AusQuest : Additional Drill Targets Identified at Balladonia

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January 28th, 2022

ASX Release

ADDITIONAL DRILL TARGETS IDENTIFIED AT BALLADONIA

COPPER-NICKEL PROJECT - FRASER RANGE, WA

• Strong EM conductors identified for drilling at the Tea Tree and Harms Lake Prospects
• Upcoming drilling program commencing in March increased to ~1,400m (six holes)

AusQuest Limited (ASX: AQD) is pleased to advise that it has identified additional priority drill targets following recent ground-based electromagnetic (EM) surveys at the Balladonia Copper-NickelProject in the Fraser Range of Western Australia (WA). The Balladonia Project is subject to the Strategic Alliance Agreement (SAA) with a wholly-owned subsidiary of South32.

The new targets, at the Tea Tree and Harms Lake prospects, will be included in the upcoming diamond drill program which is partly funded by the Government's Exploration Incentive Scheme (EIS), as advised in the ASX announcement of 26th October 2021. As a result, the upcoming program, which is expected to commence in March, has been increased to six holes for a total of ~1,400m.

Figure 1: Balladonia Project - TMI image showing location of Harms Lake & Tea Tree Prospects

At the Harms Lake Ni-Cu-PGE prospect, the moving loop transient electromagnetic (MLTEM) survey was designed to locate possible massive sulphides associated with the mafic/ultramafic intrusion outlined by the Company's earlier air-core drilling program and detailed aeromagnetic survey.

AusQuest Limited 8 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892

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Five lines (60 readings) of MLTEM were completed along lines 200m apart with stations every 100 metre along each grid line, using 200m x 200m transmitter loops and an offset receiving sensor (B-field Squid).

A shallow (<50m) strong conductor (~4,000 siemens), approximately 120m x 120m in size, was located along the northernmost grid line, suggesting the presence of a possible sulphide source close to the contact of the interpreted intrusion (Figure 2, 3). Weaker conductive responses over the centre of the intrusion are thought to reflect deeper weathering, with the possibility of disseminated to matrix sulphides associated with the more ultramafic portion of the intrusion.

Figure 2: Balladonia - Harms Lake Prospect showing magnetic and MLTEM images and drill target

Figure 3: Harms Lake Prospect - Modelling of MLTEM data showing conductive response

AusQuest Limited 8 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892

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At the Tea Tree Cu-Au prospect, a single line of MLTEM was completed along the drill section planned to test coincident magnetic and gravity anomalies that are thought to reflect possible mineralised BIF stratigraphy similar to that found in the Eastern Succession of northwest Queensland (Mt Isa Region), where a number of base metal deposits occur.

The MLTEM survey identified a strong conductor (~8,000 siemens) at a depth of ~100m located towards the western end of the survey line, suggesting a possible sulphide and/or graphitic source at the margin of the inferred BIF stratigraphy (Figure 3, 4).

While this EM target has not been fully defined, additional drilling to test this target has been included within the planned drill program - which is designed to test the base metal potential of the inferred BIF sequence.

Figure 3: Tea Tree Prospect showing location of EM target and planned drill-holes

Figure 4: Tea Tree Prospect: Modelling of MLTEM data showing strong conductor

AusQuest Limited 8 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892

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AusQuest's Managing Director, Graeme Drew, said the identification of additional priority drill targets was an exciting new development for the Balladonia Project ahead of the upcoming diamond drill program.

"The identification of strong conductors at two key prospects adds further momentum to the upcoming drilling program. We are very much looking forward to drilling getting underway in March, so we can test these and other targets within the Balladonia area and hopefully start to unlock the base metal potential of this region," he said.

Graeme Drew

Managing Director

COMPETENT PERSON'S STATEMENT

The details contained in this report that pertain to exploration results are based upon information compiled by Mr Graeme Drew, a full-time employee of AusQuest Limited. Mr Drew is a Fellow of the Australasian Institute of Mining and Metallurgy (AUSIMM) and has sufficient experience in the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Drew consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

FORWARD LOOKING STATEMENT

This report contains forward looking statements concerning the projects owned by AusQuest Limited. Statements concerning mining reserves and resources may also be deemed to be forward looking statements in that they involve estimates based on specific assumptions. Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on management's beliefs, opinions and estimates as of the dates the forward looking statements are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

AusQuest Limited 8 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892

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JORC Code, 2012 Edition - Table 1 report, Balladonia Electromagnetic Survey Results

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

		Criteria		JORC Code explanation		Commentary
		Sampling	• Nature and quality of sampling (eg cut channels, random chips, or specific specialised		• Moving Loop Transient electromagnetic surveys
		techniques	industry standard measurement tools appropriate to the minerals under investigation,			(MLTEM) using a B-Field 3 component Squid sensor
				such as down hole gamma sondes, or handheld XRF instruments, etc). These examples			were completed using 200m x 200m Tx loop and 100m
				should not be taken as limiting the broad meaning of sampling.			stations with the receiving sensor offset 100m from
				• Include reference to measures taken to ensure sample representivity and the appropriate			(behind) the TX loop.
				calibration of any measurement tools or systems used.
				• Aspects of the determination of mineralisation that are Material to the Public Report.
				• In cases where 'industry standard' work has been done this would be relatively simple
				(eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was
				pulverised to produce a 30 g charge for fire assay'). In other cases more explanation
				may be required, such as where there is coarse gold that has inherent sampling
				problems. Unusual commodities or mineralisation types (eg submarine nodules) may
				warrant disclosure of detailed information.
		Drilling techniques	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger,		•	Not applicable
				Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of
				diamond tails, face-sampling bit or other type, whether core is oriented and if so, by
				what method, etc).
		Drill sample	• Method of recording and assessing core and chip sample recoveries and results		•	Not applicable
		recovery	assessed.
				• Measures taken to maximise sample recovery and ensure representative nature of the
				samples.
				• Whether a relationship exists between sample recovery and grade and whether sample
				bias may have occurred due to preferential loss/gain of fine/coarse material.
		Logging	• Whether core and chip samples have been geologically and geotechnically logged to a		•	Not applicable
				level of detail to support appropriate Mineral Resource estimation, mining studies and

metallurgical studies.

• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

• The total length and percentage of the relevant intersections logged.

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