Ardea Resources : Emu Lake Nickel Sulphide Discovery, 2.72m at 5.42% Ni

ASX & Media Release

only14 January 2022

ASX Symbol

ARL

Ardea Resources Limited

Suite 2 / 45 Ord St

West Perth WA 6005

usePO Box 1433

West Perth WA 6872

Telephone

[phone]

Email [e-mail]

Website www.ardearesources.com.au

Directors

Mat Longworth

Non-Executive Chair

Andrew Penkethman

Managing Director & CEO

Ian Buchhorn

Technical Executive Director

Executive Management

Sam Middlemas

Company Secretary & CFO

Alex Mukherji

ForManager Land Access &

Compliance

Mike Miller

General Manager Technical

Services

Issued Capital

Fully Paid Ordinary Shares 138,830,219

Performance Rights 4,771,000

Options 4,000,000

ABN 30 614 289 342

Emu Lake Nickel Sulphide Discovery confirmed with

2.72m at 5.42% Ni

• Emu Lake core hole, AELD0003, has confirmed a high-grade massive nickel-copper-PGE sulphide discovery on an intact felsic footwall contact.
• Significant results from this round of drilling include:

• 1. AELD0003: 2.72m at 5.42% Ni and 0.85% Cu from 391.04m including 1.23m at 8.22% Ni and 0.56% Cu from 391.04m
• Following detailed interpretation, this high grade massive sulphide intersection has delineated a new fertile target horizon, the "Western Ultramafic-Dacite contact."
• Ardea 2021 results drilled into this same channel system include:
• 1. AELD0002: 4.8m at 1.44% Ni and 0.16% Cu from 365.9m

including 1.10m at 4.78% Ni and 0.16% Cu from 366.9m (ASX release 10 June 2021)

• 1. AELD0001: 0.65m at 2.95% Ni and 0.08% Cu from 336.7m (ASX 2/3/21)
• Results confirm a fertile nickel sulphide horizon, the Western Ultramafic:
• 1. AELD0003 is showing increased massive nickel (Ni) and copper (Cu) sulphide grade and thickness on an intact, basal dacite contact (Figure 1 and 2)

1. High grade massive sulphides up to 8.3% Ni, with mineralisation open in all directions

• 1. The fertile horizon, the "Western Ultramafic," opens a new exploration search space, with Ardea controlling 20km of strike on this compelling target zone
• Follow-up
• 1. An Exploration Incentive Scheme (EIS) diamond hole (co-funded with the WA government) has been approved to test the down plunge extension of AELD0003. Drill commencement will be subject to rig availability.

1. CSIRO collaborative research is studying nickel sulphide mineralisation at Emu Lake and is aimed at vectoring towards massive sulphide within Ardea's extensive Eastern Goldfields tenement holding.

Figure 1: AELD0003, NQ2 drill core from 391.04m showing the dacite footwall contact and thermal erosion on the left hand side of the photo and high grade massive nickel sulphide on the right hand side of the image.

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Following the receipt of assay results from drill core hole AELD0003, Ardea Resources Limited (Ardea or the Company) confirms a massive nickel sulphide discovery at its Kalpini Project, 70km northeast of Kalgoorlie, Western Australia (Figures 1, 2 and 3).

Ardea's Managing Director, Andrew Penkethman, said:

"The focus of historic Emu Lake exploration has been the Binti Gossan prospect area, 1km north of Ardea's Western Ultramafic channel discovery.

The Western Ultramafic is a separate and distict high-magnesium ultramafic flow that was not prioritised by past explorers, presumbaly due to an absence of surface gossans as seen at the Binti Gossan.

With the recently received assay results from core hole AELD0003 confirming high grade nickel sulphides located on an intact basal dacite contact with komatiite, we now have three adjoining drill holes with nickel sulphide mineralisation on the same contact which conclusively confirms that a discovery has been made.

Importantly, the interpreted 3D geometry of the AELD0003 discovery suggests the mineralisation is open in all directions for further drill exploration.

With Ardea holding 20km of fertile komatiite strike at Emu Lake, there is significant scope to extend this nickel sulphide discovery and make additional discoveries.

I acknowledge the Ardea team and partners such as CSIRO and Newexco for their input which has assisted in developing the Emu Lake "Thermal Erosion" nickel sulphide model which is a major exploration breakthrough for the Company, as it has opened up a new search space."

Figure 2: AELD0003, NQ2 drill core showing massive sulphide zone (391.04 - 393.76) and adjacent zones which exhibit high competency (solid core) and high recoveries. The core competency and lack of talc-chlorite shearing augurs well for good mining ground conditions. Note the down hole depth metre marks shown in black on the core trays.

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Kalpini Project - Emu Lake Nickel Sulphide Prospect

Ardea's Kalpini Project covers over 121km2, with the leading nickel sulphide target, Emu Lake, located 70km northeast of the City of Kalgoorlie-Boulder (Figure 3). This strategic tenement package contains 20km strike of prospective ultramafic stratigraphy held 100% by Ardea and mostly within granted mining leases. The project is 35km east of the Black Swan Nickel Project (Silver Swan nickel mine), operated by Poseidon Nickel Ltd, within a parallel komatiite volcanic belt.

The exploration model being applied by Ardea is similar to that modelled at the Silver Swan nickel sulphide mine (Figure 3). Silver Swan has a strike length near surface of less than 50m, but a plunge extent of over 1,000m and features very high-grade zones of massive nickel sulphide.

Figure 3: Ardea tenement plan highlighting the location of the Kalpini Project, Emu Lake Prospect and nickel mines and deposits in the region. Projection MGA 94 Zone 51.

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Defining the Emu Lake Western Ultramafic nickel sulphide discovery

Ardea drill hole AELD0001, was drilled in February 2021 to follow-up on an historic Down Hole Electromagnetic (DHEM) plate that had not been previously drill tested. This hole intersected a narrow zone of nickel sulphide (Ardea ASX release 2 March 2021). A DHEM survey completed in AELD0001 defined an off-hole conductor for drill testing. To test the strong (8,000 siemens) DHEM conductor, diamond drillhole AELD0002 was drilled and intersected a basal nickel sulphide occurrence (ASX release 10 June 2021) and returned assays of:

• 1.1m at 4.78% Ni, 0.16% Cu, 0.47g/t Pt, 0.20g/t Pd from 366.9m downhole consisting of semi-massive and matrix-style nickel sulphides, within a broader zone of:
• 4.8m at 1.44% Ni, 0.09% Cu, 0.20g/t Pt, 0.09g/t Pd from 365.9m depth.

This intersection confirmed the prospectivity of the Western Ultramafic that has received little attention in the past with most historic drilling concentrated on the Binti Gossan Main Zone 1km to the north. Although nickel sulphide has previously been intersected below the outcropping Binti Gossan, it consists of mainly remobilised stringer sulphides.

To follow-up on the nickel sulphide results in AELD002, a DHEM survey was completed which defined a strong off- hole conductor directly south and below the AELD002 nickel sulphide intercept, providing a drill target.

AELD003 was drilled in late November 2021 to a depth of 450m to test this DHEM plate (ASX release 3 December

2021). From a depth of 391.04m the following nickel sulphide zones were intersected (Figure 1 and 2):

• 1.23m at 8.22% Ni, 0.56% Cu, 0.46g/t Pt, 0.31g/t Pd from 391.04m downhole consisting of massive nickel sulphides, within a broader zone of:
• 2.72m at 5.42% Ni, 0.85% Cu, 0.58g/t Pt, 0.27g/t Pd from 391.04m downhole consisting of massive, semi- massive, disseminated and matrix nickel sulphide.

The host volcanic sequence is over-turned; hence the massive sulphide being intersected in drilling above the disseminated sulphides.

A detailed breakdown of the stratigraphy and geochemical data is shown in Table 1.

Significant project upside

In "Silver Swan style" nickel sulphide systems (as Emu Lake clearly is), the exploration methodology is to define a komatiite volcanic flow channel system, then determine whether the system is fertile for nickel sulphides. The results for AELD0003 confirm an exceptionally fertile system, entirely comparable to that documented for Silver Swan.

Of significance in terms of exploration model, the Emu Lake massive nickel sulphide is predominantly hosted by an underlying (before fold overturning), highly altered pyrite-arsenopyrite bearing dacite (termed the Footwall Dacite).

Current CSIRO theory supports the "Thermal Erosion Model" where concentrations of massive nickel sulphide accumulate at the base of an ultramafic lava flow (Figure 1). Key conditions believed to contribute to these nickel sulphide accumulations include a very hot, very turbulent lava flow, that scours and mixes high sulphide bearing basement rock into the flow. A preserved intact basal contact in the AELD0003 massive sulphides supports a Thermal Erosion Model, which is believed to be the mechanism for mineralisation in both the Emu Lake and Silver Swan areas.

The DHEM conductor from AELD0002 was stronger than that seen in AELD0001 and in light of the increased quantity of massive nickel sulphide observed in AELD0003, when compared to AELD002, indicates that the extent of nickel mineralisation is increasing.

DHEM is optimal when off-hole conductors are up to 50 metres away. As hole AELD0003 intercepted the massive sulphide (conductor), its DHEM survey results were largely ineffective and inconclusive.

A recently completed RC drill hole, AELR0002, was drilled up plunge of AELD0002 and confirms up-dip continuity of the Western Ultramafic "fertile horizon" (Figures 4 and 5).

The AELR0002 komatiite flows are intensely altered and only recognised as ultramafic rocks using Ardea's geochemical indices (Table 1). This non-recognition of ultramafic has significantly contributed to the absence of historic drill exploration on what should have been a high priority target.

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Neither surface geochemical sampling nor surface geophysical surveys are likely to detect such a system, with drilling and DHEM the most effective exploration method for this style of "blind" deposit. The exploration difficulty is further exacerbated by the limited strike length of Silver Swan style mineral systems.

The mineralised zone defined in Ardea drill holes AELD0002 and AELD0003, is open in all directions and shows increased thickness of the channel, in the down-plunge direction.

With Ardea controlling 20km of strike of this essentially unexplored komatiite channel system, there is significant scope to make additional discoveries.

Mineralisation of the AELD0003 style would be expected to generate a premium nickel sulphide concentrate with high copper and PGE credits. Importantly, the AELD0003 massive nickel sulphide mineralisation has no arsenic penalty component.

From a mining perspective, there is an absence of talc-chlorite schist in association with the mineralisation, suggesting good ground conditions in any future mining.

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