Blackstone Minerals : Gains Exposure to Minago Nickel Sulfide Project

For personal use only

22 November 2021

Strategic Investment Sees Blackstone Gain Exposure to Large

Canadian Nickel Sulfide Project

Blackstone Minerals Limited ("Blackstone" or the "Company") is pleased to announce it has made a strategic investment in Flying Nickel Mining Corp (Flying Nickel), a subsidiary of Vancouver based Silver Elephant Mining Corp. (TSX: ELEF, OTCQX SILEF) in Canada.

Flying Nickel intends to list on the TSX Ventures Exchange (TSX-V) in early 2022 with its core asset: The Minago Nickel Sulfide Project located southwest of Thompson in Manitoba, Canada (refer Figure 1). Minago is an advanced stage development asset with district scale exploration potential and excellent access to infrastructure including renewable hydro- power. Blackstone's initial investment of C$2.98m will earn a 6.85% interest in the common equity of Flying Nickel (Equity Investment).

Blackstone and Flying Nickel have also entered a Memorandum of Understanding that will see collaboration on the production of upstream and downstream nickel and cobalt concentrates and chemical products, potential offtake and / or joint ventures to meet demand from the growing electric vehicle battery industry (MoU). The Equity Investment

and MoU together represent the "Flying Nickel Transaction."

Highlights of the Flying Nickel Transaction Include:

• Minago is a large undeveloped disseminated nickel sulfide asset poised to benefit and attract significant investment from the structural shift in nickel supply and demand driven by the growth of electric vehicle adoption
• Minago has a NI 43-101 compliant Measured & Indicated resource of 44.23Mt @ 0.74% Ni for 721.6 Mlbs Ni, and Inferred resource of 19.55Mt @ 0.74% Ni for 318.9
  Mlbs Ni (refer Table 1)1
• Prior metallurgical test work by SGS has demonstrated that Minago is able to produce one-of the highest nickel concentrate grades in the world (>20%) using conventional technology2
• Blackstone and Flying Nickel will form a Steering Committee which will include an ongoing assessment of opportunities to enter into supply, offtake and financing arrangements relating to upstream and downstream nickel and cobalt products produced at Minago
• The MoU includes a legally binding anti-dilutionary clause ensuring Blackstone is able to maintain its equity interest at the time of each potential fundraising event performed by Flying Nickel

1. Flying Nickel Mining_NI 43-101 Report_2021 MRE_Minago (sedar.com), Silver Elephant Filing ,20 August 2021
2. Minago Nickel Mine Feasibility Study Rev 02 FINAL.doc (sedar.com), Victory Nickel Filing, 5 March 2010

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22 November 2021

Minago Mineral Resource	Cut-off (Ni%)	Mt		% Ni	Ni (Mlbs)
Open Pit - Measured & Indicated		23.94		0.71%	374.3
Open Pit - Inferred	0.25%	2.07		0.57%	26.0
Underground - Measured & Indicated	0.50%	20.29		0.77%	345.0
Underground - Inferred		17.48		0.76%	292.9
Combined - Measured & Indicated	0.25%/0.50%	44.23		0.74%	721.6
Combined - Inferred		19.55		0.74%	318.9

Table 1 - Minago Project Mineral Resource Estimate (refer Cautionary Note on Foreign Resource Estimate)

Scott Williamson, Blackstone's Managing Director, said:

"The known mineral endowment of the Minago asset in combination with the potential of the Ta Khoa district represents enviable scale, being highly sought after by OEMs, battery and cathode manufacturers. Large, disseminated nickel sulfide deposits of the size and grade of the Minago asset are difficult to find. The ongoing structural evolution of nickel supply chains and increasing demand for downstream nickel chemical products for the lithium-ion battery industry, is driving a unanimous view by analysts and the broader investment community that higher nickel prices are here to stay for longer. This means that large undeveloped opportunities such as Minago are primed to overcome previous barriers, including access to capital"

"The Flying Nickel Transaction provides Blackstone with opportunity to collaborate on the development of Minago, and confidence to inject future equity into the asset as it is progressively de-risked. The Ta Khoa Refinery in Vietnam is a logical home for Minago concentrate. Manitoba, like Northern Vietnam is blessed with access to renewable hydro power. Shipping a high-grade concentrate minimises carbon footprint and is aligned with Blackstone's commitment to best ESG practices and ambition to become a supplier of choice to the electric vehicle battery industry."

Further details on the Flying Nickel Transaction

Silver Elephant Mining Corp (Silver Elephant) wholly owned subsidiary Flying Nickel holds 100% of the Minago asset. Blackstone is participating a private placement which will lead to the Minago asset held by Flying Nickel being spun out of Silver Elephant, with Flying nickel separately listed on the TSX-V. The Flying Nickel Transaction is subject to Silver Elephant Shareholder approval due late December 2021.

The Equity Investment represents an initial investment of C$2.98m and will result in Blackstone holding 6.85% of Flying Nickel common equity. In addition, Blackstone will be issued 2.12 million warrants converting into common equity in Flying Nickel at a price of C$1.00/warrant (1 warrant converts to 1 share). Assuming Blackstone decides to convert warrants into shares of Flying Nickel, and further investment of ~C$2.12m would result in Blackstone holding ~9.50% of Flying Nickel on a fully diluted basis.

Blackstone's Equity Investment (C$2.98m) will be held in escrow for up to 120 days. In the event that Flying Nickel shares do not successfully list on the TSX-V within the 120-day period, funds held in escrow will be returned to Blackstone.

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22 November 2021

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Figure 1 - Minago Project Location

Authorised by the Managing Director on behalf of Blackstone Minerals Limited.

Scott Williamson	Dhanu Anandarasa	Patrick Chang
Managing Director	Manager Corporate Development	Head of Corporate Development
[phone]	[phone]	[phone]
[e-mail]	[e-mail]	[e-mail]

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22 November 2021

About Blackstone

Blackstone Minerals Ltd (ASX: BSX / OTCQX: BLSTF / FRA: B9S) is focused on building an integrated upstream and downstream battery metals processing business in Vietnam that produces Nickel: Cobalt: Manganese (NCM) Precursor products for Asia's growing Lithium-ion battery industry (refer Figure 2)

Figure 2 -Ta Khoa Project Snapshot

Ta Khoa Nickel-Cu-	UBU	90%
PGE Project
	interest
Northern Vietnam

Third Party Multiple Feed Sources, Nickel in Concentrate

Feed Sources

	DBU
NCM Precursor Production	?

MULTIPLE CUSTOMERS

The Company owns a 90% interest in the Ta Khoa Nickel-Copper-PGE Project. The Ta Khoa Project is located 160km west of Hanoi in the Son La Province of Vietnam and includes an existing modern nickel mine built to Australian standards which is currently under care and maintenance (refer Figure 3). The Ban Phuc nickel mine successfully operated as a mechanised underground nickel mine from 2013 to 2016.

In October 2020, the Company completed a Scoping Study which investigated mining the Ban Phuc Disseminated nickel sulfide ore body (upstream) and the construction of a

200kpta downstream refinery (refer to ASX announcement of 14 October 2020, including for the full details of the Company's Mineral Resource Estimate at Ban Phuc).

Building on the outcomes of the Scoping Study, the Company has since completed a technically and economically robust Pre-feasibility Study for its Downstream Business Unit (DBU) which sees expanded downstream capacity. This is based on the Ta Khoa refinery being designed to process 400ktpa of nickel concentrate, supplied from the Ta Khoa Nickel - Cu - PGE mine as well as third party concentrate.

The Company is continuing to advance a PFS for the UBU. The UBU PFS will contemplate the option to mine several higher-grade massive sulfide vein (MSV) deposits, which has the potential to reduce initial upfront capital requirements for the UBU by enabling the Company to restart the existing Ban Phuc Concentrator (450ktpa).

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22 November 2021

By combining the Company's existing mineral inventory (Ban Phuc Disseminated Sulfide - DSS), exploration potential presented by high priority targets such as Ban Chang, King Snake, Ta Cuong and Ban Khoa, and the ability to source third party concentrate, Blackstone will be able to increase the scale of its downstream business to cater to the rising demand for downstream nickel products.

Figure 3. Ta Khoa Nickel-Cu-PGE Project Location

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