FPX Nickel Corp. presented results from recently completed large-scale pilot testwork, with results validating both the flowsheet and the 85% Davis Tube Recoverable (DTR) nickel recovery assumed in the 2020 Preliminary Economic Assessment (2020 PEA) for the Baptiste Nickel Project (Baptiste or the Project) at the Decar Nickel District in central British Columbia. The Company's current large-scale, three-phase metallurgical testwork program, which has been ongoing since mid-2021, will conclude in the second quarter of 2023 and the resulting dataset will support the completion of the Baptiste Preliminary Feasibility Study (PFS).

Phase 3a –Large-Scale Pilot Testwork: Building on Phase 1 piloting, the Company undertook large-scale pilot testwork to (1) further demonstrate the recovery benefits of plant-scale processing, and (2) generate sufficient high-grade awaruite concentrate for hydrometallurgical testing. The Company engaged Corem (Quebec, Canada) to conduct this testwork based on their expertise in magnetic separation and conventional froth flotation and their extensive, world-class facilities. FPX's metallurgical team worked closely with Corem to optimize a wide range of parameters for each unit operation in the flowsheet, which was only possible due to the large overall scale of the pilot testwork.

Initial results of the large-scale pilot testwork were reported in the Phase 2 news release and focused on the performance of the primary grind and magnetic separation unit operations. This release provides complete results from the large-scale pilot testwork, which is now substantially complete. 17 tonnes of material were processed in the pilot test conducted at Corem.

The feedstock for piloting was a bulk sample from the starter pit area with a head grade of 0.117% DTR nickel, as compared to the resource average of 0.129%. Primary grind feed rates averaged 210 kg/h, with a total run time of over 80 hours. In contrast, the Phase 1 pilot plant processed 3.6 tonnes of feed material over 23 hours of run time.

As previously reported, the shorter duration of the Phase 1 pilot was insufficient to reach steady state milling conditions due to the high density of awaruite and its influence on the recirculating load, while the Phase 3 pilot reached steady state conditions after processing 11 tonnes of material over 54 hours. When steady state was reached, multiple surveys were conducted at primary grind sizes ranging from 80% passing 150 to 280 microns, leading to a robust dataset which supports the conclusions inferred from the Phase 1 pilot testing. Phase 3a – Primary Magnetic Separation: As demonstrated in the Phase 1 piloting, awaruite's high density (~8.6 specific gravity (SG)) presents an opportunity for preferentially grinding awaruite, versus the much less dense background of serpentine gangue minerals (approximately 2.5-3.0 SG).

As a hydrocyclone classifies minerals based both on particle size and particle density, preferential grinding of awaruite was both expected and observed. The preferential grinding of dense awaruite means that Baptiste can utilize a relatively coarse primary grind (target of 80% passing 275 microns for the PFS, versus 300 microns in the 2020 PEA) while achieving the metallurgical performance of a much finer grind, thus reducing circuit sizing, power consumption, and operating consumables. In addition to demonstrating the benefits of preferential grinding of awaruite, additional pilot plant runs and ancillary bench-scale programs were completed to determine the impact of magnetic field strength on recovery.

Note that the testwork supporting the 2020 PEA utilized relatively low intensity magnetic separation and did not thoroughly explore the benefits of increased field strength. The results clearly indicate a 0.5-1.5% increase in DTR nickel recovery due to increasing magnetic field strength from 1,200 to 1,800 Gauss. Note that 1,800 Gauss is still sufficiently low to be classified as "low intensity" magnetic separation and as such does not require a significant change or cost increase in the magnetic technology required for industrial equipment.

The pilot plant results clearly indicate an additional 0.5-1.0% recovery benefit attributed to preferential grinding, versus results achieved in bench-scale testing. In aggregate, preferential grinding and increased magnetic field strength leads to a recovery increase of 2-3% at the coarse primary grind size targeted for the PFS (80% passing 275 microns). Phase 3a – Regrind and Cleaner Magnetic Separation: Following the primary circuit pilot test, the regrind circuit pilot plant test was conducted.

The objective of the regrind circuit is to further liberate awaruite and subsequently clean the concentrate by magnetic separation in order to produce a higher-grade "magnetics-rich" concentrate which can then be further upgraded by conventional froth flotation. Similar to the primary circuit, the regrind circuit was set-up with closed circuit grinding using a hydrocyclone classifier, once again to take advantage of awaruite's high density and the resultant preferential grinding potential. While the preferential grinding phenomenon was expected, it was much more pronounced than in the primary circuit.

Despite a total run time of 46 hours and a total regrind feed of 1.8 tonnes, steady state conditions were not achieved. At the time of shutdown, it was estimated that the DTR nickel recirculating load was 5600% and only approximately 40% of DTR nickel was sufficiently fine enough to have reported to cyclone overflow for magnetic separation cleaning. For the approximately 40% of DTR nickel which was sufficiently ground to report to hydrocyclone overflow, the DTR nickel recovery in cleaner magnetic separation exceeded 99%, in line with the 100% stage recovery assumption in the 2020 PEA.

The remaining DTR nickel recovered in the regrind circuit clean-out was batch ground and then subjected to magnetic separation, where DTR nickel recovery also exceeded 99%. Phase 3a – Flotation: Having created a magnetics-rich product through two stages of grinding and magnetic separation, the objective of froth flotation is to separate awaruite from magnetite. The cleaner magnetic separation concentrate produced from the regrind mill clean-out material was subjected to bench- and pilot-scale batch flotation as this material contained the majority of DTR nickel (60% of the regrind circuit feed).

This material performed exceptionally well in flotation, with a 94% recovery to a final concentrate grading more than 65% nickel. This is inline with previous bench-scale flotation testwork results and the PEA's assumption of 94% flotation stage recovery to a 63% nickel concentrate. Flotation concentrate from the Corem work is now the feedstock for the current hydrometallurgical testing program, the results of which will be released in the second quarter of 2023.