23 Nov

Hannans - LiB Recycling in the Nordic Region (Updated)

www.hannans.com @Hannans _ Ltd Hannans_Ltd info@hannans.com Level 12, 197 St Georges Terrace, Perth, Western Australia ASX: HNR ABN: 52 099 862 129 22 November 2021 Shareholders Hannans Ltd Level 12, 197 St Georges terrace Perth, West Australia Dear Shareholders Updated Presentation We’re pleased to provide the attached presentation, “Lithium Battery Recycling in the Nordic Region (Updated)”. Please note today’s presentation replicates the presentation released to ASX on 5 November 2021 but for: • inclusion of the following paragraph on page 11: “The financial information on this page was sourced from multiple sources, including page 6 of Neometals Ltd (ASX:NMT) ASX release dated 7 May 2021 which itself referenced pricing information sourced from Fastmarkets (Cobalt, Nickel, Manganese – Spot) and HIS Markit Trade Data (Lithium – Spot) and Neometals Management (Copper Products – Forecast). Information pertaining to battery cell composition and product recoveries for cobalt 82%, nickel 83%, lithium 82%, copper 88% combined manganese 78% were sourced from Neometals Management. Information on multiples was sourced from BMO Capital Markets research note on Li-Cycle dated 9 September 2021. Information on this page represents a combination of industry wide metrics plus metrics released by the licensor of the recycling technology; and is not financial forecast information that shareholders should be relying on.” • removal of the statement on page 11 “potentially strong margins circa +100%” because this is forecast is not compliant with the ASX Listing Rules. This ASX announcement has been authorised for release by Damian Hicks, Executive Director, Best regards, Damian Hicks Executive Director Lithium Battery Recycling in the Nordic Region (Updated) ww w.hannans.com ASX:HNR 22 November 2021 Summary • Hannans aims to recover high purity metals from scrap and spent lithium batteries (LiB) in Norway, Sweden, Denmark and Finland (Nordic region). The LiB recycling technology is being proven, is scalable, safe and sustainable. • The Nordic region has plans for four Gigafactories, has the highest electric vehicle (EV) penetration rates in the world, a strong recycling culture and raw material security of supply concerns. Hannans is constantly evaluating rapid growth options for its LiB recycling ambitions. • Hannans will focus on securing LiB feedstock and obtaining permits before making a final investment decision on the first plant. Transaction Summary 3 • Critical Metals Ltd (Critical) holds an exclusive license to commercialise a LiB recycling technology in the Nordic Region in consideration for payment of a gross revenue royalty to Neometals Ltd (ASX:NMT). • Hannans signed a Memorandum of Understanding (MoU) with Critical on 9 September 2021 providing it with the right to earn a 50% interest in each and every LiB recycling plant developed in the Nordic region by funding activities through to a final investment decision (FID) with respect to each plant. • Hannans alone has the right to decide whether to make a positive FID. If Critical elects not to contribute Hannans has the right to 100% of that particular plant. Technology Ownership What is LiB Recycling? 5 • Lithium-ion batteries (LiB) are energy storage devices comprising several metals including nickel, cobalt, lithium and manganese (and others) - the growth in LiB is massive. • If not handled correctly LiB explode, are flammable and toxic – not suitable for long term storage at end-of-life or for disposal in landfill. • LiB recycling involves shredding, sorting and refining to make the batteries safe and to recover valuable metals for reuse. • LiB recycling using environmentally and socially acceptable processes is the only way. LiB Recycling Technology 6 • Developed over 5 years and owned by ASX listed Neometals Ltd. • Shredding and sorting (Stage 1) and refining (Stage 2) components of the technology are capable of processing multiple LiB chemistries, formats and types. • Stage 1 products include mixed cathode and anode “black mass” plus steel, plastic and foil. • Stage 2 products include high purity battery chemicals including nickel, cobalt, lithium and manganese sulphates. Neometals’ commercialisation plan though Primobius GmbH JV with SMS group 7 • Primobius to deploy Stage 1 in commercial operation early 2022, processing 10 tonnes per day of LiB feedstock. Primobius to complete current 1 tonne per day demonstration plant trial in November 2021 as part of a feasibility study into construction of a 50 tonne per day (20,000 tpa) operation. • Click here for a fly through of the Primobius demonstration plant flowsheet. • Click here for a walk through on the Primobius plant on German TV. • Click here for the Primobius Press Conference 2021. What’s recovered from a LiB? 8 By weight an LiB generally comprises: • Cathode: 30% • Anode: 15% • Electrolyte: 10% • Aluminium & copper: 35% • Steel case, binders and plastics: 10% Elemental breakdown of an LiB is generally: • Lithium: 7% • Oxygen: 33% • Ni/Mn/Co (811): 48%/6%/6% • Ni/Mn/Co (622): 36%/11%/12% Market size in Nordic region 9 • Europe Union (EU) does not have enough battery metals to meet its growth ambitions. • Every source of battery metals will be retained in the EU and the loop will be closed. • Security of raw material supply and the circular economy are key themes for the EU. • LiB recycling focus in the short-medium term is on scrap LiB from the cell manufacturing process. Year 2024 2025 2026 2027 2028 2029 2030 Production (GWh) 40 73 96 112 112 112 112 10% scrap rate 4 7.3 9.6 11.2 11.2 11.2 11.2 LiB waste (kt) 20 36.5 48 56 56 56 56 Estimates only, based on publicly stated information Table: Expected GWh in Nordic region Nordic sweet spot 10 • Four Gigafactories planned in the Nordics means access to scrap is a possibility • Strong connection with social and environmental responsibility • Strong recycling culture • Strong legislative regimes • Limited access to battery metals from mining • Focussed on circular economy and recycling to ensure supply chain resilience. Market EV (000s) EV mix (%) Germany 368 23 France 163 16 UK 153 15 Italy 80 8 Norway 78 83 Sweden 76 40 Denmark 30 28 Finland 18 28 Total 202 Table: West European new plug-in passenger car registrations January – July 2021. Combines both battery EVs (BEV) and Plug-in hybrid EVs (PHEV) Key financials for LiB recycling analysis 11 • LiB waste feedstock mix and cost • Scrap rates and product recall rates • LiB life • Collection rates • Recycling and reuse rates of LiB • Recoveries and efficiencies of refining technologies • Commodity prices • Legislative reforms • Raw material security • Variable include feedstock type, recovery and efficiency rates and commodity prices • Processing, reagents, labour, energy, collection, transportation • Estimated LiB recycling revenue ~$6,000/t – NMC811* • Estimated cost range <$2,000/t* • Listed LiB recycling companies are trading on multiples of 15 * EBITDA *The financial information on this page was sourced from multiple sources, including page 6 of Neometals Ltd (ASX:NMT) ASX release dated 7 May 2021 which itself referenced pricing information sourced from Fastmarkets (Cobalt, Nickel, Manganese – Spot) and HIS Markit Trade Data (Lithium – Spot) and Neometals Management (Copper Products – Forecast). Information pertaining to battery cell composition and product recoveries for cobalt 82%, nickel 83%, lithium 82%, copper 88% combined manganese 78% were sourced from Neometals Management. Information on multiples was sourced from BMO Capital Markets research note on Li-Cycle dated 9 September 2021. Information on this page represents a combination of industry wide metrics plus metrics released by the licensor of the recycling technology; and is not financial forecast information that shareholders should be relying on. All financial numbers are US dollars. Barriers to entry 12 • Time and resources required to research and develop an industrial scale, fully integrated, safe and compliant LiB recycling process. • Securing permits to operate. • Requirement for a steady stream of consistent LiB feedstock to underwrite business. • Means to fund and build plants to the high standard required by OEM. • Companies currently offering LiB recycling solutions in the Nordics, and those potentially planning entry into the Nordics include: Fortum, Hydro Volt, Northvolt Revolt, Li-Cycle, Stena Recycling, AkkuSer, and Redwood Materials. Characteristics of LiB recycling winners 13 • Hydrometallurgical recycling process: high recoveries, low GHG emissions, low H 2 O consumption, format agnostic. • Secure LiB feedstock supply: Short to medium term will come from Gigafactory scrap. • Scalable: must be scalable, ramp up quickly to handle scrap now and end of life in the future, leads to increased profitability and improved margins. Hannans LiB Recycling Focus 14 • Completion transaction in Nordic region. • Investigate options for rapid growth expansion. • Secure feedstock via relationship with OEM. • Identify sites for Stage 1 plants in Sweden, Norway, Denmark and Finland. • Commence site permitting: 8 to 12 month process. • Build first Stage 1 plant and sell “black mass”. • Identify site for Stage 2 plant in either Sweden, Norway, Denmark or Finland. • Commence site permitting: 8 to 12 month process. • Build Stage 2 plant and sell refined battery chemicals in full compliance with EU Battery Regulations by 2025. Proposed News Flow* 15 Deliverable Date Hannans signs Memorandum of Understanding with Critical Metals 9 September 2021 Neometals Ltd announce completion of fully integrated shredding, sorting and refining demonstration plant trial End November 2021 Hannans shareholders vote on transaction 26 November 2021 Neometals Ltd announce 10 tpd LiB disposal service – further validation of technology and business model 1 st Quarter 2022 Hannans to source LiB feedstock 1 st Quarter 2022 Hannans obtain permits to operate 1 st Plant 4 th Quarter 2022 Hannans makes final investment decision and executes plant supply agreement 4 th Quarter 2022 Hannans commence construction of 1 st Plant 4 th Quarter 2022 Start-up 1 st Plant 4 th Quarter 2023 * Subject to change Jonathan Murray, Independent Non-Executive Chairman • Director of Hannans Ltd (2010). • Partner of Steinepreis Paganin • Principal legal practice areas include equity capital markets, takeovers, project acquisitions and divestments, corporate governance, commercial law and strategy. • Currently Non-Executive Chairman of Critical Metals Ltd and Errawarra Resources Ltd. Amanda Scott, Non-Executive Director • Director of Hannans (2016) residing in Sweden. • Exploration Manager for Hannans Group (2008-2016). • Consulting Geologist with 13 years experience. • Extensive experience in the Yilgarn and Pilbara regions of Western Australia and the Caledonides and Kiruna regions of Scandinavia exploring for gold, copper, nickel, PGEs, iron and manganese. Markus Bachmann, Non-Executive Director • Director of Hannans Ltd (2012) residing in Switzerland. • Corporate finance professional. • Founding partner of Craton Capital (cratoncapital.com) • Currently Non-Executive Chairman of Critical Metals Ltd. Clay Gordon, Non-Executive Director • Director of Hannans (2016). • Bachelor of Applied Science (Geology) and a Master of Science (Mineral Economics). Member of the AusIMM and AIG. • +25 years’ experience in senior roles (operational, management and corporate) within large and small resource companies active in a range of commodities within Australia, Africa and Southeast Asia. Damian Hicks, Executive Director • Director of Hannans Ltd (2002). • Financial, legal and compliance qualifications. • Principal responsibilities includes strategy formulation, team development, deal origination& execution, stakeholder relationships and capital raising. • Developing opportunities in Sweden , Norway and Finland since 2008. Currently Executive Director Critical Metals Ltd and all group subsidiary companies. Directors Contact Details Jonathan Murray Chairman +61 8 9321 4000 jmurray@steinpag.com.au Damian Hicks Executive Director +61 8 9324 3388 dhicks@hannans.com hannans.com Hannans Ltd @Hannans_Ltd

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