Announcement PDF Yangibana Rare Earths and Niobium Project Annual Report 2024 Annual Report 2024 Contents Acknowledgment of Country Hastings Technology Metals acknowledges the Traditional Custodians of Country and their connections to land, sea and community in the spirit of cooperation and mutually beneficial objectives. We pay our respect to their Elders, past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples today. We acknowledge the Traditional Custodians on the land in which we operate. Corporate Information Letter from the Chairman  02 Executive Leadership Team  06 Review of Operations  08 Environment, Social and Governance Review  12 Mineral resources and ore reserves statement  14 Tenement Schedule  21 Directors’ Report  24 Corporate Governance Statement  54 Auditor’s Independence Declaration  55 Consolidated Statement of Profit or Loss and Other Comprehensive Income  56 Consolidated Statement of Financial Position  57 Registered office Bankers Level 3, 5 Mill Street National Australia Bank – Perth WA Australia Consolidated Statement of Changes in Equity  58 Perth WA 6000 Westpac – Sydney NSW 2000 Australia Consolidated Statement of Cash Flows  59 Auditors Notes to the Financial Statements  60 Principal place of business PricewaterhouseCoopers Level 3, 5 Mill Street 125 St Georges Terrace Consolidated Entity Disclosure Statement  93 Perth WA 6000 Australia PERTH WA 6000 Directors’ Declaration  94 Mr Malcolm Randall Share register Website Independent Auditor’s Report  95 Mr Jean Claude Steinmetz Automic Group www.hastingstechmetals.com Additional Shareholder Information  99 ABN 43 122 911 399 Directors Mr Charles Lew (Chairman) Mr Guy Robertson Mr Neil Hackett Mr Bruce McFadzean Joint Company Secretaries Mr Guy Robertson Mr Neil Hackett Telephone: +61 (8) 6117 6118 Level 5, 191 St Georges Terrace Perth WA 6000 Telephone: +61 1300 288 664 Securities Exchange Australian Securities Exchange ASX Code: HAS Solicitors King & Wood Mallesons – Perth WA Australia Herbert Smith Freehills – Perth WA Australia Annual Report 2024 | 1 Letter from the Chairman Dear Fellow Shareholders, With humility and gratitude, I present Hastings Technology Metals Ltd’s (“Hastings” or the “Company”) Annual Report for the financial year ended 30 June 2024, a year defined by steady progress and strategic consolidation. Throughout this period, we have made considerable strides in advancing our flagship Yangibana Rare Earths and Niobium Project (the “Project” or “Yangibana Project”), bringing us ever closer to production. Along the way, we have made some exciting discoveries, forged key partnerships, driven down capital costs and laid a strong foundation for the future. We also launched our new Vision and Values where our people developed our culture strategy, outlining behaviours critical towards achieving our vision to become Australia's next rare earth producer. These milestones have not only improved our prospects but have also positioned Hastings to be a leading multicommodity mining company with a strong focus on the rare earth magnets industry. Advancing Yangibana Yangibana is located in the remote Upper Gascoyne region of Western Australia. Major developments were achieved in this last financial year. With the unwavering support of our shareholders to date, we have invested $154 million in mine infrastructure and equipment 2 | Hastings Technology Metals procurement. Our accomplishments include the completion of the 298-bed Kurbilli accommodation camp, a 1.8 km airstrip capable of landing 70-seater planes, the construction of four water bores, telecommunications towers, and over 20 kms of site access roads. This substantial progress represents 32% of the Project’s total capital cost, effectively de-risking our capital expenditure and marking a significant milestone in our journey towards production. Four months ago, we proudly hosted a group of 50 investors, media, banks, research analysts, government and key stakeholders for a site visit, showcasing the infrastructure and progress at Yangibana. The positive feedback received has reinforced our commitment to delivering on our promises and staying focused on our strategic goals. In August 2023, we signed a fixed-price, fixed-schedule Engineering, Procurement, and Construction (“EPC”) contract valued at $210 million with GR Engineering Services (“GRES”), one of the leading and wellestablished process engineering and contracting companies in Western Australia. GRES has an enviable track record and this contract, which includes a process warranty, will further de-risk our path to production. Reduced Capex I would like to commend the Hastings’ management team for achieving a significant cost reduction of $56 million following an in-depth cost review exercise. The Project’s capital cost has been reduced to $474 million. With $154 million spent to date on the mine site infrastructure, the remaining capital cost is $320 million, including $27 million for contingency. Unlocking Additional Value Recent geological findings have unlocked further potential at Yangibana. Our Chief Geologist, Dr Louis Schumann, revealed the relative simplicity and economic viability of processing niobium concentrate for sale from our rare earth tailings. Niobium, essential for high-tech alloys in jet engines, steel beams and girders for bridges and building construction also possesses superconducting properties used in advanced technology magnets for medical and material science. We recently published an initial niobium resource estimate based on historical drilling at Bald Hill and Simon’s Find. Along with hafnium-rich zircon, the Yangibana Bald Hill and Simon’s Find deposits show a well-balanced commodity basket of high value. Further work is underway to bring this into a reserve estimate in the next few months. Additionally, exploration at Centipede Range (approximately 50km from Bald Hill) revealed a high concentration of heavy rare earths, where dysprosium (Dy) and terbium (Tb) to total rare earth oxides ("TREO") ratio of 11.8% ranks it high up on a global scale as a valuable heavy rare earth oxides deposit. Yangibana’s unique geology within the Gifford Creek Ferro-carbonatite zone hosts an abundance of highgrade NdPr and critical metals, setting the foundation for an expanded multi-commodity operation. Our beneficiation plant design is suited for minor modifications, enabling us to produce ferrocolumbite niobium and hafnium-rich zircon at minimal additional cost. As we progress, we will expand and define this multi-commodity potential. Importantly, Yangibana’s location and established infrastructure positions us to accelerate our path in establishing a multi commodity complex within a similar timeframe as our rare earth concentrate production. This is especially crucial as global supply chains increasingly seek to diversify away from Brazil, which currently provides 90% of the world’s niobium supply. ESG and Community Engagement This year’s report is reflective of Hastings maintaining its Environmental and Social Governance ("ESG") journey as a sustainable investment to realise the potential of critical minerals in the role of a global shift to low carbon technologies. We remain committed to the UN Global Compact Ten Principles and Sustainable Development Goals and continue communicating our progress annually. We continue to gauge our sustainability performance using credible third-party rating agencies. We recognise that this is a continuous process to report and uphold our ESG commitments, which are integrally important for our business and broader stakeholder community. Annual Report 2024 | 3 Last October, Hastings and the Thiin-Mah, Warriyangka, Tharrkari, and Jiwarli (“TMWTJ”) People jointly reaffirmed our mutual commitment to working collaboratively to develop the Yangibana Project following a review of the first five-years of the Yangibana Rare Earths Project Agreement (“the Agreement”). TMWTJ leaders and elders met on-country with Hastings to review the Agreement that was signed in November 2017. Collaborative discussions around employment, training, business opportunities, and a review of appropriate goals and targets with TMWTJ Senior Elder Pop Peter Salmon, and the Implementation Committee, ended with heritage site visits around Yangibana. These were identified and protected as part of early engagement between both parties. Strengthening Strategic Partnerships As part of our long-term vision of creating an integrated mine-to-magnet supply chain, we were pleased to announce a strategic investment of 9.8% in Hastings by JL Mag Rare-Earth Co., Limited (“JL Mag”). As the world’s largest producer of high-performance rare earth permanent magnets, JL Mag’s involvement improves our understanding of the permanent magnets demand dynamics and, therefore, our ability to achieve our mine-to-magnet ambitions, in combination with our 21.5% shareholding in Neo Performance Materials. JL Mag is the world’s largest producer of highperformance rare earth permanent magnets and a technology leader in the application of Grain Boundary Diffusion. It has a prestigious global customer base including many of the world’s top ten Electric Vehicle manufacturers. It also has a leadership position in the wind turbine generators and variable frequency airconditioner compressor markets. Commercial Arrangements Financial We have extended our long-standing offtake agreement with Thyssenkrupp to include rare earth concentrate sales for two-thirds of our production in the first five years, thereby ensuring bankability with lenders. This arrangement is in addition to the binding offtake term sheet signed in February with Baotou Skyrock Rare Earth New Material Co. Ltd. (“Skyrock”) for 7 years and for a minimum of 10,000 tonnes a year. In 2018, we signed a contract with Skyrock to take our mixed rare earth carbonate. However, when we decided last year to de-couple our Project into two stages, with stage one being the production of a rare earth concentrate, Skyrock has now agreed to buy our concentrate and self-manage the processing of our concentrate into rare earth oxides, passing on the costs to Hastings for the hydrometallurgy and oxides separation on a cost-plus basis. This revised contracting model strongly supports our mine economics and we have extended this arrangement to the Thyssenkrupp contract. To meet our interim funding needs, we undertook a pro-rata renounceable rights issue in April. It was partially underwritten by a few long-term shareholders and myself. With the strong support of shareholders we had a 72% take up and ended up raising $15.9 million. This enabled us to progress further with on-site maintenance, ongoing engineering development, longlead equipment residual payments and working capital. Although the rare earth sector has faced pricing challenges over the past twelve to eighteen months, we are now seeing signs of recovery, with a 10% increase in NdPr oxide prices in the last month alone. Market analysts forecast further price increases next year, driven by a stronger consumer market and lowered interest rates. As we look ahead, an anticipated supply deficit in 2026 and beyond is expected to shift market dynamics, leading to a supply-demand imbalance. This environment will likely attract longterm thematic investors back into the rare earth and magnets industry, strengthening our position as we aim to come into production by the second half of 2026. Whilst advancing the Project during the year with equity funds, we have undertaken a comprehensive process on various project debt funding pathways. During the year, Hastings received several indicative project funding proposals from multiple parties, including from global mining funds, senior debt, and fixed income investors (debt capital markets), to fund the Yangibana Project in line with the target gearing ratio of 60%. This is in addition to the previously announced financing support from commercial banks and government agencies. Hastings is assessing the terms and conditions of various proposals and term sheets to ensure it provides the right capital structure, cost of capital and flexibility for the Company in the long-term interest of shareholders. Financiers are satisfied with the suite of updated lender due diligence reports, including an Independent Technical Expert Report by Behre Dolbear Australia (BDA), legal due diligence reports and market report/ assessment. Leading market consultant, CRU has assessed Yangibana to be situated in the 1st quartile of the global rare earths margin curve and is expected to be one of the highest margin producers globally once in operation. will deliver substantial economic benefits, including royalties, taxes, and job creation, while also establishing reliable and strategic rare earth supply chains for the global market. The future of Hastings is indeed bright. The progress made over the past year brings us ever closer to realising our ambition of becoming Australia's next rare earth producer, encompassing not only neodymium and praseodymium (“NdPr”) but also niobium. The coming year will be pivotal as we continue to implement our financing plans, define our niobium reserves, and strengthen our management team in readiness for plant construction and deliver the first production in 2H 2026. Our core values of Passion, Teamwork, Tenacity and Owners Mindset are underpinned by honesty, loyalty and integrity. Our value system is the lamp that will light our path as we continue in our journey to bring Yangibana into production. I would like to thank all our shareholders and stakeholders for their unwavering support. Your belief in Hastings has brought us this far and together we will unlock the full potential of the extraordinary Yangibana ore body that we have been gifted to steward and realise its full potential. We look forward to bringing you good news in the near future as we aim to get to Final Investment Decision. On behalf of the Board, I would like to extend my heartfelt thanks to the entire Hastings team for their unwavering hard work and dedication. Yangibana is shovel-ready and fully permitted for first production of rare earth concentrate in 2H 2026. Closing Remarks One dream, one team. The Australian Government's "Future Made in Australia" policy supports the critical minerals sector, further strengthening our role in the global electrification and renewable energy transition. The Yangibana Project Warm regards, Mr Charles Lew Executive Chairman 4 | Hastings Technology Metals Annual Report 2024 | 5 Executive Leadership Team During the year, Hastings undertook an organisational restructure as part of ongoing efforts to manage costs and fit with the current needs of the Company as it advances financing and strategic options. Accordingly, some executive and senior management roles were made redundant, which included the departure of Chief Executive Officer, Paul Brown. Prior to Mr Brown’s appointment, Alwyn Vorster acted as Interim Chief Executive Officer from November 2022 to July 2023. With this change, the Executive Team structure was reduced to four members. Under the leadership of Charles Lew, Executive Chairman and acting in the capacity of Chief Executive Officer, the other Executive Team members are Teck Lim, Chief Financial Officer, Vince Catania, GM Corporate, and Tim Gilbert who was promoted to Chief Operating Officer. Mr Charles Lew Mr Teck Lim Mr Tim Gilbert Mr Vince Catania Mr Lew took over Hastings in December 2013, and early in 2014, he commissioned its first drill programme for rare earth at Yangibana. Working with two veteran geologists, they discovered this unique ore body at Yangibana. Since then, Mr Lew has invested significantly in the Yangibana Project and led the company from exploration all the way to being fully permitted and mine infrastructure built and ready for construction of the Beneficiation Plant. Teck Lim is a chartered accountant with over 20 years’ accounting and finance experience, specialising in mining and metals corporate finance. He was the corporate finance lead to Hastings whilst at KPMG Corporate Finance and his corporate advisory and banking experience include landmark critical minerals projects and mega project financings in Australia and globally. He has undertaken lead financing mandates for Glencore, Gold Fields, BCI Minerals, Gold Road, Aquila Resources and Rio Tinto. Tim Gilbert was appointed Chief Operating Officer in May 2024. He was previously Executive General Manager Mining Operations, appointed in 2023, after serving as General Manager Operations for the Yangibana Project. Vince Catania joined Hastings in 2023 as General Manager Corporate Affairs and moved into his role as GM Corporate in May 2024. Prior to Hastings, Mr Lew spent more than 20 years in investment banking in London and Singapore. From 1996 to 2000, he was Managing Director of ABN Amro Investment Bank in Singapore with regional responsibilities for corporate finance and mergers & acquisitions. After he left banking, he started his own investment company, Equator Capital which invested in private equity and subsequently into trading in the futures market. Mr Lim’s financing experience extends to government agencies, multilaterals, commercial banks, private equity, mining funds and bond markets and he has worked with strategic investors, joint venture development partners, offtakers and commodity trading houses to fund large scale mining projects from feasibility studies through to commercial operations and expansions. Executive Chairman Between 2004 and 2016, he was Independent Non-Executive Director of three licensed financial institutions subsidiaries of RHB Banking Group. He also served on the Board of Singapore Medical Group between 2007 to 2013. He holds a BA (Hons) in Finance and Accounting from the University of East London and a MSc (MBA) in Management Science from Imperial College, University of London. 6 | Hastings Technology Metals Chief Financial Officer Prior to joining Hastings, Mr Lim was Chief Financial Officer at a nickel/cobalt company and held various roles with ING Bank, HSBC Bank and Deloitte within their resource industry sectors. Teck holds a Bachelor of Commerce from Murdoch University, a Certificate in Mining Studies from the University of British Columbia, a Master of Business Administration from the University of Western Australia and is a graduate of the Australian Institute of Company Directors (GAICD). Chief Operating Officer General Manager Corporate He has responsibility for the Yangibana Project including construction and future operations, operational readiness, environmental approvals, health and safety, and exploration. A Member of the WA Parliament for 17 years during which he represented the Gascoyne and Pilbara regions of the State, he has extensive experience in the development and execution of public policy, and an excellent understanding of stakeholder engagement. Mr Gilbert is a mining engineer with more than four decades of experience in a range of senior roles in the resources sector across multiple commodities, including battery and base metals, diamonds and gold. During his parliamentary career, Mr Catania held senior roles in Government and Opposition, with portfolios covering water, forestry, sport and recreation, commerce, tourism, transport, and Aboriginal affairs. His expertise covers a range of strategic, operational, construction and technical roles for major contractors including Thiess, as well as global mining companies including Rio Tinto, Newmont and Gold Fields. Before joining Hastings, he was General Manager of Covalent Lithium’s Mount Holland Project. Before retiring from politics, Mr Catania held the vast seat of North West Central, which covers the Gascoyne region in which Hasting’s Yangibana Project is situated. Mr Gilbert holds a Bachelor of Engineering in Mining Engineering from the Camborne School of Mines. The combination of technical expertise and practical multi-commodity project management and oversight will enable him to deliver the Yangibana Project for Hastings and its shareholders. His strong community-oriented approach enabled him to secure substantial funding for regional infrastructure projects. He has exceptional State and Federal political contacts, well established media contacts, a detailed knowledge of government and agency processes and an excellent understanding of the community and stakeholder needs of the area. Mr Catania’s affinity for the region he represented is invaluable for Hastings as we continue to develop our flagship Yangibana Project. Annual Report 2024 | 7 Review Of Operations Project Overview Project delivery and capital review Hastings is focused on the development of the Company’s flagship Yangibana Project. Located 250kms northeast of Carnarvon in Western Australia’s Upper Gascoyne region, the project is located on Gifford Creek Station which is part of Thiin-Mah Warriyangka Tharrkari and Jiwarli country. During the reporting period, the Company completed a comprehensive review into the project delivery model and capital cost, confirming the Yangibana Project remains a world-class tier one project with excellent project economics. Company activities in FY24 were primarily focused on cost reduction and consolidation as Hastings moves into the next phase, the construction of the beneficiation plant. A key outcome of the review was the reduction in capital costs, which were independently verified by Behre Dolbear Australia. The remaining capital cost for the Yangibana Project reduced to $319 million (inclusive of $27 million in contingency). Significant progress has been made to de-risk the pathway to first concentrate production in 2026, clearing the way for the project to advance further towards main construction. • Total Capital Cost $474 million • Spent Capital Expenditure $154 million (as at 30 June 2024) • Remaining Capital Cost $319 million (including contingency of $27 million) A review of construction costs identified approximately $30 million in savings, reflecting the increased maturity of designs, further scope clarity around unawarded work and the reduction of non-essential activities, including: Development Activities • A scope reduction in the EPC contract including the amendment and optimisation of the crusher facility; A total of $154 million has been spent on non-process infrastructure and long-lead equipment for the beneficiation plant. • Reduction in management reserve due to the optimisation and clarification of earthworks for the processing plant; • Removal of the Stage 2 hydrometallurgical plant tailings storage facility; • A review of site operating costs and a reforecast of site services, owner’s costs, storage and preservation have been updated to reflect the latest timeline and estimates. A further $26 million in savings were identified across operating costs from a thorough review of the processing plant commissioning and operating labour. Savings in the mining package through optimised scheduling, and a reduction in the scope of works for Stage 2 (hydrometallurgical plant) of the Yangibana Project, resulted in total savings of $56 million. As at 30 June 2024, construction of the Yangibana Project was 32% complete. Long-lead equipment for the Yangibana Project continued to arrive including the flotation cells and storage silos. Hastings has now acquired all long-lead time items with items in storage and under preservation routine. Items include the acid bake kiln, off-gas scrubbing plant, SAG Mill, regrind mill, thickeners, flotation cells, storage silos, and various other processing equipment. For these long lead equipment packages, the majority have completed payments and as such, forecast cash outflows is expected to be reduced significantly compared to historic spend until the main construction works commences. Yangibana – Updated Capital Cost Estimate Capital cost A$m % Processing Plant & NPI 201.0 43% Enabling Works 114.1 24% Subtotal – Direct Capital Cost 315.1 67% Hastings Project Management 50.2 11% Other Indirects 81.3 17% Subtotal – Indirect Capital Cost 131.5 28% Contingency/Reserve 26.9 5% Total Capital Cost 473.5 100% Incurred to 30-Jun-24 154.1 32% Remaining (incl. contingency) 319.4 68% 5% 17% 43% 11% 24% Processing Plant & NPI Hastings Project Management Contingency Enabling works Other Indirects 8 | Hastings Technology Metals Annual Report 2024 | 9 Strategic Investment – JL Mag It is the long-term vision of Hastings to pursue its strategy of building a vertically integrated mine to magnet company. In July 2024, Hastings announced that the world’s leading producer of rare earths permanent magnets, JL Mag Rare-Earth Co., Limited (“JL Mag”), via its whollyowned subsidiary JL Mag Green Tech (Hong Kong) Company Limited is to become a strategic investor. Following completion of the $7.1 million strategic investment (19.6 million shares at $0.36 per new ordinary share), which is subject to customary overseas direct investment approvals, JL Mag will own 9.8% of the enlarged issued share capital of Hastings, and Han Yu, Vice President of JL Mag, will join the Hastings’ Board. The placement price was at a 38.8% premium to Hastings’ 30-day volume weighted average price (“VWAP”) of $0.2593 and 22.8% premium to the 10-day VWAP of $0.2932 up to and including 5 July 2024. Hong Kong Stock Exchange listed JL Mag has a market capitalisation of HK$16.4 billion/A$3.1 billion and is the world’s number one producer of high-performance rare earths permanent magnets by volume. It is also widely acknowledged as the world leader in the application of Grain Boundary Diffusion technology for magnets. It is open to Hastings to offer JL Mag to participate in future capital raisings to maintain its 9.8% shareholding (subject to regulatory and shareholder approvals). 10 | Hastings Technology Metals Board placement – Neo Performance Materials Inc. Capital Raising – Renounceable Rights Issue In June 2024, Hastings announced that following constructive engagement with Neo Performance Materials Inc., Neo’s Board of Directors had determined to appoint Hastings’ nominee, Dr John McGarva, as an independent director. Dr McGarva was appointed on 22 July 2024. In April 2024, Hastings successfully completed a Renounceable Rights Issue, which raised $15.9 million from existing shareholders and underwriters. As a result of the Renounceable Rights Issue, the exchange price for the exchangeable notes issued to Wyloo Consolidated Investments Pty Ltd has been adjusted from $5.50 per share to $4.91 per share pursuant to the terms of the debt facility. Hastings holds a 21.5% strategic shareholding in Neo, a leading global rare earths oxide processing and permanent magnets producer listed on the Toronto Stock Exchange (“TSX”), with manufacturing and downstream processing facilities located in Estonia, Thailand and China. This investment provides Hastings with a unique opportunity to pursue its long-term vision of creating a vertically integrated mine to magnet supply chain. Dr McGarva is a seasoned leader in product development and manufacturing, with experience spanning healthcare, industrial, and consumer electronics industries. His extensive international experience includes leadership roles across Europe, Southeast Asia, and China. Dr McGarva recently retired as Head of Engineering at Dyson, where he led the global design and engineering team for the company’s entire haircare product line, guiding teams in Singapore, the Philippines, and the UK. Under his leadership, Dyson’s Haircare business evolved from a single product to a significant business unit. A key element of Dyson haircare products is the integration of permanent magnets and this expertise positions Dr McGarva to offer customer insights and strategic direction to Neo. Geology and exploration The Yangibana Project hosts numerous near surface “iron stone” occurrences which consist of iron oxides and hydroxides and hosts the main rare earth mineral monazite. These surface expressions of ore are altered ferrocarbonatite intrusives situated along fault zones which developed between the Lyons Creek Fault in the south and the Bald Hill Lineament in the north. Other modes of occurrence for “iron stone” intrusions have been identified along the contacts of various older granite intrusives. The petrogenesis of this specific ore type is constantly under review with reference to understanding the potential of additional carbonatite-related mineralisation. Since the first drill program at the Yangibana Project in 2014, Hastings has continuously grown its resources and reserves through ongoing exploration and metallurgy test work. Current resources and prospects represent 24.2km cumulative strike of the prospective ironstone intrusions. In October 2022, the Company successfully completed an extensive drilling campaign along the eight-kilometre long Bald Hill – Simon’s Find – Frasers deposit, which resulted in an increase in current total JORC Resource of 29.93Mt @ 0.93% TREO (0.32% Nd2O3+Pr6O11). Due to its proximity to the proposed site of the process plant, this trend is vital for the ore feed required upon project commissioning. Subsequently in February 2023, Hastings announced a 25% increase in its Proved and Probable Ore Reserves to 20.93Mt @ 0.90% TREO (or 0.33% Nd2O3+Pr6O11), based on drilling, assaying, and optimisation work from the 2021-22 exploration program. This also reflects the completion of the acquisition of the 30% Yangibana joint venture interest from Cadence Minerals Plc (announced on 25 January 2023). This increase in Ore Reserve estimates allows Hastings to plan for a mine operating life of at least 17 years