Fundraising, Amendment to Loan Terms & Update

Kropz (AIM: KRPZ), an emerging African phosphate producer and developer, announces it is conducting a fundraising in order to raise short-term working capital.

The Company announced on 8 December 2025 that Kropz Elandsfontein (Pty) Ltd ("Kropz Elandsfontein") and the ARC Fund ("ARC") had agreed a ZAR 250 million loan (approximately US$ 14.4 million) (the "Loan"), of which ZAR 150 million has been drawn down as at the date of this Announcement. The Loan was provided by ARC to Kropz Elandsfontein to fund its cashflow and operational expenditure needs.

The Loan was structured as a demand loan in order to mitigate regulatory complexity and foreign exchange movements, and to ensure a timely provision of additional capital as and when needed. However, as the Loan was made to Kropz Elandsfontein, the Company has been unable to move funds up from Kropz Elandsfontein in a timely manner to meet ongoing operational expenditure of the group (including for Cominco SA, which owns the Hinda project in the Republic of the Congo ("Hinda Project")), due to regulatory requirements around the transfer of funds in South Africa.

As a result, the Company is undertaking an equity fundraising to fund this expenditure. The fundraising will be conducted at an issue price of 1.15 pence per new ordinary share in the Company ("Issue Price"), by way of a conditional subscription with ARC (the "Subscription") and a retail offer via the Winterflood Retail Access Platform ("WRAP") ("WRAP Retail Offer"), to raise an aggregate of £917,431, before expenses (together, the "Fundraising").

The Issue Price represents a discount of approximately 5 per cent to the 30-day volume weighted average share price per existing ordinary share to 17 February 2026 (being the latest practicable date prior to the date of this Announcement).

The WRAP Retail Offer is intended to provide minority shareholders in the Company with the opportunity to participate in the Fundraising, on the same economic terms and at the same price as ARC. Existing Shareholders will be given the opportunity to subscribe for, in aggregate, up to 7,919,793 new ordinary shares in the capital of the Company ("Ordinary Shares") via the WRAP (the "WRAP Retail Offer Shares") at the Issue Price by way of a retail offer to raise up to approximately £ 91,077 (before expenses). A separate announcement will be made regarding the WRAP Retail Offer and its terms.

ARC has agreed to subscribe in cash for a minimum of 71,856,832 new Ordinary Shares (the "Subscription Shares") and has agreed to underwrite, pursuant to an underwriting agreement entered into with the Company (the "Underwriting Agreement"), an amount equal to the WRAP Retail Offer to ensure that the entire amount of the Fundraising will equate to approximately £917,431 million (before expenses). Therefore, ARC will subscribe in cash pursuant to the Subscription for an amount equal to the WRAP Retail Offer not taken up by other shareholders, increasing the number of Subscription Shares subscribed for by ARC proportionately.

The value of ARC's total investment in Kropz by way of the Subscription Shares and the Underwriting Agreement will be deducted from the remaining balance of the Loan pursuant to an amendment of the Loan terms (the "Amendment"). The maximum amount that can be deducted from the Loan balance is £917,431 (approximately ZAR 20 million), resulting in approximately ZAR 80 million remaining to be drawn down on the Loan.

The Fundraising is conditional on approval from the South African Reserve Bank ("Exchange Control Approval") under the South African Exchange Control Regulations, 1961.

Subject to, inter alia, the Exchange Control Approval being granted, 79,776,625 new Ordinary Shares ("New Ordinary Shares") are to be allotted and issued pursuant to the Fundraising, representing approximately 5 per cent. of the enlarged issued share capital of the Company immediately following completion of the Fundraising.

The New Ordinary Shares will rank pari passu in all other respects with the existing Ordinary Shares.

Trading Update

Kropz Elandsfontein achieved production of 38,970 tonnes of phosphate concentrate (a new record) and sales of 35,850 tonnes of phosphate concentrate during December 2025. This brings production to 266,069 tonnes and sales to 236,058 tonnes for 9 months to 31 December 2025.

Admission and Total Voting Rights

An application will be made for Admission of the 79,776,625 New Ordinary Shares and dealing in respect of the New Ordinary Shares is expected to commence at 8.00 a.m. on 26 March 2026, being the fourth business day following the expected date of receipt of Exchange Control Approval. The date of Admission will be reconfirmed upon announcement of the receipt of Exchange Control Approval.

Following Admission of the New Ordinary Shares, the Company's issued share capital will be 1,647,367,866 Ordinary Shares. This figure of 1,647,367,866 may then be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Related Party Transaction

The Subscription, entry into the Underwriting Agreement and the Amendment (together the "Arrangements") are related party transactions pursuant to Rule 13 of the AIM Rules. Gerrit Duminy, a director of the Company, is the representative of ARC. Gerrit Duminy has not been involved in the approval of the Arrangements by the Company's board.

The remaining directors of the Company, who are considered independent for the purposes of the Arrangements, having consulted with the Company's nominated adviser, consider the terms of the Arrangements to be fair and reasonable insofar as the Company's shareholders are concerned.

Concert Parties and Impact on Shareholdings

As noted in the Company's AIM admission document, ARC and Kropz International SARL ("Kropz International") are treated as acting in concert for the purposes of the Code and have individual and aggregate interests in the Ordinary Shares as set out in the table below.

Kropz also has an existing £ 70.8 million (US$ 97.6 million, ZAR 1.6 billion) of existing convertible debt (the "Existing Equity Facilities") with ARC (including accumulated interest) and an existing £46.2 million (US$ 63.7 million, ZAR 1.0 billion) convertible loan note (the "Convertible Loan Note") with ARC (including accumulated interest) which are not being impacted by the Fundraising or the Amendment.

It is noted that, both before and after the Fundraising and the Amendment, on an aggregate basis, ARC and Kropz International hold and will continue to hold more than 50 per cent. of the Ordinary Shares and voting rights in the Company. On a standalone basis ARC, through its option with Kropz International, currently has a fully diluted interest of 97.4 per cent. of the Company (see footnote 5 below).

Maximum Interests in Ordinary Shares

• Assumes for illustrative purposes that there is no uptake of the WRAP Retail Offer and the New Ordinary Shares are allotted in full to ARC and consequently ARC is issued 79,776,625 New Ordinary Shares.
• Assumes for illustrative purposes that the fully drawn Existing Equity Facilities are converted into equity.
• ZAR 200 Million Equity Facility - 219,272,938 ordinary shares (6)
• ZAR 177 Million Equity Facility - 96,378,566 ordinary shares (6)
• ZAR 550 Million Equity Facility - 586,442,455 ordinary shares (6)
• Assumes for illustrative purposes that the Convertible Loan Note is converted into equity:
• ZAR 821 million Convertible Loan Note - 2,403,549,091 ordinary shares (6)
• ARC and Kropz International are deemed to be acting in concert as defined in the Code.
• Kropz International and ARC have entered into an arrangement pursuant to which Kropz International has granted to ARC a call option over 25,793,909 of its Ordinary Shares. The call option over Kropz International's Ordinary Shares can be exercised by ARC if the value of ARC's shareholding on the third anniversary of Admission is 20 per cent. lower than its value on IPO on 30 November 2018. The call option has an alternative settlement of cash or assets, if the transfer of the Ordinary Shares would require the transferee to make a Rule 9 offer for the Company pursuant to the City Code.
• Exchange rates used are fixed at:
• ZAR 200 Million Equity Facility - GBP 1 = ZAR 20.24
• ZAR 177 Million Equity Facility - GBP 1 = ZAR 19.84
• ZAR 550 Million Equity Facility - GBP 1 = ZAR 20.48
• ZAR 821 Million Convertible Loan Note - GBP 1 = ZAR 23.81