URU Metals : Annual Report 2021

URU METALS LIMITED: 2021 ANNUAL REPORT

URU METALS LIMITED

2021 ANNUAL REPORT

URU Metals Limited

Chairman's Statement

For the Year Ended 31 March 2021

I am pleased to present to our shareholders and stakeholders the consolidated financial statements of the Group for the year ended 31 March 2021.

In August 2021, URU successfully completed the disposal of the Zebediela Nickel Project ("Project") to Zeb Nickel Corp. (TSX-V: ZBNI) and the Project remains the primary focus of URU, through its 74.82% interest in Zeb Nickel Corp. and URU's continuing role as the technical operator of the Project.

The long-term fundamentals for nickel sourced from Class I nickel sulphide deposits remains good, based on the surging demand for nickel for batteries in electric vehicles and other energy storage applications. On the back of these excellent fundamentals, the Company looks forward to commencing with the 3,600 m diamond exploration drilling program, which is scheduled to commence in H2 2021. The aim of this program is to improve the confidence in the historical NI43 -101 compliant resource, as well as explore for higher grade nickel sulphide mineralisation found in Critical Zone rocks which are located in the footwall to the existing resource. The presence of Critical Zone rocks on the Zebediela Project area is exciting; these Critical Zone rocks host the Platinum Group Element and Nickel Copper mineralisation that is being exploited at Anglo American's flagship Mogalakwena Mine, as well as Ivanhoe Mines' Platreef Project, located immediately west of the Zebediela Project.

Good progress has been made on advancing the accepted Mining Right application, and all required documentation has been submitted to the South African Department of Mineral Resources (DMRE). Consultation with Interested and Affected Parties (I&AP's) continues, as the Company continues to build on its good relationship with host communities and its "social license to operate".

The Company looks forward to updating the market with positive news flow emanating from the upcoming drilling program, as well as receiving a granted Mining Right from the DMRE.

Jay Vieira

Non-executive Chairman

30 September 2021

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URU Metals Limited

Chief Executive Officer's Report

For the Year Ended 31 March 2021

Below are the major events in the year ended 31 March 2021 and major events after the reporting period.

Zebediela Nickel Project

Project Overview

Four stand out points make the Zebediela Project one of the most exciting Nickel sulphide exploration projects globally:

1. The project is located in a World-classPGE-Ni district: The Bushveld Complex located in South Africa contains over 75% of the world's platinum reserves and are usually associated with magmatic nickel deposits. Between
   Anglo American's Mogalakwena Mine, Ivanhoe Mines' Platreef Project and the Zebediela Project, the Northern
   Limb of the Bushveld Complex hosts over 34% of known global nickel sulphide resources (Mudd and Jowitt, 2014);
2. The project is well advanced with an accepted mining right application over a large nickel resource: the NI 43- 101 compliant resource is ranked in the top ten nickel sulphide resources globally. Indicated Resources of 485.4 Mt at a grade of 0.245% Ni with additional Inferred Resources of 1,115 Mt at a grade of 0.248% Ni. Environmental Impact and Economic studies indicate that exploitation of the resource could happen in a cost effective, sustainable, environmentally friendly manner;
3. Significant District Scale Ni Potential: Three distinct areas identified over a strike length of over 5 km targeting near surface Ni sulphides and high-grade mineralisation at depth; and
4. Highly Experienced Team: Top tier Board and Management team with impressive track record in the mining industry.

Management is confident that the drilling that is scheduled to commence in H2 2021 will result in both an upgrading of the confidence in the existing NI43-101 compliant resource, as well as an improvement of the overall nickel grade of the project, and also start to define the potential for significant PGE credits as the Company drills into the underlying Critical Zone rocks associated with Target 2.

Mineral Rights

Good progress on advancing the Mining Right application accepted by the DMRE has been made. The final Environmental Impact Report (EIR) was submitted to the DMRE in February 2021. Following this submission, the DMRE requested slight amendments to the submitted Social and Labour Plan, as well as a letter of support from the Mogalakwena Local Municipality for amended Social and Labour Plan. These documents have subsequently been provided and submitted to the DMRE and the Company is now waiting on the DMRE to award the Mining Right, which will be valid for a period of 30 years from the date of issue. An application for a Prospecting Right over 246 hectares of ground immediately to the south of the existing project area was made to the DMRE in February 2021, and recently accepted.

Strategy for 2021/2022

The drilling program planned for H2 2021 will assist in strategising and quantifying the exploration program required to move Target 2, as described in the previous Company Annual Report, into a 43-101 compliant resource category, and hopefully allow for the increase in the overall reportable nickel grade, as well as PGE, copper and cobalt credits.

In parallel to this, the Company will continue to advance the mining right application and associated Environmental Authorisation with the DMRE, which will ultimately lead to a right to mine one of the world's largest known Class 1 nickel deposits for 30 years. The appointed environmental specialists will ensure that future mining is carried out in the

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URU Metals Limited

Chief Executive Officer's Report (continued)

For the Year Ended 31 March 2021

most environmentally friendly manner possible, thus assisting with fulfilling the Company's vision of becoming one of the world's most environmentally friendly sources of Class 1 nickel.

As announced on 13 September 2021 the DMRE has accepted an application for a Prospecting Right over ten portions of the farm Piet Potgietersrust Town and Townlands 44 KS, totaling 246 hectares. The Prospecting Right under application is immediately south of the Zebediela Project.

The area under application could potentially contain platinum group metal, nickel and copper mineralisation related to Target 2.

The Company's bullish outlook on nickel was detailed in the Chairman's Statement, and the Company's flagship Zebediela Project represents a future source of an environmentally friendly supply of nickel, cobalt and PGE's into the rechargeable battery market.

John Zorbas

Chief Executive Officer

30 September 2021

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