Variscan Mines : Expansion of High Grade of Zinc at San Jose Mine

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EXPANSION OF HIGH-GRADE ZINC MINERALISATION AT

THE SAN JOSE MINE

Highlights

• Phase 2 drilling has expanded new zones of high-grade zinc mineralisation in the Central Zone of the San Jose Mine

168 Trend

• Discovery of upper level to 168 Trend with unexploited high-grade zinc mineralisation:

• Upper level vertically enlarges 168 Trend with further potential extensions above and below
• Future drilling expected to link-up 168 Trend with adjacent highly mineralised lenses

Los Caracoles Trend

• Southerly extension of Los Caracoles Trend defined below the main gallery

level:

o DDH NOVDD093: o DDH NOVDD095: o DDH NOVDD095:

• Lower lenses now confirmed to run the whole length of known Caracoles Trend of +300m; representing 2x enlargement since initial discovery
• Strong prospectivity for further extensions of stacked lenses above and below main gallery level

Drilling Programme Update

• Further assay results from underground diamond drilling are pending; encouraging zinc mineralisation observed

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Variscan's Managing Director & CEO, Stewart Dickson said,

"We are pleased to deliver another set of positive drilling results at the San Jose Mine.

Drilling has continued to deliver more high-grade discoveries beyond the historical mine workings. Importantly we are expanding zones of mineralisation through drilling success and also seeing new opportunities to expand tonnages by connecting mineralised trends within the deposit.

Drilling has so far doubled the length of the lower lenses running beneath the Los Caracoles Trend to over 300m. It is worth remembering that prior to the commencement of underground exploration drilling by Variscan, the existence of these lower mineralised lenses was completely unknown. The continuing occurrences of high-grade zinc mineralisation immediately below the main gallery level in multiple sections of the mine is very important for defining our high-grade inventory and future development scenarios. There are further assays that we are awaiting results on and we will update the market on as soon as practicable.

We note the very favourable performance of the zinc price and believe that the outlook should remain strong. Variscan is currently assessing how to utilise the existing infrastructure and new zones of mineralisation at the San Jose Mine to take advantage of these dynamics".

Variscan Mines Limited ("Variscan" or the "Company" or the "Group") (ASX:VAR) is pleased to report assay results from the Phase 2 underground diamond drilling programme at its San Jose Mine, located in Cantabria, northern Spain.

Figure 1. Plan view of selected mineralised intersections from drilling in the 168 Trend and the Los Caracoles Trend

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Key Findings & Exploration Potential

• The Phase 2 diamond drilling programme, which has run to just under 2,000m, is achieving its primary objective of expanding the footprint of Zn-Pb mineralisation
• Previously un-tested 168 Trend is an area of significant high-grade mineralisation; now enhanced by the discovery of an upper level with unexploited high-grade zinc mineralisation
• Lower lenses now confirmed to run the whole length of known Caracoles Trend
• Ongoing drill results continue to be very encouraging and give Variscan further confidence of discovering additional laterally extensive, vertically stacked, mineralised lenses above and below existing mine development
• New assay information provides important data that will be included in the estimation of mineral resources that can potentially be exploited by a future resumption of underground operations

168 Trend

Figure 2. NE-SW Long Section of Phase 2 drilling in the 168 Trend

Note: Figure shows certain drilling results from previous drilling conducted by Variscan - refer ASX release 20 December 2021

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Note: Figure shows certain drilling results from previous drilling conducted by Variscan - refer ASX release 20 December 2021

Looking Ahead

Our 2022 exploration program on the Novales-Udias Project is advancing, led by the Phase 2 underground drilling which will now progress to testing step-out targets in the near-surface mine areas.

Follow-on activities and deliverables include:

• Underground drilling of step-out targets in historic near-surface mines
• Returning assay results as soon as possible for market reporting
• Reporting the results of the geophysical survey of the Buenahora license area
• Delivery of pending municipal approvals to undertake surface drilling covering the Buenahora license area
• In support of the above activities, the delivery of associated environmental, social and governance ("ESG") initiatives

ENDS

This announcement has been authorised for issue by Mr Stewart Dickson, Managing Director & CEO, Variscan Mines Limited.

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Notes

Variscan Mines Limited (ASX:VAR) is a growth oriented, natural resources company focused on the acquisition, exploration and development of high-quality strategic mineral projects. The Company has compiled a portfolio of high-impactbase-metal interests in Spain, Chile and Australia. Its primary focus is the development of its advanced zinc projects in Spain.

The Company's name is derived from the Variscan orogeny, which was a geologic mountain building event caused by Late Paleozoic continental collision between Euramerica (Laurussia) and Gondwana to form the supercontinent of Pangea.

To learn more, please visit: www.variscan.com.au

Competent Person Statement

The information in this document that relates to technical information about the Novales-Udias project is based on, and fairly represents information and supporting documentation compiled and reviewed by Dr. Mike Mlynarczyk, Principal of the Redstone Exploration Services, a geological consultancy acting as an external consultant for Variscan Mines. Dr. Mlynarczyk is a Professional Geologist (PGeo) of the Institute of Geologists of Ireland, and European Geologist (EurGeol) of the European Federation of Geologists, as well as Fellow of the Society of Economic Geologists (SEG). With over 10 years of full- time exploration experience in MVT-stylezinc-lead systems in several of the world's leading MVT provinces, Dr. Mlynarczyk has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" ('JORC Code'). Dr. Mlynarczyk consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears.

The information in this document that relates to previous exploration results was prepared pre-2012 JORC code. It is the opinion of Variscan that the exploration data is reliable. Although some of the data is incomplete, nothing has come to the attention of Variscan that causes it to question the accuracy or reliability of the historic exploration.

Forward Looking Statements

Forward-looking statements are only predictions and are not guaranteed. They are subject to known and unknown risks, uncertainties and assumptions, some of which are outside the control of the Company. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward-looking statements or other forecast. The occurrence of events in the future are subject to risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to differ from those referred to in this announcement. Given these uncertainties, recipients are cautioned not to place reliance on forward looking statements. Any forward-looking statements in this announcement speak only at the date of issue of this announcement. Subject to any continuing obligations under applicable law and the ASX Listing Rules, the Company, its directors, officers, employees and agents do not give any assurance or guarantee that the occurrence of the events referred to in this announcement will occur as contemplated.