18 July 2023

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information will be in the public domain.

Andrada Mining Limited

("Andrada" or the "Company")

Issue of unsecured convertible loan notes to raise £7.7million (c.US$10 million)

Commissioning of the bulk sampling plant and tantalum circuit has commenced

Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the African technology metals mining company with a portfolio of mining and exploration assets in Namibia is pleased to announce that it has raised £7.7million (c.US$10million) through the issue of 77 unsecured, convertible loan notes of £100,000 each (the "Loan Notes") to new and existing investors. The Company has also issued the holders of the Loan Notes two warrants for every £1 of Loan Note held. Each warrant enables the holder to subscribe for one ordinary share in the Company (the "Warrants"). More details of the Loan Notes and the Warrants are set out below.

The Company is pleased to confirm that it has also completed the construction phase of the bulk sampling plant and tantalum circuit. Commissioning has commenced, in accordance with the timetable detailed in the announcement dated 22 May 2023.

HIGHLIGHTS

·   Completion of construction, and commencement of commissioning, of the lithium bulk sampling plant;

·   Completion of construction, and commencement of commissioning, of the tantalum production circuit; and

·   £7.7 million (cUS$10 million) raised through the issuance of unsecured convertible Loan Notes. Money raised will be used for the expansion of the tin, tantalum, and lithium exploration and production circuits, in line with the Company's stated objectives, and for working capital purposes.

Anthony Viljoen, Chief Executive Officer, commented:

"The completion of the construction phase of the lithium bulk sampling facility is an important milestone for Andrada, as it allows the Company to advance its exciting lithium expansion programme. The team on the ground has worked extremely hard to achieve this goal and on behalf of the Board, I would like to extend our sincere appreciation.

"I am also pleased to announce the Company has raised £7.7million via the issue of Loan Notes. The raise demonstrates the strong support that Andrada has from its existing shareholders and other investors. The proceeds are to be used for ongoing capital expansion programmes related to the lithium and tantalum development. In addition, the funds will be used for working capital purposes as Andrada progresses its exploration programme, and commences a lithium feasibility study, to further consolidate its competitive lithium advantage within the Erongo region of Namibia. These developments underpin the Directors' belief that Andrada is well-positioned to be a significant supplier of technology metals globally and to be the first AIM-listed lithium producer."

RATIONALE FOR THE CONVERTIBLE LOAN NOTES

The Directors believe that the completion of the lithium bulk sampling plant and tantalum circuit construction are key milestones in Andrada's pathway to becoming a multi-technology-metal producer. The Directors also believe that the Loan Notes offer the least dilutive method for the Company to achieve its objectives. This is particularly important whilst the funding from the Development Bank of Namibia ("DBN") and a fund managed by Orion Resource Partners ("Orion") is being finalised.

As set out in the announcement of 23 June 2023, the funding from DBN is ring fenced to be applied to the continuous improvement of current plant operations. The Directors believe the DBN funding will be drawn down by the end of July 2023 or early August 2023. The Directors remain encouraged by the progress of implementing the Orion funding (see announcement dated 15 September 2022). The original timeline has extended due to negotiations with existing lenders. The Directors believe the £7.7million (c.US$10million) Loan Notes and the £4.4million (c.US$5.8 million) senior secured debt facility from DBN should be sufficient to cover all Andrada's financing requirements for the next 15 to 18 months.

In summary, while other financing packages are delayed, further funding is required to progress the Company's work programmes and projects at full pace. The net proceeds from the issue of the Loan Notes will be mainly utilised for funding the commissioning of the bulk sampling plant as well as the tantalum circuit. Other uses are on-going exploration, metallurgical testing programmes and working capital. In addition, the funds will enable the commencement of a lithium feasibility study which is fundamental to determining the detailed design of Andrada's next transformative growth.

SUMMARY OF THE CONVERTIBLE LOAN NOTE INSTRUMENT

As set out above, Andrada will issue 77 unsecured convertible Loan Notes of £100,000 each on 21 July 2023. The term of each Loan Note is three years up to 20 July 2026 and interest accrues at a rate of 12% per annum. The Loan Notes can be converted by mutual agreement into ordinary shares in the Company at the conversion price of 9.45pence ("p") being a 35% premium to the 7p reference price based on the 30-day Volume Weighted Average Price at the date of execution of the Loan Notes. The Company has the option to redeem the Loan Notes early but is required to pay an early redemption premium of 20% on the value of the loan notes being redeemed, in addition to the outstanding interest. If the Company triggers an early redemption the Loan Note holders also have the option to convert the Loan Notes into ordinary shares in the Company at the conversion price of 9.45p. There are certain other conditions in which the Loan Notes may be redeemed. The Loan Notes are not quoted.

SUMMARY OF THE WARRANTS

For every £1.00 of Loan Notes subscribed for, each Loan Noteholder(s) will receive two warrants. Each warrant enables the holder to subscribe for one Ordinary Share at a subscription price of 9.45p (being the same as the Conversion Price) (together, the "Warrants").  The Warrants are exercisable at any time from the date of issue for a period of two years. The total number of warrants issued by the Company to subscribers of the Loan Notes is 15,400,000.

Hannam & Partners acted as sole broker to the Company in relation to the Loan Notes. 

RELATED PARTY TRANSACTION

The Orange Trust (New York) (the "Orange Trust"), a shareholder of Andrada holding 15.62% of the issued share capital of the Company has subscribed for 40 Loan Notes for a total consideration of £4million (cUS$5million). In addition, as part of the transaction detailed above, the Orange Trust will receive warrants over 8,000,000 ordinary shares in the share capital of the Company. As the Orange Trust is a substantial shareholder of the Company, the participation by the Orange Trust in this transaction is deemed to be a related party transaction pursuant to AIM Rule 13 of the AIM Rules for Companies. The Company's Directors consider, having consulted with Andrada's Nominated Adviser, WH Ireland Limited, that the terms of this transaction are fair and reasonable insofar as the shareholders of the Company are concerned.

STRATEGIC PROCESS UPDATE

The strategic process for the appropriate partner for the lithium development is progressing as planned. Discussions with various interested parties are on-going and further updates will be provided in due course, as required.

About Andrada Mining Limited

Andrada Mining Limited has a vision to create a portfolio of globally significant, conflict-free, production and exploration assets. The Company's flagship asset is the Uis Mine in Namibia, formerly the world's largest hard-rock open cast tin mine.

Andrada has three mining licences namely;

·    ML134 on which Uis Mine is located.

·    ML133 (Nai Nais / Lithium Ridge).

·    ML129 (B1C1 / Spodumene Hill).

The main minerals in these mining licences are tin, lithium and tantalum. Additionally, the Company has an exploration licence EL5445 (Brandberg West) on which the main minerals are tin, copper and tungsten. The Company has set a mineral resource target of 200 Mt to be delineated within the next 5 years. The substantial mineral resource potential allows the Company to consider economies of scale.

Andrada is managed by a board of directors with extensive industry knowledge and a management team with deep commercial and technical skills. Furthermore, the Company is committed to the sustainable development of its operations and the growth of its business. This is demonstrated by how the leadership team places significant emphasis on creating value for the wider community, investors, and other key stakeholders. Andrada has established an environmental, social and governance system which has been implemented at all levels of the Company and aligns with international standards. [END]