OM : September 2021 Quarterly Production and Market Update

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OM HOLDINGS LIMITED

(ARBN 081 028 337)

(Malaysian Registration No. 202002000012 (995782-P))

Incorporated in Bermuda

No. of Pages Lodged: 09

26 October 2021

ASX Market Announcements

ASX Limited

4th Floor

20 Bridge Street

SYDNEY NSW 2000

Dear Sir/Madam

SEPTEMBER 2021 QUARTERLY PRODUCTION AND MARKET UPDATE

The Board of OM Holdings Limited ("OMH" or the "Company") is pleased to provide the following update.

HIGHLIGHTS

OPERATING PERFORMANCE

SMELTING: OM Materials (Sarawak) Sdn Bhd (75% owned smelter in Samalaju, East Malaysia)

• Production output for the quarter ended 30 September 2021 of 33,453 tonnes of ferrosilicon ("FeSi"), 59,307 tonnes of manganese alloys (silicomanganese ("SiMn")) and 34,542 tonnes of manganese sinter ore
• A total of 23,894 tonnes of FeSi and 43,856 tonnes of manganese alloys were sold during the quarter ended 30 September 2021
• Entry applications for new foreign employees are being gradually approved by Government authorities on a case-by-case basis. However given the pace of approvals and long lead time to mobilize the new workforce due to additional COVID- 19 protocols, it is anticipated that the impeded inflow of new foreign workers is unlikely to alleviate the temporary workforce shortage in the short-term due to employee home leave rotations commencing in Q4 2021. Production plans in and after Q4 2021 will potentially decrease before gradually ramping up to full production in 2022, subject to constraints beyond the Company's reasonable control
• Loan repayments of US$4.8 million (approximately A$6.5 million) were made to project finance lenders during the quarter ended 30 September 2021

EXPLORATION AND MINING: OM (Manganese) Ltd (100% owned Manganese mine in Bootu Creek, Northern Territory, Australia)

• Manganese ore production of 230,566 tonnes with an average grade of 27.98% Mn for the quarter ended 30 September 2021

Singapore Office:		1
10 Eunos Road 8, #09-03A	Malaysian Registered Office:
Singapore Post Centre, Singapore 408600	Unit 30-01, Level 30, Tower A
Tel: [phone] Fax: [phone]	Vertical Business Suite Avenue 3
Email address: [e-mail]	Bangsar South, No.8, Jalan Kerinchi
Website: www.omholdingsltd.com	59200 Kuala Lumpur
Malaysia

ASX Code: OMH | Bursa Code: OMH (5298)

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OPERATING PERFORMANCE (CONT'D)

• Manganese ore shipments for the quarter ended 30 September 2021 were 143,847 tonnes with an average grade of 27.96% Mn
• Based on current estimates, it is anticipated that all mining operations will be concluded in Q4 2021 with processing activities continuing with the remaining ore feedstocks
• The Ultra Fines Plant ("UFP") produced 4,736 tonnes with an average grade of 27.91% Mn for the quarter ended 30 September 2021

SMELTING: OM Materials (Qinzhou) Co Ltd ("OMQ") (100% owned smelter and sinter plant in Qinzhou, Guangxi Province, China)

• OMQ produced 11,183 tonnes of manganese alloys, 7,520 tonnes of manganese sinter ore and sold 16,512 tonnes of manganese alloys for the quarter ended 30 September 2021

MARKETING, TRADING AND MARKET UPDATE

• 492,954 tonnes of ores and alloys were transacted in the period from 1 July 2021 to 30 September 2021 as compared to 743,461 tonnes from 1 April 2021 to 30 June 2021, which represented a quarter-on-quarter decrease of 34% mainly due to a decrease in ores traded from Tshipi and OMM
• World crude steel production during July and August 2021 was 334.1 million tonnes, which represented a 4.1% increase as compared to the same period in 2020, signaling a continuous recovery from the pandemic
• Price of 44% Mn ore closed at US$5.22/dmtu CIF China at the end of September 2021, marginally increasing from US$5.15/dmtu CIF China at the end of June 2021
• FeSi prices surged from US$1,920 to US$4,150 per metric tonne CIF Japan while SiMn prices remained strong at US$1,615 per metric tonne CIF Japan at the end of September 2021 according to S&P Global Platts

COVID-19 EMERGENCY AND RESPONSE

• The Company continues to prioritise the safety and well-being of employees across all its operations and the surrounding communities whilst maintaining operational resilience in its key business areas. Ongoing improvements in the business continuity plans implemented allows for flexibility in response to the constantly changing environment due to the COVID-19 pandemic. During the quarter ended 30 September 2021, all eligible employees at OM Sarawak were fully vaccinated

CORPORATE

• As at 8 October 2021, a total of 88,151,946 shares were listed on Bursa Malaysia and 650,471,391 shares listed on the Australian Securities Exchange

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SMELTING

OM MATERIALS (SARAWAK) SDN BHD ("OM Sarawak")

OM Sarawak owns a Ferroalloy Smelting Plant in the Samalaju Industrial Park in Sarawak, Malaysia (the "Plant"). The Plant consists of 8 main workshops with a total of 16 units of 25.5 MVA furnaces, of which 10 units are allocated for the production of FeSi and 6 units are allocated for the production of manganese alloys. The Plant has a design capacity to produce approximately 200,000 to 210,000 tonnes of FeSi and 250,000 to 300,000 tonnes of manganese alloys per annum. The Plant also consists of a sinter plant that has a design capacity to produce 250,000 tonnes of sinter ore per annum.

Commercial operation

As at 30 September 2021, 12 out of 16 furnaces were in operation with 6 furnaces producing FeSi and 6 furnaces producing manganese alloys. Of the remaining 4 FeSi furnaces, 2 furnaces were idled for the purpose of conversion to produce manganese alloys, while the other 2 furnaces were idled for the conversion to produce silicon metal.

	Sep	Jun	9 months
	2021	2021	YTD
	Quarter	Quarter	2021
Tonnes
Production
Ferrosilicon	33,453	23,057	94,925
Manganese Alloys	59,307	37,691	154,134
Manganese Sinter Ore (commissioning phase)	34,542	14,223	71,591
Sales
Ferrosilicon	23,894	30,331	79,254
Manganese Alloys	43,856	50,948	145,800
Manganese Sinter Ore (trial production)	-	-	7,132

Subsequent to the approval to resume operations in early July 2021, FeSi and manganese alloys production volumes increased by 45% and 57% respectively as compared to the prior quarter, while sinter ore production volume increased by 143% during trial production for the quarter ended 30 September 2021, as the sinter plant awaits technical commissioning.

During the quarter ended 30 September 2021, sales volumes for both FeSi and manganese alloys decreased by 21% and 14% respectively compared to the previous quarter. This was mainly attributed to the lower inventory of finished goods available for shipment due to the temporary suspension of the Plant at the end of the previous quarter.

With the Malaysian Government shifting into an endemic COVID-19 phase, restrictions for interstate and international travel for Malaysian residents fully vaccinated against COVID-19 have been lifted. Foreigners' entry into Malaysia however remain subject to various considerations depending on the travellers' country of origin and the respective mandatory safety procedures prior to and upon entry into Malaysia.

Entry applications for new foreign employees are being gradually approved by Government authorities on a case-by-case basis. However given the pace of approvals and long lead time to mobilize the new workforce due to additional COVID-19 protocols, it is anticipated that the impeded inflow of new foreign employees is unlikely to alleviate the temporary workforce shortage in the short-term due to employee home leave rotations in Q4 2021. Production plans in and after Q4 2021 will potentially decrease before gradually ramping up to full production in 2022, subject to constraints beyond the Company's reasonable control.

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Loan repayments of US$4.8 million (approximately A$6.5 million) were made to the project finance lenders during the quarter ended 30 September 2021.

The final performance testing of the sinter plant and equipment installation works for the furnace conversion project have been deferred to 2022 due to the absence of onsite experienced contractors. Continuous engagement with relevant authorities to manage the immigration approval processes for the contractors are underway. If applications are approved by the end of 2021, the abovementioned projects are likely to be completed by the end of Q2 2022, taking into consideration the upcoming Christmas and Lunar New Year festive seasons in December 2021 and February 2022 respectively.

SMELTING

OM MATERIALS (QINZHOU) Co Ltd ("OMQ")

Production and sales from the Qinzhou smelter and sinter plant for the quarter ended 30 September 2021 are summarised below:

		Sep	Jun	9 months
		2021	2021	YTD
		Quarter	Quarter	2021
	Tonnes
	Production		16,087	35,867
	Manganese Alloys	11,183
		12,160	21,989
	Manganese Sinter Ore	7,520
	Sales
	Manganese Alloys	16,512	14,635	34,566
	Manganese Sinter Ore	-	-	-
Production

During the quarter ended 30 September 2021, OMQ produced a total of 11,183 tonnes of manganese alloys and 7,520 tonnes of manganese sinter ore. Production volumes for manganese alloys and manganese sinter ore decreased by 31% and 38% respectively compared to the previous quarter due to power rationing and production curbs imposed by the government authorities in China.

Sales

During the quarter ended 30 September 2021, OMQ secured sales of 16,512 tonnes of manganese alloys. Manganese sinter ore production was utilised as feed for the production of manganese alloys and not sold.

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EXPLORATION AND MINING

OM (MANGANESE) LTD ("OMM")

Production at the 100% owned Bootu Creek Manganese mine (the "Mine") for the quarter ended 30 September 2021 is summarised below:

		Sep	Jun	9 months
	Unit		2021	2021
	2021
				YTD
		Quarter	Quarter
Mining
Total Material Mined	bcms	736,401	1,695,819	4,417,460
Ore Mined - tonnes	dt	324,720	339,880	910,259
Ore Mined - Mn grade	%		19.81	20.70
20.58
Production
Lumps - tonnes	dt	187,708	164,734	508,589
Lumps - Mn grade	%	26.86	26.83	26.76
Fines/SPP/UFP - tonnes	dt	42,858	39,057	136,526
Fines/SPP/UFP - Mn grade	%	32.86	33.36	33.46
Total Production - tonnes	dt	230,566	203,791	645,115
Total Production - Mn grade	%	27.98	28.08	28.18
Sales
Lumps - tonnes	dt	111,202	162,891	408,179
Lumps - Mn grade	%	26.54	27	26.63
Fines/SPP - tonnes	dt	32,645	65,938	145,879
Fines/SPP - Mn grade	%	32.78	33.89	33.77
Total Sales - tonnes	dt	143,847	228,829	554,058
Total Sales - Mn grade	%	27.96	28.79	28.51

Mining

During the quarter ended 30 September 2021, a total of 0.74 million bcms of material was mined including 324,720 tonnes of ore at a grade of 20.58% Mn.

The total material mined during the current quarter was lower compared to the quarter ended 30 June 2021 due to the completion of mining at the Chugga Far North F pit, focus of mining moving to the Shekuma 8 pit and the allocation of mining resources to the backfilling of the Yaka 4 pit void.

The backfilling of the Yaka 4 pit void is part of OMM's rehabilitation obligation with a current completion deadline of 1 December 2021. A total of 0.5 million bcms was backfilled during the quarter ended 30 September 2021.

Processing of run of mine feed stocks will continue, with the ore from the Shekuma 8 pit being heavily affected by ground water.

Based on current estimates, it is anticipated that all mining operations will be concluded during the quarter ending 31 December 2021, with processing activities continuing with remaining ore feedstocks.

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