Aurelia Metals : Great Cobar PFS outcomes & Peak Ore Reserve increase

ASX ANNOUNCEMENT

27 January 2022 | ASX: AMI

For personal use only

GREAT COBAR PFS OUTCOMES AND PEAK ORE RESERVE INCREASE

SUPPORTS LIFE EXTENSION FOR PEAK OPERATIONS PLUS SUBSTANTIAL UPSIDE POTENTIAL

Aurelia Metals Limited (ASX: AMI) (Aurelia or the Company) advises of the completion of the Great Cobar Project Pre-Feasibility Study (PFS) and maiden Ore Reserve estimate.

Highlights

• Demonstrates robust technical and economic case for low-risk brownfield development of copper-rich Great Cobar deposit via access decline and underground mining.
• Initial Great Cobar mine schedule (Production Target) unchanged: 2.3 Mt at 2.2% Cu, 1.1 g/t Au and 5 g/t Ag (see ASX release dated 23 July 2021).
• Initial mining and processing of Great Cobar expected to take place over an approximate five-year life (400-500ktpa) and deliver a total of 47kt copper and 61koz gold.
• PFS outcomes support the declaration of a maiden Ore Reserve estimate for Great Cobar (840 kt at 2.0% Cu, 1.0 g/t Au and 4 g/t Ag), increasing the total Peak Ore Reserve estimate by 19% to 3.2 Mt.
• Key physical parameters:
• • Development configuration utilises two parallel declines to access the Great Cobar deposit from the New Cobar workings with a new surface exhaust shaft and underground primary ventilation fan.
  • Longhole stoping mining method at a maximum ore production rate of 500ktpa.
  • Treatment through the Peak process plant to produce Cu-Au-Ag concentrate and Au-Ag doré; strong expected recoveries of 95% copper and 80% gold.
• Key financial parameters:
• • Pre-productioncapex of approx. A$35M with residual life of mine (LOM) capex of approx. A$50M.
  • Forecast Great Cobar site operating costs (excluding sustaining capex) of approximately A$175/t ore processed at Peak Mine's targeted 800ktpa throughput.
• The Project will proceed directly to implementation with first stope production expected approximately 18 months from access decline commencement; decline works targeted to commence in July 2022 with forecast delivery of first production ore in late CY2023.
• NSW regulatory approvals obtained to develop access decline; regulatory consent for production mining at Great Cobar expected in late CY2022.
• Key potential upside drivers:
• • Mineralisation remains open at depth and is the subject of ongoing drilling. The recently announced surface drilling results did not form part of the PFS scope and highlight the substantial potential to extend the deposit. The planned access decline is also set to provide better platforms for additional infill and extensional drilling. This is expected to deliver significant opportunity to further upgrade and extend the existing Mineral Resource, expand the initial mining area and discover potentially economic mineralisation outside the known extents of the deposit.
  • The lead-zinc portion of the Great Cobar deposit was excluded from the PFS on the basis that the mineralisation could not be reliably separated to achieve commercial concentrate specifications. This offers further upside via additional test work and potential mine schedule inclusion.

For more information, contact us at:
Level 17, 144 Edward Street	GPO Box 7	07 3180 5000
Brisbane QLD 4000	Brisbane QLD 4001	aureliametals.com
[e-mail]		ABN: 37 108 476 384

ASX ANNOUNCEMENT	2

Cautionary Statement: PEAK MINE SCHEDULE AND GREAT COBAR DEPOSIT

For personal use only

The Mineral Resource estimate underpinning the Great Cobar Ore Reserve and Production Target in the PFS have been prepared by a competent person in accordance with the requirements of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012). The Competent Person's Statement is found in the section of this ASX release titled "Competent Person's Statement". For full details of the Mineral Resources estimate, please refer to Aurelia ASX release dated 23 July 2021, Group Mineral Resource and Ore Reserve Statement. Other than drilling results released in the interim, Aurelia confirms that it is not aware of any new information or data that materially affects the information included in that release. All material assumptions and technical parameters underpinning the estimates in that ASX release continue to apply and have not materially changed.

Of the Mineral Resources scheduled for extraction and recovery in the Peak Mine production schedule (Production Target), inclusive of the Great Cobar production schedule, approximately 25% is Inferred. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the Production Target itself will be realised. Aurelia confirms that the financial viability of the Peak Mine is not dependent on the inclusion of Inferred Resources in the Production Target. For full details of the Great Cobar, and overall Peak Mine, Production Target refer to Aurelia ASX release dated 23 July 2021, Group Production Target Statement. Aurelia confirms that it is not aware of any new information or data that materially affects the information included in that release. All material assumptions and technical parameters underpinning the estimates in that ASX release continue to apply and have not materially changed.

Aurelia has concluded that it has a reasonable basis for providing the forward-looking statements and the forecast financial information included in this ASX release. While Aurelia considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the PFS will be achieved.

This ASX release has been prepared in compliance with the current JORC Code (2012) and the ASX Listing Rules. All material assumptions, including consideration of all JORC modifying factors on the Ore Reserve, Production Target and forecast financial information have been included in this ASX release.

Commenting on the Great Cobar PFS and Peak Mine Ore Reserve growth, Aurelia's Managing Director and CEO, Dan Clifford, said:

"The PFS findings justify an economically viable and relatively low-risk brownfield mine development that will provide baseload feed to the Peak process plant for at least five years. It will also enable establishment of underground drill platforms to further unlock the upside potential of the copper-rich Great Cobar deposit.

"Development of Great Cobar supports Aurelia's "copper ready" strategy and offers substantial potential value uplift from further Mineral Resource conversion and growth, mine life extension, processing of lead-zinc mineralisation, higher metal prices and discovery of additional potentially economic mineralisation in proximity to the Great Cobar deposit.

"Following completion of the PFS, the Peak Mine's Ore Reserve Estimate has increased by 19% to 3.2Mt, after allowing for mining depletion to 31 December 2021 and inclusion of the Great Cobar deposit. This demonstrates the ongoing strong Reserve growth that can be achieved from our Cobar Basin assets."

For more information, contact us at:
Level 17, 144 Edward Street	GPO Box 7	07 3180 5000
Brisbane QLD 4000	Brisbane QLD 4001	aureliametals.com
[e-mail]		ABN: 37 108 476 384

ASX ANNOUNCEMENT	3

1. Great Cobar PFS: Executive Summary

For personal use only

1.1 Introduction

The Great Cobar Project (Project) involves the underground development of a satellite base metal and gold deposit located in central-western NSW, approximately 0.5km southeast of the regional town of Cobar, 1.5km north of the New Cobar Complex and 8km north of Aurelia's Peak Mine.

1.2 Scope and Recommendation

The PFS scope was influenced by the existing Peak Mine operations and the project description submitted to NSW regulatory agencies, prior to study commencement.

The selected development case has a maximum mining rate of 500ktpa, accesses the deposit using twin declines from the New Cobar workings and requires a new surface exhaust shaft (RAR) and underground primary ventilation fan at Great Cobar to provide sufficient airflow.

The selected base case offered:

• The most favourable economic metrics, having the least pre-production capital expenditure, greatest net present value (NPV), highest internal rate of return (IRR) and equal shortest payback period.
• Less execution (schedule) risk compared to a single access decline and multiple surface shafts. The twin declines provide a ventilation circuit that sustains access development while the RAR and primary fan is being installed and offers an immediate means of emergency egress.

Apart from its direct economic contribution, recommended development of the Great Cobar Project:

• Supports Aurelia's "copper ready" strategy by contributing 47kt of copper metal and 61koz of gold to Peak Mine's LOM plan from the base case development.
• Establishes underground drill platforms that will allow more efficient infill and extensional drilling to further unlock the Project's geological potential.
• Supplies "base load" feed to the Peak Mine's process plant for a nominal production life of at least five years which underpins ore feed from other sources.
• Offers substantial value uplift potential from further Mineral Resource conversion and growth, mine life extension, processing of lead-zinc mineralisation, higher metal prices from expected global copper demand growth and discovery of potentially economic mineralisation in proximity to the Great Cobar deposit.

1.3 Geology and Mineral Resource

The Great Cobar deposit is located in the northern part of the Cobar Gold Field on the eastern margin of the Cobar basin in central-western NSW. The deposit is localised within the sub-vertical dipping Great Cobar Fault which is located wholly within siltstones and shales of the Great Cobar Slate. The deposit has a planar-shaped geometry dipping sub parallel to the regional cleavage and plunging steeply north parallel to a strong stretching lineation. The deposit is approximately 200m long, 20-30m wide and extends over a vertical distance of at least 1,200m.

The copper mineralisation is associated with a zone of intense quartz veining, magnetite brecciation and chlorite-stilpnomelane alteration. Copper is contained within chalcopyrite and shows a close association with pyrrhotite.

Significant lead and zinc intersections have been recorded from drilling. These intersections form a lens immediately west of the copper mineralisation referred to as the Great Cobar Lead (GCL) lens. The lens typically consists of galena and sphalerite with varying proportions of pyrite and pyrrhotite.

The current Mineral Resource Estimate for Great Cobar (as at 30 June 2021) is detailed in Tables 1 and 2.

For more information, contact us at:
Level 17, 144 Edward Street	GPO Box 7	07 3180 5000
Brisbane QLD 4000	Brisbane QLD 4001	aureliametals.com
[e-mail]		ABN: 37 108 476 384

ASX ANNOUNCEMENT	4

Table 1: Great Cobar Mineral Resource Estimate: copper (A$120/t NSR cut-off grade)

For personal use only

	Class			Tonnes		Au		Cu		Pb		Zn		Ag
			kt		g/t		%		%		%		g/t
Measured	-	-	-	-	-	-
Indicated	3,000	0.8	2.3	0.0	0.0	5
Inferred	2,300	0.6	2.2	0.1	0.3	9
	Total			5,300		0.7		2.2		0.0		0.1		7

Table 2: Great Cobar Mineral Resource Estimate: lead-zinc (A$120/t NSR cut-off grade)

	Class			Tonnes		Au		Cu		Pb		Zn		Ag
			kt		g/t		%		%		%		g/t
Measured	-	-	-	-	-	-
Indicated	-	-	-	-	-	-
Inferred	510	0.3	0.2	8.4	11.6	53
	Total			510		0.3		0.2		8.4		11.6		53

Drilling subsequent to the data cut-off for the 30 June 2021 Mineral Resource Estimate is expected to increase the resource, particularly via a substantial mineralised depth extension that would be readily accessible from the PFS mine design (Figure 1).

Figure 1: Great Cobar deposit long section showing mineralised zones, proposed initial mining area and depth extension drilling

For more information, contact us at:
Level 17, 144 Edward Street	GPO Box 7	07 3180 5000
Brisbane QLD 4000	Brisbane QLD 4001	aureliametals.com
[e-mail]		ABN: 37 108 476 384

ASX ANNOUNCEMENT	5

For personal use only

There remains substantial opportunity to further extend the Great Cobar deposit from:

• Resource extension both up and down dip to the Anjea zone within the Main Copper Lens;
• Potential economic copper mineralisation down dip of the historically mined Central Lens to Cagn;
• Potential economic gold, lead and zinc mineralisation on the western margin to the historical workings; and
• Potential repeat systems down plunge of the Dapville system south of the Great Cobar deposit.

1.4 Site Access and Layout

The proposed Great Cobar underground mine will be accessed via the sealed Kidman Way and Aurelia's existing New Cobar mining complex which is part of the Peak Mine.

Most infrastructure and facilities required for the Project are established and used to support mining operations at the New Cobar Complex which includes underground mining from the Jubilee and Chesney deposits. Several new infrastructure items and facilities are proposed to facilitate the development and operation of a new mine at the Great Cobar deposit. These include:

• Primary and secondary ventilation fans;
• Underground power infrastructure;
• Mine dewatering infrastructure;
• Surface RAR ventilation shaft;
• Emergency egress system;
• Mine emergency infrastructure;
• An additional dewatering bore at Great Cobar; and
• Surface water treatment facilities at the New Cobar Complex.

Existing transport corridors and linear infrastructure will be utilised by the Project including the surface ore haulage transport route (Kidman Way) to the Peak Mine process plant, water pipelines from Great Cobar to the Peak Mine via the New Cobar Complex and concentrate transport from the Peak Mine via road to Hermidale then rail to Port Botany.

1.5 Mining Operations

Mine development options assessed during the PFS focussed on the portion of the Great Cobar deposit having the highest level of geological confidence. The economic development of an initial mining area centred on this portion of the deposit allows the establishment of a platform for underground infill drilling and potential substantial additional extraction from the proposed Great Cobar mine.

The PFS was prepared from Peak Mine's Mineral Resource Estimate as at 30 June 2021 and therefore excluded the high grade copper-gold drill intercepts, released to the ASX on 12 October 2021 (Exceptional New Copper Results at Great Cobar), that extended the known limit of the deposit down-plunge by at least 100m.

The selected mining method is longhole stoping. Ore will be hauled using 50t trucks along an underground ramp system from the proposed Great Cobar mine to the New Cobar surface run of mine (ROM) stockpile. Ore will then be transported from the New Cobar ROM pad via Kidman Way to the Peak Mine's process plant using roadgoing side tipping trucks.

The preferred stope void backfill method is uncemented rockfill and cemented rockfill. There is sufficient waste rock stored on surface at New Cobar to fill the voids created by mining at Great Cobar.

Deswik's Stope Optimiser (SO) software was used to evaluate the block model and create mineable stoping shapes. A Net Smelter Return (NSR) cut-off value of A$155/t for copper ore was selected based on costs derived from the Peak Mine's LOM plan.

A detailed mine design (Figure 2) was developed using the outputs from the stope optimisation process. Key elements of the mine design, equipment and support services include:

For more information, contact us at:
Level 17, 144 Edward Street	GPO Box 7	07 3180 5000
Brisbane QLD 4000	Brisbane QLD 4001	aureliametals.com
[e-mail]		ABN: 37 108 476 384