Ann: Term sheet executed for spin out of nickel assets, page-4

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Metals X has signed a binding term sheet with NICO Resources for the sale and spin-off of its nickel assets, allowing its current shareholders to retain an interest in the assets through the initial public offering of NICO.The terms sheet provides for the sale of all of the shares in Metals Exploration, currently a 100 per cent owned subsidiary of Metals X, to NICO with eligible Metals X shareholders to receive a direct holding in NICO shares so as to spin out the nickel assets from Metals X.

NICO is set to undertake an initial public offering of its shares and apply for listing on the ASX. NICO will raise at least $8 million by issuing 20 million shares to Metals X at 20¢ a share and a further 20 million shares under the IPO.Immediately prior to, or simultaneously with, the IPO, Metals X proposes to conduct an in specie distribution of 25,000,000 shares in NICO it receives as sale consideration to eligible Metals X shareholders, being approximately 35 per cent of NICO’s total issued share capital on a post-IPO undiluted basis, subject to the approval of Metals X shareholders.

Metals X will retain the remainder of the NICO shares it obtains under the transaction and will directly hold approximately 29 per cent of NICO’s total issued share capital on a post-IPO undiluted basis.The transaction remains subject to a number of conditions.