Godolphin Resources : Farm-in on Advanced Rare Earth Element Project

ASX ANNOUNCEMENT

2 March 2022

For personal use only

Godolphin Secures Farm-in on Advanced Rare Earth Element Project

• Godolphin has signed a farm-in and joint venture agreement to earn up to a 75% interest in the Narraburra Rare Earth Element Project
• Follows an extensive review of the Rare Earth Element potential of the Lachlan Fold Belt, including assessing GRL's own tenements
• Narraburra has a previously reported a Mineral Resource Estimate of 73.2M tonnes at 1250g/t ZrO2, 327g/t REO, 146g/t Y2O3, 126g/t Nb2O5, 45g/t HfO2, 54g/t Ga2O3 and 118g/t Li2O, which was classified as Inferred under JORC (2004) by its previous owner Capital Mining Limited (ASX: CMY) not the Company (Refer Annexure B). This previously reported MRE may not conform to the requirements in the JORC Code 2012.
• Narraburra is located in the central west of NSW, host to Australia's most advanced Zirconium, Rare Earth Element and Rare Metals project, the Dubbo Project of Australian Strategic Materials
• Project is listed as a critical minerals project by the Australian Government's Australian Trade and
  Investment Commission
• Previous exploration includes airborne magnetic surveys, geological mapping, mineralogical studies, preliminary metallurgical test work, with irregular wide-spaced RAB and RC drilling
• GRL will obtain a considerable suite of historical data to progress a systematic resource drill-out to JORC 2012 standard, commencing once statutory approvals are secured - expected Q2 2022
• Earn-interms - two tranche agreement allows Godolphin to progress to 51% ownership with $1M exploration spend and 75% ownership through an additional $2M in expenditure
• Issue of success-based Godolphin shares to the counterparty, with A$1M of shares upon the 51% earn-in and A$1M of shares upon the 75% earn-in, subject to 12-month escrow period

Godolphin Resources Limited (ASX: GRL) ("Godolphin" or the "Company") is pleased to advise that it has entered into a farm-in and joint venture agreement with EX9 Pty Ltd, providing Godolphin with the opportunity to earn up to a 75% interest in the Narraburra Rare Earth Element Project located 15km north of Temora in central west NSW ("Project"). The farm-in agreement was secured following a systematic review of the Rare Earth Element ("REE") potential of GRL's own projects and a broader review of the potential of the Lachlan Fold Belt to host economic REE projects. The rapid advancement of Australian Strategic Materials' Dubbo Project, and the encouragement by Australian Governments at state and national levels for the development of REE projects, makes the Lachlan Fold Belt through central New South Wales a premier location for the assessment and ultimate development of REE projects.

The Narraburra area was first explored for REEs associated with the Devonian-aged Narraburra Granite in 1999. It was later identified as one of Australia's largest zirconium, REE and Rare Metal ("RM") resources, which also contains significant amounts of lithium. It is listed as a critical minerals project by the Critical Minerals Facilitation Office of the Australian Government's Department of Industry, Science, Energy and Resources and Australian Trade and Investment Commission1 and is a significant opportunity for Godolphin. Narraburra is 30km from the GRL's recently acquired Sebastopol target and 60km from its Gundagai Project.

Management Commentary

Managing Director Ms Jeneta Owens said: "We are very pleased to have secured this agreement with EX9 to progress a farm-in for the highly prospective Narraburra REE Project. Importantly, there has been considerable historic exploration activity undertaken, which provides us with abundant initial data, upon which we can base the next phase of project assessment which we will now expedite. REEs are vitally important for the future growth of clean energy technologies.

1https://www.austrade.gov.au/ArticleDocuments/5572/Critical_Minerals_Projects_in_Australia.pdf.aspx

1. Unit 13, 11-19 William Street, Orange NSW 2800

	P: [phone]
ASX Code: GRL	E: [e-mail]
ABN: 13 633 779 950	www.godolphinresources.com.au

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Producing REEs in an ESG-compliant and stable jurisdiction like Australia will ensure a highly sought-after product by world markets.

"This new project complements our existing copper and zinc projects, which are also an important part of the greener technologies the world is increasingly accelerating towards. Furthermore, REE projects are being actively supported by both state and the national governments, so the farm-in on the Narraburra Project is a significant strategic move by GRL."

Narraburra Rare Earth Element Project

The Narraburra Rare Earth Element Project is located approximately 340km west of Sydney and 15km north of Temora in central west NSW. The farm-in and joint venture agreement includes two tenements, EL 8420 and EL 9258, and covers a total of 349km2. Mineralisation is hosted in a fractionated, peralkaline intrusive complex of Late Devonian age.

Figure 1: Location map showing the two Exploration Licences, EL9258 and EL8420 which are subject to the earn-in

agreement in relation to GRL's existing tenement holdings.

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Since 1999, there has been considerable exploration work completed on the Project, including airborne magnetic and radiometric surveying, geological mapping, ground radiometric surveying, bedrock geochemical sampling, whole-rock analysis, petrological and mineralogical studies, preliminary metallurgical testing and RC drilling. The programs confirmed significant occurrences of Rare Earth Elements (REE) (oxide is REO) including neodymium (Nd) and praseodymium (Pr) and Rare Metals (RM) including zirconium (Zr), Yttrium (Y), niobium (Nb), hafnium (Hf), gallium (Ga) and lithium (Li). Thorium (Th) is reasonably low.

The Project has a previously reported JORC 2004 compliant Inferred resource, by previous owner Capital Mining Limited (ASX: CMY) not the Company, of 73.2M tonnes at 1250g/t ZrO2, 327g/t REO, 146g/t Y2O3, 126g/t Nb2O5, 45g/t HfO2, 54g/t Ga2O3 and 118 g/t Li2O (refer ASX Announcement: Capital Mining Limited, ASX: CMY 09 December 2011) (Refer Annexure B). It should be noted that the estimate may not conform to the requirements in the JORC Code 2012. The methodology utilised in the previous estimate were appropriate at the time of the estimate and due to the reported wide drill spacing an Inferred resource was reported.

Cautionary Statement: the estimates of Mineral Resources or Ore Reserves are not reported in accordance with the JORC Code 2012; a Competent Person has not done sufficient work to classify the estimates of Mineral Resources or Ore Reserves in accordance with the JORC Code 2012; it is possible that following evaluation and/or further exploration work the currently reported estimates may materially change and hence will need to be reported afresh under and in accordance with the JORC Code 2012; that nothing has come to the attention of GRL that causes it to question the accuracy or reliability of the former owner's estimates; but GRL has not independently validated the former owner's estimates and therefore is not to be regarded as reporting, adopting or endorsing those estimates.

The previously reported resource estimate by Capital Mining Limited was estimated based on a work program of 17 reverse circulation percussion and reverse circulation aircore drill holes. Drill samples were collected at 1m intervals and composited to 4m for analysis due to the interpreted consistency of the disseminated oxide mineralisation. All samples were assayed by NATA registered laboratories and the resource estimated by interpreting 11 cross sections through the deposit spaced at 100m to 200m. Continuity of the mineralisation was noted to be evident from the radiometric signature of the deposit and the geological correlation between sections and drill holes.

Godolphin believes there is considerable potential to expand the existing mineralisation with the planned work program, as additional drilling is completed to allow the mineral resource to be classified in compliance with JORC 2012. More importantly, a more detailed close spaced drilling pattern with an expanded analytical suite and systematic Material Type allocation should enable resource estimation at a higher cut-off grade for optimised tonnes at significantly higher head grade and a JORC Code 2012 compliant resource estimate.

The previous owner noted that mineralisation extends from the surface to a depth of 40-50 metres at end-of-hole, with shallow overburden where present consisting of clay, sand, silt, and marginal grade mineralisation at 0.5-3 metres thick. It is of note that a significant number of the historic drill holes finished in the highest grades of RM and REE and remarkably none of the drill holes intersected fresh bedrock. The resource potential at depth is completely untested.

Previous metallurgical testing of bulk samples has also been undertaken, with results indicating that there are acceptable recoveries for a range of REO components, including zirconium, niobium and lithium with clean exclusion of thorium. An historical review of this data has been undertaken and outlines that utilising a combination of conventional methods such as spiralling, flotation, hydrometallurgical and pyrometallurgical techniques has the potential to yield favourable returns.

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Figure 2: Plan view maps showing RAB and AC drill hole values as A: Maximum in hole value of Total Rare Earth

Oxides % and B: Maximum in hole value of Total Rare Metal Oxides.

Farm-in Agreement

Godolphin has entered a two-tranchefarm-in and joint venture agreement to earn up to a 75% interest in the Project. The counterparty is EX9 Pty Ltd ("EX9"), a private exploration company.

Under the first tranche, the Company will contribute $1M in expenditure towards the Project within two years, allowing Godolphin to earn a 51% interest in the Project. Subject to the Corporations Act and ASX Listing Rules and following completion of the initial earn in requirement, Godolphin would also issue EX9 with $1M in new fully paid ordinary shares ("New Shares"), calculated at the 30-day volume weighted average share price prior to the date of issue of Godolphin's New Shares ("30-dayVWAP").

As a working example, to issue EX9 with $1M in New Shares, the Company's present 30-day VWAP (approximately $0.1316 per Share) would result in the issue of 7.6 million first tranche New Shares to EX9.

Under the second tranche, to earn a total of 75% in the Project Godolphin has agreed to contribute a further $2M within 4 years in exploration and development expenditure.

Following Godolphin expending the second tranche of $2M, and subject to the Corporations Act and ASX Listing Rules, an additional $1M in New Shares also calculated at the 30-day VWAP would be issued to EX9.

To issue EX9 with an additional $1M in New Shares, the Company's present 30-day VWAP would result in the issue of an additional 7.6 million second tranche New Shares to EX9.

The Company's present ASX Listing Rule 7.1 capacity to issue equity securities in a 12-month period without Company members' approval is 12.6 million equity securities. The issue of first and second tranche New Shares, estimated to total

15.2 million New Shares, will require Company members' approval.

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All New Shares issued will be subject to a 12-month voluntary escrow from the date of issue.

Effective from the farm-in date, Godolphin and EX9 will associate in an unincorporated joint venture for the purpose of exploring and developing the tenements.

Next Steps and Exploration Plan

Prior to the completion of the EX9 agreement, Godolphin has undertaken an extensive review of historical data associated with the Project and devised an active works program.

The Company will continue its data assessment and commence work towards infill and extensional RC drilling of the deposit including quantifying primary mineralisation at depth and confirmation core drilling to enable a JORC (2012) compliant Mineral Resource Estimate to be completed.

The core drilling will additionally generate materials for bench-scale metallurgical test work.

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This market announcement has been authorised for release to the market by the Board of Godolphin Resources Limited.

For further information regarding Godolphin, please visit https://godolphinresources.com.au/

or contact:
Jeneta Owens
Managing Director	Released through: Henry Jordan, Six Degrees Investor
[phone]	Relations, [phone]
[e-mail]

About Godolphin Resources

Godolphin Resources (ASX: GRL) is an ASX listed resources company, with 100% controlled Australian-based projects in the Lachlan Fold Belt ("LFB") NSW, a world-classgold-copper province. Currently the Company's tenements cover 3,200km2 of highly prospective ground focussed on the Lachlan Transverse Zone, one of the key structures which controlled the formation of copper and gold deposits within the LFB. Additional prospectivity attributes of GRL tenure include the McPhillamy's gold hosting Godolphin Fault and the Boda gold-copper hosting Molong Volcanic Belt.

Godolphin is exploring for structurally hosted, epithermal gold and base-metal deposits and large, gold-copper Cadia style porphyry deposits and is pleased to announce a re-focus of exploration efforts for unlocking the potential of its East Lachlan tenement holdings, including increasing the mineral resource of its advanced Lewis Ponds Project. Reinvigoration of the exploration efforts across the tenement package is the key to discovery and represents a transformational stage for the Company and its shareholders.

COMPLIANCE STATEMENT The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Ms Jeneta Owens, a Competent Person who is a Member of the Australian Institute of Geoscientists. Ms Owens is the Managing Director and full-time employee of Godolphin Resources Limited. Ms Owens has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ms Owens consents to the inclusion in the report of the matters based on her information in the form and context in which it appears and that the information in the announcement is an accurate representation of the available data.

Information in this announcement is extracted from reports lodged as market announcements referred to above and available on the Company's website www.godolphinresources.com.au.

The Company confirms that it is not aware of any new information that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons' findings are presented have not been materially modified from the original market announcements.

Godolphin Resources

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