Export Development Canada Credit Facility Funds NAMCO Project and Frees Up Capital for Other Growth Strategies

TORONTO, August 17, 2022 /CNW/ – Neo Performance Materials Inc. (“Neo“, the “Company“) (TSX: NEO) is pleased to announce that the Company has entered into a loan agreement (the “Loan agreement“) with Export Development Canada (“EDC“) for a term loan of up to $75 million (there “Credit facility“), to be advanced in three increments of $25 millionto fund the relocation, expansion and sustainability upgrades of one of its environmental emissions catalyst manufacturing facilities.

The Credit Facility matures five years from the date hereof, with principal repayment beginning in two years from the date hereof. The outstanding principal amount bears an interest rate equal to the overnight secured funding rate as administered by the Federal Reserve Bank of New York, plus an applicable margin. A number of the Corporation’s subsidiaries have provided a guarantee and/or security in favor of EDC pursuant to the loan agreement.

Before drawing down each of the three tranches, the loan agreement requires that certain conditions be met, including maintenance of cost performance against budget, disclosures related to compliance with environmental and social laws and other certifications of the management and third-party environmental monitoring consultants.

The credit facility will fund the anticipated costs of relocating one of Neo’s two plants that produce environmental emissions catalysts. Demand for Neo’s rare earth-based environmental emissions catalysts, used primarily to reduce harmful air emissions in vehicle exhaust systems, continues to be robust. Neo provides these advanced materials to customers in CanadaUnited States, Europe, South Korea, Japan, Thailand, India, Indonesia, Braziland South Africa.

Neo’s current factory in Zibo, China will be relocated to a new installation (“NAMCO“) in a nearby industrial park that could increase Neo’s production capacity by 4,000 to 5,500 tons per year and provide access to advanced municipal water treatment and drainage infrastructure. This also creates an opportunity for Neo apply the latest best practices in manufacturing efficiency and implement high standards of local environmental stewardship, including reduced air emissions, greater energy efficiency, and additional recycling of waste and ‘water.

Additionally, the new NAMCO facility is expected to provide Neo with a state-of-the-art manufacturing platform from which to launch potential new products under development. Neo is also exploring a variety of partnership options and structures regarding light rare earth separation operations at the current plant.

EDC’s financing of NAMCO’s relocation and expansion will allow Neo to deploy capital into the company’s broader growth strategies, which include expanding its rare earths separations operations in Estonia and the possible construction of a new factory in Estonia to make sintered neodymium-iron-boron magnets. These advanced magnets are widely used in electric vehicle traction motors and demand for them from European and other automakers is growing rapidly. Neo currently operates the only commercial rare earth separation and rare metal processing plant in Europe in Sillamee, Estoniawhich also produces catalytic materials with environmental emissions.

“We are deeply grateful for the support of Export Development Canada for this credit facility, as it gives us the means to expand and improve our environmental catalyst business. This will strengthen our ability to provide our customers with Canada and other countries with superior environmental emissions catalyst products that reduce harmful vehicle emissions,” said Constantin Karayannopoulos, Chairman and CEO of Neo. “This loan also provides Neo with greater flexibility to pursue our capital growth strategy and meet rapidly growing global demand for value-added rare earth products and magnets.

“Neo’s expansion of its environmental catalyst business will provide innovative solutions to customers in various industries that will accelerate the reduction of harmful air emissions,” said Guillermo Freire, Acting Senior Vice President, Mid-Market. “EDC is pleased to support Neo as it continues to build on its international growth strategy that enables the shift to a more sustainable global economy.

About Neo Performance Materials

Neo manufactures the building blocks for many modern technologies that improve efficiency and durability. Neo’s advanced industrial materials – magnetic powders and magnets, specialty chemicals, metals and alloys – are essential to the performance of many everyday products and emerging technologies. Neo’s products help deliver tomorrow’s technologies to today’s consumers. Neo’s business is organized around three segments: Magnequench, Chemicals & Oxides and Rare Metals. Neo is headquartered in Toronto, Ontario, Canada; with headquarters in Greenwood Village, ColoradoWE; Singapore; and Beijing, China. Neo operates globally with sales, research and development and production in 10 countries, being Japan, China, Thailand, Estonia, Singapore, Germany, UK, Canada, United Statesand South Korea. For more information, visit www.neomaterials.com.

About EDC

Export Development Canada (EDC) is a financial Crown corporation dedicated to helping Canadian companies make an impact at home and abroad. EDC has the financial products and knowledge Canadian businesses need to enter new markets with confidence, reduce financial risk and grow their businesses as they move from local to global. Together, EDC and Canadian businesses are building a more prosperous, stronger and more sustainable economy for all Canadians.

For more information and to find out how we can help your business, call us at 1-800-229-0575 or visit www.edc.ca.

Cautions Regarding Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of applicable securities laws. Canada. Forward-looking information may relate to future events or the future performance of Neo. All statements in this release, other than statements of historical fact, regarding Neo’s objectives and goals, and statements regarding its beliefs, plans, objectives, expectations, anticipations, estimates and intentions, are forward-looking information. Specific forward-looking statements in this discussion include, but are not limited to, the following: expectations regarding Neo’s sustainability programs, its plans to further improve its sustainability performance, and potential plans for expansion operations in Europe. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is planned”, “budget”, “expected”, “estimates”, “continues “, “forecasts”, “plans”, “predicts”, “intends”, “anticipates” or “believes”, or variations or negatives of these words and expressions, or state that certain actions, events or results “may”, “could”, “will”, “should”, “might” or “will” be taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Neo believes that the expectations reflected in such forward-looking information are reasonable, but no assurance can be given that such expectations will prove to be correct and such forward-looking information included in this discussion and anal yse should not be unduly invoked. For further information about Neo, investors should consult Neo’s continuous disclosure documents which are available under Neo’s profile at www.sedar.com.

SOURCE Neo Performance Materials, Inc.

For further information: Ali Mahdavi, Senior Vice President, Corporate Development and Capital Markets, 416-962-3300, Email: [email protected]; Jim Sims, Director, Corporate Communications, 303-503-6203, Email: [email protected], Website: www.neomaterials.com; Media contact: Export Development Canada, 1-888-222-4065, [email protected],