Debt Restructure & Recapitalisation

• Proposed $34.9m recapitalisation and debt conversion to strengthen balance sheet
• Strong support from key stakeholders with ~43% share ownership and ~$27.5m debt conversion
• Non-renounceable 5:1 entitlement issue at $0.01 with 1:2 free-attaching $0.02 options

WA Kaolin Ltd (ASX: WAK) is pleased to announce a comprehensive recapitalisation of its kaolin production operation at Wickepin, Western Australia. The proposed $34.9m recapitalisation will be completed through a non-renounceable pro rata entitlement issue to eligible shareholders. The debt reduction and additional working capital will position the company well to deliver a range of high-quality kaolin products into a structurally altered global supply-demand. Key terms of the entitlement issue include a 5:1 ratio at $0.01 per share with 1:2 free-attaching $0.02 options expiring in 2030. The company has strong support from key stakeholders, with ~43% share ownership and ~$27.5m of debt expected to be converted as part of the offer. The minimum subscription will reduce debt by ~$10.1m to ~$17.4m with a defined repayment program, restructuring WA Kaolin's balance sheet ahead of major expansion.

If the Minimum Subscription is achieved, the company will convert ~$10.1m in debt into shares and secure ~$4.7m in working capital (after offer costs). This $4.7m is expected to provide sufficient working capital until end August 2026, allowing the company to overcome its short-term cash flow shortfall and undertake improvements to the Wickepin kaolin plant to increase production.