Engebø Rutile and Garnet AS : First cargo of rutile is delayed, and tap issue of existing bond

25 Sep 2025 17:00 CEST

The Engebø Project is past the construction phase and is in the production
ramp-up phase.
After the planned maintenance and modifications downtime in July, the processing
plant is ramping up the throughput and mineral recoveries. Major parts of the
plant are currently operated at design capacity, including the crushing and
milling circuits, whereas the last stage, the dry plant which produces the final
rutile and garnet products, have lower throughput and uptime due to some
operational and technical difficulties experienced in the latter part of the
third quarter.  Both rutile and garnet are produced in accordance with customer
specifications but at low volumes and insufficient for a full cargo of rutile
before year end. Consequently, revenues remain limited. 

To address the operational and technical issues, Engebø Rutile and Garnet (ERG)
will carry out an operational review and bring on site relevant rutile and
garnet processing experience from two of our customers: Iwatani and The Barton
Group will second personnel that will be available through the end of the year
to provide expertise in ramping up the volumes of final products. Action is also
taken to redesign a segment of the material transfer equipment within the dry
plant to enable higher volume throughput. Garnet shipments continue whereas the
first cargo of rutile is expected to be available in the first quarter of 2026.
Our stated goal is reaching design capacity in late second quarter 2026.  

To address the financial impact of the delay, ERG has today called for a
bondholder meeting by way of written resolution for proposed tap issue of USD
22.5 million under the Engebø Rutile and Garnet AS 12.5% Senior Secured Bonds
2022/2027 with ISIN NO0012734112 priced at 98.00% of par.
Existing holders of bonds representing more than 80% of the total outstanding
principal amount of the bonds have granted their support of the proposal.

Subject to the approval of the written resolution, the total outstanding amount
under the Bonds following the tap issue is USD 155.5 million. About half of the
proceeds from the bond issue will be used to cover additional costs related to
the ramp-up delay with the remainder as a financial buffer.

Further information on ERG's contemplated tap issue is given in the enclosed
notice of written resolution.

Clarksons Securities acts as Manager and Bookrunner for the tap issue.

Oslo, 25 September 2025

This stock exchange notice contains inside information pursuant to the EU Market
Abuse Regulation and is subject to the disclosure requirements pursuant to
Section 5-12 the Norwegian Securities Trading Act.

More information:
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656171_Notice of Written Resolution - Signed(21644484.1).pdf