M8 Sustainable Ltd

ACN 620 758 358

Unit 1, 48 Kelvin Road, MADDINGTON WA 6109

For personal use only

29 July 2022

The Manager

ASX Market Announcements Office

ASX Limited

Exchange Centre

20 Bridge Street

Sydney NSW 2000

By email

Dear Sir/Madam

Activities Report and Appendix 4C - quarter ended 30.06.2022

In accordance with Listing Rule 4.7B, please find attached M8 Sustainable Limited's Activities and Appendix 4C cashflow reports for the quarter ended 30.06.2022.

This announcement is authorised for market release by the Board of Directors.

Yours sincerely

John Colli

Company Secretary

For personal use only

M8 Sustainable Ltd

ACN 620 758 358

Unit 1, 48 Kelvin Road, MADDINGTON WA 6109

ASX Announcement | 29 July 2022

QUARTERLY ACTIVITIES REPORT

FOR THE PERIOD ENDED 30 JUNE 2022

KEY POINTS

  • key works at the Gingin Landfill Facility (Gingin) nearing completion
  • commencement of operations at Gingin have been delayed and are now anticipated to be in the last quarter of calendar 2022
  • first major waste disposal agreement secured for Gingin through a five-year agreement with Brajkovich Demolition & Salvage (WA) Pty Ltd (BDS)
  • Access Waste (trading division of M8S) progressed its software platform WasteVantage into commercialisation
  • announcement of a 21 for 10 renounceable rights issue to raise approx. $10m with a minimum subscription of $8m
  • net cash used in operating activities of $0.06m for the quarter

M8 Sustainable Limited ("M8S" or "the Company") provides the following update on its activities for the quarter ended 30 June 2022.

GINGIN LANDFILL FACILITY

Construction of Gingin, the Company's fully permitted landfill facility with an approved capacity of 150,000 tonnes per annum, is almost complete.

Major works associated with leachate ponds have been completed. Works involving Cell 1, fencing and weighbridge are in the process of being completed.

In March 2022, the Company lodged a license application for Gingin with the Department of Water and Environmental Regulation (DWER). Final documentation from consultants to the project will be lodged with DWER upon completion of the required works, which will enable DWER to issue a license to commence operations.

Delays in accessing rock aggregate used to line Cell 1 caused a slight delay to the commencement of operations at Gingin. Due to this delay, the Company expects operations to commence in the last quarter of calendar 2022.

During the reporting period, the Company executed its first major waste agreement for Gingin agreeing to a 5-year waste disposal contract with BDS, one of WA's largest demolition and salvage businesses.

M8 Sustainable Limited

For personal use only

The agreement will see BDS supply a minimum of 40,000 tonnes and up to 60,000 tonnes of waste per calendar year to Gingin.

Image 1: Airwell leachate pumping system

Image 2: Cell 1 - Final layer installation

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M8 Sustainable Limited

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MADDINGTON WASTE FACILITY

Construction & Demolition (C&D) and Commercial & Industrial (C&I) waste recycling activities continued to be subdued for the June quarter with the Company prioritising its focus on completing construction activities at Gingin and progressing the Access Waste business. Market conditions continued to provide challenges within the sector.

Activities at Maddington have been restricted over the past few months with the Company preparing the site for the anticipated significant inflows of waste timed for when Gingin commences operations as well as the ramp-up of C&D and C&I waste recycling/ sorting scheduled to start in August 2022.

Metals recycling activities were also kept on hold during the quarter.

Considering the reduced level of operations at Maddington, the Company took the opportunity to hire out under-utilised mobile equipment which generated revenue of $420k for the reporting period.

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C&D In (m3)

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Figure 1: Maddington Waste and Product Supply Volumes (Quarterly Basis)

ACCESS WASTE

Access Waste, the Company's skip bin business, continued to be well accepted by customers in both the private and commercial sectors.

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M8 Sustainable Limited

For personal use only

The business utilises an industry leading, cloud-based waste management and logistics platform, designed to streamline the ordering, logistics and end-to-end supply chain process.

In April 2022, the initial development and testing of the software platform was completed. This enabled the software to commence being commercialised as a tool for use in streamlining orders, logistics and end-to-end supply chain processes in waste management and transport related activities. In Western Australia the platform is marketed through Access Waste as WasteVantage.

For the reporting period, Access Waste generated waste volumes totalling 2,986 m3 and revenue of $161k.

CORPORATE

Capital management continues to be a key focus area for the Company, with the Board regularly monitoring and reviewing its capital and funding requirements.

As Gingin nears completion and the Company works towards the next major phase of operational growth, the Company requires additional funds to complete construction and commence operations at Gingin.

M8S announced a 21 for 10 renounceable rights issue to raise approx. $10m with a minimum subscription of $8m.

The Company's largest shareholder, M8 Holding Limited (formerly SBANG Sustainable Energies Limited) (M8H) confirmed its intention to take up its full entitlement under the rights issue which equates to $3.5m. M8H has also agreed to provide a $2m standby facility, if required, from September 2022.

The equity raising will enable the completion of Gingin construction and strengthen the balance sheet through repayment of debt and provide additional working capital.

The offer period for the rights issue will close on 12 August 2022.

A summary of cash flow during the reporting period is as follows:

Operating Activities: $63k used in total

Receipts - $990k

  • $954k - receipts from customers
  • $13k - interest received
  • $23k - government grants and tax incentives Payments - $1,053k
  • $207k - manufacturing and operating costs
  • $582k - employment costs including all on-costs
  • $253k - insurance, legal, IT, professional, variable outgoings on leased property and audit fees

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M8 Sustainable Ltd. published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 08:14:13 UTC.