Kingsrose Mining : Quarterly Activities and Cashflow Report - December 2021

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Quarterly Report for the Period Ended December 31

2021

Kingsrose Mining Limited (ASX: KRM) ("Kingsrose" or the "Company") is pleased to provide an update on its

activities for the December 2021 quarter.

HIGHLIGHTS

• Cash balance of A$28.2m at December 31, 2021 (September 30, 2021: A$30.7m)
• Acquisition of Element-46 Limited
• Commencement of a Strategic Review for a Transaction on the Way Linggo Project
• Initial Drilling at the Maul Vein Target
• Completion of Phase 1 Mine Reclamation at Way Linggo

EXECUTIVE SUMMARY

Following extensive due diligence, the Company negotiated and closed the acquisition of Element-46 Ltd and its highly prospective exploration assets in Finland and Norway during the quarter. The Penikat project in Finland is a high-gradePGE-nickel-copper project with mineralisation demonstrated over 25 kilometres of strike length through historical mapping and drilling. The Porsanger project in Norway hosts two outcropping PGE-copper- nickel mineralised intrusions and widespread copper occurrences.

During the upcoming quarter, the Company is re-assaying numerous historical drill holes at Penikat for a full suite of elements including rhodium, copper and nickel that were not routinely sampled for in the past. Additionally, Kingsrose is establishing a dedicated sustainability and permitting team to complete the work required to obtain drilling permits. At Porsanger, Kingsrose is in the process of permitting and designing an electromagnetic geophysical survey to be conducted in Q2 of 2022 to search for indications of massive sulphide accumulations at depth.

At Way Linggo, regional exploration that resulted in the discovery of the Maul vein has progressed to initial drilling, with 5 holes completed for a total of 816.7 metres, significant intercepts include:

• 3.1 metres at 13.0 g/t gold, 21.9 g/t silver (from 78.2 metres, DDH-597)
• 4.3 metres at 6.0 g/t gold, 8.6 g/t silver (from 41.2 metres, DDH-596)
• 2.7 metres at 6.7 g/t gold, 8.9 g/t silver (from 8.1 metres, DDH-595)

Mineralised intervals include gold grades up to 25.1 g/t over 0.7 metres (from 78.2 metres, DDH-597) that are evidence of high-grade mineralising events present within the vein system and indicate potential to vector toward thicker high-grade zones. Drilling of a further 500 metres in two drill holes has commenced to target depth extensions of the newly discovered mineralisation.

Despite past production at the Way Linggo project having been highly profitable at times and exploration potential remaining within the project area, the Board of Kingsrose has determined that current resources at the project do not meet the economic thresholds required to realise the Company's strategy. Therefore, Kingsrose is commencing a process to seek and assess opportunities to divest all or part of the Way Linggo project or realise value through an alternative transaction, in each case seeking to maximise the value of Kingsrose's interest in the Way Linggo project for the benefit of all shareholders. Any discussions with counterparties will remain incomplete and confidential until the process has concluded and there can be no certainty any transaction will be agreed. The Company shall inform the market of any developments with respect to this process in due course in accordance with its continuous disclosure obligations.

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In preparation for the potential divestment of Way Linggo, and to meet the Company's commitments to the Indonesian government and local communities, phase 1 of mine reclamation has been completed over all aspects of the mine site that are not of value to a future exploration or mining operation. Based on this, the Company expects to be entitled to the reimbursement of over US$300,000 from bonds previously paid to the Indonesian Government. Such repayment is subject to an independent inspection by the Mines Department and this process is currently suspended due to COVID-19 restrictions in Indonesia.

Completion of the phase 1 reclamation allows the Company to reduce ongoing holding costs at Way Linggo to provide for the minimum maintenance and environmental monitoring requirements, and to manage ongoing drilling at the Maul Vein target.

Additionally, a dedicated team is continuing to assess further acquisition and joint venture opportunities, with a focus on drill-ready opportunities in Scandinavia. The Company will keep shareholders updated on any material developments.

SAFETY

During the quarter, the Company's detailed COVID-19 Management Protocol was rigorously adhered to, to ensure the health and safety of all employees.

Site experienced one lost time injury and no restricted duty or medically treated injuries in the quarter. The 12- month moving average Lost Time Injury Frequency Rate (LTIFR) was 3.94 (September 2021 quarter: 6.17). The Total Recordable Injury Frequency Rate (TRIFR) for the site at the end of the quarter was 3.94 (September 2021 quarter: 6.17).

OPERATIONS

The Company's Care and Maintenance Plan continued to be adhered to with the aim of ensuring all major parts of the plant are preserved and to reduce the requirements for regular maintenance. Additional care and maintenance activities, including reducing personnel on site, were undertaken to further reduce ongoing costs.

Geotechnical assessments were routinely undertaken during the quarter to ensure all mine areas were stable. Siphoning of the Talang Santo pit and the construction of a spillway was undertaken to reduce water levels and improve the pit stability during periods of high rainfall.

EXPLORATION

Way Linggo Project, Indonesia

Exploration during the quarter focused on the newly discovered Maul Vein, including interpretation of assay results from trenching completed in the previous quarter, and completion of a scout drill program.

The Maul Vein is a newly discovered, largely concealed, four to eight metre thick, vein breccia system located 500 metres west of the Talang Santo open pit. Trenching has exposed the vein beneath one to three meters of alluvial cover, over a strike length of at least 300 metres, and the vein strikes under deep alluvial cover to the southeast. The vein displays high level epithermal quartz textures and mineralogy, indicative of being located above the main precious metal interval.

Results from the trenching were announced on 1 November 2021, including significant intercepts of:

• 4.5 metres at 1.2 g/t gold, including 0.2 metres at 4.7 g/t gold (TR-MV-03)
• 8.0 metres at 0.6 g/t gold, including 2.0 metres at 1.3 g/t gold (TR-MV-02)

FIGURE 1: Map showing prospects and deposits, Way Linggo Project.

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FIGURE 2: Map showing location of drill holes at the Maul Vein target, located 500 m west of the Talang Santo mine.

Acquisition of Element-46 Ltd

On 30 November 2021, the Company announced that all conditions precedent to first completion regarding the acquisition of Element-46 Ltd (E-46) had been satisfied and 88.2 % of the issued capital in E-46 had been acquired. The final 11.8% of the issued capital in E-46 will be acquired following the Company's Annual General Meeting, which will be held on 28 January 2022. Kingsrose is now the owner and operator of mineral exploration rights at the Penikat PGE-nickel-copper deposit in Finland ("Penikat Project") and Porsanger PGE-copper project in Norway ("Porsanger Project").

Penikat Project, Finland

On 24 November 2022 the Company announced the results of resampling at the Penikat project, which confirmed historical high-grade intercepts of palladium, platinum, gold, nickel and copper mineralisation with significant intercepts including:

• 8.8 metres at 11.1 g/t PdEq (8.1 g/t Pd, 2.3 g/t Pt, 0.5 g/t Au, 0.5 % Cu, 0.4 % Ni) from surface (SI/KI- 034)
• 4.0 metres at 6.8 g/t PdEq (3.9 g/t Pd, 1.2 g/t Pt, 0.4 g/t Au, 0.8 % Cu, 0.3 % Ni) from 3.2 metres (SI/KI- 456)
• 13 metres at 2.3 g/t PdEq (1.8 g/t Pd, 0.6 g/t Pt, 0.1 g/t Au, 0.1 % Cu) from 0.8 metres (SI/KI-457), including
  o 4.3 metres at 4.0 g/t PdEq (3.1 g/t Pd, 0.9 g/t Pt, 0.1 g/t Au, 0.1 % Cu) from 3.7 metres and o 0.4 metres at 11.1 g/t PdEq (8.2 g/t Pd, 2.9 g/t Pt, 0.5 g/t Au, 0.4 % Cu, 0.1 % Ni) from 12.7
  metres
• 10.0 metres at 3.1 g/t PdEq (2.4 g/t Pd, 0.7 g/t Pt, 0.1 g/t Au, 0.1 % Cu) from 0.7 metres
  Note: Refer to ASX announcement dated 24 November 2022 for palladium equivalent (PdEq) formula.

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The Company is now working towards drill permitting through an exploration licence application process at Penikat and a re-logging and resampling program is planned for January and February 2022. The aim of the re- logging and resampling program is to better characterise each of the three mineralised reefs (SJ, AP and PV), as well as to select samples for a PGE deportment study. This work will form the foundations of a metallurgical sampling strategy to be implemented once drilling is permitted.

Porsanger Project, Norway

The Company is planning to conduct a ground-based electromagnetic geophysical survey at the Porsanger project, to explore for the potential presence of copper, nickel and PGE bearing massive sulphide deposits located at the base of the mafic-ultramafic intrusions at Porsvann and Karenhaugen. The survey will be completed in Q2 2022, pending the grant of certain permits from the local authorities and municipality.

Porsanger is prospective for feeder-conduit type massive sulphide deposits, and the shallow parts of the outcropping intrusions have been proven to contain disseminated sulphide associated with copper, PGE and weak nickel mineralisation (refer to ASX announcement dated 10 November 2021).

FIGURE 3: Location of the Penikat Project and Porsanger Project within Scandinavia.