New Loan Facility and Operational Update

New Loan Facility

and

Operational Update

Kropz Plc (AIM: KRPZ), an emerging African phosphate producer and developer, announces that Kropz Elandsfontein (Pty) Ltd ("Elandsfontein") and Ubunto-Botho Investments (Pty) Ltd ("UBI") (together the "Parties") have agreed to a ZAR 200 million (approximately US$ 12.3 million) (the "Loan"), which constitutes a related party transaction.

Operational Update

The Elandsfontein mine continues to progress through its production ramp-up phase. As previously announced, record monthly production was achieved in March with over 40,000 tonnes of production. However, mining operations continue to be materially affected by variability in the ore body, including the nature and volume of slimes material, hard bank and pink ore encountered within the deposit. These conditions have resulted in slower mining rates and lower concentrate output in the quarter ended 30 June 2026. Production was also disrupted in the quarter due to availability of the mining contractor, which interrupted ore flow to the processing plant and constrained the operational flexibility required to sustain more stable production levels.

Geopolitical tensions have created additional commercial headwinds with higher energy and consumable costs, and an increase in freight rates.

Elandsfontein produced 95 956 tonnes of phosphate concentrate in quarter ended 30 June 2026 (115,686: quarter to 31 March 2026) representing a 17% decrease compared quarter to quarter. Sales for the period totalled 183,714 tonnes, and stock at the quarter end was higher than anticipated being approximately 94,000 tonnes.

The operational issues, combined with the market factors described above, has given rise to a further working capital funding requirement. Consequently, the Company has entered into the Loan with UBI to support the group. The Loan will be used by Elandsfontein to fund its cashflow and operational expenditure needs.

The Loan

Elandsfontein and UBI have agreed terms for a loan facility of ZAR 200 million (approximately US$ 12.3 million). 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 UBI, on no less than 15 business days' notice. There is no fixed term.

As announced on 21 May 2025 and 28 May 2025, Kropz SA (Pty) Ltd has issued a Guarantee, Security Cession and Pledge in favour of the ARC Fund (ARC), and Kropz Plc has issued a Limited Indemnity, Security Cession and Pledge in favour of ARC for all current and future loan facilities made to Elandsfontein, which are applicable to the Loan.These agreements will be extended by the parties in favour of UBI as the first ranking priority (through an Omnibus agreement), and ARC and the second ranking priority issued by Kropz SA (Pty) Ltd for all current and future loan facilities of Kropz Elandsfontein.

The Company will update the market on drawdown of the Loan in due course.

Related Party Transaction

UBI is the indirect controlling shareholder of ARC, and consequently the Loan and the Omnibus agreement 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. Accordingly, Gerrit Duminy has not been involved in the approval of the Loan by the Company's board. The directors of the Company, who are considered independent for the purposes of the Loan, having consulted with the Company's nominated adviser, consider the terms of the Loan to be fair and reasonable insofar as the Company's shareholders are concerned.