Lachlan Star : March Quarterly Activities and Cashflow Report

Lachlan Star Limited

(ASX:LSA)

ACN 000 759 535

29 April 2022

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 MARCH 2022

Lachlan Star Limited (Lachlan Star or the Company) is pleased to present its quarterly activities report for the March quarter.

HIGHLIGHTS:

• • Minerals 260 Limited (ASX:MI6) undertaking a major exploration campaign consisting of project wide aeromagnetic and gravity surveys, targeted ground electromagnetic and Gradient Array Induced Polarisation surveys as well as infill and follow-up geochemical sampling.

• • A maiden aircore drilling campaign has commenced at Koojan and will provide first pass testing of newly defined anomalies.

• • Results of the maiden reverse circulation ("RC") drilling program at Killaloe targeted multiple gold trends defined by the historic Buldania workings in tenement M63/177 and returned gold intersections including:

  • o 6m at 3.74g/t gold from 54m in drillhole LSK007

  • o 9m at 1.38g/t gold from 75m & 3m at 3.03g/t gold from 90m in drillhole LSK008

• • Binding Term Sheet signed with Green Critical Minerals Pty Ltd regarding the sale of a 100% interest in the Company's Princhester Magnesite Project. Consideration for Transaction is $100,000 in cash and the repayment of the Company's security deposits and environmental bonds ($35,000).

• • The Company remains well funded with ~$4.35 million cash on hand at the end of the March quarter.

OPERATIONS

Koojan Cu-Ni-PGE JV Project (LSA 75%)

Lachlan Star and Minerals 260 Limited (Minerals 260) have a farm-in agreement where Minerals 260 can earn a 51% interest in the Koojan Project held by Coobaloo Minerals (LSA 75%) (Farm-in). Minerals 260 can acquire 51% equity in the Koojan Project by spending a total of $4 million on exploration within 5 years with a minimum expenditure commitment of $500,000 before having the right to withdraw. Upon Liontown earning 51% in the Koojan JV Project, the parties respective interests will be Minerals 260 (51%), Lachlan Star (24%), Wavetime Nominees (25%).

The Koojan Project is located in the New Norcia region of Western Australia (Figure 1), approx. 80km north of the recent Julimar Ni-PGE-Cu discovery by Chalice Gold Mines Ltd, and is located in a similar geological setting. The Koojan Project is located within the Western Gneiss Terrain of the Archaean Yilgarn Craton of south-west Western Australia. The prospective mafic/ultramafic bodies are hosted within the Jimperding Metamorphic belt - a belt up to 70km wide and bounded to the west by the Darling Fault, and to the east by Yilgarn craton units.

Level 1, 33 Ord Street West Perth, WA 6005

P: +61 8 9226 1524

W:http://www.lachlanstar.com.au/

The Koojan Project is interpreted to be located within the same geophysical setting as the Julimar and Yarawindah Ni-Cu-PGE prospects. This setting is characterised as a zone of intrusive mafic to ultramafic rocks proximal to the margin of the Yilgarn craton and hosted within a complex structural setting on the margin of gravity anomalies. This structural zone is interpreted to have intruded the granite dominated terrain, and can be traced from the Julimar prospect through to the Koojan Project where filed reconnaissance and Government geological mapping has identified a series of mafic to ultramafic units within the project area.

Figure 1: Moora and Koojan JV Projects: Location plan and regional geology (source MI6 ASX announcement 14/07/2021)

Koojan JV Exploration Program Details

The reconnaissance aircore drilling will test coincident geochemical and geophysical targets including the previously announced high-priority Mallory and Bourbana prospects (reported by Liontown Resources Limited (ASX:LTR) prior to the demerger and IPO of Minerals 260 - see Liontown ASX release dated 14th July 2021).

The Mallory prospect is defined over a strike length of 2km with highly anomalous surface gold (up to 18ppb), PGE's (up to 160ppb) and copper (up 380ppm) that is coincident with a conductive zone defined by the GAIP survey (Figure 2).

The Bourbana prospect is a broad, multi-peaked gold anomaly (up to 135ppb) that has been defined over a 1km x 2.7km surface area and the completed GAIP survey has identified coincident conductive zones to be targeted by reconnaissance drilling.

In addition to the Mallory and Bourbana prospect, the reconnaissance drilling will also target surface gold and PGE anomalies defined by surface geochemical sampling and geophysical interpretation. The aim of the drilling is to provide geological information to fully evaluate and prioritise the anomalies for continued exploration (Figure 2).

The extensive surface geochemical sampling program, designed to infill previously, partially defined anomalies and assess new areas, is ongoing with approximately 40% of the samples collected and submitted for assay.

The detailed aeromagnetic and gravity surveys have been completed over the Koojan JV and continued over to ground held directly by MI6. The final data is being processed and when received and combined with the results of the reconnaissance drilling and geochemical sampling will provide a significant amount of data, which once processed and analysed, will be used to optimise drill testing of existing and new targets.

Figure 2: Moora/Koojan Projects - Regional greyscale magnetic image showing proposed aircore drill traverses

Killaloe Gold Project

The Killaloe Project, located in southeast Western Australia approximately 600km east of Perth and 35km northeast of the historic gold mining town of Norseman, comprises two, largely contiguous exploration licences (E63/1018 and E63/1017) and the separate Buldania mining licence (M63/177) covering a total combined area of 94km2 (refer Figure 3). There are no other land users and access is generally good although sometimes limited by thick bush and weather events.

Lachlan Star's maiden drilling program consisted of 8 RC drill holes for a total of 962m completed made up of 3 drill holes for 362m within the Buldania workings with drill holes oriented to the south and dipping at 60 degrees to intersect the east-west striking mineralised zones (refer Figure 3). In tenement E63/1018 drilling targeted the extensions to the Barrel prosect and parallel targets with 5 drill holes for 600m drilling with holes oriented to the east and dipping 60 degrees to cross-cut the geological sequence. All holes have been sampled on an initial 3m composite basis and analysed for gold, PGE and multi-element. Anomalous samples have been re-split to 1 metre intervals for further assay to confirm the potential for narrow high-grade gold mineralisation.

The drilling program was limited due to drill rig availability and further drilling will be planned when all results have been received and interpreted.

Buldania Gold Workings

The Gold mineralisation at the Buldania prospect within tenement M63/117 is interpreted to be controlled by a series of parallel shear zones intruded by quartz veining and associated alteration. Historic gold workings that have exploited the gold mineralised trends and the geological strike approximate an east-west orientation, and historic drilling defined multiple parallel zones that require further testing. Following on from a rock-chip sampling program, the initial drilling program tested a section across the parallel trends to confirm geological and structural interpretation on mineralisation controls.

Significant intersections for the RC drill holes calculated using a 0.5g/t gold lower cut-off, maximum 3m internal dilution are tabled below1:

Notes: Drill holes are RC drill holes. Drill holes have been sampled on a 1m basis with samples collected via a cone split system with samples for analysis consisting of 3m composite samples. Drill hole collars are surveyed using a hand-held GPS with sub 5-metre accuracy, coordinate system GDA - Zone 51S, and all holes are survey down-hole for dip and azimuth on approximately 30m intervals. All drill holes are geologically logged and recorded in database. Samples analysed by Intertek-Genalysis Laboratories for gold and PGE's by 50g Fire Assay and multi-element analysis by mixed acid digest and ICP-MS and ICP-OES finish. Intersections are reported as g/t gold (ppm) Intersections are reported using a 0.5g/t gold lower-cut-off, and allowing for a maximum of 3m (1 composite sample) internal dilution.

The initial composite sample results and the geology identified in the drill hole logging has confirmed the potential for multiple mineralised trends and for these target zones to host high-grade nuggety gold mineralisation. The next phase of exploration drilling at this prospect will consist of deeper drilling to define high-grade gold mineralised shoots similar to the high grade quart reefs within the Norseman region.

Figure 3: Killaloe Gold Project - geology and prospect location

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