Los Cerros : Quarterly Activities Report and Quarterly Cashflow Report

28 April 2022 ASX Announcement

ASX: LCL

March 2022 Quarterly Report

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HIGHLIGHTS

• ▪ Major milestone completed at Tesorito with delivery of 1.3Moz maiden Inferred Resource, which included a potential 0.5Moz high-grade "starter pit"1

• ▪ Tesorito MRE drives growth in Quinchia Project Mineral Resources to 2.6Moz @ 1.02g/t Au

• ▪ Tesorito metallurgical testwork underway as pre-curser to Quinchia-wide Preliminary Economic Assessment (PEA)

• ▪ Pipeline of ongoing newsflow with five rigs in operation across multiple sites, and target generation program continuing

• ▪ Well-funded to drive further exploration and development growth with $17.5 million cash at quarter end

  Advanced gold explorer and developer Los Cerros Limited (ASX: LCL) (Los Cerros or the Company) is pleased to provide an overview on activities completed in the March quarter.

  The Company achieved a major milestone through the release of a maiden 1.3Moz Inferred Resource at the Tesorito Gold Porphyry (Tesorito), taking the Quinchia Project, inclusive of Tesorito, to a total combined Resource of 2.6Moz2,

  A backlog of assay results was addressed with the release in January of assays for eleven drill holes, representing all remaining completed holes from the 2021 drilling campaign. By mid-quarter the drilling program had ramped back up to five rigs operating across multiple targets and with that ramped up activity, the Company anticipates more frequent drilling updates will begin to flow in from early May

  The release of the Tesorito Mineral Resource Estimate (MRE) marked the emergence of the Company's development program with the first step, metallurgical studies on the Tesorito resources, commenced in the second quarter. The second quarter will also see a return to frequent news flow from several exploration programs, with drilling to be completed at various sites including Ceibal, the Central Target and the new Claras target, located north of Tesorito.

  1.3Moz maiden MRE defined at Tesorito, including potential 0.5Moz high-grade 'starter pit'

  Los Cerros announced an MRE (Inferred) of 1.3Moz @ 0.81g/t Au for Tesorito, with a central high-grade gold zone of 0.54Moz @ 1.23g/t Au3 providing a compelling opportunity to consider higher margin 'starter pit' mining scenarios.

  Whilst the Company has elected to focus on the 1.3Moz iteration of the MRE, this occurs within a larger optimised pit shell of 2.3Moz @ 0.53g/t Au4 (Table 1 and Figure 1), which demonstrates potential for

  1 Refer announcement 22 March 2022. The Company confirms that it is not aware of any new information that affects the information contained in the announcement.

  2 Contains a mix of Inferred, Indicated and Measured Resources. Using Tesorito MRE of 1.3Moz @ 0.81 g/t Au. The Miraflores Reserve is included in the Miraflores Resource. Refer ASX announcement dated 14 March 2017 (Miraflores Resource) and 27 November 2017 (Miraflores Reserve) and 25 February 2020 (Dosquebradas Resource) and 22 March 2022 (Tesorito Resource). The Company confirms that it is not aware of any new information or data that materially affects the information included in the market announcements, and that all material assumptions and technical parameters underpinning the estimates continue to apply.

  3 At a 0.8g/t Au cut-off. Refer announcement 22 March 2022. The Company confirms that it is not aware of any new information that affects the information contained in the announcement.

  4 At a 0.25g/t Au cut-off and US$1,800/oz gold price. Refer announcement 22 March 2022. The Company confirms that it is not aware of any new information that affects the information contained in the announcement.

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sustaining a longer-term mining project, involving lower grade gold that mostly defines the margins of the optimised modelled pit shell. It is also worth noting that the unconstrained MRE, capturing additional material beyond the pit optimisation, generates an Inferred Resource of 1.7Moz @ 0.71g/t Au using a 0.45g/t cut-off grade (and doubling to 3.4Moz @ 0.45g/t Au if applying a 0.25g/t Au cut-off)1.This raises the possibility of resource growth through refinement of optimisation parameters, an improving gold price and consideration of possible underground mining methods for mineralisation below the optimised pit shell.

CUT-OFF	TONNES (Mt)	Au (g/t)	Ag (g/t)	Au (koz)	Ag (koz)
0.25g/t Au	134.3	0.53	0.62	2,290	2,673
0.5g/t Au	50.0	0.81	0.75	1,298	1,205
0.6g/t Au	33.4	0.94	0.82	1,006	880

Table 1. Tesorito optimised pit constrained Inferred MRE as at 22 March 2022 at three different gold cut-off grades.

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Figure 1a and b: Tesorito plan view (a) and section view (b) of the optimised pit shell (0.25g/t Au cut-off) and high-grade optimised pit shell (0.8g/t Au cut-off) over gold block model and drill traces. Note deeper gold mineralisation below the optimised pit shells.

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Tesorito MRE drives growth in Quinchia Project Mineral Resources to 2.6Moz @ 1.02g/t Au

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Quinchia is an established project which includes the advanced Miraflores deposit (Reserve status), Tesorito and Dosquebradas deposits (Resource status) and many additional earlier-stage targets (Figure 2). Importantly, Tesorito is situated less than 1km from the Miraflores gold ore body. The Company sees strong potential for all Quinchia gold resources to be developed as a "mining" hub with a central processing facility.

The inclusion of the Tesorito MRE using a 0.5g/t Au cut-off increases the total Quinchia Gold Project MRE to 2.6Moz gold (Table 2), with potential to add further ounces from established and early-stage exploration targets within a 3km radius of Tesorito and Miraflores.

Quinchia subzone	Resource Category	CUT-OFF	TONNES (Mt)	Au (g/t)	Au (koz)
Tesorito	Inferred	0.5g/t Au	50.0	0.81	1,298
Dosquebradas	Inferred	0.5g/t Au	20.2	0.71	459
Miraflores - U.Ground	Measured + IndIcated	1.2g/t Au	9.3	2.82	840
Miraflores - U.Ground	Inferred	1.2g/t Au	0.5	2.36	37
QUINCHIA RESOURCE	80.0	1.02	2,634

Table 2. Quinchia Gold Project MRE, as at 22 March 2022.Note: The Miraflores Resource includes a Reserve

Estimate.

The Company intends to commission a Preliminary Economic Assessment (PEA) of Quinchia incorporating Tesorito, Miraflores and Dosquebradas resources, once the first round of Tesorito metallurgical testwork is complete. A scenario of particular economic interest for investigation within the broader PEA is combining the 0.54Moz optimised ("starter pit") pit shell with material from the Miraflores Reserve less than 1km away.

Quarter exploration results and progress

A substantial tranche of assay results were released in January 2022 marking the completion of 2021 Tesorito resource drilling programs and final data inputs for the Tesorito MRE. The last tranche of results was mainly focused on defining southern and eastern limits of mineralisation. Tesorito remains open to the north. Two holes within the high grade 'starter pit' region delivered high grade gold results consistent with expectations and the geology model including5 -

• ▪ 100m @ 1.01g/t Au from surface in TS-DH52 including 31m @ 1.72g/t Au from surface

• ▪ 88m @ 1.02g/t Au from surface in TS-DH53 including 26m @ 1.93g/t Au from surface.

First quarter 2022 exploration drilling (Table 3) has been focussed on the Ceibal target with 3 rigs testing for northern and southern extensions to porphyry mineralisation intercepted in 2021 drilling. There are currently 3 holes in progress at Ceibal with current down hole depths ranging from 278m to 960m.

A fourth rig has been testing the Claras magnetic geophysics anomaly, ~1km north of Tesorito and within the Marmato Fault Corridor, which also hosts Tesorito and Ceibal. Two holes have been completed, with assays pending, however we note the first hole was terminated earlier than its target depth due to poor ground stability issues and safety concerns.

5 Refer announcement 31 January 2022. The Company confirms that it is not aware of any new information that affects the information contained in the announcement

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28 April 2022 ASX Announcement

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A fifth rig is testing a chargeability geophysics anomaly between Tesorito and Miraflores. The first hole of 1,205m was completed during the quarter with results expected shortly. A second hole from the same location has commenced.

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Area	Drill hole #	Down hole depth (m)	Comment
Ceibal	CEDDH007	278 - in progress	Testing northern Ceibal geophysics anomaly. Earlier mechanical failure caused delay
CEDDH008	960 - in progress	Testing northern Ceibal geophysics anomaly
CHDDH014	778 - in progress	Testing southern Ceibal geophysics anomaly
Tesorito	TS-DH57	1201 - complete, assays pending	Testing area between Tesorito and Miraflores
TS-DH60	701 - complete, assays pending	Testing Tesorito western edge and depth extensions
TS-DH61	600 - in progress	Testing area between Tesorito and Miraflores
TS-DH62	800 - complete, assays pending	Testing northern extension of Tesorito
TS-DH63	53 - in progress	Testing northern extension of Tesorito towards Claras
Claras	ACDH001	212 - complete, assays pending	Stopped early due to local ground instability
ACDH002	663 - complete, assays pending	Testing new Claras target

Table 3: The 2022 drill program has consisted of deep holes across several targets.

The fourth deep penetrating IP geophysics survey was completed during quarter and covers the Chuscal area. It is anticipated that outputs of the survey will guide the next campaign of drilling at Chuscal and surrounds.

Target generation activities continued at pace with several field mapping and sampling programs progressing during the quarter within the Quinchia region.

Results of these activities are pending as at the date of this report.

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