TMT: Quarterly Activities Report

The Board of Technology Metals Australia Limited (ASX: TMT) (“Technology Metals” or the “Company”) is pleased to provide an update on activities for the quarter ended 30 September 2020.

HIGHLIGHTS

TMT identifies opportunity to produce a high grade, high purity  iron-vanadium concentrate containing up to 66.3% Fe and 1.73% V2O5 from the Yarrabubba Iron-Vanadium Project. Premium product with very low levels of deleterious elements, indicates scope to produce a Platts 65 Fe product. Sinosteel Australia enters in to non-binding LoI to negotiate life-ofmine offtake and an EPC contract over the Yarrabubba Iron-Vanadium Project. Emergence of Yarrabubba is a major breakthrough for the Company, potentially delivering a low entry cost project that is complimentary to, and expected to reduce funding and implementation risk for, the Gabanintha Vanadium Project. Maiden Probable Ore Reserve estimate of 9.4Mt at 45.3% Fe and 0.97% V2O5 Defined for the Yarrabubba Iron-Vanadium Project. The two Project Mining Lease granted for an initial 21-year period. Workstreams to support the preparation of the GVP Environmental Review Document on track for the targeted submisison in the first quarter of calendar year 2021. MOU executed with APA Group to investigate the provision of gas transportation services along a new gas pipeline to be developed by APA from the south to supply gas to the GVP. Offtake MOU with Fengyuan extended until the end of December 2020 to enable the parties to fully evaluate the project development impact of the emerging Yarrabubba Project. Continuing to work with NAIF and other potential partners in line with the Company’s strategy to secure project development funding. As at the end of September 2020 the Company had cash of $2.2 million. As at 29 October 2020, the Top 20 shareholders held 49.5% of the fully paid ordinary shares.

Chairman, Michael Fry commented: “The TMT team has made significant progress during the quarter, with the identification of the opportunity to produce a premium iron-vanadium magnetite product from Yarrabubba potentially a Company defining outcome. A clear strategy to achieve a staged, cost effective development of TMT’s Projects is unfolding and we look forward to sharing this vision with stakeholders as it takes shape.”

During the September 2020 Quarter, the Company continued to progress the development of the high grade, low cost, large scale, long life Gabanintha Vanadium Project (“Project” or “GVP”). A key milestone achieved during the quarter was the grant of the two Project Mining Leases for an initial 21- year period. Activities progressed during the quarter included updating of the Yarrabubba IronVanadium

Project (formerly Southern Tenement) (“Yarrabubba Project”) Mineral Resource Estimate, delivery of the maiden Ore Reserve for the Yarrabubba Project, workstreams to facilitate the preparation and ultimate submission of the GVP Environmental Review Document (“ERD”), engagement with potential Project financiers / strategic partners and continued development of relationships with end users / vanadium industry participants. Subsequent to the end of the quarter, the Company executed a gas transportation agreement (MOU) with APA Group (“APA”) and announced that initial metallurgical testwork at the Yarrabubba Project demonstrated the ability to produce a premium high grade iron-vanadium magnetic concentrate product and that the Company had entered into an MOU with Sinosteel Australia (“Sinosteel”) to negotiate a life-of-mine offtake agreement for this product and an EPC contract with an affiliate of Sinosteel.

YARRABUBBA IRON-VANADIUM PROJECT (FORMERLY SOUTHERN TENEMENT)

The Yarrabubba Iron-Vanadium Project (formerly Southern Tenement), located on granted Mining Lease M51/884, is a satellite project to the globally significant GVP. The Yarrabubba Project was not included in the GVP definitive feasibility study (“DFS”). The updated Yarrabubba Project Mineral Resource estimate (“MRE”) was announced at the beginning of the September quarter and incorporated metallurgical testwork, consisting of Davis Tube Recovery (“DTR”) testing at the 250 micron grind size on 21 composite RC drill samples, which delivered:

• High mass recovery for the massive magnetite zone,

• Excellent vanadium recovery to magnetic concentrate,

• Higher iron and vanadium in concentrate grades than recorded in the Northern Block,

• Low silica and aluminium in concentrate

The mass recovery to a magnetic concentrate for fresh massive magnetite samples is very high, averaging 72%, with an average mass recovery across all material types of 59.1%. The average V2O5 in concentrate grades across all material types is 1.50% with an average iron grade of 60.5%. This testwork also demonstrated very low levels of the impurities silica and aluminium. The resource estimation work delivered an increased MRE for the Yarrabubba Project of 27.7Mt at 38.7% Fe and 0.9% V2O5 (a 29% increase from the previous Inferred Mineral Resource estimate), including a high grade massive mineralisation zone of 14.4Mt at 48.1% Fe and 1.1% V2O5 (ASX Announcement 1 July 2020). Importantly the updated MRE included a maiden Indicated Mineral Resource estimate of 9.6Mt at 45.3% Fe and 1.0% V2O5.

The maiden Indicated Mineral Resource estimate consists of only fresh mineralisation as informed by the DTR testwork. Fresh ore at the Yarrabubba Project commences from only 10 to 15m below surface, with predominantly transitional material and minor oxide above these depths remaining classified as Inferred due to limited metallurgical data from these shallow zones. The presence of higher yielding fresh ore close to surface, which is very similar to what is observed in the North Pit area of the Northern Block, has very positive implications for operating costs.

The updated Yarrabubba Project MRE was included in a revised ‘Global Mineral Resource estimate’ for the GVP (Inferred, Indicated and Measured), delivering an increased Global MRE of 137.2Mt @ 0.9% V2O5 and 38.9% Fe, containing an outstanding high grade component of 75.1 Mt at 1.1% V2O5 and 48.1% Fe. The Global Indicated and Measured Resource estimate has increased to 39.6Mt @ 0.9% V2O5, representing a 32% increase on the previous Global Indicated and Measured Resource estimate of 30.0 Mt at 0.9% V2O5 which supported. Open pit mine modelling and scheduling work was completed on the updated Yarrabubba Project MRE by independent consultant CSA Global. This work, incorporating metallurgical testwork results and geotechnical data from the 2018 diamond drilling, resulted in the delivery of the maiden Yarrabubba Project Probable Ore Reserve estimate of 9.4Mt at 0.97% V2O5 prepared in accordance with the JORC Code (2012 Edition) (ASX Announcement 16 September 2020). The maiden Ore Reserve represents a very high 98% conversion from the Indicated Mineral Resource estimate.

The maiden Yarrabubba Project Probable Ore Reserve estimate has been combined with the Northern Block Proven and Probable Ore Reserve to deliver a combined Proven and Probable Ore Reserve estimate of 39Mt at 0.9% V2O5, a 32% increase to the Ore Reserve included in the GVP DFS. CSA Global completed a mining study and update of the GVP mining and processing schedule based on the combined Proven and Probable Ore Reserve, targeting a production rate of 13,000 tonnes per annum V2O5 product. This work delivered a life of mine operating schedule of 22.5 years, a material increase to the initial 16 year Gabanintha project life identified in the DFS, based on a total inventory of 58.1Mt at 0.82% V2O5. The total inventory includes 47% Inferred Mineral Resource, although the first 11.9 years of the life of mine includes only 2% Inferred Mineral Resource. The majority of the Inferred Mineral Resource included in the ROM feed is within the banded and disseminated material and is processed towards the end of the life of mine. Yarrabubba High Grade Iron-Vanadium Magnetite Concentrate During the quarter, the Company commenced a program of Low Intensity Magnetic Separation (“LIMS”) testwork on seven (7) composite samples formed from PQ diamond drill hole material; two (2) massive fresh composites, three (3) hangingwall fresh composites, one footwall fresh composite and one transitional composite. This testwork was designed to verify the previously reported DTR results and assess iron and vanadium grades and recoveries at a range of grind sizes. Each composite has been milled down to eight (8) different grind sizes, ranging from 1,000 micron down to 32 micron, with each size passed through triple pass LIMS at 1200 Gauss.

Subsequent to the end of the quarter assay results were received for the two (2) massive fresh composites, confirming scope to produce a high grade, high purity iron-vanadium magnetite concentrate, with up to 66.3% Fe at 80.6% recovery and 1.73% V2O5 at 90% recovery for massive fresh one (MASFR1) at a 32 micron grind size. The average results for the two massive fresh composites at a 32 micron grind size are 64.9% Fe, 1.66% V2O5, 6.04% TiO2, 0.18% SiO2 and 0.99% Al2O3.

See Tables 3 and 4 for assay results for the range of grind sizes for MASFR1 and MASFR2 respectively, confirming very high recoveries of iron and vanadium ranging from 80.6 to 93.7% and 90.0 to 96.6% respectively. The LIMS testing of the two (2) massive fresh composites showed clear potential to discriminate between vanadiferous iron (V+Fe) phases and titanium (TiO2) containing phases across the range of grind sizes, with the majority of TiO2 rejected to the non-magnetic tails stream.

Importantly the testwork on the two (2) massive fresh composites also shows very high rejection of deleterious elements, delivering very low impurity iron-vanadium magnetite concentrates at the 32 micron grind size.

The high iron grades combined with the very low levels of impurities from this initial testwork demonstrates the scope for the Yarrabubba High Grade Iron-Vanadium Product to meet or exceed the premium Platts 65 product specifications.

There is a very strong correlation between contained iron and vanadium within the Yarrabubba Project mineralisation, however additional metallurgical testwork, engineering work and assessment of relevant modifying factors is required to assess the tenor and quantum of a possible Ore Reserve for the premium Yarrabubba High Grade Iron-Vanadium Product. The mineralisation is hosted in a differentiated gabbro closely associated with a series of massive to disseminated V-Ti-Fe bands ranging in size from a few metres up to 20–30 m thick. The mineralised units are offset and disrupted by later dolerites, faults and quartz porphyries, with a total of 14 faults interpreted to be younger than, and hence limit, offset or displace the mineralised zones. The mineralised layers strike approximately 125° to 305°, dipping on average approximately 55 towards 215°, with a modelled strike extent of approximately 1.6 km. The massive magnetite unit has a true thickness varying between approximately 5 m up to 25 m, with an average of approximately 11 m. The banded or disseminated magnetite mineralisation is interpreted to consist of up to 4 separate lenses, three in the hanging wall above the massive magnetite and one in the footwall. The cumulative true thickness of these mineralisation lenses is roughly between 7 m and 25 m.

Testwork is progressing on the five (5) remaining composite samples, with assay results for these composites expected in the coming weeks. The data from the seven (7) composites will provide a guide to the optimum blend of material types to deliver a consistent premium iron – vanadium product from the Yarrabubba Project. Further testwork is underway assessing the alteration in mineralogy that has led to these outstanding results and investigation of the components of the non magnetic tails stream.

ENVIRONMENTAL APPROVALS – GVP

The Company is progressing the workstreams required to address the key environmental factors identified in the Environmental Scoping Document (“ESD”) previously provided by the WA Environmental Protection Authority (“EPA”). The EPA has determined that the GVP will undergo a formal environmental impact assessment with no public comment period. Completion of these workstreams will facilitate the preparation and ultimate submission of the Environmental Review Document (“ERD”) for the GVP, which is targeted for the first quarter of calendar year 2021. During the quarter, the Company completed drilling programs to establish additional production water bores, as well as a series of borefield monitoring bores, to further quantify the water source for the Project. Work completed as part of the DFS identified a good quality water source within the paleochannel located to the north west of the processing facility covered by Miscellaneous Licence L51/102. The drilling was successful in developing the three planned additional production water bores spread along the paleochannel.

Subsequent to the end of the quarter, a program of pump testing was completed for the three additional production water bores designed to assess draw down and recharge rates for each of the bores. Water from the pump testing was captured in turkey nest dams. Data from the drilling and the pump testing will allow the Company’s consultants AQ2 to further develop the hydrogeological understanding of the borefield area to be included in the ERD.

Other environmental activities completed during the quarter included soil assessments, landform evolution modelling, subterranean fauna sampling and habitat assessment, material characterisation for processing waste streams and TSF design review. These activities all feed in to the various workstreams in support of the preparation of the ERD.

MARKET ENGAGEMENT

The Company continues to engage with groups with a shared long term view of the vanadium industry, a recognition of the high purity product and highly competitive lowest quartile cash operating costs of the GVP and having the capacity to participate at a meaningful level in the Project. The emergence of the Yarrabubba Project high grade, high purity iron-vanadium magnetite concentrate has broadened the Company’s market engagement, with TMT and Sinosteel Australia Pty Ltd (“Sinosteel”) entering into a non-binding Letter of Intent (“LoI”) with regard to negotiating a life-ofmine offtake agreement over the premium Yarrabubba High Grade Iron-Vanadium product (“IronVanadium Offtake”) and entering in to an Engineering, Procurement and Construction (“EPC”) contract with Sinosteel’s affiliate Sinosteel Equipment & Engineering Co., Ltd (“MECC”).

The Iron-Vanadium Offtake framework developed in the LoI includes:

• pricing to be based on the Platts 65% Fe Index Price (FOB) for contained iron and the FerroAlloyNet China V2O5 Index Price (FOB) for V2O5;

• annual quantity of up to 1.5 Mtpa of Yarrabubba High Grade Iron-Vanadium magnetite concentrate, subject to the product meeting defined quality specifications; and

• a term equal to the Yarrabubba Project life-of-mine.

The EPC contract will be subject to agreed competitive commercial terms and the availability of commercially viable project finance and will include the processing plant infrastructure, non-processing infrastructure and ancillary facilities. It is intended that the EPC contractor will manage the Project implementation through to commercial production, including pre-defined recovery and Product purity milestones, and engage with Australian engineering groups to assist as required. The parties intend to enter into negotiations that may lead to binding agreements for Offtake, EPC or both.

With regard to the Company’s vanadium offtake strategy it continues to target diversity of geography and end-user, engaging with potential offtake partners in China, Japan, South Korea, India and Europe. Discussions in these jurisdictions are at varying stages; ranging from executed binding offtake agreements and memorandums of understanding in China through to high levels of due diligence via access to the GVP digital data room with a range of entities in other jurisdictions. Entities that are engaged in discussions range from steel alloy producers, specialty alloy producers, electrolyte / battery manufacturers through to trading houses. As previously disclosed the Company has entered into a binding vanadium pentoxide Offtake Agreement (“BOA”) with CNMC (Ningxia) Orient Group Company Ltd. (“CNMNC”), a controlled subsidiary of China Nonferrous Metal Mining (Group) Co., Ltd. (“CNMC”). The BOA includes minimum sales of 2,000Tpa (4.4 Mlb pa) on a take-or-pay basis, equating to about 16% of the GVP’s forecast annual average production, over a three year term with an option to extend for a further three years. CNMNC’s vanadium alloy production business, is a top ten producer of vanadium alloys in China, producing both vanadium-nitrogen (“VN”) and ferrovanadium (“FeV”) for the Chinese domestic steel industry. During the quarter, TMT progressed due diligence in regard to the business and technology of Big Pawer Electrical Technology Xiangyang Inc. Co., Ltd. (“Big Pawer”) following the parties execution of a Memorandum of Understanding (“MoU”) in the previous quarter. The MOU contemplated negotiating a definitive and binding offtake agreement (“Agreement”) for the supply and purchase of vanadium pentoxide (“V2O5”) and the establishment of a JV to produce vanadium electrolyte / establish a VRFB manufacturing base in Australia. Big Pawer, headquartered in Xiangyang, Hubei Province, Peoples Republic of China, was established in 2002 and is one of the World’s leading VRFB research, development and manufacturing companies.

It has to date deployed over 20 VRFB’s across Asia, including Singapore, South Korea and India, and its VRFB R&D team is considered to be one of the top six R&D teams in the World. Big Pawer is considered

to be in the top 3 of VRFB enterprises in China, with only Dalian Rongke, Big Pawer and VRB Energy having MW scale projects.

The JV contemplated in the MoU provides the scope to bring together Big Pawer’s world leading proprietary VRFB technology and TMT’s very high purity product to establish a significant downstream value add industry in Australia. This opportunity further enhances the significant economic and social benefits for the Mid-West region of Western Australia, the State and the Nation that the development of Gabanintha is expected to generate over a long period of time.

The mutual due diligence to be completed by both parties is intended to include site visits, timing of which have been impacted by the travel restrictions imposed as part of the management of the COVID19 pandemic. The MoU is effective until the parties finalise agreement on the offtake terms and JV arrangements or the 30th December 2020, whichever occurs earliest, unless the parties mutually agree to formally terminate or extend the term. The Company is progressing offtake discussions with a range of counterparties across the steel and battery industries, including the previously announced 3,000Tpa V2O5 offtake MOU with Shaanxi Fengyuan Vanadium Technology Development Co., Ltd. (“Fengyuan”). The Company and Fengyuan have mutually agreed to maintain the MOU in full effect until the end of December 2020 to enable the orderly progression of mutual due diligence and to ensure the parties have fully evaluated the project development impact of the emerging Yarrabubba Project.

PROJECT DEVELOPMENT PARTNER ENGAGEMENT

Following the execution of a binding Notice of Award (“NoA”) in the previous quarter the Company continued to work with Danish engineering company FLSMIDTH, vanadium industry leading kiln suppliers, that offer advanced, custom-tailored rotary kiln solutions, with recent experience in the design, installation and support of roasting kilns for vanadium operations. FLSMIDTH, which completed the critical pilot scale kiln roast test work for the DFS on a bulk sample of Gabanintha magnetic concentrate at its facility in Pennsylvania, USA, has been selected as the preferred supplier of the key roasting kiln section of the Gabanintha vanadium processing plant. The supply contract with FLSMIDTH contemplates the completion of a front-end engineering and design (“FEED”) study and supply of the equipment for the roasting kiln section of the plant. The value of the supply contract is ~A$50 million (ex GST), including approximately A$860,000 (ex GST) for the FEED study. TMT may terminate the NoA at any time without cause, subject to payment of any outstanding fees related to activities completed up to the date of termination. Equipment and technology supplied by FLSMIDTH qualifies for financing support through the Danish export credit agency EKF, subject to EKF board approval and thorough due diligence processes. FLSMIDTH will engage in the process of obtaining support from EKF and during the quarter facilitated a meeting between TMT and EKF. EKF is owned and guaranteed by the Danish state and operates as a modern financial enterprise, helping Danish export by making it possible and attractive for customers abroad to purchase Danish products from Danish companies. During the quarter, the Company continued to work closely with the Northern Australia Infrastructure Facility(“NAIF”) and other Government agencies in support of the development of Gabanintha to be a producer of vanadium, a critical mineral with a vital role to play in the efficient and effective deployment of renewable energy. NAIF provide loans, which may be on concessional terms, to support and encourage infrastructure development in northern Australia, however at this stage, NAIF has not made a decision to offer a loan or provide financial assistance of any sort to the Company and there is no certainty that an agreement will be reached between the parties. The Company and its financial advisers are incorporating the potential involvement of NAIF, EKF and the assistance of other Government agencies into the evaluation of a range of Project financing strategies, which also include engagement with prospective strategic investors. The emergence of the Yarrabubba Project and the opportunity to produce a high grade, high purity Fe-V magnetic concentrate, is believed to be a major breakthrough for the Company, potentially delivering a low entry cost project that is complimentary to, and expected to reduce funding and implementation risk for, Gabanintha. The Yarrabubba Project is expected to be viewed favourably by prospective Project financiers and strategic partners, and to form a very important component in the Company’s Project financing strategy and the pathway to development of the GVP as the World’s next large scale, low cost, long life primary vanadium mine. Gas Supply Subsequent to the end of the quarter, the Company entered into a non-binding MOU with APA Group (“APA”) under which TMT and APA have agreed a commercial framework to investigate the provision of gas transportation services along a new gas pipeline (“New Pipeline”) to be developed by APA from the south to supply gas to the GVP. In return TMT would enter into a take or pay tariff over an agreed period linked to the life of the Project. The proposed New Pipeline, which is designed to come from a point to the east of Mt Magnet and extend approximately 152km north to the GVP, is less than half the length of the gas pipeline proposed in the DFS and is therefore expected to deliver material operating cost savings from lower gas transportation charges than those included in the DFS.

The location of the proposed New Pipeline will also enhance the opportunity for TMT to secure cost competitive gas supply from the rapidly emerging Perth Basin, with potential to further reduce gas transportation charges for the Project. TMT and APA have agreed to an exclusivity period on negotiation of the gas transportation services for the two year term of the MOU during which they will negotiate and endeavour to agree the transaction documents.

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