LETTER TO SHAREHOLDERS

20 March 2020

Dear Shareholder

Consistent with the Company’s commitment to deliver shareholder value and returns, Neometals Ltd is pleased to advise that it has announced the declaration of a partially franked dividend of 2 cents per share (approximately A$10.9 million dividend distribution in total) with a Record Date of 27 March 2020 and with payment anticipated to be made on 3 April 2020.
 
Despite the current backdrop of global health and economic challenge, the action is completely consistent with our long‐standing strategy of delivering shareholder value noting that Neometals has delivered cash returns of approximately A$45 million to shareholders progressively over the previous four financial years. Neometals is committed to continuing to deliver returns when prudent to do so.
 
Neometals has maintained a defensive business approach for some time, partnering early, sharing development costs and innovating to improve project margins. Previous project execution success has provided a strong and secure balance sheet from which to fund growth projects and pursue opportunities. In sharing a portion of the company’s cash reserves via a dividend payment, it is important to note that this is not done at the expense of our growth opportunities. Even after dividend, your Company maintains a robust cash reserve over and above its corporate overhead and project level funding requirements in the medium term.
 
Neometals recognises that COVID‐19 is a rapidly evolving situation impacting us all. Whilst acknowledging the disruption to global commerce, Neometals has materially completed its test work for its core projects and is transitioning to engineering studies for the remainder of calendar year 2020. In the current financial year Neometals entered into three agreements to jointly evaluate and potentially joint venture its three core projects. The lithium battery recycling project is the most advanced, with due diligence and legal documentation scheduled for completion next month.
 
Our commitment to the electric vehicle and energy storage thematic is resolute, and conviction grows at times like these, as the world considers the security of supply chains across the entire economy. The speed of electric vehicle adoption will slow momentarily but continue nonetheless.
 
In terms of the safety and wellbeing of our staff, partners and community. Neometals has actively monitored the COVID‐19 situation and we are following the advice of the Australian Government as a minimum.

The Company has taken significant measures to ameliorate risk to its stakeholders generally, which by extension, represents action that is in the best interest of Neometals and its shareholders as a whole. Specifically, travel has been materially eliminated, the majority of staff are working from home and face‐to‐face meetings have been significantly curtailed with video conferencing the preferred approach. As a project development company, remote work is already common place and we do not expect internal productivity to suffer.
 
Neometals will remain agile and the Board will consider a number of options to address the current environment where business fundamentals appear to be a casualty with a significant disconnect between our market capitalisation and free cash backing without value attribution for our upstream mining or downstream processing assets.
 
Please don’t hesitate to reach out to us personally or any of our team if you have queries or comments. Please stay safe and let’s look out for one another.
 
By order of the Board,

Steven Cole               Chris Reed
CHAIRMAN               MANAGING DIRECTOR