The Elmet Group Co. Common Stock Status update

In conjunction with today's announcements, we have prepared a supplementary presentation we plan to reference in today's call. Please refer to our investor relations website for a copy of the presentation. Let's begin on slide 3. Today, we are pleased to discuss four important updates. First, a landmark investment from the U.S. Department of War, or DOW. Second, a planned strategic deployment of capital intended to expand and strengthen the U.S. and allied tungsten supply chain. Third, a new framework agreement with the Defense Logistics Agency, or DLA. And fourth, our recently announced agreement to acquire ams OSRAM's metal production operations in Schwabmünchen, Germany. These announcements represent a transformational moment in Elmet's evolution, building on a nearly century of experience in high-performance refractory metals and positioning us to support a more secure U.S. critical minerals supply chain.

The DOW's $450 million committed investment, the additional investments we are making, and our new DLA framework will potentially enable us to accelerate the U.S. tungsten manufacturing, build our independent conversion capacity, and support a more resilient, non-China supply chain for critical defense in industrial applications. We believe these investments will also further solidify our company's already strong competitive positioning in expanding our manufacturing base, adding midstream capabilities, and strengthening our ability to serve as a differentiated strategic partner to both government and commercial customers. This is only possible because of the strong foundation our team has built, and we have just begun to show what we can accomplish. Let's turn to slide 4 for an overview of our business and some additional context on today's announcement.

For background, Elmet is one of the world's leading manufacturers of high-performance refractory metals and the only U.S.-owned, U.S.-based manufacturer of highly engineered pure tungsten and molybdenum critical material components. In addition, we maintain a difficult-to-replicate asset base, strong supply chain network, and a U.S.-centric manufacturing capabilities. We believe we are well-positioned to address the growing need to secure resilient and trusted tungsten supply chains. Our Critical Materials Components division, or CMC, is our core refractory metals division. We manufacture tungsten, molybdenum, and specialized alloys for demanding applications across defense, aerospace, semiconductors, medical, energy, and industrial markets. We have further enhanced the business through expanded U.S. and European capacity, including our recently announced acquisition of ams OSRAM's Schwabmünchen metal production operations in Germany, which I will discuss momentarily. We have also established a proven track record of continuously introducing new and innovative products to our customers across key end markets.

Our Engineered Microwave Products division, or EMP, provides highly engineered radio frequency systems, components, and engineering services and is continually looking to leverage this technology across new programs and platforms. Today we announce we are adding a third division, Elmet Refining & Trading, or ERT, which is operationally separate from CMC but strategically aligned with the business. ERT will manage our ammonium paratungstate, or APT, conversion capacity and mine offtake agreements, coordinating sourcing, refining, trading, and delivery across our tungsten supply chain. I will discuss the specifics of this more in a moment. APT conversion, for those unfamiliar with our business, is a critical chemical refining process that transforms raw tungsten concentrate into the standard industrial intermediates required for advanced metal powders and carbides. To close out our brief overview of these three divisions, I will note Elmet's capabilities now span material supply, processing, precision engineering, and finished components.

Each are intended to play an important role in supporting our customers and our long-term growth. Turning to slide 5. As I mentioned, last Tuesday, we announced our entry into an agreement to acquire ams OSRAM's metal production operations. The OSRAM acquisition is another important step in Elmet's global expansion strategy intended to establish a strategically integrated tungsten and molybdenum manufacturing base in Europe. It is our first refractory metals production footprint in the European Union. This is a goal we've had for long articulated since before our IPO. Through this, we plan to create a European production platform for tungsten and molybdenum powders, rods, wire, electrodes, and machined components, enhancing our ability to serve customers across key end markets while strengthening supply chain resilience.

The facility is Germany's only fully integrated producer, spanning powder through finished components, and is one of a limited number of European facilities capable of producing pure tungsten powders. When this transaction is closed, the Schwabmünchen facility will be integrated into our CMC division and is anticipated to bring a fully integrated manufacturing operation covering the entire production process from powder production through pressing, sintering, swaging, drawing, and finishing. This site also includes an advanced materials laboratory specializing in chemical and physical analysis that has been recognized as a leader in manufacturing innovation, receiving Germany's 2024 Smart Digitization Factory 4.0 award. We expect the acquisition to close the first quarter of 2027. Under the transaction, Elmet will continue supplying Osram through a 2-year framework agreement and will operate the site under a 15-year lease arrangement.

Once acquired, these capabilities will help expand our manufacturing footprint, enhance our vertical integration, and strengthen our position as a leading supplier of tungsten and molybdenum products across North America and Europe. This is also another example how we have positioned ourselves as the acquirer of choice over the years. Building on this foundation, today's announcements meaningfully expand Elmet's capacity support a secure and resilient U.S. tungsten supply chain. On slide 6, I will dig in further into the details. The Department of War has committed $450 million to expand our tungsten processing and manufacturing capacity across the U.S. This transaction is the first initiative launched under the Department of War's new Economic Defense Unit, aligning public and private capital to strengthen America's tungsten supply chain.

The investment begins with a $200 million draw on this commitment at closing, with the remaining capital in future draws tied to project spending need and execution. In connection with the investment, the DOW will receive redeemable preferred equity warrants representing up to 19.9% of Elmet's common stock on a post-exercise basis, and the right to appoint one independent director and one non-voting board observer. This preferred equity structure also includes a redemption adjustment, also known as netting feature, which provides Elmet capital structure flexibility as the warrants are exercised. We believe this structure aligns the interest of, and creates long-term value for Elmet, the Department of War, and U.S. taxpayers. Now I'd like to turn the call over to our EVP of Business Development, Scott Knoll.

Thank you, Peter. With the critical use cases across various key markets, tungsten and molybdenum. This is on slide 7. Various key markets, tungsten and molybdenum remain of significant strategic importance, with global demand projected to increase significantly by 2030. As you can see on this slide, from 2024 to 2030, the global tungsten and molybdenum markets are expected to grow by 7% and 4%, respectively, representing what we see as a meaningful opportunity to solidify our position in the development of these raw materials. On slide 8, please. There is a compelling and urgent national security issue at hand. China has a strong grasp over the global tungsten market for the past several decades and currently controls more than 85% of the world's global tungsten supply, imposing restrictions that have led to tightening supply and price volatility.

Throughout much of the 20th century, the U.S. has had an integrated supply chain for tungsten. Through this investment, we plan to rebuild that vertical integration in the U.S. from the mine to the finished product ready for end-use application. Elmet is the only U.S.-owned vertically integrated producer of pure tungsten and pure molybdenum serving the full range of critical end markets. The DOW's investment, coupled with our strategic allocation across key initiatives, are designed to allow the U.S. and its allies to reduce reliance on the China supply. With that, please turn to slide nine for more on how Elmet plans to utilize the DOW's investment across the business to fortify this global supply chain. We expect to deploy the $450 million across several clearly defined priorities. You saw several of those in the press release this morning.

First, approximately $165 million is designated to support upgrades on our existing CMC facilities in Maine, Michigan, and Ohio. We also intend to deploy approximately $100 million across the ERT division to coordinate sourcing, refining, and delivery activities across a diversified non-China supply chain. In addition to these initial funds, as part of ERT, we intend to allocate approximately $150 million to Blue Moon's Springer tungsten complex in Imlay, Nevada, forming and operating an Elmet-controlled joint venture with Blue Moon Metals and EQ Resources of Australia to restart and expand APT conversion capacity at the Springer facility. This investment provides a direct bridge from Elmet's traditionally disciplined capital investment model to the large-scale capacity needed for the widely anticipated missile and defense replenishment cycle.