NEW YORK -- Lifezone Metals Limited’s Founder and Chair, Keith Liddell, and Chief Executive Officer, Chris Showalter, announced that Lifezone has completed a definitive agreement with BHP Billiton (UK) DDS Limited (BHP) to acquire BHP’s 17% equity interest in Kabanga Nickel Limited (KNL), the majority owner of the Kabanga Nickel Project in northwestern Tanzania.

As a result of the transaction, Lifezone owns 100% of KNL, which in turn holds an 84% interest in Tembo Nickel Corporation Limited (TNCL), the Tanzanian operating company for the Kabanga Nickel Project. The remaining 16% of TNCL is held by the Government of Tanzania. All existing agreements with BHP, including the T2 Option Agreement, have been terminated. Lifezone has assumed full control of 100% of the offtake from the Kabanga Nickel Project.

Key terms of the transaction:

·FID Payment: A fixed cash payment of $10 million, payable within 30 days after the earlier of: (i) 12 months after the Final Investment Decision (FID) at Kabanga; or (ii) once Lifezone has raised $250 million in aggregate funding (whether through equity, debt or alternative sources).
·First Commercial Production Payment: A second deferred cash payment, payable within 30 days after the period of 12 months following the achievement of first commercial production. The amount is indexed to Lifezone’s share price performance, with a reference share price of $4.16 per share and a reference amount of $28 million. An index factor of 0.7x applies - meaning that a 10% increase in Lifezone’s share price results in a $1.96 million increase in the payment ($28 million x 10% x 0.7). Based on an illustrative price of $4.50 per share, the payment would total $30 million.
·Total consideration cap: Maximum of $83 million, or reduced to $75 million if the Resettlement Action Plan (RAP) Trigger Event occurs (see below).
·Lock-Up and Right of First Offer: BHP has agreed not to sell its Lifezone shares for 12 months post-completion. After this period, BHP must first offer any shares it intends to sell to Lifezone before potentially transferring them to third parties, subject to customary terms.

Mr. Liddell stated: “This transaction to own 100% of Kabanga Nickel Limited allows Lifezone to fully align our technical, commercial, and ESG strategy as we advance Kabanga toward the Final Investment Decision. We are committed to delivering the project responsibly and to creation of long-term value for all our stakeholders.”

Mr. Showalter added: “This marks a significant milestone for Lifezone as we consolidate ownership of the Kabanga Nickel Project. BHP has been a supportive and value-adding partner whose investment has contributed to advancing the project, and their exit coincides with the project’s transition into its next stage of development. Our focus remains on delivering a world-class, low-cost nickel project that benefits all stakeholders, including the Government of Tanzania and local communities.”

Ongoing strategic financing initiatives to advance to Final Investment Decision

Standard Chartered Bank - Short-term financing and strategic advisory

Lifezone has engaged Standard Chartered Bank as financial adviser to support the development of the Kabanga Nickel Project. A short-term development financing package is well advanced, to provide sufficient capital to undertake early works construction and Resettlement Action Plan activities and to progress through to Final Investment Decision, including proceeding to financial close of the multi-source project finance package.

Lifezone is also in active discussions with several major, diversified counterparties regarding long-term strategic partnerships.

Societe Generale - Project finance progress

As announced on September 23, 2024 (refer to Lifezone’s news release), Societe Generale is advising Lifezone on the project financing process. This includes potential support from the U.S. International Finance Corporation (DFC) through loans and risk insurance (refer to Lifezone’s August 27, 2024 news release). The project financing process, which commenced well ahead of the release of the Kabanga Feasibility Study, is progressing well and meaningful interest has been received from potential lenders, including export credit agencies.

These initiatives aim to deliver a capital structure aligned with Lifezone’s growth ambitions and Kabanga’s development timeline. While BHP’s exit marks a transition, it also presents a unique opportunity to reshape the Kabanga ownership and financing strategy to suit Lifezone’s aspiration of long-term value creation.