ENEGEX LIMITED — Interim / Quarterly Report 2022

Apr 28, 2022

ASX Announcement

ASX:ENX

29 April 2022

Quarterly Activities Report

For the period ending 31 March 2022

Highlights

• Geophysical anomalies identified from interpretation and modelling of Miamoon gravity survey data.

• Contact established with landholders at Miamoon and Miling with access negotiations continuing.

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

• Submission made to the DMIRS for the Exploration Incentive Scheme (EIS) for RC drilling at the Miamoon Project.

• Prospectivity study commenced for Hart Project.

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

Enegex (ASX: ENX ) has built a strategic tenure position of 20 granted exploration licences covering 3,576km[2] in the West Yilgarn Ni-Cu-PGE 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 significant exploration activity following the Julimar discovery.

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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. Historically most exploration activities in Western Australia have been directed away from 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 ). However, 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

Enegex’s near term objective is to define quality drill targets at Miamoon and Miling for drill testing as soon as feasible. 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. Contact was established with more than 20 landholders during the quarter. Initial access has been granted by some landholders, with other landholders not permitting access at this stage.

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 completed during the quarter.

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.

A submission was made to the DMIRS for a cofunded drilling grant under the Exploration Incentive Scheme (EIS) in respect of RC drilling at the Miamoon Project.

Initial access approval was granted for the northern most cluster of geophysical anomalies, where there is reasonable rock exposure and transported cover material is limited ( Figure 4 ). Although some of the gravity anomalies at this target may be attributed to dolerite dykes, the source of the magnetic anomaly remains unresolved. Enegex is planning a small soil sampling program to test this anomaly.

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Figure 3. Miamoon Gravity Survey and anomalies.

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Access has not been granted over the ‘Spitfire’ and ‘Crusader’ priority target areas and accordingly limited progress has been made to progress these targets.

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Figure 4. Strongly weathered migmatite outcrop looking to the south-east at the far northern Miamoon high priority target area.

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).

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

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Field reconnaissance and ground-truthing was undertaken in areas within the Miling Project during the quarter. A shear zone containing extensional quartz veins hosted by granite located in a road cutting 2.2km to the south-west of the Miling township was observed. The shear zone is trending in a north-westerly direction and dipping moderately to the north-east (Figure 6). Although only trace pyrite was observed, the veins do contain some iron staining and some have iron stained selvages.

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Shear fabric
Extensional Quartz Vein
Iron Staining
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Figure 6. Strongly sheared granite hosting extensional quartz veins approximately 2.2km south- west of Miling townsite.

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 ongoing.

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. Field checking of target areas commenced at the Walebing project where initial landowner access was granted in an area directly to the south of Lake Hinds where the government 1:250k geological map indicates there is an occurrence of ultramafic rock. During a preliminary field visit, no ultramafic rock was observed however, and a follow up visit will be undertaken further along strike.

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Extraction and capture of assay and spatial geology data from historical exploration reports continued during the quarter with a particular focus on the Green Hills project area. Enegex’s SQL database was updated with captured data from historical RC (112 holes) and RAB (531 holes) drillholes as well as various surface samples. Most historical sampling has been focused along the north-eastern boundary of the Green Hills project area.

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 8 ). The tenements incorporate one granted tenement covering 374km[2] (E80/5354) and a second tenement of 350km[2] under application.

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Figure 8. Hart Project Location.

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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 in the Halls Creek Orogen 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.

During the quarter, data compilation of open file historical exploration data was completed and uploaded to Enegex’s SQL database. The data included information on approximately 1700m of diamond drilling, 8000m of RAB drilling (drilling completed outside of Enegex’s tenement) and over 1200 rock chip samples. The data capture will provide a framework to drive our geological understanding across the project areas. The compilation also included open file geological and geophysical datasets.

The datasets will be integrated with the high-resolution WorldView-3 satellite data across the Hart Project E80/5354 tenement that Enegex acquired in the previous quarter. Specialist geoscientific processing of this Worldview data was undertaken by Exploration Mapping Group, Inc. in the United States, with the WorldView-3 data pack measuring 17 spectral bands.

A specialist consultant geologist with expertise in the geology within Enegex’s Hart Dolerite project has been engaged to carry out a desktop prospectivity review that will include identifying and ranking targets.

The main focus of the review is as follows:

• to develop new geological interpretation of the tenements and the Hart Dolerite Intrusion as a framework to assess prospectivity, integrating historical geochemical data with newly acquired Worldview-3 high resolution imagery;

• to generate targets for field evaluation; and

• to design a field plan for ground truthing to assess the prospectivity of defined target areas.

A field visit is planned to be completed during the September quarter.

Corporate

In January 2022 the Company completed a Share Purchase Plan (SPP) whereby eligible existing shareholders were offered the opportunity to subscribe for up to $30,000 of new shares in Enegex at an issue price of $0.08 per share, together with a free unlisted option, exercisable at $0.14 on or before 30 June 2024 (“options’), on the basis of one option granted for every share issued. 16,375,500 new shares and 16,375,500 options were issued on 4 February 2022. The SPP raised $1,313,000 prior to costs.

Incentive Options

During the quarter 4,250,000 incentive options were granted to consultants and employees.

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Appointment of Director

During the quarter Dr Robina Sharpe was appointed a non-executive director of the Company. Robina has 30 years’ experience with a focus on the exploration for and evaluation of gold and base metal projects in Australia and internationally. Robina’s diverse industry background spans green and brown field projects that have ranged from the evaluation and drill delineation of mine to near-mine resource expansion projects, to project generative and prospectivity analysis, including program implementation and management.

Appointment of Exploration Manager

Adrian Woolford joined the Company during the quarter as Exploration Manager. Adrian has a Bachelor of Science with Honours degree (Geology) from the University of Tasmania and over 18 years industry experience across a variety of roles and geological terrains. Adrian’s experience ranges from grassroots exploration for gold in Achaean Greenstone belts to resource definition drill outs on deposits including the Mongbwalu deposit in the Democratic Republic of Congo and the Birimian hosted Konkera deposit in Burkina Faso, West Africa.

Adrian has been involved in the discovery of an economic gold deposit as well as having worked on three feasibility studies, including the high grade 55 Zone and Bagassi South Zones at the Yaramoko Project in Burkina Faso.

References

The information in this report that relates to Exploration Results was previously reported in the ASX announcement listed below. The Company is not aware of any new information or data that materially affects the information included in the market announcement.

Further details can be found in the following ASX announcement:

18 January 2021 Priority Targets Emerging at Miamoon

By Order of the Board

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R J Wright Company Secretary 29 April 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

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Tenement Enegex Interest Km [2] Tenement Status
Western Australia (Kimberley Region)
E 80/5354 100% 373.79 Granted
E 80/5355 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
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• 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 totalling approximately $90,000. 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 31 March 2022

Consolidated statement of cash flows	Current quarter $A’000	Year to date (9 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	46 (91) (103)	75 (223) (370)
	(148)	(518)
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	(8) (273)	(12) (896)

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 (9 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
	(281)	(908)
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	1,313 - (15)	1,313 156 (20)
	1,298	1,449
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)	116 (148) (281) 1,298	962 (518) (908) 1,449

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 (9 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period
	985	985

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)	985	116
	985	116

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 90 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 include a description of, and an explanation for, such payments.	90
	-

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) (148) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (273) Total relevant outgoings (item 8.1 + item 8.2) (421) Cash and cash equivalents at quarter end (item 4.6) 985 Unused finance facilities available at quarter end (item 7.5) Total available funding (item 8.4 + item 8.5) 985 Estimated quarters of funding available (item 8.6 divided by item 8.3) 2.3 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?	(148) (273) (421) 985
		985
		2.3
	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 April 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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