Vital Metals Limited (ASX: VML) ('Vital Metals' or 'the Company') is pleased to report on its activities during the March 2021 quarter, including at its 100%-owned Nechalacho Rare Earth Project in Yellowknife, Northwest Territories, Canada, where it expects to commence rare earth oxide production in Q2 CY2021.

Vital Metals Managing Director Geoff Atkins said: 'The March quarter has seen us achieve several major milestones on our way to commencing rare earth production at Nechalacho in the current quarter, including a transformational A$43 million placement that fully funds our operations into production and validates our strategy to produce rare earths for a globally diversified supply chain.

'Vital Metals is on its way to becoming Canada's first rare earths producer - and only the second in North America - within weeks following the mobilisation of our mining fleet and I look forward to keeping our shareholders up to date on our progress towards that goal.'

NECHALACHO RARE EARTHS PROJECT, CANADA (JORC RESOURCE: 94.7MT @ 1.46% REO)

Mining Commences at Nechalacho In late March, Vital Metals announced the commencement of mining operations at Nechalacho, with the contract mining fleet mobilising to site. Local mining contractor Det'on Cho Nahanni Construction commenced operations at Nechalacho's North T Zone following mobilisation via the private Nechalacho ice road, a 110km long, 1.1m thick engineered ice road on the Great Slave lake from Dettah, Yellowknife Bay, NWT to the Nechalacho Rare Earth Project on the Hearne Channel in Chief Drygees Territory.

Vital Metals and its subsidiary Cheetah Resources held a ceremony on 20 March 2021 marking the commencement of mobilisation.

Commencement of mining followed the signing of a definitive mining contract with Det'on Cho Nahanni Construction in February after a Memorandum of Understanding executed in January 2020 established Det'on Cho Nahinni Construction as the preferred Mining Services Contractor. Det'on Cho Nahanni Construction is 51% owned by Det'on Cho Corporation, which is in turn owned by the Yellowknives Dene First Nation.

The scope of work under the mining contract includes mining, site clearing, preparation of retention pond, site roads, ROM pad, plus crushing and screening. All plant and equipment, including an ore sorter and associated infrastructure, has arrived at site in preparation for rare earth production at Nechalacho

Drilling for Stage 2

Mine Plan In February, Vital Metals announced it had entered a drilling contract, through its subsidiary Cheetah Resources Corp, with NorthTech Ltd, a Yellowknife-based drilling company. The 1,800m drill program is underway at Nechalacho to test three high-grade targets in the Tardiff deposit and evaluate potential expansion of the T Zone by targeting two additional zones, the South T and the S zones, which lie adjacent to the planned North T pit, where Vital Metals plans to commence production later this year.

Definitive Offtake Agreement

Vital Metals executed a definitive Offtake Agreement with REEtec AS ('REEtec') on 2 February 2021, the material terms of which were announced on 21 December 2020. Under the definitive Offtake Agreement Vital Metals will provide REEtec mixed rare earth carbonate product containing an annual volume of 1,000 REO (ex-Cerium) over 5 years. Both parties have an option to increase this offtake volume by up to 5,000 tonnes REO per annum over 10 years (subject to a corresponding supply agreement)

CORPORATE

As of 31 March 2021, the Company held approximately $44.4 million in cash and cash equivalents. During the quarter, the Company made payments of $85k to related parties and their associates. These payments relate to existing remuneration agreements for the Managing Director, Executive and Non-Executive Directors. During the quarter, Vital Metals spent $2.1 million on exploration and evaluation expenditure. Details of activities carried out during the quarter are set out in this report

Performance Shares

In 2019, Vital Metals issued 800 million Performance Shares in accordance with the terms of the acquisition by Vital Metals of Cheetah Resources Pty Ltd (Cheetah Resources). The purpose of the Performance Shares, which were issued to the original Cheetah Resources' shareholders, was to link part of the consideration for the acquisition of Cheetah Resources to certain key performance criteria.

The commencement of commercial mining operations at the Nechalacho4 or Wigu Hill projects is a key performance criterion for the conversion of all Performance Shares into fully paid ordinary shares in the capital of the Company (Shares). Therefore, all Performance Shares converted to Shares on a 1:1 basis on commencement of mining operations

Contact:

Mr Geoff Atkins

Tel: +61 2 8823 3100

Email: vital@vitalmetals.com.au

ABOUT VITAL

Vital Metals Limited (ASX: VML) is an explorer and developer focussing on rare earths, technology metals and gold projects. Our projects are located across a range of jurisdictions in Canada, Africa and Germany

Nechalacho Rare Earth Project

The Nechalacho project is a high grade, light rare earth (bastnaesite) project located at Nechalacho in the Northwest Territories of Canada and has potential for a start-up operation exploiting high-grade, easily accessible near surface mineralisation. The Nechalacho Rare Earth Project hosts within the Upper Zone, a measured, indicated and inferred JORC Resource of 94MT at 1.46% TREO.

Forward Looking Statements

This release includes forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward-looking words such as 'may', 'will', 'expect', 'intend', 'plan', 'estimate', 'anticipate', 'continue', and 'guidance', or other similar words and may include, without limitation statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production output.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of resources or reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation

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