FAST FACTS

ASX Code: HNR

CAPITAL STRUCTURE

Shares on issue: 2.3 billion

Market cap: $83.6M (at 3.5c)

Cash: $0.3M (30 Sep 2021)

Debt: Nil

BOARD OF DIRECTORS

Non-Executive Chairman

Jonathan Murray

Executive Director

Damian Hicks

Non-Executive Directors

Markus Bachmann

Clay Gordon

Amanda Scott

LITHIUM-IONBATTERY RECYCLING

Nordic joint venture

MINERAL EXPLORATION

Sole Funded

Fraser Range (Ni-Cu)

Forrestania (Ni)

Moogie (Cu-Au & Ni-Cu)

Free-Carried to Decision to Mine

Forrestania (Au) 20%

ABOUT HANNANS LTD (EST. 2002)

Our vision is to sustainably produce metals for society.

1st QUARTER ACTIVITIES REPORT 2021/2022

1st Quarter (July - September 2021):

LITHIUM-IONBATTERY RECYCLING

  • Signed Memorandum of Understanding (MoU) to commercialise lithium-ion battery recycling technology in Norway, Sweden, Denmark, and Finland.
  • Signed (and subsequently terminated) a Memorandum of Agreement (MoA) to complete exclusive due diligence on an opportunity to recycle LiBs in the UK and Ireland.

MINERALS EXPLORATION

  • Forrestania (Nickel) - completed diamond drill testing and reporting of geophysical nickel targets.
  • Moogie (Copper-Gold & Nickel-Copper) - identified coincident geophysical and geochemical anomalies at Breccia, Minni Ritchi and Ghallangee prospects.
  • Fraser Range (Nickel-Copper) - increased holdings of prospective tenure.
  • New business (Nickel) - continued search for attractive nickel sulphide exploration projects in Western Australia.
  • Southern Cross (Gold & Nickel) - elected not to exercise option to acquire project.

COMPLIANCE AND CORPORATE GOVERNANCE

  • Lodged Annual Report 2021 and Corporate Governance Statement.

Goals for the 2nd Quarter (October - December 2021):

LITHIUM-IONBATTERY (LIB) RECYCLING

  • Settle MoU and execute definitive binding agreement to recycle LiBs in the Nordic region.
  • Rapidly grow LiB recycling business in Europe.

MINERALS EXPLORATION

  • Moogie (Gold & Nickel-Copper) - fly detailed helicopter- borne EM survey over Breccia, Minni Ritchi and Ghallangee prospects and complete interpretation of results.
  • Fraser Range (Nickel-Copper) - complete review of historical exploration activities on new tenure and sign heritage agreement.

CORPORATE

  • Complete $5.5 Million fully underwritten rights issue.

www.hannans.com

@Hannans_Ltd

Hannans_Ltd

info@hannans.com

Level 12, 197 St Georges Tce, Perth WA

ASX: HNR ABN: 52 099 862 129

HANNANS 1st QUARTER ACTIVITIES REPORT

LITHIUM-ION BATTERY RECYCLING IN THE NORDICS

Introduction

During the Quarter Hannans secured a significant opportunity to recover high purity metals from scrap and spent lithium-ion batteries (LiB) in Norway, Sweden, Denmark, and Finland (Nordic region) - the region with the highest electric vehicle (EV) penetration rates in the world.

The battery recycling technology enables the recovery of high purity metals from scrap and spent LiB via a safe, sustainable, low energy and low CO2 process when compared to incumbent technologies. Production scrap, reject batteries, end-of-life returns, and end-of-life cells are the feedstock sources for a LiB recycling plant. The LiB recycling focus in the short-medium term is on production scrap from the cell manufacturing process. Importantly the growing volumes of scrap and spent LiB contain significant nickel, cobalt, lithium and manganese and the LiB recycling technology to be commercialised by Hannans in the Nordic region unlocks that embedded value.

The recycling technology has undergone comprehensive validation and pilot plant test work programs and has been substantially derisked. A fully integrated demonstration recycling plant was recently commissioned in Germany.1 Hannans shareholders are poised to leverage off both the long term research and development investment into the technology and the high quality strategic partnerships entered by the technology owners2. Hannans believes these attributes significantly increase the potential for the commercialisation strategy to be successfully executed.

Hannans' focus will be securing feedstock for the recycling plant and the social license to operate recycling plants in multiple locations.

Figure 1: Production scrap, reject batteries, end-of-life returns, and end-of-life cells are all feedstock sources for the lithium ion battery recycling plant. It is vital that Hannans secures feedstock sources in the Nordic

region to feed into the recycling technology. Source: Neometals Ltd

  1. Refer ASX release by Neometals Ltd dated 26 October 2021.
  2. Refer Figure 4 on page 5.

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HANNANS 1st QUARTER ACTIVITIES REPORT

Recycling Technology and Saleable Products

The recycling technology targets the recovery of valuable materials from consumer electronic batteries (devices with lithium cobalt oxide (LCO) cathodes), and nickel-rich electric vehicle (EV) and stationary storage battery chemistries (with lithium-nickel-manganese-cobalt (NMC) cathodes).

The recycling technology comprises two stages:

  1. Shredding and beneficiation to physically separate components and remove metal casings, electrode foils and plastics from the active materials (shredding and beneficiation circuit); and
  2. Leaching, purification and precipitation to produce predominantly refined chemical products via the hydrometallurgical processing facility (refining circuit).

Figure 2: The two stages to the process are shredding and sorting (stage 1) and refining (stage 2). Source:

Neometals Ltd

The technology is designed to recover cobalt, nickel, lithium, copper, iron, aluminium, carbon, and manganese into saleable products that can be used in the battery supply chain.

Figure 3: Proprietary Hydrometallurgical Refining flowsheet showing the products to be produced in the Demonstration Plant trials. Source: Neometals Ltd

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HANNANS 1st QUARTER ACTIVITIES REPORT

Lithium Battery Recycling in the Nordic region

Electrification in Europe is creating enormous demand for lithium batteries for electric vehicles and stationary energy storage and Europe does not produce enough metals to meet its massive growth ambitions. The recovery of metals from scrap and spent lithium batteries (LiB) is imperative because the volumes of flammable toxic scrap and spent LiB are forecast to grow exponentially because of government policies to encourage the uptake of LiB and the unstoppable trend towards electrification. European LiB and EV manufacturers also need to reuse metals recovered from scrap and spent LiB within their own ecosystems to meet their legal, social, environmental, and financial obligations. Security of raw material supply and the circular economy are also key themes for the EU.

From a Nordic perspective four Giga factories are planned in the region meaning access to production scrap for recycling is a possibility. There a two planned in Norway (Freyr and Morrow), one in Sweden (Northvolt) and one in Finland (also Freyr). The Nordic region has a strong connection with social and environmental responsibility, a recycling culture, supportive legislative regimes, limited access to battery metals from mining and is focussed on circular economy and recycling to ensure supply chain resilience.

Growth opportunities

Hannans also signed a memorandum of agreement (MoA) with unrelated private Irish company Greenhouse Investment Group Limited (Greenhouse) to complete exclusive due diligence on Greenhouse and lithium battery recycling opportunities generated by Greenhouse in the UK and Ireland. The MoA was evidence of Hannans desire to rapidly grow the lithium battery recycling business in Europe. Hannans entered a trading halt to inform ASX of its plans prior to announcing details of the MoA to the market. Unfortunately, ASX considered the MoA likely constituted a change in the nature and scale of Hannans activities. Hannans considered it more important in the short term for trading in its share to recommence immediately and therefore the MoA was terminated by mutual agreement. Hannans will revisit growth opportunities in the future.

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 1: West European new plug-in passenger car registrations January - July 2021. Combines both battery EVs (BEV) and Plug-in hybrid EVs (PHEV)

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HANNANS 1st QUARTER ACTIVITIES REPORT

Transaction Summary

The transaction securing the opportunity for Hannans takes the form of a memorandum of understanding (MoU) with Critical Metals Ltd (www.criticalmetals.eu) (Critical) enabling Hannans to earn its interest by funding and managing certain tasks and activities.3 Hannans will manage and fund all tasks and activities through to a final investment decision (FID) with respect to the construction of each plant for the processing or recycling of feedstock batteries using the lithium battery recycling technology. A plant may comprise a shredding and beneficiation plant (Stage 1) or a refining plant (Stage 2) (each, a Plant).

If Hannans makes a final investment decision (FID) and enters a binding engineering, procurement, and construction agreement for a Plant, Critical will be required to either (1) co-contribute to all future construction costs of the new Plant (capital and operating costs), in which case, each party would have a 50% equity interest in the Plant, or (2) its equity interest in the Plant will be diluted pro-rata to its relative funding contribution.

To make an FID, Hannans will need to have secured enough feedstock to justify the economics of a Plant and obtained the required permits to operate the Plant. Under the proposed joint venture arrangement, the costs of permitting and sourcing and marketing the business will always be borne by Hannans (i.e., Hannans will fund all activities up to each FID for a given Plant, at which point, LiB will have the option to contribute or dilute).

The MoU and entry into further substantive agreement (to be consistent with the above terms) (Substantive Agreement) remains conditional on receipt of Hannans shareholder approval and completion of a capital raising of not less than $5 Million by Hannans prior to 31 December 2021.

Figure 4: Chart showing the relationship of the parties involved in the lithium battery recycling

memorandum of understanding.

3 Refer ASX release by Hannans dated 9 September 2021 for transaction details.

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Hannans Limited published this content on 31 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 November 2021 00:26:01 UTC.