Notice of Share Exchange Agreement (Simplified Share Exchange) and Management Integration Agreement for the Complete Subsidiarization of Toho Titanium Co., Ltd. by JX Nippon Mining & Metals Corporation

Purpose and Background of Management Integration

JX Nippon Mining & Metals Corporation holds 50.37% of the shares of Toho Titanium Co., Ltd., and although the two companies have a cooperative relationship, to strengthen governance of the listed subsidiary, optimize allocation of management resources, and accelerate decision-making, they resolved to conduct a management integration through a share exchange to make Toho Titanium a wholly-owned subsidiary. This aims to deepen information sharing and technological collaboration, accelerate the creation of new businesses, and strengthen the management foundation.

Overview and Schedule of the Share Exchange

The share exchange is scheduled to take effect on June 1, 2026, following approval at an extraordinary shareholders' meeting of Toho Titanium. Toho Titanium shares will be delisted from the Tokyo Stock Exchange Prime Market on May 28, 2026. The share exchange ratio is 0.70 shares of JX Nippon Mining & Metals for each share of Toho Titanium, with new shares of JX Nippon Mining & Metals to be issued and delivered. A system is also established to handle fractional shares.

Fairness Assurance Measures and Evaluation

For the calculation of the share exchange ratio, both companies appointed independent third-party valuation agencies (Daiwa Securities, Mizuho Securities, and Plutus Consulting) to ensure fairness. A special committee was established at Toho Titanium and conducted a careful review with advice from legal advisors. The special committee issued a report stating that the share exchange is fair to minority shareholders.

Future Outlook and Impact

Through this share exchange, Toho Titanium will become a wholly-owned subsidiary of JX Nippon Mining & Metals, aiming to enhance corporate value across the entire group. JX Nippon Mining & Metals is also considering revising capital policy including share buybacks. While the delisting of Toho Titanium will limit its financing options, funding support from the parent company is expected to mitigate this. Employment and treatment of employees are expected to be maintained.