Essential Metals : Quarterly Activities Report

onlyASX Code: ESS

C rp rate Profile

Shares on issue: 243,092,268

Cash: $9m (31 Dec 2021)

Debt: Nil

useKEY PROJECTS LITHIUM Pioneer Dome GOLD Golden Ridge GOLD Juglah Dome

Joint Ventures (ESS %) personal2 x nickel projects (20-25%)*

4 x gold projects (25-30%)*

* Free carried to a decision to mine

Corporate Directory

Non-Executive Chairman

Craig McGown

N n-Executive Directors

Paul Payne

Warren Hallam

Managing Director

Timothy Spencer

CFO & Company Secretary

Carl Travaglini

Exploration Manager

Andrew Dunn

Investor Relations

ForNicholas Read Read Corporate t: [phone]

e: nich [e-mail]

ABN: 44 103 423 981

t: [phone]

1. [e-mail]

1. essmetals.com.au

Level 3, 46 Ord St

West Perth, WA 6005

Australia

PO Box 1787,

West Perth, WA 6872

Australia

AMENDED: Please note that the exploration results included in the section 'Acra Gold Joint Venture' beginning on Page 8 are newly reported results as they were not considered sufficiently material to be reported separately when they were received from the Joint Venture partner.

18 February 2022

DECEMBER 2021 QUARTERLY REPORT

Pioneer Dome Lithium Project continues to advance with strong results from Dome North, more lithium targets, new drilling programmes underway and advancements made towards project development.

HIGHLIGHTS

• Pioneer Dome Lithium Project, WA: Key operational activities during the Quarter were:
  o Receipt and analysis of assay results from the 5,934m Reverse Circulation (RC) drill programme completed at Dome North in August. The best results came from four RC holes drilled into the upper portion of the Cade Deposit:
  o 21m @ 1.08% Li2O from surface (PDRC589) o 24m @ 1.29% Li2O from surface (PDRC590) o 15m @ 1.06% Li2O from 47m (PDRC591)
  o 26m @ 1.46% Li2O from 51m (PDRC592)

1. 13-holediamond drill programme commenced in December, targeting near-surface mineralisation (oxide/transition) at the Cade and Davy deposits to obtain samples for bulk density measurements and for confirmatory metallurgical test work.

• 1. Baseline environmental survey completed as part of a range of activities currently underway to prepare Dome North for development.
• Corporate: The Company's 51% interest in the non-core,early-stage Mavis Lake exploration asset located in Canada was divested to Critical Resources Limited (ASX: CRR) for $0.75M in cash (50% withheld for Canadian tax purposes) and 34 million listed CRR ordinary shares.
• Closing cash on hand as at 31 December 2021 was $9 million.

Page 1 of 24

PIONEER DOME LITHIUM PROJECT

The Pioneer Dome Project (ESS: 100%) is located in the heart of Western Australia's lithium corridor in onlythe Eastern Goldfields, approximately 130km south of Kalgoorlie and 275km north of the Port of Esperance. A Mineral Resource of 11.2Mt @ 1.21% Li2O1 has been defined at Dome North in the

northern area of the Project.

The southern Yilgarn area is recognised as being well-endowed with spodumene deposits, including the Bald Hill Mine, the Mt Marion Mine and the Buldania Project. The world-class Greenbushes Deposit, the Mt Holland Mine and the Mt Cattlin Mine are located further west, south-west and south- south-west, respectively.

For usepersonal

Figure 1 - The location of the tenements of the Pioneer Dome Lithium Project relative to major infrastructure.

1 Refer ASX:ESS announcement 29 September 2020 - Dome North Resource upgrade

Page 2 of 24

RC DRILL PROGRAMME RESULTS

All assays from the slim-line Reverse Circulation (RC) drill programme completed in late August were received and reported in ASX announcements released on 15 October and 3 November.

onlyThe 5,934m RC drill programme was undertaken to test areas with potential for the discovery of additional spodumene-bearing pegmatites which could add to the currently defined Mineral Resource at Dome North and to test the upper zone of the Cade Deposit.

As announced on 15 October2, four RC holes drilled in the upper zone of the Cade Deposit returned broad high-grade intercepts, with highlights of:

• 21m @ 1.08% Li2O from surface (PDRC589)
• 24m @ 1.29% Li2O from surface (PDRC590)
• 15m @ 1.06% Li2O from 47m (PDRC591)
• 26m @ 1.46% Li2O from 51m (PDRC592)

useAlso, hole PDRC519, located at the southern end of the Davy deposit, returned encouraging assays of:

• 7m @ 1.02% Li2O from 21m, including 3m @ 1.44% Li2O; and
• 9m @ 0.62% Li2O from 42m

For personal

Figure 2 - Cross-section showing drill hole PDRC590 and previously drilled holes on the same section.

2 Refer ASX:ESS announcement 15 October 2021 - High grade assay results from Cade Deposit

Page 3 of 24

Figure 3 - Cross-sectionshowing drill holes PDRC591 and PDRC592 and previously drilled holes on the same section.

onlyuse

personalOther than those outlined above, no other significant intersections (>0.5% Li2O) were returned, however encouraging geochemical results were returned from Heller North (PDRC543 & 44) as well as the 'Davy to

Cade' (PDRC571 to PDRC575) area, both of which required further investigation. For

Figure 4 - Dome North LCT drilling (see legend).

Page 4 of 24

Botanica Consulting, a Kalgoorlie-basedenvironmental consultancy, conducted a springtime flora and fauna survey to assist with the coordination of the baseline studies required to secure regulatory approvals and licences. The final report is expected in February, however Botanica has already advised that no particularly sensitive flora or fauna were identified during the survey.

Lastly, a hydrology study was underway during the Quarter with the final report expected in February.

Page 5 of 24

• Option 1 - Whole of Ore Flotation (WOF)

• Option 2 - DMS and flotation (Hybrid)

Figure 5 - Dome North proposed drilling (green circles), surface projection of MRE (magenta outlines) and previous drilling

(see legend) on top of the interpreted geology.

-

Davy to Cade

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personalSTEPS TOWARDS DEVELOPMENT READY

As part of its strategy to become a new force in the lithium supply chain, Essential took several key steps during the Quarter to advance the Pioneer Dome Lithium Project to a 'development-ready'status.

The Company has engaged Primero, a leading integrated engineering group, to develop order of magnitude (OOM) capital and operating cost estimates for two plant flowsheet options, processing 1.6 million tonnes per annum of spodumene ore:

The costs were collated from Primero's database and factored as required with an order of magnitude accuracy of +/-35%.The scope of costs considered only related to the process plant, from the run-of-mineto concentrate stockpile and TSF discharge. Items such as bulk earth works, NPI, power and water supply were

Fornot included in the CAPEX estimate.

The evaluation will assist Essential in understanding the economic thresholds of a stand-alonelithium concentrate operation. The results of the evaluation will be incorporated into a Scoping Study, expected to commence by mid-year,pending assays from the current drill programmes and results from further metallurgical test work.

Heller NE

Basement Geology