Stavely Minerals : Quarterly Activities Report

Quarterly Report March 2022

HIGHLIGHTS

Exploration

Thursday's Gossan Copper-Gold Prospect (Stavely Project, Western Victoria)

• ➢ Mineral Resource definition drilling targeting the south-eastern extension of the Cayley Lode deposit was completed during the Quarter.

• ➢ High-grade intercepts were returned from the drilling south of the railway.

• ➢ Diamond drill hole SMD164 intercepted:

  • o 5.8m at 5.38% Cu, 0.77g/t Au and 23g/t Ag from 198m down-hole, including

    • ▪ 0.8m at 16% Cu, 0.71g/t Au and 42g/t Ag from 203m

• ➢ Diamond drill hole SMD165 intercepted:

  • o 3.2m at 7.08% Cu, 0.46g/t Au and 11g/t Ag from 215.1m down-hole, including

    • ▪ 1.0m at 16.35% Cu, 0.81g/t Au and 24g/t Ag from 215.1m

• ➢ Diamond drill hole SMD173, designed to test the south-easterly plunge of the Cayley Lode mineralisation below the Low-Angle Structure, intersected a 92.1m zone of inter-fingered micro-diorite and Cayley Lode sulphide mineralisation.

• ➢ The post-intrusion remnant mineralisation in SMD173 includes an upper portion of:

  • o 3m at 3.81% Cu, 0.11g/t Au and 457g/t Ag from 328m down-hole, including:

    • ▪ 1.10m at 2.53% Cu, 0.10g/t Au and 1,225g/t silver

And a lower intercept of:

• o 43m at 2.60% Cu, 0.42g/t Au and 10g/t Ag from 378m down-hole, including:

  • ▪ 3m at 10.38% Cu, 3.00g/t Au and 71g/t Ag, from 396m, including:

    • • 1m at 19.65% Cu, 8.29g/t Au and 202g/t Ag from 397m.

Regional Exploration (Stavely & Yarram Park Projects, Western Victoria)

• ➢ Significant results were received from follow-up diamond drilling at the Toora West porphyry copper-moly-gold prospect, which is at an early stage of exploration evaluation.

• ➢ Diamond drill hole STWD005 intersected two high-grade gold zones including:

  • o 0.6m @ 4.27g/t Au, 0.31% Cu, 2.6g/t Ag and 130ppm Mo from 274.2m, and

  • o 0.6m @ 8.72g/t Au, 1.85% Cu, 5.2g/t Ag & 151ppm Mo from 286.7m.

• ➢ Drill hole STWD006 (the northernmost diamond drill hole) intersected an interval of low-grade copper anomalism, terminated by a fault, including:

  • o 27m @ 0.15% Cu from 112m down-hole.

ASX Code: SVY	Head Office
Shares on issue: 261M	168 Stirling Hwy
Market capitalisation: $102M	Nedlands, Western Australia 6009
Cash: $4.7M (31 March 2022)	T: [phone]
ABN 33 119 826 907	E:[e-mail]: stavely.com.au

• ➢ Diamond drill hole STWD007 intersected an interval of silver mineralisation near-surface and deeper intervals of copper and molybdenum mineralisation:

  • o 16m @ 16g/t Ag from 52m, including:

    • ▪ 1m @ 150g/t Ag from 65m

  • o 27m at 0.14% Cu from 268m

  • o 2m @ 0.24% Cu, 0.19 g/t Au, 1.8g/t Ag & 103ppm Mo from 335m

  • o 1m @ 0.19% Mo from 477m

  • o 1m @ 0.13% Mo from 495m

• ➢ A SensorEM drone airborne magnetic survey flown at the Yarram Park Project, identified a porphyry target just north of drill hole STWD006 (the northernmost diamond drill hole) displaying a central magnetic high surrounded by a magnetic low annulus coincident with potassic alteration noted in recently completed air-core drill holes.

• ➢ Air-core drilling across the S4, Buninjon, S41, Muirhead and Nekeeya prospect areas has identified significant zones of sulphides, clay altered sediments and intrusions - assays pending.

• ➢ A total of 264 auger samples were collected across the southern regional grid extending coverage at the southern end of RL2017 (south of Thursday's Gossan) and completing coverage over EL5425 - assays pending.

Corporate

• ➢ Stavely Minerals had a total of $4.7M cash on hand at the end of the March 2022 Quarter.

• ➢ Stavely Minerals Strengthens Strategic Footprint After Executing Key Property Purchase which included a 524-acre farm and residence adjacent to Thursday's Gossan.

• ➢ Stavely Minerals announced the appointment of experienced mining executive Mark Mantle as Chief Operating Officer.

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OVERVIEW

The final stage of the Mineral Resource drill-out on the Cayley Lode mineralisation was completed during the Quarter. This major milestone provides the foundation for Stavely Minerals to achieve its objective of posting an initial Mineral Resource estimate for the Cayley Lode in the second quarter of

2022. The Scoping Study for the Thursday's Gossan Project and Carroll's VMS deposit will follow from the initial Mineral Resources estimate.

The Mineral Resource drill-out for the initial Mineral Resource at the Cayley Lode has taken a total of two and half years to complete. In excess of 45,000m (45km) of dedicated Mineral Resource drilling was undertaken, with the vast majority of that being diamond drilling and approximately 1,300m being Sonic drilling. Each metre of oriented diamond drill core was logged for lithology, mineralogy, alteration, veining, weathering, structure as well as geotechnical parameters including core recovery and fracture count. Magnetic Susceptibility measurements were taken for each 1m diamond core interval. Systematic photography of the core in trays in both wet and dry form was completed and ASD short-wavelength infra-red measurements were taken for each metre of core.

In excess of 50,000 assays have been completed, including duplicate sampling of selected holes and routine insertion of duplicates and standards for QA/QC assessment. One-metre samples of either quarter-core for PQ large-diameter drill core and half-core for HQ diameter drill core was submitted to ALS Laboratories for analysis of multielement - Method ME-ICP61, a four- acid digest with ICP-AES or AAS and gold using Method Au-AA23. There was no small-diameter NQ drill core in the Mineral

Resource drilling campaign. Below is a photo of part of the core yard at Stavely's shed near

Glenthompson (Photo 1).

The reasons for the length of time to complete the drill-out include:

• • All drilling had to be conducted by diamond drilling. Due to the shallow and mildly saline water table, it was not possible to utilise percussion drilling methods due to large volumes of near-surface saline water and it could not be contained.

• • Diamond drilling allowed all fluids to be contained to 3 cascading rain-water tanks and at the end of each hole, all fluids could be removed and disposed off-site.

• • The majority of the drilling was conducted on a 40m by 40m grid to ensure that a large proportion of the total Mineral Resource estimate had a high degree of probability that it could be classified as Indicated Resources.

• • With above-average rainfall over the last two years in the Stavely region it was not possible to continue drilling during the winter months from May to September.

• • Delays in negotiating access to the paddock south of the railway line to complete the drill-out.

Stavely's field team have done a fantastic job conducting the Mineral Resource drill-out. With a relatively small crew of geologists and field staff, the team has managed up to 6 diamond drill rigs operating concurrently and, at times, when the regional exploration programs were underway, an air-core rig and soil auger drilling as well. This was all done while living with the COVID-19 restrictions and the associated stresses of living through a pandemic.

During the Quarter, the regional exploration programme continued across the Company's 100%-owned Stavely Copper-Gold Project and the Black Range Joint Venture tenement in western Victoria

(Figure 1). The regional targeting methodology has continued to successfully identify 'blind' targets under basalt and transported cover with a success rate of around 80% of drill holes intersecting quartz veining / alteration / sulphides to date.

Recent drilling and geophysical programs at the Toora West porphyry prospect have returned encouraging results. While Toora West is at an early stage of reconnaissance exploration, it has displayed a number of key attributes that are providing encouragement to vector into a shallow porphyry target include potassic alteration in the form of secondary biotite (a potassium-rich mica) and potassium feldspar alteration on the margin of porphyry-style quartz-sulphide veins. The sulphide assemblage includes pyrite, molybdenite, chalcopyrite and bornite mineralisation. It is also very pleasing that the system demonstrates potential for high-grade gold as a late mineralisation phase.

The recently completed drone magnetic survey has highlighted a distinct magnetic high with a concentric magnetic low annulus in an area where recently completed air-core drill holes are logged as displaying potassic alteration. The magnetic feature in combination with the potassic alteration was being drill tested at the end of the Quarter.

Subsequent to the Quarter, Dr Greg Corbett visited site and spent some time looking at drill core from the Toora West prospect and the Cayley Lode, as well as air-core chips from the regional exploration drilling program. Results of Dr Corbett's observation will be reported once he has compiled his report.

Photo 1. Part of the core yard at Stavely Minerals' core farm near Glenthompson.

Figure 1. Western Victoria Project location plan.