23 April 2021

Red Emperor Resources NL

Quarterly Activities and Cashflow Report

For the Period ended 31 March 2021

The Board of Red Emperor Resources NL (ASX/AIM: RMP) ("RMP", "Red Emperor" or the "Company") provides the following commentary on its activities and an Appendix 5B for the quarter ended 31 March 2021.

Proposed Acquisition of Panton PGM Project

On 25 March 2021 Red Emperor announced that it intends to acquire Great Northern Palladium Pty Ltd ("GNP") which owns 80%, and holds an option over the remaining 20%, of Panton Sill Pty Ltd, the holder of the Panton Platinum Group Metals ("PGM") Project (the "Panton PGM Project" or "Project") in the Kimberley region of Western Australia (the "Proposed Acquisition"). Details of the Proposed Acquisition are set out in such announcement, however the key transaction highlights include:

·    All equity consideration of A$17.5m (shares and options) to be paid to GNP's shareholders

·    Pre-existing Independent JORC(2012) Mineral Resource Estimate ("MRE")* of:

o   14.3Mt @ 2.39g/t Pd, 2.19g/t Pt, 0.27% Ni for 2.06Moz Pd/Pt

·    Former Stillwater Mining Company Managing Director, Mick McMullen, to be appointed as a strategic adviser and experienced company director, Justin Tremain, to join the Board, both on completion of the Proposed Acquisition

·    Subsequent to the quarter end, on 20 April 2021, Red Emperor also announced the proposed appointments of Allan Mulligan and Robert Mosig, as Proposed Non-Executive Technical Director and Proposed Non-Executive Director respectively, and Shane Hibbird as Consulting Geologist, all on completion of the Proposed Acquisition

·    MRE outcrops at surface and remains OPEN, along strike and at depth

·    MRE covers approximately 3.5 kilometres of the circa 12 kilometres of mapped outcropping PGM-bearing chromite reefs (remaining 8.5km relatively untested). No significant exploration performed for almost 20 years

·    Located in 'Tier One' mining jurisdiction of Western Australia

·    Project benefits from having a higher palladium grade relative to platinum grade, at a time of record palladium prices (c.US$2,400/ounce)

·    Historic studies on the Panton PGM Project undertaken when prevailing palladium prices were much lower

·    Step-out drilling to test for extensions to the MRE to commence upon completion of the Proposed Acquisition, along with metallurgical and mining studies

·    Located on granted mining leases with excellent infrastructure including nearby (c.1 kilometre away) sealed highway and an existing exploration decline

·    A$10M equity raising to be undertaken at a price of A$0.10 per share on a post consolidated basis (14:100 consolidation) to provide strong financial position from which to advance the Panton PGM Project

·    Enterprise value of approximately A$26M at the fund raising price with cash of approximately A$9M upon successful completion of the Proposed Acquisition and associated fundraising 

·    The Company will seek shareholder approval for the Proposed Acquisition under ASX Listing Rule 11.1.2 and re-comply with Chapters 1 and 2 of the ASX Listing Rules

As set out in the Company's announcement of 25 March 2021, the Company has been evaluating structuring options with its Nominated Adviser from a UK perspective and in light of certain differences between the requirements of the ASX Listing Rules and the AIM Rules for Companies ("AIM Rules") and the general chronology, processes and requirements of the two stock exchanges, the Board considers it to be in the best interests of Red Emperor and its shareholders as a whole to seek cancellation of the admission to trading of the Company's ordinary shares on AIM (the "Cancellation") in order to facilitate and ensure the timely implementation of the Proposed Acquisition and associated fundraising in Australia on the ASX on the commercial terms and timeframe agreed with the major shareholders of GNP.

Accordingly, as announced on 20 April 2021, Cancellation is scheduled to occur at 7.00 a.m. (London time) on 19 May 2021 and in accordance with the guidance notes to AIM Rule 41, shareholder consent in a general meeting of the Company is not required as the Company is maintaining its listing on ASX, being an AIM Designated Market as defined in the AIM Rules. It is expected that trading on AIM will remain suspended until the Cancellation.  It is currently intended that re-admission to trading on AIM for the enlarged entity will then be sought as soon as practicable (targeting July 2021) following successful completion of the Proposed Acquisition and capital raising on the ASX in order to restore the enlarged entity's dual listing at the earliest opportunity. There can be no guarantee that the Company will be able to complete the Proposed Acquisition or any alternative transaction and consequently be re-admitted to trading on AIM.   

Financial Commentary

The Quarterly Cashflow Report (Appendix 5B) for the period ending 31 March 2021 provides an overview of the Company's financial activities and can be viewed at the following link: http://www.rns-pdf.londonstockexchange.com/rns/3786W_1-2021-4-22.pdf. The Company is in a strong financial position with A$3.98 million in cash at the end of the quarter. This will be sufficient to fund corporate costs well into 2021 and also facilitate the completion of the Proposed Acquisition and satisfaction of the costs associated with the re-compliance with Chapters 1 and 2 of the ASX Listing Rules.

Payments for administration and corporate costs amounted to A$249k and related to costs incurred in respect of and associated with directors' fees, listing and compliance, legal and consulting fees. The aggregate amount of payments to related parties and their associates included in the quarter's cash flows from operating activities was approximately A$72.5k (please refer to Table 1 below).

For further information, please visit www.redemperorresources.com or contact:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018. 

* - The Company announced the Mineral Resource Estimate in its announcement entitled "Proposed Acquisition of +2Moz Panton PGM Project" on 25 March 2021, which included the Competent Person statements and consents required by Listing Rule 5.22.  The Company is not aware of any new information that materially affects the information included in that announcement, and all material assumptions and technical parameters underpinning the estimate in that announcement continue to apply and have not materially changed.

Table 1: Payments to Related Parties of the Entity and their Associates