PNX Metals Limited announced that it has executed a sale and purchase agreement with private Company Ausgold Trading Pty Ltd. ("Ausgold") to acquire the Mt Porter gold Deposit ("Mt Porter") for consideration of $1.05 million to be paid upon Completion (incorporating PNX shares with a deemed value of 0.04c and cash). Further staged payments are required subject to certain resource scale and development hurdles being met (refer Key Terms for further information). The acquisition is consistent with PNX's strategy to consolidate nearby projects which host existing gold, silver or base metals mineral resources to support the proposed Fountain Head and Hayes Creek development (Project), and have significant exploration upside. The Mt Porter Mineral Lease (ML23839) is situated approximately 50 km southeast of the proposed Plant and Infrastructure at Fountain Head via the existing Mt Wells Road (Figure 1). A JORC 2012 compliant Mineral Resource Estimate (MRE) of 681,000 tonnes at 2.2 g/t Au for 48,200 oz Au, with 84% reporting to the higher-confidence Indicated category, was completed by independent mining consultants Measured Group Pty Ltd. ("MG") on 28 June 2022 (refer Table 1 below and JORC tables for full details). PNX's current exploration and development projects are located approximately 170km south of Darwin in the Pine Creek region of the Northern Territory. Exploration Potential and Recommendations; Additional areas of exploration potential have been identified to the north and south of the Mt Porter Mineral Resource. A further 224 reverse circulation and diamond drill holes have been drilled outside of the MRE. In the Mt Porter South area, gold mineralisation was discovered over a significant strike extent with a best result of:9m @ 1.55 g/t Au from 2m (MPOP037); At Mt Porter North, a best intercept of: 8m @ 8.38 g/t Au from 54m (MPRC089). Further work interpreting the geology to develop updated models for Mt Porter South and North is underway. Importantly, all of the historic diamond drill core has been preserved, and so significant work on reinterpreting the geological model can be achieved prior to drilling new holes. Further work on the regional geology will increase the current understanding of controls on mineralisation and
potentially lead to the identification of new areas of gold mineralisation. Work recommended by MG includes: Systematic geochemical program (soil grid) around known mineralisation areas Detailed geophysical survey (magnetics and IP) Detailed structural mapping Deeper drilling program to determine mineralisation at depth Key Terms of the Agreement; PNX to acquire a 100% interest in ML23839 from Ausgold for the following consideration: Tranche 1 - 200 million fully-paid PNX shares (with a deemed value of $0.8 million based on PNX share price of 0.04c) to be issued within 5 business days of Completion using the Company's existing capacity under ASX Listing Rule 7.1. The shares will be subject to voluntary escrow until Title transfer occurs. AUD 250,000 cash to be paid at Completion Performance-based payments comprise: Tranche 2 - A$1 million in cash or shares, at PNX's election (and subject to any required approvals), when a Mineral Resource Estimate with more than 100,000 oz gold is estimated using a 1 g/t Au cut-off, of which at least 50,000 oz gold reports to the Indicated category under the JORC Code, 2012, within the Mt Porter ML, and Tranche 3 - A$1 million in cash or shares, at PNX's election (and subject to any required approvals), on the production of 10,000 ounces of gold (recovered) from Mt Porter If Tranches 2 and 3 are not satisfied within 5 years of the Completion date then these hurdles are deemed to have not been met and no payments are due As part of the transaction, the Company will also assume the following existing royalty obligations: 1% net smelter return royalty to existing royalty holders, capped at AUD 1 million; and 1.25% net smelter return royalty to an existing royalty holder PNX to be nominated as Operator, and to replace the current environmental bond (approx. AUD 11K) relating to groundwater monitoring bores. The Completion of the Agreement is subject to certain Conditions Precedent typical of an agreement of this nature including PNX obtaining Foreign Investment Review Board (FIRB) and in principle Ministerial approval for the title transfer If for any reason, the Agreement terminates after the Tranche 1 Shares have been issued but before Completion occurs, PNX will have the option to either buy back the T1 Shares for $1.00 in aggregate or to direct Ausgold to sell the Tranche 1 Shares on market and remit all proceeds of sale to PNX. Total Project Mineral Resources; Near surface oxide and free milling gold mineral resources capable of being processed through the proposed Fountain Head CIL Plant between Fountain Head, Glencoe and Mt Porter now total 283,200 oz. The Mt Bonnie and Iron Blow zinc-gold-silver-rich massive sulphide deposits host polymetallic mineral resources and contain 237,700 oz Au, 16.2 M oz Ag, 177 kt Zn, 37 kt Pb and 10 kt Cu. PNX's Global Mineral Resources now contain a total metal inventory of: 520,900 oz gold, 16.2 M oz silver, 177 kt zinc, 37 kt lead and 10 kt copper.