Wiluna Mining : Operational and Corporate Update - June 2022

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ASX Announcement

8 June 2022

ASX: WMC

WILUNA OPERATIONAL AND CORPORATE UPDATE - JUNE 2022

HIGHLIGHTS

• Production continues to build; 6,559oz gold production for May 2022
• Concentrator ramping up to expectations and continues to outperform nameplate capacity; targeting full production run rate of 110-120kozpa by end of CY2022
• Receipts for concentrate produced and sold now on track after significant delays
• WilTails Plant Construction targeting commissioning in October
• Grade control drilling continues to deliver wide and high-grade sulphide intersections in immediate development areas
• Company-wideefficiency and cost review underway as the mine is being set up to achieve commercial production
• Capital raising progressing with commitments currently above minimum raise amount

Wiluna Mining Corporation Limited ("Wiluna", "WMC" or "the Company") (ASX: WMC) is pleased to provide an update on the Company and the operations at the Wiluna Mining Centre.

OPERATIONS

Wiluna Mining controls 100% of the Wiluna Mining Operation. The Wiluna Mining Operation is located at the northern end of the Western Australian Goldfields, approximately 530 km north of Kalgoorlie and 900km northeast (one and a half hours by direct flight) of Perth.

The Wiluna Mining Operation has a Mineral Resource of 5.5 million ounces, which makes it one of the largest gold districts in Australia under single ownership.

The Wiluna Mining Operation is currently in development to transform Wiluna from a modest, cashflow positive producer of free milling ore via a conventional CIP plant to a multi circuit operation producing circa 110-120kozpa once commercial production is reached (refer ASX announcement - 'Ore Reserves Update and Feasibility Progress Report' dated 12 April 2022). On completion, the development plan will enable Wiluna to treat all the ore types at Wiluna through four processes including;

• Existing 2.1Mtpa CIP process plant;
• 750,000tpa flotation concentrator which is now complete, following successful commissioning in December 2021;
• Gravity circuit which produces gold doré; and
• Tailings retreatment plant (WilTails) which will link tailings reclaim and reslurrying (as well as flotation tailings) with the existing CIP circuit to produce gold doré.

Note: The Company confirms that all material assumptions underpinning the production target, or the forecast information derived from the production target, included in the original ASX announcement dated 12 April 2022 continue to apply and have not materially changed.

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ASX Announcement 8 June 2022

Production Ramp-Up

The Company is pleased to announce that it has achieved 6,559oz of gold production in May 2022, ahead of expectations. Of this production, 5,855oz comprised gold in concentrate and 704oz comprised gold doré. During the month of May, the Company processed 66,251t at a grade of 3.46g/t, an improvement on the past 2 months.

Efficiency & Cost Review

The Company continues to work on optimising productivity and costs based on an efficient deployment of underground and surface equipment, targeting costs at or below industry standards as we move towards commercial production. This will be achieved through focusing on reducing development costs, increasing grade of ore mined, efficient production methods and support services. Key improvements include:

• Resizing mining equipment around 3 core mining areas through to commercial production: reduction of at least 1 jumbo and associated support equipment in the short term;
• Limiting mining works and development to only core mining areas required to achieve commercial production;
• Demobilising all drill rigs in the short term (recently occurred) with a view to bringing back 1-2 rigs in the coming months as required to assist with any grade control work;
• Reducing overheads and increasing productivity from site administration, maintenance, surface operations and other site support functions;
• Corporate cost reductions; and
• Strengthening the operating and planning team under acting COO to focus on achieving commercial production & scoping out the optimal path forward past that point, with a view to optimising margins around throughput and grade to achieve optimal economics.

Flotation Plant Progress & Concentrate Sales

Construction of the Company's 750ktpa Flotation Plant was completed (with successful commissioning) in December 2021. It is currently ramping up to its full production rate, with commercial production expected by the end of CY2022. The Concentrator was commissioned to process ~750ktpa, but recent outperformance of the name plate capacity has demonstrated processing rates of up to ~900-950ktpa.

Since ramp up began (1 January 2022) and up until 31 May 2022, the Company has produced 5,084 bags of gold concentrate (gold content approximately 18,913 oz), comprising: 3,240 bags which have been shipped to one of our off-take partners and 1,844 bags which have been produced and sold to an offtake partner but have yet to be shipped. Further, the Company is pleased to present the below (unaudited, unreconciled) receivables, inventory & gold in circuit balances at 31 May 2022.

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Figure 1: Completed Concentrator

Underground Development

Underground operations continue to ramp up with the focus remaining on securing production and cash flow from the Bulletin North, Bulletin South and Happy Jack North areas.

The Company has been hampered by manning issues due to the significant shortages of skilled labour, which have been further exacerbated by COVID-19 issues. This has resulted in slower mining and drilling rates than expected including a delay of the drilling of higher-grade stopes which has only just commenced, which has in turn, negatively affected mined grades in the first four months of CY2022. The Company estimates that it is therefore three to four months behind where it expected to be into its mining program.

The Company, because of its decision to pause further expansion, has taken the decision to focus immediate term mining in concentrated areas in the north mine area (Bulletin North, Bulletin South and Happy Jack North). This refocus is expected to result in improved outcomes.

Tailings Plant Construction (WilTails)

Construction of the WilTails plant, which is designed to treat the current and historic tailings, is continuing. The lime slaking facility is expected to be operational in August, which will allow WMC to process tailings from its concentrator. There has been a delay in the delivery of the Motor Control Centre due to shipping and logistics issues, and this is expected to defer commissioning of the plant until October.

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Figure 2: WilTails Plant Construction Progress

Grade Control Update

Grade control drilling has returned further thick, high-grade intercepts supporting geological interpretation and the short- term production profile as part of the ramp-up in sulphides concentrate production. Grade control results have demonstrated further high-grade sulphides in areas immediately ahead in the mine schedule, with extensions to mineralisation also defined (Figure 3). Better intercepts are listed below, with full results presented in Table 3:

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Figure 3: Bulletin grade control long section view, showing potentially economic intersections located beyond the currently planned stopes

Capital Raising Update

The Company is pleased to announce that its planned Entitlement Issue (refer to ASX announcements dated 23 & 24 May 2022) is progressing. The Entitlement issue, which comprises one share for every existing share at a price of A$0.40/share, plus one free listed option exercisable at A$0.60/share expiring 31 December 2024, opened to shareholders on 1 June 2022, and closes on 10 June 2022, is seeking to raise up to approximately A$84.5 million, with a minimum subscription under the Prospectus of A$50.0 million.

Following the initial announcement of the Entitlement Issue, the Company has seen significant inbound interest, with current commitments from shareholders and shortfall currently above the minimum amount of A$50 million. The Company notes these commitments include its top shareholders and its mining contractor, Byrnecut, which has agreed to convert approximately A$13.4 million of payables into the offer.

Further, the Company's secured lender, Mercuria, has provided the Company with a waiver which consents to this capital raising taking place and waives the event of default which arises under the Company's voluntary suspension from trading in the lead-up to the capital raise.