CZR Resources : Significant Growth in Robe Mesa JORC Resource

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CZR Resources Ltd

ABN: 91 112 866 869

Level 3, 47 Havelock St

West Perth Western Australia 6005

PO Box 16

Perth WA 6872

Phone: [phone]

Website: www.czrresources.com

The Company Announcements Office, ASX Limited

2 June, 2022

Robe Mesa Iron Ore Project, Pilbara

CZR set for significant growth as Mineral Resource increases by 52%

Outstanding result puts CZR on track to grow mine life and production rate.

Robe Mesa adjoins Rio Tinto's Robe Valley Project

Highlights

• Robe Mesa JORC Mineral Resource has increased from 24.7Mt to 37.5Mt at 56%
  Fe (62.6% Fe calcined) (55% Fe cut-off grade)
• This represents a 52% increase in tonnes while maintaining the same iron ore grade
• This new Mineral Resource is consistent with CZR's objective to increase its production target from 2Mtpa to 3Mtpa in the Definitive Feasibility Study (DFS)

CZR Resources Limited (ASX: CZR) is pleased to announce significant progress in its strategy to grow the target production rate and mine life at its Robe Mesa deposit in WA's Pilbara, with a 52 per cent increase in the JORC Resource to 37.5Mt at 56% Fe.

The expanded Mineral Resource reflects the strong assay results reported in the March Quarter, which revealed the presence of extensive direct shipping iron ore (DSO) outside the Prefeasibility Study (PFS) pit designs.

The new estimate is consistent with CZR's strategy to increase the forecast production rate while maintaining similar iron ore specifications to its peers and Rio Tinto's adjoining Robe Valley operations.

CZR Managing Director Stefan Murphy said the new Mineral Resource was a pivotal step in the Company's growth strategy.

"Our objective at Robe Mesa is to grow the production rate to 3Mtpa and increase mine life," Mr Murphy said. "This in turn is aimed at increasing free cashflow generation and overall financial returns.

"These results will feed into the mine planning and design work now underway. At the same time, we are updating our cost model through the DFS, targeting lower transport costs from export locations closer to the Robe Mesa deposit than were considered in the PFS."

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Fig 1. Robe Mesa Resource area with drill hole collars

Cut-Off	Category	Tonnes	Fe	SiO2	Al2O3	LOI	P	S	Feca
Grade		Mt	%	%	%	%	%	%	%
55% Fe	Indicated	25.2	55.9	6.0	2.8	10.6	0.04	0.02	62.6
	Inferred	12.3	56.0	5.9	2.8	10.6	0.04	0.02	62.7
	Total	37.5	56.0	6.0	2.8	10.6	0.04	0.02	62.6
50% Fe	Indicated	47.4	54.5	7.4	3.2	10.7	0.04	0.02	61.1
	Inferred	22.2	54.5	7.5	3.2	10.6	0.04	0.02	60.9
	Total	69.6	54.5	7.5	3.2	10.7	0.04	0.02	61.0
Table 1. May 2022 updated Robe Mesa Mineral Resource
Cut-Off	Category	Tonnes	Fe	SiO2	Al2O3	LOI	P	S	Feca
Grade		Mt	%	%	%	%	%	%	%
55% Fe	Indicated	19.5	56.0	5.9	2.7	10.7	0.04	0.02	62.7
	Inferred	5.2	56.0	5.8	2.8	10.7	0.05	0.02	62.7
	Total	24.7	56.0	5.9	2.7	10.7	0.04	0.02	62.7
50% Fe	Indicated	65.7	53.8	8.3	3.4	10.6	0.04	0.02	60.2
	Inferred	18.8	53.8	8.2	3.4	10.7	0.05	0.02	60.3
	Total	84.5	53.8	8.3	3.4	10.6	0.04	0.02	60.2

Table 2. Previous January 2016 Robe Mesa Mineral Resource for Comparison purposes (CZR release to ASX; 8 February 2016)

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The Robe Mesa deposit sits within CZR's Yarraloola Iron Ore Project, located 120km southwest of Karratha. The deposit strike length is 1.3km and is bounded to the south by the tenement boundary with Rio Tinto's Mesa F deposit but remains open to the north on CZR tenure.

The deposit represents the track of a Tertiary-aged channel from the Robe River into older rocks of the Ashburton formation that have since eroded. Drilling has identified two intervals of flat-lying pisolitic iron- stone sediments that are each up to 25m thick and separated by up to 20m of shaley material.

CZR geologists provided mineralisation and geological wireframes to Snowden Optiro, with separate high and low grade mineralisation domains. The lower-grade domain was defined by iron grades exceeding 50% and the higher-grade domain captures iron grades that largely exceed 53% and are associated with silica (SiO2) grades less than 10%. The parent block dimensions are 50m x 50m x 5m, with sub-blocking to 6.25m x 6.25m x 1.25m at domain boundaries.

No downhole compositing process was required as all samples were collected at 1m increments and this length was considered appropriate for the modelling process. Iron (Fe), silica (SiO2), alumina (Al2O3), loss on ignition (LOI), phosphorous (P) and sulphur (S) grade estimation into parent blocks was carried out using ordinary kriging with hard boundaries between mineralised domains and against waste/background domains.

Three sample search passes, with increasing search distances, were employed to estimate grades in a block model representing the geometry of the deposit. Snowden Optiro validated the grade estimates by statistical analysis and visual comparison to the informing samples. All elements compared extremely well for all the mineralised domains.

The Robe Mesa Mineral Resource estimate has been classified as a combination of Indicated and Inferred Mineral Resources in accordance with the JORC code (2012) reporting guidelines. The Mineral Resource has been classified based on confidence in the geological and grade continuity, geological modelling, demonstrated grade continuity and the quality of survey control. A contributing factor is the absence of density measurements. No Measured Mineral Resource has been defined.

This classification is supported by a preliminary pit optimisation analysis which showed that all the upper channel and the majority of the lower channel satisfies reasonable prospects of eventual economic extraction.

Table 1 presents the updated Mineral Resource (May 2022) and Table 2 the Mineral Resource reported in January 2016.

An additional 184 holes have been drilled into Robe Mesa since 2016 and a modified approach has been applied to define the mineralisation domains for the May 2022 estimation.

The modified methodology was aimed at improving the delineation of the higher-grade mineralisation. The new sample data and modified domain methodology has resulted in a 52% increase in the tonnage above a 55% Fe cut-off while the reported Fe grade has remained the same. Reporting above a 50% Fe cut-off resulted in an 18% reduction in the tonnage and an associated increase in Fe grade from 53.8% to 54.5% compared to the 2016 case, primarily due to improved grade modelling, which has excluded low-grade mineralisation that was incorporated in the 2016 Resource estimate.

Indicated Mineral Resources are defined by contiguous zones where the nominal drillhole density is 50m by 50m. Areas of the lower channel where the drilling is sparce have been assigned an Inferred classification (Figure 2). In order to maximise the Ore Reserve tonnes, the Inferred Resource within the conceptual pit shell, in particular the south of the deposit, need to be drilled on a 50m x 50m grid to improve confidence levels to the Indicated Resource category (refer to Appendix A).

CZR has diamond and RC drill rigs scheduled to commence drilling in early June. The diamond drilling will collect metallurgical core samples and facilitate density measurements, while the RC drill rig will drill the southern Inferred Resource to improve the confidence level to Indicated Resource, allowing conversion to Ore Reserves.

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Fig 2. Plan view showing the classification of the mineralisation. Upper channel - left and lower channel - right (Indicated Resource - red, Inferred Resource - green).

Next Steps

Following recent unseasonal heavy rainfall in the Pilbara, site activities are due to resume in the next two weeks, with diamond and RC drilling. The diamond drilling will support CZR's metallurgical program and generate bulk product samples for customer review and acceptance. RC drilling will focus on infill and extensional drilling, converting Inferred to Indicated Resource, critical for reporting Ore Reserves.

DFS activities are also ramping up, with heritage and environmental surveys set to continue. Engineering and logistics studies are underway with more detailed capital and operating costs starting to feed into the DFS model.

Lower CID

Lower CID

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Project Background

CZR's 85%-owned Robe Mesa deposit sits within the Robe Valley Channel Iron Deposits (Robe Valley CID). The Robe River JV (Rio Tinto 53%, Mitsui 33%, Nippon Steel 14%) has been mining Robe Valley CID since the 1970s and has current mining operations at Mesa A, Warramboo and Mesa J, with rail linking to export facilities at Cape Lambert.

Fig 3. CZR's Yarraloola project and Robe Mesa deposit showing local infrastructure and iron ore deposits. Insert map showing regional infrastructure of the West Pilbara, relative to the Robe Mesa deposit

This announcement is authorised for release to the market by the Board of Directors of CZR Resources Limited.

Stefan Murphy	Media
Managing Director	Paul Armstrong
CZR Resources Ltd	Read Corporate
[phone]	[phone]

CZR Resources Ltd

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