It's that time of the year again when we look back at the last twelve months of 2021 to reflect on developments and trends and then try to peer into our crystal ball to make some predictions for what's to come in 2022. I'm glad we're not fortune tellers. It's actually very taxing to make predictions and do up today's Insights. Thing is, every publication, every "influencer" and every blog post has already done something, which makes this Samso Insights a bit of a late comer to this stage. Still, in spite of that, it's useful to look back and also see what's happening right here, right now and be open and curious to what could come in 2022. 2021 What a year we have had on the Australian Stock Exchange (ASX). I believe the current count of IPOs in 2021 is around the 120 mark and rising. Even as I write this article, there is another one listed today. I remember a time when it was just a fraction of that number. In fact, we could count them and probably even name the companies. As in so many industries around the world, the COVID factor played a huge part and it has driven one of the best bull runs for the small-cap mineral explorers that I have seen in more than thirty years of being in this sector. Looking at the upcoming list on the ASX as of 23rd December 2021, I can count 38 IPOs of which I think two or three have just been listed yesterday. If you assume an average capital raise of AUD$6M per listing, you are looking at nearly AUD$220M to be raised in the next couple of months. Hence, with over 120 IPOs in 2021, that is over AUD$720M raised in 2021. And this is excluding placements and Rights issue. Figure 1: (Source: GESB Superannuation) Looking at Figure 1, it is obvious where returns are coming from in terms of investments, for 2021. The returns from equities have gone through the roof and the number of participants have greatly increased. I don't think there are any arguments about the influx of new investors, new type of investors and new ideology of investors into all sectors of the Australian Stock Exchange. Over the last three years, the returns are just below 10%. However, the twelve-month return is over 35%. This is actually a spectacular result, and if you were to take parts of the mineral sector, the returns have been in the 100s to 100s of percent. This is not what you would get in the sensible investing ideologies, but it is the common reality and the expected realities over the last twelve months. Figure 2: (Source: GESB Superannuation) This is backed up with the data in Figure 2. Look at the steep incline in ASX curve. The steep returns are not well represented but if you take into account that this curve includes all the boring "blue chips", this is a significant information. Market Expectations for 2022 I think 2022 is going to be better than 2021. Volatility will definitely be a common feature but I think the next twelve months could be even better. I was told that there was nearly AUD$400M raised in the second half of 2020. In 2021, the ASX raised over AUD$700M. In my opinion, the capital market is going to either burst out of the gates in 2022 and create a bubble for investors to be concerned about, or it will just plough on to 2023. I think the later will happen as there are just too many things happening and the shift to No Emission will be the main driver of activities. Capital is still abundant outside the game and the uncertainty of the changing landscape of the post-pandemic scene will drive the narrative. Asset allocation will be trying to find some form of normality and this will create a "race" to be in the right place. A flight of capital to compete for the best investment. Figure 3: (Source: E& MJ) I saw a great article recently which expressed my sentiments perfectly. It is written by E&MJ - Engineering and Mining Journal (Figure 3) where they talk about the restarting of projects globally. When you look at the delayed projects, capital requirement will rise just for that portion of the market. To conserve cash, most mining firms deferred capital expenditures and halted or slowed project activity in 2020. GDP growth, an important leading indicator for capital spending in the mining industry, is estimated by the International Monetary Fund (IMF) to have declined by about 4.9% in 2020. As of the end of 2020, the number of metals and mining industry projects impacted by the pandemic exceeded 1,600, representing $212 billion, according to surveys conducted by Industrial Info. About 66% of that is for mining projects, with the remainder being for downstream processing and smelting sectors. The good news is that most of these projects are merely being delayed as opposed to cancelled. Most delays range from three to 18 months, with a lot of project development being pushed into 2021-2022 timeframe. ----- (Source: E&MJ) The renewed interest and the increased opportunistic interest in the mineral sector will push the current "bull" run for a longer period. How long this period will be is hard to say but if the general curve of interest remains smooth, then I think this will be a three to five-year run. Would this become the next super cycle? I think there is a chance that could happen. If you compare my thoughts in June 2019 with the Insight I wrote (Is the Commodities Shortage a Mirage?), with what is happening now, you can see why I am optimistic about the path ahead. My confidence in this optimistic narrative is entirely based on the EV-No Emission Revolution. This is the Industrial Revolution of our current times. At that time of my Insight in 2019, there were no rumblings of the impending lithium run. If you look at Figure 4, the sentiment was still going down. Figure 4: The 5 year chart for Lithium Carbonate. (Source: Trading Economics) The sentiment for lithium was at its all time low in September 2021 and it took off like a greyhound chasing a rabbit on the racecourse. That has changed the entire dynamics of the No Emission narrative.There was already a movement for Green-EV-Reduced / No Emission but as the sharp price movement happened, it is as if the world woke up suddenly and decided this was the way to go. And this movement is now going at break-neck speed. What will Drive the Growth in 2022 It is an obvious statement to say that lithium is the driver but it would be foolish to believe that lithium is the only or main component. In June 2021, I wrote - The Mystical Journey of the Commodity Price - Will it Continue? - as an Insight, and I came across Figure 5. This was the light bulb moment for me in trying to narrate the ongoing space. Figure 5: The elements that are required to have a renewable industry. (Source: www.elements.visualcapitalist.com) When investors get all excited about lithium, one must also get excited about the things that support the lithium products i.e. the buildings, the casing, the products that require lithium etc. As seen in Figure 5, there are a lot of other metals that are required and are more in demand now than in the previous industrial community. Molybdenum - Who Would Have Thought? Let´s look at something that is so unknown and unloved but is now garnering a place in the spotlight - molybdenum. Molybdenum is a component of stainless steel and its claim to fame is that it is what makes stainless steel anti-corrosive. When you look at Figure 6, you get a sense that there is renewed interest and there is a correlation of increasing demand for lithium and molybdenum. Is it a coincidence that the sharp increase in Molybdenum price is at the same time frame as Lithium? This resurgence is another reason that makes me feel the mineral "bull" run will stay around for a lot longer. The short cyclical range that we are used to in the past may be on the verge of breaking into a new range. Figure 6: 25 year chart for Molybdenum. (Source: Trading Economics) Why is Molybdenum going through this new phase is still a mystery to me. The research I have done do point to a correlation to the rise of the oil and gas industry. The increased need for structures that are not corrosive is a factor but if you look at the diagram in Figure 5, the increasing use of renewable energy source could be driving up the pricing as well. Then there is Nickel In my opinion, this metal is going to have a better future. The reason is mainly due to the fact that the EV industry is always seeking for better and more cost effective components. There are now commentaries of how the industry is actively looking at Nickel Solid State batteries. If this is going to be the future, then the demand for the metal will far exceed existing supply. Users are going to struggle to find reliable sources of nickel sulphides and if they go towards the Green space, that market will be even tighter. Figure 7: 5 year chart for Nickel. (Source: Trading Economics) The need for nickel sulphides is going to be a struggle as there is a little problem of finding the source and then mining it. For those who are not proponents in this industry, the mining process is a not an overnight process. It takes time and that is going to cause an even greater strain on demand. Copper - Old faithful Doctor Copper. Copper is the main stay of our civilisation and there have been countless commentaries on the need for more copper. I don't think we are going to have a sky-rocketing price surge as the supply of copper is pretty good. When I say pretty good, I mean that we can get to a source more easily as the price will get to a point where it allows the not so economical projects to become viable. Supply will kick in and that will stabilise the price rise. Unlike cobalt and in some case nickel (at some point in the future), there is a supply issue and the price will get to a point where it is uneconomical to use as a component. Figure 8: 5 year chart for Copper. (Source: Trading Economics) This is like using gold as an industrial use. It just won´t happen with the price. There is indeed a need for more copper but I think the shortage will not be as bad. This is not saying that there may not be pressure on the price. I just don't feel a great fear of not finding copper. And then there is Lithium There is no need to elaborate on the need of this metal. It is a well-known story but the latest price surge is pretty vertical. I will think that there is going to be a coming back to reality at some point. In late 2019, I was talking to an associate who was trading in spodumene and he told me that the turning of lithium is close. I agree with him but the rate at which it turned is what really surprised me. Figure 9: 5 year chart for Lithium. (Source: Trading Economics) I am not entirely sure where the price will end up, but what I can say is that the projects that are near to the market will be beneficial. With these last two years of shifting economics, shifting logistics, shifting politics, I feel that there is a balanced shift of reliance on world supply to one of domestic supply. The position I have on lithium is no longer that of whether the price will rise or if there is a demand, but rather one of location of the project. What I am saying is that if you have a project that is in the right jurisdiction, you will be closer to your market. I have one thought which may raise some eyebrows. The "shortage" of lithium may be due to the lack of plants to produce the end product. The bottleneck in the supply chain is the plant and not the raw material. If I am right, this is not going to sorted out in the near future. There is no doubt that the critical nature of lithium is going to play a big role in the coming years, maybe even extending decades. This will shape political and economical boundaries. These boundaries will become the balancing powers. Hence, the jury will still be out but I suspect we will have the answer soon. These are simply my observations based on experience, past and current happenings. Conclusions The mineral exploration industry is experiencing a state of euphoria which have never existed in my thirty years of participating in this industry. Geologists are in great demand and are being paid handsomely. I have never heard nor seen anything like this kind of fortune for the rock lickers. We have had a long period of suffering with a lack of capital and been seen as not as important as the corporate participants. When you take into account that there was nearly AUD$750M raised in 2021 and about AUD$400M to AUD$500M raised in 2020, you can't help but think that exploration activities will continue to be strong. The outlook for the metals is also strong with the EV / No Emission story that is dominating in every aspect of the resource industry. Another factor which we have not covered is the onset of Environmental, Social and Governance (ESG) requirements and participation. This will be a big driver for the industry as companies look to bring their businesses in line with the ESG bracket. The emergence of a strong ESG requirement is also creating more opportunities and allowing more capital to be allocated. When I quote the metal pricing and potential demand in this Insight, I want to highlight that there is a shift in the use. This shift is what makes up the building blocks of the coming decades. 2022 is most likely at the starting blocks. This shift will create more opportunities and more demand for capital and resources which will fuel economic activities. In 2020, everyone was surprised at the rapid rise in equities. In 2021, investors were trying to work out when the cycle will end. In 2022, I feel that investors are more accepting of the potential of the bull run and may push the pedal closer to the floor. I think investor confidence of a continued surge in mineral equities will be higher. It may be a case of investors doubling down on their expectations. It is as if investors were expecting a slow down. With a slowdown no where in sight, their excitement has been validated and they are speaking with their increase eagerness and money. What I like about the coming Year of the Tiger, 2022, is that the new world is just beginning to start. There is no going back to the old world. This is not a COVID issue. This is a new "industrial revolution" and I feel excited to be part of the process. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. This article is also published on Brilliant-Online

Is the commodity market depressed or is it just not used to the China Panda taking a long time to chew through the bamboo stalks. Whenever the markets get a whacking, the general public is hoping for a quick recovery. This reaction is natural, but seasoned investors will tell you that this never happens. The recovery is always longer than you expect and usually is more depressing than you wish. Interestingly, this is the same, whether you are talking about property or the equity markets. Over the last decade, the commodity boom has been primarily being driven by the growth of China. China has come from a farmyard economy to a world juggernaut in just 30 years. I was in China a few years ago and an associate (Chinese migrant with Australian residence for 20 years) was telling us that several years ago when he came home to China, he used to take his relatives and friends out for dinner. Now it is the other way around, and the return of favour was magnitudes of difference. The wealth creation in China over that time has been tremendous and even surprised those closer to home. Now that China is undergoing a slowdown and Trump is doubling the misery, the world is confused. Should we buy more? Should we produce more? Should we invest more? These are the puzzle that is causing heartburn for the rest of the world. I wonder if all the confusion on the market is just the general commodity market getting used to something new after so many years of the same prosperity. The Chinese Economy Source: Trading Economics The Chinese economy advanced 6.4 per cent year-on-year in the March quarter of 2019, the same pace as in the previous quarter but slightly above market expectations of a 6.3 per cent expansion. Industrial output growth accelerated markedly, and consumer demand strengthened amid government’s pro-growth policies, which helped stabilise sentiments rattled by the trade dispute with the US. On a quarter-on-quarter basis, the economy grew 1.4 per cent in the first quarter, compared to a 1.5 per cent expansion in the previous period and matching market estimates. It was the weakest quarterly growth rate since the first quarter of 2016. GDP Annual Growth Rate in China averaged 9.52 per cent from 1989 until 2019, reaching an all-time high of 15.40 per cent in the first quarter of 1993 and a record low of 3.80 per cent in the fourth quarter of 1990. Over Inflated GDP Figures In March 2019, I read an article in Bloomberg, which talked about how China had been over-reporting its GDP between 2008 and 2016. As you can see in Figure 1, the GDP range is much like a roller coaster ride. Over time, there have been numerous reports on this issue, and many debates have argued if this was a conspiracy or an act of jealousy. According to Bloomberg, one of the significant culprits could be the over inflation of growth by local governments. The provincial government authorities would want to be seen to be achieving economic growth goals to improve their chances of promotion. These are times before President Xi, where brown paper bags and inaccurate reporting were the things to do. Local government authorities had absolute power to approve and influence economic development. As President Xi started to exert his authority, fear has been brought over the system and “more accurate” figures are appearing. To the shock of the western economist, these figures started to send shock waves through the market. What was a reality? It was around 2015 when I started getting involved with China investments, and that gave me a first-hand look at how private industry do things in China. There was no shortage of money, especially with the younger generation. Ferraris, Lamborghinis and Bentleys were standard features of associates. What else was apparent was over capacity: elaborate factories not fully occupied and the typical industries that were showcased to create a mirage of prosperity. I saw several factories, car parts, shoes, clothing, plastic manufacturing and furniture, to give some examples. The one common feature was the overcapacity. Many buildings looked like there was nothing in them. And some of the buildings had 25 per cent occupancy. Apart from that, things were just “normal”. Friends and associates in China were telling me of a retail downturn, and even the food and beverage sector was not doing well. The tightening of elaborate “entertaining” killed off “entertaining” cities. Excessive dinning was non-existent practically overnight. My associates in smaller cities in Malaysia were telling me that the Chinese company officers would be too scared even to be associated with these expensive dishes. That was how hard the crackdown was on excessive expenditures by government officials. Is the commodity price just reacting to World economics? To blame the fluctuating commodity pricing solely on the China market would be simplistic. In January 2016, almost every commodity was at its lowest, but Crude oil joined the depressed pricing late in 2014. That period was the first time that I can remember where every valuable commodity was at its lowest. During that first quarter of 2016, the markets rebounded, and there was optimism for the next phase for the resource sector. In our new world of debt, corporations servicing the rapidly growing mountain of debt has proved a great deal more expensive than expected. Corporates have been forced to sell their commodities at increasingly deflated prices (and continue to do so). What many assumed were exceedingly good borrowing terms have proved to be anything but, once the cost of exchange rates are taken into account. The slowdown in Chinese economic growth is, in no small degree, the result of problems in the banking industry. In 2016, The issues of non-performing loans were rising at no more than 1-2% a year, according to official statistics. During that period, the actual growth rate in non-performing loans is probably more like 5-10%. The shadow banking story has been a problem since 2016, and there were reports of the second and third level financial institution not having enough money to repay depositors. The problem in the financial sector has exacerbated domestic slowdown, which will, in turn, create a roll of depressed pricing. The One Belt and One Road Issue. What is a debt financing tool is now slowly biting back with non-repayments and the building of white elephants? Many projects were built on this debt facility all over the world. This was going to be the instrument that would help China get its growth back on track. However, reports are indicating a lack of real growth and economies are being left with white elephant projects. Ports that are built, but there is no infrastructure to support the development. One of the most significant infrastructure projects in Kazakhstan is now in limbo. China invested over 14 billion dollars in Kazakhstan as the gateway to the new Silk Road. There is a great article titled, Kazakhstan – The Broken Buckle in the Belt and Road, which talked about this particular issue. On the other hand, projects in Indonesia are booming. Large state-owned enterprises were implementing the One Belt One Road song, and dance and all is happening. Factories and cement plants are popping up everywhere. However, the locals are telling me that they are not performing well, and local employees are being laid off or had wages cut to keep overheads down to show profits. Conclusion The slowdown in the world economy is the real blame for the commodity price sentiments. The China story is just part of the equation but I think commodity pricing has just got too comfortable with a rising Chinese economy. The European market is not a happening thing and the US revival is coming to a close. If you take into account that the China GDP was really not that high and the numbers were not that big, then you would assume that the buoyant pricing had to do with other factors. Now that the pricing is heading south, you would have to apply the same relevance to the other non-china factors. One can blame the slowdown in the world economy to the instruments of debt funding that has created a circle of death. The same geniuses that created all the tools that blew up Wall Street during the Financial Crises are still doing their magic. The recent demise of Gascoyne Resources, Dacian Gold and all the Eastern Goldfields companies are most likely to have been driven by the same financial models that were created to justify investments during the Ninja (No Income, No Job, No Asset) Loans period of madness. The same instruments are hurting corporations and driving the volatility of commodity prices. I am no economist but I am convinced that a combination of these hybrid alternative investment products that are the root cause of the direction of commodity pricing. One would argue that if investing groups were to make decisions on the factual repayable model, there would be a more stable movement in pricing. This ability would lead to more reliable forecast on pricing movement and future pricing levels. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

5 Points you need to know before investing in a small-cap resource company on the ASX? Many would ask, are you trying to sell a How to Blog? My answer is simple. I have been in this industry for nearly 30 years, and I feel that the structural parameters of risk and reward ratio that “entice” investors have not changed after all these years. You would be surprised how often investors ignore these simple basic questions. In the last ten years of “corporate” work, I have heard so many people say that promoters misled them and were all liars. What I know is that in many instances, the fault is in not asking these simple questions. It is not negligence, its that fact that this is a unique and dangerous sector but filled with the excitement of more substantial capital gains. How many times have you been approached to look at a company that is raising money, doing an RTO, an IPO or merely being asked to buy on the market? We all know that investing in a small-cap resource company on the ASX can be very challenging. When you look at this industry, many commentators have compared the process much like going to the casino. In many aspects, I agree, but every gambler has a system that uses science to explain the process. It is this science if applied properly that increase your chances of getting a good result from investing in a small-cap resource company on the ASX. So What Should We Be Looking For? Investing in a small-cap resource company on the ASX is something of a unique beast as it deals with the blue sky but yet requires a lot of the first principle of investing, DYOR (Do Your Own Research). The issue with the average punter and those that are new to the industry is that many of the research may sound like a foreign language or don’t see the full spectrum of activities behind the scene and don’t realise that what they read and see is not necessarily a result in reality. In my opinion, there are many factors to put on a checklist. However, let’s discuss those that are probably more relevant, more important or more critical. These points are not a saviour of a decision but give an excellent guide to what you would want to know, before investing in a small-cap resource company on the ASX. So How Does it Normally Work? For your average Joe investor, opportunities arise where an “introducer” proposes to you to invest your hard-earned money into a company through one of these five scenarios, • RTO (Reverse Takeover – probably less likely in time to come as the ASX is slowly making it less attractive to do this method.) • IPO (Initial Public Offering) • Placement • Rights Issue. • Buy on Market RTO Lately, the RTO or Reverse Takeover was a flurry of activities, but I see this as less likely. The ASX is now making it hard for an easy RTO and instead of making participants go down the route of re-compliance and do a new IPO. All pathways to the “easy money” no longer exist. IPO The traditional IPO is probably the least favoured as there is a perception that it is harder for 20 cents to get to $1 than for a stock to go from 2c to go to 10c. This kind of thinking is purely an act of market psychology and I feel that strongly through my trading activities. The market is all about psychology and very little on fundamentals. One can argue that but what makes a stock price plummet many percentage points overnight, technical or psychological? Placement Placements are the most commonly used instrument, and they occur very often. When you are dealing with a business that does not make an income and the investors make money from the capital appreciation of the share price (and this is why activities are essential for the company), you would expect cash burn rates to be higher than usual. The downside of placements is that they usually are not placed to the public and all the good ones are for the “boys” club. And when you get a look, you would wonder why am I getting this? Rights Issue Rights issues are an interesting phenomenon as it is like a double edge sword. Rights Issues are taken to raise more money from existing shareholders and sometimes, it’s a good thing, and sometimes it’s a bad thing. It is also used in many cases to change ownership of the management and the shareholding. Don’t get me wrong, this happens in all the other forms of capital raising, but this is just the most commonly used instrument. It is also the most “legal” way of doing things :-). Buy On The Market Buying on the market is the most easily understood. Buying on the market is least used to influence a sinister plot. In saying that, I am assuming that you are not going to buy a controlling stake from a recommendation. The professionals do take controlling stakes from the open market. I have seen this happen more than once, but they are people who have a mandate/agenda to achieve a future yet determined purpose. So what are the points to look out for? With over 30 years of experience, it usually only takes a quick 5 minute of reading and investor deck, an Information memorandum or Presentation for me to decide if I need to spend any more of my time. You will be surprised at the numerous name changes that projects can go through with a new concept or a new super idea over and over again. The predominant motive for investors in this sector is to make money and make good capital gains. Otherwise, you would buy BHP (ASX: BHP), Rio Tinto (ASX: RIO), National Australia Bank (ASX: NAB) or Westpac Bank (ASX: WBC). Investors in this sector tend to turn a blind to the “sharks” in return for the share price heading north. Let’s try and make this simple and discuss some of the critical points that I think one must check before throwing our hard earned money into the hands of these “sharks”. In my normal checklist are these items to be considered, Technical Merits Corporate News People involved Brokers Market Perception of the Commodity 1 – Technical Merits All projects have a specific component that will make it happen or not. A good friend of mine once told me that all diamond mines have something unique that will make it viable. If not for that component, the mine will never happen. He said, look at Argyle Diamond mine, it’s the Pink diamonds that make it viable. You could also add the marketing of its browns as Cognac and Champagne diamonds was anything but a spectacular stroke of genius. Take Ellendale diamond mine, the yellow diamonds kept the company going, and as soon as that marketing game finished, the company was in administration. On the other side is the Letseng Diamond mine in Lesotho. Letseng is characterised by extremely low-grade ore (less than 2 carats (400 mg)/hundred tons) and is known for producing huge diamonds, having the highest percentage of large diamonds (greater than 10 carats (2.0 g)), giving it the highest dollar value per carat of any diamond mine. The world average is roughly US$81 per carat, while Letseng averaged over US$1,894 per carat for the first six months of 2007. My point is that the technical merits of a project are not the headline numbers. It is about possible production numbers. It is about the intrinsic value that it has which makes it a viable project. Also, depending on your investment strategy, are you looking for capital gain while the story is in high momentum or when it comes to production. Again, these are essential factors to consider. In many gold projects, investors get excited with big numbers, but they need to realise that an interception of say 5m at 125g/t is markedly different from 150m at 2.5g/t. The example I have given there is almost on two extremes of the spectrum, meaning that the first may not work and the second is practically a discovery. 2 – Corporate News Corporate activities are the most contentious point for investors and vendors of projects. In reality, most plays are in a public company scenario and where everyone is going to make lots of money from the share price going up. For companies that are in the ASX, it is common for vendors of projects to be paid in part or in full with company shares. The share price going up is what vendors are all hoping that they will have their payday soon. Under present ASX listing rules, in most cases, vendors of projects have their shares escrowed for up to 12 months or at least 12 months (the shares are held and not allowed to sell till a particular time in the future). This is where the problem starts for everyone. Everyone benefits with a rising share price, and if your drill hole does not come right, that is not going to be good for all shareholders. As companies “make money” through placements, the company wants as high a price as possible before they start issuing shares for new money. As you can see, the ingredients for mining the market begins, and with all schemes, it just gets worse as time goes. The Old Boys Club, kool to some people. (source:Tailgatecorneroffice) The term “mining the market” is very well used and the losers are the shareholders, and the smaller you are, the more insignificant your thoughts and feelings are to the company. Sweet deals are very commonly placed to “the boys club” to average their cost down while the smaller shareholders are ignored. 3 – People The management team/directors need to be compatible with the activities of the company. As the company is a non-income generating spending machine, those paid an income need to be doing it’s best to reduce the expenditure. A mineral resource company with AUD5m in the bank is not going to have a lot of money left if they are paying themselves a high wage and employing everyone under the sun. I would go further in saying that the directors who are geologist should be the ones sitting on drill rigs. Mark Bennett is one that is a real example of saving money and doing it all and the result was the discovery of the Nova-Bollinger nickel-copper mine with Sirus Resources Limited. Sirus is now absorbed into IGO (ASX: IGO). There are too many examples of directors who are on a high wage and not making any real effort to reduce the spending. For a small company, controlling cash is a significant issue as the cost of operating a public company and making sure you get the stories and maintaining market expectations is very difficult. 4 – Brokers The broking industry is not doing well at this time as there is a downturn in the small-cap sector. My 30 years in this industry have taught me that the broking industry is one that is very robust. It is incredible how they can survive for this long. My relationship with brokers is in a ubiquitous phrase; the broking industry gives you the umbrella when it has stopped raining. It is very frustrating, but I do understand why that is the case. The brokers are only interested in no lose stories, and they negate bad stories by being lined with options and shares that are or will be “in the money”. This is a commercial world, and that is a simple truth. Hence, when these guys start coming to you, be very aware that all the walls are lined, and you are the fuel that the vehicle needs to get going. They are given the incentive to approach you and compensation has been given to them in case they lose you as a client. Brokers play an essential role in helping companies to promote however I am open to thinking that in today’s social media world, companies can do a lot of promotion internally with the right personnel. Don’t get me wrong. I am not saying that the brokers are all shonky hub stealing people in suits. What I am saying is that they are in this business to make money. The everyday investor is also in this business to make money. All I am alerting to is that investors should understand the motive of the introduction. There is always going to be a level of conflict of interest as they make money for companies in getting you to invest, but that is just the nature of the game. The other way to look at this is that you would not get the opportunity to make money without them. 5 – Market Perception of the Commodity Market perception of the commodity is obvious, and as I explained in my previous blogs with zinc (Zinc Market- What happened to the price surge?; 7 Interesting Zinc Companies on the ASX), market perception may not necessarily be the market reality. In the first part of 2018, I started telling people that I believe that the simple commodity like nickel and copper will flourish. At that time, cobalt was still the darling with many commentators always saying, get cobalt and all your worries will be over. At that time, I think Cobalt pricing was near USD 92,000. As I write today, the price of cobalt is around USD 32,000. Nickel and Copper are showing good signs of recovery, and simple commodities such as iron ore are now back in favour. As I tell my associates, I don’t need to have lithium as I don’t need an electric car, but I need the essential metals to have that car. The next EV story could be hydrogen or tungsten or vanadium, but I need the nickel, copper and the iron in any of those scenarios. Gold is a good example. After the crash in 1999, it was USD 240/ounce, and today it is over USD 1300/ounce. Market perception, in my opinion, takes into consideration, timing, price upside and demand upside. When all three points are aligned, then, in my opinion, that is a good thought. Conclusion It is never easy to decide what is a good investment or the right timing and I am not professing that I am an expert. The more I write, the more there is to share, and suddenly I realise that there is an endless amount of mines field that I have seen and heard over my 30 years. For example, it was only recently that I realise that no more than five personalities control the whole mineral resource small-cap sector in Australia. Everyone else feeds from them and deals are done in a myriad of ways in companies that are related to or friendly to these identities. I don’t mean that in some illegal manner, what I mean is that they have positioned themselves well over time in projects that are in their portfolio. To get a good look into whether the investment is a good move, one needs to understand how the market works in this industry. It is easier for the likes of myself to understand if there are any big holes in the presentation, but it is also impossible to say that a bad reputation means a bad investment. In some cases, you can make a lot of money with a functional promoter with a lousy project. Sometimes, it is the opposite. When I started this blog, I thought I could cover everything that I wanted to say. However, it appears that I have already written too much and there is still so much to share. I guess that this means that I will have to do the rest in another blog. These 5 points are just a rough guide to what I think I know, so there is no need to crucify my thoughts. I have been wrong, and luckily for me, I have been correct most times 🙂 Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

Diamond projects have been my geological soul mate ever since I studied geology in high school. I have always been intrigued by diamonds and the whole coloured gemstone sector. I don’t think I was fascinated with geology. I was fascinated by coloured stones and how they appear in their crystalline forms in nature. Emeralds were my favourite, followed by coloured diamonds. White diamonds are beautiful, but they are just too vanilla. My Honours thesis was on the topic of diamonds. It was after doing my Honours year in Geology that I got interested in diamond geology that was very different from the other commodities. Although I should have done better with the thesis, I did learn a lot from the research with the help from my supervisors Dr Rob Ramsay, Dr Wayne Taylor and the late Dr Nick Rock. Without Rob and Wayne, there would not have been a thesis. What has happened with diamond exploration? The last time I remember a diamond exploration IPO was that by Cambridge Gulf Exploration Limited in the early 1990s. Could have been 1993. They had a plan to mine the diamonds that were in the Cambridge Gulf. The theory was that the action of weathering and erosional would transport diamonds from the Argyle pipe into the gulf. There were Striker Resources which was exploring the North Kimberley Ashmore pipes in the 1990s and then went and tackled the Merlin Diamond project. Striker changed its name to North Australian Diamond Company, and I think, it later became Merlin Diamonds. Recently there was POZ Minerals who are trying to prove up the Blina Diamonds. Poz Minerals is now called Gibb River Diamonds (ASX: GIB). Lucapa Diamond Company Limited (ASX: LOM) is probably the most recent successful ASX listed diamond company. Lucapa is mining high-value diamonds from the Lulo (Angola) and Mothae (Lesotho) mines. They are uncovering some huge stones from their projects. The Webb Project (Source: Geocrystal Limited IPO Prospectus) In 2018, Geocrystal was unsuccessful in their attempted to list the company on the ASX (Australian Stock Exchange). The company is now still an unlisted public company. The Webb Diamond Project is located approximately 500km due south of Halls Creek and 630km west of Alice Springs (Figure 1). Webb is located in the remote West Arunta region of the Gibson Desert of Western Australia. The Webb tenements contain a large cluster of bulls-eye, magnetic dipole features interpreted to be pipe-like intrusions. These geophysical targets compare to geophysical features of mantle-derived rocks found associated with swarms of kimberlite and lamproite pipes in Archean cratons and Proterozoic mobile belts that host known diamond occurrences. Initial modelling of the magnetic features was based on Government aeromagnetic surveys flown on 400m line spacings. However, additional modelling took place following an aeromagnetic study carried out by Meteoric Resources in 2010 over part of E80/4235. More detailed modelling took place following an aeromagnetic survey carried out by the Company in 2014. A total of 12,574 line km was flown on 100m line spacings, and 280 magnetic dipole features were interpreted. Detailed modelling of selected magnetic targets indicates vertical pipe-like bodies with depths to the unweathered top of the modelled bodies ranging from 50 to 150m below surface and diameters varying from 180 to 300m. Recent Exploration by Geocrystal. In 2013 and 2014, the Company carried out the first exploration and drilling programs (7,713m) over these magnetic features and drilled 64 targets located on tenements E80/4235, E80/4407 and E80/4506, discovering 51 kimberlite bodies. There remain 216 untested kimberlite targets at Webb. In the period 2013 through to 2015, the Company undertook extensive loam (surface concentrate) sampling programs of the desert sands (totalling 42 tonnes) to determine the presence of Kimberlitic indicator minerals and microdiamonds. A total of 27 micro-diamonds were recovered with the majority located within a broad surface microdiamond dispersion anomaly 150km2 in area. The surface microdiamond anomaly is characterised by a high incidence of microdiamonds and with larger dimensions up to 0.4mm at its eastern margin. During 2016 and 2017, the company applied ground penetrating Lozar radar, ground magnetic and gravity geophysical surveys on selected kimberlite magnetic targets within the Webb project area, especially over targets, lying within the large surface microdiamond area. These surveys aimed to obtain a better understanding of the size, shape and depth extent of the targets and therefore prioritise these targets for future drilling. A New Diamond Province. The Webb project is one of the best exploration stories that I have heard. The unfortunate part is that its a diamond story. Looking for diamonds is as raw as you are ever going to get in the exploration industry. It is a long and slow process and in my opinion, an intellectual tease as you have to look at geomorphology, geochemistry and damn hard work. My experience in this industry came from my time with Ashton Mining Limited. Ashton was eventually taken over by Rio Tinto Limited (ASX: RIO). Those years were the most memorable as I got to work at the Merlin Diamond Project which later became the Merlin Diamond Mine. It was great to have been involved with the discovery of the Bronzewing Gold Mine and the Merlin Mine in the first five years of my geological career. I was the lucky one as I was supervising the drilling and not doing the stream and loam sampling, which was backbreaking work. After learning what they had to do, I was thrilled to stick to my mustard. I was like the resident at what was then called Boomerang Creek. Living in five-star accommodation and cooking five Michelin star meals as you can see below. Why Is The Webb Diamond Project Prospective? The Webb project may have given Australia the diamond province that had eluded great explorers since the late 1970s when Argyle was discovered. The closest project that came close to a province like Webb was the Coanjula Pipes, which was my Honours Thesis. Ashton Mining owned the project. There was a sizeable microdiamond field that led many thoughts that the pipes were potentially a field of kimberlites or lamproites. However, analysis of the pipes showed that they were alkaline pipes and not from the mantle which produced diamonds. Geocrystal has been working on Webb for several years now, and the evidence is throwing up some very compelling evidence that one or more of the pipes are bearing diamonds. The project is now at the point where drilling will show either they are on the verge of discovering a diamond bearing field or another false hope. The Geocrystal exploration is headed by Thomas Reddicliffe, who is the technical director. Mr Reddicliffe described the Webb project as one of the more exciting current diamond exploration projects. Mr Reddicliffe was involved in the Kimberley diamond exploration teams that discovered both the Ellendale and Argyle diamond deposits. He also worked as the Australian exploration manager for Ashton Mining in the 1990s and later continue to be prominent working in Striker Resources and Merlin Diamond Limited. A wise “old” man who is a probably one of the few actively working diamond geologist that has seen that much experience. The Webb Geology As you can see in Figure 2, Geocrystal has identified approximately 300 discrete magnetic targets. Drilling and sample analysis has confirmed the pipes show characteristics to a kimberlite. Both gravity and magnetic modelling show some of the kimberlite pipes to be potentially as large as 12-15 hectares (Ha) in surface extent5, at depths of c.100m. Exploration by the company has now highlighted an area to the Northeast, where the most prospective untested targets need to be drilled. The discovery of larger microdiamonds has led the company to believe that this region (highlighted pink area) as the area of most significant interest. What is interesting to me is that the 100s of discrete magnetic targets form a series of linear NNE trending dyke – like anomalies. The relationship between these linear anomalies and the discrete magnetic anomalies has not been established. However, you learn in exploration that nature never produces a pattern for no reason. When you have items being injected up from the mantle (a long way down), it always seeks the path of least resistance, and if there is a linear feature that allows you to come up, you do that. What that means is that potentially, these linear features could be part of the whole endowment story for diamonds in the area. Simplistically, what all the evidence are saying is that Webb is a Kimberlitic province that has a cluster of pipes with varying mineral geochemistry indicating that they are tapping different parts of the mantle material that are from the “zone” of interest. Diamonds are only stable at 900 – 1300 C and pressures between 45 – 60 kilobars. (kB), so to identify that particular pipe from that point inside the mantle, you require statistics. The first good news in Webb is the identification that a cluster of Kimberlite, the source of the mantle (the medium in which potential diamonds are to be hosted.) exists. The second is the presence of diamonds, and Webb has a microdiamond trail. The third is the presence of indicator minerals which show the chemistry from that diamond formation region of the mantle. When you have all that geochemistry sorted, you need the geomorphological factors, such as the trialling of the diamond and indicator minerals towards the northeastern region. The discovery of microdiamonds that are still showing the crystal forms means that they have not travelled that far from its source. This is an important feature. The photo of the diamond discovered by exploration activities, as shown in Figure 3, is a critical aspect. This small macle is one of 30 microdiamonds recovered from surface sands overlying the Webb field. Eighty per cent of these microdiamonds are concentrated in the northern part of the kimberlite field within a coherent and repeatable surface anomaly. Webb is a vast kimberlite field, with the pipes tested to date being sourced around the theoretical diamond-graphite transition depth. The deepest sourced pipes tested to date occur in the northern part of the field, so it is not a big stretch to imagine that the source for the microdiamonds will be found in the northern part of the field. – Thomas Reddicliffe, Geocrystal Limited. Conclusion – My Thoughts I admit I love the excitement of diamond exploration. Real exploration has not been done for a long time. There have been a few companies that have gone into “near mine” projects and then moved into production, but there has not been a discovery of sorts, especially in Australia. The late Maureen Muggeridge led the last person or group that had any profile looking for diamonds. I may have graduated as a geologist, but I am in awe of the thing done by the likes of Maureen. I had an insight into what is required to find diamonds and how much it cost. The most important part of diamond exploration is money and time. Both of these items are in short supply in the equity markets and especially the catch cry today is “near-production”. The reward for finding a producing diamond mine today is the fact you will be the one and only diamond producer in Australia. Quality stones still see a high price as companies like Lucapa and Lesotho will tell you. Merlin Diamonds was fetching up to $300/carat. The Webb project is the only project that will give you that option of spending $2-3M and drill those targets. If you hit a diamondiferous pipe and the results are favourable, you will know immediately. There is no need to spend years looking at the trail, looking for the trail or analysing the geochemistry. This is the only diamond project that you literally can walk up to it and drill. A well-executed exploration program is also supporting the optimism. The cluster of Kimberlite pipes in a confined space with microdiamonds that are consistent with a lack of transportation is what gives me the confidence that this could be the elusive diamond province that everyone has been looking for since the discovery of Argyle and to a lesser extent, Ellendale, Melin and Blina. I was the supervising geologist when the Merlin Diamond Field was discovered. Although I did not realise that I had just drilled through the pipe, named Ector but really should have been named Noel, I knew I had drilled something different. The thrill of knowing that I played a part in the discovery hole (after Excalibur which was discovered 1-2yrs prior) that proved the concept of a field of pipes would be etched in my memory till I am too old to tell the story. That is what Webb can provide after all these years. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

Champion Iron Limited (ASX: CIA, TSX: CIA) is an iron ore exploration and development company with significant projects in the southern Labrador Trough, Canada’s largest iron ore-producing region. Champion Iron, through its wholly-owned subsidiary Champion Iron Mines Limited, is developing eight iron-rich projects in a 707 km2 area. The projects are all strategically located close to the electrical grid, all-season roads and railway lines. This infrastructure connects the projects to a terminal located in water that does not freeze, on the north shore of the Gulf of St. Lawrence. The fascinating story with Champion iron is their vast resource. As you can see in the diagram below, it has several billion tonnes but with what Australians would consider low grade. However, they appear to be able to beneficiate the grades to over the 60% mark and are producing very impressive tonnages for sale. I have very little knowledge of the iron ore industry in this part of the world, but I am impressed. If they can beneficiate all these tonnes, this could be a significant play for investors. An associate had suggested I write about Champion Iron and on first look, I will admit that I was not so keen. Upon more detail reading, I was curious about the size of their resource and the share price journey. The share price has had a great ride and as you will agree after reading this article, technically, I have a feeling, this journey may have only started. Projects As I mentioned the resources shown in the diagram above is super impressive. With the recent iron ore pricing taking a run this has got to be a company to look out for in any portfolio. The Australian magnetite projects differ significantly from the metasomatic varieties in the tropical areas where magnetite “pods” can grade up to 60% plus. However, these Canadian varieties are lower in grade, but I believe they occur as weathered varieties which I assume will help in the economic department during the beneficiating process. I think the structure of the magnetite must allow a more natural beneficiation process. Capital Structure (Data as of November 7, 2018) Market Capitalisation: 682M Top 20 Shareholders: 51.9% as of 2018 Share Outstanding * | 419 319 747 Company stock options | 11 050 000 Compensation options | 21 000 000 Champion is on the ASX and the TSX. It has been an exciting share price journey. The company was a merger of Champion Iron (TSX) and Mamba Minerals Limited (ASX). The merger was initiated in the last quarter of 2012 and completed in the first quarter of 2013. Merger Details • Announced in December Quarter 2012 • The merger of Mamba Minerals Limited and Champion Iron Mines (TSX: CIA) • Champion shareholders to receive 11 Mamba shares for every 15 shares of Champion shares. • Raised AUD$10 million with the merger. The recent upsurge in pricing appears to have taken hold after the acquisition of the Bloom Lake project in 2016. The addition included related rail assets and a capital raising of C$30 million at C$0.16. The transaction brought in two private equity firms invested in the placement, • WC Strategic Opportunity( a Wynnchurch Capital LLC portfolio company) • Resource Capital Fund These two funds are big players, and this would have been a great sign of support from the “smart money” and the “big money sector”. It would be a boast of confidence to the general market. The old saying” safety in numbers” or rather ” Don’t get me angry, my big brother behind me will fight you” :-). Labrador Trough – What is the deal? (source: Canada Natural Resource) The Labrador Trough is something like the Pilbara Region of Western Australia. A mass of super-rich mineralisation with a lot of iron ore. It has been mined since 1954 and currently, production is at a rate of over 30 Mt per year. The region has several billion tonnes of ore outlined in fine-grained, cherty magnetite iron formation. The iron deposits occur within an extensive Proterozoic geosyncline. Several facies of iron formation within the Sokoman Formation reflect variations in chemical composition and depositional conditions. This band extends for about 1100 km southeast of Ungava Bay through both Quebec and Labrador. Further south, it turns southwest past the Wabush and Mont-Wright areas to within 300 km of the St. Lawrence River. The iron formation is essentially folded and faulted along most of its length. The degree of metamorphism is variable, ranging from intense in the northern and southern portions to greenschist facies in the central part. Sokoman Formation (source: Newfoundland and Labrador Natural Resources) The Sokoman Formation consists of a 30–170-m-thick sequence of cherty iron-rich sediments and is continuous for 250 km from Labrador City to Schefferville. It also continues into Québec in both directions and is one of the most extensive iron formations known on Earth. The lower part of the Sokoman Formation consists mainly of oxide-rich beds which are the most important economically, with iron-rich layers and lenses commonly containing more than 50% hematite and magnetite. Iron Ore Types (source: Newfoundland and Labrador Natural Resources) Generally, the majority of iron ore production, including that of the Labrador Trough, comes from iron-rich cherty sedimentary rocks and their metamorphic or supergene derivates. All iron-ore deposits in the Labrador Trough formed as these sediments and are eventually altered and metamorphosed in some form and affect grade, mineralogy and grain size, which impacts the economic viability of iron-ore deposits. In addition, faulting and folding led to a repetition of sequences in many areas, which significantly increases the surface extent and mineable thicknesses of the iron-ore deposits. What the above paragraph means is that all the geological “cooking” creates a variety of ore types with differing grades. Three main types of iron-ore deposits are as follows: Taconites are found throughout the Labrador Trough. These are weakly metamorphosed sedimentary iron formations (15 to 30% Fe), with magnetite as the dominant iron-ore mineral. None are presently mined in the Labrador Trough. Metataconites are present in the southern part of the Labrador Trough, especially in the Labrador City– Wabush area. They have been moderate to strongly metamorphosed, and the grade of these iron- ore deposits is generally higher than unmetamorphosed taconites (up to 41% Fe). They are easily beneficiated into iron concentrates (approximately 65% Fe), which are ideal for pellet production. Direct Shipping Ores (DSO) are secondary iron ores containing >50% Fe that formed from the enrichment of primary taconites. Such ores require minimal beneficiation and have very low mining costs. Two main types of DSO deposits occur in the Labrador Trough. Soft, friable, fine-grained, variably porous deposits occur mostly in the Schefferville District and may be related to deep groundwater circulation and supergene enrichment associated with Mesozoic (Cretaceous) tropical climates. Specifically, silica and carbonate were leached from the ores, leaving a high residual iron content. Hard DSO deposits occur in several locations, including Sawyer Lake and Astray Lake, southeast of Schefferville. These are dominated by blue hematite and martite, and, typically, are denser than the soft, friable ores, with no evidence of an increase in porosity. The origin of these deposits is unknown, but they may be related to early hydrothermal processes. In addition, some DSO deposits have characteristics of both the soft and hard DSO deposits (e.g., the Houston deposits close to Schefferville). What could this mean for The Future? According to my research and the information from Champion Iron, the iron in the UIF, MIF and LIF is for the most part in its oxide form, mainly as specular hematite and specularite in its coarse-grained form and to a lesser extent, like magnetite, with some of the iron in iron silicates. Recent research on iron formations in Australia and Brazil has emphasised the importance of structurally controlled hypogene alteration and upgrading of iron formations before supergene alteration. Such models imply that not all high-grade iron ores are linked to surface weathering and leaching processes, which in turn suggests that some ore bodies of this type may lack surface expression. In Australia, there are notable examples of high-grade zones that sit beneath unaltered low-grade primary iron formations. (source: Newfoundland and Labrador Natural Resources) The Koolyanobbing iron ore mine (Southern Cross, Western Australia) has a distinctive ore. It is not your typical BIF types. When you consider that, understanding the ores at the Labrador Trough could be the way to unravel deposits that have been ignored. The mineral exploration industry has a bad habit of following historical methods, and the lack of funding means new techniques and new thoughts are expensive and dangerous. Conclusion Recently, I learned that several Chinese companies are searching for lower grade ore for beneficiation. Chinese steel mills prefer magnetite to hematite, and they can bring grades over 10%. Now that is very impressive. In steel mill language, magnetite is the preferred mineral. One report mentioned that up to 15 billion dollars were spent in the Labrador Trough as investments. This kind of investments is long term looking people and the Chinese are very good with this kind of thinking. Helping these miners in the Labrador Trough is the Quebec government. The Quebec government had set aside the C$20 million from its Northern Plan Fund to contribute to a study to determine the optimum rail option for iron ore miners in the Labrador Trough region to reach ports to service international markets competitively. What the Quebec government have done is very smart with the allocation of funding to help build infrastructure and encourage studies to improve the delivery of products from the Labrador Trough. In the 1960s the Western Australian government did the same for the Pilbara region. This government spending allowed all this wealth created the iron-ore industry as we know it. Otherwise, it will still be in the ground. The booming iron ore industry in Western Australia is all in part due to the foresight of previous government spending and policies. Like all commodities, ports are an essential part of the equation. Currently, as I am lead to believe the ports handle Cape-Size and Chinamax vessels. These port all the mineral wealth to be realised by allowing labrador miners a great passage to markets. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

In December 2018, I did a write up on Doriemus PLC and the Fishbones Technology. Once I understood all the terminology, I was wondering if Doriemus could potentially be another Woodside in the making. I decided to contact the management of Doriemus to try and understand the whole process and was subsequently given a bit of oil geology and production 101 lecture. I began to appreciate all the numbers and the potential of the Butler prospect or The Derby Block as referred by Rey Resources Limited. With my new found knowledge, I did my research and subsequently took me to the light bulb moment of “Could this be another Woodside in the Making?”. What Do We Know Already? For the readers who are not oil and gas savvy, one would need to understand some of the definition. There is a saying that “oils ain’t oils” and boy did I find that out. As I write this, I am still trying to understand everything I have read. Let’s try and summarise what we are talking about first. In December 2018, Doreimus PLC (ASX: DOR) announced a JV with Rey Resources Limited in regards to their The Derby Block/ Butler Prospect located in the Canning Basin. The project is east of the township of Derby. The Butler prospect sits within the license EP487 which is owned by Rey Resources. Buru Energy and Mitsubishi hold the adjacent tenures. Buru has the EP to the northern boundary, and Mitsubishi is towards the southeastern border. According to Buru in their 2017 presentation, they stated that the Butler prospect has multi-TCF potential. Buru pointed out that the key is the prospect is newly defined and with recent seismic work, the management is feeling confident that the potential of the field may be able to be realised soon. This field of thought is consistent with the beliefs of the current Doriemus management. In June of 2015, the Butler prospect or EP 487 was “operated” between Rey Resources Limited and Oil Basins Limited (now called Emperor Energy Limited, ASX: EMP). I assumed that relationship did not last, and somehow Rey Resources found a new partner in Doreimus in 2018. In 2013, the US Energy Information Agency reported that the Canning Basin has the most substantial unconventional (shale) gas potential in Australia and eighth most significant in the world (source: OBL 2016 AGM). By all accounts, this seems to be still the case. Potential of Resource EP 487 has been around for a long time. As I mentioned it dates back to at least 2015. As usual, a lot of these kinds of projects take time and funding has always been the issue. The fact that the current management is talking drilling in 2019 is a good sign. Management being proactive is a good asset of a company for shareholders. In October 2018, the Japanese oil and gas company Inpex had their first shipment of condensate from their Ichthys LNG project in Western Australia’s Bowen Basin. To give a proper perspective on how long these projects can take, Inpex had the exploration permit in 1998, and they first discovered the Ichthys field 18 years ago. It took them six and a half years to complete the construction. Now they are producing 100,000 barrels of condensate per day. At a conservative price of USD70/barrel, that’s USD7M per day. Looking at the diagrams below, EP 487 is in the right zone. The “Fitzroy Trough has been explored for a while now, and I would suspect it will just be a matter of time before a discovery is made that will make the world take notice. Buru Energy is lead by the old Arc Energy management, and they appear to believe in the area, and that is encouraging to know. All the focus is on the Butler prospect as shown in the broad red region in the diagram below. Now Buru has the bit that is not in EP487 so I would see these companies will be working closely together in future. Form my understanding, the nearology issue in oil and gas is more consistent and more applicable that the mineral resources. Just because you have a gold mine in your tenement does not mean that it will be in present in my adjacent project, that kind of thinking. However, in the oil industry, this occurs more often. IT seems that in the oil game, being neighbours could mean that we are taping the same reservoir. The table below is from a presentation by Doriemus PLC which shows the potential of the Butler Project. As explained in the previous blog, the Fishbones Stimulation Technology will be used to help with production when and if the project gets to that stage. From what I have heard and learned, this new technology is doing what Fracking is trying to do without the fracking. I am sure there are more qualified people out there that can explain this better, but as far as I am concerned, it allows more oil to be produced with the old conventional ways. What do all the do numbers mean? What is a TCF? What is a condensate you ask? I will try and explain that later but it is the premium product from the suite of oil products. What is a TCF? (source: Investopedia) TCF (Trillion Cubic Feet) is a volume of measurement of natural gas used by the US oil and gas industry. A TCF is worth about USD3 billion at the wellhead, although this is dependent on many factors which could increase or decrease that figure. So if you look at the table above, you start to understand the potential upside. What is a Condensate? (source: Wintershall.com; drillinginfo) Condensate is a very light hydrocarbon with an American Petroleum Institute (API) specific gravity of greater than 50 degrees and less than 80 degrees. In underground formations condensate can exist separately from the crude oil or dissolved in the crude oil. Some oils are light and can be used almost immediately and are therefore very valuable. Other oils are heavy and have to undergo additional refining processes before they can be used practically. One of the lightest and most valuable crude oils is condensate which is used to produce products like petrol, jet fuel, diesel and heating fuels. Condensate comes in various colours, from clear like water to yellow or even brown. Compared to conventional crude oil, condensate is much thinner and has a similar consistency to regular water at room temperature. What is API? (source: Wikipedia) The American Petroleum Institute gravity or API is a measure of how heavy or light a petroleum liquid is compared to water. If its API gravity is higher than 10, its lighter than and floats on water. If it is less than 10, it is denser and sinks. Although API gravity is mathematically a dimensionless quantity (see Wikipedia), it is referred to as being in ‘degrees’. API gravity is graduated in degrees on a hydrometer instrument. API gravity values of most petroleum liquids fall between 10 and 70 degrees. Typically, the characterisation of API gravity in regards to petroleum are as follows, Light – API > 31.1 Medium – API between 22.3 and 31.1 Heavy – API < 22.3 Extra Heavy – API < 10.0 So What do all these TCF and MMbbl mean? Let’s start with Western Australia’s North West Shelf. It is estimated to have 130 TCF of natural gas resource. Everyone knows that the North West Shelf is the talk of the resource industry. Its the hotspot for a few decades. Billions of dollars have gone into the development, and the whole Karratha and Dampier area has blossomed due to this investment. There is no sign of any slowdown as the business model is projected into the decades. In the table above, at P50 EP 487 has recoverable gas of just over 28 TCF. Then there is P50 of 707 MMbbl of Condensate. Granted that these are estimates and the future exploration wells will be the proof of concept, in the oil and gas industry (as I understand), the calculation of the probability of success is much more scientific and precise. I know there are many people out there that will say that they have been involved in more dry wells than they care for, but if you compare minerals and hydrocarbon exploration success, you would understand the difference. According to the Australian Petroleum Statistics issued by the Department of the Environment and Energy, there were 98MMbbl of crude oil and condensate produced in 2017-2018. The figure is made up of 8,145ML of Crude Oil and 7,512ML of Condensate. In comparison, Doreimus is claiming at P50 that there will be 707MMbbl of condensate from EP487. If that were to be true, I would say we are dealing with something worth taking some notice. Even if they were 10% correct, that would be 70 MMbbl which is almost equivalent to the total crude oil and condensate produced in 2017-2018 from Australia. How does Fishbones Stimulation Technology help? The Fishbones Stimulation Technology is applied to increase well productivity and access the difficult geological formations and unconventional reservoirs. Fishbones Technology differs from hydraulic fracturing, and its main advantages are the competitive price and reduced operation time. Fishbone shaped multilateral wells may prove to better productivity than multi-fractured horizontal wells in relatively low permeable reservoirs. Not all geological conditions are appropriate for this technology. There are specific conditions that are ideal, and apparently, the Butler prospect appears to be suitable for this technology. If this were the case, this would be another reason to be excited. As I had mentioned in my first blog on Doreimus PLC and the Fishbones Stimulation Technology, from a geological point of view, this is like the invention of the bread slicer. Conclusion So what does all this mean? Assuming that the management of Doriemus does raise the fund required to do the necessary drilling, I would be pretty confident that you will get a result. When you think about what is available with technology these days, the prospects that were substandard are now producible. Throw in the use of Fishbones Technology and things will get more than impressive. What is a bit on the unbelievable thought is the size of this field? The size of what Doriemus is talking about is BIG. I have worked in the mineral resource sector since 1992 and have never worked a day in the oil and gas industry. Taking that into consideration, I am just a bit perplexed with the numbers. Let’s take the scenario that those figures were correct and Doriemus and Rey Resources are happily producing those numbers, what kind of money are we talking about? What would their share prices be? Imagine if that just came from the Butler prospect and the Basin Centres Gas System within EP487. 707 MMbbl of condensate 28 TCF of recoverable gas. Whatever the final figure is, what I can say is that the shareholders of all companies involved will be happy. If the drilling comes up empty, then they are not any worst of… 🙂 Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

2020 was an unprecedented year for many reasons. One of which, was the rapid return of business practices Environmental, Social and Governance (ESG) and Diversity, Equity and Inclusivity (DE&I). Society’s response to multiple polarising social and political events has spilled over into the place we spend the most time at – work. If ESG was running for office, DE&I would be its running mate. Diversity, Equity and Inclusivity is now a defining aspect of the overarching framework of ESG. As its name suggests, it refers to a company’s human resources. It’s not a new concept, it’s existed since 1968 but its progress has been until recent years, slow. Recently I attended a Perth networking panel event that focused on diversity, equity and inclusivity called ‘Moving Forward in a Diverse Community’ that was held at the Flour Factory on October 27th, 2021. The panel featured: Host Toto Boutdara, a designer and non-executive director of four companies. Whadjuk Ballardong Nyoongar lady, Lorraine Pryor, a mining industry employee. Economist and workplace consultant Conrad Liveris. Workplace consultant Ali Local. All are Western Australians who had insights to share about where Perth, WA and Australia stand in the quest for true DE&I progression. Each spoke of their personal experiences and observations with DE&I. Being part of Perth’s local workforce enabled them to share their opinions and advice on implementing DE&I with true relevance. The key takeaways I gleaned from the event are featured below in the form of an infographic ebook PDF available for download, for both management and employees’ point of view. These are the crucial steps to tearing down your old structures and building them back up again in favour of your employees and businesses long-term future. This event was created in response to all the promises we’ve heard made by the C-Suite at large who wax lyrical about the changes they intend to make in respective workplaces. So that begs the question, Just how much change has been made? What has been successful? What methods turned out to be duds? The event was timely, as it comes on the heels of last year’s Mercer report. Below are two key infographics that break down the statistics from the report on the website Consultancy. Both Mercer and Consultancy provide a comparison breakdown of Australia’s statistics on ESG and more specifically DE&I to the rest of the world as of October 2020. The above facts and figures illustrate why the fires of ESG and DE&I must be stoked. This is why ESG and DE&I need to become part of boardroom conversations globally. For ASX listed companies, implementing both ESG and DE&I are imperative measures as part of a business’s operations. For discerning investors, it’s an essential metric for their investing strategies. Companies that incorporate both practices into businesses are proving to be better investment performers than their competitors who refrain. Committing to and being an outcome focused company rates a higher ESG score allocated by credit analysts than those who perform superficial checkbox ticking exercises. Credit analysts use a variety of research methods to compile their score and recommendations including investing into companies themselves. Creating a façade of introducing the ‘right’ policies in a business, short-changes workers by avoiding the forming of real commitments to them and the environment and short-changes you as an investor. How do investors feel about ESG/DE&I focused investments? The Schroders investor information website conducted research (which I have chosen some key insights from) about how investors worldwide currently view ESG in ASX companies. Schroders sampled 23,000 investors living in 32 different locations and these statistics show a cross-section of the investment space. The sentiment is positive, and it will be interesting to see an update next year. For more expert advice on creating an ESG and DE&I positive workplace, please check out these websites: Australian Workplace Equality Index Diversity Council Australia Workplace and Gender Equality Agency The business practices of ESG and DE&I are sure to evolve, affecting the investing space, stay abreast of changes as they happen on Samso Insights. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer.

What is happening with the gold sector ? It was not so long ago that gold was riding high at around USD $1370 (Figure 1). Everything gold was fantastic and I could see many exploration projects attracting the eyes of investors. That was a fantastic run. I think the Australian investing (small cap exploration types…) community was getting excited and rightly so. Then gold started going the opposite direction. Trump was taking office and the jokes were getting less and less and the reality started sinking in that maybe he is not that bad…. or could he…. ? The good thing was that the consultants that I know were still telling me that they were very busy. The fact that the gold price in AUD was really not moving that much meant that many investors still felt comfortable that Australian gold producers were still doing well. However, the fickle market seem to always look at the USD gold price as sentiment. The good news is that China is a buyer and a a big buyer. I think if the market thought the iron ore project buying spree was big, I think they have not seen anything yet. I hear news on the grapevine that things have been and will be getting busy. The bad news is that they are a lot wiser now and things will not be so easily sold without proper due diligence. Where will the gold price go ? If you look at the gold price from the mid to late 1990s (Figure 2), the approximate 50% retracement is around the 1050 mark. Now the current price of 1169 is not too far. So if you are a gold punter and you are looking for a base to work from, this is a very interesting time. When the gold price was above 1200, many traders were saying that it needed to break that support to create a clear view and now that we are at these levels, many are calling for support signs above 1200 before they will call a long buy. I think this is a very interesting scenario as it was about 12 months ago that the gold price was at the level of 1060. I think as usual, the market has already prepared for something, bad or worst, I am not sure but as you can see, a lot of gold producers are now with share prices at lower values than months ago. I do see some that are going up (ASX:SLR) and to me, that could be a sign that the company is healthy or have a healthier play in place… 🙂 Dacian Gold not getting their full placement is very interesting but I am sure the quality management have that under control. Even the Michael Jordan of the industry, Northern Star Resources (ASX:NST) have taken a belting in the share price since July. As the great Warren Buffet have always said, companies do not devalue overnight so when there is a sale happening on the share price, buy happily. What does it all mean for me? It very simple. We are coming off the worst downturn that I have seen in my 25 years in this resource sector. Pricing of every commodity that is worthy of mentioning have come off its lows and some like tin have gone to as high as it was in the last 7 years. Coal has taken a run and in an article on the Australian Financial Review quoting coking coal prices at as high as $US300/tonne and thermal coal at Newcastle port at up to $US89/tonne. (http://www.afr.com/markets/how-an-administrative-oversight-in-china-sent-aussie-miners-skyrocketing-20161208-gt6w92) I have been a buyer for the last 12 months but I think there is a correction happening now.So I will go with Mr Warren Buffet. Buy wisely when the sale is on …. 🙂 Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

Mining clay is not what your typical mining conversation would be about if one is talking shop over a beer with friends. Over the last 30 years in this industry, the connotation of being a geologist is all about mining. I will say that the mention of clay would not be part of that conversation. If you mention industrial minerals, you would have them confused. Imagine mentioning the term Halloysite-Kaolin. Interestingly, if you mention the mining of clay to those in the industry, you will be told that this has been happening for centuries. What will come as a surprise to my non-mining Malaysian friends is that Malaysia or at least South-East Asia do mine a lot of clay. I have been looking at this commodity for a while. I think I looked at this in the early 2000s, but I will say that my understanding of the market, especially in the last decade is lacking. Hence, you can imagine my surprise when I looked into Andromeda Metals Limited (ASX: ADN). Looking back, I should have taken more notice and looked at it more seriously. The most significant disadvantage of being in this industry is thinking you know better. I mean, mining clay, what is so special. After all, this has been happening for decades and centuries. What could be so exciting? Andromeda Metals Limited (ASX: ADN) (source: Andromeda Metals website) Andromeda Metals (previously Adelaide Resources) was incorporated on 23 December 1993 and subsequently listed on the ASX on 11 September 1996. The Company’s head office is in Adelaide, South Australia. Andromeda Metals’ vision is to be a sustainable industrial minerals producer of high-quality halloysite-kaolin and high purity alumina material. The company aims to provide shareholders with a sustainable financial return on their investment in the Company. ADN has projects covering 6,102 km2 within 22 exploration licences located in South Australia, Queensland, Western Australia and the Northern Territory. The flagship and darling for the company would undoubtedly be the Poochera Halloysite-Kaolin project. What is Halloysite -Kaolin? An excellent question as I don’t even know how to spell it! Well, let’s see what Wikipedia says: Halloysite is an aluminosilicate clay mineral with the empirical formula Al2Si2O5(OH)4. Its main constituents are aluminium (20.90%), silicon (21.76%) and hydrogen (1.56%). Halloysite typically forms by hydrothermal alteration of alumino-silicate minerals.[4] It can occur intermixed with dickite, kaolinite, montmorillonite and other clay minerals. X-ray diffraction studies are required for positive identification. It was first described in 1826 and named after the Belgian geologist Omalius d’Halloy. Halloysite is more for the High Purity Alumina or HPA part of the market. It is the high end. Kaolin is principally used to make chinaware and “simpler” products. As described in several resources on Halloysite, the main focus is to get to the HPA market, which is slowly approaching as the next best thing. The Poochera Project. As one that prides in finding these non-descript projects that have hidden value, I am totally “pissed” that I did not get in when first introduced. Why am I saying this? Well, the project is straightforward — a white pile of clay mined with a loader and a truck. I may have described it too simplistically, but if you get through all the jargon, it is that simple. Corporate Information Market Capitalisation: Approximately 83M (20/08/2019) Outstanding Shares: 1.3B (20/08/2019) Top 20 shareholding: 41% (2019) My Thoughts Like all these “next best thing” market, I am not overly convinced that it is going to be the Holy Grail. How many of these Holy grail markets have we seen in the last few decades? The only one that has come in and created a large new community is that of the Internet. For those that are sceptics on what I have mentioned, look at graphite, graphene, lithium, cobalt, tantalum, tungsten…the list goes on. I am not saying that there is no demand. What I am saying is that there is a difference between futuristic product demand and real current demand. Lithium has an existing demand. However, the hype for a futuristic demand will be debated. The profitability of a lithium producer is not worthwhile to debate. We all know that they will make money eventually as the lithium market will get squeezed, the supply shortages will guarantee a goof profit for producers. In terms of Andromeda Metals, I do believe that they have a great product. They are now sitting on a market capitalisation of 80M based on no mining and a good story. Are they worth the current value of 80M or the potential of higher values, my short answer is an overwhelming yes, for now? Why? It’s simple. They have a product that is required, and it is not that expensive to mine and deliver. The market loves the story, and the perception of “off-takes” meaning products selling is working. Will we see some consolidation on the price till the mining and real delivery happen, yes. Where I can be very wrong here is that the market perception does not allow it to fall and instead hold the current position. I have seen this happen before, but if the final execution never happens, the price will fall. If the market keeps it at the current levels, I suspect that the level of risk will be higher. Market sentient has a history of keeping things where they may not be technically viable. Do I think that the company strategy is right? I will have to say yes as I know Rhod Grivas. Rhod has been in several great success, and I am sure he has plans in place. For the very least, I do feel that management is not going to be the issue. Like it or not, the content of the management group is essential. For those “experts” who tell you that management is not that important, they are in for a big shock. Conclusion Andromeda has the market’s attention. The momentum is on their side, and this is a very positive component of a reasonable share price. The steady newsflow is helping the market pundits excited in anticipation of more positive news. If I had to play the devil’s advocate, I would say that the market capitalisation of AUD80M before a scoping study on mining is probably getting to a temporary roof. What I want to see is a good pull back from the current pricing. This thinking is probably one that comes from a trading perspective. The old, let it come back and take a rest trading mentality, take a few steps to consolidate for the next move. This move creates a sense of relief that the pressure is not boiling. The “off-takes” are good. However, as we have seen in the past, the Iron ore “MOUs” was not a good outcome. The other drawback is that you are not mining a rare as hen’s teeth commodity. What is the positive side of the equation? As I have said, it is a simple mining process. What they need to do is deliver a scoping study that is going to show the dollars. They have the buyers, and they will get the funding, they need to show to the world a useful spreadsheet calculation. People in the mining sector refer to the term “free dig”. When you look at the previous photographs of the area, it will be easy picking for the machines so mining cost will be minimal. If this scoping study shows promise, Andromeda is going to reach much higher values. A lot higher than the current market capitalisation value of AUD80M. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

Abstract AML3D Limited makes solid metal components on a welding robot it calls ARCEMY, laying down one weld bead on top of another until the part exists. Its largest customer is the United States Navy and the parts go into submarines. This is the first Samso Research Workup on a company that does not dig anything up. The analysis behind it was done by a panel of five specialists assembled for advanced manufacturing and the defence industrial base, in place of the four mining practitioners this product normally uses. The operating story turned in FY2026. Revenue was A$12.5 million, up 70 per cent, and the second half produced earnings before interest, tax, depreciation and amortisation of a positive A$608,000. That is the first EBITDA-positive half in the company's history. The loss after tax narrowed 38 per cent to A$4.48 million. AML3D has not raised equity since November 2024 and held A$26.67 million in cash at 30 June 2026. Over roughly the same twelve months the shares fell about 46 per cent, to A$0.150 on 21 September 2026. The gap between those two facts is what this workup examines. Samso's view is that the business has not deteriorated. What has happened is that the company's disclosures do not yet answer a set of questions. AML3D does not report feedstock revenue and does not report utilisation of its installed base. A machine business whose customers come back is a different company from one whose customers do not, and on the evidence available two customers have come back. Two constraints deserve to be read before any of the growth figures. Every US Navy parts contract AML3D announced up to March 2026 was for components the company itself described as non-safety-critical, which is obsolescence and supply-chain gap filling rather than pressure-boundary work. And the same programme office that funds AML3D funded Lincoln Electric, a very much larger welding company, for the same purpose in September 2025. Neither point is fatal, and both change what the story is. One of those two moved on 17 September 2026. AML3D announced a A$0.5 million order from Austal USA Advanced Technologies for three large, high-pressure copper-nickel fluid control components for US Navy nuclear submarines, and said the order converts a copper-nickel qualification programme into production part manufacturing. It is the first production parts order the company has announced in that alloy. It is also the first submarine parts release that does not carry the non-safety-critical qualifier, and AML3D has not said why. Section 6 sets out both. The balance sheet is comfortable and has been committed. A$26.67 million funds either a long runway or the announced A$17 million expansion of US and European capacity, and it does not obviously fund both plus a weak year. AML3D enters FY2027 with A$16.8 million of contracted orders against A$9 million a year earlier, which is the strongest number in the outlook and is a real one. The company has issued no numerical FY2027 revenue guidance and never has. The Samso Call is Watch and DYOR. FY2027 is a year of checkable events with dates on them. The A$16.8 million has to be delivered, the Ohio expansion has to be built, four ARCEMY X systems have to be commissioned at Newport News Shipbuilding in the March 2027 quarter, and the three copper-nickel components have to be delivered and commissioned by the end of that same quarter. Contents 1 Why This Company Warrants A Full Workup 10 The Register 2 What AML3D Actually Does 11 The People 3 What ARCEMY Can And Cannot Make 12 Peer Comparison 4 The Problem AML3D Is Selling Into 13 The Competition 5 The Contract Record, 2023 To 2026 14 What Has To Go Right, And What Could Go Wrong 6 What “Qualified” Actually Means Here 15 Samso Concluding Comments 7 The FY2026 Result 16 References and Sources 8 Cash, Capital Commitments And Dilution 17 Disclaimer 9 The Order Book Nearly Doubled, And How It Converts Snapshot Prices below are as at the date in the meta line above, the point this workup was compiled from. This is a living document: the share price and market cap will have moved, up or down, in the time since (check a live quote before acting on anything here, and see the note on data currency in the disclaimer). Metric Value Share price A$0.150 (ASX, 21 September 2026, unchanged on the day) Market capitalisation approximately A$85.1 million, Samso's own multiplication of price by shares on issue Shares on issue 567,445,783 (30 June 2026) Unquoted options 45,070,383, held by eight holders Cash A$26,670,484 (30 June 2026) FY2026 revenue A$12.5 million, up 70 per cent FY2026 result loss after tax A$4,482,811. H2 EBITDA positive A$608,000 Contracted orders into FY2027 A$16.8 million at 30 June 2026 (A$9 million a year earlier), plus a A$0.5 million parts order signed 17 September 2026 Sales pipeline A$78 million, company estimate, not contracted Revenue guidance none issued Product ARCEMY wire arc additive manufacturing systems, and printed parts Principal customer US Navy Maritime Industrial Base, contracted through BlueForge Alliance ARCEMY systems in the US Navy supply chain 16 deployed on the company's 17 September 2026 count, against 14 contracted on its 31 August 2026 count 52-week range A$0.090 to A$0.290 Samso Call Watch and DYOR Substantial holders (AML3D 2026 Annual Report, register as at 24 August 2026): Netwealth Investments Limited (Wrap Services A/C) 35,716,514 shares, 6.29 per cent. That is the only substantial holding disclosed. The twenty largest holders together hold 178,210,262 shares, 31.41 per cent, and most of the top ten lines are platform and custodian nominees rather than beneficial owners. There were 6,500 holders in total, of whom 1,605 held less than a marketable parcel. Share price context: AL3 closed at A$0.150 on 21 September 2026, unchanged on the day, against a 52-week range of A$0.090 to A$0.290. The shares are down about 46 per cent over the twelve months to that date. The twelve-month base sits close to the stock's high for the period, so the figure overstates the fall. Measured from the end of September 2025 it is about 41 per cent. Over three years the shares are up and over five years they are down, and the shape across the three periods matters more than any one of them. AML3D has never paid a dividend, so total shareholder return equals price return. Coverage is thin. Two boutique brokers publish on the stock, and Samso found no note from either published after the order announced on 17 September 2026, on the searches it ran to 21 September 2026. Two highs appear in this workup on different bases. A$0.275 was the highest monthly close in the series behind Figure 1, and A$0.290 is the 52-week intraday high the ASX publishes at the data date. The A$0.29 daily close of 17 September 2025 has now passed out of the 52-week window. 1 Why This Company Warrants A Full Workup AML3D Limited builds metal parts by welding them into existence, one bead at a time. Its customer of consequence is the United States Navy, and the parts are for submarines. That sentence is the reason this workup exists. Almost every company Samso writes about is looking for something in the ground. AML3D makes things instead. It is a manufacturer, listed on the ASX, with a market capitalisation of about A$85 million, selling machines and components into the United States submarine construction programme, which the FY2027 US budget request funds at US$13.99 billion for the Virginia-class line alone. It is the first Samso Research Workup on a company of this kind, and the analysis behind it was done by a panel of five specialists assembled for the sector rather than by the four mining practitioners this product normally uses. Three things make it worth the length. The first is that the company reported its first EBITDA-positive half in the six months to 30 June 2026. EBITDA is earnings before interest, tax, depreciation and amortisation, a measure of operating performance that excludes financing costs and the accounting cost of assets as they are used up. It came in at a positive A$608,000 for that half.[R1] Full-year revenue was A$12.5 million, up 70 per cent. For a company that recorded revenue of A$634,422 in FY2023, that is a change of state, and it happened without a capital raising since November 2024. The second is that the share price has gone the other way. AL3 closed at A$0.150 on 21 September 2026, unchanged on the day.[R2] Over twelve months that is a fall of about 46 per cent. The comparison is unkind by accident, because the stock was running through September 2025 and reached its closing high of A$0.29 on 17 September that year. Measured from the end of September 2025 the fall is about 41 per cent. Either way the company delivered its best year and its shares fell, and that gap between operating performance and share price is the situation a workup is for. Figure 1. AML3D monthly closing share price, January 2023 to 21 September 2026, with six announcements marked. The company reported its best operating year in the twelve months to June 2026, and over the twelve months to 21 September 2026 the shares fell about 46 per cent, to A$0.150. The last three points are the 16, 18 and 21 September closes rather than month ends, because September 2026 had not closed when this was drawn. Source: Samso, built from AL3 closing prices retrieved 21 September 2026 and announcement dates from AML3D company releases. The third is that the whole thesis rests on one customer relationship, in one country, funded by one government programme, for a class of part AML3D had until recently described as non-safety-critical. Each of those clauses is a real constraint. The last of them moved on 17 September 2026, when the company announced its first production parts order in copper-nickel, and section 6 sets out both what changed and the fact that the release, unlike every earlier parts announcement, does not describe the components as non-safety-critical and does not say why.[R3] This workup does not tell anyone what to do with the shares. It sets out what AML3D makes, who buys it, what has actually been contracted as against what has been forecast, what the accounts say, and what would have to hold for the story to keep working. It is a living document. It was built on 9 September 2026, updated on 19 September 2026 to carry the production parts order announced two days earlier, and refreshed before release. Company data runs to 17 September 2026 and market data to the close of 21 September 2026, which are the two dates in the line under the title. What this workup does not attempt There is no valuation here and no price target. Samso does not publish them. There is also no estimate of AML3D's addressable market, and that omission is deliberate. The arithmetic is available and tempting. The US Navy has forecast a need for up to 100 additive manufacturing systems, AML3D has disclosed prices for systems it has sold, and multiplying the two takes ten seconds. It would also be a revenue forecast invented by Samso and presented in a document readers treat as research. Section 5 gives the customer's forecast and the company's disclosed contract values as two separate published facts, and stops there. 2 What AML3D Actually Does AML3D's product is a machine called ARCEMY, and a service that uses the same machines to print parts to order. The process is wire arc additive manufacturing, shortened in the industry to WAAM. AML3D trademarks its version as WAM, for Wire Additive Manufacturing. In plain terms it is an industrial welding robot that has been taught to build a solid object rather than join two objects together. A spool of certified welding wire feeds into an electric arc, the arc melts the wire, and the molten metal is laid down on a base plate. The robot moves, lays the next bead beside or on top of the last, and repeats. After enough passes there is a metal part where there was nothing. In the company's words, "the certified wire feedstock is melted by an electric arc, and the molten metal is deposited onto a substrate, layer by layer to create a three-dimensional part". The formal classification is direct energy deposition, arc, usually written DED-arc.[R4] Why ARCEMY has no chamber Most metal 3D printing happens inside a sealed chamber. Powder bed fusion, the process most people picture when they hear metal 3D printing, spreads a thin layer of metal powder inside a box and melts it with a laser. The box works. It also sets a hard ceiling on how big the part can be. ARCEMY has no chamber. It uses shielding gas delivered at the torch itself, which protects the weld pool from the air without needing to enclose the whole machine. AML3D states that this "localised gas shielding eliminates the need for an enclosed chamber, unlocking the potential for larger component build sizes". Local shielding works well for steels, copper alloys and nickel alloys. Reactive metals are a harder case. Titanium keeps absorbing oxygen and nitrogen from the air well below its melting point, and it embrittles when it does, so depositing it usually needs trailing shields or a local shielding tent rather than the torch alone. AML3D lists titanium among its feedstocks and has not published how it shields it. That single decision is the basis of the company's commercial position. It is why AML3D talks about propeller components and pressure spools rather than turbine blades and dental implants. It is also why the parts come out rough, which section 3 deals with. The four steps of a print AML3D's workflow runs through three pieces of its software and then the hardware. WAMSoft. The company describes it as "the first software package used in AML3D's WAM workflow. It turns a computer aided design (CAD) model into a path plan that the ARCEMY welding torch will follow." AMLSoft. "The ARCEMY operating system that uses the WAMSoft path plan to metal 3D print parts. AMLSoft provides real-time feedback and displays all measurable parameters during the metal 3D printing process." AMLRapid. It "translates AMLSoft instructions into the specific commands that control the robot, welder, lights, and all other peripherals that are integrated into an ARCEMY Wire Additive Manufacturing system." The deposition. An ABB robot arm carrying a Fronius welding package, running as an eight-axis system. Six axes are the arm itself.[R5] The other two are a positioner that tilts and rotates the part underneath the torch, so the robot can always weld into a convenient orientation. Sensors watch the build as it happens. A laser profile sensor measures the bead geometry. An infrared pyrometer, a non-contact thermometer, reads the temperature of the metal between passes. A dynamic cooler adjusts to keep that temperature in range. Temperature control is the hard part of the process. Every new bead re-melts and re-heats the metal beneath it. Deposit too hot and the wall slumps and the grain structure coarsens. Deposit too cold and you get poor fusion between beads and voids. Managing that thermal cycle is the technology. It is also the difference between a part that will survive a surveyor's inspection and an expensive lump of metal. Machining after the print Cost and risk sit in what happens after the robot stops. WAAM is a near-net-shape process. The part comes out approximately the right shape and then has to be machined. The foundational academic paper on the process puts numbers on it. That paper is Williams, S. W., Martina, F., Addison, A. C., Ding, J., Pardal, G. and Colegrove, P., "Wire + Arc Additive Manufacturing", Materials Science and Technology, 2016, volume 32, number 7, pages 641 to 647.[R6] Layer height is normally 1 mm to 2 mm, and the paper reports a surface waviness of roughly 500 micrometres for single track deposits. Waviness is the peak-to-valley variation left by the deposition itself rather than a fine surface texture. Half a millimetre of texture is far coarser than any bearing, sealing or mating face can tolerate, so it is the machining allowance that has to be cut off every functional face. A WAAM part is priced with a machining operation attached. The same paper measured peak longitudinal residual stress in steel WAAM at about 600 megapascals, written MPa. Residual stress is force locked inside the metal by the heating and cooling cycle, and it can bow a part off its base plate or shorten its fatigue life. Rolling the surface between passes brought that figure down to about 250 MPa in the Cranfield work. AML3D markets "minimal stress/distortion" as an attribute of WAM but publishes no stress data of its own, so that claim sits as marketing rather than evidence. Heat treatment is standard practice for these alloys, to even out the microstructure and relieve stress. AML3D does not publish its heat treatment routes. Nor does it publish as-printed surface figures, residual stress magnitudes, or its non-destructive testing protocols. Non-destructive testing is inspection that does not damage the part, usually X-ray or ultrasound, and for a pressure-boundary or safety-critical component it has to be done to a defined acceptance standard. A wire arc deposit's rough as-built surface makes ultrasonic inspection difficult until the surface has been machined, so the inspection plan and the machining plan are tied together. That is the practical mechanism behind the phrase non-safety-critical, which section 6 takes up. AML3D's commercial answer on quality is accreditation rather than per-part disclosure. 3 What ARCEMY Can And Cannot Make AML3D sells four baseline ARCEMY editions, described as fully customisable. The numbers that appear in announcements, 2600 and 6700, are the ABB robot arm models inside them rather than product names. AML3D's announcements use "ARCEMY X 6700" for the flagship, and its product page lists the 6700-series arm for that edition. The systems actually sold to the US Navy's shipbuilders are larger than anything on that list. The four ARCEMY X systems ordered by Huntington Ingalls Industries Newport News Shipbuilding in March 2026 are described by AML3D as "custom systems based on the large scale ARCEMY X 6700 but using a ~11,000 kg positioner to create a heavy capacity build capability".[R8] Two systems already commissioned at the same yard use a 10,886 kg positioner, which is the same 24,000-pound rating rounded a different way. Either figure is about four times the catalogue X Edition's 2,700 kg rating. The biggest machines AML3D sells are bespoke, not off the price list. Minimum print size Every commercial ARCEMY has a stated minimum safe print footprint 0.5 m wide by 0.5 m long. That is a machine constraint the company states rather than something inferred here. It is not strictly a minimum part size, because several small parts can share one substrate, but it tells a reader what the machine was designed around. The reason the economics work that way is worth spelling out. For a small precision component, machining from a solid block is cheap and the waste is trivial. For a large one, waste dominates. The Cranfield work reports aerospace buy-to-fly ratios of 10 to 20 when machining from solid, against about 1.2 for WAAM titanium spars and landing gear. Buy-to-fly is the mass of metal bought divided by the mass that ends up in the finished part. Buying twenty kilograms to fly one is normal in aerospace machining and is a large number when the metal is titanium. AML3D claims up to 80 per cent savings in material waste against cast and forged methods. The same logic runs the other way on surface finish. Machining 500 micrometres off every face is a rounding error on a 1.5 m pressure spool and a total loss on a 30 mm fitting. The alloys Because the feedstock is ordinary certified welding wire, the material range is wide. AML3D publishes the following. Aluminium alloys 2319, 4043, 5183, 5183 with scandium, and 5356. Nickel aluminium bronze, and copper-nickel 70/30 and 90/10. INVAR, and Inconel 622, 625 and 718. Duplex 2209, super duplex 2594, and stainless 304, 310, 316LSi, 410 and 420. Carbon steels ER70S-6 to ER120. Titanium Ti-6Al-4V and commercially pure titanium. The company says it has tested and printed with close to 30 feedstocks. The marine alloys in that list show what the product was built for. Nickel aluminium bronze is what propellers and seawater valves are made from. Copper-nickel 70/30 and 90/10 are seawater piping alloys. Super duplex 2594 is high-pressure seawater service. This is a product for navies and offshore work rather than for aerospace structures. What ARCEMY cannot do Six limits, each of them stated by the company or measured in the literature rather than inferred here. It cannot make fine-featured parts. The 1 mm to 2 mm layer height and the bead width of an arc process rule them out. It cannot deliver a finished surface. Machining is required on every functional face. It cannot yet make safety-critical US Navy submarine components. AML3D's contract language is "non-safety critical", and section 6 deals with what that means. It cannot achieve the geometric complexity of powder bed fusion. Internal lattices, fine cooling channels and thin walls are outside the resolution of an arc process. The material has to be weldable in wire form. No ceramics, no non-weldable alloys, no metal matrix composites off the shelf. Reactive metals are not simply a matter of having a compatible wire, for the shielding reason set out in section 2. One number AML3D does not publish is a deposition rate, in kilograms per hour, for any ARCEMY edition. It does not appear on any product page, in the February 2026 presentation or in the FY2025 Annual Report. The company does market a claim that WAM makes parts "up to 75% faster, 30% stronger and 50% more resistant to metal fatigue, compared to traditional manufacturing". That sentence mixes a lead-time comparison with two mechanical property claims. The property claims carry no stated alloy, no comparison baseline, no test orientation and no test standard, and Samso could locate no published dataset behind any of the three. The absence is not neutral, because deposition rate is a known constraint the company is spending money on. The FY2025 Annual Report describes a A$2.24 million project called ARCEMY Increase Deposition Rates, supported by a A$1.12 million grant from South Australia's Economic Recovery Fund, whose end point is a multi-robot, twin wire ARCEMY system. Research and development spending rose 83 per cent to A$1.07 million in FY2025, focused on that programme, which the company expects to finalise in FY2027.[R7] For a general benchmark rather than an AML3D figure, the Cranfield paper reports WAAM deposition rates of 1 kg to 4 kg per hour depending on material, and notes that higher rates compromise fidelity. 4 The Problem AML3D Is Selling Into The United States Navy cannot build submarines fast enough, and one of the reasons is that it cannot get the metal parts. The Congressional Research Service, reporting to Congress in January 2026, sets out the shape of it. The Navy has procured 41 Virginia-class attack submarines through FY2025 and funds two per year. Actual deliveries have run at about 1.1 to 1.2 boats per year since 2022, against a target of two and then 2.33. Procurement cost is about US$5.0 billion per boat under the FY2026 budget submission.[R9] The gap between two funded and 1.1 delivered is the market. Ken Jeanos, vice president of supply chain, materials and logistics at General Dynamics Electric Boat, put the cause plainly in the joint announcement of 30 September 2025 that section 13 returns to. "Material availability continues to drive construction delays across the submarine enterprise."[R10] The supplier base for large marine castings has thinned over decades, and some of the parts needed are for boats whose original manufacturer no longer supports them. Additive manufacturing is one of the levers the Navy has chosen. AML3D is one of the suppliers it has funded. How the money reaches AML3D Almost every US Navy contract AML3D has announced ran through BlueForge Alliance rather than directly with the Navy. BlueForge is a Texas non-profit spun out of the Texas A&M Engineering Experiment Station in 2022. AML3D describes it as the "neutral convener and integrator" for the US Navy's Submarine Industrial Base. A note on names, because AML3D and the Navy use two. The earlier contracts were written under the Submarine Industrial Base label. The programme office was later stood up as the Maritime Industrial Base, and AML3D's 2025 and 2026 releases use that name. They refer to the same effort, and this workup uses Maritime Industrial Base for anything dated 2025 or later. The scale of the vehicle is public. On 10 September 2024 the Navy awarded BlueForge a sole-source contract of US$950,744,520, with options to US$980,744,520, of which US$503.1 million in FY2024 shipbuilding and foreign-partner funds was obligated at award. Naval Sea Systems Command, the US Navy body which sets and approves technical standards for ships and submarines and which is usually written NAVSEA, told USNI News that BlueForge had received approximately US$1.3 billion since inception.[R11] AML3D signed a Manufacturing License Agreement with BlueForge on 11 September 2024. That agreement permits AML3D to work with suppliers inside the Submarine Industrial Base and to receive technical assistance and data, which in turn allows it to print, test and validate a wider range of Navy parts. It is the enabling instrument for everything that has followed.[R12] Payment terms on the parts contracts are described as payable up front and on milestones. For a small company that is a material feature. It means the customer funds the work rather than AML3D carrying it. The Letter of Intent On 6 July 2025 AML3D announced a Letter of Intent from the US Department of the Navy, signed by Matthew D Evans, Deputy Program Manager for Ships, US Navy Maritime Industrial Base. The release describes it as outlining plans to collaborate, and it carries no dollar value.[R13] Samso notes, as its reading rather than the company's wording, that a letter of intent of this kind creates no contractual obligation on either party. What it does carry is a demand forecast. As announced in July 2025, the figures were about 400 parts required in 2026, about 1,600 parts by 2030, and up to 100 additive manufacturing systems. Two cautions belong with those numbers, and they are the company's rather than Samso's. First, this is the customer's forecast of its own future need, in a letter of intent rather than a contract. It is not an order and it is not revenue. It is the strongest signal of intent AML3D has received and it should be read as exactly that. Second, AML3D has quoted the 2030 parts figure two different ways. The July 2025 release says about 1,600 parts by 2030. The release of 19 June 2026 quotes Managing Director Sean Ebert describing the same letter as indicating "a need for up to 100 additive manufacturing systems and 3,400 additively manufactured parts by 2030".[R14] The company has not reconciled the two publicly. Samso quotes the figure from the release that announced the letter, 1,600, and notes the discrepancy. The most recent release, of 17 September 2026, returns to the lower figure. It states that "US Navy forecasts indicated a need for up to 100 advanced additive manufacturing systems and 1,600 additively manufactured components by 2030". That is the same 1,600 this workup uses, and it is the company's most recent wording. Key to AML3D's successful US growth strategy is our ability to support the US Navy's Additive Manufacturing needs and our strong relationships within the US Navy Maritime Industrial Base. We are looking forward to continuing to build these relationships, to working with the US Navy to meet the surging demand for additive manufacturing identified in the Letter of Intent and continuing our strong investment in our US manufacturing capability. Sean Ebert, CEO, AML3D, in "US Navy Issues AML3D with Letter of Intent", AML3D company release, 6 July 2025 The quote claims a relationship and an intention to invest against a forecast. It stops short of claiming an order, and it should not be read as one. The policy weather The programme AML3D depends on sits inside AUKUS and inside the US shipbuilding budget, and both are political. AUKUS is the defence partnership between Australia, the United Kingdom and the United States. Its first pillar, usually written Pillar 1, is the transfer of nuclear-powered submarine capability to Australia. The US Department of Defense began a review of AUKUS in June 2025. By early December 2025, administration officials had publicly affirmed support for AUKUS including Pillar 1, though the Congressional Research Service records that further details of the review were not publicly disclosed. Australia is providing the United States US$3 billion, about A$4.2 billion, to increase American shipbuilding capacity. The first AUKUS-specific contract award followed on 24 April 2026, when General Dynamics Electric Boat received US$197 million, about A$276 million, for engineering and design work supporting the transfer of nuclear submarine capability to Australia, with options that could take it to US$930 million.[R15] The FY2027 US budget request, released in April 2026, was reported by Naval News as including US$65.83 billion for Navy shipbuilding, of which US$13.99 billion is the Virginia-class line. Samso has taken those figures from that report rather than from the budget documents themselves, so a reader wanting the exact appropriation account should go to the budget highlights book. Australia's May 2026 defence budget was reported at A$45.2 billion with a ramp-up in AUKUS spending.[R16] Samso found no evidence of a 2026 cut to US Navy Submarine Industrial Base funding or to the BlueForge vehicle. That search covered US Navy budget documents, USNI News, Naval News and the Congressional Research Service reporting, and it ran to 9 September 2026. Commentary questioning whether AUKUS will hold has continued through 2026, and it is commentary rather than policy. The honest position is that the funding has been appropriated and is flowing, and that a programme dependent on political continuity across two governments carries a risk that no operating performance by AML3D can remove. 5 The Contract Record, 2023 To 2026 AML3D has announced two kinds of US defence work. It sells ARCEMY systems to companies inside the submarine supply chain, and it prints parts and runs alloy testing under contract to BlueForge Alliance. The two revenue lines behave differently and are worth keeping apart. A currency warning, before the numbers AML3D reports in Australian dollars, and its announcement headlines drop the currency prefix. The March 2026 release is headlined "$9.9M ARCEMY X Order from US Military Shipbuilder: HII-NNS". The body of the same release says "~AU$9.9 million" and carries the footnote "1 USD = 1.4306 AUD at 02/03/2026". Applying the company's rate, which is Samso's arithmetic rather than a published figure, the order is worth about US$6.9 million. Several trade outlets have reported that contract as a US dollar figure. It is an Australian dollar figure. Every figure in the tables below is taken from the body of the company's release, in the currency the company used. Where trade press has converted a figure to US dollars at its own rate on its own day, Samso has ignored the conversion, because different outlets used different rates and do not agree with each other. Contracted is not installed In its FY2026 results release of 31 August 2026, AML3D states that it "has signed contracts to deploy 14 ARCEMY systems into the US Navy's supply chain", plus two further systems supporting high-value US industrial manufacturing. Table 2 does not reconcile cleanly to fourteen. Counting the units in that table gives sixteen, because the May 2024 entry is a lease of two systems and the November 2025 FasTech system may be one of the two the company assigns to industrial rather than Navy work. The October 2025 release called the two Newport News systems the ninth and tenth, and adding the four ordered in March 2026 gives fourteen only if the leased pair and FasTech are excluded. AML3D has not published the reconciliation and Samso has not attempted one on the company's behalf. The count also moved, and the company has not explained how. The release of 17 September 2026 states in its body that there are "16 systems deployed to support the US Navy SIB to date", and quotes Sean Ebert saying AML3D has "already deployed 17 ARCEMY systems to meet US demand to date, with 16 of those in support of the US Navy SIB". Seventeen days earlier the FY2026 results release said the company "has signed contracts to deploy 14 ARCEMY systems into the US Navy's supply chain, together with two further orders for systems supporting high-value US industrial manufacturing". A third figure sits between them. The 2026 Annual Report, lodged the same day as the results release, says AML3D "signed orders for a further eight ARCEMY systems for deployment into the US Navy supply chain during the year", and that this "brings the total number of ARCEMY System orders to support the of [sic] US Defence sector to fifteen, including the ARCEMY X at FasTech". So two documents lodged on 31 August 2026 give fourteen and fifteen, and the release of 17 September gives sixteen and seventeen. Three things differ between those sentences and none is defined in any of the documents. The verb moves from signed contracts to deploy to deployed. The population moves, because August splits fourteen Navy systems from two non-Navy ones while September puts sixteen inside Navy support. And the name of the programme moves, from Maritime Industrial Base in August to submarine industrial base in September, which are not the same scope. Samso has quoted each figure as published and named the document it came from. AML3D announced nothing between 31 August and 17 September, so there is no further document to read against them. Signed contracts to deploy is not the same as installed and operational. As at June 2026, of the six systems ordered by Newport News Shipbuilding, two were operational and four were due in FY2027. The February 2026 investor presentation shows three systems installed at Austal and two at Huntington Ingalls, and the two at Newport News were not announced as operational until 19 June 2026. Table 2 records two Austal orders rather than three, so the presentation's Austal count includes a unit Samso could not match to an announced order. The distinction matters because it tells a reader where the revenue is. A system that is contracted but not yet built sits in the order book. Commissioning releases the last payment and is when the revenue lands. The 19 June 2026 release makes the mechanism visible. Commissioning the two Newport News systems triggered "the final payment of ~$892,000" on a A$4.5 million order, which is about a fifth of the contract value held to the end. Share price response to the 2026 announcements The share price reaction to the 2026 announcements says something about how the market reads this company. Two readings come out of that table. On the seven announcements in Table 4, the market moved further on orders than on delivery. The three order announcements moved the stock 26 per cent, 18 per cent and 11 per cent. The three delivery and commissioning milestones moved it 5 per cent, minus 5.6 per cent and 7 per cent, even though those were the events that turned contracts into cash. Samso's view is that this is a pattern rather than a coincidence. Seven announcements in one year is a small sample and it is offered as an interpretation. The FY2026 result moved the stock 3.7 per cent on the heaviest volume of the year, 16.12 million shares. Samso's view is that heavy volume with a small move on genuinely good news is what selling into good news looks like, and that this is a fair description of what happened on 31 August. It is an interpretation rather than a fact, and it is offered as one. 6 What "Qualified" Actually Means Here The language around qualification in additive manufacturing is loose. Qualifying an alloy on test coupons and holding an approval to supply a given part to a named standard are different things, and the same word gets used for both. What AML3D verifiably holds AML3D holds four accreditations and two further listings, each announced or published and dated. DNV Additive Manufacturing Facility accreditation with wire feedstock, for marine components. Announced 3 August 2022 and described by the company as a world first.[R19] DNV is a Norwegian classification society, one of the bodies that certifies ships and offshore structures. AS 9100D aerospace quality management, announced 2 April 2024. Lloyd's Register Certified AM Facility and ISO 9001, both listed in the investor presentation lodged 27 February 2026. Listed as an AUKUS Community member in the same presentation. Separately, the FY2026 results release of 31 August 2026 reports onboarding to the Australian Submarine Agency's Defence Industry Vendor Qualification programme, which runs an additive manufacturing stream. The FY2025 Annual Report treats these as material. It states that "the reputation of AML3D's products and services is largely dependent on retaining Lloyd's Register and AS 9100 accreditation". A company that names its accreditations as a principal business risk is telling you they are load-bearing. None of them is a US Navy credential. DNV and Lloyd's Register are commercial marine classification societies, and their approval carries no automatic standing in US Navy procurement. AS 9100D is a quality management system certification, which is a statement about how a factory is run rather than an approval of any product or process. Those certificates are not nothing, and they carry no automatic standing in US Navy procurement, so they should not be read as a step towards one. What AML3D does not hold, or does not disclose Samso searched AML3D's announcements, annual reports, investor presentations and website, and the trade press covering the company, for a NAVSEA technical publication number, a NAVSEA approval letter, or a Qualified Products List entry. A Qualified Products List is the register of suppliers approved to make a given item. That search ran to 19 September 2026 and found none, and the release of 17 September 2026 makes no NAVSEA claim either. AML3D's Industry Standards page lists standards that apply to wire arc additive manufacturing generally, including ASTM F3187, AMS 7004 and 7005, AWS D20.1 and ASME BPVC Section IX, and names "NAVSEA, Mil-Spec, Def Stans" as a category. It does not claim AML3D holds any of them.[R20] That is a claim of absence, so the search behind it is stated. It does not mean no such approval exists. It means AML3D has not announced one, and a reader should not assume one. Alloy by alloy Nickel aluminium bronze is the furthest advanced. Characterisation, corrosion and strength testing were contracted through BlueForge in 2023. The FY2025 Annual Report, in August 2025, still described the nickel aluminium bronze and copper-nickel qualification programmes as continuing. By March 2026, AML3D announced an order for five replacement parts in that alloy following successful US Navy hydrostatic testing of ARCEMY-printed components. Hydrostatic testing is a pressure test, where the part is filled with water and pressurised to prove it does not leak or deform. Copper-nickel has moved furthest in the shortest time. Testing contracts came in September 2023 and May 2024, and prototype Virginia-class tailpieces were supplied in January 2025 for testing and in-service trial. Until September 2026 that was as far as the public record went, and this workup treated the alloy as in progress with prototypes delivered. The release of 17 September 2026 changes that. AML3D states that the order "demonstrates AML3D can successfully convert a successful CuNi qualification program in support of the US Navy submarine industrial base (“SIB”) into production part manufacturing". That is the company saying a qualification programme has produced a production order, which is the step this workup identified as the one that matters. The release does not use the word qualified, it does not name a qualifying authority, and it does not link the order back to the January 2025 prototypes. It is the first production parts order AML3D has announced in that alloy. Super duplex stainless steel has published fatigue data behind it, covered below, and test components were supplied to Australia's Defence Science and Technology Group in April 2024. That is materials development and test supply, not a US Navy qualification. Non-safety-critical Every US Navy parts contract AML3D announced up to March 2026 was for non-safety-critical components. The FY2026 results release of 31 August 2026 describes that work as "high demand, non-safety critical replacement components used in US Navy submarines". The March 2026 order was for parts no longer supported by the original manufacturer. The 17 September 2026 release does not use the phrase. Samso ran a term scan over the full text of the ASX-lodged release and over the version on the company's website. The words safety, critical and non-safety critical do not appear in either. The release describes the parts as "three large, high pressure, fluid control components for use in US Navy nuclear submarines" and classifies them no further. Read that as an absence and nothing more. AML3D has not said the parts are safety-critical, and it has not repeated the qualifier it used before. The qualifier was in current use as recently as 31 August 2026, in the document describing the immediately preceding submarine parts contract, so this is not a phrase the company had dropped from its vocabulary months earlier. Why it is absent from the September release is not something the release settles, and Samso is not going to infer it. Samso's concern is that the phrase has carried real information in every earlier parts release, and a reader who relied on it to judge what class of work AML3D is doing no longer has it. Non-safety-critical is the company's language, and it describes the current work accurately. The work is obsolescence and supply-chain gap filling rather than primary pressure-hull or safety-critical manufacture. It also says how far the qualification journey still has to run. Nothing about that is a criticism. Non-safety-critical replacement parts for boats whose original suppliers have gone is a real problem the Navy is paying real money to solve, and being trusted with it is how a supplier earns the next thing. It is a different business from the one an investor pictures on reading the words US Navy submarine parts. What the anisotropy evidence shows AML3D's Chief Technology Officer Andrew Sales is the first author of a peer-reviewed paper that is unusually useful here, because it publishes a nuanced result rather than a promotional one. The paper is "Fatigue Crack Growth Rates and Crack Tip Opening Loads in CT Specimens Made of SDSS and Manufactured Using WAAM", in Materials, 2024, volume 17, article 1842, with co-authors from the University of Queensland and the University of Adelaide. SDSS is super duplex stainless steel. CT specimens are compact tension coupons, small test pieces machined out of a printed wall rather than components, so coupon behaviour is where a qualification programme starts rather than where it finishes.[R21] Anisotropy means a material behaving differently depending on direction, which is a known weakness of layer-built metal. AML3D's summary of the work, published on 10 May 2024,[R22] states that "fatigue properties are almost identical, or Isotropic, in both directions when expressed in terms of the effective stress intensity factor range". The paper itself puts it as fatigue crack growth rates being very similar in both directions when correlated by the effective stress intensity factor range. Either way it is a genuine positive for super duplex stainless steel on that measure. The same work is candid about what remains. AML3D's summary states that "the difference in crack tip opening loads between the two directions can be attributed to any residual stresses induced by the WAM process", and that "if a component is overloaded in service, this difference can affect its fatigue life". It follows that "to prolong the fatigue life of a load-bearing SDSS component, one can account for a longitudinal deposition direction in the component design". Print direction is a design variable that affects fatigue life. That is the anisotropy problem managed rather than removed. The company adds that more research is needed to confirm the findings using different printing parameters. Publishing that, with the CTO's name on it, is a point in the company's favour. It is also the clearest independent statement available of what the process still has to prove. 7 The FY2026 Result AML3D lodged its FY2026 results on 31 August 2026 under the heading "AML3D Delivers Record FY2026 Revenue and Reports H2 Profit". The numbers behind that heading are the best the company has produced. Revenue including lease income was A$12,473,338, up 70 per cent on FY2025. Revenue on its own, before the A$713,026 of equipment lease income, was A$11,760,312, which the Annual Report describes as up 76 per cent. Both are AML3D's figures on different bases, and the A$12.5 million the company led with is the first of them. Gross profit was A$7,801,528, up 54 per cent. EBITDA improved to a loss of A$4,234,179 from A$6,541,507. The loss after tax narrowed 38 per cent to A$4,482,811. Gross margin fell during the year and the company states both ends of it. The Annual Report gives a gross profit margin of 63 per cent against 68 per cent in the prior year, on gross profit of A$7,801,528 against A$5,051,738. That is five points of margin compression in the year of record system deliveries. It matters because it is the number that says whether the big bespoke systems are being sold at catalogue economics or bought into, and AML3D does not comment on the move. The number the company led with is smaller than any of those. EBITDA for the second half was a positive A$607,607, which the results release rounds to A$608,000. It is the first EBITDA-positive half in the company's history. The 2026 financial year saw rapid growth in ARCEMY system installations and component manufacturing in the USA. It is encouraging to see our strategy of moving beyond the US Defence market begin to gain traction. During the year, we achieved record revenue growth and delivered our first profitable half-year in the second six months. Sean Ebert, Managing Director, AML3D, "AML3D Delivers Record FY2026 Revenue and Reports H2 Profit", 31 August 2026 The claim in the middle of that quote is worth testing. Moving beyond the US defence market is what AML3D says is gaining traction, and the evidence for it is thin in the disclosures. The two named non-defence customers are Tennessee Valley Authority and FasTech, and the company published no defence against non-defence revenue split for FY2026. On what is public, the FY2026 growth was overwhelmingly a US defence story. How lopsided the year was The full-year figures cover a first half that was poor. In the six months to 31 December 2025, revenue was A$3.2 million, down 30.4 per cent on the A$4.6 million of the prior first half. Gross profit fell 47.1 per cent to A$1.8 million. The net loss for that half was A$5.0 million, against A$3.3 million a year earlier.[R24] Set that against the full year and the shape becomes clear. A first half with A$3.2 million of revenue and a A$5.0 million loss sits inside a full year of A$12.5 million and a A$4.48 million loss. AML3D did not publish a discrete second-half revenue figure or a discrete first-half EBITDA figure, so the split has to be derived. Samso's subtraction gives second-half revenue of about A$9.3 million and a second-half net profit of about A$0.5 million. Both of those are Samso arithmetic on published half-year and full-year figures, not company disclosures, and they should be read that way. The profit figure in particular is a small difference between two large numbers, so it is sensitive to the rounding in the published half-year loss. Figure 2. AML3D's FY2026 by half. Roughly three quarters of the year's revenue landed in the six months to 30 June 2026. First-half figures are as reported. Second-half figures are Samso's subtraction of the reported first half from the reported full year and are not company disclosures. Source: Samso, from AML3D half-year report of 27 February 2026 and AML3D FY2026 results release and 2026 Annual Report of 31 August 2026. What the arithmetic says is that essentially three quarters of the year's revenue landed in the second half. That is a commissioning-driven business. Revenue arrives when systems are installed and signed off, and the installations clustered. Two consequences follow, and they pull in opposite directions. The favourable one is that the company has now demonstrated it can be profitable at a revenue rate it has actually achieved, rather than at a hypothetical one. The unfavourable one is that a half-year result driven by the timing of commissioning is not a run rate. A first half like FY2026's could happen again whenever installations bunch at the far end of a year, and the FY2026 first half is the evidence for that. Where the growth came from AML3D does not disclose a defence against non-defence revenue split, and it has not for either year. What it does disclose is the split between machines and printing, and that moved a long way. In FY2025, 48 per cent of revenue came from the sale of ARCEMY units and associated parts and 40 per cent from print revenue. In FY2026 the Annual Report gives 75 per cent from ARCEMY units and associated parts, 23 per cent from print revenue, and the remainder from recurring licence and lease fees. That is the most useful disclosure in the report and it cuts against the easy reading of the year. The record revenue was machine-led. The share coming from printing parts, which is the repeatable end of the business, fell from 40 per cent to 23 per cent. In dollar terms print revenue was roughly flat, because the total nearly doubled while the share more than halved. Samso's view is that a reader looking for evidence that the installed base generates recurring work will not find it in the FY2026 split, and that the September 2026 parts order matters partly because it is the first sign of that line growing again. Two cash figures in the same results release The FY2026 results release states cash at bank of A$26.7 million in its Highlights and a A$26.8 million cash balance at 30 June 2026 in its Outlook, in the same document. The Appendix 4C is the quarterly cash flow report an ASX company of this kind has to lodge. The one lodged on 27 July 2026 gives A$26,670,484, made up of A$6.67 million at bank and A$20.0 million in call deposits, and the Annual Report gives the same figure. Samso uses A$26,670,484. The discrepancy is noted because it is in a published document. A prior period restatement Note 36 of the 2026 Annual Report[R25] discloses four misstatements identified in the prior financial year, corrected by restating FY2025 across the profit and loss, balance sheet, statement of changes in equity and cash flows. A$10,000,000 of at-call deposits with a term over three months was reclassified out of cash and cash equivalents into other financial assets. A$147,836 of interest accruing on term deposits was recognised as a receivable, which is what restated the FY2025 loss after tax from A$7,401,734 to A$7,253,898. Grant funding of A$423,268 was recognised as a receivable with a matching deferred grant income liability. A transposition error meant the FY2025 potential tax benefit was overstated by A$1,880,571, reducing carried-forward tax benefits not brought to account from A$8,227,965 to A$6,347,394. Only one of the four changed the reported loss, and by A$147,836. A prior period restatement of four items in a company of this size is nonetheless a governance data point, and it belongs in a workup rather than in a footnote. 8 Cash, Capital Commitments And Dilution AML3D held A$26,670,484 in cash and cash equivalents at 30 June 2026, against a restated A$20,398,193 a year earlier. On that line cash rose about A$6.3 million. The company has not raised equity since November 2024, so the rise needs explaining, and the explanation is in the restatement. At 30 June 2025 AML3D also held A$10,079,840 in other financial assets, almost all of it at-call deposits with a term over three months that Note 36 moved out of cash and cash equivalents. At 30 June 2026 that line was A$79,840. Add the two together and total liquid funds went from A$30,478,033 to A$26,750,324, a fall of about A$3.7 million. Both numbers are true and they say different things. Cash and cash equivalents rose because money moved back out of term deposits. Total liquidity fell by A$3.7 million, which is what running the business cost after receipts. A reader comparing AML3D's cash line to last year's without the other financial assets line beside it will reach the wrong conclusion, and this workup uses the total. That November 2024 raising was a two-tranche institutional placement of approximately A$30 million at A$0.19, issuing about 157.9 million new shares. The issue price was a 17.4 per cent discount to the A$0.23 close of 19 November 2024. It is the money the company is still spending. The raising before it was smaller and struck at a far lower price. In May 2024 AML3D raised A$6,938,389 at A$0.05 through a one-for-three non-renounceable rights issue, its shortfall and two placements. Those two events are the reference points for what a raising costs this company when it needs one. The operating burn is falling within the year and rising across years. The June quarter used A$603,000 of operating cash, against A$2.058 million in the March quarter. Full-year operating outflow was A$4.65 million, which the Annual Report notes is up from A$2.89 million in FY2025. At the FY2026 rate the balance covers more than five years. Two things stop that being a comfortable reading, before the capital programme is even counted. The burn is volatile because the revenue is lumpy, so a single quarter's outflow is not a rate. And total liquid funds went backwards during FY2026, by about A$3.7 million, in the year the company describes as its best. A falling quarterly burn inside a falling annual balance is what a business looks like when it is improving and still consuming capital. There is also a gap between cash and revenue. FY2026 receipts from customers were A$10.4 million against revenue of A$12.5 million. The A$2.1 million difference sits in receivables and contract assets, which is the working capital AML3D carries between doing the work and being paid for it. Then there is the capital programme. AML3D has announced a A$17 million investment, A$12 million to double US manufacturing capacity at Stow, Ohio, and A$5 million for a UK and European Technology Centre. That is money the company intends to spend out of the A$26.67 million balance, and it is capital expenditure rather than operating burn, so it does not appear in the operating cash flow figures above. Set the two against each other and the position is that the cash balance funds operations comfortably and funds the expansion comfortably, and does not obviously fund both plus a downturn. Samso is not modelling the timing of that spend, because AML3D has not published a schedule for it. The point for a reader is that A$26.67 million is not A$26.67 million of runway once A$17 million of it has been committed to plant. The A$17 million is not a new commitment. The November 2024 placement announcement already allocated approximately A$12 million to the Ohio expansion and approximately A$5 million to United Kingdom and European market opportunities, alongside about A$3 million for research and development. The structure has been public since the raising. Dilution overhang AML3D had 567,445,783 fully paid ordinary shares on issue at 30 June 2026, up from 537,740,595 a year earlier, with share capital of A$60,148,146. That is 29,705,188 new shares in a year with no capital raising. The 2026 Annual Report attributes A$3,145,519 of share capital to those issues, and Samso has not established from the documents available how the issues break down between option exercises, vesting rights and consideration shares. The 2026 Annual Report also records eight holders of 45,070,383 unquoted options, each converting one for one, and separately about 8.2 million performance rights. Together those are about 9.4 per cent of the current share count. AML3D does not publish the exercise prices or expiry dates of those options in the material Samso could access. Without them a reader cannot tell how much of the overhang is live at A$0.150 and how much is well out of the money. Several data services carry share counts between 552 million and 556 million for AL3. Those registers are stale. The figure above is from Note 23 of the 2026 Annual Report and is confirmed in the Additional Shareholder Information as at 24 August 2026. 9 The Order Book Nearly Doubled, And How It Converts AML3D's order book is the most quoted number in its story and the one most easily misread. The roll-forward is a useful cross-check. AML3D opened FY2026 with A$9 million of contracted orders, won A$20 million of new contracts during the year, and closed with A$16.8 million. The difference, about A$12.2 million, is what it delivered, against A$12.5 million of reported revenue. Those two numbers being close is a point in favour of both. Three distinctions in that table do real work. An order book is not revenue. A$16.8 million of contracted orders roll into FY2027. That is work AML3D has been engaged to do, and it converts to revenue only as systems are built, delivered and commissioned. The four Newport News systems ordered in March 2026 are expected to be installed in the third quarter of FY2027, which is January to March 2027. Revenue on those arrives when they are signed off, not when they were ordered. A pipeline is not an order book. The A$78 million is AML3D's estimate of opportunities it is pursuing. It is not contracted, and the company does not publish a conversion rate on it or a definition of what qualifies for inclusion. It is a useful indicator of activity and it should not be added to anything. The rollover almost doubled. A$9 million became A$16.8 million. On the company's numbers, AML3D enters FY2027 with more contracted work in hand than it entered FY2026 with, and FY2026 was a record year. That is the strongest single number in the outlook and it is a real one. One order has been added since. The A$0.5 million copper-nickel parts order announced on 17 September 2026 was signed after the 31 August balance date, so on the dates it is additional to the A$16.8 million. AML3D does not say so. The September release does not mention the order book at all, and Samso has not added the two figures together in any table here. Demand that supported our FY26 performance has continued into FY27. While we continue to deliver the $16.8 million orders in hand, we are also working to convert our $78 million global sales pipeline and have visibility on potential near-term contracts in the US and the UK. Our strong balance sheet means we have the capacity to complete our planned $17 million investment to double US manufacturing capacity and establish a European Technology Centre to support growth. We are focused on continuing AML3D's multi-year track record of record delivery and building shareholder value over time. Sean Ebert, Managing Director, AML3D, "AML3D Delivers Record FY2026 Revenue and Reports H2 Profit", 31 August 2026 The quote expresses confidence that FY2027 can deliver another record revenue performance, and it names the two numbers behind that confidence. What it stops short of is a forecast. AML3D has issued no FY2027 revenue guidance. Any FY2027 revenue figure a reader encounters is either an analyst estimate or somebody's arithmetic, and it should be labelled as one of those. The repeatability question The panel's manufacturing systems seat asks a question AML3D's disclosures do not answer. What happens after a customer buys a machine? There are three possible answers. The customer buys more machines, which Austal USA and Newport News Shipbuilding have both done. The customer becomes a consumables annuity, buying certified wire feedstock in volume, which AML3D has invested in the capacity to supply but does not report as a separate revenue line. Or the customer buys once and is finished. On the evidence, the first is happening with two customers. Austal USA has taken three systems on the company's count, two of which Samso can match to an announced order, and Newport News has ordered six. Austal USA has now also placed a parts order, which is a third kind of repeat from the same customer. The FY2026 split in section 7 sets a limit on how much comfort to take from that, because print revenue fell from 40 per cent of the total to 23 per cent while machines went to 75 per cent. The second is plausible and undisclosed. AML3D took US$0.2 million of a May 2024 BlueForge contract specifically to build copper-nickel wire feedstock capacity, and it sourced 8.5 tonnes of nickel aluminium bronze wire for a BAE Systems UK programme in April 2025. It does not report feedstock revenue separately, so nobody outside the company can size it. That is the gap in the story. A machine business whose customers repeat is worth considerably more than one whose customers do not, and AML3D's reporting does not yet let a reader tell which it is. 10 The Register AML3D's share register has one substantial holder, and that holder is a retail platform rather than an institution. At 24 August 2026 there were 6,500 holders of 567,445,783 shares. The twenty largest held 178,210,262 shares between them, or 31.41 per cent. There was one substantial shareholder, Netwealth Investments Limited, holding 35,716,514 shares or 6.29 per cent. A substantial shareholder is one holding 5 per cent or more, a level that triggers a disclosure notice to the ASX. Rows 1, 2, 5, 6 and 7 are platforms and custodians, which are administrative wrappers holding shares for many underlying accounts rather than conviction positions. Netwealth is a wrap platform, so the largest single line on the register is beneficially thousands of retail investors. Those five lines alone are 15.13 per cent of the company, against 31.41 per cent held by the top twenty in total. Samso has not put a figure on identifiable end holders across the full twenty, because AML3D publishes only the twenty largest lines and not the beneficial ownership behind them. There is no cornerstone institution and no director line in the top twenty. Nor is there a US defence strategic holder. Samso's view is that this is a structural weakness rather than a neutral fact, and that it is consistent with two other things in this workup. It fits the thin broker coverage, and it fits the 3.7 per cent move on the heaviest volume of the year when the company reported its first profitable half. A register with no anchor holder has nobody with the position or the incentive to look closely. The distribution adds to the picture. Holders of 50,001 shares and over hold 87.72 per cent of the company, and 1,605 holders, 24.7 per cent of the register, hold less than a marketable parcel. A marketable parcel is a holding worth at least A$500 at the current price, and a holder below it can be bought out under the ASX listing rules. The founder's holding Andrew Sales founded the company in 2014 and is now Executive Director and Chief Technology Officer. The FY2025 Annual Report gives his relevant interest as a director at 30 June 2025 as 26,207,707 shares plus four million options. He sold 7,000,000 shares during FY2025, reducing that interest from 33,207,707 at 1 July 2024. He does not appear in the twenty largest holders at 24 August 2026, where twentieth place was 3,328,760 shares. His holding has therefore either fallen a long way in about fourteen months or moved into a nominee account, and Samso could not establish which. The place a reader would settle it is the directors' interests disclosure in the 2026 Annual Report and any Appendix 3Y lodged since. Founder selling is not by itself a signal. Founders sell for reasons that have nothing to do with the company. It is a fact a reader is entitled to have, and the reduction is disclosed in AML3D's annual report. 11 The People AML3D has a four-person board, unchanged since 15 January 2024. The chairman ran steel manufacturing in Ohio. AML3D's US manufacturing base is in Stow, Ohio. Samso's view is that this is unlikely to be a coincidence, and it is the kind of thing a small company's board is for. The founder is still in the building, as Chief Technology Officer rather than as Managing Director. He handed the chief executive role to Ryan Millar on 26 September 2022 and moved to Chief Technology Officer the same day. Millar resigned on 15 June 2023, Sean Ebert stepped in as interim Chief Executive that day, and Ebert was confirmed as Managing Director and Chief Executive Officer on 18 September 2023. In a technology company whose entire product is a process, having the person who developed the process still running the technical side is an asset. It is also a key-person risk that AML3D does not quantify. The US bench The more interesting appointments are one level down, at AML3D USA Inc. Pete Goumas was appointed President of AML3D USA on 18 September 2023 and is described in the company's 2026 materials as President and Chief Executive Officer of AML3D USA. His background is given as more than 38 years leading technical and manufacturing organisations in government and civil nuclear power, power generation and technology development. Frederick J Stefany's appointment to the board of AML3D USA Inc as a Non-Executive Director was announced on 26 June 2025. His record, as set out in the company's release, is the reason the appointment matters. He established and served as the first Program Manager of the US Navy's Maritime Industrial Base, from July 2024 to February 2025. He was Principal Civilian Deputy Assistant Secretary of the Navy for Research, Development and Acquisition from October 2019 to August 2024, overseeing the start of the Columbia submarine programme and the expansion of the Virginia programme, [R26] and spent almost three years as acting Assistant Secretary in that role. AML3D's release also dates his entry to the Department of the Navy to 1985. That does not sit exactly with the 43 years of service he describes in the quotation below, and Samso has left both as published. After 43 years of deeply fulfilling service, I was happy to retire from the US Department of the Navy earlier this year. This decision created an opportunity to join the Board of AML3D USA and I am proud to be able to continue to support the great work being done to enhance the US Navy's capabilities. Frederick J Stefany, Non-Executive Director, AML3D USA Inc, in "Senior US Navy Program Lead Appointed to Board of AML3D USA", 26 June 2025 A retired US Navy Rear Admiral, David Goggins, was announced as a US Board Advisor on 16 June 2026. He is an advisor rather than a director of either entity. AML3D has not published that release on its own website and Samso could not open the primary announcement, so the detail of his background here rests on trade press reporting rather than on a company document, and no quotation from him is reproduced. What this bench amounts to is straightforward. AML3D has hired the people who used to run the programme it now sells into. That is a legitimate and common way to build a defence business, it is disclosed, and it is worth naming as the commercial asset it is. Two things belong beside it. Access to a programme office is not a qualification, and it does not by itself convert a non-safety-critical parts contract into a safety-critical one. And United States post-government employment rules constrain what former officials may do on behalf of a contractor. Frederick Stefany left the Maritime Industrial Base programme in February 2025 and joined the board of a supplier to that programme in June 2025. Nothing about that sequence is improper on its face, and AML3D has not published how those restrictions are managed. 12 Peer Comparison A Samso workup compares its subject against peers on five dimensions. On a mining company those are market capitalisation, stage of exploration, commodity, jurisdiction risk and geological potential. On a manufacturer the first, second and fourth carry over, commodity becomes technology and end market, and geological potential becomes the credibility of the path to sustained profit. Table 10 sets out all five for the two closest analogues, using the result and the auditor's position as the evidence on that last dimension. Titomic and Amaero Two ASX-listed companies are doing something recognisably similar. Titomic (ASX: TTT) makes cold spray systems, which build parts by firing metal powder at supersonic speed rather than melting it. Amaero (ASX: 3DA) makes the specialty alloy powders that other people's machines consume. All three began as Australian companies, all three are selling into the US defence industrial base, and all three are loss-making. Four things come out of that comparison. AML3D is the only one of the three approaching profitability. On the periods examined here, a positive EBITDA half is something neither of the others has produced. AML3D is the cheaper of the two that can be compared on a full year. On its most recent full-year revenue it trades at about 6.6 times revenue, and Amaero at about 13 times. Both multiples are Samso's division of market capitalisation by reported revenue rather than published figures. Titomic has no comparable year, because it moved its balance date from 30 June to 31 December. AML3D has more revenue than Titomic on any comparable basis, a fraction of the loss, roughly double the cash, and a market capitalisation about A$120 million lower. The Titomic comparison needs care, and this is a warning for anyone building a peer table from a data service. Titomic moved its balance date from 30 June to 31 December to align with its US and Netherlands subsidiaries. Data aggregators have stitched the mismatched periods together and report a Titomic FY2026 revenue of A$10.54 million, up 11.8 per cent. There is no such year. The audited half to 30 June 2026 shows total revenue of A$4,869,881, down 11.1 per cent, of which only A$3,508,590 came from contracts with customers. The balance was research and development tax incentive, grants and interest. Its auditor, RSM Australia Partners, drew attention to a material uncertainty related to going concern, noting a half-year loss of A$19,351,495 and operating cash outflows of A$14,488,995. Titomic announced a A$16.5 million placement at A$0.13 within days of that report.[R27] Both peers are leaving Australia and AML3D is not. Amaero completed its redomicile to Delaware in June 2026 and has confidentially submitted a draft registration statement on Form S-1 to the US Securities and Exchange Commission. Titomic has flagged a US redomicile for the second half of 2026.[R28] AML3D remains Australian. Samso's view is that this is the clearest strategic divergence in the group, that it is a real question rather than a settled one, and that the market has not visibly rewarded AML3D for staying. The wider ASX comparison Aurora Labs is in that table deliberately. It is an ASX-listed metal 3D printing company that has been listed for years and reports revenue of A$560,000. It is what this sector can look like when a technology reaches the market and the commercialisation does not follow, and it is the downside case a reader should hold beside the upside one. The companies that are gone A peer table built only from companies still listed is flattering by construction. The listed history of metal additive manufacturing is a history of value destruction, and the full comparison includes the companies that are gone. Desktop Metal was removed from the New York Stock Exchange on 14 April 2025 and filed for Chapter 11 bankruptcy protection on 28 July 2025. Its core remaining assets were sold for about US$7 million, with the foreign subsidiaries fetching a further US$10 million. Equity was cancelled and shareholders received nothing.[R29] Markforged was acquired by Nano Dimension for approximately US$116 million, closing on 25 April 2025, and delisted. Nikon SLM Solutions was acquired by Nikon in 2023 and taken private. In February 2026 Nikon wrote down about ¥90.6 billion against that acquisition, reported in the trade press at about US$591 million, and cut its guidance, citing an intensifying competitive environment in the metal 3D printer market. Of the remaining large listed names, 3D Systems reported second quarter 2026 revenue of US$94.6 million, down 0.3 per cent year on year, with a net loss of US$12.9 million.[R30] Nano Dimension holds cash of about US$432 million, and its market capitalisation is below that figure, so the market values the whole company for less than the money in it. Only one of the international names commonly grouped into this sector is profitable, Protolabs, and it is a digital manufacturing bureau rather than a metal additive manufacturing company. None of that is an argument against AML3D. AML3D is doing something the others largely did not, which is selling into a customer with a budget, a shortage and a political mandate. It is context, and it is the context in which a reader should hold the phrase "3D printing company". 13 The Competition AML3D's technology is not unique and the company does not claim it is. Wire arc additive manufacturing is a well-understood process built from off-the-shelf industrial robots and off-the-shelf welding equipment. AML3D uses ABB arms and Fronius welding packages, both of which anyone can buy. What AML3D owns is a set of commercial positions rather than a technical monopoly. It holds patents on its method and apparatus, granted in Australia, Europe, India, Japan, New Zealand, the Republic of Korea, Singapore, Malaysia and the United Kingdom. It owns its software stack, and it holds the DNV, Lloyd's Register and AS 9100D accreditations. It has a working relationship with the US Navy's Maritime Industrial Base and, on the company's September 2026 count, sixteen systems deployed in support of it. Those advantages are built from relationships and time. They are real, and they are not barriers to entry in the technology itself. The United States is not on that patent list, in the material Samso could access, and the United States is where the entire business is. Either AML3D has no granted US patent, which matters given who it is competing with, or the list Samso worked from is incomplete. The intellectual property note in the annual report is where a reader would settle it. Lincoln Electric Lincoln Electric Additive Solutions, part of Lincoln Electric Holdings (Nasdaq: LECO), is, in Samso's view, the most serious competitive threat, and it is funded by AML3D's customer. On 30 September 2025 the US Navy's Maritime Industrial Base Program, General Dynamics Electric Boat and Lincoln Electric announced a Maritime Industrial Base-funded investment for Lincoln Electric to supply critical components for nuclear submarine construction, using four large-format metal additive manufacturing machines at its Cleveland facility. Steven B Hedlund, Chairman and Chief Executive of Lincoln Electric, described it as strengthening the company's partnership with Electric Boat. Matt Sermon, Executive Director of the Maritime Industrial Base Program, described the programme as charged with strengthening and expanding the shipbuilding and repair capacity the nation needs. Lincoln Electric is a welding company more than a century old, with a US manufacturing footprint, a consumables business, a balance sheet AML3D cannot match, and arc expertise as deep as anyone's. It is competing on the same proposition, wire arc for shipbuilding, funded by the same programme office. Matt Sermon also appears in AML3D's February 2026 investor presentation, photographed visiting AML3D USA. The same programme is courting both. The wording in the two announcements is worth holding side by side. The Maritime Industrial Base funded Lincoln Electric to supply critical components for nuclear submarine construction. Every AML3D parts contract up to March 2026 was for components the company described as non-safety-critical, and its September 2026 order classifies its parts neither way. Samso's view is that this fact gets less attention than it deserves. It does not make the company's position worthless. Navies deliberately fund more than one supplier, and being one of two funded suppliers to a programme with a shortage is a defensible place to be. What it does rule out is any reading in which AML3D has a clear run at the US Navy. The private competitors Most of AML3D's real competition is private. A reader comparing AML3D only against listed companies is looking at the smaller half of the field. 14 What Has To Go Right, And What Could Go Wrong The analysis in this workup was done by a panel of five specialists constituted for this sector, and the risks below are grouped by the seat that raised each one. The seats are the welding and materials engineer, the manufacturing systems engineer, the defence procurement and qualification analyst, the capital goods financial analyst, and the programme and policy analyst. What has to go right Four things have to happen. The A$16.8 million order book has to convert on time. Most of it is the four Newport News systems due in the third quarter of FY2027. Systems that slip a quarter move revenue across a reporting line, and FY2026's first half showed what that looks like. The A$17 million capital programme has to produce capacity that gets used. Doubling US manufacturing capacity is only value-creating if the demand arrives to fill it. AML3D is spending most of its cash on a bet that it does. The qualification pathway has to keep moving. Replacement parts of the kind AML3D has been contracted for are a real business and a small one. The value in the story is the move up the qualification ladder. The September 2026 copper-nickel order is one step along it, at A$0.5 million, and the next measure is whether a second and larger order in that alloy follows. The programme funding has to hold. Everything above assumes the US Navy keeps paying and that AUKUS survives politically for long enough. What could go wrong Materials seat. Qualification stalls short of safety-critical work. Every US Navy parts contract AML3D announced up to March 2026 was for non-safety-critical components, and the September 2026 order classifies its parts neither way. The company's published research shows residual stress is present and consequential, and that print orientation is a design variable affecting fatigue life. Moving from parts where a failure is an inconvenience to parts where a failure is a casualty is a large step, and no announced approval shows AML3D has taken it. Samso found no NAVSEA technical publication number, approval letter or Qualified Products List entry for AML3D, having searched company announcements, annual reports, presentations, its website and the trade press to 19 September 2026. Manufacturing systems seat. The machine sales do not repeat. AML3D does not disclose feedstock revenue separately, nor utilisation of its installed base. What it does disclose is that print revenue fell from 40 per cent of the total to 23 per cent in FY2026 while machine sales went to 75 per cent, so on the year just reported the installed base did not generate a growing annuity. Fourteen systems contracted, against a customer forecast of up to a hundred, is either an early position in a programme that keeps buying, or most of the demand there was ever going to be. AML3D's disclosures do not settle which, and Samso is not going to multiply the two figures together to pretend they do. Procurement seat. The customer funds a competitor on the same rationale. Lincoln Electric received Maritime Industrial Base funding for the same purpose in September 2025, and for critical components rather than non-safety-critical ones. DEEP Manufacturing holds a product-level DNV certification for wire arc pressure vessels rated for human occupancy that AML3D has not announced an equivalent of. AML3D was early into this customer. The programme has not yet settled on anyone. Financial seat. The cash is committed. The A$26.67 million balance funds either a long runway or a A$17 million expansion, and it does not comfortably fund both plus a bad year. Revenue is lumpy enough that a bad year is a real possibility, and a company that needs to raise after a weak half raises on weak terms. AML3D's history shows what that looks like. The November 2024 placement was struck at a 17.4 per cent discount to the previous close, and the May 2024 raising was priced at A$0.05. Policy seat. The programme is political and the exposure is unhedged in two ways. The obvious exposure is that US Navy Maritime Industrial Base funding, and AUKUS behind it, depend on political continuity in two countries. The less obvious one is currency. AML3D reports in Australian dollars and an increasing share of its revenue is earned in US dollars from US customers through a US subsidiary. The company has not quantified that exposure in any document Samso could access, so a reader cannot tell how much of the FY2026 revenue growth was operational and how much was translation. Currency cuts the other way too. The A$16.8 million order book is largely US dollar work reported in Australian dollars, and AML3D's release footnotes an exchange rate on the day of the order. A stronger Australian dollar reduces the Australian dollar value of that order book before a single system ships. The case for AML3D, stated fairly The risks above run to some length, so the argument on the other side deserves the same treatment in one place rather than scattered through the workup. Every figure in it is sourced in the sections above. The operating numbers moved in the right direction on every line but one. Gross margin fell five points. Revenue up 70 per cent to A$12.5 million. Gross profit up 54 per cent to A$7.8 million. EBITDA improved 35 per cent. The loss after tax narrowed 38 per cent. And the second half produced the first EBITDA-positive half in the company's history. A company that reaches operating breakeven at a revenue level it has actually achieved is in a different position from one that projects reaching it. The order book nearly doubled. A$16.8 million of contracted work rolls into FY2027 against A$9 million a year earlier, and the roll-forward reconciles closely to reported revenue. That is the most useful forward indicator AML3D publishes, and it is a contracted number rather than a pipeline estimate. The customer is real, is funded, and has a problem its existing supply chain has not solved. The US Navy is delivering about 1.1 Virginia-class submarines a year against a target of two, its contractor names material availability as a cause, and the shipbuilding budget request runs to tens of billions of dollars. Very few ASX small caps sell into a customer of that size with a shortage of that kind. Two customers have come back and bought more. Austal USA has taken three systems and Newport News Shipbuilding has ordered six. Repeat orders from a shipyard are the best evidence publicly available that the machines are performing. In September 2026 Austal USA came back again, this time for parts rather than a machine. A qualification programme has produced a production order. AML3D says the September 2026 copper-nickel order converts a qualification programme into production part manufacturing. It is small at A$0.5 million, and it is the first time the company has been able to say that sentence about an alloy in the US Navy supply chain. It also comes in the year the print revenue share fell, so it is the counterweight to that rather than a confirmation of it. The company has not needed money since November 2024. A$26.67 million of cash, a falling operating burn, and no raising in nearly two years is an unusual position for an ASX company of this size and stage. The bench is credible and the published technical claims are stated with their limitations. AML3D has hired people who ran the programme it sells into, and its Chief Technology Officer publishes peer-reviewed work that reports the limitations of the process as well as its strengths. Neither is common at this end of the market. The share price fall and the absence of guidance are not risks The share price fall is not evidence of a deteriorating business. The operating numbers improved on every line but gross margin through FY2026 while the shares fell about 46 per cent over the twelve months to 21 September 2026. Those two facts sit together and only the operating performance is about the company. The absence of formal FY2027 guidance is not a warning signal. AML3D has never issued numerical revenue guidance. A company that has not given guidance before is not withholding it now. 15 Samso Concluding Comments AML3D is a small Australian manufacturer that has done something unusual. It has taken a well-understood industrial process, certified it, and sold it to the United States Navy at a moment when the Navy has a shortage its existing supply chain has not solved. It has done that without raising equity for nearly two years, and it has just posted its first EBITDA-positive half. The market has marked the shares down about 46 per cent over the twelve months to 21 September 2026. Samso's view is that both can be true at once, and that the reason is that AML3D's disclosures do not yet show whether an installed ARCEMY generates revenue after the sale. Whether the company can win contracts is no longer the open question. It has won them and the record is in section 5. First, the question is whether an installed base of ARCEMY systems generates anything after the sale. The FY2026 accounts answer part of it and the answer is not the flattering one. Machines went from 48 per cent of revenue to 75 per cent, and printing parts fell from 40 per cent to 23 per cent. The record year was machine-led, and the repeatable line did not grow with it. AML3D still does not report feedstock revenue or utilisation. Two customers have come back and bought more, and in September 2026 one of them came back for parts rather than machines. That last point is the one to watch, because it is the first move in the right direction on the line that matters. Second, the phrase non-safety-critical is AML3D's and it has been the most honest measure of where the business sits. Printing replacement parts that nobody else can supply, for boats whose original manufacturers are gone, is a real service to a customer with a real problem, and it is how a supplier earns the right to be asked about harder parts. The distance between that and what most people picture when they read US Navy submarine components is where the value in this company sits. The September 2026 order is the first evidence of that distance closing. It is a production order rather than a prototype, it is in an alloy AML3D says it has taken through qualification, and it does not carry the qualifier the earlier orders carried. It is also A$0.5 million, which is small. Both of those are true and a reader should hold them together. Third, the competitive position is more contested than the announcements suggest. The same programme office that funds AML3D funded Lincoln Electric for the same purpose in September 2025, and Lincoln Electric is a very much larger welding company with a US manufacturing base of its own. Navies fund more than one supplier on purpose, so none of this is fatal. It does mean AML3D is not the only supplier the programme is backing for this work. Fourth, the register deserves more attention than it gets. There is one substantial holder, and that holder is a retail wrap platform. There is no institution, no strategic industry holder and no director in the top twenty, and of 6,500 shareholders a quarter hold less than a marketable parcel. A company whose entire story is a relationship with the US Navy has attracted no strategic holder from that world. Samso's view is that this helps explain both the thin coverage and the muted reaction to a good result, and that it is a fair thing for a prospective holder to weigh. Finally, the balance sheet is the part of this story that is currently comfortable and could stop being. A$26.67 million against a falling operating burn is a strong position. A$26.67 million against a falling operating burn and a A$17 million capital commitment is a decision, and the company has made it. If the demand arrives to fill the capacity, that decision looks correct in FY2028. If it does not, AML3D will be raising money with a smaller cash balance than it has now, and its two prior raisings were struck at a 17.4 per cent discount and at a price of A$0.05. What AML3D has that most of its peers do not is a customer with a budget and a shortage. What it does not yet have is proof that the relationship compounds. FY2027 is the year that starts to answer that. The A$16.8 million already contracted has to be delivered, the four Newport News systems have to be commissioned in the March 2027 quarter, and the three copper-nickel components have to be delivered, tested and commissioned by the end of that same quarter. Those are checkable events with dates on them. The Samso Call on AML3D is Watch and DYOR. This is a company doing real work for a real customer, at a point where its numbers have turned and its share price has not. It is also a company whose thesis depends on one programme, one customer relationship and a qualification step it has not yet taken. That combination is worth watching, and anyone who acts on it should do their own research, starting with the phrase AML3D itself uses about the parts it makes, non-safety-critical. 16 References and Sources Every source used in this workup is listed below with its date. Each entry carries an identifier, and the same identifier appears in the body at the point that source is used, so any number, quotation or finding here can be traced back to the document behind it in one step. [R1] AML3D Limited, AML3D Delivers Record FY2026 Revenue and Reports H2 Profit , ASX release, 31 August 2026. [R2] Daily closing price data for AL3, retrieved 21 September 2026. Cross-checked at two dates against an independent market data source. [R3] AML3D Limited, AML3D signs initial production parts order for US Navy submarines , ASX release, 17 September 2026. [R4] AML3D Limited, WAM technology and ARCEMY product pages, aml3d.com/technology and aml3d.com/arcemy, retrieved 19 September 2026. [R5] AML3D Limited, Investor Presentation , lodged 27 February 2026. [R6] Williams, S. W., Martina, F., Addison, A. C., Ding, J., Pardal, G. and Colegrove, P., “Wire + Arc Additive Manufacturing”, Materials Science and Technology , 2016, volume 32, number 7, pages 641 to 647. [R7] AML3D Limited, FY2025 Annual Report , lodged 18 August 2025. [R8] AML3D Limited, $9.9M ARCEMY X Order from US Military Shipbuilder: HII-NNS , ASX release, 17 March 2026. [R9] Congressional Research Service, report to Congress on the Virginia-class submarine programme and AUKUS Pillar 1, 26 January 2026. [R10] US Navy Maritime Industrial Base Program, General Dynamics Electric Boat and Lincoln Electric, joint announcement on additive manufacturing for submarine production, 30 September 2025. [R11] USNI News, Navy Awards BlueForge Alliance $951M Contract for ‘Uplifting’ U.S. Sub Base , 10 September 2024. [R12] AML3D Limited, MLA Expands AML3D’s Delivery to US Navy via BFA , ASX release, 11 September 2024. [R13] AML3D Limited, US Navy Issues AML3D with Letter of Intent , ASX release, 6 July 2025. [R14] AML3D Limited, First ARCEMY Systems Operational at Largest U.S. Military Shipbuilder , ASX release, 19 June 2026. [R15] ABC News, report on the first AUKUS-specific US Navy contract award to General Dynamics Electric Boat, April 2026. [R16] Naval News, Landmark U.S. Budget Request Includes $65.8 Billion for Navy Shipbuilding , 10 April 2026, and Breaking Defense, report on Australia’s May 2026 defence budget. [R17] AML3D Limited, Order Received for Portable ARCEMY System from Austal USA , 21 July 2025. AML3D Receives Order from Largest Shipbuilder in USA, HII-NNS , 20 October 2025. AML3D Receives ARCEMY X Order from Defence & Industry Supplier , 18 November 2025. Earlier system orders as dated in Table 2. [R18] AML3D Limited, BlueForge Alliance parts, feedstock and alloy qualification releases as dated in Table 3, 2023 to 2026, including AML3D Receives Order for Submarine Parts , 16 August 2023, and AML3D Order for US Navy Submarine Parts , 26 March 2026. [R19] AML3D Limited, DNV Accreditation Received to Manufacture Marine Parts , 3 August 2022, and AML3D Soars to New Heights with AS 9100D , 2 April 2024. [R20] AML3D Limited, Industry Standards page, aml3d.com/industries/industry-standards, retrieved 19 September 2026. [R21] Sales, A., Khanna, A., Hughes, J., Yin, L. and Kotousov, A., “Fatigue Crack Growth Rates and Crack Tip Opening Loads in CT Specimens Made of SDSS and Manufactured Using WAAM”, Materials , 2024, volume 17, article 1842. [R22] AML3D Limited, Super Duplex Stainless Steel Shows Promising Fatigue Life , 10 May 2024. [R23] AML3D Limited, Appendix 4C quarterly activities and cash flow reports, lodged 27 April 2026 and 27 July 2026. [R24] AML3D Limited, half-year report and accounts for the six months to 31 December 2025, lodged 27 February 2026. [R25] AML3D Limited, 2026 Annual Report to shareholders , lodged 31 August 2026. [R26] AML3D Limited, Senior US Navy Program Lead Appointed to Board of AML3D USA , ASX release, 26 June 2025. [R27] Titomic Limited, Appendix 4D and half-year financial report for the six months to 30 June 2026, lodged 1 September 2026. [R28] Amaero Inc, FY2026 results materials and redomicile announcements, June to August 2026, and Titomic Limited redomicile disclosures, 2026. [R29] Desktop Metal Chapter 11 filing of 28 July 2025 and delisting of 14 April 2025, Nano Dimension’s completion of the Markforged acquisition on 25 April 2025, and Nikon’s February 2026 write-down against SLM Solutions, as reported in the additive manufacturing trade press. [R30] 3D Systems Corporation, second quarter 2026 results announcement, 3 August 2026. [R31] DEEP Manufacturing DNV Approval of Manufacture announcement, September 2025, and Houston facility launch, May 2026. Horizon Manufacturing Technologies and Relativity Space published material. Sciaky EBAM published deposition rates. GEFERTEC arc series specifications. MX3D funding announcement. All retrieved 19 September 2026. 17 Disclaimer The information contained on this website is the writer's personal opinion and is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. There may be a conflict of interest present with commercial arrangements with companies and/or stock held. Samso or an associate may receive a commission for funds raised. The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Accordingly, no warranty whatsoever is given, and no liability whatsoever is accepted for any loss arising, whether directly or indirectly as a result of this information. Investments are subject to investment risks, including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before committing to purchase or invest in the investment product(s) mentioned herein. If you choose not to do so, you should consider whether the investment product(s) mentioned herein are suitable for you. The writer will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials appended herein. The information and/or materials are provided "as is" without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials. The Samso Way – Seek the Research Here at Samso, we pride ourselves on delivering content for investors that is independent and informed by over three decades of experience in the industry. Our content is well-researched and is only created if I see merit in discussing the company's story. Our mission is simple. Cut through the noise and spotlight what matters. Genuine stories, grounded insights, and real opportunity. Investors can explore our four core platforms: Coffee with Samso Samso Insights Samso News Samso Research There may be numerous paths to success in investing, but the common thread among successful individuals is that they remain committed to making informed decisions. Equip yourself with the right knowledge and tools, and you will be well on your way to achieving your financial goals. The Samso Philosophy: Stay curious. Stay sharp. And remember, digging deeper always uncovers the real value. Happy Investing, and the only four-letter word you need to know is DYOR. Disclaimer This Samso Research Workup is independent research commentary for general information only. Nothing in this document is financial product advice, and it does not take into account any reader's objectives, financial situation or needs. Figures are drawn from public sources believed reliable at the stated dates but are not guaranteed; market-sensitive numbers change daily. Samso or associated parties may hold positions in, or have commercial arrangements with, companies mentioned. Seek professional advice before making investment decisions. Read full Disclaimer. About Samso Samso is a trusted platform that equips dedicated investors with up-to-date industry knowledge and insights from top CEOs and thought leaders. Samso Research | www.samso.com.au | An Investor Lens on ASX-Listed Companies

What is the problem with vanadium? There is a rush for the product, but the market does not seem to be giving the vanadium companies any slack. We all know that it’s a complex element and many a company have gone bust trying to master it. We also know about its special properties that are luring young and old to invest and take that punt hoping for a big payday. Over two centuries have passed since the Spanish scientist Andres Manuel del Rio discovered vanadium in Mexico. Despite this, we are only now understanding the mineral’s vast potential. If vanadium is known for anything, it’s steel. Added in small quantities – as little as 0.15% – vanadium is proven to double the strength of the alloy. Henry Ford was one of the first exponents of the metal, using it to strengthen the Model T – the car credited with introducing the automotive industry to the masses in the early 1900s. Its the unique properties of vanadium that is driving the excitement at the moment. What is Vanadium? According to Wikipedia, Vanadium is a chemical element with symbol V and atomic number 23. It is a hard, silvery-grey, ductile, and malleable transition metal. The elemental metal is rarely found in nature, but once isolated artificially, the formation of an oxide layer (passivation) somewhat stabilizes the free metal against further oxidation. Andrés Manuel del Río discovered compounds of vanadium in 1801 in Mexico by analyzing a new lead-bearing mineral he called “brown lead”, and presumed its qualities were due to the presence of a new element, which he named erythronium (derived from Greek for “red”) since, upon heating, most of the salts turned red. Four years later, however, he was (erroneously) convinced by other scientists that erythronium was identical to chromium. Chlorides of vanadium were generated in 1830 by Nils Gabriel Sefström who thereby proved that a new element was involved, which he named “vanadium” after the Scandinavian goddess of beauty and fertility, Vanadís (Freyja). Both names were attributed to the wide range of colors found in vanadium compounds. Del Rio’s lead mineral was later renamed vanadinite for its vanadium content. In 1867 Henry Enfield Roscoe obtained the pure element. Vanadium is the 20th most abundant mineral in the earth crust and occurs naturally in about 65 different minerals. The metallic vanadium is rare and is known as the mineral vanadium, native vanadium. Wikipedia has a pretty substantial write up on its uses and other factors. One should contribute and keep it free :-). Traditional uses of Vanadium. About 90% of vanadium is used to produce speciality steel alloys. Vanadium pentoxide is a catalyst for the production of sulfuric acid. Uses in the Renewable Sector. The recent rush to find vanadium stems from the introduction of vanadium flow batteries. As reported in altenergymag.com, these batteries allow intermittent energy supplies to be regulated from moment to moment. This dispatchable energy or dispatchable power enables the grid to balance the amount of energy going into wires. Vanadium flow batteries utilise vanadium’s unique characteristics for rechargeable energy storage, which is critical to renewable and dispatchable power systems. Research facilities around the world are investing in vanadium flow battery research and development to meet the projected global demand. The vanadium flow battery has virtually unlimited storage capacity with the ability to scale the batteries. As a result, the vanadium flow battery’s value to the emerging renewable energy technology sector is compelling for many utility companies and grid operators. Why is the Vanadium Flow Battery not as famous as the Lithium Battery? Currently, the Lithium Battery (LiB) are more efficient and hence more cost effective for the everyday household. The Vanadium Flow battery (VFB) close the efficiency gap with the larger storage capacities. However, at this stage of the technological race, the VFB is still at its infancy. Like the tungsten battery article that I wrote about in my previous blog, at this stage, the race is still favouring the LiB. Interestingly, when you look at the capacity of the VFB, I do see them doing well with the massive solar and wind farms. The way the battery works will be a great benefit in those cases, but I think the cost effectiveness is going to be a big issue. Research does show that these batteries are the most efficient in large capacity requirements. The VFB has up to 40% vanadium content, and this will make the battery vulnerable to price fluctuations. Imagine what the price of a Cobalt battery now if there was a Cobalt battery. LiB has already established a big stronghold on technology, and as always, this is going to be hard to change. No matter how good your technique is, once the mainstream players set their views, they are not going to change in a hurry. So what does that mean for the mineral resource fraternity? For those that have been following this sector, the lack of keen interest is becoming very frustrating. Many people would have remembered the Windimurra Vanadium project. The last proponents to take on this project was Atlantic, and that ended in tears. I believe that was around 2014. The project had a significant mineral resource. As quoted on the Atlantic website, the resource was over 235MT. They claimed to have highest quality ore and was building a plant as well. Recently there was news that the owners of the project are making a comeback with the rising interest in vanadium. This project had many issues, and the volatile vanadium price did not do them any favours. However, if my memory serves me well, the main problem was the chemistry and the issues in the plant. Whether it is a chemistry problem or a lack of management, one will never know. I remember talking to a few guys about this and they did say that chemistry was the issue. It was because of these issues that I have always maintained, if you have that large a resource and you cannot get the chemistry right, what hope would any company have without all those positive parameters. The guys who were in that industry would tell me that it is easier to work with another commodity than to try and work this one out :-). I am sure that this is now had many technological advances and such issues would have been overcome. Vanadium Companies on the ASX There is a good list of these companies listed on www.smallcap.com.au and it had a good summary of vanadium facts. I will admit that I have not followed them much because I feel that there is a gap in making the chemistry right. These boutique stocks are now taking a hiatus on the market, and like all things unique, it needs the market to be hot. Lithium and Cobalt stocks are a good example. Late last year, you could do no wrong, but now, they are not looking healthy. Even the ones that have a good story are having a hard time getting the market to get excited. As you can see in the share price charts that I have included, things are not happening. I have added the stocks that I have some knowledge about so please don’t think that I am favouring any particular companies. My Conclusions The vanadium Flow battery is new technology compared to the traditional Lithium variants. My thought is that the science behind the technology is very good. This battery can handle the fluctuation in energy within itself as if it has a living ecosystem. The fact that you have an ever-changing flow of reactions that is comfortably controlled by vanadium with its “living” oxidation states is critical. Lithium batteries have a tendency to surge and the technology required to manage that is not simple. This is why we don’t have a rush on electric aeroplanes. The imbalance use of charging and discharging in batteries promotes decay, and that is what these Vanadium batteries can overcome. I feel that in the long run, the VFB will become significant tools. I read in one article that the New York’s Metropolitan Transport Authority has signed a deal to test vanadium redox batteries. Researchers are developing a prototype that can store electricity generated overnight when the demand is low. The energy stored in the cell could then be used in the morning when the demand for electricity goes up, and this would reduce the amount of power needed during the day. The city would also save money on its electricity bills because power generated overnight costs less than during the day. In the case of the most widely used renewable energy source for everyday households, the solar panels, vanadium-based redox batteries could also help in to be more efficient. Solar panels produce the most electricity in the middle of the day, when residents are often at school or work and when the demand for electricity is low. Vanadium batteries could store this excess electricity and discharge it later in the evening when people are at home to use it. Cost efficiency of these batteries is now what holds it back. There is a company that makes a “mega-battery” that is as big as a car which sits on top of an office building in Manhattan skyscraper that is charged at night when electricity is cheap and discharge during the day to reduce the amount the building has to pat in daytime prices. So as you can see, in future, these batteries will be a big player. It is just a matter of time. Disclaimer The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer. www.samso.com.au If you find this article informative and useful, please help me share the information. I try and write about topics that are interesting and have the potential to be of investment value. It is not easy to find stories that fit those parameters. If you or your organisation see the benefit of what Samso is trying to achieve and have a need to share your journey, please contact me on noel.ong@samso.com.au. About Samso

The Samso News update is all about the commencement of drilling at the Belleterre Project by Pivotal Metals since acquiring the project package in Québec, Canada. As we say, the litmus test is now and a program to test the multiple electromagnetic conductor targets within a district that already hosts high-grade copper, nickel, gold, and platinum-group metal (PGM) mineralisation should be interesting, especially when both gold and copper are hot topics. For investors, this is a time to keep the Pivotal story on your watchlist. This is a bet on positive results and hence speculation as the targets lie within a proven magmatic sulphide system where previous drilling has returned high-grade copper and nickel intersections. Belleterre complements Pivotal’s more advanced Horden Lake project, which already hosts a defined copper-equivalent mineral resource. The Belleterre exploration program will compliment the current narrative that a district-scale discovery potential may be in the making. Drilling to Commence at Belleterre High-Grade Cu Targets – 26th February view the announcement The Pivotal Metals Limited Story Pivotal Metals Limited (ASX: PVT) is a Canadian-focused explorer and developer targeting copper, nickel, and platinum-group metals. The Company’s key assets include: Horden Lake Project (Québec) – an advanced copper-nickel-PGM deposit with a JORC Mineral Resource of 37Mt at 1.1% CuEq containing 407kt copper equivalent. Belleterre Exploration Projects – a portfolio of high-grade Cu-Ni-PGM and gold prospects including Midrim, Lorraine, Laforce and Alotta. The Belleterre portfolio covers approximately 160 km² within the Belleterre-Angliers Greenstone Belt, part of the Archean Superior Province of the Canadian Shield, an established mineral province with extensive historical mining. Introduction The ASX announcement reports that Pivotal Metals is preparing to commence its first drilling campaign at the Belleterre Projects in Québec. The initial program will focus on targets at the Midrim project area (Figure 1), where geophysical surveys have identified conductive anomalies interpreted to represent potential sulphide mineralisation. These targets lie beyond the footprint of historical drilling and represent new exploration opportunities within a known high-grade mineral district. The program will also extend to the Lorraine project area, where copper and gold targets are planned for follow-up drilling once permitting is completed. Figure 1: MIDRIM PROJECT (Belleterre) Location of known Cu-Ni-PGE sulphide deposits with a 6km priority envelope and new untested drill-ready conductive anomalies (stars) interpreted to represent possible sulphide accumulations; on satellite image background with property outline. (source: PVT) Highlights Drilling is scheduled to commence at the Midrim project area, with drill mobilisation expected shortly. The program will test multiple undrilled electromagnetic conductors identified through recent geophysical surveys. Key drill targets include: “Alotta” – an undrilled extension target parallel to historical drilling. “Midrim East” – a newly identified sub-cropping conductive anomaly. The Midrim system hosts multiple high-grade Cu-Ni-Au-PGM deposits. An initial 1,500m diamond drilling program has been planned. Drilling may expand depending on results and ongoing exploration programs. The Company reported $5.5 million cash at 31 December 2025 to support exploration activities. Follow-up drilling is planned at the Lorraine Project, targeting the Shanty Lake and Lorraine Mine East copper and gold prospects. Management Commentary Managing Director Ivan Fairhall stated that the Midrim project hosts a mineral system with a high intensity of magmatic sulphide mineralisation. The exploration strategy is focused on expanding the search radius around the existing cluster of high-grade occurrences. The initial drilling campaign is designed to test priority targets across the broader Belleterre land package. Management noted that the Company remains well funded and has the flexibility to expand the program depending on results and additional targets generated through ongoing exploration. Near-Term Milestones to Watch Commencement of diamond drilling at Midrim. Drill testing of the Alotta and Midrim East conductor targets. Receipt of remaining permits for the Lorraine Project drilling program. Expansion of drilling depending on initial results. Ongoing geophysical interpretation and regional exploration across the Belleterre land package. Previous Samso News Coverage – An Investor Lens Samso has previously covered Pivotal Metals Limited through several Samso News articles focused on exploration progress and project development across the Company’s Québec assets. 1. Pivotal Metals Limited (ASX:PVT) – Ore Sorting Delivers Up to 2.1x Grade Uplift at Horden Lake – Interesting Time Published: 20 February 2026 This article discusses large-scale ore sorting trials at the Horden Lake Project which demonstrated the potential to significantly upgrade copper-equivalent grades while rejecting waste prior to processing. The work highlights development optionality and potential cost benefits as the project advances toward production studies. 2. Pivotal Metals – Multiple Gold & Copper Targets Defined at Lorraine – A District-Scale Cu-Ni-Au Exploration Leverage – Decent Looking Targets – Cautious DYOR Required Published: 23 January 2026 This Samso News article examined the results of an induced polarisation (IP) survey at the Lorraine Project, which identified multiple copper, gold, and nickel targets east of the historic Lorraine Mine. The work expanded the geological understanding of the Belleterre district and supported further exploration drilling. 3. Pivotal Metals Limited (ASX:PVT) Broadens High-Grade Exploration Targets at Lorraine with High-Resolution Magnetic Survey – Au-Cu-Ni-PGM Published: 7 July 2025 This earlier Samso News article reviewed results from a high-resolution magnetic survey at Lorraine which identified additional structural features and exploration targets associated with copper, nickel, platinum-group metals, and gold mineralisation within the Belleterre-Angliers Greenstone Belt. Samso Concluding Comments The Belleterre drilling campaign represents a classic early-stage exploration step in a district with known high-grade mineralisation. The Midrim area already hosts multiple copper-nickel-PGM occurrences and historic drilling results that demonstrate the fertility of the system. The current program is designed to move beyond those historic discoveries and test new targets generated through modern geophysical surveys (Figure 2). Figure 2: Belleterre Project mineralised occurrences over the regional shaded total field magnetic map illustrating the complex nature of the geology and the extensive areas under Pivotal Metals’ 100% ownership. (source: PVT) A key aspect of this announcement is the identification of undrilled electromagnetic conductors. In magmatic sulphide systems, conductive responses are often associated with sulphide accumulations that can host copper, nickel, and platinum-group metals. The drilling program therefore represents a geological test of whether these geophysical anomalies correspond to mineralised sulphide bodies. The broader Belleterre landholding (Figure 3) also provides district-scale context. Multiple occurrences including Midrim, Alotta, Lac Croche, Delphi-Patry, and Lorraine demonstrate that the mineralising system extends across several kilometres. Historical drill intersections at Midrim and Alotta include wide zones of copper-nickel-PGM mineralisation, indicating the presence of a robust magmatic system within the greenstone belt. Figure 3: Belleterre Projects location map in relation to nearby current and historic mining and milling operations. (source: PVT) From a project development perspective, Belleterre complements the more advanced Horden Lake deposit in Pivotal’s portfolio. While Horden Lake represents a defined copper resource moving toward development studies, Belleterre provides exploration optionality with the potential to discover additional high-grade deposits within the same regional mining district. Market Implication - The Investor Lens The PVT story is one that could be compared to Firefly Metals Limited (ASX: FFM) as they try and make their story tick which is not a bad place to be if the success can be similar. A market capitalisation of just under AUD $25M is not bad for a "punt". That part of Canada is not easy to work but the data does look "interesting". An early stage play that is in the realm of highly speculative but in the current state of the metal markets, this is what investors look for to have a go. Figure 4: The share price chart of Pivotal metals as of the 6th March 2026. (source: commsec). Cover photo: Pretty Rocks, Mary Lewandowski. 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