Mithril Resources : Quarterly Activities Report and Appendix 5B

ASX ANNOUNCEMENT

22 April 2022

MARCH 2022 QUARTERLY ACTIVITIES REPORT

Highlights - Copalquin Gold-Silver, Mexico

• • High gold and silver extractions achieved in in metallurgical test work on El Refugio core sample composite utilising conventional processing methods

• • At La Soledad, first round of drilling on eastern side of clavo intercepted sheeted vein system at relatively shallow downhole depths

  • o 6.00m @ 1.84g/t gold, 23.0 g/t silver from 41.0m, (CDH-109), plus 1.00m @ 1.79 g/t gold, 25.0 g/t silver from 55.0m, plus 1.70m @ 1.77 g/t gold, 117 g/t silver from 59.3m, plus 2.14m @ 0.89 g/t gold, 63.9 g/t silver from 78.5m

  • o 4.80m @ 0.91 g/t gold, 56.8 g/t silver from 70.75m (CDH-110), plus

    2.30m @ 1.75 g/t gold, 135 g/t silver from 109.0m, including

    0.55m @ 5.89 g/t gold, 474 g/t silver from 110.75m

  • o 8.10m @ 1.64 g/t gold, 106 g/t silver from 77.3m (CDH-111), including

    0.80m @ 4.59 g/t gold, 212 g/t silver from 78.3m, and including

    0.95m @ 7.99 g/t gold, 526 g/t silver from 82.45m, plus

    1.00m @ 1.50 g/t gold, 30.0 g/t silver from 98.0m, plus

    0.75m @ 1.59 g/t gold, 220 g/t silver from 107m, plus

    0.50m @ 2.21 g/t gold, 61.0 g/t silver from 140m, plus

    1.00m @ 1.20 g/t gold, 2.00 g/t silver from 190m

• • At Los Pinos strong alteration, gold in soils and now narrow, high-grade veins in early-stage drilling for development of this target along strike of El Refugio-La Soledad

  • o 0.60m @ 9.91 g/t gold, 161 g/t silver from 78.1m (CDH-113)

• • Major target area identified at La Montura, 2km east and along strike of El Refugio-La Soledad maiden resource area (373koz Au + 10.9Moz Ag see page 13 for maiden resource details)*

• • Conceptual exploration access - mine design indicates El Refugio-La Soledad has potential as an underground project utilising common contemporary mechanised mining methods suited to narrow to moderate mining widths

• • District mapping, and geochemical sampling has developed new drill targets at Copalquin

Highlights - Corporate

• • Total cash of A$4.3M including inflow of A$0.5M from Limestone Well sale and A$3.5M (before costs) from share placement, both completed post end of quarter

• • Mexican value added tax refunds continued throughout the quarter with a total of ~A$0.27M received

DIRECTORS	MITHRIL RESOURCES LIMITED	REGISTERED OFFICE
John Skeet - Managing Director & CEO	ACN: 099 883 922	Level 4
Garry Thomas - Non-Executive Director	ASX: MTH	100 Albert Rd
Stephen Layton - Non-Executive Director	South Melbourne VIC 3204
Claire Newstead-Sinclair - Company Secretary	T: [phone]
www.mithrilresources.com.au	E:[e-mail]

Mithril Resources Ltd (ASX: MTH) (Mithril or the Company) is pleased to provide a quarterly update on activities at its Copalquin Gold Silver Project in Mexico for the period ending 31 March 2022.

Mithril Managing Director and CEO, John Skeet, commented:

"The work completed during the quarter has laid the groundwork for exploration drilling to develop the resource potential of the Copalquin District as well as drilling to expand the maiden resource which is already substantial due to its high-grades for gold and silver. Pre-development study work for metallurgy and mining indicate a simple and conventional development scenario. The recently completed share placement puts the Company in a strong financial position to carry out then next phase of work in the Copalquin District to further demonstrate the potential for significant gold and silver production."

COPALQUIN DISTRICT, MEXICO

HIGH GOLD AND SILVER RECOVERIES - EL REFUGIO COMPOSITE SAMPLE

A metallurgical test work program following the maiden mineral resource estimate (MRE) was completed by SGS Laboratories.(ASX Announcement 25 February 2022) Building on Mithril's excellent high-grade gold and silver maiden mineral resource estimate(ASX Announcement 17 November 2021), the high recoveries of gold and silver from the flotation and leaching test work reinforce attractive project metrics for the district.

The high-grade maiden MRE released 17 November 2021 is given at the end of this report in Table 4. The full report can be found here -Copalquin District - Maiden Mineral Resource Estimate.

The sample used for the test work is a composite sample from El Refugio crushed drill core. The average grade of the composite is similar to the average grade of the maiden resource estimate. The calculated composite grade from the flotation test work is 4.52 g/t gold and 124 g/t silver.

Flotation test work has been completed using the same reagent scheme determined for the Palmarejo deposit (located in the Sierra Madre Trend and north of the Copalquin District) test work, due to the similarities in geology and mineralogy between Palmarejo and El Refugio at Copalquin.

Description 48 hr Leaching Time	Test Au % Ag %	Duplicate Test Au % Ag %
Flotation Concentrate (% recovered)A	94.2	87.6	92.9	87.9
Leaching of Flotation ConcentrateB	97.3	93.4	97.4	92.9
Flotation Tailings (% remaining)C	5.8	12.4	7.1	12.1
Leaching of Flotation Tailing D	85.8	76.5	82.9	75.7
Total Recovery to solution (B x A)+(DxC)	96.6	91.3	96.4	90.8

Table 1- Summary of the flotation and the flotation product cyanide leaching recoveries giving the final gold and silver recoveries to solution.

Intensive cyanide leaching of the flotation concentrate and low-level cyanide leaching of the flotation tailings allows high recovery of silver to be achieved. Cyanide leaching of silver is slower under the typical conditions used for gold only leaching. Recovering a high proportion of the silver into a concentrate (by flotation or gravity) allows the concentrate to leached under intensive conditions resulting in higher silver recovery. The overall recovery to solution is 96.5% for gold and 91% for silver. Gold and silver would be extracted from solution using the widely used Merrill-Crowe zinc precipitation method and then smelted to produce metal gold-silver ingots.

The process flowsheet for El Refugio-La Soledad resource material being tested is as shown below in Figure 1. This is the same flowsheet is used at similar deposits in the Sierra Madre Trend, Mexico including Palmarejo and SilverCrest Metals' Las Chispas (under construction).

Figure 1 - Process flow sheet proposed for the El Refugio-La Soledad typical of other properties in the Sierra Madre Trend with similar geology

Further metallurgical test work will allow the crushing, grinding, thickening, flotation and filtration equipment sizes to be determined.

HIGH-GRADE MULTIPLE VEIN INTERCEPTS AND TARGET EXPANSION

Copalquin is well positioned for significant gold-silver resource growth throughout 2022, with planned deep drilling at El Refugio and confirmed extension at Refugio West(ASX Announcement 17 March 2022).The Company's expansive exploration program across the district has delivered excellent results ahead of resource development drilling along strike from the high-grade maiden resource at El Refugio.

Drilling at La Soledad and East at Los Pinos

The series of holes completed at La Soledad have clearly shown the existence of a sheeted vein system and association with a granodiorite pre-mineral intrusion. The intrusion of the granodiorite into the favourably-fracturing andesite rock unit, created cracks and voids that later became sites for mineralised deposits. Where there are voids along the gold-silver veins, favourable conditions lead to the formation of high-grade 'clavos' (oreshoots) such as the one mined historically at La Soledad and discovered at El Refugio, as part of the maiden resource drilling. The recent drilling andinterpretation at La Soledad are guiding the discovery of further clavos and veins along strike and deeper at La Soledad, with highly encouraging results to date.

Figure 2 - Cross-section 40 for drill results at La Soledad holes CDH-109 to 111 plus previous drill hole results for holes CDH-008 and 011. Sheeted vein system associated with the granodiorite intrusion.

At Los Pinos, the ridge just to the east of El Refugio-La Soledad, the extensive surface alteration and the strong gold in soils anomaly rank this area as a high-priority target. To date, only a handful of exploration holes have been completed at Los Pinos and importantly, drill hole CDH-113 has intercepted a narrow, high-grade vein only 78 metres down hole. Locating this high-grade vein allows planning of further drilling at Los Pinos as we continue to search of the main source of the alteration and strong surface gold anomaly. The angle and orientation of the vein suggest it may be on the same

District Middle Section - Target Expansion

The dry season mapping program (January-May) in the Copalquin District further strengthens data supporting the high prospectivity of the district. Already we have demonstrated the high-quality resource potential of the district with the excellent maiden resource with high-grade gold and silver at El Refugio-La Soledad delivered after only 15 months of drilling. New targets to the east and to the west of Refugio along the trend of rhyolite intrusives are being developed towards being drill-ready for expansion of the resource footprint. The best of these new targets to-date is the La Montura (the saddle) area which has over 500 meters of strike length of silicified rhyolite (highlighted in green, in the figure below. Soil sampling is underway at La Montura in preparation for drilling.

La Montura

Figure 3 - Copalquin 70km2 concession area showing exploration target areas and locations of the schematic long sections shown in

Figure 4and Figure 6

Figure 4 - Schematic long section of the Copalquin District middle mineralised trend which includes the maiden JORC resource at El Refugio/La

Soledad.