Heavy Minerals Limited announced the results of the Port Gregory Scoping Study and Preliminary Economic Assessment ("PGSS" or "Scoping Study") Study Highlights Substantial Net present Value (NPV) relative to HVY market capitalisation Low CAPEX project 16-year mine life with the potential to extend with further successful drilling (planned for 2022) Short Payback period Significant Life of Mine (LOM) Revenue High Internal Rate of Return (IRR) Significant after-tax Free Cash Flow (FCF) Low OPEX and high margin project Averaging 141 kt of garnet and 6 kt of ilmenite product per annum Scoping Study Overview The Port Gregory Garnet Project consists of six tenements totaling 227.28 km2 located approximately 50 km North of Geraldton. The Port Gregory Project is the initial focus of the Company and is prospective for industrial minerals, in particular garnet. The Project has a JORC Mineral Resource estimate of 135 Mt @ 4.0% (THM) or 4.9 Mt Contained garnet.

The Port Gregory Mineral Resource estimate is reported at a cut-off grade of 2.0% THM. At a cut-off grade of 2.0% THM the Port Gregory deposit comprises a total Mineral Resource of 135 Mt @ 4.0% THM, 10% SLIMES and 10% OS (Over Size) containing 5.4 Mt of THM with an assemblage of 90% garnet, 4% ilmenite, 1% rutile and 0.6% zircon. The JORC categories are specifically stated as: an Indicated Mineral Resource of 88 Mt @ 3.8% THM, 10% SLIMES and 9% OS containing 3.3 Mt of THM with an assemblage of 89% garnet, 4% ilmenite, 2% rutile and 0.6% zircon; and an Inferred Mineral Resource of 47 Mt @ 4.5% THM, 10% SLIMES and 11% OS containing 2.1 Mt of THM with an assemblage of 91% garnet, 4% ilmenite, 1% rutile and 0.5% zircon.

The Scoping Study highlights that the project has a low capital requirement for production with substantial operating margins which has the potential to elevate Heavy to the ranks of producer in the coming years. The cash flow and economic analysis has been prepared on a 100% of project. Cost estimations are considered to be at a scoping study level of accuracy of ± 35% There are two major mining areas which will be selectively mined with mining initially beginning on the eastern flank of the project where material will be mined for approximately 12 years.

The western flank will be mined for the remaining 4 years of the life of mine which is currently estimated at 16 years. Given the resource is open to the north and south there is the potential for the mine life to be extended with successful drilling. The proposed operation will process mineralisation from surface or with limited overburden removal via conventional dozer trap mining (MUP) from shallow pits at a rate of 488 TPH to produce a slurry that is pumped to a Wet Concentration Plant (WCP).

A Heavy Mineral Concentrate (HMC) is produced via processing the sand fraction through a series of gravity spirals and up-current classifiers (UCC). The HMC is transferred to the dry Mineral Separation Plant (MSP) where the HMC is further upgraded by removing material via magnetic separation. The magnetic concentrate which is dominated by ilmenite will form a valuable by- product, estimated to sell for AUD 640 per tonne.

The garnet material will then be screened, bagged, and shipped to Geraldton Port for export to the market. The Project has excellent surrounding infrastructure including bitumen roads and a short haulage path to Geraldton for offsite storage at a warehouse in Narngulu. Once a shippable amount of product (20kt) has accumulated, material will be trucked to port for loading onto ships for export.

Furthermore, given the location, it is expected that a high-quality residential workforce located in either Geraldton or Kalbarri will enhance the opportunities for regional development. Should the project source a considerable proportion of the workforce from Kalbarri the potential for NAIF (Northern Australia Infrastructure Fund) funding will be investigated as a source of debt financing. Key Study Outcomes and Assumptions The Scoping Study demonstrated the technically simple and robust nature of the project and the significant potential economic value that would result from a future development at Port Gregory.

There remains significant upside to add to the Mineral Resource Estimate at Port Gregory as highlighted by the Mineral Resource Estimate which shows that it is open to both the North and South within HVY tenure. Should this occur the effect on the NPV of the project will rerate upwards accordingly. A total of 8 production and processing scenarios were originally evaluated during the Scoping Study, with Scenario 1 originally the production base case.

This Scenario was left out due to overproduction and bottlenecking of the processing flowsheet. Scenario 6 was selected as the production and financial case for the Scoping Study as it does not exceed WCP /MSP capacity and allows for the reasonable placement of product in the market. Garnet pricing assumptions were sourced from a variety of open-source data and publications including Garnet distributors marketing pricing and Garnet producers market releases.

Industry expert interviews were also conducted. Low to midpoint pricing was utilised to ensure robustness in the model. Ilmenite concentrate pricing was sourced from current ferroalloy.net pricing data for ilmenite product ex-WA.

Production Projections and Options Investigated The production profile of the Port Gregory Garnet Mine demonstrates annual production of 71 kt of Blasting grade garnet, 70 kt of Water Jet grade garnet and 6 kt of Ilmenite product. 77% of production throughout the life of mine is sourced from Indicated Mineral Resources with the remainder from Inferred Mineral Resources. Nameplate capacity is conservatively modelled to be reached within 3 months of commissioning.

It should be noted that the 80 mesh garnet could be placed into the blasting market as well as the waterjet market.