Santa Fe Minerals : Option to Acquire Base Metals Project

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Suite 1, 9 Hampden Road Nedlands WA 6009 Tel: [phone] [phone] ABN: 59 151 155 734

www.santafeminerals.com.au

19 November 2021

Company Announcements Office

ASX Limited

SANTA FE MINERALS ENTERS INTO OPTION TO ACQUIRE NICKEL AND

LEAD/ZINC EXPLORATION PROJECTS IN WESTERN AUSTRALIA.

• Santa Fe Minerals has entered into a binding option agreement to acquire 80% of the Mt Murray Nickel and Lead/Zinc project.
• The project comprises two granted exploration licences and the metals rights over an existing mining licence.
• Nickel-copper-PGESulphide target - 4.2km x 1.2km mostly covered and unexplored magnetic zone with a historic rock chip result of 2,965ppm Cu, 781 ppm Ni, 425ppm Cr.
• High grade silver lead target with rock chips grading up to 39.6% Pb 134g/t Ag, 0.46g/t Au and 0.1% Zn.

Santa Fe Minerals Ltd (ASX: SFM) (SFM, the Company) is pleased to announce that it has entered into a binding option agreement to acquire 80% of two granted exploration licences and the metals rights over an existing mining licence. The project area covers 29km2 and is located 95km south-eastof Onslow in the Ashburton region of Western Australia.

Figure 1: Project location.

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The Mt Murray project covers a 9km north south trending zone of poly metallic copper-lead-zinc-silver-gold mineralisation adjacent to a 4.2km x 1.2km magnetic high zone considered to represent a mafic-ultramafic intrusive package prospective for nickel-copper-PGE mineralisation similar to the recently discovered tier one Julimar Ni-Cu-PGE deposit (Chalice Mining Ltd).

The geology of the project area comprises Paleoproterozoic metasediments and gneiss of the Leake Springs Metamorphics (previously the Morissey Metamorphics) intruded to the west by the Kilba granite unconformably overlain to the east by the Wongida dolomite member of the Irregully Formation. Previous exploration has been light comprising surface geochemistry with only shallow minor follow up drilling.

Rockchip grading 39.6% Pb 134g/t Ag, 0.46g/t Au and 0.1% Zn.

Rockchip grading 2,965ppm Cu, 781 ppm Ni, 425ppm Cr.

Rockchip grading 23.4% Cu.

Figure 2: Mt Murray tenement map over magnetics including high grade rock chip assays.

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Nickel/Copper/PGE Target

The nickel sulphide prospectively was first noted by BRL Exploration Pty Ltd in 2010 based on the discovery of small outcrop of altered ultramafic associated with a composite high magnetic zone extending over about 5km of strike. One rock chip sample of the altered ultramafic outcrop returned 2,965ppm Cu, 781 ppm Ni, 5.4% Mg, 1.8g/t Ag and 419ppm S. The sample was not assayed for platinum or palladium. Apart from the small ultramafic outcrop, the magnetic high zone is completely covered by shallow sand and alluvial cover. No further work on this target was reported at the time.

SFM considers the interpreted mafic-ultramafic complex within the Mt Murray project has potential to host nickel-copper-palladium, platinum mineralisation similar to the Chalice Mining tier one Ni-Cu-PGE discovery at Julimar. The target area high magnetic zone at Mt Murray is almost totally concealed beneath shallow sand and alluvial cover and has not previously been systematically explored.

SFM will consider a range of exploration techniques including ultrafine soil sampling and/or auger drilling to outline the ultramafic complex for follow up electromagnetic surveys and drilling. Aboriginal Heritage surveys may be required prior to the commencement of any drilling programs. SFM will engage with traditional owners to discuss a heritage program.

Lead/Zinc Target

The Hill silver lead zinc prospect is located adjacent to the North West Coastal Highway. Historic rock chip samples returned very high results of up to 39.6% Pb 134g/t Ag, 0.46g/t Au and 0.1% Zn. The mineralisation is hosted in chert and quartz over about 300m strike. Despite the high grades and its proximity to the highway no drilling has been recorded. SFM visited this prospect as part of the due diligence. SFM rock chip samples returned 3.5% Pb, 0.48g/t Au, 13g/t Ag and 0.08% Zn. SFM believes this zone extends under cover to the north and south with a possible 4km strike length. Auger geochemistry sampling or ultrafine soil sampling is planned to test this target prior to drilling.

Polymetalic Copper-Lead-Zinc-Silver-Gold Target

Historic exploration work comprising high density creek sediment sampling and three 1km spaced soil sampling lines have defined a 3.5km x 500m zone comprising anomalous Cu- Pb-Zn-Ag-Au extending from the southern tenement boundary and including the historic Kin copper workings. The anomalous trend is thought to extend further north under recent sand and alluvial cover along the western side of the magnetic high zone considered to represent a mafic ultramafic intrusive complex. Rock chip sampling of the Kin Copper workings by SFM returned a very high 23.4% Cu from a narrow quartz veined zone. Historically similar rock chip samples have been reported. The historic soil sampling on three 1km spaced lines defined broad north-south trending Au and Cu anomalies associated with the historic Kin copper workings. Highest soil results are Au 20ppb and Cu 48ppm. This soil anomaly merges to the south with the stream sediment Cu-Pb-Zn-Ag-Au anomaly discussed above forming a 3.5km long anomalous zone. The only other exploration reported here comprises 6 shallow RC holes targetting the historic Kin-1 copper workings. One of the holes located closest to the copper workings was reported to have intersected pervasive sulphide mineralization however with no significant results. The 5 other holes did not effectively test the line of the historic copper workings.

SFM considers the 3.5km strike of the anomalous polymetallic zone has potential for multiple discoveries and plans to complete systematic surface geochemistry to define targets for follow-up geophysics and drilling.

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Commercial Terms of the Acquisition

Via its wholly owned subsidiary Challa Resources Pty Ltd (ACN 619 903 196) (Challa), SFM has entered into a binding option agreement to acquire, subject to certain conditions precedent, 80% of the legal and beneficial interest in any or both of the exploration tenements E 08/2978 and E 08/3230 and 80% of the metals rights on M 08/139 from North West Stone Pty Ltd (ACN 159 838 712) (NWS) (Option). The key terms of the agreement are detailed below.

Key Terms

The consideration for the grant of the Option is A$50,000. The initial period of the Option will expire on 19 November 2023 (Initial Period) and will automatically be extended by three six month terms unless Challa provides written notice otherwise (Option Period). Challa must pay A$30,000 for each additional term.

As a condition to the exercise of the Option, Challa must:

1. incur at least A$200,000 of exploration expenditure on the tenements in the Initial Period; and
2. incur at least A$300,000 of exploration expenditure on the tenements (in addition to the amount detailed in paragraph (a) above) in the Option Period.

If the condition is satisfied and the Option is exercised, the Company must issue to NWS the greater of:

1. 5,000,000 fully paid ordinary shares in Santa Fe; or
2. fully paid ordinary shares in Santa Fe to a value of A$1,000,000 based on a 5 day VWAP share price prior to the date of exercise of the Option.

If the condition is satisfied, Challa may also elect to enter into a split commodity agreement with NWS for 80% of all metal rights in M 08/139 (Split Commodity Agreement). Upon election to enter into the Split Commodity Agreement, the Company must issue to NWS the greater of:

1. 500,000 fully paid ordinary shares in Santa Fe; or
2. fully paid ordinary shares in Santa Fe to a value of A$100,000 based on a 5 day VWAP share price prior to the date of electing to enter into the Split Commodity Agreement.

Under the agreement, the total consideration shares that SFM will issue to exercise the option in its entirety is capped at 10,000,000. The Company intends to issue the above shares using its available placement capacity under listing rule 7.1.

If the Option is exercised, the parties shall commence good faith negotiations with a view to executing a joint venture agreement for the development of the tenements Challa has an interest in, with Challa as manager and operator of the joint venture. NWS will be free carried until a decision to mine.

The option agreement is otherwise on customary terms and conditions for a transaction of this nature, including pre-completion obligations, termination rights and warranties provided by the parties.

Santa Fe has agreed to pay approximately $2,600 of rates outstanding in respect of the exploration tenements.

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Authorised for release by the Board of Directors.

For investor queries, please call:

Doug Rose Managing Director Santa Fe Minerals Limited [phone]

COMPLIANCE STATEMENT

The information in this announcement that relates to exploration targets and exploration results is based on information compiled by Reginald Beaton, a competent person who is a member of the Australian Institute of Geoscientists (AIG). Reginald Beaton is an employee of Santa Fe Minerals Limited. Mr Beaton has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Beaton consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.