Deutsche Rohstoff : Half Year Report 2022

HALF-YEAR REPORT

2022

CORPORATE BODIES (AS OF 30 JUNE 2022)

EXECUTIVE BOARD	SUPERVISORY BOARD
Jan-Philipp Weitz	Dr. Thomas Gutschlag (Chairman)
	Martin Billhardt
	Dr. Werner Zöllner

DEUTSCHE ROHSTOFF GROUP AT A GLANCE (IN MILLION EUR)

Sales Revenue	72.2
EBITDA	64.0
Net profit	32.5
Operating Cash Flow	62.6
Liquidity	79.8
Debt to Equity ratio in %	36.9

THE FUTURE

COMMODITIES ARE

HALF-YEAR REPORT 2022 - DEUTSCHE ROHSTOFF GROUP 2

HIGHLIGHTS FIRST HALF 2022 DEUTSCHE ROHSTOFF GROUP

02

02

03

5 February 2022	17 February 2022	9 March 2022
Salt Creek participates in 18	Bright Rock adds to its	Value of oil and gas
wells drilled by Occidental	acreage position in	reserves rises to over
	Wyoming	500 million USD

03

05

21 March 2022	2 May 2022
Deutsche Rohstoff AG	Q1 figures confirm
evaluates entry into the	successful start to the new
lithium industry	financial year

HALF-YEAR REPORT 2022 - DEUTSCHE ROHSTOFF GROUP 3

OVERVIEW OF THE FIRST HALF-YEAR 2022

The first half of 2022 was economically very pleasing for the Deut- sche Rohstoff Group. We were able to increase our oil and gas production in the USA significantly, Cub Creek is preparing further wells in Wyoming and we entered into a very promising joint venture with Occidental Petroleum (Oxy), one of the largest oil and gas companies in the USA.

Consolidated net profit for the first half of the year amounted to EUR 32.5 million (previous year: EUR 17.5 million). We were thus once again able to exceed our best half-year operating result in the history of the company from the year 2021. Sales almost dou- bled, rising to EUR 72.2 million (previous year: EUR 38.8 million), while EBITDA increased to EUR 64.0 million (previous year: EUR

39.9 million). Our equity is also at a record high of EUR 124.7 mil- lion (Dec. 31, 2021: EUR 80.1 million).

The good results and the positive outlook for the coming years are of course partly the result of the high oil and gas prices, but they are above all an expression of the fact that with our US subsidiaries we have now achieved stable production that is diversified across several oil fields. This very comfortable position is the result of high investments, highly economic acquisitions and ongoing optimization in recent years.

However, this is not the end of the story; we will keep on developing the company. Our oil & gas business will continue to be the core of our business and development. With our acreage position in Wyoming, we are faced with an inventory of over 100 potential wells, a growth opportunity that far exceeds our position of the past. The strong returns from existing wells will allow us to make the necessary investments from cash flow.

In addition to the oil and gas business, our metals and mining business is also to remain in place. While it currently consists mainly of the investment in Almonty Industries with a book value of EUR 15.4 million and a portfolio of shares with a book value of EUR 10.0 million , we have been looking into strengthening our activities in the lithium sector for some time. In China, the USA and Europe, around 4 million passenger cars were recently sold every month, with the share of electrically powered vehicles, being now at 26%. In our view, the trend towards electromobility will continue and can offer attractive market opportunities for us as a resource company based in Germany.

In parallel with electromobility, however, the global fleet of internal combustion engines will continue to grow for many years,

increasing by around 200 million vehicles by 2030. This shows that a coexistence of different types of new and old mobility is likely to develop. For us, this means an attractive constellation.

In general, our position offers many opportunities to implement the right strategy for times of sharply rising, but also times of falling commodity prices. Our guiding principle here is to increase the value of the company through economically valuable investments in production growth, but also acquisitions, new ventures and occasionally divestments. However, growth at any price is not our maxim; rather we want to grow with a healthy balance sheet and reinvest cash flows from the oil and gas business partly in the metals and mining business.

We would be pleased if you would continue to accompany us in our development in the years to come.

HALF-YEAR REPORT 2022 - DEUTSCHE ROHSTOFF GROUP 4

The company's result for 2022 is in line with our guidance of the increased price scenario from April 2022. Accordingly, we expect sales of between EUR 140 and 150 million and EBITDA of EUR 120 to 130 million for the full year. This guidance is based on an average oil price of USD 92 per barrel and an average gas price of USD 4.0 per MMBtu from April to December 2022. The guidance does not yet include the recent stronger-than-expected dollar exchange rate. In our planning, we expect a EUR/USD exchange rate of 1.12.

The very good results of the first half of the year also had a very positive impact on the balance sheet. Equity of EUR 124.7 million is EUR 44.6 million higher than equity at December 31, 2021, and the equity ratio at the end of the first half was 36.9 percent (De- cember 31, 2021: 30.2 percent). This increase is attributable to the high consolidated net profit and the weak development of the euro, which caused equity differences from currency translation to increase by around EUR 11 million.

In the first half of 2022, our portfolio companies in the USA produced significantly higher volumes than a year earlier. Production from the important Knight wells was further increased towards the end of the first quarter following early completion work. For the full year, we continue to expect Group production of 9,300 to 10,000 BOEPD.

The four companies produced an average of 9,386 BOE per day in the first half of the year (previous year 7,801 BOE per day), for a total production of 1,689,532 BOE (previous year 1,412,019 BOE). Crude oil accounted for 930,658 barrels (previous year 660,682 barrels), with natural gas and condensates accounting for the re- mainder. All volumes correspond to the Group's net share.

In the first half of the year, our hedge book generated a loss of around EUR 26.8 million due to the high prices. For the second half of the year, the Group's hedge ratio is significantly lower and around 309,000 barrels of oil are still hedged at a minimum of USD 65.67/barrel. For natural gas, the companies have entered into hedges for a total of 1.7 million MMBtu at a minimum of USD 3.52/MMBtu. It is continuously evaluated whether further hedging transactions will be entered into.

Our investment Almonty Industries announced the first "draw- down" of the low-interest USD 75.1 million loan from KfW-IPEX Bank at the end of July. This is a significant milestone for the company, as nothing now stands in the way of developing the mine in Sangdong, South Korea. Almonty's share price has decli-

PRODUCTION FACILITIES IN WYOMING, USA

ned slightly compared to last year and has been consolidating around CAD 0.90 per share for some time. The tungsten price increased by around 7 percent between the beginning of the year and the end of June.

Current geopolitical developments underline the importance of Sangdong and Almonty Industries as a major independent source of tungsten in the Western world. Deutsche Rohstoff remains convinced of the metallurgical-geological quality of the Sangdong deposit and its economic potential.

HALF-YEAR REPORT 2022 - DEUTSCHE ROHSTOFF GROUP 5