Vital Metals : Commences Resource Definition Drilling at Tardiff

For personal use only

ASX / Media Announcement

9 March 2022

VITAL COMMENCES RESOURCE DEFINITION DRILLING AT

TARDIFF ZONE 1

Growth strategy for large-scale,long-life light and heavy rare

earths production

HIGHLIGHTS

• Drilling program commences to define initial reserve for Vital's ongoing Tardiff operation within its 94MT @ 1.4% REO resource (1.3 MT contained TREO)
• Tardiff to be developed in a modular fashion, commencing at Tardiff Zone 1, before expansion to Zone 3, with further expansion along open boundaries
• The current resource for the three modules (without consideration of recent drilling programs) is 16.3mt @ 1.85% TREO (or 303kt contained TREO). At the completion of these three modules further expansion may be considered throughout the remainder of the 1.3MT contained TREO resource
• The first operational module will be focused on the Tardiff Zone 1 resource area (4.0mt @ 1.95% TREO or 79,000kt contained TREO) with expansion into the Tardiff Zone 3 resource area to occur after an initial 5-10 years production, with plant capacity and expansion to be determined based on customer demands
• Modular development plan will enable Vital to apply flexibility to its operations to meet the requirements of customers and increase production as required.
• Drilling at Tardiff Zone 1 aims to define a reserve for Module 1 mining operations
• Drilling program to include sterilization drilling for infrastructure planning
• Tardiff contains elevated heavy rare earths mineralisation to complement North T's xenotime deposit, part of Vital's strategy to be world's first light and heavy REO producer

Canada's first rare earths producer Vital Metals Limited (ASX: VML) ("Vital Metals" or "the Company") is pleased to announce it has commenced resource definition drilling at the Tardiff deposit, part of its 100%-owned Nechalacho Rare Earth Project in Northwest Territories, Canada.

Vital has planned 48 holes to follow up on results from its 2021 program at Tardiff Zone 11, aiming to extend known high-grade REO mineralisation along the trends.

Vital plans to mine at Tardiff as part of its Stage 2 growth plan as it builds a large-scale,long-life rare earths operation at Nechalacho, executing its three-stage development strategy - Foundation (targeting customer acceptance of product - mining North T); Growth (expansion into 1 million contained tonne Tardiff resource, plus potential for Wigu Hill, Tanzania); and Heavy Rare Earths. It will use results from 2022 drilling to update a Mineral Resource Estimate for the high-grade Tardiff

• ASX announcement 26 May 2021: Vital intersects broad high grade REO in near surface drilling at Tardiff Zone

For personal use only

Zone 1 area, aiming to convert existing Inferred resources to Measured and Indicated resources, with the potential to be converted into reserves, with previous drilling identifying high grade zones opening the possibility for the contained tonnage to increase.

Vital Metals' Managing Director Geoff Atkins said successful drilling could define a reserve to support the first 5-10years of operation at Tardiff, dependent on customer demand. With this forming a small percentage of our total resource, along with clearly defined resources to support ongoing operations and further expansion, the future at Nechalacho is exciting.

"We aim to develop the Tardiff deposit in a modular fashion as part of our Stage 2 growth phase. This offers the opportunity for a much larger scale, longer life rare earths project at Nechalacho now that we have proven our ability to develop, mine and produce rare earths from the Stage 1 North T pit," he said.

"We plan to develop the Tardiff Deposit in modules, commencing at Tardiff Zone 1 before expanding into Tardiff Zone 3 with further expansion possible along open resource boundaries, including to Tardiff Zone 2 which currently sits outside of our defined resources. The region identified as the target for modular operations at Tardiff has a defined resource of 16.3mt @ 1.85% TREO. With this resource containing over 300,000t of rare earth oxides the potential is enormous. Following our previous drilling program the initial focus of our first operations module will be the Tardiff Zone 1 resource area, which contains 4Mt @ 1.95% TREO (or 79,000t of contained rare earths). However, with our drilling campaign at Tardiff last year exceeding our expectations, achieving grades up to 13.78% TREO and consistently returning results above 2% TREO, with all our holes at Tardiff Zone 1 intersecting mineralisation, we see significant opportunities for improvement.

"We are currently completing follow up drilling to define an initial reserve at Tardiff Zone 1. This will form the basis for a pit to service Module 1. During development and operation of Module 1, Vital will continue to expand our reserve drilling throughout the defined 16.3mt @ 1.85% TREO (or 303kt contained TREO) resource to service continued and expanded operations.

"This is part of our three-stage strategy of development, in which we initially build the foundations at North T, then grow through expanded operations at Tardiff in Stage 2 and commence production of heavy rare earths in Stage 3, which would make us the only rare earths producer to achieve that."

2022 Drill Plan Details

Tardiff is part of the Upper Zone at Nechalacho, which boasts an impressive light rare earth oxides (LREO) resource of 94.7 million tonnes at 1.46% TREO2 in the measured (2.9 million tonnes at 1.47%), indicated (14.7 million tonnes at 1.51%) and inferred (77.1 million tonnes at 1.46%) JORC 2012 categories. Tardiff Zone 1 is a higher-gradebastnasite-rich area.

Vital designed the drill plan to extend the north-northwest-south-southwest trending zone from the known 75m of strike to 250m of strike length with three rows of holes to the north and three rows south of the zone. This aims to intersect a zone of +2% REO on the west side of the 2021 drilling pattern that remains open. Drill spacing will be sufficient for this resource to be classified as a reserve when accompanied by appropriate engineering studies.

• ASX Announcement 13 December 2019: Nechalacho Rare Earth Deposit - JORC 2012 Resources

For personal use only

Figure 1 - 2022 proposed drill plan targeting the extension of the high grade north-south trend

Background

Vital completed its first mining campaign at Nechalacho as part of Stage 1 operations, using rare earth materials from the high-grade North T pit to produce a rare earth carbonate at its Saskatoon extraction facility, which will commence production in mid-2022.

Vital is developing the much larger Tardiff deposit in Stage 2 as it executes its growth strategy, and resource definition drilling at Tardiff Zone 1 is a step in its development plans for the deposit.

Vital's drilling at Tardiff in 2021 targeted three high-grade REO zones previously identified in wide- spaced historic drilling by Avalon Materials Inc, known as Tardiff Zones 1, 2 and 3., which are contained within the larger overall resource.

For personal use only

Figure 2 - 2021 drill plan showing the Tardiff Zones 1, 2 & 3. Operations are planned to commence at Tardiff Zone 1 before extending along the high grade trend to Tardiff Zones 2 and 3

Vital completed close spaced drilling (25m x 25m) at Tardiff Zone 1, which defined a strong zone of higher grade REO mineralisation with wide intersections greater than 2% TREO. The higher grade mineralisation in Zone 1 was drilled on a 25m grid over 300m x 100m is open in all directions. More importantly, Vital intersected the highest grades on the most northern and southern sections.

For personal use only

Figure 3 - Section along Eastern boundary at Tardiff 1,

Figure 3 - Section along southern boundary at Tardiff 1, where holes 566 and 549 ended in mineralisation in 2021 drilling

Best results from Vital's 2021 drilling at Zone 1 included:

• 31.8m at 4.35% TREO from 11.5m including 6.9m at 13.78% TREO
• 60.9m at 1.92% TREO from 11.4m
• 40m at 2.54% TREO from 16m
• 25.8m at 2.56% TREO from 15.3m
• 13m at 3.12% TREO from 36m including 4m at 7.06% TREO.

A full table of results is available in the ASX Announcement dated 26 May 2021.