Victory Metals Secures Rare Earth Supply Chain with Strategic Discoveries

SUMMARY OF THIS MAJOR MILESTONE

Victory Metals Ltd (ASX: VTM) has achieved a pivotal milestone by producing a Mixed Rare Earth Oxide (MREO) containing 94% Total Rare Earth Oxides (TREO) at its flagship North Stanmore Heavy Rare Earth Project in Western Australia. This production represents a significant breakthrough for an Australian clay-hosted system, resulting in a high-purity, heavy rare earth product with direct market applicability. Key details from this achievement include:

• 94% TREO (940,000 ppm) in the final MREO product.
• Derived from a composite of 453 individual samples, with an average of 525 ppm TREO.
• Eliminates the need for additional CAPEX-intensive processes, such as concentration and cracking.
• Positioned to meet rising global demand from non-Chinese offtakers seeking secure and ethically sourced heavy rare earth supply.

Quote from Management

Brendan Clark, CEO and Executive Director of Victory Metals, emphasised the importance of this technical achievement:

"This is one of the most significant technical and commercial breakthroughs in Victory's journey so far. To produce a 94% TREO Mixed Rare Earth Oxide in Australia from a clay-hosted system highlights the true commercial value of the North Stanmore deposit. We are now sitting at the most advanced downstream processing point prior to rare earth separation and metallisation."

KEY COMPOSITION IN TABLE FORMAT

The final MREO product displays a high-level composition dominated by both light and heavy rare earth elements, key to its market appeal. Heavy rare earths such as Dysprosium (Dy) and Terbium (Tb) are essential for advanced applications, including high-temperature magnets used in critical industries.

TABLE: FINAL MREO COMPOSITION (ABRIDGED)

Key Highlights:

• Heavy rare earths, specifically Dysprosium (Dy) and Terbium (Tb), make up 3.14% of the total product. These metals are integral to high-temperature magnets and defence-grade alloys.
• The final MREO is largely devoid of deleterious elements such as aluminium, iron, magnesium, and radioactive elements, making it highly attractive to global downstream processors.

WHAT IS A MIXED RARE EARTH OXIDE (MREO)?

Defining MREO

A Mixed Rare Earth Oxide (MREO) is a composite intermediate product encompassing multiple rare earth oxides. Rare earths are processed into such oxides through leaching, impurity removal, and precipitation steps. MREOs represent an advanced stage in the rare earth supply chain, preceding the final separation of individual rare earth elements and eventual metallisation into usable metals.

Importance within the Supply Chain

To investors and end-users, MREOs hold particular relevance due to their high commercial value and applicability within global manufacturing processes, such as:

• Electric vehicles and wind turbines requiring permanent magnets.
• Aerospace and defence applications benefiting from high-temperature alloys.

Why 94% TREO MREO Matters

The high concentration of TREO in Victory Metals' gallium discovery signifies a leap forward in the processing efficiency and commercial feasibility of clay-hosted deposits. Global demand continues to grow for rare earth materials as industries seek ethical and reliable supplies, particularly outside of China. A high-purity intermediate product with a focus on heavy rare earth content allows for stronger offtake appeal and a more direct pathway to integration within global rare earth supply chains.

Key Definitions to Understand:

• TREO (Total Rare Earth Oxides): Refers to the sum of all rare earth oxides found within a material, measured as a percentage by weight.
• HREO (Heavy Rare Earth Oxides): Oxides of heavier rare earth elements, including Dysprosium (Dy) and Terbium (Tb), which are critical for high-tech, temperature-resilient applications.

FUTURE PLANS & TIMELINES

Building on this success, Victory Metals has outlined a forward-looking roadmap to maximise the potential of its North Stanmore deposit.

Key Next Steps Include:

1. Advancing metallurgical test work to recover additional elements, including hafnium, scandium, and further heavy rare earth oxides.
2. Expanding strategic offtake discussions with global processors seeking alternative sources of heavy rare earths.
3. Broadening drilling and sampling programs to confirm larger-scale resource feasibility.
4. Considering the development or partnership on rare earth resource development after assessing project-level feasibility.

Indicative Timeline for Key Milestones

• Q1 – Q2: Variability testing and additional metallurgical refinement.
• Q2 – Q3: Offtake agreements and MOUs potentially finalised.
• Q2 – Q3: Delivery of an updated resource estimate showcasing scalability.
• Q3 – Q4: Pilot-scale production tests to demonstrate readiness for commercial applications.

INVESTMENT THESIS

Victory Metals presents a compelling opportunity, underpinned by the following factors:

1. High-Purity MREO Achievement: The ability to produce a 94% TREO product from a clay-hosted system underscores potential operational efficiencies and reduced capital intensity.
2. Strategic Importance of Heavy Rare Earths: Heavy rare earth elements, including Dysprosium (Dy) and Terbium (Tb), remain in demand due to their integral role in renewable energy solutions and defence applications.
3. Supply Chain Security Potential: By targeting non-Chinese processors, Victory Metals positions itself favourably within an increasingly sensitive rare earths market. ESG-compliant sourcing remains a critical differentiator.
4. Favourable Resource Base: Uniformity in grade distribution, as evidenced by the composite sample of 453 feed samples, validates the potential for consistency and scalability.

STATISTICAL SUMMARY

A numerical breakdown of Victory Metals rare earth supply achievement:

• 525 ppm average feed grade from a composite of 453 samples.
• 3.14% combined Dysprosium (Dy) and Terbium (Tb) content in the final product.
• TREO enrichment near 94% in processed MREO material.

WHY INVESTORS SHOULD FOLLOW THIS COMPANY

Victory Metals demonstrates all the attributes of a promising producer of high-value rare earth materials within a rapidly evolving global market. Its ability to generate a high-purity intermediate product while avoiding CAPEX-heavy steps distinguishes it from other early-stage rare earth developers. Furthermore, recent high-grade rare earth discoveries in the industry have shown the increasing focus on Dy and Tb, which aligns strategically with increasing demand from electric vehicle manufacturers, wind turbine producers, and defence contractors.

Final Key Points

• Victory Metals has successfully achieved the highest reported heavy rare earth-enriched MREO from an Australian clay-hosted project.
• The company's high-purity output could play a role in reshaping global reliance on concentrated supply chains.
• Ongoing developments, from drilling programs to offtake discussions, will serve as critical catalysts for further value creation.
• Recent industry developments have revealed untapped potential gold discovery opportunities, however Victory Metals remains focused on rare earth elements.

"Victory Metals is progressing as a significant contributor to the global rare earth supply chain. With robust technical results and strategic partnerships likely on the horizon, the company presents a strong case for further industry and investor attention."

In addition to Victory Metals' advancements, the industry has seen other players confirming high-grade rare earth elements through exploration, further validating the growing importance of secure rare earth supply chains outside of traditional sources.

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