Speciality Metals International Limited Annual Report 2019

Page | 8 REVIEW OF OPERATIONS GOLD P ANAMA H AT – EL8024 Figure 1. Historical Workings EL8024 The Company holds 100% of EL8024, Panama Hat, 20km south east of Broken Hill in NSW. This licence covers 80% of the historical gold workings in the Broken Hill district, mainly small-scale workings dating from the Depression years of 1930-32. The workings are distributed along an arcuate north to north east trending linear zone (Figure 1 above). Considerable previous exploration has been carried out by various companies in the licence area since 1980, but sampling and mapping by Speciality Metals indicates that the geological setting of the gold was not understood, nor were the prospects in the licence adequately tested. The Company’s mapping indicates that the gold is hosted in pyrite (iron sulphide) bearing, subvertical quartz veins that strike right angles to the arcuate trend of old workings. This structural interpretation was found to be confirmed by NSW Geological Survey mapping but was not tested by previous explorers. As previously announced, sampling by Speciality Metals has determined that the near surface is likely to be intensely leached of gold, however sampling of waste dumps associated with deeper historical workings has identified gold values locally of bonanza grade (up to83g/t Au). Speciality Metals plans to drill a number of shallow RC holes to test the potential for oxide gold at open pit depths and has permitted 20 holes to enable this testing to commence. TUNGSTEN MARKET OUTLOOK APT prices hit a four-year high of US$350 per metric tonne unit in June 2018 as a result of a decrease in Chinese production. These prices have not been seen since September 2014 when the Fanya Metal Exchange was still active. For the remainder of 2018 the price trended lower before hitting US$275/mtu in January 2019. According to Roskill, Fanya is widely believed to have contributed to the last tungsten price spike in 2012-2014, as a result of APT purchasing that ultimately led to the accumulation of large stocks. However over the last few months, the APT price has stabilised and is currently in the range of US$210-255/mtu with some market analysts forecasting a price at around US$275-300/mtu in the near future and up to as high as US$445/mtu by 2023. Some factors that could drive the tungsten price higher in 2019 include how quickly new mine projects at La Parilla and Barruecopardo in Spain can ramp up and whether any of the APT stocks in Fanya are released to the market. In addition, a potential resolution to trade discussions between China and the US in the coming months could impact prices going forward. Source : https://smallcaps.com.au/tungsten-stocks-asx- ultimate-guide/, written by Danica Cullinane 5 June 2019. CORPORATE C HANGE OF C OMPANY S ECRETARY Mr Adrien Wing was appointed as Company Secretary for the Company, effective from 1 February 2019. Mr Wing is a certified practicing accountant. He previously practiced in the audit and corporate advisory divisions of a chartered accounting firm before working with a number of public companies listed on the ASX as a corporate and accounting consultant and Company Secretary. The Board would also like to thank Mr David Clark for his dedication and service since his appointment to the role of Company Secretary in July 2014 and the Company wishes him every success in his future endeavours. COMPETENT PERSONS’ STATEMENT The information in this Report that relates to Exploration Results and Mineral Resources and Ore Reserves is based on information compiled by Dr Andrew White, who is a Fellow of the Australian Institute of Geoscientists and a consultant to Carbine. Dr White has sufficient experience relevant to the style of mineralisation, mining and processing the type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr White consents to the inclusion of the matters based on his information in the form and context in which it appears.