Investment in US Cobalt Opportunity

MetalNRG plc
("MetalNRG" or the "Company")

12 July 2017

Investment in US Cobalt Opportunity

MetalNRG plc (NEX:MNRG) the natural resource investing company quoted on the NEX Exchange Growth Market in London is pleased to announce the Company’s latest cobalt investment through a transaction immediately securing an 18.18% holding in US Cobalt Pty Limited (“US Cobalt”) and signature of a simultaneous option agreement (“Option”) to acquire a further 81.82% of US Cobalt from the remaining shareholders (“Vendors”) taking MetalNRG’s holding to 100%.

Highlights:

• MetalNRG invests AUD$200,000 (approximately £118,000) in cash from existing resources to acquire 2,000,000 shares in US Cobalt amounting to an immediate 18.18% holding;

• US Cobalt is the operator of Columbia Pass, a potentially high-grade cobalt exploration and development opportunity in the Las Vegas area of Nevada, United States;

• MetalNRG has secured a 3 month Option to acquire the remainder of US Cobalt (81.82% taking the MetalNRG holding to 100% of USC);

• Option fee of AUD$50,000 (approximately £29,507) payable in 1,967,133 MetalNRG shares at 1.5p per share;

• Should MetalNRG at their sole volition exercise the Option to acquire the remainder 81.82% the consideration due will be paid entirely through the issue of 48,285,000 MetalNRG new ordinary shares at 1.5p per share representing (approximately £724,275);

• Should the Option be exercised the Vendors will also receive 40 million 2 year warrants to subscribe for new ordinary shares in MetalNRG at prices up to 10p per share, further details below;

• A ground exploration programme is to be undertaken in July 2017 and additional technical reports produced with regards to geological prospectivity. Exploration plan, progress and findings will be communicated to the market, with news updates commencing very shortly;

• Investment in US Cobalt is the second investment in the high impact cobalt sector and complements the Company’s existing cobalt interests in Western Australia, further news in respect of which is expected shortly.

  Paul Johnson Chief Executive Officer of MetalNRG said “I am pleased to announce this investment in US Cobalt which builds our Cobalt Division considerably and exposes shareholders to cobalt opportunities in another safe operating jurisdiction, the United States.

  The potential prospectivity of the US Cobalt Columbia Pass project is demonstrated quite clearly through US Geological Survey reports highlighting high-grade surface sampling; a formerly producing Cobalt Mine in the area; and numerous exploration targets identified and in need of systematic modern exploration techniques.

  We will be producing a summary announcement with technical characteristics of the project shortly, together with details of the proposed ground exploration programme scheduled to commence within the next fortnight.”

  Transaction Summary:

  First stage - Initial 18.18%:

  MetalNRG is to acquire 18.18% of US Cobalt Pty Limited, an Australian private company, through the payment of AUD$200,000 (approximately £118,000) to acquire 2,000,000 new ordinary shares in US Cobalt Pty Limited.

  Second stage - Option to acquire balancing 81.82%

  US Cobalt is to undertake a ground exploration programme commencing within the coming fortnight, with programme updates, exploration data and updated technical reports to be released over the July, August and September period.

  To provide time for MetalNRG to review the exploration programme and results, for which, the Company has secured a 3 month option period during which it can acquire the remaining 81.82% of US Cobalt.  If this acquisition is undertaken Metal NRG would hold 100% of US Cobalt.

  The Option period expiry date will not be less than 20 business days following receipt by MetalNRG of the technical exploration data and updated technical report therefrom. This provides MetalNRG with sufficient time to review the entirety of exploration findings before commitment to the second stage acquisition.

  The Option fee is AUD$50,000 (approximately £29,507) payable entirely through the issue of 1,967,133 MetalNRG shares at 1.5p per new ordinary share to US Cobalt shareholders in direct proportion to their existing holdings (excluding MetalNRG’s holding).

  Should MetalNRG at their sole volition exercise the Option to acquire the 81.82% remaining issued share capital of US Cobalt, the consideration is agreed at 48,285,000 Metal NRG new ordinary shares (approximately £724,275) which is payable entirely through the issue of new ordinary MetalNRG shares priced at 1.5p per share.

  Overall therefore the Option fee and second stage consideration shares taken together would result in the issue of 50,252,133 new ordinary MetalNRG shares at 1.5p per share. Following Option exercise and reflecting the number of shares in issue as at today’s date (135,859,271 shares) the new shares issued would represent 27% of total issued share capital.

  In addition in the event of Option exercise the Vendors will receive two year life warrants to subscribe for a further 40 million new ordinary shares in MetalNRG on the following basis:

  15 million warrants at 2p (raising £300,000 on exercise)

  15 million warrants at 5p (raising £750,000 on exercise)

  10 million warrants at 10p (raising £1,000,000) on exercise

  Furthermore on Option exercise Paul Lloyd, principal vendor and project manager will join the board of MetalNRG as an Executive Director and would be awarded 5 million options in MetalNRG with an exercise price of 2p and a three year longevity.

  The Directors of the Company accept responsibility for the contents of this announcement.

  Contact details:

MetalNRG plc Paul Johnson (Chief Executive Officer)	[phone]
NEX Exchange Corporate Adviser PETERHOUSE CORPORATE FINANCE LIMITED Guy Miller Mark Anwyl Corporate Broker [phone] SI CAPITAL Nick Emerson Andy Thacker	[phone]

Notes for Editors:

MetalNRG is quoted on the NEX Exchange Growth Market in London with the stock code MNRG and is a natural resource investing company.

NEX Exchange:

Investors wishing to consider trading in NEX Exchange Growth Market quoted shares can access this market from numerous brokers, a full list of which can be accessed through the following link:

http://www.nexexchange.com/for-investors/find-a-broker/

The list accessed through the link above includes certain brokers offering online trading of NEX Exchange quoted shares.

The Investing Policy of the Company is as follows:

The Company’s proposed new Investing Policy is to invest in and/or acquire companies and/or projects within the natural resources and/or energy sector with potential for growth and value creation, over the medium to long term. The Company will also consider opportunities in other related sectors if the Board considers there is an opportunity to generate an attractive return for Shareholders. This will include natural resource technologies and fintech opportunities offering leverage to resource identification, processing, recording, storage and trading businesses.

Where appropriate, the Board may seek to invest in businesses where it may influence the business at a board level, add their expertise to the management of the business, and utilise their significant industry relationships.

The Company’s interests in a proposed investment and/or acquisition may range from a minority position to full ownership and may comprise one investment or multiple investments. The proposed investments may be in either quoted or unquoted companies; be made by direct acquisitions or farm-ins; and may be in companies, partnerships, earn-in joint ventures, debt or other loan structures, joint ventures or direct or indirect interests in assets or projects.

The Board may focus on investments where intrinsic value can be achieved from the restructuring of investments or merger of complementary businesses. The Board expects that investments will typically be held for the medium to long term, although short term disposal of assets cannot be ruled out if there is an opportunity to generate an attractive return for Shareholders. The Board will place no minimum or maximum limit on the length of time that any investment may be held. The Company may be both an active and a passive investor depending on the nature of the individual opportunity.

Where the Company builds a portfolio of related assets it is possible that there may be cross-holdings between such assets. The Company does not currently intend to fund any investments with debt or other borrowings, but may do so if appropriate. Investments in early stage assets are expected to be mainly in the form of equity, with debt potentially being raised later to fund the development of such assets. Investments in later stage assets are more likely to include an element of debt to equity gearing. The Board may also offer new Ordinary Shares by way of consideration as well as cash, thereby helping to preserve the Company’s cash for working capital and as a reserve against unforeseen contingencies including, for example, delays in collecting accounts receivable, unexpected changes in the economic environment and operational problems.

The Board will conduct initial due diligence appraisals of potential business or projects and, where they believe further investigation is warranted, intend to appoint appropriately qualified persons to assist. The Proposed Board believes its expertise will enable it to determine quickly which opportunities could be viable and so progress quickly to formal due diligence. The Company will not have a separate investment manager. The Company proposes to carry out a comprehensive and thorough project review process in which all material aspects of a potential project or business will be subject to rigorous due diligence, as appropriate.