Neometals Regulatory News (NMT)

17 March 2023

Neometals Ltd

("Neometals" or "the Company")

Vanadium Recovery Project Advances to Formal Finance Appraisal with European Investment Bank

Emerging sustainable battery materials producer, Neometals Ltd (ASX: NMT & AIM: NMT) ("Neometals" or "the Company"), is pleased to announce material progress in the finance process that is being run for its joint venture company, Recycling Industries Scandinavia AB ("RISAB") (see Neometals ASX announcement dated 2nd March 2023 titled "Neometals Now Controlling Shareholder in Vanadium Recovery Project SPV"). Specifically, RISAB's ongoing debt financing dialogue with the EIB has successfully passed the proposal for funding consideration stage and has now entered into a formal appraisal stage of diligence by the EIB. RISAB is engaged in discussions with several debt providers and will make a final decision on the debt funding package and participating lenders in due course.

Neometals is a 50% shareholder in RISAB which is evaluating the feasibility of constructing a facility to process and recover high-grade V2O5 from vanadium-bearing steel making by-product generated by SSAB EMEA AB and SSAB Europe Oy (collectively "SSAB") in Scandinavia. ("Vanadium Recovery Project "or "VRP1"). A Final Investment Decision for VRP1 is on schedule for June 2023, subject to successful project financing.

The EIB is the lending arm of European Union and one of the largest providers of climate finance through its focus on climate action and environmental sustainability.  Every year, the EIB provides direct loans for a wide range of projects.

The EIB proposal assessment noted that the VRP1 would be processing steelmaking by-product that is currently stockpiled, while the recycling nature of the project avoided upstream mining costs or associated operating risks. Importantly, The European Commission has identified vanadium as a "Critical Raw Material (CRM)" and the EIB notice published on the subject says "The project supports a circular economy solution that will reduce the usage of primary resources for vanadium manufacturing."

VRP1 has passed a key stage of finance appraisal with the EIB. Remaining in this appraisal stage is the lenders technical assessment (LTA) which has been prepared by independent third-party experts. EIB satisfaction with the LTA represents the last piece of diligence before a binding term-sheet can be offered for debt financing.

Neometals Managing Director Chris Reed said:

"We first submitted our proposal to the EIB in October 2022, its acceptance validates our circular economy ambition to produce critical raw materials in Europe. Typically, cornerstone funding from the EIB for environmentally sustainable opportunities in the battery supply chain is on very attractive terms. There is keen interest from a number of debt providers for the funding of the Vanadium Recovery Project. We watch with interest the imminent release of the EU Critical Raw Materials Act today in Europe, particularly the expected financial support for strategic projects that produce critical raw materials, like vanadium, where the EU is 100% dependent on imports."

Figure 1 below shows the EIB loan 'project cycle'.

Figure 1: EIB loan 'Project Cycle'

 Current Status

Authorised on behalf of Neometals by Christopher Reed, Managing Director.

ENDS

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About Neometals

Neometals is an emerging, sustainable battery materials producer. The Company has developed a suite of green battery materials processing technologies that reduce reliance on traditional mining and processing and support circular economic principles.

Neometals' three core battery materials businesses, listed below, are commercialising these proprietary, low-cost, low-carbon process technologies:

· Lithium-ion Battery ("LIB") Recycling (50% equity) - to produce nickel, cobalt and lithium from production scrap and end-of-life LIBs in an incorporated JV with leading global plant builder SMS group. The Primobius JV is operating a commercial disposal service at its 10tpd Shredding 'Spoke' in Germany and is the recycling technology partner to Mercedes Benz. Primobius' first 50tpd operation, in partnership with Stelco in Canada is expected to reach investment decision in JunQ3 2023;

· Vanadium Recovery (50% equity) - to produce high-purity vanadium pentoxide via processing of steelmaking by-product ("Slag"). Finalising evaluation studies on a 300,000tpa operation in Pori, Finland, underpinned by a 10-year Slag supply agreement with leading Scandinavian steelmaker SSAB. Finnish project investment decision with JV partner, Critical Metals, expected June 2023. MOU with H2Green Steel for up to 4Mt of Slag underpins a potential second operation in Boden, Sweden; and

· Lithium Chemicals (earning 35% equity) - to produce battery quality lithium hydroxide from brine and/or hard-rock feedstocks using patented ELi® electrolysis process owned by RAM (70% NMT, 30% Mineral Resources Ltd). Co-funding pilot plant and evaluation studies on a 25,000tpa operation in Estarreja with Portugal's largest chemical producer, Bondalti Chemicals S.A.

For further information visit www.neometals.com.au