Havilah Resources : Quarterly Activities/Appendix 5B Cash Flow Report

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Havilah Resources Limited (Havilah or the Company) (ASX: HAV) is pleased to present its Activity Report for the 3 months ended 31 October 2021 (quarter).

Significant Events for the Quarter

• Appreciable progress on essential pre-development tasks, including regulatory approval documentation for the West Kalkaroo gold open pit (West Kalkaroo).
• Ongoing field reconnaissance by an experienced Havilah exploration geologist highlighted several new prospects for future drill testing within the Mutooroo Project Area. Exploration drilling partially tested the Mutooroo West prospect with encouraging copper, cobalt and gold assay results received.
• Release of Havilah's2021 Annual Reportto shareholders, highlighting many significant achievements over the financial year, notwithstanding the external challenges faced.
• Subsequent to the end of the quarter, announcement of the proposed NU Energy new initial public offering (IPO) that will aim to raise at least $10 million in exploration funds as a means of crystallising value for shareholders in Havilah's highly prospective Frome Basin uranium assets.
• Subsequent to the end of the quarter, Havilah advised that its Annual General Meeting will be held as a virtual meeting via webcast on Tuesday 21 December 2021.

Advanced Project Activities

Kalkaroo Copper-Gold-Cobalt Project (HAV 100% ownership)

During the quarter Havilah's management team continued to focus on several key pre-development tasks for West Kalkaroo, as summarised below.

1. Final South Australian government approvals
   Key to the regulatory approvals process is acceptance of the Program for Environment Protection and Rehabilitation (PEPR) document by the Department for Energy and Mining (DEM). The Kalkaroo PEPR document was lodged during March 2021 and first substantive feedback was received from the DEM during August 2021. Since then, Havilah's management team and an environmental consultant have worked to systematically address all points raised by the DEM. Several additional consultant's reports and reviews on groundwater and the tailing storage facility have been requested. No issues have been raised that would inhibit development of the mining operation in its presently proposed form.
   Havilah is currently preparing a revised Kalkaroo PEPR document that addresses all of the DEM's points. Delay in receipt of key consultants' reports, due to their present heavy workloads, means the revised PEPR document will not be re-lodged with the DEM until early 2022, which should lead to final approval for go- ahead of the West Kalkaroo open pit mining operation during 2022. This represents a major investment of time and money by Havilah, the end result of which will be approval from a jurisdiction that enforces world's best practice mining regulations and ESG (Environmental, Social and Governance) standards.
2. Mining contractor
   Havilah's discussions to date are moving towards drafting contract term sheets with reputable mining contractors. There is a large amount of overburden to remove at West Kalkaroo, hence any incremental reduction in mining rates and adoption of the most efficient mining technologies could result in material cost savings.
3. Construction contractor
   Havilah intends to purchase much of the oxide ore processing equipment in modular form from suppliers. Escalating construction costs are a high risk factor at the present time in Australia and Havilah is seeking to mitigate this by use of an experienced local contracting firm and maximising modular construction off-site.
4. Financial model and mining study
   Havilah's senior mine planning engineer and consultants have continued to refine the West Kalkaroo financial model, which currently demonstrates that the project economics are robust. RPM Global Asia Limited (who prepared the original Kalkaroo pre-feasibility financial model) has been contracted to draft an updated mining study, which integrates all new technical work completed for West Kalkaroo over the past 3 years. This study, including the key financial metrics for West Kalkaroo, will be released as soon as it is available.

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5. Project financing

Havilah's management team continues to investigate financing options for West Kalkaroo. Havilah's present intention is to seek maximum project debt financing to minimise dilution of its current 100% Kalkaroo project equity interest. From discussions so far, it is apparent that finalisation of project financing arrangements are critically dependent on receipt of final South Australian government approvals and completion of a high quality feasibility study.

Development of the open pit gold mine at West Kalkaroo is subject to a final investment decision by the Havilah Board during 2022, which is contingent on successful conclusion of the tasks listed above.

About the Kalkaroo copper-gold-cobalt project

Kalkaroo is Havilah's flagship mineral project, located approximately 400 kilometres (km) northeast of Adelaide and 90 km west of the regional mining centre of Broken Hill with its skilled mining workforce (Figure 1). It lies approximately 55 km north of the Transcontinental railway line and Barrier Highway. The project comprises a

100.1 million tonne (Mt) JORC Ore Reserve (Proved 90.2 Mt; Probable 9.9 Mt) at a copper equivalent grade of 0.89% that is capable of supporting a large-scale open pit mining operation over at least 13 years. Havilah has already secured the required mining permits for the Kalkaroo project (Mining Leases and Miscellaneous Purposes Licences). It also owns the surrounding 550 km2 Kalkaroo Station pastoral lease, a non-mineral asset on which the Kalkaroo project is located, thus reducing land access risks for the project.

Havilah has a staged strategic plan to develop the Kalkaroo deposit, commencing with a lower capital expenditure operation that initially focuses on mining the comparatively shallow and soft oxidised gold and native copper ore at West Kalkaroo. The proposed West Kalkaroo gold open pit is located at the very western (and upper) part of the Kalkaroo deposit, where it is planned to produce 80,000-90,000 ounces of gold and 5,000 tonnes of native copper (near pure copper metal) over an initial 3-4 year period. The current West Kalkaroo oxidised ore open pit is designed to lead into the long-term,large-scale copper sulphide mining operation at the earliest opportunity, subject to prevailing metal prices and availability of financing.

Kalkaroo is projected to be a future source of ethically produced metals vital to modern society, operating under industry best practice ESG (Environmental, Social and Governance) regulations that are enforced by the South Australian government. ESG credentials for Kalkaroo can be found on the Company's website.

Mutooroo Copper-Cobalt-Gold Project (HAV 100% ownership)

Mutooroo is a lode-style sulphide copper and cobalt deposit, located approximately 60 km southwest of Broken Hill, and 16 km south of the Transcontinental railway line and Barrier Highway. It contains 195,000 tonnes of copper, 20,200 tonnes of cobalt and 82,100 ounces of gold in Measured, Indicated and Inferred JORC Mineral Resources.

At long-term consensus US$ copper and cobalt prices, the economics of Mutooroo as an open pit, and later as an underground, mining operation are potentially attractive due to the comparatively high grades of copper (1.53%) and cobalt (0.16%) in the sulphide ore.

Eight reverse circulation (RC) drillholes were completed at Mutooroo during the quarter, with the program limited to some extent due to logistical issues associated with cross-borderCOVID-19 restrictions and delays in obtaining spare parts for Havilah's drilling equipment.

Full drilling results and assays will be reported in a separate ASX announcement, once compilation and interpretation is completed by Havilah's geologists.

Grants Basin, Maldorky and Grants Iron Ore Projects (HAV 100% ownership)

Havilah has previously reported an iron ore Exploration Target* at Grants Basin of 3.5-3.8 billion tonnes of 24- 28% iron (refer to ASX announcement of 5 April 2019). The western end of this Exploration Target crops out as a solid body of iron ore at least 270 metres thick from surface. Havilah had planned to carry out an up to 64 hole RC resource delineation drilling program during 2021 to convert a portion of the western end Exploration Target to a maiden JORC Mineral Resource, initially targeting at least 0.5 billion tonnes of iron ore.

Due to delays on drilling at Mutooroo it is unlikely that the Grants Basin drilling program will commence this year.

• Note that the potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

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One of the Company's major assets is its ~16,000 km2 under-explored tenement holding in the Curnamona Craton, that is prospective for a variety of commodities including several strategic and critical minerals such as cobalt, copper, rare earth elements, tin and tungsten. Exploration for new economic discoveries leveraging off Havilah's large prospective tenement holding and utilising the Company's extensive knowledge base is a key objective.

Despite hosting the giant lead-zinc-silver ore deposit at Broken Hill, much of the Curnamona Craton is under- explored due to extensive sedimentary cover. The geological similarity of the Curnamona Craton to the eastern Gawler Craton and the Mount Isa-Cloncurry Block indicates similar prospectivity for major ore deposits. Accordingly, a key Board objective is to maintain an active program of exploration work on projects and prospects that have the most potential for new discoveries.

Mutooroo Project Area (HAV 100% ownership)

The area surrounding the Mutooroo deposit (termed the 'Mutooroo Project Area') is highly prospective for the discovery of lode-stylecopper-cobalt-gold resources which can potentially provide supplementary feed to a central sulphide ore processing hub at Mutooroo and hence boost that project's economics. Many earlier economic grade copper and/or gold drilling intersections in the area (Figure 2) have never been followed up, in some cases for over 50 years. The area has the major logistical advantage of being close to Broken Hill, the Barrier Highway and Transcontinental railway line.

During the quarter an experienced Havilah exploration geologist continued with systematic data compilation, mapping and sampling of the numerous historic prospects within the Mutooroo Project Area. This work identified several areas of gossans (the oxidised surface expression of primary sulphide minerals) that have either never been drilled or incompletely drilled during the past. Many encouraging surface sampling results have been received and point to new drilling targets. These will be reported in due course following compilation and interpretation of results.

Figure 2 Mutooroo Project Area showing promising regional prospects in proximity to the Mutooroo resource.

Mutooroo West Copper-Cobalt-Gold Prospect (HAV 100% ownership)

The Mutooroo West prospect lies 4 km northwest of Mutooroo and like Mutooroo was mined for copper during the early 1900's after discovery of an outcropping copper stained gossan by early prospectors. The Record of the Mines of South Australia (Fourth Edition, 1908, page 98) in describing the early 1900's mining activity here notes a "large body of sulphide ore" with the lode approximately 6-7 metres wide at 30 metres depth and returning 3-4%(hand-picked) copper grades and 20-30% sulphur. The best result from 5 diamond drillholes completed by MEPL (Mines Exploration Pty Ltd) during 1965 was 7.17 metres of 0.32% copper from

115.8 metres. These drillholes were not assayed for cobalt or gold, but rock chip samples of gossan and pyritic dump material assayed up to 0.16% cobalt and 2.22 g/t gold (refer to ASX announcement of 26 April 2018).

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In the first drilling for over 50 years, Havilah completed 6 RC drillholes to test for shallow copper-cobalt mineralisation near the base of oxidation, up-dip and along strike from the MEPL diamond drillholes and specifically testing a priority one AEM (airborne electromagnetic) bedrock conductor (Figure 3). Results for all RC drillholes are summarised in the following table.

The Mutooroo West sulphide lode was intersected in all drillholes at the expected position (see cross sections Figures 4, 5 and 6). The results indicate copper-cobalt-gold mineralisation of potential economic interest within a mostly narrow single lode at the depths intersected, of similar tenor to the earlier MEPL drilling. It is considered that the RC drillholes have given a fair test of the Mutooroo West lode position for shallow economic copper-cobalt-gold mineralisation over the 200 metres of strike drilled. The strong AEM conductor is not fully explained by this drilling and may indicate potential for a wider sulphide lode at depth, which may be followed up at a later date.

Further RC drilling at Mutooroo West is not planned until after a number of other high priority targets identified in the Mutooroo Project Area have been drilled.