Bluejay Mining : Annual Report and Financial Statements for Year Ended 31 December 2021

Registered number: 05389216

BLUEJAY MINING PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

BLUEJAY MINING PLC

CONTENTS

BLUEJAY MINING PLC

COMPANY INFORMATION

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BLUEJAY MINING PLC

CHAIRMAN'S REPORT

2021 marked another year that saw disruptions and difficult conditions relating to COVID-19 regulations and restrictions. However, the Company was still able to deliver on several key milestones and make significant progress across all its projects and business areas. During the year the Company signed a $20 million Joint Venture ('JV') and earn-inagreement on one of its nickel projects in Finland with one of the world's largest mining companies. We also strengthened our Board with the appointments of Johannus Egholm Hansen as Non-Executive Director and post year-end, Eric Sondergaard as Executive Director. In addition, Peter Davis was appointed as Project Manager for the Dundas Ilmenite Project ('Dundas'). Peter has extensive experience in mineral sands and titanium dioxide pigment operations. These additions undoubtedly leave us in a strong position going forward with the Board and management team well equipped with the experience and knowhow to drive the Company forward and deliver on its stated objectives.

One of the most significant developments during the Period was the signing of a JV agreement at the Disko-Nuussuaq magmatic massive sulphide nickel-copper-platinum-cobalt project ('Disko') in Greenland with KoBold Metals ('KoBold'), whereby KoBold will fund exploration on the project. KoBold's principal investor is Breakthrough Energy Ventures, which is overseen by Bill Gates, and is committed to identifying sustainable supplies of critical and battery metals using their proprietary AI Technology. KoBold recently completed a $192.5 million fundraise, which will fund its work on Disko as well as their other exploration assets. Over the Period, Bluejay also reached agreement to spin out its Finnish Black Shales Assets to Metals One for circa £4 million in cash and shares.

During 2022 the Company will focus on the continued development of its various assets specifically advancing Dundas to production, supported by early site development and geotechnical work for infrastructure as well as progressing project financing.

Greenland

Most notably, during the Period, we entered a strategic partnership with KoBold on the Disko project. KoBold may earn up to 51% of the project through significant expenditure over a three-year period. It is of particular significance that KoBold is aligned with our goals to develop critical materials needed for the green transition sourced in an ethical and sustainable manner.

In the post period the Company and KoBold released the 2022 work programme plan for Disko. This is the first major exploration campaign to be undertaken by the JV, and will incorporate KoBold's cutting-edge technology and Bluejay's operational and local expertise with the objective of targeting massive nickel, copper, cobalt and platinum group metals bearing sulphides. The 2022-programme will include 9,500-line kilometres ('km') of fixed-wing/helicopter/drone supported geophysical surveys, and 4,000 geochemical sample locations covering 200-line km of soil sampling. Work is expected to commence in early June with the mobilisation and build-up of the exploration camp starting in mid-May.

KoBold's cutting-edge technology will provide a high degree of confidence in targeting which, alongside Bluejay's operational expertise in Greenland, increases confidence of a major discovery and the recognition of a new mineral province in West Greenland. The geopolitical turmoil experienced this year has exposed supply risks, and the need to identify and develop new deposits in stable jurisdictions, such as Greenland, has never been greater.

Last year Bluejay received approval for the Exploration and Closure Plan for Dundas from the Government of Greenland, the final Government approval. This follows the awarding of the project's Exploration Licence that was announced in December 2020. On a technical front we continue to progress the engineering optimisation and cost saving studies for Dundas. The £5.2 million of net proceeds received from the placing in March 2022 will be utilised to complete the feasibility study at Dundas to the level required for financial sign-off by a project finance lending syndicate. The Company will commence works this forthcoming field season, completing the necessary engineering, geo-technical and planning activities, including an optimised mine schedule for production. Additionally, the Company has received Letters of Interest from four International Export Credit Agencies, which could form part of the lending syndicate along with commercial banks, and industrial entities that Bluejay has been engaged in communication with over the last 12 months. The syndicate will be led by our Lead Arranger, a leading global investment bank, all within a backdrop of robust ilmenite prices.

Following the restart of the pilot plant and commencement of processing in early 2021, the final samples from the pilot plant in Canada were produced in co-operation with the Company's distribution partner, a large, long established Asian international industrial and trading company. The parcels will be used to target key end consumers identified by our distribution partner, with the aim of consolidating and extending the existing distribution agreement.

The pilot processing plant in Canada was successfully restarted in 2021 following its closure in 2020 due to COVID restrictions. This enabled the remaining material shipped from Greenland to be processed to produce concentrate suitable for larger scale testing by key customers. The test work also provided additional valuable data for the detailed design of the industrial scale plant. The pilot plant was decommissioned and closed in December 2021. The output from the pilot plant was shipped for potential customers of the Company's distribution partner. Feedback in 2022 will enable negotiations to consolidate and extend the existing distribution agreement.

Post period, the Danish Geodata Agency, Geodatastyrelsen, published the Electronic Nautical Charts which cover the key seaward approach and coastal waters for shipping to and from Dundas. The charts provide important navigational and

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BLUEJAY MINING PLC

CHAIRMAN'S REPORT

bathymetric data which will be utilised during the construction period and the production phase of the project to ensure future safe shipping operation. This enables us to advance discussions with potential bulk-carrier companies regarding the transport of our products from the mine area.

Turning to Thunderstone, we received, in late January, initial exploration results from our maiden field programme. These initial results justify continued work to further assess the newly identified gold-silver anomalies as well as other high tenor base-metal results (Cu-Au-Ag-Mo-Zn and Cu-Ni-Cr-Co±Pt, Pd anomalies). Future work will focus on these newly identified anomalies.

Additionally, during the year, Greenland held a general election and formed a new coalition Government. Our newly appointed CEO, Bo Stensgaard, met with the newly appointed Minister for Housing, Infrastructure, Mineral Resources and Gender Equality, Ms Naaja Nathanielsen in May 2021. During this meeting the Minister confirmed that the Greenland Government continues to support the Mineral Strategy 2020-2024, which provides the framework for further development of mineral resources in the country.

Finland

In 2021, the Company entered into a JV and earn-in agreement with Rio Tinto Mining and Exploration Ltd ('Rio Tinto') at the Company's Enonkoski nickel-copper-cobalt-PGM project ('Enonkoski'). During the year an initial diamond drill programme of 3,000m was completed. The programme targeted mineralisation in the near-mine areas Tevanjoki and Laukunsuo and included a top of bedrock sampling programme with a total of 99 drill holes and downhole electromagnetic surveys on 22 drill holes. All diamond drill cores and top of bedrock core samples have been submitted for analysis with assay results pending. In September, Rio Tinto approved and extended further exploration expenditure which resulted in a further 12 diamond drill holes and one drill hole extension for a total of 4149.45m of drilling. This approval showcased Rio Tinto's confidence in the project and emphasised the potential of Enonkoski to be a profitable project. From the drill programme, intersections of nickel- copper sulphide droplet zones logged in mafic intrusions were identified, which indicates promising results as these were analogous features of the former mine close to the orebody.

Following on from the work carried out in 2021, further confidence in the project was demonstrated when the JV recently announced its planned work programme for 2022. Preliminary plans include 1,500m follow-up diamond drilling at targets drilled last year, up to 60 top of bedrock drill holes focused on new targets and infill sampling, as well as geological mapping and sampling.

In July the Company provided an update on its Outokumpu copper-cobalt-gold-silver project ('Outokumpu') where Bluejay's 100% owned subsidiary, FinnAust Mining Finland Oy ('FinnAust') identified five drill targets on the Outokumpu Belt. The first stage of the drill programme is focusing on the Haapovaara target with 1,500m of drilling and the Haaponiemi target, a deep target with 2,500m of drilling. The Company is in early discussions with various parties interested in partnering on the project, adding a further potential asset to the Company's value realisation strategy to monetise its non-flagship assets. The compelling nature of this project's exploration targets are emphasised by the global demand for base metals to be used within the battery industrial ecosystem, the electrification movement and in the green transition. As a result, the five targets identified at Outokumpu provide an exciting outlook for the project that will, and have, drawn interest from potential partners.

Bluejay went on to sign a binding term sheet and entered into a conditional agreement for the sale of its Paltamo and Rautavaara nickel-zinc-copper-cobalt projects (collectively known as The Black Shales Project) to Metals One plc for a combination of cash and shares totalling more than £4 million, further monetising the Company's portfolio of high-quality mineral projects. This agreement operates in line with a key aspect of the Company's strategy to develop its range of assets and attract potential partners.

Financial

Following a period of cash preservation during the peak of the COVID-19 Pandemic, the Company has accelerated activities. The Group's cash balance at year-end was £2.7 million and has been bolstered following the post-period placing in March. The additional $7 million (£5.38 million before fees) fundraise supported by the Company's existing institutional shareholders, will enable the Company to complete the feasibility study that is required for Dundas to continue to progress the project into production. Over the year Bluejay has continued its extensive optimisation process to maximise project economics, identify lower cost options for infrastructure, mine, and processing solutions.

We ended the year with the receival of the VAT refund, of approximately £1.1 million, from our activities in Finland and Greenland . This was a result of Her Majesty's Revenue and Customs ('HMRC') withdrawing its appeal on the First-Tier Tribunal's decision. With the case closed, Bluejay can continue to reclaim VAT on its future activities.

Outlook

The past year saw the Company complete and further develop the portfolio, as well as monetise Company assets with the conditional sale of the Black Shales. The JV agreement with KoBold marked a notable step towards the development of the Disko project with secure funding and world class technology being utilised at the project.

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