Alliance Resources : Weednanna Drilling Assay Update

8 April 2022

ALLIANCE RESOURCES LTD

ASX: AGS

ABN: 38 063 293 336

Market Cap: $42.12M @ $0.18

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Suite 3, 51-55 City Road Southbank Victoria 3006 AUSTRALIA

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Web:www.allianceresources.com.au

Projects:

Wilcherry, SA (100%): gold, iron, base metals, graphite

Nepean Wst, WA (100%): gold-nickel

Kalgoorlie Sth, WA (100%): gold-nickel

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GPO Box 2975 Melbourne Victoria 3001 AUSTRALIA

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DRILLING ASSAY UPDATE

Weednanna Au-Fe Deposit

Update of preliminary and incomplete assay results provided to inform market following receipt of off-market takeover bid from Gandel Metals.

Significant delay in turn-around time for analysis of drill samples experienced due to industry demand and impact of COVID-19 pandemic.

2021 diamond drilling results received from 4 of 6 holes drilled to replicate high-grade gold intersections and to provide core for research by CSIRO has returned:

• • 37.4m @ 3.3 g/t Au from 40.7m in 21WDDH001 (Shoot 1)

• • 41.55m @ 3.4 g/t Au from 54.4m in 21WDDH002 (Shoot 1)

• • 9.15m @ 35.6 g/t Au from 104.95m in 21WDDH003 (Shoot 3)

• • 11.1m @ 24.8 g/t Au from 106.1m in 21WDDH004 (Shoot 4)

Results confirm previous RC drill intersections and provide excellent core specimens for CSIRO research.

47 RC holes, totalling 6,180m, drilled in Shoot 3, 7 and 8 areas at north end of deposit in November and December 2021

Preliminary gold assay results from 4m composite scoop samples used to inform the collection of 1m split samples have returned:

• • 4m @ 1.3 g/t Au from 64m in 21WDRC003 (Shoot 8)

• • 4m @ 2.4 g/t Au from 140m in 21WDRC006 (Shoot 8)

• • 4m @ 1.4 g/t Au from 76m in 21WDRC025

• • 4m @ 1.1 g/t Au from 104m in 21WDRC027

• • 4m @ 2.7 g/t Au from 116m in 21WDRC027

• • 16m @ 4.1 g/t Au from 148m in 21WDRC037 (Shoot 3)

• • 4m @ 1.0 g/t Au from 92m in 21WDRC041 (Shoot 3HW)

• • 4m @ 1.3 g/t Au from 128m in 21WDRC042 (Shoot 3)

2,112 1m split samples collected during February and March 2022 and sent to laboratory for gold and iron analysis to confirm 4m composite results.

Alliance Resources Ltd (Alliance) is pleased to provide an update on drilling assay results received to-date from diamond and RC drilling completed at the Weednanna Au-Fe Deposit (Weednanna), located 45 km north of Kimba on the Eyre Peninsula, South Australia.

During 2021, Alliance completed 6 diamond holes, totalling 1,560.6m, and 47 RC holes, for 6,189m.

The Company has experienced significant delays in the receipt of assay results from these drill programs due to high industry demand for diamond drill core cutting and sampling services and mineral laboratory analysis, which has also been impacted by labour shortages resulting from the COVID-19 pandemic.

Alliance routinely announces the results of its drilling programs to the ASX upon the receipt of the final, complete, and interpreted drill assay data to provide a considered and balanced judgement of their significance. The current ASX Announcement contains preliminary and incomplete drill assay data but is being released to provide an update to investors following the receipt of an off-market takeover bid from

Gandel Metals (refer to Alliance ASX Announcement dated 4 April 2022).

2021 Diamond Drilling

Between August and October 2021 six diamond holes (21WDDH001-006), totalling 1,560.6 metres, were drilled at Weednanna to provide drill core samples for research by the CSIRO (refer to Alliance ASX Announcement dated 21 May 2021).

Five of the drill holes were designed to intersect known high-grade gold mineralisation at Shoots 1, 3, 4 and 5E and the sixth hole was designed to test the host rocks, potential mineralising structures, and granite intrusions at depth beneath the deposit (Figures 1 and 2).

All drill-core has been cut and ¼ core sampled and is being analysed for gold and a broad range of elements before being sent to the CSIRO. Assay results have been received for holes 21WDDH001-004 (Table A). The outcomes of this drilling program and assay results received to date are discussed for each drill hole below.

Hole 21WDDH001 was designed to test the eastern end of Shoot 1 in an area where RC holes 17WDRC003 and 19WDRC140 returned 57m @ 5.5 g/t Au from 45m and 27m @ 7.6 g/t Au from 34m respectively.

Hole 21WDDH001 intersected 37.4m @ 3.32 g/t Au from 40.7m including 8.85m @ 9.35g/t Au from 58.5m (Figure 3). Gold mineralisation is hosted within granite and is associated with disseminated arsenopyrite and pyrite and moderate to strong chlorite-sericite alteration.

Hole 21WDDH002 was designed to test the western end of Shoot 1 near RC hole 06WDRC007 that returned 36m @ 6.3 g/t Au from 54m. Hole 21WDDH002 intersected 41.55m @ 3.41 g/t Au from 54.4m including 16.8m @ 6.97 g/t Au from 70.6m including 9.15m @ 11.28 g/t Au from 72.85m (Figure 3). Gold mineralisation is hosted within granite and is associated with disseminated arsenopyrite and pyrite and generally chlorite-sericite alteration. High-grade gold correlates with a biotite schist zone and surrounding strong chlorite and moderate sericite altered granite with strong disseminated sulphide and local net textured and massive sulphide.

Hole 21WDDH003 is located at Shoot 3 at the north end of the deposit and was designed to test near RC hole 17WDRC017 that returned 14m @ 36.1 g/t Au from 118m, including 5m @ 95.6 g/t Au from 120m, and hole 98WDRC049 that returned 18m @ 58.2 % Fe from 159m. Hole 21WDDH003 intersected 9.15m @ 35.56 g/t Au from 104.95m and 50.3m @ 47.80 % Fe from 125.5m. Gold mineralisation is associated with fractured serpentine altered marly metasediment. Iron mineralisation is crystalline and massive and associated with magnetite skarn altered dolomite.

Hole 21WDDH004 is located at the southern end of the deposit and was designed to twin RC hole 17WDRC067 that returned 15m @ 18.2 g/t Au from 107m in Shoot 4 hosted in skarn-altered metasedimentary rocks. Hole 21WDDH004 intersected 11.1m @ 24.84 g/t Au from 106.1m including 7.95m @ 34.22 g/t Au from 107.2m. Gold mineralisation is associated with a zone of strong sulphidation (pyrite with lesser pyrrhotite and minor chalcopyrite) and minor quartz veining.

Hole 21WDDH005 is located in the southern area of the deposit and was designed to twin RC hole 19WDRC067 that returned 6m @ 16.6 g/t Au from 107m in Shoot 5E hosted in skarn-altered metasedimentary rocks. This hole intersected Sleaford Complex granite and gneiss (62.6-101.95m) in the hanging wall to the Darke Peak Group calc-silicate altered metasediments. Darke Peak Group metasediments occur from 101.95m to 176.75m depth and consist of weakly fractured strong calc-silicate altered marly rocks (101.95-112.2m) that are intruded by coarse grained granite that grades into massive crystalline magnetite skarn interleaved with minor calc-silicate (112.2m-138.95m) then back into fractured calc-silicate altered marly metasediment and gneiss (after psammite?) (138.95-176.75m). The footwall Sleaford Granite is moderately fractured, variably sheared, and chlorite altered with rare sulphide veinlets to 197.2m. The granitoid briefly becomes less altered to 205.65m before increased fracturing, brecciation, alteration (chlorite, silica, sericite, and biotite) and irregular disseminated sulphide (mainly pyrite, up to 3%) to 256.3m associated with a zone of quartz veining, that occurs between 227.2-237.25m and 241.25-244.2m. Variable chlorite, sericite and biotite altered granite and gneiss, with minor pegmatite, occur below the quartz vein zone from 156.3m to the end of hole at 272.9m. Assay results have not yet been received for this drill hole, however geological logging indicates that granite may intrude into the gold interval targeted by the hole and result in a narrower or lower grade intersection.

The quartz vein zone, with associated chlorite alteration and disseminated pyrite, has only returned anomalous gold mineralisation elsewhere at the deposit.

Hole 21WDDH006 is located near the centre of the deposit and was designed to test the depth extent of the metasedimentary unit in an area where the metasediment, chlorite-altered breccia zone / quartz vein, and underlying Hiltaba-aged granite converge. Prior to this drill hole there were no deep west-oriented holes drilled at Weednanna to test the depth extent of the metasedimentary unit, underlying structural architecture, and interaction with the Hiltaba-aged granite. This hole intersected Sleaford Complex granite and gneiss and variable k-feldspar altered quartzite in the hanging wall to the Darke Peak Group calc-silicate altered metasediments. The hanging wall shear was intersected between 268.5-284.75m

(expressed as biotite schist and gneiss) before minor possible fractured and weakly weathered calc-silicate altered metasedimentary rocks (284.75-290.7m) that appear to close off at depth and be truncated by the hanging wall shear. In the footwall to the calc-silicate altered Darke Peak Group metasediments, the hole intersected Sleaford Complex granite and gneiss that increases in chlorite alteration intensity before intersecting several zones of quartz vein with associated brecciation and disseminated pyrite (407.3-448.6m). The quartz vein occurs close to the Hiltaba granite and it is uncertain if the fractured and variably chlorite-sericite-hematite? or k-feldspar? altered granitoid between 448.6-460.6m is Sleaford or Hiltaba granite (or both). Hiltaba granite occurs from 460.6m to the end of hole at

552.7m. Alteration is variable and consists of weak to moderate sericite and epidote alteration and weak local chlorite alteration. From 465.65-472.3m irregular quartz-carbonate veining occurs as fracture and cavity fill. While assay results have not yet been received for this drill hole, geological logging shows that the calc-silicate altered metasedimentary rocks that host much of the gold at Weednanna appear to close off at depth (Figure 4). The quartz vein zone, with associated chlorite alteration and disseminated pyrite, has only returned anomalous gold mineralisation elsewhere at the deposit, but is interpreted to be a feeder structure for skarn and gold mineralisation.

2021 RC drilling

During November and December 2021 47 RC holes, totalling 6,180 metres, (21WDRC001-006 & 009-049) were completed at Weednanna (Figures 1 and 2).

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.

Holes 21WDRC007 and 21WDRC008 that were planned to be drilled at Shoot 7 were not completed because of equipment failure at the end of the drilling program.

Drill samples were collected over 1m spaced intervals in calico bags using a cone splitter while drilling, however Alliance uses 4m composite scoop samples to guide the selection of 1m spaced intervals for gold analysis and geological logging of RC chips to identify 1m spaced intervals for iron analysis.

All 4m composite gold assay results were received during February and March 2022. A total of 2,112 1m split samples have been collected and sent to a laboratory for gold and iron analysis.

All 4m composite samples returning >0.1 g/t Au are listed in Table B. Significant assay results >1.0 g/t Au include:

• • 4m @ 1.3 g/t Au from 64m in 21WDRC003 (Shoot 8)

• • 4m @ 2.4 g/t Au from 140m in 21WDRC006 (Shoot 8)

• • 4m @ 1.4 g/t Au from 76m in 21WDRC025 (between Shoots 7/8 & 3)

• • 4m @ 1.1 g/t Au from 104m in 21WDRC027 (between Shoots 7/8 & 3)

• • 4m @ 2.7 g/t Au from 116m in 21WDRC027 (between Shoots 7/8 & 3)

• • 16m @ 4.1 g/t Au from 148m in 21WDRC037 (Shoot 3)

  including 12m @ 5.4 g/t Au from 148m (Shoot 3)

• • 4m @ 1.0 g/t Au from 92m in 21WDRC041 (Shoot 3HW)

• • 4m @ 1.3 g/t Au from 128m in 21WDRC042 (Shoot 3)

In general, (based on the preliminary results received to date) the drilling program has been disappointing with Shoot 8 effectively closed off, no substantial gold intersections in between Shoots 7/8 and 3, and infill drilling at Shoot 3 only returning one potentially economic gold intersection (16m @ 4.1 g/t Au from 148m in 21WDRC037). The results of infill drilling at Shoot 3 do not support the current interpreted geometry of the high-grade gold shoot and further drilling is required to better test the geometry and extent of gold mineralisation.

Current and Future Work

Alliance is awaiting the final assay results from the 2021 diamond and RC drilling programs completed at Weednanna. These results will be announced once they have all been received and interpreted.

All diamond drill core has been sent to CSIRO for research on the paragenesis of the deposit, which is ongoing and expected to continue through to September 2022.

Alliance has planned some extensional RC drilling to define the extend of Shoot 7, which is planned to be completed during April or May 2022 and further RC drilling at Shoot 3 will be planned once all 1m split gold assay results are received.

Feasibility study work is ongoing to assess the economic potential to develop a gold and iron producing operation at Weednanna.

Competent Person

The information in this report that relates to the Exploration Results is based on information compiled by Mr Anthony Gray. Mr Gray is a Member of the Australian Institute of Geoscientists and is an employee of Alliance Resources Ltd. Mr Gray has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Gray consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.