ASX Announcement

11 November 2021

Horn Island Scoping Study Outcomes

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and Mineral Resource Estimate

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IMPORTANT NOTE

Advanced gold and copper explorer, Alice Queen Limited (ASX:AQX) ("Alice Queen") on behalf of its subsidiary

company, Kauraru Gold Pty Ltd ("Kauraru Gold" or the "Company") is pleased to provide an updated Mineral Resource

estimate and the results from a Scoping Study investigating the historical open pit area at the Company's Horn Island

Project, located in the Torres Strait, Queensland.

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The Scoping Study referred to in this announcement is a preliminary technical and economic study of the potential

viability of developing the Horn Island Project as a mine and was carried out to enable the Company to decide on

proceeding to more definitive studies. The Scoping Study referred to in this announcement is based on low-level

technical and preliminary economic assessments and is insufficient to support estimation of Ore Reserves or to provide

assurance of an economic development case at this stage, or certainty that the conclusions of the Scoping Study will

be realised by the Company. Further exploration and evaluation work and appropriate studies are required before the

Company will be in a position to estimate Ore Reserves or provide any assurance of an economic development case.

The Scoping Study is based on the material assumptions outlined elsewhere in this announcement. These include

assumptions about the availability of funding. While the Company considers all the material assumptions to be based

on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated

by the Scoping Study will be achieved.

To achieve the potential mine development outcomes indicated in the Scoping Study, funding in the order of $75

million will likely be required. Investors should note that there is no certainty that the Company will be able to raise

funding when needed, however the Company has concluded it has a reasonable basis for providing the forward-

looking statements included in this announcement and believes that it has a "reasonable basis" to expect it will be able

to fund the development of the Horn Island Project.

It is also possible that the Company could pursue other 'value realisation' strategies such as sale, partial sale or joint

venture arrangements. If it does, this could materially reduce the Company's proportionate ownership of the Horn

Island Project. Given the uncertainties involved, investors should not make any investment decisions based solely on

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the results of the Scoping Study.

The Scoping Study includes JORC 2012 Indicated and Inferred resources defined within the Horn Island Project. The

Production Target referred to in this announcement is based on Mineral Resources, which are comprised of 65%

Indicated and 35% Inferred. The Company has concluded that it has reasonable grounds for disclosing a Production

Target, given that a majority of the Mineral Resource is in the Indicated category.

Investors are cautioned that there is a low level of geological confidence associated with Inferred Mineral Resources

and there is no certainty that further exploration work will result in the determination of further Measured or Indicated

Mineral Resources or that the Production Target or preliminary economic assessment will be realised.

Advanced gold and copper explorer, Alice Queen Limited (ASX:AQX) ("Alice Queen" or the "Company"), on behalf of its subsidiary company, Kauraru Gold Pty Ltd ("Kauraru Gold" or the "Company") is pleased to provide an updated Mineral Resource estimate and the results from a Scoping Study investigating the historical open pit area at the Company's Horn Island Project, located in the Torres Strait, Queensland.

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Scoping Study Highlights

♦ Life of Mine (LOM) 8.5 years

♦ Average production rate of 37koz Au per annum

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♦ Mill feed to Waste Ratio 2.5:1

♦ Initial Capital Cost A$75M

♦ Capital payback period of 27 months (2.25 years)

♦ Net Cashflow (EBITDA) of ~A$200M

♦ Net Present Value (NPV) @ 5% discount of ~$140M

♦ Internal Rate of Return (IRR) of 44.3%

♦ All-in Sustaining Costs (AISC) of A$1,388/oz

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Alice

Queen's Managing Director, Andrew Buxton said,

The Horn Island Scoping Study has been an exciting exercise in endeavouring to

determine some high-level understanding about the potential economics of the

project. The most exciting thing, however, is the prospect that the range of numbers

contained in this report represent the minimum starting position of a potential mine.

"We believe that real opportunities exist to find significantly more gold on Horn Island.

Accordingly, while we are very pleased with the results of the Scoping Study, we are

also keenly focused on our forthcoming exploration programs to ensure sure they

are as aggressive and effective as possible. In this way we leverage the opportunity,

of what we can now consider the base case for the Horn Island gold mine, to one

with significantly greater scale.

"

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Material Assumptions

A preliminary assessment of the project was conducted at a Scoping Study level of confidence by:

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♦ Running an open pit optimisation on the Mineral Resource block model,

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Scheduling the optimised pit shell,

♦ Applying process recoveries based on the preliminary flow sheet to the gold mineralisation

from the schedule,

♦ Applying preliminary mining, processing and site operating cost estimates to the scheduled

quantities,

♦ Estimating revenue by applying the forecast gold price to the estimated gold production from

the schedule, and

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♦ Preliminary estimation of the capital cost to build, run and close the project.

Material assumptions used in the Scoping Study include:

♦ Unless otherwise stated, all dollar amounts are in Australian dollars (AUD).

♦ Open mining using conventional hydraulic excavators and rigid body haul trucks. All material

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drilled and blasted.

♦ Pit wall slope angles for open pit optimisation based on the former mining operation.

estimated process cost is A$25.66 per tonne crushed.

♦

Process flow sheet including two stage pre-concentration with bulk and particle ore sorting

and conventional gravity / carbon in leach (CIL) processing.

♦ Process feed rate of 1.2 Mtpa.

♦ Process recoveries based on preliminary test work for the particle ore sorters and the gravity

/ CIL circuit. Test work to date is on the individual components of the flow sheet. The Scoping

Study combines the pre-concentration and gravity / CIL test results to estimate overall gold

recovery at 87%.

♦ Use of facilities from the former mining project wherever possible.

♦ A gold price of A$2,450/oz was used in the Scoping Study schedule.

♦ Mining costs based on preliminary first principles cost estimate and benchmarked against

similar projects. Average estimated mining cost is A$3.75 per tonne of material mined.

♦ Process operating costs based on preliminary estimates for the assumed flow sheet. Average

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♦ Site costs based on initial assessment of ESG and management requirements. Average site

cost is A$1.25 per tonne crushed.

♦ Preliminary capital cost estimation for the assumed process flow sheet and site layout using information based on similar projects. Initial capital cost is estimated to be approximately A$75M.

♦ Sustaining capital of 0.5% of the initial process and infrastructure capital cost is applied each year.

♦ A nominal estimate of A$7.5M is allowed for closure costs at the end of the project.

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Executive Summary

The outcomes from the Horn Island Scoping Study, focusing on the immediate area of the historical open pit, present a strong economic case for ongoing studies to support the recommencing of mining. All the Mineral Resources included in this study are within the granted tenement EPM25520, which

onlyconcentrate low grade material profitably.

covers the entire Horn Island 34sqkm mineral filed.

The Scoping Study production and commercial outcomes are indicative only.

Production outcomes in the following table are presented as ranges which reflect the ability to pre-

Commercial outcomes are only shown as the Scoping Study Base Case values because they depend on multiple factors. If project specific factors such as process recovery are considered it is likely that the commercial outcomes may vary by approximately -50% +10%. External factors, such gold price, may have comparable or larger impacts, both positive and negative.

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Outcome

Units

Low

Base

High

Life of Mine (LOM)

years

7

8.5

10

Waste Rock tonnes per tonne

2.5

2.5

4.2

Processed

Average Annual Gold

koz

34

37

37

Production

Total Gold Production

koz

280

310

330

Net Cashflow (EBITDA)

A$M

200

Net Present value @ 5%

A$M

140

Payback period1

years

< 3

All-in Sustaining Cost2

A$/oz

1,388

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1 Payback is defined as period until cumulative net cashflow becomes positive.

2 (Mining, Processing and G&A Operating Costs) + Sustaining Capex - Silver credits

The Mineral Resource Estimate has been completed by Dale Sims of Sims Consulting Pty Ltd. The Fordeposit consists of thin stockwork veins, gold is associated with sulphide veins with no gold occurring in the alteration zone or host rock. The nature of the deposit is such that a lower cut-off grade can be mined, resulting in a lower grade, however more ounces can be achieved. The total estimated Mineral Resources using a 0.4g/t Au cut off are 16.7Mt @ 0.98g/t Au containing 524k ounces of gold. The mining material included in the Scoping Study consists of 65% in Measured or Indicated JORC

category.

Due to the nature of the deposit, the study has found that there is a significant opportunity to remove large amounts of waste rock through pre-concentration. This reduces the scale of the mill that is required which enhances the overall economics of the project. The study found that pre-

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concentration by Bulk Ore Sorting (BOS) and/or Particle Ore Sorting (POS) worked well and thus the preconcentrating features are central to the scoping study results.

A number of independent parties were engaged by The Company to complete test work, studies and reports that inform this Scoping Study. The Company engaged Peter Fairfield of Miner Insight Pty Ltd onlyas our Study Manager, in addition we engaged Dale Sims of Sims Consulting Pty Ltd (Mineral Resource Estimate), John Wyche of AMDAD (Mine planning), Scantech and OrePortal (Bulk Ore Sorting), Tomra (Particle Ore Sorting), GR Engineering (GRES - Process and Metallurgy) and Mincore (alternate Capital

Expenditure).

The study focuses on the areas that make up the Mineral Resource Estimate (MRE) around the historic pen pit at Horn Island and only includes the MRE stated in this release. The study does not include

other areas within the tenement that consist of other Exploration Targets, deposits, or prospective useareas.

The Scoping Study establishes a business case to support further studies leading to establishing an open pit mine, commencing with a starter pit at the site of the historical open pit at Horn Island. Material can be mined to a lower cut-off grade of 0.4g/t Au due to the nature of the deposit and ability to pre-concentrate. Material will be separated into High Grade, above 0.6g/t Au cut off (HG), Low Grade, above 0.4g/t Au cut off (LG) and Mineralised Waste, less than 0.4g/t Au cut off (MW).

Scoping Study Confidence

The Scoping Study is intended to:

♦ Provide a preliminary indication of the Project's potential as justification for further work to

improve confidence.

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♦ Identify areas where more work is needed to improve confidence.

In terms of technical risk:

♦ The Scoping Study includes Inferred Mineral Resources. There is a low level of geological

confidence associated with Inferred Mineral Resources and there is no certainty that further

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exploration will result in the determination of Indicated Mineral Resources or that the results

of the Scoping Study will be realised.

♦

Conventional open pit mining is proposed. The site conditions should present minimal mining

risk. However, the disseminated nature of the gold mineralisation increases risk that grade control will result in changes to the process feed tonnes and grades modelled for the Scoping Study.

♦ Further process test work is required, particularly the application of BOS. Testwork has demonstrated the gold mineralisation is amenable to pre-concentration with particle sorting and no material issues arose with the gravity / CIL test work. However, performance of the bulk ore sorter as assumed in the preliminary flow sheet requires further work to confirm mass yield and gold recovery. If the bulk ore sorter is removed processing costs per tonne crushed are estimated to increase by approximately 30%.

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Alice Queen Ltd. published this content on 10 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 November 2021 23:06:03 UTC.