Caravel Minerals : Quarterly Activities/Appendix 5B Cash Flow Report

ASX:CVV

29 July 2022

QUARTERLY ACTIVITIES REPORT

FOR PERIOD ENDED 30 JUNE 2022

Highlights

• Caravel Copper Project Pre-Feasibility studies were finalised during the quarter and released to ASX in in July
• The PFS demonstrates the Caravel Copper Project is an executable project with strong cashflows over a minimum 28-year mine life
• PFS report was based on parallel development of two 13.9Mtpa capacity trains for a total throughput capacity of 27.8Mtpa
• Optimisation studies are continuing with Ausenco working on a Single Train ~27Mtpa design with the aim of reducing capex and operating. An update on this work is expected in August 2022
• As part of the PFS studies, Caravel finalised its Maiden Ore Reserve (JORC 2012) of 583.4Mt at 0.24% copper for 1.42Mt contained copper (at 0.10% cut- off) confirms:

• 1. Proven Ore Reserves of 105.4Mt for 0.28Mt contained copper o Probable Ore Reserves of 478.0Mt for 1.14Mt contained copper o 81.6% of the Project's 28-year mine life is in Ore Reserve
• PFS studies show annual copper production of ~62,000 tonnes (contained copper in concentrate) with very clean concentrate
• Project mining studies confirmed low operating costs (C1 ~US$1.72/lb) due to very low life-of-mine strip ratio of 1.3:1 (including pre-strip), good metallurgy, low-cost electricity and large scale
• Assay results from recent drilling have shown extensions to the Bindi Lower Limb, which remains open to the east and has potential for significant areas of new mineralisation outside the current resource model.

Caravel Copper Project

Caravel Minerals' Copper Project is located 120km north-northeast of Perth in Western Australia's Wheatbelt region, between the towns of Calingiri and Wongan Hills. Caravel's copper deposits form part of a regional porphyry style copper-molybdenum-gold mineralised belt discovered in a previously unexplored part of the Yilgarn Craton. The Project combines the Bindi, Dasher and Opie deposits.

Caravel Pre-Feasibility Study

Caravel announced results of the Pre-Feasibility Study ("PFS") and a Maiden Ore Reserve for its Caravel Copper Project. Refer to ASX Announcement 12 July 2022.

Key Results

Detailed technical, environmental, and commercial studies completed as part of the PFS indicate Caravel can be built and operated with low operating costs (C1 costs of US$1.72/lb, All- in Sustaining Cost of US$2.55/lb), low technical risks, minimal environmental impact and positive economic and social outcomes.

The base case financial model assumes a long-term price of US$4.00/lb Cu and exchange rate of US$0.72:A$1.00. Over the current 28-year project mine life, modelling demonstrates that the Project will produce ~62,000 tonnes per annum of copper in concentrate, generating cumulative pre-tax net cashflows of $4.62B on total copper sales revenues of $17.55B.

Initial capital required to construct the dual train process plant, site infrastructure, tailings storage, borefield and owners' costs is estimated to be $1.2B. Initial costs for mining equipment to achieve full production are estimated at $309M, which is expected to be arranged under vendor financing. The study allowed a further $189M for pre-stripping overburden at Bindi over the same period.

Utilising a 7% real discount rate, the Project generates a pre-tax, project level, Net Present Value (NPV) of $1.1B and pre-tax IRR of around 15%. The Project is forecast to repay up-front development capital within seven years from the start of production.

Life Of Mine Financial Economics (A$)

Cu Revenue (net of payability and TCs/RCs)		$17,555m
Net cash flow (pre-tax)		$4,622m
Pre-tax NPV (7% discount rate)		$1,066m
Pre-tax IRR		14.7%
Capital payback period		6.8 years

Summary of assumptions:

• Exchange rates: An exchange rate of 0.72 US$ per A$ was used to convert the US$ market price projections into Australian currency.
• Discount rate - Caravel Minerals considers 7% to be an appropriate discount rate based upon the Australian risk-free interest rate, low risk profile of Western Australia as reported by Fraser Institute and the Project's proximity to major infrastructure.
• All costs and sales are presented in constant Q2 2022 A$, with no inflation or escalation factors considered.
• All related payments and disbursements incurred prior to commencement of construction are considered as sunk costs.

The PFS reports on a single stage development of two identical processing trains each of 13.9Mtpa, delivering a total capacity of 27.8Mtpa. This Dual Train design was originally adopted to allow a staged development, however recent studies have demonstrated it is more attractive for the project to commence at the higher throughput without staging.

Optimisation studies for the development of a Single Train design with ~27Mtpa capacity are underway with initial results expected to be reported in August 2022. These studies are expected to show potential for lower capital and lower operating costs, with substantial benefits to the financial metrics of the project. Several other opportunities are also being studied to increase plant throughput and further reduce capital and operating costs.

Caravel Maiden Ore Reserve

A Maiden Ore Reserve was declared for the Caravel Deposits on which the PFS is based. Orelogy Consulting Pty Ltd prepared the Ore Reserve Statement in conjunction with mining studies undertaken as part of the Caravel Copper Project Pre-Feasibility Study.

Caravel Copper Project Maiden Ore Reserve (JORC 2012) statement includes:

• Proven and Probable Ore Reserve of 583.4Mt at 0.24% Cu for 1.42Mt contained Cu
• Proven Ore Reserves of 105.4Mt for 0.28Mt contained copper
• Probable Ore Reserves of 478.0Mt for 1.14Mt contained copper
• Average strip ratio of 1.3:1 (including all pre-strip)
• 82% of the Project's 28-year mine life is in Ore Reserve
• Estimation methodology is based on an owner mining scenario with costs and productivities developed from first principles and Q1 2022 capital and operating costs.

The Ore Reserve is detailed report in Table 1 below and in ASX Announcement 12 July 2022.

Table 1: Caravel Copper Project Ore Reserve Summary

Description	Units	Bindi	Dasher	Total
	Cut-off Grade Cu %	0.1	0.1	0.1
	Mt	105.4	-	105.4
Proven	Cu %	0.27	-	0.27
	Contained Cu Mt	0.28	-	0.28
	Mt	369.6	108.4	478.0
Probable	Cu %	0.23	0.27	0.24
	Contained Cu Mt	0.84	0.29	1.14
	Mt	475.0	108.4	583.4
Total	Cu %	0.24	0.27	0.24
	Contained Cu Mt	1.13	0.29	1.42

Note: Appropriate rounding applied

Caravel's Ore Reserve is reported according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, JORC Code 2012. The Ore Reserve is based on the updated Mineral Resource announced in November 2021 which followed 7,740m of diamond drilling and 20,233m of reverse circulation (RC) percussion drilling

undertaken at the Bindi deposit since 2019. The drilling resulted in the reclassification of a significant portion of the Project's Mineral Resource to Indicated and Measured status (Figures 1 and 2).

Figure 1: Bindi Deposit. Starter pits and Ore Reserve pit designs showing Measured, Indicated and Inferred Mineral Resource zones.

Figure 2: Bindi Deposit. Grade distribution within Starter pits and Ore Reserve pit showing higher grades in the early mining schedule and extensions at depth.

Plant throughput parameters for the Ore Reserve are based on a 27.8Mtpa copper processing facility at 92% recovery and minimal to no deleterious elements impacting plant performance.

The mine plan supporting the Ore Reserve is based on an open-pit mine using diesel-electric autonomous haulage trucks with electric trolley assist and electric power for drills and face- shovels. The mine planning study involved mine cost estimation, pit optimisation (see Figure 3), mine design and scheduling. The overall ore loss and dilution are low due to the strategy for bulk mining at lower grades, which reduces mining risk for unplanned dilution. Dilution for Bindi and Dasher are 2.7% and 1.6%, and ore loss 0.2% and 2.7% respectively.

Figure 3: Final pit design at Bindi closely matches the WhittleTM optimisation used to evaluate the financial viability and optimal mining strategy for the deposit

Proven Ore Reserves are based on the Project's Measured Resources and Probable Ore Reserves are based on Indicated Resources reported within the pit design. The cut-off grade was derived as part of the mine optimisation factoring in processing costs, the copper recovery factor and the net copper price after considering the associated selling costs. The result was a cut-off grade of 0.1% Cu on which the Probable and Proven Reserves are based.

Mining at Bindi will be sequenced and developed in five stages with a similar approach at Dasher which is to be developed in three stages. This allows ore feed to the mill of >0.28% Cu for the first five years of the project. The schedule also balances the amount of waste stripping in the early years with maintaining both a continuous supply of ore at the desired rates and an acceptable vertical rate of advance for each stage.

There are additional Inferred and unclassified resources below the Bindi and Dasher pits with significant Inferred Resources at Bindi West below the current Ore Reserve. Included within the pit design inventory but not the Ore Reserve is 131.5 Mt of inferred material at 0.249% Cu. Given the strong geological continuity in ore zones above there is good potential for converting these Inferred

Resources into higher classifications through further drilling. It should be noted that inferred mineral resources have a lower level of geological confidence and there is no certainty that further exploration work will result in the determination of indicated mineral resources.