Speciality Metals International Limited Annual Report 2020

12 Speciality Metals International Limited Annual Report 2020 Crow Mountain – New England The Crow Mountain tenement covers part of the Great Serpentine Belt in the western New England province of north eastern NSW. Shallow marine sediments of late Devonian age on the western side of the tenement are separated from much older deep marine sediments and intrusive rocks on the eastern side of the tenement by a major north-south trending structure, the Peel Fault. The fault is well known for the belt of serpentinite, formed by alteration of pre- existing ultra-mafic intrusives exposed for several hundred kilometers along the fault. Operating and Financial Review continued Historical work has shown that mineralisation occurs within the structure and is likely the conduit for much of the mineralisation surrounding the fault Targeting for drilling will concentrate on this conduit, however a mapping program will initially be undertaken, as the first step in the process, once the COVID-19 inter-state travel restrictions are eased. Chile The adverse geo-political climate in Chile during the 2020 financial year resulted in the Company deciding not to pursue any further exploration activities in this sector. The Company did not renew its Exploration Concessions (Pinta 1-15 and Bellavista 1-5) upon expiry of their initial term (refer to ASX announcement Quarterly Activities and Cashflow Report released on 30 April 2020). Tungsten Market Outlook Tungsten prices recovered towards the end of the 2020 financial year, coming from the peak of European FOB APT price US$352/mtu in June 2018 and a floor of US$200/mtu in September 2019 (source: Roskills Tungsten: Outlook to 2029 Report as announced by StreetInsider Premium on 22 April 2020). In the opinion of the Company, the APT price has bottomed out throughout the first half of 2020 and is now steadily increasing in response to positive impacts on manufacturing activities as a results of economic stimulus packages by governments globally. In its ‘Tungsten Outlook to 2029 Report’, Roskill forecasts tungsten demand to rise by over 1% per year between 2019 and 2029, driven by increased consumption in the cemented carbides and steel and alloys sectors. The lower demand from the automotive sector, due to rise of EV (electric vehicles) and lesser demand for cemented carbide tools used in their production, is expected to be offset by a larger demand for cemented carbide tools in other sectors, such as marine and mining. Roskill predicts the highest growth rate is set to be seen in the steel and alloys sector. According to another report (’Global Tungsten Carbide Market 2020-2024’ report published by ResearchAndMarkets.com, as announced on globenewswire.com on 29 June 2020 ), the tungsten carbide market is poised to grow by $4.04bn during 2020-2024 progressing at a compound annual growth rate (CAGR) of 4% during the forecast period. The factors identified by the author as driving the growth include the vast reserves of tungsten ores in China, dynamic properties of tungsten carbide, increasing demand from mining and construction industries and emerging applications of tungsten carbide. Peel fault and associated known gold occurrences