Metals Australia : Raises $7.8M to Accelerate Key Projects

ASX Announcement
07 March 2022	ASX:MLS

Metals Australia Raises $7.8M in Heavily Oversubscribed Capital Raising

Funds Raised to Accelerate Exploration and Development of Key Battery Minerals Projects

➢ Metals Australia has completed a heavily over-subscribed placement to sophisticated and

only	professional investors to raise $7.8 million (before costs) via the issue of 100 million fully paid
ordinary shares (ASX: MLS) at $0.078 (7.8c) per share with a free attaching option resulting in
	the issue of 100 million options (Placement).
➢ Funds raised will be principally used to:
use	- immediately accelerate exploration and resource drilling of the Manindi Lithium Project,
where sampling of the Foundation Pegmatite produced rockchip results of up to 2.30%
Li2O, averaging 1.29% Li2O over the entire 500m strike length1, and,
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- fast-trackdown-stream metallurgical testing2 and development studies at the Company's
Lac Rainy Graphite Projectin Canada, as well as drilling to extend the Carheil high-grade
resource and test the West Carheil trend that produced rockchip results up to 28.5% Cg4.

➢ The Placement has been made in accordance with shareholder approval received at the

Company's Annual General Meeting (AGM) held on 27 January 2022.

➢ Melbourne based Peak Asset Management acted as Lead Manager for the Placement.

Metals Australia Ltd ("MLS" or the "Company") is pleased to announce that it has received a letter of firm commitments from Peak Asset Management Pty Ltd in relation to a Placement of $7.8 million (before costs) via the issue of 100 million fully paid ordinary shares (ASX. MLS) at $0.078 (7.8c) per share with a free attaching option on a 1-for-1basis resulting in the issue of 100 million options exercisable at a price of $0.05 (5.0c) with an expiry date of 10 February 2024 (Placement Options).

ForIn addition, the Company will issue 25,000,000 options exercisable at a price of $0.05 with an expiry date of 10 February 2024 (Consultant Options) as approved by shareholders at the Company's AGM held on 27 January 2022. The Consultant Options will be issued to technical consultants that have been instrumental in the Company being able to deliver on its commitment to exploration and development of the Company's Manindi Lithium Project in Western Australia, and the Company's Lac Rainy Graphite Project in Quebec, Canada.

The Company will lodge a Prospectus with ASIC and seek ASX approval to have the Placement and Consultant Options quoted on the ASX at the earliest opportunity.

Funds raised from the Placement will be principally applied to the Company's key battery minerals projects, including:

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Manindi Lithium Project, Western Australia:

• To immediately accelerate exploration drilling of key lithium-Cesium-Tantalum (LCT) pegmatites, including the Foundation Pegmatite, where rockchip sampling has produced results of up to 2.30% Li2O, averaging 1.29% Li2O over the entire 500m strike length1, and,
• to carry out diamond drilling to test depth extensions of key pegmatites and allow maiden resource estimation, as well as generate metallurgical samples for testwork and initial development studies.

1. Lac Rainy Graphite Project, Quebec, Canada:

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• Fast-trackdown-stream spheroidization and purification testing for lithium-ion battery applications2, prior to advancing development studies to pre-feasibilitystage, and,
• Additional drilling to test the major exploration potential that exists at Lac Rainy to extend the
  Carheil high-grade resource (currently 13.3Mt @ 11.5% Cg3) and test the West Carheil trend that has produced rockchip results of up to 28.5% graphitic carbon (Cg)4.

Funds will also be utilised to advance exploration at its Eade, Felicie and Pontois Copper-Gold- personalPolymetallic Projects and the Lac du Marcheur Copper-CobaltProject, both in Canada, as well as to build on its portfolio of Battery Minerals Projects in the highly ranked exploration/mining jurisdictions

of Western Australia and Quebec Canada (both top 6 global mining jurisdictions, Fraser Institute, 2021).

Manindi Lithium Project:

The Manindi Project includes three granted mining leases in the fertile Youanmi Igneous geological complex, located approximately 20 km southwest of the Youanmi Gold Mine in the Murchison District of WA.

The Company has recently been exploring the Lithium-Caesium-Tantalum(LCT-Type) pegmatites at Manindi, which are extensively developed within a >3km corridor at the north-western end of the Project (Figure 1).

Field work during the December Quarter 2021 identified the Foundation Pegmatite8, which is the largest pegmatite identified to date at Manindi at over 500m strike-length in a southwest-northeast direction and including multiple pegmatite outcrops across a 200m zone in a northwest-southeast

Fordirection (see Figure 1).

A systematic rock chip sampling program was undertaken over the entire 500m strike length of the Foundation Pegmatite, as well as over nearby pegmatites, Foundation North and Dibbler (Figure 1). Samples were also collected from extensions of the Mulgara Pegmatites (Figure 1) and the recently identified Quoll and Bandicoot Pegmatites, south of Mulgara.

Over 1.2km strike length of Lithium-Caesium-Tantalum (LCT) bearing pegmatites have been sampled at an average spacing of approximately 40m.

High-grade, consistent, >1% Li2O and >0.4% Rb, results were produced from the central, thickest, part of the Foundation Pegmatite (see Figure 1), including up to 2.30% Li2O and 0.70% Rb with an average of 1.29% Li2O and 0.51% Rb over the entire 500m strike length1.

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Figure 1: Manindi Lithium Project, mapped pegmatites and Rockchip sample locations

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Quoll

An up to 3,500m RC drilling program is currently testing the central, high-grade, part of the Foundation Pegmatite. Initial testing has intersected up to 16 metres (m) downhole of mineralised pegmatite in RC drillhole MNRC0431 (Figure 1). Drilling details will be reported upon receipt of results.

The Dibbler, Quoll (SE of Mulgara) and Bandicoot (south of Mulgara) pegmatites will also be the focus of this reconnaissance RC drill testing program.

Drilling will also further test the Mulgara pegmatites (Figures 1 and 2), below previously reported high- grade RC drilling LCT pegmatite intersections6,7 that included:

For	•	MNRC030: 8m @ 1.06% Li2O from 18m incl. 3m @ 1.65% Li2O with up to 1.96% Li2O
•	MNRC033: 8m @ 1.0% Li2O, 158ppm Ta205 from 32m & 7m @ 1.29% Li2O, 242ppm Ta205
	from 42m incl. 5m @ 1.53% Li2O

The additional funding raised in the Placement will allow the Company to accelerate drilling at Manindi, which will include up to 45 holes for 3,500m and drillholes will range from 60m depth in areas of initial testing, to 120m depth on sections where there are existing significant intersections or as immediate follow-up below encouraging new pegmatite intersections.

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Along with the completion of the current RC drilling program, a second phase of diamond core drilling is planned, to include deeper testing of the Manindi LCT pegmatites as well as the generation of metallurgical samples for further metallurgical testwork.

onlycommence initial development studies. Subject to initial outcomes, these studies may now be fast tracked towards development of these high-grade LCT pegmatites, located on granted mining leases.

The RC and diamond drilling programs, with supporting metallurgical testwork, will allow the Company to generate a maiden LCT pegmatite resource for the Manindi Lithium Project.

Completion of Mineral Resource estimates for the Project will in-turn allow the Company to

Manindi Zinc Project:

The Manindi project also includes the Kultarr and Kowari Zinc deposits that host a JORC 2012, Measured, Indicated & Inferred resource of 1.08Mt @ 6.52% Zn for 70,102t Zn (2% Zn cut-off)9.

useexisting resources. Drilling to date has been limited to a depth of approximately 250m10 and this high- grade zinc resource is open below this depth.

A number of target zones remain to be tested for both zinc and also copper mineralisation, close to the

Further RC drilling is planned to test for down-plunge extensions of the high-grade zinc resources as well as test a parallel trend with electromagnetic anomalies that may be associated with zinc and/or copper mineralisation.

Lac Rainy Graphite Project:

The Lac Rainy Graphite Project is located in Quebec, Canada (Figure 2), in close proximity to the operating mines around Fermont and is 100% owned by Metals Australia. The Lac Rainy project hosts a JORC 2012 Indicated and Inferred Resource of 13.3Mt @ 11.5% TGC3. In 2020, Metals Australia completed a Phase 1 Scoping Study highlighting the significant economic attractiveness of the Lac Rainy project11.

Recently completed Phase 2 metallurgical tests2 produced very encouraging results based on the optimum flowsheet developed from testing of a composite sample from the high-gradeLac Rainy Graphite Project grading 16.2% Cg. Highlights of the concentrate testing program are as follows:

i)	Optimised tests produced a combined, -150µm and +150µm, concentrate grade of 96.8% Cg,
personal	which is at the upper end of the targeted purity range of 95% to 97% Cg.
ii)	The proportion of larger flake recovered under these optimised grinding and flotation
	conditions was 13.9% in the +150µm fraction, at a very high-purity of 97.4% Cg.
iii)	The proportion of medium to fine flake recovered under these optimised grinding and flotation
For	conditions was 86.1% -150µm flake, at a high-purity of 96.7% Cg, which is well above the >95%
Cg targeted for down-stream spheroidization and purification testing.
Carbon recovery in open-circuit tests ranging from 69.4% to 85.6%. Recovery is expected to
iv)
	increase substantially (>90%, based on nearby deposits such as Lac Knife (Focus Graphite))
	during closed-circuit tests where tails are re-cycled through the process. The additional test
	work associated with closed-circuit testing is currently underway with SGS Canada.

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The flow-sheet development program has significantly improved the open-circuit processing

conditions of the rougher, primary cleaning and secondary cleaning flotation circuits, providing a stepping-stone to feasibility study level, larger scale, closed circuit and variability testing.

onlyThe optimised processing circuit flow-sheet conditions that generated the combined concentrate grade of 96.8% Cg2 are currently being applied to a larger volume of composite sample, in order to produce 10 to 12kg of concentrate, including >10kg of the fine-medium(-150µm) flake fraction, at the targeted grade of >96% Cg. The -150µm flake size component of this bulk concentrate sample will be shipped to specialist battery grade graphite testing group, ProGraphite GmbH (ProGraphite), in Germany.

ProGraphite will conduct specialist downstream testwork, including spheroidization and purification, targeting 99.9% Cg purification upgrade and battery testwork to determine the quality of the Lac Rainy graphite products for use in lithium-ion battery applications in the Electric Vehicle (EV) industry.

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Figure 2: Location of the Lac Rainy Graphite Project with key prospect locations and airborne EM anomalies

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