Announcement PDF \ Quarterly Activities Report For the period ended 30 June 2023 17 July 2023 HIGHLIGHTS • Strong health and safety performance resulted in no recordable injuries for the period • Early infrastructure works at Yangibana nearing completion with the finalisation of the airstrip, site access road, water supply infrastructure and 50% of the new Kurrbili Village becoming operational Announcement of a staged development strategy to reduce initial funding requirements and project execution risks, and provide early cash flows • • Initial focus will be on construction of the Yangibana mine and beneficiation plant to produce a rare earth concentrate (Stage 1), followed by development of a hydrometallurgical plant to produce mixed rare earth carbonate (Stage 2) • Updated Stage 1 capital cost estimate of $470m (inclusive of contingency) reflecting industrywide cost escalations • Terms for a binding fixed price EPC contract agreed with GR Engineering Services Limited for delivery of beneficiation plant to minimise risk of capital cost increases and provide guarantees on project schedule and product throughput • Non-binding Heads of Agreement with Neo Performance Materials outlining framework to negotiate commercial offtake agreement for supply of Stage 1 rare earth concentrate • Discussions advancing with multiple interested project financiers and optimal funding source being reviewed • High calibre and experienced management team recruited and in position, ready to undertake construction phase • Interim CEO Alwyn Vorster has successfully completed his mandate and elected not to extend his fixed term contract to focus on his non-executive roles and opportunities in the industry • Hastings had $102m in cash and equivalents as of 30 June 2023. Australia’s next rare earths producer, Hastings Technology Metals Ltd (ASX: HAS) (Hastings or the Company), is pleased to report on development, corporate and exploration activities for the threemonth period to 30 June 2023. Activity focused mainly on advancing construction of the Yangibana Rare Earths Project (Yangibana) in the Gascoyne region and planning for a proposed Hydrometallurgical Plant in the Pilbara region of Western Australia. HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 1 of 12 Hastings Executive Chairman, Mr Charles Lew, said: “The June quarter marked a period of significant momentum for the Yangibana Project with early infrastructure works nearing completion and the dispatch of long-lead critical path items, both vital to maintaining our fast-track development schedule to achieve first rare earths concentrate sale in Q1 2025.” “The completion of the comprehensive project delivery and capital review has repositioned the project for a lower risk construction and commissioning phase through the staged development strategy.” “The market fundamentals for rare earth elements remain strong, driven by unprecedented growth in demand for clean energy technologies. Notwithstanding the ongoing challenges in delivering a rare earth project such as Yangibana, the project economics reaffirms the two-stage approach to implementation plan which has the benefits of enabling a faster pathway to early project cash flows.” SUSTAINABILITY Health and Safety Health and safety continued to be a key focus on the Project with contracting partners and Hastings’ employees. No recordable injuries were reported during the quarterly period and the total recordable frequency rate (TRIFR) has reduced to 3.66. Environmental, Social and Governance During the quarter, a number of ESG activities were progressed including: • Compulsory cultural awareness training for all Hastings employees, as part of the Company’s obligation under the voluntary Native Title agreement with the Thiin-mah Warriyangka, Tharrkari and Jiwarli People • Ongoing engagement with local governments and communities, including a project update in Gascoyne Junction • Finalising agreements with both local and Traditional Owner businesses – Coral Coast Plumbing, Redcliff Electrical and Maarlu Resources – to provide electrical, plumbing, water treatment, water supply and mechanical services to the project site • Continued focus on addressing outstanding secondary approvals for the Yangibana and Onslow projects. Draft permits have been received from environmental authority on Onslow Hydromet facility • Completed flora and vegetation monitoring survey and subterranean survey activities to support Yangibana Expansion Project environmental assessment HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 2 of 12 YANGIBANA PROJECT DEVELOPMENT Staged Development Strategy On 31 May 2023, Hastings released a Project Update announcing the outcome of the project capital and delivery model review, which supported a two-stage development strategy to reduce upfront capital requirements and project execution risks. Under the new strategy, the Yangibana Project will be developed in two stages: • Stage 1: Develop Yangibana mine and beneficiation plant to produce up to 37,000tpa of rare earth concentrate (27% REO grade) and achieve first concentrate on truck by Q1 CY2025; and • Stage 2: Develop Hydrometallurgy plant at Onslow to produce up to 15,000tpa of Mixed Rare Earth Carbonate (59% REO grade). During the quarter, Hastings announced the results of the comprehensive capital and operating cost review. The capital cost estimate for Stage 1 is $470m, which includes $55m for contingency and management reserves. Hastings has incurred $106m of the $470m capital cost to advance early infrastructure works at Yangibana. To provide greater certainty to the capital estimate and delivery schedule, Hastings has elected to adopt a fixed price Engineering, Procurement and Construction (EPC) contract model to reduce overall project risk. On 3 May 2023, the Company announced that it had entered into a binding term sheet with GR Engineering Services Limited (GRES) for the delivery of the Yangibana beneficiation plant and associated infrastructure. The $210m EPC contract is lower than cost estimates for an equivalent scope of works under the former Engineering, Procurement and Construction Management (EPCM) model, in addition to offering additional benefits and lowering risk in multiple areas. This includes guarantees on time, cost and product quality with first concentrate delivery in Q1 CY2025, providing a pathway to early project cashflows. Construction for Stage 1 of the Yangibana Project is expected to commence in Q3 CY2023 following the completion of early works and site infrastructure at late stages of completion, and after securing the final project funding to develop the Project. Construction Activities Early infrastructure works at Yangibana are in the final stages with a number of important milestones achieved during the quarter – these works are all critical items for Hastings’ to allow them to meet the current development schedule which is targeting commencement of construction in the third quarter of 2023. As at 30 June 2023, $106m has been incurred for early works and include: HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 3 of 12 • Site Access Road: construction of a ~25km access road alignment to connect with the shire road network – 100% complete • SipHon Well Borefield: works to install water infrastructure including six bores and a 20 km pipeline to supply water to the village, mine and construction works – 100% complete • Yangibana Airstrip: construction of a 2km x 30m airstrip to allow for up to 70-seater aircraft – 100% complete with the first flight landing on 18 May 2023 • Communications: series of communication towers installed to allow permanent high speed communication with site – 100% complete • Kurbilli Accommodation Village – 83% overall completion o Stage 1: construction of the first 126 of 298 rooms, kitchen, messing facilities, medical centre, administration buildings and gym – 100% complete o Stage 2: construction of remaining rooms and sports courts Figure 1: Site Access Road Figure 2: SipHon Well Borefield Figure 3: Yangibana Airstrip Figure 4: First flight landing at Yangibana Airstrip HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 4 of 12 Procurement Packages In June 2023, the first major piece of long-lead equipment for the project was dispatched by MetsoOutotec. Weighing 27,692 tonnes and measuring 6.64m-wide in diameter and 5.54m-high, the shell will form part of the semi-autogenous grinding (SAG) mill – a key component for the Yangibana beneficiation plant. Figures 5/6: SAG mill shell dispatched by Metso-Outotec Engineering Designs and Contracts Engineering designs for the Yangibana beneficiation plant were handed over to GRES during the quarter, at 60% complete. Further key contracts awarded during the period were as follows: • • EPC early works contract - $3.5m Tailings Storage Facility detailed design and associated geotechnical works - $1.3m These contracts allow for early works to commence on mobilising and planning works for the EPC contractor ahead of the commencement of main construction in the Q3 2023, and risk reduction in sourcing construction materials and finalising construction methodology. CORPORATE Management Team Update Interim CEO Alwyn Vorster has elected not to extend his fixed term contract beyond its expiry on 31 July 2023 to focus on his non-executive roles and other opportunities in the industry. Chief Operating Officer Rudolph van Niekerk will assume the role of Acting CEO, overseeing the advancement of the Yangibana Project, while a formal search process for a permanent CEO is underway. HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 5 of 12 The Board recognises the valuable contribution that Mr Vorster has made over the past seven months, including achieving the highlights outlined in this report, and recruiting a high calibre and experienced management team capable of taking the project forward into development. During the quarter, a number of other management appointments were made, including: • • • • Mr Gareth Fleming as Project Director, bringing over two decades of experience working in construction across Europe and Australia as a professional engineer, project manager and construction manager Dr Louis Schurmann as Chief Geologist bringing over three decades of experience leading scientific teams, most recently working on rare earth, copper-gold and critical minerals projects in Zambia, North East Asia and Queensland Mr Ian Hind as GM Marketing and Logistics bringing over two decades working in marketing, sales and logistics at leading mineral producers including Rio Tinto, Iluka Resources, Kalium Lakes and Western Metals Mr Neil Foster as GM Environment and Sustainability brings over 25 years’ experience managing sustainability, environmental and community-related matters across multiple geographies, most recently at Iluka Resources. Offtake arrangements During the quarter, Hastings signed a non-binding Heads of Agreement with TSX-listed rare earth magnet manufacturer, Neo Performance Materials (Neo), in which Hastings holds a 19.9% interest, signalling both companies’ intention to negotiate a binding offtake agreement for Hastings’ Stage 1 concentrate. This will extend to a Mixed Rare Earth Carbonate (MREC) following the construction of the Onslow hydrometallurgical plant in Stage 2 or earlier via third party tolling arrangements. Under the offtake arrangement, Hastings would initially supply up to 25,000 tonnes per annum of concentrate from Q1 2025 for Neo’s downstream processing facilities across Europe and Asia. This arrangement could cover up to 70% of Stage 1 and 2 Yangibana production for an initial period of 10 years. The strategic partnership builds on the vertical integration strategy of both companies to supply magnets to the European electric vehicle traction motor market and other electrification markets, including wind turbines and robotics. Potentially, the strategic partnership with Neo could generate higher margin MREC economics at Stage 1 via the tolling arrangement with third parties prior to Stage 2 becoming operational. Project Finance Hastings is continuing discussions and is assessing interest for up to 60% gearing for the total Stage 1 funding from multiple funding sources including export credit agencies (ECA), development finance institutions (DFI), commercial banks, mining/credit funds, and debt capital markets (bonds)/ fixed income investors. HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 6 of 12 As previously announced, the Northern Australia Infrastructure Facility (NAIF) approved a $220m loan facility for the Yangibana Project (single stage combined beneficiation and hydrometallurgical plants construction1) and Export Finance Australia (EFA) provided a letter of support to lend up to $100m for the Project2. During the quarter, two commercial banks provided a letter of support and indicative proposal for $110m for Stage 1. Subject to an agreed offtake structure and funding terms, the company aims to finalise the optimum funding for the Project during the current quarter. Quarterly Expenditure The Company had cash outflows on exploration and evaluation costs for the quarter of approximately $1.4 million and project development cash outflows of approximately $40 million for the quarter. 1 See ASX Release ‘NAIF Increases Financial Support for Yangibana Rare Earths Project to A$220 million’, dated 17 January 2023 2 See ASX Release ‘Letter of Support secured from Export Finance Australia for $100m loan’, dated 21 March 2023 This report has been approved by the Board for release to the ASX. FOR FURTHER INFORMATION CONTACT: Alwyn Vorster Chief Executive Officer (Interim) +61 8 6117 8621 HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 MEDIA QUERIES: Stephanie Vanicek Communications Manager +61 405 183 237 Page 7 of 12 ABOUT HASTINGS TECHNOLOGY METALS LIMITED Hastings Technology Metals Limited (ASX: HAS) is a Perth based rare earths company primed to become the world’s next producer of neodymium and praseodymium concentrate (NdPr). NdPr are vital components in the manufacture of permanent magnets used every day in advanced technology products ranging from electric vehicles to wind turbines, robotics, medical applications and digital devices. Located in the Gascoyne and Pilbara regions of Western Australia, Hastings’ flagship Yangibana Rare Earths Project is underpinned by its world-class deposit with an average life-of-mine NdPr:TREO ratio of 37% surpassing most global projects. The Project will be developed in two stages with an initial focus on the construction of the Yangibana mine and beneficiation plant to produce up to 37,000 tonnes per annum of mixed rare earth concentrate, followed by the construction of a hydrometallurgical plant in Onslow with the capacity to produce up to 15,000 tonnes per annum of Mixed Rare Earth Carbonate. The Yangibana Project is permitted for long-life production and with offtake commitments and debt finance being finalised. In 2022, Hastings acquired a strategic 19.9% shareholding in TSX-listed Neo Performance Materials, a leading global rare earth processing and advanced permanent magnets producer, providing the Company with the opportunity to explore opportunities to create a mine-to-magnet supply chain. Hastings also owns and operates the Brockman project, Australia’s largest heavy rare earths deposit, near Halls Creek in the Kimberley. For more information, please visit www.hastingstechmetals.com HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 8 of 12 \ Quarterly Activities Report For the period ended 30 June 2023 17 July 2023 COMPETENT PERSONS AND QUALIFYING PERSONS STATEMENT The information in this announcement that relates to Mineral Resources is based on information compiled by David Princep. Mr. Princep is an independent consultant to the Company and a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Princep has sufficient experience relevant to the styles of mineralisation and types of deposits which are covered in this announcement and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (“JORC Code”). The information in this announcement that relates to the Ore Reserves at Bald Hill, Simon’s Find, Fraser’s, Auer, Auer North, Yangibana, Yangibana North is based on information reviewed or work undertaken by Mr. Stephen O’Grady, member of the Australasian Institute of Mining and Metallurgy, and a Director of Intermine Engineering Consultants. Mr O’Grady has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the preparation of mining studies to qualify as a Competent Person as defined by the JORC Code 2012. Mr O’Grady consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears. The scientific and technical information in this announcement and that relates to process metallurgy is based on information reviewed by Ms. Narelle Marriott (GM Process Development) Hastings Technology Metals Limited. Ms. Marriott is a member of the AusIMM and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined by the JORC Code 2012. Ms. Marriott consents to the inclusion in this announcement of the matters based on their information in the form and context in which it appears. HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 9 of 12 APPENDIX – MINING TENEMENTS HELD AS AT 30 JUNE 2023 YANGIBANA PROJECT Tenement All tenements are in Western Australia Gascoyne Metals Pty Ltd (100% subsidiary) Locality Status Holder/s E09/1989 E09/2007 WA WA Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd E09/2084 E09/2086 E09/2095 E09/2129 E09/2137 E09/2334 WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd E09/2364 E09/2403 E09/2404 G09/10 G09/14 G09/23 WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd G09/24 G09/25 L09/66 L09/67 L09/68 L09/69 WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd L09/70 L09/71 L09/72 L09/74 L09/75 L09/80 WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd L09/81 L09/82 L09/83 L09/85 L09/86 L09/87 WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd L09/89 L09/91 M09/157 M09/160 M09/164 WA WA WA WA WA Granted Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 10 of 12 M09/165 M09/177 M09/179 P09/489 E09/1703 E09/1704 WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd E09/1705 E09/1706 E09/2296 E09/2298 E09/2333 G09/11 WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd G09/13 M09/159 M09/161 M09/163 WA WA WA WA Granted Granted Granted Granted Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Gascoyne Metals Pty Ltd Yangibana Pty Ltd (100% subsidiary) Tenement Locality Status Holder/s G09/26 G09/27 G09/28 L09/96 L09/97 M09/176 WA WA WA WA WA WA Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd M09/178 E09/1700 E09/1943 E09/1944 E09/2018 G09/17 G09/18 WA WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Granted G09/20 G09/21 G09/22 L09/93 L09/95 M09/158 M09/162 Granted Granted Granted Granted Granted Granted Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd WA WA WA WA WA WA Granted Granted Granted Granted Granted Granted Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd Yangibana Pty Ltd WA Granted Yangibana Pty Ltd HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Page 11 of 12 BROCKMAN PROJECT All tenements are in Western Australia Brockman Project Holdings Pty Ltd (100% subsidiary) Tenement Locality Status Holder/s E80/5248 P80/1626 P80/1628 P80/1629 P80/1630 WA WA WA WA WA Application Granted Granted Granted Granted Brockman Project Holdings Pty Limited Brockman Project Holdings Pty Limited Brockman Project Holdings Pty Limited Brockman Project Holdings Pty Limited Brockman Project Holdings Pty Limited EXPLORATION PROJECT All tenements are in Western Australia Ark Gold Pty Ltd (100% subsidiary) Tenement E09/2385 E09/2399 Locality WA WA HASTINGS TECHNOLOGY METALS LIMITED Level 3, 5 Mill Street, Perth WA 6000 www.hastingstechmetals.com | +61 8 6117 6118 Status Granted Granted Holder/s Ark Gold Pty Ltd Ark Gold Pty Ltd Page 12 of 12