Troy Resources : Dec 21 Quarterly Report and Appendix 4C

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QUARTERLY REPORT &

APPENDIX 4C

COMPANY UPDATE AND QUARTERLY CASH FLOW REPORT FOR ENTITIES SUBJECT TO LISTING RULE 4.7B FOR THE THREE MONTHS ENDED 31 DECEMBER 2021

31 January 2022

HIGHLIGHTS

• Company recapitalisation announced on 5 January 2022.
• At the end of the December quarter, cash and equivalents (including gold inventories) totalled AUD$0.7 million.
• The Karouni processing facility remains in care and maintenance.
• Pursuant to the Karouni Earn-in Agreement, Barrick Gold Corporation advises that, during the September quarter, it undertook a field mapping and rock-chip sampling program, as well as establishing field office facilities, building a team of geologists and field technicians, road building, etc
• Subsequent to the quarter, on 10 January 2022, the Company issued 42 million shares at $0.022 per share pursuant to Tranche 1 of the recapitalisation, raising $0.93 million before costs.

TROY RESOURCES LIMITED, L2 5 ORD STREET, WEST PERTH WA 6005

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For personal use only

FOR THE THREE MONTHS ENDED 31 DECEMBER 2021

TROY RESOURCES QUARTERLY REPORT & APPENDIX 4C

OPERATIONS

KAROUNI, GUYANA (Troy 100% through Troy Resources Guyana Inc.)

Care and Maintenance

As previously reported, operations were placed into a period of care and maintenance from August 2021 following the depletion of open pit ore reserves. The period of care and maintenance is expected to last until the commencement of the Smarts Underground project.

The Company is currently working through its pre-feasibility study as released to the ASX on 26 July 2021 "Maiden Smarts Underground Ore Reserve".

A comprehensive care and maintenance program is in place and includes a defined schedule of weekly and monthly checks on plant and mobile equipment to ensure the integrity and operability of the company's physical assets are maintained during this period. The main power station has been shutdown to reduce fuel costs, with power now being supplied by portable generators installed at primary locations (camp, mill admin, plant).

The camp continues to operate with a minimal population to support the care and maintenance program. Barrick Gold Corporation (Barrick) activities increased during the quarter with the addition of field staff and contractors. Troy continues to provide support to Barrick in terms of camp and office accommodations, light vehicle use and maintenance, medical and security which has allowed for sharing of many of the site operating costs.

Care and maintenance activities have included the review and sale of redundant mobile equipment, spares, and inventory items with a life span of less than one year such as explosives and mill reagents.

The sale of items has resulted in AUD$0.284 million in sundry income during the quarter.

Health and Safety

As at 31 December 2021, the 12-month rolling Total Recordable Injury Frequency Rate (TRIFR) was 9.2 and the 12-month rolling Lost Time Incident Frequency Rate (LTIFR) was 1.3. The TRIFR increases slightly over the last quarter (due to one Medical Aid); however, the LTIFR decreased to below 2.0.

Manhours for the period averaged approximately 26,000 per month including TRGI staff, Barrick staff and contractors.

Table 1: TRIFR and LTIFR for 2021

TROY RESOURCES LIMITED, L2 5 ORD STREET, WEST PERTH WA 6005

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For personal use only

FOR THE THREE MONTHS ENDED 31 DECEMBER 2021

TROY RESOURCES QUARTERLY REPORT & APPENDIX 4C

During the quarter, there was one reportable incident (Medical Aid). A member of the exploration team experienced an allergic reaction to a bee sting at their exploration project. The medical team was dispatched and the person was transported to the Madia hospital for treatment. The individual returned to site and then travelled to Georgetown on their next scheduled rotation for further medical evaluation.

As of the start of the October 2021, care and maintenance has been fully implemented with only the routine maintenance checks in the plant and security and camp activities occurring. Reduced staffing and changes in how the site operates meant that individuals were required to take on new responsibilities, leading to the development of new safe work procedures and a continued emphasis on pre-task risk assessments. Even with the reduced manpower compliment, there was a continual focus by all staff on safety and achieving Zero-Harm in the workplace.

Environment

With the stoppage of mining and processing activities and transition into the care and maintenance activities, the priority of the environmental staff was maintaining environmental compliance, implementing the revised monitoring requirements in the new permit, and reviewing the Asset Retirement Obligation (ARO) model as part of the 2021 year-end audit.

The EPA conducted the 2021 annual inspection in October. The main focus of the inspected were related to solid and hazardous waste management, water, noise and air monitoring and radiation monitoring. Additionally, the EPA performed the initial UG verification inspection to assess any additional impacts to the Karouni Project Area from underground mining.

The dry season biodiversity study was completed during the month of October. Significant observations of reptile/amphibian, bird, mammal, and fish species were made during the exercise indicating that, despite the previous mining operations, the impact to the natural wildlife is minimal.

Rainfall for the period was in line with seasonal average. Rainfall did not have a significant impact on the operations.

Table 2: Historic Average vs. 2021 Rain Fall

The site brought on some additional manpower during October to assist with the transfer of waste oil from drums to larger tote containers for more effective storage. While the work was able to improve the conditions at the hazardous waste storage yard, there is still a large inventory stored at site.

TROY RESOURCES LIMITED, L2 5 ORD STREET, WEST PERTH WA 6005

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FOR THE THREE MONTHS ENDED 31 DECEMBER 2021

TROY RESOURCES QUARTERLY REPORT & APPENDIX 4C

HR and Community

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The reduced workforce was maintained throughout the quarter to match operational requirements. As of 31 December 2021, the total TRGI workforce was 26 at site and 10 at the Georgetown office, A minimal manpower compliment continues to provide security, maintenance, and camp support services. All non- essential contractors have been demobilized except for those required for catering, fuel management, bussing, and medical services.

The Site Medical Centre remained in operation during the quarter and continued to provide medical services to the local communities. Approximately 60 off-campers were seen during the quarter. Most of the off-camper visits were related to testing for Covid and other tropical diseases. There were issues with staffing of the medical centre during the quarter due to availability of medical professionals in Georgetown. This did not have a major impact on the operation as the staff were able to adequately respond. Going forward, it has been agreed to reduce the number of staff on site to two at any time (combination of Doctor, Nurse or Medic).

There were several occurrences of illegal mining activity during the quarter, primarily located at Smarts pit. When detected, security has contacted the individuals and advised them to vacate the area. Guyana Geology and Mines Commission (GGMC) was advised, and plans are in place to have a GGMC officer stationed at Karouni on a temporary basis.

Coronavirus

During the quarter, three individuals tested positive for COVID-19, developing mild symptoms. In each of the cases, the patients were placed into quarantine, treated by the site medical staff and evacuated to Georgetown by road.

At the start of November 2021, the government imposed new restrictions requiring that all persons using domestic airlines will require two doses of an approved vaccine to travel (or have a PCR test within 72 hours of travel). As a result, all persons coming to site (by air or by road) are required to be fully vaccinated. With the implementation of this restriction, pre-flight antigen testing was discontinued. The site continued to follow government mandated protocols.

Overall, our COVID safety measures and risk management have been successful in preventing and/or limiting its affect, despite levels of COVID-19 infection in Guyana increasing during this period. To combat this trend, Troy continues to engage in active management of the COVID risk; preventative measures such as pre-flight screenings, wearing of masks and social distancing remain in effect and enforced for protection of employees, contractors and visitors.

DEVELOPMENT

SMARTS UNDERGROUND, GUYANA (Troy 100% through Troy Resources Guyana Inc.)

All pre-development work at the Smarts area was halted in September 2021 including dewatering of the pit.

Review of the geotechnical and mine design has been ongoing with opportunities for improvement in the stope designs and ventilation system identified.

TROY RESOURCES LIMITED, L2 5 ORD STREET, WEST PERTH WA 6005

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FOR THE THREE MONTHS ENDED 31 DECEMBER 2021

TROY RESOURCES QUARTERLY REPORT & APPENDIX 4C

EXPLORATION

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KAROUNI, GUYANA (Troy 100% through Troy Resources Guyana Inc.)

No exploration activities of substance were undertaken by Troy during the quarter.

On 8 November 2021, Barrick provided Troy with its "Report on Activities and Expenditure Third Quarter 2021" in respect of the Karouni Earn-in Agreement.

Barrick advises that initial prospecting, involving mapping and rock chip sampling in drainages cutting through the sand, is exposing complex and varied geology and parallel shear zones. A geological and geochemical screening program is in planning to test the Makapa-Kuribrong Shear Zone, which will comprise BLEG (Bulk Leach Extractable Gold) stream sediment sampling of drainages in areas where drainages penetrate the sand cover, and an aircore drilling program in areas of sand cover to test the bedrock potential.

Additional activities during the quarter comprised establishing field office facilities, building a team of geologists and field technicians, road-building / drill line clearing for access, and payment of all 2021 claim fees due from 1 July to 31 December 2021.

At the Potaro Prospect, field mapping and rock chip sampling program, designed to ground-truth the existing geologic map interpreted from aeromagnetic data, indicates that the project area contains more complex lithologies than interpreted, including metasediments, felsic volcanics, intermediate to mafic volcanics, and dioritic intrusions. Mapping south of the Bartica-Potaro road is largely complete and this area will be followed up on with a BLEG stream sediment sampling program.

Excavation of access roads and drill sites commenced in September.

At the Apanachi Prospect situated to the northwest of the project area, exploration activities in the consisted of geologic mapping and rock chip sampling; rock chip results are pending.

Aggregate expenditure by Barrick for the quarter was approximately US$450,000.

TROY RESOURCES LIMITED, L2 5 ORD STREET, WEST PERTH WA 6005

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