the Company.

Participants in the Placement will also, subject to shareholder approval, be eligible to subscribe for one (1) free attaching option for every three (3) New Shares issued under the Placement (Placement Option). Each Placement Option will have an exercise price of A$0.30 and an expiry date of 8 July 2024. The Company will, subject to the satisfaction of the requirements in ASX Listing Rule 2.5, seek quotation of the Placement Options on ASX.

The New Shares under the Placement will be issued, pursuant to the Company's existing placement capacity under ASX Listing Rule 7.1, on or around 4 May 2022.

Entitlement Offer

The Company will also undertake a fully underwritten one (1) for ten (10) pro rata non-renounceable entitlement offer of up to 3,794,667 New Shares at an issue price of A$0.18 (being the same issue price as the Placement) to raise up to approximately A$683,000 (before costs) (Entitlement Offer). Participants in the Entitlement Offer will also be issued one (1) free attaching option for every three (3) New Shares issued under the Entitlement Offer (Entitlement Offer Option). Each Entitlement Offer Option will have the same terms and conditions as the Placement Options (being an exercise price of A$0.30 and an expiry date of 8 July 2024). The Company will, subject to the satisfaction of the requirements in ASX Listing Rule 2.5, seek quotation of the Entitlement Offer Options on ASX.

Each New Share issued under the Entitlement Offer will rank equally with existing Shares on issue. The Company will, upon issue of the New Shares under the Capital Raising, seek quotation of the New Shares on ASX. The Entitlement Offer is non-renounceable (i.e. entitlements will not be tradeable or otherwise transferrable). The Entitlement Offer is fully underwritten and there will not be a minimum subscription amount under the Entitlement Offer.

It is presently envisaged that the Entitlement Offer will open from 3 May 2022 to 2 June 2022 to eligible shareholders who are registered as a holder of Shares as at 5:00pm (AEST) on the Record Date of 29 April 2022 and have a registered address in Australia or New Zealand (Eligible Shareholders).

A prospectus in respect of (amongst other matters) the Entitlement Offer and the offer of the Placement Options to participants of the Placement is expected to be dispatched on 3 May 2022 (Prospectus).

The Entitlement Offer will be underwritten by CPS Capital Group, with Inyati Capital acting as sub-underwriter. The underwriting is subject to certain termination rights. Details in respect to the underwriting arrangement will be provided in the Prospectus

In connection with Capital Raising, the Company proposes to issue:

•

3,500,000 options to the Joint Lead Managers (to be split equally) for the provision of lead manager services (Lead Manager Options); and

•

1,500,000 options to CPS for the provision of underwriting services (Underwriter Options),

on the same terms and conditions as the Placement Options and Entitlement Offer Options (being an exercise price of A$0.30 and an expiry date of 8 July 2024).

An Appendix 3B for the proposed issue of new securities in respect to the Placement and Entitlement Offer and the Lead Manger Options and Underwriter Options will follow this announcement.

TECHNICAL DIRECTOR APPOINTMENT

The Board welcomes Andrew Law as an independent technical Director.

Andrew Law has over 35 year' experience in the mining and Resources industry in Australia, Africa and South America. His extensive technical and management experience ranges from deep level underground miningenvironments to large open pit environments to large mineral sands dry mining and dredging environments, across a range of mineral commodities.

Andrew's executive management experience has been gained at the Board, Corporate and Executive operational levels at Anglo American, Plutonic Resources, Downer Group, Placer Dome, Millenium Minerals, Mundo Minerals Limited, St Barbara Limited and Optiro. Recently, he was the Executive Director - Projects at Relentless Resources, a private Resources exploration and development company, exploring and developing mineral sands projects in NSW.

Andrew is a qualified Mining Engineer (University of Johannesburg) with a Master's degree in Business Administration from The University of Western Australia. He is a Fellow of the AusIMM (CP - Management), a Fellow of the Institute of Quarrying - Australia, a member of the Australian Institute of Company Directors and an Associate Fellow of the Australian Institute of Management.

As part of Andrew's appointment to the Board, the Company has agreed to issue him 400,000 unlisted options on the following terms:

•

200,000 Class A Management Performance Options - each with an exercise price of $0.001 expiring 8 July 2023, vesting upon the Company achieving a 20 day VWAP of $0.40; and

•

200,000 Class B Management Performance Options - each with an exercise price of $0.001 expiring 8 July 2023, vesting upon the Company achieving a 20 day VWAP of $0.80.

Following Andrew's appointment, Mr Joseph van den Elsen will transition from Managing Director of the Company to a non-executive director role.

SHAREHOLDER APPROVALS

The Company will shortly dispatch a notice of meeting to convene a meeting of shareholders to be held in May 2022, to consider resolutions in relation to the Transaction. These resolutions will include (amongst others):

•

shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of the Consideration Shares to the Vendors;

•

shareholder approval pursuant to ASX Listing Rule 7.1 for the issue of Placement Options pursuant to the Capital Raising; and

•

shareholder approval pursuant to ASX Listing Rule 7.4 to ratify the issue of New Shares pursuant to the Placement.

The Company anticipates that, subject to shareholder approval, completion of the Transaction will occur in late May 2022.

INDICATIVE TIMETABLE

The following is an indicative timetable for completion of the Transaction and the Capital Raising:

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