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SunMirror to acquire Latittude 66 Cobalt Oy

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Global Mining Review,

SunMirror AG, an exploration company specialising in mineral resources such as gold, lithium, cobalt and other metals and minerals powering future industries, continues to successfully pursue its expansion strategy during the COVID-19 pandemic.

The company has announced that it has, via its wholly owned subsidiary, SunMirror Luxembourg S.A. (SM S.A.), agreed to acquire Finnish cobalt company Latitude 66 Cobalt Oy (Latitude 66) with focus on exploration and mine development with its business operations located in Finland.

Founded four years ago, Latitude 66 is one of the leading explorers of cobalt in Europe and controls the largest exploration tenement package of any single company in Finland, currently in excess of 9000 km2. Latitude 66's most advanced mine development project is the fourth largest known cobalt deposit in the EU and the second largest not yet in production. In addition, Latitude 66 has an extensive exploration portfolio with over 100 targets identified for further exploration.

The expected purchase price payable to the Parent will be €45 million, payable in cash on closing, and SM S.A. has agreed to a 2% net smelter royalty on future production. The Board of Directors of SunMirror and the Board of Directors of Latitude 66's parent company Latitude 66 Cobalt Limited (parent) have already approved the sale of Latitude 66 to SM S.A. The conditional binding agreement in respect of the acquisition of Latitude 66 contains an alternative completion structure which, subject to satisfaction of certain conditions, provides SM S.A. with the ability to propose a takeover offer of the parent in accordance with applicable Australian corporations laws. The completion of the acquisition of Latitude 66, or a takeover bid if one is subsequently announced by SM S.A., is subject to completion by SunMirror of a capital raising of €70 million and other customary conditions.

Current resource estimate for Latitude 66's K Camp project according to mineral resource classification JORC is 16 490 t cobalt and 725 000 oz gold contained. The average grade for cobalt is 0.064%, which is the highest of the five largest known cobalt resources in the EU, and the average gold grade is 2.7 g/t. Finland is the largest refiner of cobalt and nickel in Europe and the second largest of cobalt in the world after China, which has a market share of around 80%. Furthermore, Finland is currently the only country in the EU with mines producing cobalt today. A fully European supply chain for batteries will significantly reduce carbon dioxide and other emissions in the manufacturing process of electric vehicles and other batteries. Domestic supply of key battery minerals will significantly reduce strategic and geopolitical risks for European companies.

SunMirror focuses on exploration and mine developments in areas known for their high geological potential and where some of the world's most productive mines and mineral deposits are located. SunMirror, which has prospective resource projects in Australia, with the acquisition of Latitude 66 holds a highly prospective portfolio of battery metals projects in the world's premier mining jurisdictions. SunMirror is targeting to supply the European economy with cobalt and other raw materials and metals such as lithium from sustainable, stable and legally secure sources, while complying with laws, regulations and environmental, social and governance (ESG) requirements.

The EU recently affirmed, as part of the launch of its European Green Deal, which presents Europe's new growth strategy and sets out a roadmap for achieving climate neutrality by 2050, that not having access to critical raw materials or being overly dependent on individual suppliers would undermine Europe's ability to become an industrial leader in new technologies. In order to achieve the EU's climate neutrality goal, it is important not to create a new dependency of these critical raw materials on uncertain third countries in terms of legal certainty, working conditions and environmental standards.

Dr Heinz Rudolf Kubli, Member of the Board of Directors of SunMirror AG, said: “It is more important than ever for European industry to have direct access to raw materials for future technologies with independent supply chains. With access to highly attractive cobalt projects in Finland, SunMirror can meet the EU's requirements for critical raw materials and contribute raw material security. Through the acquisition of Latitude 66 SunMirror is excellently positioned to provide raw materials and is thus a strategic partner for the digital transition in Europe. Our aim is to provide crucial raw materials like cobalt for battery tech, which are indispensable for the implementation of next-generation electro-mobility, and the expansion of renewable energies. We are differentiated by a transparent, traceable and sustainable framework. As a raw material supplier, we want to make our contribution to decarbonising the entire value chain, responsibly – ahead of industry peers.”

Latitude 66 is a member of the Finnish government project ‘BATTRACE’. This initiative is dedicated to the traceability of battery materials and the production processes used to extract metals from ores and refine them into high-quality raw materials for battery material manufacturers. SunMirror is also developing a blockchain technology solution for enhanced traceability. This will transparently document the source of raw materials and the conditions of the extraction process in a tamper-proof manner and be made available to third parties for the calculation of ESG criteria. The traceability of the raw materials ensures that the extraction of the materials is ESG-compliant and not at the expense of environmental standards, labour law and conditions or through illegal over-exploitation.

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