Latin Resources : Quarterly Activities Report and Appendix 5B

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LATIN RESOURCES LIMITED

ACN: 131 405 144

Unit 3, 32 Harrogate Street,

West Leederville, WA

6007

P [phone]

E [e-mail]

W www.latinresources.com.au

31 January 2022

QUARTERLY ACTIVITIES REPORT

for the period ending 31 December 2021

Highlights

Cloud Nine Halloysite-Kaolin Deposit, WA

• High-gradehalloysite results were received from 28 holes in the geostatistical cross drilling programi,ii. Significant intersections in consecutive holes included:
• • NBA356: 12m @ 25% Halloysite from 34m
  • NBA357: 12m @ 24% Halloysite from 32m
  • NBA358: 25m @ 28% Halloysite from 14m
  • NBAC373: 3m @ 18% Halloysite from 3m and 15m @ 21% Halloysite from 10m
  • NBAC374: 16m @ 25% Halloysite from 9m to EOH
• The Company announced a three-year, Research & Development project investigating emission reduction technologies, utilising halloysite from the Cloud Nine depositiii.
• The Company has fast tracked mining and other related studies, focused on an initial simple Direct Shipping Ore (DSO) operation for the Ultrabright white kaolinite materiali.

Salinas Lithium Project, Brazil

• Assays from outcrop sampling on the Bananal Valley tenement returned high-grade lithium of 2.71% Li2O and 1.45% Li2O from adjacent samplesiv.
• The Company re-signed and extended the exclusive 2-year Option on the Bananal Valley 830.691 tenementiv. The Company also secured an exclusive and binding 12-month option over two new concessions (830.219/2017 and 831.799/2005) adjacent to the existing Bananal Valley tenementv.
• Drilling to commence in February, assessing 14 drill sites to test outcropping high-grade Li bearing pegmatites in the Bananal Valleyv.

Solis Minerals Initial Public Offering (IPO)

• Solis Minerals Ltd. (ASX: SLM) successfully listed onto Australian Securities Exchange (ASX) in December following A$5.5 million equity raisingvi. Latin holds a 13.14% interest in Solis post- listing (with a market value of approximately A$1.6 million at the IPO price of $0.20).
• The Solis IPO was well supported by Latin shareholders via a priority offer.

Environment, Social and Governance (ESG)

• Latin advanced progress on several ESG reporting measures, the first ESG report was published on 28 January 2022.

Corporate

• Latin held $2,243,000 in cash and investments as at 31 December 2021.
• The Company received $167,232 in cash from option holders exercising in-the-money LRSOC Options ($0.012 LRSOC, Expiry 31 Dec 2022) during the quarter.

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Latin Resources Limited (ASX: LRS) ("Latin" or "the Company") is pleased to report on its activities for the three months ending 31 December 2021.

The Company made significant progress on the Cloud Nine Halloysite-Kaolin Deposit ("Cloud Nine") during the quarter, with drilling confirming high-grades and continuity and a major research project initiated investigating potential commercial uses of halloysite to reduce greenhouse gas emissions, particularly methane emissions from cattle.

At the Salinas Lithium Projects in Brazil, high-grade lithium assays were returned from outcrop sampling, additional tenure was secured and Latin's first drilling of the project is planned to commence in February 2022.

Cloud Nine Halloysite-Kaolin Deposit, WA

As part of the focused advancement of Cloud Nine, the Company completed a series of close spaced aircore drillholes at 50 metre centres as part of a wider infill and extension drilling campaigni,ii.

The close-spaced holes, completed along a 1km north-south line and a 1km east west line (Figure 1), were aimed at providing sufficient data to assess the variability of an area of ultra-bright white kaolinite and high-grade halloysite.

Results from this work confirmed that both the thickness and brightness of the kaolinised granite is extremely consistent within the area tested. A near surface blanket, up to 28 metres thick, of ultrabright (>80 ISO-B), was defined over an area approaching one square kilometre.

Of the 40 holes drilled in the Geostatistical Cross, a total of 31 holes have returned significant brightness values over 80 ISO-B.

Selected intersections are listed below, with a full list of results included in ASX Announcements dated

12 November 2021:

• NBAC361: 10m @ 85.8 ISO-B from 10m
• NBAC356: 24m @ 83.4 ISO-B from 14m
• NBAC357: 28m @ 82.7 ISO-B from 16m
• NBAC358: 20m @ 82.5 ISO-B from 16m
• NBAC385: 28m @ 82.0 ISO-B from 11m
• NBAC386: 22m @ 82.0 ISO-B from 11m

This area also contains a blanket of high-grade halloysite material below the ultra-bright Kaolinite, with multiple holes returning thick zones (>10m) of +20% halloysite. Significant results received included:

• NBA356: 12m @ 25% Halloysite from 34m
• NBA357: 12m @ 24% Halloysite from 32m
• NBA358: 25m @ 28% Halloysite from 14m
• NBAC368: 19m @ 23.4% Halloysite from 13m
• NBAC373: 3m @ 18% Halloysite from 3m and 15m @ 21% Halloysite from 10m
• NBAC374: 16m @ 25% Halloysite from 9m to EOH
• NBAC375: 9m @ 36% Halloysite from 14m to EOH

Full results of the halloysite results can be found in ASX Announcements dated 12 November 2021 and 20 December 2021.

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DSO Studies Fast Trackedi

The exceptional results to date at Cloud Nine have provided the Company confidence to commence fasttracking of mining and other related studies, focused on an initial simple Direct Shipping Ore (DSO) operation for the Ultrabright white kaolinite material.

These studies will include detailed metallurgical testwork, which is currently underway, mine design and scheduling, environmental and other approvals, shipping and logistics, Capex-Opex modelling, and project execution plans along with other related work streams.

The objective of the studies is to consider the opportunity for a capital light approach to development through mining and selling a DSO product.

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Alternate Analysis Pathway Developmenti

In order to combat delays in assay result turnaround and to de-bottleneck the analytical workflow, the Company has been working with Cloud Nine Mineral Resource consultants, RSC Global Pty Ltd (RSC), to develop an alternate analysis pathway to the current X-Ray Diffraction (XRD) methodology.

This work, which involves a combination of Fourier Transform Infra-Red (FTIR) spectral analysis and Machine Learning (ML), will potentially enable more rapid quantification of kaolinite and particularly halloysite abundances.

Following the publication of a detailed technical peer review whitepaper in a recognised scientific journal, the Company is now able to utilise this alternate analytical pathway for its ongoing sample test work. Processing has already commenced on the significant number of samples from detailed infill drilling completed toward the end of 2021, which are ready for analysis.

Results from these samples will form the basis of the proposed mineral resource estimate update to be completed as part of the ongoing scoping studies assessing the viability of a mining operation at Cloud Nine.

Major Halloysite Research & Development Project Initiatediii

During the quarter, the Company announced a major Research & Development (R&D) Project, to be undertaken by CRC CARE Pty Ltd ("CRC CARE"), investigating potential emission reduction technologies using halloysite from the Company's Cloud Nine deposit.

The three-year, $3.2 million project is being led by Professor Ravi Naidu from CRC CARE.

Under the agreement reached with CRC CARE, complementary to its current activities that include exploration for halloysite at its 100% owned Cloud Nine Halloysite-Kaolin Deposit in WA, Latin will fund two key research projects running in parallel to the extent of $3.2m over a three-year period.

The research results and all intellectual property rights associated with and derived from the research results will be owned 100% by Latin.

The research projects to be undertaken by CRC CARE are designed to develop applications that are superior to those of other natural materials including:

• Microbial intervention: use of halloysite in feed supplement formulation to influence methane producing rumen microbes.
• Nutrient and methane adsorption in the cattle industry: real-timecapture and desorption of animal gas emissions for energy conversion as well as capturing nutrients from animal excreta (Figure 2).
• Carbon capture: adsorption at various pressures (industrial uses) and conversion of the captured carbon into fuel or the whole adsorbent into value-added material such as building material or fertiliser (Figure 3).
• Low-costprecise purification of halloysite nanotubes (HNT): from variants of halloysite and kaolinite mixtures (pure HNT can generate double the revenue of HNT/kaolinite mixes).

Methane expelled from cattle rumen is a significant unsolved problem in reducing overall Green House Gas emissions. Furthermore, the stockpile of cattle excreta is another source of methane in the cattle farm and feedlots industry. The research project aims to modify the Cloud Nine halloysite/kaolinite minerals to develop material-based emission reduction technologies, including feed supplements for cattle, spreadable material and halloysite shale for inhibiting and adsorbing methane in this growing industry.

The diagrams below show the two projects including nutrient and methane adsorption in Proposed Discovery 1 and carbon capture in Proposed Discovery 2. Each diagram compares the current state and the proposed state by CRC CARE.

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