CRITICAL RESOURCES LIMITED — Capital/Financing Update 2019

Oct 31, 2019

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1 November 2019

ASX Announcements Office 152-158 St Georges Terrace Perth WA 6000 Australia

DEBT AND EQUITY FUNDING PACKAGE SECURED

Force Commodities Limited ( Force or the Company ) ( ASX Code: 4CE ) advises that it has secured a debt and equity funding package of A$3.5m primarily to advance the development and construction of the high-grade lead and silver Tshimpala Project located in the Dowa District of the Republic of Malawi ( Tshimpala Project ).

The funding package comprises:

1. Committed working capital debt facilities of A$2.75m; and

2. A share placement to professional and sophisticated investors to raise A$0.75m.

Funds raised under the funding package will be used to fund capital and working capital costs associated with the development of the Tshimpala Project, to fund further regional exploration expenditure on 1,414km[2 ] of granted Exploration Licenses at the Tshimpala Project and to fund general working capital costs of the Company.

Working Capital Facilities

Total working capital debt facilities ( Facility ) of A$2.75m have been committed and are to be made available to the Company in 3 tranches.

An initial unsecured tranche of A$0.25m and which has already been made available and drawn by the Company. A secured second tranche of A$1.0m, which is to be advanced upon final due diligence and execution of the formal loan documentation (which is expected to occur by 15 November 2019) and a final tranche of A$1.5m, that is available to be drawn by the Company following the sale of 1,000 tonnes of product from the Tshimpala Project under the existing Offtake Agreement with Swiss-based Transamine Trading SA (refer ASX Announcement dated 17 July 2019).

Interest is payable on amounts outstanding under the Facility at a rate of 10% p.a. and is paid quarterly in arrears.

One-third of the amount drawn under the Facility is repayable in cash within 6 months, with the balance of the Facility to be repaid in full and in cash after 12 months. The Company has the right to repay the Facility in full and in cash at any time and without any penalty.

Force Commodities Ltd | Ground Floor, 20 Kings Park Road, West Perth, WA, 6005 | PO Box 1024 West Leederville WA 6007 Ph: +61 8 6426 1421 | F: +61 8 6323 3347 | web:forcecommodities.com.au | ABN 12 145 184 667 | ASX:4CE

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The second and third tranches of the Facility are secured over the Company’s interests in its base metals exploration projects in New South Wales and its interest in the Tshimpala Project and are subject to standard market terms and conditions that are customary for a facility of this nature.

An establishment fee of A$50,000 and 36,000,000 unlisted options exercisable on or before 31 October 2021, with an exercise price of $0.02 (2 cents) is to be paid and issued. The options are to be issued under ASX Listing Rule 7.1.

The Facility has been arranged by Brigg Macadam and is to be provided by Brigg Macadam and its clients.

Brigg Macadam is a London based investment banking group, with major strengths in investment in Africa’s natural resources sector where it has worked for European and African clients in Angola, Cape Verde, the Democratic Republic of Congo, Egypt, Ghana, Kenya, Mozambique, Namibia, Nigeria, the Republic of Congo, Senegal, South Africa, Tanzania and Zimbabwe.

Share Placement

The Company has also received commitments from professional and sophisticated investors (under section 708 of the Corporations Act, 2001) for a share placement utilising the Company’s 15% placement capacity (under ASX Listing Rule 7.1) and the Company’s 10% enhanced capacity (under ASX Listing Rule 7.1A) ( Placement ).

In total, 50,000,000 new fully paid ordinary shares ( Shares ) are to be issue at an average price of $0.015 (1.5 cents) raising $750,000. These Shares are to be issued under ASX Listing Rule 7.1A and following the release of a Cleansing Prospectus by the Company.

Participants in the Placement are to be issued one free attaching option for every two shares subscribed for, exercisable on or before 31 October 2021, at an exercise price of $0.02 (2 cents) for a total of 25,000,000 options. In addition, Sixty Two Capital Pty Ltd ( Sixty Two ), who managed the Placement have been issued with 15,000,000 options on the same terms.

In aggregate, a total of 40,000,000 options are to be issued in association with the Placement. These options are to be issued under ASX Listing Rule 7.1.

Funds from the Placement are to be received by the Company by 8 November 2019.

Additional Disclosures under ASX LR3.10.5A

The Company provides the following additional disclosure in relation to ASX Listing Rules 7.1A4(b) and 3.10.5A in connection with the 50,000,000 Shares issued under Listing Rule 7.1A and referred to above:

(a) Details of the dilution to existing holders of ordinary securities caused by the issue:

• § The number of Shares on issue prior to the issue of the Shares was 507,654,757

• § The number of Shares on issue following the issue of the Shares is 557,654,757, resulting in a dilution of 9.85%.

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• (b) The Shares were issued for cash consideration. The Company issued the Shares under ASX Listing Rule 7.1A as it required the funds principally to advance development and exploration activities at the Tshimpala Project in Malawi.

The Board considered that a placement of securities provided the most certain and expedient manner to achieve this outcome.

• (c) The Placement was not underwritten.

• (d) The Company will pay to Sixty Two a fee of 6% on funds raised and issue to Sixty Two 15,000,000 options for management of the Placement.

Tshimpala Project Update

Civil engineering and construction activities at the Tshimpala Project are continuing following the mobilisation of Malawian based engineering and construction company, Shire Construction Limited ( Shire ) earlier this month (refer ASX Announcement dated 25 October 2019).

Shire has mobilised plant and equipment and personnel to the Tshimpala Project site and is completing upgrades and improvements to the haul road, completion of minor road access routes on the project area, and the preparation of drill pads for the initial 2,500m reverse circulation 150-hole drill program.

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Figure 1, 2 and 3: Shire have mobilised personnel and equipment to the Tshimpala Project and commenced activities

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Figure 4 and 5: Shire’s mobile equipment at the Tshimpala Project commencing activities

South African based drilling and exploration specialists Georoc Pty Limited ( Georoc ), who were appointed in August 2019 (refer ASX Announcement dated 21 August 2019) have fully mobilised its drilling rig, ancillary equipment and personnel and will shortly commence the Company’s planned reverse circulation drilling program at the Tshimpala Project.

Update on Voluntary Suspension of Company’s Securities

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Further to the Company’s ASX Announcements dated 7, 14, 21 and 28 October 2019 and the Cleansing Prospectus ( Prospectus ) that was lodged with ASIC on 14 October 2019, the Company filed an application with the Federal Court of Australia ( Court ) seeking declaratory relief and ancillary orders relating to prior trading in the Company’s shares so that any trading prior to lodgement of the Prospectus will be validated and will not attract any civil liability.

The matter was heard before the Court at 10:15am on Friday, 1 November 2019 (WST) and the Company was successful in its Federal Court proceedings for validation orders in relation to the secondary trading in these shares issued by the Company.

As at the date of this report the Company’s securities remain in suspension, however the Company is in discussions with ASX about the reinstatement of its securities following receipt of the orders from the Federal Court.

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For further details please contact:

Jason Brewer David Tasker Managing Director Chapter One Advisors Force Commodities Limited Tel: +61 433 112 9036 Tel: +61 (0) 8 6426 1421 Em: dtasker@chapteroneadvisors.com.au

Forward looking statements

Information included in this release constitutes forward-looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, and “guidance”, or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the Company and its management’s good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company’s business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company’s business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company’s control.

Although the Company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake

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any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

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