Giyani Metals Corp. (TSX-V:EMM) (GR:A2DUU8) developer of the K.Hill battery-grade manganese project in Botswana is pleased to announce that on February 20, 2024 it closed the US$10 million investment by ARCH Sustainable Resources Fund LP announced on January 24, 2024. The Company and ARCH have satisfied all necessary conditions precedent to Closing and US$10 million has now been received by the Company.

The ARCH funding fulfils a key condition for drawdown of the US$16 million convertible loan facilities secured by Giyani from the Industrial Development Corporation of South Africa Limited and forms part of a larger aggregate US$26 million funding package to progress K.Hill to Final Investment Decision.

The IDC Facility remains subject to the approval of the TSX Venture Exchange and satisfaction of certain other conditions customary for a transaction of that nature.

Summary of the ARCH funding package

The ARCH funding package consists of: (i) a US$4.8 million (approximately C$6.4 million) offering of 54,835,235 units at C$0.117 per unit, with each unit consisting of one common share  and one common share purchase warrant exercisable at a price of C$0.225 per Warrant for five years (subject to acceleration); and (ii) US$5.2 million for a 2% gross revenue royalty which includes a 1% buy-back provision and an automatic step-down by 0.5% after the earlier of: (i) 2.5Mt of battery grade manganese production, and (ii) 20 years following the date of commencement of production of HPMSM or manganese metal at a processing plant that is at least majority owned by Giyani continuously during that period.

Following Closing, the Company will have 274,313,330 Shares issued and outstanding. The securities issued or made issuable under the offering are subject to a four-month Canadian statutory hold period and a further contractual escrow with half of the Shares issued or made issuable escrowed for 12 months following Closing and the other half of the Shares issued or made issuable are escrowed for 15 months following Closing. Without the prior written approval of Giyani and the TSXV and the approval of disinterested shareholders, ARCH shall not be entitled to exercise

Warrants to the extent that, after giving effect to such exercise, ARCH would beneficially own in excess of 19.9% of the issued and outstanding number of Shares of Giyani.

At Closing, the Company entered into an investor rights agreement with ARCH pursuant to which ARCH will have certain board nomination rights, equity subscription and top up rights and a right of first offer for future royalty or stream financings of the Company.

Giyani intends to use the net proceeds of the ARCH funding package to progress K.Hill to FID, including an Optimized Feasibility Study for the Project and completing the construction, commissioning, and operation of the Company’s demonstration plant, as well as for working capital and other general corporate purposes.

As consideration for services rendered to Giyani in connection with the US$10 million ARCH funding, Giyani has agreed to pay Hannam & Partners an aggregate cash fee of US$219,250, approximately US$166,950 in respect of the financing and approximately US$52,300 in respect of the royalty.

ARCH ESG Commitment

A core part of ARCH’s investment strategy is focused on environmental, social and governance principles, including:

• monitoring and measuring environmental performance and implementing measures to reduce environmental impacts;
• respecting the rights, interests, customs and values of those who it interacts with, engaging with impacted communities and seeking to demonstrate a net positive impact resulting from operations; and
• being guided by the principles established by applicable stock exchanges, aspiring to meet the highest standards of ethical business practice and seeking to integrate sustainable development into corporate strategies.

Giyani, as a responsible battery metals developer, is committed to strive for carbon neutrality as per the Company’s Environmental Policy and together with ARCH the Company will continue to expand its carbon neutral vision and net-zero strategy for the Project.

Board Appointments

Pursuant to the ARCH investor rights agreement, Giyani welcomes the appointment of Alex Azpitarte to the Board of Directors. Mr. Azpitarte has worked at ARCH since 2021. Prior to this Mr Azpitarte spent seven years working in the engineering industry, developing and managing power generation projects across the USA, China and Mexico. Mr. Azpitarte holds a Masters in Mechanical Engineering from the Illinois Institute of Technology in Chicago and an MBA from London Business School.

Early Warning Disclosure by ARCH

At Closing, ARCH was issued 54,835,235 Shares, representing approximately 19.99% of Giyani’s issued and outstanding Shares on the date hereof. ARCH was also issued 54,835,235 Warrants exercisable for 54,835,235 Shares subject to the terms and conditions noted above.

The Shares were acquired for investment purposes. ARCH has no current plans or intentions which relate to, or would result in, acquiring additional securities of Giyani, disposing of securities of Giyani, or any other actions described in Item 5 of Form 62-103F1 Required Disclosure under the Early Warning Requirements. ARCH may, ‎depending on market and other conditions, increase or decrease its beneficial ownership of or ‎control or direction over Giyani’s securities, whether in the open market, by privately ‎negotiated agreements or otherwise, subject to a number of factors, including general market ‎conditions and other available investment and business opportunities.‎

Further to the requirements of National Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 62-103 -‎The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, ARCH will file an early warning report which will be made available on SEDAR+ at www.sedarplus.ca. Further information and a copy of the early warning report may be obtained by contacting Robert Mason on behalf of ARCH at rob@mason-law.ca.

About Giyani

Giyani’s mission is to become a sustainable, low-carbon producer of battery materials for the electric vehicle industry. The Company has developed a hydrometallurgical process to produce HPMSM, a lithium-ion battery cathode precursor material critical for EVs, directly from ore from its manganese oxide deposits in Botswana. The Company’s assets include K.Hill and the Otse and Lobatse manganese prospects.