Audalia Resources : Bulk sample testwork confirms premium lump ore product

BULK SAMPLE TESTWORK CONFIRMS

PREMIUM LUMP ORE PRODUCT

•  Bulk sample testwork confirms premium lump ore product with high TiO2 content.

•  Average 19.48% TiO2, 59.69% Fe2O3 and 0.97% V2O5 in lump ore product.

•  Low levels of deleterious elements confirm suitability for proposed application.

•  Simplified process only crushing and screening required.

Audalia Resources Limited (ASX: ACP) (Audalia or the Company) is pleased to provide an update on activities at the Medcalf Project, a vanadium-titanium-iron project located approximately 470km south east of Perth near Lake Johnston, Western Australia.

Bulk Sample Testwork

The addition of titanium bearing material in the blast furnace is a popular protection measure applied in the iron making industry to reduce the wear of hearth refractory linings. Audalia has recently identified the opportunity of producing a High Titanium Lump Ore Product to be used for blast furnace refractory liner protection. The proposed product is a direct shipping ore (DSO) type product only requiring crushing and screening process. The minimum product requirement is: TiO2 > 12.5%, TFe > 35%, and particle size between 10 and 60mm.

A bulk sampling programme was completed in October 2021 and approximate 13 tonnes of bulk samples were delivered to Nagrom to undergo the metallurgical testwork (Refer to ASX announcement dated 24 November 2022). The bulk samples were collected within the proposed open pit footprint as shown in Figure 1. The mineral resource model developed by Cube Consulting has indicated the mineralisation exists at the surface of the selected location. After removing the top soil, the bulk samples were excavated from surface to approximate 3m below the ground. These bulk samples are representative of the initial operation conditions.

The bulk sample testwork programme was developed in conjunction with Nagrom. The bulk samples were composited to a single unified composite sample by a bobcat. The composite was staged crushed to P100 60mm. The crushed composite was then dry screened at 10mm. The +10mm to -60mm portion is the target product and was assayed at various size fraction. The -10mm portion is the mineralised waste and was assayed at various size fraction as well.

Sample Size (mm)	TiO2 (%)	Fe2O3 (%)	V2O5 (%)	SiO2 (%)	Al2O3 (%)
+50	21.24	58.50	0.92	4.38	7.53
+40	22.02	59.03	1.00	3.87	6.95
+31.5	21.32	59.38	0.93	3.85	7.73
+20	22.08	60.27	0.96	3.51	7.47
+16	21.38	61.40	0.98	3.35	7.66
+12.5	21.43	61.95	0.99	3.27	7.54
+10	21.19	61.67	1.00	3.47	7.55
Calc. Head	21.48	59.69	0.97	4.02	7.72
+8	21.17	61.77	1.01	3.99	7.29
+6.3	21.52	61.49	1.01	3.82	7.39
+5.6	21.37	61.34	1.01	4.07	7.44
+4	21.53	61.31	1.01	3.93	7.35
+3.35	21.67	60.88	1.00	4.02	7.29
+2	21.06	61.06	0.98	4.31	7.58

Figure 1: Bulk sample pit location.

Assay results have now been received for all the size fractions. See Table 1 for the major element results. The full suite of assay results is detailed in Appendix 1.

Table 1: Major element of bulk sample testwork.

This bulk testwork has confirmed the opportunity to produce a high titanium lump ore product of the mineralisation at Medcalf, with a weighted average grade of 21.48% TiO2, 59.69% Fe2O3, 0.97% V2O5, 4.02% SiO2 and 7.72% Al2O3. The weighted average was calculated based on the proportion of each size fraction. The titanium and iron content in the lump ore product are well above the product requirement. The bulk testwork has also confirmed the low deleterious elements across all size fractions, with weighted average grades of 4.02% SiO2, <0.06% S and <0.01% P. See Appendix 1 for the full suite of assay results.

The testwork results indicated, for the proposed lump ore product, the concentration of major elements is very consistent across all different size ranges. This will allow great flexibility in actual operation to produce specific size product meeting customer's specification. The high titanium and iron grade combined with low levels of impurities demonstrates the scope for the Medcalf High Titanium Lump Ore Product to meet or exceed the market product specifications.

The testwork results also confirmed the concentration of major elements in the fine ore fractions (-10mm to +1mm) is almost equivalent to the lump ore product. The fine ore fractions could potentially be used for ore blending of sinter pellet. This could generate additional income stream for the Medcalf Project.

The bulk testwork results is a critical component of the current PFS study. The testwork results will provide information for flowsheet definition and engineering design.

Next Step

Ongoing work in support of the development of the Medcalf Project includes:

•  Delivery of the product samples to potential customers for testing and analysis.

•  Completion of the PFS study incorporating the bulk testwork results.

•  Discussion with Southern Port Authority (SPA) on access to Esperance Port.

This announcement was authorised to be given to ASX by the Board of Directors of Audalia Resources Limited.

Sample Size (mm)	TiO2 (%)	Fe2O3 (%)	V2O5 (%)	SiO2 (%)	Al2O3 (%)
+1	19.59	57.56	0.92	6.64	9.19
+0.5	16.74	47.00	0.77	12.84	13.79
+0.355	17.23	45.97	0.75	14.77	13.58
+0.25	16.60	40.87	0.67	19.18	14.27
+0.106	13.96	31.19	0.50	31.44	14.73
+0.075	14.24	30.60	0.49	29.88	16.54
+0.045	14.19	26.79	0.43	31.42	18.16
+0.038	13.22	29.48	0.47	27.34	19.57
+0.025	12.66	23.37	0.37	30.41	22.27
-0.025	6.51	17.96	0.29	32.88	29.19

Authorised by:

Brent Butler

CEO and Executive Director

For more information please contact:

Brent Butler

CEO and Executive Director Audalia Resources Limited T: [phone]

E:[e-mail]

Forward Looking Statements and Cautionary Statements

Some statements in this summary regarding estimates or future events are forward-looking statements. They include indications of and guidance on, future earnings, cash flow, costs and financial performance. Forward-looking statements include, but are not limited to, statements preceded by words such as "planned', "expected", "projected", "estimated", "may", "scheduled", "intends", "anticipates", "believes", "potential", "could", "nominal", "conceptual" and similar expressions. Forward-looking statements, opinions and estimates included in this announcement are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements are provided as a general guide only and should not be relied on as a guarantee of future performance. Forward-looking statements may be affected by a range of variables that could cause actual results to differ from estimated results and may cause the Company's actual performance and financial results in future periods to materially differ from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include but are not limited to liabilities inherent in mine development and production, geological, mining and processing technical problems, the inability to obtain mine licences, permits and other regulatory approvals required in connection with mining and processing operations, competition for among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions, changes in commodity prices and exchange rates; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of mineral products, including labour stoppages and severe weather conditions; the demand for and availability of transportation services; the ability to secure adequate financing and management's ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be correct.

Statements regarding plans with respect to the Company's mineral properties may contain forward-looking statements. Statements in relation to future matters can only be made where the Company has a reasonable basis for making those statements.

Competent Person's Statement

The information in this report that relates to the Exploration Results is based on information compiled by Mr Brent Butler, who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Butler has 37 years' experience as a geologist and is CEO and Executive Director of Audalia. Mr Butler has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code). Mr Butler has provided his consent to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Appendix 1 - Bulk Sample Testwork Results

Sample Size (mm)	TiO2 (%)	Fe2O3 (%)	SiO2 (%)	Al2O3 (%)	MnO (%)	CaO (%)	P2O5 (%)	SO3 (%)	MgO (%)
+50	21.244	58.507	4.386	7.538	0.071	0.048	0.023	0.321	0.105
+40	22.029	59.036	3.879	6.950	0.064	0.029	0.020	0.292	0.079
+31.5	21.328	59.387	3.853	7.734	0.066	0.026	0.022	0.255	0.079
+20	22.085	60.274	3.512	7.479	0.058	0.026	0.019	0.187	0.078
+16	21.387	61.409	3.356	7.660	0.053	0.028	0.020	0.161	0.074
+12.5	21.432	61.958	3.273	7.549	0.054	0.027	0.022	0.144	0.075
+10	21.197	61.674	3.478	7.552	0.047	0.030	0.022	0.151	0.077
+8	21.178	61.771	3.990	7.294	0.051	0.053	0.022	0.149	0.078
+6.3	21.522	61.490	3.826	7.398	0.045	0.033	0.023	0.139	0.081
+5.6	21.379	61.347	4.078	7.449	0.044	0.037	0.023	0.135	0.082
+4	21.537	61.319	3.932	7.354	0.040	0.039	0.025	0.137	0.079
+3.35	21.678	60.881	4.022	7.292	0.036	0.035	0.024	0.136	0.079
+2	21.061	61.068	4.316	7.584	0.035	0.041	0.023	0.137	0.079
+1	19.597	57.568	6.643	9.192	0.032	0.047	0.022	0.155	0.079
+0.5	16.745	47.005	12.849	13.795	0.045	0.067	0.021	0.201	0.106
+0.355	17.237	45.979	14.772	13.588	0.063	0.074	0.022	0.186	0.134
+0.25	16.608	40.879	19.181	14.274	0.067	0.090	0.019	0.160	0.145
+0.106	13.969	31.191	31.448	14.735	0.059	0.100	0.016	0.115	0.130
+0.075	14.247	30.603	29.889	16.547	0.046	0.120	0.016	0.100	0.144
+0.045	14.197	26.790	31.423	18.166	0.073	0.144	0.016	0.090	0.153
+0.038	13.220	29.483	27.342	19.576	0.057	0.190	0.018	0.113	0.147
+0.025	12.663	23.378	30.415	22.270	0.036	0.206	0.017	0.081	0.180
-0.025	6.517	17.963	32.888	29.190	0.014	0.221	0.016	0.079	0.193
Sample Size (mm)	ZnO (%)	K2O (%)	V2O5 (%)	Cr2O3 (%)	CoO (%)	NiO (%)	CuO (%)	As2O3 (%)	PbO (%)
+50	0.005	0.008	0.927	0.022	<0.001	0.005	0.011	0.003	<0.001
+40	0.004	0.006	1.006	0.021	<0.001	0.003	0.007	0.003	<0.001
+31.5	0.004	0.005	0.933	0.026	<0.001	0.006	0.010	0.003	0.002
+20	0.002	0.005	0.965	0.029	<0.001	0.005	0.007	0.003	<0.001
+16	0.003	0.007	0.982	0.036	<0.001	0.007	0.006	0.003	<0.001
+12.5	0.003	0.005	0.993	0.039	<0.001	0.006	0.006	0.004	<0.001
+10	0.003	0.006	1.004	0.039	<0.001	0.005	0.006	0.003	<0.001
+8	0.003	0.028	1.012	0.042	<0.001	0.005	0.005	0.004	<0.001
+6.3	0.003	0.008	1.016	0.042	<0.001	0.004	0.005	0.003	<0.001
+5.6	0.001	0.007	1.012	0.044	<0.001	0.005	0.005	0.004	<0.001
+4	0.002	0.009	1.014	0.047	<0.001	0.006	0.005	0.003	<0.001
+3.35	0.001	0.009	1.002	0.044	<0.001	0.003	0.004	0.004	<0.001
+2	0.002	0.011	0.981	0.049	<0.001	0.003	0.005	0.003	0.002
+1	0.002	0.014	0.926	0.045	<0.001	0.002	0.006	0.004	<0.001
+0.5	0.002	0.021	0.778	0.038	<0.001	0.004	0.006	0.003	<0.001
+0.355	0.006	0.026	0.753	0.037	<0.001	0.005	0.006	0.002	0.003
+0.25	0.002	0.035	0.670	0.033	<0.001	0.003	0.005	0.003	<0.001
+0.106	0.002	0.047	0.509	0.034	<0.001	0.011	0.005	0.001	0.001
+0.075	0.002	0.070	0.499	0.032	<0.001	0.005	0.006	0.002	<0.001

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