A Cap Energy : ACTIVITIES REPORT FOR QUARTER ENDED 31 MAR 22

ACN 104 028 542

Quarterly Report

For the quarter ending 31 March 2022

acap.com.au

A-Cap Energy (ASX: ACB) is a minerals exploration and development company focused on the development of "new energy" projects including the company's flagship Letlhakane Uranium Project in Botswana, host to one of the world's top 10 uranium deposits.

Highlights

• • Letlhakane Uranium Project reviewed and a work program and budget for work to be commenced in Q2 2022 was prepared.

• • The team within Botswana has been keeping the project active with ongoing water bore sampling and Mining Licence compliance. Further key personnel are being re-engaged to restart the Letlhakane Uranium Project.

• • At the Wilconi Ni-Co Project, a 2000m, large diameter (PQ sized) diamond core drilling program was completed during the quarter.

• • Core samples were delivered to Simulus

  Laboratories (Perth) for metallurgical testwork.

• • MiningPlus (Perth) completed an updated mineral resource estimate for the Wilconi Ni-Co Project.

• • Hydrogeological, biological and geotechnical studies are on-going as part of the Wilconi pre-feasibility study.

Letlhakane Uranium Project

Botswana, Africa

Located in Botswana, the Letlhakane Uranium Project, is host to one of the world's largest undeveloped uranium deposits. The project has a total JORC resource of 365.7 million pounds (822.1Mt @ 202ppm U3O8 using a 100ppm cut-off grade).1

A Mining Licence designated ML 2016/16L was granted on 12 September 2016 and is valid for 22 years. The Department of Environmental Affairs formally approved the project's Environmental Impact Statement on 13 May 2016. Provisional surface rights were granted on 6 June 2016.

The Company's Letlhakane Uranium Project remains an important project asset within the diversified minerals strategy.

While the nuclear industry is confident in the long-term fundamentals of uranium and nuclear power it has not previously translated to an increased uranium price. The U3O8 per lb price increased from a range between US$40-50 during the quarter to over US$60 by mid-April. The price rise is the catalyst for restarting work which will consist of improving the project outcomes by revisiting opportunities found subsequent to the 2015 Feasibility Study.

Planning for drilling and metallurgical testwork that were suspended back in 2018 are now progressing to further the positive project value-adding results through understanding of the processing acid

1 Refer to Resource Statement and disclaimer on page 11.

consumption of different mineralised lenses. These opportunities will focus on new technologies to optimise acid consumption and beneficiation with the aim to reduce projected capital and operational costs.

Wilconi Nickel-Cobalt Project

Western Australia, Australia

The Wilconi Project hosts a JORC total mineral resource of 660,000 tonnes of nickel and 46,400t of cobalt and is being developed to serve the escalating global electric vehicle (EV) market.

Following a 256 RC infill drilling program in 2021, A-Cap Energy upgraded the Wilconi Ni-Co resource, with parts of the resource now reported as Indicated. Independent geological resource specialists, Mining Plus Pty Ltd were commissioned by A-Cap using historical and recent drilling data to update the Wilconi Mineral Resource estimate, which is presented in Table 1. Grade-tonnage information at various other Ni cut-off grades are shown in Table 2.

Table 1 and 2 have been extracted from the ASX announcement titled "Wilconi Project JORC Resource Update" released to the ASX on 18 March 2021. Acap confirms that it is not aware of any new information or data that materially affects information included in that release and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

Wilconi Diamond Core Drilling

Category

Rounding may cause minor inconsistencies

Co Metal (t)

Indicated

17,900

Inferred

28,500

Total

0.5 90

0.73 0.051 660,000

46,400

Table 1: February 2022 Wilconi Ni-Co Mineral Resource Estimate

Rounding may cause minor inconsistencies

Cut-Off (Ni %)

0.5

90

0.73

0.051

660,000

46,400

0.6

0.7

70 44

0.78 0.86

0.055 0.061

540,000 380,000

38,200 27,100

0.8

25

0.94

0.069

240,000

17,400

0.9

13

1.02 0.078

130,000

Table 2: Wilconi Ni-Co grade-tonnage information at various Ni cut-off grades

Completed in January, the three-month drill campaign comprised 31 holes over 1490.7m and follows last year's reverse circulation (RC) drill program totalling 11,096m (Refer ASX announcement dated 24 September 2021). Most holes were drilled at a 60˚ angle towards the west in order to detect any steep structures that focus deeper weathering, producing thicker mineralisation in the lateritic profile. Results from this drilling were reported in April.

A-Cap's 2021 RC drill program clearly defined a particular rock unit (olivine rich ultramafic) that underlies the better grades in the laterite. This unit can be traced over much of the 20km of strike of the broad ultramafic package, and the unit is approximately 250m wide, and lies within the total ultramafic package. Drilling the laterite above this unit mostly intersected >1% nickel with associated Co. Zones of thicker (+30m) mineralisation identified in the RC drilling that represent "keels" in the lateritic profile.

Large diameter cores (90mm) were drilled to ensure good recoveries were obtained in the soft lateritic ores to permit bulk density determinations and to provide sufficient sample for metallurgical testwork and engineering studies. Metallurgical testwork is underway to determine the best methods of nickel and cobalt extraction and optimise metal recoveries for the various ore types.

A-Cap Chairman Mr Jiandong He said "Our earlier metallurgical studies demonstrated that the project can deliver high recoveries of both nickel and cobalt, and we look forward to more good news from this upcoming work".

The Wilconi Project is a farm-in joint-venture project with Wiluna Mining Corporation Limited (ASX:WMC), with A-Cap earning 75% equity in the project under the terms outlined on 20 December 2018.

Mr He said "Wilconi would seek to serve the supply of critical materials to the global electric vehicle market which was experiencing accelerating sales led by China and Europe. The primary batteries of choice forWestern manufacturers are nickel manganese cobalt due to their high energy density." "Continuing drilling work at Wilconi is vital for the completion of the PFS study currently underway. A new 17,000m combined RC and diamond infill drill program was now being planned for Wilconi to convert resources to indicated and measured categories," he said.

Other PFS work that has been completed includes:

• • An updated mineral resource estimate to JORC standards by Miningplus. Recently completed (Refer ASX announcement dated 18th March 2022).

• • Animal Plant Mineral Pty Ltd (APM) completed a fauna and flora study over the entire resource area in December 2021.

• • Peter O'Bryan & Associates supervised engineering and geotechnical testwork on selected core samples.

• • A desktop hydrogeological study of the Wilconi project area was completed by Rockwater Hydrogeological and Environmental Consultants. As recommended by Rockwater, six water monitoring wells were established across the Wilconi resource area.

On-going PFS work and additional studies include:

• • Hydrogeological studies including Baseline surface and ground water studies

• • Subterranean fauna studies

• • Cultural heritage surveys

• • Design and geotechnical assessment of constructed landforms including waste dumps, open cuts and tailings storage facilities

• • Soil, waste rock and tailings characterisation studies

• • Noise and greenhouse gases assessment

Figure 1: Regional geological setting of the Wilconi Nickel-Cobalt Project showing extent of nickel bearing ultramafic rocks, outline of the Wilconi nickel resource and location of recent diamond drilling.