Lunnon Metals Limited provided an update on targeting activities at the recently acquired Silver Lake nickel deposit, an addition to its Kambalda Nickel Project (KNP). An Exploration Target of between approximately 0.65Mt and 1.3Mt grading between 1.3% Ni and 2.7% Ni has been estimated. The Company highlights that the potential quantity and grade of the Exploration Target stated above is conceptual in nature, that there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Following completion of the transaction with St Ives Gold Mining Co. Pty Ltd, a wholly owned subsidiary of major global gold producer Gold Fields Ltd. (St Ives), the Company has been able to ramp up targeting activities including access to diamond drill holes within the 260km of historical core stored at the St Ives Kambalda Core Farm. As presented at the recent 2022 Australian Nickel Conference, the Silver Lake Hanging Wall prospect (SLHW) displays remarkably similar characteristics to the area (East Cooee H/W) that subsequently played host to the Baker Shoot discovery in late 2021.

These key elements include: The scale of SLHW - the area of interest has dimensions of approximately 600m (plunge extent) by 200m across plunge; The spacing of the historical WMC Resources Ltd. (WMC) drilling - SLHW was drilled on a broad approximate 100m x 100m pattern; The style of the nickel mineralisation identified in that drilling - there are consistent modest width, low to modest nickel grade intercepts hosted at the base of the second komatiitic flow; and Indication of higher-grade potential - geological logs and assay database entries for select diamond holes document the presence of discrete narrow, but high-grade massive nickel sulphides. Significant historical intercepts from the SLHW include (>1.0% Ni cut off): KD285 2.28m @ 3.08% Ni (from 345.34m): KD611 3.00m @ 2.01% Ni (from 455.0m); KD639 7.80m @ 1.87% Ni (from 482.7m); KD626 7.77m @ 1.64% Ni (from 367.23) and 3.20m @ 6.82% (from 375.20m); KD211 5.00m @ 1.75% Ni (from 400.81m); and KA11-121 1.70m @ 9.50% Ni (from 72.0m). EXPLORATION TARGET BASIS: An Exploration Target for SLHW has been estimated by the Company in accordance with the guidelines of the JORC Code (2012).

The work focussed on the extensive hanging wall surface known during the operational life of the mine as the `25H'. The combined tonnage and grade potential of the Exploration Target is estimated to be in the range of approximately 650,000t to 1,300,000t with an average grade of between 1.3% to 2.7% nickel. The Company highlights that the potential quantity and grade of the Exploration Target is conceptual in nature.

There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The Exploration Target is based on supporting geological information and drillhole data from WMC and interpretations by Lunnon Metals' geologists. Included in the data on which this Exploration Target has been prepared are the results from 14 surface and six underground diamond drillholes, completed by WMC during the 1970s and 1980s.

The details of the relevant SLHW drill intercepts were previously lodged with the ASX as an annexure to the Company's 2022 Australian Nickel Conference presentation slides on 6 October 2022. During verification of the Silver Lake database as part of the assessment of the Exploration Target, select assays were corrected leading to minor improvements in the previously reported nickel grades of certain drill holes. Annexure 2 to this report includes the final assay intervals used in the modelled wireframe volume for the Exploration Target estimate.

The Exploration Target does not account for potential geological complexity, possible mining method or metallurgical recovery factors. The Exploration Target was estimated in order to provide an assessment of the potential scale and grade of the mineralisation intersected in drilling and supported by development and ore production in operating levels immediately up dip of the Exploration Target. The Exploration Target was defined by using the historical surface and underground drilling to generate a 3D model (within the Leapfrog Geo® 3D software environment) of the nickel mineralisation at the base of the second komatiite flow within the Kambalda Komatiite Formation.

This stratigraphic position is a known host to nickel mineralisation from which previous economic ore production has occurred at the Silver Lake nickel mine itself and the Jan Shaft nickel mine on the Company's southern project area at Foster-Baker. The recent discovery of the Baker Shoot to the north of Jan Shaft is also hosted at this same stratigraphic position. A lower cut-off grade of approximately 0.5% nickel was used to identify and tag drillhole intercepts in the 3D modelling environment as representing a continuous hanging-wall mineralised domain.

A solid 3D wireframe was created from these tagged drill intercepts. The wireframe was modelled to an extent that it: conformed to the geometry of the interpreted base of the second komatiite flow; is supported by adjacent drill intercepts; and had dimensions no greater than what is supported by observed occurrences of those styles of mineralisation in the other known locations mentioned above. The extent of the wireframe was limited to approximately 50m beyond the outermost of the 20 selected drillholes.

Tonnes (rounded to 985,000t) were calculated by multiplying the wireframe volume generated by an assumed density of 3.0 t/m3 that is a conservative estimate based on the Company's existing database. The true-width length weighted average grade of the modelled intercepts was 1.99% Ni. The resultant tonnage was then factored, by one third both up and down, to determine approximate lower and upper limits to the Exploration Target tonnage range.

Likewise, the average grade was also factored, by one third both up and down, to determine approximate lower and upper limits to the Exploration Target grade range. Lower and upper limit grades are reported to two significant figures. The Company notes that the upper end of the grade range also approximates the outcome recorded at the Baker Shoot following its progression from an Exploration Target at the time of the Company's Initial Public Offering (IPO) in June 2021 to JORC Code (2012) compliant Mineral Resource some 12 months later.

The upper end of the grade range is also consistent with previous historically mined nickel grades in the Kambalda region.