Perpetual Resources : Formal Launch of Beharra White Sand Only PFS Update

ASX RELEASE

8th December 2021

ASX:PEC

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CORPORATE onlyDIRECTORY

Executive Chairman Julian Babarczy

Managing Director Robert Benussi

Non-ExecutiveDirector Brett Grosvenor

useNon-Executive Director & Company Secretary George Karafotias

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PROJECTS personalBeharra Silica Sands

Arrowsmith West

Sargon Hub

Eneabba Hub

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CONTACT

223 Liverpool Street Darlinghurst NSW 2010

George Karafotias

[phone]

Robert Benussi

[phone] For

We wish to acknowledge the Traditional Custodians of the land (Yamatji Southern Regional) on which we are developing the Beharra Project, and pay our respects to their Elders past, present and emerging.

Formal Launch of Beharra White Sand Only

Pre-Feasibility Study Update

HIGHLIGHTS:

• Perpetual Board approves formal commencement of a Pre- Feasibility Study Update (PFSU) in response to recent successful white sand only bulk metallurgical test work
• PFSU will build on the previously delivered PFS, but with a focus on a white sand only development scenario at Beharra
• PFSU outcome will provide a side-by-side analysis between the previously studied comingled white and yellow sand development scenario with the white sand only scenario
• Timeline for delivery of the PFSU will be augmented by the significant work that can be utilised from the original PFS
• PFSU confirms Perpetual's decision to develop Beharra as a white sand only development scenario
• DSO Scoping study continuing, presenting potential for multiple revenue streams from the Beharra Project

Perpetual Resources Limited (ASX: PEC, "PEC", "Perpetual" or "the Company") is pleased to announce the formal approval of the Beharra Pre-Feasibility Study Update (Beharra PFSU). This follows on from the recently announced successful white sand only bulk representative metallurgical test work, which confirmed that Beharra can consistently produce a low impurity end product specification (99.6% SiO2 with Fe2O3 impurity levels of only 173ppm), with scope for further improvements due to the identification of geological and chemical domaining within the white sand horizon.

The Beharra PFSU is designed to prove the economic potential of the Beharra Project under the chosen white sand only development scenario. The Beharra PFSU follows on from the previously announced Beharra Pre-Feasibility Study (PFS), which was announced to the market in March 2021 (please refer to ASX announcement dated 17th March 2021, titled "Maiden Ore Reserve and Outstanding Beharra PFS Result Update").

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Mr. Robert Benussi, Managing Director of Perpetual, provided the following comment, "The delivery of such a compelling PFS Study in March 2021 validated Perpetual's decision to pursue the Beharra Project. Our ongoing optimization work, which was substantially progressed through the delivery of the recent exciting white sand only bulk metallurgical test result, has demonstrated that a development scenario that targets the white sand horizon is clearly in the best interests of shareholders. After completion of what we expect to be further impurity reductions through an analysis of the distinct domains that exist within the white sand horizon at Beharra, we now intend to update the previously announced PFS with specific analysis that demonstrates the superiority of the white sand development scenario and look forward to delivering this in the first half of 2022".

Previous Pre-Feasibility Study Outcomes

Perpetual previously completed a highly successful PFS in March 2021. This study focused on a development scenario that mined and processed the entire Beharra ore-body, which is comprised of around 90% white sand and 10% yellow sand. Figure 1 below provides a summary of the PFS outcomes from the March 2021 announcement.

	Beharra Project Economics	Unit	Base Case
	Total Silica Sand Produced	Mt	48
	Annual Production	Mt	1.5
	In-situ Probable Ore Reserve (@ 98.6% SiO2)	Mt	64
	Ore Reserve Life	Years	32
	JORC Mineral Resource Estimate (@ 98.6% SiO2)	Mt	139
	Total Life of Mine Revenue	A$M	4,983
	Start-up Capital	A$M	39
	Total Life of Mine Capital Expenditure	A$M	77
	Total Life of Mine EBITDA	A$M	1,714
	Total Life of Mine Free Cashflow	A$M	1,131
	Post-tax Discounted Cashflow (NPV10) - ungeared	A$M	231
	Post-tax Internal Rate of Return (IRR) - ungeared	%	55%
	Post-tax Discounted Cashflow (NPV10) - 40% geared	A$M	236
	Post-tax Internal Rate of Return (IRR) - 40% geared	%	77%
	Payback Period	Years	2
	FOB Costs	A$/t	43.07

Figure 1 - Summary of March 2021 Beharra PFS Study Outcomes

The purpose of the Beharra PFSU is to update the various inputs from the March 2021 PFS to reflect the selective mining and processing of the white sand horizon only, as well as to update other important economic inputs in the financial model (i.e. revenue per ton assumptions, mining and processing costs, logistics and any other key study variables). The delivery of the PFSU will then allow a clear side-by-side analysis between the Beharra PFSU and the March 2021 PFS, including an updated investment return analysis (i.e. NPV & IRR) calculation.

Perpetual anticipates delivering the outcome of the PFSU in late 2QCY22.

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Below is a summary of the key areas of study for the Beharra PFSU workstreams.

• Sales and marketing

• 1. Discussions have commenced and will continue in coming months with potential offtake partners to determine the relevant pricing assumptions for the Beharra white sand only product specification, which has been shown to contain materially lower Fe2O3 content (with further reductions possible via sub-domain analysis within the white sand horizon) which should be increasingly sought after for higher quality applications.
• Mining
• 1. A white sand only development scenario will require a selective mining operation targeting the thicker and predominantly white sand horizon at Beharra (or sub- domains if additional testing confirms their presence), with additional mining tenders required to reflect the new operating scenario.
• Metallurgy
• 1. The recently announced white sand only bulk representative metallurgical test work

confirmed materially lower impurities and suggested the presence of geological/chemical domaining within the Beharra white sand horizon.

• 1. Follow up bulk metallurgical test work targeting the discrete sub-domains within the Beharra white sand sequence is expected to be completed early in 2QCY22, and subject to results, is likely to form the foundation of the Beharra PFSU.
• Engineering
• 1. Slight modifications to the flow sheet (predominantly in sequencing of the various separation stages) will require some modest changes to the engineering documentation and quotations.
• Transport & Logistics
• 1. Transport and logistics related inputs will also be updated, although are anticipated to remain broadly similar to the previous PFS study outcomes.
• Water
• 1. Recent water access agreement with Yamatji Southern Regional Corporation (refer announcement dated 19th October 2021 title, "Landmark Collaboration with YSRC - Water License") has secured the water needs for Beharra for an initial 10 year term.

• 1. Additional hydrological studies are now underway, including the drilling in early 2022 of production and monitoring bores for test work.
• Flora & Fauna & Heritage Studies
• 1. Level 2 flora and fauna and related studies are well advanced, with delivery of these anticipated late 1QCY22.

• 1. Additional heritage studies have also been recently completed, with no identification of significant heritage impediments found.
• Occupational Health & Safety
• 1. Perpetual reaffirms its commitment to workplace safety and employee welfare, with follow up studies planned for the Beharra PFSU.
• Power
• 1. In addition to the previously announced power studies for Beharra, the Beharra PFSU may also contemplate renewable energy sources for the project

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About Perpetual Resources Limited

Perpetual Resources Limited (Perpetual) is a focused explorer of silica sands, aiming to produce high onlypurity silica for export to the high growth Asian markets.

Perpetual's flagship asset, the Beharra Project (Beharra) is located 300km north of Perth and is 96km south of the port town of Geraldton in Western Australia. Access to the Project from Geraldton (to the north) and Perth (to the South) is via the sealed Brand Highway, thence approximately 8.5km east on the Mt Adams unsealed road providing access to the center of the tenure.

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The port of Geraldton is an established bulk material handling facility and is currently utilised for the export of bulk materials, minerals, grain and concentrates. Commodities currently exported via Geraldton Port include grains, copper concentrates, zinc concentrates, nickel concentrates, mineral sands, talc, and iron ore.

Geraldton Port - Operated by Mid-West Port Authority

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Beharra comprises a granted mining lease, M70/1406, covering an effective area of 10.4km2, and a granted exploration license, E70/5221, covering an effective land area of 56.8km2. Extensive heavy mineral sands mining occurs to the south of Beharra, lime sands mining to the west and natural gas production to the south of the project area.

Auger and air core drilling has confirmed the presence of extensive, high purity silica sands, with a maiden Mineral Resource Estimate completed in July 2020. A detailed Pre-Feasibility Study demonstrating compelling project economics was for Beharra was released to the ASX in March 2021, along with a Maiden Ore Reserve.

Silica Sands Market

Silica sands have an extensive range of uses, with lower purity (<99.5% SiO2) and lower priced applications including construction sand, proppant sand used in well fracturing, and foundry sand. With increasing purity (>99.5% SiO2) and price, uses include glass making including ultra-clear glass, with a main determinant of the sand's suitability for specific applications and pricing being the level of the key impurity iron oxide (Fe2O3). Significant expansion of solar PV cell manufacturing capacity globally is driving demand for silica sand with Fe2O3 content of <200ppm and lower, which is a key focus market for Beharra.

Source: IMARC Group, Report Title: "Asia Pacific Silica Sand Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2021-2026", Report Date: February 2021

Perpetual is targeting the high growth Asia Pacific silica sand markets, where independent market assessments have calculated a 40mtpa incremental market growth opportunity through to 2026.

This announcement has been approved for release by the Board of Perpetual.

For enquiries regarding this release please contact:

Mr. George Karafotias

Company Secretary

[phone]

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