PHOSCO LTD — Interim / Quarterly Report 2021

Oct 27, 2021

ASX Announcement 28 October 2021

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Celamin Holdings Ltd

ASX Code: CNL

ACN 139 255 771 ABN 82 139 255 771

Board and Management:

Robin Widdup Chairman Simon Eley Managing Director Taz Aldaoud Non-Exec Director Tim Markwell Alternate Director to Robin Widdup

Company Secretary

Stefan Ross

Securities on Issue

195,045,594 ordinary shares 12,000,000 unlisted options 500,000 unlisted options

Contact

Phone: +61 (0)3 9692 7222 Fax: +61 (0)3 9077 9233 Email: info@celamin.com

Registered Office Address

Level 4, 100 Albert Road South Melbourne VIC 3205

Website

www.celaminholdingsltd.com

Quarterly Activity & Cashflow Reports for Quarter ending 30 September 2021

Summary:

• CELAMIN WINS OPERATIONAL CONTROL OF CHAKETMA PHOSPHATE PROJECT

• TECHNICAL REVIEW COMMENCED

• TRANSITION TO TECHNICAL MANAGEMENT UNDERWAY AND COUNTRY MANAGER APPOINTED

• CELAMIN HOLDINGS LIMITED TO BECOME PHOSCO LTD

Celamin Holdings Limited (ASX: CNL ) (“ Celamin ” or the “ Company ”) is pleased to present details of its activities for the September 2021 Quarter. Subsequent to the end of the Quarter, Celamin announced that it had assumed operational and management control over Chaketma Phosphate SA ( CPSA ), holder of the Chaketma Phosphate Project as a 50.99% shareholder of CPSA. As a result, technical work has begun, and Donald Thomson was appointed as Country Manager.

Chaketma is a potential large-scale, world-class phosphate development asset, which comprises six prospects over a total area of 56km[2] . It hosts a total JORC compliant Inferred Resource of 130Mt @ 20.5% P₂O₅[1] , confirmed from drilling at only two of the project’s six prospects with access by road, and proximal to rail and gas pipelines (see Figure 1).

Celamin has immediately commenced a process to complete legal and accounting due diligence on CPSA. The financial state of CPSA and the status of CPSA’s equity needs to be determined, and Celamin will also consider criminal action against TMS and the executives or advisors of CPSA if any irregularities are uncovered during this process. TMS owes Celamin US$4.9M in costs and damages, plus interest calculated daily, and Celamin is actively pursuing TMS for the payment of this amount. Celamin will continue to enforce its rights pursuant to court orders as well as force the sale of TMS assets to recover funds to offset the damages and costs owed.

1 ASX announcements dated 9 November 2012 and 18 June 2013

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Figure 1: Location of the Chaketma Phosphate Project

Initial technical work will involve a review and assessment of all historical work with the shortterm objective of updating the JORC Resources at the project. In conjunction with this, critical steps including the clarification of the financial state of CPSA and the status of the CPSA equity are ongoing, with the potential for additional claims against TMS and its associates in relation to their management of CPSA.

With operational control of CPSA, Celamin has the right to access all Chaketma technical data. At the time of the dispute Chaketma had an Inferred JORC Resource of 130Mt @ 20.5% P2O5[2] . Celamin has identified reputable consultants to conduct a GAP Analysis on the available data to

2 ASX announcements dated 9 November 2012 and 18 June 2013

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determine the work required to complete a feasibility study at Chaketma. This will also include a review of the Chaketma Resource with recommendations on updating it under JORC 2012. Further drilling has taken place since the Inferred JORC Resource was defined, and a project update is targeted shortly.

With the continued progress, Celamin announced that it had engaged geologist Donald Thomson as Country Manager. Donald will initially work for Celamin on a consulting basis but will move to become resident in Tunis once safe travel from Australia is possible. Donald has more than 35 years of experience as a geologist of which 20 years have been in senior management roles and has worked for companies including Newcrest, Johnsons Well Mining and Legend Mining. Donald has also previously worked for Celamin as Country Manager in 2011-2012 and was instrumental in the first phase of drilling at Chaketma. He is ideally suited to assist with Celamin restarting operations and leading the project team in Tunisia. Donald is a Member of the Australasian Institute of Mining and Metallurgy and qualifies as a Competent Person under the JORC Code.

With Donald’s appointment, Tim Markwell has stepped down as Interim CEO.

Phosphate Market Update

Phosphate is a critical fertilizer that underpins the world’s food supply. Celamin’s control of the Chaketma Phosphate Project comes at an exciting time as the price of rock phosphate has risen substantially, from US$80/t several months ago to over US$147/t today. According to studies, the continued supply of phosphate fertilisers that underpin global food production is an imminent crisis with some regions including the European Union declaring phosphate a critical strategic commodity.

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Source: World Bank Commodity Prices, F.O.B. North Africa

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Management Transition

In addition to Donald’s appointment, Celamin also announced during the quarter that it is transitioning its executive team, with Celamin’s Managing Director Mr Simon Eley focussed on final enforcement of Celamin’s arbitration success and resolution of the dispute with TMS to advance Chaketma, something he has been instrumental in achieving since his initial appointment in July 2018. Mr Eley’s salary was reduced by 50% to be taken entirely in shares, subject to shareholder approval. Any additional time worked above 2.5 days will be paid at a rate of A$1,000/day.

Mr Craig Smyth was also appointed interim CFO during the transition period and will assist the Company with financial reporting and long-term business and financial planning. Mr Smyth is a chartered accountant with 25+ years’ experience having previously worked for Coopers and Lybrand, ANZ Investment Bank and Credit Suisse First Boston. Mr Smyth has been with Lion Selection since 2005.

Mr Smyth will be paid a rate of $1,000/day for time worked in his role as interim CFO, with a monthly limit of $10,000. His fees for services provided will be settled through Lion Manager Pty Ltd (‘Lion Manager’) pursuant to the Services Agreement between the Company and Lion Manager. All fees that are paid through the Services Agreement are on an arm’s length basis.

Currently all Directors and executive management are accruing pay to be taken in Celamin shares subject to Celamin shareholder approval.

Change in Company Secretary

The Company has also announced during the quarter that specialist Company Secretarial, Governance and Accounting firm, Leydin Freyer, continues to undertake the Company Secretarial role noting that Ms Melanie Leydin has stepped down as appointed Company Secretary and Mr Stefan Ross appointed in the office holder position as Company Secretary. Ms Leydin will continue to support the Company via Leydin Freyer.

Mr Ross has over 10 years of experience in accounting and secretarial services for ASX Listed companies. His extensive experience includes ASX compliance, corporate governance control and implementation, statutory financial reporting and board and secretarial support.

Celamin Holdings Limited to become PhosCo Ltd

On 14 October 2021, the Company announced that it proposes to change its name to PhosCo Ltd in recognition of its future direction and restarting work at the Chaketma Phosphate Project in Tunisia. This is an important decision and requires a Special Resolution with at least 75% of shareholders voting in favour. This will be voted on at the Company’s 2021 Annual General Meeting.

Celamin’s directors believe that PhosCo more clearly represents the Company’s vision to become a significant phosphate producer and embrace a “Green Shift” towards future fertiliser production. Chaketma is a potential large scale phosphate development asset which could be complemented by resource growth from the existing deposit and with additional nearby deposits. This would offer the ability to progress from rock phosphate production, with possible direct application phosphate, through to fully integrated fertiliser production.

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Celamin Director Options

In relation to the 12,000,000 unlisted options currently on issue to Directors of the Company, exercisable at $0.09 (9 cents) each, expiring 15 July 2022 and vesting as follows:

• 50% vesting upon regaining a majority interest in Chaketma; and

• 50% vesting upon securing funding for Definitive Feasibility Study (DFS).

Although Celamin has recovered the 50.99% interest, the Company notes that various actions related to the enforcement of the arbitration orders remain before the courts, including clarification of the financial state of CPSA and will include status of the CPSA equity. Accordingly, the conditions applicable to the options vesting have not yet been triggered.

Corporate update

Celamin held cash and cash equivalents of approximately A$0.4m at the end of the September 2021 quarter.

Payments to related parties and their associates during the quarter as outlined in Section 6 of the accompanying Appendix 5B to this quarterly activity report were $4,000. These payments are related to components of Director salaries paid during the September 2021 quarter.

This announcement is authorised for release to the market by the Board of Directors of Celamin Holdings Limited.

For further information, please contact:

Simon Eley

Managing Director T: +61 (03) 9692 7222 E: info@celamin.com

Lists of Tenements Held

Mining Tenement	Location	Beneficial Percentage held	Interest acquired/farm-in during the quarter	Interest Disposed/farm- out during the quarter
Chaketma	Tunisia	50.99%*	-	-
Zeflana	Tunisia	100%	-	-
Ain El Bouma	Tunisia	100%	-	-
Zaouiet Sidi Mbarek	Tunisia	100%	-	-
Djebba	Tunisia	100%	-	-
Djebba 2	Tunisia	100%	-	-

* _The Chaketma Phosphate Exploration Permit is 100% held by CPSA. On 13 November 2020, Celamin announced that it had recovered its interest in CPSA following the transfer by the court appointed expert as outlined in the arbitration award returning Celamin’s interest in Chaketma and payment of damages and costs amongst other matters. In addition, on 11 October 2021, Celamin announced that is has assumed operational and management control over Chaketma Phosphate SA (CPSA), holder of the Chaketma Phosphate Project as a 50.99% shareholder of CPSA. Although Celamin has recovered the 50.99% interest, the Company notes that various actions related to the enforcement of the arbitration**_

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orders remain before the courts, including clarification of the financial state of CPSA and will include status of the CPSA equity. CPSA applied to convert the Chaketma Exploration Permit to a Mining Concession in late 2017, ahead of the February 2018 deadline. As at the date of this report, the Chaketma mining concession had not been granted, and application remains under consideration by the Tunisian regulatory authorities. The Chaketma Exploration Permit remains valid and in good standing whilst the application is being considered by the Tunisian regulatory authorities.

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity

CELAMIN HOLDINGS LIMITED ABN Quarter ended (“current quarter”) 82 139 255 771 30 September 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) - Government Incentive 1.9 Net cash from / (used in) operating activities	- (16) - - (17) (155) - - - - - -	- (16) - - (17) (155) - - - - - -
	(188)	(188)
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments (f) other non-current assets	- - - - - -	- - - - - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - - -	- - - - - - - -
	-	-
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - - - - - -	- - - - - - - - -
	-	-
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	575 (188) - -	575 (188) - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	387	387
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	387 - - -	575 - - -
	387	575
6. Payments to related parties of the entity and their associates		Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 4 6.2 Aggregate amount of payments to related parties and their associates included in item 2 - Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.		4
		-

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

7. 7.1 7.2 7.3 7.4 7.5 7.6	Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities - - Credit standby arrangements - - Other (please specify) - - Total financing facilities - - Unused financing facilities available at quarter end - Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-
		-	-
	N/A

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (188) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) - Total relevant outgoings (item 8.1 + item 8.2) (188) Cash and cash equivalents at quarter end (item 4.6) 387 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 387 Estimated quarters of funding available (item 8.6 divided by item 8.3) 2.05 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	(188) - (188) 387 -
		387
	Answer: Not applicable as item 8.7 is greater than 2.
	8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer: Not applicable as item 8.7 is greater than 2.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer: Not applicable as item 8.7 is greater than 2.

Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Date: 28 October 2021

Authorised by: The Board..................................................................

(Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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