Fortress Minerals Limited announced the recent issuance of two new prospecting licences in East Malaysia by the Land and Surveys Department State of Sabah. The prospecting licences were granted to subsidiaries of Fortress Minerals, 65%-owned Saga Mineral Sdn. Bhd. and 51%-owned Kencana Primary Sdn. Bhd. and covers prospecting in the concession areas of 40km2 in TelInternet, Sabah and 400km2 in Tongod, Sabah. The prospecting licence granted to SMSB commences from 15 December 2022 to 14 December 2024 to prospect for the copper mineral whereas the prospecting licence granted to KPSB commences from 19 December 2022 to 18 December 2024 to prospect for nickel, copper and cobalt minerals. The TelInternet and Tongod areas of Sabah are known to be rich in mineral resources including copper, iron ore, nickel and cobalt. The TelInternet concession area was first prospected in the 1950s by various companies. In the 1980s, detailed exploration work was conducted by the Joint Malaysian German Mineral Exploration Project in the vicinity of the concession area. In 1988, there were significant drilling activities which resulted in 3.6 million tonnes of copper resources being reported in an adjacent tenement. The Tongod concession area has historical occurrence of nickel, cobalt and iron ore and exhibits favourable geological conditions that are conducive for the mineralisation of such resources. As part of the Group's strategic growth efforts to invest prudently through the cycle and to enhance long-term shareholder value, the prospecting licences offer the opportunity to expand the Group's commodities profile and diversify its revenue streams. The exploration activities are expected to commence in April 2023 and comprise surface geological survey, pulse electromagnetic survey, magnetic surveys and other ground geophysical surveys to better define the targets for drilling campaigns. Total estimated commitment of the exploration activities for both projects is approximately RMB 30 million ($6.8 million) over the two-year period, which is expected to be funded by a combination of internal and external sources. The estimated commitment is not expected to have any material impact on the net asset value per share and earnings per share of the Group for the financial year ending 29 February 2024. At the same time, the Group is building up its production capabilities at the Cermat Aman Sdn Bhd
("CASB") mine, which commenced production in July 2022. The Group is looking to add new integrated processing plants which will enhance production capability at the CASB mine and enable the Group to produce high grade iron ore, copper and pyrrhotite concentrate previously documented in the CASB's mine's Mineral Resource Estimate as at 28 February 2022. In the event the production of new minerals would result in a significant change to the risk profile of the Group, the Company will seek the separate approval of its shareholders at an extraordinary general meeting to be convened at such time, prior to commencing such operations.