Cyclone Metals : Quarterly Report - 31 March 2022

27 April 2022

Quarterly Activities and Cash Flow Report for the Quarter Ended 31 March 2022

CORPORATE

Strategy and Business Model

Cyclone Metals Limited (ASX: CLE)(Cyclone Metals or the Company) is an Australian domiciled mineral development and investment company. Cyclone Metals has interests in several exploration and mining projects and companies, providing exposure to copper, gold, iron ore, lithium, rare earths, uranium and lead-silver-zinc assets in Australia, Europe, Africa and South America (refer Figure 1).

Cyclone Metals' strategy is to acquire and invest in undervalued and/or distressed mineral assets and companies (Projects) and:

• • improve the value of these Projects, through a hands-on approach to management, exploration, evaluation and development; and

• • retain long-term exposure to these Projects through a production royalty and/or equity interest.

Cyclone Metals aims to deliver Shareholder value by adding value to these undeveloped Projects. If Projects are converted into cash, the Company intends to follow a policy of distributing surplus cash to Shareholders.

Placement

On 15 December 2021, the Company announced that it would be undertaking a placement to raise up to $1,000,000 (before expenses) at an issue price of $0.0045 per fully paid ordinary share (December Placement Shares) with one free attaching unlisted option for every one share applied for at an exercise price of $0.005 expiring 12 months from the date of issue (December Placement Options) (December Placement). Funds raised will be used for general working capital purposes. On 4 February 2022, the Company issued 151,111,110 December Placement Shares and 151,111,110 December Placement Options.

On 24 February 2022, the Company announced that it would be undertaking a placement to raise up to $500,000 (before expenses) at an issue price of $0.005 per fully paid ordinary shares (February Placement Shares) with one free attaching unlisted option for every four shares applied for at an exercise price of $0.006 expiring 12 months from the date of issue (February Placement Options) (February Placement). Funds raised will be used toward the acquisition and initial work on the Grand Port projects (refer below) and for general working capital purposes. The February Placement includes a firm commitment from Cyclone Metals Director Will Scott to subscribe for 10,000,000 February Placement Shares with 2,500,000 February Placement Options on the same terms the February Placement, subject to shareholder approval. On 23 March 2022, the Company issued 90,000,000 February Placement Shares and 22,500,000 February Placement Options.

ASX: CLE

Appendix 5B Quarterly Report and Statement of Cash Flows

The ASX Appendix 5B quarterly report is attached to and lodged with this report. The Company's

Appendix 5B Quarterly Report covers the 3-month period from 1 January 2022 to 31 March 2022. During the quarter, exploration and evaluation expenditure was $192k, associated predominantly with work undertaken on the Wee MacGregor and Nickol River Project (NRP) tenements and tenement compliance costs. Administration and corporate expenditure during the quarter was $319k which included Director, employee, and consultant costs. In addition, a payment of $260k was made to the ATO in respect to the tax amount payable. Financing activity inflows during the quarter was $1,130k (before expenses) in relation to the December Placement and February Placement.

As at 31 March 2022, the Company had approximately A$499k.

Payments to Related Parties and their Associates

In accordance with ASX Listing Rule 5.3.5, payments to related parties of the Company and their associates during the quarter totalled $155k relating to the Executive Directors salary and Non-Executive Director fees ($128k) and payments to Director related entity ($27k). These amounts are included at item 6.1 and item 6.2 of the Appendix 5B.

Refer to the Remuneration Report in the Annual Report for further details on director remuneration and related party transactions.

Figure 1: Group Structure

Exploration Projects

Nickol River Project

CLE - 100%

Western Australia

Wee MacGregor Copper Project

CLE - 20%

Qld, Australia Grand Port Project

CLE - 100%

New Zealand Yalardy Rare Earth Project

CLE - 100%

Western Australia Kukuna Iron Ore Project

CLE

Sierra Leone

Investments

CuFe Limited (ASX: CUF)

15.45% interest

Iron Ore, Gold, Lithium, Base Metals

(NT and WA, Australia)

International Goldfields Limited (Unlisted)

18.82% interest

Gold (Australia / Cote d'Ivoire / Brazil)

Cauldron Energy Limited (ASX: CXU)

4.70% interest

Uranium (Australia / Argentina)

European Lithium Limited (ASX: EUR)

5.65% interest

Lithium (Austria)

PROJECTS

Grand Port Acquisition

On 24 February 2022 and 17 March 2022, the Company announced that it had entered into a binding term sheet with Grand Port Resources Pty Ltd (Grand Port) to acquire 100% of the issued share capital of Grand Port which owns and has applications over a diversified portfolio of gold, copper, nickel and PGE assets in New Zealand, with locations show in Figure 1 (together, the Acquisition).

Figure 1: Location of Grand Port Projects

South Island - Longwood

Longwood Range Gold Copper PGE Project (application pending) (Longwood Project) is situated 40km west of Invercargill, New Zealand and covers 424km2. Historic production includes: ~88koz Au and 1,500oz of platinum. Previous drilling intersected a PGE reef with no follow up work and the project area has been identified as being fertile for copper and nickel by Otago University. There has been only 4 historic drill holes to date on the Longwood Project. On-ground work will kick off with a geochemical sampling program that will generate the maiden drill program.

South Island - Mareburn and Macraes South

The Mareburn Gold Project (Mareburn Project) and Macraes South Gold Project (granted) (Macraes Project) (figure 2) covers 464km2 within the Otago Goldfield of the South Island, which has 10Moz of proven historical gold production. The Mareburn Project sits 8km north of the producing Macraes Gold

Mine and processing plant, New Zealand's largest producing gold mine, and ~2km from the Coronation

open pit. The Macraes Project is contiguous to the south of the Macraes Gold Mine and processing plant.

Figure 2: Macraes South and Mareburn Project locations, contiguous to the Macraes Gold Mine.

No modern exploration techniques or drilling has been undertaken at the Macraes Project. Initial walkup extension drill targets have been undertaken at the Mareburn Project. Cyclone will target structurally hosted gold, with the use of modern exploration techniques, once the existing data has been reviewed in full and complete a range of exploration programmes to generate new data, including a detailed soil geochemical programme orientation survey and a geophysical survey to identify transverse structures.

South Island - Drybread and Waikerikeri

The Drybread - Waikerikeri Gold Project (application pending) (Drybread Project) (Figure 3) covers ~198km2 and crosses over Santana Minerals Limited's (ASX: SMI) Bendigo-Ophir Project in Central

Otago and contains historical alluvial workings contiguous to the Drybread Project. The area has been underexplored for hard rock potential with no primary gold exploration undertaken.

Figure 3: Drybread and Waikerikeri projects contiguous to Santana Minerals project

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