ARIKA RESOURCES LIMITED — Capital/Financing Update 2020

Jul 5, 2020

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ASX RELEASE: 6 July 2020

Drilling to recommence at the High Grade Kookynie Gold Project

HIGHLIGHTS

• Drilling is set to re-commence at the high-grade Kookynie Gold Project in WA (which includes the historic Cosmopolitan mine which produced 360,000oz at a very high average head grade of 15 grams per tonne (g/t)).

• This follows outstanding results received to date from the June 2020 Phase 1 drilling programme, where 21 out of 29 drill holes returned so far have delivered material grade intercepts (15 drill holes still pending) including:

• LPRC0012 – 4m @ 16.3g/t Au from 42 metres,

  • inc. 3m @ 20.7g/t Au from 42 metres[1 ]

• LPRC0015 – 9m @ 5.7g/t Au from 35 metres,

  • inc. 2m @ 17.9g/t Au from 40 metres[1]

• LPRC0013 – 4m @ 13/g/t Au from 33 metres[1]

• LPRC0032 – 10 metres @ 3.21 g/t Au from 26 metres[2]

• LPRC0003 – 6 metres @ 9.4 g/t Au from 26metres,

  • inc. 2metres @ 19g/t Au from 26metres[3]

• Initial focus area of the new drilling programme will be at Leipold where the southernmost hole of the Phase 1 programme returned 10 metres at 3.21 g/t Au from 26 metres. This extends known mineralisation at Leipold to a total of 0.5kms. It is also in an area where 2.2kms of additional strike, north and south of Leipold, remain relatively untested.

• The new drilling programme, currently planned for an additional 5,000 metres, will likely be increased following receipt of the final 15 drill-hole assays from the Phase 1 programme and the receipt of the magnetic interpretations from the recently completed drone survey.

• All the Company’s work to date is contributing towards being able to potentially convert the significant Exploration Target (refer below) to JORC 2012 compliant mineral resource estimates.

• Metalicity is well funded to execute this programme expeditiously.

• 1Please refer to ASX Announcement “ Metalicity Continues to Deliver Spectacular Drill Hole Results for the Kookynie Gold Project ” dated 25 June 2020

2 Please refer to ASX Announcement “ Metalicity Continues to Deliver Excellent Drill Hole Results for the Kookynie Gold Project ” dated 2 July 2020

3Please refer to ASX Announcement titled “ Metalicity Reports Drill Hole Intercepts Up To 80 g/t Au & Additional Tenement Acquisition for Kookynie ” dated 21 January 2020.

Metalicity Limited (ASX: MCT) (“ MCT ” or “ Company ”) is pleased to announce that, based on the results to date of the Phase One drilling programme, the Company is moving to recommence a significantly expanded drilling programme at the Kookynie Gold Project[4] (“ Kookynie ”). The return of significant intercepts from the June 2020 Phase One drilling programme has continued to confirm mineralisation within and extensions of previously developed and drilled areas for the Leipold Prospect. The second phase is planned to commence in mid-July incorporating the results and targeting the extents of Leipold, with further drilling designed to target McTavish, Cosmopolitan, Champion and Altona.

4Please refer to ASX Announcement “Metalicity Farms Into Prolific Kookynie & Yundamindra Gold Projects, WA” dated 6 May 2019

Metalicity Limited ASX Code: MCT ABN: 92 086 839 992

www.metalicity.com.au Level 25, 108 St Georges Terrace Perth WA 6000

The Kookynie Gold Project is located 60 kilometres south south-east from Leonora, Western Australia and is host to seven, significant prospects; Champion, McTavish, Leipold, Diamantina, Cosmopolitan and Cumberland. Diamantina, Cosmopolitan and Cumberland are known collectively as the DCC Trend (see Figure 1) and the Altona Trend. The historic Cosmopolitan mine which produced 360,000oz at a very high average head grade of 15 grams per tonne (g/t).

Metalicity has also defined a significant “ Exploration Target” of between 294,000 ounces and 967,000 ounces and is inclusive of historically stated mineral resource estimates and previously excluded areas of underground development (please refer to ASX Announcement “ Kookynie Gold Project – Development Strategy & Exploration Target Update ” dated 12 March 2020)

“ Exploration Target ” cautionary statement: The potential quantity and grade is conceptual in nature, given that there has been insufficient exploration to estimate a Mineral Resource and that it is uncertain if further exploration will result in the estimation of a Mineral Resource.

All the work to date by Metalicity and its partner Nex Metals has been designed to work towards producing JORC 2012 compliant Mineral Resource Estimates (which will potentially include previous JORC 2004 resources). The aim is also to establish a solid understanding of the mineralised extensions of all of the Prospects which are open in all directions.

Overall, the exploration upside for the Kookynie Gold Project outside of the known Prospects is phenomenal with 8 kilometres of strike extensions that have had relatively little to no work historically.

Commenting on the planned drilling, Metalicity Managing Director, Jason Livingstone said:

“The results to date from all our drilling programmes have been a delight to present. We have confirmed mineralisation and are addressing aspects of JORC 2012 compliancy, but most importantly, we continue to highlight that these prospects remain open in all directions through our step out drilling.”

“The Second Phase Drilling Programme is a major step forward for the Kookynie Gold Project. We intend to continue our work methodically and expeditiously to illustrate the potential of the Kookynie Gold Project. Through this expanded programme of approximately 5,000 metres of RC with a possible component of diamond drilling initially targeting the southern extents of Leipold after the incredible 10 metres @ 3.21 g/t Au from LPRC0032, we will move quickly to fold in the pending results from McTavish and the greater project from the drone magnetic survey. Whilst the Leipold Prospect has also returned fantastic, high grade results like 4 metres @16.3 g/t Au, 9 metres @ 5.7 g/t Au, 6 metres at 9.4 g/t Au etc. This result from the southernmost drill hole indicates we are far from the edge of mineralisation we are observing at Leipold, let alone along strike, but down dip.”

“Finally, the Company is well placed financially to execute this programme and potentially expand it further depending on the target generation exercises that may generate further targets from our drone magnetic survey. It is truly an exciting time as we apply our learnings through methodical exploration and development at the Kookynie Gold Project.”

Planned Drilling Programmes:

The planned programme at the Kookynie Gold Project (Figure 1) is designed to follow up on the phenomenal drill-hole results to date through further step out and infill drilling. The Phase Two expanded drilling programme will initially concentrate on the southern extents of Leipold (see Figure 2), but also include, pending drone magnetic survey results and further assays, the circa 2 kilometre gap between Leipold and McTavish, the extensions of McTavish, but also aspects at Champion, Cosmopolitan, and the Altona area. The tenement E40/289, immediately east and along strike from the Orient Well mine site was also surveyed using the drone. This data will be processed accordingly to generate drill targets which dependent on the interpretations, may form part of the expanded programme. However, the expanded programme will initially concentrate within the 8 kilometres of strike we have identified within the Kookynie Gold Project around the Leipold, McTavish, Champion, DCC and Altona Trends.

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Figure 1 – Kookynie Prospect Locality Map with mineralised trends.

The Leipold Prospect

The Company has previously confirmed and stepped out from the mineralisation, this expanded programme of up to 5,000 metres of RC will initially target the southern strike extent and dip aspects of the Leipold Prospect. The Company is continually updating aspects of the JORC 2004 Mineral Resource Estimate of 555kt @ 1.9 g/t for 33koz (please refer to ASX Announcement by NME dated 1 August 2011 “ Update on activities ”) to potentially re-estimate and significantly refine the mineralisation model to JORC 2012 guidelines.

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Figure 2 – Leipold Collar Plan with trend extension and recent drilling.

Summary:

Below is a table with all drill hole results since entering the farm-in agreement (please refer to ASX Announcement “ Metalicity Farms Into Prolific Kookynie & Yundamindra Gold Projects, WA ” dated 6 May 2019):

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				MGA 94 Zone 51 South	MGA 94 Zone 51 South	MGA 94 Zone 51 South
Prospect	Hole ID	Tenement	Hole Type	Easting	Northing	RL	EOH	Dip	Azi	From (m)	To (m)	Down Hole Width(m)	Grade (Au g/t)	Comments
Leipold	LPRC0001	M40/22	RC	350,744	6,752,130	420	48	-60	250	34	43	9	7.31	9m @ 7.31 g/t Au from 34m
								including		34	37	3	7.91	inc. 3m @ 7.91 g/t Au from 34m
								including		39	43	3	10.4	inc. 3m @ 10.4 g/t Au from 39m
								including		40	41	1	31.2	inc. 1m @ 31.2 g/t Au from 40m
	LPRC0002			350,760	6,752,040	431	42	-60	250	18	22	4	7.1	4m @ 7.1 g/t Au from 18m
								including		19	21	2	10.8	inc. 2m @ 10.8 g/t Au from 19m
								-60	250	26	29	3	3.4	3m @ 3.4 g/t Au from 26m
	LPRC0003			350,766	6,752,030	431	42	-60	250	24	30	6	9.4	6m @ 9.4 g/t Au from 24m
								including		26	28	2	19	inc. 2m @ 19 g/t Au from 26m
	LPRC0004			350,785	6,752,027	431	60	-60	250	38	46	8	3.2	8m @ 3.2 g/t Au from 38m
								including		38	41	3	6.3	inc. 3m @ 6.3 g/t Au from 38m
	LPRC0005			350,713	6,752,113	430	30	-60	250	9	12	3	6.81	3m @ 6.81g/t Au from 9 metres
	LPRC0006			350,732	6,752,121	430	36	-60	250	18	21	3	9.92	3m @ 9.92g/t Au from 18 metres
										26	27	1	2.7	1m @ 2.7g/t Au from 26 metres
	LPRC0007			350,720	6,752,092	430	30	-60	250	15	19	4	3.71	4m @ 3.71g/t Au from 15 metres
	LPRC0008			350,739	6,752,099	430	36	-60	250	21	25	4	4.12	4m @ 4.12g/t Au from 21 metres
	LPRC0009			350,728	6,752,074	430	30	-60	250	No intercept >1g/t Au
	LPRC0010			350,746	6,752,081	430	36	-60	250	18	22	4	7.08	4m @ 7.08g/t Au from 18 metres
	LPRC0011			350,765	6,752,088	430	54	-60	250	32	33	1	1.98	1m @ 1.98g/t Au from 32 metres
										41	43	2	8.57	2m @ 8.57g/t Au from 41 metres
	LPRC0012			350,784	6,752,096	430	78	-60	250	31	32	1	1.26	1m @ 1.26g/t Au from 31 metres
										42	46	4	16.3	4m @ 16.3g/t Au from 42 metres
							Including			42	45	3	20.7	inc. 3m @ 20.7g/t Au from 42 metres
	LPRC0013			350,751	6,752,128	430	54	-60	250	33	37	4	13.28	4m @ 13.28g/t Au from 33 metres
	LPRC0015			350,757	6,752,107	430	60	-60	250	30	31	1	2.69	1m @ 2.69g/t Au from 30 metres
										35	44	9	5.7	9m @ 5.7g/t Au from 35 metres
							Including			40	42	2	17.9	inc. 2m @ 17.9g/t Au from 40 metres
	LPRC0016			350,776	6,752,114	430	84	-60	250	46	47	1	1.26	1m @ 1.26g/t Au from 46 metres
										49	50	1	4.48	1m @ 4.48g/t Au from 49 metres
										52	64	12	2.34	12m @ 2.34g/t Au from 52 metres
										54	57	3	5.1	inc. 3m @ 5.1g/t Au from 54 metres
	LPRC0014			350,769	6,752,135	430	75	250	250	No intercept >1g/t Au
	LPRC0017			350,736	6,752,057	430	30	250	250	No intercept >1g/t Au
	LPRC0018			350,755	6,752,064	430	42	250	250	23	27	4	3.69	4 m @ 3.69 g/t Au from 23m
	LPRC0019			350,774	6,752,071	430	54	250	250	39	42	3	2.21	3 m @ 2.21 g/t Au from 39m
	LPRC0020			350,792	6,752,079	430	72	250	250	57	60	3	-	Void - Historical Workings Intersected
	LPRC0021			350,745	6,752,037	430	30	250	250	No intercept >1g/t Au
	LPRC0022			350,764	6,752,044	430	42	250	250	26	30	4	2.7	4 m @ 2.7 g/t Au from 26m
	LPRC0023			350782.5348	6752051.181	430	60	250	250	37	39	2	4.63	2 m @ 4.63 g/t Au from 37m
										41	42	1	1.55	1 m @ 1.55 g/t Au from 41m
	LPRC0024			350801.1609	6752058.466	430	78	250	250	53	54	1	2.39	1 m @ 2.39 g/t Au from 53m
										58	64	6	2.87	6 m @ 2.87 g/t Au from 58m
	LPRC0025			350,753	6,752,019	430	30	250	250	No intercept >1g/t Au
	LPRC0026			350,772	6,752,026	430	40	250	250	24	32	8	2.92	8 m @ 2.92 g/t Au from 24m
	LPRC0027			350,759	6,751,999	430	36	250	250	15	19	4	1.2	4 m @ 1.2 g/t Au from 15m
	LPRC0028			350,778	6,752,006	430	42	250	250	31	34	3	4.59	3 m @ 4.59 g/t Au from 31m
	LPRC0029			350,763	6,751,977	430	30	250	250	No intercept >1g/t Au
	LPRC0030			350,781	6,751,984	430	40	250	250	25	31	6	1.77	6 m @ 1.77 g/t Au from 25m
	LPRC0031			350,775	6,751,941	430	30	250	250	No intercept >1g/t Au
	LPRC0032			350,794	6,751,948	430	48	250	250	26	36	10	3.21	10 m @ 3.21 g/t Au from 26m
	LPRC0033			350,790	6,752,033	430	60	250	250	No intercept >1g/t Au
Continued over page.

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MGA 94 Zone 51 South
Down
Hole From To Grade
Prospect Hole ID Tenement Easting Northing RL EOH Dip Azi Hole Comments
Type (m) (m) (Au g/t)
Width (m)
-60 270 67 71 4 6.4 4m @ 6.4 g/t Au from 67m
McTRC0001 350,647 6,754,118 423 112
including 67 68 1 15.47 inc. 1m @ 15.47 g/t Au from 67m
McTRC0002 350,647 6,754,098 424 84 -60 270 73 76 3 1.41 3m @ 1.41 g/t Au from 73m
McTavish McTRC0003 M40/77 RC 350,576 6,754,153 423 30 -60 270 14 15 1 1.9 1m @ 1.9 g/t Au from 14m
McTRC0004 350,596 6,754,153 423 48 -60 270 33 35 2 2.2 2m @ 2.2 g/t Au from 33m
-60 270 48 53 5 17.9 5m @ 17.9 g/t Au from 48m
McTRC0005 350,618 6,754,083 424 66
including 51 52 1 80.17 inc. 1m @ 80.17 g/t Au from 51m
CPRC0001 352,224 6,757,503 417 112 -60 270 Stope fill intersected - structure present but mined out.
CPRC0002 352,265 6,757,582 416 138 -60 250 127 128 1 1.35 1m @ 1.35 g/t Au from 127m
CPRC0003 352,158 6,757,586 417 48 -60 270 31 33 2 1.8 2m @ 1.8 g/t Au from 31m
Champion M40/27 RC -60 270 28 30 2 25.2 2m @ 25.2 g/t Au from 28m to EOH
CPRC0004 352,149 6,757,566 417 30
including 28 29 1 42.04 inc. 1m @ 42.04 g/t Au from 28m
16 17 1 1.3 1m @ 1.3 g/t Au from 16m
CPRC0005 352,167 6,757,631 417 42 -60 270
39 40 1 2.1 1m @ 2.1 g/t Au from 39m
167 168 0.72 3.1 0.72m @ 3.1 g/t Au from 167m
RC/DD
CDRCDD0001 M40/61 Tail 354,377 6,753,209 427 186.33 -60 270 173.07 173 0.21 8.8 0.21m @ 8.8 g/t Au from 173.07m
174.85 176 1.15 1.5 1.15m @ 1.5 g/t Au from 174.85m
DCC Trend
CLRC0001 M40/61 RC 354,153 6,754,058 429 136 -60 270 72 74 2 1.4 2m @ 1.4 g/t Au from 72m
CDDD0001 E40/332 DD 354728 6753398 432 529.5 -60 270 Structure diluted by Proterozoic Dolerite Dyke
CDRC0001 M40/61 RC 354284 6753513 430 148 -60 270 76 78 2 22.1 2m @ 22.1 g/t Au from 76m
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Table 1 – All Drillhole results since July 2019*.

*Please refer to announcements:

ASX Announcement “Metalicity Confirms Mineralisation” dated 31 July 2019,

ASX Announcement “Metalicity Confirms Additional Gold Mineralisation at Kookynie” dated 2 October 2019, ASX Announcement “Metalicity Reports Drill Hole Intercepts Up To 80 g/t Au & Additional Tenement Acquisition for Kookynie” dated 21 January 2020.

Based on the results obtained from the drilling programmes to date, the Company will continue with the same methodical, results driven approach to the exploration of the Prospects we have performed before.

The objective is to efficiently explore the large high-grade mineralised systems that the Company’s initial work identified. The Second Phase of this expanded exploration programme will be concentrated initially on the Leipold and McTavish Prospects, with the DCC, Champion and Altona being assessed in due course through this Phase Two Drilling Programme

ENQUIRIES

Jason Livingstone Managing Director & CEO +61 (0)8 6500 0202 jlivingstone@metalicity.com.au

Note

This Announcement is designed to also supplement for Nex Metals Exploration as it relates to our farm-in agreement as announced on the 6[th] May 2019 titled “ Metalicity Farms Into Prolific Kookynie & Yundamindra Gold Projects, WA ”.

Competent Person’s Statements

Please refer to the ASX Announcements listed in the body of the announcement for the relevant competent person’s statements.

Forward Looking Statements

This announcement may contain certain “forward-looking statements” which may not have been based solely on historical facts, but rather may be based on the Company’s current expectations about future events and results. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have reasonable basis. However, forwardlooking statements:

(a) are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies;

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(b) involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements. Such risks include, without limitation, resource risk, metals price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, as well as political and operational risks in the countries and states in which the Company operates or supplies or sells product to, and governmental regulation and judicial outcomes; and

(c) may include, among other things, statements regarding estimates and assumptions in respect of prices, costs, results and capital expenditure, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward-looking statements.

All forward-looking statements contained in this presentation are qualified by the foregoing cautionary statements. Recipients are cautioned that forward-looking statements are not guarantees of future performance and accordingly recipients are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

The Company disclaims any intent or obligation to publicly update any forward-looking statements, whether as a result of new information, future events or results or otherwise.

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