Heavy Minerals : Port Gregory Maiden JORC Mineral Resource Exceeds Target

ASX Announcement Date: 02 May 2022

PORT GREGORY MAIDEN JORC MINERAL RESOURCE EXCEEDS TARGET

•  Maiden JORC Mineral Resource estimate of 135 Mt @ 4.0% THM

  • o Indicated Mineral Resource of 88 Mt @ 3.8% THM; and

  • o Inferred Mineral Resource of 47 Mt @ 4.5% THM.

•  90% garnet fraction within the global total heavy mineral suite

•  4.9 Mt contained garnet (equivalent to 5 years of global demand)

•  Minor ilmenite and rutile credits

•  96% Valuable Heavy Mineral (VHM) in the THM fraction exceeds all upper limit expectations

•  Significant upside potential to the Mineral Resource with mineralisation open to the north and south within HVY's tenure

•  Majority of Mineral Resource (65%) is in the Indicated JORC category

•  Infill drilling planned to begin in Q3 2022 is aimed at increasing confidence in the deposit's JORC category and adding to the Mineral Resource footprint.

Heavy Minerals Limited (ACN 647 831 833) ("HVY", "Heavy Minerals" or the "Company") is pleased to announce the Maiden Mineral Resource estimate for the Port Gregory Garnet Project of 135 Mt @ 4.0% (THM) at a 2.0% THM cut-off grade. The 90% garnet fraction of the THM exceeded expectations resulting in 4.9 Mt of contained garnet. Significant upside also exists with mineralisation open to the north and south within HVY tenure(Figure1).

Figure 1: Port Gregory Block Model showing THM grade

Executive Director & CEO, Mr. Nic Matich said:

"The HVY board were confident that the Port Gregory Project was highly prospective, however the size and quality of the resource has exceeded all expectations and this positions HVY as the next potential garnet producer in the region. High grade, shallow mineralisation, lends itself to a low-cost mining operation. The Company is firmly of the view that the Port Gregory asset is a world-class deposit".

HEAVY MINERALS LIMITED | ABN: 26 647 831 883

Registered Address: Level 11, London House, 216 St George's Terrace, Perth, Western Australia 6000 | Phone: [phone] | Fax: [phone] Non-Executive Chairman: Adam Schofield | Executive Director & CEO: Nic Matich | Non-Executive Director: Greg Jones | Non-Executive Director: Glenn Simpson

E-mail:[e-mail] | Website:www.heavyminerals.com

Company Secretary: Stephen Brockhurst

Summary of Mineral Resource estimate (1) Classification In Situ In Situ Material THM Garnet (Mt) (Mt) (Mt)THM (%)SL (%)OS Garnet Ilmenite Zircon (%) (%) (%) (%)Rutile (%)

THM Assemblage (2) Anatase Other (%) (%)

JORC Mineral Resource Estimate

The Mineral Resource estimate for Port Gregory is reported in accordance with the JORC Code (2012 edition). Further information about the Port Gregory Mineral Resource is set out in the Summary of Resource Estimate Reporting Criteria section below and includes the information prescribed by ASX Listing Rule 5.9. This information should be read in conjunction with the applicable explanatory information provided for the purposes of Table 1 of the JORC Code, included in Appendices 1 to 3 of this announcement.

The Port Gregory Mineral Resource estimate is reported above a cut-off grade of 2.0% THM and is presented below in Table 1. This table conforms to guidelines set out in the JORC Code (2012).

The Mineral Resource outline for the Port Gregory deposit is presented in Figure 5 and the JORC Classification is presented in Figure 8.

At a cut-off grade of 2.0% THM the Port Gregory deposit comprises a total Mineral Resource of 135 Mt @ 4.0% THM, 10% SLIMES and 10% OS (Over Size) containing 5.4 Mt of THM with an assemblage of 90% garnet, 4% ilmenite, 1% rutile and 0.6% zircon. The JORC categories are specifically stated as:

• ▪ an Indicated Mineral Resource of 88 Mt @ 3.8% THM, 10% SLIMES and 9% OS containing 3.3 Mt of THM with an assemblage of 89% garnet, 4% ilmenite, 2% rutile and 0.6% zircon; and

• ▪ an Inferred Mineral Resource of 47 Mt @ 4.5% THM, 10% SLIMES and 11% OS containing 2.1 Mt of THM with an assemblage of 91% garnet, 4% ilmenite, 1% rutile and 0.5% zircon.

Table 1 Port Gregory - Mineral Resource Estimate

Indicated	88	3.3	3.0	3.8	10	9	89	4	0.6	2	0.4	4
Inferred	47	2.1	1.9	4.5	10	11	91	4	0.5	1	0.2	3
Grand Total	135	5.4	4.9	4.0	10	10	90	4	0.6	1	0.3	4
Notes:

• (1) Mineral Resource reported at a cut-off-grade of 2.0% THM.

• (2) Mineral assemblage is reported as a percentage of in situ THM content.

Upcoming News:

•  May 2022: Metallurgical Testwork results (Inhambane)

•  May 2022: Scoping Study Commencement (Port Gregory)

•  May 2022: DGPR survey at Red Hill prospect

•  June 2022: Metallurgy results (Port Gregory)

•  3rd Quarter 2022: Scoping Study delivery

•  3rd Quarter 2022: Red Hill drilling and 2nd phase Port Gregory drilling

Port Gregory Project - CEO discussion

The Mineral Resource Estimate of 135 Mt @ 4.0% THM containing 4.9 Mt of garnet equates to approximately five years of global garnet demand. A Mineral Resource containing 4.9 MT garnet with an ilmenite/rutile credit is an enviable position for the Company to be in after only eight months of being listed on the ASX.

The assemblage of 90% Garnet, 4% Ilmenite, 1% Rutile and 0.6% Zircon, equates to a 96% VHM fraction which is higher than the Board expected and provides HVY with numerous options with respect to developing the project. With the Mineral Resource estimate now defined, the project moves into the scoping phase, which is where the team will gain a greater understanding of the project's true potential.

In the coming weeks, pit optimisation work will be undertaken by IHC Mining to test the areas of the deposit where mineralised zones could be converted into potential mining inventory with the aim of providing input to a Scoping Study. HVY's future exploration program at Port Gregory will then be driven by the results of the Scoping Study. The Company has the option of conducting infill and extension drilling to increase the JORC confidence of the Mineral Resource and potentially adding further tonnes to the resource inventory. These future activities will be reviewed as potential options, based on results from the Scoping Study and internal strategic discussions to determine which option(s) align with HVY's strategy to rapidly develop the project, whilst simultaneously adding shareholder value.

The project is located on private land with no identified heritage sites1 and no known threatened ecological communities (TEC's). The current landowners are proactive in working with HVY and GMA on land access, exploration, and mining rights. These factors, though not definitive in ensuring a positive outcome for HVY moving to development, are certainly positive indicators for the future.

Zircon, rutile and ilmenite grades improve moving eastward across the resource. This may indicate that there is potential for heavy mineral sand deposits further to the east which appear to have a more varied and traditional mineral sands assemblage. The securing of tenement E70/5934 has proven to be a strategic and prudent addition, as the wide spaced step-out drilling to be undertaken in the second phase of the Port Gregory program will likely extend into this tenement. In preparation for this, land access agreements have been put in place for a significant portion of the tenure (E70/5934) and PoW (Program of Works) permits have been submitted.

The Company's potential is further enhanced by the greenfields discovery at the "Red Hill Prospect" which highlights the opportunity for additional mineral deposits across HVY's extensive tenure holding which will add to HVY's global resource package. Follow up drilling for the prospect in the third quarter of 2022 will test this potential.

1 Schwede, M. 1993. The archaeology of the Geraldton Coastal Region. A Report for the Aboriginal Communities of the Geraldton Coastal Region.

Industrial garnet demand is forecast to outstrip supply in the coming years with a widening deficit forecast from 2024 onwards2(Figure 2)unless additional supply is brought to market. Pricing has responded accordingly with garnet pricing increasing 20% Y.O.Y in the USA, reaching US$325 per tonne (garnet concentrate) in 2021.

Future alluvial almandine garnet produced from the Port Gregory region can not only help fill this supply gap but is also likely to displace inferior hard rock garnet that is less preferred by end users, typically due to its reduced recyclability.

Widening supply deficit

Figure 2: Garnet Supply/Demand Forecast

Key Appointment:

IHC Mining have been engaged as the Study Managers for the Port Gregory Scoping Study and Preliminary Economic Assessment (PEA). IHC Mining are an industry leading Mineral Sands Engineering Consultancy with over 100 years of mineral sands and execution experience. The Study Team selected for the project is led by Engineers that worked directly on the RDG Lucky Bay mine project within the last 2.5 years.

With extensive, in-house experience over a complete suite of services, IHC Mining's capabilities include:

• ▪ Geology;

• ▪ Metallurgical testwork;

• ▪ Mining Engineering and Mine Planning;

• ▪ Engineering;

• ▪ Equipment supply ; and

• ▪ Project delivery, including commissioning.

IHC are expected to deliver an industry leading and robust assessment, thereby maximising the value proposition for HVY for the Port Gregory project. This includes the most practical and economically feasible project development pathway for HVY, thereby delivering the maximum value for shareholders.

2 1TZMI Garnet Market Data (Project 11759) Jan 2021.

Summary of Resource Estimate Reporting Criteria

Regional Geology:

The heavy minerals in the known deposits in Western Australia were ultimately, but indirectly, derived from the weathering of crystalline igneous rocks in the Archean Yilgarn Block. Heavy mineral grains derived from the Yilgarn Block were initially deposited in thick sequences of Mesozoic sediments that filled the Perth Basin. There was some local degree of concentration of heavy minerals in these sediments relative to the primary source areas, in places reaching potential ore grades. For example, the Beenup deposit is thought to be Mesozoic in age. Erosion and reworking of the relatively soft Mesozoic sediments, particularly those parts of the stratigraphic sequence dominated by coarse sandstones and grits, subsequently released the heavy minerals into the strand deposits.

The project area lies in the most northerly part of the Perth Basin, on the western side of the Northampton Block.

The Tamala Limestone, a belt of coastal limestone extends up to 8 km inland. It is composed of eolianite, which accumulated originally as coastal sand dunes in the late Pleistocene. This has developed over a basement of late Cretaceous age Winning Group sediments which can be seen outcropping near Yanganooka Well. Several erosional scarps have been developed on the seaward side of the Tamala Limestone, one of which is equivalent to the strand-line mineralisation to the south. Fossil crescent dunes can also be distinguished on top of the massive limestone area which may be of early Pleistocene age.

Mobile coastal dunes, equivalent to the Safety Bay Sand, are extensively developed and in the northern part transgress over the Tamala Limestone. They are divided into a coastal zone of large mobile longitudinal and crescent dunes, from an inner zone of older, stabilized and more sparsely distributed crescent dunes.

Project Geology:

The local geology is dominated by dunal accumulations of grey to brown to white sand and Limesand. These sediments are thought to be Quaternary in age and overlay Silurian aged Tumblagooda Sandstone which is composed of a Red-bed sequence of sandstone; siltstone; and minor conglomerate. They locally appear to have been deposited in an embayment eroded into the Tumblagooda Sandstone.

The Limesand has been partially indurated with carbonate cementation and sandy limestone is locally developed. The older the formation the more induration appears to be developed.

Drilling Techniques:

Aircore (AC) drilling was used to obtain samples for analysis with a total of 187 AC holes for 5,653.5 metres drilled to an average depth of 30 m. Three companies were ultimately engaged to conduct the program with the bulk of the work undertaken by Bostech Drilling (Figure 4) with their Truck mounted Drillboss 200 AC rig.

AC drill sample recovery is monitored by reviewing the sample mass of the total weight of the 1.0, 1.5 or 2.0 m interval weighed both on site as a wet sample and at the laboratory as a dried sample. The entire sample passes through the on-board rotary splitter and the sample collected in a pre-numbered calico bag. The bulk reject is not collected and is shovelled back down the hole upon completion

The drilling program was undertaken in dry conditions with holes drilled vertically and spaced at 100 m across strike and 500 m along, with 10 lines capturing the footprint of the defined Mineral Resource. The spacing / density of the holes is deemed to adequately define the mineralisation in the Mineral Resource estimate.

Sampling Techniques and Sample Analysis Methodology:

The aircore drill samples have an average range between 6 kg and 9 kg and were split using the rig based rotary splitter to between 1.5kg and - 2.5 kg. The split samples were "panned" and visually estimated for THM on site.