20th June 2018 Marindi enters in-principle agreement with Pacton Gold for the sale of the Bellary Dome conglomerate project, Pilbara region Transaction to be structured through cash and share issues which could see Marindi emerge with a 9.9% non-diluting stake in new TSX-V listed, Pilbara-focused gold explorer HIGHLIGHTS • Marindi enters into a Letter of Intent (LOI) for the sale of the Bellary Dome Conglomerate Gold Project to Pacton Gold (TSX-V: PAC), subject to (amongst other conditions) agreement of definitive sale documentation • Consideration to include an upfront payment of C$2m cash plus 10.098m Pacton shares • This will be equivalent to a 9.9% fully-diluted stake in Pacton (current market cap: ~C$70m) • Subsequent milestone payments totalling C$2m worth of Pacton shares 12 and 18 months will be payable after completion • The consideration will include an anti-dilution right on capital raises up to C$10 million, allowing Marindi to maintain its 9.9% interest at no cost to Marindi • Proposed transaction will be consistent with Marindi’s focus on its Forrestania Lithium-Gold Project in WA, where a major drilling campaign is currently underway Marindi Metals Limited (ASX: MZN; “Marindi”) is pleased to advise that it has entered into a Letter of Intent (LOI) in relation to the sale of its Bellary Dome Conglomerate Gold Project in the Pilbara to Canadian-listed Pacton Gold (TSX-V: PAC; “Pacton”). The proposed transaction has the potential to crystallise significant value for Marindi over the next two years. Pacton is a well-financed Canadian junior with key strategic partners focused on the exploration and development of conglomerate-hosted gold properties in the Pilbara region of Western Australia. The Company recently raised approximately C$5 million and controls the third largest conglomerate-hosted gold property in the Pilbara. Under the LOI the two companies have agreed to a 10-day exclusivity period in which Pacton intends to complete due diligence and finalise a binding definitive Tenement Sale Agreement for the Bellary Dome Project. The key terms of the LOI which are expected to underpin the definitive Tenement Sale Agreement include the payment of C$2 million in cash and the issue of 10,098,000 common shares in Pacton, equivalent to a fully-diluted stake of ~9.9%. The shares will be subject to a four-month escrow period. In addition, Pacton must also pay C$1 million or issue shares equal to that amount both on the 12-month anniversary of the completion of the agreement and again on the 18-month anniversary of the completion of the agreement. If there is a “change of control” of Pacton, as defined in the agreement, the Pacton share issuances will be accelerated and will be issued before the change of control. Page 2 of 2 Pacton has also agreed to grant an anti-dilution right to Marindi on capital raises up to C$10 million, such that Pacton will cause Marindi’s interest to be maintained at 9.9%, at no cost to Marindi. Marindi’s Managing Director, Simon Lawson, said the Company was pleased to be working with a dynamic and focused conglomerate gold explorer in the Pilbara to finalise an agreement with the potential to deliver significant value for both parties. “The deal with Pacton has been structured to allow us to realise a significant return from the pioneering work which the Marindi team has put into the Bellary Dome conglomerate gold project over the past nine months, via an upfront cash payment, through a cornerstone non-diluting 9.9% interest in Pacton and through milestone payments in Pacton shares or cash. “We believe that Pacton has the funding, the focus, the backing and the team to maximise the value of the Bellary Dome Project by drawing on their knowledge of the conglomerate gold potential across the Pilbara. “If the transaction is completed, Marindi shareholders will crystallise an immediate benefit in the form of cash that can be applied to our lithium and gold exploration programs at Forrestania, while retaining exposure to the future upside at Bellary Dome through our holding in Pacton. “This is consistent with our focus on discovering and developing large-scale lithium and gold deposits at Forrestania, where we have a major drilling program currently underway adjacent to the world-class Kidman Resources/SQM lithium deposits.” Simon Lawson Managing Director and CEO
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