Horseshoe Metals : Lights Copper-Gold Resource Grade-Tonnage Review

For personal use only

ASX ANNOUNCEMENT	11 March 2022

Horseshoe Lights Copper-Gold Resource

Grade-Tonnage Review

• 2013 Resource Model (JORC 2012) grade vs tonnage sensitivity review completed
• At 0.25% Cu cut-off, in situ resource is 178,000t Cu metal @ 0.67%; an increase of ~50,000kt Cu metal compared to the 0.5% cut-off
• Current model and grade-tonnage relationship excludes ~54,500t of Cu metal contained within high-grade copper mineralisation extracted during previous mining
• Horseshoe Lights Deposit current copper endowment totals ~232,000t Cu metal (excluding copper contained in surface stockpiles and tailings)
• Review highlights significant sensitivity for tonnages and metal immediately below the current cut-off of 0.5% Cu
• AUD copper price has improved significantly since previous resource estimation was completed in 2013 - from ~$7500/t to a current price of ~$14,000/t
• 56 Reverse Circulation (RC) holes, totalling 6075m have been drilled into the Resource since the 2013 Resource model was released
• Horseshoe Lights Copper-Gold Project summary:

1. Current in situ resource 128 kt Cu metal @ 1.0% (0.5% cut-off)o Current stockpile resource 9.5 kt Cu metal @ 0.57%
   o Extensive drilling (over 120km total) and metallurgical test work
   o Open pit only drilled to a depth of ~250m - proximal major deposits in Bryah Basin have been drilled to ~800-1000m
   o Horseshoe is targeting a deep sulphide copper target - "Below the

Dolerite" (BTD)

_______________________________________________________________________

Horseshoe Metals Limited (ASX: HOR) ('Horseshoe' or the 'Company') is pleased to report an assessment and review of the 2013 Resource Model (JORC 2012) grade vs tonnage sensitivity in relation to its Horseshoe Lights Copper-Gold deposit located in the Bryah Basin, Western Australia.

The prevailing AUD copper price in 2013 when the existing JORC Resource Estimate was completed was approx. $7500/t, compared with the current price of approx. $14,000/t.

Given the significant increase in copper pricing, an assessment of the Resource Model with respect to grade vs tonnage sensitivity has been completed and is summarised below.

The Horseshoe Lights Copper-Gold Project is the original Cu/Au VMS discovery in the Bryah Basin and is located approx. 60 km west of DeGrussa Copper Mine operated by Sandfire Resources (ASX: SFR). Past production from Horseshoe Lights includes around 316,000 oz Au & 55 kt Cu metal in two phases of mining, and the deposit contains a current in situ resource 128 kt Cu metal @ 1.0% (0.5% cut-off)and 36,000 oz Au (refer Table 1, Appendix 1, and Table 4).

only2013 Resource Model Summary

The current JORC Resource Estimate was reported and classified at a cut-off grade of 0.5% Cu in June 2013 (refer ASX release dated 5 June 2013 -under JORC 2004 and under JORC 2012 in the Quarterly Report released on 31 July 2013).

The current Resource was calculated and provided to the Company at a variety of cut-off grades, as is
the norm for such exercises, highlighted in Table 1 below. The Company has provided interpolated
values for cut-off grades between 0.25% Cu and 0.5% using a curve of best fit to highlight the effect of
lower cut-off grades on the current copper resource.
Table 1. Summary of Grade and Tonnage relationship, Copper metal at Horseshoe Lights Deposit (for
usefull classifications at each cut-off, refer Appendix 1)
personal
Cut-off grade	1.0	4.00	1.692	67,585
	CSA 2013 model	%Cu	Resource (Mt)	Cu Grade (%)	Cu Metal (t)
	global	0.18	36.48	0.535	195,099
	Cut-off grade	0.25	26.55	0.670	177,891
	interpolated	0.3	22.63	0.74	167,800
	interpolated	0.35	19.43	0.81	157,700
	interpolated	0.4	16.86	0.87	147,800
	interpolated	0.45	14.70	0.94	138,100
	Cut-off grade	0.5	12.85	1.001	128,646
	Cut-off grade	0.6	9.82	1.141	112,110
	Cut-off grade	0.7	7.70	1.277	98,368
	Cut-off grade	0.8	6.16	1.410	86,822
	Cut-off grade	0.9	4.92	1.552	76,313

N.B. Please note rounding errors may occur.

Grade-tonnages and metal relationships are shown in graphs at Figures 2 and 3, with the interpolated points highlighted.

ForThe Company notes that the current model and grade-tonnage relationship has been altered by the exclusion of substantial high-grade copper mineralisation from previous mining events, with estimated historical production of around 54,500t of Cu metal from 1.7Mt of copper and gold ore averaging around 3.2% Cu (and 1.8 g/t Au) between 1988-1994.

As shown in Table 1, and Table 2 below, an additional 49,250 tonnes of copper metal is estimated to be available to the resource between cut-off grades of 0.5% and 0.25% Cu. This material averages 0.36% Cu from 13.7Mt of resource, with around 90% of this material reporting as fresh.

Table 2. Summary of Material types for Resource between 0.5-0.25% Cu, Horseshoe Lights Deposit

	Between 0.50-0.25% Cu cut off	(Resource) Mt	Cu Grade %	Cu Metal (t)
	Oxide	0.89	0.35	3,102
	Transition	0.49	0.36	1,753
	Fresh	12.32	0.36	44,390
only	Total	13.70	0.36	49,245
Using an interpolated line of best fit to the grade-tonnage curve, at a 0.3% Cu cut-off, an additional
39,000 tonnes of copper metal is estimated to be available to the resource between cut-off grades of
0.5% and 0.3% Cu, averaging 0.40% from 9.8 Mt of material.
use

Using the interpolated value for 0.4% Cu cut-off, an additional 19,000 tonnes of copper metal is stimated to be available to the resource between cut-off grades of 0.5% and 0.4% Cu, averaging an estimated 0.48% Cu from 4.0 Mt of material.

Although the interpolated figures cannot be considered precise, they highlight the sensitivity of the resource volume and contained metal to a cut-off grade at 0.5% Cu, and that future MRE's should formally include additional lower cut-off grades.

personalSignificant drilling has been completed post the July 2013 Resource calculation, comprising 56 RC holes (RC1103-1159, excluding RC1109) drilled in the resource area (refer Figure 4) totalling 6075m, with

results summarised in Table 3.

Background to current MRE

The July 2013 MRE was prepared by respected consultancy CSA Global Pty Ltd (CSA) for the remaining in situ mineralisation at the Horseshoe Lights copper-gold deposit, which updated an earlier estimate from December 2011. CSA noted that the modelling and resource estimation study used a strong, well- constructed analytical database to establish a robust resource estimate for gold, copper and silver mineralisation, using all the reliable historical data and results of the Company's 2010-2013 drilling.

CSA chose 0.18% Cu as the natural cut-off for the deposit, after noting the unrestricted copper grade opulation had a positively skewed log distribution and that the cumulative probability plot

demonstrated an inflection point at that grade.

ForInterpretation of mineralised bodies was carried out for 34 W-E cross sections over approximately 700m f strike. Strings were generated for three lodes at 0.18% cut-off grade for copper mineralisation, as well as strings for internal dilution, and strings for a 'chalcocite domain' with high copper and relatively

high silver grades. Grade composites were created to assist with the interpretation of mineralisation.

CSA then undertook development of the block model and grade interpolation employing Multiple Indicated Kriging (MIK), with depletion of the model using a digital terrain model (DTM) of the existing pit surface, and formally reported the MRE and classification of Resources at 0.5% Cu cut-off. Specific gravity values for the tonnage estimation were provided by Horseshoe Metals, as were DTM's of oxidation boundaries. CSA also reviewed QA/QC analysis undertaken by Horseshoe personnel at the time. All surface stockpiles and flotation tailings values were excluded from the MRE provided by CSA.

Conduct supplementary drilling throughout the deposit south from the section 16 (7194140 mN) at a density sufficient to complement and confirm the results of the historical drilling.

Collect additional core samples for density measurements to support the current density estimate, with multiple samples to be collected in every drill hole in mineralisation and in waste. Further diamond core drilling to collect additional geotechnical and metallurgical information. Reconcile the modelled mineralised bodies within the limits of the existing pit against the historical production results.

Use optimised pit shells as a guide to design further drilling programmes. Subsequent model updates to employ further modelling of internal dilution.

The developed block model was classified using geostatistical parameters, geological continuity characteristics and drill hole density. Generally, CSA classified blocks as Measured Resource with the assumption that at least three samples from at least two drillholes had been selected for grade interpolation, and that the exploration grid density was close to 20 x 20 metres. Those areas of the deposit that were explored with the density of between 20 x 40 and 40 x 40 metres were classified as

onlyIndicated.

All other blocks were classified as Inferred. All model cells south from Section 16 (7194140 mN) were downgraded to Inferred category due to the lack of more modern drilling results (refer Figure 1).

At the time, CSA recommended the following geological and exploration activities to improve the MRE:

•

use•

•

•

•

personal•

The Company notes the recommendations, and either is or intends to incorporate these directions into Phase 2 and additional activities prior to commissioning of an updated MRE for the Horseshoe Lights in situ mineralisation.

As previously advised (refer Horseshoe Lights Activities Update 3 March 2022) the Company intends updating inputs for the 2014 Scoping Study (released to the market on the 19 December 2014), primarily to assess the effects on and mineral values associated with the different resource types, grade cut-offs, and resource classifications, and their respective development streams. It is also anticipated that updated economics will highlight additional drilling requirements in certain areas, driven by new, deeper pit shells, as suggested by CSA above. The Scoping Study will utilise the current MRE.

Phase 2 RC drilling will commence during March, primarily targeting the Motters zone (refer blue encircled area, Figure 4), following up significant shallow copper mineralisation highlighted in Phase 1

Foractivities (refer ASX release dated 29 October 2021). The unmined southern extension of the Motters structure which is proximal to the eastern wall of the open pit will also be further assessed during this programme.

The Board of Directors of HOR has authorised this announcement to be given to the ASX.

Enquiries

Craig Hall

Non-Executive Director

1. [phone]

E: [e-mail]

onlyuse

personalForFigure 1: Horseshoe Lights Deposit- vertical resource projection highlighting spacial relationship of resource confidence classifications