Long Term Strategic Collaboration Established between Queensland Pacific Metals and General Motors

Queensland Pacific Metals Ltd (ASX:QPM) (“QPM” or “the Company”) is delighted to announce that it has entered into a binding equity subscription agreement (“Investment Agreement”) and offtake agreement (“Offtake Agreement”) with General Motors Holdings LLC (“GM”).

Highlights

• General Motors Holdings LLC and Queensland Pacific Metals Ltd are pleased to announce the formation of a strategic collaboration, via a material investment and long term offtake agreement.
  
• Conditional commitment of up to US$69m (A$108m) by way of equity subscription in QPM, including initial binding commitment of US$20.1m at A$0.18 per share.
• Through this strategic collaboration, GM is granted the right to purchase all uncommitted nickel and cobalt sulfate produced in the first 15 years of Phase 1 of the TECH Project.
  
• Furthermore, by undertaking an additional investment when QPM reaches a Final Investment Decision:
  • GM’s offtake rights for Phase 1 are extended to life of project; and
  • GM is granted the right to purchase 100% of nickel and cobalt sulfate under a Phase 2 expansion of the TECH Project.
• The TECH Project’s outstanding ESG credentials align with the values and vision of GM and its transition towards electric vehicle production.
  
• The funding provided by GM will be used for ongoing development and construction of the TECH Project.

Investment Agreement

Under the Investment Agreement, GM has agreed to invest up to US$69m in equity in QPM, comprised of the Initial Investment of up to US$25m and FID Investment of up to US$44m. At each opportunity, GM will invest the maximum amount possible under its commitment, subject to GM’s total shareholding in QPM being less than 10.0%.

Initital Investment

As part of the Initial Investment, GM has commited to subscribe for 174,634,791 shares in QPM at a subscription price of $0.18 per share for a total of US$20.1m (A$31.4m). The subscription price represents a premium of 20% to the last closing price of QPM and 22.8% to the 3-month volume weighted average price of QPM.

QPM will also issue 46,833,661 unquoted options to GM with an exercise price of A$0.20 and a term of 3 years (from the date of issue) as part of the initial binding commitment.

QPM will issue 138,421,313 shares under its existing LR7.1A placement capacity and 20,131,969 shares under its existing LR7.1 placement capacity to GM upon receipt of funds. The remaining shares and options will be subject to shareholder approval at an Extraordinary General Meeting (“EGM”). A notice of meeting will be sent out to QPM shareholders in the near future.

The balance of the Initial Investment can be called by QPM prior to FID to support other agreed funding initiatives in relation to the Tech Project.

FID Investment

Subject to its satisfaction with the Definitive Feasibility Study and other customary conditions, GM will also participate in any equity raising undertaken by QPM as part of a Final Investment Decision to construct the TECH Project. The investment price will be on the same basis as offered to other investors participating in the equity raising. GM’s commitment of up to US$44m (plus the balance of the Initial Investment, if not called earlier) provides a material cornerstone position to support any fund raising.

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