Neometals Quarterly Activities Report - Pioneering Circular EV Battery Materials Supply Chains

• Cash balance A$14.2 million, investments of A$22.7 million and no debt.
• Mercedes-Benz awarded Primobius purchase order for 2,500 tonne per annum battery recycling plant
• Engineering cost study indicates potential for Primobius' lithium production to be lowest cost globally
• Pilot plant trials co-funded with Bondalti in Portugal progressing, targeting potential 25,000 tonne per annum lithium hydroxide operation
• Strong interest from banks for financing vanadium recovery project in Finland, but decision made not to proceed with construction
• Offtake negotiations discontinued with Jiuxing for Barrambie titanium project, discussions ongoing with other parties

About Neometals

Australian company Neometals Ltd (ASX: NMT, LSE: NMT) is rapidly advancing its portfolio of proprietary technologies to sustainably produce critical battery materials from recycling and steelmaking waste. With strong industry partnerships, Neometals is demonstrating the economic and environmental benefits of its lithium-ion battery (LIB) recycling, lithium chemicals and vanadium recovery technologies.

Neometals is commercializing three environmentally-friendly processing technologies to produce strategic battery materials like lithium, nickel, cobalt and vanadium. By recovering these materials from waste streams instead of traditional mining, Neometals aims to reduce the industry's reliance on energy-intensive mining while supporting the circular economy.

The company operates via three core business units that are exploiting the technologies through partnerships and licensing models:

• LIB Recycling (50% technology share) – Commercializing via Primobius GmbH joint venture with German plant builder SMS Group. Providing recycling services in Germany and licensing technology to Mercedes-Benz. Targeting first commercial plant offer to Canada's Stelco.
• Lithium Chemicals (70% technology) – Commercializing patented ELi™ electrolysis to produce lithium hydroxide from brines/ores at low costs. Co-funding pilot plants and planning 2024 demonstration plant in Portugal with Bondalti Chemicals.
• Vanadium Recovery (100% technology) – Producing vanadium pentoxide from steel slag. Aiming to partner with steelmakers under a licensing model.

With this diversified model spanning multiple Critical Minerals and leveraging proprietary IP, Neometals is positioned as a key enabler of the global energy transition.

Major Milestones Across All Business Units

The September quarter saw Neometals achieve important milestones across all three core business units:

• Primobius GmbH, Neometals' 50/50 LIB recycling JV, received its first purchase order from Mercedes-Benz for a 2,500 tonne per annum battery shredding plant. This milestone marks the transition from demonstration operations to commercial plants.
• Engineering studies demonstrated Neometals' technologies have among the lowest operating costs globally for recovering lithium chemicals and vanadium from waste streams instead of mining.
• The lithium business progressed pilot plants and demonstration plant plans in Portugal with partner Bondalti Chemicals, a major chemicals producer.
• In the vanadium business, Neometals secured a 'take-or-pay' offtake agreement with Glencore for planned production in Scandinavia. This de-risks future operations.

With leading cost positions and maturing industry partnerships, Neometals is executing on its vision of sustainably supplying the battery materials needed for decarbonization.

Major Progress in Lithium-Ion Battery Recycling

Neometals' LIB recycling business achieved an important milestone by receiving its first purchase order from Mercedes-Benz, a global leader in electric vehicles. This initial 2,500 tonne per annum battery shredding plant will be installed at Mercedes' Kuppenheim site in Germany. It marks the shift beyond demonstration facilities to full-scale commercial plants integrated into auto manufacturing hubs.

The quarter also saw Primobius complete key engineering studies for a proposed integrated 21,000 tonne per annum recycling plant. The studies indicated Neometals' lithium recovery process could position it as the global lowest cost producer after nickel/cobalt credits.

With these engineering optimizations and initial purchase orders, Primobius is poised to capitalize on the enormous growth forecast in spent electric vehicle and consumer electronics batteries. LIB recycling will only become more critical as demand for sustainably produced battery metals accelerates.

Major Progress in Lithium Chemicals Production

In lithium chemicals, Neometals is pilot testing and designing a demonstration plant for its ELi™ electrolysis process that produces lithium hydroxide from brines at far lower costs than incumbent methods.

The quarter saw Neometals complete the first phase of pilot testing with partner Bondalti Chemicals, validating ELi's ability to achieve high lithium recoveries from brines. The remaining pilot testing will finalize operating parameters ahead of demonstration plant design.

Recent engineering studies indicate ELi™ could produce lithium hydroxide from brines at US$1945 per tonne, competitive with the lowest cost brine and spodumene projects globally. By eliminating the need for bulk reagents like lime, ELi™ also reduces transport costs and emissions.

With lithium prices over US$70,000 per tonne, Neometals' ELi™ process could provide developers a step-change in brine project economics. By licensing this tech to producers, Neometals can capitalize on rising lithium demand without major capex.

Major Progress in Vanadium Production

Neometals is also commercializing a process to extract high-purity vanadium pentoxide from steelmaking slag, aiming to partner with slag producers under a licensing model.

The quarter saw Neometals sign a 'take-or-pay' offtake agreement with Glencore for planned vanadium production from slag in Scandinavia. This agreement provides confidence in global demand and pricing.

Recent studies indicate Neometals' process could position it in the lowest quartile of the vanadium cost curve. The minimal steps and low temperatures required give it a negligible carbon footprint versus vanadium mining.

By providing a profitable solution for slag producers to extract vanadium units, Neometals can enable low-cost and sustainable vanadium supply without major capital outlay.

Advancing Towards Development at Barrambie Titanium/Vanadium Project

In addition to its three recycling/recovery technologies, Neometals is advancing its 100% owned Barrambie Titanium/Vanadium Project in Australia. With one of the world's highest-grade titanium deposits, Barrambie could become a globally significant supplier of sustainable titanium and vanadium units.

During the quarter, Neometals undertook further regional exploration, environmental studies and metallurgical assessments to optimize future extraction and recovery processes. It continues to engage with potential titanium offtake partners and contract miners to bring Barrambie towards a development decision.

Vanadium demand is forecast to grow over 9% per annum to 2030, driven by steel and energy storage uses. Barrambie contains a globally significant vanadium resource that could be developed to supply this growth. The project also stands out for its high-grade titanium mineralization, which could displace less sustainable titanium feedstocks.

Strong Financial Position to Execute Growth Strategy

With a robust cash balance and investments worth over A$36 million, Neometals is in a strong financial position to commercialize its portfolio of sustainable technologies.

Now that the first LIB recycling purchase order has been secured, investors can expect Neometals to focus on converting its pipeline of potential projects into firm contracts. This will see the shift from demonstration facilities to globally diversified commercial plants integrated into major auto and battery manufacturing hubs.

The lithium business will focus on completing pilot testing campaigns and advancing demonstration plant design work with partner Bondalti. Success here could see Neometals pivot towards licensing agreements with brine producers seeking to slash lithium production costs.

Finally, Neometals will aim to execute partnerships with slag producers seeking profitable vanadium recovery solutions with minimal operational risks and capital costs.

Conclusion

With proprietary technologies to sustainably produce battery materials at industry-leading costs, Neometals is executing a strategy that perfectly aligns with global decarbonization trends.

The September quarter marked an inflection point, with the first commercial recycling purchase order from Mercedes-Benz validating Neometals' business model. Investors can expect revenue growth and commercial traction to build from here as Neometals exploits its unique portfolio.

Backed by strong industry partners and a healthy balance sheet, Neometals has what it takes to establish itself as a key player enabling the electric vehicle revolution. Investors wanting exposure to the energy transition would do well to keep an eye on this emerging force in sustainable battery materials production.