Elementos : Optimisation Study Oropesa Tin Project

ASX:ELT

ASX ANNOUNCEMENT

29 March 2022

Optimisation Study materially increases scale and economics for Oropesa Tin Project

• • Oropesa Tin Project Optimisation Study confirms robust 1.25Mtpa project, capable of producing 3,350 tonnes of contained tin per year

• • On a base case tin price of US$32,500 per tonne, Oropesa's Optimisation Study has confirmed:

  • o Pre-tax ungeared NPV8% of approximately A$292m and post-tax NPV8% of approximately A$198m1.

  • o Pre-tax Internal Rate of Return is approximately 46%

  • o Mine life of at least 13 years, Payback period of ~ 2.5 years

• • Oropesa's strong Study economics, are based on a conservative long term tin price assumption of US$32,500/t (24% less than current LME cash price#, 40% less than current SHFE SN2204 contract+)

• • The Study underwrites a globally significant tin project, with a Production Target of 15.5Mt RoM Ore

• • Elementos to use 1.25Mtpa project scale as the basis of an Oropesa Definitive Feasibility Study and for Spanish Environmental & Mining licence applications

Elementos Limited's (ASX:ELT) Optimisation Study (JORC defined Scoping Study) for its Oropesa Tin Project in Spain has confirmed a robust case for upgrading the project scale to 1.25Mtpa Run of Mine (ROM) rate, with average annual contained tin production projected at 3,350tpa.

Oropesa project economics are robust at a variety of tin price assumptions and discount rates as evidenced by the following table, with the Scoping Study tin price of US$32,500/t and the current cash tin price of US$42,650/t (LME#) US$54,000/t (SHFE+) highlighted for ease of comparison.

A$M1 Project NPV - 100% basis, real, ungeared, pre-tax

Tin Price US$/t

Study BasisLME Spot#SHFE Spot+

$30,000	$32,500	$42,650
6% A$256M	A$338M	A$420M	A$584M	A$671M	A$749M
8% A$220M	A$292M	A$365M	A$509M	A$586M	A$654M	A$799M	A$915M	A$944M
10% A$188M	A$252M	A$317M	A$445M	A$513M	A$574M	A$702M	A$805M	A$831M

$35,000 $40,000

$45,000 $50,000

$54,000

$55,000

A$913M A$1,044M A$1,077M

Inferred Resources make up 6% of 15.5Mtpa Production Target used for mine plan and economic evaluation. Cautionary statement: 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.

1 Project modelled in USD, NPV converted to AUD using flat AUD:USD FX 1:0.75 # London Metals Exchange official cash tin price - 25 March 2022lme.com/tin + Shanghai Futures Exchange SN2204 Price - 25 March 2022https://www.metal.com/price/Base%20Metals/Tin

Level 6, 10 Market Street

Brisbane Queensland 4000 Phone [phone]

Elementos Limited | ABN 49 138 468 756 | ASX: ELT

elementos.com.au

US$M Project NPV - 100% basis, real, ungeared, pre-tax

Tin Price US$/t

Study BasisLME Spot#SHFE Spot+

####

$30,000

$32,500

$35,000

$40,000

$42,650

$45,000

$50,000

$54,000

$55,000

DiscountRate

6% US$192M

US$315M

US$438M US$504M US$561M

US$684M US$783M

US$808M

8% US$165M

US$273M

US$382M US$440M US$491M

US$599M US$686M

US$708M

10% US$141M

US$238M

US$334M US$385M US$430M

US$527M US$604M

US$623M

Project Internal Rate of Return (IRR) -100% basis, real, ungeared, pre-tax

Tin Price US$/t

LME Spot#

$30,000

$32,500

$35,000

$40,000

$42,650

$45,000

$50,000

$54,000

$55,000

38%

52%

65%

77%

89%

100%

The Optimisation Study confirms a Production Target2 of 15.5Mt of RoM Ore at 0.37% Sn grade (including dilution) using a US$30,000/t mining pit shell revenue price and all operating costs re-estimated and updated to a 2022 cost base. This is summarized below, and detailed further in attached Scoping Study Report Table-5.

Production Target (Based on Total available Mineral Resource)	ROM Ore (Mt)	Grade (% Sn)	Contained Tin (kt)
Total	15.5	0.37%	56.8

The Study confirms the Production Target being mined at the following average annual scale operation2:

Tonnage

Annual ore mined

1,250,000tpa

Annual ore sorter feed

1,250,000tpa

Annual Processing Plant feed

1,000,000tpa

Annual Tin Concentrate (62%)

5,400tpa

Annual Tin metal production

3,350tpa

x 13 years

Mining life

The Optimisation Study provides a significant increase from Elementos' previous 2020 Updated Economic Study (750ktpa operation, US$92M NPV8, Pre-tax)3. The increase in project scale includes increases to mining, ore sorting, processing and supporting infrastructure and is designed to comply with the Spanish mining and environmental regulations, including back-fill and rehabilitation of the open-pit.

Elementos has redesigned the mine to comply with all known environmental and mining licence regulations and restrictions, with a focus on minimising disturbed areas and environmental impact. A major update to the prior Study is the design and costing of the back-fill and rehabilitation of the open pit, tailings dam, waste dumps and all project infrastructure. This Study is fully aligned with the regulatory requirements planned for submission in April 2022. These regulatory submissions include both the Environmental Impact Assessment and Exploitation Licence application (Mining Licence).

• 2 Average annual number (rounded)

• 3 May 2020 Updated Economic Study (ELT ASX Release - 7 May 2020)

Mr Duncan Cornish	Mr Joe David
Company Secretary	Managing Director
Phone: [phone]	Phone [phone]
[e-mail]	[e-mail]

Elementos will use the matured design and upgraded scale confirmed by the Optimisation Study as the basis for a Definitive Feasibility Study (DFS).

The Study also notes that using a pit-shell revenue price of US$45,000/t would likely add an extra two years of full production onto the mine life of the operation using available Mineral Resources, excluding any additional exploration potential.

At the base case tin revenue of US$32,500/tonne, the mine is forecast to generate an average annual gross revenue of US$108 million against a forecast operating cost of US$50 million per year and All-In-Sustaining-Cash (AISC) cost of US$18,607/tonne of metal4. The estimated capital development cost is US$86 million including a 20% contingency6. Readily executable, the development proposes a modern open-cut mining operation, which backfills the pit progressively, and a conventional tin processing facility producing tin metal in concentrate which would be shipped to smelters in Europe and Asia.

Elementos Managing Director Joe David said:

"The Optimisation Study confirms that Oropesa will deliver a low capital-intensive project, with a competitive operational cost base, producing significant quantities of tin concentrate for at least 13 years.

"The operational and financial metrics summarised in this Optimisation Study are extremely positive. It demonstrates Oropesa's potential to become a significant European tin operation, supplying material quantities of tin concentrate into the global supply chains during a period of unanticipated growth in demand to service the world's insatiable appetite for critical electrical components.

"This Optimisation Study is now the basis for the company's DFS and will be the basis of all the required regulatory submissions. The fact that the financial outcomes presented are incredibly strong when based on a design which we believe is conservative and complies with all required regulations has the company more motivated than ever.

"Following recent mineralisation intercepts outside the current Mineral Resource limits, the company anticipates that the presented Optimisation Study will prove to be the first phase of a larger mining operation, with the company planning further Oropesa exploration programs at the appropriate time."

Mr David said the Optimisation Study was presented at a level of accuracy of a JORC Scoping Study but several work streams in the Study have been completed to a more detailed standard of evaluation and definition.

"The Study, completed by a team of independent consultants, follows extensive drilling, geological, geotechnical, feasibility and metallurgical test work programs over more than 12 years," he said.

Elementos' Board has authorised the release of this announcement to the market.

For more information, please contact:

• 4 See AISC summary and definitions in attached Scoping Study Report, Table-12

• 5 This forward-looking statement should be read in conjunction with the cautionary statement on page-4

ABOUT ELEMENTOS

Elementos is committed to the safe and environmentally conscious exploration, development, and production of its global tin projects. The company owns two world class tin projects with large resource bases and significant exploration potential in mining-friendly jurisdictions. Led by an experienced-heavy management team and Board, Elementos is positioned as a pure tin platform, with an ability to develop projects in multiple countries. The company is well-positioned to help bridge the forecast significant tin supply shortfall in coming years. This shortfall is being partly driven by reduced productivity of major tin miners in addition to increasing global demand due to electrification, green energy, automation, electric vehicles and the conversion to lead-free solders as electrical contacts.

CAUTIONARY STATEMENTS

The Optimisation Study (Study) referred to in this announcement has been undertaken for the purpose of assessing the technical and economic viability of developing the Oropesa Tin Project. The Study has been completed to an overall Scoping Study level of accuracy of +/- 35%. It should be noted that some the work streams in the Study have been undertaken to a more detailed standard of evaluation and definition.

The Study is preliminary in nature, it does include 6% of Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Indicated or Measured Mineral Resources or Ore Reserves, and there is no certainty that the Study outcomes will be realised during operations or further studies. Mineral Resources are not Ore Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into an Ore Reserves estimate.

While the estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues, the Company is not aware of any such issues. The quantity and grade of reported Inferred Resources are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.

The Study outcomes, Production Target and forecast financial information are based on information that are considered to be at Scoping Study level. The information applied in the Study is insufficient to support the estimation of Ore Reserves. While each of the modifying factors was considered and applied, there is no certainty of eventual conversion to Ore Reserves or that the Production Target will be realised. Further exploration work and evaluation studies are required before Elementos will be in a position to estimate any Ore Reserves or provide any assurance of an economic development case.

Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Study. The Study is based on the Measured, Indicated and Inferred Mineral Resources Estimate compiled and reviewed by Mr

Chris Grove (Announced to the ASX on the 8th November 2021), who is a Member of the Australasian Institute of Mining and Metallurgy and is a Principal Geologist employed by Measured Group Pty Ltd. Mr Chris Grove has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Mineral Resources. Mr Chris Grove consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Elementos 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 in the Study mine production plan, approximately 21% are classified as Measured, 67% as Indicated and 6% as Inferred, with 6% Unclassified (0% grade - dilution). 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. Inferred Resources do not contribute to the production schedule in the first 6 years of operations and only 1% in the first nine years of the proposed development. The production plan includes Inferred Resources in the latter stages of the production schedule. In the attached Scoping Study Figure-16 charts the contributions of Inferred Resources to the mining schedule.

This release contains a series of forward-looking statements. The words "expect", "potential", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties that may cause the actual results, performance or achievements to differ materially from those expressed or implied in any of the forward-looking statements in this release that are not a guarantee of future performance.

Statements in this release regarding the Elementos business or proposed business, which are not historical facts, are forward-looking statements that involve risks and uncertainties. These include Mineral Resource Estimates, metal prices, capital and operating costs, changes in project parameters as plans continue to be evaluated, the continued availability of capital, general economic, market or business conditions, and statements that describe the future plans, objectives or goals of Elementos, including words to the effect that Elementos or its management expects a stated condition or result to occur. Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by Elementos, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Investors are cautioned not to place undue reliance on forward-looking statements.

Elementos has concluded that it has a reasonable basis for providing these forward-looking statements and the forecast financial information included in this release. This includes a reasonable basis to expect that it will be able to fund the development of the Oropesa Tin Project upon successful delivery of key development milestones. The detailed reasons for these conclusions are outlined throughout this ASX release and in Appendix 1 (JORC Code 2012, Table 1. Consideration of Modifying Factors). While Elementos 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 Study will be achieved. To achieve the range of outcomes indicated in the Study, pre-production funding in excess of US$86m will likely be required. There is no certainty that Elementos will be able to source that amount of funding when required. Discussions with potential funders have confirmed that a project of this scale will be able to be funded with a combination of Debt and Equity. The company is confident that the capital costs are sufficiently low that raising the required equity will be possible. The company continues to have the full support of its existing largest shareholders and is working with potential offtake partners, brokers, senior debt providers, private equity firms and traditional funders to ensure that the Company will be in a position to fund the project as needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Elementos'

shares. It is also possible that Elementos could pursue other value realisation strategies such as a sale, partial sale or joint venture of the Oropesa Tin Project. This could materially reduce Elementos' proportionate ownership of, and corresponding funding liability, for the Oropesa Tin Project.

No Ore Reserve has been declared. This ASX release has been prepared in compliance with the current JORC Code (2012) and the ASX Listing Rules. All material assumptions, including sufficient progression of all JORC modifying factors, on which the Production Target and forecast financial information are based have been included in this ASX release.

COMPETENT PERSON STATEMENTS

The information in the report to which this statement is attached that relates to mining and the Production Target including the assumptions for the Modifying Factors are based on, and fairly reflect the information and supporting documentation compiled and prepared by Mr Michael Hooper a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hooper is employed by Optimal Mining Solution Pty Ltd as an independent consultant to Elementos Ltd. Mr Hooper has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hooper consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. The Mineral Resources underpinning the Production Target have been prepared by a competent person or persons in accordance with the requirements in Appendix 5A (JORC Code).

The Study is based on the Measured, Indicated and Inferred Mineral Resources Estimate compiled and reviewed by Mr Chris Grove (Announced to the ASX on the 8th November 2021), who is a Member of the Australasian Institute of Mining and Metallurgy and is a Principal Geologist employed by Measured Group Pty Ltd. Mr Chris Grove has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as