Elmore : Expanded Territory Minerals contract & Ball Mill update

April 20th, 2022

Market Update

KEY POINTS

•  Territory Minerals contract significantly expanded, with potential for over a decade of processing.

•  Elmore to manage all elements of production over Territory's known mineralisation

•  Revised deal provides potential to increase both annual revenue from the contract, as well as length of the contract

•  New Ball Mill components have commenced arriving in Western Australia

Elmore Ltd (ELE: ASX or Elmore) is pleased to provide an update on the development of the contract with Territory Minerals.

Expanded Scope

Elmore previously announced that the Company had entered into a contract to provide processing services to Territory Minerals ("Territory") over their projects in Far North Queensland. The contract was limited to 2.5 years or circa 1 million tonnes. Commencement of the project was delayed due to lack of access throughout 2021, brought on by COVID-19 state border lockdowns. The lockdowns prevented key personnel from both Territory and Elmore completing on ground work required to submit licensing requests to the relevant authorities in Queensland.

Elmore and Territory have now significantly expanded both the scope and potential duration of the contract, with Elmore to now be responsible for design, licensing, and total project management over all of Territory's projects that have defined mineralisation. Territory have, to date, defined circa half a million ounces of gold mineralisation, contained in over 8 million tonnes of host-rock.

The key points of the new contract are:

•  Elmore will fund and manage all remaining elements required to design and license the initial mining areas, starting at Northcote, West of Cairns.

•  Elmore will provide, at no cost though retain ownership of, a moveable processing plant.

•  Elmore will provide up to $2 million working capital after licencing has been finalised and the plant is established (this funding is not needed now).

•  Elmore will manage all mining, processing, and product sales.

•  Operating costs will be recovered and then all free-cash will be divided 50/50 between Elmore and Territory.

Elmore already owns the majority of the process plant intended to be used on the projects, and thus only has a small amount remaining to be sourced to complete the plant.

About Territory Minerals

Territory Minerals is a Western Australian based unlisted public company.

Territory's Directors Ron Stanley, Lisa Wells and Michael Britton have a long history in the minerals industry. Territory acquired the land package in Far North Queensland over a decade ago based on both the defined resources and the lack of any drilling beyond 100m from the surface leaving significant potential to for the tenements to host further mineralisation.

Territory's tenements start approximately 100km West of Cairns, near the town of Mareeba and extend around 100kms north. The disjointed and refractory nature of the defined ore has made the resource base unsuitable for a central conventional CIL plant, though ideal for the moveable plant proposed by Elmore, which utilises flotation rather than cyanide for gold recovery. Test-work to date funded and supervised by Elmore demonstrate excellent recoveries with the proposed circuit.

Elmore will be focused on starting mining and processing at the Northcote project area.

Territory Minerals Resources Location Map

Global Resources

Northcote Resources

INDICATED TONNESg/t AuOzs INFERRED TONNES g/t AuOzs	TOTAL TONNESg/t AuOzs
East Leadingham	292576	2.53	23765	45856	1.45	2137	338432	2.38	25902
Emily	549641	1.95	34514	46086	1.85	2748	595727	1.95	37261
Emily North	43607	1.61	2257	1305	0.94	39	44912	1.59	2296
Emily South	133194	2.29	9785	76914	1.70	4194	210108	2.07	13980
Ethel	719834	1.94	44923	101177	1.85	6004	821011	1.93	50927
Belfast Hill	201986	1.28	8281	22746	0.97	710	224732	1.24	8991
Black Bess	556026	2.40	42880	161236	2.45	12694	717262	2.41	55574
Navan Hill	34526	1.63	1809	22758	1.35	988	57284	1.52	2796
Tunnel Hill	399297	1.84	23670	68372	1.89	4157	467670	1.85	27827
Featherzone	74758	1.09	2631	47640	0.85	1301	122398	1.00	3932
Limerick	0	0.00	0	38456	1.03	1274	38456	1.03	1274
TOTAL	3,005,445	2.01	194,514	632,547	1.78	36,245	3,637,992 1.97 230,759

New Ball Mill

Elmore's new ball is on schedule to be fully assembled and ready to operate in Q4, 2022 with the components now arriving in Western Australia. To the Company's knowledge, once assembled, this mill will be the biggest moveable ball mill in the world. The mill will be skid mounted and will be positioned on Elmore's proprietary moveable foundation system, which will allow the mill to be established quickly and then moved after the proximal resources have been depleted. The Company intends to take the mill to Territory's projects, once the first site is licensed, along with a mobile crushing and screening plant (already owned by Elmore) and a flotation circuit (yet to be procured). Elmore is also assessing an opportunity to utilise the plant on the way to Territory's projects, processing some near surface gold mineralisation next to the Peko tailing project that the Company manages in the Northern Territory.

Managing Director's Comments

Elmore's Managing Director Mr David Mendelawitz commented, "Territory Minerals' Far North Queensland projects represents an ideal opportunity for Elmore to showcase how a large moveable process plant can transform a project from stranded and uneconomic with a conventional fixed plant into one that could generate a heathy return to both the project owners and Elmore. Territory potentially has enough defined resources to justify a second plant, andwith Territory focused on further exploration, whilst we take care of all of the design, permitting and mining operations, this may occur sooner rather than later. Beyond this, I am looking forwards to rolling out our new ball mill once we have skid mounted it. It should be a game-changing piece of equipment when combined with our proprietary foundation system."

END

Resource Table 1 to follow on next pages

JORC Code, 2012 Edition - Table 1

Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.)

Sampling techniques

Drilling techniquesDrill sample recovery

JORC Code explanation

•  Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

•  Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

•  Aspects of the determination of mineralisation that are Material to the Public Report.

•  In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

•  Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

•  Method of recording and assessing core and chip sample recoveries and results assessed.

•  Measures taken to maximise sample recovery and ensure representative nature of the samples.

•  Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Commentary

•  This resource estimate is based on diamond (DD), reverse circulation (RC) and minor rotary air blast (RAB) drill samples carried out in multiple campaigns by several companies. Within the gold estimation domains 3528 samples (72%) were from RC drilling, 1125 samples (23%) were from DD drilling, 30 samples (0.6%) were from open hole percussion (OHP) drilling and 182 samples (4%) were from Western Mining RAB drilling.

•  All diamond core samples were cut using a diamond core saw.

•  RC drilling carried out by Republic Gold (RGL), Strategic Minerals (SRE) and WMC was sampled by riffle splitter to produce a 2-3kg sub-sample. The sub-sampling method for other RC drilling carried out by Homestake and Nittoc was not stated. The Homestake and Nittoc RC drilling comprises 407 (8.3%) of the samples in the gold estimation domains.

•  The sub-sampling methods were also not stated for the OHP and RAB drilling.

•  The assay methods for the Homestake, WMC and Nittoc data are unknown.

•  Strategic and Esso samples were analysed for Au by fireassay with AAS finish of a 30g charge (Strategic) of 50g charge (Esso).

•  Oxide RGL samples were analysed by aqua regia digest with AAS analysis. Fresh and Transition RGL samples were analysed by fire assay with AAS finish of a 25g charge by SGS labs and ALS labs in Townsville..

•  The RGL RC drilling utilized a face sample hammer with a 5 ¼ inch bit.

•  The WMC RC drilling utilized a cross-over hammer. The type of hammer used for the other RC drilling was not recorded, but was likely a cross-over hammer given the timing of the drilling

•  All diamond drilling was by conventional wireline drilling at NQ or HQ size.

•  Diamond core was routinely wireline drilling. Selected RGL holes were drilled using triple tube to maximise core recovery.

•  RC and DD gold results were compared by gold grade domain and oxidation domain. No significant differences were found.

•  RC drill sample moisture is only available the RGL drilling. Of the 700 RGL RC samples 1 was wet and the remainder dry.

•  The relationship between grade and drilling recovery (if any) was not investigated as drilling recovery data was only available for the RGL DD drilling.