Speciality Metals International Limited Annual Report 2019

Page | 2 CHAIRMAN’S REPORT Dear Fellow Shareholders, Speciality Metals International Limited (“Speciality Metals” or “the Company”) has had an extremely busy year. This year your Company has been successful in achieving the following: - • 100% acquisition of Mt Carbine Quarries Pty Ltd for $8 million dollars. This included the quarry business itself, all plant and equipment, out buildings and the Mining Leases over the Mt Carbine Tungsten assets. The purchase of the Mining Leases has resulted in the previously held Sublease becoming redundant from the Company’s perspective. • Completion of the Cronimet Asia Pte Ltd Retreatment Joint Venture and Offtake Agreement. • Completion of placements and fully underwritten Rights Issue to fund the Mt Carbine Quarry purchase and existing Retreatment Plant upgrades. The plant upgrades are based on significant metallurgical test work completed during the year on the Company’s Tungsten assets. • Restructuring of your Company’s Board and Management Team. • Employment of additional key staff. • Ongoing Insurance and Information Technology upgrades. • Ongoing Exploration Tenement reviews and restructuring. • Ongoing Corporate Compliance reviews and enhancements. • Ongoing development of our Corporate Business strategy, accounting and business systems and associated budgetary planning. • Ongoing review of the Australian Gold and Tungsten exploration concessions. • Detailed geophysical work and review of Chilean Boron and Lithium exploration concessions. The result of these achievements means your Company is now well positioned to commence a significant production growth phase over the next twelve months. This has been achieved against a backdrop of mixed financial markets and fluctuating commodity prices. Of recent times we have seen the Gold price surge and the Tungsten price, after a prolonged stable period, decline to around US$200 mtu based largely on fears of the overhanging stockpile held in the Fanya Metal Exchange. The good news is that in September 2019 this stockpile was auctioned and sold to China Molly, at a 4% premium on the spot price at that time. Most experts are now predicting a gradual increase in the Tungsten price. Hopefully these predicted increases will coincide with your Company’s future production schedules. The achievements in the past year have served to position Speciality Metals for a very exciting next twelve months of development. I am looking forward to the Retreatment Plant commissioning later this year and the associated production and revenue growth. The business development of the Mt Carbine Quarry, exploration work at Mt Carbine and further assessments of the gold concessions in NSW along with the completion of the geophysical review of the Chilean exploration concessions will also be an ongoing focus for the Company. I believe the past twelve months has well positioned your Company to enter the new financial year full of optimism. Your board is dedicated to achieving the best possible financial outcome for Speciality Metals. I am confident we will see these efforts reflected in our future results and that this translates to a stronger share price and a stronger and more robust Company. Yours truly, Russell Krause Executive Chairman