AusQuest : Maiden Drilling Confirms Extensive Alteration at Los Otros

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March 8th, 2022

ASX Release

MAIDEN DRILLING CONFIRMS EXTENSIVE ALTERATION

AT LOS OTROS COPPER PROJECT, PERU

AusQuest Limited (ASX: AQD) advises that it has completed its maiden drilling program at the Los Otros Porphyry Copper Project in southern Peru, which is subject to its Strategic Alliance Agreement (SAA) with a wholly-owned subsidiary of South32 Limited.

The Reverse Circulation (RC) drill program, which consisted of four widely spaced drill- holes for a total of 1,261m, was designed to provide an initial test of porphyry copper targets located close to the Palaeocene Porphyry Copper Belt of southern Peru, which is the country's major copper producing region (Figure 1).

Advanced argillic alteration (AAA) indicative of a lithocap environment, often associated with porphyry copper deposits, was intersected in every drill-hole, indicating the presence of an extensive alteration system(s) within the volcanic stratigraphy at Los Otros.

Figure 1: Los Otros Project showing location of drill-holes

The AAA is defined by moderate temperature clay mineralogy (alunite-dickite) and sericite, as indicated by analysis of TerraSpec and geochemical data. This suggests that the drill-holes are located distal to a porphyry system, which is either buried deeper in the profile or located lateral to the current drilling.

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

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The strongest alteration occurs within drill-hole LOTRC04, where upwards of 250 metres of

1. was intersected containing highly anomalous molybdenum (up to 44ppm Mo), antimony (up to 22ppm Sb) and lead (up to 480ppm Pb), with weakly elevated bismuth (up to 1.3ppm Bi) and tin (up to 10ppm Sn), suggesting it is closer to a causative porphyry than the other three holes.

Drill-hole LOTRC02, which contains the least altered volcanics, is considered to be the most distal from a causative porphyry, suggesting that the target(s) is likely to occur to the north, possibly under sediment cover.

Further exploration work at Los Otros is subject to the SAA and will be determined in consultation with South32 once a full assessment of all available results has been completed.

Porphyry copper targets at Los Otros are associated with large areas of advanced argillic alteration, some of which have a Palaeocene age date - similar to the age dates reported for the giant porphyry copper deposits located nearby.

AusQuest Managing Director Graeme Drew said the initial drill program at Los Otros had confirmed the scale and intensity of the alteration system in the area, and provided some important vectors to assist with targeting the causative porphyry.

"These data will now be incorporated into our prospect database and further interrogated before further exploration work is considered under the SAA with South32," 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

www.ausquest.com.au

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JORC Code, 2012 Edition - Table 1 report, Reverse Circulation Drilling at Los Otros in Peru

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		• Samples were collected using a tube sampler by spearing
	techniques		industry standard measurement tools appropriate to the minerals under investigation,		into each one metre sample bag and compositing samples
				such as down hole gamma sondes, or handheld XRF instruments, etc). These examples		on a two-metre basis.
				should not be taken as limiting the broad meaning of sampling.		• Sample depths were determined by the length of the rod-
				• Include reference to measures taken to ensure sample representivity and the appropriate		string and confirmed by counting the number of samples
				calibration of any measurement tools or systems used.		and bags at the drill platform as per standard industry
				• Aspects of the determination of mineralisation that are Material to the Public Report.		practice.
				• In cases where 'industry standard' work has been done this would be relatively simple		• A ~5kg sample was collected for representivity.
				(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,		• RC Drilling with a face sampling bit has been used with a
				Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of		hole diameter of approximately 132mm.
				diamond tails, face-sampling bit or other type, whether core is oriented and if so, by		• Down-hole surveys were undertaken using a Gyro3-193
				what method, etc).		with measurements every 10m.
	Drill sample		• Method of recording and assessing core and chip sample recoveries and results		• Experienced RC drillers and an appropriate rig were used
	recovery		assessed.		to provide maximum sample recovery.
				• Measures taken to maximise sample recovery and ensure representative nature of the		• Minimal to no water was encountered in all drill holes.
				samples.		• The weight of every bulk 1 metre sample was recorded
				• Whether a relationship exists between sample recovery and grade and whether sample		and checked for sample recovery estimates. Sample
				bias may have occurred due to preferential loss/gain of fine/coarse material.		recovery was acceptable to industry standard.
						• The sample weight of every laboratory sample was also
						collected and weighed on site for future reference.
						• At this early stage of exploration, it is not known if there
						is a relationship between sample recovery and assay
						grade.
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	Criteria			JORC Code explanation		Commentary
	Logging		• Whether core and chip samples have been geologically and geotechnically logged to a		• RC sample chips were collected into chip trays and are
				level of detail to support appropriate Mineral Resource estimation, mining studies and		stored for future reference.
				metallurgical studies.		• RC samples were logged on site during the drilling by
				• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc)		experienced geologists to identify key rock types and
				photography.		mineralization.
				• The total length and percentage of the relevant intersections logged.		• Selected RC samples were logged with a hand held XRF
						and portable XRD unit to confirm visual mineralization
						and help identify clay mineralization.
						• Sample logging was qualitative with visual estimates of
						mineralization made for later comparison with assay
						results.
						• All one metre drill samples were logged.
	Sub-sampling		• If core, whether cut or sawn and whether quarter, half or all core taken.		• RC samples were collected every 1 metre into large
	techniques and		• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or		plastic bags and stored in rows per depth at the drill site.
	sample preparation		dry.		• Samples were collected using a 50mm tube sampler and
				• For all sample types, the nature, quality and appropriateness of the sample preparation		composited on a two metre basis.
				technique.		• Certified coarse blanks and fine standards are inserted
				• Quality control procedures adopted for all sub-sampling stages to maximise		approximately every 35 samples and duplicates taken
				representivity of samples.		every 20 samples for quality control purposes.
				• Measures taken to ensure that the sampling is representative of the in situ material		• The sample sizes are considered appropriate for the
				collected, including for instance results for field duplicate/second-half sampling.		geological materials sampled.
				• Whether sample sizes are appropriate to the grain size of the material being sampled.
	Quality of assay		• The nature, quality and appropriateness of the assaying and laboratory procedures used		• Assaying of the drill samples is by standard industry
	data and		and whether the technique is considered partial or total.		practice.
	laboratory tests		• For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters		• The samples are sorted, dried, crushed then split to obtain
				used in determining the analysis including instrument make and model, reading times,		a representative sub-sample which is then pulverized.
				calibrations factors applied and their derivation, etc.		• A portion of the pulverized sample is digested using a
				• Nature of quality control procedures adopted (eg standards, blanks, duplicates, external		four acid digest (Hydrofluoric, Nitric, Hydrochloric and
				laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and		Perchloric) which approximates a total digest for most
				precision have been established.		elements. Some refractory minerals are not completely
						dissolved.
						• Inductively Coupled Plasma Mass Spectroscopy (ICP-
						MS) was used to measure Ag, Al, As, Ba, Be, Bi, Ca, Cd,
						Ce, Co, Cr, Cs, Cu, Fe, Ga, Ge, Hf, In, K, La, Li, Mg,
						Mn, Mo, Na, Nb, Ni, P, Pb, Rb, Re, S, Sb, Sc, Se, Sn, Sr,
						Ta, Te, Th, Ti Tl, U, V, W, Y, Zn, Zr,
						• Au assays were provided by 30g fire assay with AA
						finish.
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	Criteria			JORC Code explanation		Commentary
						• Every 2 metre composite sample is submitted for
						Hyperspectral analysis using a TerraSpec instrument and
						uploaded into the aiSIRISTM software for mineral
						identification and spectral output.
						• Assays are provided by ALS del Peru in Lima which is a
						certified laboratory for mineral analyses. Analytical data
						is transferred to the company via email.
						• Data from the laboratory's internal quality procedures
						(standards, repeats and blanks) are provided to check data
						quality.
						• The Company collects duplicate samples on an
						approximate 1: 20 basis, and inserts coarse blanks on a
						1:30 basis and fine blanks on a 1:35 basis and fine
						standards are inserted on a 1:35 basis.
	Verification of		• The verification of significant intersections by either independent or alternative company		• No verification of intersections was undertaken. Drilling
	sampling and		personnel.		was wide spaced and reconnaissance in nature.
	assaying		• The use of twinned holes.		• All primary sample data is recorded onto a printed sheet
				• Documentation of primary data, data entry procedures, data verification, data storage		on site and uploaded to a site laptop, all geological data is
				(physical and electronic) protocols.		recorded at the drill platform on a site laptop and
				• Discuss any adjustment to assay data.		downloaded daily and onto an external backup.
						• No adjustments have been made to the assay data.
	Location of data		• Accuracy and quality of surveys used to locate drill holes (collar and down-hole		• Drill hole collars including elevation are located by hand
	points		surveys), trenches, mine workings and other locations used in Mineral Resource		held GPS to an accuracy of approximately 5m.
				estimation.		• Down hole surveys were carried out using a Gyro3-193
				• Specification of the grid system used.		with measurements every 10m down hole.
				• Quality and adequacy of topographic control.		• All surface location data are in WGS 84 datum, UTM
						zone 19S.
	Data spacing and		• Data spacing for reporting of Exploration Results.		• RC drill-holes were reconnaissance in nature and drilled
	distribution		• Whether the data spacing and distribution is sufficient to establish the degree of		between 300m and 1000m apart to provide initial test of
				geological and grade continuity appropriate for the Mineral Resource and Ore Reserve		targets. No systematic grid drilling of the target has been
				estimation procedure(s) and classifications applied.		undertaken.
				• Whether sample compositing has been applied.		• Samples were composited on a 2 metre basis.
	Orientation of data		• Whether the orientation of sampling achieves unbiased sampling of possible structures		• Any bias due to the orientation of the drilling is unknown
	in relation to		and the extent to which this is known, considering the deposit type.		at this early stage of exploration.
	geological		• If the relationship between the drilling orientation and the orientation of key mineralised
	structure		structures is considered to have introduced a sampling bias, this should be assessed and
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