Comet Resources : Acquires Strategic Qld Copper Project from Glencore

Comet Acquires Strategic Queensland Copper Project from

Glencore

HIGHLIGHTS:

• • Comet to acquire 100% of Mt Margaret Copper Project from Glencore

• • The Mt Margaret Copper Project successfully produced from open pit mining from 2012 until 2014, when operations were suspended due to the copper price environment and outlook at that time

• • Located only 7km from key processing infrastructure at Ernest Henry, where Mt Margaret ore was previously processed into export quality copper concentrate

• • JORC open-pit Resources of 13.0Mt at 0.78% copper and 0.24g/t gold with >95% in the Measured and Indicated categories1

• • Near-term production potential - 2 open-pit deposits are already pre-stripped

• • Significant potential for resource growth through further exploration

• • Defined high priority exploration targets - both extensional and regional

• • The Company to raise approx. $50 million to fund acquisition and initial post-acquisition pre-development activities

Comet Resources Limited (Comet or Company) (ASX: CRL) is pleased to announce that it has executed a binding agreement to acquire a 100% interest in the Mt Margaret Copper Project and associated regional tenements near Cloncurry, Queensland (Project or Mt Margaret) from Mount Isa Mines Limited, a wholly-owned subsidiary of Glencore Plc (Acquisition).

Managing Director, Matthew O'Kane commented, "Acquisition of the Mt Margaret Copper Project is a truly transformational event for Comet. Mt Margaret is a substantial past-producing copper mine that we've been able to acquire due to portfolio rationalisation of a global tier one mining company. It contains existing Mineral Resources of 13.0Mt at approximately 1% copper equivalent2, with over 95% of this resource in the Measured and Indicated categories. The majority of Mt Margaret's Resource sits in two already pre-stripped open-pits providing reduced capex pathways to production."

ACQUISITION OVERVIEW

Comet has entered into a share sale agreement (MTM Acquisition Agreement) with Minerals Mining and Metallurgy Limited (ACN 645 972 309) (MMM), Mount Isa Mines Limited (ACN 009 661 447) (MIM) and Mount Margaret Mining Pty Ltd (ACN 150 366 224) (MTM) pursuant to which MIM has agreed to sell, and MMM has agreed to buy, 100% of the issued capital in MTM (MTM Shares). MTM is the owner of the Project. Neither MMM, MIM or MTM are related parties of the Company.

The consideration for the acquisition of the MTM Shares is:

(i) a non-refundable payment by MMM of $5,000,000 to MIM; and

• 1 Please see Table 2 for a complete composition of the Measured, Indicated and Inferred resources details

• 2 Please see Table 2 for a complete composition of the Measured, Indicated and Inferred resources details

(ii)on completion, the issue by Comet (such issue to be procured by MMM) of 25,000,000 fully paid ordinary shares in the capital of Comet (Shares) to MIM (or its nominee) (at an aggregate deemed issue price for those Shares of $0.20 per Share, equal to an amount of $5,000,000.

In addition, the Company has entered into a share sale agreement (MMM Acquisition Agreement) with MMM and the current shareholders of MMM (MMM Vendors) pursuant to which the MMM

Vendors have agreed to sell, and the Company has agreed to buy, 100% of the issued capital in MMM. The consideration for the acquisition of the MMM Shares is 73,550,000 Shares (Consideration Shares) and 36,775,000 options to acquire Shares (Consideration Options), to be issued to the MMM Vendors and new shareholders of MMM since execution of the MMM Acquisition Agreement as follows:

MMM Shareholders	Number of MMM Shares	Number of Consideration Shares to be received	Number of Consideration Options to be received
Kiandra Nominees Pty Ltd ACN 125 369 995 ATF	12,900,000	12,900,000	6,450,000
Valiant Equity Management Pty Ltd ACN 122 958 614 ATF	5,400,000	5,400,000	2,700,000
Bilka Two Pty Ltd ACN 636 706 002	2,700,000	2,700,000	1,350,000
Andrea Lee McLure	250,000	250,000	125,000
New Shareholders	52,300,000	52,300,000	26,150,000
Total	73,550,000	73,550,000	36,775,000

Summaries of the key terms of the MTM Acquisition Agreement and MMM Acquisition Agreement are set out in Annexure A to this announcement.

Mt Margaret is located 7km from key infrastructure at the Ernest Henry Copper-Gold Mine which was recently sold to Evolution Mining Ltd (ASX: EVN) for $1 billion.3 Comet will acquire 100% of MMM and MTM (the owner of the Project) in exchange for the issuance of 98,550,000 Shares at a deemed issue price of $0.20 per Shares (on a post-Consolidation basis, details of which are set out below), resulting in an acquisition value of $19.71 million.

Mt Margaret represents both potential near-term copper production and regional exploration upside. It comprises nine (9) mining, infrastructure and regional exploration tenements hosting known iron oxide copper gold (IOCG) style deposits including JORC Measured, Indicated and

Inferred Mineral Resources of 13.0Mt at 0.78% copper and 0.24g/t gold (please see Table 2 for a complete composition of the Measured, Indicated and Inferred resources details).

3 Refer to announcement of Evolution Mining Ltd (ASX:EVN) dated 17 November 2021.

Map 1: Location of the Mt Margaret Copper Project

Over 95% of the Resource is within the Measured and Indicated category (please see Table 2 for a complete composition of the Measured, Indicated and Inferred resources details). Open-pit mining took place at the Project for approximately two years until production was suspended in 2014 due to copper market conditions and outlook at the time. At the time of suspension, two additional open-pits had been pre-stripped covering the majority of the currently defined Resource. Mt Margaret has great potential for optimisation of its open-pit mining plans for prevailing market prices for consideration of a low capital expenditure restart of mining. Extensive geological and geophysical data sets also come with the Project and the Company intends on utilising these to generate drilling targets for resource extension and regional exploration.

The Company has appointed Euroz Hartleys Limited to act as lead manager to the capital raising to fund the Acquisition and the Company's further exploration and pre-development activities. The capital raising will comprise a raising of up to $50 million with an issue price of $0.20 per Share (on a post-Consolidation basis) (Public Offer) by way of full form prospectus (Prospectus). The predominant use of these funds will be used to satisfy the environmental bond requirements for the Project which are currently assessed at approximately $32.2 million.

Comet will undertake re-compliance with Chapters 1 and 2 of the ASX Listing Rules and, in doing so, will subject to shareholder approval, undertake a consolidation of its issued capital on a ten (10) to one (1) basis (Consolidation). The Acquisition will amount to a significant change in the scale of the Company's current activities and, as such, the Company will be required to obtain approval from its shareholders (Shareholders) for the Acquisition (see Annexure E for further details).

The Company's securities have been suspended from quotation since 31 January 2022 and will remain suspended from quotation on ASX until the Company has re-complied with Chapters 1 and 2 of the ASX Listing Rules and the Acquisition is completed.

If Shareholders do not approve the Acquisition, the Company will not proceed with the Acquisition and will need to find an alternate means to meet the requirements of Chapter 12 of the ASX Listing Rules.

On completion of the Acquisition, satisfaction of the environmental bonding conditions for the Project (namely payment of $32,203,375 which relates primarily to rehabilitation of the mined and pre-stripped pits at the E1 project area) completion of the Public Offer, issue of the consideration for the Acquisition and Share Consolidation, Comet will maintain the following capital structure:

Fully Paid Ordinary Shares:	422,709,009
Options:	78,149,718*
Debt:	Nil
Cash (estimated):	$12.0 million

* This figure does not include 10,500,000 Options held by current and previous Directors exercisable at $0.018 on or before 30 June 2023. These Options will be cancelled by the Company prior to completion of the Acquisition.

The Public Offer price of $0.20 per Share implies a market capitalisation of approximately $84.5m (see Annexure D containing the Company's pro-forma balance sheet).

MT MARGARET COPPER PROJECT

Mt Margaret consists of a total of six (6) mining and infrastructure licences covering 3,412ha and three (3) exploration tenements covering 46 sub-blocks as detailed in Table 1 (below). The Project consists of two (2) primary project areas (being E1 and Monakoff) joined by a haul road and infrastructure tenement.

The Project is currently owned by MIM via its 100% shareholding in MTM. MIM's ultimate parent is Glencore Plc (Glencore). Mining originally commenced at Mt Margaret in July 2012 after Mt Margaret was acquired from Exco Resources Ltd in June 2011 for $175 million by Xstrata Plc.4 Approximately $124 million was subsequently spent on project development and infrastructure.5 Xstrata was later acquired by Glencore on 2 May 2013. Glencore ceased mining in 2014 as copper entered into a bear market. Since Glencore's decision to cease mining, the Project has been on 'care and maintenance'.

Copper prices today are approximately 30-40% higher in $US and 90-100% higher in $A than the time of the decision to suspend mining at Mt Margaret and, perhaps more importantly, the medium and long-term outlook for copper is positive. Following the Acquisition, Comet aims to expand the current JORC Mineral Resource by drilling strike and depth extensions of current resources and will also undertake a comprehensive review of the Project database to delineate further regional drill targets highlighted by past geophysical and geochemical work.

• 4 Refer to announcement of Exco Resources Ltd (ASX:EXCO) dated 30 June 2011.

• 5 Refer to Xstrata Copper press release dated 31 July 2012.

Area	ID	From (m)	To (m)	Interval (m)	Cu (%)	Au (g/t)
E-1 South	EMMD049	40.00	68.00	28.00	1.31	0.29
EMDT063	214.00	241.00	27.00	0.81	0.24
ELZD0133	61.00	106.00	45.00	1.28	0.32

Project Area	Tenement	Area	Area Unit	Grant/Renewal	Expiry
E1	ML90157	181.6	ha	In renewal
ML90199	1655.4	9/12/2011	31/12/2032
ML90228	71.1	17/02/2012	28/02/2033
EPM8609	27	Sub-blocks	15/01/1921	14/01/2023
Monakoff	EPM14201	17	13/10/2004	12/10/2022
EPM7085	2	13/03/2021	13/03/2023
ML90198	614.4	ha	26/07/2012	31/07/2033
ML7122	32.3	15/10/1992	31/10/2032
Haul road and infrastructure	ML90229	856.8	26/07/2012	31/07/2033

Table 1 - Licences of the Mt Margaret Project

Deposit	Classification	Tonnage (Mt)	Cu (%)	Au (g/t)
E1	Measured	4.6	0.70	0.20
Indicated	5.5	0.75	0.23
Inferred	0.4	0.90	0.30
TOTAL	10.5	0.74	0.22
Monakoff	Measured	0.0	0.0	0.0
Indicated	2.4	0.95	0.3
Inferred	0.1	0.80	0.20
TOTAL	2.5	0.94	0.30
Total	Measured + Indicated + Inferred	13.0	0.78	0.24

Table 2 - JORC (2012) Resources

Mt Margaret Copper Mine - E1 Project

The E1 Project consists of 3 currently defined open pit orebodies, E1 North, E1 South and E1

East. E1 North has been mined to the previously defined pit shell parameters prior to the Project being put into care and maintenance. The existing JORC Measured, Indicated and

Inferred Resource at E1 is contained within the E1 South and E1 East deposits. Exploration around the E1 Project area will focus on drilling at depth and also along strike from currently defined mineralisation to test for further extensions.