Quarterly Activities and Cash Flow Report

ASX ANNOUNCEMENT

ASX code: SBR

29 October 2021

Quarterly Activities Report for the period ended 30 September 2021

Highlights:

• Scoping Study on the Sherlock Bay nickel-copper-cobalt sulphide project nearing completion, with processing cost inputs finalised and mining studies to be updated for an optimised cash-flow model focussed on higher-grade early in the mining sequence
• Potential has been identified to discover higher-grade to massive nickel sulphides at Sherlock Bay, where the resource is increasing in grade with depth and EM anomalies along strike are inadequately tested. The company will develop these targets for drill testing during the next Quarter
• Acquisition of the Ninghan Gold Project has been finalised. Highly gold-anomalous trends under-cover, north of the 3Moz Mt Gibson gold project, to be tested with further drilling planned
• Phase 2 studies on the Border Zinc-Lead Project and further exploration to expand resources is awaiting renewal determination from the Namibian Mining Ministry

Sherlock Bay Nickel Sulphide Project M47/567, WA - Scoping Study:

Sabre Resources Ltd ("Sabre Resources" or "Company") holds a 70% interest in the Sherlock Bay Nickel (sulphide) Project ("SBNP", or, "Project") on M47/567, located 40km east of Roebourne in the Pilbara region of Western Australia (see Figure 1).

The SBNP includes a current JORC 2012 nickel sulphide Measured, Indicated and Inferred Mineral Resource of 24.6 million tonnes @ 0.4% nickel (Ni), 0.09% copper (Cu), 0.02% cobalt (Co)1, containing

nearly 100,000 tonnes Ni, 21,700 tonnes Cu and 5,400 tonnes Co.

In April 2021 the Company commenced a scoping study on the SBNP ("Study") to determine the economics of the Project at current and projected nickel, copper and cobalt prices. Global nickel consumption is forecast to more than double by 2040 and the proportion used in battery precursors for electric vehicles (EVs) is projected to increase from 7% to over 30% of demand with almost exponential demand growth by 2030 (Wood-McKenzie,Paydirt Nickel Conference, Oct. 21). Nickel sulphide projects are favoured due to the high payability (>90%) of the nickel intermediates produced, that are suitable for EV battery production.

The current Study is based on previous work conducted from 2004 to 2007 by Sherlock Bay Nickel Corporation, that included heap-leach processing, and mining study reports completed by AMC consultants Pty Ltd (AMC), initially in 2005 and updated for the Company in August 20182.

The SBNP includes two nickel sulphide deposits, Symonds and Discovery, both of which are tabular and trend northeast-southwest over an approximately 1.5km strike corridor (see mineralisation envelopes, Figure 2), within the regional scale Scholl Shear Zone (Figure 1). The deposits are each approximately 15m to 20m wide and dip and plunge almost vertically (see cross section, Figure 3).

Figure 1 - Regional Geology and Location map of the Sherlock Bay Nickel Project in WA

Discovery

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Figure 2 - Discovery and Symonds Well 0.20% Ni Mineralisation Envelope, Plan View

The updated AMC mining report (2018)2 includes two, optimised, open-pits that would operate for up to 5 years and overlap with underground development and establishment of sub-level cave operations, via separate declines (see longitudinal section, Figure 3). The underground mines continue for the remaining 8 years of a 12-year operation, producing 2.0 million tonnes of "ore" per annum (Mtpa) once full production levels are reached.

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Figure 3 - AMC mining Study, optimised open-pits and underground development and mining layout2

The AMC mining report2 demonstrated that, at the applied nickel price of USD15,000/t (now >USD20,000/t), significant operating cash-flows could be generated from both the open-pit and underground operations and, subject to additional studies required to determine updated processing capital and operating costs, there is potential for an economic mining project to be established at SBNP.

The new work is based on inputs generated by Strategic Metallurgy Pty Ltd of Perth, who have completed the processing flow-sheet design, and Lycopodium, who are finalising their report on updated processing and surface infrastructure capital costs and processing operating costs.

The final stage of the Study is to incorporate the updated processing capital costs and operating costs with updated mining schedules to produce a new SBNP cashflow model at current nickel, copper and cobalt prices, that maximises cash-flow from the current resources. This will be an iterative process, with potential changes to mining schedules required to optimise cash flow in the early stages of the operation.

It is clear from the early evaluation of the Study inputs that cashflow is sensitive to mined grade. The average grade of the SBNP resource is 0.4% nickel with copper and cobalt credits. However, there is

evidence that the two deposits increase in nickel sulphide grade at depth, as shown in a cross section

through Symonds deposit, Figure 4. The nickel sulphide deposits occur in the footwall felsic volcanics but converge with the Sherlock intrusive (ultramafic/gabbro) contact at depth. Previous work has indicated that the nickel-copper-cobalt mineralisation is associated with the Sherlock mafic-ultramafic Intrusion, that has been demonstrated to be sulphur saturated. Anomalous base metal and PGE values with associated sulphides were reported by Outokumpu based on 1990s drilling and previous EM anomalies along strike of the Sherlock Bay deposit have only receiving limited testing.

The likely presence of higher-grade disseminated to massive sulphides at Sherlock Bay is also supported by the Andover discovery by Azure Minerals Ltd (ASX:AZR), located 40km to the west of Sherlock Bay (Figure 1). Andover has produced nickel intersections, with massive sulphide mineralisation, including 4.5m @ 3.95% Ni, 0.8% Cu, 0.16% Co from 486.6m in ANDD0045, and 16.8m @ 1.04% Ni, 0.46% Cu, 0.05% Co from 460m in ANDD004323. The mineralogy of these intersections and association with gabbro intrusions is similar to the Sherlock Bay nickel deposit associated with the Sherlock Intrusive (Figure 1).

In summary, the Company is focused on completing studies that maximise the cash-flow potential of the current SBNP resource, in parallel with developing a program to take advantage of the outstanding opportunity at Sherlock Bay to discover higher grade nickel sulphides in the near-resource environment. The addition of higher-grade nickel sulphide discoveries would likely have a very positive impact on the economics of the SBNP and drill-targeting is well advanced.

Figure 4 - Sherlock Bay Nickel Project, cross section 20,760mE, Symonds deposit with Ni Intersections

Ninghan Gold Project, E59/2402, WA

During the Quarter the Company completed the acquisition of the Ninghan Gold Project, E59/2402 ("the Project"), which is located approximately 50km southwest of Paynes Find in the southern part of the, highly gold-endowed, Murchison Province of Western Australia4.

Mt Gibson Gold Mine is located less than 20km along strike to the south of the Project and has previous production of nearly 0.9Moz's and a recently released resource upgrade by Capricorn Metals Ltd5 of 2.1Moz, for a total of 3.0Moz pre-mininggold endowment (see Figure 5 below).

Wolfram

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Figure 5 - Ninghan Gold Project on regional magnetics image (TMI, RTP) and Mt Gibson gold deposit