Taruga Minerals : Quarterly Activities & Cashflow Report

26 October 2020

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED

30 SEPTEMBER 2020

Taruga Minerals Limited (Taruga or the Company) is pleased to present its quarterly activities report for the September 2020 quarter.

HIGHLIGHTS:

• Maiden drilling program commenced at Woolshed/Metabase and the Jenkins prospects, Flinders, in early October, targeting coincident soil, rock chip and geophysical anomalies.
  o Approximately 4,000m of Aircore drilling has been planned from 6 drill fences which will cover roughly 2km of strike at Woolshed/Metabase and will test over 200 - 300m in width. o All holes drilled at Woolshed and Metabase will be angled at -600 towards the west and
  will target mineralisation from the surface.
• High-gradechannel sample results reported at the Flinders Project. Significant results include:
  o 4m at 4.2% Cu including 2m at 8.4% Cu and 1m at 16.4% Cu (Woolshed) o 4.5m at 2.8% Cu including 2m at 3.7% Cu (Rainy Day)
• Significant 3km copper in soil anomaly coincident with magnetic trend at Woolshed/Metabase, Flinders.
• New high-grade copper and silver rock chip results from waste rock at Main Lode and Rambla: o WK0556 - 51.9% Cu; 10.8g/t Ag at Main Lode
  o WK0539 - 41.7% Cu; 14.4g/t Ag at Main Lode o WK0581 - 5.1% Cu; 22.8g/t Ag at Rambla
• Confirmed mineralised strike length of 15km at Flinders - 0.5% Cu and 0.018g/t Au at surface from Mt Stephen Prospect in the south and Jenkins Prospects in the north - 2060ppm V, 237ppm LREE, 29ppb Au, 250ppm Cu and 0.32g/t Ag

• Completion of gravity modelling and interpretation in the northern portion of the Flinders Project has identified significant gravity anomalies, directly coincident with or on the periphery of magnetic highs and geochemical anomalies

o Significant pipe and dome-like gravity anomalies identified at Jenkins which could potentially represent breccia pipes or intrusions of a significant scale

• New project acquisition, with the inclusion of the Mt Craig Copper Project (MCCP) as part of the Strikeline Resources option agreement. MCCP contains over 60 known copper occurrences and 32 historic small scale and artisanal copper mines over a continuous strike length of more than 34km

• Appointment of highly experienced mining and commercial executives, Paul Cronin and Eric de Mori as non-executive directors of the Company

• Following an oversubscribed placement to sophisticated and professional investors to raise $4,000,000, the Company remains well funded with ~$5.2 million cash on hand at the end of the September quarter

OPERATIONS

Australia

On 14 May 2020, the Company announced that the Company has entered into a 12-month Option Agreement, in which Taruga can purchase a 100% interest in Strikeline Resources Pty Ltd (Strikeline) and its Flinders IOCG-style Project (Project) located 80km north of Port Augusta, South Australia, 80km from Carrapateena and 160km from Olympic Dam IOCG's, with power and rail on the lease (Option Period). On executing the terms sheet with Strikeline, Taruga paid a cash consideration A$15,000, with a further A$25,000 payable within 6 months in the event the Company elects to extend the Option Period.

Subject to Taruga having paid the cash consideration and having incurred exploration expenditure totalling A$250,000 across the Flinders Project prior to the first anniversary, Taruga will have earned the right to exercise the option to acquire 100% ownership of Strikeline and the Flinders Project through the issue of 40 million shares to the Strikeline vendors.

Flinders Project, South Australia

Copper mining has been conducted sporadically on the Flinders Project from 1863-1909, and subsequently iron oxide was mined in the 1980's from Main Lode Prospect in the Warrakimbo Ranges.

The Flinders Project covers 647km2 along the eastern limit of the Gawler Craton in a similar structural setting as the nearby Olympic Dam and Carrapateena deposits. IOCG-style mineralisation has been mapped and sampled at surface at Flinders, however, and not under several hundred metres of sedimentary cover, as is often the case within the highly prospective G2 structural Corridor shown in Figure 1. Mineralisation usually occurs within diapiric and elongated breccias hosted within structures that crosscut the marine metasediments which dominate the prospect areas. The breccia is often associated with mineralised and altered intrusive meta-basalts and dolerites that can be mapped for over 6.4km along the dominant Mt Stephen Thrust (MST) (Figure 5). Reprocessing and interpretation of the governmental regional magnetic data has increased the potential mineralised strikelength to 15km with the inclusion of the Jenkins North and South anomalies. Sub-structures and fault splays which branch out from the MST have been proven to contain high-grade copper mineralisation, indicating the potential for a larger "fluid system" or mineralised network beneath the surface.

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Figure 1: The Flinders Project Regional and Structural Setting including the Gawler Graton outline as

published by the Geological Survey of South Australia in purple

Recent Exploration

Gravity Modelling

On 5 October 2020, the Company announced that it had completed detailed geophysical modelling and interpretation over the northern portion of the Flinders Project, with drilling targets confirmed. Significant gravity anomalies, directly coincident with or on the periphery of magnetic highs and geochemical anomalies have been defined at Woolshed and Jenkins as shown in Figures 2 and 3.

At Woolshed, the targeted zone of mineralisation is bounded by high-density footwall and hangingwall lithologies. The highest-grade rock chips at Metabase were collected directly above an isolated gravity high, while the high-graderock-chips and channel samples collected at Woolshed are located at the southern tip of a similar gravity high (Figure 2). Both isolated gravity anomalies are coincident with a magnetic high and lie within the contiguous copper in soil anomaly at Metabase and Woolshed which extends over 3km.

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Figure 2: Significant Gravity and Magnetic Anomalies over the Northern Portion of the Flinders Project showing

Prospects and Geophysical Anomalies

Jenkins North and South

Four highly significant gravity anomalies have been identified from the high-resolution gravity survey and inversion modelling at Jenkins as shown in Figures 2 and 3. Similar to the Carrapateena geophysical anomaly (OZ Minerals Ltd), the Tantum and Immanis gravity anomalies (Figure 2) are coincident with the periphery of the magnetic highs of Jenkins North and South prospects. In contrast, the Draco gravity anomaly is directly coincident with the southern extension of the Jenkins North magnetic core.

The Tantum gravity anomaly is a high-density,pipe-like feature shown in Figure 3 which sits at the hinge of the Jenkins North and Jenkins South magnetic highs and has been modelled to depths exceeding 2.7km. The Tantum anomaly lies in a potential crush zone where the WE-trending Jenkins South structure intersects the NNW-trending Jenkins North structure. This relationship can be seen in the aerial imagery which highlights a series of lineaments at various orientations to one another.

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