Trading Update and Loan Facility

Kropz Plc (AIM: KRPZ), an emerging African phosphate producer and developer, announces a trading update for the period to 31 March 2025 and that Kropz Elandsfontein (Pty) Ltd ("Elandsfontein") and ARC Fund ("ARC") (together the "Parties") have agreed to a ZAR 130 million (approximately US$ 6.7 million) loan facility (the "Loan"), which constitutes a related party transaction. The Company also announces agreement of a legal stay on the claim which Kropz and its subsidiary company, Cominco Resources Limited ("Cominco"), are defendants (the "Claim").

Trading Update

Elandsfontein produced 77,318 tonnes of phosphate concentrate during Q1 2025 and had sales of 88,554 tonnes of phosphate concentrate over the same period. This included a record production month of 33,000 tonnes of phosphate concentrate in January 2025.

However, the mine is still in its trial production phase and the Company has encountered some challenges during its progression to full production. Elandsfontein produced 28,000 tonnes of phosphate concentrate during April 2025 with no sales in the month due to one sale being delayed due to the receiving vessel arriving at the port in early May 2025. As noted in the Company's announcement on 26 February 2025, the Company is undergoing a number of projects to address these challenges, which has resulted in an increase in capital expenditure requirements at Elandsfontein. This has resulted in a further funding requirement of ZAR 130 million (approximately US$ 6.7 million).

The Loan

Elandsfontein and ARC have agreed pending formal execution terms for a loan facility of ZAR 130 million (approximately US$ 6.7 million) where interest is payable on the Loan at the South African prime overdraft interest rate plus 6%, nominal per annum and compounded monthly. The Loan is repayable on the earlier of a date as agreed between the Parties or on demand from ARC, on no less than 15 business days' notice. There is no fixed term.

Associated with the Loan, a Guarantee, Security Cession and Pledge by Kropz SA (Pty) Ltd was issued in favour of ARC and pending formal execution a Limited Indemnity, Security Cession and Pledge by Kropz Plc will be issued in favour of ARC for all current and future loan facilities made to Elandsfontein.

The Loan will be used by Elandsfontein to fund its cashflow and operational expenditure needs.

Of the Loan facility, ZAR 50 million was drawn down on 25 April 2025 ("Tranche 1") and ZAR 30 million was drawn down on 9 May 2025 ("Tranche 2").

Related Party Transaction

The Loan, Tranche 1 and Tranche 2 (the "Transactions") are related party transactions pursuant to Rule 13 of the AIM Rules for Companies. Gerrit Duminy, a director of the Company, is the representative of ARC and has not been involved in the approval of the Transactions by the Company's board. The directors of the Company, who are considered independent for the purposes of the Transactions, having consulted with the Company's nominated adviser, consider the terms of the Transactions at the time they were entered to be fair and reasonable insofar as the Company's shareholders are concerned.

Legal Claim Update

On 26 February 2025, Kropz announced that Teh Hong Eng Investments Holding Limited ("THE") and Meridian Investment Group PTE. Limited ("Meridian") had served Particulars of Claim in litigation in the English High Court to which Kropz and its subsidiary company, Cominco, are defendants. The litigation relates to an alleged breach of THE's right of first refusal to acquire Cominco shares at the time of Kropz's offer to Cominco's shareholders in November 2018 which resulted in the acquisition by Kropz of the entire issued and to be issued share capital of Cominco, including the acceptance of the offer by THE and Meridian as shareholders of Cominco.

Kropz has agreed a legal stay with THE and Meridian in respect of the litigation. The legal stay expires in July 2025.

Further updates will be made if necessary in due course.