CZR RESOURCES LTD — Capital/Financing Update 2020

Dec 23, 2020

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CZR Resources Ltd

ABN: 91 112 866 869 Level 24, 44 St George’s Terrace Perth Western Australia 6000 PO Box Z5183 Perth WA 6831 Phone: +61 8 6211 5099 Facsimile: +61 8 9218 8875 Website: www.czrresources.com

The Company Announcements Office, ASX Limited

24 December 2020

Robe Mesa Iron Ore Project, WA

CZR signs MOU for second, closer port option

Use of Onslow port offers significant scope to cut costs

CZR Resources Limited (ASX:CZR) is pleased to announce that it has signed a non-binding Memorandum of Understanding (MOU) under which it could ship its Pilbara iron ore through the Onslow port.

The MoU is with the Onslow Marine Support Base Pty Ltd (OMSB). OMSB is the owner of the Onslow Marine Support Base facility (OMSB Facility) located in Beadon Creek, Onslow, 2km west of the town of Onslow in WA’s Pilbara.

Beadon Creek provides CZR with a second port option for the export of iron ore from the Company’s Robe Mesa project. Robe Mesa is only 180km by road from the Onslow port compared with the 420km distance to the facilities at Port Hedland ( Figure 1 ).

The Robe Mesa Pre-feasibility Study, which found the project has the potential to be a robust and profitable operation, was based on using the Utah Bulk Handling facility at Port Hedland (see ASX release dated December 10, 2020).

In addition to reducing the haulage cost associated with the significant reduction on the haulage distance, OMSB Facility has the potential to provide the Robe deposit with options to increase the volume of export, with a lower impact on the community and generate a more sustainable business.

CZR Resources Ltd

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Figure 1 Location of Robe Mesa in relation to port facilities at Pt Hedland and Onslow

The Onslow Facility

Onslow Marine Support Base (OMSB) is a privately owned multi-user facility, with the Western Australian Department of Transport as the controlling authority. The OMSB Facility has hard-stand areas in excess of 250,000sqm ready for use, an inner and outer harbour, wharf with heavy lift facilities and channel to deeper water ( Figure 2, 3 ). It supports on-shore to off-shore activities for the petroleum industries in the Carnarvon Basin but is planning to expand into the handling of bulk commodities.

The channel and the OMSB Facility can currently accommodate a transhipping operation for the loading of iron-ore onto barges or self-propelled barges (up to 100 metres in length), before sailing to a suitable transhipment anchorage.

The channel and the OMSB Facility have the potential to accommodate the berthing of vessels for direct ship loading. The direct loading of Handymax or larger vessels requires further modelling and will require further dredging and channel widening.

Coziron Resources Ltd

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Figure 2 Oblique aerial view of the OMSB Facility at Beadon Creek near Onslow showing the dock-side hardstand and shipping channel.

Coziron Resources Ltd

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Figure 3 More recent vertical aerial photograph of the OMSB Facility with a vessel dock-side.

Background to CZR and the Robe Mesa Iron-Ore Deposit

The Robe Mesa iron-ore deposit is 85% owned by CZR Resources Ltd and is located 150 km southwest of Karratha and 30km to the east of a bitumen sealed highway that connects to all the ports and towns along the coast of the Pilbara ( Figure 1 ).

The combined Robe and Robe East extension deposits report a total JORC2012 Resource of 89.1Mt @ 53.7% Fe (calcining to 60.2% Fe) above a Fe50% cut-off but include a near surface higher grade JORC2012 resource of 24.7Mt @ 56% Fe above a 55%Fe cut-off (CZR release to ASX 8 February 2016; 26 April 2017).

CZR recently released prefeasibility study (PFS) on the Robe Mesa that showed the deposit had the potential for a robust and profitable mining operation that underpinned a maiden Probable Ore Reserve for Robe Mesa of 8.2 Mt @ 56% Fe (CZR release to ASX on 10 December 2020). The financial model was defined around a central case that targets the production of 2 million tonnes per annum (dry) of direct shipping ironore product at a grade of 56% Fe, from a low strip ratio (Waste tonnes to Ore tonnes of approximately 0.6) mine located approximately 420km by road from the Utah Bulk Handling Facility in Port Hedland.

Coziron Resources Ltd

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MOU Objectives and Significance to the Robe Mesa Project

The non-binding MOU with OMSB will allow CZR to investigate the potential logistical and financial benefits of utilising a second port that is significantly closer to the Robe Mesa deposit. The OMSB Facility is located approximately 180km by road from Robe Mesa, and as such represents a 60% reduction in haul distance to that which was assumed in the PFS for export through Utah Point ( Figure 1 ).

The MOU will investigate the receival of product and product handling and storage on the landside facility, along with the loading of vessels via transhipping versus direct ship loading of vessels berthed at the facility.

Transhipment of bulk materials has been successfully deployed at numerous ports, both in Australia and overseas. CZR and OMSB will work together to understand the economics, technical, environmental and community considerations such that an optimal solution can be identified for all stakeholders.

This announcement is authorised for release to the market by the Board of Directors of CZR Resources Limited.

For further information, contact:

Dr Rob Ramsay CZR Resources Ltd +61 8 6211 5099

Or

Media Paul Armstrong Read Corporate +61 8 9388 1474

Coziron Resources Ltd

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