Pursuit Minerals : 2021 Half Year Accounts

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Limited

ABN: 27 128 806 977

And Controlled Entities

CONSOLIDATED REPORT

For the Half-Year Ended

31 December 2021

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CONTENTS

Competent Person's Statement

Statements contained in this announcement relating to exploration results, are based on, and fairly represents, information and supporting documentation prepared by Mr. Mathew Perrot, who is a Registered Practicing Geologist Member No 10167 and a member of the Australian Institute of Geoscientists, Member No 2804. Mr. Perrot is a full-time employee the Company, as the Company's Exploration Manager and has sufficient relevant experience in relation to the mineralisation style being reported on to qualify as a Competent Person for reporting exploration results, as defined in the Australian Code for Reporting of Identified Mineral Resources and Ore Reserves (JORC) Code 2012. Mr Perrot consents to the use of this information in this announcement in the form and context in which it appears.

Forward looking statements

Statements relating to the estimated or expected future production, operating results, cash flows and costs and financial condition of Pursuit Minerals Limited's planned work at the Company's projects and the expected results of such work are forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by words such as the following: expects, plans, anticipates, forecasts, believes, intends, estimates, projects, assumes, potential and similar expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should occur. Information concerning exploration results and mineral reserve and resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed.

Pursuit Minerals Limited and its Controlled Entities

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CORPORATE DIRECTORY

REGISTERED OFFICE

Suite 4

246-250 Railway Parade

West Leederville WA 6007

Telephone: +61 8 6102 4826

WEBSITE & EMAIL

www.pursuitminerals.com.au

info@pursuitminerals.com.au

SHARE REGISTRY

Automic Pty Ltd

Level 2267 St Georges Terrace

Perth WA 6000

AUDITORS

Pitcher Partners BA&A Pty Ltd

Level 11,

12-14 The Esplanade

Perth WA 6000

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DIRECTORS' REPORT

Your Directors submit the financial report of Pursuit Minerals Limited ("Pursuit" or the "Company") and its controlled entities (the "Group") for the half-year ended 31 December 2021.

DIRECTORS

The following persons were directors of Pursuit Minerals Limited during the whole of the half-year under review and up to the date of this report, unless otherwise stated:

OPERATING RESULT

The Group incurred an operating loss after income tax for the half-year ended 31 December 2021 of $324,825 (half-year ended 31 December 2020: operating loss after income tax of $3,294,212).

The loss for the half-year includes a gain on discontinued operations of $270,335 relating primarily to $175,000 of fees received for extending the settlement period for sale of the discontinued operations, as well as foreign exchange gains.

The Directors believe the Group is in a sound financial position to continue its exploration endeavours.

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

The Group's principal business objectives are the acquisition, exploration, development and operation of PGE, copper, nickel silver, gold, vanadium and other mineral deposits.

Its strategy for the remainder of the year is to further exploration on its projects in Western Australia and to finalise the divestment of the Scandinavian projects.

Warrior Project

A maiden 8-hole diamond drilling program was completed during the period at Phil's Hill Prospect at Calingiri East highlighting an Ag-Au-Cu-As-Mo-Co-Bi sulphide mineral association with silver mineralisation up to 8.4 g/t. A 40 km2 auger geochemistry program and follow-up Air Core (AC) drill program is scheduled for Phil's Hill Prospect in the second half of FY 2022

Field reconnaissance and rockchip sampling at Calingiri West (Anzac Hill) identified ultramafic pyroxenite rock, adjacent to DevEx's Sovereign Prospect. Surface EM and gravity surveys followed by an AC drill program are planned for this project in the second half of FY 2022.

An auger geochemical program is also planned for the Bindi Bindi prospect in the March 2022 quarter.

Commando Gold Project

The Company entered into a 12-month option agreement to acquire the highly prospective Commando Gold Project near Kalgoorlie in December 2021. The Commando Gold Project lies 38 km north of Kalgoorlie and is significantly under-explored compared to surrounding areas. In consideration for the option agreement Pursuit paid $160,000 in cash and $284,000 in Pursuit shares and options.

Combatant PGE-Ni-Cu Project

The Combatant PGE-Ni-Cu Project lies approximately 270km northeast from Geraldton and 210km west of Meekatharra. Sampling and reconnaissance completed during the half-year has identified 3 ultramafic units at Garden Well, Currie Currie Bore and Murrum Creek. The Company is currently reviewing existing geological

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DIRECTORS' REPORT

and geophysical information to better understand the prospectivity before heritage surveying and plans to conduct an AC drilling program in H2 2022.

Gladiator Gold Project

The Gladiator Project comprises 4 exploration licences located 10km northwest of Laverton in Western Australia. The Company is reviewing existing geological and geophysical information followed by a Heritage survey and AC testing of targets anticipated in the second half of 2022.

Sale of Scandinavian Assets for ~$3.35 million

Kendrick Resources Plc (Kendrick) is targeting to list on the London Stock Exchange (LSE) prior to 31 March 2022. Kendrick's listing is in the final review stages with the Financial Services Authority in the UK and, in the meantime, Kendrick continues to cover all costs associated with the Scandinavian projects.

Kendrick has increased the consideration payable to Pursuit by GBP150,000 to GBP1.4 million in shares to extend settlement until 31 March 2022. GBP100,000 of this increase was agreed to after period end (refer to "Events Occurring After Reporting Period" below). Consideration will be paid to Pursuit as follows:

• GBP1.4 million (A$2.60 million) in Kendrick shares immediately following listing on LSE;
• $250,000 in cash, upon completion of a Bankable Feasibility Study on any of the Scandinavian Projects that demonstrate an internal rate of return of not less than 25%; and
• $500,000 in cash upon a decision to mine in relation to any of the Scandinavian Projects.

Corporate

The Group had a cash position of $7.4 million at period end and expects to settle the sale of the Scandinavian assets to Kendrick by 31 March 2022.

During the period, Pursuit issued 10,000,000 shares at a price of $0.05025 per share or the remaining consideration payable for the acquisition of the Warrior Project.

Pursuit also issued 8,535,278 shares and 2.5 million options exercisable at $0.0281 expiring 23 December 2024 during the period as payment for an option to acquire the Commando Gold Project.

Subsequent to period end, the Company issued 60,000,000 performance rights to directors, consultants and staff following approval by shareholders at the annual general meeting held 31 January 2022 (refer below).

EVENTS OCCURING AFTER REPORTING PERIOD

The sale of the Group's Scandinavian assets to Kendrick has been extended to 31 March 2022 for an increase in consideration of GBP50,000 (agreement dated 24 February 2022), increasing the total consideration to GBP1,400,000. This is in addition to a GBP50,000 increase for extending the settlement date to 28 February 2022 (agreement dated 28 January 2022) and GBP50,000 increase for extending the settlement date to 31 January agreed in December 2021. The total GBP150,000 increase in consideration is payable in Kendrick shares immediately following Kendrick's listing on the London Stock Exchange.

The Company issued 60,000,000 performance rights to directors, consultants and staff following approval by shareholders at the annual general meeting held 31 January 2022. Performance rights issued to Directors are summarised below: