LOYAL METALS LTD — Capital/Financing Update 2021

Jul 1, 2021

ASX RELEASE

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1 July 2021 Market Announcements Platform ASX Limited

Terms and Conditions of Options

Capitalised terms not defined have the meaning given to them in the Company’s Prospectus dated 16 April 2021.

The Options issued pursuant to the Offer have the following terms and conditions:

• (i) (Entitlement) : Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

• (ii) (Exercise Price) : The amount payable upon exercise of each Option will be $0.30 ( Exercise Price ).

• (iii) (Expiry Date) : Each Option will expire at 5:00 pm (AWST) on 6 July 2024 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

• (iv) (Exercise Period) : The Options are exercisable at any time and from time to time on or prior to the Expiry Date ( Exercise Period ).

• (v) (Notice of Exercise) : The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

• (vi) (Exercise Date) : A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

• (vii) (Quotation) : The Company will not apply for quotation of the Options on ASX.

• (viii) (Timing of issue of Shares on exercise) : Within 5 Business Days after the Exercise Date, the Company will:

• (A) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (B) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (C) apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

  • If a notice delivered under paragraph 8(a) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

• (ix) ( Shares issued on exercise ): Shares issued on exercise of the Options will rank equally with the then Shares.

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P: (08) 6245 2490 E: info@mongergold.com.au W: www.mongergold.com.au

Office : 204-206 Balaclava Road, Caulfield North VIC 3161

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• (x) (Reconstruction of capital) : If at any time the issued capital of the Company is reconstructed, all rights of an Option holder are to be changed in a manner consistent with the Corporations Act and the Listing Rules at the time of the reconstruction.

• (xi) (Participation in new issues) : There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options. The Company must give notice to holders of the Options before the record date for determining entitlements to the issue in accordance with the Listing Rules of ASX.

• (xii) (Adjustment for bonus issues of shares) : If the Company makes a bonus issue of Shares or other securities to existing shareholders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment):

• (A) the number of Shares which must be issued on the exercise of an Option will be increased by the number of shares which the Option holder would have received if the Option holder had exercised the Option before the record date for the bonus issue; and

• (B) no change will be made to the Exercise Price.

• (xiii) (Change in exercise price) : An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

• (xiv) (Transferability) : The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

Authorised for release by the Directors of the Company.

Ends

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