Cannon Resources : Quarterly Activities Report - June 22

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ASX ANNOUNCEMENT | ASX: CNR

29 July 2022

Quarterly Activities Report

for the period ending 30 June 2022

Highlights

• Fisher East resources increase to 116.3 Kt of contained nickel
• Maiden JORC 2012 Mineral Resource for the Sabre deposit at Fisher East of 1.8 Mt @ 1.4% Ni for 24.5 Kt contained nickel
• Diamond drilling at Fisher East intersected extensive zones of massive nickel sulphide at Sabre
• Resource update for Sabre underway with completion due in the September 2022 quarter
• Post June 2022 quarter end nickel mineralisation was intersected 520m down plunge at Sabre

Cannon Resources Limited (ASX:CNR) ("Cannon" or "the Company") is pleased to provide shareholders with an overview of quarterly activities for the period ending 30 June 2022 ("Quarter", "Reporting Period").

Commenting on the Quarter, Cannon CEO, Steve Lynn said:

"The June quarter saw Cannon announce a further nickel resource increase with a maiden resource at Sabre of 24.5kt of contained nickel. In less than 12 months since listing, the resource at Fisher East has grown by an outstanding 49% to 116.3kt of contained nickel.

The drilling campaign at Fisher East continued during the quarter and again met with success with the discovery of high-grade nickel zones at the Sabre deposit. These new discoveries were adjacent but outside the current Sabre resource and saw us pivot the bulk of our drilling program to Sabre to investigate and define the full extent of mineralisation within the channel margins. Excitingly, post quarter end nickel mineralisation was intersected 520m down plunge at Sabre, with similar grade to the resource average.

On the back of the high-grade nickel zones at Sabre, we have launched into a resource update for the Sabre deposit, which we are aiming to complete in the current September quarter. Drilling at Sabre had been concentrated in the top 300 metres, with mineralisation remaining open down plunge and along strike.

Our Fisher East exploration program continues with a focus on delineating new mineralisation at Sabre and Musket."

ASX Code: CNR | ACN: 646 149 902 | www.cannonres.com.au

A: Level 2, 87 Colin Street, West Perth WA 6005

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Fisher East Exploration

Fisher East Resource Increased to 116.3 Kt Contained Nickel

During the Quarter, Cannon announced the completion of a maiden Mineral Resource for the Sabre prospect at the Company's Fisher East Nickel Project. The Sabre Mineral Resource is 1.8 Mt @ 1.4% Ni for 24.5 Kt of contained nickel at a cut-off grade of 0.9% Ni (JORC 2012). The Fisher East Project now has a total of 116,300 tonnes of contained nickel in four high grade Class 1 JORC 2012 resources at Musket, Camelwood, Cannonball and Sabre.

Sabre is a channelised komatiite hosted nickel deposit sharing the same genesis, mineralisation style and host stratigraphy as Cannon's three other Fisher East nickel deposits of Musket, Camelwood, and Cannonball. Sabre is 6 km south of Musket and the four deposits are all located on an 8 km section of the basal komatiite/sediment contact on 100% held Cannon tenure.

The Sabre resource was defined over a strike length of 600 metres and to a maximum depth of just 300 metres and remains open laterally, internally and down plunge.

Figure 1. Sabre Mineral Resource in long section. Section shows 2022 Inferred

Resource, all drilling pierce points, selected significant intercepts plus all Cannon drilling

ASX Code: CNR | ACN: 646 149 902 | www.cannonres.com.au

A: Level 2, 87 Colin Street, West Perth WA 6005

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Figure 2. Sabre - Musket - Cannonball - Camelwood deposits in long section. All deposits are located on same ore-position contact, all sub crop at the surface and all remain open at depth and laterally along strike

										Grade						Contained Metal
	Ni Cut-off												Bulk
			Material			Quantity (Mt)			Ni (%)			Density			Nickel Metal (kt)
	Grade (%)
												(t/m3)
							Inferred Mineral Resource
				Oxide	0.03		1.1		3.1		0.3
0.9			Transitional	0.12		1.2		3.2		1.4
		Fresh	1.6		1.4		3.2		22.8
				Total Inferred	1.8		1.4		3.2		24.5
	Total				1.8		1.4		3.2		24.5

Table 1. Sabre Mineral Resource April 2022

Notes:

1. Totals may differ due to rounding, Mineral Resources reported on a dry in-situ basis.
2. All Mineral Resources figures reported in the table above represent estimates as of 5th April 2022. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape, and continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies.
3. Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The Joint Ore Reserves Committee Code - JORC 2012 Edition).
4. A reporting cut-off grade of 0.9% Ni was used to report the Mineral Resource. This was based on parameters from a previous scoping study in 2015 by CSA Global and updating of the parameters as appropriate by Cannon. Key parameters were a nickel price of AUD 21,500 per tonne, processing costs of AUD 42.51, mining costs of AUD 65.40, dilution of 10% and payability of 70%.

ASX Code: CNR | ACN: 646 149 902 | www.cannonres.com.au

A: Level 2, 87 Colin Street, West Perth WA 6005

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Fisher East

	Deposit	Category		Tonnes (Mt)		Grade Ni %		Contained Ni Metal
		Indicated		1.7		2.0		34.0
	Camelwood
	Inferred	0.3	1.5	5.0
		Total		2.0		2.0		39.0
		Indicated	0.24	2.9	7.0
	Cannonball
	Inferred		0.02		1.9		0.3
		Total	0.26	2.8	7.3
		Indicated		0.9		2.1		19.0
	Musket
	Inferred	1.5	1.8	26.4
		Total		2.4		1.9		45.5
	Sabre	Inferred	1.8	1.4	24.5
	Total	1.8	1.4	24.5
		Indicated	2.8	2.1	60.0
	Total
	Inferred		3.6		1.6		56.2
		Total	6.4	1.8	116.3

Table 2: Total Fisher East Mineral Resource

Note: Cut-off grades: Camelwood, Cannonball 1.0% Ni; Musket, Sabre 0.9% Ni. Values may not sum due to rounding.

ASX Code: CNR | ACN: 646 149 902 | www.cannonres.com.au

A: Level 2, 87 Colin Street, West Perth WA 6005

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Wide Zones of Massive Nickel Sulphide Intersected at Sabre

During the quarter, the Company announced that new diamond drilling at the Company's flagship Fisher East Nickel Project had intersected substantial zones of massive nickel sulphide at Sabre.

Highlights included:

• Diamond drill hole MFED103 intersected 5.70m @ 2.62% Ni and 0.58 g/t (Pd + Pt) from 192.76m. Multiple zones of nickel rich massive sulphide were interspersed within this interval with the thickest zone being 1.10m @ 7.63% nickel and 1.61 g/t (Pd + Pt) from 194.33m;
• MFED117 returned 5.7m @ 4.5% Ni from 310.28m. Included in this interval was the massive nickel sulphide zone of 3.7m @ 6.0% Ni from 311.30m;
• MFED118 returned 8.3m @ 2.7% Ni from 132.95m. Included in this interval was the massive nickel sulphide zone of 2.8m @ 5.2% Ni from 138.48m; and
• The massive nickel sulphides in MFED117 and MFED118 also returned significant PGE assay of 1.2 g/t and 0.8 g/t (Pd + Pt) respectively. Over the entire mineralised intervals, MFED117 assayed 5.7m @ 1.0 g/t (Pd + Pt) and MFED118 assayed 8.3m @ 0.4 g/t (Pd + Pt).

Figure 3. Sabre long section showing mineralised intercepts of latest drilling

ASX Code: CNR | ACN: 646 149 902 | www.cannonres.com.au

A: Level 2, 87 Colin Street, West Perth WA 6005

| P: [phone] |

E: [e-mail]