Sovereign Metals : Securities Trading Policy

SECURITIES TRADING POLICY

April 2022

• 1. INTRODUCTION

• 1.1. Securities of the Company are listed on ASX and AIM.

• 1.2. This policy outlines:

  • (a) when PDMRs, Applicable Employees and other Employees may deal in Company Securities;

  • (b) when PDMRs, Applicable Employees and other Employees may deal in listed securities of another entity (because they may obtain Inside Information about another entity's securities while performing their duties for the Group); and

  • (c) procedures to reduce the risk of insider trading and the appearance of insider trading.

• 1.3. This Securities Trading Policy has been prepared to address the requirements of the ASX Listing Rules, the AIM Rules, and EU Market Abuse Regulation (as applied in the UK) which require the Company to provide a framework to PDMRs, Applicable Employees and Employees when Dealing in Securities of the Company. The Securities Trading Policy has been prepared taking into consideration the following:

  • (a) the size, nature and stage of the development of the Company's resource projects (see below for further details);

  • (b) obligations under the Corporations Act not to Deal in Company Securities whilst in possession of Inside Information;

  • (c) rights of shareholders under the Constitution of the Company to freely trade their shares; and

  • (d) contractual and statutory rights embedded in the Securities.

• 1.4. The Company's Securities Trading Policy has been prepared for the current stage of development of the Company. As the Company is in the exploration and development phase, key Inside Information will include results from exploration, feasibility studies and corporate activities. Accordingly, the Closed Periods include amongst other periods, times around the release of this information. In addition, Closed Periods are also defined to include periods in the lead up to the release of financial reports as specifically required by MAR.

• 2. BREACH OF POLICY

• 2.1. A breach of this Policy by an Employee (even if the Employee is not a PDMR or Applicable Employee) is serious and may lead to disciplinary action, including dismissal in serious cases. It may also be a breach of the law.

Sovereign Metals Limited | ASX:SVM AIM:SVML

T: [phone] | F: [phone] | E:[e-mail]| www.sovereignmetals.com.au Level 9, 28 The Esplanade, PERTH WA 6000 | ABN: 71 120 833 427

• 2.2. Insider trading is a serious matter which is a criminal offence. It is punishable by substantial fines or imprisonment or both.

• 2.3. Insider trading may also attract civil penalties. A court may impose substantial pecuniary penalties for insider trading and order payment of compensation to persons who suffer loss or damage because of insider trading.

• 3. WHEN EMPLOYEES MAY DEAL

  An Employee, who is not a PDMR or Applicable Employee, may Deal in Company Securities or the Securities of a Transaction Entity if he or she does not have information that he or she knows, or ought reasonably to know, is Inside Information in relation to Company Securities or the Securities of a Transaction Entity.

• 4. WHEN EMPLOYEES MAY NOT DEAL

  An Employee, who is not a PDMR or Applicable Employee, may not Deal or procure another person to Deal in Company Securities or the Securities of a Transaction Entity if he or she has information that he or she knows, or ought reasonably to know, is Inside Information in relation to Company Securities or the Securities of a Transaction Entity.

• 5. WHEN A PDMR OR APPLICABLE EMPLOYEE MAY DEAL

  Subject to the requirements of this Policy (including the required prior approvals and restrictions during Closed Periods), a PDMR or Applicable Employee may Deal in Company Securities or the Securities of a Transaction Entity if he or she does not have information that he or she knows, or ought reasonably to know, is Inside Information in relation Company Securities or the Securities of a Transaction Entity.

• 6. WHEN A PDMR OR APPLICABLE EMPLOYEE MAY NOT DEAL IN COMPANY SECURITIES

• 6.1. Subject to Clauses 7 and 8 of this Policy, a PDMR or Applicable Employee may not Deal or procure another person to Deal in Company Securities:

  • (a) if he or she has information that he or she knows, or ought reasonably to know, is Inside Information in relation to Company Securities;

  • (b) during a Closed Period;

  • (c) if he or she has information that he or she knows, or ought reasonably to know, has not been announced to the market under ASX Listing Rule 3.1A or in accordance with AIM Listing Rule 11 in relation to Company Securities.

• 6.2. A PDMR or Applicable Employee may not Deal or procure another person to Deal in the Securities of a Transaction Entity if he or she has information that he or she knows, or ought reasonably to know, is Inside Information in relation to the Securities of a Transaction Entity.

• 6.3. PDMRs or Applicable Employees are prohibited at all times from Dealing in financial products issued or created over or in respect of the Company's Securities (including, but not limited to, hedge arrangements). For the avoidance of doubt this clause does not apply to an option over unissued capital granted by the Company.

• 6.4. PDMRs or Applicable Employees are prohibited at all times from entering into margin lending or similar arrangements in respect to Company Securities they hold or in which they have a Relevant Interest.

• 7. EXCLUDED TRADING

  Subject to compliance with MAR, in particular Article 19, this Policy does not prohibit Dealing in the Company's Securities during a Closed Period as outlined in Schedule 2 and Schedule 3, however, those items listed in Schedule 3 still require prior approval as per The Securities Trading Policy and subsequent market notification.

• 8. EXCEPTIONAL CIRCUMSTANCES

• 8.1. The Approving Officer may give clearance during a Closed Period for a PDMR or Applicable Employee to sell (but not buy) Company Securities in Exceptional Circumstances.

• 8.2. The Approving Officer may not give clearance under the exception in clause 8.1 without obtaining permission from AIM if the PDMR or Applicable Employee is the subject of an AIM Rule 7 Lock-in agreement.

• 8.3. The Approving Officer may not give clearance under the exception in clause 8.1 if there is a matter about which there is Inside Information in relation to Company Securities (whether or not the PDMR or Applicable Employee knows about the matter) when the PDMR or Applicable Employee requests clearance or proposes to Deal in Company Securities. This prohibition is subject to any lawful obligation to the contrary (for example, for an order of a court).

• 8.4. The PDMR or Applicable Employee seeking clearance to Deal in the Securities must outline in writing to the Approving Officer the circumstances of their severe financial hardship or as to why their circumstances are otherwise exceptional and that the proposed Dealing in the Securities is the only reasonable course of action available and why that transaction cannot be executed at any time other than during a Closed Period.

• 8.5. The Approving Officer will decide if the Exceptional Circumstances exist.

• 8.6. Clearance may only be granted in respect of such number of shares as the PDMR needs to sell to obtain the required financial resources.

• 8.7. A list of matters that may constitute Exceptional Circumstances is contained in Schedule 4.

• 9. CLEARANCE FROM THE APPROVING OFFICER

• 9.1. At least two (2) Business Days prior to when a PDMR or Applicable Employee intends to Deal in Company Securities, the PDMR or Applicable Employee must first inform the Approving Officer (and at the same time the Company Secretary) by submitting a completed Securities Trading Request Form (see Schedule 7). If the PDMR or Applicable Employee is not able to fax or email a scanned copy of the Securities Trading Request Form, then the PDMR or Applicable Employee may send an email with the same information in it to the Approving Officer.

• 9.2. The Approving Officer must approve or reject the Securities Trading Request as soon as practicable (generally within 2 Business Days). The PDMR or Applicable Employee must not Deal in Company Securities until it has received the clearance from the Approving Officer.

• 9.3. The Approving Officer may not give clearance if:

  (a)

  there is a matter about which there is or may be Inside Information in relation to Company Securities (whether or not the PDMR or Applicable Employee knows about the matter) when the PDMR or Applicable Employee requests clearance or proposes to deal in Company Securities;

  • (b) the Securities Trading Request form is lodged during a Closed Period;

  • (c) the proposed Dealing is during a Closed Period; or

  • (d) the Approving Officer has any other reason to believe that the proposed Dealing breaches this Policy.

• 9.4. In making a determination under 9.3(a) about the existence of Inside Information the Approving Officer should exercise caution and refuse the clearance if there is any possibility that Inside Information may exist.

• 9.5. Irrespective of any clearances given under this Policy, the Employee or PDMR is not to Deal with Company Securities whilst in possession of Inside Information.

• 9.6. The Approving Officer must:

  • (a) keep a written record of:

    • (i) any information received from a PDMR or Applicable Employee in connection with this Policy; and

    • (ii) any clearance given under this policy, including the duration for which the clearance applies; and

  • (b) send a copy of the written record to the Company Secretary for keeping.

• 9.7. The Company Secretary must keep a file of any written record referred to in clauses 9.1 and 9.6.

• 9.8. For the purposes of this policy, written requests and clearances may include facsimiles and emails and are valid for a period the earlier of:

• (a) 5 Business Days;

• (b) the Business Day before the Company enters a Closed Period; and

• (c) the time that the PDMR or Applicable Employee comes into possession of Inside Information.

• 10. DEALINGS IN WHICH A PDMR OR APPLICABLE EMPLOYEE HAS A RELEVANT INTEREST

  A PDMR or Applicable Employee must prohibit any Dealing in the Company Securities in which the PDMR or Applicable Employee has a Relevant Interest while the PDMR or Applicable Employee is in possession of Inside Information.

• 11. COMMUNICATING INSIDE INFORMATION

• 11.1. If an Employee (including a PDMR or Applicable Employee) has information that he or she knows, or ought reasonably to know, is Inside Information in relation to Company Securities or the Securities of Transaction Entity, the Employee must not directly or indirectly communicate that information to another person if he or she knows, or ought reasonably to know, that the other person would or would be likely to:

  • (a) Deal in Company Securities or the Securities of a Transaction Entity; or

  • (b) procure another person to Deal in Company Securities or the Securities of a Transaction Entity.

• 11.2. Unless otherwise authorised, an Employee must not inform colleagues (except the Approving Officer) about Inside Information or its details.

• 12. NOTIFICATION OF DEALINGS IN COMPANY SECURITIES

• 12.1. PDMRs must notify the Company Secretary of any Dealings in the Company's securities promptly, and in any event within one (1) business day of such Deal occurring. Initial, ongoing and final notifications will be required which must include the details set out in Schedule 5 to this Securities Trading Policy.

• 12.2. Under MAR, dealings in Company securities over €5,000 within a calendar year by PDMRs or a PCA must be notified promptly, and in any event within three (3) business days, on AIM and to the FCA through its website.

• 12.3. The ASX Listing Rules require the Company to notify ASX within five (5) business days after any dealing in securities of the Company (either personally or through an associate) which results in a change in the relevant interests of a Director in Company securities.

• 12.4. The Company Secretary will arrange for lodgement of any required notification to ASX and AIM within the prescribed time periods. Notification to the FCA is the individual responsibility of the PDMR or the PCA (as the case may be). The Company Secretary will, following a request, assist with providing such notification. Notifications to the FCA must be made using the form attached in Schedule 8 and provided to the Company Secretary as soon as practicable and in any event within one (1) business day of the Dealing taking place.

• 12.5. The Company must make a determination of who is classified as a PDMR, inform those determined to be PDMRs of such, and maintain a current and historical register of PDMRs.