Cyclone Metals : Acquisition of highly prospective gold, copper, nickel & PGE

ASX

Announcement

24 February 2022

only	ACQUISITION OF HIGHLY PROSPECTIVE GOLD, COPPER, NICKEL AND
PGE PROJECTS IN NEW ZEALAND
Highlights
	• Cyclone to acquire 100% of Grand Port Resources Pty Ltd (Grand Port), which holds 6 highly
	prospective gold, copper, nickel and PGE projects in New Zealand, with a further 2 lithium and
use	REE project applications being submitted shortly;
• Grand Port's projects covering 1,140km2 , are all either near operating mines and facilities, or
other resources companies;
• The projects are Macraes South, Muirs, Mareburn, Longwood Range, Waikerikeri and Drybread,
and all are considered underexplored by modern exploration methods;
• Muirs Reef Gold Project, contains a non-JORC foreign inferred resource estimate of 222koz
Au @ 1.34g/t*, with significant exploration upside, historic drilling results include1:
personal	▪ 11.0m at 11.0 g/t Au from 48m incl. 2.0m @ 38.4g/t Au (MSDDH009)
▪ 0.7m at 17.0 g/t Au from 92.2m (TP6);
	• Mareburn Gold Project, contains a number of initial walkup extension drill targets to previous
	results2:
	▪ 10m at 2.4/t Au from 38m (RCH4535), including 3m @ 7.1g/t Au from 38m
	▪ 10m @ 1.99g/t Au from 2m (MEH21), including 6m @ 3g/t Au from 5m
	▪ 2m at 3.04g/t Au from 2m (RCH4542);
	• Acquisition conditional on shareholder approval at a General Meeting expected to be held in
	April 2022,
	• Following Completion, Cyclone plans to undertake a maiden JORC compliant mineral resource
	estimate at Muirs and commence first-pass drilling at Muirs and Mareburn.
Cyclone Metals Limited (ASX: CLE) (Cyclone or the Company) is pleased to announce that it has
For
entered into a binding term sheet with Grand Port Resources Pty Ltd (Grand Port) to acquire 100% of

the issued share capital of Grand Port which owns and has applications over a diversified portfolio of gold, copper, nickel and PGE assets in New Zealand (together, the Acquisition).

1 Note: these are a selection of intercepts which have been chosen to demonstrate the prospectivity of the Muirs and Mareburn projects. Full results are set out in Table 3 and Table 4

ASX: CLE

• Non-JORCforeign estimate (2013) by Glass Earth Limited on the Muirs Reef Project, were summarised in a 2013 NI43-101 Technical Report on Resources at Muirs Project, Te Puke, Bay of Plenty, New Zealand, Glass Earth Gold Limited. The foreign estimates are not reported in accordance with the JORC Code and a competent person has not done sufficient work to classify the foreign estimates as mineral resources in accordance with the JORC Code. It is uncertain that following evaluation and further

exploration work that the foreign estimates will be able to be reported as mineral resources in accordance with the JORC Code.

ASX Announcement

24 February 2022

New Zealand is now a premier investment destination for resources with successful explorers and new mines being approved. The Acquisition is aligned with Cyclone's strategy to acquire and invest in strategic, value add projects around the world.

onlyIn addition to the current projects Grand Port will make applications for lithium projects in New Zealand to further diversify the portfolio with this strategic mineral.

Following completion of the Acquisition Cyclone plans to undertake a maiden JORC compliant mineral resource estimate at Muirs and commence first-pass drilling at Muirs and Mareburn. It is anticipated that settlement of the Acquisition will complete in the coming weeks.

Cyclone Executive Director, Tony Sage, commented: "Grand Port owns an impressive portfolio of brownfield precious and base metal assets in New Zealand, which we believe, we can add significant usevalue through our hands on approach and strong contacts in-country. Other ASX companies are xperiencing success in New Zealand and we look forward to developing these assets in the coming

months to realise value for Cyclone's shareholders."

Grand Port's Projects

Grand Port's Projects comprise of a portfolio of highly prospective precious and base metals projects on the North and South Islands of New Zealand, with locations shown in Figure 1.

personalFor

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24 February 2022

onlyuse personalForFigure 1: Location of Grand Port Projects

South Island

Longwood Range Gold Copper PGE Project (application pending) is situated 40km west of Invercargill, New Zealand and covers 424km2. Historic production includes: ~88koz Au and 1,500oz of platinum. Previous drilling intersected a PGE reef with no follow up work and the project area has been identified as being fertile for copper and nickel by Otago University. There has been only 4 historic drill holes to date on the project. On-ground work will kick off with a geochemical sampling program that will generate the maiden drill program.

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ASX Announcement

24 February 2022

The Mareburn Gold Project and Macraes South Gold Project (granted) covers 464km2 within the Otago Goldfield of the South Island, which has 10Moz of proven historical gold production. Mareburn sits 8km north of the producing Macraes Gold Mine and processing plant, New Zealand's largest producing gold mine, and ~2km from the Coronation open pit. Macraes South is contiguous to the south

onlyof the Macraes Gold Mine and processing plant. These areas have been significantly underexplored using modern exploration techniques.

Mareburn Gold Project, covers 30km2 and is located ~8km from the Macraes gold mine, and contains a number of initial walkup extension drill targets to previous results2:

• 10m at 2.4/t Au from 38m (RCH4535), including 3m @ 7.1g/t Au from 38m
• 10m @ 1.99g/t Au from 2m (MEH21), including 6m @ 3g/t Au from 5m
• 2m at 3.04g/t Au from 2m (RCH4542)

useMacraes South Gold Project, covers 434km2 and is contiguous to the 10Moz Macraes gold mine. No modern exploration techniques or drilling has been undertaken and the project requires immediate attention.

The Drybread - Waikerikeri Gold Project (application pending) covers ~198km2 and crosses over Santana Minerals Limited's (ASX: SMI) Bendigo-Ophir Project in Central Otago and contains historical

alluvial workings contiguous to that project. The area has been underexplored for hard rock potential personalwith no primary gold exploration undertaken.

North Island

The Muirs Reef Gold Project (application pending) covers 52.6km2 and is close to Oceania's Hauraki Gold Field with 45Moz proven historical gold production. With the same geology as Hauraki, Muirs Reef has a non-JORC foreign inferred resource estimate of 222,000oz @ 1.34g/t* Gold Resource, and silver yet to be estimated. Muirs Reef is ~100km from the Waihi Gold Mining operations and is drill target ready.

Muirs Gold Project, contains a non-JORC foreign inferred resource estimate of 222koz Au @ 1.34g/t*, with significant exploration upside.

1. Historic drilling results include2:
2. • 11.0m at 11.0 g/t Au from 48m incl. 2.0m @ 38.4g/t Au (MSDDH009)
   • 0.7m at 17.0 g/t Au from 92.2m (TP6)
   • 14.0m at 2.76 g/t Au from 54m (RC22)
   • 12.0m at 2.36 g/t Au from 79.0m (RC39)

For1 Note: these are a selection of intercepts which have been chosen to demonstrate the prospectivity of the Muirs and Mareburn projects.

• Non-JORCforeign estimate (2013) by Glass Earth Limited on the Muirs Reef Project, were summarised in a 2013 NI43-101 Technical
  Report on Resources at Muirs Project, Te Puke, Bay of Plenty, New Zealand, Glass Earth Gold Limited. The foreign estimates are not reported in accordance with the JORC Code and a competent person has not done sufficient work to classify the foreign estimates as mineral resources in accordance with the JORC Code. It is uncertain that following evaluation and further exploration work that the foreign estimates will be able to be reported as mineral resources in accordance with the JORC Code.

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ASX Announcement

24 February 2022

▪ 9.0m at 2.70 g/t Au from 29.0m (RC02) ▪ 28.0m at 1.57 g/t Au from 48.0m (RC30)

Acquisition Terms

The material terms of the Acquisition are as follows:

1. Consideration: the Company will issue Grand Port (or its nominees) 900,000,000 fully paid

only	ordinary shares in the capital of the Company in two tranches:
a. 500,000,000 to be issued under the Company's existing placement capacity under Listing Rule
	7.1 (Tranche One); and
	b. 400,000,000 to be issued following receipt of shareholder approval (Tranche Two);
2. Conditions precedent: completion of due diligence by Cyclone on Grand Port's business, assets
use	and operations, including but not limited to its mineral tenements, expected to be within 30 days;
3. Board nominee: Grand Port will have the right to nominate one person to the board of Cyclone;
	and
4. Shareholder approval: A notice of meeting will be put to Cyclone shareholders to approve the
	Acquisition and Tranche Two shares.
Completion of the Acquisition is also conditional upon:
personal	• Cyclone receiving written evidence that the relevant minister has consented to the Acquisition
proceeding pursuant to the Overseas Investment Act 2005 (NZ);
• Cyclone receiving written evidence that the relevant minister has consented to the change in
effective control of Grand Port Resources Pty Ltd pursuant to the Crown Minerals Act 1991
(NZ); and
• Other conditions considered customary for a transaction of this nature.

Placement

In addition to the above, prior to completion of the Acquisition, Cyclone also proposes to undertake a Forcapital raising to raise $500,000 via the issue of 100,000,000 shares to sophisticated and professional investors, at an issue price of $0.005 per share (Placement Shares) with one free attaching option for every 4 shares at an exercise price of $0.006 expiring 31 March 2024 (Placement Options) (together, the Placement). The Placement Shares will be issued under the Company's existing placement capacity under Listing Rule 7.1A and the Placement Options using the Company's capacity under Listing Rule 7.1. Funds raised from the Placement will be applied toward initial work on Grand Port's

projects, costs of the Acquisition and general working capital.

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