Quarterly Activities/Appendix 5B Cash Flow Report

For personal use only

AUSTPAC RESOURCES N.L.

ACN 002 264 057

Level 5,

37 Pitt Street

SYDNEY NSW 2000

GPO Box 5297

SYDNEY NSW 2001

Telephone: (+61 2) 9252 2599

Facsimile: (+61 2) 9252 8299

Email: apgtio2@ozemail.com.au

www.austpacresources.com

Quarterly Activities Report for the period ending 30 September 2021

Austpac Resources NL (Austpac Resources or the Company) (ASX: APG) is pleased to provide an update on its quarterly activities for the period ending 30 September 2021.

The Company is currently in voluntary suspension of the trading of its securities following its ASX announcement on the 17th of June 2021. The suspension will remain in force pending the satisfactory resolution of ASX's queries in relation to certain prior issues of securities that occurred in the period between 2016 and 2019 and other Listing Rule matters (including any orders that may need to be made by the Federal Court of Australia), and ASX being satisfied that APG is otherwise in compliance with the Listing Rules.

The Company's primary activities for the reporting period were:

• Continuing discussions with third parties interested in assisting the Company to advance the development of its ZIRP technology;
• Continuing its detailed investigation into a number of matters arising from enquiries from the ASX regarding possible failures of the Company to fully comply with all the applicable requirements of the Corporations Act and Listing Rules; and
• Monitoring the impact of COVID19 on the proposed drill program at the Company's exploration property EL5291 at Nhill, Victoria.

During the quarter, the Company was approached and held initial discussions with an organisation to carry out testwork on steel waste using the Company's ZIRP technology.

The Company continues to pursue new opportunities which are compatible with its current activities.

Zinc Iron Recovery Process (ZIRP)

As previously noted, the Company demonstrated last year that its ZIRP technology is capable of producing a quality zinc oxide and iron product from steel industry waste products.

Page 1

For personal use only

The Company has recently conducted a review of its technology and has reconfigured the flowsheet to remove the acid regeneration part of the ZIRP to simplify the overall process. This was in conjunction with potential partners who were looking specifically at the recovery of iron and zinc without the need for treating spent pickle liquor.

As part of that review, bench scale test work was completed on a sample of EAF (Electric Arc Furnace) dust to demonstrate the capability of forming granules and subsequently pre-reduction of those formed granules without the need for the acid generation. This is a significant step in the simplification of the process for commercialising the ZIRP technology.

On the back of the recent test work, the Company is in advanced discussions with a number of local and an overseas companies who are investigating the potential use of the ZIRP technology within their market.

As noted last quarter the Company closed its ZIRP facility at Kooragang Island, Newcastle on the basis that it now needed to build a dedicated plant to prove the process at a commercial scale and as previously stated, the Company is now of the view that a partner who can work hand in hand with the Company is likely to provide the most effective path to fast tracking the commercialisation of the technology.

Nhill Exploration - EL 5291

The Company's proposed drilling program at its Nhill project (EL5291) in Victoria continues to be impacted by the COVID19 issues. As such, there was no exploration undertaken by the Company during the quarter.

The Company has received quotations for the drilling program on EL5291 and drilling will be reassessed once the COVID19 pandemic stabilises. The Department of Jobs,

Page 2

For personal use only

Precincts and Regions Victoria is considering the Company's application for a 1-year

extension to the Nhill exploration licence.

As previously disclosed, geophysical work was undertaken on the exploration licence in early 2020 and as a result of that work the Company has determined the best location for the next drill hole GG03.

Voluntary Suspension from the ASX

During the quarter, the Company addressed a number of queries received from the ASX. These queries relate to a range of matters. The ASX has further questions and requests for information and the Company anticipates that the ASX may have additional questions and requests for information, including in relation to the Company's Annual Report (once reviewed by the ASX), the forensic investigation (upon completion), and other correspondence from the Company.

The Company most recently released an update on the status of the voluntary suspension on the 30th of July 2021 (see ASX announcement "Update on Suspension

from Official Quotation").

We understand that the ASX is concerned that Company is not currently in compliance with Listing Rules 12.1 and 12.2.

The Company's securities will not be reinstated to official quotation until:

1. The Company has responded to and/or addressed all of ASX's queries to ASX's satisfaction; and
2. The Company has obtained all of the requisite Federal Court orders relating to various issues of securities; and

Page 3

For personal use only

3. The ASX is satisfied that:

• The Company is in compliance with its obligations under the Listing Rules including in particular Listing Rules 12.1 and 12.2, its disclosure obligations in Chapter 3, and its obligations under Listing Rule 10.1;
• APG has adequate systems and controls in place to manage its obligations to comply with the Listing Rules; and
• it is otherwise appropriate to reinstate APG's securities

The Company has engaged legal representation in order to make an application for the required orders to the Federal Court of Australia, which is expected to be filed in the near future.

Tenement Holdings

In accordance with ASX Listing Rule 5.3.3, Austpac Resources provides the following information in relation to its tenement holdings at the end of the quarter:

Corporate

• Cash at the end of the quarter was $51,000, which comprises of $22,000 cash in its bank account and a bank guarantee of $29,000 in its bank deposit account.
• AS previously disclosed, the Company has a loan facility of $200,000 with Kore Management Services P/L, of which the Company's non-executive chairman, Mr T Cuthbertson has an interest. During the quarter, $45,000 was drawn down on that facility (full details provided in the Appendix 5B). The remaining funds available under the loan facility are $55,000.
• Cash used in operating activities during the quarter was $138,000.
• Expected cash outflows for the next two quarters is $40,000 per quarter. The Company has cash and unused loan facilities totalling $106,000. Excluding the bank guarantee of $29,000, the amount of available cash and unused loan facilities is $77,000
• No payments were made to related parties of the Company during the quarter.
• The Company is considering various funding options and continuing to review potential new projects.

Page 4

Page 5