4 Impact Minerals Ltd Annual Report 2023 Review of Operations continued In March Impact Minerals signed a binding term sheet with Playa One Pty Ltd, an unrelated private company, to earn an 80% interest in the advanced Lake Hope High Purity Alumina (HPA) Project in Western Australia. The Project offers Impact the opportunity to be a low-cost entrant into the HPA chemical market, a high‑margin business forecast to grow strongly over the next decade. The Project contains a globally unique deposit of high-grade aluminium clay minerals in the top few metres of a playa lake, which has unique physical and chemical properties that allow for low-cost mining and offsite metallurgical processing via a novel and cost-disruptive acid leaching process. Preliminary economic studies indicate that the production of HPA and related products from Lake Hope will be cost-competitive with current producers and other developers in Australia and globally. The project is a transformational acquisition for Impact and the company is focused on the challenge of developing the project and ensuring that Impact Minerals is the next “playa” in HPA. KEY TERMS OF THE BINDING TERM SHEET Impact earn an interest in Playa One Pty Ltd in stages according to the following terms: 1. Impact made a $25,000 cash payment for a six-week option to complete due diligence (completed). LAKE HOPE PROJECT 2. Impact has commenced sole funding a Pre-Feasibility Study (PFS) by paying $175,000 cash, issuing 50 million fully paid ordinary shares (escrowed for 12 months), and issuing 30 million unlisted options exercisable at 1.125c, vesting 12 months from the date of issue and expiring on 1 December 2025, to the shareholders of Playa One (completed). 3. Upon completion of a Pre‑Feasibility Study (PFS), Impact can enter an incorporated joint venture with the Playa One shareholders (through an entity representing them, Playa Two Pty Ltd). If so, it will acquire an immediate 80% interest in Playa One by issuing up to 120 million fully paid ordinary shares capped at a maximum value of $8 million (based on the 5-day VWAP before the election) to the Playa One Shareholders. 4. Upon completion of a Definitive Feasibility Study to be sole‑funded by Impact, Impact will issue up to 100 million fully paid ordinary shares capped at a maximum value of $10 million (based on the 5-day VWAP before the ASX announcement of the completion of the DFS) to the Playa One Shareholders. 5. Playa One shareholders will be free-carried to a Decision to Mine. Impact will maintain all Playa One tenements in good standing during this time. 6. If a Decision to Mine is made, the Playa One Shareholders may contribute to mine development costs or be diluted. If their interest falls below 7.5%, it will convert to a 2% net smelter royalty. PROJECT DETAILS The Lake Hope Project covers numerous prospective salt lakes between Hyden and Norseman in southern Western Australia, a Tier One jurisdiction (Figures 1 and 2). It comprises five granted exploration licences and three further exploration licence applications all of which are very poorly explored. The tenements cover about 238 km2 and are all 100% owned by Playa One. Figure 2. Location of Playa One tenements with options for trucking and off-site processing.
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