SHAREHOLDER UPDATE11 July 2023Key Highlights:1. Implementation...

SHAREHOLDER UPDATE11 July 2023Key Highlights:
1. Implementation Agreement signed with Medcaw Investments a London Stock Exchange shell company.
2. Completion of a US$25 million funding facility by way of a secured convertible note which is convertible at same price as the series B (AU$1.50). Attaching to the US$25 million funding facility is an equity line of credit of up to US$100 million which is to be made available to the Company on an as needs basis once the Company has completed its listing.
3. Operations update as the Company transitions to production.
4. Initial mine studies completed.
5. Marketing initiatives.
6. Appointment of CFO.
7. Cash Reserves.

1. Implementation Agreement signed with Medcaw Investments a London Stock Exchange shell companyKey points:• Implementation Agreement allows AML to merge, raise funds and list on the standard segment of the London Stock Exchange• Deal metrics with Medcaw Investments (ShellCo) values AML at AU$1.50 per share (current Series B fund raise)• Significant milestone in AML’s finance and listing strategyAbyssinian Metals Limited (AML or Company) has on 7 July 2023 entered into a conditional implementation agreement with Medcaw Investments Limited, a cash shell listed on the standard segment of the London Stock Exchange (“Medcaw”).The proposed transaction with Medcaw is effectively a reverse listing onto the London Stock Exchange. Further details of the proposed transaction will be published to shareholders under separate cover.With respect to the “Reverse Strategy”, we are pleased to report that significant support for the strategy has been obtained and two internationally recognised investment banks specialising in the resources sector have been mandated to work with the Company on the listing strategy and future financing requirements.The Proposed Transaction outlined with Medcaw is a significant milestone within the AML financing and listing strategy, and is viewed as providing the platform to the enlarged shareholder base for exposure to capital appreciation and liquidity as AML builds out its Kenticha lithium production profile within the on-going electric vehicle and battery revolution.

22. Financing ActivitiesThe Company has raised circa A$6 million to date via the Series B fundraise at AU$1.50/share mainly from US and European investors and continues to raise funds under the Term Sheet. Accruing from the Series B activities, the Company is pleased to announce that it has also entered into a US$25 million funding package with a New York based institutional funder. The funding package is by way of a secured convertible note agreement.
Following managements very successful meetings at the Fastmarket lithium conference held on 13-15 June, meetings were then held in New York with representatives of a very significant US Family Office which are very keen on taking a strategic investment in AML.
The Family Office is well known, and its founder was previously the major shareholder and CEO of a significant US funds management group with Funds Under Management of US$500 billion. The Family office is very keen on pursuing the downstream opportunities together with AML in the US and is extremely well connected with automotive manufacturers and within US Government responsible for funding via the Inflation Reduction Act (US).
AML is progressing discussions and is confident a Letter of Intent can be signed in the coming weeks.

33. Operations update4Geology and resource upgradeNumerous work streams and activities have been carried out at Kenticha since the issuance of the exploration license renewal in January 2023 and upon securing site access.
The key initiatives are as follows:
• The generation of a detailed (1 metre contour interval) digital terrain model (DTM) for the Kenticha exploration license area to be used for exploration and mine planning purposes, and as a surface for Mineral Resource estimation. The DTM was constructed by East View Geospatial using high resolution satellite imagery (stereographic pairs) derived from the Maxar satellite constellation.
• Completing a detailed inventory of historical diamond drill core from Kenticha stored in the nearby town of Shakiso with the involvement of independent geological specialists.
• Collection of two bulk samples of pegmatitie core material for metallurgical test work, and export of the sample material to a testing facility in South Africa for processing. Results received to date point to a Spodumene Concentrate 5.5% product.In addition, assaying of historical pulps (historical laboratory samples from 2015 drilling campaign) that have been flown to Perth and re-assayed by Nagrom has indicated that the MRE grade could be underestimated by up to 25% Li2O.The revised MRE with increased grade and tonnage is likely to be released by CSA Global once works has been completed reviewing historical pulps. This will be an important milestone for the Company so as to further demonstrate that this is a “tier 1” asset.DrillingOur drilling contractor is at site and has begun the diamond drilling program at the southern pit area to infill and extend the existing Mineral Resource Estimate completed in July 2022 by CSA Global.Drilling is planned in several phases including:
• Phase 1: 25 Priority 1 holes targeting outcropping pegmatite at the southern pit target (~1,520m) referred to as the “Toe area” which will form the initial starter pit.• Phase 2: 15 holes (~3,270m) plus 7 twin holes (~1,141m required by CSA).
• Phase 3: 11 holes (~2,725m).
• Phase 4: 11 holes (~3,010m).5The following specific Mineral Resource goals in the southern pit area are:
• First update to the Inferred Mineral Resource after completion of southern pit (“Toe Area”) target holes (Phase 1, 25 drillholes) – the Mineral Resource will remain in the Inferred category (until twins drilling confirms additional tonnage and updated grade distribution).
• Upgrade of the Inferred Mineral Resource to an Indicated (+/- Measured) Mineral Resource after completion of Phase 2 drilling and twin holes.
• Second upgrade of the Mineral Resource after Phase 3 and 4 drilling is completed with additional Indicated +/- Measured resources.
• Drilling to update the MRE to an Indicated JORC Resource status commenced in May 2023 following the award of the Drilling Contract and mobilization of a drill rig and consumables to site.
• The drilling to date has been exceptionally successful with core indicating increased thicknesses above the Inferred Resource estimates.Infill drilling at the southern pitSite ServicesNumerous work programs are underway at Kenticha primarily designed for the arrival of the Dense Medium Separation (DMS) processing plants in the next few months. This includes the following:
• Established a 30-person tented camp at Kenticha for geological, technical, and mine construction staff.6Kenticha staff camp
• Vendors were selected to provide mine site laboratory and on-site medical facilities at Kenticha.
• Preparation of site works for the arrival of DMS plants.• Rehabilitation of terrace embankments with stone and concrete batching, access roads have been constructed and compact materials have been installed, 420m x 1.5m storm drains with stone for water drainage, 15,000m2 of backfill compact materials have been installed on roads and terrace stabilization. Kenticha Mining is currently constructing a fence around the camp and processing site area. This is a major undertaking – installation of the fence poles and crossbars has been completed, with the next steps being the wire mesh, gates, and guard posts.Construction of perimeter fencing around mining services & processing areas7Near Term Production - DMS plantThe near-term production strategy includes the manufacture and delivery of Dense Medium Separation (DMS) plants built in South Africa.The Stage 1(a) DMS plants – 20tph and 50tph plants have been constructed in South Africa and are currently being packed up for shipment to Ethiopia. The Company has received a shipment date of 29 July 2023 and has been advised that shipment will take between 6 to 8 weeks at sea. We therefore expect that commissioning of the 20tph plant will commence in November 2023, and aim for this plant to be operational at the end of 2023.20tph DMS plant8

4. MiningInitial Mine Studies have commenced using CSA Global (Perth) mining engineering division. Conceptual open pit mine layout is as below.Pit Design in Plan ViewA-A' Cross Section Showing Pit Stages9Stage 1 as outlined on the above cross section is known as the Toe Area. This contains little overburden (waste rock) with pegmatitie outcropping across the exposed floor of the initial pit.SecurityThe Ethiopian government has classified certain mining projects as assets of national significance and as such they will be supported by presence of the Federal Defence Force (FDF) and they have now been at the Kenticha Lithium Project area since December 2022. Currently there are 65 FDF personnel on the ground including senior commanders. More personnel will be added as the mine goes into production.Community supportOur focus for the Community has been delivery of drinking water to the people of Kenticha and outlying areas where water has been an essential requirement for communities. Our 60kt water trucks have now delivered 7,702,000.00 litres to date.Road Construction has also been part of our community service between the varies communities, and essential roads to Clinics and Government establishments have also been completed. We have recently repaired 6.2 kms of road between Kenticha Mine and 3 villages, where the road was badly damaged due to heavy rainfall this year, and this provided a vital link between these villages and the main town of Shakiso.

5. Marketing initiativesAML is now active in its discussions with various parties in the EV supply chain as have been set out in this newsletter. In the last few months AML has been introducing the Kenticha Lithium Project to several new parties and to the public at large. As a result, management has been present at conferences and will continue in this vein as it seeks in the medium term to be in the top quartile of the lithium spodumene producers globally.Fastmarkets Lithium conference – 20-22 June – Las Vegas, USAThere was over 1100 delegates which was double than the previous year. Unlike a traditional mining conference this was a conference that was attended by the entire EV battery supply chain. From automotive manufactures including GM, Ford, Tesla to the battery manufacturers and as importantly the lithium hydroxide and carbonate suppliers. Also in attendance were the US Government who take a very active role in the sector having deployed funding directly to miners in the battery supply chain under the Inflation Reduction Act (US).AML had very productive meetings including with potential off-take partners and downstream strategics. What was very clear that those companies seeking spodumene concentrate are looking for large tonnage and multi decade supply which is what the Kenticha project has in spades.10The Fastmarkets conference summarised by the organisers and was integral to some of the Company’s meetings with third parties with some key topics as follows:• The importance of strategic partnerships for a sustainable supply chain and battery material security.• Supply chain integration hurdles and the impact of global policies and regulations.• The evolution of the supply chain with automakers and OEMs moving up the chain and miners moving to midstream processing.• An increased focus on a responsible and sustainable battery material supply.

6. Tristan Jenkins appointed Chief Financial OfficerTristan was recently appointed as CFO of AML and will be based in London. Tristan has an excellent pedigree to hold down our finance role with over 20 years of experience and having previously worked in the resources industry with E.ON and Shell and in particular, with Ophir Energy PLC, a FTSE 250 company based in London who had operations throughout Africa. Tristan is well equipped to lead our developing finance functions particularly as we roll out our financial processes and procedures in Ethiopia. Tristan is a certified accountant (Australia) and has a Bachelor of Commerce (Accounting & Finance, Economics) from Griffith University. Tristan will be working alongside the finance team in Perth and Ethiopia while also supporting the corporate finance function in London.

7. Cash ReservesThe company had cash reserves of US$1.23M as at 7th July 2023. In addition, it has Convertible Notes and additional lines of finance of US$22M.