PNX Metals : Near-surface high-grade gold drill results at Glencoe

ASX Announcement	Level 1, 135 Fullarton Road
Rose Park, SA 5067
14 January 2022	Australia
	Telephone [phone]
This announcement has been authorised to	Facsimile [phone]
be lodged with the ASX by the Board of	[e-mail]
Directors of PNX Metals Limited.	www.pnxmetals.com.au

Near-surfacehigh-grade gold zones extended to over

1.4 km at Glencoe and remains open in all directions

• Drilling at Glencoe continues to intersect near-surface gold mineralisation including: o 6m at 3.84 g/t Au from 36 metres in GLRC044
  o 2m at 8.58 g/t Au from 10 metres in GLRC045 o 8m at 1.52 g/t Au from 80 metres in GLRC048 o 20m at 1.01 g/t Au from 72 metres in GLRC052 o 5m at 1.61 g/t Au from 11 metres in GLRC053 o 12m at 1.05 g/t Au from 43 metres in GLRC054
• Near-surfacehigh-grade gold mineralisation intersected at Glencoe now exceeds 1.4 km of strike and remains open in all directions
• Favourable scale comparison with PNX's 100% owned Fountain Head gold deposit, located 3 km to the south and on a parallel mineralised trend to Glencoe
• Geological modelling identifies significant potential upside at Glencoe; diamond drilling to commence late January 2022

PNX Metals Limited (ASX: PNX) ("PNX", "the Company") is pleased to announce further positive gold assay results from its 2021 reverse circulation (RC) drilling program at the Glencoe gold deposit ("Glencoe") which comprised 54 RC drill holes for a total of 4,470 metres. The program was extremely successful in confirming and enhancing historic drill results, and identifying along-strike gold lode extensions that remain open.

Glencoe is located on a granted Mineral Lease approximately 170 km south of Darwin and 3 km north of PNX's Fountain Head Gold Project in the Pine Creek region of the Northern Territory. The Glencoe Project represents a 'bolt-on' asset that has significantly expanded the proposed Fountain Head development (refer ASX release 20 December 2021).

PNX previously reported a Mineral Resource Estimate (MRE) at Glencoe of 2.1 Mt @ 1.2 g/t Au for 79,000 oz Au (Inferred category; reported in accordance with the JORC Code, 2012; refer ASX release 28 April 2021 and Table 1).

This latest batch of gold assay results are from the final 13 RC holes drilled in late 2021 (Table 2) that continue to increase the gold mineralised footprint at Glencoe, which has now been drilled and demonstrates good continuity over a 1,400-metre strike extent. The assays for the balance of the 54 drillhole program were reported on 14 September and 25 November 2021.

These holes have extended the easternmost line of drilling towards the south, generated valuable infill data in the 'Eastern Extension' area previously reported, and complete the confirmatory RC drilling within the currently defined Mineral Resource domain. Significant gold intervals were intersected, with many holes returning multiple

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intervals consistent with PNX's current geological model (Table 2). Broad zones of gold mineralisation (11 to 20 metres wide at ≥1.0 g/t Au) were intersected in GLRC048, GLRC049, GLRC052 and GLRC054 (Figures 1 and 2).

Of the 54 RC holes drilled by PNX at Glencoe, only six extended beyond 80 metres vertical depth, as delineating near-surface gold lodes was prioritised to maximise the gold reporting to the optimised mining studies and conceptual pit designs. The deposit remains open at depth and further down-dip testing will occur during 2022. The drilling was complemented by other work at Glencoe, including surface geological mapping and sampling, which will also assist in informing an updated MRE, to be completed after the planned diamond drilling scheduled to commence in January.

Managing Director's Comment

PNX Managing Director James Fox said: "Glencoe continues to strengthen with infill and extensional drilling complementing our previous results and supporting the increased scale potential of the deposit. Additional holes drilled along the easternmost traverse returned high-grade gold and the deposit remains open in all directions. Geological comparison with Fountain Head suggests a gold system of similar scale potential and PNX expects with the recently reported drilling and improved geological understanding an increase in the overall contained ounces reporting to the proposed mining plan. We look forward to our 2022 exploration campaign with diamond drilling due to commence in late January, whereby we aim to add further value at Glencoe and across our entire Pine Creek exploration package."

Figure 1: Glencoe Mineral Resource outline, all RC and Diamond drill holes to date, and location of the cross-section shown

in Figure 2 ('Section').

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Interpretation and Discussion

The Glencoe and Fountain Head gold deposits exhibit similar geology, with gold mineralisation in both deposits hosted within and adjacent to a complex network of interconnected sub-vertical quartz veins associated with a prominent anticlinal fold of weakly metamorphosed sandstone, siltstone and mudstone beds. Given their similar geological setting and close proximity, the current gold mineralised footprint at Glencoe can be compared with the more advanced Fountain Head MRE (2.94 Mt @ 1.7 g/t Au for 156,000 oz gold; refer ASX release 16 June 2020) (Figure 3) to provide some guidance to the scale potential PNX believes exists at Glencoe.

The current Glencoe mining optimisation contains 31,500 oz Au from four separate pits with a maximum depth of 40 m (0.81 Mt @ 1.21 g/t Au) (refer ASX release 17 June 2021). PNX expects with the recently reported drilling and improved geological understanding, these separate pit optimisations will merge and likely increase the overall contained ounces.

Next Steps

The Company continues to integrate its 2021 data with the historic Glencoe data and has engaged CSA Global to update the Glencoe MRE. Currently, the Glencoe MRE is entirely in the Inferred category due to a lack of modern QAQC protocols and robust density measurements.

These historical shortcomings have been addressed with recent work and it is expected that the Mineral Resource confidence will improve materially and also extend to cover most, if not all of the 'Eastern Extension'.

Three diamond drill holes for approximately 360 metres are scheduled to start in late January. The primary purpose of these holes is to collect material from the Oxide and Transitional zones and provide further rock density data and structural information, as well as material for confirmatory geotechnical and metallurgical test work. The updated MRE is expected to be finalised in Q2 2022 and will be used to further refine drill targets for the 2022 field season and update the Project mining optimisation.

The update to the MRE and subsequent mining optimisation will form the basis to measuring the impact on the Project economics where an incremental increase in the resource is expected. The geometry of mineralisation (approx. 45° dip), and location near-surface immediately along strike from the current pit optimisation is likely to result in an increased resource utilisation.

About the Glencoe Development Opportunity

Under the Sale and Purchase Agreement (SPA) (executed 27 April 2021) with private company, Ausgold Trading Pty Ltd, PNX has acquired Glencoe for a total consideration of $1.875 million; of which $1.175 million has been paid to date. The Company has received unconditional approval from the Foreign Investment Review Board for the acquisition.

PNX has agreed with Ausgold Trading Pty Ltd to extend the period for completion of the Glencoe acquisition to 31 January 2022 to allow for finalisation of the stamp duty assessment and Ministerial approval (refer to Key Terms in PNX ASX announcement 10 December 2020 for further information).

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Figure 2: Glencoe cross-section showing exploration holes GLRC048 -049, and -050, and interpreted mineralised zones.

Figure 3: Comparing Glencoe drilling and optimised pit shells with Fountain Head MRE outline superimposed in yellow

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Glencoe Mineral Resource

Independent mining consultants H&S Consultants Pty Ltd estimated the Mineral Resource, summarised in Table 1, in accordance with the 2012 JORC Code.

Table 1: Glencoe Mineral Resources by oxidation zone and JORC Classification as at 26 April 2021 estimated using a cutoff grade of 0.7 g/t Au which is consistent with the assumed open-cut mining method.

	JORC Classification			Oxidation			Tonnage (Mt)			Au (g/t)			Ounces (Koz)
				Oxide	0.5		1.3		20
	Inferred
			Transitional	0.3		1.2		11
				Fresh	1.3		1.1		48
		Total	2.1		1.2		79

* Due to the effects of rounding the totals may not represent the sum of all components

The Company confirms that it is not aware of any new information or data 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 referenced in this release continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcements.

Competent Person's Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Marco Scardigno, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy (AusIMM). Mr Scardigno has sufficient experience relevant to the style of mineralisation and the type of deposits 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". Mr Scardigno is a full-time employee and Resource Geologist with PNX Metals Ltd and consents to the inclusion in this report of the matters based on his information in the form and context in which it appears

For further information please visit the Company's website www.pnxmetals.com.au,or contact us directly:

James Fox

Managing Director & CEO

Telephone: [phone]

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