Lunnon Metals Limited provided an update on the progress of its technical studies programme at the historical Foster nickel mine, part of its Kambalda Nickel Project (KNP). A diamond drill (DD) programme completed in late 2022 collected core samples for metallurgical and geotechnical test work from its intersection with the existing 85H Mineral Resource Estimate (MRE). The assay results of that programme provided excellent validation of the current 85H JORC Code (2012) MRE 1. The 85H MRE is accessible off the existing, historical Foster mine decline once dewatered.

Metallurgical test work results have now been received for DD hole, FOS22DD_004W2 (W2), that was completed as a twin to the significant result in FOS22DD_004W3 (W3) (3.75m at 4.34% Ni, 0.28% Cu, 0.10% Co, 0.60g/t Pd & 0.28g/t Pt from 435.70m >1.0% Ni cut off 2). The composited DD core for W2 returned head assays as follows: 6.8m at 3.90% Ni, 0.27% Cu, 0.08% Co, 0.51g/t Pd & 0.21g/t Pt (from 435.65m). Metallurgical Test Work Results: W2 head assay of 3.90% Ni outperformed the previously reported W3 twin hole (W3 when interval diluted by the same amount of footwall and hanging wall DD core yields 5.85m at 3.24% Ni); Clean, high grade concentrate produced grading 14.97% Ni with 86.25% recovery (from calculated 3.66% Ni feed grade); Excellent Fe:MgO ratio in concentrate of 17.4 with mass recovery of 21.07%; Cu and Co recoveries of 94.4% and 90.15% yielding concentrate grades of 1.20% and 0.33% respectively; Low As in concentrate of 96 ppm.

FOS22DD_004 was drilled between the 9 and 10 Foster mine levels at -67mRL (approximately 380m below surface) and targeted high-grade zones or shoots interpreted to be present in the 85H mineralised surface. For reference, the closest historical DD hole, drilled by WMC Resources Ltd. (WMC), is approximately 65m away. The parent DD hole did not successfully achieve target depth and so a wedge hole, FOS22DD_004W1 (W1), was drilled off the bottom of that hole through to the designed end of hole depth.

Two further wedge holes, W2 and W3, were also drilled with all three resultant 85H surface mineralised intervals being located within 5m of each other. W3 was cut and assayed. A sample comprising 6.8m of DD core from W2 (between down hole depths 435.65m to 442.45m) was sent for metallurgical analysis.

The composite sample included an approximate 4.75m interval logged as matrix or massive sulphides of pyrrhotite, pentlandite and lesser chalcopyrite together with approximately 2.05m of less well mineralised hanging wall and footwall material (Kambalda Komatiite). The inclusion of the hanging wall and footwall material was to simulate a diluted mined width (perpendicular to the dip of the mineralised surface), as the 85H deposit may be so mined in the future. The mineralised interval in W1 was retained as back-up for any future metallurgical or geotechnical test work.

The head assays for the Foster 85H W2 composite sample, analysed prior to the commencement of the test work, were as follows: Ni = 3.90% Ni (reconciled extremely well with both the 85H MRE and the adjacent interval reported in W3); Cu = 0.27%; Co = 0.08%; As = 28 ppm (considered very low); Fe:MgO ratio= 0.93; MgO = 20.7% (noted as being similar to the Baker deposit composite); SiO2 = 25.2% (noted as being similar to the Baker deposit composite); and PGEs were noted as low at 0.51g/t Pd and 0.21g/t Pt. The Company highlights that DD core identified for possible metallurgical testing was vacuum sealed and stored in a freezer at the Foster mine offices, pending commencement of the test work. The metallurgical test work programme for 85H DD core was chosen in consultation with BHP Group Limited subsidiary, Nickel West Pty Ltd. (Nickel West) technical personnel, to simulate the process flow at their Kambalda Concentrator.

Rougher/Cleaner optimisation tests were conducted at a grind size of P80 53 µm. The process covering the ongoing collection and handling of the metallurgical samples and the supervision of the test work completed by Independent Metallurgical Operations Pty Ltd. (IMO), that aligns with Nickel West's process flow, is being managed by Mr. Barry Cloutt, an external independent metallurgical consultant who previously worked for WMC Resources in Kambalda in the 1990s and directly managed the Kambalda Concentrator. This was a period in time when the plant was receiving nickel ore from between 10 and 15 separate underground sources across the Kambalda and Widgiemooltha districts from various ore suppliers. In addition to the metallurgical test work, intact rock property testing was undertaken on W2.

The triaxial and tensile strength test work on selected samples from W2 have evaluated the mineralised zone and host ultramafic to have an average strength of 50MPa. Similar test work returned an average strength of 221MPa for the deeper Lunnon basalt which is planned to host the majority of future underground access development. Using the ISRM classification standards the ultramafic and mineralised zone is considered to be moderate to medium strength rock and the basalt is high to very high strength rock.

Additional intact rock property testing and geotechnical assessment of core will continue as additional drilling becomes available. Warren metallurgical test work is ongoing as the MRE update for this channel is now progressing post completion of the 2022 surface DD programme. An update in respect to the commencement of exploration activity at the Silver Lake component of the Company's Kambalda nickel assets will also be provided in due course, along with the assay results from the cutting and re-sampling of historical WMC DD core at the Silver Lake Hanging Wall Exploration Target.