What we own

In September, 2017 Anglo Pacific Group (Anglo Pacific or the Company) entered into a royalty agreement with Brazilian Nickel Ltd (Brazilian Nickel) to acquire an initial 1% gross revenue royalty (GRR) over the Piauí nickel-cobalt project (Piauí or the Project) for a US$2m (~£1.5m) cash payment.

Performance

Anglo Pacific has the right to acquire up to US$70m in additional royalties to fund in part the construction of a processing plant.

»    The initial US$2m consideration will fund in-part further project assessment and/or the expansion of the existingnickel-cobalt demonstration

plant to a nameplate production capacity of 1,000 tonnes of nickel per annum

»   Brazilian Nickel intends to ramp-up production to 24,000 tonnes of nickel per annum after a potential expansion of the existing demonstration plant to 1,000 tonnes of nickel per annum, or alternatively Brazilian Nickel may pursue a lower-capex staged development first ramping-up to 10,000 tonnes and then to 24,000 tonnes of nickel per annum

»    Upon the achievement of certain Piauí development milestones and Anglo Pacific board approval for eachtranche, the Company has the right to invest up to a total of US$70m (~£52.9m) in additional GRRs withproceeds restricted to funding in-part the construction or expansion of a processing facility:

Under the staged ramp-up development scenario: US$20m for an incremental 2.0% GRR when plans forthe construction of a processing plant with a nameplate capacity of 10,000 tonnes of nickel per annum areimplemented and US$50m for an incremental 2.5% GRR when plans to ramp-up to 24,000 tonnes ofnickel per annum are implemented; OR

US$70m for an incremental 3.0% GRR at the point when plans for the construction of a processing plant with a nameplate capacity of

24,000 tonnes of nickel per annum are implemented

»    The staged consideration approach allows for flexibility with regards to potential Piauí development scenarios aswell as for the Project to be de- risked prior to Anglo Pacific proceeding with additional tranches

Valuation

The transaction is in-line with the Company’s strategy to invest in development opportunities with significant growth potential to complement its existing portfolio of income producing assets.