Estrella Resources : Quarterly Activities/Appendix 5B Cash Flow Report

QUARTERLY ACTIVITIES REPORT

Quarter ending 31 March 2022

HIGHLIGHTS

•  CBDD064 intersected Massive and Semi-Massive Nickel-Copper Sulphides beneath the Carr Boyd Nickel Mine

  • o Main Zone - 16.2m @ 3.12% Ni and 0.60% Cu

  • o Mid Zone - 1.45m @ 1.57% Ni and 0.75% Cu

  • o Lower Zone - 12.97m @ 1.07% Ni and 0.25% Cu

  • o Studies on Carr Boyd and T5 mineralisation by the Estrella and the CSIRO commenced

•  Downhole Electromagnetic (DHEM) platform hole CBDD062 extended the potential of new zone below the T5 Discovery

  • o DHEM modelling indicates the mineralisation at depth is still open to the north and south

  • o New EM plate situated between previous drilling

•  CBDD067 intersected basal contact nickel-copper sulphide mineralisation 700m below surface at T5

  • o Cumulative 17.5m of disseminated and blebby sulphides intersected

•  Phase 5 regional RC and diamond drilling has intersected nickel-copper sulphides at all three basal contact prospects

  • o The RC phase at Broonhill and Gossan Hill has concluded with sulphides being discovered at both prospects, assays are pending

  • o The diamond rig is currently concentrating on the Mossgiel Prospect where sulphides have also been discovered

  • o Second diamond rig due on site soon to speed up the Phase 5 exploration program

Estrella Resources Limited (ASX: ESR) ("Estrella" or "the Company") is pleased to provide its activities report for the quarter ended 31 March 2021.

Commenting on the quarter, Estrella Managing Director Chris Daws said:

"It has been a very busy quarter at Estrella Resources as we continue to make progress at the Carr Boyd nickel project, 80km north of Kalgoorlie.

During the period we not only identified further sulphides at T5 but also uncovered new nickel-copper sulphide potential at Broonhill 1.4km to the north, and plenty of "smoke" between indicating that the whole contact in that area is fertile.

"The results have increased our understanding of the broader Carr Boyd region and we have been able to identify additional opportunities at Mossgiel and Gossan Hill."

High Grades Received for Carr Boyd Drilling

Assay results were received for CBDD064 which intersected two broad zones of massive and semi-massive nickel-copper sulphides below the Carr Boyd workings (Figure 1). The intersection confirms the continuation of nickel-copper sulphides into the unmined areas and coincides with a Downhole Electromagnetic (DHEM) response modelled from CBDD056A which was drilled by Estrella into the basal contact in October 2021 (Figure 1).

The diamond drillhole was targeted across the dip of mineralisation to assist the Company and CSIRO in understanding the relationship of the Carr Boyd mineralisation to the T5 Discovery on the Carr Boyd basal contact 1km away to the northwest.

If a link is proven then it would mean the Carr Boyd mineralisation was derived from a large pool of sulphides on the basal contact, possibly at depth. If, conversely, there is no link between the two, then the Carr Boyd position can be interpreted as a new, mineralised horizon which has received little exploration outside of the immediate mine area.

Figure 1: Location of CBDD064 mineralisation in relation to the historical workings and the Carr Boyd basal contact.

The remaining JORC2004 resource at Carr Boyd stands at 636,000t at 1.4% Ni and 0.5% Cu (8,800 NiT and 3,100 CuT). This resource was calculated in 2007 by Resource Evaluations Pty Ltd based upon historical mine mapping and additional drilling. Further confirmatory drilling will need to be conductedby Estrella to produce a re-interpretation and JORC2012 compliant resource in light of the findings of the current scientific studies.

Downhole Electromagnetics Extends the T5 Zone

The Company received positive results from the DHEM surveying of CBDD060 and CBDD062 in defining a potential new zone of mineralisation discovered below T5 (Figure 3).

The DHEM result confirms the continuation of mineralisation potential to the north which escaped detection when holes CBDD044 and CBDD047 were DHEM surveyed. The currently modelled DHEM plates extend over a strike length of 165m, and it is a further 50m South to the massive sulphide breccia intersection in CBDD042A to the south. Work is underway to schedule several more step-out holes to the north and south of T5 to locate the continuation of mineralisation both up and down plunge.

The next northern step-out will explore a potential fault off-set that has dislocated the massive sulphides resulting in a DHEM response skewed towards the main T5 mineralisation, leaving additional areas blind to electromagnetics. Drilling will also test the new plates generated by CBDD060 and CBDD062.

The southern drilling will target the continuation of the T5 massive sulphide mineralisation towards the Proterozoic Dyke (Figure 3).

Figure 3: Emerging new mineralised zone below T5 highlighted by recent DHEM from holes CBDD060 and CBDD062

T5 Mineralisation Continuing at Depth

Diamond drillhole CBDD067 was drilled as a downhole electromagnetic (DHEM) platform hole to explore the T5 basal contact at depth. The diamond hole pierced a broad, ~24m wide zone containing a cumulative 17.5m wide Ni-Cu sulphide intersection with some interstitial dolerite dyke material, below the T5 nickel discovery (Figure 4).

The intersection occurred between ~782m-806m on the T5 Basal Contact, 80m south and 150m below the massive sulphide discovered in CBDD042A which until now has been the deepest intersection informing the known T5 mineralisation (Figure 5).

The drillhole was designed to intersect the basal contact underneath a set of flat faults that have been inferred from geological studies on previous drilling. DHEM will be used down this hole to explore a large vertical section of the basal contact for additional massive sulphides often seen associated with the silica-sulphide plume material identified in CBDD067. This method of establishing deep DHEM platform holes was used successfully by Estrella in 2020 to discovery the T5 mineralisation along the basal contact of the Carr Boyd Intrusion.

Figure 4: Diamond core with globular nickel-copper sulphides at 802m in CBDD067. Silica plume material is visible in the top row of core with globular nickel-copper sulphides.

Figure 5: 3D rendering of the Carr Boyd Igneous Complex basal contact showing the location of CBDD067 with respect to the known T5 mineralisation.

Regional Exploration and Potential

The RC program was concluded, the aim of which was to confirm the fertility of the basal contact pyroxenites that were mapped in 2021. Assay results are yet to be received from the laboratory however pXRF results and geological logging has confirmed the high Prospectivity of these areas.

Some 12km of fertile basal contact has been identified to date, comprising three main prospects; Mossgiel, T5-Broonhill and Gossan Hill (Figure 6). Mapping and scout RC drilling at all three prospects has proven that the rocks in these areas are fertile and contain accumulations of semi-massive to disseminated nickel-copper sulphides.

Phase 5 exploration will systematically cover a cross-section of the contact with diamond drilling and DHEM at each of these prospects so as to locate additional massive sulphides. A second diamond drill rig is expected on site shortly to assist in completing a series of exploration holes between T5 and Broonhill whilst the current diamond rig completes a program at Mossgiel.

Figure 6: Image of the Carr Boyd Igneous Complex with the fertile basal pyroxenite contacts highlighted in red.

SPARGOVILLE NICKEL PROJECT (100%)

Over the March quarter, the Company has continued to work up a exploration and development strategy for the nickel resources within the greater Spargoville Nickel Rights project areas.The Company is currently planning targeted drilling to define extentions to the known nickel sulphide deposits at 1A, 5A, 5B and Andrews Mine. Statutory approvals to drill were received back from DMIRS and the Company expects to be able to commence drilling activities during the current quarter.

Table 3: Spargoville JORC Mineral Resource 5A Nickel Sulphide Deposit

October 2019 Mineral Resource Estimate - Min Type (0.5% Ni Cut-off)

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