Rafaella Resources : RFR strengthens PGM-Ni-Cu portfolio in Canada

Rafaella Resources

Limited

onlyABN: 49 623 130 987

ASX: RFR

Pr jects

SPAIN use∙ Santa Comba

W-Sn development ∙ San Finx

W-Sn development

CANADA

∙ Midrim/Laforce PGM-Ni-Cuexploration

personal∙ A otta & Lorraine PGM-Ni-Cu exploration

∙ McCleery

Au-Co-Cu-Ag exploration

ForRegiste ed Address

Level 8

175 Eagle Street

Brisbane QLD 4000 AUSTRALIA

Postal Address

GPO Box 2517 Perth

WA 6831 AUSTRALIA

1. [phone]

1. [phone] [e-mail] www.rafaellaresources.com.au

For further information please contact: Rafaella Resources

Steven Turner Managing Director [phone] [e-mail]

ASX ANNOUNCEMENT

24 May 2022

RAFAELLA STRENGTHENS POSITION IN CANADIAN HIGH-

GRADE PGM, NICKEL AND COPPER SULPHIDE

EXPLORATION

Rafaella Resources Limited (ASX:RFR) ('Rafaella' or the 'Company') announces that it has acquired a second significant battery metals project area in Canada, adjacent to its existing PGM-nickel-coppersulphide assets thereby consolidating an exciting area highly prospective for platinum, palladium, nickel, copper and gold.

The Company has signed a binding agreement with Chase Mining Corporation Limited to acquire the Alotta and Lorraine PGM-Ni-Cu projects located in Quebec, Canada ('Alotta and Lorraine'). The Alotta and Lorraine tenement packages (93.2 km2 of granted licences) are adjacent to Rafaella's existing Midrim and Laforce PGM-Ni-Cu projects ('Midrim and Laforce'). This deal consolidates 157.4 km2 of the eastern portion of the Belleterre-Angliers Greenstone Belt ('BAGB'), located in the Abitibi-Pontiac Greenstone Sub-Province, under Rafaella's control and elevates the strategic importance of the Canadian operations.

Highlights

• Binding agreement to acquire 100% of the Alotta and Lorraine PGM-Ni-Cu battery metals projects for A$100,000 cash and A$500,000 in Rafaella shares.
• Alotta and Lorraine are located immediately south of Rafaella's 100% owned Midrim and Laforce PGM-Ni-Cu battery metals projects, with a number of exciting geophysical anomalies straddling both land packages.
• Previous open pit mining at Lorraine during the 1960s produced recovered grades of 0.38% nickel, 0.90% copper, 0.62 g/t gold. PGMs, silver and cobalt were also reported but were not specified (Charlton, 2003).
• Adds a further 34 discrete drill targets (10 in the Alotta region and 24 at Lorraine) to the 36 target areas recently identified, using both new geophysics and historic drilling information, by SRK Exploration Services (SRK ES) at the Midrim and Laforce projects. Seven of these new targets are classified as Priority 1.
• VTEM anomalies from the 2019 survey over the region are coincident with mineralisation in historical drilling, supporting the interpretation that the gabbro intrusions are mineralised with PGM-Ni-Cu magmatic sulphides and are thus prospective for other sulphide accumulations, are conductive and can be imaged with VTEM.
• Drill results at Alotta are comparable to the historic high-grade polymetallic intersections at Rafaella's existing Midrim project, located just 1.5 kms NE of Alotta.
• Rafaella's strategy and capital allocation has been rebalanced to reflect the compelling drill targets, which include both discrete near-surface targets and deeper systems, within this known productive geology.
• The proposed acquisition of the Borralha and Vila Verde tungsten projects in Portugal from PanEx has been terminated.
• Iberian tin/tungsten strategy will focus on carefully progressing the Spanish development stage projects through their respective mine permitting stages.

 A$100,000 cash and A$500,000 in Rafaella shares at a deemed price of A$0.06/share in line with the Company's recent placement.1

 Consideration shares to be held in a voluntary escrow for 6 months.

Managing Director, Steven Turner said: "The acquisition of Alotta and Lorraine is extremely exciting for the Company and significantly expands Rafaella's battery metals position in the BABG, a productive yet under-explored geological region that is known to host high grade sulphide mineralisation, rich in platinum group metals, nickel, onlycopper and gold. Canada has demonstrated a commitment to supporting the critical battery metals mining sector and the Canadian Government's Budget for 2022 included a commitment to climate action and supply chain

security through the provision of strategic funding to the mining sector.

Rafaella Resources continues to believe in the significant value of our Spanish tin-tungsten development projects and in the importance of securing European domestic production of critical metals, so the Company will continue to support San Finx and Santa Comba as they step through permitting. However, Rafaella has elected to withdraw from the Portuguese acquisitions to allow capital to be redeployed to the enhanced Canada portfolio."

Acquisition

useA binding agreement for the acquisition of the Alotta and Lorraine high-gradePGM-Ni-Cu assets has been executed with Chase Mining Corporation Limited as follows:

The acquisition of Alotta and Lorraine, which are adjacent to the Midrim and Laforce projects respectively, will

mean Rafaella's strategic focus will shift to battery metal exploration in the favourable jurisdiction of Canada. personalThe Company has engaged Orix Geoscience ('Orix') to manage an exploration programme covering the combined portfolio. Orix Geoscience previously managed the exploration programme when these assets were

under common ownership. SRK Exploration Services ('SRK ES') has conducted the technical due diligence following their detailed review of the Midrim and Laforce assets earlier this year.

Enhanced Canadian Portfolio

For

Figure 1: Regional Geology of the Midrim, Laforce, Alotta and Lorraine Projects in the Belleterre Angliers Greenstone Belt,

compiled by SRK ES. Note that Kelly Lake sits outside of the Chase Claims.

1 See ASX announcement dated 16 February 2022 "Rafaella completes oversubscribed $2M Private Placement"

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Alotta and Lorraine PGM-Ni-Cu Projects

The Alotta and Lorraine Projects are located within the Belleterre-Angliers Greenstone Belt (BAGB) in the Pontiac onlysub-province, the youngest and southernmost greenstone belt in the Archean Superior Province of the Canadian Shield. This volcano-sedimentary belt is situated just north of the Grenville Front and south of the Abitibi Greenstone Belt. The belt is divided into three parts known as the Baby, Lac des Bois, and Belleterre Groups.

The northern part of the Baby Group consists of komatiitic basalts at the base, overlain by tholeiitic basalts that are in turn overlain by calc-alkali intermediate to felsic volcanic rocks and volcaniclastic sedimentary rocks. The southern part of the Baby Group and the Lac des Bois and Belleterre groups lack komatiitic rocks but include tholeiitic basalts and calc-alkalic volcanic rocks.

PGM-Ni-Cu mineralisation forms during emplacement of the intrusive phases when sulphur become immiscible in the magma forming its own liquid that concentrates within the magmatic conduit, or chonolith, or within the usefootwall immediate to the intrusion. PGMs have an extremely high affinity for this sulphide-rich liquid and are

fficiently scavenged and concentrated from the magma.

The Alotta Project consists of 20 claims in the Ville Marie area of western Quebec, south of the Rouyn-Noranda mining camp. The Property is centred in Baby Township, Témiscamingue County, Quebec approximately 25 km east of Lake Timiskaming and the Quebec-Ontario provincial border. The Alotta Project is situated SW of Midrim on similar linear chonolithic gabbroic bodies (Figure 4).

The historic Alotta drill results, as reported in the Kilbourne reports, are comparable to the historic high-grade intersections at Rafaella's existing Midrim project, located just 1.5 kms east-northeast of Alotta. Selected historical intersections from Alotta are presented in Table 1.

Table 1. Selected historic drill intersections from the Alotta licences.

personalFor		BHID			From		To			Interval		2PGM+Au		Ni (%)		Cu (%)		Company		Reference
											(g/t)
		ZA-18-01			70.60		76.77			6.17		3.76		0.95		3.48		TopTung Ltd.		Kilbourne (2018)
		ZA-18-01	70.60	81.26		10.66	2.44	0.69	2.38		TopTung Ltd.		Kilbourne (2018)
		ZA-18-02			25.83		59.00			33.17		0.96		0.56		0.81		TopTung Ltd.		Kilbourne (2018)
		ZA-18-03	40.70	61.50		20.80	1.41	1.18	1.50		TopTung Ltd.		Kilbourne (2018)
		ZA-18-04			53.10		77.27			24.17		1.85		1.23		2.31		TopTung Ltd.		Kilbourne (2018)
		ZA-18-05	61.15	72.43		11.28	3.10	2.17	2.15		TopTung Ltd.		Kilbourne (2018)
		ZA-18-06			43.17		51.30			8.13		1.64		1.74		2.06		TopTung Ltd.		Kilbourne (2018)
		ZA-18-06	63.30	68.60		5.30	1.99	3.04	0.84		TopTung Ltd.		Kilbourne (2018)
		ZA-18-07			34.55		54.25			19.70		0.56		0.44		0.49		TopTung Ltd.		Kilbourne (2018)
		ZA-18-08	85.20	94.40		9.20	3.55	2.59	2.79		TopTung Ltd.		Kilbourne (2018)
		ZA-18-09			81.00		84.68			3.68		1.17		0.59		0.60		TopTung Ltd.		Kilbourne (2018)
		ZA-19-02	30.25	37.00		6.75	0.24	0.15	0.32		ZOSC		Kilbourne (2020)
		ZA-19-03			31.70		73.00			41.23		1.14		0.87		0.93		ZOSC		Kilbourne (2020)
		ZA-19-04	49.00	71.60		22.60	1.09	0.77	1.16		ZOSC		Kilbourne (2020)
		ZA-19-05			54.00		71.00			17.00		3.33		1.52		2.90		ZOSC		Kilbourne (2020)
		ZA-19-06	64.50	78.50		14.00	1.53	1.54	1.56		ZOSC		Kilbourne (2020)
		ZA-19-07			57.00		66.15			9.15		0.35		0.23		0.43		ZOSC		Kilbourne (2020)
		ZA-19-08	55.50	79.90		24.40	1.15	0.68	1.15		ZOSC		Kilbourne (2020)

SRK Exploration Services has not independently verified this information for quality control or quality assurance nor been to the sites.

A VTEM geophysical survey was flown in March 2019. Core Geophysics identified multiple targets at Alotta. Only 2 of these targets have been drill tested. SRK ES has suggested adding 10 of these target areas (4 classified as Priority 1) to a potential consolidated programme (Figure 2).

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Figure 2: Target areas at Alotta identified by SRK ES following detailed review underlain by MegaTEM Xch5 anomaly

map.

The extensions to the geophysical anomalies for the Midrim-Lac Croche deposits are found within the Alotta licences. These gabbro intrusions have been demonstrated to be prospective for PGM-Ni-Cu mineralization and the inclusion of their extensions will permit a more thorough exploration of the mineralised intrusive conduits which onlyformed the known deposits. It will also be possible to explore for other sulphide accumulations within the fertile intrusions, which may be deeper and in previously unrecognised settings. The recent application of modern

e ectromagnetic survey methods has permitted better imaging of potential subsurface conductors.

usepersonalThe Lorraine licences, located in the south of the Belleterre-Angliers Greenstone Belt, contain the historically mined Lorraine nickel mine (producing 661,480 tonnes with recovered grades of 0.38% nickel, 0.90% copper, 0.62 g/t

gold, with PGMs, silver, PGMs and cobalt being reported but amounts not specified, between 1964-68. Charlton, 2003), the Blondeau nickel deposit (250,000 tonnes at 0.45% Ni and 0.45% Cu. Hinzer, 1985. GM 43679) and the Kelly Lake PGM-Cu-Ni deposit licences (non-compliant historic resource of 1.4 Mt at 1.3 g/t Pt+Pd, 0.7% Ni %,

Forand 0.7% Cu; Globex Mining Press Release, 2017) (Figure 5). The gabbro intrusions within the licences are thus demonstrated to be fertile and capable of producing sulphide accumulations.

A 2019 VTEM survey revealed a number of discrete, high conductance bodies, in the vicinity of, or along strike of known mineralisation, or coincident with historical Ni-Cu sulphide drilling intersections. To date, the majority of these have not been tested or were tested for other commodities, and these remain prospective.

More than 30 individual late-time bedrock conductors were identified across the Lorraine property. SRK ES has recommended adding up to 20 of these target areas (3 classified as Priority 1) to a consolidated programme. Another 4 targets are defined in the western portions of the licence where mafic-ultramafic intrusions are mapped but have not been covered by VTEM surveys. Activities would include ground EM and Ionic leach-testing of soils to vector to mineralisation and produce drill ready Maxwell plate models.

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use only

Figure 3: Target areas at Lorraine identified by SRK ES following detailed review, underlain by VTEM Tau B-Field anomaly

map.

personal

Midrim and Laforce

The Company already owns a 100% interest in the high-gradePGM-Ni-Cu assets located in the Belleterre-Angliers Greenstone Belt. Activities undertaken in 2021 to better understand their potential, including a low-frequency heli- borne VTEM survey followed by a ground-floor fixed loop EM, have further increased the Company's confidence in these assets. The Company now has several drill ready targets as well as a detailed and structured exploration

rogramme.

In January 2022 SRK ES undertook a geological review of the Midrim-Lac Croche and Laforce licence areas. A total of 36 target areas have been identified for possible follow-up work, including a high priority drill ready target at

MRB-01.

For

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