Alvo Funded To Accelerate Exploration At Bluebush REE Project

Alvo Minerals Limited (ASX: ALV)(“Alvo” or the “Company”) is pleased to announce that it has received binding commitments for a two tranche Placement to raise A$5.1 million before costs (“Placement”).

HIGHLIGHTS

• Alvo has secured binding commitments to raise c.$5.1 million (before costs) through a two-tranche Placement at 25.0 cents per share.
• The Placement was strongly supported by a number of high quality new and existing, domestic and international institutions and dedicated resource funds.
• Cornerstone support received from high-quality existing institutional shareholders including Resource Capital Fund (RCF), Paragon Funds Management and Lowell Resources Fund.
• Alvo’s Directors have subscribed for shares worth a total of $75,000 subject to shareholder approval at a General Meeting proposed to be scheduled for on or around late July 2023.
• Commencement of truck mounted auger drill program at Bluebush REE Project is imminent following the payment of binding 6-months exclusive purchase option fee of BRL100,000 (A$30,530).
• Alvo is funded to complete due diligence work at Bluebush including auger drilling to quantify mineralisation at depth and along strike, and sampling of saprolite to confirm Ionic Clay mineralisation.
• In parallel, Alvo will continue to advance its high-grade Palma VMS Project, including an updated Mineral Resource Estimate (“MRE”) in H2 CY2023 and diamond drill testing of new high priority regional targets.

• Tranche 1 of the Placement, comprising up to ~10.9 million New Shares (A$2.7M), is not subject to shareholder approval and will fall within the Company’s placement capacity under ASX Listing Rule 7.1 (“Tranche 1 Placement”); and
  
• Tranche 2 of the Placement, comprising up to ~9.4 million New Shares (A$2.4M), will be subject to Shareholder Approval at a General Meeting (General Meeting) proposed to be held on or around late July 2023 (“Tranche 2 Placement”).

Rob Smakman, Alvo’s Managing Director commented on the Capital Raising:

“We are thrilled with the overwhelmingly positive response we have received on the Bluebush Rare Earth Project from new and existing investors. We believe Bluebush has the potential to be a ‘Tier 1’ ionic clay rare earth project, given its proximity and similar attributes to Serra Verde, which is believed to be the largest and most advanced ionic clay project outside of China.“The $5M raised sees Alvo fully funded for the remainder of CY2023 and beyond. During this time, we plan to complete due diligence at Bluebush, including exploration and technical studies, in addition to advancing the high-grade Palma VMS Project through an updated MRE and drilling new regional VMS targets.We haven’t slowed down since the IPO in October 2021 and don’t plan on it. We believe 2023 will be a milestone year as we demonstrate the ionic clay rare earth scale potential at Bluebush, in addition to making a new VMS discovery at Palma. It is an exciting time to be an Alvo shareholder.”

The Placement ensures Alvo is well funded to execute its strategic exploration plan in Central Brazil. Use of funds will include:

• Due diligence, exploration and preliminary metallurgical testwork at the Bluebush REE Project (see ASX announcement dated 7 June 2023);
  
• Resource expansion and high priority regional target drilling at the Palma VMS Project which hosts a JORC 2012 Resource of 4.6Mt @ 1.0% Cu, 3.9% Zn, 0.4% Pb & 20g/t Ag;
• Ongoing geological, geophysical and geochemical exploration programs along the Palma VMS Project;
• General working capital purposes.

Placement Details

The issue price of 25.0 cents per share represents a 12.3% discount to Alvo’s last close on 8 June 2023 of 28.5 cents and a 29.6% discount to the 30-day VWAP of 35.5 cents.

Placement Shares will rank equally with existing fully paid ordinary shares. Settlement of Tranche 1 of the Placement is expected to be completed on Tuesday, 20 June 2023. Settlement of Tranche 2 of the Placement is expected to be completed on or around late July 2023 and subject to prior Shareholder Approval at a General Meeting to be scheduled for on or around late July 2023.

The Tranche 1 Placement has been conducted pursuant to the Company’s existing Placement capacity under ASX Listing Rules 7.1. A total of 10,924,547 New Shares will be issued under Listing Rule 7.1.

The Tranche 2 Placement for a total of 9,475,453 New Shares will be issued subject to shareholder approval at the meeting in late July 2023.

Discovery Capital Partners (Discovery) acted as Lead Manager to the Placement.

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