Aeon Metals : Walford Creek 2022 Exploration Strategy

ASX ANNOUNCEMENT

29th March 2022

WALFORD CREEK 2022 EXPLORATION STRATEGY

Highlights:

Aeon Metals Limited (ASX: AML) (Aeon or the Company) is pleased to provide an update on the proposed 2022 exploration activities at its Walford Creek Copper-Cobalt Project (Walford Creek Project or Walford) in north-west Queensland.

An extensive recruitment drive has been successful in securing a core field team to execute the 2022 drilling strategy at Walford Creek. Logistical planning has commenced, with the reopening of the Walford Creek Camp facility to occur in April 2022. The company has successfully secured the services of two multi-purpose drill rigs to commence a 19,000 m program in May 2022. The key focus of this program will be Mineral Resource expansion from along strike at Walford Creek and at nearby high-priority exploration targets refined from the 2021 high resolution geophysical survey work.

Aeon was recently awarded a grant from the Queensland Government Collaborative Exploration Incentive (CEI) scheme to undertake an airborne electro-magnetic survey (AEM) of its Walford Creek tenements, which host the existing Walford Creek Mineral Resources (see AML ASX release dated 18 February 2022). Aeon has now secured the services of a suitable contractor to complete this AEM in July 2022.

This additional high resolution geophysical data set will further enhance the existing targeting information that is based on high resolution magnetic and gravity data sets. Upon completion, Aeon will possess an outstanding high resolution geophysical data set that can be used to guide exploration targeting across the entire Walford Creek tenement package of some 400 km2.

Importantly, this will be the first time that exploration drilling at Walford Creek will have had the benefit of being guided by such a comprehensive suite of geophysical data informed by the geophysical signatures of an extensive existing drilling data set.

An aggressive drilling exploration strategy has been developed to make full use of this outstanding opportunity. With the completion of the Walford Creek Pre-Feasibility Study (PFS) expected in coming weeks, the twin objectives of the drilling program will complement the advancement of the Walford Creek study agenda by, in combination, pursuing expansion of the Mineral Resources underpinning the existing Walford Creek development proposal. If successful, either a longer mine life and/or increased scale could be contemplated with each potentially providing a source of substantial additional value to the Walford Creek Project.

Initially, both drill rigs will be assigned to expanding the Mineral Resources west of the recently updated Marley/Vardy deposits into the Le Mans zone and beyond into the Amy zone. Once the AEM survey is completed, one or both drill rigs will move to initial drill testing of the satellite targets identified following the 2021 magnetic and gravity surveys as well as any additional targets generated from the planned CEI funded AEM survey.

At the completion of the 2021 in-fill drilling program at Vardy and Marley, three exploratory holes were drilled stepping out some 150 m to the west of Vardy into the Le Mans zone. These step-out holes demonstrated the previously unrecognised presence of continued mineralisation within the PY1 unit, with a 60 metre periphery zone intersected over 50 metres away from the Fish River Fault (FRF). The Walford Creek geological model, based on the extensive drilling completed to date, anticipates a continuation of the high grade mineralisation within the PY1 adjacent to the fault along the entire 2.1 km strike of this untested zone.

An existing Inferred Mineral **Resource of some 5.1 Mt is already defined for the Amy Zone. The Amy zone has previously yielded the highest-grade intercept recorded at Walford Creek with hole WFDH352 assaying *42m @ 2.55% Cu and 0.29% Co from 332 m. As such, the Amy zone represents another great opportunity to further increase Mineral Resources along strike.

Aeon Managing Director and CEO, Dr Fred Hess, commented:

"While the finalisation of the PFS results is still several weeks away, it is a measure of our growing confidence in the Walford Creek Project that we are able to commit to a substantial exploration program for 2022. Our exploration team is gearing up amidst great anticipation for what promises to be a potentially transformative six months ahead for our Company. The proposed drilling campaign is aggressive in terms of its objectives, yet considered and systematic in its approach, relying on an outstanding geophysical data set and a proven geological model for its guidance.

"The portfolio of quality exploration targets now defined within the Walford Creek Project area warrants optimism and promises to unlock a step change in project value, even if only partially successful. The extent of known mineralisation in conjunction with the geological continuity observed within the three existing resources provide the platform upon which our increasingly detailed geological understandings have been built to yield a formidable targeting tool for use in what is undoubtedly a target rich environment.

"For even greater encouragement, our recent awakening to the wider occurrence of significant Walford Dolomite hosted copper mineralisation observed at Vardy Deeps opens up a further opportunity to add yet another dimension to the portfolio of Walford Creek Mineral Resources.

"Any resulting step change in the scale of Mineral Resources arising from a successful exploration program has strong potential to deliver a re-rate of the Walford Creek Project and further underpin wider interest in both the project specifically and the mineral province more broadly."

*See AML ASX Announcement dated 30th August 2018 "42 metres at 2.55% Copper and 0.29% Cobalt 4.6km west of current resource

** See AML ASX Announcement dated 19th August 2021 "Walford Creek Resource Update

Near Resource Exploration - Le Mans and Amy - 18 drill holes planned for 2022

The Mineral Resources at the Walford Creek Project currently consist of the well-studied Vardy and adjacent Marley zones, and the lesser studied Amy deposit.

Figure 1: Existing resources at Walford Creek and long term planned drilling to link the

Amy resource with Vardy and Marley

These deposits are located on the southern side of the regional FRF over a 10 km strike length. Mineralisation occurs extensively within two distinct stratigraphic units (PY1 and PY3) and is also recognised in the under-explored Walford Dolomite. The higher tenor copper and cobalt mineralisation occurs directly adjacent to the fault and typically extends out 25 metres away from the FRF. Low-grade base metal mineralisation (Cu-Co-Pb-Zn) forms a halo (periphery zone) around the higher tenor mineralisation and typically extends out over 100 metres from the FRF (see Figure 2). This understanding of the halo mineralisation underpinned the discovery and successful drilling of the Amy resource. The continuity of geology and mineralisation has been robustly displayed along strike of the FRF and past drilling has validated and refined Aeon's geological model.

Understanding this spatial relationship of mineralisation is critical to further exploration targeting at Walford.

Drilling of near resource exploration will focus on both the Le Mans Prospect and progressing the understanding of mineralisation observed at Amy. Amy hosts some of the best mineralised intercepts within the project area, including WFDH352 (*42 metres @ 2.55% Cu, 0.29% Co and 41gt Ag) and WFDH378 (***13m @ 3.73%Cu, 0.27%Co and 49gt Ag from 300m including 9m @ 5.1%Cu, 0.36%Co and 59gt Ag) yet the resource is poorly defined, remaining entirely in the inferred category with significant gaps occurring due to lack of targeted (by the geological model) drilling. Drilling is proposed to establish the extent of these insufficiently explored copper zones.

*See AML ASX Announcement dated 30th August 2018 "42 metres at 2.55% Copper and 0.29% Cobalt 4.6km west if current resource

*** See AML ASX Announcement dated 17th October 2018 "High Grade Continues 5.7km West of Amy

Figure 2 illustrates a schematic cross section demonstrating the typical distribution of metals in relation to the geology at the Walford deposits. The high-grade copper core is presented in red, and the surrounding peripheral cobalt mineralisation is shown in blue.

Four theoretical drill holes are depicted in Figure 2, over a 100-meter section. These are designed to target Walford style mineralisation. To test the potential of high-grade fault bound Cu-Co mineralisation in PY1 and PY3, holes A and C (respectively) must be executed precisely. These target holes delineate the resource. Holes B and D will likely only return anomalous Cu-Co metal values. It is important to note that the high-grade Cu-Co is fault-bound and therefore requires accurately drilled target holes to delineate a resource.

The impact on results from implementing this model targeted approach is presented in Figure 3 which differentiates targeted PY1 drillholes (type A, presented in orange), and targeted PY3 drill holes (type C, presented in purple), and all other drillholes that failed to test the target (grey), overlaying these with the copper block model (grade >0.8%).

Hole C-Targeted PY3 hole, Hole D - Peripheral PY3 hole.

First pass reconnaissance drilling of three drill holes were completed in 2021 in the underexplored Le Mans zone. These preliminary holes failed to hit the target zone, however they intersected a significant 60-metre-thick mineralised sequence within the PY1 unit over 50 metres from the FRF. The presence of lower tenor base metal mineralisation distal from the fault suggests a higher tenor mineralisation proximal to the FRF. An example of this is provided in the cross sections of Figures 4

and 5, where initial drilling from Le Mans is compared to sections 213550mE and 213230mE within the Vardy Deposit.

At Vardy 213550mE, drill hole WFDD202 intercepted 20 metres @ 0.52% CuEq, around 55 metres from the FRF in PY1. Drilling to the north (WR26 and WFDH445) within 25 metres from the FRF intersected 60 metres @ 1.79% CuEq and 28.2m @ 3.55% Cu Eq respectively.

At Vardy 212320mE, drill hole WFDD265 intercepted 22 metres @ 0.44% CuEq, approximately 100 metres from the FRF in PY1. Drill hole WFPD139 to the north, drilled 25 metres from the FRF intersected 84 metres at 1.54% CuEq. Additionally on the same section, drill hole WFDH494 intercepted 13 metres at 0.55% CuEq, around 43 metres from the FRF in PY3. Drilling within 25 metres of the fault returned 43 metres @ 1.85% CuEq in hole WFDD265, and 25.4 metres @ 2.40%

CuEq in hole WFDH416.

See AML ASX release dated 11th February 2022 "Step-out drilling identifies potential Vardy repeat at Le Mans" for full details on the above drill results.

Following the geological model, these initial Le Mans drill holes have intersected the periphery zone of halo mineralisation. The tested geological model suggests that high tenor mineralisation will occur closer to the FRF.

The 2022 exploration drilling will focus on extending the Marley zone west through the Le Mans zone towards the Amy resource by drilling targeted holes, along with the further delineation of high grade copper within Amy. An initial 18 planned holes will target both PY1 and PY3 horizons.

Figure 4: 2021 drilling of peripheral PY1 and PY3 zone at Le Mans with proposed 2022 drilling shown, compared to Vardy section 213550mE

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