Spruce Point Issues “Strong Sell” Research Opinion On IperionX

The Following Is an Investment Opinion On Iperionx Ltd (NASDAQ:IPX) (ASX:IPX) Issued by Spruce Point Capital Management

NEW YORK, October 3, 2025: Spruce Point Capital Management, LLC (“Spruce Point” or “we” or “us”), a New York-based investment management firm that focuses on forensic research and short-selling, today issued a detailed report entitled “A Critical Analysis of Commercial Viability And Valuation Concerns” that outlines why we believe and estimate that shares of IperionX Ltd. (Nasdaq/ASX: IPX) (“IPX” or the “Company”) face up to 70% - 95% potential long-term downside under certain scenarios. Download and view the report, disclaimers, additional information, and exclusive updates by visiting www.sprucepointcap.com.

Spruce Point Report Overview:

After conducting a forensic review of IperionX Ltd. (Nasdaq / ASX: IPX or “the Company”) and its ambitions of becoming a vertically integrated producer (mining to production) of titanium powders and products, we believe that investor expectations are too high, and it faces significant challenges in commercial efforts that may not be fully reflected in its valuation. We also express concerns with the accuracy of its financial reporting. We applaud IPX’s desire to reshore the U.S. titanium supply chain with a lower cost and more environmentally friendly production process and think management is competent and capable.

However, we do not believe the end markets to be attractive or that its highly promoted HAMRTM process is likely to “revolutionize” the industry or displace the 70-year established Kroll process. As such, we question IPX’s economic rationale for expanding capacity when it has few customer contracts and no historical revenue. Originally a penny stock named TAO Commodities, then Hyperion Metals, and now IperionX, the Company has a $1.2 billion market cap and is trading at 9.7x and 24x book value and 2026E revenues vs. the specialty metal industry median of 1.4x and 1.8x, respectively. Based on our analysis, we believe investors should exercise caution because the shares may be significantly overvalued, with potential downside risk of 70% - 95% under certain scenarios outlined in this report.

The report highlights several key concerns with the Company, including:

• IPX management and technical advisors have significant overlap with Piedmont Lithium (Nasdaq/ASX: PLL) which faced allegations from two short sellers that it was a stock promotion with ties to a banned Australian stockbroker and had various financial and operational shortcomings. PLL collapsed in value, merged and changed names. We identified other ventures where IPX management promoted large resources and clear paths to predictable, strong cash flows, but which failed to produce anything, including Paringa Resources (now Terra Metals) and Coalspur Mines. While these examples do not represent all of management’s experience at public company ventures and the ones that faced difficulties do not necessarily indicate future performance issues at IPX, investors should consider their track record alongside other factors.
• Even if IPX reaches scaled production, based on our research, the end markets are not attractive. The titanium powder market is already oversupplied with 3.5x more capacity than shipments. Fasteners are also highly competitive with the market being consolidated and dominated by large players.
• We question the scalability and likelihood of success of IPX’s promoted HAMR technology which it believes can displace the 70-year-old established Kroll process. The technology appears to have been passed over by its initial commercial partners Boeing and Arconic and was acquired for only a modest premium to its decade-long R&D cost. We also identify other promising technologies that were intended to compete against the Kroll process but ultimately failed to scale from the lab to sustained commercial production.
• We express concerns with IPX’s claim that the HAMR process can succeed with titanium scrap feedstock and identify a potential barrier to scale. The alternative is that IPX uses ore from its Titan mining project in Tennessee, but we see that project as challenged and having fallen short of its initial timeline. IPX described a potential offtake partner as a Japanese conglomerate but just this week a Japanese conglomerate invested in a similar mining project in Australia.
• Other partnership and customer announcements do not appear to have resulted in much and future revenue remains uncertain. We’ve analyzed each of IPX’s partner and customer announcements and spoke with experts familiar with the business. Some partnerships have expired, while others IPX no longer references. There is enthusiasm around a Ford contract estimated to generate ~$11 million starting in 2025 but no revenues have been booked and IPX listed no inventory on its balance sheet (raw materials or finished goods) at fiscal year end and no inventory purchases through September 30th, so we question if any revenues are imminent.
• We identify concerns with financial and operational reporting including discrepancies with Titan’s acreage, capex, G&A costs and employee counts. IPX recently had a material weakness of internal controls but says it was remediated. A recent site visit to IPX’s U.S. headquarters revealed what appeared to be an empty office with stacked boxes, mail on the ground, and outdated investor materials.
• The Company is valued at a substantial premium to other specialty metal companies with revenue and production while IPX faces continued revenue uncertainties and has a yet to completely demonstrate it can scale production to its desired goal of 1,400 and eventually 10,000 tpa.

Executive Summary

Repeated Calls And A Site Visit To IperionX’s Corporate HQ Came Up Empty.....

After repeated attempts calling IPX’s headquarters in Charlotte, NC to speak with someone (980-237-8900) and receiving an automated voice-box message, we visited the office on a recent weekday in hopes of asking questions and found no one there. Packages were piled up with no attempt to safeguard or secure the package identities. A 2023 Annual Report was visible despite the 2025 Annual Report being available as was a 2022 Sustainability Report (the 2024 report is available). We spoke with someone at the neighboring business who said they never see anyone there and that security often puts packages piling up outside the door into the office.

We Are Short IperionX Ltd. (Nasdaq/ASX:IPX) And See Potential 70% - 95% Downside Risk In Some Scenarios

After conducting a forensic review of IperionX Ltd. (Nasdaq / ASX: IPX or “the Company”) and its ambitions of becoming a vertically integrated producer (mining to production) of titanium powders and products, we believe that investor expectations are too high, and it faces significant challenges in commercial efforts that may not be fully reflected in its valuation. We also express concerns with the accuracy of its financial reporting. We applaud IPX’s desire to reshore the U.S. titanium supply chain with a lower cost and more environmentally friendly production process and think management is competent and capable. However, we do not believe the end markets to be attractive or that its highly promoted HAMRTM process is likely to “revolutionize” the industry or displace the 70-year established Kroll process. As such, we question IPX’s economic rationale for expanding capacity when it has few customer contracts and no historical revenue. Originally a penny stock named TAO Commodities, then Hyperion Metals, and now IperionX, IPX has a $1.2bn market cap and is trading at 9.7x and 24x book value and 2026E revenues vs. the specialty metal industry median of 1.4x and 1.8x, respectively. Based on our analysis, we believe investors should exercise caution because the shares may be significantly overvalued, with potential downside risk of 70% - 95% under certain scenarios outlined in this report.

• IPX management and technical advisors have significant overlap with Piedmont Lithium (Nasdaq/ASX: PLL).

Piedmont faced allegations from two short sellers that it was a stock promotion with ties to a banned Australian stockbroker and had various financial and operational shortcomings. PLL collapsed in value, merged and changed names. While we acknowledge the mining industry is fraught with risks that are not entirely under management’s control, we identified other ventures where IPX management promoted large resources and clear paths to predictable, strong cash flows, but which failed to produce anything, including Paringa Resources (now Terra Metals) and Coalspur Mines. While these examples do not represent all of management’s experience at public company ventures and the ones that faced difficulties do not necessarily indicate future performance issues at IPX, investors should consider their track record alongside other factors.

• Based on our research, the titanium powder market is already oversupplied.

Part of IPX’s production output is titanium powders. Even if IPX can scale its operations and produce qualified Ti-6AI-4V powder at a lower cost, our research suggests it’s already a highly competitive market and capacity will not be an issue even if the 3D printing Ti 6AI4V market continues to grow double digits per annum. We estimate 3.5x more capacity than shipments for this powder and that ATI, Sandvik, Oerlikon, Tekna and AP&C combined account for ~80% of the capacity. Furthermore, we estimate the U.S. market for Ti 6Al4V mill product to be 150k – 170k metric tonnes per annum with aerospace being >50%. We believe U.S. melters (Timet, Howmet, ATI) only use 20-25% sponge in new ingots, with the remainder coming from recycled or revert material. We also don’t think the titanium fastener market is attractive because the industry has been consolidated by large dominant players over time. We believe IPX’s story of reshoring the titanium industry from mine, scrap to product is a noble cause, but one which, under current market conditions, may not generate attractive returns on capital.

• We question the scalability and likelihood of success of the “revolutionary” HAMR process that is promoted to displace the 70-year-old and established Kroll process.

The key to IPX’s story is that it owns the IP to a “revolutionary” technology acquired from Dr. Zhigang Zak Fang’s Blacksand Technology and developed through the University of Utah. To believe in the IPX story you must believe that a small group led by Australian mining executives discovered something that has been overlooked for years by everyone else in the global titanium industry. We estimate the IP was acquired for a modest premium above the estimated $10m invested in its research and development over a decade with Arconic (Alcoa) and Boeing as commercial testing partners who apparently passed on licensing or acquiring it first. History is littered with failures in taking promising Kroll process alternatives from lab to scale. An expert we spoke with that is familiar with HAMR warned there were many steps involved (more steps=more potential issues). An academic research paper published in Journal of The Electrochemical Society (2021) concludes for HAMR that “the process is not energy-efficient”. The journal also reports that the major disadvantages of HAMR are “High temperature (700°C–800°C)” and “High energy consumption”. IPX keeps changing operating cost disclosures and pictures of the HAMR furnace configuration, thereby making it difficult to evaluate progress, and has lowered the next phase capacity expansion from 2,000 to 1,400 tpa while slightly increasing capex costs. Tellingly, IPX recently promoted process improvements (despite previously touting “Breakthrough Large Scale Commercial Test Runs of the HAMR Process”) and made modifications to things like reagents that it previously said did not appear to need change. IPX also reported PP&E impairments and losses on disposals despite recent equipment purchases. Moreover, the IPX stock received by Dr. Fang in the deal, and by IPX’s patent advisor, have already been sold, at least partially and possibly entirely, by its owners. Of course, there are many reasons why they sold stock so soon that could be unrelated to their belief in the prospects of IPX.

• We have grave concerns about titanium scrap feedstock needed to scale the HAMR process.

IPX says the process can use ore or titanium scrap. There appear to be challenges of dealing with oxygen when using titanium scrap for feedstock. We noticed the Company initially suggested that oxygen impurities were to be “cleaned” but has now changed it to “removed”. The U.S. scrap market is opaque, heavily import dependent, and the U.S. Geological Survey stopped reporting figures in 2021 while IPX also stopped providing scrap operating cost assumptions after 2022. IPX provides a wide scrap price range of $3 - $15k/t which points to significant potential price variability with limited ability to hedge through long-term contracts. For IPX to achieve its stated long-term capacity goal of 10,000 tpa by 2030, we estimate that IPX scrap purchases could account for between 20%-30% of the scrap market which could make them beholden and vulnerable to sellers raising prices in anticipation of their purchasing requirements. In addition, recent reports about fake titanium in Boeing and Airbus jets could make auditing scrap supplies more challenging.

• We think the Titan mining project which could supply the ore feedstock for the HAMR process is also a long-shot to succeed. The asset is part of the McNairy sands which has been explored for decades.

Titanium is extracted from minerals like ilmenite and rutile which are a large portion of Titan’s JORC-complaint mineral resource which also includes zircon.IPX’s initial plans indicated that Chemours (NYSE: CC) would be a likely offtake partner, but that hasn’t materialized. IPX touts the project’s ~10,100 acres, but it is only permitted for 308 acres and assets were recently written off and acreage options extinguished. IPX promotes rare earth minerals as a potential byproduct, which is timely given investor excitement about the sector over China decoupling. The initial project said it would be “shovel ready” by Q4 2023 but that timeline has clearly slipped. IPX has also said that a Japanese conglomerate has been evaluating and testing samples since mid-2023 but no offtake agreements have been announced. On November 10, 2025, Japanese conglomerate Marubeni invested in RZ Resources’ Australian Copi Project to advance rutile, zircon, ilmenite and rare earths which may potentially diminish its interest in the Titan Project. Also, Japan and the U.S. are teaming up to explore rare earths projects outside the U.S. but nothing announced in Tennessee. Tronox (NYSE: TROX) recently reported sustained weakness in titanium dioxide and zircon. Moreover, Tennessee has not historically been a hotbed of mining activity. According to the state’s last mineral industry overview, only coal, oil, and natural gas are currently being recovered, and we find no evidence that Tennessee has ever commercially developed a zircon or titanium ore mining operation.

• Other partnership and customer announcements do not appear to have resulted in much and future revenue remains uncertain.

We’ve analyzed each of IPX’s partner and customer announcements and spoke with experts familiar with the business. Some partnerships have expired, while others IPX no longer references. There is enthusiasm around a Ford contract estimated to generate ~$11 million starting in 2025 but no revenues have been booked and IPX listed no inventory on its balance sheet (raw materials or finished goods) at fiscal year end and no inventory purchases through September 30th, so we question if any revenues are imminent. For IPX to sell into the aerospace and defense markets, product qualification becomes a real issue and came take time. A year ago, IPX indicated it had ~100 active customer engagements but now is signaling just 22. One cause for optimism is that IPX secured a U.S. army task order for $99 million under a Small Business Innovation Research Phase III contract and received a $1.3 million order which is its obligation according to USAspending.gov. The contract is Indefinite Delivery Indefinite Quantity (IDIQ) which only obligates the government to fulfill its minimum obligation and makes future orders not guaranteed. The U.S. Department of War stated that bids were solicited via the internet and only one bid was received.

Concerns given apparent financial and operational reporting discrepancies.

IPX had a material weakness of internal controls which it said was remediated in 2025. However, we have our doubts. IPX’s CFO was VP of Finance at Proterra Inc. (Nasdaq: PTRA), a SPAC which went bankrupt and settled a lawsuit which alleged that its liquidity was mis-portrayed. IPX’s Chief Legal Officer left with only a one sentence footnote disclosure in the 2025 Annual Report while IPX reported she received no executive compensation last year.

We’ve identified discrepancies in reported Titan Project acreage figures, G&A costs, total employees and capex accounts.

Titan Acres: IPX says it owns approximately 1,486 acres in Tennessee, but our review of county records indicates approximately 1,349.4 are owned.

Capex: We are concerned by the reported cash costs related to capex and amounts recorded on the balance sheet within PP&E. Through 2023, the reported amounts reconciled, but in 2024 and 2025 we find that they diverged. 2024 and 2025 quarterly capex totals do not match yearly totals. We could not confirm values for IPX’s machinery, tools, or tangible property at its main manufacturing facility because Halifax County, VA said the regulatory forms did not exist. IPX claims that a furnace costs in the range of $2.7 - $5.0 million. However, IPX’s import records from its Netherlands-based partner suggest a furnace system is in the $369,000 to $405,000 range. Of course, the difference may be explainable by the service costs to put the furnace into operation, or some other explanation. However, we believe the Company should clarify the discrepancy.

G&A Costs: By evaluating the 2025 quarterly reports, we see that the full year figures do not reconcile. The biggest difference is in administration and corporate costs which were off by $274,000.

Employees: There is a large difference between employees reported in the 2025 20-F and Annual report filed two weeks apart. Either IPX has 52 or 70 employees, but in March 2025 the COO told Halifax County that IPX needed ~60 to expand capacity.

There may be reasonable explanations for these discrepancies, but the Company should clarify. Lastly, PricewaterhouseCoopers’ (PwC) audit engagement partner is based in Perth, Australia despite the Company having no assets in Australia and PwC having a Charlotte, NC office five minutes from IPX’s U.S. headquarters. We do not allege any wrongdoing or impropriety on the part of PwC but believe that investors would be better served with an audit engagement partner based in Charlotte, NC.

• IPX trades at a substantial premium to book value and expected revenues among specialty metals peers. We see 70% – 95% downside potential in some scenarios.

Revenue uncertainties exist: IPX is still in the process of scaling production, and we believe revenue uncertainties from limited customers still exist. For example, we previously highlighted a Ford contract announced in late 2024 which was expected to begin in 2025, but no revenues appear imminent. Also, a $99m IDIQ contract from the U.S. government only obligates $1.3 million of revenue. In 2023, IPX suggested 2026E revenues and EBITDA were forecasted to be ~$145m and ~$100m, respectively. IPX also provided a forecast for powder production. These initial projections proved to be too optimistic. IPX is now offering less specific financial forecasts for 2026 and says revenues will “progressively scale” and “with a positive EBITDA inflection point projected by year-end 2026”. However, unlike in 2023, IPX is not providing specifics about powder production.

CEO share pledge recently increased:The CEO recently increased his shares pledged on margin by 5x. which amplifies risks. The notification was made with the ASX, but we find no recent notification with the SEC. IPX previously received an SEC comment letter that highlighted reports filed with the ASX were not filed with the SEC.

A substantial valuation premium exists: IPX trades at 9.7x and 24x book value and 2026E revenues vs. the specialty metal industry median of 1.4x and 1.9x, respectively. We believe that if revenues fail to materialize, investors may revalue IPX on a price to book value basis. In this scenario, IPX could be valued at little more than its cash and value of its property and equipment with little value ascribed to intangible assets. If losses accelerate from increasing capacity through increased capital spending with no revenues, at 0.5x to 1.0x tangible book value, IPX’s share price could see 70% – 95% potential downside risk. We expect the share price to underperform the natural resource and materials industry.

What could go right for IPX: Our view of IPX’s share price differs from the consensus sell-side analyst view. The average price target is $62.00 which we note is a large discount to the current price. This could suggest market skepticism with projections being attained. On the other hand, we acknowledge that there are factors that could work in IPX’s favor such as a faster ramp in capacity, more customer commitments, a positive Definitive Feasibility Study (DFS) for the Titan Project that makes potential Japanese customers convert into off take agreements and improved demand for titanium products.

Read the full report here by Spruce Point Capital Management

About Spruce Point

Spruce Point Capital Management, LLC is a forensic fundamentally-oriented investment manager that focuses on short-selling, value and special situation investment opportunities.