Australian Mines : Proof-of-Concept Study Completed for Alternative Processing

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Australian Mines Limited

ABN 68 073 914 191

ASX | AUZ

Level 34, 1 Eagle Street,

Brisbane, Queensland 4000

T + 61 7 3184 9184

E [e-mail]

W australianmines.com.au

9 March 2022

Australian Securities Exchange

20 Bridge Street

Sydney NSW 2000

ASX RELEASE

Proof-of-Concept Study on Alternative Nickel-Cobalt Laterite Ore Processing

Australian Mines Limited ("Australian Mines" or "the Company") is pleased to advise it has completed a Proof-of-Concept Study ("Study")1 investigating an innovative, low- capex, scalable, and environmentally benign (non-HPAL)2 processing technology targeting the extraction of nickel, cobalt, and scandium from the lateritic ores at its Bell Creek-Minnamoolka (QLD) and Flemington (NSW) Projects.

Background

Australian Mines recently commissioned a Study (Stage 1) conducted by UK-based research and development (R&D) partner Descycle3 investigating the potential to unlock value in both its Bell Creek-Minnamoolka and Flemington Projects using deep eutectic solvents (DES), targeting the extraction of nickel, cobalt, and scandium from lateritic ores.

The Study was carried out by UK-based clean tech company Descycle and covered, at a concept level, incorporating a DES leaching technology as a potential alternative to existing treatment and recovery processes (such as HPAL) in the extraction of target metals from nickel and cobalt lateritic ores (see Figure 1 of this report).

1. Descycle, Investigation of the potential for processing Ni-laterite ore with Deep Eutectic Solvents (28 February 2022).
2. 'HPAL' means high pressure acid leach, a hydrometallurgical process used to extract nickel and cobalt from lateritic ores.
3. www.descycle.com

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Conventional and Alternative Processing Flowsheets

Figure 1: Conventional and Alternative Nickel and Cobalt Processing Flowsheets

DES leaching technology has the following potential benefits, including:

• Significantly lower capital expenditure (compared to other existing process flowsheets, such as HPAL),
• A scalable processing plant, through the modular design and construct approach (with the ability to start small and expand over time),
• Environmental benefits, given DES are environmentally benign, biodegradable, and non-aqueous, with the potential for significantly reduced water usage, and low CO2 emissions; and
• High recovery rates of nickel, cobalt, and scandium.

Sampling and Leach Tests

The Study for DES leaching utilised samples from Sconi4 and Flemington5 Project ores (~10 kg for each bulk sample) - see Figure 2 of this report.

4 The Bell Creek-Minnamoolka deposits are 100% owned by Australian Mines and are located within the Company's Sconi Project. These nickel-cobalt deposits, however, sit outside the Offtake Agreement with LG Energy Solution, which only concerns the Sconi Project's Greenvale, Lucknow, and Kokomo deposits.

The Mineral Resource Estimate for the Bell Creek deposit is reported under JORC 2012 Guidelines and was reported by Australian Mines on 29 April 2019. There has been no Material Change or Re-estimation of the Mineral Resource since this 29 April 2019 announcement by Australian Mines.

The Mineral Resource Estimate for the Minnamoolka deposit is reported under JORC 2012 Guidelines and was reported by Australian Mines on 21 October 2019. There has been no Material Change or Re-estimation of the Mineral Resource since this 21 October 2019 announcement by Australian Mines.

5 The Mineral Resource Estimate for the Flemington Cobalt-Nickel-Scandium Project is reported under JORC 2012 Guidelines and was reported by Australian Mines Limited on 31 October 2017. There has been no

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Sconi Ore Sample

Flemington Ore Sample

Figure 2: Sconi and Flemington ore samples as received, prior to processing and sampling

Three experimental series (Phase 1-3) were conducted on the Sconi and Flemington ore samples to investigate and establish the leaching characteristics of nickel laterite in DES, including:

• Phase 1 - Initial screening of DES, single stage bulk leach,
• Phase 2 - Advanced screening of DES, single stage bulk leach, and
• Phase 3 - Multi-stage leach.

Material Change or Re-estimation of the Mineral Resource since this 31 October 2017 announcement by Australian Mines.

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A range of operational conditions were explored using a broad range of DES formulations and tested on both (Sconi and Flemington) ore types.

These DES formulations were compared against a range of aqueous acid mixtures that are commonly associated with laterite leaching.

Solid residues from each of the three leach test phases were sent to and analysed by ALS6 geochemistry laboratory in Galway Ireland, a laboratory accredited to international standard ISO/IEC 17025 for testing laboratories.

Results

The results from the Study highlighted the potential for the economic processing of two low-grade oxide nickel laterites and other metal laterites and recovery of by- products, including cobalt and scandium from Sconi and Flemington ores.

Phase 1 and 2 highlights from the testing program, include:

• Sconi ore - In the single-stage leach (Phase 2), DES was found to be effective, leaching up to 89% nickel, 96% cobalt, and 75% scandium,7
• Flemington ore - In the single-stage leach (Phase 2), DES was effective, in leaching up to 97% nickel, 100% cobalt, and 94% scandium (see Figure 3 of this report).

Phase 3 highlights from the testing program, include:

• Sconi ore - In the multi-stage leach, the best performing DES formulation was able to leach 97% nickel and 96% cobalt, higher than the single stage leach (see Figure 3 of this report).

1. www.alsglobal.com
2. Industry standards for HPAL nickel and cobalt recovery rates are typically between 93% and 95%.

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Sconi Ore Samples - Pregnant DES Liquid and Solid Residue

Flemington Ore Samples - Pregnant DES Liquid and Solid Residue

Figure 3: Images of both the recovered lixiviant and cleaned and dried solid residues post leach from Sconi and Flemington ores

In summary, leaching rates from the Sconi and Flemington ores tested in this Study were seen as high as 100% cobalt, 97% nickel, and 94% scandium.

Designer DES formulations can outperform aqueous mineral acids under the same conditions and show significant potential for leaching of nickel and by-products from laterites.

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