Encounter Resources : Quarterly Activities Report and Appendix 5B

Quarterly Report

For period ended 30 June 2022

29 July 2022

For personal use only

Diamond drilling at three Encounter projects in Sept 2022 quarter

100% owned projects in Australia's most exciting new copper districts:

Lamil Copper-Gold Project - Paterson Province WA (100% ENR)

• Gravity survey completed in May 2022
• EIS co-funded diamond drilling to commence in August 2022

Sandover Copper Project - NT (100% ENR)

• Additional surface sampling confirmed further areas of surface copper oxide mineralisation
• Gravity survey commenced, co-funded by the Northern Territory Geological Survey ("NTGS")
• Sandover expanded to cover lithium potential in the Northern Arunta Pegmatite Province

Aileron Copper-Gold-REE Project- West Arunta WA (100% ENR)

• Geochronology completed by the GSWA classifies the host sequence and mineralisation events at Aileron are a similar age to the events at Olympic Dam
• Heritage survey completed in May 2022 to clear access tracks and drill pads

Major copper exploration drive funded through farm-ins

Yeneena Copper Project - Paterson Province WA (IGO $15m farm-in)

• Diamond drilling has commenced, operated and funded by IGO Limited (ASX:IGO)
• 2022 activities (~4,500m of diamond drilling) represent a significant program of high impact drilling targeting sediment hosted copper

Elliott Copper Project - NT (BHP $25m farm-in)

• Diamond drilling is scheduled to commence in September 2022, operated and funded by BHP (ASX:BHP)
• 2022 exploration program (including ~3,000m of diamond drilling) to advance the understanding of basin architecture and prospective deposition locations for large, sediment-hosted copper deposits

Jessica and Carrara Copper-Zinc Projects - NT (South32 $15m & $10m farm-ins)

• Two new Farm-in Agreements completed with South32 (ASX:S32) in June 2022 covering the Jessica Copper Project and the Carrara Copper-Zinc Project in the Northern Territory
• South32 to wholly fund initial exploration on each project and Encounter carried to the completion of a Scoping Study
• Exploration has commenced with reprocessing of seismic lines at Carrara, which is part of the first year budget of $1.3 million exploration expenditure across both projects

Corporate

• Encounter was successful in its application for the Junior Mineral Exploration Incentive ("JMEI") for up to $1.25 million tax credits

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Encounter Resources Limited

P [phone]

Suite 2, 1 Alvan St

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Subiaco WA 6008

www.enrl.com.au

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Lamil Copper-Gold Project - Paterson Province - WA (100% ENR)

Background

Lamil covers an area of ~61km2 and is located 25km northwest of the major gold-copper mine at Telfer, owned by Newcrest Mining Ltd (ASX:NCM). Lamil is adjacent to a major regional gravity lineament which marks the location of an interpreted significant crustal scale structure that would have acted as a pathway for ore forming fluids during the formation of the Proterozoic aged deposits.

The Dune prospect is located in the northwest of Lamil and consists of a laterally-extensive gold- copper system, outlined by broad spaced RC drilling over 1km of strike (Figure 1). The mineralisation at Dune is hosted in metasedimentary rocks of the Proterozoic Lamil group which also host the Telfer, Havieron and Winu Au-Cu deposits. Dune is situated close to the interpreted fold axis in the northern part of the Lamil Dome.

Seven diamond holes were completed at Dune in September 2021. Copper-gold mineralisation was intersected in two diamond drill sections spaced 200m apart (Figure 1).

The intersection of multiple, stacked, narrow copper-gold reefs in ETG0243 within a thick prospective package analogous to Telfer's Upper Malu formation is an important step forward for the project.

The increased frequency of mineralised 'reef style' intervals containing strengthening copper grades and frequent +1g/t Au grades within ETG0243 infers a strengthening of the mineralised system to the north-west where the system remains open on section and down plunge.

The intersection of high-grade copper contained in chalcocite and additional copper-gold reefs in the Middle to Lower Malu quartzite package in ETG0226, ETG0227 and ETG0243 provides further evidence of a depth extensive mineral system at Dune.

A detailed gravity survey was completed at Lamil in May 2022. This survey has helped refine the targets for the upcoming drill program and identified a discrete density anomaly adjacent to the Elsa prospect in the south-east of the project.

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Figure 1 - Dune prospect plan showing only holes that have tested the Telfer analogous stratigraphic package and the outline of the stacked reef mineralisation intersected in drilling to date and the planned 2022 drill holes. 1

Figure 2- Schematic Dune cross section with planned drill hole. The Telfer analogous stratigraphy and Upper and Lower Reef horizons are shown with multiple narrow Cu-Au reefs which are generally sub parallel to stratigraphy. 1

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Figure 3 - Schematic long section of Dune showing the interbedded siltstone unit dipping below previous drilling at Dune and planned drill holes. The prospective unit is untested down plunge of the Lamil Dome away from ETG0243 where drilling has intersected an increase in frequency of Cu-Au reefs. 1

Next Steps

During the June 2022 quarter, Encounter was awarded a co-funded drilling grant of up to $220,000 under the WA Government's Exploration Incentive Scheme ("EIS") for Lamil.

This EIS co-funded diamond drill program (1,500m) is scheduled to commence in August 2022. The program will test the mineralised units identified in drillholes ETG0226, ETG0227 and ETG0243, containing high-grade copper in chalcocite and copper-gold reefs, down plunge and along strike.

A gravity anomaly identified in the recent survey adjacent to the Elsa prospect at Lamil is also planned to be tested, either in the upcoming diamond drill program or when a suitable RC becomes available in the area.

1 For further details regarding the exploration results at the Lamil Copper-Gold Project, please refer to the following ASX announcements:

ASX release 26 April 2017

ASX release 19 January 2017

ASX release 18 December 2020

ASX release 21 April 2021

ASX release 6 September 2021

ASX release 16 November 2021

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Sandover Copper Project - NT (100% ENR)

Background

Sandover is located 170km north of Alice Springs and covers a major structural corridor on the southern margin of the Georgina Basin. Access is excellent with the Stuart Highway and Ghan railway extending through the western margin of the project.

Sampling in October 2021 was conducted in four field areas located up to 6km apart (Figure 4). Each area confirmed the presence of an outcropping red-bed sandstone sequence with multiple narrow but strike extensive grey shale units containing copper oxide mineralisation (malachite). Sampling of copper mineralisation at surface returned assays up to 20.9% Cu and a suite of highly anomalous pathfinder elements (Zn, Ag, As, Bi, Mo and Pb) (refer ASX announcement 16 December 2021).

Copper Exploration Activity

Additional surface sampling and field reconnaissance was completed in April 2022. This program confirmed additional mapped areas containing surface copper oxide mineralisation (see Figure 4, Area 5). The surface mapping also identified small bornite nodules, interpreted to be zones of increased fluid flow after replacement of anhydrite, within the grey shale unit (Photo 1).

1cm	1cm

Photo 1 (left) - weathered copper rich nodules collected from surface at Area 1 (refer Figure 1) - containing malachite (interpreted after bornite-chalcopyrite), visual estimate 10% malachite in 2.5cm diameter nodule Photo 2 (right) - primary copper rich nodule from historical drillhole (Mt Skinner DDH3 203.3m) located adjacent to Area 4 (refer Figure 1) containing bornite-chalcopyrite, visual estimate 30% bornite-chalcopyrite over ~1cm width.

Surface samples were also collected from various outcropping stratigraphic horizons for chemical analysis and stratigraphic correlation.

Inspection of historical drill core from Sandover in the Alice Springs core library was completed in April 2022. A number of historical drill holes (drilled in 1968, 1971 and 1994) were reviewed and confirmed key geological units and processes to enable the formation of sediment hosted copper deposits are present. Significantly, narrow zones of copper sulphide minerals, including bornite, were identified in historical drill core (Photo 2).

It is interpreted that the copper rich nodules identified at the surface represent the weathered form of the bornite nodules observed in historical drill core. This provides encouraging evidence that processes capable of forming high grade copper mineralisation are present in the basin.

Furthermore, shale units containing the outcropping copper mineralisation at Sandover are considered moderate reductants yet have precipitated considerable copper. This suggests that a highly copper charged fluid has been active at the project.

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