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EQ RESOURCES LIMITED AGM Information 2020

Nov 25, 2020

64867_rns_2020-11-25_892a3774-2f91-4f8b-9d25-c19f281af874.pdf

AGM Information

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ABN: 77 115 009 106 (ASX: SEI)

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26 November 2020

Company Announcements Office ASX Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Annual General Meeting – Chair’s Address and CEO Presentation

In accordance with Listing Rule 3.13.3, attached is a copy of the Chair’s Address and CEO’s Presentation to be delivered at Speciality Metals International Limited’s (ASX:SEI) 2020 Annual General Meeting ( AGM ).

The AGM will be conducted as a virtual meeting today at 2:00pm (AEST) / 3:00pm (AEDT).

If you wish to virtually attend the AGM (which will be broadcast as a live Zoom webinar), please preregister here: https://us02web.zoom.us/webinar/register/WN_bxi9Fw2fQt2No0A-IEqjMA.

After registering you will receive a confirmation containing information on how to attend the virtual AGM.

Authorised by Resolution of the Board:

Suzanne Irwin Company Secretary Speciality Metals International Limited

Further Enquiries: Peter Taylor Investor Relations 0412 036 231 [email protected]

About the Company

Speciality Metals International Limited is an ASX-listed company transforming its world-class tungsten assets at Mt Carbine in North Queensland; leveraging advanced technology, historical stockpiles and unexploited resource with the aim of being the pre-eminent tungsten producer in Australia. The Company also holds gold exploration licences in New South Wales. The Company aims to create shareholder value through the exploration and development of its current portfolio whilst continuing to evaluate corporate and exploration opportunities within the new economy and critical minerals sector.

ABN: 77 115 009 106 (ASX: SEI)

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2020 AGM Chair’s Address

Oliver Kleinhempel, Chair of the Board

The past 12 months has been a period of consolidation for the Company; building on the momentum started in 2019 to transition from a junior exploration company to an emerging tungsten producer. Against the backdrop of the COVID-19 pandemic and these unprecedented times, we have stayed on track.

Our leadership team changed during the year, and they likewise have welcomed a lot of new faces in their effort to expand the operational teams on the ground. We thank you, our shareholders, for your patience, trust and continued support as the team assembled to execute the operational strategies and further strengthen the corporate foundation of the Company.

The world is facing enormous challenges such as climate change, political and social polarisation, rising protectionism and supply chain uncertainty. Businesses and society are interdependent, and Speciality Metals does not operate in a vacuum. Society and investors now have expectations in relation to a company’s environmental, social and governance (ESG) performance and are increasingly holding executives to account. Given these fundamental shifts, the Board with the leadership team have taken the time to reflect on the Company’s purpose, values and positioning. We believe everything starts with a purpose, and it is necessary for all of us to align on what we are about so that we can move in the same direction.

We have articulated our Purpose as shown:

Resourcing the new economy for a better tomorrow.

We are a value-oriented resources company, sustainably producing and managing new economy minerals and metals . We maximise the potential of our assets through resource-efficiency and investment in our people to deliver materials that are critical for a better tomorrow . It’s how we drive value in our operations, approach new opportunities and at the same time deliver positive societal impact while minimising our environmental footprint .

Let’s shortly look at the Company’s positioning in a global context. Covid 19 is a terrible tragedy, given it has or will impact each and every global citizen as we will still feel the economic and social consequences of it for a long way to come. But Covid 19 has also been a very timely wake up call for Governments and policy makers around the world, as we must secure the supply of sustainable raw materials for our value chains, if we want to leave a positive legacy for future generations. With ‘sustainable’ we not only mean ‘what minerals are we extracting’, but also ‘how are we extracting and processing them into higher value products’.

Our focus at Speciality Metals clearly is on critical and new economy minerals, those which are in growing demand to meet the global shifts in energy, industry and sustainability, ultimately allowing global society to increase living standards and human wellbeing. Looking at what is going on around the world – while still being in the midst of a pandemic – this subject has never been as pressing as today and very much being prioritized on geopolitical agendas. Tungsten has, just a few weeks ago, been recognized by the European Commission as having the highest economic importance of all raw materials in the European industrial eco-system, and is already listed by the US, Japan, India and Australia as a critical mineral. Bottom line, our team is committed to enhancing Speciality Metals’ existing portfolio and business model to contribute to this globally relevant agenda.

This is exciting and challenging at the same time, but I would like to invite you to continue to support our team on their journey to realise the potential of this Company to add significant value beyond our existing assets and for all stakeholders.

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Annual General Meeting

26 November 2020

AGM 2020

Disclaimer

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Competent Person's Statement

  • The information in this presentation relating to Mineral Resource summary are extracted from the following report on the Company's website, http://www.specialitymetalsintl.com.au/: Mineral Resource & JORC 2012 Compliance Update dated 13 January 2014. The underground resource is under review as announced by the Company on 16 October 2020: “High-grade Structural Zones Extend for 1.2km”. The Company confirms that it is not aware of any new information that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements.

General Disclaimer

  • The material contained in this document is a presentation of general information about the Company's activities current as at the date of this presentation. It is provided in summary and does not purport to be complete. You should not rely upon it as advice for investment purposes, as it does not take into account your investment objectives, financial position or needs. These factors should be considered, with or without professional advice, when deciding if an investment is appropriate.

  • This document may contain forward-looking statements with respect to the financial condition, results of operations, and business strategy of the Company. These forward-looking statements are based on estimates, projections and assumptions made by the Company about circumstances and events that have not yet taken place. Although the Company believes the forwardlooking statements to be reasonable, they are not certain. Forward-looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond the Company's control, and which may cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements (and from past results).

  • The Company makes no representation or warranty as to the accuracy of any forward-looking statements in this document and undue reliance should not be placed upon such statements.

  • Forward-looking statements may be identified by words such as “aim”, “anticipate”, “assume”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “should”, “will”, or “would” or the negative of such terms or other similar expressions that are predictions of or otherwise indicate future events or trends. The forward-looking statements included in this document speak only as of the date of this document. The Company does not intend to update the forward-looking statements in this document in the future.

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2

AGM 2020

Mt Carbine Quarry

Mt Carbine Overview

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3 AGM 2020

Progress Since AGM 2019 and Opportunities Ahead Mt Carbine Site

Production and cash-flow today…

Refurbished tungsten process plant commissioned and expanded to 300k tpa capacity

Proven viability of advanced XRT ore sorting for 20+ times upgrade of feedstock gradeCrushed (low grade) ore stockpile providing 10+ years feedstock for XRT operationDelivering first major quarry contract for by-product revenue stream

…with long-term growth opportunities moving forward. 100% ownership of mining leases and exploration permitsExisting 430m decline allowing cost- and time-efficient start of underground works Target production throughput of 1Mtpa by 2022 (permit application in process)

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W atershed
Mt Carbine
W olfram Camp
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The Mt Carbine deposit is situated in proximity to two other significant scale tungsten deposits; Geological potential to form a tungsten cluster in Far-North Queensland:

  • Watershed [2014 DFS by Vital Metals (2012 JORC): Ore Reserves of 21Mt @ 0.15% WO3, Mineral Resources of 49Mt @ 0.14% WO3, Exploration Potential of 49-80Mt @ 0.1-0.19% WO3]

  • Wolfram Camp [2015 Technical Report by Almonty Industries (NI 43-101): Ore Reserves of 375kt @ 0.22% WO3, Mineral Resources of 2.3Mt @ 0.29% WO3]

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Tungsten Operation
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Quarry Operation
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Exploration
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4 AGM 2020

Mt Carbine Site Tour

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Office, Lab &
1
Core Shed
2 3 5 Tailings Pond /
2
4 Retreatment
Plant
Quarry &
3
OOSR Stock-
pile
1
4 XRT Sorter
LG Ore Stock-
5
pile
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5 AGM 2020

Mt Carbine Site Tour - Retreatment Plant

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6 AGM 2020

Mt Carbine Site Tour - Quarry

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7 AGM 2020

Mt Carbine Site Tour - XRT Sorter

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8 AGM 2020

Mt Carbine Site Tour - Low Grade Ore / Waste Stockpile

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~30m
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9 AGM 2020

Mt Carbine Production & Development

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10 AGM 2020

Retreatment Plant Progress 2019/20

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11 AGM 2020

Mt Carbine Project Timeline

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2020 2021 2022
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 
Amendment Process
for 300,000tpa
Commence Phase 1 – XRT Pilot Plant Conversion to full time operation @300,000tpa & quarry project pipeline development
Pilot Plant Test Program while the Amendment is completed on the EA to increase to a total of 1,000,000tpa
Re-assess core & Complete resource evaluation, infrastructure development, sorting plant expansion,
interpret geo info and mine planning in preparation for receipt of amended EA
All projects now
running at increased
capacities under
revised EA
Complete component studies for 1Mtpa Amendment Submit Application for 1Mtpa Amendment
Continued operation of Mt Carbine Retreatment Plant and ongoing development of the quarry project pipeline
and marketing development in line with infrastructure targets and specialized products
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* EA = Environmental Authority

12

AGM 2020

XRT Pilot Plant - Mine Waste Transformation Process

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Oversize
Stockpile
-40mm +8mm
Aggregates
Primary Crush
Historic & Screen
Stockpile
-8mm to Stockpile for
Aggregate/Processing,
Assay Dependent
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XRT Sensor Based Sorting:

Increasing productivity Lowering resource consumption Maximising value derived from deposit

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REJECT ACCEPT
+8mm Upgraded Tungsten Ore
Taken to Beneficiary Plant
Stockpiling of Barren
Aggregates for Sale
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13

AGM 2020

XRT Pilot Plant - Development

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Commissioning completed Production scale-up ongoing

Development program

In line with environmental permitting

Structured & logical approach Development & feasibility work ongoing

Bulk Testing

Of mineralized stockpiles to understand characteristics of each (positive results so far)

Fines Generation

Test work conducted, thus far, shows significant value in processing of -8mm material from stockpiles (“fines”); Natural deportment of tungsten to fines fraction

Low Cost

Debulking waste by producing XRT concentrate early in beneficiation process, with increased grade in primary fines, sets operation apart from peers. Low OPEX processing historic mineralized stockpiles

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14 AGM 2020

Historic Stockpile Sampling for XRT Pilot Plant

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Trench & Pit Sample Program

Under the METS Ignited program, in line with SEI’s XRT feasibility work, several samples are being extracted and processed on a bulk basis.

In addition to this, several other bulk samples simulating production runs are being processed to verify consistency in sortability and stockpile characteristics.

Feasibility and financial modelling will take place once sufficient information is gathered.

Go-forward plan:

  • Convert Pilot Plant to full time operation

  • Complete detailed design of Phase 2 processing plant for 1Mtpa, secure environmental permitting, funding & execute expansion

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Trench & Pit Samples - METS Program

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15 AGM 2020

Mt Carbine Quarry - Evaluation & Development

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Historic Stockpiles

  • 12Mt Historic Waste Rock

  • 2Mt Historic Tailings

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Site Assessment
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  • Stockpiles low OPEX

  • • Equipment review • Personnel requirement

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Mt Carbine
Quarry
Development
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Growth Planning

  • Value-Add Product

  • • Leverage Government Infrastructure Plans

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Beneficial Reuse
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  • XRT and Retreatment Plant Waste used as Quarry Materials

  • • 18 Quarry Products

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Personnel Appointment
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  • Quarry Operations Manager

  • Several operator appointments

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Bama Contract
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  • Secured $4-Million with Bama

  • • Road Development FNQ

Equipment Modernisation

  • New Crushers & Modifications

  • Electrical Upgrade

  • • Investigating New Earth Moving Fleet

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16 AGM 2020

Mt Carbine Underground Development

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Open
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Open
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We completed re-assaying of historical drill core, as a basis for reinterpretation of the Mt Carbine underground resource and definition of High-Grade King-Veins .

Next steps in developing the underground resource:

  • Submission of facility documentation to re-open the portal & decline

  • Investigate state of decline

  • Complete underground survey & sampling

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17 AGM 2020

Mt Carbine Expansion Targets (part of ongoing feasibility work)

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Tonnes installed
capacity
2500 - 3000
3000
XRT Sorter Upgrade
subject to positive
outcome of feasibility
work & permitting
2000
Production
Guidance 2021 1200 - 1500
with existing plant
arrangement
UG Mine opening
1000 subject to positive
600 - 800
outcome of feasibility
work & permitting
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Next 12 months

Next 12-18 months

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Next 24 months
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*Basis 50% WO3 concentrate

18

AGM 2020

**The company is currently compiling independent feasibility reports for (1) the XRT sorter expansion (based on METS program results) and (2) an UG mine development planning

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Gold Exploration NSW

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19 AGM 2020

Our Gold Exploration Assets (100% owned)

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Extensive exploration potential both at Crow Mountain (EL6648) and Panama Hat (EL8024)

  • Shallow and underground gold workings dating back to the late 19[th] and early 20[th] century

  • Significant data set available from historical exploration programs and more recent activities conducted by the Company

  • EL8024 covers approx. 80% of the historical gold workings in the Broken Hill district (Company’s previous sampling program identifying rock chip samples of bonanza grade up to 83 g/t Au)

  • Drill ready targets identified on renewed tenement (EL8024 granted a further 5-year term to November 2024); EL6648 renewal submitted

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  • EL6648 – Historic gold occurrences and drilling conducted in 1984 and 2010

  • EL8024 – Surface geochemistry (rock chips) and gold occurrences by type of working

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20

AGM 2020

Strategic Roadmap with ESG Agenda

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21 AGM 2020

Our Value Proposition

Critical Minerals Security

US, UK, EU, Japan, South Korea and India classified tungsten as critical for its economies

Australia has a role to play (#2 largest tungsten resource globally)

Mt Carbine is Australia’s sole primary tungsten mine in operation

By-Product Revenue

Tungsten operations generating waste rock streams for use as aggregates/ road base for own quarry business

Quarry can operate based on tungsten waste rock from active operations or alternative historical stockpiles

Low Cost Expansion

Minimal investment since acquisition of mining leases, take over of existing installations

XRT sorting operation will allow output expansion of 500%

Lowest specific capex and opex amongst peers

World Class Resource

47.3Mt @ 0.12-0.14% WO3 and 12Mt @ 0.07% WO3 (JORC 2012 resource) Underground operation within two years

Upside potential through further drilling of West Dyke, Iron Duke and Petersen Lode, and collaboration across known tungsten belt in Far North Queensland

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First Class Infrastructure

Highway connecting to Cairns within two hours (Int’l airport, port facilities)

Nearby towns and regions allows local recruitment and sourcing

Previous operators developed mine site and underground decline (total replacement cost A$30m+)

Clear ESG Agenda

Resource efficiency as basis of operational strategies

ESG-related key performance indicators for leadership team Purpose-driven organization

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22 AGM 2020

Competitive Environment & Peer Analysis

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Industry Cash Cost vs Historic APT Price (in US$)*

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2018 2019 2020
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It’s all about China…:

  • High cost producers (primarily state-owned) supported floor pricing around 210 US$/mtu throughout 2020

  • Quota restrictions keeping domestic market in balance (thus “criticality” a problem of the western world)

  • More stringent environmental regulations expected to add cost to producers

Reported Cash Cost & Specific CAPEX of Selected Non-Chinese Producers (in US$)**

…and our own cost position:

  • We assume continuous by-product credits, supporting cost competitiveness

  • Expanding upon existing infrastructure allows industry leading specific-capex (=US$ investment per MTU reported capacity)

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300
200
Cash Cost Reporting
in 2021
100 (estimated by-product credits
approx. 30 US$/mtu)
Avg. Cash Cost Specific CAPEX Selected
Selected Non-Chinese SEI by-product credits Non-Chinese Projects
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*Source: Argus (2019), Company internal

23

AGM 2020

**Non-Chinese Producers/Developers: Almonty Industries, King Island Scheelite, Masan Resources, Ormonde/Saloro, Tungsten Mining, W Resources (information sourced from company presentations and public announcements)

Our Roadmap 2025

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The Company aims to create shareholder value through the exploration and development of its current portfolio whilst . continuing to evaluate corporate and exploration opportunities within the new economy & critical minerals sector

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2020 2022 2025
2020 2022 2025
Prepare Focus Accelerate
Define geo-metallurgical Portfolio review (divest or Portfolio diversification
potential of the Mt Carbine abandon projects without (3-4 production sites;
resource and concessions strategic fit) 2-3 commodities)
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Expand production at the Mt Carbine site for both tungsten and quarry

Be the lowest-cost tungsten producer outside China

Maximize return from the Mt Carbine concessions

Have a mix of cash generating assets and promising exploration projects

Be a top-3 tungsten producer (by output) outside China

Maintain a robust capital structure with minimum debt

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24 AGM 2020

Our Values

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Act Safe. Feel Safe.

Act safe at work. Care and respect each other. Feel safe to be yourself.

Embrace Difference

Diversity of thinking, skills and background creates value and drives innovation.

Tread Lightly

Embed resource efficiency to minimise environmental footprint and deliver positive societal impact.

Dig Deep

Go one better. Strive to continuously learn and improve. Challenge the status quo.

Buddy Up

Collaboration is key to realising shared value.

Lead with Integrity

Have courage to do the right thing. Be accountable.

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25 AGM 2020

Our Positioning

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Resource Efficient

  • We support the transition to a low carbon future and are committed towards sustainable development of natural resources

  • We produce minerals and metals in a way that decouples growth from environmental degradation ; for example, by extracting from secondary sources

  • We integrate advanced technologies to increase resource, cost and energy efficiencies

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Value-Oriented

  • We ‘ leapfrog’ old models and methods, and adopt new ways to maximise the potential of our assets

  • We invest in our people to enable, empower and retain a productive workforce

  • We consider sustainability a catalyst for long-term profitability and to increase shareholder value

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Critical for Tomorrow

  • We target new economy and critical minerals and metals that are in high demand to meet the global shifts in energy, industry and sustainability

  • We look for opportunities to innovate raw materials to deliver higher value and more environmentally-friendly products

  • We focus on continuously strengthening our portfolio with a mix of revenuegenerating assets and promising exploration projects

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26 AGM 2020

Walk the Talk

Resource Efficient

…extract from secondary sources … integrate advanced technologies to increase resource, cost and energy efficiencies

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Buddy up
… collaboration is key to
realising shared value
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Tread Lightly …minimise environmental footprint

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27

AGM 2020

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Thankyou Follow us

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28 AGM 2020