The in-specie distribution is considered to be an opportunity for Shareholders to realise maximum value from the Scandinavian Assets as it will allow the Company to divest these assets which it considers non-core to its future strategic objectives and incubate them in a dedicated company, Critical Metals, whilst focusing on its Flagship Project. Refer to Hannans’ Notice of Meeting dated 12 August 2016 for detailed information.

Following the completion of the in-specie distribution, you will now hold shares in both Hannans and Critical Metals. Your number of shares in Hannans will not change as a result of this transaction. Hannans shares can still be traded as normal through ASX.

Critical Metals is currently not listed on any stock exchange. Therefore, Critical Metals shares cannot be traded on any stock exchange for the moment. The management of the Critical Metals are assessing the best pathway forward for the Company.

There may be a limited liquid market for the Critical Metals shares, as they are not listed on ASX. They can be traded between anyone who wishes to purchase the shares at a price determined between the buyer and seller.

A transfer form and update details form are available from the website or contact Critical Metals at:

Hannans shareholders are advised that the in-specie distribution of shares in Critical Metals Ltd will be considered a return of capital by the Australian Taxation Office (ATO). The taxation impact of this decision is twofold, Hannans shareholders will need to reduce the cost base of their Hannans shares by 0.124 cents per share; and furthermore, the initial tax cost base for each share received in Critical Metals Limited is deemed to be 1.24 cents per share. Hannans shareholders need to include this information in their Income Tax Return for the year ended 30 June 2017.

Note: On 11 May 2017, the Company shareholders approved the consolidation of capital where the issued capital of Critical Metals be consolidated on the basis that every 5.4134085 Shares be consolidated into 1 Share. The consolidation shareholding statement was sent to Critical Metals shareholders on 8 June 2017.

As the shares are not listed on the ASX, there may be a limited liquid market for the Critical Metals shares. The market price when buying or selling the shares will be determined between the buyer and seller.

You should seek and rely on your own taxation advice in relation to the taxation consequences of the distribution. Neither Critical Metals nor any of its officers, or its advisers accept liability or responsibility with respect to such consequences.

The following is an example of how to calculate your new Hannans tax cost base and Critical Metals tax cost base.

Mary owned 100,000 Hannans shares with an aggregate cost base of $1,000 ($0.01 cents per share) prior to the in-specie distribution. She received 9,938 shares in Critical Metals Ltd representing a non-assessable return of capital.

Step 1: Mary assesses if the non-assessable return of capital (i.e. the value of the Critical Metals shares) is more or less than the cost base of her shares in Hannans.

Step 2: In this instance, the non-assessable return of capital of $120 (100,000 Hannans shares x $0.0012) is less than her Hannans cost base of $1,000.

Step 3: Mary reduces the tax cost base of her Hannans shares by the non-assessable return of capital ($1,000 – $120 = $880).

Step 4: Mary records the new tax cost base for her Hannans shares and Critical Metals shares as follows: Hannans tax cost base for 100,000 shares of $880 ($0.0088 cents per share) Critical Metals tax cost base for 9,938 shares of $123.23 ($0.0124 per share).

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