Condor Gold Plc - Announces Rule 2.7.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR CIRCULAR OR PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN RELATION TO METALS EXPLORATION PLC SHARES EXCEPT ON THE BASIS OF THE INFORMATION IN THE SCHEME DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE COURSE.

NEITHER THIS ANNOUNCEMENT, NOR THE INFORMATION CONTAINED HEREIN, CONSTITUTES A SOLICITATION OF PROXIES WITHIN THE MEANING OF APPLICABLE CANADIAN SECURITIES LAWS. SHAREHOLDERS ARE NOT BEING ASKED AT THIS TIME TO EXECUTE A PROXY IN FAVOUR OF THE OFFER OR THE MATTERS DESCRIBED HEREIN.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO.596/2014 AS IT FORMS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION WILL BE CONSIDERED TO BE IN THE PUBLIC DOMAIN.

RECOMMENDED OFFER for CONDOR GOLD PLC by METALS EXPLORATION PLC to be implemented by means of a scheme of arrangement under Part 26 of the Companies Act 2006

LONDON, UNITED KINGDOM / ACCESSWIRE / December 4, 2024 / Condor Gold plc

Summary

• The boards of Metals Exploration plc ("MTL") and Condor Gold plc ("Condor Gold") are pleased to announce that they have agreed the terms and conditions of a recommended offer by MTL for the entire issued, and to be issued, ordinary share capital of Condor Gold (the "Offer"). It is intended that the Offer will be implemented by means of a court-sanctioned scheme of arrangement under Part 26 of the 2006 Act.

• Under the terms of the Offer, each Condor Gold Shareholder will be entitled to receive for each Condor Gold Share:

4.0526 New MTL Shares and 9.9p in cash
and
1 Contingent Value Right

• Under the terms of the Offer, each Condor Gold Shareholder shall be entitled to the fixed consideration of 4.0526 New MTL Shares and 9.9p in cash for each Condor Gold Share held (the "Fixed Consideration").

• Based on the closing middle-market price per MTL Share on 29 November 2024 (being the last Business Day prior to the commencement of the Offer Period), the Fixed Consideration values Condor Gold's existing issued ordinary share capital at approximately £67.5 million, representing approximately 33.0p per Condor Gold Share.

• In addition, each Condor Gold Shareholder will be entitled to one Contingent Value Right for each Condor Gold Share held (the "CVR Consideration"), which entitles them to their pro rata share of:

  • US$14.4 million (to be paid in pounds sterling using the CVR Exchange Rate) following the first gold pour after commissioning of the relevant processing facilities (as confirmed by the Independent CVR Representative) using ore from the La India mining operations, subject to the first gold pour occurring within the five-year period following the earlier of (i) the first date upon which a suitable drilling rig to carry out the agreed work commitments has been mobilised to the La India Project (as confirmed by the Independent CVR Representative); and (ii) six months following the Effective Date (the "CVR Commencement Date"), to be settled by way of the issue of loan notes (issued by MTL) with a maturity of six months and one day after their date of issue (the "Loan Notes"), within 15 Business Days of the first gold pour; and

  • up to an aggregate of US$14.4 million on the basis of US$18.00 per ounce (to be paid in pounds sterling using the CVR Exchange Rate) of additional contained gold JORC Mineral Resource discovered in excess of 3.158 million ounces (Moz) total resource at the Condor Group's La India, Rio Luna and Estrella projects (the "Gold Projects") (subject to a cap of 800,000 ounces above the 3.158Moz hurdle), over the five-year period following the CVR Commencement Date. Payments due under the CVR, will be settled by way of the issue of either New MTL Shares or unsecured Loan Notes, or a combination thereof, at MTL's sole election, following the third and fifth anniversary of the CVR Commencement Date.

• Accordingly, the maximum potential CVR Consideration payable pursuant to the Offer, as detailed further below, amounts to US$28.8 million (approximately £22.6 million at the Exchange Rate), representing 11.1p per Condor Gold Share (the "Maximum CVR Consideration"). Accordingly, the Fixed Consideration and the Maximum CVR Consideration (at the Exchange Rate), in aggregate, could amount to up to approximately £90.1 million, representing approximately 44.1p per Condor Gold Share (the "Maximum Potential Consideration").

• The CVRs are complex instruments and a number of factors will determine the amount, if any, that will ultimately be paid to Scheme Shareholders by way of the Contingent Value Rights. Whilst the MTL Board is confident in both the Combined Group's ability to commence production at La India and the exploration upside at the Gold Projects, the minimum payment under the Contingent Value Rights is uncertain and could be zero.
  Further details in respect of the Contingent Value Rights are included in paragraph 3 of this announcement and will be contained in the Scheme Document.

• Based on the closing middle-market price per MTL Share of 5.7 pence on 29 November 2024 (being the last Business Day prior to the commencement of the Offer Period), the Fixed Consideration represents a premium of approximately:

  • 16.8 per cent. to the closing middle-market price of 28.3 pence per Condor Gold Share on 3 December2024 (being the last Business Day prior to the date of this announcement);

  • 37.5 per cent. to the closing middle-market price of 24.0 pence per Condor Gold Share on 29 November2024 (being the last Business Day prior to the commencement of the Offer Period);

  • 58.1 per cent. to the volume-weighted average price of 20.9 pence per Condor Gold Share for the 20-day period ended 29 November 2024 (being the last Business Day prior to the commencement of the Offer Period); and

  • 55.8 per cent. to the volume-weighted average price of 21.2 pence per Condor Gold Share for the three-month period ended 29 November 2024 (being the last Business Day prior to the commencement of the Offer Period).

• Upon Completion of the Offer, Condor Gold Shareholders will hold approximately 33.8 per cent. of the Enlarged Share Capital of the Combined Group (based on the existing issued ordinary share capital of MTL and the fully diluted in-the-money ordinary share capital of Condor Gold, in each case as at the last Business Day prior to the date of this announcement).

• In order to allot the New MTL Shares, MTL will be required to seek the approval of the MTL Shareholders at the MTL General Meeting. The Offer is accordingly conditional on such approval being obtained. It is expected that the MTL Circular, which will contain notice of the MTL General Meeting will be published and sent to MTL Shareholders at or around the same time as the Scheme Document is posted to Condor Gold Shareholders. MTL has received irrevocable undertakings from its largest shareholders, MTL Luxembourg S.à.r.l and Drachs Investments No.3 Limited to vote in favour of all resolutions at the MTL General Meeting in respect of, in aggregate, 968,532,143 MTL Shares, representing approximately 56.0 per cent. of the voting rights of the MTL Shares in issue as at 3 December 2024, being the last Business Day prior to the date of this announcement. Further details, including any circumstances in which the irrevocable undertakings cease to be binding, are set out in Appendix 3 to this announcement.

• As announced by MTL on 2 December 2024, MTL has received an irrevocable undertaking from Galloway Limited ("Galloway") to vote (or procure the vote) in favour of, or accept (or procure the acceptance of) (as applicable), the proposed acquisition by or on behalf of MTL of all the issued and to be issued shares in Condor Gold, whether implemented by way of a scheme of arrangement or a contractual offer (whether on the terms of the Offer or including any revision or variation in the terms of any such acquisition which may be made by or on behalf of MTL from time to time). Galloway is beneficially owned by Mr Jim Mellon, Non-Executive Chair of Condor Gold. The Galloway irrevocable undertaking is in respect of Galloway's entire existing holding of 50,212,597 Condor Gold Shares (representing approximately 24.6 per cent. of Condor Gold's existing issued ordinary share capital). The undertaking from Galloway will remain binding in the event that a higher competing offer for Condor Gold is made. Further details regarding these irrevocable undertakings are set out in Appendix 3 to this announcement.

• If, on or after the date of this announcement and prior to the Offer becoming Effective, any dividend and/or other distribution and/or other return of capital or value is announced, declared, made or paid or becomes payable in respect of the Condor Gold Shares, MTL reserves the right to reduce the consideration payable for each Condor Gold Share under the terms of the Offer by the amount per Condor Gold Share of such dividend or distribution, in which case any reference in this announcement to the consideration payable under the terms of the Offer will be deemed to be a reference to the consideration as so reduced.

• It is intended that the Offer will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the 2006 Act. However, MTL reserves the right to elect to implement the Offer by way of a Takeover Offer (subject to the consent of the Panel and in accordance with the terms of the Cooperation Agreement).

Background to and reasons for the Offer

• MTL is a gold exploration and production company with two projects located in the Philippines. MTL's primary asset is the Runruno mine, located 205km north of Manila in the province of Nueva Vizcaya, which is now at a mature stage and has limited remaining life of mine and no significant exploration or expansion opportunities. MTL's more recently acquired asset, the Abra Project, is an early exploration-stage copper and gold project located on the western belt of the highly endowed Central Cordillera region in Abra, Luzon and covering an area of 16,200 hectares. MTL has a strong balance sheet and, save for the MTL Acquisition Loan described in paragraph 12 of this announcement entered into specifically in connection with the Offer, has no debt. MTL is seeking to implement its growth strategy of building a diversified cash generative portfolio of projects through appropriate acquisition opportunities. With MTL's Runruno mine nearing the end of its mine-life and the Abra Project still being early stage, Condor Gold's assets present a compelling opportunity to simultaneously acquire a well-explored and substantial gold project with a relatively near-term path to production, diversify geographically, and strategically expend the free cash flow its Runruno mine is generating to increase the potential for enhanced returns to shareholders.

• MTL believes that Condor Gold's current gold resources and its potential development path to production in Nicaragua have significant potential, which MTL can realise utilising its cash surpluses and operational expertise. MTL's management team brings a proven track record, having orchestrated a turn-around of MTL's operational and capital difficulties from 2019 to its current cash generative position. For its latest quarter to 30 September 2024, MTL produced 22,533 oz of gold with recoveries of 89.0 per cent. On 25 November 2024, MTL announced that it expects FY2024 gold production of 82,500 oz with an AISC of US$1,125 per oz.

• MTL's Chief Executive Officer has in excess of 15 years' work experience in Central/South America and is fluent in Spanish. His past experience in the region will assist in quickly assembling a Spanish speaking team of mining professionals to add to MTL's existing professional team.

• MTL intends to utilise its substantial existing cash reserves and future free cash flow from the Runruno mine to commence construction of Condor Gold's planned gold operation, thereby alleviating capital constraints and reducing the timetable to commercial production.

• Completion of the Offer would combine MTL's producing Runruno gold operation and the significant exploration upside at its Abra copper/gold project with Condor Gold's significant development ready La India gold project and its other gold projects, which is expected to create a larger, more mature, gold exploration and production company with significant free cash flow and increased capacity to bring Condor Gold's assets into production.

Recommendation by the Condor Gold Directors

• The Condor Gold Directors, who have been so advised by Beaumont Cornish as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing independent financial advice for the purposes of Rule 3 of the Takeover Code, Beaumont Cornish has taken into account the commercial assessments of the Condor Gold Directors.

• Accordingly, the Condor Gold Directors believe that the Offer represents the best opportunity for Condor Gold Shareholders to gain exposure to additional scale and the opportunities offered by the Combined Group and that the terms of the Offer are in the best interests of Condor Gold Shareholders as a whole. The Condor Gold Directors therefore unanimously recommend that Condor Gold Shareholders vote in favour of the Scheme at the Court Meeting and the Condor Gold Resolution to be proposed at the Condor Gold General Meeting as the Condor Gold Directors who hold Condor Gold Shares (in a personal capacity or through a nominee or related family trust)have irrevocably undertaken to do in respect of their own beneficial holdings totalling 8,316,145 Condor Gold Shares (representing approximately 4.1 per cent. of the existing issued ordinary share capital of Condor Gold as at 3 December 2024, being the last Business Day prior to the date of this announcement). Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.

Background to, and reasons for, the recommendation of the Offer by the Condor Gold Directors

• On 22 November 2022, Condor Gold announced that it was seeking a potential buyer for its key asset, namely the La India Project. Since then, Condor Gold has explored various potential transactions with a variety of prospective counterparties whereby a number of non-disclosure agreements ("NDAs") have been entered into, site visits hosted, and discussions held around indicative terms and different transaction structures.

• In November 2024, MTL submitted a draft non-binding indicative offer to Condor Gold to acquire the entire issued and to be issued share capital of Condor Gold. Following discussions, the terms of the proposed Offer were agreed, subject to due diligence, between the parties which included the agreement of the consideration.

• In considering the financial terms of the Offer and determining whether they reflect an appropriate valuation of Condor Gold and its future prospects, the Condor Gold Directors took into account a range of factors including: the premium to Condor Gold's volume weighted average share price, the various alternative proposals received for acquiring the Company and/ or its assets, greater access to capital to take the La India Project into production and thus reduction in funding risk and the overall enhanced capital markets profile of the business and hence liquidity in the enlarged group's shares.

• In considering their recommendation of the Offer to Condor Gold Shareholders, the Condor Gold Directors have given due consideration to the intentions of MTL for the Condor Gold Group's management, employees and all stakeholders of Condor Gold. In particular, the Condor Gold Directors note that MTL has confirmed that it will seek to continue with the growth plan of the Condor Gold Group's business and the importance placed by MTL on the existing employees and other stakeholders of Condor Gold. The Condor Gold Directors have considered alternative strategic options for the future of the Condor Gold business and the likelihood of successfully executing such alternatives (including the low likelihood of successfully raising capital on its own for the construction of a new mine in Nicaragua in the current market environment and investor attitude towards Nicaragua generally on the AIM market). They have also noted the irrevocable undertaking to approve the Offer entered into by Condor Gold's major shareholder, Galloway, which has hitherto been the lead investor on financing rounds and has recently provided a limited short-term working capital facility to Condor Gold. Having considered such alternative proposals as well as the extensive sale process undertaken to date, which has included outreach to a number of other gold producers, along with Condor Gold's increasing reliance on its major shareholder for funding, the Condor Gold Directors believe that the Offer represents a positive outcome for shareholders, the vast majority of Condor Gold's employees as well as the Condor Gold Group's other stakeholders, particularly, potentially greater employment and investment in the community of La Cruz de la India, who will benefit from the opportunities provided by a combination of Condor Gold with MTL. The Condor Gold Directors consider MTL to be an appropriate custodian of Condor Gold as it embarks on its next stage of growth and development as part of the combined group.

• The Condor Gold Board, who have been advised by Beaumont Cornish (who are providing independent financial advice to the Condor Gold Board for the purposes of Rule 3 of the Takeover Code) as to the financial terms of the Offer, considers the terms of the Offer to be fair and reasonable. In providing its financial advice to the Condor Gold Directors, Beaumont Cornish has taken into account the commercial assessments of the Condor Gold Directors.

Irrevocable undertakings

Timetable and conditions

• It is intended that the Offer will be implemented by way of a court‑sanctioned scheme of arrangement under Part 26 of the 2006 Act (although MTL reserves the right to effect the Offer by way of a Takeover Offer, subject to the consent of the Panel and in accordance with the terms of the Cooperation Agreement).

• The terms of the Offer will be put to Condor Gold Shareholders at the Court Meeting and the Condor Gold General Meeting. The Court Meeting and the Condor Gold General Meeting are required to enable Condor Gold Shareholders to consider and, if thought fit, vote in favour of the Scheme and the Condor Gold Resolution to implement the Scheme. In order to become Effective, the Scheme must be approved by a majority in number of Condor Gold Shareholders, present and voting at the Court Meeting, whether in person or by proxy, representing 75 per cent. or more in value of the Scheme Shares voted. In addition, a special resolution implementing the Scheme must be passed by Condor Gold Shareholders representing at least 75 per cent. of votes cast at the Condor Gold General Meeting.

• The Conditions to the Offer are set out in Appendix 1 to this announcement along with certain other terms; the full terms and conditions will be provided in the Scheme Document.

• The Scheme Document, containing further information about the Offer and notices of the Court Meeting and General Meeting, together with the associated Forms of Proxy, will be posted to Condor Gold Shareholders as soon as practicable and in any event within 28 days of this announcement (or such later time as Condor Gold, MTL and the Panel agree) and the Meetings are expected to be held as soon as reasonably practicable thereafter. Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will also be made available on Condor Gold's website at https://www.condorgold.com/investors and MTL's website at https://metalsexploration.com/investors.

• The Offer is currently expected to complete in Q1 2025, subject to the satisfaction or (where applicable) waiver of the Conditions. An expected timetable of key events relating to the Offer will be set out in the Scheme Document.

Jim Mellon, Chairman of Condor Gold, commented:

"The business combination with MTL offers Condor Gold Shareholders the opportunity of joining forces with an existing gold producer with signification exploration upside. In addition, shareholders will receive an immediate and significant cash payout. MTL and Condor Gold together would form a multi-asset and multi-jurisdiction gold platform with a management team possessing a strong track record of building and operating gold mines.

"Through this transaction, existing cash-flow from MTL's producing mine in the Philippines will support the build out of La India in Nicaragua. The transaction offers shareholders the ability to fully realise the potential of La India as it transitions into production and proves up what it hopes will be a major Gold District. Shareholders are offered an upfront consideration of 33.0p (70 per cent. in MTL Shares and 30 per cent. in cash), with additional contingent consideration of up to 11.1p by way of the CVR should MTL, as we hope, achieve a ‘first gold pour' and establish additional gold resources.

We are proud of the accomplishments to date by the Condor Gold team and strongly recommend this Offer, which we believe is in the best interests of shareholders, Condor Gold's employees and local community partners. I will also be joining the board of the Combined Group."

Nick von Schirnding, Chairman of MTL, commented:

"Today's Offer represents a compelling strategic opportunity which provides an exciting future platform for growth, in line with our strategy of building a cash generative portfolio of projects. There is a clear development path to production at La India, that will provide cashflow at an opportune time, replacing that from Runruno as it approaches the end of its life of mine. The La India gold project is shovel ready, and we intend to use cash generated from Runruno to commence construction in accordance with the approvals that are already in place. Additionally, La India offers significant upside resource potential and we look forward to commencing the agreed exploration work programme.

MTL's CEO, Darren Bowden, is a fluent Spanish speaker, with vast experience in the region, having spent more than 15 years working in Centra/South America. We are therefore confident that we will be able to quickly assemble a team of experienced individuals to work alongside the existing management team to successfully bring the La India Project into production. Additionally, we intend to build and maintain excellent relationships with the local community in the project area, and at a wider regional and national scale, as has been a key focus at our existing Runruno operation in the Philippines."

This summary should be read in conjunction with the following announcement and the Appendices. The Conditions to, and certain further terms of, the Offer are set out in Appendix 1. The bases and sources for certain financial information contained in this announcement are set out in Appendix 2. Details of the irrevocable undertakings received by MTL are set out in Appendix 3. Certain definitions and terms used in this announcement are set out in Appendix 4.

The person responsible for arranging release of this announcement on behalf of Condor Gold is Mark Child and the person responsible for arranging release of this announcement on behalf of MTL is Darren Bowden.

Enquiries:

Squire Patton Boggs is acting as legal adviser as to English, US and Australian law to MTL.

Hill Dickinson LLP is acting as legal adviser as to English law to Condor Gold.

Blake, Cassels & Graydon LLP is acting as legal adviser as to Canadian law to Condor Gold.

Further information

Strand Hanson Limited ("Strand Hanson"), which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser exclusively to MTL and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than MTL for providing the protections offered to clients of Strand Hanson or for providing advice in connection with any matter referred to in this announcement. Neither Strand Hanson nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Strand Hanson in connection with this announcement, any statement contained herein, the Offer or otherwise. No representation or warranty, express or implied, is made by Strand Hanson as to the contents of this announcement.

H&P Advisory Ltd ("Hannam & Partners"), which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser exclusively to Condor Gold and no-one else in connection with the matters described in this announcement and will not be responsible to anyone other than Condor Gold for providing the protections afforded to clients of Hannam & Partners nor for providing advice in connection with the subject matter of this announcement. Neither Hannam & Partners nor any of its affiliates (nor any of their respective directors, partners, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Hannam & Partners in connection with this announcement, any statement contained herein, the Offer or otherwise. No representation or warranty, express or implied, is made by Hannam & Partners as to the contents of this announcement.

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Nominated Adviser and Rule 3 Adviser exclusively to Condor Gold and no-one else in connection with the matters described in this announcement and will not be responsible to anyone other than Condor Gold for providing the protections afforded to clients of Beaumont Cornish nor for providing advice in connection with the subject matter of this announcement. Neither Beaumont Cornish nor any of its affiliates (nor any of their respective directors, partners, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Beaumont Cornish in connection with this announcement, any statement contained herein, the Offer or otherwise. No representation or warranty, express or implied, is made by Beaumont Cornish as to the contents of this announcement.

This announcement is for information purposes only and is not intended to, and does not, constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor shall there be any sale, issuance or transfer of the securities of Condor Gold in any jurisdiction in contravention of applicable law. The Offer will be implemented solely pursuant to the terms of the Scheme Document (or, if the Offer is implemented by way of a Takeover Offer, the Offer Document), which will contain the full terms and conditions of the Offer, including details of how to vote in respect of the Offer. Any vote in respect of the Scheme or other response in relation to the Offer should be made only on the basis of the information contained in the Scheme Document (or, if the Offer is implemented by way of a Takeover Offer, the Offer Document).

This announcement does not constitute a prospectus, prospectus equivalent document or exempted document nor does this announcement, or the information contained herein, constitute a solicitation of proxies within the meaning of applicable Canadian Securities Laws. Condor Gold Shareholders are not being asked at this time to execute a proxy in favour of the Offer or the matters described herein.

MTL reserves the right to elect to implement the Offer by way of a Takeover Offer as an alternative to the Scheme (subject to the Panel's consentand in accordance with the terms of the Cooperation Agreement). In such event, the Offer will be implemented on substantially the same terms, so far as applicable, as those which will apply to the Scheme, subject to appropriate amendments to reflect, among other things, the change in method of effecting the Offer (including, without limitation: (i) the inclusion of an acceptance condition set at 90 per cent. of the Condor Gold Shares to which such Offer relates (or such other percentage as MTL may, subject to the rules of the Takeover Code and with the consent of the Panel, decide); and (ii) those required by, or deemed appropriate by, MTL under applicable law). Further, if sufficient acceptances of such Offer are received and/or sufficient Condor Gold Shares are otherwise acquired, it is the intention of MTL to apply the provisions of Chapter 3 of Part 28 of the 2006 Act to acquire compulsorily any outstanding Condor Gold Shares to which such Offer relates.

If you are in any doubt about the contents of this announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Overseas Shareholders

The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves of, and observe, any applicable legal or regulatory requirements. Any failure to comply with such requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared in accordance with and for the purpose of complying with English law, the Takeover Code, the AIM Rules, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England including, without limitation the United States and Canada.

The availability of the Offer to Condor Gold Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Condor Gold Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person.

Unless otherwise determined by MTL or required by the Takeover Code, and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into, from, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Copies of this announcement and any formal documentation relating to the Offer are not being, and may not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including, without limitation, agents, custodians, nominees and trustees) may not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Offer. If the Offer is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in, into, from, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

Notice to Australian Condor Gold Shareholders

The offer of New MTL Shares and CVRs for issue, sale or re-sale within Australia is prohibited unless a disclosure document has been lodged with the Australian Securities and Investments Commission ("ASIC"), or an exemption applies. The New MTL Shares and CVRs will be issued in reliance on exemptions in ASIC Legislative Instrument 2015/358 as the Offer will be made under a foreign compromise or arrangement that is made in accordance with laws in force in the United Kingdom, being an eligible foreign country.

This document is not a disclosure document for the purposes of Chapter 6D of the Australian Corporations Act 2001(Cth) ("Corporations Act") and does not purport to include the information required of a disclosure document under Chapter 6D of the Corporations Act. It has not been approved by any Australian regulatory authority, such as ASIC or the Australian Securities Exchange and has not been lodged with ASIC. You are advised to exercise caution in relation to the proposal set out in this announcement. You should obtain independent professional advice if you have any queries or concerns about any of the contents or subject matter of this announcement.

To the extent this announcement is received by a Condor Gold Shareholder in Australia, it is provided in reliance upon ASIC Corporations (Unsolicited Offers-Foreign Bids) Instrument 2015/1070.

Notice to Canadian Condor Gold Shareholders

The enforcement by Canadian Condor Gold Shareholders of civil liabilities under applicable Canadian Securities Laws may be affected adversely by the fact that Condor Gold and MTL are incorporated under the laws of a jurisdiction other than Canada, that some or all of Condor Gold's and MTL's officers and directors are and, in the case of MTL, will be residents of countries other than Canada, that some or all of the experts named in this announcement may be residents of countries other than Canada, and that all or a substantial portion of the assets of MTL, Condor Gold and such persons are and will be located outside Canada. As a result, it may be difficult or impossible for Canadian Condor Gold Shareholders to effect service of process within Canada upon MTL, Condor Gold or the officers or directors or MTL and/or Condor Gold or the experts named herein, or to realise against them, upon judgments of courts of Canada predicated upon liabilities under applicable Canadian Securities Laws. In addition, Canadian Condor Gold Shareholders should not assume that the courts of England and Wales: (a) would enforce judgments of courts of Canada obtained in actions against such persons predicated upon civil liabilities under applicable Canadian Securities Laws; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under applicable Canadian Securities Laws.

The distribution of the New MTL Shares and the CVRs pursuant to the Offer will constitute a distribution of securities that is exempt from the prospectus requirements of applicable Canadian Securities Laws and is exempt from or otherwise is not subject to the registration requirements under applicable Canadian Securities Law. The New MTL Shares and the CVRs received pursuant to the Offer will not be legended and may be resold through registered dealers in all of the provinces and territories of Canada provided that (i) the trade is not a "control distribution" as defined under applicable Canadian Securities Laws, (ii) no unusual effort is made to prepare the market or to create a demand for MTL Shares or the CVRs, (iii) no extraordinary commission or consideration is paid to a person in respect of such sale, and (iv) if the selling security holder is an insider (as defined under applicable Canadian securities laws) or officer of MTL, as the case may be, the selling security holder has no reasonable grounds to believe that MTL is in default of applicable Canadian Securities Laws.

The Offer relates to the securities of a company organised under the laws of England and Wales with a listing on the AIM market of the London Stock Exchange and the TSX and is proposed to be implemented pursuant to a scheme of arrangement provided for under the 2006 Act. A transaction effected by means of a scheme of arrangement may differ from the procedures and requirements that would be applicable to a similar transaction under applicable Canadian corporate laws or Canadian Securities Laws, including the including the Canadian Take-Over Bid Rules. While MTL and Condor Gold will complete the Offer in accordance with applicable Canadian Securities Laws, the Offer is subject to the procedural and disclosure requirements, rules and practices applicable to schemes of arrangement involving a target company incorporated in England and Wales and listed on AIM and the TSX, which differ in certain areas from the requirements applicable to similar transactions under applicable Canadian corporate laws or applicable Canadian Securities Laws.

As a result of the Offer being effected by means of a scheme of arrangement provided for under the 2006 Act, the Offer does not constitute a "take-over bid" for the purposes of Canadian Take-Over Bid Rules. However, if, in the future, MTL elects, with the consent of the Panel, to implement the Offer by means of a Takeover Offer and determines to extend such Offer into Canada, such Offer will be made in compliance with all applicable Canadian Securities Laws and regulations, including, without limitation, and to the extent applicable, the Canadian Take-Over Bid Rules. In addition to any such Offer, MTL, certain affiliated companies and their nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Condor Gold outside such Offer during the period in which such Offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made, they would be made outside of Canada and would comply with applicable law, including applicable Canadian Securities Laws. Any information about such purchases will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service of the UK Financial Conduct Authority and will be available on the London Stock Exchange's website: www.londonstockexchange.com.

None of the securities, including the New MTL Shares, CVRs or Loan Notes to be issued in connection with the Offer, referred to in this announcement have been approved or disapproved by any Canadian securities regulatory authority nor has any Canadian regulatory authority passed upon or determined the fairness or merits of such securities or the Offer or upon the adequacy or accuracy of the information contained in this announcement. Any representation to the contrary is an offence.

The receipt of consideration pursuant to the Offer by a Canadian shareholder of Condor Gold as consideration for the transfer of its Condor Gold Shares will be a taxable transaction for Canadian federal income tax purposes and under applicable Canadian provincial income tax laws, and may be a taxable transaction for foreign and other tax laws. Upon the delisting of the Condor Gold Shares from trading on the TSX, the Condor Gold Shares will cease to be qualified investments under the Income Tax Act (Canada) for trusts governed by registered retirement savings plans, registered retirement income funds, registered disability savings plans, deferred profit sharing plans, registered education savings plans, tax-free savings accounts and first home savings accounts (each, a "Registered Plan"). Penalty taxes apply to a Registered Plan that holds property that is not a qualified investment. Each annuitant, subscriber or beneficiary of a Registered Plan that holds Condor Gold Shares should consider causing such Registered Plan to dispose of such shares prior the delisting of the Condor Gold Shares from trading on the TSX. Each shareholder of Condor Gold is urged to consult their independent professional adviser immediately regarding the tax consequences of the Offer applicable to them.

Notice to U.S. Condor Gold Shareholders

Condor Gold Shareholders in the United States should note that the Offer relates to the securities of a company organised under the laws of England and Wales and is proposed to be effected by means of a scheme of arrangement under the 2006 Act. This announcement, the Scheme Document and certain other documents relating to the Offer have been or will be prepared in accordance with English law, the AIM Rules, the Takeover Code and UK disclosure requirements, and the format and style applicable to a scheme of arrangement under the 2006 Act, all of which differ from those in the United States. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements of and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure requirements and practices of the United States tender offer and proxy solicitation rules.

The New MTL Shares, the CVRs and the Loan Notes referred to in this announcement have not been, and will not be, registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold, exercised, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an exemption from the registration requirements of the US Securities Act. The New MTL Shares, the CVRs and the Loan Notes are expected to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by section 3(a)(10) thereof.Condor Gold Shareholders who are or will be "affiliates" (within the meaning of Rule 144 under the US Securities Act) of Condor Gold or MTL prior to, or of MTL after, the Effective Date will be subject to certain US transfer restrictions relating to the New MTL Shares, the CVRs and the Loan Notes received pursuant to the Scheme as will be further described in the Scheme Document.

None of the securities referred to in this announcement nor the information contained in this announcement has been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon the fairness or merits of the proposal contained in this announcement or determined the adequacy or accuracy of the information contained herein. Any representation to the contrary is a criminal offence in the United States.

Condor Gold's and/or MTL's financial statements, and all financial information that is included in this announcement or that may be included in the Scheme Document, or any other documents relating to the Offer, have been prepared in accordance with UK adopted International Accounting Standards and may not be comparable to the financial statements of companies in the United States or other companies whose financial statements are prepared in accordance with US generally accepted accounting principles. US generally accepted principles differ in certain respects from UK adopted International Accounting Standards. None of the financial information in this announcement has been audited in accordance with the auditing standards generally accepted in the US or the auditing standards of the Public Company Accounting Oversight Board of the US.

It may be difficult for US holders of Condor Gold Shares to enforce their rights and any claims they may have arising under US federal securities laws in connection with the Offer, since Condor Gold is organised under the laws of a country other than the United States, and some or all of its officers and directors may be residents of countries other than the United States, and most of the assets of Condor Gold are located outside of the United States. US holders of Condor Gold Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US federal securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's jurisdiction or judgment.

If, in the future, with the consent of the Panel, MTL were to elect to implement the Offer by means of a Takeover Offer, such Offer will be made in accordance with the Takeover Code. Such a Takeover Offer may be made in the United States by MTL and no one else. Accordingly, the Offer may be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law.

None of the securities referred to in this announcement have been approved or disapproved by the US Securities and Exchange Commission, any State securities commission in the United States or any other US regulatory authority, nor have any such authorities passed judgment upon the fairness or the merits of the Offer or determined if the information in this announcement is accurate or complete. Any representation to the contrary is a criminal offence in the United States.

The receipt of the Fixed Consideration and the CVR Consideration pursuant to the Offer in the United States as consideration for the transfer of Scheme Shares pursuant to the Scheme may be a taxable transaction for United States federal income tax purposes and under any applicable United States state and local income tax laws. Each Scheme Shareholder in the United States is urged to consult its independent professional tax or legal adviser immediately regarding the US federal, state and local income and non-income tax consequences of the Offer applicable to it, as well as any consequences arising under the laws of any other taxing jurisdiction.

Forward-Looking Statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Offer, and other information published by MTL and Condor Gold contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of MTL and Condor Gold about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include statements relating to the expected effects of the Offer on MTL and Condor Gold (including their future prospects, developments and strategies), the expected timing and scope of the Offer and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "prepares", "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "synergy", "strategy", "scheduled", "goal", "estimates", "forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of MTL, Condor Gold, the MTL Group or the Condor Gold Group's operations and potential synergies resulting from the Offer; and (iii) the effects of global economic conditions and governmental regulation on MTL, Condor Gold or any member of the MTL Group's or Condor Gold Group's business.

Although MTL and Condor Gold believe that the expectations reflected in such forward-looking statements are reasonable, MTL and Condor Gold can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the Offer; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; changes in the global political, economic, business and competitive environments and in market and regulatory forces; changes in future exchange and interest rates; changes in tax rates; future business combinations or disposals; changes in general economic and business conditions; changes in the behaviour of other market participants; changes in the anticipated benefits from the proposed transaction not being realised as a result of changes in general economic and market conditions in the countries in which MTL and Condor Gold operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which MTL and Condor Gold operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors. Neither MTL nor Condor Gold, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place any reliance on these forward-looking statements.

Specifically, statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. Due to the scale of the Condor Gold Group, there may be additional changes to the Condor Gold Group's operations. As a result, and given the fact that the changes relate to the future, the resulting cost synergies may be materially greater or less than those estimated.

Other than in accordance with their legal or regulatory obligations, neither MTL nor Condor Gold is under any obligation, and MTL and Condor Gold expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Dealing and Opening Position Disclosure Requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of