Alchemy Resources : Review of Battery Metals Assets

onlyBOARD AND MANAGEMENT MR LINDSAY DUDFIELD

NON-EXECUTIVE CHAIRMAN

MR JAMES WILSON

CHIEF EXECUTIVE OFFICER

MS LIZA CARPENE

NON-EXECUTIVE DIRECTOR

useMR ANTHONY HO

NON-EXECUTIVE DIRECTOR

MS CARLY TERZANIDIS

COMPANY SECRETARY

PROJECTS

personalLAKE REBECCA (ALY 100%) KARONIE (ALY 100%)

LACHLAN (ALY 80%)

WEST LYNN (ALY 80%)

BRYAH BASIN (ALY 20%, TSX-V SGI 80%) BRYAH BASIN (ALY 20%, SFR 80%)

For

1 Refer to Alchemy Resources ASX Announcement 19 February 2019

2 Refer to Alchemy Resources ASX Announcement 19 June 2019

3 Refer to Austrade Announcement https://www.austrade.gov.au/ArticleDoc uments/5572/Critical_Minerals_Projects _in_Australia.pdf.aspx

ASX: ALY

10 February 2022

Review of battery metals assets

HIGHLIGHTS

• Alchemy has initiated a strategic review of its battery metals assets at the 80% owned West Lynn Ni-Co-Al Project in New South Wales.
• West Lynn has an existing Inferred Resource of 21.3Mt @ 0.84% Nickel and 0.05% Cobalt1, and an Alumina Resource of 6.5Mt @ 20.8% Al203.2
• Following the recent strength in Nickel-Cobalt and Alumina pricing, the Company has commenced a strategic review of the Project to re-visit the potential for resource growth and optimisation of metallurgical process routes.
• Auralia Mining Consultants has been engaged to assist with the strategic review.

Alchemy Resources Limited (ASX: ALY) ("Alchemy" or "the Company") is pleased to announce that it has commenced a strategic review of the West Lynn Nickel-Cobalt and the Summervale Alumina assets in New South Wales. The Company announced maiden Resource estimates for the West Lynn Ni-Co deposit and the Summervale Alumina deposit in 2019¹ ². Early-stage metallurgical test-work was also completed with positive results. With the significant increase in base metals prices and the unprecedented demand for High Purity Alumina ("HPA") products, the Company will investigate pathways to add shareholder value from the West Lynn Ni-Co-Al assets.

The review aims to focus on the following areas:

• Identifying additional treatment pathways for the Alumina Resource and the potential to obtain a high quality ("4N") HPA product,
• Evaluating the exploration potential to build on the existing Resource base, and
• Considering potential partners to help develop the Project.

Chief Executive Officer Mr James Wilson commented:

The review of the West Lynn Project is particularly exciting since Nickel prices are at an 11 year high, and High Purity Alumina is a key component in Lithium batteries. Demand for these critical and battery metals has skyrocketed since we completed our initial resource and test-work in 2019. Since then, West Lynn was named as a critical minerals project by Austrade in 20203. Our advanced critical and battery metals projects comprise an important part of Alchemy's exploration portfolio and we believe it is strategically timely to review the pathways to enhance the value in these assets.

Alchemy Resources Limited

ABN: 17 124 444 122

1. 9481 4400 | E: [e-mail] | W: www.alchemyresources.com.au 8/8 Clive Street, West Perth 6004, WA

ABOUT THE WEST LYNN BATTERY METALS ASSET (NSW ALY 80%)

The West Lynn Project is located 13km northwest of Nyngan in central NSW. The West Lynn Project forms part onlyof a joint venture with Heron Resources Limited (ASX: HRR) where Alchemy has earned an 80% interest.

The tenure lies over both leased and freehold farmland where the land is mainly used for wheat crops and livestock. Access is directly via the Mitchell Highway which runs through the north-east corner of the licence, and various public and private gravel roads and tracks within the licence area.

For usepersonal

Figure 1: West Lynn Project Location

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GEOLOGY

The West Lynn Project is located over a north-south trending folded belt of serpentinised ultramafics known as

onlyThe West Lynn Serpentinite is derived from the alteration of a medium grained dunite intruded into the metamorphosed Ordovician Girilambone Group. The serpentinite is strongly magnetic compared to the surrounding sediments of the Girilambone Group (Figure 2).

the West Lynn Serpentinite, surrounded by sediments of the Girilambone Group within the Girilambone-Wagga

Anticlinal Zone in central NSW. The linear orientation of the belt suggests emplacement along regional shears or faults of Alpine-type origin (ophiolite).

useRESOURCES

Nickel-Cobalt Resource1

Nickel-cobalt mineralisation at West Lynn is flat lying and associated with variably lateritic clay, saprolite and weathered serpentinite units. Mineralisation remains open both along and across strike, showing good potential to deliver additional resources.

		Deposit	Cut Off (Ni %)	Tonnes (Mt)	Ni %	Co %	Al %	Fe %
		West Lynn	0.6	14.70	0.85	0.05	2.4	20.2
		Summervale	0.6	6.64	0.82	0.04	2.4	19.7
personal	TOTAL	0.6	21.34	0.84	0.05	2.4	20.0

Table 1: West Lynn and Summervale Nickel-Cobalt Resource

Alumina Resource2

The kaolinite zone hosting the alumina mineralisation at Summervale is flat lying, commences from ~15 to 25m b low surface, is between 2m and 40m thick (commonly ~10m thick), and is interpreted to be derived from weathered pelite units of the Girilambone Group. Mineralisation remains open along and across strike, showing good potential to deliver additional resources. It is anticipated that the alumina resource could potentially be exploited in conjunction with open pit mining of the underlying Ni-Co resource.

ForDeposit

Summervale

Cut Off (Al2O3 %)	Tonnes	Al2O3%	Fe2O3%	K2O%	Na2O%	TiO2%	SiO2%
(Mt)
18	6.55	20.8	2.8	1.79	0.43	1.15	64.2

Table 2: Summervale Alumina Resource

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METALLURGY

onlyWEST LYNN NICKEL COBALT:

Alchemy has previously engaged Direct Nickel ("DNi") to undertake metallurgical test work using a nitric acid each via the patented DNi Process™. This test-work returned very encouraging recoveries for both nickel and cobalt from composite samples, with averages of 91.5% Ni (saprolite), 88.3% Co (saprolite), 86.4% Ni (lateritic clays) and 82.1% Co (lateritic clays) 1.

SUMMERVALE HIGH PURITY ALUMINA:

A test-work program was conducted by DNi on the Summervale alumina material to assess the amenability of usethe ore to a standard HPA from kaolin process. The test-work successfully demonstrated that a HPA product could be achieved, resulting in a final HPA product of 99.95% purity. Recommendations from the metallurgical tudy suggested carrying out additional tests on a larger sample to assess the potential to achieve a 4N purity

product (99.99% Al2O3)2. personalFor

Figure 2: West Lynn Resource with drilling coloured by maximum downhole Ni(%) over regional aeromagnetic image

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MINERALISATION

The mineralisation at the Project is the result of weathering processes concentrating Ni, Co and Al within clays onlyand saprolite derived from the underlying serpentinite. The Alumina Resource is in a discrete layer overlying

the Ni-Co mineralisation in the Summervale area and remains open in all directions.

Ni-Co mineralisation at West Lynn is associated with variably limonitic and ferruginous clay, saprolite and weathered serpentinite units, and shows good continuity between adjacent drill holes. The higher alumina grades are more prevalent at the Summervale Prospect and are associated with white kaolinitic clay units located immediately above or adjacent to the Ni-Co mineralisation.

For usepersonal

Figure 3: Plan of Summervale Prospect showing all drilling (coloured by Ni%), with significant Alumina intercepts

(labelled) over regional aeromagnetic imagery

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