Desert Metals : High Value Rare Earth Elements at Innouendy

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ASX RELEASE 23 MAY 2022

High-Value Rare Earth Element Intercepts at Innouendy

Highlights

• Samples from reconnaissance aircore drilling at the Innouendy Project have returned significant Rare Earth Element (REE) intercepts close to surface within the lateritic and saprolitic clay layers.
• A total of 16 samples, 15 4-metre composite samples, and one 1-metre sample were re-submitted for analysis of the full suite of REEs following out-of-range cerium (Ce) (>500 ppm) in the initial analyses.
• Thirteen of the 16 samples re-submitted returned Total Rare Earth Oxide (TREO1) values higher than 1,000 ppm, with six samples higher than 2,000 ppm:
• • 16m intersection of mineralisation in hole INAC027, including:
  • • 4m @ 4,376 ppm TREO from 20-24 m (1,349 ppm MREO2)
    • 4m @ 2,199 ppm TREO from 24-28 m (457 ppm MREO)
    • 4m sample from 28-32m still pending re-assays (high cerium noted in initial assay3)
    • 4m @ 2,060 ppm TREO from 32-36 m (417 ppm MREO)
  • 4m @ 2,786 ppm TREO from 16 m (676 ppm MREO) - Hole INAC025
  • 4m @ 2,428 ppm TREO from 36 m (301 ppm MREO) - Hole INAC004
  • 4m @ 2,185 ppm TREO from 32 m (484 ppm MREO) - Hole INAC005
  • 4m @ 1,770 ppm TREO from 28 m (381 ppm MREO) - Hole INAC033
• The above results are from isolated samples that were sent for re-analysis. Adjacent 4-metre samples have now been re-submitted for analyses, the results of which are pending.
• These encouraging intersections have been recorded over approximately four kilometres (Figure
• 1. highlighting the potential scale of the system.
• Hole INAC027, which intercepted 4m @ 4,376 ppm TREO, shows that mineralisation is 'open' to the north, south, and west.
• An extensive drill program is being planned to follow up on these significant results to define the extent of the mineralisation.

1. TREO (Total Rare Earth Oxide) = La2O3 + CeO2 + Pr6O11 + Nd2O3 + Sm2O3 + Eu2O3 + Gd2O3 + Tb4O7 + Dy2O3 + Ho2O3 + Er2O3 + Tm2O3 + Yb2O3 + Y2O3 + Lu2O3.
2. MREO (Magnetic Rare Earth Oxide) = Pr6O11 + Nd2O3 + Sm2O3 + Gd2O3 + Tb4O7 + Dy2O3.
3. Initial Exploration Results extracted from the report entitled "Significant Shallow Nickel Results from Aircore Drilling at the Innouendy Project" created on 19 April 2022 and available to view onhttps://www.asx.com.au/asxpdf/20220419/pdf/4583b04dqg86tf.pdf. Competent Person: Rob Stuart. The company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

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ASX RELEASE 23 MAY 2022

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Figure 1. Collar locations of holes from which samples were re-submitted for full suite REE analysis. The background image shows RTP magnetics.

Rare Earth Elements

Initial results from the recent 49-hole aircore drilling at Innouendy returned out-of-range REE cerium results (>500 ppm) in lateritic clays from 14 samples across ten holes4. Sixteen samples across those ten holes were resubmitted for the full suite of REE analysis to determine the presence of any high-value REEs. The Narryer Terrane has been identified by other explorers as being prospective for ionic adsorption clay REE deposits (e.g. Krakatoa Resources Ltd; Mt Clere project. ASX:KTA).

4 Initial Exploration Results extracted from the report entitled "Significant Shallow Nickel Results from Aircore Drilling at the Innouendy Project" created on 19 April 2022 and available to view on https://www.asx.com.au/asxpdf/20220419/pdf/4583b04dqg86tf.pdf. Competent Person: Rob

Stuart. The company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

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ASX RELEASE 23 MAY 2022

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Samples from all ten holes that were re-submitted returned TREO values above 996 ppm. The most outstanding result was from hole INAC027, which returned 4m @ 4,376 ppm TREO from 20 m (Figure 1, Table

1. Composite samples above and below this intercept have been submitted to determine the full downhole thickness of mineralisation. The true thickness of mineralisation is unknown at this stage. INAC027 is the most westerly hole on the northern line of current drilling (Figure 1). Mineralisation is open to the north, south, and west.

Holes INAC033, INAC035, and INAC037, located at the recently identified Cattle Yard Nickel prospect approximately 4 km to the southwest of the Innouendy prospect, also returned highly anomalous REEs (Figure 1, Table 1).

Eleven of the 16 samples reported here have now been submitted for analysis by weak-acid digest to determine the proportion of easily recoverable REEs associated with ionic adsorption clay mineralisation. Adjacent samples have now been re-submitted for full-suite REE analysis, and an extensive follow-up drilling program is being planned to define the full extent of REE mineralisation.

Desert Metals Managing Director, Rob Stuart, commented:

"The aircore program at Innouendy was designed to follow up on encouraging soil anomalies and EM data that may indicate the presence of Ni-Cu-PGE intrusives. Several encouraging nickel occurrences were detected. While we were aware that other companies were actively exploring for REEs on neighbouring licenses and knew there was a possibility of intersecting REE mineralisation, the drill spacing and collar locations of our recent program were not designed to specifically test for it. The Company is extremely encouraged by the grades and intercept widths of REEs at Innouendy and by how well these compare with similar announcements made recently by other companies. The possible extent of REE mineralisation makes this an exciting opportunity to execute a drill program to define the system further. This will also assist in defining the extent of Ni and PGE mineralisation on the Innouendy project."

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ASX RELEASE 23 MAY 2022

Authorised by the Board of Desert Metals Limited.

Rob Stuart	Tony Worth
Managing Director	Technical Director

Competent Person Statement

The information in this announcement that relates to Exploration Results is based on information compiled by Mr René Sterk, a Competent Person who is a Fellow and Chartered Professional of the Australasian Institute of Mining and Metallurgy. Mr Sterk is employed by consulting firm RSC and confirms there is no potential for a conflict of interest in acting as the Competent Person. Mr Sterk has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code). Mr Sterk consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Table 1: Rare Earth Oxide (ppm) results of all re-analysed samples.

	Hole_ID	From		To	TREO	TREO-Ce	LREO	HREO		CREO		MREO	CeO2		Dy2 O3		Er2O3	Eu2O3	Gd2 O3	Ho2O3	La2O3	Lu2O3	Nd2 O3	Pr6 O	11	Sm2 O3	Tb4 O7	Tm2O3	Y2O3	Yb2O3
only	INAC004	36		40	2427.74	787.83	2371.82	55.93	231.09	301.27	1639.91		6.43	2.54	2.89	11.87	1.02	450.36	0.23	193.04	66.94	21.57	1.42	0.33	27.30	1.89
INAC004	40		44	1249.53	530.92	1188.96	60.57	189.03	226.92	718.61			6.12	2.96	2.56	10.71	1.09	261.53	0.27	145.80	45.67	17.34	1.28	0.35	33.27	1.96
INAC005	24		28	167.90	101.32	154.10	13.80	30.27	34.37	66.58			1.30	0.88	0.47	1.82	0.25	56.53	0.18	20.88	7.31	2.81	0.26	0.25	7.37	1.01
INAC005	28		32	636.99	345.86	612.01	24.98	98.89	127.81	291.13			2.59	1.35	1.30	4.33	0.49	200.55	0.23	82.00	29.85	8.49	0.55	0.25	12.45	1.43
INAC005	32		36	2184.90	1035.12	2110.38	74.51	371.12	484.31	1149.78		8.45	3.33	5.36	17.58	1.37	504.30	0.28	321.93	97.15	37.22	1.99	0.45	33.40	2.31
INAC008	12		16	1407.24	610.01	1358.51	48.73	208.10	270.07	797.23			5.44	2.40	3.02	10.56	0.90	308.45	0.24	175.54	56.19	21.10	1.24	0.37	22.86	1.71
INAC024	0		4	1105.04	178.82	1040.36	64.67	90.52	86.36	926.21			7.93	4.75	1.60	7.68	1.58	44.80	0.66	46.19	13.59	9.57	1.40	0.77	33.40	4.92
INAC025	16		20	2785.65	1861.89	2684.63	101.02	517.49	676.19	923.76			9.06	4.41	4.01	21.78	1.64	1117.68	0.56	449.06	152.85	41.28	2.15	0.57	53.21	3.63
INAC027	20		24	4376.04	3311.01	3929.29	446.75	1146.78	1349.46	1065.02		48.32	19.73	22.87	86.10	8.20	1659.51	1.80	831.64	263.41	109.70	10.29	2.24	233.66	13.55
use	INAC027	24		28	2198.70	1293.37	1977.27	221.43	448.01	456.54	905.33			18.13	10.54	5.52	29.16	3.79	666.15	1.18	279.94	92.92	32.93	3.46	1.32	140.96	7.36
INAC027	32		36	2060.24	1157.37	1904.18	156.06	377.99	417.30	902.87			13.49	7.08	4.92	22.71	2.55	622.76	0.81	261.27	87.24	30.03	2.56	0.89	95.75	5.31
INAC037	32		36	1017.31	184.45	989.16	28.15	72.17	88.45	832.86			3.80	1.96	0.81	4.54	0.64	76.94	0.31	54.12	17.10	8.15	0.74	0.39	12.70	2.27
	INAC036	36		40	996.02	247.92	971.10	24.92	83.43	103.32	748.10			2.75	1.34	0.66	4.23	0.47	127.25	0.18	66.48	21.39	7.89	0.58	0.33	12.95	1.42
	INAC035	36		37	1959.12	1386.69	1808.90	150.22	448.65	559.22	572.43			19.86	8.60	5.50	28.70	3.33	729.48	1.00	348.75	113.70	44.53	3.68	1.18	70.86	7.52
	INAC033	24		28	1440.71	686.47	1319.07	121.64	262.12	288.09	754.24			14.12	6.60	4.89	17.40	2.43	310.79	0.65	173.79	54.74	25.51	2.53	0.89	66.80	5.34
	INAC033	28		33	1770.83	897.44	1622.65	148.18	344.65	380.61	873.39			15.78	7.90	5.80	22.01	2.85	409.31	0.74	236.78	71.17	32.00	2.86	0.95	83.43	5.85
personal					TREO (Total Rare Earth Oxide) = La2O3 + CeO2 + Pr6O11 + Nd2O3 + Sm2O3 + Eu2O3 + Gd2O3 + Tb4O7 + Dy2O3 + Ho2O3 + Er2O3 + Tm2O3 + Yb2O3 + Y2O3 + Lu2O3.
				• TREO-Ce = TREO - CeO2
	light		• LREO (Light Rare Earth Oxide) = La2O3 + CeO2 + Pr6O11 + Nd2O3 + Sm2O3
		heavy		• HREO (Heavy Rare Earth Oxide) = Eu2O3 + Gd2O3 + Tb4O7 + Dy2O3 + Ho2O3 + Er2O3 + Tm2O3 + Yb2O3 + Y2O3 + Lu2O3
		Critical		• CREO (Critical Rare Earth Oxide) = Nd2O3 + Eu2O3 + Tb4O7 + Dy2O3 + Y2O3
		Magnetic	• MREO (Magnetic Rare Earth Oxide) = Pr6 O	11		+ Nd	2 O	3	+ Sm2 O3	+ Gd	2 O	3	+ Tb4 O	7	+ Dy2 O3 .
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