Sarama Announces Equity Placement of up to A$2M and Issue of Equity for Debt

Sarama Resources Ltd. (“Sarama” or the “Company”) (ASX:SRR, TSXV:SWA) is pleased to announce it has received binding commitments to undertake a A$2 million (before costs) equity placement (the “Placement”).

Funds raised will be used to undertake exploration activities, general administration and for general working capital purposes. The Placement was well supported by existing shareholders and professional and sophisticated investors.

The Placement will comprise the issue of up to 66,666,666 Chess Depository Interests (“CDIs”) at an issue price of A$0.03 per CDI to raise gross proceeds of up to A$2 million. The issue price represents a ~15% discount to Sarama’s 10-day VWAP and a 21% discount to the last traded CDI price on the Australian Securities Exchange (“ASX”) on Monday, 18 November 2024 of A$0.038 and a ~24% discount to Sarama’s 10-day VWAP and a 7% discount to the last traded share price on the TSX Venture Exchange (“TSXV”) on Friday, 15 November 2024 of C$0.03. Each new CDI issued under the Placement will rank equally with existing CDIs on issue and each CDI will represent a beneficial interest in 1 common share of the Company. The Placement CDIs will be issued pursuant to the shareholder approval obtained at the annual general meeting.

Subject to the receipt of shareholder approval, Sarama will issue 1 free attaching unlisted option (“Placement Option”) for every 4 new CDIs issued pursuant to the Placement. Each Placement Option will be exercisable at A$0.09 and will expire on 30 November 2028.

Australian resources brokers, Ventnor Securities Pty Ltd and RM Capital will act as Advisor and Lead Manager for the Placement and will receive up to 14,000,000 broker options, depending on quantum of funds raised, (“Broker Options”) at an exercise price of A$0.09 each and expiring on 30 November 2028. Ventnor Securities Pty Ltd will also receive a capital raising fee of 6% of funds raised. The issue of the Broker Options is subject to shareholder approval.

The Placement is comprised of two tranches:

• Tranche 1 consists of 66,666,666 new CDIs which will be issued pursuant to the approval granted by shareholders at the annual general meeting held on 11 September 2024. The Company expects to complete allotment of the new CDIs under Tranche 1 by 27 November 2024.
• Tranche 2 consists of up to 16,666,666 Placement Options and up to 14,000,000 Broker Options which are subject to shareholder approval at a special meeting of shareholders anticipated to be held in late January 2025 (“Special Meeting”). No funds will be received from Tranche 2.

The Placement remains subject to the approval of the TSXV.

Members of Sarama’s Board and Management do not intend to subscribe for any CDIs in the Placement, however concurrent with the Placement the Company’s executives and non-executive directors have agreed to receive a portion of their deferred salaries and director fees, in an aggregate amount of A$393,981.18 in common shares or CDIs of the Company.

In September 2023, the Company’s executives and non-executive directors agreed to suspend the payment of salaries and fees to ensure the Company had sufficient financial resources to work through the period of uncertainty created by the illegal withdrawal of the Company’s rights to the Tankoro 2 exploration permit in August 2023.

The Company intends to issue shares (CDIs) and warrants (options) on the same terms as the Placement in part settlement of deferred executive salaries and director fees, subject to the ASX Listing Rules and the prior approval of the TSXV.

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