ENERGY METALS LTD — Interim / Quarterly Report 2021

Oct 26, 2021

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ABN 63 111 306 533

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QUARTERLY REPORT TO SHAREHOLDERS

for the three months ended 30 September 2021

ASX Code - EME

For further information, contact:

Shuqing Xiao Energy Metals Limited

Telephone: 61 8 9322 6904 Facsimile: 61 8 9321 5240 Email: enquiry@energymetals.net Level 2, 5 Ord Street, West Perth WA 6005

PO Box 1323 West Perth WA 6872

This report and further information are available on Energy Metals’ website at:

www.energymetals.net

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HIGHLIGHTS

Bigrlyi JV Project (NT)

Ore beneficiation and carbonate rejection study in progress.

Other project re-optimisation studies underway.

FINANCIAL

Energy Metals had approximately $15.42M in cash and 209.7M shares on issue at 30 September 2021.

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Shuqing Xiao Managing Director 27 October 2021

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INTRODUCTION

Energy Metals (EME) is a dedicated uranium company with eight exploration projects located in the Northern Territory (NT) and Western Australia covering over 2,700 km² (Figure 1). Most of the projects contain uranium and associated vanadium mineralisation discovered by major companies in the 1970s, including the advanced Bigrlyi Project (NT).

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Energy Metals is well placed to take advantage of the favourable outlook for uranium as nuclear power continues to play an increasing role in reducing global carbon emissions.

China Uranium Development Company Limited, Energy Metals’ largest shareholder (with 66.45% of issued capital), is a wholly owned subsidiary of CGN, a leading company in clean energy and nuclear power technologies in China and world-wide. As of 30 September 2021, the installed capacity of CGN’s operating nuclear generating plants was 28,261MWe from 25 nuclear power units with six other power units of 7,090MWe capacity under construction in various locations across China. This unique relationship with CGN gives Energy Metals direct market exposure as well as access to significant capital and places the Company in a very strong position going forward.

Market Update. During September the uranium spot price trended strongly upwards, reaching a peak of over $US 50/lb U3O8 on 17 September 2021 – a record increase for a three-week period. Following a correction, the spot price surged again to $US 49/lb in late October. Analysts have forecast a long-term uranium price of $60/lb on the back of increased future global demand following world decarbonisation targets and net-zero commitments. During the period uranium equities were revalued significantly upwards and broker outlooks remain strongly positive for the uranium sector with a number of nuclear energy utilities expected to enter the uranium market over the next 12 months. Significant contributing factors contributing to the price rise

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include the August launch of the Sprott Uranium Physical Trust, and the recent announcement that Kazatomprom, the world's largest producer of uranium, will also establish a physical uranium fund. New technology based on small modular nuclear reactors (SMRs), which can be substituted for decommissioned coal-fired plants, are cheaper to build than conventional nuclear plants and provide enhanced safety features; they are expected to become a significant source of additional demand in the near future.

The vanadium price is presently near $US 8/lb V2O5, about 20% above the long-term average.

NORTHERN TERRITORY

Bigrlyi Joint Venture (EME 72.39%)

The Bigrlyi Joint Venture comprises two granted exploration licences in retention (ELRs), one granted EL, and several applications within the Ngalia Basin, located approximately 350km northwest of Alice Springs. Energy Metals operates the Joint Venture in partnership with Northern Territory Uranium Pty Ltd (NTU; a wholly-owned subsidiary of Elevate Uranium Ltd, EL8), and with Noble Investments Pty Ltd (NIL), a private investment company that holds a 6.79% interest.

The Bigrlyi Joint Venture has been the subject of significant exploration activity since 1973, including over 1,040 drill-holes, metallurgical test-work and mining studies focussed on the flagship Bigrlyi deposit, which comprises a number of sub-deposits over a 11km strike length on ELR32552 (Figure 2). The Bigrlyi project is characterised by relatively high uranium grades, vanadium credits and excellent metallurgical recoveries. Further information is available in ASX announcements or from Energy Metals’ website: www.energymetals.net.

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Figure 2 – Bigrlyi Joint Venture project area showing simplified geology (grey = Mt Eclipse Sandstone) with the outline of amalgamated ELR 32552 shown in blue; Anomaly-2 to Anomaly-15 (A2 to A15) sub-deposit locations (blue dots) and exploration drill-hole collars (green dots) are shown.

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The historic Karins uranium deposit (Figure 3) is part of the Bigrlyi Joint Venture and a JORCcompliant resource estimate was released to the ASX in 2015. In 2015 a maiden JORC (2012) resource estimate was announced for the historic Sundberg deposit, which is part of the Bigrlyi Joint Venture, and a satellite of the larger Walbiri deposit (Figure 3).

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Figure 3 – Uranium deposits, occurrences and exploration target areas in the Ngalia Basin

Walbiri Joint Venture (EME 77.12%)

ELR45 covers part of the historical Walbiri deposit and part of the Hill One satellite deposit (Figure 3). The project is a joint venture with NTU, with EME as the operator. Energy Metals holds a 77.12% beneficial interest in the JV. A JORC (2012) mineral resource estimate was announced for the Walbiri deposit in 2015 confirming Walbiri as the second largest sandstone-hosted deposit in the Ngalia Basin after Bigrlyi.

Malawiri Joint Venture (EME 76.03%)

ELR41 covers the historical Malawiri deposit. The project is a joint venture with NTU, with Energy Metals as the operator. Energy Metals holds a 76.03% beneficial interest in the JV and NTU holds a 23.97% interest. The Company advanced the Malawiri project to JORC-compliant resource status with release of a mineral resource estimate on 14 December 2017.

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JV Activities (September 2021 Quarter)

Recent exploration work has focussed on the re-optimisation of various aspects of the Bigrlyi Project 2011 Prefeasibility Study (PFS). This work is aimed at enabling key components of the project to be re-started in a timely manner once the uranium market shows sustained recovery. The work is also designed to increase the level of confidence in geological, mining, processing and economic aspects of the project. In addition to uranium, the Bigrlyi deposit contains a target resource of vanadium of approximately 44,000 tonnes V2O5 within a mineralised envelope that is more than three times the size of the present uranium resource volume (refer to the ASX release of 4 December 2019 and the caveats therein). Energy Metals is committed to improving the economics of its flagship Bigrlyi project and a program to enhance the value of vanadium as a by-product commodity is on-going.

Field Program 2021. Because of the on-going Covid-19 situation affecting much of Australia, field activities have currently been suspended due to assessed travel-related risk, but are expected to resume shortly.

Ore Beneficiation Study. A program of ore beneficiation test-work is currently in progress with the dual aims of upgrading run-of-mine uranium and vanadium grades, and the rejection of carbonate gangue to reduce acid consumption. A successful program would have a positive impact on project economics. Energy Metals is encouraged by recent positive ore beneficiation test results from the Kayelekera and Angela uranium deposits, which are both sandstone-hosted uranium deposits similar in style to the Bigrlyi deposit (refer to ASX: LOT Lotus Resources Ltd announcement of 05 July 2021 and ASX: EL8 Elevate Uranium Ltd announcement of 29 October 2020, respectively).

Deep uranium potential study. In order to expand the future resource base of the project, a review of the uranium potential in the deeper, poorly-tested part of the Bigrlyi deposit, below about 250m depth, is in progress.

Ngalia Regional Project (EME 100%)

The Ngalia Regional project comprises twelve 100% owned exploration licences, applications and exploration licences in retention located in the Ngalia Basin, between 180km and 350km northwest of Alice Springs in the Northern Territory (Figure 3). The tenements are contiguous and enclose the Bigrlyi project as well as containing a number of uranium occurrences, including part of the historic Walbiri deposit and the Cappers deposit.

Nine of the twelve Ngalia Regional exploration licences have been granted; the three remaining applications (ELs 24450, 24462 and 27169) are located on Aboriginal Freehold (ALRA) land and Energy Metals is negotiating access agreements with the Traditional Owners through the Central Land Council (CLC) (Figure 3).

A number of high priority targets have been identified on the 100% owned tenements and Energy Metals is undertaking a program of systematic evaluation of these prospects, some of which were originally discovered in the 1970s. In February 2014, Energy Metals announced maiden resource estimates for the Bigwest, Anomaly-15 East and Camel Flat satellite deposits and in October 2015, Energy Metals announced inferred JORC resources for the historical Walbiri, Sundberg and Hill One deposits (Figure 3).

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Activities (September 2021 Quarter)

No field-based exploration activities were undertaken this quarter.

On title application ELA24450, Energy Metals acquired, by default, two new uranium prospects due to relinquishments of historical title applications by NTU. The prospects are known as Anungka and Mt Allan, and are located, respectively, 13km and 20km northwest of the Malawiri deposit adjacent to the Tanami Highway. Both prospects were explored by AGIP Australia Pty Ltd in the late 1970s, early 1980s and appear to be similar in style to Malawiri though mineralisation occurs at slightly shallower depths and in beds that dip only about 30 degrees rather than vertically. The best result obtained by AGIP was in hole Y352RP where 1,606 ppm U3O8 was intercepted over 5m from 102m and 1,167 ppm U3O8 was intercepted over 3m from 117m. Both prospects have only been tested by a few, widely spaced drill holes, and the mineralisation footprint appears to be significant. ELA24450 is currently the subject of exploration access negotiations with the CLC; initial meetings with Traditional Owners have taken place and have been positive.

Macallan (EME 100%)

The Macallan project comprises a single exploration licence application (ELA27333), located 460 km NW of Alice Springs and 140 km from Bigrlyi. The tenement covers a strong 3km-wide bullseye radiometric anomaly. The Macallan anomaly lies within the Wildcat Palaeovalley, an ancient valley system that drains into Lake Mackay to the southwest. The Macallan anomaly most likely represents a surficial accumulation of uranium minerals associated with the Wildcat palaeodrainage system, although other explanations are possible.

ELA27333 lies on land under Aboriginal Freehold title and access is subject to negotiation with the Traditional Owners and the CLC. The negotiation period has been extended until October 2022 and the CLC are currently reviewing the Company’s comments on a draft exploration agreement.

WESTERN AUSTRALIA

Manyingee (EME 100%)

The Manyingee project comprises retention licence application R08/3, underlying tenement E08/1480 and exploration licence application E08/2856, which are located 85 km south of Onslow. The project is located adjacent to mining leases containing Paladin Energy’s Manyingee resource, a stacked series of buried, palaeochannel-hosted, roll-front uranium deposits. In November 2016 Energy Metals announced an initial JORC (2012) Mineral Resource Estimate for the Manyingee East uranium deposit, which is located up-channel of Paladin’s Manyingee deposit.

Law firm Gilbert+Tobin was appointed in 2019 to assist Energy Metals with landholder objections to grant of the Manyingee title applications. No significant progress was made this quarter while the outcome of various, related legal matters is awaited.

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Other Deposits - Mopoke Well, Lakeside, Anketell, Lake Mason (all EME 100%)

These four projects are surficial uranium deposits associated with calcrete or calcretised sediments related to ancient drainage and/or lacustrine systems. All projects are located on granted retention licences and mineral resource estimates under the JORC 2004 or 2012 codes have previously been announced for each deposit. All deposits are affected by the WA Government’s current ban on uranium mining, and under present uranium market conditions the deposits are not economic. Energy Metals will continue to monitor the market and political situation with a view to re-starting exploration and development activities should positive conditions return.

The renewal of the Anketell and Mopoke Well retention licences was approved by DMIRS this quarter.

CORPORATE

Energy Metals remains in a strong financial position with approximately $15.42 million in cash and bank deposits at the end of the quarter, forming a solid resource for ongoing exploration and project development.

The Company’s office moved to Level 2, 5 Ord Street, West Perth during the period.

As disclosed under item 6.1 in the Appendix 5B, Energy Metals paid $60,000 in total during the quarter to related parties and their associates. The payments represented amounts paid to the directors, including salaries, non-executive director’s fee and consulting fees.

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Table 1: Tenement Information as required by listing rule 5.3.3

TENEMENT*	PROJECT	LOCATION	INTEREST	CHANGE IN QUARTER
	Northern Territory
EL24451	Ngalia Regional	Napperby	100%	-
EL31098	Ngalia Regional	Napperby	100%	-
EL31820	Ngalia Regional	Mt Doreen	100%	-
EL31821	Ngalia Regional	Mt Doreen	100%	-
EL32113	Ngalia Regional	Mt Doreen	100%	-
ELR31754	Ngalia Regional	Mt Doreen	100%	-
ELR31755	Ngalia Regional	Mt Doreen	100%	-
ELR31756	Ngalia Regional	Mt Doreen	100%	-
ELR32552	Bigrlyi Joint Venture	Mt Doreen	72.39%	-
ELR41	Malawiri Joint Venture	Napperby	76.03%	-
ELR45	Walbiri Joint Venture	Mt Doreen	77.12%	-
EL30004	Ngalia Regional	Mt Doreen	100%	-
ELA27169	Ngalia Regional	Yuendumu	100%	-
EL30144	Bigrlyi Joint Venture	Mt Doreen	72.39%	-
ELR31319	Bigrlyi Joint Venture	Mt Doreen	72.39%	-
ELA24462	Ngalia Regional	Yuendumu	100%	-
ELA24450	Ngalia Regional	Yuendumu	100%	-
ELA27333	Macallan	Tanami	100%	-
MLNA1952	Bigrlyi Joint Venture	Yuendumu	72.39%	-
	Western Australia
E08/1480	Manyingee	Yanrey	100%	-
E08/2856	Manyingee	Yanrey	100%	-
R08/3	Manyingee	Yanrey	100%	-
R21/1	Lakeside	Cue	100%	-
R29/1	Mopoke Well	Leonora	100%	-
R57/2	Lake Mason	Sandstone	100%	-
R58/2	Anketell	Sandstone	100%	-

• EL = Exploration Licence (NT); ELA = Exploration Licence Application (NT); ELR = Exploration Licence in Retention (NT); ELRA = Exploration Licence in Retention Application (NT); MCSA = Mineral Claim (Southern) Application (NT); MLNA = Mineral Lease (Northern) Application (NT); E = Exploration Licence (WA); R = Retention Licence (WA).

Competent Persons Statement

Information in this report relating to exploration results, data and cut-off grades is based on information compiled by Dr Wayne Taylor and Mr Lindsay Dudfield. Mr Dudfield is a member of the AusIMM and the AIG. Dr Taylor is a member of the AIG and is a full time employee of Energy Metals; Mr Dudfield is a consultant to Energy Metals. They both have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – The JORC Code (2012)”. Dr Taylor and Mr Dudfield both consent to the inclusion of the information in the report in the form and context in which it appears.

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The information discussed in this report relating to mineralisation modelling, exploration targets and metallurgical test-work results is based on information compiled by Dr Wayne Taylor. Dr Taylor is a member of the Australian Institute of Geoscientists (MAIG) and a full-time employee of Energy Metals Ltd. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – The JORC Code (2012)”. Dr Taylor consents to the inclusion of the information in the report in the form and context in which it appears.

This report references mineral resource estimates and/or related information that was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

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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 Energy Metals Limited ABN Quarter ended (“current quarter”) 63 111 306 533 30 September 2021

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 (receipt from JV) 1.9 Net cash from / (used in) operating activities	- - - (111) (125) - 5 - - - 51	- - - (341) (374) - 56 - - - 115
	(180)	(544)
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	- - - (107) - -	- - - (245) - -

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	- - - - - - - -	- - - - - - - -
	(107)	(245)
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	- - - - - - - - -	- - - - - - - - -
	-	-
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)	15,706 (180) (107) -	16,208 (544) (245) -

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	-	-
	15,419	15,419
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 Term deposits 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	327 - - 15,092	494 - - 15,212
	15,419	15,706
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 60 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.		60
		-

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

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

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) (180) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (107) Total relevant outgoings (item 8.1 + item 8.2) (287) Cash and cash equivalents at quarter end (item 4.6) 15,419 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 15,419 Estimated quarters of funding available (item 8.6 divided by item 8.3) 53.7 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?	(180) (107) (287) 15,419 -
		15,419
	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:

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

8.8.3 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.

Date:

27 October 2021

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Xuekun Li, Company Secretary

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 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.

3. 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.

4. 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”.

5. 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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