AUSTRALIAN SILICA QUARTZ GROUP LIMITED

ENCOURAGING RESULTS FROM ALBANY SILICA SAND DRILLING

HIGHLIGHTS

  • The Company has completed vacuum drilling for silica sand at the Albany White Hill Silica Sand Project located 70 km east north east of the port of Albany
  • White silica sand intersections of up to 13.0 m from 0.5 m
  • 76 vacuum drill holes completed for 489 m
  • Preliminary modelling of the geometry of the silica sand deposit allows the Company to refine the Exploration Target targeting a high-grade silica sand suitable for the PV cover-glass market along with other specialty industrial applications
  • Laboratory test work on drilling samples is underway aimed at defining the expected silica sand product characterisation for input into a mineral resource estimate
  • Maiden mineral resource estimate is expected to be reported in accordance with the JORC code early in 2021
  • The Exploration Target is within a tree farm on private freehold land with no clearing of native vegetation required for mining

9 DECEMBER 2020

ASX Code: ASQ

AUSTRALIAN SILICA QUARTZ

GROUP LTD

ABN: 72 119 699 982

DIRECTORS:

Robert Nash

Non Executive Chairman

Luke Atkins

Non Executive Director

Neil Lithgow

Non Executive Director

Pengfei Zhao

Non Executive Director

CHIEF EXECUTIVE OFFICER AND COMPANY SECRETARY:

Sam Middlemas

Head Office:

Suite 10, 295 Rokeby Road

Subiaco WA 6008

Mail:

Suite 10, 295 Rokeby Road

Subiaco WA 6008

  1. +61 8 9200 8200
  1. +61 9 9200 8299
  1. admin@asqg.com.au
  1. www.asqg.com.au

Share Registry:

Automic Group

GPO Box 5193

Sydney NSW 2001

  1. 1300 288 664 (within Australia)
  1. +61 2 9698 5414 (international)www.automicgroup.com.au

Vacuum drilling by ASQG of silica sand in a tree farm at the Albany White Hill Silica Sand Project

Suite 10, 295 Rokeby Road, SUBIACO WA 6008

Phone: +61 8 9200 8200 Fax: +61 8 9200 8299 www.asqg.com.au

Australian Silica Quartz Group Limited (ASX:ASQ, "ASQ" or "the Company") has entered into an Exploration and Mining Access agreement on a property located 70 km east of Albany along the Albany to Esperance South West Coastal Highway which is capable of road train access direct to the Albany Port (See Figure 1). The Property has been selected following extensive desktop assessment and roadside reconnaissance over the last +18 months.

The Mining Agreement covers an area of 189 Ha located on ASQ's 100% owned exploration licence E70/5262 and covers access for both exploration and also for mining should the project progress to development. The area of interest is former grazing property planted into a blue gum tree plantation and as such would not require clearing of native vegetation for mining.

Albany White Hill Silica Sand Project on E70/5262 (ASQ 100%)

Figure 1: Location of the Albany White Hill Silica Sand Project on E70/5262 east north east of Albany. ASQ South Stirling Ni-Cu Sulphide tenements shown for context. Other holder tenements not shown.

VACUUM DRILLING

The Company has now followed up the previously reported encouraging surface sampling and hand auger drilling results (ASQ (2020). Preliminary Exploration Results - Albany White Hill Project. ASX Release 2 November 2020) with 76 vacuum drill holes completed for 489 m with a maximum hole depth of 14.5 m. 58 drill holes encountered clean white silica sand profiles of 2 m or greater thickness. All silica sand intersections occurred below a 0.3-1.0 m layer of sandy topsoil. Refer to figure 3 for drill hole locations with silica sand interval thicknesses and appendix 1 for details of the drill holes that intersected significant silica sand.

2

Suite 10, 295 Rokeby Road, SUBIACO WA 6008

Phone: +61 8 9200 8200 Fax: +61 8 9200 8299 www.asqg.com.au

Figure 3: Vacuum drill holes with significant silica sand intersections - E70/5262

EXPLORATION TARGET

The vacuum drill holes have been imported into a wireframe to estimate the tonnage of the deposit. An Exploration Target of 11 to 13 million tonnes of silica sand of a grade suitable for producing sand acceptable to the export glass sand market is now considered appropriate for the White Hill Silica Sand deposit subject to confirmation of sand quality by test work currently underway. The Company cautions the reader of this report that the potential quantity and grade of the exploration target is conceptual in nature, further work is required to estimate a Mineral Resource and it is uncertain if further work will result in the estimation of a Mineral Resource.

3

Suite 10, 295 Rokeby Road, SUBIACO WA 6008

Phone: +61 8 9200 8200 Fax: +61 8 9200 8299 www.asqg.com.au

FORWARD PLAN

Laboratory test work is underway to define grades and confirm suitability of the sand to produce commercial products. If successful, the resource estimation will be undertaken early in 2021 followed by more detailed metallurgical test work.

ASQDHV0073

Figure 4: Vacuum drill hole ASQDHV0073 sample tray showing silica sand intersection from 0.5-13.5 m

This Announcement has been authorised by the board.

Sam Middlemas, CEO, Australian Silica Quartz Group Ltd

9 December 2020

Competent Persons Statement

The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Nick Algie, a Competent Person who is a registered member of the Australian Institute of Mining and Metallurgy (AusIMM). Mr Algie is a full-time employee of the Company in his capacity as Technical and Exploration Manager. Mr Algie has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a competent person as defined in the 2012 edition of the 'Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Algie consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward Looking Statements

This report may include forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", or other similar words and may include, without limitation, statements regarding plans, strategies, and objectives of management. Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance and achievements to differ materially from anticipated results, performance or achievements. Forward looking statements are based on the Company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the company's business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company's control. Accordingly, readers are cautioned not to place undue reliance on forward looking statements.

4

Suite 10, 295 Rokeby Road, SUBIACO WA 6008

Phone: +61 8 9200 8200 Fax: +61 8 9200 8299 www.asqg.com.au

About Australian Silica Quartz Group Limited

ASQ DEVEX 50/50 JV (non-dilutable at ASQ's election)

ASQ has entered into a joint venture with DevEx Resources ("DevEx" ASX:DEV) on it's 100% owned E70/3405 tenement located along strike from Chalice Gold Mines ("Chalice" ASX:CHN) nickel copper platinum group elements Julimar discovery in WA. The first $3M expenditure on the JV area is to be fully funded by DevEx to earn 50%. ASQ has the option to jointly fund future expenditure to maintain 50% share or opt to allow DevEx to fund the next $3M to earn a further 20% share in non-bauxite minerals. Initial geochemical and geophysical exploration work has returned positive results with the establishment of multiple drill targets. (refer full detail in the 1 June 2020 announcement ASQ reaches agreement for funding of exploration on its tenement in Julimar Region, WA, 8 October 2020 announcement Update on Geophysics Targets at ASQ/DevEx JV in Julimar Region, WA, 19 August 2020 announcement Update on ASQ/DevEx 50/50 JV in Julimar Region, WA.) and 4 December 2020 announcement DevEx Exploration Update.

SILICA

ASQ has established a range of silica sand and hardrock projects held via exploration licence applications 100% owned by ASQ's subsidiary Australian Silica Quartz Pty Ltd. These projects now consist of 12 granted exploration licences and 8 applications covering approximately 1,500 km2 within Western Australia and Queensland.

High grade silica (99.5-99.9% SiO2) and high purity silica (>99.95% SiO2) currently have a wide range of applications. All indications suggest the high grade and high purity silica market is currently growing strongly due to greater demand from the PV Solar, TFT glass, Electronics, Flat Glass and Speciality Glass industries. This is reinforced by the level of enquiries received from qualified end user customers the Company has received primarily from China and South East Asia.

SILICA SAND

ASQ's high grade silica sand projects are located in the regions of Albany, Gingin and Esperance in the south west of Western Australia.

In the shorter term these projects potentially present the opportunity for the Company to produce a washed DSO silica sand product with longer term potential to enter the higher value higher grade silica sand market with a niche processed product.

ASQ is currently working on an exploration program at the Albany White Sand Hill Project aimed at reporting a maiden silica sand resource early in 2021. The Albany White Sand Hill Project is located on farmland cleared of native vegetation 70 km east north east of the port of Albany.

In addition to it's wholly owned silica exploration projects ASQ has reached an agreement with an existing local sand producer. In 2019 the Company executed a binding terms sheet with Urban Resources Pty Ltd (Urban) to jointly exploit Urban's Silica Sand deposit located in Bullsbrook, Western Australia. Urban has operated the mine for the last six years and produced over 1Mt from the deposit in last two years. The ASQ/Urban Resources agreement presents the Company with the opportunity to potentially fast track it's entry into the DSO silica sand export market. ASQG have completed a JORC 2012 Inferred Mineral Resource on the raw sand at Urban's Maralla Road tenement M70/326 (refer full detail in the 7 May 2019 announcement Update on Maralla Road Silica Sand Deposit Maiden Resource and 29 January 2020 announcement Spiral and Classifier Testwork Results for the M70/326 Silica Sand Products).

HARDROCK QUARTZ R&D

The Company is undertaking an R&D program aiming to develop a high purity, high value silica quartz product. To this end the Company has secured a number of hardrock quartz tenements and is progressing with a research and development project in this area. Assays from rock chip sampling of ASQ's hard rock tenements reported grades of up to 99.993% SiO2 with processed hard rock samples demonstrating further grade improvement (refer full detail in the 14 December 2017 announcement Silica Sand and Hardrock Quartz Project Updates).

5

Suite 10, 295 Rokeby Road, SUBIACO WA 6008

Phone: +61 8 9200 8200 Fax: +61 8 9200 8299 www.asqg.com.au

SOUTH STIRLING Ni/Cu PROJECT

ASQ has established the South Stirling Ni/Cu Project by way of four exploration lease applications lodged covering 1,603 km2 over the Albany Fraser Mobile Belt, South Western WA where the Company has identified a historic end of hole aircore drilling assay of 1.5m at 0.79% Ni, 934 ppm Cu, 832 ppm Co from 28.5m that was never followed up. ASQ considers the application area has potential for Nickel-Copper magmatic sulphide mineralisation associated with mafic-ultramafic intrusions emplaced into granulite facies country rocks. (refer full detail in the 23 September 2020 announcement Exploration Update.)

BAUXITE JV

ASQ has a joint venture with HD Mining & Investments Pty Ltd (HDM). HDM is currently working towards obtaining a 40% interest in the bauxite rights of several tenements under the joint venture which are wholly owned by ASQ. Exploration activities are fully funded by HDM. Should HDM and ASQ make a subsequent decision to mine, then HDM will earn an additional 20% interest in bauxite rights on the tenements. ASQ maintains 100% interest in all other minerals. A ninety five million tonne Bauxite JORC resource has been identified under this JV. (refer Company Annual Financial Report for 2020 - Mineral Resources and Ore Reserves section)

BAUXITE ROYALTY

Following the sale of the Bauxite Resources Joint Venture Bauxite Project to Yankuang Group a royalty on future bauxite sales from the project of 0.9% of FOB price payable to ASQ was negotiated. The Yankuang Group bauxite project contains in excess of 300 million tonnes in the world class bauxite region in the Darling Range, Western Australia. ASQ is entitled to a royalty of 0.9% of the FOB price on the first 100 million tonnes mined (under current prices of Bauxite this royalty would equate to approx. A$0.50/tonne)(refer full detail in 30 November 2015 announcement Final Agreements signed with Yankuang for sale of Joint Venture Interest and Buy Back of Shares)

6

Suite 10, 295 Rokeby Road, SUBIACO WA 6008

Phone: +61 8 9200 8200 Fax: +61 8 9200 8299 www.asqg.com.au

APPENDIX 1 - Significant Silica Sand Intersections Drill Hole Details

DrillholeID

East

North

Zone

White Silica Sand Intersection

End of Hole

(mGDA94)

(mGDA94)

From (m)

To (m)

Thickness (m)

(m)

ASQDHV0011

640246

6159518

50

0.5

4.5

4

5.5

ASQDHV0012

640424

6159615

50

0.5

6

5.5

7

ASQDHV0013

640601

6159699

50

0.5

6

5.5

7.5

ASQDHV0014

640775

6159793

50

0.5

5.4

4.9

6

ASQDHV0015

640951

6159885

50

0.5

10.5

10

11

ASQDHV0016

641125

6159977

50

0.5

12

11.5

13

ASQDHV0017

641313

6160040

50

0.5

10

8.5

10

ASQDHV0018

641169

6160177

50

0.5

9.5

8.5

10

ASQDHV0019

641021

6160295

50

0.5

6

5.5

6.5

ASQDHV0022

640970

6160836

50

0.5

5.3

4.8

7.5

ASQDHV0024

640717

6159971

50

0.5

6.8

6.3

7

ASQDHV0025

640589

6160120

50

0.5

4.9

4.4

5.5

ASQDHV0028

640929

6159426

50

0.5

3

2.5

3.5

ASQDHV0029

640982

6159301

50

0.5

5.8

5.3

6.5

ASQDHV0032

641451

6159537

50

0.5

4.1

3.6

4.5

ASQDHV0033

641483

6159927

50

1

3

2

3.5

ASQDHV0034

641322

6159819

50

0.5

7.5

7

8

ASQDHV0035

641154

6159724

50

0.5

13.5

13

14.5

ASQDHV0036

640983

6159636

50

0.5

6

5.5

6.5

ASQDHV0037

641098

6159518

50

0.5

5.5

5

6

ASQDHV0038

641271

6159602

50

0.5

6.5

6

7.5

ASQDHV0039

641397

6159711

50

1

3.5

2.5

4

ASQDHV0040

640281

6159321

50

0.5

2.5

2

3.5

ASQDHV0041

640455

6159417

50

0.5

8.9

8.4

9.5

ASQDHV0043

640763

6159356

50

0.5

8.5

8

9

ASQDHV0044

640575

6159302

50

0.5

6

5

6.5

ASQDHV0046

640067

6159426

50

0.5

4.5

4

5

ASQDHV0049

640376

6159800

50

0.5

3

2.5

6.5

ASQDHV0050

640549

6159884

50

0.5

5

4.5

6.5

ASQDHV0051

640897

6160053

50

0.5

10.3

9.8

11

ASQDHV0052

641027

6160111

50

0.5

11.5

11

12

ASQDHV0053

640884

6160234

50

0.5

6

5.5

6.5

ASQDHV0054

640739

6160166

50

0.5

5.3

4.8

5.5

ASQDHV0056

640222

6159961

50

0.5

3

2.5

3

ASQDHV0058

639978

6159377

50

0.5

4

3.5

4.5

ASQDHV0059

641348

6160228

50

0.5

5.8

5.3

8.5

ASQDHV0060

641192

6160350

50

0.5

7

6.5

7.5

ASQDHV0061

641043

6160470

50

0.5

2.8

2.3

3.5

ASQDHV0062

640940

6160582

50

0.5

3

2.5

4.5

ASQDHV0063

641116

6160689

50

0.5

5.7

5.2

12

ASQDHV0064

641270

6160553

50

0.5

8.5

7.5

9

ASQDHV0068

641307

6160399

50

0.5

7

6

7

ASQDHV0069

641179

6160477

50

0.5

6.9

6.4

7.5

ASQDHV0070

641259

6160201

50

0.5

6.7

6.2

8

ASQDHV0071

641111

6160320

50

0.5

7.2

6.7

8

7

Suite 10, 295 Rokeby Road, SUBIACO WA 6008

Phone: +61 8 9200 8200 Fax: +61 8 9200 8299 www.asqg.com.au

APPENDIX 1 (continued) - Significant Silica Sand Intersections Drill Hole Details

DrillholeID

East

North

Zone

White Silica Sand Intersection

End of Hole

(mGDA94)

(mGDA94)

(m)

ASQDHV0072

641178

6160070

50

0.5

10.4

9.9

11

ASQDHV0073

641015

6159988

50

0.5

14

13

14.5

ASQDHV0074

641056

6159806

50

0.5

12

11.5

12.5

ASQDHV0075

641212

6159889

50

0.5

9.5

9

10.5

ASQDHV0076

640908

6159756

50

0.5

6

5.5

7

ASQDHV0078

640533

6159549

50

0.5

7

6.5

8

ASQDHV0079

640359

6159465

50

0.5

7

6.5

8.5

ASQDHV0080

640422

6159295

50

0.5

2.5

2

3.5

ASQDHV0081

640613

6159399

50

0.5

7.5

7

8

ASQDHV0084

641125

6159621

50

0.5

13.5

12

14

ASQDHV0085

641280

6159709

50

0.5

9

8

9

ASQDHV0086

641246

6159448

50

0.5

3.5

3

7.5

APPENDIX 2 - JORC 2012 Table 1

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria

Commentary

Sampling

• Samples are 1/2 m down hole intervals with the entire sample collected and chip trays retained

techniques

to provide a permanent record of the down hole lithology of each hole drilled.

Drilling

• Drilling was undertaken using a tractor mounted vacuum drill rig.

techniques

Drill sample

• Sample weights were monitored to provide an indirect record of sample recovery.

recovery

• All samples were visually checked for recovery, moisture and contamination.

Logging

• All holes were field logged by company geologist. Sand colour, sorting and composition was

recorded.

Sub-sampling

•

Test work is still in progress and not reported here. At the time of reporting no sub sampling or

techniques and

sample preparation has been undertaken

sample

preparation

Quality of assay

• Test work is still in progress and not reported here.

data and

laboratory tests

Verification of

• As these exploration results are preliminary in nature they have not been independently verified

sampling and

• No twin holes were completed

assaying

• Paper logs and records have been transferred to electronic computer files for storage and cloud

based backup

• Hole positions have been plotted and checked for validity within mapping systems

• The logging process involves placing drill samples for each 1/2 m interval into chip trays which

are retained to provide a permanent record of the down hole lithology. ASQG geologists logged

all drill samples at the rig, with a minimum logging interval of 1/2 m. All chip-tray samples were

collected as permanent physical records for audit and validation purposes.

8

Suite 10, 295 Rokeby Road, SUBIACO WA 6008

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Criteria

Commentary

Location of data

• Drill hole locations have been recorded using hand held GPS that has been checked for accuracy

points

against a known base station.

• The coordinate system employed was GDA94 Zone 50.

• The location accuracy using this method is thought to be +/-5m for X & Y coordinates

Data spacing and

• Drill holes were located approximately every 200 m along existing tracks and then on an

distribution

approximately 200 m spaced grid in areas of plantation trees. Where significant sand was

intersected approximately 100 m spaced infill holes were completed.

• Until such time as a mineral resource estimation is completed it is not known if this spacing is

sufficient to establish any conclusions about geological continuity.

Orientation of

• All holes were drilled vertically on a broad dune structure which is not expected to introduce any

data in relation

bias into the sampling

to geological

structure

Sample security

• Test work is still in progress and not reported here however the drilling samples were collected

by ASQG geological staff and transported to ASQ's sample storage facility by the drilling

contractor. ASQ Geologists supervised the loading and unloading of the samples.

Audits or reviews

• There has been no audit or review of the drilling or sampling at this time.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria

Commentary

Mineral tenement

• All samples were collected from private property on E70/5262

and land tenure

• All samples have been collected from areas where ASQ has a Mining and Exploration Land Access

status

Agreement in place and where there is no known impediment to ongoing access for exploration

Exploration done

• No previous exploration for silica sand has been recorded in the area of interest

by other parties

Geology

• The sand targets are aeolian sand dunes formed in quaternary sand deposits.

Drill hole

• The locations of each drill hole with a significant silica sand intersection is given in appendix 1 of this report

Information

Data aggregation

• No weighted averages, cutoff grades or metal equivalents are used

methods

Relationship

• The extent of mineralization is unknown at this stage

between

mineralisation

widths and

intercept lengths

Diagrams

• See figures in body of text

Balanced reporting

• This announcement is considered to be a balanced report

Other substantive

• No other exploration data is considered material to this report

exploration data

Further work

• Test work to determine the quality of the silica sand in the deposit is underway. If possible, a Resource

Estimate will be calculated.

9

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Phone: +61 8 9200 8200 Fax: +61 8 9200 8299 www.asqg.com.au

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Australian Silica Quartz Group Limited published this content on 09 December 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 December 2020 16:30:02 UTC