ENCOUNTER RESOURCES LIMITED — Capital/Financing Update 2023

Mar 26, 2023

ASX Announcement 27 March 2023

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Targets defined for April 2023 diamond drilling - West Arunta

• Three priority geophysical targets at Aileron have been modelled with diamond drilling to commence in April 2023. The initial program will include:

• Caird – ‘bullseye’ coincident magnetic and density anomaly 5km north-west of the Luni mineralised carbonatite discovery (ASX:WA1)

• Crean – regional scale magnetic anomaly with an offset gravity anomaly similar to the Prominent Hill IOCG deposit

• Worsley – the region’s standout magnetic and coincident gravity anomaly with anomalous Cu, Au, Mo, Nb and REE (up to 0.8%) in prior incomplete drillhole EAL0001

• 3,300 line km airborne Falcon gravity survey will be completed in May 2023 to extend detailed gravity over the entire project .

• Diamond drilling commencing in April 2023, co-funded by the Exploration Incentive Scheme

Encounter Resources Ltd (“Encounter”) is pleased to announce that geophysical modelling has refined targets for drilling to commence in April 2023 at the Aileron Cu-REE project (100% ENR) in the West Arunta region of WA.

Commenting on the upcoming drilling, Encounter Managing Director Will Robinson said: “Encounter has completed major gravity, magnetics and radiometric surveys at Aileron. These surveys have defined three priority drill targets. The Crean, Worsley and Caird targets are exceptional, large scale magnetic and gravity anomalies in an unexplored emerging critical minerals province.

These anomalies have similar geophysical characteristics to the IOCG deposits in South Australia, such as Prominent Hill, and the recently discovered mineralised carbonatites in the West Arunta. The drill targets have been modelled as sub-vertical features at explorable depth. Diamond drilling will commence in April 2023.”

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Figure 1 - Residual gravity image with interpreted structures and targets to be drilled commencing April 2023 in the western part of >100km long Aileron project[1,2,3 ]

P +61 8 9486 9455 E contact@enrl.com.au www.enrl.com.au

Encounter Resources Limited Suite 2, 1 Alvan St Subiaco WA 6008

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Background

Aileron is located in the West Arunta region of WA ~600km west of Alice Springs. To date, only one diamond hole, EAL001, has been drilled within the project which targeted a discrete magnetic anomaly at the Worsley target. EAL001 was partially completed to a depth of 158m and drilled through 5m of shallow cover followed by a brecciated hydrothermal hematite-chlorite-altered granite with a narrow mafic intrusion.

Assays from EAL001 include zones of anomalism in copper (up to 0.1% Cu), gold (up to 48ppb Au), molybdenum (up to 155ppm Mo), niobium (up to 773ppm Nb) and highly elevated rare earth elements (up to 0.8% TREO) consistent with the IOCG deposit model (refer ASX release 28 January 2021) .

The presence of highly anomalous copper-gold-REE in the first hole at Aileron and the recent mineralised carbonatite discoveries by WA1 indicate that an alkaline magmatic hydrothermal system has been active in the region. Such systems are known to play an important role in the formation of both IOCG and carbonatite-hosted REE deposits.

Encounter completed large gravity, magnetic and radiometric surveys at Aileron during 2021 and 2022. These surveys have defined three priority drill targets for 2023: Caird, Crean and Worsley.

Caird

Caird is a ‘bullseye’ coincident magnetic and density anomaly on the Endurance fault, 5km northwest of WA1’s recent mineralised carbonatite discovery at Luni (see Figure 1).

Geological reconnaissance noted that the gravity high was covered by aeolian sand and was surrounded by a semi-circular series of low lying ferruginous duricrust hills.

Gravity and magnetic modelling have defined the first hole to test Caird (see Figure 2). Additional drill sites have been heritage cleared for follow up drilling.

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Figure 2 – Caird modelled gravity and magnetic shells with first drill hole location.

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Crean

Crean is a regional scale magnetic anomaly at a key structural location on the major Elephant Island fault which has an offset gravity anomaly, a similar geophysical footprint to the Prominent Hill IOCG deposit in South Australia.

Two holes will be drilled to test both the magnetic and gravity anomalies at this target.

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Figure 3 - Worsley (L) and Crean (R) diamond drill hole locations over residual gravity and RTP magnetics

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Figure 4 – Crean modelled gravity and magnetic shells with drill hole locations

Worsley

Worsley is the region’s standout magnetic and coincident gravity anomaly. The upcoming diamond drill program will extend drill hole EAL0001 that was terminated at a depth of 158m without testing the magnetic-gravity anomalies. EAL0001 was ineffective and ended prior to designed depth due to a mechanical failure on the drill rig. Assay results later confirmed highly anomalous Cu, Au, Mo, Nb and REE (up to 0.8%) in the top of the hole.

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Figure 5 - Worsley cross section with coincident gravity anomaly (shown as isosurfaces) and modelled magnetic plate with incomplete diamond drill hole EAL001 which will be extended in April 2023

Upcoming Activity

Diamond drilling at Caird, Crean and Worsley will commence in April 2023.

In addition, a track will be established to the Shackleton target located ~12km west of Caird. Shackleton is a gravity anomaly over which no outcrop was identified during geological reconnaissance. In the northern part of Shackleton there is a low lying quartzite outcrop, containing iron alteration where a single reconnaissance rock chip sample of the iron rich material returned 0.5% REE. Geological mapping and systematic geochemical sampling are planned at Shackleton in April-June 2023.

A 3,300 line km airborne Falcon gravity survey will be completed in May 2023 to extend detailed gravity over the entire project. This 300m spaced survey will be a fundamental dataset for the targeting of IOCG and carbonatite-hosted REE deposits in the West Arunta.

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Figure 6 - Aileron project – Area of planned Falcon gravity survey overlayed on regional gravity data

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About Encounter

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Encounter is one of Australia’s leading mineral exploration companies listed on the ASX. Encounter’s primary focus is on discovering major copper dominant deposits in Australia.

Encounter controls a large portfolio of 100% owned projects in Australia’s most exciting mineral provinces that are prospective for copper, rare earths and lithium. Complementing this, Encounter has numerous large scale copper projects being advanced in partnership and funded through farmin agreements with leading miners: BHP, South32 and IGO. Encounter’s assets include:

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Will Robinson Managing Director +61 8 9486 9455 contact@enrl.com.au

Michael Vaughan Fivemark Partners +61 422 602 720 michael.vaughan@fivemark.com.au

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1 refer ASX release 28 January 2021 2 refer ASX release 14 February 2022 3 refer ASX release by WA1 – 16 November 2022

The information in this report that relates to Exploration Results is based on information compiled by Mr. Mark Brodie who is a Member of the Australasian Institute of Mining and Metallurgy. Mr. Brodie holds shares and options in and is a full time employee of Encounter Resources Ltd and has sufficient experience which is relevant to the style of mineralisation under consideration to qualify as a Competent Person as defined in the 2012 Edition of the 'Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Brodie consents to the inclusion in the report of the matters based on the information compiled by him, in the form and context in which it appears.

The Company confirms that it is not aware of any new information or data that materially affects the information in the relevant ASX releases and the form and context of the announcement has not materially changed. The Company confirms that the form and context in which the Competent Persons findings are presented have not been materially modified from the original market announcements. This announcement has been approved for release by the Board of Encounter Resources Limited.

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SECTION 1 SAMPLING TECHNIQUES AND DATA

	SECTION 1 SAMPLING TECHNIQUES AND DATA	SECTION 1 SAMPLING TECHNIQUES AND DATA
Criteria	JORC Code explanation Commentary
Sampling	Nature and quality of sampling (e.g. cut	The aircraft used for the magneticsurvey was a Cessna 210,
techniques	channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation,	specially modified for geophysical survey with a tail boom and various other survey configuration modifications.
	such as down hole gamma sounds, or handheld	The magnetic geophysical sampling was collected via a
	XRF instruments, etc). These examples should	stinger mounted G-823A caesium vapour magnetometer.
	not be taken as limiting the broad meaning of	Nominal traverse separation of 100m, with an average ground
	sampling.	clearance of 40m. Sampling rate was at approximately 20Hz.
	Include reference to measures taken to ensure sample representivity and the appropriate	Base station was a GSM-19 Overhauser & Scintrex EnviMag proton precession unit sampling at 1 Hz intervals.
	calibration of any measurement tools or systems	For the radiomentric spectrometer an RSI RS-500 gamma-ray
	used	spectrometer incorporating 2x RSX-4 detector packs, 32 litre
	Aspects of the determination of mineralisation	crystal, sampling interval of 2 Hz was used.
	that are Material to the Public Report. In cases	A helicopter supported 400m spaced gravity survey was
	where ‘industry standard’ work has been done	completed at Aileron by Atlas Geophysics.
	this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other	In addition, 200m spaced gravity infill data was collected to cover a series of high priority magnetic targets including the Caird target at Aileron.
	cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information	At each station, the gravity operator took a minimum of two gravity readings of 15 or 20 second duration so that any seismic or wind noise could be detected. Control station readings were set to 60 second duration. Before taking the reading, the operator ensured that the instrument tilt-reading
		was restricted to less than 5 arc-seconds and after the reading,
		not higher than 20 arc-seconds. Tilt-testing prior to project
		commencement showed that the gravity meters performed
		well even at extreme tilts (better than 0.05 μm/s2 at +150/-150
		arc-seconds).
		A helicopter supported 400m spaced gravity survey was
		completed in 2021. In addition, 200m spaced gravity infill
		data was collected to cover a series of high priority magnetic
		targets at Aileron.

Drilling
techniques	Drill type (e.g. core, reverse circulation, open-
	hole hammer, rotary air blast, auger, Bangka,
	sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-	No new drilling is being reported in this announcement.
	sampling bit or other type, whether core is
	oriented and if so, by what method, etc).
Drill sample
recovery	Method of recording and assessing core and
	chip sample recoveries and results assessed
	Measures taken to maximise sample recovery
	and ensure representative nature of the samples	No new drilling is being reported in this announcement
	Whether a relationship exists between sample
	recovery and grade and whether sample bias
	may have occurred due to preferential loss/gain
	of fine/coarse material
Logging	Whether core and chip samples have been geologically and geotechnically logged to a level	No new drilling is being reported in this announcement

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	of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. The total length and percentage of the relevant intersections logged Sub-sampling techniques and sample preparation If core, whether cut or sawn and whether quarter, half or all core taken. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub- sampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. Whether sample sizes are appropriate to the grain size of the material being sampled. No new drilling is being reported in this announcement Quality of assay data and laboratory tests The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established. Gravity data were acquired concurrently with GNSS data using two Scintrex CG-5 gravity meters and two Scintrex CG- 6 gravity meters. Data were acquired in single shifts of up to ten hours duration, with each shift consisting of a single loop controlled by observations at the gravity control station. At each station, the gravity operator took a minimum of two gravity readings of 15 or 20 second duration so that any seismic or wind noise could be detected. Control station readings were set to 60 second duration. Before taking the reading, the operator ensured that the instrument tilt-reading was restricted to less than 5 arc-seconds and after the reading, not higher than 20 arc-seconds. Tilt-testing prior to project commencement showed that the gravity meters performed well even at extreme tilts (better than 0.05 μm/s2 at +150/-150 arc-seconds). Each loop contained a minimum of two repeated readings so that an interlocking network of closed loops was formed. A total of 10.09% repeats were acquired for quality control purposes. Repeat readings were evenly distributed on a time-basis throughout each of the gravity loops.
	Criteria JORC Code explanation Commentary
	Verification of sampling and assaying The verification of significant intersections by either independent or alternative company personnel. The use of twinned holes. Documentation of primary data, data entry Data was reviewed by Geophysical field contractors and Terry Hoschke on completion of the survey. Terry Hoschke then processed the final data and returned a range of gravity and magnetic products to Encounter in the form of images and isoshells which are stored on Encounter’s severs.

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	procedures, data verification, data storage	The field gravity observations have been processed
	(physical and electronic) protocols.	using standard formulae and constants as
		documented in the completion report to produce a
	Discuss any adjustment to assay data.	Bouguer Anomaly for each gravity station.
Location of data		Magnetic Survey: Integrated Novatel OEM719 DGPS
points		receiver was used to provide navigation information to
		the pilot via an LCD steering indicator. All data were
		synchronised to a one pulse per second triggered by
		the GPS time.
		Gravity Survey: Dual-frequency Leica Geosystems
	Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral	GPS1200 GNSS receivers have been utilised on the project to allow for post-processed kinematic (PPK) centimetre level accuracy 3D positions
	Resource estimation.	Final position coordinates were established for all
	Specification of the grid system used.	control stations, and this allowed all position and height information obtained from the gravity survey to
	Quality and adequacy of topographic control.	be tied to the Geocentric Datum of Australia (GDA94) and Australian Height Datum (AHD), calculated using
		AusGeoid09.
		Dual-frequency Leica Geosystems GPS1200 GNSS
		receivers have been utilised on the project to allow for
		post-processed kinematic (PPK) centimetre level
		accuracy 3D positions
Data spacing and		Line spacing of the magnetic airborne survey is 100m
distribution		which is considered appropriate for the level of
		geological and structural interpretation that was
		completed.
	Data spacing for reporting of Exploration Results.	Gravity Stations were 400m spaced.
	Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation	More detailed 200m spaced stations were collected covering a series of high priority magnetic targets at Aileron including the Caird target.
	procedure(s) and classifications applied.	Mineralisation has not yet demonstrated to be
	Whether sample compositing has been applied.	sufficient in both geological and grade continuity appropriate for the Mineral Resource and Ore Reserve
		estimation procedure(s) and classifications to be
		applied.
Orientation of data	Whether the orientation of sampling achieves	Line spacing of the magnetic airborne survey is 100m
in relation to	unbiased sampling of possible structures and the	which is considered appropriate for the level of
geological structure	extent to which this is known, considering the deposit type.	geological and structural interpretation that was completed.
	If the relationship between the drilling orientation	The gravity data was collected 400m spaced and lines
	and the orientation of key mineralised structures is	with infill to 200m covering a series of high priority
	considered to have introduced a sampling bias,	magnetic targets at Aileron including the Caird target.
	this should be assessed and reported if material.
Sample security	The measures taken to ensure sample security.	No new drilling is being reported in this announcement
		No audits have been conducted however the data was
	The results of any audits or reviews of sampling	reviewed by Geophysical contractors and Terry
Audits or reviews	techniques and data.	Hoschke on completion of the survey.

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SECTION 2 REPORTING OF EXPLORATION RESULTS

	SECTION 2 REPORTING OF EXPLORATION RESULTS
Criteria	JORC Code explanation Commentary
Mineral tenement and land tenure status	Type, reference name/number, location and ownership including agreements or material issues with third parties including joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The Aileron project is located within the tenements E80/5169, E80/5469, E80/5470 and E80/5522 which are held 100% by Encounter Resources This tenement is contained completely within Aboriginal Reserve land where native title rights are held by the Parna Ngururrpa. No historical or environmentally sensitive sites have been identified in the work area.
Exploration done by other parties	Acknowledgment and appraisal of exploration by other parties. Prior to Encounter Resources, no previous on ground exploration has been conducted on the tenement other than government precompetitive data.
Geology	Deposit type, geological setting and style of mineralisation The Aileron project is situated in the Proterozoic West Arunta Province of Western Australia. The geology of the area is poorly understood due to the lack of outcrop and previous exploration. The interpreted geology summarises the area to be Paleo – Proterozoic in age and it is considered prospective for IOGC style and carbonatite-hosted REE deposits.
Drill hole information	A summary of all information material to the understanding of the exploration results including tabulation of the following information for all Material drill holes: • Easting and northing of the drill hole collar • Elevation or RL (Reduced Level – elevation above sea level in meters) of the drill hole collar • Dip and azimuth of the hole • Down hole length and interception depth • Hole length No new drilling is being reported in this announcement
Criteria	JORC Code explanation Commentary
Data aggregation methods Relationship between mineralisation widths and intercept lengths Diagrams	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated. No new drilling is being reported in this announcement
	Where aggregated intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. No new drilling is being reported in this announcement
	The assumptions used for any reporting of metal equivalent values should be clearly stated. No new drilling is being reported in this announcement
	These relationships are particularly important in the reporting of exploration results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’). No new drilling is being reported in this announcement
	Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any No new drilling is being reported in this announcement

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Balanced Reporting Other substantive exploration data Further Work	significant discovery being reported. These should include, but not be limited to a plane view of drill hole collar locations and appropriate sectional views.
	Where comprehensive reporting of all Exploration Results is not practical, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. No new drilling is being reported in this announcement
	Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observation; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. No other meaningful and material results to report
	The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large – scale step – out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive. The targets have been prioritised with diamond or RC drilling targeted to scheduled to commence in April 2023.

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