ENEGEX LIMITED — Interim / Quarterly Report 2022

Jul 28, 2022

ASX Announcement

ASX:ENX

29 July 2022

Quarterly Activities Report For the period ending 30 June 2022

Highlights

• Reconnaissance field visits undertaken to target areas at Miamoon, Miling and Walebing.

• Access negotiations continuing with landholders at Miamoon, Miling and Walebing

• Soil sampling program completed at the Miamoon Project.

• Successful Exploration Incentive Scheme (EIS) application for RC drilling at the Miamoon Project.

• Prospectivity study completed for the Hart Project.

West Yilgarn Ni-Cu-PGE Projects – Enegex 100%

Enegex (ASX: ENX ) has built a strategic tenure position in the West Yilgarn Ni-CuPGE province of Western Australia. The prospectivity of the West Yilgarn as an endowed mineral province is highlighted by the discovery of the nearby Gonneville NiCu-PGE resource at Julimar ( Figure 1 ) by Chalice Mining.

The province is now a focus of exploration activity following the Julimar discovery.

Figure 1. Enegex Tenure across the West Yilgarn Ni-Cu-PGE Province.

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Enegex Project Overview

Enegex has divided its West Yilgarn tenements, into five project areas; Miamoon, Miling, Walebing, Goomalling and Green Hills (Figure 2).

Archean geology across the Enegex project areas is not well defined. Private freehold farming land that is prevalent across the West Yilgarn province. As a result, the area has, until recently, undergone precursory geology and explorative work largely limited to broad-scale government mapping, interpreting the bedrock geology as metamorphic sedimentary, greenstone and granite ( Figure 2 ). Economic potential of the province is highlighted by the Julimar discovery of Ni-Cu-PGE mineralisation within a mafic-ultramafic host rock sequence (the Gonneville intrusion) in an area historically interpreted to be a granitic domain.

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Figure 2. GSWA Interpreted bedrock geology 1:500,000 scale showing Enegex Tenure.

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Whilst the geology of Enegex tenements is at this stage not well defined, government geology maps record small areas of outcropping mafic (greenstone) to ultramafic units scattered across a number of the tenement areas including Miamoon and Milling. The presence of these maficultramafic rock units on Enegex tenements is encouraging, with further definition and evaluation of these units needed to determine mineralisation potential.

Exploration Activities

Miamoon and Miling Priority Project Areas

Activities during the quarter were directed toward the refinement and ranking of exploration targets, with a number of reconnaissance field visits made to various target areas.

Substantial effort was directed towards land access arrangements with local landowners to gain access to targets on private freehold property. Access was granted to a further 4 properties during the quarter and negotiations on other properties was further advanced.

Enegex’s near term objective is to define quality drill targets at Miamoon and Miling for drill testing as soon as feasible. Target rankings are being dynamically assessed based on accessibility, reconnaissance field visits and geochemical sampling.

Miamoon Project

At its flagship Miamoon Project, Enegex acquired an Airborne Falcon Gravity Gradiometer (AGG) survey over the western part of the Miamoon Project in late 2021 for which interpretation and modelling was subsequently completed.

Numerous geophysical target areas were defined from the gravity data interpretation and are shown on the right panel of Figure 3 , with priority targets highlighted in red.

Enegex was notified that its submission for a DMIRS co-funded drilling grant under the Exploration Incentive Scheme (EIS) in respect of RC drilling at the Miamoon Project was successful. The grant is for an amount of $90,500 and based on drilling 6 RC holes for 1600m to test the Spitfire target.

However, access has not been granted over the ‘Spitfire’ and ‘Crusader’ priority areas and accordingly, limited progress has been made to progress these targets. Negotiations for the landholding that covers the Spitfire target will be the focus of negotiations for the September quarter.

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Figure 3. Miamoon Gravity Survey and anomalies.

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A soil sampling program consisting of 112 samples was completed in late April on the northern geophysical target (Figures 3 and 4) and samples were analysed at Intertek, Perth. Although the results showed no significant anomalisim, the data will be further analysed in conjunction with field mapping to build our geological model and determine the source of the geophysical anomalies that were targeted.

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Figure 4. Soil sample location map at the Miamoon northern geophysical target over a total magnetic intensity image.

Miling Project

At its Miling Project, Enegex continued data integration and interpretation to refine initial target areas where magnetic anomalies are coincident with prospective stratigraphy and also where mineralised trends identified on adjacent tenements potentially extend in strike into Enegex tenements (Figure 5).

Field reconnaissance and ground-truthing was undertaken over 2 properties within the Miling Project during the quarter that generally had good outcrop exposure (Figure 6). Several occurrences of mafic and ultramafic rocks were observed that are potential host rocks for the mineralisation style that Enegex is targeting. More detailed mapping is planned to be carried out in these areas during the September quarter.

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Figure 5. Miling Project target areas on magnetics and anomalous geochemistry zones.

Access was granted to one of the landholdings that covers some of Enegex’s high priority targets within the Miling project and negotiations with other landholders are ongoing. Landowner access negotiations for the northern part of E70/5445 where the Ni-Cu-PGE anomaly in the adjacent Todd River Resources tenure is projected to extend are also ongoing.

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Figure 6. Photo showing typical outcrop at one of the properties that was reconnaissance mapped during the quarter.

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Other West Yilgarn Projects Areas

Enegex’s activities at its southern West Yilgarn project areas (Walebing, Goomalling and Green Hills) incorporates ongoing interpretation and data integration to define first pass target areas.

Property access was granted by one landowner at Walebing and preparations to contact landholders over priority areas at the Goomalling and Green Hills projects are now at an advanced stage.

Extraction and capture of assay and spatial geology data for all historical digital data and raster data was completed for Walebing during the quarter, and is continuing for the Green Hills project area. The data is being uploaded to Enegex’s SQL database.

Interpretation of the new datasets is ongoing and will be integrated with historical map and data sets to underpin the target generative activities that define Enegex’s forward exploration framework. An important aspect of this process will be field checking target areas.

Hart Ni-PGE Project, North Kimberley - Enegex 100%

Enegex’s Hart project consists of two tenement areas along the eastern margin of the Kimberley Basin of Western Australia ( Figure 7 ). The tenements incorporate one granted tenement covering 374km[2] (E80/5354) and a second tenement of 350km[2] under application.

The geology of the project area has been mapped largely as a regionally extensive Proterozoic sill complex termed the “Hart Dolerite”. The project area has undergone little previous exploration with mapping of the Hart Dolerite complex to the north of Enegex’s project area indicating the dolerite units consist of a layered series of intrusive rocks including mafic sills that are tholeiitic in composition. Tholeitic compositions, although associated with a wide range of tectonic settings (continental flood basalt provinces, back-arc basins, volcanic arcs and mid ocean ridges), can often be associated with higher prospectivity for Ni, Cu, PGE, V and Ti mineralisation, concentrated in specific layers within the intrusive complex.

Previous exploration by other companies along mafic-ultramafic intrusion units along the eastern margin of the Kimberley Basin have identified a number of Ni sulphide deposits including the Savannah (Sally Malay) and Copernicus (Alicia Downs Ultramafics) deposits in addition to numerous untested prospects across the area.

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Figure 7. Hart Dolerite Project Location.

Dr. Karin Orth completed a desktop prospectivity review of the Hart Dolerite project during the quarter. A new geological interpretation was developed for the tenements and the Hart Dolerite Intrusion integrating historical geochemical data with newly acquired Worldview-3 high resolution imagery to providing a framework to assess prospectivity. A number of exploration targets were generated by the review and will be the subject of field evaluation in the September quarter.

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A total of 7 target areas were identified (Figure 8) that were prioritised according to a number of factors including lithology, magnetism, worldview-3, radiometrics and the presence of known mineralisation or geochemical anomalism.

One of the main target horizons is identified as the equivalent basal part of the disseminated magnetite gabbro horizon that hosts mineralisation at Speewah Dome, directly north of the project. This horizon is elevated in V-Ti and Cu-Ni-PGE and occurs below a felsic granophyre horizon that could be an important marker horizon.

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Figure 8. Hart Dolerite priority target areas on a reduced to pole magnetic image.

A three week field visit is currently occurring in July 2022 and will include mapping and rock chip sampling along traverses over the target areas. The geophysical characteristics of the rocks will also be tested utilising a hand-held magnetic susceptibility instrument.

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Corporate

During the quarter 19,668 listed options were exercised.

By Order of the Board

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Rae Clark , Director 29 July 2022

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Additional Information Required by Listing Rules 5.3.3 and 5.4.3

Mining Tenements held/applied for at the end of the quarter and their location

Tenement	Enegex Interest	Km2	Tenement Status
Western Australia(Kimberley Region)
E80/5354	100%	373.79	Granted
E80/5355	100%	350.22	Application
Western Australia (South-West Terrane)
E 70/5439	100%	203.55	Granted
E 70/5440	100%	206.21	Granted
E 70/5441	100%	85.43	Granted
E 70/5442	100%	82.40	Granted
E 70/5446	100%	207.76	Granted
E 70/5459	100%	207.64	Granted
E 70/5457	100%	207.55	Granted
E 70/5458	100%	208.00	Granted
E 70/5460	100%	207.71	Granted
E 70/5463	100%	207.97	Granted
E 70/5444	100%*	204.00	Granted
E 70/5445	100%*	203.93	Granted
E 70/5566	100%	203.78	Granted
E 70/5567	100%	204.06	Granted
E 70/5568	100%	203.47	Granted
E 70/5569	100%	203.83	Granted
E 70/5570	100%	203.45	Granted
E 70/5571	100%	203.72	Granted
E 70/5580	100%	214.18	Granted
E 70/5631	100%	115.06	Granted

• via First Right of Refusal

Tenements acquired during the quarter and their location Nil

Tenements disposed of during the quarter and their location Nil

Beneficial percentage interests held in farm ‐ in or farm ‐ out agreements at the end of the Quarter:

Nil

Additional Information Required by Listing Rule 5.3.5

Payments to related parties during the quarter included in Appendix 5B – Quarterly Cash Flow Report

Payments were made to directors and their associates during the quarter totaling approximately $88,000. Payments were for contracted services including consulting fees, office costs and administrative support.

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Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity ENEGEX LIMITED ABN Quarter ended (“current quarter”) 28 160 818 986 30 June 2022

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (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	- (28) (96)	75 (251) (466)
	(124)	(642)
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments (f) other non-current assets	(20) (136)	(32) (1,032)

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 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
	(156)	(1,064)

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	1	1,313 157 (20)
	1	1,450
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)	985 (124) (156) 1	962 (642) (1,064) 1,450

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period
	706	706

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)	706	985
	706	985

6. Payments to related parties of the entity and their associates	Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 66 6.2 Aggregate amount of payments to related parties and their associates included in item 2 22 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.	66
	22

7. 7.1 7.2 7.3 7.4 7.5 7.6	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 Loan facilities Credit standby arrangements Other (please specify) Total financing facilities Unused financing facilities available at quarter end 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

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (124) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (136) Total relevant outgoings (item 8.1 + item 8.2) (260) Cash and cash equivalents at quarter end (item 4.6) 706 Unused finance facilities available at quarter end (item 7.5) Total available funding (item 8.4 + item 8.5) 706 Estimated quarters of funding available (item 8.6 divided by item 8.3) 2.7 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 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?	(124) (136) (260) 706
		706
		2.7
	Answer:
	8.8.2 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:
	8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?
	Answer:
	Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

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.

29 July 2022

Date: ...................................................................................

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Authorised by: ................................................................................... Robert Wright – Company Secretary Released with authority of the Board

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

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

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.

1. 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.

2. 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”.

3. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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