Ardea Resources : Nickel Sulphide Discovery Confirmed at Emu Lake

ASX & Media Release

only3 December 2021

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

ForAlex Mukherji

Manager Land Access &

Compliance

Mike Miller

General Manager Technical

Services

Issued Capital

Fully Paid Ordinary Shares 138,830,219

Directors/Employee

Performance Rights 4,971,000

ABN 30 614 289 342

Nickel Sulphide Discovery Confirmed at Emu Lake

• Diamond drill hole AELD0003 intersects massive nickel sulphide mineralisation on an intact basal contact in the West Channel
• The nickel sulphide is on the same komatiite basal flow contact intersected in adjoining diamond drill hole AELD0002 (4.8m of mineralisation, up to 4.78% nickel from 365.9m depth) (ASX release 10 June 2021)
• With two intersections of massive nickel sulphide now established on the same basal komatiite horizon, Ardea confirms a discovery
• Identification of pentlandite (nickel sulphide) and chalcopyrite (copper sulphide) confirmed by handheld XRF
• Down Hole Electro-Magnetic (DHEM) contractor has commenced work aimed at extending the target zone for follow-up drilling

Ardea Resources Limited (Ardea or the Company) confirms a massive nickel sulphide discovery at its Kalpini Project, 70km northeast of Kalgoorlie, WA (Figure 1 and 2).

Figure 1: ALED0003, NQ2 core at 392.1m showing massive sulphide zone containing visible pentlandite (nickel sulphide), chalcopyrite (copper sulphide) and pyrrhotite-pyrite (iron sulphides).

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 West Channel discovery.

West Channel is on a separate ultramafic flow that pinches out before reaching surface, so the massive sulphide has no surface gossan expression and has therefore been missed by past explorers.

The geometry of the AELD0003 discovery will be better understood once the DHEM survey is completed, and multi-element assays received.

The discovery of massive nickel sulphide on an intact basal contact in two adjoining drill holes has opened up a new search space and is a major exploration breakthrough for the Company. With Ardea holding 20km of fertile komatiite strike at Emu Lake, there is significant scope to extend this discovery and make additional nickel sulphide discoveries."

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Kalpini Project - Emu Lake Prospect

Ardea's Kalpini Project covers over 121km2, with the leading nickel sulphide target, Emu Lake, located 70km northeast of Kalgoorlie (Figure 2). 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 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 2). Silver Swan has a strike length near surface of less than 50m, but a plunge extent over 1,000m and features very high-grade zones of massive nickel sulphide.

Figure 2: 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 target that confirmed the Emu Lake West Channel nickel sulphide discovery

AELD0001 was drilled to follow-up on an historic DHEM plate that had not been previously drilled tested. This hole intersected a narrow zone of remobilised nickel sulphide (ASX release 2 March 2021). A DHEM survey completed in this 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 @ 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 @ 1.44% Ni and 0.09% Cu, 0.20g/t Pt, 0.09g/t Pd from 365.9m depth.

This intersection confirms the prospectivity of the West Channel position 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 target for future drilling.

AELD003 was recently drilled to a depth of 450m to test this DHEM plate. From a depth of 391.05m the following nickel sulphide zones were intersected (Figure 3, 4 and 5):

3.33m of massive, semi-massive, disseminated and matrix nickel sulphide

• 1.20m of massive sulphides, with visible pentlandite (nickel sulphide), chalcopyrite (copper sulphide), pyrrhotite and pyrite (iron sulphides).
• 1.55m of disseminated and matrix sulphides with some minor zones of massive sulphides. Visible sulphides include pentlandite, chalcopyrite, pyrrhotite and pyrite.
• 0.20m of massive sulphides, with visible pentlandite, chalcopyrite, pyrrhotite and pyrite.
• 0.38m of mixed matrix and disseminated sulphides with visible pentlandite, chalcopyrite, pyrrhotite and pyrite.

Figure 3: AELD0003 NQ2 core photo, 391.00 to 393.75m.

Left hand side core stick - Massive sulphide zone with visible pentlandite (nickel sulphide), chalcopyrite (copper sulphide), pyrrhotite and pyrite.

Right hand side core stick - Net textured sulphide zone with visible pentlandite, chalcopyrite and pyrrhotite.

For scale, the green line in the photo is 10cm in length.

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The massive and semi-massive sulphides are of similar high grades (based on handheld XRF Niton results) to other previously reported intercepts in the Emu Lake area, with laboratory assays required to quantify the results, which will be reported once available.

Following on from the above zone of massive nickel sulphide, there is a 0.52m zone of barren intermediate volcaniclastic, followed by a further 37m of disseminated 1% to 2%, sulphide to a depth of 431.90m, within an ultramafic unit. Assay results are required to determine the nickel sulphide prospectivity of this wide low grade zone.

The host volcanic sequence is interpreted to be over-turned, hence the massive sulphide being intersected before the disseminated sulphides.

Significant project upside

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.

A recently completed RC drill hole, AELR0002, was drilled up plunge of AELD0002. This hole did not intersect the target komatiite lava channel and indicates that this zone has pinched out closer to surface (Figure 5). This realisation helps explain why past explorers have missed the massive nickel sulphides discovered by Ardea in core holes AELD0002 and AELD0003 (Figure 4 and 5).

Neither surface geochemical sampling nor geophysical surveys would be able to detect such a system, with drilling and DHEM the only 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 down-plunge.

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

Figure 4: Drill hole location plan. Local Binti Grid.

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Figure 5: Cross section 47,750mN. Local Binti Grid.

Next Steps

Drill core logging of AELD0003 is being finalised. The core will be sampled and dispatched to an independent assay laboratory in the coming days. Assay results will be reported once available (expected in Q1, 2022).

Results of the in-progress DHEM surveys on drill holes AELR0002 and AELD0003 will be reported once they have been received and interpreted (expected during December 2021).

Once the above information is available, follow-up exploration will be planned to expand the known extent of this exciting nickel sulphide discovery.

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