December 2022 Quarterly and Cash Flow Report

Queensland Pacific Metals Ltd (ASX:QPM) (“QPM” or “the Company”) is pleased to present a summary of activities from the December 2022 quarter.

Highlights

• Watershed investment and offtake agreement signed with General Motors.
• Strong political support from key ministers and departments.
• Release of Feasibility Study results for the TECH Project demonstrating attractive project financial metrics.
• Receipt of all major Federal and State regulatory approvals for construction of the TECH Project.
• Launch of QPM Energy, a wholly owned subsidiary, to vertically integrate the gas supply chain with the TECH Project and facilitate reduction of carbon emissions from waste coal mine gas.
• Completion of updated Life Cycle Assessment, which has re-estimated the TECH Project to have NET- NEGATIVE carbon emissions of 989,213 tonnes per annum
• $10.2m received from R&D Tax incentive refund, leaving QPM in a strong cash position with $45.1m in cash and cash equivalents as at the end of the December quarter.

On 12 October 2022, QPM announced a major investment and offtake agreement with General Motors (the “Transaction”). Under the Transaction and subject to certain conditions being met:

• General Motors will invest up to US$69m (A$108m) by way of equity subscription for ordinary shares in QPM, which includes an initial investment of US$20.1m which has already been settled; and
  
• General Motors has an option to purchase all uncommitted nickel and cobalt production for Stage 1 of the TECH Project and 100% of nickel and cobalt production under a Stage 2 expansion.

The Transaction with General Motors represents the start of a long term strategic collaboration between the two companies. As part of undertaking the Transaction, General Motors undertook extensive due diligence on all aspects of QPM, engaging external technical and financial consultants as part of the process.

The initial investment of US$20.1m was undertaken at a share price of $0.18 per share, which is significantly higher than the current share price of QPM ($0.12 at the time of publishing this Quarterly Report). General Motors’ ownership level in QPM is just under 10%.

QPM is focussed on becoming a significant part of General Motors’ battery metal supply chain. The sustainability credentials of the TECH Project and the values of QPM align well with that of General Motors’. QPM is excited to form this partnership and believes that the relationship between the two companies will be mutually beneficial. The US Inflation Reduction Act, which requires supply of raw materials from countries with a Free Trade Agreement with the United States in order to qualify for tax credits, adds further support for the supply of nickel and cobalt from QPM.

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