FALCON METALS LTD — Capital/Financing Update 2023

Dec 11, 2023

12 December 2023

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ASX / Media Announcement
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Soil Sampling Confirms Gold, Nickel and Lithium Potential at Mt Jackson

• Results from 818 soil samples have increased the prospectivity of the Mt Jackson Project

• Highlights of the follow-up program include:

• Confirmation of several gold anomalies up to 7km long

• Three zones of coincident nickel, copper, platinum and palladium anomalism

• Several zones of anomalous lithium

• Planning underway for a ground EM survey to test the base metal anomalies

• Follow up soil sampling in Q1 2024 to further test the extent of the lithium anomalies

• Aircore drilling on the Mt Jackson permit expected mid-2024

Falcon Metals Limited ( ASX: FAL ) ( “Falcon” or “the Company” ) advises that it has received results for 818 soil samples taken at the Company’s Mt Jackson Project, 110km north of Southern Cross in Western Australia. The Mt Jackson Project is interpreted to contain the concealed northern extension of the Southern Cross Greenstone Belt. The soil sampling was following up results previously announced (see ASX Announcement dated 14 September 2023 ‘Exploration Update – Pyramid Hill & Mt Jackson’ ) infilling several gold and nickel targets to a sample density of 100m x 100m. The sampling provides increased confidence in several orogenic gold, komatiitic nickel and lithium pegmatite targets that warrant further exploration, including ground Electromagnetic (EM) surveys, further soil sampling and aircore drilling.

Mt Jackson Soil Sampling

The Mt Jackson Project is located at the convergence of the Southern Cross Greenstone Belt, the major crustal-scale Youanmi Shear Zone and the regional scale Koolyanobbing Shear Zone at the northern end of the belt (See Figure 1). The Southern Cross Greenstone Belt is a well-endowed mineral province and has collectively produced >15Moz of historical gold[1] . In addition, the Forrestania Greenstone Belt forms the southern extension of the Southern Cross Greenstone Belt and has historical nickel production of ~384kt[2] and is also host to the Earl Grey Mt Holland Lithium Project with a preproduction resource of 189mt @ 1.5% Li₂O that is being developed by Covalent Lithium Pty Ltd, a joint venture between Wesfarmers (ASX: WES) and SQM[3] .

The Mt Jackson Project was initially targeted on a 5km long magnetic anomaly in an area of shallow sand cover that was interpreted to be the northern extension of the Southern Cross Greenstone Belt. Earlier wide-spaced soil sampling confirmed the likely presence of mafic and/or ultramafic rocks with several low-level gold anomalies identified.

1 ASX announcement RRL 03/08/2022, “Diggers and Dealers Mining Forum”

2 ASX announcement: IGO 30/08/2022, “FY22 Cosmos and Forrestania Mineral Resources and Ore Reserves”, p32

3 Zoe Phelps-Barber, Allan Trench & David I. Groves (2022) Recent pegmatite-hosted spodumene discoveries in Western Australia: insights for lithium exploration in Australia and globally, Applied Earth Science, 131:2, 100-113, DOI: 10.1080/25726838.2022.2065450

Falcon Metals Limited ASX: FAL Level 6, 350 Collins St, Melbourne VIC 3000 PO Box 106, Flinders Lane VIC 8009

T : +61 3 8648 6684 1 E : info@falconmetals.com.au www.falconmetals.com.au ABN 87 651 893 097

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Figure 1 Location of Mt Jackson Project in reference to the Southern Cross Greenstone Belt

Falcon completed a comprehensive soil sampling program in July 2023 with the objective of confirming the previous soil anomalies identified on permit E77/2577, whilst also extending the soil sampling coverage to permit E77/2946, where there was limited previous work. Several areas with multi-point anomalous gold and base metal values were identified from this program that required further infill soil sampling. This was completed in October 2023 with an additional 818 samples collected on a 100m x 100m spacing. Due to the early encouraging results, the project was expanded with an additional application, E77/3134 to the north of E77/2946.

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These new results have further refined several of the gold targets (see Figure 2) with the highlight being a 1km long north-south trending target >3ppb Au with a peak value of 17.5ppb Au that is coincident with the interpreted Southern Cross Greenstone Belt. In addition to this, a 7km long northeast-southwest anomaly has been confirmed in a demagnetised zone that is interpreted to be associated with the Youanmi Shear Zone and is open to the south. This anomaly is >2ppb Au and is a more subtle response given the extensive aeolian cover interpreted to be developed in this location on the eastern side of a salt lake system.

The analytical method that was used for Au was a 10g cyanide leach of -50µm material that is sieved under lab conditions. This was designed for defining low-level gold anomalism in areas of transported aeolian cover. It allows confidence in low-level gold interpretation because it has a detection limit of 0.01 ppb Au and no samples from this program were below the detection limit. Further to the north there are also several other anomalous zones on a parallel structure, and what appear to be conjugate northwest-southeast trending structures. These targets will be tested with aircore drilling in 2024.

In addition, three zones with coincident nickel, copper, platinum and palladium anomalism along the interpreted Southern Cross Greenstone Belt have been prioritised. Moving Loop Electromagnetic (MLEM) surveying is planned to test for nickel sulphide mineralisation (See Figure 3). Drill planning for these targets will be dependent on the outcomes of the MLEM surveys.

Although the soil sampling programs were designed to test largely for gold and base metals, several anomalous lithium zones (see Figure 4) were also detected. The sampling and assaying methodology is not considered optimal for lithium exploration and specific orientation programs will be required if encouraging results are obtained from the current work programs. The analytical method used for this was a 0.5g Aqua Regia digest of -50 µm material. This is considered a partial digest so can report lower values than more aggressive methods such as a four-acid digest or sodium-peroxide fusion. Although the level of lithium anomalism is low, they have formed discrete anomalies relative to the background and these zones are considered targets requiring further soil sampling and potential aircore drilling. The Southern Cross region is prospective for lithium given it hosts the Earl Grey Mt Holland Lithium Deposit. A large LCT pegmatite system has also been identified directly southwest of permit E77/2577 by Midas Minerals (ASX: MM1, see ASX announcement dated 16 January 2023 ‘Midas defines priority lithium and gold target zones over 20km strike at Newington, WA’ ).

Planning is now underway for an aircore drilling program in 2024 which will be the first exploration drilling undertaken in the highly prospective Mt Jackson Project area for any commodity.

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Figure 2 Plan map of Mt Jackson showing the Au soil sampling results

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Figure 3 Plan map of Mt Jackson showing Ni and Cu soil sampling results

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Figure 4 Plan map of Mt Jackson showing Li soil sampling results

This announcement has been approved for release by the Board of Falcon Metals.

For more information, please contact:

Tim Markwell Media and Investor Queries Managing Director Ben Creagh tmarkwell@falconmetals.com.au benc@nwrcommunications.com.au

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COMPETENT PERSON STATEMENT:

The information contained within this announcement relates to exploration results based on and fairly represents information compiled and reviewed by Mr Doug Winzar who is a Member of the Australian Institute of Geoscientists. Mr Winzar is a fulltime employee of Falcon Metals Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves”. Mr Winzar consents to the inclusion in the documents of the matters based on this information in the form and context in which it appears.

FORWARD LOOKING STATEMENT:

This announcement may contain certain forward-looking statements, guidance, forecasts, estimates, prospects, projections or statements in relation to future matters that may involve risks or uncertainties and may involve significant items of subjective judgement and assumptions of future events that may or may not eventuate (Forward Statements). Forward Statements can generally be identified by the use of forward looking words such as "anticipate", "estimates", "will", "should", "could", "may", "expects", "plans", "forecast", "target" or similar expressions and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production and expected costs. Indications of, and guidance on future earnings, cash flows, costs, financial position and performance are also forward looking statements. Forward looking statements, opinions and estimates included in this announcement are based on assumptions and contingencies which are subject to change, without notice, as are statements about market and industry trends, which are based on interpretation of current market conditions. Forward looking statements are provided as a general guide only and should not be relied on as a guarantee of future performance.

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APPENDIX : JORC Table 1 – Mt Jackson Project

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sampling techniques	•	Nature and quality of sampling (eg. cut	•	The recent soil samples were collected from 0- 25 cm and
		channels, random chips, or specific		sieved to -0.3mm in the field with approximately 500g
		specialised industry standard measurement		collected. The samples are then dried and sieved to -50um
		tools appropriate to the minerals under		(0.05mm) at the laboratory and 30g of this material is used
		investigation, such as down hole gamma		for assay.
		sondes, or handheld XRF instruments, etc).
		These examples should not be taken as
		limiting the broad meaning of sampling.
	•	Include reference to measures taken to
		ensure sample representivity and the
		appropriate calibration of any measurement
		tools or systems used.
	•	Aspects of the determination of
		mineralisation that are Material to the Public
		Report.
	•	In cases where ‘industry standard’ work has
		been done this would be relatively simple
		(eg. ‘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 cases more explanation may
		be required, such as where there is coarse
		gold that has inherent sampling problems.
		Unusual commodities or mineralisation types
		(eg. submarine nodules) may warrant
		disclosure of detailed information.
Drilling techniques	•	Drill type (eg. core, reverse circulation, open-	•	Not applicable.
		hole hammer, rotary air blast, auger, Bangka,
		sonic, etc) and details (eg. core diameter,
		triple or standard tube, depth of diamond
		tails, face-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	•	Not applicable.
		chip sample recoveries and results assessed.
	•	Measures taken to maximise sample
		recovery and ensure representative nature of
		the samples.
	•	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	•	Not applicable.
		geologically and geotechnically logged to a
		level 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.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sub-sampling	•	If core, whether cut or sawn and whether	•	The recent sampling involved sieving the material to -50um
techniques and		quarter, half or all core taken.		to remove the diluting effect of sand from the clay that was
sample preparation	•	If non-core, whether riffled, tube sampled,		targeted. This was done in the laboratory once the sample
		rotary split, etc and whether sampled wet or		was dried.
		dry.	•	The sample size was appropriate to ensure enough -50um
	•	For all sample types, the nature, quality and		material was available for analysis.
		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 beingsampled.
Quality of assay data	•	The nature, quality and appropriateness of	•	Soil samples were processed by Intertek Genalysis in
and laboratory tests		the assaying and laboratory procedures used		Maddington, WA.
		and whether the technique is considered	•	The samples were analysed using a 10g Cyanide Leach for
		partial or total.		Au (CN10/MS), specifically designed for fine fraction soil
	•	For geophysical tools, spectrometers,		sampling. This is a partial digest. The sample was also
		handheld XRF instruments, etc, the		analysed with a 0.5 g Aqua Regia digest with a 53-element
		parameters used in determining the analysis		package and analysed on a triple quad ICPMS to allow for
		including instrument make and model,		low level detection (AR005/MSQ53). This is considered a
		reading times, calibrations factors applied		partial digest.
		and their derivation, etc.	•	Falcon used 1 standard every 100 samples.
	•	Nature of quality control procedures adopted	•	The lab uses their own certified standards and blanks, and
		(eg. standards, blanks, duplicates, external		this data is also provided to Falcon.
		laboratory checks) and whether acceptable
		levels of accuracy (ie. lack of bias) and
		precision have been established.
Verification of	•	The verification of significant intersections by	•	Results were checked by the Falcon Metals Exploration
sampling and		either independent or alternative company		Manager.
assaying		personnel.
	•	The use of twinned holes.
	•	Documentation of primary data, data entry
		procedures, data verification, data storage
		(physical and electronic) protocols.
	•	Discuss anyadjustment to assaydata.
Location of data	•	Accuracy and quality of surveys used to	•	Sample locations have been picked up using a handheld
points		locate drill holes (collar and down-hole		global positioning system (GPS) with a ±5 m error.
		surveys), trenches, mine workings and other	•	The grid system used for the location of all drillholes is
		locations used in Mineral Resource		MGA, GDA94 (Zone 50).
		estimation.	•	The reliability of RL data is unknown.
	•	Specification of the grid system used.
	•	Qualityand adequacyof topographic control.
Data spacing and	•	Data spacing for reporting of Exploration	•	Sample spacing was 100m x 100m, this was designed to
distribution		Results.		increase the resolution of previously defined anomalous
	•	Whether the data spacing and distribution is		zones.
		sufficient to establish the degree of	•	This spacing is not considered suitable for establishing
		geological and grade continuity appropriate		geological or grade continuity but to aid in the drill
		for the Mineral Resource and Ore Reserve		planning.
		estimation procedure(s) and classifications	•	No sample compositing has been applied.
		applied.
	•	Whether sample compositing has been
		applied.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Orientation of data in	•	Whether the orientation of sampling	•	The infill sampling on a 100m x 100m grid was designed to
relation to geological		achieves unbiased sampling of possible		remove any bias.
structure		structures and the extent to which this is
		known, considering the deposit type.
	•	If the relationship between the drilling
		orientation and the orientation of key
		mineralised structures is considered to have
		introduced a sampling bias, this should be
		assessed and reported if material.
Sample security	•	The measures taken to ensure sample	•	Samples were delivered to the laboratory by the
		security.		contractors who collected the samples.
Audits or reviews	•	The results of any audits or reviews of	•	No review has been carried out to date.
		samplingtechniques and data.

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Section 2 Reporting of Exploration Results

Criteria	JORC Code explanation Commentary	JORC Code explanation Commentary	JORC Code explanation Commentary	JORC Code explanation Commentary	JORC Code explanation Commentary
Mineral tenement	•	Type, reference name/number, location and •	Surface		sampling has been carried out within
and land tenure		ownership including agreements or material	E77/2577 and E77/2946. The tenement areas are
status		issues with third parties such as joint ventures,	wholly owned by Falcon Metals (WA) Pty Ltd
		partnerships, overriding royalties, native title
		interests, historical sites, wilderness or
		national park and environmental settings.
	•	The security of the tenure held at the time of
		reporting along with any known impediments
		to obtaininga licence to operate in the area.
Exploration done by	•	Acknowledgment and appraisal of exploration •	Southern Cross Goldfields took eight rock chip
other parties		by other parties.	samples at the south end of the project area in 2009.
			No	gold	values were noted in the digital data file. No
			anomalous pathfinder results were noted in the
			multi-elements. In 2018, Fleet Street Holdings took
			63	soil samples within the southwest corner of the
			project area. A peak gold value of 7 ppb was
			returned, and no significant gold pathfinder results
			are noted.
Geology	•	Deposit type, geological setting and style of •	Two mineralisation styles are being explored for:
		mineralisation.		1)	orogenic style gold similar to that seen
					across the goldfields of the Yilgarn Craton.
				2)	Komatiite hosted Ni-Cu-PGE
		•	In addition to this the area is also prospective for LCT
			pegmatites and this will be assessed as part of the
			exploration.
Drill hole	•	A summary of all information material to the •	Not applicable.
Information		understanding of the exploration results
		including a tabulation of the following
		information for all Material drill holes:
		o easting and northing of the drill hole collar
		o elevation or RL (Reduced Level – elevation
		above sea level in metres) of the drill hole
		collar
		o dip and azimuth of the hole
		o down hole length and interception depth
		o hole length.
	•	If the exclusion of this information is justified
		on the basis that the information is not
		Material and this exclusion does not detract
		from the understanding of the report, the
		Competent Person should clearly explain why
		this is the case.
Data aggregation	•	In reporting Exploration Results, weighting •	Not Applicable.
methods		averaging techniques, maximum and/or
		minimum grade truncations (eg. cutting of
		high grades) and cut-off grades are usually
		Material and should be stated.
	•	Where aggregate 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.
	•	The assumptions used for any reporting of
		metal equivalent values should be clearly
		stated.

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Relationship	•	These relationships are particularly important •	Not applicable.
between		in the reporting of Exploration Results.
mineralisation	•	If the geometry of the mineralisation with
widths and		respect to the drill hole angle is known, its
intercept lengths		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 (eg. ‘down hole
		length,true width not known’).
Diagrams	•	Appropriate maps and sections (with scales) •	The results of the soil sampling results for the
		and tabulations of intercepts should be	targeted elements are shown in the figures and
		included for any significant discovery being	discussed in the text.
		reported These should include, but not be
		limited to a plan view of drill hole collar
		locations and appropriate sectional views.
Balanced reporting	•	Where comprehensive reporting of all •	The contouring has been done to 2ppb Au, 5ppb Pt,
		Exploration Results is not practicable,	50 ppm Cu, 50ppm Ni and 25ppm Li. This is
		representative reporting of both low and high	appropriate for the identification of anomalous areas
		grades and/or widths should be practiced to	for further sampling.
		avoid misleading reporting of Exploration
		Results.
Other substantive	•	Other exploration data, if meaningful and •	Not applicable.
exploration data		material, should be reported including (but not
		limited to): geological observations;
		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
		contaminatingsubstances.
Further work	•	The nature and scale of planned further work •	Additional infill sampling at 100m x 100m over
		(eg. tests for lateral extensions or depth	anomalous Li areas that have not been closed out is
		extensions or large-scale step-out drilling).	required.
	•	Diagrams clearly highlighting the areas of •	Refer to figures in the body of the report for
		possible extensions, including the main	interpreted mineralised trends.
		geological interpretations and future drilling
		areas, provided this information is not
		commerciallysensitive.

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