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Tri-Star Resources Plc - Update on SPMP

Tri-Star Resources plc ("Tri-Star" or the "Company")

Update on SPMP

Tri-Star Resources plc (AIM: TSTR), the minerals processing company, announces an update on its investment in Strategic & Precious Metals Processing LLC ("SPMP") an antimony and gold production facility in the Sultanate of Oman in which the Company holds a 40% equity interest. The other joint venture partners are The Oman Investment Fund (40% equity holder) and DNR Industries Limited, part of Dutco Group in Dubai (20% equity holder).

Funding of Tri-Star

As previously announced, SPMP has been in the process of seeking further financing in order to ramp up operations at its antimony and gold production facility in Oman, targeting 100% capacity by the end of 2020 and securing its long- term operation. The board of SPMP has determined that in order to reach 100% capacity and sustainable positive cash flow, SPMP will eventually require up to USD160 million of additional finance, including a working capital facility of USD60 million to fund a build-up in inventories, a normal creditor and debtor cycle, the continued investment in the plant and to meet current debt obligations.

SPMP has considered several different combinations and types of finance including debt, mezzanine and equity funding and although negotiations with various potential providers of finance continue, the terms offered to date are, in the view of the board of Tri-Star, unacceptable. It is also the board of Tri-Star's view that any such provider of further finance to SPMP will require comfort that the total funding required of up to USD160 million is available prior to confirming its individual commitment to the funding package.

Accordingly, whilst negotiations are ongoing, there is uncertainty as to whether SPMP will be able to achieve the financing it requires on a timely basis and, if it is able to secure such financing, the terms on which it would be made available. As a result, the long term future of SPMP will remain uncertain until any such financing is secured.

Negotiations between the shareholders of SPMP continue as to how to provide short term financing to SPMP in order for it to continue its operations. No agreement has yet been reached. However, the various outcomes might include the dilution of Tri-Star's share-holding in SPMP (as a result of the financial contributions of other shareholders) and the temporary suspension of operations at SPMP.

Tri-Star will update the market as negotiations progress.

SPMP's bank loans

SPMP is currently in technical default of its current banking facility arrangements with Bank Nizwa SAOG and Alizz Islamic Bank SAOG as the most recent repayment obligation has not, as yet, been met. The short term funding arrangements referred to above are intended to remedy this default.

As part of the current SPMP facility arrangements, on 15 March 2018 each shareholder in SPMP entered into a conditional completion guarantee (the "Guarantee") in favour of Bank Nizwa SAOG and Alizz Islamic Bank SAOG. Tri-Star's obligation under the Guarantee amounts to 40% of SPMP's liabilities outstanding to these two banks, which currently stands at approximately USD30 million (out of a total owed of approximately USD75 million). Tri-Star's obligations under the Guarantee fall away once commercial production of SPMP's facility in Oman has been achieved. The board of Tri-Star believes this now to be the position as it has been informed by SPMP that commercial grade antimony has been produced (as announced on 18 November 2019) and commercial grade gold dore has been produced and sold. The Guarantee will be formally discharged once an independent consultant certifies to the banks that commercial production has been successfully started.

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No. 596/2014 until the release of this announcement.

**ENDS**

For further information, please visit www.tri-starresources.com or contact:

Tri-Star Resources plc
David Facey, CEO/ CFO
c/o SBP
Tel: +44 (0)20 7236 1177
St Brides Partners (Financial PR)
Isabel de Salis / Beth Melluish

Tel: +44 (0)20 7236 1177
SP Angel Corporate Finance (Nominated Adviser)
Robert Wooldridge / Jeff Keating

Tel: +44 (0)20 3470 0470
finnCap Ltd (Broker)
Scott Mathieson / Camille Gochez

Tel: +44 (0)20 7220 0500

Notes to Editors:

Tri-Star's principal interest is in an antimony and gold production facility (the "SPMP Project"). The SPMP Project is based in Sohar, Sultanate of Oman, and is being developed by Strategic & Precious Metals Processing LLC ("SPMP"), an Omani company in which Tri-Star has a 40% equity interest.

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