25 Nov 2021

Ardmore Phosphate Project - Extension Fee Settlement

1 | P a g e ASX ANNOUNCEMENT – 2 5 NOVEMBER 2021 ARDMORE PHOSPHATE PROJECT – EXTENSION FEE SETTLEMENT Centrex Metals Limited (ASX: CXM) (“Company”) is pleased to announce that it s 100% owned subsidiary Agriflex Pty Ltd ( Agriflex ) has reached a settlement with Southern Cross Fertilisers Pty Ltd (SCF) over their extension fee claim under the Royalty Deed . As part of the extension fee settlement , SCF has agreed to withdraw their invoice for a $2m Extension Fee and extend the e xtension p eriod under the Royalty Deed by a further 12 months to 27 June 2022. In return , Agriflex h as agreed to pay SCF a A $1m settlement amount and increase the Royalty payable to SCF under the Royalty Deed from 3% to 3.5% except during calculation periods where the average Morocco 7 2 % BPL FOB phosphate benchmark is less than US$150 per tonne where the royalty will remain at 3% . In addition , Agrif l ex and SCF have agreed to increase SCF ’s first right of refusal over Ardmore’s available p roduction un der the Royalty Deed to 30 % from the original 20% . Significantly , t he parties have also agree d t o negotiate with a view to SCF agreeing to the future subordination of its security interest to a financier on the terms acceptable to SCF, in return for Agriflex providing and maintaining an unconditional A$15m Bank Guarantee in favour of SCF as security for any future payment obligations of Agriflex to SCF under the Royalty Deed, in addition to SCF retaining a position as second ranking mortgage holder. Centrex Metals ’ Managing Director said : “ Th is settlement avoid s the expense of a lengthy legal dispute. The increased offtake , should the first right of refusal be exercised, is a gre a t outcome for Agriflex. SCF and its owner I ncitec Pivot Limited are Australia’s largest consumers of Phosphate Rock . We look forward to proving Agriflex a reliable supplier of high grade phosphate rock. With th is agreement and the recent Samsung agreement, Agriflex now has 50% of its initial production reserved subjec t to a first right of refusal . Significantly, with a final investment decision expected in October 2022, any agreement reached with SCF for the future subordination of SCF ’s security interest to a future project financier will assist in our efforts to secure a funding package for Agriflex’s planned 800,000 tpa production plant .” This ASX announcement has been approved and authorised for release by the Board of the Company. F or further information please contact: Robert Mencel Jonathan Lindh Managing Director Company Secretary Centrex Metals Limited Centrex Metals Limited Ph (08) 8213 3100 Ph (08) 8213 3100 2 | P a g e For media enquiries, please contact: Grant Law Grant Law Public Relations Ph (61) 488 518 414 Email - grant@grantlaw.com.au
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