S2 Resources Ltd ('S2' or the 'Company') advisesthat it hasreached agreement with private company Oxley Resources Limited ('Oxley') to earn a 70% interest in the Warraweena project, which comprises Exploration Licence EL9269, covering an area of 932 square kilometres extending 75 kilometres northeast from Bourke in northern New South Wales.
EL9269 was pegged by Oxley in 2021 using public domain geological and geophysical data together with limited drilling information from previous explorers which suggests that the basement rocks display calc-alkaline to shoshonitic volcanic arc affinities, similar to the rocks of the Macquarie Arc1 , which host the giant Cadia and North Parkes copper-gold porphyry deposits to the south.
The project is also considered prospective for Cobar basin-style massive zinc and lead sulphide-style mineralisation. S2 recently identified the area as an attractive target based on the presence of coincident distinct, unexplained gravity and magnetic anomalies, concealed beneath the transported cover of the upper Darling River drainage catchment
Limited previous drilling that has penetrated the cover into basement has also identified mafic and possible ultramafic rocks associated with these anomalies. Groundwater samples collected within the catchment as part of the Geoscience Australia (GA) Australian Groundwater Hydrochemistry Data survey2 are also anomalous in nickel.
The area also stands out as being strongly anomalous in the recent Australia-wide Heavy Mineral Map of Australia (HMMA) survey publicly released by Geoscience Australia and Curtin University on 12th October 20233 which maps the occurrence and abundance of heavy minerals in sediments collected from various drainage catchments across the country. Intriguingly, the sample from this catchment contains the highest number of pentlandite (nickel sulphide) grains recorded in any of the 1,315 samples collected in the Australia-wide survey (actually ten times more than the next highest sample), and also the second highest concentration of chalcopyrite (copper sulphide) and sphalerite (zinc sulphide) in all samples in this survey, making this the most nickel-copper-zinc sulphide anomalous sample of the entire Australian dataset.
S2's Executive Chairman Mark Bennett said 'the very unusual combination of unexplained hidden gravity and magnetic anomalies combined with evidence of Macquarie Arc-like calc-alkaline rocks in limited drilling, nickel in groundwater, and a startlingly high concentration (and unusual combination) of nickel, copper and zinc sulphide minerals in a heavy mineral concentrate directly above them make this a compelling exploration target. It would be easy to dismisssuch a strongly anomaloussingle heavy mineral concentrate sample as being spurious, butsuch a situation is also very reminiscent of the single anomalous laterite sample collected by the Geological Survey of Western Australia (the 'GSWA anomaly') that was one of the clues that led to the discovery of the Nova-Bollinger deposit in the Fraser Range.
At this stage it would be premature to attempt to second guess the style and range of deposit styles that might be associated with this cocktail of features, but the empirical evidence is too compelling to ignore. We look forward to working with Oxley to answer these questions.' 'The acquisition of this project is part of S2's ongoing process of maintaining a diversified pipeline of opportunities by identifying and exploring potentially high impact targets in underexplored areas. These are usually underexplored because they are unconventional plays or not in well understood areas, but many of the more significant discoveries are those that are the first in a particular area, or the first of a particular style' he said.
Earn-in terms The key terms of the earn-in phase of the agreement are as follows: S2 to issue Oxley with 590,000 ordinary shares on signing, representing a consideration of approximately A$100,000 at a deemed price of A$0.17 per share S2 to spend A$2.7 million by end July 2027 to earn a 70% participating interest
This includes a minimum expenditure of A$350,000 by end December 2024 before withdrawal, itself including a minimum expenditure of A$270,000 by end July 2024
At least A$750,000 of the overall earn-in spend to be spent on drilling At the earn-in point: A joint venture will be formed with S2 having a 70% participating interest and Oxley having a 30% participating interest
Oxley will have a one-time choice to retain its 30% participating interest or to convert this to a 15% carried interest In the circumstance of a 30% participating interest, Oxley must contribute or dilute
Should Oxley's interest drop below 10%, its interest will revert to a 2% net smelter return (NSR) royalty
S2 can buy down half of this royalty (ie, 1%) for A$1.5 million
In the circumstance of a carried interest, S2 will have an 85% interest and Oxley' 15%
interest will be funded by S2 up to the commencement of commercial production
Oxley will repay this carried amount from 80% of the production revenue attributable to its 15% interest in a mining operation
Contact:
Tel: +61 8 6166 0240
Past Exploration results reported in this announcement have been previously prepared and disclosed by S2 Resources Ltd in accordance with JORC 2012. The Company confirms that it is not aware of any new information or data that materially affects the information included in these market announcements. The Company confirms that the form and content in which the Competent Person's findings are presented here have not been materially modified from the original market announcement. Refer to www.s2resources.com.au for details on past exploration results.
Competent Persons statement
Information in this report that relates to Exploration Results from Victoria is based on information compiled by Rohan Worland, who is an employee and equity holder of the Company. Mr Worland is a member of the Australian Institute of Geoscientists (AIG) and has sufficient experience of relevance to the style of mineralization and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Worland consents to the inclusion in this report of the matters based on information in the form and context in which it appears. Information in this report that relates to Exploration Results from Western Australia, New South Wales and Finland is based on information compiled by John Bartlett, who is an employee and equity holder of the Company. Mr Bartlett is a member of the Australian Institute of Mining and Metallurgy (MAusIMM) and has sufficient experience of relevance to the style of mineralization and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bartlett consents to the inclusion in this report of the matters based on information in the form and context in which it appears.
S2 RESOURCES LTD 
