Speciality Metals International Limited Annual Report 2020

2 Speciality Metals International Limited Annual Report 2020 Chief Executive Officer’s Letter Dear Shareholders The past year has been a momentous year for Speciality Metals, transitioning from explorer to emerging producer. Getting things right on the operational front at our flagship Mt Carbine asset has been our focus. The four key development areas are visually presented in the project timeline set out in the Operating and Financial Review section of this report at page 5. In summary: 1. Leveraging the expertise and experience of our unincorporated joint venture partner, CRONIMET Australia Pty Ltd (part of the CRONIMET diversified commodities group), the Retreatment Plant has been successfully brought online and commissioned. We are continuing to improve and optimise the operations to increase production levels toward sustainable commercial levels. 2. The XRT Pilot Plant has been installed and has started processing bulk samples returning positive initial results of up to a 28x upgrade from head feed to concentrate. It is anticipated that the sorting technology will be employed for low cost bulk processing of the historical stockpiles around Mt Carbine and expansion to firstly 300,000 tonnes per annum and then the targeted 1 million tonnes per annum over the coming years, maximising resource value already on surface. 3. We’ve made large strides in the modernisation of Mt Carbine Quarries during the year having secured the $4 million purchase order from Bama Civil Pty Ltd. We are continuing to target infrastructure projects and contractors in the region for the sale of our various aggregates products to grow the quarry business as a steady source of revenue. At the same time, we are investigating collaborations to develop higher value/ lower emissions products. 4. The redefinition of the Mt Carbine resource has started and we are tracing high-grade veins labelled as “King Veins” with a view to developing the next phase, underground mining as a narrow underground deposit rather than block caving. With our exploration assets, we have been somewhat hindered in the further development of our gold assets in New South Wales due to government travel restrictions imposed in response to the COVID-19 pandemic. As the situation improves, we will be looking to reinstate our works program in relation to our licences. Concurrently, we remain open to new opportunities which fit our purpose and positioning. As previously announced, during the year, we made the decision not to renew our lithium interests in Chile as it was no longer the best strategic fit for us. Mt Carbine Site