Lefroy Exploration : Financial Report for the Half Year Ended 31 December 2021

For personal use only

LEFROY EXPLORATION LIMITED AND CONTROLLED ENTITIES

ARBN 052 123 930

DIRECTORS' REPORT

The Directors present their report together with the financial report of Lefroy Exploration Limited (the "Company") and its controlled entities (the "Group"), for the half-year ended 31 December 2021 and independent review report thereon. This financial report has been prepared in accordance with IAS 34 Interim Financial Reporting.

DIRECTOR'S names

The names of the Directors in office at any time during or since the end of the half year are:

Gordon Galt (Non-executive Chairman)

Michael Davies (Non- executive Director)

Geoffrey Pigott (Non-executive Director) - Retired 31 January 2022

Wade Johnson (Managing Director)

The Directors have been in office since the start of the half year to the date of this report unless otherwise stated.

Results and Review of operations

For the half year ended 31 December 2021, the Group recorded a loss (after providing for income tax) amounting to $912,000 (Dec 2020: loss $504,000).

During the 6 months ended 31 December 2021, the Company maintained its gold exploration focus on the Lefroy Gold Project (LGP) 50km to the south-east of Kalgoorlie. Exploration activities here continue to be progressed in two tenement packages, with work being continued by Gold Fields Limited (Gold Fields) at the Western Lefroy JV area and by the Company at the wholly owned Eastern Lefroy tenements.

At Eastern Lefroy the primary focus was at the Burns copper gold prospect where multiple RC drilling programs were completed. These were designed to expand the footprint of the system guided by the results from a detailed aeromagnetic survey. This was followed thereafter by a broad aircore drilling program, evaluating the limits of the Burns system and corridor beneath Lake Randall. A maiden aircore drill program was also completed at Coogee South subsequent to the excision of that prospect from the Western Lefroy JV.

The key exploration results and progress made by the Company during the six months were: -

• FINAL assay results were received and compiled for the 9 diamond holes completed on the zero north baseline and 40 north sections drilled in the June 2021 Quarter. Better results include:
• • 12.7m @ 2.53g/t Au & 0.08% Cu from 141.3m in LEFD004
  • 15m @ 1.61 g/t Au & 0.33% Cu from 218m in OBURCD025
  • 5m @ 2.90 g/t Au & 0.66% Cu from 228m in OBURCD025
  • 15.4m @ 1.02g/t Au & 0.19% Cu from 154.6m in LEFRD261
  • 27.4m @ 1.93g/t Au & 0.22% Cu from 219.8m in LEFRD262
  • 25.4m @ 2.13g/t Au & 0.13% Cu from 152.4m in LEFRD283

For personal use only

LEFROY EXPLORATION LIMITED AND CONTROLLED ENTITIES

ARBN 052 123 930

DIRECTORS' REPORT

• A detailed aeromagnetic survey over the wider Burns Intrusive complex identified six new magnetic anomalies with signatures similar to Burns over a 3000m corridor and coincident with a +200ppm drill hole copper anomaly
• A 17-hole RC drill program that evaluated multiple targets generated from the aeromagnetic survey at Burns enhanced the Intrusion related mineral system and identified new areas that include the Lovejoy target:
  O At Lovejoy, hole LEFR297 intersected and ended in strongly altered diorite porphyry similar to that observed at Burns which is some 2000m to the southeast. Assay results were:
• • 10m @ 0.21g/t Au & 0.60% Cu & 2.5g/t Ag from 218m Including 2m @ 0.41g/t Au & 1.56% Cu & 5.5g/t Ag from 225m
  • 8m @ 0.22g/t Au & 0.51% Cu & 1.75g/t Ag from 250m to EOH and

Including 2m @ 0.67g/t Au & 1.53% Cu & 5.0g/t Ag from 256m to EOH

• 1. Hole LEFR307 located 1600m to the west of the established Burns system intersected a new palaeochannel hosted intercept of 17m @ 1.70g/t Au from 75m including 7m @ 3.58g/t Au from 80m that remains open.
• A maiden 136-hole AC drilling program evaluating a 1500m corridor commencing 250m south of the high grade Coogee open pit successfully generated two new broad gold anomalies known as Catalina and Bronte which are both open
• At the Western Lefroy JV project Gold Fields satisfied the Stage 1 Farm-In requirement for the WLFI & JV and elected to increase its interest in the WLFI to 70% by sole funding a further $15 million of exploration over the next three years
• Subsequent to the JV election, Gold Fields commenced a large 46,000m land based Full Field Aircore (FFAC) drilling program, with 1318 holes planned.
• The Company registered a wholly owned subsidiary company, Johnston Lakes Nickel Pty Ltd (JLN) and formed to hold the nickel assets of the Company. To add to this portfolio five large exploration licenses were applied for to form the Glenayle project, north of Wiluna in Western Australia in September 2021

Subsequent to year end the Company announced (21 February 2022) significant high-grade results from two vertical AC holes that are approximately 180m to the north of the Burns discovery hole LEFR260 (LEX ASX release 23 February 2021) located on the baseline section (0N). The holes are 40m apart on the same drill section, both intersecting altered Eastern Porphyry, the key host to Au Cu mineralisation at Burns.

Significant results from this program include:

• 16m @ 3.79g/t Au from 20m in LEFA1088 Including 8m at 7.31g/t Au from 20m
• 24m @ 2.86g/t Au from 16m to EoH in LEFA1089 Including 16m @ 4.04g/t Au from 20m
• 20m @ 0.47g/t Au from 20m in LEFA1091

Including 4m @ 1.05g/t Au from 24m

Importantly, hole LEFA1089 ended in gold (Au) and copper (Cu) mineralisation, that included 8m at 1.91g/t Au & 0.31% Cu from 32m to EoH. The results to date from these three and other holes immediately northeast of the discovery section demonstrate the expanding footprint of the Burns system.