EQ RESOURCES LIMITED — Capital/Financing Update 2019

Jul 2, 2019

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3 July 2019

SEI

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

ABN: 77 115 009 106 (ASX: SEI)

Registered Office: Level 17 500 Collins Street Melbourne VIC 3000 Ph: (03) 9614 0600 Fax: (03) 9614 0550 www.specialitymetalsintl.com.au Postal: PO Box 1496 Mareeba QLD 4880

Dear Shareholder,

NOTIFICATION TO INELIGIBLE SHAREHOLDERS

As announced on 2 July 2019, Speciality Metals International Limited (ASX:SEI) ( Speciality Metals or Company ) is conducting a pro rata non renounceable entitlement offer to raise up to approximately $2.9 million before offer costs ( Entitlement Offer ).

The Entitlement Offer provides eligible shareholders with the opportunity to subscribe for 1 new share for every 5 shares held at 7.00pm (Sydney time) on Friday, 5 July 2019 ( Record Date ) at an issue price of $0.018 per new share.

The Entitlement Offer is fully underwritten by Rymill Global Venture Ltd.

The Entitlement Offer will be made under section 708AA of the Corporations Act. Accordingly, the Company will not prepare a prospectus or other disclosure document.

The Offer Booklet can be accessed from the ASX and Speciality Metal's website, www.asx.com.au and http://www.specialitymetalsintl.com.au/ respectively.

This letter is to inform you that, unfortunately, you are not eligible to participate in the Entitlement Offer. You are not required to do anything in response to this letter.

Why am I not eligible to participate in the Entitlement Offer?

Shareholders who are eligible to participate in the Entitlement Offer ( Eligible Shareholders ) are those persons who:

• are registered as a holder of the Company's shares as at the Record Date;

• have a registered address on the Company's register of members in Australia, New Zealand, Singapore, Malaysia, the United Kingdom or the British Virgin Islands;

• are not located in the United States and are not a US Person or acting for the account of or benefit of a person in the United States or a US Person; and

• are eligible under all applicable securities laws to receive an offer under the Entitlement Offer.

The Company has determined, pursuant to section 9A(3)(a) of the Corporations Act 2001 (Cth) and Listing Rule 7.7.1(a) of the ASX Listing Rules, that it would be unreasonable to make offers to shareholders in countries outside of Australia, New Zealand, Singapore, Malaysia, the United Kingdom or the British Virgin Islands in connection with the Entitlement Offer.

The securities laws of many countries require the use of offer documents specific to that country or compliance with local laws for the Entitlement Offer to be made in those countries. Having regard to the number of shareholders in particular countries, the number and value of the Company's ordinary shares to which those shareholders would otherwise be entitled and the potential cost of compliance with local laws to make the Entitlement Offer in those countries, the Company has limited the countries in which the Entitlement Offer will be made.

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Unfortunately, according to our records, you do not satisfy the eligibility criteria for an Eligible Shareholder stated above.

Accordingly, in compliance with ASX Listing Rule 7.7.1(b), the Company wishes to advise you that it will not be extending the Entitlement Offer to you and you will not be able to subscribe for new shares under the Entitlement Offer.

As an ineligible shareholder you are not required to do anything in response to this letter.

On behalf of the directors and management of the Company, we regret that you are not eligible to participate in the Entitlement Offer and thank you for your continued support.

Yours sincerely,

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RH Krause

Executive Chairman

Speciality Metals International Limited

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