Vital Metals Limited (ASX: VML) ('Vital Metals' or 'the Company') is pleased to announce it has produced a rare earth carbonate sample within specification at its Nechalacho Project in the North West Territories ('NWT') in Canada.

Managing Director Geoff Atkins said, 'Production of a rare earth carbonate sample which meets specification is an important milestone as we move towards rare earth production at the project this year.

'It has allowed us to finalise the process flowsheet and commence our program to provide samples of our product to our off-take partner REEtec in Norway, as well as other potential customers. REEtec can use the sample as part of customer acceptance protocols as outlined in Vital's agreement with the company.'

Production of the sample follows Vital's execution of a definitive agreement with Norwegian rare earth separation company REEtec AS earlier this month and continues Vital's progress towards rare earth production in CY2021. Under the agreement, Vital will provide REEtec an annual volume of 1,000 tonnes of rare earth oxide (ex-cerium or 2,000t TREO) over five years, with the option to increase this offtake volume up to 5,000 tonnes REO (ex-cerium or 10,000t TREO) per annum over 10 years (subject to a corresponding supply agreement).

In accordance with the off-take agreement, Vital has been working with REEtec to finalise the rare earth carbonate specification and associated process flowsheet which will minimise the combined Vital and REEtec operating costs for the production of separated rare earth oxides.

Following the successful production of rare earth carbonate which satisfies REEtec's impurity specifications, Vital has commenced a bulk customer sample production program to generate sufficient quantities of rare earth carbonate to provide to REEtec, and other prospective customers, as part of the customer qualification process.

Benefication

Following the beneficiation test program previously undertaken (refer ASX Announcement dated 5 December 2019), the bulk customer sample program produced a high grade beneficiated product (>40% TREO) through a combination of sorting and gravity separation.

Approximately 200kg of sorted Nechalacho ore was crushed and then processed via a combination of Dense Media Separation (coarse fractions) and Wilfley tables (fines fractions). This process replicates both the treatment of sorted product to ensure homogeneity of product being fed into the kiln, and also the beneficiation of undersize material which will not sorted.

The combinations of ore-sorting, DMS and Wilfley table operations produced a beneficiated product in accordance with expectations with rare earth grades in excess of 40% REO. This product was combined prior to being processed through a kiln in preparation for the final leaching and precipitation program. As anticipated the material within the kiln was free flowing which is highly desired to reduce potential production bottlenecks which have struck other rare earth operations.

Output from the successful calcination program is currently undergoing a bulk leaching and purification program to produce rare earth carbonate products for delivery to customers. Carbonate product from the bulk customer sample program is expected to be produced and available for transportation to REEtec and other prospective customers by the middle of March 2021.

Vital is on track to commence REO production at Nechalacho this year with Stage 1 production from the North T pit. Vital has commenced a 30-hole drilling program at Nechalacho that aims to define a preliminary mine plane for its Stage 1 production from the Tardiff resource (94.7Mt @ 1.46% TREO with over 1.3Mt contained rare earths)1 . Vital's drilling program will test three high-grade targetsin the Tardiff deposit and evaluate potential expansion of the T Zone by targeting two additionalzones, the South T and the S zones, which lie adjacent to the planned North T pit.

Contact:

Mr Geoff Atkins

Tel: +61 2 8823 3100

Email: vital@vitalmetals.com.au

Forward Looking Statements

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Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance and achievementsto differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of resources or reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

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