Cyclone Metals : Quarterly Report - 30 June 2022

Q2

Quarterly Report

30 June 2022

27 July 2022

Quarterly Activities and Cash Flow Report

for the Quarter Ended 30 June 2022

CORPORATE

Strategy and Business Model

Cyclone Metals Limited (ASX: CLE) (Cyclone Metals or the Company) is an Australian domiciled mineral development and investment company. Cyclone Metals has interests in several exploration and mining projects and companies, providing exposure to copper, gold, iron ore, lithium, rare earths, uranium and lead-silver-zinc assets in Australia, Europe, Africa and South America (refer Figure 1).

Cyclone Metals' strategy is to acquire and invest in undervalued and/or distressed mineral assets and companies (Projects) and:

• improve the value of these Projects, through a hands-on approach to management, exploration, evaluation and development; and
• retain long-term exposure to these Projects through a production royalty and/or equity interest.

Cyclone Metals aims to deliver Shareholder value by adding value to these undeveloped Projects. If Projects are converted into cash, the Company intends to follow a policy of distributing surplus cash to Shareholders.

Board and Joint Company Secretary Appointment

During the quarter, the Company announced the appointment of Mr Stirling Ross as Non-Executive Director of the Company with effect from 13 April 2022.

On 24 June 2022, the Company announced the appointment of Ms Catherine Grant-Edwards as Joint Company Secretary with effect from 24 June 2022.

Unmarketable Parcels Sale Facility

On 10 May 2022, the Company announced that it had established an Unmarketable Parcel Sale Facility (Facility) for shareholders who hold less than A$500 worth of fully paid ordinary shares (Unmarketable Parcel) in the Company. The Company established the Facility to enable shareholders who hold an Unmarketable Parcel to sell their shares without having to act through a broker or pay brokerage or handing fees. Shareholders with an Unmarketable Parcel were instructed to return the Share Retention Form (Retention Form) by the closing date of Friday 1 July 2022 if they wished to retain their shareholding.

Subsequent to the quarter end on 6 July 2022, the Company confirmed that following receipt of

Retention Forms, the final number of shares eligible to be sold under the Facility was 43,064,049 shares
from a total of 2,588 shareholdings. The Company has completed the sale of these shares with
proceeds from the sale being distributed to participating shareholders.	ASX: CLE

Quarterly Report

27 July 2022

Shareholder Meeting

On 20 May 2022, the Company held a general meeting (GM) of shareholders. All resolutions were carried.

On 24 February 2022, the Company announced that it would undertake a placement to raise up to $500,000 (before expenses) at an issue price of $0.005 per fully paid ordinary shares (Placement Shares) with one free attaching unlisted option for every four shares applied for at an exercise price of $0.006 expiring 12 months from the date of issue (Placement Options) (Placement). The Placement included a firm commitment from Cyclone Metals Director Will Scott to subscribe for 10,000,000 Placement Shares with 2,500,000 Placement Options on the same terms as the Placement (Director Shares and Options). On 23 May 2022, the Director Shares and Options were issued to Will Scott (or nominee) following receipt of shareholder approval at the GM.

On 23 May 2022, the Company issued 50,000,000 performance rights to Tony Sage as resolved at the GM.

Appendix 5B Quarterly Report and Statement of Cash Flows

The ASX Appendix 5B quarterly report is attached to and lodged with this report. The Company's Appendix 5B Quarterly Report covers the 3-month period from 1 April 2022 to 30 June 2022.

During the quarter, exploration and evaluation expenditure was $263k, predominantly associated with work undertaken on the Grand Port Project, Nickol River Project and tenement compliance costs. Administration and corporate expenditure during the quarter was $382k which included Director, employee, and consultant costs. In addition, a payment of $260k was made to the ATO in respect to the tax amount payable. Investing activity inflows during the quarter totalled $123k from the sale of investments. Financing activity inflows during the quarter was $50k (before expenses) in relation to the Director Shares and Options issued pursuant to the Placement and $500k from the advancement of a short-term loan from European Lithium Ltd (ASX: EUR). The Company also received funds of $50,000 in respect to shares not yet issued at 30 June 2022.

As at 30 June 2022, the Company had approximately A$314k.

Payments to Related Parties and their Associates

In accordance with ASX Listing Rule 5.3.5, payments to related parties of the Company and their associates during the quarter totalled $193k relating to the Executive Directors salary and Non- Executive Director fees ($111k) and payments to Director related entity ($82k). These amounts are included at item 6.1 and item 6.2 of the Appendix 5B.

On 20 June 2022, the Company entered into a loan agreement and received funds of $500,000 from European Lithium Ltd (ASX: EUR). The loan is repayable on 30 November 2022 and accrues interest of 5% per annum. On the same day, the Company entered into a deed of variation in respect to the short terms loan entered into with EUR on 14 December 2021 to extend the repayment date to 30 November 2022. Mr Tony Sage is a director of EUR.

Refer to the Remuneration Report in the Annual Report for further details on director remuneration and related party transactions.

Cyclone Metals Limited

ASX: CLE

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Figure 1: Group Structure

Exploration Projects

Nickol River Project

CLE - 100%

Western Australia

Wee MacGregor Copper Project

CLE - 20%

Qld, Australia

Grand Port Project

CLE - 100%

New Zealand

Yalardy Rare Earth Project

CLE - 100%

Western Australia

Kukuna Iron Ore Project

CLE

Sierra Leone

Quarterly Report

27 July 2022

Investments

CuFe Limited (ASX: CUF)

15.13% interest

Iron Ore, Gold, Lithium, Base Metals

(NT and WA, Australia)

International Goldfields Limited (Unlisted)

18.82% interest

Gold (Australia / Cote d'Ivoire / Brazil)

Cauldron Energy Limited (ASX: CXU)

4.70% interest

Uranium (Australia / Argentina)

European Lithium Limited (ASX: EUR)

4.70% interest

Lithium (Austria)

Cyclone Metals Limited

ASX: CLE

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Quarterly Report

27 July 2022

PROJECTS

Grand Port Acquisition

On 24 February 2022 and 17 March 2022, the Company announced that it had entered into a binding term sheet with Grand Port Resources Pty Ltd (Grand Port) to acquire 100% of the issued share capital of Grand Port which owns and has applications over a diversified portfolio of gold, copper, nickel and PGE assets in New Zealand, with locations show in Figure 2 (together, the Acquisition).

Pursuant to the Acquisition, Cyclone agreed to issue a total of 900,000,0000 fully paid ordinary shares in the Company (Consideration Shares) of which the first tranche of the Consideration Shares of 500,000,000 Consideration Shares (Tranche 1 Consideration Shares) were issued on 23 March 2022, and the second tranche of the Consideration Shares satisfied by the issue of 400,000,000 Consideration Shares subject to Cyclone obtaining shareholder approval (Tranche 2 Consideration Shares). The Company issued the Tranche 2 Consideration Shares on 23 May 2022 following receipt of shareholder approval at the general meeting of shareholders held on 20 May 2022.

Figure 2: Location of Grand Port Projects

Cyclone Metals Limited

ASX: CLE

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Quarterly Report

27 July 2022

South Island - Longwood

Longwood Range Gold Copper PGE Project (application pending) (Longwood Project) is situated 40km west of Invercargill, New Zealand and covers 424km2. Historic production includes: ~88koz Au and 1,500oz of platinum. Previous drilling intersected a PGE reef with no follow up work and the project area has been identified as being fertile for copper and nickel by Otago University. There has been only 4 historic drill holes to date on the Longwood Project. On-ground work will kick off with a geochemical sampling program that will generate the maiden drill program.

South Island - Mareburn and Macraes South

The Mareburn Gold Project (Mareburn Project) and Macraes South Gold Project (both granted) (Macraes Project) (figure 3) covers 464km2 within the Otago Goldfield of the South Island, which has 10Moz of proven historical gold production. The Mareburn Project sits 8km north of the producing Macraes Gold Mine and processing plant, New Zealand's largest producing gold mine, and ~2km from the Coronation open pit. The Macraes Project is contiguous to the south of the Macraes Gold Mine and processing plant.

Figure 3: Macraes South and Mareburn Project locations, contiguous to the Macraes Gold Mine.

Cyclone Metals Limited

ASX: CLE

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