Rutile Producer Well-Positioned for Long-Term Growth Despite Global Supply Squeeze

• Sierra Rutile Holdings is an operating company in Sierra Leone, producing over 20% of the global supply of natural rutile, a critical mineral used in applications like aircraft construction and wind turbines.
• They are committed to ESG principles and supporting local communities in Sierra Leone.
• The company is looking to develop additional deposits in Semburn, Sierra Leone, to extend its operations and reduce operational costs.
• Sierra Rutile Holdings plans to complete a definitive feasibility study by the end of the year, with construction and operations at Semburn expected to begin in late 2026.

About Sierra Rutile

Sierra Rutile Holdings Limited (SRX) is the world's largest producer of natural rutile, accounting for over 20% of global supply. The company has been operating in Sierra Leone for over 50 years and is a major employer in the country. SRX was recently spun out from Iluka Resources and listed on the ASX. With tightening global rutile supply and ongoing demand growth, SRX looks well-positioned to increase production and maintain its position as the leading rutile supplier.

Operations Focused on Flagship Area 1 Mine

SRX currently operates the Area 1 mine in Sierra Leone, which has produced rutile, ilmenite and zircon for over 50 years. Area 1 has remaining ore reserves to support mining for at least 3 more years at a rate of 10-11 million tons per annum. There is potential to extend Area 1 mine life by 1+ year by re-treating tailings.

The company has a lean corporate office in Perth, with the vast majority of its 2,200+ employees based in Sierra Leone. Only around 30 expats work at the mine site, mostly from South Africa and Ghana, highlighting the company's focus on local employment. While shareholders are Australian, operations and employees are predominantly African.

Progressing Large-Scale Sembehun Development

SRX is progressing studies on a new major rutile mining operation at Sembehun, located 30km from Area 1. Sembehun will be the largest ever foreign direct investment in Sierra Leone at US$300 million. The company is working towards a definitive feasibility study by end 2022 and is running a financing process in parallel.

Sembehun will leverage existing infrastructure including the mineral separation plant and export facilities at Area 1. The operation is planned to start production in 2026 with an initial 13 years of ore reserves, extending SRX's rutile production lifespan. Significant additional resource upside exists at Sembehun beyond the initial reserves.

Rutile Market Fundamentals Support Expansion

Rutile is a critical mineral used in titanium dioxide pigment, titanium metal, and welding. It has limited substitution possibilities, with SRX's high-grade rutile best suited for demanding applications. Global rutile supply is set to decline by around 30% by 2027 as major operations cease production.

However, demand is forecast to grow strongly driven by the increasing use of titanium in aerospace, energy infrastructure and other critical manufacturing industries. SRX is uniquely positioned to supply this growing supply deficit. Sembehun will increase production levels while still maintaining global output.

Delivering Shareholder Value and Community Benefits

SRX aims to deliver value for Australian shareholders while also supporting its workforce and community in Sierra Leone. The company has a long-standing commitment to sustainability initiatives including community development programs and rehabilitation.

Sembehun represents a major investment in Sierra Leone's economy, employment, and future export revenue. SRX is focused on training and upskilling its largely local workforce. With project financing underway, definitive studies progressing well and tight market conditions, SRX looks on track to maintain its position as the leading global rutile producer.

The Investment Thesis for Sierra Rutile Holdings

• Favorable market fundamentals - With global rutile supply tightening and demand continuing to grow, especially in critical industries like aerospace, SRX is well-positioned to benefit from rising prices and demand for its products. Its high-grade rutile will be in strong demand.
• Increased production/reserves - The Sembehun project will significantly boost SRX's rutile production volumes and extends reserves well into the future. This will increase cash flow and the company's leverage to higher rutile prices.
• Cost advantages - As an existing producer with infrastructure in place, SRX expects to have major cost advantages developing Sembehun compared to a new greenfields project. This should deliver higher margins.
• Strong track record - SRX has over 50 years of successful rutile mining experience in Sierra Leone. It has established relationships and understands how to operate effectively in the country.
• Attractive valuation - The recent demerger and listing provide an opportunity to invest in a focused, pure-play rutile producer at an attractive entry valuation compared to peer mineral sands companies.
• Growth potential - Sembehun reserves likely understate the full potential of the deposit. Additional exploration success could substantially increase mine life and reserves.
• Shareholder returns - The mature Area 1 mine and Sembehun cash flows should enable SRX to fund growth while also delivering dividends/capital returns to shareholders.

In summary, SRX offers investors exposure to a strategically important mineral with strong tailwinds, significant production growth potential, and an experienced management team, at an attractive entry point. The outlook appears very positive.