Strategic Energy Resources : June 2022 Quarterly Activities & Cashflow Reports

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JUNE 2022 QUARTERLY ACTIVITIES REPORT

HIGHLIGHTS

• Machine Learning Model uncovers hidden targets at Isa Undercover Initiative
• Landholder access secured at Isa North as majors surround SER
• NT Government grant to conduct IP survey across East Tennant Project area
• UltraFine+TM geochemistry survey identifies a significant Au-Cu anomaly at the Achilles Copper-Gold Prospect, South Cobar

Strategic Energy Resources Ltd (ASX Code: SER) is a specialised undercover mineral explorer and project generator

focused on discovery in greenfield frontiers of Australia

Isa Undercover Initiative

East Tennant Cu-Au Project

Cobar Basin & Lachlan Fold

Belt Projects

Ambergate Heavy Mineral

Sands Project

Ionic Industries

Shareholding

Figure 1: SER Project Locations

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ISA UNDERCOVER INITIATIVE

QUEENSLAND (SER 100%)

• Queensland Government funded Machine Learning Project uncovers hidden targets across Isa Undercover Initiative
• Landholder access secured at Isa North as majors surround SER
• Ni-CuSulphide targeting continues following positive drill results at Canobie Domain

The Isa Undercover Initiative consists of two Greenfield Projects located in the undercover extensions of the world-class Mt Isa Province in northwest Queensland (Fig. 2).

The Canobie Domain area covers over 1,800km2 within the Mt Isa Eastern Succession, bounded to the east by the Quamby fault Zone-Gidyea Suture Zone. The fault system hosts several significant deposits to the south including the giant Evolution owned Ernest Henry Copper-Gold mine as well as significant Cu-Au projects such as the Mount Margaret Mine, Rocklands and Roseby projects, and the Dugald River Ag-Pb-Zn deposit.

The Isa North Project are covers over 900km2 along the projected northern extension of the mineralised Mt Gordon fault, host to several large deposits to the south, including the Mt Isa, Mt Oxide and Gunpowder copper deposits and the Mt Isa, Hilton and George Fisher lead-zinc-silver deposits.

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During the quarter SER deployed a deep learning-based model to interpret basement geology from geophysical data and uncover previously unidentified Iron Oxide Copper-Gold (IOCG) drill targets within the Isa Undercover Initiative region. The model was built by Caldera Analytics (Caldera), a leading Machine Learning and Data Analytics Company based in Melbourne and funded entirely by a Geological Survey of Queensland (GSQ) Collaborative Exploration Initiative (CEI) grant. The images below indicate the identified IOCG drill targets generated free from interpretational bias, some of which are coincident with existing SER targets generated via traditional geoscientific methodologies (Fig. 3). The coming quarter will see the Machine Learning generated targets ranked alongside current targets as preparations are made for future drill testing.

Figure 3: Machine Learning (ML) generated drill targets (red diamonds) over Magnetic Reduced to Pole (RTP) images of the Isa North (left) and Canobie Domain (right) project areas

Early in the quarter SER reported the successful negotiation of a landholder access agreement at Isa North, removing an obstacle that had previously limited exploration activities across the project area. This agreement paves the way for SER to begin on ground exploration activities at the Nardoo Prospect (Fig. 4), which was identified as the source of a 'near-miss' intersection based on the identification of IOCG alteration and pathfinder elements indicating the outer halo of a potential IOCG system identified in previous drilling (INMD001).

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Figure 4: SER's Isa North Project over BA Gravity (left) and RTP magnetics (right) indicating the location of target areas and previous drill holes

Towards the end of the quarter SER was encouraged by actions of three major mining companies in staking large landholdings in the vicinity of the Isa North Project. Since SER secured the project in May 2021, Rio Tinto (ASX:RIO) lodged a tenement application to the south of Isa North, Fortescue Metals Group (ASX:FMG) has flanked SER to the east and west while Anglo American (LSE:AAL) has lodged several applications for ground to the north of the project area (Fig 5.).

During the quarter work continued at the Canobie Domain to assist in vectoring towards areas of potentially higher tenor sulphide mineralisation following the intersection of thick intervals of nickel-elevated ultramafic rock with semi-massive sulphide zones during the two-hole drill program at Kalarka last year. World renowned magmatic nickel expert, Dr Steve Beresford has continued a review of the project and established a low-costde-risking program of work which includes relogging historical drill core and selected petrological analysis. The review and associated work program will be completed in the coming quarter and will be used to delineate work programs across the project.