Troy Resources : Mar 22 Quarterly Report and Appendix 4C

QUARTERLY REPORT &

APPENDIX 4C

COMPANY UPDATE AND QUARTERLY CASH FLOW REPORT FOR ENTITIES SUBJECT TO LISTING RULE 4.7B FOR THE THREE MONTHS ENDED 31 MARCH 2022

29 April 2022

HIGHLIGHTS

• • Company recapitalisation announced on 5 January 2022 and 1 February 2022 which, if approved by the ASX and shareholders, will see Troy raise approximately $7.2 million in cash and retire approximately $20.7 million of net debt.

• • On 10 January 2022, the Company issued 42 million shares at $0.022 per share pursuant to Tranche 1 of the recapitalisation, raising $0.93 million before costs.

• • At the end of the March quarter, cash and equivalents totalled $0.38 million.

• • The Karouni processing facility remains on care and maintenance.

• • During the quarter, the Company employed Mr Sven Tegeler as the Country Manager for Guyana. Sven has previously lived and worked in Guyana as General Manager of First Bauxite's Bonasika Project and has successfully developed and executed corporate and operational strategies across multiple commodities within the global resource sector.

• • Pursuant to the Karouni Earn-in Agreement, Barrick Gold Corporation continues with its exploration programmes.

• • After the end of the quarter, the Company released its 2021 Annual Report and December 2021 Half Yearly Report bringing all required ASX announcements up to date.

• • After the end of the quarter, the Company announced that it had entered into a binding Letter of Intent with a Brazilian counter party in respect of the lease and assignment of certain non-core mining rights in Brazil prospective for iron ore, which will see the Company receive the aggregate amount of US$4 million in staged payments.

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OPERATIONS

KAROUNI, GUYANA (Troy 100% through Troy Resources Guyana Inc.)

Care and Maintenance

As previously reported, operations were placed into a period of care and maintenance from August 2021 following the depletion of open pit ore reserves. The period of care and maintenance is expected to last until the commencement of the Smarts Underground project.

The care and maintenance program continued with the defined schedule of weekly and monthly checks on plant and mobile equipment to ensure the integrity and operability of the company's physical assets are maintained for both short- and long-term periods. The main power station remained offline to reduce environmental impacts and unnecessary costs, with power being supplied by portable generators installed at primary locations (camp, mill admin, processing plant). Fuel cost analysis was completed, reducing supply requirements ensuring sufficient quantities are available to supply critical operating assets. Significant maintenance resources were allocated to work involving removal of reagents / explosives and the container housing units.

The camp continues to operate with a total population of between 50-60 personnel, including TRGI staff, camp support contractors and Barrick workers. TRGI staff number approximately 26 to support all associated infrastructure in respect of the care and maintenance program and site security. Barrick activities included geological field work and exploration drilling. Troy continues to provide support to Barrick with site services across the project, including the use of equipment along with maintenance, medical and security functions.

Ongoing sales and / or disposal of the remaining inventory of reagents and explosives, along with several pieces of redundant heavy equipment, was undertaken during the quarter. Steel recycling contractors were engaged during the period and mobilized to site to remove accumulated scrap steel over the past three years and commenced extensive housekeeping activities across the site. In addition, all pre-camp container housing units were sold. Despite this sale, the site retains sufficient accommodation dwellings to house the existing workforce (including contractors and Barrick personnel). Additional accommodation will be scheduled to be constructed, aligned with the ramp-up strategy of the development and operations of the Smarts Underground.

The sale of items has resulted in A$1.0 million in sundry income during the quarter.

Health and Safety

During the quarter, there were no reportable (Medical Aid or Lost Time) incidents or any First Aid incidents. An equipment damage incident occurred involving a light vehicle being operated by Barrick. The vehicle was parked at the Potaro site when it rolled backwards and came in contact with a tree causing damage to the driver's side front and back door.

As of 31 March 2022, the 12-month rolling Total Recordable Injury Frequency Rate (TRIFR) was 9.5 and the 12-month rolling Lost Time Incident Frequency Rate (LTIFR) was 1.9. Despite having zero lost time or reportable incidents, both the TRIFR and LTIFR increased slightly over the last quarter. This is attributed to lower hours in the current quarter. Employee hours for the period averaged approximately 19,420 per month including TRGI staff, Barrick staff and contractors.

Table 1: TRIFR and LTIFR for Previous 12 Months

Environment

With the ceasing of operational activities and transitioning into care and maintenance activities, the priority was maintaining environmental compliance, implementing the revised monitoring requirements in the new permit. During the quarter, regular monitoring for noise, water pH and stream turbidity flow occurred. Due to cyanide not being utilised at the plant and the closure of the onsite lab, monitoring was not required. The previous full spectrum water sampling regime was carried out in late 2021. No significant variances were identified in the results. TRGI is working with environmental consultants to propose a reduced monitoring program to the Environmental Protection Agency (EPA) that complies with the environmental permit but recognises the current status of the operation. Discussions with the EPA have been conducted and are currently ongoing to confirm an appropriate frequency of monitoring and reporting to reflect TRGI operational status.

All reporting has been submitted as per permit requirements.

Rainfall for the period was above the season average; however, it did not impact the operations.

Table 2: Historic Average vs. 2021 Rain Fall

HR and Community

The reduced workforce was maintained throughout the quarter to match operational requirements. As of 31 March 2022, the total TRGI workforce was 28 at site and 15 at the Georgetown office. A minimal manpower compliment continues to provide security, maintenance, and camp support services. All non-essential contractors have been demobilized except for those required for catering, fuel management, bussing, and medical services.

The Site Medical Centre remained in operation during the quarter and continued to provide medical services to the local communities. Approximately 50 regional community individuals were attended to during the quarter. A majority of the regional community visits were related to testing for COVID-19 and other tropical diseases. The medical centre was reduced to a staff of one on site - alternating between a doctor and a medic.

During the quarter, there has been an increase in illegal mining activity occurring at site. There are daily occurrences of illegal mining activity in both Smarts and Spearpoint pits. Guyana Geology and Mines Commission (GGMC) was onsite in January to conduct reconnaissance and engagement on managing the illegal mining activity. The responsibility for enforcement and security of the mining operations remains with the Company. TRGI continues to engage with the government agencies regarding this problem and has implemented new security protocols to better manage the situation.

Coronavirus

During January, several individuals tested positive for COVID-19. The patients were placed into quarantine, monitored by the site medical staff and remained at site for the required period of isolation.

At the end of March, the government removed restrictions requiring masks to be worn in public places.

However, TRGI continues to implement preventive controls and measures across the site. Pre-flight antigen testing was re-instated in early January in response to increased case numbers in Guyana; however, the protocol was removed again in late March.

Overall, our COVID safety measures and risk management have been successful in preventing and / or limiting its affect, despite levels of COVID-19 infection in Guyana increasing during this period. To combat this trend, Troy continues to engage in active management of the COVID risk; preventative measures such as pre-flight screenings, wearing of masks and social distancing remain in effect and enforced for protection of employees, contractors and visitors.

DEVELOPMENT

SMARTS UNDERGROUND, GUYANA (Troy 100% through Troy Resources Guyana Inc.)

All pre-development work at the Smarts area was halted in September 2021 including dewatering of the pit.

Review of the geotechnical and mine design has been ongoing with opportunities for improvement in the stope designs and ventilation system identified.

EXPLORATION

KAROUNI, GUYANA (Troy 100% through Troy Resources Guyana Inc.)

No exploration activities of substance were undertaken by Troy during the quarter.

Barrick continued to undertake exploration activities over the quarter.

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