Saturn Metals : Quarterly Activities Report and Cash Flow

ASX Announcement 26 April 2022

MARCH 2022 QUARTERLY ACTIVITIES REPORT

HIGHLIGHTS

Metallurgical Test Work - Potential for Low-Cost Mineral Processing Options & Scalability at Apollo Hill

Excellent Recovery at Target Crush Sizes

• • Significant results from metallurgical test work on samples of mineralised diamond drill core from Apollo Hill were returned during the quarter. A composite sample derived from high quality diamond core, gave an excellent overall gold recovery of 81% from intermittent bottle roll tests, preceded with gravity separation, using high pressure grinding roll (HPGR) crushing to 8mm P100 (targeted commercial fresh rock crush size).

  Importantly, this indicates gold recovery is viable from material which would normally be considered marginal in the absence of a low unit cost processing solution and highlights the potential for the use of lower cut off grades to improve economics through greater resource utilisation and application of bulk mining methods. Figure 1 highlights the potential to improve stripping ratios at Apollo Hill by using lower cut off grades.

• • The metallurgical test work results, the outcomes of preliminary mineral process engineering cost studies1, and data from Saturn's successful 2021 drilling campaign (refer recent 2021 ASX announcements and Quarterly Reports) will be utilised to derive important input information for open pit optimisation studies which form part of the upcoming resource upgrade process.

Exploration - Regional Gold Results 10km Along Strike of Apollo Hill

Artemis - 10km north-west of Apollo Hill

• • Regional reconnaissance exploration Aircore (AC) drilling completed in early 2022 has highlighted an exciting new prospect at Artemis, 10km northwest of the Apollo Hill Mineral Resource (35.9Mt @ 0.8g/t Au for 944,000 oz of gold2) (Figure 2).

• • Drillhole AHAC0672 intersected 4m @ 4.08g/t Au from 40m within 33m @ 0.73g/t Au from 24m

• • Artemis is located directly along strike from Apollo Hill, highlighting the potential for additional discovery in the expansive, largely untested corridor between the two prospects.

• • The width and grade of the AHAC0672 intersection is similar to some zones in the Apollo Hill deposit.

Bob's Prospect - 7km east of Apollo Hill

• • A step out aircore (AC) drilling program was completed at Bob's prospect in February with the aim of extending the mineralisation system defined in late 2021 (including reverse circulation (RC) intersections of 5m @ 6.82g/t Au from 130m - AHRC0825).

  • • New results (Figure 2), effectively provide a strike length increase of 600m in both the north and south directions and include 4m @ 0.68g/t Au from 64m - AHAC0597, 4m @ 0.47g/t Au from 84m - AHAC0536 and 4m @ 0.41g/t Au from 130m - AHAC0541

Follow Up Work Commenced

• • A follow up 5,000m, fifty-hole AC and RC extensional drilling program commenced around significant intersections at Artemis and Bob's.

Corporate

Strong Cash Position

• • The cash position of the Company at 31 March 2022 was A$9.5M. During the quarter the Company received the balance of the November 2021 placement proceeds, totalling $1.4M (before costs), after the completion of a Foreign Investment Review Board approval process.

• 1 CPC Engineering, Perth. Preliminary Mineral Process Engineering Cost Study nearing completion - 23 March 2022.

• 2 Details of the Mineral Resource which currently stands at 35.9 Mt @ 0.8 g/t Au for 944,000 oz Au and a breakdown by category are presented in Table 1a (page 11 of this document) along with the associated Competent Persons statement and details of the ASX announcement that this information was originally published in.

Saturn Metals Limited ABN: 43 619 488 498

9 Havelock Street, West Perth WA 6005

ASX: STN

www.saturnmetals.com.auinfo@saturnmetals.com.au

Saturn Metals Limited (ASX:STN) ("Saturn", "the Company") is pleased to release its Quarterly Activities Report for the period ended 31 March 2022.

ACTIVITIES

APOLLO HILL RESOURCE AREA

Metallurgical Test work

Saturn's recent metallurgical test work is a key part of the Company's ongoing strategy to grow and assess the potential development of the Apollo Hill Mineral Resource, which was last upgraded over one year ago to 944,000 ounces2. (28 January 2021).

Appendix 1 provides relevant summary data for the intermittent bottle roll leach tests completed by Bureau Veritas in Perth in a mix of Perth and site waters3. The Company utilises the professional services of independent metallurgical consultant Mr. Gary Jobson of Macromet to assist with its test work and planning schedules. In Addition to the 'Highlights' on page 1 of this report, test work also showed:

First Rate Recovery from Lower Grade mineralisation Demonstrates Economic Potential

• • A strong average recovery of 77% was obtained at a ~8.6mm P100 average crush size in the intermittent bottle roll tests (IBRT's) for Apollo Hill's major material types, across the deposit's lower grade range (0.2g/t Au to 0.6g/t Au), using conventional stage crushing and High Pressure Grinding Rolls (HPGR) sample subsets.

  These results, and those outlined in the 'Highlights' section of this report, demonstrate the clear potential to achieve low processing costs through simple and scalable treatment options. Lower unit operating costs can in turn lead to lower cut off grades which allow for the processing of additional mineralised material, improved strip ratios, more efficient mining processes and superior economies of scale.

Results Verify Previous Column Leach Recovery Values

• • Results complement, confirm, and potentially improve on column leach test work previously published by the Company4 where recovery was 73% at 8mm crush on an Apollo Hill typical drill core composite.

Low Reagent Use

• • Cyanide consumption was considered consistently low at an average of only 1.42kg/t. Lime addition was minimal at an average rate of only 1.68 kg/t highlighting the clean nature of the tested material types and site water and the potential for low reagent usage.

Strong Percolation and Favourable Agglomeration Results

• • Efficient percolation results on various rock types across the deposit showed a very respectable average rate of 14,447 L/m2/hr percolation (slump 5.6%), as compared to a traditionally acceptable rate of 10,000 L/m2/hr and where full-scale requirements are substantially lower again. An average cement addition rate of 1.55 kg/t was recorded for agglomeration with site water to reach the very acceptable percolation characteristics3. Good percolation results and low agglomeration cement requirements bode well for heap leaching techniques.

Uniform Characteristics by rock type and geography

• • Strong performance was noted across the deposits geography and rock types suggesting the potential for simple ore scheduling.

Favourable Rock Processing Characteristics

• • Results of rock competency and crushing tests indicate amenability for crushing operations via either conventional or HPGR methods. Crushing characterisation testing also demonstrated values typical of other Archean lode gold systems in production in Western Australia. For example, the Impact Work Index (essentially a measure of crushability) returned average results for Apollo Hill's key rock types of approximately 16kWh/tonne and an Abrasion Index of 0.125.

• 3 Intermittent bottle roll tests were undertaken in some instances in Perth tap water (40% of tests) and in some instances in Site water (60% of tests).

  Agglomeration testing was undertaken using site water.

• 4 Saturn Metals Limited Presentations - Metallurgy Slide; ASX Announcement by previous Apollo Hill project owner, Peel Mining Limited (ASX:PEX) dated 16 June 2016.

Capital Efficiency Options - High Pressure Grinding Roll Results (HPGR)

• • Recovery results for conventional staged crushing sample subsets were generally lower than for HPGR sample subsets. The HGPR method effectively produces a greater proportion of fine material for a nominal P100 size and HPGR induced micro-cracking has been generally reported to lead to improved cyanide solution ingress (improved porosity). HPGR crushing could provide a further avenue for improvements in gold recovery across the deposit.

Next Steps

• • Following on from these results, the Company has commenced additional column leach test work (Plate 1) to provide more information on the scalability of the heap leaching technique.

Plate 1 - Apollo Hill Heap Leach column tests underway at Bureau Veritas in Canning Vale (March-April 2022). The tests are being performed across a range of rock types and gold grades and crushing techniques to assess leaching kinetics (speed and efficiency) and scalability.

Figure 1 - Section view of 2021 Apollo Hill Mineral Resource Block Model at various cut off grades.

(a) This diagram contains exploration results and historic exploration results as originally reported in fuller context in Saturn Metals Limited's ASX Announcements as published on the Company's website. Saturn Metals Limited confirms that it is not aware of any new information or data that materially affects the information on results noted.

APOLLO HILL RESOURCE AREA - Continued

Costs Study

During the Quarter, a preliminary capital and operating costs study for large scale, bulk tonnage processing at Apollo Hill was initiated1. The engineering firm engaged to conduct the study has significant experience in this style of operation and are the design engineers for a similar project currently under construction in Western Australia. The study is expected to deliver up to date and locally based cost information which will provide a sound basis for assessing Apollo Hill's project development options.

Resource Update

The results of Saturn's successful 2021 drilling campaign are being integrated into a new mineral resource block model. This block model will be used with results of the costs study and the new metallurgical data to provide important cost and recovery information for open pit optimisation studies and the subsequent resource upgrade, planned for release in late April 2022.

Step Out Drilling Apollo Hill

During the Quarter the Company attempted several pre-collars for a deeper diamond hole planned as a step out, and step beneath, test of the Apollo Hill deposit. Four RC pre-collar holes (AHRCDD003-AHRCDD007; hole details in Appendix 3) were attempted from various locations along the eastern shore of Lake Raeside for a total of 743m. All holes exhibited excessive hole deviation and were abandoned as suitable platforms for the planned diamond drilling. The Company is now considering and planning drill holes from alternate positions. Assays are pending for the four pre-collars.

EXPLORATION - REGIONAL

Artemis

Regional reconnaissance exploration AC drilling completed in early 2022 has highlighted an exciting new prospect at Artemis, 10km northwest of the Apollo Hill Mineral Resource (35.9Mt @ 0.8g/t Au for 944,000 oz of gold2). Figure 2 shows a plan of significant results at Artemis including 4m @ 4.08g/t Au from 40m within 33m @ 0.73g/t Au from 24m which is located on the geological corridor termed the 'Apollo Hill Super Structure'.

Drilling at Artemis is still widely spaced with the AHAC0672 4m @ 4.08 g/t Au result being returned on a single fence line traverse program of 100m spaced holes. The closest drilling along strike towards Apollo Hill is 6km away, where drilling is predominantly historical shallow set depth holes. These set depth holes are deemed to have been largely ineffective as they did not penetrate the cover sequence. Mineralisation therefore remains open. A large, interpreted strike length is available for extensional drilling to build on this initial promising result. An AC rig was onsite at the end of the quarter.

Figure 3 shows a geological cross section of the Artemis Prospect with planned follow up AC and RC holes also illustrated. The discovery intersection is hosted within sheared rocks similar to those at Apollo Hill. The intersection width and grade are similar to some mineralised zones at Apollo Hill.

Bob's - 7km east of Apollo Hill

In addition, extensional AC drilling has also delivered 600m strike extensions to the mineralised system at both the northern and southern end of Bob's (Figure 2). Results including 4m @ 0.68g/t Au from 64m in AHAC0597 have been returned underneath a relatively shallow cover sequence.

The focus at Bob's has now shifted to additional RC drilling to target underneath previous significant intersections including 5m @ 6.82g/t Au from 130m - AHRC0825, 5m @ 3.15g/t Au from 168m - AHRC0827 and 8m @ 1.04g/t Au from 153m - AHRC0822 (see Saturn ASX Announcement dated 27 January 2022). Assays are pending for four RC holes completed as at the end of the quarter (hole details listed in Appendix 3).

New Regional Intersection 2km East of Bob's

Also, to the east of Bob's, an intersection of 4m @ 0.33g/t from 56m was returned in basalts and sediments in AC hole AHAC0628 drilled on an access track (Figure 4). Further work is planned to investigate this standalone anomaly where drilling along the track remains widely spaced.

Appendix 2 lists significant intersections received from 191 holes and 13,000m of drilling completed during the quarter over regional targets on the Apollo Hill project leases. Figure 4 shows the location of this drilling and Appendix 3 lists relevant hole details.

Figure 2 - Plan of significant Aircore results at Artemis and Bob's (10km along strike and 7km to the east of Apollo Hill respectively), Saturn Metals tenement outline and significant prospects on aerial image background.

(a) This diagram contains exploration results and historic exploration results as originally reported in fuller context in Saturn Metals Limited's ASX Announcements as published on the Company's website. Saturn Metals Limited confirms that it is not aware of any new information or data that materially affects the information on results noted.

5

This is an excerpt of the original content. To continue reading it, access the original document here.