Encounter Resources : Evidence Mounting for Copper Potential at Sandover - NT

ASX Announcement

3 June 2021

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Evidence Mounting for Copper Potential at Sandover - NT

• Additional surface sampling and field reconnaissance completed at Sandover in April 2022 confirmed further areas of surface copper oxide mineralisation
• Historical drill holes (drilled in 1968, 1971 & 1994) reviewed at Alice Springs Core Library
• • Key geological units and processes for the formation of sediment-hosted copper established
  • Nodules of copper sulphide minerals, including bornite, identified in historical drill core providing evidence of high grade mineralisation processes
• Encounter awarded a $100,000 grant by the Northern Territory Geological Survey ("NTGS") to complete a gravity survey at Sandover which is scheduled to commence in the coming weeks
• Sandover has been expanded by 2,195km2 to increase Encounter's portion of the Northern Arunta Pegmatite Province. The potential for lithium and other critical metals will be investigated in conjunction with copper exploration activities.

The directors of Encounter Resources Ltd ("Encounter") are pleased to provide an update on exploration activities at the 100%-owned Sandover project in the Northern Territory.

Commenting on Sandover's emerging copper potential, Managing Director Will Robinson said:

"Evidence of the processes that produce high grade copper mineralisation continue to mount at Sandover.

A field trip by our team in April 2022 confirmed further areas containing copper-bearing shale units. In addition, bornite nodules within a mineralised grey shale horizon were identified in both surface sampling and historical drill core at Sandover.

The shale units containing the outcropping copper at Sandover are only considered to be moderate reductants but have precipitated considerable copper which provides evidence that a highly copper charged fluid has been active at Sandover.

We have also significantly expanded our footprint over the Northern Arunta Pegmatite Province.

A detailed gravity survey is scheduled to commence in the coming weeks to inform the basin wide stratigraphic model for drill targeting. Encounter appreciates the co-funding support from the NTGS."

1cm	1cm

Photo 1 (left) - weathered copper rich nodules (containing malachite after bornite-chalcopyrite) collected from surface at Area 1 (refer Figure 1)

Photo 2 (right) - primary copper rich nodule (containing bornite-chalcopyrite) from historical drillhole (Mt Skinner DDH3 203.3m) located adjacent to Area 4 (refer Figure 1).

Encounter Resources Limited	P [phone]
Suite 2, 1 Alvan St	E [e-mail]
Subiaco WA 6008	www.enrl.com.au

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Background

Sandover is located 170km north of Alice Springs and covers a major structural corridor on the southern margin of the Georgina Basin. Access is excellent with the Stuart Highway and Ghan railway extending through the western margin of the project.

Sampling in October 2021 was conducted in four field areas located up to 6km apart (Figure 1). Each area confirmed the presence of an outcropping red-bed sandstone sequence with multiple narrow but strike extensive grey shale units containing copper oxide mineralisation (malachite). Sampling of copper mineralisation at surface returned assays up to 20.9% Cu and a suite of highly anomalous pathfinder elements (Zn, Ag, As, Bi, Mo and Pb) (refer ASX announcement 16 December 2021).

Copper Exploration Activity

Additional surface sampling and field reconnaissance was completed in April 2022. This program confirmed additional mapped areas containing surface copper oxide mineralisation (see Figure 1, Area 5). The surface mapping also identified small bornite nodules, interpreted to be zones of increased fluid flow after replacement of anhydrite, within the grey shale unit (Photo 1).

Surface samples were also collected from various outcropping stratigraphic horizons for chemical analysis and stratigraphic correlation.

Inspection of historical drill core from Sandover in the Alice Springs core library was completed in April 2022. A number of historical drill holes (drilled in 1968, 1971 and 1994) were reviewed and confirmed key geological units and processes to enable the formation of sediment hosted copper deposits are present. Significantly, narrow zones of copper sulphide minerals, including bornite, were identified in historical drill core (Photo 2).

It is interpreted that the copper rich nodules identified at the surface represent the weathered form of the bornite nodules observed in historical drill core. This provides encouraging evidence that processes capable of forming high grade copper mineralisation are present in the basin.

Furthermore, shale units containing the outcropping copper mineralisation at Sandover are considered to be only moderate reductants yet have precipitated considerable copper. This suggests that a highly copper charged fluid has been active at the project.

Accordingly, exploration activities at Sandover are focused on identifying more reduced units within the basin. There will be a particular emphasis on where these units intersect long-lived basin forming structures which are areas with the potential to host major mineral deposits.

	MGA 94	MGA 94
Hole Name	Zone 53	Zone 53	RL	Dip/azimuth	Type	Total Depth m
	Easting	Northing
CMS1	431070	7540117	600	-90 vertical	Diamond	762
CMS2	436758	7539644	525	-90 vertical	Diamond	535.8
CMS4	425749	7545960	525	-90 vertical	Diamond	300.5
DD94MG01	396968	7573137	525	-90 vertical	Diamond	416.9
DD94MG02	375514	7600330	525	-90 vertical	Diamond	175
MT SKINNER 3	428202	7543140	575	-90 vertical	Diamond	365.7
MT SKINNER 1	428300	7548030	550	-90 vertical	Diamond	30.3
MT SKINNER 2	427960	7548155	550	-90 vertical	Diamond	76.2

Table 1.Historic diamond drillholes at Sandover inspected by Encounter Resources geologists at the Alice Springs core library.

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NTGS Funding

All available geophysical datasets have been compiled, integrated and evaluated by Encounter's geophysical consultant Terra Resources. As a result of this exercise, 1x1km spaced gravity data has been identified as a key dataset to be collected. Encounter has been awarded a $100,000 grant to complete this gravity survey at Sandover under the Northern Territory Geological Survey Geophysics and Drilling Collaborations Program.

Sandover Lithium and Critical Minerals Potential

Sandover sits within the Northern Arunta Pegmatite Province. NTGS interpret that these pegmatites are Lithium-Caesium-Tantalum (LCT) pegmatites similar to the host pegmatites of the lithium deposits at Greenbushes in Western Australia and the Finnis deposit in the NT*. The presence of LCT type pegmatites is further supported at Sandover by two tin-tantalum occurrences in the south-east of the project area which also occur within these pegmatite mineral systems. The region's lithium prospectivity has also been recognised by a number of other companies including Core Lithium Ltd (ASX:CXO) who hold the Anningie and Barrow Creek Lithium Projects in the district.

Sandover has been expanded by 2,195km2 to increase the portion of the Northern Arunta Pegmatite Province controlled by Encounter. The new tenure contains additional mapped pegmatites with lithium potential (Figure 4). The potential for lithium and other critical metals will be investigated in conjunction with copper exploration activities.

Next Steps

The development of a basin wide stratigraphic model is in progress and a NTGS co-funded gravity survey is scheduled to commence in June/July 2022.

Data compilation of historical tin-tantalum exploration will assess the potential for LCT (Lithium- Cesium-Tantalum) pegmatites at Sandover.

* NTGS Report 16, Tin-tantalum pegmatite mineralisation of the Northern Territory (Frater, 2005)

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Figure 1 - Geological map showing cupiferous outcrop, drillhole locations and surface sampling (compiled from company reports and Haines 2004) Source: NTGS Geology and Mineral Resources of the Northern Territory. Special Publication 5. Compiled by Ahmad, M. and Munson, T.J., June 2013.

Areas 1-4 sampled by Encounter in October 2021, Area 5, 6, 7 sampled in April 2022.

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Location of

Areas 1-7

(see Figure 1)

Figure 2 - Location of field mapping and sampling

Figure 3 - Sandover Schematic Cross

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