Andromeda Metals Limited

ABN: 75 061 503 375

Corporate details:

ASX Code: ADN

Cash: $2.40 million

(as at 31 March 2019) Issued Capital:

1,355,499,211 ordinary shares

704,588,163 ADNOB options

20,000,000 unlisted options

Directors:

Rhod Grivas

Non-Executive Chairman

James Marsh

Managing Director

Nick Harding

Executive Director and

Company Secretary

Andrew Shearer

Non-Executive Director

Contact details:

69 King William Road, Unley, South Australia 5061

PO Box 1210

Unley BC SA 5061

Tel: +61 8 8271 0600

Fax: +61 8 8271 0033

[email protected]

www.andromet.com.au

ASX Announcement

8 May 2019

Increased Ounces in Updated

Wudinna Gold Project Mineral Resource

Summary

Based on a new geological reinterpretation, an increased Mineral Resource for the Wudinna Gold Project located on the Eyre Peninsula in South Australia of 4.43 million tonnes at 1.5g/t gold for 211,000 ounces of gold is reported.

The revised Mineral Resource covering the Barns, White Tank and Baggy Green deposits represents an increase of 5% in total contained gold and 15% in resource tonnes over the previous Mineral Resource estimate. All three deposits are located within 6kms of each other and remain open in multiple directions.

The new Mineral Resource comprises 4.02 million tonnes at 1.5g/t gold for 193,000 ounces of Inferred Resource and 0.41 million tonnes at 1.4g/t for 18,000 ounces of Indicated Resource.

The resource update was completed by the Joint Venture operator Cobra Resources PLC. Subject to funding, Cobra is planning to undertake an extensive exploration program at Baggy Green and other identified targets across the Wudinna Gold Project during the second half of 2019.

Discussion

Andromeda Metals (ASX: ADN) has been provided with an updated Mineral Resource covering the Company’s Wudinna Gold Camp on the Eyre Peninsula in South Australia which is under a Joint Venture with Lady Alice Mines Pty Ltd (“LAM”) (refer ASX announcement dated 31 October 2017). LAM was acquired by London Stock Exchange Limited Cobra Resources PLC (“Cobra”) on 6 March 2019 and as a consequence Cobra is now acting as the operator of the Joint Venture.

ADN’s Managing Director James Mash commented, “It is a very positive development to have Cobra Resources undertaking new exploration at the Wudinna Gold Project while the current focus for Andromeda Metals remains the Poochera Halloysite‐Kaolin Project”.

Deposit Descriptions

The Eyre Peninsula Gold Joint Venture comprises a 2,027km2 land holding in the Gawler Craton. The Wudinna Gold Camp within the Joint Venture tenement holding comprises a cluster of gold prospects which includes the Barns, White Tank and Baggy Green deposits (refer Figure 1).

Figure 1: Eyre Peninsula Gold Joint Venture location plan

The Central Gawler Gold Province is a belt of gold‐dominant mineralisation which formed approximately 1590 million years ago during the regionally extensive Hiltaba/GRV tectonothermal event. Gold mineralisation at the Barns, White Tank and Baggy Green deposits is hosted by variably deformed granodiorite/gneiss interpreted to belong to the Tunkillia Suite, a group of 1690Ma granitiods that form important host rocks in the Central Gawler Gold Province.

Interpreted mineralisation at Barns extends over and area of 400 mN by 250 mE and is up to 200 metres deep. Two lodes of flat‐lying supergene mineralisation and 12 lodes of shallow dipping, fresh mineralisation have been interpreted.

At White Tank, the interpreted mineralisation extends for 250 mN by 150 mE and is up to 120 metres deep. One lode of flat‐lying mineralisation and two shallow dipping lodes of mineralisation within fresh material have been interpreted.

The Baggy Green resource has two areas of mineralisation: within the south the interpreted mineralisation extends over an area of 200 mN by 400 mE and in the north it extends over an area of 150 mN by 300 mE. One lode of flat‐lying supergene mineralisation and 13 shallow dipping lodes of mineralisation have been interpreted within the fresh material to a depth of 200 metres.

Updated Mineral Resource

In 2018, LAM requested Optiro Pty Ltd (“Optiro”), a respected geological and mining consultancy group based in Perth, Western Australia, to investigate an alternative orientation to the interpreted mineralisation at Barns, White Tank and Baggy Green aligned with the strong regional northwest/southeast orientation observed in:

Calcrete gold geochemical data;

Regional gravity and magnetic data; and

Structural interpretation of drill core data.

Variography indicated that the maximum continuity for the mineralisation at Barns is orientated along 305o, which is consistent with the regional orientation observed by LAM. LAM requested Optiro to re‐model the mineralisation at Barns, White Tank and Baggy Green using this as the dominant orientation for the mineralisation and to develop alternative conceptual resource models.

In April 2019, Cobra requested Optiro to re‐estimate the Barns, White Tank and Baggy Green resources incorporating this alternative interpretation and new variography. As a result, a revised Mineral Resource estimate for the Barns, White Tank and Baggy Green deposits has been calculated and is shown in table 1. A nominal cut‐off grade of 0.3g/t gold has been used for interpretation of the mineralisation at Barns, White Tank and Baggy Green with the revised Mineral Resource. The Mineral Resource has been reported above a 0.5g/t gold cut‐off grade to reflect current commodity prices and extraction by open pit mining.

Note: inconsistencies in totals due to rounding

Table 1: Revised Wudinna Gold Camp Mineral Resource

The previous Mineral Resource was determined by Mining Plus Pty Ltd and was released to the market (refer ADN ASX announcements dated 19 July 2016 (Barns) and 23 January 2017 (White Tank and Baggy Green)) using the same cut‐off grade of 0.5g/t gold. A 0.5g/t nominal grade was also used for mineral interpretations. A comparison of the two resource estimates is shown in table 2.

Table 2: Comparison of 2017 and 2019 Mineral Resource Estimates

For Barns the global estimates are similar, with the 2019 estimate reporting a slightly higher tonnage and lower grade with a resultant decrease in gold ounces. Within the 2019 model a slightly higher proportion of

the resource has been classified as Indicated. The 2017 interpreted resource has a slightly larger lateral extent compared to the 2019 resource. While the alternative orientation has not significantly changed the global resource estimate at Barns, it does present alternative strategies for future exploration and potential resource extension.

At both White Tank and Baggy Green, there is additional tonnage at a lower grade, with an overall increase in contained gold ounces.

For the total Wudinna Gold Camp, the tonnage for the revised Mineral Resource has increased by 15% and the grade decreased by 8% for an overall increase in contained gold of 5%.

Further information on updated Mineral Resource

A summary of attached JORC Table 1 (see Appendix 1) is provided below with respect to the Mineral Resources pursuant to the requirements of ASX listing rule 5.8.1.

Geology ‐ the deposits are considered to be either a lode gold or intrusion related mineralisation related to the 1,590 Ma Hiltaba/GRV tectonothermal event. The gold mineralisation is associated with significant alteration of host rocks. Mineralisation interpretation was undertaken using a nominal cut‐off grade of 0.3g/t gold, structural measurements from drill core, and regional orientations observed from calcrete gold geochemistry observed in calcrete gold geochemistry, magnetic and gravity data.

Drilling method – included aircore (AC), rotary air‐blast (RAB), RC (reverse circulation), rotary hammer (RH) and diamond drilling. Hole diameter for AC was 90 mm. RC hole diameters were generally 4.5 to 5.5 inch with face sampling hammers employed. Diamond core was HQ/ NQ2 diameter. Data from the AC and RAB holes have not been used for resource estimation.

Sampling and sub‐sampling ‐ 1m drill chip samples were collected from AC, RC, RAB and RH drillholes. RC and many of the RH, AC and RAB samples have been riffle split if dry. Wet samples have been sub‐sampled using trowels. Composite sample of 6 m were submitted for analysis and anomalous intersections were re‐ submitted for analysis of the 1 m samples. Core samples from diamond drillholes were collected based on geology and half core samples submitted for analysis. A 30 g or a 50 g charge was used for analysis. Pulverising was completed with P80 passing 75μm in preparation for analysis.

Sample analysis method ‐ samples were analysed by fire assay with AAS finish. Some screen fire assays have been completed where coarse gold was suspected to be present.

Estimation methodology ‐ the resource models for the Barns and White Tank deposits were constructed using a parent block size of 10mE by 10mN on 4m benches; the parent blocks were allowed to sub‐cell down to 2mE by 2mN by 0.5mRL to more accurately represent the geometry and volumes of the weathering horizons and mineralisation domains. For Baggy Green, a parent block size of 20mE by 20mN by 5m was used and the parent blocks were allowed to sub‐cell down to 4mE by 4mE by 1mRL. Gold block grades were estimated using ordinary kriging techniques, with search ellipses oriented within the plane of the mineralisation. Hard boundary conditions were applied for grade estimation into each of the mineralised domains (i.e. grade estimation for each domain used only the data that is contained within that domain).

Density ‐ a total of 255 bulk density determinations have been undertaken at Barns on either historical or recent diamond drillholes and 185 bulk density determinations have been undertaken at Baggy Green on recent diamond drillholes. Average values were calculated using a combination of weathering and mineralisation. Density values assigned to the mineralised domains in the resource models range from 2.29t/m3 to 2.73t/m3.

Resource classification ‐ the Mineral Resources have been classified on the basis of confidence in geological and grade continuity and taking into account data quality (including sampling methods), data density and confidence in the block grade estimation, using the modelled grade continuity and conditional bias measures (slope of the regression) as criteria. Indicated Mineral Resources have been defined at Barns within the supergene mineralisation in areas where drill spacing is generally 20 mE by 50 mN or less. An Indicated classification was applied to four of the fresh lodes where the drill spacing is generally 20 mE by 50 mN or less and the resources are above 40 mRL. Inferred Mineral Resources have been defined in areas where an extension of mineralisation is supported by the drilling. The total Mineral Resources at White Tank and Baggy Green have been classified as Inferred.

Cut‐off parameters ‐ the Mineral Resource is reported above a 0.5 g/t gold cut‐off grade.

Mining modifying parameters ‐ planned extraction is by open pit mining and mining factors such as dilution and ore loss have not been applied.

Metallurgical factors ‐ no metallurgical assumptions have been built into the resource models. Metallurgical testwork from material at Barns and Baggy Green indicated gold recoveries ranging from 94.3% to 99.3% and averaging 97.7% across all samples from a combination of conventional gravity and cyanide leaching.

Wudinna Gold Farm‐in and Joint Venture

The principal terms of the Wudinna Gold Farm‐in and Joint Venture which was executed on 31 October 2017 between ADN and LAM include:

LAM will sole fund $2.1 million within 3 years of execution to earn a 50% equity position (Stage 1 earn‐ in).

At the end of Stage 1, a joint venture can be formed, or alternatively LAM can spend a further $1.65 million over a further two years (total funding of $3.75 million over 5 years) to earn a 65% equity interest (Stage 2 earn‐in).

At the end of Stage 2, a joint venture can be formed, or alternatively LAM can spend a further $1.25 million over a further 12 months (total funding of $5.0 million over 6 years) to earn a 75% equity interest (Stage 3 earn‐in).

Once a joint venture is formed, the parties will contribute to further expenditure in accordance with their respective equity, or dilute using a standard dilution procedure.

Should a party’s equity fall below 5%, its equity will be compulsorily acquired by the other party at a price to be negotiated in good faith, or failing agreement, at a price determined by an independent valuer.

LAM must meet the requisite statutory expenditure requirements to keep the project tenements in good standing.

LAM will act as manager during the farm‐in and thereafter while ever it holds at least 50% equity.

Competent Person’s Statement

Information in this announcement that relates to the Estimation and Reporting of Mineral Resources has been compiled by Mrs Christine Standing BSc Hons (Geology), MSc (Min Econs), MAusIMM, MAIG. Mrs Standing is a full‐time employee of Optiro and has acted as an independent consultant on the Mineral Resource estimates for the Barns, White Tank and Baggy Green deposits. Mrs Standing is a Member of the Australian Institute of Geoscientists and the Australian Institute of Mining and Metallurgy and has sufficient experience with the style of mineralisation, deposit type under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code. Mrs Standing consents to the inclusion in this report of the contained technical information relating to the Mineral Resource estimations in the form and context in which it appears. The detailed Mineral Resources estimation parameters per Table 1 of the JORC Code are set out in Appendix One of this release.

Cautionary Statement

Readers should use caution when reviewing the exploration and historical production results presented and ensure that the Modifying Factors described in the 2012 Edition of the JORC Code are considered before making an investment decision.

APPENDIX 1 ‐ JORC CODE, 2012 EDITION – TABLE 1

Section 1 Sampling Techniques and Data

Section 2 Reporting of Exploration Results

Section 3 Estimation and Reporting of Mineral Resources