COPPERMOLY LIMITED — Interim / Quarterly Report 2021

Oct 27, 2021

28 October 2021

ASX Code: COY

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September 2021 Quarterly Activities Report

The following report details the operating and corporate activities of Coppermoly Ltd ( Coppermoly or the Company ) for the quarter ended 30 September 2021 .

SUMMARY

• All planned exploration activity, including the previously proposed drilling program at the Mt Nakru prospect, continued to be deferred during the quarter due to COVID-19 related restrictions on travel between Australia and PNG.

• Coppermoly is well capitalised with cash reserves of $3.15 million as of 30 September 2021.

• Subsequent to the end of the quarter the Group was granted a 320 km[2] tenement – EPM27835 (Fox Creek Project) – on the Mt Isa Inlier in northwest Queensland.

Exploration Projects

Mt Nakru (EL 1043)

The Mt Nakru Cu-Au project (EL 1043) comprises two known deposits, Nakru 1 and Nakru 2, which are 1.5km apart. The Mt Nakru Project hosts Mineral Resources, classified in accordance with JORC (2012), which were estimated by Mining Associates in February 2019 and are summarised in Table 1.[1] Highgrade copper-zinc mineralisation has also been exposed at surface at the Nakru 2 North-West and Nakru 3 Prospects.

During the quarter, the Company received notification from the Mineral Resources Authority of Papua New Guinea that the Company’s application for the renewal of exploration licence EL1043 Mt Nakru (L1043) has been approved.

The renewal is for a two year term from 8 December 2020 to 7 December 2022.

Table 1. Nakru Project Indicated and Inferred Mineral Resource Estimate, Feb 2019 (> 0.3% Cu)

Resource	Mineralised		Grade			Metal
Category	Tonnes (millions)	Copper %	Gold **g/t **	Silver **g/t **	Copper (kt)	Gold (koz)	Silver ( koz)
Indicated	7.03	1.00	0.28	1.81	70	64	409
Inferred	34.36	0.69	0.21	1.55	239	237	1,707
Total	41.39	0.75	0.23	1.59	309	300	2,116

1, See Coppermoly ASX Announcement 28 February 2019. The Company is not aware of any new information or data that materially affects the information included in the referenced ASX announcement and confirms that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

A planned exploration drilling program at Mt Nakru to define the strike length and depth extent of the currently exposed massive and disseminated sulphides has been deferred pending the lifting of COVID19 related restrictions on travel between Australia and Papua New Guinea.

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Coppermoly Ltd

Figure 1 – Location of Coppermoly’s PNG exploration projects

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Simuku (EL 2379)

The Simuku Project comprises Exploration Licence 2379 on the island of New Britain in Papua New Guinea (Figure 1). Mineralisation at Simuku is copper-molybdenum-gold porphyry style associated with the Simuku-Kulu Intrusive Complex, which is Upper Oligocene in age. Three and potentially four porphyry copper-molybdenum-gold prospects, spaced along a 3 to 4 km, north to northeast trending zone, have been recognised on the Simuku Project.

Table 2 details the Simuku Mineral Resource, which reported in March 2020 at a 0.2% copper cut off.

	Table	**2 - Simuku Mineral Resource Statement2 **	**2 - Simuku Mineral Resource Statement2 **	**2 - Simuku Mineral Resource Statement2 **	**2 - Simuku Mineral Resource Statement2 **
Category	Mt	Cu %	**Aug/t **	**Ag ppm **	**Moppm **	Cut-Off
Inferred	373.6	0.31	0.05	2.1	59	0.2% Cu

2 See Coppermoly ASX Announcement 4 March 2020 for full details of the Simuku Mineral Resource Estimate. The Company is not aware of any new information or data that materially affects the information included in the referenced ASX announcement and confirms that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

Coppermoly’s exploration strategy is to investigate areas adjacent to the Simuku Mineral Resource for similar styles of mineralisation to expand the overall Mineral Resource. Recent geophysical studies completed by the Company have outlined target areas near the Simuku Mineral Resource for follow up exploration.

During the quarter the Company continued to review historical exploration data for the purpose of

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Coppermoly Ltd

generating drilling targets for the next phase of the Simuku exploration program. No significant field exploration activity was undertaken on the Simuku project during the quarter.

Mak Mak (EL2514)

Mak Mak is a greenfield exploration tenement that lies proximal to the Nakru tenement. There are several sites within the tenement where rock chip and stream sediment samples have returned elevated copper and gold.

No significant exploration activity was undertaken on the Mak Mak project during the quarter.

Kori River (EL2578)

EL2578 comprises 116 sub-blocks, covering an area of approximately 315 km2, that encloses the Company’s existing Simuku exploration licence (refer figure 1). EL2578 includes areas near the boundary of the Simuku exploration licence that show encouraging signs for potential conductive and resistive anomalous zones.

No significant exploration activity was undertaken on EL2578 during the quarter.

Metelen River (EL2638)

Metelen River occupies an area of 246km[2] and is located adjacent to the Company’s existing Mt Nakru and Mak Mak exploration licences.

Ongoing data compilation, but no fieldwork was undertaken on EL2578 during the quarter.

Corporate Activity

As of 30 June 2021, the Company had cash reserves of $3.15 million.

During the quarter the Company made payments totalling $41,250 to related parties or their associates. These payments represented remuneration, including superannuation, paid to the Managing Director.

Recent developments

On 21 October 2021, the Company announced that the Queensland Department of Natural Resources, Mines and Energy (“DNR”). has granted exploration licence EPM27835 (Fox Creek Project) to the Company. EPM27835 covers an area of 320km2 in the Eastern Succession, Mount Isa Inlier, in northwest Queensland which hosts a number of significant base metals deposits including the Cannington Ag-ZnPb deposit and the Ernest Henry Cu-Au deposit (Figure 2).

The Company has also applied for a second exploration licence, EPM27836 (Mount Tracey Project), which covers an area 294km2 immediately south of EPM27385 (Figure 2). EPM27836 is subject to approval from DNR.

Outlook

PNG Projects

Due to the COVID-19 pandemic and the related restrictions on the ability of Australian based personnel to travel to PNG to oversee exploration programs, the Company has deferred all planned exploration activities including the proposed drilling program at Mt Nakru.

The Company remains well funded to resume exploration activities on its Papua New Guinea projects when circumstances allow.

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Coppermoly Ltd

A comprehensive review of those historic copper zones is currently underway, which involves amassing the historical data, validating and enhancing previously reported gold and base metal anomalies. The Company will follow up and rank targets before commencing work on ground shortly.

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Mt. Is a Inlier
Cloncurry
Q U E E N S L A N D
Bris bane
Naraku
Granite
Legend
Tommy Creek Microgranite
Williams Supersuite
Maramungee Suite
Dolerite Dikes
Quamby Conglomerate
Double Crossing Metam
Mount Albert Group
Makbat Sandstone
Saxby Granite
EMP27835 Toole Creek Volcanics
Malbon Group
Wimberu Granite EMP27836 Milo beds
(application) Mt Fort Constantine Volcanics
Soldiers Cap Group
Squirell Staveley Formation
Hills Corella Formation
Granite Overhang Jaspilite
Surprise Creek Formation
Kurbayia Complex
Boomarra Metamorphics
Lower Haslingden Group
Bulonga Volcanics
Myally Subgroup
Marraba Volcanics
Wonga Suite
0 50 Argylla Formation
kilometers Kalkadoon Supersuite
Town
Major Road
Mines_ES
Major Faults
EPM27835 & 27836
Projection: GDA94 Zone 54
Fountain Range Fault
Cloncurry Fault
Mt Margaret Fault
Pilgrim Fault
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Figure 2, Tenement location in the eastern Succession, Mt Isa Inlier, Northwest Queensland (Map compiled after Qld’s Mines Department database - NWQ Geology 2011)

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Coppermoly Ltd

Exploration Portfolio on 30 September 2021

As of 30 September 2021, the Company had interests in the following mineral exploration tenements:

	PROJECT	EXPIRY DATE	AREA	LOCATION
	Granted Exploration Licences
	EL 1043 Mt Nakru*	7 December 2022	47km²	West New Britain
	EL 2379 Simuku*	10 September 2021^^	122km²	West New Britain
	EL 2514 Mak Mak	11 September 2021^^	269km²	West New Britain
	EL 2578 Kori River	24 February 2021^^	396km²	West New Britain
	EL 2638 Metelen River	17 May 2022	246km2	West New Britain

• Two of the Company’s exploration licences, EL 1043 Mt Nakru and EL 2379 Simuku, together known as the West New Britain Projects ( WNB Projects ), were previously subject to a farm-in agreement with Barrick (PD) Australia Ltd ( Barrick ), a subsidiary of Barrick Gold Corporation. Barrick earned a 72% interest in the WNB Projects by spending more than $20 million on exploration. In July 2013 Coppermoly entered into an agreement with Barrick to reacquire 100% ownership of the WNB Projects’ licences on a staged basis. Barrick still holds a nominal 28% interest in the WNB Projects, which the Company has a binding agreement to acquire, completion of which will be affected on the payment of a further $4.5 million to Barrick within 6 months following the commencement of commercial production at the WNB Projects. Barrick do not have to contribute any further costs for exploration or development of the WNB Projects nor are they entitled to any profits from the projects.

^^As at the date of this Quarterly Report the Company has submitted renewal applications for these tenements for a further two year period commencing on the expiry date of the previous term as set out in the above table. The renewal application is proceeding in accordance with the regulatory processes prescribed by the PNG Mining Act. The Company believes it has complied with all licence conditions, including minimum expenditure requirements, and is not aware of any matters or circumstances that have arisen that would result in the Company’s application for renewal of the exploration licence not being granted in the ordinary course of business.

Authorised by the Board of Coppermoly Limited.

For further information please contact

Dr Wanfu Huang

Managing Director

wfhuang@coppermoly.com.au

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Coppermoly Ltd

Corporate Directory

Coppermoly Limited (ABN 54 126 490 855)

Corporate Directory Coppermoly Limited (ABN 54 126 490 855)	Corporate Directory Coppermoly Limited (ABN 54 126 490 855)
Executive Director Dr Wanfu Huang Non-Executive Directors Mr Kevin Grice Mr Zule Lin Mr Jincheng Yao Mr Xuan Jian	Registered office Unit 2, 42 Morrow Street, Taringa, Queensland 4068 Telephone: +61 7 3217 7544 Facsimile: +61 7 3876 0695 Email: info@coppermoly.com.au Website: www.coppermoly.com.au
Company Secretary Mr Stephen Kelly

About Coppermoly

Coppermoly (COY) is an ASX listed junior exploration company which has been listed on the ASX since 2008. Coppermoly’s head office is in Brisbane, Australia and mineral exploration activities are focused entirely on the island of New Britain in PNG where it is exploring for copper, gold, silver, zinc, and molybdenum.

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

COPPERMOLY LIMITED

ABN Quarter ended (“current quarter”) 54 126 490 855 30 SEPTEMBER 2021

54 126 490 855

Consolidated statement of cash flows	Current quarter $A’000	Year to date (Three months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (if expensed) (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- - - - (70) (73) - - - - - -	- - - - (70) (73) - - - - - -
	(143)	(143)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (if capitalised) (e) investments (f) other non-current assets	- - (91) -	- - (91) -

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Consolidated statement of cash flows	Current quarter $A’000	Year to date (Three months) $A’000
2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - - -	- - - - - - - -
	(91)	(91)
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - - - - - -	- - - - - - - - -
	-	-

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Consolidated statement of cash flows	Current quarter $A’000	Year to date (Three months) $A’000
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	3,392 (143) (91) - (4)	3,392 (143) (91) - (4)
	3,154	3,154
5. Reconciliation of cash and cash Equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	3,154 - - -	3,392 - - -
	3,154	3,392
6. Payments to related parties of the entity and their associates 6.1 Aggregate amount of payments to related parties and their associates included in item 1 6.2 Aggregate amount of payments to related parties and their associates included in item 2 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must and an explanation for, such payments
		Current quarter $A'000
		41
		-
		include a description of,

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

7. Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 7.1 Loan facilities - - 7.2 Credit standby arrangements - - 7.3 Other – convertible note facility 1,200 1,200 7.4 Total financing facilities 1,200 1,200 7.5 Unused financing facilities available at quarter end - 7.6 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
	-	-
	-	-
	1,200	1,200
	1,200	1,200
Not applicable

8. Estimated cash available for future operating activities	$A’000
8.1 Net cash from / (used in) operating activities (Item 1.9) 8.2 Capitalised exploration & evaluation (Item 2.1(d)) 8.3 Total relevant outgoings (Item 8.1 + Item 8.2) 8.4 Cash and cash equivalents at quarter end (Item 4.6) 8.5 Unused finance facilities available at quarter end (Item 7.5) 8.6 Total available funding (Item 8.4 + Item 8.5) 8.7 Estimated quarters of funding available (Item 8.6 divided by Item 8.3)	(143) (91) (234) 3,154 - 3,154
	13
8.8 If Item 8.7 is less than 2 quarters, please provide answers to the following questions: 1. Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?

Answer:

Not applicable

1. Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

Answer:

Not applicable

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

1. Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer:

Not applicable

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Date: 28 October 2021

Authorised by: The Board of Directors of Coppermoly Limited

(Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.