VYSARN LIMITED — Investor Presentation 2021

Oct 4, 2021

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AGM PRESENTATION Investor Presentation NOVEMBER 2020 October 2021

Disclaimer

This presentation has been prepared by Vysarn Limited ("Vysarn" or the "Company") ("Presentation") and contains general and background information about Vysarn activities current as at the date of the Presentation. The Presentation should not be considered to be comprehensive or to comprise all the information that an investor should consider when making an investment decision. The information in the Presentation should be read in conjunction with Vysarn's other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, available at www.asx.com.au.

The Presentation 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 forwardlooking 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 forwardlooking statements contained in this document are qualified by this cautionary statement. The past performance of the Company is not a guarantee of future performance. None of the Company, or its officers, employees, agents or any other person named in the Presentation 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 Presentation 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 Presentation should make their own enquiries and investigations regarding all information in the Presentation 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 Presentation. 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 Presentation or its contents or otherwise arising out of, or in connection with it. Any recipient of the Presentation should independently satisfy themselves as to the accuracy of all information contained herein.

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VYSARN LIMITED ASX:VYS

The Path to Vertical Inte ration g

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Established Operations FY2020

Expanded Operations FY2021

• Vysarn Limited (‘Vysarn’ or ‘the Company’) acquired hydrogeological drilling assets from Ausdrill Limited (now Perenti Ltd) via its wholly owned subsidiary Pentium Hydro Pty Ltd (‘Pentium Hydro’).

• Enhanced and expanded operations, delivering sustainable profitability.

• Attracted additional highly experienced management and operational personnel.

• Increased rig fleet to 12.

• Executed multi-year Master Service Agreements (MSA) with Fortescue Metals Group Limited and Roy Hill Iron Ore.

• Assets acquisition only (no contracts or personnel).

• Relisted on ASX September 2019.

• Defined a clear growth strategy and positioned the Company to become a vertically integrated water service provider.

• Established experienced executive and operational team.

• Initiated operations and executed contracts servicing tier-1 miners.

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Enhanced & Vertically Integrated FY2022

• Delivering operational excellence.

• Realised opportunities to achieve full utilisation of rig fleet.

• ▪ Enhanced profitability via standardised and predicable contracts.

Transitioned to a vertically integrated water service provider

• Acquisition of Yield Test Pumping (‘Yield’).

• Provides low-risk entry into the water vertical with strong growth potential.

• ▪ Active assessment of additional acquisition opportunities ongoing.

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VYSARN LIMITED ASX:VYS

About Yield Test Pum in p g

About Yield Test Pumping

Yield is a leading provider of tailor-made test-pumping solutions to tier-1 clients in Western Australia. Utilising significant experience, innovative test pumping equipment and live data collection solutions, Yield’s data accurately characterises aquifer parameters, individual well and bore-field performance.

The robust, valid and statistically significant groundwater data produced from test pumping services is critical for the construction and management of large scale, complex and consistently evolving bore fields.

Premium pump testing equipment

Remote access & monitoring tech

Yield’s fleet of all terrain, test pump testing equipment consists of:

• Yield’s advanced remote access technologies allow remote: ▪ Selection of specific pump tests. ▪ Viewing of real-time test pumping data. ▪ Interpretation of aquifer properties with an overlay of hydrographs.

• ▪ Adjustment of testing parameters.

• Fully automated purpose-built truck mounted test pumping unit.

• Multiple submersible pumps.

• ▪ 330KVA generator.

• Full complement of support vehicles and ancillary equipment.

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Anticipated Annualised EBITDA* $700,000 - $800,000

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Asset Utilisation Personnel
100% 5
Key Client Type Length
Master Service
2 + 1 years
Agreement
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Previous Clients
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• *Annualised budgeted EBITDA for Yield (for the first 12 months of operations) under Vysarn ownership pre performance incentives for Yield management.

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The Im ortance of Test Pum in p p g

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Five Critical Tests
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Test pumping is the next service in the water vertical, occurring immediately after a well is drilled and cased

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Calibration test
Preliminary testing to guide the
following phases
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What is test pumping?

• Controlled abstraction of groundwater from a well and measurement of the pumping rate, water levels within the well and nearby observation wells.

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Step-test
Testing various pump rates to
determine well efficiency
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• Measurement of drawdown (or recovery) in water levels relative to the pumping rate allowing the hydraulic characteristics of the aquifer to be evaluated.

The importance of test pumping

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Test pumping data answers the following critical questions:

• The expected water yield from the well.

• The most efficient pump to deliver the water supply.

Constant rate test Determines the hydraulic properties of the aquifer

• Effect on the aquifer and nearby wells.

• The aquifer’s hydraulic properties (transmissivity, permeability, storativity).

• Optimal pumping rates required for dewatering.

• Assessing effects of pumping on nearby environmental features (creeks, wetlands, neighbouring groundwater users).

• Assessing effects of environmental changes on the well.

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Artesian Well test
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Free flow rate test of confined aquifers

Recovery test Monitoring aquifer performance post test pumping

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Ac uisition Rationale q

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The next service in the vertical

Strong clients & Foundation for staged relationships expansion

Lower risk vs. organic entry

Highly experienced with aligned culture

The next service

Pump testing occurs immediately after a well is drilled and cased.

Requested by clients

The integration of these services has been requested by Vysarn’s major clients and prospective clients.

Vysarn can now provide an integrated service of drilling and test pumping services.

Shared key client

Both Pentium Hydro and Yield have Master Service Agreements with Fortescue Metals Group Limited.

Strong track-record

Yield has also contracted to tier-1 clients such as Rio Tinto, highlighting their premium and certified service offering.

Strong Foundation

Yield has established a strong foundation for growth.

Operating as a founder owned private company, Yield has been naturally capital constrained.

Clear growth strategy

Integration into Vysarn will facilitate staged expansion to meet ongoing and increasing demand.

Optimal scale for entry

Acquisition of Yield presents a lower risk avenue to enter test pumping given that Yield comes with:

• Highly experienced team

• Quality contracts & relationships

• Premium equipment and technological systems

• Robust foundation capable of delivering scalable growth

Highly experienced

The Yield management team possesses significant test pumping and hydrogeological experience.

Aligned vision & culture

• Yield founder is aligned with Vysarn’s vision of building a specialised end-to-end water service provider of significant scale.

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VYSARN LIMITED ASX:VYS

Ac uisition Summar q y

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Deal Value
Cash Consideration Scrip Consideration
$2.875 million $2.50 million 5.0 million shares
Key Terms of Acquisition
▪ Vysarn will acquire 100% of the issued shares in Yield via a Share Sale Agreement (‘SSA’).
▪ Yield to be acquired debt-free with the acquisition including the business operations, Targeted Annualised EBITDA
contracts, tangible assets, working capital, intellectual property, transferring employees,
$700,000 – $800,000^
goodwill and sufficient inventory to support ongoing operations.
▪ Effective transaction date of 30 September 2021 with SSA condition precedents to be
satisfied or waived by no later than 30 November 2021.
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• Cash consideration adjustment mechanism within the SSA relating to agreed and targeted working capital of $150k and debt of $0 at completion.

• Managing Director and majority shareholder of Yield, Mr Dwayne Moppett, agreed to executive employment agreement for a term of three years to lead and grow the business.

Transaction EV/EBITDA ~4X

• Mr Moppett’s share consideration voluntarily escrowed for 12 months.

Acquisition Timetable

Binding Agreement	29 Sept 2021
Revenue Recognition (from)	1 Oct 2021
Expected Completion Date (by no later)	30 Nov 21

*Based on closing share price of $0.075 as at 29 September 2021 which was the execution date of binding Share Sale Agreement ^Before Yield management performance incentives as disclosed in ASX release Acquisition of Yield Test Pumping 30 September 2021

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STRATEGY & OUTLOOK

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Yield Growth Strate gy

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Yield presents a robust foundation capable of delivering significant growth and sustainable returns

Cross selling to Pentium Hydro clients

• Vysarn will become an integrated provider of hydro drilling and test pumping services.

• Strong inbound interest from existing and prospective clients for the provision of integrated test pumping services.

• Satisfying the test pumping requirements aligned to Pentium Hydro’s current contracts.

• Yield has previously serviced notable tier-1 clients, which will enhance Vysarn’s prospects of executing new multi-year MSAs for integrated services.

Test pumping fleet expansion

• Yield’s test pumping fleet is currently fully utilised under a MSA with FMG.

• Staged test pumping suite expansion planned to target specific client needs and market demand. Expansion to be undertaken via the design and construction of additional truck mounted automated test pumping units.

Operational excellence to deliver optimised returns

• Aggressive BDM, targeting MSAs and contracts that provide multi year work.

• Standardised and predictable structured contracts to achieve earnings from all operating activities.

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Client Pentium Hydro Yield
✓ ✓
-
✓
Active
Clients
-
✓
-
✓
-
✓
Previous
Clients
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• Maximise return on net operating assets.

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VYSARN LIMITED ASX:VYS

V sarn Growth Strate y gy

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“With the acquisition of Yield, Vysarn is executing on its vision to become a pre-eminent whole of life end-to-end water service provider”

James Clement – Vysarn CEO & MD

FY2022

~~Vertically Integrated Water Services~~ Provider

FY2023+

~~Large Diversified Water Services Provider~~

▪ EBITDA $10m+*.

• Integrate Yield Test Pumping and initiate staged growth strategy.

• Maintain full asset utilisation across Yield and Pentium Hydro.

• Execute/expand MSAs with Tier-1 client(s).

• Implement double shifting of a percentage of assets in drilling business.

• Execute additional organic entry or acquisition of vertical opportunity.

• EBITDA – Targeting sustained YoY growth.

• Continue staged expansion of test pumping offering (and other entries into the vertical).

• Aspirational large scale horizontal or vertical acquisition.

• Positioned as preeminent player in hydrogeological drilling space.

• Establish position as a major contractor in the whole of life end to end water service vertical.

• Target company transformational acquisitions in water services across Australia.

• ASX announcement Vysarn Financial Results for FY2021 (27 August 2021) Based on full rig utilisation with no significant rig downtime events such as prolonged wet weather, major mechanical breakdowns and COVID lockdowns

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VYSARN LIMITED ASX:VYS

Growth via Vertical Inte ration g

Vysarn is focused on continuing to build value, scale and diversity Vysarn is focused on continuing to build value, scale and diversity through organic growth and strategic acquisitions through organic growth and strategic acquisitions

Design

Stage 1

• Hydrogeological Consulting

• ▪ Borefield Design

• Infrastructure Design

• ▪ Engineering

The acquisition of Yield Test Pumping is the first step in Vysarn’s vertical integration strategy. Importantly it meets all Vysarn's acquisition criteria:

• ✓ Asking price is fair relative to earnings.

Extract

• ✓ Clear group strategic rationale (i.e. service demanded by client base).

Stage ✓ Drilling

• ✓ Acquisition comes with quality management and industry expertise.

• Borefield Construction

• ✓ Test Pumping ▪ Headworks

• ✓ Earnings are sustainable, with realistic growth prospects.Tweak to remove IP

2

• ✓ Potential to be immediately earnings accretive.

Vysarn is actively assessing additional upstream and downstream opportunities within the ‘four stages’ of water management

Transfer

• Stage ▪▪ Pump InstallationBore Pump Stations 3 ▪ Pipeline Construction ▪ Transfer Pump Stations

The ongoing transformation into a specialised whole of life water service provider aims to deliver:

• Reduced economic and concentration risk.

• Diversified revenue streams with a balanced mix of capital light and capital intensive businesses.

Store

• Stage ▪▪ Aquifer RechargeMine use 4 ▪ Water Treatment

• Scale and sustainable shareholder returns.

• Better service to current and prospective customers.

• Water Treatment

• ▪ Water Control

• Clear market positioning as a leader and ‘go-to’ provider of end-to-end water services.

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VYSARN LIMITED ASX:VYS

V sarn Outlook y

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Iron Ore Price Commentary

Q1FY22 Performance

FY22 Budgeted EBITDA

Corporate Development

• There has been no indication that Vysarn’s position will be impacted by the recent iron ore price volatility.

• Vysarn has positioned itself to be a provider of production critical services to tier-1, lowcost producers.

• This positioning aims to shield Vysarn against the consequences of price volatility typically experienced by exploration focused drilling companies.

▪ Demand for Vysarn’s services remains strong, from prospective and existing clients.

• Record quarterly EBITDA earned in Q1FY22 (based on unaudited management accounts).

• Completion of dual rotary rig rebuilds.

• Contracts in place that has enabled the utilisation of 12 drill rigs in the quarter.

• Opportunity identified and realised for the dry-hire of a thirteenth drill rig.

• Combined fleet of 13 drill rigs (12 Pentium Hydro owned & 1 dry-hired) now allocated to current clients.

• Vysarn is focused on integrating Yield and initiating its growth strategy.

• Current contracts in hand underpin the opportunity to maintain full utilisation of Pentium Hydro’s owned rig fleet throughout the remainder FY2022.

• Management has identified additional opportunities within the water vertical.

• The Company is budgeting –

• FY2022 EBITDA to be $10.0m $11.0 million*.

• These opportunities encompass organic business development and minor bolt-on services through to company transformational acquisitions.

• The integration of Yield is set to further underpin the FY2022 EBITDA budget, with potential for notable growth in FY23 and beyond.

• ASX announcement Vysarn Financial Results for FY2021 (27 August 2021) Based on full rig utilisation with no significant rig downtime events such as prolonged wet weather, major mechanical breakdowns and COVID lockdowns

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VYSARN LIMITED ASX:VYS

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Key Contacts

Vysarn Limited

Registered Office

Investor Relations

James Clement

Managing Director

108 Outram Street, West Perth WA 6005 Telephone: +61 8 6144 9777 ASX Code: VYS Website: www.vysarn.com.au

Alastair Murray

Candour Advisory M: +614 15 629 977 E: alastair@candouradvisory.com.au

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VYSARN LIMITED ASX:VYS