Hannans : 2nd Quarter Activities Report

FAST FACTS

ASX Code: HNR

CAPITAL STRUCTURE

Shares on issue: 2.6 billion

Market cap: $104M (at 4.0c)

Cash: $5.1M (31 Dec 2021)

Debt: Nil

BOARD OF DIRECTORS

Non-Executive Chairman

Jonathan Murray

Executive Director

Damian Hicks

Non-Executive Directors

Markus Bachmann

Clay Gordon

Amanda Scott

LITHIUM-IONBATTERY RECYCLING

Nordic joint venture

MINERAL EXPLORATION

Sole Funded

Fraser Range (Ni-Cu)

Forrestania (Ni)

Moogie (Cu-Au & Ni-Cu)

Free-Carried to Decision to Mine

Forrestania (Au) 20%

ABOUT HANNANS LTD (EST. 2002)

Our vision is to sustainably produce metals for society.

www.hannans.com@Hannans_Ltd

2nd QUARTER ACTIVITIES REPORT 2021/2022

2nd Quarter (October - December 2021):

LITHIUM-IONBATTERY (LIB) RECYCLING

• Nordic region - satisfied all conditions precedent to the MoU announced in the 1st Quarter.
• New business (LIB recycling and energy storage) - commenced search for rapid growth opportunities in Europe.

MINERALS EXPLORATION

• Moogie (Copper-Gold & Nickel-Copper) - monitored arrival
  of contractor to complete helicopter-borne (electromagnetic) geophysical survey over four priority targets.
• Fraser Range (Nickel-Copper) - reviewed historical data covering new tenure and completed preparations for ground (electromagnetic) geophysical surveys.
• Forrestania (Nickel) - completed preparations for ground (electromagnetic, EM) geophysical surveys and geochemical sampling of nickel prospects within the Western Ultramafic Belt.
• New business (Nickel) - continued search for attractive nickel sulphide exploration projects in Western Australia.

COMPLIANCE AND CORPORATE GOVERNANCE

• TCFD - selected the Recommendations of the Task Force on Climate-related Financial Disclosures as the framework for reporting on environmental, social and governance matters.
• AGM - all resolutions were passed by shareholders.

CORPORATE

• Capital Raising - raised $5.5M by way of a fully underwritten rights issue at a price of 2.5 cps.

Goals for the 3rd Quarter (January - March 2022):

LIB RECYCLING

• Execute material transaction.
• Source LIB feedstock within Nordic region.

MINERALS EXPLORATION

• Moogie (Copper-Gold & Nickel-Copper) - complete airborne EM survey, and complete interpretation of results.
• Fraser Range (Nickel-Copper) - complete ground EM survey and acquisition of historic airborne EM data.

COMPLIANCE AND CORPORATE GOVERNANCE

• ASX - re-comply with Chapters 1 and 2 of the Listing Rules.

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Level 12, 197 St Georges Tce, Perth WA	ASX: HNR ABN: 52 099 862 129

HANNANS 2nd QUARTER ACTIVITIES REPORT

LITHIUM-ION BATTERY (LIB) RECYCLING

During the 1st Quarter 2021/2022 Hannans signed a Memorandum of Understanding (MoU) with Critical Metals Ltd (Critical) and LIB Recycling Pty Ltd (a wholly owned subsidiary of Critical) to commercialise a lithium battery recycling technology in Norway, Sweden, Denmark, and Finland (Nordics). During the 2nd Quarter all conditions precedent to the MOU were satisfied. These included approval by the Critical Board and shareholders, approval by the Hannans Board and shareholders, and completion of a $5 Million capital raising by Hannans before 31 December 2021. Having satisfied the condition precedent Hannans' focus has now turned to securing LIB feedstock agreements with Nordic based companies requiring a recycling solution for scrap and end-of-life lithium batteries.

As advised during the Quarter the Nordic region has one of the highest EV penetration rates in the world and further has six Giga factories in planning and construction 1. The volume of scrap and end-of-life lithium batteries available for recycling in the Nordics will underpin a vibrant LIB recycling sector into the future. From an environmental perspective the recovery of metals from scrap and end-of-life lithium batteries is imperative because the volumes of flammable toxic scrap and spent lithium batteries are forecast to grow exponentially. Importantly the growing volumes of scrap and end-of-life batteries contain significant nickel, cobalt, lithium, and manganese. The recycling technology to be commercialised by Hannans in the Nordics unlocks that embedded value.

The agreement with LiB Recycling provides that Hannans will manage and fund all tasks and activities in the Nordic region through to a final investment decision (FID) with respect to the construction of each plant for the processing or recycling of feedstock batteries using the recycling technology. A plant may comprise a shredding and beneficiation plant (Stage 1) or a refining plant (Stage 2) (each, a Plant). Subject to Hannans re- complying with Chapters 1 and 2 of the ASX Listing Rules (assuming the current ASX position remains unchanged), if Hannans makes a FID and enters a binding engineering, procurement, and construction agreement for a Plant, LiB Recycling Pty Ltd will be required to either (1) co-contribute to all future construction costs of the new Plant (capital and operating costs), in which case, each party would have a 50% equity interest in the Plant, or (2) its equity interest in the Plant will be diluted pro-rata to its relative funding contribution. To be able to make an FID, Hannans will need to have secured enough feedstock to justify the economics of a Plant and obtained the required permits to operate the Plant. Under the proposed joint venture arrangement, the costs of permitting and sourcing and marketing the business in the Nordic region will always be borne by Hannans (i.e., Hannans will fund all activities up to each FID for a given Plant, at which point, LiB Recycling will have the option to contribute or dilute).

For more than two years LiB Recycling has been actively seeking to establish relationships with potential providers of battery feedstock and engineering, procurement, and construction firms. LiB Recycling has passed to Hannans the benefit of these relationships, discussions and initiatives and responsibility for the carriage of these matters is now the sole responsibility of Hannans. For further information please refer to the Annual General Meeting presentation available here.

Hannans recognises the opportunity for rapid growth within the European energy storage industry and it will pursue new opportunities that add value for shareholders.

1 Refer ASX release dated 30 November 2021.

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HANNANS 2nd QUARTER ACTIVITIES REPORT

MINERALS EXPLORATION

Figure 1: Map showing location of Hannans mineral exploration projects in Western Australia

Moogie (Nickel-Copper and Copper-Gold)

The Moogie Project is located approximately 260km north-west of Meekatharra and 300km east of Carnarvon in the East Gascoyne Region of Western Australia.

Moogie is located within the Gascoyne Province proximal to the margin with the Yilgarn and Pilbara Cratons. Such collision belts at the margin of cratons are known to host deep crustal-scale structures, favourable target sites for mineralisation. The Project hosts a significant strike length of the Cardilya Shear Zone, identified as such a deep-seated structure.

The Cardilya Shear Zone is a 2-5km wide, east-west trending shear zone which buckles and thickens at its intersection with northeast-trending Deadman Fault Zone, a second major structure transecting the Project. Hannans is currently exploring the Cardilya Shear Zone and related structures for intrusive copper-gold (Cu- Au), nickel-copper-platinum group elements (Ni-Cu-PGE), and shear hosted gold (Au) mineralisation.

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HANNANS 2nd QUARTER ACTIVITIES REPORT

Figure 2: Moogie tenure and geology

Hannans has employed a systematic exploration process of generating and testing targets and the next phase will aim to test priority targets called Breccia, Mission Bore, Minnie Ritchi and Ghallangee.

The Breccia and Mission Bore prospects are priority Cu-Au targets. Outcropping copper-oxide mineralisation is associated with an (approx.) 4km long zone of intensely altered and brecciated suite of gneissic rocks. The alteration suite of albite-silica-k-feldspar,copper-magnetite mineralisation and structural position all support a possible IOCG / porphyry base metal deposit model.

The Minni Ritchi and Ghallangee prospects are located within a zone of thickening of the Cardilya Shear Zone proximal to its intersection with the Deadman Fault Zone. Both prospects are considered prospective for intrusive-hostedNi-Cu-PGE mineralisation. Weak multi-element soil anomalism is present over prominent magnetic anomalies at Minni Ritchi and Ghallangee and could represent the presence of a mafic-ultramafic intrusive at depth, an interpretation supported by mapping of deformed ultramafic rocks at Ghallangee.

Figure 3: Flights lines for airborne EM survey that commenced late January 2022 over the Mission Bore, Breccia, Minni Ritchi

and Ghallangee prospects.

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HANNANS 2nd QUARTER ACTIVITIES REPORT

An airborne electromagnetic (EM) survey2 previously scheduled to commence late 2021, commenced last week. The survey is a 413 line kilometre high resolution EM and magnetic survey using the XciteTM system. The line spacing over the Breccia, Mission Bore, Minni Ritchi and Ghallangee prospects will be 200m and the line spacing for the regional part of the survey will be 400m.

Follow-up geological mapping and character-sampling in the next field season (April - October) is planned and if warranted, surface EM and reconnaissance drilling (RAB/AC/RC) will be scheduled.

Fraser Range (Nickel-Copper)

The Fraser Range nickel-copper project is located 100km east of Norseman, in Western Australia.

Figure 4: Location Plan of the Fraser Range Project showing the Project Tenements

All tenements within the Hannans Fraser Range Project contain host rocks/stratigraphy that are considered prospective for nickel-copper sulphide mineralisation related to mafic-ultramafic intrusions. However, the status of exploration by previous explorers remains variable and much of this potential remains to be rigorously tested, particularly considering the geological targets for nickel-copper sulphide mineralisation need not be large (i.e. there is a significant trade-off between the detail/resolution with which previous exploration has been conducted and the scale or size of a deposit).

2 Refer ASX release dated 2 September 2021

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