Flinders Mines : Canegrass Project exploration update

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ASX ANNOUNCEMENT

10 June 2022

Canegrass Project Exploration Update

Flinders Mines Limited (ASX:FMS) (Flinders or Company) is pleased to provide the following update on exploration activities at the Company's Canegrass Project in Western Australia. Previous exploration has shown that gold and vanadium remain the principal commodities of interest.

Exploration Highlights:

Reverse circulation percussion (RCP) drilling intersects vein-hosted gold mineralisation on structural trends associated to the Honeypot and Boulder prospects.

• Honeypot:

• 1. 4 m grading 2.03 g/t Au from 34m (CGRC0016)
  1. 4 m grading 0.47 g/t Au from 20m (CGRC0015)
• Boulder:
• 1. 2 m grading 2.41 g/t Au from 42m (CGRC0018)
• In addition, an elevated copper (2m grading 0.56% Cu from 32m) intercept was reported in drillhole CGRC0031.

Overview of Exploration Programme

At the request of Flinders, CSA Global Pty Ltd (CSA Global) completed a gold focused exploration work programme across the Canegrass Project. Exploration activities were completed with the objective being to explore for vein-hosted gold mineralisation on structural trends defined in previous exploration. Activities comprised:

• A soil geochemistry sampling programme on E58/521 targeting gold mineralisation along an interpreted structural trend. A total of 36 soil samples were collected.
• A reverse circulation percussion (RCP) drilling programme comprising 23 drillholes for a total of 1,000 m on E58/232-I,E58/236-I,E58/282-I, E58/520, and E58/522 (Table 1). The drillholes were angled -60° targeting an interpreted structural trend and historical anomalous soil geochemistry and aircore drill results.

1. Table 1: Canegrass 2022 drill program summary

	Tenement			Drill type			Drillholes			Metres
	E58/232-I			RCP	3		200
	E58/236-I			RCP	2		80
	E58/282-I			RCP	4		160
	E58/520			RCP	10		400
	E58/522			RCP	4		160
		Total	23		1,000

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Exploration Update

Flinders is pleased to update the market with the results of a soil sampling and RCP drill exploration programme that was completed at the Canegrass Project between January to February 2022. The results have now been received, verified, and reported. The programme is summarised:

Results and Interpretation

• The soil geochemical sampling program on E58/521, which included 36 soil samples on two east-west lines 200 metres apart with samples spaced at 40 m along the lines, did not return any anomalous results.
• The RCP drill program intersected anomalous gold results and a single copper anomaly:

1. E58/236-I(drillholes CGRC0015 and CGRC0016), targeting a northwest trending interpreted structure from the historical Honeypot gold prospect.

1. E58/232-I(drillhole CGRC0018), targeting a historical aircore anomaly (drillhole BAC0030, 24-28 m grading 0.2 g/t Au. Associated to the Boulder gold prospect.

1. E58/522 (drillhole CGRC0031), targeting a north trending structural trend. The significant drill intercepts are presented in Table 2.

Drilling on E58/282-I, targeting an anomalous aircore gold result (HAC022, 12 to 16 m grading 2 g/t Au, Figure 4) on a structural trend north of the Honeypot gold prospect did not return any anomalous gold results.

Table 2:

Canegrass 2022 significant drill results

Drillhole

Tenement

Depth

Depth to

Au

Cu

Lithology

Target/Comments

from (m)

(m)

(g/t)

(ppm)

Gold soil anomaly and northwest

CGRC0015

E58/236-I

20

22

0.32

Gabbro

trending aeromagnetic lineament from

Honeypot gold prospect

Gold soil anomaly and northwest

CGRC0015

E58/236-I

22

24

0.62

Gabbro

trending aeromagnetic lineament from

Honeypot gold prospect

Gold soil anomaly and northwest

CGRC0016

E58/236-I

34

36

0.97

Gabbro

trending aeromagnetic lineament from

Honeypot gold prospect

Gold soil anomaly and northwest

CGRC0016

E58/236-I

36

38

3.08

Gabbro

trending aeromagnetic lineament from

Honeypot gold prospect

CGRC0018

E58/232-I

42

44

2.41

Semi-oxidised

Boulder gold prospect

gabbro

Gabbro, trace

CGRC0031

E58/522

32

34

0.006

5590

quartz,

North trending structure

sulphides

The Canegrass project location plan is presented in Figure 1 and exploration programme and soil sampling locations as Figure 2.

Drill hole location plans for the significant gold intercepts associated to the Honeypot and Boulder prospects are included as Figure 3, Figure 4 and Figure 5.

A summary of sampling techniques and data, estimation and reporting methodologies is contained in JORC Table 1 which is included as an attachment to this ASX release.

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Canegrass exploration history since 2017

Flinders first engaged CSA Global as consultants to support the Canegrass Project in June 2017. The work activities, the rationale behind the programmes, and the results are summarised:

• June 2017: A geochemical soil and rock chip sampling Programme comprising 576 soil samples and 19 rock chip samples for the purposes of identifying potential sulphide mineralisation was completed.
• October 2017: CSA Global completed a "Technical Review of Historic Data of the Canegrass Project", which concluded that vanadium and gold were the two commodities offering the greatest exploration potential. Prospectivity for cobalt, copper and other sulphide mineralisation, including nickel, was assessed and considered very low but not inconceivable.
• November 2017: CSA Global reviewed the previous vanadium Mineral Resource estimate prepared in 2011 by Flinders and Optiro Pty Ltd, and reported in accordance with the 2004 edition of the JORC Code. CSA Global has re-reported the Mineral Resource estimate in accordance with the 2012 JORC Code, and is the current Competent Person for the estimate (ASX announcement
  30 January 2018).
• November 2017: A drilling programme targeting cobalt-nickel-copper anomalous areas identified from the June 2017 geochemical study. The programme consisted of 29 air-core (AC) holes and two reverse circulation percussion (RCP) holes for a total of 772 m.
• December 2017: A Market Analysis of the Canegrass Project Vanadium Mineral Resource completed by CSA Global. CSA Global collated and interpreted all publicly available Mineral Resource data related to vanadium, primarily using the SNL database. Other resources included the United States Geological Survey (USGS), various other internet sources and vanadium company internet websites.
• June to July 2018: Canegrass 2018 Gold Activity and Work Programme Design, including a summary of gold related activities and prospectivity across the Canegrass tenements.
• September 2018: A drilling programme targeting both potential gold mineralisation at the Honeypot prospect and extensions to the existing Inferred Vanadium Mineral Resource of 79 Mt @ 0.64% V2O5, 6.0% TiO2 and 29.7% Fe (ASX announcement 30 January 2018). The drilling was completed on tenements E58/232-I,E58/236-I and E58/282-I. The programme comprised:

1. A reverse circulation percussion (RCP) programme drilling consisting of eight holes for 1,064 m. Three drillholes targeted the potential depth extension of an outcropping quartz vein mapped at surface on E58/236-I, containing anomalous gold grades. The remaining five drillholes targeted the lateral extents of the current Inferred VTM Mineral Resources; the Kinks and Fold Nose, across tenements E58/232-I,E58/282-I and E58/236-I.

• 1. An aircore (AC) drilling programme of six holes for 198 m on E58/282-I to confirm previous drill results from the 2014/2015 AC programme undertaken by Flinders.
• October to December 2019: A work programme comprising:
• 1. Soil geochemistry sampling on E58/236-I targeting gold mineralisation along a structural trend north of the Honeypot gold prospect, and in the north of E58/521 targeting vanadium-titanium-magnetite (VTM) mineralisation.

1. Preliminary mineralogical studies on select 2018 reverse circulation percussion (RCP) VTM drill chips.

1. Three RCP drillholes (one each on E58/232-I,E58/236-I and E58/282-I) to collect Mineral Resource (ASX announcement 30 January 2018) grade samples for metallurgical testwork. The drillholes were collared on a previously cleared drill section and adjacent to known mineralisation.

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• 1. Desktop review of E58/520 and E58/522.
• September/October 2020: Exploration activities completed comprised:
• 1. Soil geochemical sampling on E58/520, E58/521, and E58/522 which included several rock samples of potentially gold-bearing quartz float and selected soil samples and rock samples within E58/236-I and E58/282-I. The soil sampling programs on E58/520 and E58/522 targeted potentially gold-bearing structural trends south of the Honeypot gold prospect. The soil sampling within E58/521 was designed to test for possible platinum group metals (PGMs) across the interpreted contact between the upper and middle units of the WIC.

1. Ten RCP drillholes, six within E58/232-I, and four within E58/282-I, designed to infill and test for shallower higher-grade VTM zones within the Mineral Resource (ASX announcement, 30 January 2018) VTM mineralisation.

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Figure 1: Canegrass tenement and exploration programme location plan