ENOVA MINING LIMITED — Interim / Quarterly Report 2020

Jan 26, 2021

ASX ANNOUNCEMENT ASX: ENV

26[th] January 2021

Enova Mining Limited ABN: 64 087 595 980 Reg. Office: Level 26, 360 Collins Street, Melbourne VIC 3000, Australia Tel: +61398677199, Fax: +61398678587 Email: contact@enovamining.com Mail: PO Box 783, Berwick, VIC 3806 www.enovamining.com

QUARTERLY ACTIVITIES REPORT FOR PERIOD ENDED 31 DECEMBER 2020

CORPORATE

Enova Mining Limited (“Enova”, “the Company”), remains focused on the development of the Charley Creek rare earth project located in central Northern Territory, Australia.

FINANCE

On the 8[th] and 19[th] October 2020, two loan agreements each being $50,000 respectively were entered into with EMMCO Sdn. Bhd. (a Malaysian incorporated company). The funds are being used to complete laboratory test work using Cattle Creek drill samples and for ongoing operations. These are unsecured loans, with interest of 15% per annum and a maturity date of 8th February 2021 and 9[th] February 2021, respectively. Enova Director, Mr Harun Halim Rasip, is a Director and Shareholder of EMMCO Sdn. Bhd. The Directors of EMMCO have given assurance that Enova will be able to roll-over the loan and will not call for settlement until Enova is in a stronger financial position.

The Company continues to investigate all available finance options, mindful of ASX and ASIC requirements. The Company is actively in discussions with investors and anticipates continued future funding by way of private placements.

The Company and its Board continue to closely monitor and manage available funds to ensure adequate funds for creditors and expense commitments are in place.

PROJECT DEVELOPMENT STRATEGY

Background Information

Air-core drilling at Cattle Creek in 2019 provided drilling coverage as required for both resource estimation and for metallurgical testing. In addition, the program seeks to explore new zones below alluvial sediments and at depth (generally less than 60 metres). The core program consisted of 105 vertical holes drilled to bedrock on a regular 15 (east-west) x 7 (north-south) grid with nominal dimensions of 200m x 400m per hole respectively. These holes were assayed upon drilling. A further 34 holes were drilled as infill and twinned holes for check purposes and to provide added drill density in areas of interest.

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critical metals for a sustainable future

Enova Mining Limited (ABN 64 087 595 980) Quarterly Activities Report – Q4, October to December 2020

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Assay results, below the alluvium horizon, have revealed localized elevated rare earth elements (REE) and scandium (Sc) grades, at the northern end of Cattle Creek within the respective sequence of weathered meta-sediment, saprolite and weathered bedrock horizons.

In April 2020, the Company commenced preliminary leach tests (‘sighter tests’) using samples now held at Brisbane Metallurgical Laboratories (BML), Brisbane. BML continues to investigate the particle size distribution and contained metals within the samples. The objective is to identify natural particle sizes in each rock type that can be targeted to pre-concentrate ore prior to leaching. Leach tests and sizing tests should be completed in the first quarter.

Further details of our tests are provided in the Project Activity section of this report.

Our Strategy

Our strategy is to firstly identify and assess hydrometallurgical processes to concentrate and recover REE and Scandium from higher-grade weathered material horizons and assess the viability of derived concept options. This shall benefit the existing project concept or spawn a new project concept. This strategy seeks to benefit the project by:

1. Reducing the size/complexity of the operational concept;

2. Improving product value; and

3. Reducing project capital

For this reason, the Board decided to prioritize this investigation, placing the current large scale alluvial gravity project concept temporarily on-hold.

The Company now intends to complete the following tasks, in order of priority:

1. Complete metallurgical tests.

2. Based test work that has been in progress since April 2020, Enova is narrowing work programmes, targeting mineral properties important to economic extraction. Enova is identifying and testing a combination of process techniques with consideration of practical scalability. Test work must be of a confidence level that confirms ‘reasonable’ expectations for a selected process to be a commercial success;

3. Engage a consulting Metallurgist to peer-review on-going test work and confirm the conceptual design case and provide recommendations for further work. With sufficient confidence from our metallurgical tests, we expect to finalise our conceptual process flowsheet and estimate key project parameters and costs. This will allow Enova to assess the viability of this process and to ascribe economic cut-off grade(s) to resource data and move forward with supporting resource reporting work. Enova is currently in discussions with process engineering consultants to review metallurgical test work assist in process design;

4. Additional drill hole assay information from 34 infill holes was completed during the quarter. This material is currently being used for metallurgical tests. In

Enova Mining Limited (ABN 64 087 595 980) Quarterly Activities Report – Q4, October to December 2020

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March, work will commence on updating the drilling database. This data combined with the existing database will be used to update the resource block model;

1. Continue independent technical development of the existing resource model and drill information, focusing on mineralized zones that support the project concept;

2. With the above technical work complete, Enova can report ‘significant drilling’ intercept results and a technical summary of metallurgical work with a work schedule and budget estimate;

3. Based on funding in Q1, 2020, Enova will recommence finalizing the resource model and thereafter undertake economic pit optimization and mine planning work,

4. Complete resource estimates and proceed with the required scoping study.

Enova will be actively seeking interest and support from ‘Sophisticated Investors’. Failing this, the Company will seek public funding, by preparing an Information Memorandum and engaging an advisor to assist in raising funds.

In May 2020, shareholders approved an allocation of 10% Placement Capacity. The additional 10% Placement Capacity is in addition to the Company’s 15% Placement Capacity under ASX Listing Rule 7.1. This allocation is currently only available to Sophisticated Investors.

PROJECT ACTIVITY

During Q4, Brisbane Metallurgical Laboratories (BML) continued laboratory screening and hydro-cyclone beneficiation followed by leach tests. Due to the emergence of COVID and the recent boom in the resource sector, our test process is being drawn out awaiting assay turnaround and then adapting tests based on results. In regard to leaching, saprolite is of most interest due localized areas of grade concentration and lower calcareous mineral content. A considerable proportion of metal is contained in the fine size fractions (below 100 micron). With screening and hydro-cyclone sizing, this provides an upgraded readily leachable product with lower acid consumption.

Assays have been received for samples from 34 infill and twinned holes that were drilled in 2019. Assays focused in the saprolite areas of potential interest. These samples are currently the main source of metallurgical samples and additional assays for our drilling database. Testing will use samples made up from drill hole intervals passing through the enriched ore zones and investigate the leach character of specific rock types within the mineralized zone, such as weathered meta-sediments, weathered saprolite variants (ferruginous, mottled, pallid and saprock), clays and weathered bedrock. Thereafter, the next phase of test work will be to isolate valuable metals in solution, targeting the isolation of REE and Sc in solution.

TENEMENTS

Enova has not changed its tenement holdings since the March 2020 quarter. No further tenement reductions are planned in 2021. Enova is focused on the Charley Creek project tenements to conserve finances.

Enova Mining Limited (ABN 64 087 595 980) Quarterly Activities Report – Q4, October to December 2020

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Further information about Enova is available at our website www.enovamining.com.

The market will be kept appraised of developments, as required under ASX Listing Rules and in accord with continuous disclosure requirements.

Approved for release by the Board of Enova Mining Limited

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Eric Vesel, CEO/ Executive Director. Enova Mining Limited

Contact details:

Eric Vesel, CEO/ Executive Director eric@enovamining.com +60 19 988 7931

Enova Mining Limited (ABN 64 087 595 980) Quarterly Activities Report – Q4, October to December 2020

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About the Charley Creek (Mineral Sands) Project

The Charley Creek rare earth project is located 110 km W-NW of Alice Springs in the central Northern Territory, Australia (see map below, Figure 1). The operation will involve free-dig mining of mineralized sand/silt extending from the surface to varying depths (10 to 80m) with little to no overburden. Enova Mining Limited, with 100% project equity, is working to re-establish a resource statement and scoping study. The project is well positioned to be a low environmental impact mine with few encumbrances. The Company is currently reviewing its resource model and the mineral processing flowsheet. Metallurgical laboratory test-work is in-progress to increase the rare earth and scandium mineral process recovery. The target final products are high purity rare earth oxide/hydroxide/carbonates, suitable for export to downstream high-purity product refiners, with potential industrial mineral by-products.

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Figure 1 Project Location
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Enova Mining Limited (ABN 64 087 595 980) Quarterly Activities Report – Q4, October to December 2020

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Disclaimer

This ASX announcement (Announcement) has been prepared by Enova Mining Limited (“Enova” or “the Company”). It should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this Announcement.

This Announcement contains summary information about Enova, its subsidiaries, and their activities, which is current as at the date of this Announcement. The information in this Announcement is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor may require in evaluating a possible investment in Enova.

By its very nature exploration for minerals is a high-risk business and is not suitable for certain investors. Enova’s securities are speculative. Potential investors should consult their stockbroker or financial advisor. There are many risks, both specific to Enova and of a general nature which may affect the future operating and financial performance of Enova and the value of an investment in Enova including but not limited to economic conditions, stock market fluctuations, commodity price movements, regional infrastructure constraints, timing of approvals from relevant authorities, regulatory risks, operational risks and reliance on key personnel.

Certain statements contained in this announcement, including information as to the future ‐ financial or operating performance of Enova and its projects, are forward looking statements that: may include, among other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, capital expenditures, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions; are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Enova, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies; and, involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward ‐ looking statements.

Enova disclaims any intent or obligation to update publicly any forward-looking statements, whether because of new information, future events, or results or otherwise. The words ‘believe’, ‘expect’, ‘anticipate’, ‘indicate’, ‘contemplate’, ‘target’, ‘plan’, ‘intends’, ‘continue’, ‘budget’, ‘estimate’, ‘may’, ‘will’, ‘schedule’ and similar expressions identify forward-looking statements.

All forward-looking statements made in this announcement are qualified by the foregoing cautionary statements. Investors are cautioned that forward-looking statements are not guarantee of future performance and accordingly investors are cautioned not to put undue reliance on forward ‐ looking statements due to the inherent uncertainty therein. No verification: although all reasonable care has been undertaken to ensure that the facts and opinions given in this Announcement are accurate, the information provided in this Announcement has not been independently verified.

Enova Mining Limited (ABN 64 087 595 980) Quarterly Activities Report – Q4, October to December 2020

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