Speciality Metals International Limited Annual Report 2020

Speciality Metals International Limited Annual Report 2020 17 as part of the process to pre-sort the mineralised material from the Low Grade Stockpile. This had been estimated to result in capital expenditure saving of AU$6.5M with the capital cost for the remainder of the plant to treat the stockpile estimated to be AU$8.5M. − Otherwise, capital cost for treatment of Low Grade Stockpile only was estimated to be AU$15M, based on a detailed EPCM exercise carried out in 2016 and revised in August 2018. − Operating costs were estimated to be AU$8.50 per tonne, however possible price increases for electricity were not factored into this estimate. 3. Tailings Speciality Metals has previously stated that the tailings stockpile contained approximately 2Mt at a global average grade of 0.1% WO 3 , based on comprehensive but non-JORC compliant historical studies. The stockpile includes a basal layer 1-2m thick amounting to approximately 400,000 tonnes of slimes (<75micron particles) with a global average grade of 0.35% WO 3 . Mt Carbine Mineral Resource Summary – Tungsten Resource as WO 3 (as announced to ASX on 13 January 2014) Resource Resource Cut-off Grade (%) Tonnes (Mt) WO 3 (%) WO 3 (mtu) Low Grade Stockpile Indicated 0.00 12.0 0.07 840,000 Main Zone Hard Rock Indicated 0.05 18.0 0.14 2,520,000 Main Zone Hard Rock Inferred 0.05 29.3 0.12 3,516,000 Total 59.3 6,876,000 Exploration targets adjacent to Inferred and Indicated Mineral Resources in the Mt Carbine sheeted quartz vein tungsten deposit. 1. Sheeted quartz vein system: Exploration drilling to date suggests that the Mt Carbine tungsten deposit may plunge to the north, and the deposit is open in this direction, to the south east and at depth. The deposit contains an Indicated Mineral Resource of 18Mt at 0.14% WO 3 (at a cut-off of 0.05% WO 3 ) based on drill core assays. These are considered to be conservative and influenced by the nugget effect characterising the deposit. Exploration of the depth extensions of the deposit will be carried out after production from this resource has commenced. 2. The Iron Duke prospect: The Iron Duke prospect on the eastern side of the planned open pit had been intersected in 6 drill holes, and mapped in detail on the surface and shown to extend more than 2km to the north of where it has been drilled. Surface width of the sub-vertical zone that hosts the Iron Duke mineralisation ranges from 10m to 20m over this strike length. Scheelite and minor wolframite mineralisation have been observed in rock chips along the entire length of surface exposure. The Iron Duke mineralisation is dominated by scheelite (whereas the main Mt Carbine sheeted quartz vein tungsten deposit is dominated by wolframite) and the weighted average grade of the 6 drill intercepts in the Iron Duke is 0.32% WO 3 over an average true width of 8m. The 6 drill holes cover a strike length of 300m, and the shallowest intersection of the prospect is at a depth of 100m immediately adjacent to the planned open pit. Although the surface expression of the Iron Duke adjacent to the open pit is now covered by mine dumps, historical maps indicate that it was recognised as a scheelite prospect at the surface in 1917, and therefore there is a reasonable expectation that the prospect will extend from the surface to below its present maximum drilled depth of 195m. The Iron Duke mineralisation is not included in either the present Inferred or Indicated Mineral Resources. Exploration of the Iron Duke to test grade, width and continuity was deferred due to market conditions in 2014. The Exploration Target for the Iron Duke over a strike length of 400m immediately adjacent to the open pit was 3.5Mt to 6.5Mt with possible grades ranging from 0.13% WO 3 to 0.59% WO 3 (based on drilling data), with the weighted average grade of drill hole intersections of 0.32% WO 3 possibly reflecting the average grade. This Exploration Target did not include the potential for further mineralisation along the established northern continuation of the prospect.