Quarterly Activities Report

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For the three months ended 30 June 2022

28 July 2022

ASX:BCA

Mineral Resources grow, further drilling and

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excellent metallurgical testwork results

CARAWINE JV

• Indicated Mineral Resource at Flanagan Bore increased to 104Mt @ 10.5% Mn, containing

11Mt of manganese at the LR1 and FB3 deposits.

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• Mineral Resource includes a significant high-grade component of 33Mt @ 12.8% Mn

across the LR1 and FB3 deposits.

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a further $2.5 million in exploration expenditure.

7,500m reverse circulation (RC) infill and extensional drill program completed at Flanagan

Bore which was designed to further increase Mineral Resource confidence and extend the mineralisation. Assays pending at the end of the reporting period.

• Excellent metallurgical testwork results returned during the quarter, with concentrate grades of >30% Mn achieved from high-level sighter testwork. Further beneficiation techniques can increase the concentrate grade to >35% Mn.

• Company has completed the earn in requirements for a 51% equity interest in the

Carawine JV (including Flanagan Bore) and has elected to increase to 75% by sole funding

CORPORATE

  • Equity capital raising of $3.2 million completed during the quarter at $0.33 per share with the placement taken up by Sophisticated and Wholesale investors including Black Canyon Directors
  • Strong cash position with $4.75m at 30 June 2022

ForCommenting on activities completed during the June quarter, Black Canyon's Executive Director, Brendan Cummins, said "Flanagan Bore continues to grow and shows significant scale potential. With mineral resources now in excess of 100Mt and further upside from additional targets, we continue our investigations into the potential development of the LR1 and FB3 deposits. Early stage sighter level metallurgical testwork completed during the quarter yielded excellent results achieving grades in excess of 30% Mn, with plans to optimise process flowsheet design work during the coming quarters.

"The second half of 2022 looks extremely exciting for Black Canyon as we complete the Flanagan Bore Scoping Study, with the aim of demonstrating the projects significant value."

ASX Code: BCA

Registered Address

Telephone: +61 8 9426 0666

283 Rokeby Road

Email: info@blackcanyon.com.au

Subiaco, WA, 6008

Website: www.blackcanyon.com.au

Activities Report

Black Canyon (ASX: BCA) is focused on manganese exploration and development in WA's Pilbara region. onlyThe Company has a portfolio of tenements that are prospective for manganese mineralisation and hosts

the large Flanagan Bore Mineral Resource.

Mineralisation includes both "Woodie-Woodie" hydrothermal (high-grade Mn) and "Supergene Balfour" style manganese deposits (med-grade Mn/Fe).

Flanagan Bore is part of the Company's Carawine JV and is subject to a farm-in and joint venture agreement with Carawine Resources Ltd (ASX:CWX). Having earned a 51% interest, Black Canyon is now earning up to 75% in the Carawine Project tenements by sole-funding an additional $2.5m of exploration expenditure. The Carawine Project covers approximately 793km² of tenure located south of

usethe operating Woodie-Woodie manganese mine, providing a large footprint in a proven and productive manganese belt.

The Company also holds a number of 100% owned tenements some of which have been recently granted. The land holdings controlled by Black Canyon now totals over 2500 km2. Project locations are presented in Figure 1.

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Figure 1. Black Canyon Project locations

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FLANAGAN BORE MINERAL RESOURCE EXCEEDS 100Mt (INDICATED)

Following excellent drilling results in the March quarter at LR1 and FB3, the Company updated the Mineral Resource Estimate (MRE) during the June quarter.

The previous Mineral Resource at Flanagan Bore comprising 15Mt @ 11.3% Mn (Inferred) has been significantly expanded and upgraded to 104 Mt @ 10.5% Mn (Indicated) containing 11 Mt of manganese

(Table 1). This represents a substantial increase of 89 Mt of total tonnage and 9Mt of contained

manganese from the previous Mineral Resource or a 580% increase in Mineral Resource tonnes.

The Mineral Resources at LR1 and FB3 have been estimated based on drill assay information received

onlyfrom the 4,312 m reverse circulation (RC) drill program completed in December 2021, in addition to 516

m of historic RC drilling from 2012.

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Table 1. Global Mineral Resource estimate for the FB3 and LR1 deposits at Flanagan Bore April 2022*

Summary of Mineral Resources

(1)

Mineral

In Situ

Deposit

Resource

Material

Mn

BD

Mn

Fe

Si

Al

Category

(Mt)

(Mt)

(gcm3)

(%)

(%)

(%)

(%)

FB3

Indicated

67

7

2.4

10.4

10.3

17.6

4.5

LR1

Indicated

37

4

2.4

10.8

8.9

18.3

5.0

Grand Total

104

11

2.4

10.5

9.8

17.9

4.7

Notes:

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(1) Mineral resources reported at a cut-off grade of 7% Mn

A shallow high-grade subset of mineralisation has been delineated across the LR1 and FB3 Mineral Resources and presented in Table 2. At an elevated cut-off grade of 11% Mn the MRE totals 33Mt @ 12.8% Mn at an Indicated level of classification. This higher-grade material could be capable of supporting a substantial, multi-decade mining operation at Flanagan Bore with potential to also grow the resource base in the region. As the Company progresses the Scoping Study the proposition of having immediate access to higher grade manganese resources from surface will be evaluated and potentially add significant value.

Table 1. High-grade Zone Mineral Resource estimate from FB3 and LR1 deposits at Flanagan Bore April 2022*

Summary of Mineral Resources

(1)

Mineral

In Situ

Deposit

Resource

Material

Mn

BD

Mn

Fe

Si

Al

Category

(Mt)

(Mt)

(gcm3)

(%)

(%)

(%)

(%)

For

FB3

Indicated

19

2

2.4

12.7

11.5

18.5

4.6

LR1

Indicated

15

2

2.4

12.9

9.9

18.4

4.9

Grand Total

33

4

2.4

12.8

10.8

18.5

4.8

Notes:

(1) Mineral resources reported at a cut-off grade of 11% Mn

* refer below, JORC Table 1, Sections 1 to 3 and Appendix 1-3 for further details

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For personal use only

Figure 2. FB3 Mineral Resource grade tonnage curve

Figure 3. LR1 Mineral Resource grade-tonnage curve

Figure 4. Type section 273,760 mE (looking east) showing LR1 MRE model cells and drill holes coloured on Mn

grade (%) (2x vertical exaggeration)

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METALLURGICAL TESTWORK DELIVERS >30% Mn GRADE

During the quarter, the Company announced highly promising results from initial metallurgical testwork, achieving concentrate grades of more than 30% Mn. A total of three composite samples (PQ3) were tested from the LR1 and FB3 deposits.

Key highlights include:

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Significant manganese grade uplifts from feed grades of 11.7% and 13.7% Mn upgraded to

approximately 19% and 26% Mn through scrubbing and washing - an important first step for

beneficiation.

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Further beneficiation tests on the scrubbed/washed manganese feed material result in additional

manganese grade improvements:

  1. Heavy Liquid Separation (HLS) (used to simulate dense media separation (DMS)) achieved grades up to 35.5% Mn from the FB3 composite sample.
  1. Ore sorting achieved grades of up to 31.3% Mn from the FB3 composite sample

useThe Company will now leverage off the learnings from these initial results and plan additional metallurgical programs to further optimise and improve manganese grade with the goal of designing a robust flowsheet capable of delivering a consistent saleable manganese concentrate

personalPreliminary discussions with commodity marketing specialists indicate that manganese concentrates with similar key characteristics to the potential ore processed at Flanagan Bore would be suitable for silico or ferro manganese alloying as feedstocks into the steel manufacturing industry.

Further engagement with a number of commodity traders and other interested parties will continue as the Company refines it flowsheet to produce a saleable manganese product.

INFILL AND EXTENSIONAL DRILLING AT FLANAGAN BORE

During the quarter the Company completed 7,534m of RC drilling as part of an infill and extensional drilling program across the previously announced Mineral Resource at Flanagan Bore

The infill drill program was designed to focus on an outcropping high-grade manganese subset of the Mineral Resource estimate, comprising 33Mt @ 12.8% Mn (Table 2) across the FB3 and LR1 deposits. The drill program also evaluated the potential of the mineralised horizon between the FB3 and LR1 deposits and yielded promising visual results as additional shale enriched manganese mineralisation was intersected.

ForTwo other manganese-enriched shale targets were drilled and confirmed mineralisation at the FB2 and FB6 prospects.

As a result of this RC drill program (181 holes), the overall drill spacing at FB3 and LR1 has been reduced from 200m spaced lines and 100m centred holes to 100m spaced lines and 100m centred holes. Significantly, the doubling of the drill density should enable the current Indicated classified Mineral Resources to be upgraded to Measured, which is suitable for detailed feasibility and associated mining and processing studies. No further mineral resource drilling is required once Measured Mineral Resources have been estimated

Assay results were pending at the end of the quarter.

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Black Canyon Ltd. published this content on 27 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2022 22:27:01 UTC.