Cannon Resources : Quarterly Activities Report - March 2022

ASX ANNOUNCEMENT | ASX: CNR

22 April 2022

Quarterly Activities Report for the period ending 31 March 2022

Highlights

• ● Fisher East Resource Increased 49% to 116.3Kt Contained Nickel

  • o Musket resource increased 44% to 45.4 Kt contained nickel at 1.9% Ni

  • o Post-quarter end Sabre maiden resource delivered 24.5 Kt contained nickel at 1.4% Ni

• ● PGE content also estimated for the first time at Musket at 0.5 g/t (Pd +

  Pt) within the resource for 38,580 Oz contained (Pd+Pt) (also JORC 2012 compliant)

• ● Assay results from 2 diamond holes from the Fisher East Nickel Project have intersected extensions to nickel mineralisation at Camelwood:

  • o 4.67m @ 2.31% nickel from 434.33m in hole MFED090

  • o 0.71m @ 3.26% nickel from 728.85m in hole MFED094

• ● AC drilling results from Cannon's late 2021 program define strong PGE anomalies along the ore-hosting basal contact at Fisher East

Cannon Resources Limited (ASX:CNR) ("Cannon" or "the Company") is pleased to provide shareholders with an overview of quarterly activities for the period ending 31 March 2022 ("Quarter", "Reporting Period").

Commenting on the Quarter, Cannon CEO, Steve Lynn said:

"The March Quarter 2022 saw a rapid advancement of the Fisher East project. We compiled and interpreted all assay, geology and down-hole EM results from our 2021 drilling campaigns at Musket and Camelwood as well as the regional aircore program.

Excitingly, Musket is starting to reveal its full potential. We completed a renewed geological model for the nickel mineralisation and combined with the new drilling we updated and increased the resource by 44% to 45.5 Kt of contained nickel. The ore body remains open internally and down-plunge and is still only drilled to a maximum depth of 600 metres.

Similarly, at Camelwood our work resulted in a better understanding of mineralisation controls and highlighted areas for potential resource expansion to the south of the current resource.

The regional AC program tested the ore-position contact along a 12 km section that included the Musket, Cutlass, Sabre, Tomahawk and Horatio areas with very strong PGE anomalies returned from Musket, Sabre and Horatio. These results have allowed us to focus our current drilling programs to test potential high-grade zones within the mineralisation envelopes at Sabre as well as follow-up follow drill test the anomalous areas outside of the main resources.

Fisher East AC and Diamond drill programs commenced in March 2022, with approximately 8,000 metres of drilling planned. The outcomes from this program is highly anticipated and I look forward to keeping shareholders up to date with the results as they come to hand over the next few months.

Post quarter end we achieved another significant milestone with the announcement of a maiden resource for Sabre of 24.5 Kt contained nickel which has grown the resources at Fisher East to 116.3Kt of contained nickel, an increase of 49% since Cannon's listing in August last year."

Resource Upgrades

During the quarter, Cannon announced that an update of the Musket Mineral Resource had been completed which resulted in a 44% increase in nickel metal over the previously reported resource estimate. Musket has now been estimated to contain 2.4 Mt @ 1.9% Ni and 0.5 g/t PGE (Pt + Pd) for 45.4 Kt contained nickel at a cut-off grade of 0.9% Ni (JORC 2012). This is an increase in both tonnage and grade over the previous estimate of 1.9 Mt @ 1.7% Ni for 31.6 Kt contained Ni.

With the Musket resource upgrade, nickel endowment at the Fisher East Project increased to 91,800 tonnes of contained nickel in 3 JORC 2012 resources at Camelwood, Cannonball and Musket. Subsequent to March Quarter end, a maiden resource for Sabre was announced and this increased the total resource at Fisher East to 116.3 kt of contained nickel. Importantly, all resources remain open laterally, internally and down plunge.

In addition, a comprehensive program of resampling for PGE from relevant holes as well as a new and existing PGE analysis has enabled Cannon for the first time to estimate a PGE content for the Musket Mineral Resource. The combined PGE content (Pt and Pd) has been estimated within the Musket resource at 2.4 Mt @ 0.5 g/t (Pt+Pd) for 38,580 Oz contained (Pt+Pd) and is also JORC 2012 compliant.

Figure 1: Musket Mineral Resource in long section.

Section shows 2022 Indicated Resource, 2022 Inferred Resource and outline of previous

2015 Mineral Resource. Also shown are all drilling pierce points plus Cannon drilling results.

Post quarter end the Company announced a maiden resource for the Sabre deposit at Fisher East of 1.8 Mt @ 1.4% Ni for 24.5 Kt contained nickel.

Sabre is a channelised komatiite hosted nickel deposit sharing the same genesis, mineralisation style and host stratigraphy as Cannon's 3 other Fisher East nickel deposits of Musket, Camelwood, and Cannonball. Sabre is 6 km south of Musket and the 4 deposits are all located on an 8 km section of the basal komatiite/sediment contact on 100% Cannon tenure.

Table 2: Sabre Mineral Resource April 2022

As a result of the Sabre maiden resource the Fisher East Project increased to 116,300 tonnes of contained nickel in 4 high grade Class 1 JORC 2012 resources at Musket, Camelwood, Cannonball and Sabre.

Figure 2: Sabre Mineral Resource in long section.

Section shows 2022 Inferred Resource, all drilling pierce points, selected significant intercepts plus all Cannon drilling

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