Eclipse Metals : Quarterly Activities and Cash Flow Report

29 July 2021

Quarterly Activities Report and Appendix 5B

For the Quarter ending 30 June 2021

IVITTUUT PROJECT- GREENLAND

COMMENCING EXPLORATION ACTIVITIES AT THE WORLD'S LARGEST CRYOLITE MINE WITH REE POTENTIAL

Eclipse acquired mineral exploration licence, MEL2007-45, in Greenland in January 2021.

The project area hosts the historic Ivittuut cryolite mine and undeveloped mineral resources, including a large REE-bearing carbonatite deposit. Over 120 years between 1865 and 1985, the Ivittuut mine produced

3.8 million tonnes of high-grade cryolite, for use in the aluminium industry, from the world's largest known minable resource of naturally occurring cryolite.

During the quarter, Eclipse received confirmation from the Government of Greenland of a four-year extension to its Ivittuut Project mineral exploration licence, MEL2007-45, to 31 December 2024 and heavily reduced minimum expenditure commitments for the first year of tenure.

The changes follow Greenland's Minister for Mineral Resources, Naaja Nathanielsen, signing addendum No. 6 to the licence document granted to Eclipse, providing the updated conditions.

Subsequent to quarter end, on 7 July 2021, Eclipse announced it had received approval for an initial fieldwork programme at Ivittuut. Approval to commence on 1 August 2021 has now been granted following receipt of formal advice from the Greenland Mineral Licence and Safety Authority. This approval will enable Eclipse Metals to assess access, ground conditions and confirmation of geological features at Ivittuut.

Eclipse's approved programme of work at Ivittuut will include field assessment and general inspection and familiarisation by the new field team, sampling of the existing mullock heaps and sampling of geological bulk intrusions. This appraisal will pave the way for further testwork to facilitate calculation of a JORC- compliant mineral resource estimate and project feasibility study.

An initial sampling program will include collection of representative samples from the Ivittuut mine tailings and low-grade waste dumps and the Gronnedal-Ika carbonatite.

ECLIPSE METALS LTD

Level 3, 1060 Hay Street, West Perth WA 6005

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ECLIPSE METALS LTD (ASX:EPM)

Quarterly Report to 30 June 2021

Figure 1: Ivittuut Project Location Map - MEL 2007- 45

NORTHERN TERRITORY- NGALIA BASIN URANIUM PROSPECTS (Refer map)

The Ngalia Basin is located approximately 300km west-northwest from Alice Springs and is considered highly prospective for sandstone roll-front and paleochannel style uranium mineralisation.

Currently, the company holds approx. 274 km2 of granted tenure (EL24808 & EL32080) with another 7,280 km2 exploration licence applications (ELA's 24623, 31499-31502 & ELA's 32077-32079 & ELA 26487) within the Ngalia Basin.

The Ngalia Basin notably hosts the following deposits:

1. Bigrlyi Deposit (inferred and indicated resources of 9,570t of U308 at 1,283 ppm and 8,930t of V2O3 averaging 1197 ppm at 500 ppm U308 cut-off);
2. Capper Deposit (Inferred Resource 3,200t of U3O8, averaging 145 ppm U at 100ppm cut-off); and
3. Napperby Project (inferred resource of 3,643t of U308 at 382 ppm U at and 2,251t of V2O3 grading 236 ppm at 200 ppm U308 cut-off).

Eclipse Metals is seeking drilling rigs to conduct initial reconnaissance drilling in EL24808 (Cusack's Bore) and EL32080 (Ngalia North), in the northern part of Ngalia Basin, targeting potentially uranium/vanadium bearing paleochannels indicated from its 2019 geophysical gravity survey over EL24808. Paleochannels from Cusack's Bore appear to extend south into Ngalia North, which will be verified with further gravity or seismic surveys prior to drilling.

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ECLIPSE METALS LTD (ASX:EPM)

Quarterly Report to 30 June 2021

Figure 2: Eclipse Metals Ngalia Exploration Licence Location Map showing various U Resources

and Prospects

During the quarter Eclipse announced its ongoing evaluation and desktop review of exploration within ELA31051 had identified shallow uranium-vanadium-strontium mineralisation in RAB drilling results from the Mt Wedge Station and Rabbit Bore areas.

Interpretation of data from a previous airborne geophysical survey highlighted several untested high-priority drill targets with geophysical signatures similar to other uranium deposits in the prospective Ngalia Basin. Mineralised envelopes of uranium-vanadium-strontium results include 0.5m @ 960ppm U and 570ppm Sr (strontium) from 1m and 1.0m @ 110ppm V and 4.8% Sr from 2m.

Mineralised envelopes of uranium-vanadium-strontium vary from 1m to 3m thick. Best intersections include:

• Drill Hole NW17 - 1.5m @ 110 ppm V and 4.14% Sr from 8.5m
• Drill Hole NW24 - 1m @ 1.93% Sr from 2.5m
• Drill Hole NW34 - 1m @ 120 ppm V and 4.80% Sr from 2m
• Drill Hole NW62 - 1m @ 230 ppm U and 0.23% Sr from 4m
• Drill Hole NW99 - 1m @ 110 ppm U and 0.25% Sr from 2m
• Drill Hole NW103 - 1m @ 200 ppm U and 0.11% Sr from 1m
• Drill Hole NW112 - 1m @ 310 ppm U and 0.11% Sr from 1m
• Drill Hole AK6 - 0.5m @ 960 ppm U and 570 ppm Sr from 1m
• Drill Hole AK8 - Surface sample 0.13% U and 0.54% Sr

These highly anomalous near-surface historical exploration drilling results indicate excellent potential for ELA31501 to host uranium-vanadium and strontium mineralisation. This tenement application area shows all the geological hallmarks for discovery of blind mineralisation. The size of the untested mineralised zone is very extensive with excellent potential to delineate further mineralisation through shallow drilling.

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ECLIPSE METALS LTD (ASX:EPM)

Quarterly Report to 30 June 2021

ELA31501 tenement is located about 300km north-west of Alice Springs in the Northern Territory. Currently, Eclipse Metals holds two granted exploration licences and eight exploration licence applications in the Ngalia Basin, with a combined area of approx. 7,550km2 situated within this extensive uranium mineralised region. To the north, roll-front uranium mineralisation at Bigrlyi occurs in Devonian aged sandstones of the Ngalia Basin.

ELA31501 has an area of approx. 790km2 proximal to Energy Metals Ltd's (ASX: EME) Cappers Uranium deposit (3,200t @ 145 ppm U) about 3.7km from the eastern boundary of the exploration licence and Malawiri Uranium deposit about 6.6km north-east from ELA31501 (Figure 2).

All historical data for the Project sourced in open file reports from the Northern Territory Geological Survey (NTGS) open file portal was digitised and geological maps, assay data and cross sections from Uranerz Australia Pty Ltd were evaluated.

Eclipse reviewed and digitised historic data, comprising paper cross-sections and plans containing both lithological and analytical data, to form the significant drill hole location map. This review indicated the data are reliable and methods used were appropriate to the industry standards of that time.

Eclipse recorded data from 149 RAB historical drill holes for 1,243m of drilling (refer Appendix B, 7 June ASX Announcement). Analytical data associated with each hole was digitally captured to form a database. The data was derived from laboratory analytical reports contained within 172 pages of NTGS Reports CR1980/0133 and CR1981/0173 and verified with historic cross sections and plans.

Eclipse is planning further work on re-interpretation of airborne radiometric data to delineate the source of the anomalies and is progressing with negotiations through the Central Land Council to facilitate an exploration agreement with the Traditional Owners to commence exploration within the licenced area ELA31501.

The company has reviewed the reprocessing details and re-interpretation of all available geophysical data, targeting particularly radiometric anomalies to complete further RAB drilling of the strongly mineralised zone and infill drilling of the western and central portion of the Exploration Licence area.

NGALIA BASIN BASE METAL PROSPECTS (Refer map)

In April, Eclipse announced it had identified very encouraging historical diamond drilling results in an ongoing evaluation and desktop review of exploration on its ELA26487 Yuendi exploration licence application area (in the name of its wholly owned subsidiary Whitvista Pty Ltd). This ELA is one of the Company's Ngalia base-metal prospects in the Northern Territory within the Aileron Province of the Arunta Block.

Historical drilling results demonstrated presence of significant wide copper-zinc-silver mineralisation within the Mt Hardy and Yuendumu areas of the Arunta Complex.

Best results included:

• 11.6m @ 0.43% Cu, 0.3m @ 10.20% Cu, 27g/t Ag (DDH1);
• 3.0m @ 2,288g/t Ag (DDH3)
• 3.0m @ 1,118g/t Ag (DDH3); and
• 38.1m @ 0.14% Zn (DDH1).

Eclipse Metals believes this ELA area has the potential to host significant base metal and silver mineralisation. The Aileron Province has been subject to relatively limited historical mining and is under-

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ECLIPSE METALS LTD (ASX:EPM)

Quarterly Report to 30 June 2021

explored compared with other Proterozoic orogenic regions. The province has a high base metal and gold endowment.

Strong base metal and silver mineralisation results reported in historical drilling records indicate excellent potential to host high-grade and broad zones of mineralisation within ELA26487. Extensive visible copper mineralisation (consisting of malachite, azurite, chrysocolla) in historically mined prospects runs over several kilometres. The Rock Hill mineralised zones all remain untested by modern day exploration techniques. The only exploration work conducted over the Rock Hill Copper Mineral Field was completed by the Northern Territory Geological Survey in 1970 - more than 50 years ago.

ELA26487 is ~300km north-west of Alice Springs in the Northern Territory. The Rock Hill Project tenement has an area of approximately 1,017km2 situated 6.5km north of the Yuendumu Indigenous Community settlement.

The Rock Hill prospects lie approx. 20km southeast from the Mt Hardy Copper field held by Todd River Resources Ltd, which has yielded a JORC Resource of 2.6 Mt @ 6.7% Zn, 0.9% Cu, 1.5% Pb, 35 g/t Ag.

EPM's projects within the Ngalia basin include two granted exploration licences (ELs) and eight EL applications with an area of approx. 7,000km2. The Company's portfolio of strategic tenements within the basin covers parts of the Ngalia Basin and parts of the surrounding Arunta Block, where ELA 26487 is located (Figure 2).

Eclipse has reviewed data from 912m of drilling in eight historical diamond holes. Analytical data associated with each hole has been digitally captured to form a database.

Data was derived from laboratory analytical reports contained in 17 pages in NTGS Report CR1970/001 and verified with historic cross sections and plans. See ASX Announcement 20 April 2021 for full details.

Eclipse is currently communicating with the Central Land Council to commence negotiation with Traditional Owners for exploration and mining rights over ELA26487.

Subject to approval from the Traditional Owners, Eclipse plans to undertake an airborne EM survey similar to the exploration methods used in the delineation of resources within the Mt Hardy copper field. This will be followed by further RC drilling in strongly mineralised zones and further infill diamond drilling within the western and central portion of the Exploration Licence area.

Reconnaissance exploration will include the Mt Hardy Prospect No.6 (polymetallic Cu-Pb-Zn-Ag mineralised vein) in the north-western portion of ELA26487. No exploration is known to have been conducted over this prospect area.

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