NEOMETALS LTD — Capital/Financing Update 2020

Jan 22, 2020

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23 [rd] January 2020
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BARRAMBIE PROJECT UPDATE

HIGHLIGHTS

• High purity titanium dioxide hydrolysate produced from recent Barrambie pilot trial

• Trial successfully recovered titanium at high rates (90%) from Barrambie concentrate feedstocks

• Results are being evaluated by potential JV partner IMUMR and titanium hydrolysate samples are being evaluated by multiple Chinese titanium pigment producers

• Barrambie Ministerial Approval renewed and Mining Proposal approved

Project developer, Neometals Ltd (ASX: NMT) (“ Neometals ” or “ the Company ”), is pleased to provide an update on its Barrambie Titanium and Vanadium Project (“ Barrambie ”). The Company has successfully produced high purity (>98%) titanium hydrolysate (hydrated titanium dioxide ‐ TiO2.2H2O) from the titanium recovery stage of its Australian pilot plant trial (“ Titanium Pilot ”). Importantly, titanium recovery from Barrambie concentrate exceeded 90%. The batch Titanium Pilot results confirm the technical feasibility of Neometals’ process at pilot scale for the production of a high purity intermediate (hydrolysate) used in the titanium pigment process.

The Barrambie resource contains high‐grade ilmenite intergrown with a vanadium‐bearing magnetite (iron) and, as demonstrated, the Neometals process flowsheet can produce a superior intermediate feed material that is safer, cleaner and cheaper to produce titanium pigment from. In addition, the Barrambie titanium hydrolysate has very favourable morphology and chemical properties that offer numerous cost and quality advantages for the titanium pigment industry. Further upside in this flowsheet for Barrambie is the recovery of the accessory vanadium and iron in a saleable form.

The Titanium Pilot is the first key evaluation milestone under the memorandum of understanding (“ MOU ”) with Chinese metallurgical group, IMUMR ( see Neometals ASX release dated 4[th] October 2019 ). Pursuant to the MOU, if IMUMR funds the demonstration plant program at its extensive research facilities in China, and both parties agree to jointly fund a formal evaluation study for a mining and concentrating operation at Barrambie with subsequent downstream processing in China, the parties may negotiate in good faith the terms of a 50:50 production JV. IMUMR has the right (subject to Neometals approval) to assign its interests under the MOU to a commercial Chinese chemical processing partner.

Samples of titanium hydrolysate have been freighted for evaluation by prospective concentrate offtake customers, being titanium pigment producers within and outside of China.

The next evaluation step is the recovery and production of a vanadium by‐product from the primary leaching stage of the Titanium Pilot Plant (see Figure 1). In parallel, Neometals is preparing approximately 10 tonnes of gravity and magnetic concentrates from the high titanium grade Eastern Band for the proposed Chinese demonstration plant trial. The vanadium test work and concentrates shipment should be completed by the end of the March Quarter 2020.

Neometals Managing Director Chris Reed commented:

“We are confident our flowsheet can produce the highest value‐in‐use for potential customers and recover maximum value from the deposit for Neometals and its partners. Proving an ore can be concentrated and converted to high purity chemicals at good recoveries is the first step in attracting quality offtakers to enable the development of globally significant industrial mineral projects, whether they be lithium or titanium. The outcomes to date bode well for advancing our commercialisation plans in 2020.”

info@neometals.com.au neometals.com.au

Locked Bag 8 West Perth WA 6872

ACN 099 116 361 Level 1, 1292 Hay Street West Perth WA 6005

T: +61 8 9322 1182 F: +61 8 9321 0556

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TECHNICAL SUMMARY

Pilot test‐work aims to prove at scale the optimal beneficiation and hydrometallurgical process flowsheets to capture the value of both titanium and vanadium in the Barrambie concentrates. A high‐level view process flowchart is shown below:

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The hydrometallurgical process flowsheet consists of two stages of leaching. Firstly, selective primary leaching produces a vanadium‐rich solution for the subsequent recovery of vanadium by‐products (leaching conducted at Neometals Montreal laboratory). The solid or ‘leach residue’ from filtering the primary leach solution, containing > 99% of the titanium values, is re‐ leached in a secondary leach step which produces a titanium‐rich solution. Titanium hydrolysate is then produced via selective precipitation under mild conditions which recovers ~90% of the titanium contained in the original primary leach feed. Titanium hydrolysate is produced in a manner that ensures it has very favourable acid digestion properties making it an attractive intermediate feed material for sulphate or chloride titanium pigment producers.

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Figure 1 ‐ High level view of the hydrometallurgical process Figure 2 – Neometals Titanium leach and hydrolysate

production reactors at Strategic Metallurgy, Perth

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PERMITTING

Neometals has received a five‐year extension to its Ministerial Approval 911 to develop a fully integrated mine, concentrator and chemical processing facility. It has also received approval of a Mining Proposal for a ~1Mtpa mining, crushing and screening operation. Neometals’ strategy is to have Barrambie development ready as it enters the final stage of demonstrating the significant value‐in‐use of its Barrambie mineral concentrates to the largest titanium pigment market, China.

NEXT STEPS

Bulk beneficiation test work involving both gravity and magnetic separation technologies is being undertaken at ALS (Australian Laboratory Services) and AML (Allied Mineral Laboratories) in Perth. This work continues as Neometals prepares to send 10 tonnes of Barrambie Eastern Band concentrate to the IMUMR research facilities in China, to feed the proposed demonstration plant. In addition to titanium hydrolysate samples, concentrates are also being prepared for evaluation by potential offtake parties.

Neometals plans to commence a Class 4 Engineering Cost Study (“ECS”) utilising results from the current piloting work with completion expected in the September Quarter 2020. The results of the study and the demonstration plant will be used to consider proceeding to a Class 3 ECS which would form the basis for IMUMR/Neometals to make an investment decision on a fully‐integrated titanium chemical business. Evaluation activities are expected to be complete by mid‐2021.

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Figure 3 – Professor Zhang (IMUMR) and Darren Townsend (Neometals) during the piloting

campaign and a filter sample of the product hydrolysate made during this visit.

ENDS

COMPETENT PERSONS STATEMENT

Metallurgy

The information in this report that relates to metallurgical test work results is based on information compiled and / or reviewed by Mr Gavin Beer who is a Member and Chartered Professional of The Australasian Institute of Mining and Metallurgy. Mr Gavin Beer is an employee of the Company and has sufficient experience relevant to the activity which he is undertaking to be recognised as competent to compile and report such information. Mr Gavin Beer consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Authorised on behalf of Neometals by Christopher Reed, Managing Director

For further information, please contact:

Chris Reed Jeremy Mcmanus Managing Director General Manager ‐ Commercial and IR Neometals Ltd Neometals Ltd T: +61 8 9322 1182 T: +61 8 9322 1182 E: info@neometals.com.au E: jmcmanus@neometals.com.au

About Neometals Ltd

Neometals innovatively develops opportunities in minerals and advanced materials essential for a sustainable future. With a focus on the energy storage megatrend, the strategy focuses on de‐risking and developing long life projects with strong partners and integrating down the value chain to increase margins and return value to shareholders.

Neometals has three core projects:

• Lithium‐ion Battery Recycling – a proprietary process for recovering cobalt and other valuable materials from spent and scrap lithium batteries. Pilot plant testing currently underway with plans established to conduct demonstration scale trials with potential JV partner SMS Group;

• Barrambie Titanium and Vanadium Project ‐ one of the world's highest‐grade hard‐rock titanium‐vanadium deposits, working towards a development decision in mid‐2021 with potential JV partner IMUMR; and

• Lithium Refinery Project – progressing plans for a lithium refinery development to supply lithium hydroxide to the battery cathode industry with potential JV partner Manikaran Power, underpinned by a binding life‐of‐mine annual offtake option for 57,000 tonnes per annum of Mt Marion 6% spodumene concentrate.

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23 [rd] January 2020
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JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

	Criteria JORC Code explanation Commentary
	Sampling techniques  Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.  Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.  Aspects of the determination of mineralisation that are Material to the Public Report.  In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information. Metallurgical drilling comprises 20 PQ core holes. Core was ¼ cut for assaying in 1-meter lengths.
	Drilling techniques  Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and ifso, by what method, etc). Metallurgical drilling was conducted by PQ drilling technique.
	Drill sample recovery  Method of recording and assessing core and chip sample recoveries and results assessed.  Measures taken to maximise sample recovery and ensure representative nature of the samples. A quantitative logging code was used to record recovery for the recent RC and DD drilling. Recovery of samples is considered to be good.
	ACN 099 116 361 Level 1, 1292 Hay Street West Perth WA 6005 Locked Bag 8 West Perth WA 6872 T: +61 8 9322 1182 F: +61 8 9321 0556 info@neometals.com.au neometals.com.au

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	Criteria	JORC Code explanation	JORC Code explanation	Commentary
			Whether a relationship exists between sample recovery and grade
			and whether sample bias may have occurred due to preferential
			loss/gainof fine/coarse material.
	Logging		Whether core and chip samples have been geologically and	Geological logging of core and rock chips was carried out recording
			geotechnically logged to a level of detail to support appropriate	lithology, major minerals, oxidation, colour, texture, mineralisation,
			Mineral Resource estimation, mining studies and metallurgical	water and recovery. The logging was carried out in sufficient detail to
			studies.	meet the requirements of resource estimation and mining studies.
			Whether logging is qualitative or quantitative in nature. Core (or
			costean, channel, etc) photography.
			_The total length and percentage of the relevant intersections logged. _
	Sub‐sampling		If core, whether cut or sawn and whether quarter, half or all core	All samples were dried, crushed to approximately 2mm, split and
	techniques and		taken.	pulverized.
	sample		If non-core, whether riffled, tube sampled, rotary split, etc and
	preparation		whether sampled wet or dry.
			For all sample types, the nature, quality and appropriateness of the
			sample preparation technique.
			Quality control procedures adopted for all sub-sampling stages to
			maximise representivity of samples.
			Measures taken to ensure that the sampling is representative of the
			in-situ material collected, including for instance results for field
			duplicate/second-half sampling.
			Whether sample sizes are appropriate to the grain size of the
			_material being sampled. _
	Quality of		The nature, quality and appropriateness of the assaying and	No field QAQC data was conducted by Neometals. Intertek
	assay data and		laboratory procedures used and whether the technique is considered	Genalysis conducted their own internal QAQC, with no issues being
	laboratory		partial or total.	reported.
	tests		For geophysical tools, spectrometers, handheld XRF instruments,
			etc, the parameters used in determining the analysis including
			instrument make and model, reading times, calibrations factors
			applied and their derivation, etc.
			Nature of quality control procedures adopted (e.g. standards, blanks,
			duplicates, external laboratory checks) and whether acceptable
			levels of accuracy (i.e. lack of bias) and precision have been
			_established. _

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	Criteria		JORC Code explanation	JORC Code explanation	Commentary
	Verification of			The verification of significant intersections by either independent or	Data was recorded in the field on paper logs and transferred to
	sampling and			alternative company personnel.	individual .xls files prior to merging with project database. No twin
	assaying			The use of twinned holes.	holes were drilled and no verification of significant intersections by
				Documentation of primary data, data entry procedures, data	independent laboratories has been undertaken.
				verification, data storage (physical and electronic) protocols.
				_Discuss any adjustment to assay data. _
	Location of			Accuracy and quality of surveys used to locate drill holes (collar and	Drill collar and azimuth were pegged in the field using GDA94
	data points			down-hole surveys), trenches, mine workings and other locations	system by independent surveyors.
				used in Mineral Resource estimation.
				Specification of the grid system used.
				Quality and adequacy of topographic control.
	Data spacing			Data spacing for reporting of Exploration Results.	Metallurgical holes were spaced at 50m intervals along the strike of
	and			Whether the data spacing and distribution is sufficient to establish the	the Barrambie mineralisation.
	distribution			degree of geological and grade continuity appropriate for the Mineral
				Resource and Ore Reserve estimation procedure(s) and
				classifications applied.
				_Whether sample compositing has been applied. _
	Orientation of			Whether the orientation of sampling achieves unbiased sampling of	Metallurgical holes were drilled within the plane of the Barrambie
	data in relation			possible structures and the extent to which this is known, considering	mineralisation.
	to geological			the deposit type.
	structure			If the relationship between the drilling orientation and the orientation
				of key mineralised structures is considered to have introduced a
				sampling bias, this should be assessed and reported if material.
	Sample security			The measures taken to ensure sample security.	Samples were stored onsite and transported to the laboratory on a
					regular basis by Neometals employees.
	Audits or			The results of any audits or reviews of sampling techniques and	No audits or reviews of sampling techniques and data have been
	reviews			data.	conducted.

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Section 2 Reporting of

Exploration Results

	Criteria	JORC Code explanation	Commentary
	Mineral	 Type, reference name/number, location and ownership including	The Barrambie mineralisation is within 100% owned granted mining
	tenement and	agreements or material issues with third parties such as joint	lease M57/173 in the Eastern Murchison Goldfields. No known
	land tenure	ventures, partnerships, overriding royalties, native title interests,	impediments exist in the area.
	status	historical sites, wilderness or national park and environmental
		settings.
		 The security of the tenure held at the time of reporting along with any
		_known impediments to obtaining a licence to operate inthe area. _
	Exploration	 Acknowledgment and appraisal of exploration by other parties.	No relevant exploration has been completed by other parties to
	done by other		acknowledge or appraise at this time.
	parties
	Geology	 Deposit type, geological setting and style of mineralisation.	The ferrovanadium titanium (Ti-V-Fe) deposit occurs within the
			Archaean Barrambie Greenstone Belt, which is a narrow, north-
			northwest to south-southeast trending greenstone belt in the northern
			Yilgarn Craton. The linear greenstone belt is about 60 km long and
			attains a maximum width of about 4 km. It is flanked by banded
			gneiss and granitoids. The mineralisation is hosted within a large
			layered, mafic intrusive complex (the Barrambie Igneous Complex),
			which has intruded into and is conformable with the general trend of
			the enclosing Greenstone Belt. From aeromagnetic data and
			regional geological mapping, it appears that this layered sill complex
			extends over a distance of at least 25 km into tenements to the north
			and south of M57/173 that have been acquired by Neometals. The
			layered sill varies in width from 500 m to 1,700 m.
			The sill is comprised of anorthositic magnetite-bearing gabbros that
			intrude a sequence of metasediments, banded iron formation,
			metabasalts and metamorphosed felsic volcanics of the Barrambie
			Greenstone Belt. The metasediment unit forms the hanging-wall to
			the layered sill complex.
			Exposure is poor due to deep weathering, masking by laterite,
			widespread cover of transported regolith (wind-blown and water-
			borne sandyand siltyclay),laterite scree and colluvium. Where

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	Criteria	JORC Code explanation	Commentary
			remnant laterite profiles occur on low hills, there is ferricrete capping
			over a strongly weathered material that extends down to depths of
			70 m.
			Ti-V-Fe mineralisation occurs as bands of cumulate aggregations of
			vanadiferous magnetite (martite)-ilmenite (leucoxene) in massive
			and disseminated layers and lenses.
			Within the tenement the layered deposit has been divided into five
			sections established at major fault offsets. Cross faults have
			displacements that range from a few metres to 400 m. The water
			table occurs at about 35 m below the surface (when measured
			where the laterite profile has been stripped).
	Drill hole	 A summary of all information material to the understanding of the	No exploration results being reported. Exploration results can be
	Information	exploration results including a tabulation of the following information	found in previous public reports.
		for all Material drill holes:
		o easting and northing of the drill hole collar
		o elevation or RL (Reduced Level – elevation above sea level in
		metres) of the drill hole collar
		o dip and azimuth of the hole
		o down hole length and interception depth
		o hole length.
		 If the exclusion of this information is justified on the basis that the
		information is not Material and this exclusion does not detract from
		the understanding of the report, the Competent Person should
		_clearly explain why this is the case. _
	Data	 In reporting Exploration Results, weighting averaging techniques,	No exploration results being reported. Exploration results can be
	aggregation	maximum and/or minimum grade truncations (e.g. cutting of high	found in previous public reports.
	methods	grades) and cut-off grades are usually Material and should be stated.
		 Where aggregate intercepts incorporate short lengths of high grade
		results and longer lengths of low grade results, the procedure used
		for such aggregation should be stated and some typical examples of
		such aggregations should be shown in detail.
		 The assumptions used for any reporting of metal equivalent values
		_should be clearly stated. _

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	Criteria	JORC Code explanation	Commentary
	Relationship	 These relationships are particularly important in the reporting of	There are no new exploration results to report. For past news
	between	Exploration Results.	releases of exploration results, all holes drilled at an angle of 60°
	mineralisation	 If the geometry of the mineralisation with respect to the drill hole	from the horizontal toward grid east or west, depending on the
	widths and	angle is known, its nature should be reported.	apparent dip of mineralised bands. All depths and intercept lengths
	intercept	 If it is not known and only the down hole lengths are reported, there	are down-hole distances and not intended to represent the true width
	lengths	should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).	of high-grade bands. Metallurgical holes were drilled within the plane of the mineralisation
			(i.e. down-dip) and therefore do not reflect the true width of the
			orebody.
	Diagrams	 Appropriate maps and sections (with scales) and tabulations of	All appropriate maps (with scales) and tabulations of survey
		intercepts should be included for any significant discovery being	parameters are reported.
		reported These should include, but not be limited to a plan view of
		_drill hole collar locations and appropriate sectional views. _
	Balanced	 Where comprehensive reporting of all Exploration Results is not	Due to size of the drill hole database, it is not practicable to report all
	reporting	practicable, representative reporting of both low and high grades	drilling results. Cut-off grade for reporting is a natural well-defined
		and/or widths should be practiced to avoid misleading reporting of	boundary for the higher-grade massive magnetite bands that will be
		Exploration Results.	the principal target for selective mining of the deposit.
	Other	 Other exploration data, if meaningful and material, should be	Only drill hole data used for resource calculation purposes.
	substantive	reported including (but not limited to): geological observations;
	exploration	geophysical survey results; geochemical survey results; bulk
	data	samples – size and method of treatment; metallurgical test results;
		bulk density, groundwater, geotechnical and rock characteristics;
		_potential deleterious or contaminating substances. _
	Further work	 The nature and scale of planned further work (e.g. tests for lateral	Limited ongoing exploration work is planned in the Barrambie area.
		extensions or depth extensions or large-scale step-out drilling).
		 Diagrams clearly highlighting the areas of possible extensions,
		including the main geological interpretations and future drilling areas,
		_provided this information is not commercially sensitive. _

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