THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 (INCLUDING AS IT FORMS PART OF THE LAWS OF ENGLAND AND WALES BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").

27 June 2025

Ferro-Alloy Resources Limited

("Ferro-Alloy", the "Group" or the "Company")

Carbon Black Substitute Product Update and Feasibility Study Update

Ferro-Alloy Resources Limited (LSE:FAR), the vanadium producer and developer of the large Balasausqandiq vanadium deposit in Southern Kazakhstan, is pleased to announce progress in the development of the carbon black substitute ("CBS") product and an update of the Feasibility Study ("Feasibility Study") on Phase 1 of the Balasausqandiq Project (the "Project").

Highlights

·    A new CBS product developed based on processing high-carbon / low vanadium waste rock located within the existing pit shells scheduled to be stripped during the mining of Ore-Body 1 ("OB1")

·    Successful laboratory testing of the new CBS product (and the existing c. 40% carbon CBS product) by a major manufacturer and supplier of automotive rubber products to the Chinese car industry opens the prospect of a valuable CBS revenue stream with the potential to be brought online prior to the construction of the Project's main processing plant

·    A 20 tonne sample of the new CBS product is being sent to the potential Chinese customer for industrial testing

·    Feasibility Study substantially complete including the 1.65 million tonnes per year ("Mtpa") process plant design, tailing storage facility design and mine plan

·    Potential changes to the CBS product specification, source ore and treatment process, which could materially improve the CBS aspects of the Feasibility Study, will be made over the course of the summer, deferring the projected issue date of the Feasibility Study to September 2025

Nick Bridgen, CEO of Ferro-Alloy Resources, said:

"Our new CBS product is an important development as it can be made in larger quantities, both from the tailings of our vanadium project as already planned, and now, in addition, from other high-carbon sectors within the mining waste. This could have a significant positive impact on the timing and financial characteristics of the overall project. We are pleased with the expressions of interest we have received from large scale industrial customers seeking to secure long term contract access to our CBS products." 

"The results of the Feasibility Study so far are excellent and in line with previous announcements, but we believe the optimisation of the CBS elements of the Project will be well worth the short delay in issuing the overall study."

Carbon

Current CBS product

As previously announced, the Company has successfully tested a CBS product, with a carbon content of c. 40%, to be produced by concentrating the carbon within the tailings from the planned vanadium process plant. This product can be used in partial substitution for carbon black, a high-value form of carbon used for rubber manufacture. Test-work by global rubber consultants in the UK demonstrated that the CBS acts as a reinforcing filler and can be used for the production of rubber for passenger vehicle tyre sidewalls, a technically demanding product, as well as for other rubber items.

The marketing division of the same consultancy advised that the CBS product should be marketed, based on a comparison with other reinforcing fillers currently available, at a price of US$500 per tonne for the tyre market, and between US$500 and US$600 per tonne for the non-tyre market. Grades of carbon black suitable for tyre sidewalls currently sell for between $1,200 and $1,800 per tonne. The proposed selling price of the CBS does not include any value attributable to the expected far lower CO₂ emissions from the manufacture of the CBS compared with the production of standard carbon black, for which potential carbon emission tariffs may be substantial.

New CBS product

On 2 December 2024, the Company announced that the focus of its operating plant would be switched to research and development ("R&D"), including the development of CBS markets.

As a result of that R&D, the Company has developed a further CBS product, with a lower carbon content in comparison to the existing CBS product, whilst still maintaining good reinforcing qualities in the manufacture of rubber. Being of lower carbon content, this product can be made in larger quantities both from the tailings of the Project processing plant, but also from processing high-carbon / low vanadium waste rock located within the existing pit shells scheduled to be stripped during the mining of OB1.  

The Company has built a test-plant which is currently producing around 400 kg of the new CBS product per hour. This has fully demonstrated the effectiveness of the production process and is providing samples that can be supplied to potential customers for evaluation purposes.

A separate plant to produce the new CBS product, processing the stripped high carbon / low vanadium waste rock, could be built and operated in advance of the construction of the Project processing plant, providing the Company with a valuable early cash flow stream.

Product testing

Laboratory scale samples of both CBS products have been tested by a major manufacturer and supplier of automotive rubber products to the Chinese car industry. The results of those tests were successful and identified that both products can be substituted for carbon black at varying levels up to 25%, saving not only the cost of the substituted carbon black but also eliminating the need for further addition of white carbon (silica also used as a filler in making rubber), and reducing consumption of naphthenic oil. The potential savings to the customer from use of the Company's CBS products is, therefore, significant in comparison to current rubber manufacturing formulations.

A 20 tonne sample of the new CBS product is being sent to the potential Chinese customer for industrial scale testing, following which, offtake discussions are likely to result.

Feasibility study

The Feasibility Study is substantially complete with respect to the mining and processing to recover vanadium pentoxide as flake. 

·    Mineral reserve 33 million tonnes (OB1 only)

·    Mining and throughput to the process plant - 1.65 Mtpa

·    Vanadium pentoxide output - 8,500 tonnes per year ("tpa")

·    Carbon black substitute output - up to 220,000 tpa

·    Process plant design, tailings storage facility design and mine planning complete

·    Ecological and social studies have not identified any significant issues

The Board of Directors is of the opinion that deferring the publication of the Feasibility Study to September 2025 will allow time to conduct additional work on the new CBS product and reflect any offtake agreements that might ensue.  These steps could lead to significant benefits for the economics of the Project which is already, on the basis of existing drafts, highly profitable.

ENDS

For further information, visit www.ferro-alloy.com or contact:

Notes to Editors

About Ferro-Alloy Resources Limited:

The Company's operations are all located at the Balasausqandiq deposit in Kyzylordinskoye Oblast in the South of Kazakhstan.

Balasausqandiq is a very large deposit, with vanadium as the principal product together with the carbon black substitute ("CBS") and several by-products. Owing to the nature of the ore, the capital and operating costs are very much lower than for other vanadium projects.    

The most recent mineral resource estimate for ore-body one (of seven) provided an Indicated Mineral Resource of 32.9 million tonnes at a mean grade of 0.62% vanadium pentoxide ("V₂O₅") equating to 203,364 contained tonnes of V₂O₅. In the system of reserve estimation used in Kazakhstan the reserves are estimated to be over 70 million tonnes in ore-bodies 1 to 5, but this does not include the full depth of ore-bodies 2 to 5, or the remaining ore-bodies which remain substantially unexplored. 

The grade of carbon in the deposit is over 8%. The carbon flows through to the tailings from where it is concentrated, in a simple low-cost operation, into a 40% carbon product, the CBS, that can be used in place of carbon black as a reinforcing filler in the making of rubber.

The Project will be developed in two phases, Phase 1 and Phase 2, with Phase 1 treating 1.65 million tonnes per year.

There is an existing concentrate processing operation at the site of the Balasausqandiq deposit. The production facilities were originally created from a 15,000 tonnes per year pilot plant, which was then expanded and adapted to recover vanadium, molybdenum and nickel from purchased concentrates.  Alongside this operation, there is a well-equipped laboratory and highly skilled technical team, who have already developed the technology that is being built into the feasibility study and is further developing and optimising processes needed for future vanadium and carbon operations. The plant will operate only when profitable concentrates are available and, when not operating as a production facility, will operate on an expanded basis as an R&D centre.