Audalia Resources : Medcalf Project Updated Mineral Resource estimate

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MEDCALF PROJECT UPDATED MINERAL

RESOURCE ESTIMATE

H I G H L I G H T S

• Mineral Resource estimate of 25.7M of 9.98% TiO2, 0.52% V2O5 and 50.9% Fe2O3.
• Mineral Resource estimate updated using 6% titanium cut-off grade
• Updated prefeasibility study on DSO type product near completion
• Ore Reserve estimation to commence using updated mineral resource estimate.

Abstract

Audalia Resources Limited (ASX:ACP) (Audalia or the Company) is pleased to report an update on the Company's JORC (2012) compliant Mineral Resource estimate for the Medcalf Project using a 6% TiO2 grade cut off to be line with Company's updated pre-feasibility study (PFS) study currently underway on a direct shipping ore (DSO) type product (ASX release on 24 November 2021).

The updated PFS information that will include this latest mineral resource estimate will be provided to a mining consultant for reporting a JORC compliant Ore Reserve estimate.

Audalia recently identified the possibility of producing a lump ore product to be used for blast furnace refractory liner protection. The proposed product is a DSO type product only requiring crushing and screening to specified size range.

A preliminary review of the 2018 resource model has indicated through a series of optimisations, that high grade TiO2 ore could be mined from the existing mineral resource.

Cube Consulting, the Company's independent geologist, who estimated the 2018 mineral resource using a 0.2% V2O5 cut off were appointed again to revisit the block model focussing on titanium as a cut-off grade and demonstrate reasonable prospects for economic extraction via assessment against an optimisation shell.

Grade tonnage curves were developed for the reported Mineral Resources within each prospect area. A review of the grade tonnage curves demonstrates that the resource is sensitive to the applicable reporting cut-off, with resource tonnes consistently reducing at a material rate with increasing cut-off grades. The 6% cut-off titanium grade was found to be the optimal cut-off grade for tonnage and grade suitable for upgrading to an Ore Reserve.

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Mineral Resource Estimation Summary

The geological interpretation has divided the Medcalf Project into three broad, spatially unique areas (Figure 1):

• Egmont located to the west of the project area.
• Kilimanjaro located to the southeast.
• Vesuvius in the central part of the project, which has been further sub-divided based on modelled fault boundaries.

1. Vesuvius West

1. Vesuvius Central (including the Fuji prospect)

1. Vesuvius East (including the Pinatubo prospect).

Figure 1 - Prospect location plan

Cube Consulting re-ran the 2018 resource block model using a 6% TiO2 grade cut off. Reasonable prospects for eventual economic extraction were determined with reference to the results of Whittle optimisation resource limiting shells. The extents of the selected open pit shell were used as an analogy to help limit the extents for reporting of the Mineral Resources associated with the Vesuvius, Egmont and Kilimanjaro prospect. Figure 2 provides an oblique view of the resource classification categories for the Vesuvius prospect area.

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Figure 2 - Oblique view looking northwest

Within each prospect area the block model grades were reviewed sectionally against the corresponding drill hole information. Overall, this showed good alignment between estimated block grades and reported drill hole assays. Examples for the V2O5 and TiO2 estimates area presented below for Vesuvius (Figure 3), Egmont (Figure 4) and Kilimanjaro (Figure 5).

Figure 3 - Vesuvius Visual Validation at 292,740mE - V2O5 % (top), TiO2 % (bottom)

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Figure 4 - Egmont Visual Validation at 291,820mE - V2O5 % (top), TiO2 % (bottom)

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Figure 5 - Kilimanjaro Visual Validation, oblique section centred ~295,700mE - V2O5 % (top), TiO2 %

(bottom)

The Medcalf resource has demonstrated sufficient geological and grade continuity to support the definition of a Mineral Resource and enable classification in accordance with the JORC Code (2012 edition) guidelines.

The input drill data is considered representative of the V2O5 and TiO2 grade distribution and does not misrepresent the mineralisation. Knowledge of the geological controls on mineralisation has been used to develop the overall resource estimate.

The Mineral Resource in Table 1 is reported above a lower cut-off grade of 6 % TiO2 based on preliminary economic considerations. The preliminary mining studies are based on open cut mining methods using conventional drill and blast mining. These studies have assisted with definition of an appropriate cut-off grade above which mineralisation has reasonable prospects for economic extraction.

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