CARNABY RESOURCES LIMITED — Capital/Financing Update 2021

Jul 18, 2021

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ASX Announcement 19 July 2021

Fast Facts

IMPROVED TERMS - LAINEJAUR PROJECT DIVESTMENT UPDATE

Shares on Issue 117.9M

Market Cap (@ 34.5 cents) $40.7M Cash $8.0M[1 ]

1As of 31 March 2021

Carnaby Resources Limited (ASX: CNB) ( Carnaby or the Company ) is pleased to advise an improvement in the terms of the previously announced Share Sale Agreement ( SSA ) for the divestment of the Lainejaur Project in Sweden (see ASX release 18 March 2021).

Board and Management

Peter Bowler, Non-Exec Chairman Rob Watkins, Managing Director

Greg Barrett, Non-Exec Director & Company Secretary

Paul Payne, Non-Exec Director

Carnaby will benefit from an expedited payment schedule relative to the previous arrangement.

Company Highlights

• Proven and highly credentialed management team

Total consideration of $1,500,000 remains the same with payments made as follows;

1. If, on or before 31 December 2021, Bayrock Resources Ltd ( BRL ) has completed either an IPO or a reverse takeover transaction ( RTO ), consideration payable to Carnaby will consist of;

2. a) Cash payment of $1,000,000 ; and

3. b) $500,000 worth of fully paid ordinary shares in either the capital of BRL if an IPO is undertaken or the RTO Target Entity if an RTO is undertaken.

4. If BRL has not completed either an IPO or RTO prior to 31 December 2021, consideration payable to Carnaby will consist of;

5. a) Cash payment of $750,000 on 31 December 2021; and

6. b) Cash payment of $750,000 on 31 December 2022.

The Company’s Managing Director, Rob Watkins, commented:

“The settlement of this transaction with Bayrock Resources Limited will provide a healthy boost to Carnaby’s already robust cash reserves and allow the Company to continue its focus on expansive drilling on our highly prospective Pilbara Gold and Greater Duchess Copper exploration projects in Australia.”

• Tight capital structure and strong cash position

• Pilbara Gold Project, 442 km[2] of highly prospective tenure near to De Grey’s Hemi gold discovery in the Mallina Basin of WA

• Discovery of potentially “Hemi-style” intrusion hosted gold mineralisation up to 3.2 g/t Au[2]

• Greater Duchess Copper Project in Qld comprises 384 km[2] exploration package with numerous copper and gold targets

• Stand-out initial results include 87m @

• 0.9% Cu containing 56m @ 1.1% Cu[3]

• 100% ownership of the Tick Hill Gold Project (granted ML’s) in Qld, historically one of Australia highest grade and most profitable gold mines

• Past production of 511 koz at 22 g/t gold

• Indicated and Inferred Mineral Resource of 845,000 t @ 2.47 g/t gold for 67,100 ounces[4]

• Proven and Probable Ore Reserves of 459,600 t @ 1.89 g/t gold for 28,000 ounces[4]

• 2Refer ASX release 28 May 2021

• 3Refer ASX release 5 July 2021

4Refer ASX release 5 June 2020, to be adjusted following Tailings Sale & NSR Royalty Agreement, refer ASX release 3 August 2020

Registered Office

78 Churchill Avenue Subiaco Western Australia 6008

T: +61 8 9320 2320

www.carnabyresources.com.au

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Further information regarding the Company can be found on the Company’s website

www.carnabyresources.com.au

For further information please contact: Robert Watkins, Managing Director +61 8 9320 2320

Competent Person Statement

The information in this document that relates to exploration results and Exploration Targets is based upon information compiled by Mr Robert Watkins. Mr Watkins is a Director of the Company and a Member of the AusIMM. Mr Watkins consents to the inclusion in the report of the matters based upon the information in the form and context in which it appears. Mr Watkins has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is undertaken 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).

Previously released ASX Material References that relates to announcement include:

Divestment of Lainejaur Project in Sweden for $1.5M, 18 March 2021

Disclaimer

References may have been made in this announcement to certain ASX announcements, including references regarding exploration results, mineral resources and ore reserves. For full details, refer to said announcement on said date. The Company is not aware of any new information or data that materially affects this information. Other than as specified in this announcement and the mentioned announcements, the Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources, Exploration Target(s) or Ore Reserves that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

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