EAGLE MOUNTAIN MINING LIMITED — Capital/Financing Update 2019

Nov 21, 2019

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A S X A n n o u n c e m e n t | 2 2 N o v e m b e r 2 0 1 9

Update on Oracle Ridge Copper Mine Acquisition

Receiver’s Motion to Sell the Oracle Ridge Copper Mine to a Subsidiary of Eagle Mountain Mining has been Granted

Highlights:

• Arizona Superior Court grants Receiver’s Motion to sell the assets of Oracle Ridge Mining LLC to Wedgetail Operations LLC, a subsidiary of Eagle Mountain Mining Limited.

• The court order was made on Thursday afternoon 21 November 2019 Mountain Time in Tucson, Arizona.

• Closing of the asset purchase is now expected to be completed on Monday, 25 November 2019 (Mountain Time) in Tucson, Arizona.

At Closing, the following key transactions and events will occur:

• $US500,000 will be paid by Eagle Mountain’s existing wholly owned subsidiary, Wedgetail Operations LLC (“WT Operations”) as the purchase price for all assets of Oracle Ridge Mining LLC (“ORM”) to the Receiver for the benefit of the sole secured creditor Vincere Resource Holdings LLC (“Vincere”).

• WT Operations will assume all ORM’s leases, easements and access agreements with third parties.

• WT Operations will assume a 10-year secured note with Vincere for US$6,423,000, with repayments commencing at the start of the 6th year.

• Vincere will be issued a 20% interest in WT Operations.

• An Operating Agreement will be signed which appoints Eagle Mountain’s wholly owned subsidiary, Silver Mountain Mining Operations Inc as Operator.

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ORACLE RIDGE COPPER MINE PROJECT

Substantial Resource, Underground Workings, Drilling, Infrastructure and Permitting

The project presents Eagle Mountain with an advanced stage opportunity underpinned by a high-grade copper and silver non JORC NI43-101 Mineral Resource of 11.7 million tonnes at 1.57% Cu and 17.47 g/t Ag[1] containing 409 million lbs Cu and 6.6 million ounces Ag. (Refer ASX 29 October 2019)

In addition to the Mineral Resource the project has the following significant features:

• 18 kms of underground workings

• Over 70,000 metres of historical and recent drilling

• Road, rail and smelter all reasonably nearby

• Refurbished buildings and equipment remain onsite; and

• US$26 million invested between 2011 and 2015 on technical studies, permitting, exploration.

• Mining workforce within easy drive

• Advanced Permitting, where most required mining permits were previously secured with some requiring amendment depending upon final project design.

LOCATION AND GEOLOGY

The Oracle Ridge Copper Mine was last in production in 1995, before being placed into care and maintenance.

The Oracle Ridge Copper Mine is located less than a two-hour drive from Tucson, Arizona and only a half-hour from the mining town of San Manuel. (Refer Figure 1)

Arizona has a rich copper mining history and has been host to a number of world class copper mines. The nearby San Manuel copper mine was the world’s largest underground copper mine by the 1980’s and produced over 700 million tons of ore from underground alone.

Copper production from Arizona accounts for two thirds of United States output, if Arizona was a country, it would be the 7[th] largest copper producer in the world.

The Arizona mining sector is well supported by world-class infrastructure and a highly skilled workforce. A rail line leading from the town of San Manuel leads north about 50 kms to a copper smelter.

1 Cautionary Statement: references in this announcement to the publicly quoted resource tonnes and grade of the Project are historical and foreign in nature and not reported in accordance with the JORC Code 2012, or the categories of mineralisation as defined in the JORC Code 2012. A competent person has not done sufficient work to classify the resource estimate as mineral resources or ore reserves in accordance with the JORC Code 2012. It is uncertain that following evaluation and/or further exploration work that the foreign/historic resource estimates of mineralisation will be able to be reported as mineral resources or ore reserves in accordance with the JORC Code 2012. Resource estimates and other information used in this announcement are based on the March 2014 NI43-101 compliant Independent Technical Report prepared by Dr Giles Arseneau of Arseneau Consulting Services Inc for Oracle Mining Corp. This report can be found on the Company’s website “www.eaglemountain.com.au”.

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Figure 1: Arizona state map showing Eagle Mountain project locations and existing copper deposits.

There are over 76,000 metres of drilling in 613 drill holes, approximately 18 kilometres of underground developments & substantial underground development work has been completed by previous owners. Importantly, Oracle Ridge presents Eagle Mountain with significant exploration upside and the Company’s immediate focus will be on developing and advancing Oracle Ridge and, in particular, upgrading and expanding the known resource.

The location of Oracle Ridge will complement the Silver Mountain Project and carry over similar benefits, such as the friendly regulatory and permitting regime. Most required mining permits for the Oracle Ridge Mine were previously secured with some requiring amendment depending upon final project design.

The geology of the Oracle Ridge Copper Mine is well understood.

• Oracle Ridge is hosted in Cambrian to Mississippian limestones and dolomites;

• Source of alteration and mineralisation is intrusion by Cretaceous (Laramide) Leatherwood granodiorite stock, sills and dikes;

• Skarn and endoskarn mineralisation

• Bornite, chalcocite, chalcopyrite

• Significant silver and minor gold

• Concentrated magnetite in some areas; and

• Mineralisation contained within four limestone beds ranging from Cambrian to Pennsylvanian in age.

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Figure 2: Simplified north-south cross section displaying local geology at Oracle Ridge. The intrusion of the Laramide Leatherwood granodiorite (pink colour) caused skarn alteration and Cu-Ag mineralisation in the overlying carbonate beds

The geological conditions at the Oracle Ridge Copper Mine provide for:

• Exceptionally favourable geotechnical conditions;

• Neutralisation of any acidic run-off through the limestone host rock; and

• Hardness of host rock is well suited for underground mining.

MINERALISATION

Copper mineralisation exists in a copper-bearing skarn. Mining and exploration to date have identified:

• 12 major deposits;

• 15 minor and medium size deposits; and

• Locally massive magnetite associated with dolomitic beds.

Copper sulphide minerals are dominantly bornite and chalcocite (Figure 5), with chalcopyrite occurring near the Leatherwood intrusive contact.

OUE NEXT STEPS

• Consolidate all existing data into a comprehensive database.

• Conduct new airborne and ground geophysics.

• Map and sample underground structure.

• Design a drill program to expand existing resource.

• Commence mining studies on basis of enlarged resource base.

For further information please contact:

Charles Bass Mark Pitts BSc, MSc, FAusIMM, FAIG, FAICD B.Bus, FCA, GAICD Managing Director & CEO Company Secretary charlie@eaglemountain.com.au mark@eaglemountain.com.au

COMPETENT PERSON STATEMENT

The Company confirms that where it refers to technical information about the Oracle Ridge Copper Mine and the previous announcement made on 29 October 2019 it is not aware of any new information or data that materially affects the information included in that announcement and all material assumptions and technical parameters underpinning the resource estimates with those announcements continue to apply and have not materially changed.

EAGLE MOUNTAIN MINING LIMITED

Eagle Mountain is a copper-gold explorer focused on the strategic exploration and development of highly-prospective greenfields and brownfields projects in Arizona, USA.

Arizona is at the heart of America’s mining industry and home to some of the world’s largest copper discoveries such as Bagdad, Miami and Resolution, one of the largest undeveloped copper deposits in the world.

Annexure A

Mineral Resource Estimation

The resource estimates provided in this announcement have been taken from the 31 March 2014 Independent Technical Report for the Oracle Ridge Project prepared by Dr Gilles Arseneau, P.Geo, principal of Arseneau Consulting Services Inc. (refer ASX announcement 29 October 2019)

These resource estimates are Canadian NI43-101 compliant. As such, the Canadian Institute of Mining applies a standard that there are “reasonable prospects for economic extraction” in its definition of Mineral Resources.

Arseneau considers that ”major portions of the Oracle Ridge Project are amenable to underground extraction”.

The table below presents the Mineral Resource Estimate calculated by Arseneau at a 1.0% CuEq (copper equivalent) cut-off grade. The Mineral Resource Estimate is not JORC compliant.

mpliant.
Resource Class	Tonnes (Millions)	Cu %	Ag g/t	Au g/t	Contained Cu, lbs (Millions)	Contained Ag, oz (Millions)	Contained Au, oz (‘000)
Measured	1.06	1.59	18.86	0.24	37	0.6	8
Indicated	5.58	1.61	17.83	0.21	199	3.2	38
Inferred	5.12	1.53	16.80	0.14	173	3	22
Total	11.76	1.57	17.47	0.18	409	6.8	68

Table 1 Summary of latest Mineral Resource Estimate – NI43-101 Compliant. (See Figure 8 and Figure 9 for a 3D representation of the orebodies and MRE block model)

Note in respect to Copper Equivalency:

The cut-off grade of 1% CuEQ was used to ensure reasonable prospects of economic extraction assuming underground mining. Silver and gold grade estimates were based on a less comprehensive data set than the copper grade estimates. Where copper grade estimates exist without accompanying silver and gold grade estimates, the drill hole was not used to estimate silver or gold grade. Copper equivalency has been estimated using metal pricing of US$2.80 per pound of copper, US$20 per ounce of silver and US$1,300 per ounce of gold. Metallurgical recovery was derived from preliminary locked cycle test results and assumed to be 81% for gold and silver. The prices used were a reflection of market at the time of the Mineral Resource Estimate and reasonable forecasts. The formula used is as follows:

CuEQ= Cu% + {(Ag oz/tonUS$200.81)+(Au oz/tonUS$1,300 0.81)} /$2.80/2,000*100

Cautionary Statement: references in this announcement to the publicly quoted resource tonnes and grade of the Project are historical and foreign in nature and not reported in accordance with the JORC Code 2012, or the categories of mineralisation as defined in the JORC Code 2012. A competent person has not done sufficient work to classify the resource estimate as mineral resources or ore reserves in accordance with the JORC Code 2012. It is uncertain that following evaluation and/or further exploration work that the foreign/historic resource estimates of mineralisation will be able to be reported as mineral resources or ore reserves in accordance with the JORC Code 2012. Resource estimates and other information used in this announcement are based on the March 2014 NI43-101 compliant Independent Technical Report prepared by Dr Giles Arseneau of Arseneau Consulting Services Inc for Oracle Mining Corp. This report can be found on the Company’s website “www.eaglemountain.com.au”.