Metals Australia : Acquires Key Battery Metals Projects

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ASX Announcement
16 June 2022	ASX:MLS

Metals Australia to Acquire Key Battery Metals and Gold Projects

• tenements with multiple nickel, copper and gold targets in Tier 1 locations

• Sale agreement executed to purchase 80% of Payne Gully Gold Pty Ltd which holds a suite of highly prospective nickel, gold and copper-gold tenements in Western Australia and the Northern Territory, including:
• 1. The Warrambie Project located between Sabre Resources' Sherlock Bay nickel sulphide deposit1 and the Andover massive nickel sulphide discovery2 in Western Australia's Pilbara region. Warrambie is highly prospective for mafic intrusive nickel-copper-cobalt-PGE sulphide mineralisation.
  2. The Murchison Project, including five tenements along strike from major gold deposits including the >5Moz Big Bell3 and the >3Moz Mt Gibson mine4 in Western Australia's Murchison Province. The Murchison Project tenements are highly prospective for gold, Ni- Cu-Co-PGE and lithium mineralisation.
  3. The Tennant Creek Project in the Northern Territory which includes three tenements along strike from Warrego high-gradecopper-gold deposit5 and a tenement southeast of Tennant Creek along strike from Tennant Minerals (ASX:TMS) Bluebird copper-gold discovery9. All tenements are considered highly prospective for iron-oxide-copper-gold (IOCG) deposits.
• The acquisition of Payne Gully will enhance the Company's portfolio of battery metals and gold projects with multiple targets in Tier 1 jurisdictions - Western Australia and Northern Territory.

Metals Australia Chairman, Mike Scivolo, said:

"The Company has taken advantage of an outstanding opportunity to acquire a suite of highly prospective battery metals and gold projects with multiple drill targets near major deposits in Tier One jurisdictions.

"These new projects give Metals Australia the opportunity to build on its exploration success over the past few months. This includes at our Manindi Project in WA, where multiple high-grade lithium pegmatite intersections have been produced and where we have also identified high-grade zinc resource extensions and made a new vanadium with nickel, copper and cobalt discovery.

"The Payne Gully acquisition is in line with the Company's focus on projects in highly-prospective mineralised terranes such as in the Yilgarn and Pilbara regions of Western Australia and the Tennant Creek region of the Northern Territory."

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Metals Australia Ltd ("Metals", "MLS" or "the Company") is pleased to announce the execution of a binding sale agreement ("the Agreement") to acquire an 80% interest in Payne Gully Gold Pty Ltd ("Payne Gully" or, "PGG"), which has a suite of highly prospective battery and precious metals projects in key mineralised regions of Australia, including:

1. The Warrambie Project - a granted exploration licence (EL) E47/4327 in the Pilbara region of Western Australia (Figure 1) located along strike 15km west of the Sherlock Bay nickel sulphide project (Sabre Resources Ltd, ASX:SBR)1. Warrambie is considered highly prospective for mafic intrusive nickel- copper-cobalt sulphide mineralisation analogous to Sherlock Bay and the Andover massive nickel sulphide discovery 20km to the west (Azure Minerals, ASX:AZS)2, (see location, Figure 2).
2. The Murchison Domain Project, including granted E51/2058 and four large EL applications located along strike from major gold deposits such as the >5Moz Big Bell deposit3 and the >3Moz Mt Gibson mine4 in the Murchison Province of Western Australia (see Figure 4). The Murchison Domain tenements are considered highly prospective for major gold deposits as well as Ni-Cu-Co-PGE and/or lithium mineralisation.
3. The Tennant Creek Project in the Northern Territory, which includes granted E32725, directly along strike within the corridor east of the Warrego copper-gold mine and three EL applications both north and south of Tennant Creek near key iron oxide copper-gold (IOCG) deposits. The Tennant Creek Project is considered highly prospective for IOCG discoveries of the Tennant Creek style.

The Agreement terms provide for the issue of 40 million MLS shares from existing Listing Rule 7.1 capacity upon signing the Agreement and, subject to shareholder approval, the issue of an additional 84 million MLS shares and a cash payment to the PGG vendors of $300,000 (see detailed Agreement terms, Appendix 1).

Figure 1: Location of Projects to be acquired through purchase of Payne Gully Gold

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Warrambie Nickel-Copper-Cobalt Project:

The Warrambie Project ("Warrambie" or, "the Project") comprises a large (126km²) granted exploration licence, E47/4327, located approximately 40 km east of Roebourne in the western Pilbara in northwest Western Australia (see location and regional geology, Figure 2).

Warrambie is considered prospective for mafic intrusion related Ni, Cu, Co sulphide mineralisation, being centrally located between the Sherlock Bay Ni (Cu-Co) sulphide deposit 15km to the northeast, and the Andover Nickel (Cu-Co) massive to disseminated nickel sulphide deposit 20km to the west (Figure 2).

Sherlock Bay is owned by Sabre Resources Ltd (ASX:SBR) and has a current nickel sulphide resource containing almost 100,000t of nickel (24.6Mt @ 0.40% Ni, 0.09% Cu, 0.02% Co, containing 99.2Kt Ni1). The Andover nickel sulphide discovery of Azure Minerals Ltd (ASX: AZS) has a recently announced resource of 4.6Mt @ 1.11% Ni, 0.47% Cu, 0.05% Co for 51.7Kt contained nickel2 (Figure 2).

Figure 2: EL47/4327 -Regional geological setting showing main resources and prospects.

Sherlock Bay is hosted within the regional scale Scholl Shear Zone, that strikes ENE and extends southwest, continuing through the centre of the Warrambie tenement (Figures 2 and 3).

Interpretation of geological mapping and regional magnetics indicates that mafic and ultramafic rocks, including the "Sherlock Intrusion", are offset and entrained by the Scholl Shear Zone. This structural corridor is juxtaposed against folded mafic rocks and felsic volcanics of the Whundo Group, that form a broad northeast

• southwest oriented dome that continues to the Whim Creek base metals deposit6 30km to the east of the Warrambie Project (see Figures 2 and 3).

Underlaying the predominantly soil covered Warrambie E47/4327 is interpreted extensions of the Sherlock Intrusive, a layered mafic intrusion comprising of gabbro, granophyre and pyroxenite that is associated with the Ni-Cu-Co sulphide mineralisation at Sherlock Bay.

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The western end of the previously explored (by Outokumpu in the 1990s) George Sherlock magnetic anomaly, part of the Sherlock Intrusive complex, extends onto EL47/4327 (see Figure 3). The George Sherlock magnetic anomaly is 6.5km long by up to 1km wide trending ENE and is described as a pyroxenite-gabbro complex under transported cover (Figure 3). A TEM survey was conducted over the magnetic anomaly by Outokumpu, resulting in a broad EM conductor on the northern margin of the intrusion. Drilling revealed the intrusion contains sulphides, indicative of sulphur saturation, with anomalous base metal and PGE values recorded with associated sulphides.

The Sherlock Intrusive is similar to the gabbroic intrusive that hosts the Andover nickel sulphide deposit, 20km west of Warrambie, and other intrusive related nickel deposits in WA such as Nova-Bollinger (ASX:IGO)7. This association highlights the prospectivity of the Warrambie Project for major Ni-Cu-Co sulphide deposits.

Figure 3: EL47/4327 on regional TMI magnetics imagery with draped aerial photography and project locations

There has been limited effective exploration on the Warrambie tenement due to extensive areas of cover sediments, apart from detailed magnetics modelling and geological interpretation.

An immediate priority is to fly airborne electromagnetics (EM) to locate potential nickel-copper-cobalt bearing sulphide deposits associated with the discrete magnetic features in the vicinity of the Scholl Shear Zone. In addition, detailed gravity is planned, to map the extensions of the highly prospective Sherlock Intrusion.

Targeted Reverse Circulation (RC) and/or diamond drilling would then be carried out to test key EM/mag/gravity targets associated with the Scholl Shear and/or the Sherlock Intrusion for nickel-copper-cobalt-PGE massive to disseminated sulphide deposits.

Murchison Domain Gold Project:

Payne Gully's Murchison Domain tenements include granted Exploration Licence (E51/2058) and five exploration licence applications (E51/2059, E59/2956, E70/5853 and E70/5854) located in the Murchison Domain of the prospective Yilgarn Province of Western Australia (see Figure 1 and Figure 4 below).

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The Murchison Domain tenements lie within the regional structural corridor that host major gold deposits, including the Meekatharra and Mt Magnet gold mining centres (Figure 4).

The tenements were acquired by Payne Gully in areas where magnetics and gravity imagery indicates partially subsumed greenstone lithologies and structural settings associated with major gold deposits, either along strike or in adjacent belts.

The granted E51/2058 (White Well) and application E51/2059 (Star Well), are large ELs (123km² and 214km² respectively), located approximately 50km SW of Meekatharra and cover a 50km strike length of the regional scale Chunderloo Shear Zone. The >5Moz Big Bell Gold Mine3 is located 50km along strike to the SW within this corridor, highlighting the potential within these tenements for the location of major gold deposits.

Figure 4: Payne Gully Gold tenement locations, Murchison Domain, WA, with mineral occurrences

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