Bassari Resources : December 2021 Quarterly Activity Report and Appendix 5B

onlyBassari Resources Limited is an Australian ASX- listed company focused on discovering and developing multi-million ounce gold deposits in the Birimian Gold Belt, Senegal, West Africa.

FAST FACTS
ASX Code	BSR
I	ued Capital	2,418,855,633
No of shareholders	2,310
Top 20	36%
useINVESTMENT HIGHLIGHTS
Mineral tenements over approximately 312km²
of prospective Birimian Gold Belt, Senegal.
personal
•	Makabingui Gold Project Feasibility Study -
	Initial high grade open pit project of 1Mt at
	5.7g/t for 174,000 oz production inventory,
	$678/oz cash cost, US$90m pre Capex after
	tax cash flow in first three years, and
	expansion anticipated from underground and
	infill drilling of 8km Makabingui South zone.
• Makabingui Gold Project Mineral Resource
	(Prepared and disclosed under JORC Code
	2004 and remains unchanged) 1 Moz in 11.9
	Mt at 2.6 g/t gold (0.5 g/t cut-off) :
	- Indicated: 336,000 oz in 2.6 Mt at 4.0g/t
	- Inferred: 669,000 oz in 9.3 Mt at 2.2g/t
• Makabingui Gold Project open pit JORC
	2012 Probable Ore Reserve:
	- 158,000 oz in 0.86 Mt at 5.7 g/t
• Senegal, stable democracy since 1960.
• Well located tenements in a +60M ounce
	gold province hosting world class deposits.
• Multiple prospects identified along 60km
For
	of partially drilled mineralised strike.
BOARD AND MANAGEMENT
J	hn Traicos
Executive Chairman

Modou Guene

Director

Malik Easah

Director

Andrew Goode

Director/Acting CEO

Ian Riley

Director/Company Secretary/CFO

CONTACT US

Bassari Resources Limited (ACN 123939042)

25 Collin Steet, West Perth

WA 6005, Australia

T: [phone]

Email: [e-mail]

Website: www.BassariResources.com

31 January 2022

DECEMBER 2021 QUARTERLY ACTIVITY REPORT

Bassari Resources Ltd's ("Bassari" or "the Company") activities during the quarter focussed on efforts to reach agreement with the Senegal Government for the renewal of the Makabingui Project mining permit, to reach a settlement with Coris Bank International ("Coris") regarding its Makabingui Gold Project facility and securing additional funding necessary to recommence the project.

Highlights of the quarter

• Oceanic Facility increased to $3.06 million.
• Bishop Loan Facility of $15 million secured.
• Plant and equipment procurement recommences.
• Memorandum of Understanding secured by MGO with the State of Senegal.
• Settlement Agreement reached with Coris.

Funding

The funding facility made available by Oceanic Capital Pty Ltd (Oceanic Facility) enabled the Company's Makabingui Gold Project activities to continue during the quarter whilst additional financing opportunities were being considered by the Company. The Oceanic Facility increased during the quarter from $1.085 million to $3.06 million at the end of this quarter.

During the quarter, one of the funding options being considered was secured with documentation signed for a loan facility to be provided by Bishop Resources UK Limited (Bishop Loan Facility). Refer to the Company's ASX Announcement of 29 October 2021 for further details.

The key terms of the Bishop Loan Facility include:

•	Loan amount	-	AUD15 million
•	Interest rate	-	15% per annum
•	Loan period	-	36 months from settlement date
•	Security	-	Pledge by Bassari Mauritius Holding No 2 Ltd of its
			shareholding in MGO

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Further security was provided to Bishop Resources UK Ltd through a pledge by Bassari Mauritius Holding Ltd of its shares in Bassari Mauritius Holding No 2 Ltd.

At the end of the quarter, $8.23m of the Bishop Loan Facility had been drawn down and utilised to make partial repayments of US$5m to Coris pursuant to the settlement agreement reached with Coris, with the balance drawn to meet MGO debt repayment and operations costs.

The Bishop Loan Facility and the Oceanic Facility have enabled recommencement of Makabingui Gold Project plant and equipment procurement, which had stalled due to lack of available funding, and negotiations with shipments of equipment, including steelworks, laboratory equipment and numerous other items expected to be shipped in the current quarter.

Funding has also enabled the MGO project team to plan and commence the necessary civil works at site in readiness for the arrival and installation of plant and equipment to the Makabingui Gold Project.

Memorandum of Understanding, Makabingui Gold Operation SA and the State of Senegal

Your Directors are pleased to report that a Memorandum of Understanding ("MOU") was agreed to and signed on 9 November 2021, by Makabingui Gold Operation SA ("MGO") and The Minister of Mines and Geology, representing the State of Senegal, for the continuation of the Makabingui Gold Project ("Project").

Execution of the MOU followed the settlement agreement reached with Coris in relation to the FCFA 7 billion project finance facility (refer to ASX Announcement of 29 October 2021 for further details).

The MOU defines the technical, financial and legal conditions for the Project and the undertakings given by the State of Senegal to facilitate the development of the Project. Importantly, the State of Senegal confirmed that MGO retains its right to renew the operating permit at the end of its initial term of five (5) years in July 2022, under the conditions provided for by the mining agreement and the Mining Code and subject to MGO complying with the terms and conditions of the MOU.

The key terms and conditions of the MOU require MGO to:

1. reach an agreement with Coris for the settlement of the debt owed by MGO and making payments to Coris under the agreement when due;

1. immediately re-commence operations at the Project and carry out pre-production works (civil, earthworks, plant construction, mine site preparation and commence mining) in accordance with an agreed schedule of works towards gold production by August 2022;

1. pay all unpaid MGO worker salaries and retain current MGO staff;

1. meet all outstanding obligations to Project contractors to ensure compliance with the schedule of works;

1. provide monthly progress updates to the State of Senegal; and

1. not be involved in carrying out any direct or indirect transfer of the Project operating licence during the project re-start phase.

The MOU also releases a notice given by the State of Senegal to MGO dated 26 April 2021, lifting any restrictions on the continuation of mining operations at the Project.

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MGO, during the quarter and subsequent to the end of the quarter, have met many of the key milestones, including making payments of all unpaid Senegal employee salaries, numerous payments to local contractors and suppliers, providing progress reports to the State of Senegal and recommencing Makabingui Gold Project operations.

Coris Bank International - Settlement Agreement

A settlement agreement was reached by the directors of MGO with Coris for repayment of all amounts due under the FCFA 7 billion Makabingui Gold Project loan facility. The settlement agreement provided for the payment of a total of US$13.3m by way of three payments comprising: US$3 million by 29 October 2021, the remaining 50% of the debt by 30 November 2021, and the outstanding balance by 30 December 2021. Two payments totalling US$5 million have been made.

The settlement agreement was executed following a long period of negotiations with Coris, as previously announced by the Company. Importantly, the agreement provides for MGO to withdraw its rights of appeal and for Coris to cancel all proceedings before the Dakar Courts, including the proceeding initiated by Coris for a seizure and sale process for the Sambarabougou Exploitation Permit.

At the date of this report, and following further discussions with Coris, MGO has reached agreement with Coris to vary the settlement agreement between MGO and Coris to enable MGO to repay the outstanding balance of US$8.3m by no later than 15 March 2022.

Corporate

Suspension from Quotation

During the quarter, the Company sought in-principle guidance from the ASX to plan for the Company seeking re-quotation of its securities on the official list of ASX. ASX's policy is to remove from the official list an entity whose securities have been suspended from quotation for a continuous period of 2 years, however a short extension may be granted if the entity is in the final stages of implementing a transaction that will lead to the resumption of trading in its securities.

As the Company's securities were suspended from quotation on 1 April 2020, the Company will be required to meet various conditions before 1 April 2022 in order to avoid automatic removal. Such conditions are likely to include the Company demonstrating compliance with ASX Listing Rules 12.1 and 12.2, which require the Company to satisfy the ASX as to the sufficiency of its operations and the adequacy of its financial condition to warrant continued quotation of its securities.

The Company continues to work towards progressing its operations at the Makabingui Gold Project and consider options to secure additional equity or debt financing to carry out its objectives. Further updates will be provided to shareholders in due course.

Change of Directors

On 15 November 2021 the Board of Bassari accepted the resignation as a director of Conrad Karageorge. On 16 December 2021, Ian Riley was appointed a director of the Company.

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About Bassari

Perth - based West African gold developer, Bassari Resources Limited (ASX:BSR), has a strategic portfolio of exploration and exploitation permits focused on the Birimian Gold Belt in Senegal. The permits cover an area of 312 km² with 60km of strike along the two adjoining permits. The permits are located within the Keneiba Inlier which is a +60M ounce gold region. Bassari's vision is to discover and delineate gold resources which can be developed into profitable operations.

John Traicos	Ian Riley
Director	Company Secretary/CFO
Mob:	[phone]	Phone:	[phone]
Email:	[e-mail]	Email:	[e-mail]

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Appendix 5B

Mining exploration entity or oil and gas exploration entity

quarterly cash flow report

For personal use only

Name of entity
BASSARI RESOURCES LIMITED
ABN	Quarter ended ("current quarter")
123939042	December 2021

Consolidated statement of cash flows	Current quarter	Year to date
	$A'000	(12 months)
		$A'000

1. Cash flows from operating activities

1. Receipts from customers
2. Payments for
3. 1. exploration & evaluation (if expensed)

(b)	development	(71)	(305)
(c)	production
(d)	staff costs	(1,117)	(2,094)
(e)	administration and corporate costs	(618)	(1,240)

1. Dividends received (see note 3)
2. Interest received

1.5

Interest and other costs of finance paid

(2)

(76)

1. Income taxes paid
2. Government grants and tax incentives

1.8	Other (provide details if material)	(140)
1.9	Net cash from / (used in) operating	(1,877)	(3,855)
	activities

2. Cash flows from investing activities

2.1	Payments to acquire:
	(a)	entities
	(b)	tenements
	(c)	property, plant and equipment	(125)	(125)

1. exploration & evaluation (if capitalised)
2. investments
3. other non-current assets

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