VYSARN LIMITED — Earnings Release 2021

May 26, 2021

ASX:VYS

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27 May 2021

ASX ANNOUNCEMENT

VYSARN OPERATIONAL AND EARNINGS UPDATE

Hydrogeological drilling service provider Vysarn Limited (ASX:VYS) (Company) provides operational update and earnings guidance for FY2021 and FY2022.

FY2022 Earnings and Operational Outlook

Subject to maintaining 100% rig utilisation the Company is budgeting FY2022 EBITDA (earnings before interest, tax, depreciation and amortisation) to be between $10.0 million and $11.0 million.

The Company currently has 83% rig utilisation (i.e. 10 rigs mobilised to site or on paid standby), expects to have 92% rig utilisation (i.e. 11 rigs mobilised to site or on paid standby) in June 2021 and anticipates 100% rig utilisation (12 rigs mobilised to site or on paid standby) in July 2021 conditional, upon third party service providers completing the final rig upgrade. Current contracts and continuing strong demand are then expected to deliver 100% rig utilisation throughout FY2022, noting that earnings are also conditional upon wet weather, unforeseen repairs and maintenance and other unbudgeted operational expenses.

FY2021 Earnings and Operational Update

FY2021 EBITDA is expected to be approximately $5.0 million. The Company previously provided guidance in February 2021 of $6.0 million.

Timing and availability of third-party critical services (for rig modifications and upgrades) and supply chain constraints have resulted in delays in rig readiness and subsequent actual mobilisations versus February forecasts. Additionally, the Company made a deliberate and strategic decision during the June quarter to attract and retain key drilling employees in a highly competitive labour market. This decision was to ensure the availability of guaranteed labour in anticipation of full rig utilisation in July 2021. Subsequently, the labour overhead in the June quarter has been disproportionately high compared to the average number of rigs utilised in the same period.

The consequential difference of approximately $1.0 million EBITDA is a result of not having all rigs operational from early in the June quarter as forecast and the additional drilling labour costs incurred pertaining to these rigs.

Capital expenditure and increases in working capital requirements required to reach 100% rig utilisation is nearing completion with Company net debt expected to be approximately $9.0 million (assuming normalised working capital) as at 30 June 2021. Given the forecast FY2022 rig utilisation and earnings the Company will aggressively amortise a significant portion of group debt in FY2022.

This announcement has been authorised for release by the Board of Vysarn Limited.

Vysarn Limited | ABN: 41 124 212 175 | ACN: 124 212 175 | 108 Outram St, West Perth, WA 6005 | PO Box 1974, West Perth WA 6872 T +61 (0) 8 6144 9777 | E info@vysarn.com.au | vysarn.com.au

For further information:

James Clement

Managing Director Vysarn Limited Telephone: +61 8 6144 9777 Email: info@vysarn.com.au

Disclaimer

This announcement contains statements, opinions, projections, forecasts and other material ("forward-looking statements") with respect to the financial condition, business operations and competitive landscape of the Company and certain plans for its future management. The words anticipate, believe, expect, project, forecast, estimate, likely, should, could, may, target, plan and other similar expressions are intended to identify forward-looking statements. Such forward-looking statements are not guarantees of future performance and include known and unknown risks, uncertainties, assumptions and other important factors which are beyond the Company's control and may cause actual results to differ from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. Any forward-looking statements contained in this announcement are qualified by this cautionary statement. The past performance of the Company is announcement makes any representation, assurance or guarantee as to the accuracy or likelihood of fulfilment of any forward-looking statements or any of the outcomes upon which they are based.

The announcement is not financial product, investment advice or a recommendation to acquire Vysarn securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Each recipient of the announcement should make their own enquiries and investigations regarding all information in the announcement including, but not limited to, the assumption, uncertainty and contingencies which may affect future operations of Vysarn and the impact that different future outcomes may have on Vysarn. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. Vysarn is not licensed to provide financial product advice in respect of its securities or any other financial products. Cooling off rights do not apply to the acquisition of Vysarn securities. Each investor must make its own independent assessment of Vysarn before acquiring any securities in Vysarn.

Vysarn Limited results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain non IFRS measures that are not prepared in accordance with IFRS and therefore are considered non-IFRS financial measures. The non-IFRS measures should only be considered in addition to and not as a substitute for, other measures of financial performance prepared in accordance with IFRS.

To the maximum extent permitted by law, the Company and its directors and advisers give no warranty, representation or guarantee as to the accuracy, completeness or reliability of the information contained in the announcement. Further, none of the Company, or its officers, employees or agents accepts, to the extent permitted by law, any liability for any loss, claim, damages, costs or expenses arising from the use of the announcement or its contents or otherwise arising out of, or in connection with it. Any recipient of the announcement should independently satisfy themselves as to the accuracy of all information contained herein.

Vysarn Limited | ABN: 41 124 212 175 | ACN: 124 212 175 | 108 Outram St, West Perth, WA 6005 | PO Box 1974, West Perth WA 6872 T +61 (0) 8 6144 9777 | E info@vysarn.com.au | vysarn.com.au