Alliance Resources : 3rd Quarter Activity and Cashflow Report - March 2022

29 April 2022

ASX Code: AGS No. of pages: 11

QUARTERLY REPORT - FOR THE PERIOD ENDED 31 MARCH 2022

DETAILS OF ANNOUNCEMENT

• ▪ Quarterly Activity Report for the period ended 31 March 2022 (5 pages)

• ▪ Appendix 5B for the period ended 31 March 2022 (5 pages)

Authorised for release by the BoardBob Tolliday Company Secretary

Further information relating to the Company and its various mining and exploration projects can be found on the Company's website atwww.allianceresources.com.au

Suite 3, 51-55 City Road

Southbank, VIC, 3006

P [phone] F [phone]

ABN 38 063 293 336

31 March 2022

ASX Code: AGS

QUARTERLY REPORT FOR THE PERIOD ENDED 31 MARCH 2022

HIGHLIGHTS

SUMMARY

• • Alliance received notice of an "Intention to make an off-market take-over bid for Alliance Resources" from Gandel Metals Pty Ltd dated 22 February 2022.

• • During February, the Company issued Offer documents for a non-renounceable pro-rata entitlement offer to shareholders on the basis of one new share for every 8 shares held on the record date to raise $3.38 million before costs. The Offer closed on 4 March 2022 oversubscribed, and a scale-back applied to all additional applications.

• • Following the 47 hole, 6,180 metre RC drilling program completed at the Weednanna deposit during Nov/Dec 2021, outstanding 4 metre composite gold assay results were received and 1 metre split gold and iron samples collected and submitted for analysis.

• • Stage 2 of the Research Project with CSIRO to undertake analysis of the Weednanna Au-Fe deposit genesis continued during the March quarter. A total of 6 diamond holes have been drilled and geologically logged, 4 holes have been scanned with Minalyze and three holes have been sampled for Maia Mapper XRF imaging.

• • Project design work continued during the quarter with preliminary underground development and stope designs produced, production schedules prepared, ventilation requirements evaluated and estimated power requirements analysed. Progress was made on capital estimates for gold and iron recoveries and the site infrastructure layout and civil requirements. An internal review of the Geological orebody model was undertaken, including results from drilling undertaken in H2 2021. Once completed, open pit optimization work will be finalised, a final review of underground development and production schedules and the cost model finalised.

• • The SoDAR monitoring unit installed onsite to collect wind speed and direction data and solar energy potential shall remain onsite collecting data throughout 2022.

• • Following the Aeromagnetic survey completed during November 2021 at Kalgoorlie South Project, Southern Geoscience Consultants have identified 29 structural orogenic gold targets, with 9 considered high priority. These targets are currently being reviewed and an exploration strategy developed to commence testing the project area.

• • A 37.3 line-kilometre IP survey was completed at the Weednanna North and Mawson prospects during the quarter. A final report is expected during April.

• • Travel restrictions imposed due to the Covid-19 virus continued to cause disruptions to corporate and exploration activities during the quarter. Personnel continue to work remotely from the corporate office and access to South Australian exploration locations remains restricted due to interstate travel restrictions and quarantine requirements.

• • Discussions with the Gawler Ranges Aboriginal Corporation to facilitate mining at Weednanna progressed well during the quarter with agreement in principle on the terms of the Native Title Mining Agreement achieved. The NTMA document is now being prepared for final consideration.

• • Changes to the Sth Australia legislation in 2021 relating to security of tenement tenure resulted in discussions with Mines Department (DEM) to clarify the changes and secure long-term tenure. These discussions are ongoing.

• • Cash reserves of $2.76 million as at 31 March 2022.

Alliance Resources Ltd - Quarterly Report for Period Ended 31 March 2022

WILCHERRY PROJECT, SOUTH AUSTRALIA (100%)

Weednanna Exploration

A 47 hole RC drilling program, totaling 6,180 metres, was completed during the December quarter, 2021. This drilling program was designed to define the extents of Shoots 7 and 8 using a 20m x 25m spaced grid, upgrade Shoot 3 from the Inferred to Indicated resource category using a 12.5m x 20m spaced grid, and test for new gold shoots between Shoot 7 / 8 and Shoot 3 using a 20m x 50m spaced grid.

Final four metre composite gold assay results were received during March. Laboratory analysis times have increased significantly since mid-2021 due to high industry demand, labour shortages, Covid-19 close contact isolation requirements and transport delays.

873 1m split RC samples were collected for gold and iron analysis during February and a further 1,240 samples were collected during March. These assay results are expected during April and May.

N Au

N Fe

Figure 1. Weednanna: 3D plan views of gold and iron in drilling results with location of RC and diamond holes completed to-date (process plant diamond holes not shown)

Legend-

Bold blue lines: RC holes drilled during Quarter	Bold black lines: diamond holes drilled during Quarter
Gold Assay Results	Iron Assay Results
Green: 0.1 - 0.5 g/t Au	Brown: > 55% Fe
Yellow: 0.5 - 1.0 g/t Au
Orange: 1.0 - 5.0 g/t Au
Red: 5.0 -10.0 g/t Au
Magenta: > 10 g/t Au

Weednanna Study Work

• • Detailed engineering design parameters of the Weednanna processing plant were finalised during the March quarter and work progressed on capital cost evaluation, individual component selection to achieve the design product sizing and metallurgical recoveries and power and water requirements. Refinements were made to the site layout plan to ensure smooth access to various work areas, fuel and consumable deliveries and haulage of proposed Iron ore products from site safely and efficiently.

• • Detailed mine design work was delayed during the quarter whilst further work was completed on the geological block model. The revision to the geological model work was completed in Q1, 2022 allowing re-optimisation of the open pit and underground designs to be undertaken in the June quarter.

• • Preparation of the Mining Lease Application document progressed, with several chapters in final draft form. The mining section is still in the preliminary stage until final designs, ore and waste schedules and haulage schedules can be finalised. This information will be required to complete final designs for the Tailings storage and waste rock storage facilities. The Hydrological modelling of underground water progressed during the quarter and is due to be finalised in the June quarter.

• • Following discussions with the Department of Mines and Energy in South Australia regarding the uncertainty created around security of tenement tenure, particularly for long-held tenements or long-held tenements acquired from previous explorers, the decision was made to revise the power supply options for the Weednanna site. Solar (PV) and battery storage remain viable options for the project in conjunction with Diesel or gas power generation. However, the indicative capital cost of wind generation, combined with the uncertainty around tenement security resulted in Alliance deciding to cease investigating wind power generation onsite. The SoDAR monitoring unit installed onsite in December 2021 to collect real-time wind speed and direction data and solar energy potential shall remain onsite. Data is continuously collected and analysed by a third-party consultant. Once sufficient data is collected, our power team will evaluate the economics of the supply of power for site.

Weednanna North and Mawson IP survey

During January and February 2022, Alliance completed a 37.3 line kilometre IP survey at the

Weednanna North and Mawson prospects. The survey was designed to test for chargeable anomalies potentially associated with gold mineralisation over 6 kilometres strike length using 200m spaced lines and 100m spaced dipole stations.

A final report on the IP survey work is expected during April.

Bonza Cross-Section Review

23 RC holes (08NMRC005-024 & 030-032), for 3,412m, were drilled on four traverses at Bonza by Ironclad Mining in 2008 to test for iron mineralisation. These holes were re-logged by Alliance and are currently being reviewed to compile a detailed cross-section interpretation before a moving loop electromagnetic survey is commenced to test for conductors associated with nickel sulphide mineralisation.

Interpretation is focussing on the depth of transported cover, depth of weathering, distribution of mafic, ultramafic, and metasedimentary rocks, and occurrence of sulphidic metasediments.

This work will be completed during April.

WEST AUSTRALIAN EXPLORATION

Nepean West Project (E15/1658, E15/1788, E15/1787, & P15/6591)

• • A Program of Work was submitted to DMIRS in February to allow for the clearing of access tracks and drilling of 90 aircore holes at the Penrith Prospect. This drilling program is planned to commence in July or August.

Kalgoorlie South Project (E26/208, P26/4460-63, P15/6389, & PLA26/4458-4459)

• • A 1,837 line kilometre high resolution aeromagnetic survey was completed over the northern area of the Kalgoorlie South Project during November 2021 using 25m line spacing and 35m terrain clearance. The interpretation of the data and conceptual structural gold targeting was completed during the quarter. Twenty nine conceptual structural orogenic gold targets were generated with 9 considered high priority, 9 considered moderate priority, and 11 considered low priority.

  The conceptual structural targets are currently being reviewed and an exploration strategy developed to effectively test the project area.

TENEMENTS

Tenement	Name	Location	BeneficNial percentage acquireda or disposed t of during the quarter u	Beneficial percentage held at end of quarter
South Australia (Wilcherry Project) r e
EL6379	Uno/Valley Dam	60 km northeast of Kimba	oG 0%	100%
EL5875	Mount Miccollo	60 km north of Kimba	fGr 0%	100%
EL6475	Peterlumbo	40 km north of Kimba	ra iG 0%	100%
EL5931	Maratchina Hill	35 km north of Kimba	n ran G 0%	100%
EL6072	Eurila Dam	40 km northeast of Kimba	tan rG 0% e	100%
EL6188	Wilcherry Hill	40 km north of Kimba	an rG 0% red	100%
EL6521	Buckleboo West	60 km northwest of Kimba	n ra P 0% ed	100%
an e sd te n t
ed td d ie
Western Australia nd
E15/1658	Nepean West	65 km southwest of Kalgoorlie	g G 0%	100%
E15/1787	Nepean West	65 km southwest of Kalgoorlie	r 100%	100%
E15/1788	Nepean West	65 km southwest of Kalgoorlie	a 0%	100%
P15/6591	Nepean West	65 km southwest of Kalgoorlie	n 0%	100%
E26/208	Kalgoorlie South	15 km south of Kalgoorlie	P 0% e	100%
P15/6389	Kalgoorlie South	20 km south of Kalgoorlie	eP 0% d	100%
PLA26/4458	Kalgoorlie South	15 km south of Kalgoorlie	n eP 0%	0%
PLA26/4459	Kalgoorlie South	15 km south of Kalgoorlie	nd eP 0%	0%
P26/4460	Kalgoorlie South	15 km south of Kalgoorlie	nd e n 0%	100%
P26/4461	Kalgoorlie South	15 km south of Kalgoorlie	nd P 0% ng	100%
P26/4462	Kalgoorlie South	15 km south of Kalgoorlie	d eP 0% ng	100%
P26/4463	Kalgoorlie South	15 km south of Kalgoorlie	en ng 0%	100%

nd g id in ng g

Kevin Malaxos Managing Director T: 03 9697 9090

E:[e-mail]