Capricorn Metals : Excellent Drill Results Returned From Mt Gibson & Karlawinda

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ASX ANNOUNCEMENT

26 July 2022

ASX:CMM

EXCELLENT RESULTS RETURNED FROM RESOURCE DRILLING AT BOTH MT GIBSON AND KARLAWINDA

Highlights

Mt Gibson Gold Project (MGGP)

• A total of 80,124 metres (514 holes) of planned 81,000 metre RC resource definition and extension drilling programme completed to the end of June 2022.
• Assays received from 280 holes since the last update (first 55 holes) in April 2022 continue to return exceptional results within and extensional to the resource including:

Outside current resource
∙ 4 metres @ 118.74g/t from 142 to 146m	∙ 35 metres @ 1.55g/t from 200 to 235m
∙ 10 metres @ 6.08g/t from 48 to 58m	∙ 5 metres @ 8.09g/t from 199 to 204m
∙ 12 metres @ 3.44g/t from 78 to 90m	∙ 10 metres @ 4.07g/t from 85 to 95m
∙ 24 metres @ 2.27g/t from 256 to 280m	∙ 16 metres @ 2.52g/t from 202 to 218m
Within current resource
∙ 16 metres @ 3.15g/t from 170 to 186m	∙ 17 metres @ 3.61g/t from 37 to 54m
∙ 20 metres @ 2.72g/t from 107 to 127m	∙ 5 metres @ 17.23g/t from 79 to 84m
∙ 11 metres @ 6.75g/t from 98 to 109m	∙ 34 metres @ 2.93g/t from 121 to 155m
∙ 10 metres @ 4.48g/t from 58 to 68m	∙ 12 metres @ 6.85g/t from 144 to 156m

• Drilling on the unmined Saratoga and Orion North trends (east of the main Gibson trend) has defined zones of better grade within the resource shell and extending below the resource shell.
• Capricorn has expanded the programme from 81,000m to 105,000m in order to follow up and extend strong results returned both within and outside current resource optimisation shells.
• Results from this extended programme of drilling will be included in the updated Mineral Resource Estimate (MRE) in September 2022 and maiden Ore Reserve Estimate (ORE) in October 2022.
• In an important step for development of the project, Capricorn's application for a mining lease over the area required for a mining operation has been granted for an initial term of 21 years.
• 30,000 metres first pass regional exploration AC and RC drilling across a number of high priority target areas to commence in the September 2022 quarter.

Karlawinda Gold Project (KGP)

• 23,664 metres (109 holes) of a planned 30,000m resource infill and extension RC drilling programme completed to the end of June 2022.
• Assays have been returned from 51 holes with encouraging gold results including:

∙ 10 metres @ 5.04g/t from 99 to 109m*	∙ 18 metres @ 1.36g/t from 197 to 215m*
∙ 3 metres @ 11.16g/t from 169 to 172m*	∙ 26 metres @ 1.19g/t from 168 to 194m
∙	22 metres @ 1.20g/t from 152 to 174m	∙	6 metres @ 4.36g/t from 54 to 60m
∙	18 metres @ 1.40g/t from 140 to 158m	∙	26 metres @ 0.97g/t from 175 to 201m*

* intercept outside the current 2020 MRE

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• High grade intercepts have been returned near the base of, below and along strike of current resource pit optimisations, which remain open down dip and south along strike.
• Results to form part of update to the Karlawinda MRE targeted for September 2022 and ORE in October 2022.
• A 30,000 metre regional exploration AC programme commenced in July 2022 following up AC gold anomalies adjacent to the shear zone at Mundiwindi and surface geochemical anomalies at Jim's East, Renaissance and Forfar prospects.
• A 3,010 metre RC programme planned to commence at the Muirfield prospect in the current quarter following up mineralisation reported in the December 2021 quarter.

Capricorn Executive Chairman Mark Clark commented:

"Exceptional results from resource definition and extensional drilling at Mt Gibson are continuing to point to the quality and growth potential of the resource there. We made the obvious decision to extend the programme by at least another 24,000 metres given the strength of results within and below the current resource shells. We are excited by the potential of Mt Gibson to become Capricorn's second gold mine. We also continue to return strong results from the resource infill and extensional drill programme at Karlawinda. These two critical drill programmes will culminate in resource and reserve studies for both projects and are expected to underpin the delivery of Capricorn's organic growth strategy."

MGGP - RC drilling at Lexington Pit (Looking North)

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Mt Gibson

Infill and Extensional RC Drilling

In January 2022 two RC rigs commenced drilling a planned 81,000 metre drill programme across the 8 kilometres of strike of current resources at the Company's 100% owned Mt Gibson Gold Project (MGGP).

The objectives of this programme included:

• Infill drilling of the resource to broadly bring the drill density to 25 x 25 metres;
• Test gaps between resource pit optimisation shells along the 8 kilometres of strike; and
• Test for extensions of gold mineralisation below the current resource shells.

Early results from this drilling were announced in April 2022 based on the first 29,842 metres of drilling. To the end of June 2022 a further 50,282 metres of drilling has been completed taking the total drilling to 80,124 metres. Following a review of very encouraging ongoing results Capricorn has extended the programme to 105,000 metres to continue testing strong extensional areas.

The 514 holes (80,124 metres) completed to date have mainly focussed on the Orion Mine Trend, one of the more significant areas of the 2.08 million ounce resource at MGGP.

Figure 1. Drilling progress over the MGGP 8km long mine trend & MRE pit crests

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Assays have now been received from the first 335 holes (46,342 metres). Assays received from 280 holes since the last update continue to return very encouraging results including:

Hole No	Easting	Northing	From (m)	To (m)	Width (m)	Grade (g/t Au)
CMRC052	516230.61	6709301.76	170	186	16	3.15
CMRC058	516241.54	6709551.45	107	127	20	2.72
CMRC063	516287.49	6709700.24	78	107	29	1.56
CMRC071	516448.02	6709996.06	79	84	5	17.23
CMRC078	516553.44	6709843.35	98	109	11	6.75
CMRC0101*	516504.82	6709631.304	78	90	12	3.44
CMRC0138	516354.23	6705274.023	121	155	34	2.93
CMRC0182*	516380.9	6705223.34	142	146	4	118.74
CMRC0202	515996.7	6706408.138	54	62	8	5.99
CMRC1014	516349.79	6709023.71	69	77	8	5.25
CMRC1016*	516399.85	6709047.41	199	204	5	8.09
CMRC1017	516322.22	6709399.38	59	78	19	2.62
CMRC1017*	516322.22	6709399.38	256	280	24	2.27
CMRC1018	516331.64	6709424.13	41	52	11	3.76
CMRC1028	516253.55	6709401.16	144	156	12	6.85
CMRC1035*	516312.08	6707208.589	93	96	3	13.65
CMRC1040	516337.09	6707349.23	58	68	10	4.48
CMRC1044	516250.67	6707476.45	50	63	13	3.31
CMRC1046	516300.63	6707475.158	48	58	10	6.08
CMRC1067*	516347.07	6707773.923	85	95	10	4.07
CMRC1070	516298.2	6707800.184	37	54	17	3.61
CMRC1094	516288.48	6708100.401	43	51	8	5.38
CMRC1137	517524.16	6712292.974	204	216	12	3.55
CMRC2005	516091.3	6708205.487	58	66	8	5.69
CMRC2015*	516138.1	6708403.01	202	218	16	2.52
CMRC2030*	516164.32	6708608	200	235	35	1.55

*intercept is outside the current 2021 MRE

A comprehensive table of significant results is included in Appendix 1.

Results of this extended programme will underpin an updated MRE targeted for completion in September 2022 and a maiden ORE targeted for completion in October 2022. Capricorn's current MRE of 79.7Mt at 0.8g/t Au for 2.083 million ounces is all classified as Inferred (in spite of drill density of 25m x 25m for the majority of the resource) due to the need to validate the quality of historical data.

The assays received from drilling to date continue to line up with the historic data both spatially and for grade tenor, providing validation of the historic +660,000 metre drill database acquired with the project in July 2021 and the expectation that a significant proportion of the Inferred resource will be converted to Indicated category.

Current and previously reported drilling at the depth extremities of the resource optimisation shells (where historic drill density is broader spaced) and below them has returned results consistent with Capricorn's geological interpretations of mineralisation location, widths and grade tenor. Drilling across the project to date indicates that mineralisation remains open down dip and along strike to the north and south with multiple stacked lodes intersected.

Drilling along the Saratoga trend and Orion North trend (unmined structure to the east of the main mined Mt Gibson trend) has defined zones of better grade within the resource shell and assay results that extend below the resource shell (refer Figure's 5 & 6 - Cross section 6709050mN and 6709870mN).

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Long Sections and Cross Sections

The plan below shows the drilling activity from the infill and extensional RC programme and the location of the following long and cross sections.

Figure 2. Long and cross section locations

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