OAR Resources : Drilling & Metallurgical Testwork - Oakdale Graphite Project

For personal use only

26 May 2022

Drilling and Metallurgical Testwork planned

at Oakdale Graphite Project

HIGHLIGHTS

• Extensive 5,500m aircore drilling program planned to expand and upgrade the existing JORC Resource at the Oakdale Graphite Project on the Eyre Peninsula, in South Australia.
• Program for Environment Protection and Rehabilitation (PEPR) for drilling lodged with South Australian Department for Energy and Mining.
• Existing Inferred JORC Resource remains open along strike and at depth, the drilling program is designed to expand the current resource and upgrade portions of the resource to the Indicated category.
• New metallurgical testwork program to be undertaken to assess if Oakdale graphite may be amenable to producing a battery-grade spherical graphite for use in the production of lithium- ion batteries.
• Core from previous diamond drilling to be used in testwork - removes need for new diamond drilling and will reduce time and cost to obtain new metallurgical samples for a planned updated Scoping Study.
• The Oakdale Graphite Project is located in the Central Eyre Peninsula in South Australia, which also hosts Renascor Resources' (ASX: RNU) emerging, Siviour Graphite Project.

Oar Resources Limited ("OAR" or "the Company", ASX: OAR) is pleased to provide the following update on exploration plans for its wholly owned Oakdale Graphite Project ("the Project") located on the Eyre Peninsula in South Australia (Figure 1).

The Oakdale Graphite Project is listed as a 'critical minerals project' by the Federal Government1 and has been subject to extensive previous exploration by OAR, culminating in the definition of an initial Combined Indicated and Inferred JORC Resource of 13.47Mt @ 3.3% Total Graphitic Carbon (TGC) including 6.31Mt @ 4.7% TGC (Appendix 1), and a Scoping Study2.

Given the highly favourable market conditions and a positive long-term outlook for battery-grade graphite, OAR has undertaken a detailed assessment of the Oakdale Project. This included a review of the previous Scoping Study and JORC Resource, plus assessment of the drill core from previous drilling conducted by OAR3.

The positive outcomes of this review have led the Company to make plans to recommence exploration and other project-advancing works at Oakdale, with a view to updating and expanding the previous Scoping Study.

OAR aims to adopt a staged approach to assessing the potential to produce purified spherical graphite for the future supply of spherical graphite, critical to the production of the anode utilised in lithium- ion batteries.

1. Refer to "Critical Mineral Projects in Australia 2020" report prepared by Commonwealth of Australia represented by the Australian Trade and Investment Commission (Austrade), Geoscience Australia and the Department of Industry, Science, Energy and Resources
2. Refer to ASX announcements dated 27 October 2015 and 2 December 2015 for full details and associated JORC tables
3. Refer to ASX announcements dated 27 October 2015 for details and associated JORC tables

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OAR Exploration Manager, Ross Cameron said:

"The Company has undertaken a detailed review of its Oakdale Graphite Project with a view to assessing the Project's development options. It is focused on a staged approach to expand on the previous work at the Project, which includes metallurgical testwork to determine if the Oakdale graphitic material may produce a finer grade spherical graphite concentrate. This will be followed by an extensive drilling program to upgrade the existing Inferred JORC Resource.

"This staged approach will ensure the Company is well positioned to capitalise on the prevailing strength in the graphite market which has changed substantially for the better since the initial Scoping Study was undertaken in 2015, due to the demand for ethically sourced battery-grade graphite and the rapid uptake of electric vehicles."

Figure 1: Oakdale Graphite Project location map

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Drill Planning

The Company has lodged the Program for Environment Protection and Rehabilitation (PEPR) with the Department of Energy and Mining of South Australia and has engaged the landholders in the Project area, in preparation for a planned extensive 5,500m aircore drilling program at Oakdale.

OAR's previous drilling at the Project totalled 330 air core and 11 diamond drill holes over a combined 19,124 metres1.

The previous drilling delivered excellent results and resulted in the definition of an initial Combined Indicated and Inferred JORC Resource of 13.47Mt @ 3.3% Total Graphitic Carbon (TGC) including 6.31Mt @ 4.7% TGC (Appendix 1), which formed the basis of the previous Oakdale Scoping Study.

The existing resource remains open along strike and at depth, which offers great potential for the expansion of the scale of the project.

The planned aircore drilling program will target areas of the current resource that remain open and will also aim to upgrade portions of the resource to the Indicated JORC Resource category.

Metallurgical Testwork

The Company has also engaged an independent consultant to conduct further processing and metallurgical test work. This work is initially designed to produce a graphite concentrate of >95% TGC, as a first step in assessing the potential to produce a higher margin Purified Spherical Graphite (PSG).

The graphite rich diamond core, used in the original Scoping Study, has been resampled at the Company's storage facility in preparation for the metallurgical testwork.

The engagement is based on the detailed assessment undertaken on the Oakdale Graphite Project, which included a review of the previous Scoping Study, together with the Inferred JORC Resource completed at the Project4 and assessment of drill core from previous drilling conducted by OAR.

The original Scoping Study showed an estimated flotation concentrate grade of >90% TGC5, and amongst other outcomes, 'highlights the robust economic nature of the Project'.

OAR notes that demand for battery-grade graphite was substantially lower at the time of the original Scoping Study than it is currently, as was the graphite price. Other inputs to the original study have also changed significantly.

The graphite price is now at historic highs and demand is set to continue to remain strong, with electric vehicles and other high growth sectors relying heavily upon graphite in the production of lithium-ion batteries. Graphite is the dominant anode material utilised in batteries, regardless of the battery chemistry.

Previous Metallurgical Diamond Drilling

Five diamond holes (OAD001-004a) were drilled previously by The Company to provide samples for the initial metallurgical testwork used in the 2015 Scoping Study6.

The ability to now resample the historic drilling will allow the new metallurgical testwork to commence without the immediate need to complete more diamond drilling. This will help reduce both time and costs associated with obtaining new metallurgical samples for an updated scoping study. This will also allow the Company to prioritise the aircore drilling designed to upgrade and infill the current Oakdale Resource Estimate.

1. Refer to ASX announcement date 2 December 2015
2. Previous test work conducted by ALS and Bureau Veritas
3. Refer to ASX announcement dated 17 July 2015

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Table 1: Metallurgical diamond holes with significant graphitic intersections7

Hole ID	From	To	Interval	Assay
	(m)	(m)	(m)	TGC %
OAD001	28.20	40.10	11.9	5.56
	Incl. 31.80	32.20	0.4	25.1
OAD002	32.30	70.3	38	5.03
	Incl.
	32.3	42.8	10.5	8.28
	60.80	70.30	9.5	9.47
OAD003	29.80	45.80	16	6.27
OAD004	43.80	61.80	18	5.37
OAD004a	22.50	25.2	2.7	2.60

The diamond drilling twinned previously drilled aircore holes, which intersected similarly wide intersections of soft and easily mined, graphitic material as outlined below:

Table 2: Aircore graphite intersections when compared to diamond intersections8

Diamond	Aircore	From	To	Interval	Assay
Drillhole	Drillhole	(m)	(m)	(m)	TGC %
OAD001	OAC050	28.00	48.00	20	5.12
		Incl.
		40.00	48.00	8	7.11
OAD002	OAC097	33.00	70.00	37	3.97
		Incl.
		61.00	70.00	9.0	6.07
OAD003	OAC022	31.00	59.00	28	6.87
OAD004	OAC019	25.00	69.00	44	3.10

1. Refer to ASX announcement dated 17 July 2015
2. Refer to ASX announcement dated 17 July 2015

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Figure 2: High-grade diamond drill core fragments from OAD001 - resampled for revised testwork9

Figure 3: Remaining core from OAD002, (containing 1.7m @ 16.65% TGC from 39.60m), prior to resampling for

the revised testwork to feed into the updated scoping study10

1. Refer to Appendix 2 for full assay results of the metallurgical diamond drilling
2. Refer to Appendix 2 for full assay results of the metallurgical diamond drilling

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