Renascor Resources : Quarterly Activities Report September 2020

ASX:RNU

Quarterly Report

30 September 2020

ASX Release

Quarterly report for the period ending 30 September 2020

Renascor Resources Ltd ABN 90 135 531 341

Head Office

36 North Terrace

Kent Town, SA 5067

Australia

CONTACT

T: [phone]

[e-mail]

www.renascor.com.au

ASX CODE

RNU

Developing

Australia's Largest

Graphite Deposit

Significant Events

• Renascor enters into non-binding Memorandum of Understanding (MOU) with Chinese anode company Shanxi Minguang New Material Technology Co. Ltd., part of one of China's largest battery supplier groups, to supply up to 10,000 tonnes per annum of Purified Spherical Graphite (PSG) from Renascor's 100%- owned Siviour Battery Anode Material Project in South Australia.
• Other significant milestones for the Siviour Battery Anode Material Project achieved during the quarter include:

o Completion of Battery Anode Material Study, confirming globally competitive costs for producing PSG through a vertically integrated mine and downstream processing operation in South Australia;

1. Independent qualification tests undertaken by German graphite specialist confirming Siviour PSG meets product specifications required for integration of PSG into lithium-ion battery anodes; and

• 1. Updated Mineral Ore Reserve estimate for Siviour confirming Siviour as the largest reported total Ore Reserve of graphite outside of Africa, and the second largest reported Proven Reserve of graphite in the world.1
• Multiple drill-ready gold targets identified at Renascor's 100%-owned Carnding Gold Project in South Australia's Central Gawler Craton.
• 1. Targets include the Soyuz Prospect, where previous drilling intersected shallow gold, with results including:

1. 7m @ 5.14g/t Au from 26m to end of hole, including 2m @ 16.42 g/t Au from 30m, and

1. 6m @ 4.94g/t Au from 14m.

1. Additional near-surface gold targets along-strike from Soyuz identified from induced polarisation survey.

• 1. Carnding Gold Project expanded with the approval of an exploration licence application that includes the area immediately north of the Soyuz Prospect. Expanded project area includes an extension of a large magnetic anomaly at Soyuz related to a discrete part of afractionated Hiltaba Suite intrusion.
• Renascor completes share placement to $3.6m to fund work streams for the Siviour and Carnding projects.
• Cash position of approximately $5.2m as of 30 September 2020.

1 See Figure 4 and Tables 4 and 5.

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ASX:RNU

Quarterly Report

30 September 2020

ASX Release

Quarterly report for the period ending 30 September 2020

Renascor Resources Ltd ABN 90 135 531 341

Head Office

36 North Terrace

Kent Town, SA 5067

Australia

CONTACT

T: [phone]

[e-mail]

www.renascor.com.au

ASX CODE

RNU

Developing

Australia's Largest

Graphite Deposit

Overview

During the recently completed quarter, Renascor's work programs were primarily focused on advancing the development the Siviour Battery Anode Material Project (Siviour) and the Carnding Gold Project (Carnding). See Figure 1.

Figure 1. Renascor's Exploration and Development Projects

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ASX:RNU

Quarterly Report

30 September 2020

ASX Release

Quarterly report for the period ending 30 September 2020

Renascor Resources Ltd ABN 90 135 531 341

Head Office

36 North Terrace

Kent Town, SA 5067

Australia

CONTACT

T: [phone]

[e-mail]

www.renascor.com.au

ASX CODE

RNU

Developing

Australia's Largest

Graphite Deposit

Siviour Graphite Project

MOU with 'Minguang New Material'

During the recently completed quarter, Renascor entered into its first PSG offtake agreement, a non-binding MOU with Chinese anode company Shanxi Minguang New Material Technology Co. Ltd. (Minguang New Material), a subsidiary of Fujian Metallurgical Holding Co. Ltd. (Fujian Metallurgical).

Minguang New Material is an anode manufacturing company developing a ¥5 billion (A$1 billion), 40,000tpa lithium-ion battery anode manufacturing facility in China's Shanxi Province.

Fujian Metallurgical is a large, Chinese state-owned enterprise with 142 subsidiaries (including 3 listed companies), more than 38,000 employees and total assets of approximately A$17 billion2. It has diversified holdings in steel production, metal refining and battery materials, including a controlling interest in Xiamen Tungsten (XTC) Co. Ltd., a Shanghai-listed company that owns XTC New Material Xiamen Co., Ltd., China's largest cathode producer in 20193, and Fujian Sangang (Group) Co. Ltd., a Shenzhen-listed steel producer and one of the largest 500 companies in China4.

The MOU covers the purchase of up to 10,000tpa of PSG over a ten year term, which represents approximately one-third of the projected initial PSG production capacity of Renascor's planned Battery Anode Material operation.

The MOU with Minguang New Material is non-binding and is intended to provide the initial framework for further negotiations in relation to price, product quality and other offtake parameters following completion of additional product validation tests.

Progress on additional PSG offtake

In addition to concluding the MOU with Minguang New Material, Renascor is concurrently advancing offtake negotiations for the balance of its planned PSG production capacity, including with anode manufacturers and lithium-ion battery companies headquartered in Northeast Asia and Europe.

While COVID-19 has caused some delays by preventing site visits and in-person meetings, Renascor continues to make progress in relation to PSG offtake, with current activities largely focused on undertaking PSG validation tests, responding to due diligence enquiries and negotiating potential offtake terms.

Battery Anode Material Study

During the recently completed quarter, Renascor completed a study assessing an integrated battery anode material operation (Battery Anode Material Study) in South Australia to produce PSG for lithium-ion battery anodes.

The Battery Anode Material Study updates a prefeasibility level study completed in February 2019 (PSG PFS) (see Renascor ASX announcement dated 21 February 2019) by

1. Source: Fujian Metallurgical (Holding) Co. Ltd website: http:www.fjyjkg.com.
2. Source: Benchmark Mineral Intelligence (2020).
3. Source: Fujian Sangang (Group) Co. Ltd website: http://www.fjsg.com.cn.

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ASX:RNU

Quarterly Report

30 September 2020

ASX Release

Quarterly report for the period ending 30 September 2020

Renascor Resources Ltd ABN 90 135 531 341

Head Office

36 North Terrace

Kent Town, SA 5067

Australia

CONTACT

T: [phone]

incorporating the results of the Siviour Graphite Concentrate Definitive Feasibility Study (Siviour Concentrate DFS) (see Renascor ASX announcement dated 11 November 2019) and adjusting and validating material inputs to the downstream PSG processing operation, including PSG and by-product production levels, Graphite Concentrate feedstock specifications, operating and capital costs and revenue projections.

Wave International, an independent resource development consulting group with specific expertise in downstream processing of industrial minerals, acted as the study manager and supervising engineer of the Battery Anode Material Study, as well as the original PSG PFS.

Financial highlights of Battery Anode Material Study

Estimated values of key parameters of the Battery Anode Material Study are shown below. Material assumptions are described in Renascor ASX announcement dated 1 July 2020.

[e-mail]

www.renascor.com.au

ASX CODE

RNU

Developing

Australia's Largest

Graphite Deposit

Average annual LOM production of PSG Life of mine/project

Start-up capital cost of mine and concentrator

Start-up capital cost of battery anode materialoperation

Total start-up capital (integrated operation)5

Payback of total start-up capital

NPV10 (after tax) of integrated operation IRR (after tax) of integrated operation

Average cost of Graphite Concentrate feedstock per tonne PSG

Average cost of converting Graphite Concentrates to PSG

Average gross PSG cash operating cost

Average net PSG cash operating cost (with byproduct credit6)

Projected PSG sales price

Net revenue of integrated operation EBITDA of integrated operation Project cashflow of integrated operation

Table 1. Financial highlights

28,000t

40 years

A$114mUS$79m

A$90mUS$63m

A$204m US$142m

4.5 years

A$713m US$499m

33%

A$1,107/t US$775/t

A$1,735/t US$1,214/t

A$2,842/t US$1,989/t

A$1,998/t US$1,398/t

A$6,160/t US$4,312/t

A$9,552m US$6,686m

A$6,267m US$4,387m

A$4,112m US$2,878m

1. The Siviour Concentrate DFS contemplates a second stage expansion in year five to be paid with projected cashflows. The projected stage two capital requirement is A$77 million or US$ 54 million.
2. Adjustment of A$786/US$550 per tonne made for by-product sales.

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