Mr. Matthew Allas reports

CANADIAN MANGANESE PROVIDES UPDATE ON ROYALTY FINANCING AND ANNOUNCES RESULTS OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS AND APPOINTMENT OF NEW BOARD CHAIR

Canadian Manganese Company Inc. has provided an update on the status of its previously announced gross revenue royalty and announce the results of voting at its annual general and special meeting of shareholders which was held on June 25, 2024. Full details of all the voting results for the 2024 meeting are available on SEDAR+.

Update on royalty financing

On April 2, 2024, the company agreed to grant a gross revenue royalty (GRR) on the Woodstock project to Leventis Capital Pte Ltd. The company initially contemplated the purchase by Leventis of a 3-per-cent GRR in one transaction for $15-million (U.S.), which was subsequently amended to two tranches whereby Leventis would first purchase a 1.5-per-cent GRR for $7.5-million (U.S.) and then purchase an additional 1.5-per-cent GRR for $7.5-million (U.S.) at a later date. The company and Leventis have now agreed that the royalty will be completed in one single transaction of a 2-per-cent GRR for $10-million (U.S.).

GRR repurchase terms

Canadian Manganese will have the option to buy back the 2-per-cent GRR at any time by paying Leventis $15-million (U.S.). To preserve the option, an additional cash payment will be made by Canadian Manganese to Leventis, if the option is not exercised on or before Nov. 30, 2027, and each three-year anniversary of such date. The amount of the payment to be made will be calculated based on a formula that provides notional interest on the purchase price at a rate of 10 per cent per annum.

If the option is not exercised on or before Nov. 30, 2027, the payment that would be owing to preserve the option is $3.31-million (U.S.), payable by March 30, 2028. If the option is not exercised on or before Nov. 30, 2030, the payment that would be owing to preserve the option would be a further $4,405,610 (U.S.), payable by March 30, 2031. The payments due each third March 30 to preserve the option will continue to be payable until the option is exercised. If the payments are not made, Canadian Manganese would lose the option to repurchase the GRR for $15-million (U.S.).

Full details of the GRR and the formula for the foregoing option payments will be available in the royalty agreement, a copy of which will be filed under the company's profile on SEDAR+ following completion of the sale of the GRR.

Closing of the 2-per-cent GRR for $10-million (U.S.) is now expected to occur by Nov. 28, 2024. The company intends to repay its outstanding $5-million principal senior secured convertible debenture, as well as accrued interest and early repayment fees, immediately upon closing of the above gross revenue royalty.

AGM results and appointment of new board chair

A total of 56,916,474 common shares, representing 38.96 per cent of the votes attached to all outstanding shares as at the record date for the meeting, were represented at the meeting.

The nominees for directors were elected as set out in the attached table.

The chairman of the meeting, John Kearney, disallowed proxies representing 41,907,114 common shares. Such proxies were withheld from voting in respect of Mr. Kearney's election as a director but were voted for the election of all other nominees. Mr. Kearney disallowed such proxies based on his sole determination as chairman of the meeting and based upon his own personal legal advice that they were illegally solicited by certain directors and others acting as a group. This determination to disallow these proxies was made by Mr. Kearney despite the objections of Matthew Allas, chief executive officer and director, who was in attendance at the meeting.

At the meeting, shareholders also approved (i) the company's stock option plan as amended to increase the number of common shares reserved for issuance from 10 per cent to 20 per cent of the outstanding common shares from time to time, (ii) all unallocated options under the option plan, (iii) the reappointment of McGovern Hurley LLP as auditor of the company for the ensuing year, (iv) the approval of the company's restricted share unit plan as amended to increase the number of common shares reserved for issuance from 3 per cent to 5 per cent of the outstanding common shares from time to time, and (v) the amendment of the terms of 333,333 common share purchase warrants exercisable at 27 cents per share to extend the expiry date from April 29, 2024, to April 29, 2027.

Appointment of a new chairman

The company also announced that on July 4, 2024, the board of directors appointed John Allan as the chair of the board of directors. Mr. Kearney continues as a director.

About Canadian Manganese Company Inc.

Canadian Manganese is a Canadian critical mineral development company aiming to become a supplier of high-purity manganese metal products for the rechargeable battery industry. Canadian Manganese holds the Woodstock project in New Brunswick.

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