REG - Future Metals NL - Quarterly Activities Report

Future Metals NLAnnouncement

31/01/2024 07:00

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RNS Number : 4063B  Future Metals NL  31 January 2024

31 January 2024

Future Metals NL

Quarterly Activities Report for period ending

31 December 2023

 

Future Metals NL ("Future Metals" or the "Company", ASX | AIM: FME) is pleased
to announce its Quarterly Activities and Cashflow Report for the quarter ended
31 December 2023 (the "Quarter").

 

Highlights

§ Completed the Panton Scoping Study leveraging off ~A$50m investment at
Panton to date, including previous feasibility studies, ~45,000m drilling,
decline access to orebody & comprehensive bulk metallurgical testwork

§ Study demonstrated the potential for Panton to be one of few long life,
globally significant PGM operations in the western world

§ Robust project economics, low capital intensity versus industry benchmarks
and strong leverage to PGM price appreciation, with:

o  1.5Moz PdEq(2) mining inventory from 9.8Mt @ 3.60g/t PGM(3E)(1), 0.25% Ni,
12.6% Cr(2)O(3) (4.77g/t PdEq(2)) for 1.1Moz PGM(3E)(1), 25kt Ni, 1.1Mt
Cr(2)O(3) concentrate

o  Initial ~9-year mine life (study's mine plan covers 26% of the current
defined Reef & High Grade Dunite material and 10% of the overall MRE)

o  PGM production averaging 117,000oz pa from high grade feed of 3.60g/t
PGM(3E)(1)

o  PdEq(2) production averaging 161,000oz pa (incl. nickel and chromite
by-products)

o  Low All-in Sustaining Costs (AISC), averaging US$789/oz (projected to be
in the 2nd quartile), providing resilience throughout the metal price cycle

§ Completed the strategic acquisition of Osprey Minerals(3), doubling the
Company's exploration position in the East Kimberley. Acquisition includes the
Eileen Bore project, an advanced Cu-Ni-PGM exploration prospect with wide,
shallow mineralisation shown in historical drill intersections including:

§ 120m @ 0.73% Cu, 0.29% Ni & 0.86g/t PGM(3E) from 0m (EoH) ((EBRC 010))

o  Incl. 16m @ 1.0% Cu, 0.36% Ni & 0.99g/t PGM(3E) from 100m

§ 96m @ 0.70% Cu, 0.29% Ni & 0.78g/t PGM(3E) from 24m (EoH) ((EBRC 003))

o  Incl. 10m @ 1.08% Cu, 0.34% Ni & 1.04g/t PGM(3E) from 56m

§ 84m @ 0.54% Cu, 0.24% Ni & 0.75g/t PGM(3E) from 36m (EoH) ((EBRC 011))

§ Strategic Board changes in line with the continued development of the
Panton Project with the appointment of Executive Chairman, Mr Patrick Walta, a
qualified metallurgist and mineral economist who brings experience across
technical and commercial roles

§ In parallel with progressing value-add activities at the Panton project and
planning for exploration at Eileen Bore, the Company is assessing multiple
regional and broader opportunities

(1) Platinum-Group-Metals 3E refers to platinum, palladium and gold

( 2) PdEq (Palladium Equivalent). Refer to page 11 for calculation details

(3) See announcement dated 5 October 2023 regarding Future Metals option over
Osprey Minerals Pty Ltd which was subsequently exercised.

 

Scoping Study Highlights

§ Scoping Study demonstrated the potential for Panton to be one of the few
significant primary PGM operations in the western world. The Study supports a
high-grade, initial 9-year operation processing both Reef and High-Grade
Dunite material through a conventional crush, grind and flotation flow sheet,
producing:

 Avg. Production  PGM       Chromite Conc.  Nickel  PdEq(2)

                  (Oz pa)   (Tpa)           (Tpa)   (Oz pa)
 1,250ktpa        117,000   134,000         1,200   161,000

§ Robust economics with Panton demonstrating strong financial metrics that
reflect the high-grade and low capital intensity of the Project.

 Valuation         Pre-Production Capex           NPV(8%)                     IRR

 (1,250kt)         (A$m)                          (A$m)                       (%)

                                                  (pre / post tax)            (pre / post tax)
 Base Case         267                            250 / 153                   26% / 21%
 PGM 5yr Avg Case                                 477 / 311                   39% / 31%
                   PGM Basket                                                          By-product credits
 Prices            Platinum   Palladium  Gold             Rhodium*   Basket Price      Nickel    Chromite

                   (US$/oz)   (US$/oz)   (US$/oz)         (US$/oz)   (US$/oz)          (US$/t)   (US$/t)
 Base Case         1,285      1,400      2,000            4,450      1,556             20,000    282
 PGM 5yr Avg Case  1,040      2,115      1,870            12,450     2,200             20,000    282

*Note Rh not included in Panton Scoping Study's economic evaluation. Included
for comparison to South African PGM Basket Price only

§ Panton Base Case long term PGM pricing aligns with the ~85(th) percentile
of the cost curve (see Figure One), with the current South African PGM(4E)
basket price at an unsustainable ~65% percentile (i.e. ~35% of current global
operations are losing money), near all-time lows

§ Panton's estimated AISC of US$789/oz (projected 2(nd) quartile) provides
the opportunity for the planned future operations to generate robust operating
margins in all phases of the PGM price cycle (see Figures One & Two).

§ Study included just 26% of Reef & High Grade Dunite material - mine
life extension and valuation uplift to be targeted via progressive uplift in
Resource categorisation

o   Average annual operating free cash flow A$72m - clear value-add from
mine life extensions

§ Panton has the opportunity to achieve an accelerated pathway to production,
driven by:

o   Project's location on granted Mining Leases

o   >A$50m invested in the Project to date including an established
portal and decline, comprehensive metallurgical test work, >45,000m of
drilling & prior environmental studies

o   Strong relationships with local stakeholders including the Traditional
Owners

§ Panton is optimally located, with good access to established
infrastructure:

o   East Kimberley region of Western Australia, a top-tier mining and
investment jurisdiction

o   ~1km from a sealed highway utilised by other mining operations

o   ~70km from a sealed airstrip for employee and contractor transportation

o   300km from deep-water port at Wyndham, with easy access into key
potential markets

Figure One | PGM Industry's Cost Curve and Panton Project's positioning.
Source SFA (Oxford)

*Further details for the industry cost curve analysis are shown under the PGM
Industry Cost Curve Position section in the body of the Company's announcement
of 7 December 2023 entitled "Panton Scoping Study Demonstrates Potential for
Long-life, Globally Significant PGM Operation"

 

 

Figure Two | South African PGM4E Basket Price. Source: Bloomberg & Company
estimates.

*The PGM(4E) basket price is calculated based on the weightings of Pt, Pd, Au
and Rh production for the South African PGM industry. All other metals
production is considered a by-product and credited towards an operations' cost
base

 

§ Significant upside potential for Panton over and above the Scoping Study
outcomes from:

o   Panton orebody is open at depth and interpreted to have improving
thicknesses and grades; further drilling may support mine life extensions

o   Inclusion of other payable metals including rhodium, iridium, copper and
cobalt

o   Resource delineation and inclusion of processing feed from nearby
projects such as the Eileen Bore Project or other discoveries within Future
Metals' 176km(2) exploration acreage

o   Pricing upside associated with 'Western premiums' for scarce and
critical resources located in Australia supporting supply chain development
outside of China, Russia and South Africa

o   Expansion potential from the significant near-surface Bulk Dunite
mineralisation which is not included within the Scoping Study

 

 

Figure Three | Panton PGM-Ni-Cr Project's Location

 

Project's Positioning

The Study highlighted the Project as being a potentially globally significant
producer of PGMs and chromite. Panton also represents one of the only
near-term development PGM projects outside of Russia and South Africa.
Additionally, the Study demonstrated that Panton has a lower capital intensity
than other similar PGM projects in the study phase, given its higher PGM
grade.

PGM Market Dynamics

The supply of primary PGM production is currently dominated by South African
and Russian operations. Such operations supply >80% of PGM(4E) (Pd, Pt, Au
& Rh) production (based on actual 2022 figures). Both of these countries
are subject to material investment and operating risks:

-    Russia is currently subject to international sanctions which has
deterred Western investment into its mining industry, complicated the sourcing
of new and sustaining mining equipment for existing operations and caused
Western customers to seek alternative sources for metals such as PGMs.

-    South Africa produced over 71% of primary platinum supply and 37% of
primary palladium supply in 2022. Many of the operations in South Africa have
operated for several decades, leading to deep mines and aging infrastructure
which ultimately increases operating costs and sustaining capital. These
issues are amplified by the chronic power availability issues in the country.

     South African deposits are also relatively high in rhodium, with the
recent profitability of many operations being driven by very strong rhodium
prices, which has subsequently declined (2021: Rh price ~US$29,000/oz vs 2023:
Rh price ~US$4,450/oz). This price decline, coupled with significant cost base
inflation has the potential to lead to mine closures in the near to medium
term.

PGM Industry Cost Curve Position

The Study demonstrated that the proposed operation has the potential to be a
low-cost producer of PGMs, with strong resilience for future operations
throughout the PGM price cycle.

Figure One shows that at the current PGM(4E) basket price of ~US$1,250/oz
approximately 35% of existing PGM production is loss-making. This creates
potential for a significant amount of supply to cease in the near to medium
term unless prices increase.

Panton's cash costs net of by-product credits and AISC of US$678/oz and
US$789/oz, respectively, demonstrate that if the Project was currently
producing, it would be towards the middle of the second quartile of PGM
production, thereby ensuring resilient margins in a depressed price
environment and making for an economically robust project capable of
withstanding sustained downturns in PGM prices.

Further details on the calculation methodology for the Company's stated cash
costs, AISC and PGM industry cost curve are set out in Chapter 10 of the
Study, which is available on the Company's website.

Study Stage PGM Projects ex-South Africa and Russia

Table One shows how Panton compares to two other study-stage PGM projects
outside of South Africa and Russia. In contrast to other developers, Panton
has a superior grade and materially lower capital requirements.

Table One | PGM Project Comparisons (ex-South Africa & Russia)

 Project     Owner              Location           Upfront Pre-Production Capital  PGM(3E)(1) Grade  Life of Mine  PGM(3E)(1) Production  Co-Product Production

                                                   (A$m)                           (g/t)             (Years)       (Koz, LOM Avg)         (LOM Avg)
 Panton      Future Metals      Western Australia  267                             3.60              8.5           117                    1kt nickel

                                                                                                                                          134kt chromite concentrate
 Gonneville  Chalice Mining     Western Australia  1,600                           0.95              19            280                    9kt nickel

 (15Mt)                                                                                                                                   10kt copper

                                                                                                                                          0.8kt cobalt
 Marathon    Generation Mining  Ontario, Canada    1,243(4)                        0.90              12.5          216                    9kt copper

                                                                                                                                          248koz silver

*See Appendix Three for source details

(4) Pre-production capital estimate of C$1,110. AUD:CAD exchange rate of 0.89
applied

 

 

Upside Opportunities

The Study underpins a compelling investment case for progressing the Project,
and the Company sees significant further upside opportunities as set out
below:

§ Improved geological confidence of existing Resource: The Study only
includes 26% of the Reef and High Grade Dunite MRE due to reporting
constraints regarding the inclusion of Inferred resources. Average annual free
cash flows of A$72m in the Study demonstrate the significant upside in
increasing mine life through the inclusion of existing Resources.

§ Resource growth: The Panton orebody is open at depth and interpreted to
have improving thicknesses and grades; further drilling may support mine life
extensions beyond the currently modelled life of mine.

§ Additional payable metals: The Panton deposit contains metals either not
included in the MRE or not assumed to be payable. Additional work in the PFS
stage may support the inclusion of other payable metals including rhodium,
iridium, copper and cobalt.

§ Expansion potential: The Study does not include the near-surface Bulk
Dunite mineralisation. This component of the MRE comprises 55.7Mt @ 1.2g/t
PdEq(5), such that future metallurgical studies may support a significantly
expanded operation.

§ Regional discoveries: The Company has recently expanded its exploration
position around the Panton Project. Additional nearby discoveries will
potentially further enhance the Project's economics through shared surface and
processing infrastructure. Future Metals' Eileen Bore Project is located ~15km
to the east of Panton and historical drilling indicates the potential to
quickly establish a resource estimate, progress metallurgical understanding
and include it in the overall project development plan.

§ Western price premiums: Pricing upside associated with being one of the few
western PGM & chromite projects outside of China, Russia and South Africa.
The Company will establish the Project's competitiveness on a carbon intensity
basis during the planned PFS, however given the grade, and intended power
source the Company is currently of the view that the Project will be
substantially less carbon intensive than many existing projects.

(5) MRE PdEq calculation details provided in Appendix One of the Study (refer
to the Company's announcement of 7 December 2023).

 

Strategic Exploration Position

On 5 October 2023, the Company entered into an option agreement to acquire
100% of Osprey Minerals Pty Ltd ("Osprey") which owns ~100km(2) of highly
prospective exploration tenements (the "Osprey Projects") in the East
Kimberley region of Western Australia (shown in Figure Four).

The Osprey Projects are located within a 20km radius of the Company's 100%
owned Panton Project and made up of the Eileen Bore, Sally Downs and
Springvale Projects.

Figure Four | Future Metals' tenements including the Octava Joint Venture, and
Osprey Projects (Eileen Bore, Sally Downs and Springvale)

 

Eileen Bore

The Eileen Bore Project (shown in Figure Five) is characterised by a series of
differentiated pyroxenite and gabbro intrusions emplaced along a structural
corridor, the Alice Downs Fault, which represents a major north-northeast
trending splay off the deep-seated mantle tapping Halls Creek Fault. Broad
zones of disseminated and net-textured Cu and Ni sulphides occur within the
host intrusions and are comprised of chalcopyrite, pyrrhotite, pentlandite and
pyrite. Much of the project area is under cover which has limited the
effectiveness of historical surface sampling. There is significant potential
for blind deposits with no surface anomalism.

The Eileen Bore prospect is an advanced exploration target with drilling
confirming wide zones of consistent Cu-Ni-PGM mineralisation from surface
along a known strike of ~300m. Mineralisation remains open along a significant
strike and at depth, with an average hole depth of just 96m and a maximum
drilled vertical depth of ~200m. Eileen Bore sits along the same structure
which hosts the Copernicus mine 15km to the north-east.

Figure Five | Aeromagnetics with Ni-Cu-PGM prospects highlighted at the Eileen
Bore Project. The Copernicus Mine is excluded.

 

Drilling results include (see announcement of 5 October 2023):

o   120m @ 0.73% Cu, 0.29% Ni & 0.86g/t PGM(3E) from 0m (EoH)((EBRC
010))

§ Incl. 16m @ 1.0% Cu, 0.36% Ni & 0.99g/t PGM(3E) from 100m

o   96m @ 0.70% Cu, 0.29% Ni & 0.78g/t PGM(3E) from 24m (EoH) ((EBRC
003))

§ Incl. 10m @ 1.08% Cu, 0.34% Ni & 1.04g/t PGM(3E) from 56m

o   84m @ 0.54% Cu, 0.24% Ni & 0.75g/t PGM(3E) from 36m (EoH) ((EBRC
011))

o   47m @ 0.62% Cu, 0.30% Ni & 0.60g/t PGM(3E) from 3m((AD07))

o   36m @ 0.53% Cu, 0.25% Ni & 0.59g/t PGM(3E) from 40m((EBRC 002))

o   64m @ 0.77% Cu, & 0.30% Ni from 32m (EoH) ((EP09))

o   52m @ 0.74% Cu, & 0.29% Ni from 10m ((EP08))

 

Figure Six | Cross section of drilling at Eileen Bore demonstrating
mineralisation open at depth.

Prior drilling to date (shown in Figure Six) has focused on near surface
mineralisation. Interpretation of this drill hole data is that mineralisation
is controlled by a south-west plunging, chonolith-like body with grades and
thicknesses increasing towards the centre of the intrusion. The down plunge
extent of the body has not been effectively drill tested.

Preparation for drilling at the Company's Cu-Ni-PGM(1) Eileen Bore Project is
underway and set for commencement after the current East Kimberley wet season
ends. The drill programme will target mineralisation extensions near surface
and at depth. The programme will also include infill drilling of known
mineralisation to underpin a maiden JORC (2012) Mineral Resource Estimate
("MRE") for Eileen Bore.

Following the completion of the acquisition of Osprey in late 2023, the
Company continues to assess opportunities for further enhancing the Company's
strategic land position in the highly prospective East Kimberley region. The
Company sees a strong opportunity for development of a potential 'hub and
spoke' strategy utilising Panton and Eileen Bore as potential feed sources for
a central processing hub.

Corporate

The Company announced strategic Board changes in line with the continued
development of the Panton PGM-Ni-Cr Project and overall growth of the Company.
Experienced board executive Mr Patrick Walta was appointed as Executive
Chairman following the Company's 2023 Annual General Meeting.

Patrick is a qualified metallurgist and mineral economist with experience
across both technical and commercial roles within the mining and water
treatment industries.

In 2017 Patrick founded New Century Resources Ltd and became Managing Director
following the successful acquisition of the Century Zinc Mine in Queensland.
Over the proceeding five years Patrick led the growth of the Company though
feasibility, mine restart, commissioning and steady state operations. Through
this process, the Century Mine became the 13th largest zinc producer in the
world. In 2023, New Century was acquired by the multinational PGM-gold
producer Sibanye-Stillwater Ltd.

Mr Justin Tremain stepped down from the position of Non-Executive Chairman,
remaining on the Board as the Senior Independent Non-Executive Director and
former Non-Executive Directors, Allan Mulligan and Rob Mosig, retired to focus
on their other business interests.

 

Financial commentary

The Quarterly Cashflow Report (Appendix 5B) for the period ending 31 December
2023 provides an overview of the Company's financial activities.

The Quarterly Cashflow Report (Appendix 5B) is available at the following
link: http://www.rns-pdf.londonstockexchange.com/rns/4063B_1-2024-1-30.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4063B_1-2024-1-30.pdf)  and
on the Company's website.

The Company held approximately A$607k in cash at the end of the Quarter. This
does not include any proceeds from the underwritten non-renounceable
entitlement issue of A$3.3m (before costs) described below.

Exploration and project development expenditure during the Quarter amounted to
approximately A$580k, plus a A$25k option fee payment for the acquisition of
Osprey. Payments for administration and corporate costs amounted to
approximately A$468k. This included payments to related parties and their
associates of A$169k, comprising Director fees and remuneration (including
superannuation). The Quarter also included a number of one-off payments
related to due diligence and preparation of documentation for the entitlement
issue as described below.

On 15 December 2023, the Company announced an underwritten non-renounceable
entitlement issue to raise gross proceeds of approximately A$3.3 million. The
funds raised will be used for drilling and other exploration activities at the
Company's Eileen Bore Project and to progress the Pre-Feasibility Study for
the Panton Project.

For additional information please refer to the ASX/AIM announcements covered
in this report:

§ 5 January 2024 | Letter to Shareholders and Despatch to Eligible
Shareholders

§ 29 December 2023 | Entitlement Issue Details for Depository Interest
Holders

§ 18 December 2023 | Update | Proposed Issue of Securities - FME

§ 15 December 2023 | Entitlement Issue Prospectus

§ 15 December 2023 | Proposed Issue of Securities - FME

§ 15 December 2023 | Proposed Issue of Securities - FME

§ 15 December 2023 | Underwritten Non-Renounceable Entitlement Issue

§ 14 December 2023 | Application for quotation of securities - FME

§ 13 December 2023 | Trading Halt

§ 7 December 2023 | Investor Webinar

§ 7 December 2023 | Panton Project Scoping Study Presentation

§ 7 December 2023 | Panton PGM-Ni-Chromite Project Scoping Study

§ 5 December 2023 | Trading Halt

§ 28 November 2023 | Cleansing Notice

§ 27 November 2023 | Application for quotation of securities - FME

§ 23 November 2023 | Change of Director's Interest Notice

§ 23 November 2023 | Application for quotation of securities - FME

§ 22 November 2023 | Initial Director's Notice

§ 22 November 2023 | Notification regarding unquoted securities - FME

§ 20 November 2023 | Final Director's Interest Notice x3

§ 20 November 2023 | Results of Meeting

§ 17 November 2023 | Updated - proposed issue of securities - FME

§ 17 November 2023 | Acquisition of Osprey

§ 15 November 2023 | Board Changes and AGM Resolutions Update

§ 6 November 2023 | Variation to Option Agreement

The above announcements are available to view on the Company's website at
future-metals.com.au. The Company confirms that it is not aware of any new
information or data that materially affects the information included in the
relevant original market announcements. The Company confirms that the
information and context in which the Competent Person's findings are presented
have not been materially modified from the original market announcements.

For further information, please contact:

 

 Future Metals NL                           +61 8 9480 0414
 Jardee Kininmonth                          info@future-metals.com.au (mailto:info@future-metals.com.au)
 Strand Hanson Limited (Nominated Adviser)  +44 (0) 207 409 3494
 James Harris/James Bellman
 Panmure Gordon (UK) Limited (UK Broker)    +44 (0)207 886 2500

 Hugh Rich/Rauf Munir
 FlowComms (UK IR/PR)                       +44 (0) 789 167 7441
 Sasha Sethi

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as is forms part of United Kingdom domestic law pursuant to
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.

 

Palladium Metal Equivalents

Metal recoveries used in the palladium equivalent (PdEq) calculations are
shown below:

§ Reef: Palladium 80%, Platinum 80%, Gold 70%, Nickel 45% and Chromite 70%

§  Dunite: Palladium 75%, Platinum 75%, Gold 85% and Nickel 40%

Assumed metal prices used are also shown below:

§ Palladium US$1,500/oz, Platinum US$1,250/oz, Gold US$1,750/oz, Nickel
US$20,000/t and US$175/t for chromite concentrate (40-42% Cr(2)O(3))

Metal equivalents were calculated according to the follow formulae:

§ Reef: PdEq (Palladium Equivalent g/t) = Pd(g/t) + 0.833 x Pt(g/t) + 1.02083
x Au(g/t) + 2.33276 x Ni(%) + 0.07560 x Cr(2)O(3) (%)

§ Dunite: PdEq (Palladium Equivalent g/t) = Pd(g/t) + 0.833 x Pt(g/t) + 1.322
x Au(g/t) + 2.2118 x Ni(%)

 

 

 

Appendix One | Exploration and Mining Permits

Exploration & Mining Permits changes during the Quarter

 

                                                     Interest at beginning of Quarter  Interest at end of Quarter

 Project      Location           Tenement
 Springvale   Western Australia  E80/4753            0%                                100%
 Eileen Bore  Western Australia  E80/4922            0%                                100%
 Eileen Bore  Western Australia  E80/4923            0%                                100%
 Sally Downs  Western Australia  E80/4951            0%                                100%
 Sally Downs  Western Australia  E80/5056            0%                                100%
 Sally Downs  Western Australia  E80/5911 (pending)  0%                                100%

 

Farm-In / Farm Out Agreement changes during the Quarter

 

                                                                      Interest at beginning of Quarter  Interest at end of Quarter

 Joint Venture        Project           Location           Tenement
 Octava Minerals Ltd  Panton North      Western Australia  E80/5455   -                                 -
 Octava Minerals Ltd  Copernicus North  Western Australia  E80/5459   -                                 -

Future Metals may earn up to 70% in the two tenements listed above. Details of
the transaction can be found in the announcement 'Farm-In Agreement Over East
Kimberley Ni-Cu-PGE Prospects' released on 17 January 2023.

Interests in Mining & Exploration Permits & Joint Ventures at 31
December 2023

 

 Project                                   Location           Tenement         Area     Interest at end of Quarter
 Panton PGM-Ni Project                     Western Australia  M80/103 M80/104  8.6km2   100%

                                                                               5.7km2   100%
                                                              M80/105          8.3km2   100%
 Panton North                              Western Australia  E80/5455         8 BL     -
 Palamino (renamed from Copernicus North)  Western Australia  E80/5459         2 BL     -

 

 

Appendix Two | Panton Mineral Resource Estimate (JORC Code 2022)

 

 Category   Mass  Grade                                                                             Contained Metal
            (Mt)  Pd      Pt      Au      PGM(3E) (g/t)  Ni    Cr(2)O(3)  PdEq(1)     Cu    Co      Pd      Pt          Au          PGM(3E) (Koz)     Ni        Cr(2)O(3)  PdEq(1)  Cu     Co

                  (g/t)   (g/t)   (g/t)                  (%)   (%)        (g/t)       (%)   (ppm)   (Koz)   (Koz)       (Koz)                         (kt)      (kt)       (Koz)    (kt)   (kt)

 Upper Reef
 Indicated  3.0   3.3     2.8     0.5     6.5            0.29  15.5       7.9         0.08  217     318     272         46          635               9         472        771      2      0.7
 Inferred   4.9   3.2     2.7     0.4     6.4            0.30  15.6       7.8         0.10  221     506     431         65          1,003             15        761        1,227    5      1.1
 Subtotal   7.9   3.2     2.8     0.4     6.4            0.30  15.6       7.8         0.09  219     824     703         111         1,637             23        1,233      1,998    7      1.7
 Lower Reef
 Indicated  1.4   1.3     1.7     0.1     3.1            0.17  10.7       4.1         0.04  200     59      79          6           143               2    151             186      1      0.3
 Inferred   1.4   1.6     2.1     0.1     3.8            0.19  13.0       4.9         0.05  215     73      95          5           173               3    185             223      1      0.3
 Subtotal   2.8   1.4     1.9     0.1     3.5            0.18  11.8       4.5         0.04  208     132     174         11          316               5    337             409      1      0.6
 Total Reef
 Indicated  4.5   2.6     2.4     0.4     5.4            0.25  14.0       6.7         0.07  211     377     350         51          778               11   623             957      3      0.9
 Inferred   6.3   2.9     2.6     0.3     5.8            0.28  15.0       7.2         0.09  220     579     526         70          1,175             17   946             1,450    5      1.4
 Subtotal   10.8  2.8     2.5     0.4     5.6            0.27  14.6       7.0         0.08  216     956     876         122         1,954             29   1,569           2,407    8      2.3

 High Grade Dunite (Underground, below 300mRL, 1.4g/t PdEq cut-off)
 Indicated  5.9   0.6     0.6     0.2     1.4            0.20  2.2        1.7         0.04  151     120     109         30          259               12   132             334      2      0.9
 Inferred   20.5  0.6     0.6     0.1     1.3            0.21  2.3        1.8         0.04  160     425     373         87          885               43   478             1,154    9      3.3
 Subtotal   26.4  0.6     0.6     0.1     1.3            0.21  2.3        1.8         0.04  158     545     482         118         1,144             54   610             1,488    11     4.2
 Reef + High Grade Dunite
 Indicated  10.4  1.5     1.4     0.2     3.1            0.22  7.3        3.9         0.05  177     497           459         81    1,037             23        755        1,291    5      1.8
 Inferred   26.8  1.2     1.0     0.2     2.4            0.22  5.3        3.0         0.05  174     1,004         899         158   2,061             60        1,424      2,604    14     4.7
 Subtotal   37.2  1.3     1.1     0.2     2.6            0.22  5.9        3.3         0.05  175     1,501         1,358       239   3,098             83        2,179      3,895    19     6.5

 Bulk Dunite (Near surface, above 300mRL, 0.9g/t PdEq cut-off)
 Indicated  30.3  0.4     0.4     0.1     0.9            0.18  1.1        1.3         0.03  144     384           363         103   850               56        337        1,220    9      4.4
 Inferred   25.3  0.3     0.3     0.1     0.7            0.18  1.3        1.1         0.03  140     273           230         61    564               46        329        873      8      3.5
 Subtotal   55.7  0.4     0.3     0.1     0.8            0.18  1.2        1.2         0.03  142     657           593         164   1,414             102       666        2,094    17     7.9

 Total Resource
 Indicated  40.7  0.7     0.6     0.1     1.4            0.19  2.7        1.9         0.04  153     881     822         184         1,887             79   1,092           2,511    15     6.2
 Inferred   52.1  0.8     0.7     0.1     1.6            0.20  3.4        2.1         0.04  157     1,277   1,129       219         2,625             106  1,753           3,478    22     8.2
 Total      92.9  0.7     0.7     0.1     1.5            0.20  3.1        2.0         0.04  155     2,158   1,951       403         4,512             185  2,846           5,989    37     14.4

 

(            1) Refer to the main body of the announcement for
palladium equivalent (PdEq) calculations

(2) No cut-off grade has been applied to reef mineralisation and a cut-off of
0.9g/t PdEq has been applied to the Bulk Dunite mineralisation and 1.4g/t PdEq
cut-off to the High-Grade Dunite mineralisation

 

Appendix Three | Peer Benchmarking References - Study Stage PGM Projects

 

 Project     Company            Study Stage  Release Date    Source
 Gonneville  Chalice            Scoping      29 August 2023  Gonneville Nickel-Copper-PGE Project Scoping Study
                                                             (https://chalicemining.com/wp-content/uploads/2023/08/61165357.pdf)
 Marathon    Generation Mining  Feasibility  31 March 2023   Marathon 2023 Feasibility Study Update
                                                             (https://genmining.com/site/assets/files/3815/2023_updated_feasibility_study.pdf)

 

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