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NEOMETALS LTD Investor Presentation 2023

Aug 6, 2023

65430_rns_2023-08-06_3513fbb0-a4a9-477a-a6a9-0e6872981ad7.pdf

Investor Presentation

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Greener Battery Materials

Diggers and Dealers Mining Forum – 7[th] August 2023 ASX: NMT | AIM: NMT | OTC: RDRUY | DEU: 9R9

Authorised for release by Christopher Reed, Managing Director of Neometals

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ASX: NMT | AIM: NMT | OTC: RDRUY | DEU: 9R9 neometals.com.au

Disclaimer

Summary information:

This document has been prepared by Neometals Ltd (“Neometals” or “the Company”) to provide summary information about the Company and its associated entities and their activities current as at the date of this document. The information contained in this document is of general background and does not purport to be complete. It should be read in conjunction with Neometals’ other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au.

Investment risk:

An investment in securities in Neometals is subject to investment and other known and unknown risks, some of which are beyond the control of Neometals. The Company does not guarantee any particular rate of return or the performance of Neometals. Investors should have regard to the risk factors outlined in this document.

Forward-looking information:

This document contains, opinions, projections, forecasts and other statements which are inherently subject to significant uncertainties and contingencies. Many known and unknown factors could cause actual events or results to differ materially from the estimated or anticipated events or results included in this document. Recipients of this document are cautioned that forward-looking statements are not guarantees of future performance.

Any opinions, projections, forecasts and other forward-looking statements contained in this document do not constitute any commitments, representations or warranties by Neometals and its associated entities, directors, agents and employees, including any undertaking to update any such information. Except as required by law, and only to the extent so required, directors, agents and employees of Neometals shall in no way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatever nature arising in any way out of, or in connection with, the information contained in this document.

Financial data:

All figures in this document are in Australian dollars (AUD) unless stated otherwise.

Not financial product advice:

This document is for information purposes only and is not financial product or investment advice, nor a recommendation to acquire securities in Neometals. It has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making any investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction.

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Executive Summary

Neometals is enabling sustainable battery materials production from recycling and waste recovery – ‘walking the ESG talk’

Lithium-ion Battery Recycling

3 key proprietary, green processing technologies (15 granted. 48 pending patents)

To produce new battery materials from spent LIBs

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Lithium Chemicals

Vanadium Recovery

Demonstrating lowest quartile costs and carbon footprint in pilot, demonstration and commercial plant operations

To produce highpurity V2O5 via processing of steelmaking byproduct (“Slag”)

To produce battery quality LiOH from brine and/or hard-rock feedstocks using patented ELi™ electrolysis

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Commercialisation via incorporated JV’s with strong industry partners

Strong, growing team with trackrecord of value creation and shareholder returns

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Core Battery Materials Business Unit Snapshot

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1Neometals has the option to acquire between 25-50% of Stelco Battery Recycling SPV

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Unparalleled exposure to energy transition commodities

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  • Focus on Europe and North America where battery raw material resilience is critical

  • Emerging as World's 2nd and 3rd biggest battery producing regions

  • Raw material supply deficits predicted; new green, circular domestic supply needed

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Source: World Bank Group

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Lithium Battery Recycling Canada Hilchenbach, Germany Kuppenheim, Germany

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Vanadium Recovery
Pori, Finland
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Lithium Chemicals
Estarreja, Portugal
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Corporate Dashboard

ASX: NMT OTC: RDRUY
Shares on Issue(1) m 552.7
Share Price A$ 0.52
Market capitalisation A$m 284.7
Cash(30-Jun-23) A$m 24.6
Debt A$m
Investments(2) A$m 19.9

BROKER COVERAGE

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Latest research from Cenkos Securities (01-Aug-23), Euroz Hartleys (01-Aug-23), and RBC Europe Limited (1-Jun-23)

MAJOR SHAREHOLDERS(3)
David Reed
6.1%
Institutional Holdings 12.6%
Top 20 37.5%
No of Shareholders 14,257

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FY23 - Successful transition from upstream producer to downstream recycler. Inclusion in ASX300. Completed 4 Engineering Cost Studies. FY24 - Plan to scale-up recycling volumes and revenues through maiden plant supply to MB and other third-parties, build battery materials royalty portfolio from technology licencing.

12-MONTH SHARE PRICE PERFORMANCE

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2.00 20
1.80 18
1.60 16
1.40 14
1.20 12
1.00 10
0.80 8
0.60 6
0.40 4
0.20 2
0.00 -
Aug-22 Nov-22 Feb-23 May-23 Aug-23
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  • Notes: Market data as at 02 August 2023 (unless otherwise noted) 1Excludes ~11.9m performance rights

2Receivables and investments

3Latest research from Cenkos Securities (25-May-23), Euroz Hartleys (1-Aug-23), and RBC Europe Limited (1-Jun-23) 4As at 02 August 2023

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Experienced and Growing Team

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Board of Directors

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Stephen Cole Chris Reed Dr. Natalia Streltsova
Independent Managing Independent Non-
Chairman Director/CEO Executive Director
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Douglas Ritchie
Independent Non-
Executive Director
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Business Unit Heads

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Vanadium Recovery

Lithium Battery Recycling

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  • Over 30 years of experience in the energy and mineral resource space

  • Over 25 years of experience of development, mining and corporate experience for ASX and TSX-listed companies

  • Experience across Hydrogen, Solar, Embedded Bioenergy and Cathode materials for Lithium-ion Batteries (LiB)

  • Supported by 5 senior project team members

  • Darren Townsend Head of Vanadium

  • Supported by 5 senior project team

  • Merrill Gray members

  • Head of Recycling

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Dr. Jennifer Purdie Les Guthrie Independent NonIndependent NonExecutive Director Executive Director

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Lithium Chemicals

  • Over 30 years of experience in the metals industry, covering lithium, tantalum, vanadium, base metals, industrial minerals and chemicals

  • Supported by 5 senior project team members

  • Michael Tamlin Head of Lithium

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Sustainability Sustainability

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Neometals is committed to optimising finite resources with circular practices to benefit society and the environment for a sustainable future.

  • Focus on production of sustainable battery materials - reducing reliance on new mined materials.

  • Commercialising internationally recognised award-winning sustainable processing technologies.

  • Annual transparent sustainability reporting (since FY20) against four key pillars

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Sustainability Pillars:
Environmental care - Minimise negative Community benefits - Shared economics
impact on people and the planet. and social outcomes.
People - Foster an environment where
employees are valued and supported to Ethics and accountability - Continually
fulfill their potential. operate in an ethical and transparent
manner.
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Best Technology - Winner
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Lithium-ion Battery (LiB) Recycling

ACN 630 - Intellectual Property Holding Company 50% Neometals / 50% SMS group Primobius GmbH – Commercialisation Incorporated 50:50 JV with SMS group

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Aim is to be leading provider of recycling solutions to OEMs

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  • Our scalable plant solutions address growing volumes of production scrap and end-of-life batteries

  • Fast growing – high value urban mining opportunity

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Source: McKinsey Battery Insights (2023) 1 Numbers are rounded. 2 2023 Q1

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Our scalable patent-pending recycling technology

  • Novel process to efficiently recover majority of LIB constituents to generate materials that can be used for new LIBs

  • Safe, environmentally friendly equipment solutions backed by leading German plant builder

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  • Robust economics across leading battery chemistries Financials - Robust Economics Across Key Battery 50tpd Spoke and Hub cost studies demonstrate compelling economics for customers Chemistries
Spoke and Hub Engineering Cost Study Results
announced for ~50tpd integrated recycling facility at
assumed German site
Tools now available for plant purchasing customers and
analysts to quantify economic benefits at 50tpd scale
Lithium is the largest revenue stream and all costs against
lithium products (net of by-product credits) sees lowest quartile
offering
Spoke and Hub Engineering Cost Study Results
announced for ~50tpd integrated recycling facility at
assumed German site
Tools now available for plant purchasing customers and
analysts to quantify economic benefits at 50tpd scale
Lithium is the largest revenue stream and all costs against
lithium products (net of by-product credits) sees lowest quartile
offering
Spoke + Hub ECS
Annual Throughput (tpa) 21,000
(70% modules, 30% cells)
Annual Operating Cost (per annum)
(per t Feed)
€83.1 M / US$91 M(1)
€3,936 / US$ 4,356
Capital Costs
(incl 20% contingency)
€377 M(1)
US$417 M

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*For further information, refer to ASX release dated 1 August 2023 – “Battery Recycling ‘Hub’ Engineering Cost Study Results” and the assumptions set out therein. 1. Assumes 1:1 USD:Euro FX

Source: London Metal Exchange (Ni/Co Price), Benchmark Mineral Intelligence (Li Price), Primobius (product recoveries, payabilities, cell composition). For further information, refer to ASX release dated 31 July 2023 – “Battery Recycling ‘Hub’ Engineering Cost Study Results” and the assumptions set out therein regarding Opex and recovery percentages..

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Potentially lowest-cost lithium production costs

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Lithium is the only non-substitutable element in LIB and key revenue driver from product basket

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Source: London Metal Exchange (Ni/Co Price), Benchmark Mineral Intelligence (Li Price), Primobius (product recoveries, payabilities, cell composition).

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European Regulation Driving Automakers to “Close the Loop”

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  • Huge tailwinds from EU demonstrating ‘best practice’ mandatory, high recycling targets, North America following

  • Primobius plants will be fully compliant with all EU Battery Regulations for LIB recycling

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Minimum Higher
Compulsory Cu 90% Cu 95%
LiB required
carbon
recycling Ni 90% minimum Ni 95%
footprint
Key Measures of the declaration to recovery Co 90% recycling Co 95%
Battery Recycling customers rates recovery
Li 50% Li 80%
established rates
Regulations
2023 2024 2026 2027 2028 2030 2031 2032 Indicative
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Source: European Commission, FCAB

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Recycling creates resilient raw material supply chains

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  • Cellmakers required to include recycled content

  • Recycled lithium forecast to exceed mined lithium between 2038 ~ 2040

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Source: Plutonic Raw Materials Advisory (2023)

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Impact of Recovered Material
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Source: Argonne NL – Presented by Linda Gaines at IMLB2022

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Recycling = lowest carbon footprint raw materials

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Efficient LiB recycling significantly reduces the emissions to make tomorrows battery raw materials

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Source: McKinsey Battery Insights (2023)

1 United States, 2023 Q1.

Source: Duesenfeld

2 Assuming mechanical pre-treatment and hydrometallurgical recycling.

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Tailored equipment solutions backed by SMS group

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SMS is a 150 year-old leading German plant builder, ≥14,000 employees. production facilities in EU, NA, India and China Commercial Spoke and Demonstration Scale Hydromet Refinery at SMS Hilchenbach to tailor solution for customers

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Flexible business models for tailored customer solution

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  • Targeting sale of recycling plants under technology licensing agreements to earn project equity or royalty income

  • Licensing delivers lowest Total Cost of Recycling maximum, low-risk exposure to battery commodity prices

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Lower total cost of recycling
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Operational Model Revenue Model Primobius provides Disposal (tipping) fee Recycling-as-aper tonne and sale of Hilchenbach Disposal Operation Service (RaaS) to recovered materials. 1 Principal EV and LiB OEMs Equipment supply, Equity Share of operate & maintain NPAT from Stelco JV Option plants in equity joint operation 2 venture with EV and Partnership LiB OEMs Primobius/ACN630 has issued 10% Equipment supply Gross Sales Royalty under EPC and on all materials gross sales royalty covering Technology License recovered Scandinavia, UK, Italy and Balkans 3 to third parties. License

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Hilchenbach Disposal Operation – established EU presence

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  • CY23 Baseload feed EOL batteries from German OEM supply chain

  • Revenues from LiB tipping fee and sales of Black Mass, ramp to licensed capacity DecQ 23

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Note: Only battery production since 2017 considered, 2022 average spot market prices limited to Li, Ni, Co, Mn Source: Roland Berger Integrated LiB Demand and Supply Model

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Mercedes-Benz

Plant Supply and R&D Technology License and Collaboration

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  • Cooperation agreement between Mercedes-Benz

  • Primobius has offered to supply/install/commission equipment for MB’s 2,500tpa Integrated Recycling Plant in Kuppenheim, Germany (building above) on royalty-free basis

  • Long-term research collaboration to recycle next generation cell formats and chemistries

  • Strong validation of the Primobius technology

*For further information, refer to ASX release dated 13 May 2022 – “Primobius executes Co-operation Agreement with Mercedes Benz”

**Source: Mercedes-Benz Strategy Update: electric drive, July 2021

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Mercedes-Benz Target Cell Production**

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200 GWh
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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  • Key Illustrative Assumptions • ~10-year battery life

  • • ~4.5MWh to tonne of battery

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Potential Mercedes-Benz EOL LiB Recycling Requirements by 2040

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900ktpa of batteries

~50 x 50tpd OR 5 x 500tpd Plants

Potential EOL recycling requirement by 2040 with additional volumes potentially available from production scrap

Required to process*

*Based on Neometals assumptions.

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Steel Company of Canada (Stelco)

Technology License and JV Option (≤50%)

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in North America

  • Recycling venture to offer a holistic end-of-life vehicle recycling solution in North America with the ability to secure large feedstock volumes

  • Stelco will be responsible for supply of LiB feedstock and the securing of sites for plants

  • Exclusively licensed to Stelco for end-of-life LiB’s in North America with exception of German OEMs for a 10% gross revenue royalty[(1)]

  • Primobius has option to acquire 25–50% of the equity in Stelco’s recycling SPV, if exercised the licence will be royalty free

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Stelco has leased back 75 acres and 2 million sq feet of offices and buildings as part of a new industrial park at its Hamilton Works near Toronto

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  • *For full details refer to Neometals ASX release dated 31 December 2021 titled “Primobius to Enter North America with Stelco for Recycling of Electric Vehicle Batteries””

  • (1) Scope for reductions in the royalty rate depending on IRRs generated, and a minimum royalty fee in cases of stalled recycling production.

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Existing Technology Licenses

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Lowest-risk exposure to battery commodities, royalty earnings attract higher P/E’s than miners or chemical producers

10% Gross Sales Royalty on the following products recovered by the Primobius Integrated Flowsheet including:

  • Lithium

  • • Nickel

  • • Cobalt

  • • Manganese

  • • Copper

  • • Aluminium

  • • Carbon

  • • Ammonium Sulphate

Neometals is the largest shareholder in licencees – Hannans Ltd (26%) and Critical Metals Ltd (18%). Primobius holds an exclusive global licence with the exception of preexisting licences as outlined herein.

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Primobius Indicative Timeline

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JunQ 2023 SepQ 2023 DecQ 2023 MarQ 2024 JunQ 2024 SepQ 2024
Complete Hub Deliver Hub ECS Receipt of MB Hub Progress detailed Deliver detailed Commence
process
improvement
demo trial
Receipt of MB
Spoke PO
PO
Commence MB
Spoke installation**
engineering for
integrated ~50tpd
Spoke and Hub plant
engineering for
integrated ~50tpd
Spoke
installation of ~50tpd
Spoke for Stelco
Progress detailed*
Progress Hub ECS Deliver AACE Class
3 engineering on
integrated ~50tpd
Complete MB Spoke
installation
Commence MB Hub
Progress detailed
engineering integrated
~50tpd Spoke and Hub
engineering
integrated ~50tpd
Spoke and Hub plant
Spoke and Hub installation** Complete MB Hub
Offer Stelco 50tpd installation
Spoke*

Stelco Feedstock and Offtake Negotiations

  • Subject to Primobius GmbH and Neometals Limited Board of Directors Approvals

  • ** Subject to PO issue by Mercedes (“MB”)

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Highlights - Unique Positioning for Rapid Growth

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 Recovery of key battery materials in supply  Early mover advantage to deliver industrial
deficit LiB hydromet solutions
Robust

 Industry Rapidly growing TAM with exceptional
Potential to capture premiums for
Economics
Tailwinds policy tailwinds
ability to secure ethically sourced
material outlook
5 1
 Safe policy aligned method for
 Partnership with SMS allows for Partnerships Environmentally disposal of LiBs
4 2
to support
accelerated and de-risked plant rollout Friendly
Scale-up
Solution
3
 Low emission hydromet solution for
 Industry validation from Mercedes
OEMs to ‘close the loop’
& Stelco
Robust Technology
and Flexible
Business Model

 Flexible business models with ability to
High battery material recovery rates and ability to
deliver plants & license Technology so
process multiple battery chemistries
OEMs secure battery metals back
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