XRF SCIENTIFIC LIMITED — M&A Activity 2013

Jun 25, 2013

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26 June 2013

ASX and Media Announcement

XRF to Expand its Precious Metals Division by Acquisition

XRF Scientific Ltd (“XRF” or “The Company”) is pleased to announce that it has entered into a Memorandum of Understanding (MOU) to acquire the business of Kitco Labware, a division of Kitco Metals Inc. Kitco Labware is a supplier of platinum labware and precious engineered products, from its office in Montreal, Canada. It is expected that the acquisition will be completed by 31 July 2013, subject to certain approvals being obtained and conditions precedent being met.

Kitco Labware was founded in 2002 and currently has sales into Canada, USA and Latin America. The business has a diverse customer base that operates in industries such as cement, soil analysis, mining and petro chemicals.

XRF is currently a supplier to Kitco Labware, having provided fusion platinum labware products to the business since it was founded.

Key Acquisition Benefits

• A low‐risk, bolt‐on acquisition within XRF’s core technical, operational, financial and management competencies

• Broader access to key markets in the Americas and a strengthening of XRF’s distribution and customer network

• Diversification of revenue from mining into other industries such as cement, soil‐analysis and petro chemicals

• The business has professional, multi‐lingual and experienced employees, to support XRF’s international expansion strategy

• Enables expansion into key markets without having to establish far more expensive and administrative overheads using Australian staff

• Geographical expansion into Latin America, and

• Provides a significant new and expanded customer database

XRF’s CEO, Vance Stazzonelli, commented on the MOU “We are extremely pleased to announce the potential acquisition of Kitco Labware, which is a direct fit within our Precious Metals division. For some time now XRF has been reviewing acquisition opportunities as part of its medium to long term strategic plan, and this business ranks highly across all set criteria.

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The business will provide a profitable footing for XRF’s international expansion strategy, without incurring the high costs associated with establishing a totally new entity. XRF’s distributors and customers will have the benefit of around the clock support.

We look forward to welcoming the Director of the business, Hubert Coutu, and his team at Kitco Labware to the XRF Scientific group.”

Kitco Metals Inc. Senior Executive Vice President, Larry Pogue, commented “The understanding we have reached with XRF Scientific is a win‐win situation for both parties. For strategic reasons it allows Kitco Metals Inc. to concentrate on its core media and precious metals activities, whilst allowing Kitco Labware employees to continue to work within their field of expertise.

The solid growth of the business over the last decade is a credit to our Industrial Group Director Hubert Coutu. We look forward to seeing the business benefit from being part of a group that has a focus on platinum labware products.”

As Kitco Metals Inc. is operating subject to the Companies’ Creditors Arrangement Act (Canada), an order has been sought from the Superior Court of Quebec, authorising the execution of the Asset Purchase Agreement and the completion of the transaction.

Acquisition Price

The consideration for the acquisition will be as follows:

• CAD$1.7m cash on settlement

• An additional CAD$300,000 in cash consideration, should the business generate EBITDA of CAD$500,000 in the period of 12 months from settlement

• A further CAD$300,000 in cash consideration (pro‐rata), should the business generate an EBITDA result of between CAD$500,000 and CAD$650,000 in the period of 12 months from settlement

The acquisition will be funded from XRF’s existing cash reserves. In the last financial year the business generated EBITDA of $0.4m, and therefore it is expected that the acquisition will be EPS accretive.

Please direct any inquiries to:

Vance Stazzonelli Chief Executive Officer

vance.stazzonelli@xrfscientific.com +61 8 9244 0600

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About XRF Scientific:

XRF Scientific Limited is an Australian listed company (ASX: XRF) based in Perth, Western Australia. XRF manufactures equipment and chemicals, which are distributed to production mines and commercial analytical laboratories in Australia and overseas and used in the preparation of samples for analysis.

XRF has manufacturing, sales and support facilities located in Perth and Melbourne plus a global network of distributors. The Company has representation in the United States, South America, Canada, Europe, Africa, the Middle East and Asia and has a customer base that includes multinational blue‐chip customers such as:‐ BHP Billiton, Rio Tinto, Vale, Iluka, Xstrata, Nickel West, Robe River Iron Associates, Alcoa, CSIRO, Intertek, PT Inco, Pilbara Iron, Bureau Veritas, SGS and ALS.

XRF’s technology is used to measure the composition and purity of materials and is mainly applied in industrial quality control and in process control for manufacturing processes in industries such as metals and mining, construction materials, chemicals and petrochemicals.

XRF products help customers to improve product quality and performance, increase productivity and yield and reduce downtime and waste. Its businesses have established positions in their specialised markets.

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