CZR Resources : Assay Results Confirm Growth Potential for Robe Mesa

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CZR Resources Ltd

ABN: 91 112 866 869

Level 3, 47 Havelock St

West Perth Western Australia 6005

PO Box 16

Perth WA 6872

Phone: [phone]

Website: www.czrresources.com

The Company Announcements Office, ASX Limited

24 February 2022

Robe Mesa Iron Ore Project, Pilbara

Assays reveal extensive DSO outside planned pits, paving way for updated Ore Reserves

Outstanding results support CZR's strategy to grow mine life and production rates

Highlights

• Assay results from the first 55 RC drill holes have been received, with direct shipping iron ore (DSO) intersected in all holes
• The results reveal extensive DSO sits outside the pit designs contained in the pre-feasibility study (PFS); This is highly significant as it supports CZR's strategy to increase Ore Reserves, mine life and production rates
• The outlook for more growth is also supported by the fact that the drilling shows the lower pisolite ironstone, which was excluded from the PFS, is a more consistent and higher quality iron ore than the upper pisolite
• Overall grade continuity is exceptional, with low impurity and high calcining iron, ideal for sinter fines production
• Mineralisation is very shallow (maximum depth 60m), with a low indicative strip ratio1 of 0.9
• CZR has installed an exploration camp at Robe Mesa and secured drill rigs to accelerate extensional drilling and metallurgical test work

CZR Resources Limited (ASX: CZR) is pleased to announce outstanding assays which point to the potential for significant growth in the mine inventory and production rate at its Robe Mesa Iron Ore project in WA's Pilbara.

The assays, which come from the first 55 RC drill holes of the 164-hole program, show that DSO mineralisation was intersected in all holes, with most intersecting a thick, flat-lying channel iron deposit (CID) from surface.

These intersections were outside the planned pits contained in the Robe Mesa PFS and therefore point to a significant increase in the mining inventory.

These results are from the northern end of the deposit, with drill testing of the upper and lower pisolite ironstone. The orebody shows strong grade continuity, with low contaminants due to its high LOI (loss on ignition) content, making it an ideal sinter fines product.

At a 53% Fe cut-off (60% Fe calcined)1, the combined upper and lower pisolite units average 27m thick at a very low indicative strip ratio2 of 0.9 (see Table 2). The combined grade of 55.7% Fe (62.4% Fe calcined), 6.2% SiO2, 2.8% Al2O3 and 0.04% P is similar to Rio Tinto's Robe Valley Fines, FMG's Super Special Fines, and Atlas Iron's Atlas Fines (see Table 1).

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1. 60% Fe calcined cut-off grade is greater than the 55% Fe calcined cut-off grade used in the previous JORC Resource estimate
2. Downhole waste interval divided by downhole mineralised interval (see Table 2)

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Fig 1. Location of all RC drill-holes on the Robe Mesa, including 2021 infill drilling

CZR is now updating its geological and grade model as part of a Resource and Reserve update. It is also gearing up field activities, with an exploration camp now installed to support heritage surveys, environmental baseline surveys and metallurgical and resource definition drilling planned for Q2.

CZR Managing Director Stefan Murphy said the results supported CZR's strategy to grow the mine life and production rate at Robe Mesa.

"These results show Robe Mesa is emerging as a significant iron ore project based on shallow DSO with low impurities," Mr Murphy said.

"We will feed these results, along with those pending from the remainder of the program, into the model in preparation for a resource update in the coming quarter.

"This will in turn underpin the Definitive Feasibility Study."

Mr Murphy said that in light of these outstanding results, CZR has planned RC and diamond drill rigs to commence a follow-up drilling program in the coming quarter.

The RC drilling will target further mine life extensions and test water targets for the establishment of a production water bore field. The diamond drilling will include 12 drill holes, testing the upper and lower pisolite for metallurgical test work.

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Fig 2. Location of RC drill-holes with significant intersections outside PFS pit designs annotated

The latest drilling has provided a much clearer picture of the iron ore grade distribution, with DSO mineralisation extending outside of the PFS pit designs along strike and in the underlying lower pisolite (see figures 3 and 4).

Using the 53% Fe cut-off (60% Fe calcined), the upper pisolite has an average thickness of 14.3m at 55.4% Fe (62.3% Fe calcined), 6.5% SiO2, 2.7% Al2O3 and 0.03% P. The lower pisolite averages 13.4m thick at 56.0% Fe (62.5% Fe calcined), 5.9% SiO2, 2.9% Al2O3 and 0.04% P.

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Fig 3. 7593930N cross section of the geology and mineralisation through the Robe Mesa deposit

Fig 4. 7593730N cross section of the geology and mineralisation through the Robe Mesa deposit

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The iron ore quality from Robe Mesa is comparable to other Pilbara fines products that have a strong market presence, having been used by steel mills for decades. The combined silica and alumina levels from Robe Mesa are comparable to its Pilbara peers (see Table 1), and while the iron content is lower, this is due to higher LOI (loss on ignition), meaning Robe Mesa iron calcines to similar levels through the sintering process.

Table 1 - Robe Mesa Fines Peer Analysis
Product	Fe	SiO2	Al2O3	P
	%	%	%	%
Robe Mesa - 2020 Ore Reserve +55% Fe	56.0	5.9	2.7	0.04
Robe Mesa - 2021 Drilling +53% Fe (results to date)	55.7	6.2	2.8	0.04
Rio Tinto - Robe Valley Fines	56.4	5.5	3.1	0.03
FMG - Super Special Fines	56.5	6.4	3.1	0.05
Atlas Iron - Atlas Fines	57.5	6.5	2.0	0.09
Average	56.8	6.1	2.7	0.06

Source:https://www.spglobal.com/platts/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/iron-ore-and-metallurgical-coal-specifications-tree.html

CZR will continue to pursue its strategy of assessing different quality products, with the diamond drilling and metallurgical test work scheduled to commence in Q2. CZR is specifically assessing the following options:

• Sale of a primary +56% Fe product and separate low-grade DSO product
• Process low-grade through a wet plant (scrubbing/scalping) to upgrade the ore quality
• Lowering the grade of the primary product by including low-grade in the iron ore blend (increased tonnes, lower product grade)

Part of this process will also focus on the ore body grade distribution to provide better definition of the higher-grade core of the CID in the updated Resource and Reserve estimates.

The previous JORC Resource estimate undertaken in 2020 used a 49% Fe (55% Fe calcined) cut-off, while the Reserve estimate used a 55% Fe (62% Fe calcined) cut-off. Based on the updated grade distribution, CZR is completing a revised ore body model using a +53% Fe (60% Fe calcined) cut-off grade to model the higher- grade core of the CID more accurately, and a lower grade +50% Fe halo to model the lower-grade ore for potential beneficiation.

CZR will continue to assess assay results as they come in and update the geological and grade model ahead of the updated Mineral Resource estimate, scheduled to be completed by Snowden Optiro in April.

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