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LOYAL METALS LTD Capital/Financing Update 2023

Mar 19, 2023

65244_rns_2023-03-19_c33869c1-48f3-4415-a8bf-0210865b5f8b.pdf

Capital/Financing Update

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ASX:LLI
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ASX Announcement | 20 March 2023

MT Traverses Implies Sedimentary Target as Drill Mobilisation Commences at 100% owned Scotty Lithium Project, Nevada, USA

Highlights:

  • A 19.2km Magnetotelluric Survey (MT) completed across 5 traverses, with three traverses across Target 2 implying a 3.6km[2] sedimentary basin (highly conductive <3 ohm.m) on the 100% owned Scotty Lithium Project.

  • The Target 2 sedimentary basin is beneath strong lithium-boron soil assay results[2] (maximum of 448ppm lithium and 3,360ppm boron) and just 1km west of Nevada Lithium’s (CSE: NVHL) 2022 drilling that confirmed 2 layers of lithium mineralisation.[1,6,7]

  • The MT interpretation implies the Target 2 sediment basin starts at surface and extends to a depth of ~150m in the north and deepens to ~500m in the south - a substantial sedimentary target for Loyal Lithium.

  • The completed MT interpretation has fine-tuned drill locations ahead of mobilisation works (commencing March 2023) with Boart Longyear sonic drill rig engaged.

  • Subject to drilling results, a successful drilling program could achieve a maiden lithium resource for Loyal Lithium.

  • Nevada lithium is poised to be a significant part of global lithium supply, underpinned by President Biden’s Inflation Reduction Act, which supports and encourages locally sourced critical minerals. Recent regional industry catalysts include:

  • Ioneer (ASX:INR) obtaining US$700m loan from U.S. Dept of Energy to develop their Rhyolite Ridge Project in Nevada[3] (Jan 2023)

  • General Motors (GM) and Lithium Americas Corp. (NYSE: LAC) partner through US$650m equity investment and exclusive supply agreement for the Thacker Pass Project in Nevada[4] (Jan 2023)

  • Lithium Americas Corp’s Thacker Pass Project in Nevada receives favourable federal court ruling allowing construction to commence[5] (Feb 2023)

Loyal Lithium Limited ( ASX:LLI ) ( Loyal or the Company ) is pleased to announce the completion and interpretation of a 19.2km Magnetotelluric Survey (MT) across 5 traverses to identify several areas of interest at the Scotty Lithium Project in Nevada, USA. Three traverses within Target 2 are of most interest to the company as the interpretation implies a 3.6km[2]

A: 5/10 Johnston St,

ASX Code: LLI ACN : 644 564 241 www.loyallithium.com

Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]

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sedimentary basin beneath the strong lithium-boron soils assay results recorded by Loyal in September 2022[2] . The MT results in combination with Nevada Lithium’s recent positive drilling results, just 1km the east, provides the company with confidence as drilling mobilisation commences.

Commenting on the MT results and interpretation, Loyal Lithium’s Managing Director, Mr Adam Ritchie, said:

“The MT traverses are extremely encouraging as they clearly illustrate the size and potential of the Scotty Lithium Project.

The implied Target 2 sedimentary basin is a great initial target for the Company, and additionally, the MT results also indicate further potential to the south and north of the project. These are now additional secondary targets for the Loyal Lithium.

Further, the work conducted on the adjacent property gives us additional confidence, as Nevada Lithium’s 2022 drilling campaign reported exceptional lithium-boron results, and their recent testwork has successfully produced battery grade lithium carbonate from core samples.

If mineralised, the Target 2 sedimentary basin would indicate a significant quantity of lithium sediments. The implied basin geometry could also support traditional mining methods and we look forward to the imminent drilling campaign at the Scotty Lithium Project.”

Magnetotelluric Survey (MT)

A 19.2km Magnetotelluric Survey (MT) has been completed across 5 traverses at the Scotty Lithium Project, with the objective of to identifying the presence and extent of any sedimentary basin and major geological structures. This technique was successfully used at the adjacent Bonnie Claire Project (Nevada Lithium), where the MT survey identified sedimentary layers which have subsequently been confirmed via drilling to be lithium baring sediments.

The MT survey indicated several areas of interest, however the very low resistivity readings within Target 2 of the Scotty Lithium Project is of most interest due to the reading (<3 ohm.m), size of basin and correlation with previous geochemical works such as soil samples assays and Nevada Lithium’s 2022 drill results from just 1km east.

The MT survey also identified a very large deep (>500m) horizontal very low resistivity layer (VLRL) in the southern portion of the claims (target area 4). This deep layer has never been sampled for lithium in brines or sediments and is now a secondary drill target for Loyal.

A: 5/10 Johnston St,

ASX Code: LLI ACN : 644 564 241 www.loyallithium.com

Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]

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Figure 1 - MT Survey – Scotty Lithium Project (includes historical MT traverse)

Target 2 MT Results and Interpretation

The three MT traverses across Target 2 run perpendicular to the western basin margin across the entire width of LLI’s claims. MT traverses indicate a very low resistivity layer (VLRL) which has been interpreted to be a potential lithium baring sedimentary basin of 3.6km[2] . The sedimentary basin appears to start at surface and extends to a depth of ~150m in the north and deepening to ~500m in the south. The basin is interpreted to be at least 4km long with a width greater than 1km. The MT also suggests that the basin is open to the north and south.

A: 5/10 Johnston St, Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]

ASX Code: LLI ACN : 644 564 241 www.loyallithium.com

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Figure 2 - Scotty Lithium Target 2 - MT traverses projected to the horizontal

Nevada Lithium’s 2022 drilling program clearly identified two layers of lithium on the adjacent claims (1-4km to the east of LLI’s claims)[1,6,7] . The shallow layer starts near surface and extends to ~116m (6-116m), whereas the deeper layer appears to be reducing in width and depth as it approaches LLI’s target 2 claims - 299-610m layer (310m) in the southwestern to a 250-439 m layer (189m) just 1km from LLI’s target 2 claims.

The drill holes suggest that the lower layer is thinning and reducing in grade to the west (1,043ppm), but higher grade and thicker towards the south-southwest (2,116ppm). The upper layer is also suggested to be increasing in vertical thickness and increasing in lithium grade to the SSW. Loyal has claims both to the northwest, west and southwest of these recent drill holes. Therefore, the implied sedimentary basin has the potential to contain a significant tonnage (sedimentary sg=1.5) in the north, but particularly in the south. BLM drilling permits have been received and the MT traverses will now fine-tune the drill hole locations.

A: 5/10 Johnston St,

ASX Code: LLI ACN : 644 564 241 www.loyallithium.com

Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]

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Figure 3 - Stacked MT geophysics sections illustrating implying sedimentary basin, deepening in the north

Boron generally precipitates very late in the evaporitic sequence and therefore correlates with being present in the shallowest portion of a basin, or at least near surface. In September 2022, LLI recorded strong lithium-boron values (maximum of 448ppm lithium and 3,360ppm boron) via soil assays, with the strongest readings being in the very north of Target 2 (MT line 4), which is the shallow portion of the implied sedimentary basin.

The high boron values of >10,000ppm recorded by Nevada Lithium in their 2022 drilling program, were not in the shallower regions of the basin, but recorded at depth (lower layer). This reflects the progressive infill of the eastern basin (Nevada Lithium’s claims) and implies that the target 2 sedimentary basin (western topographic low) may have been present during the formation of the upper lithium layer and therefore has the potential to concentrate higher grades of lithium.

Mobilisation of Drilling Contractor

Drilling permits were approved in January 2023 by the BLM in Tonopah, Nevada, and DGC-USA have been commissioned to manage the drill program. The MT traverses have fine tuned the drilling location and mobilisation will commence by the end of March 2023, subject to weather conditions. Boart Longyear have been engaged for the Sonic Drilling program.

A: 5/10 Johnston St,

ASX Code: LLI ACN : 644 564 241 www.loyallithium.com

Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]

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The following exploration milestones have been completed to confirm extensions of lithium (and boron) into the substrata on LLI’s claims:

  • Extensive Soils Program Complete: Strong soil assay results of up to 540ppm Li defined five targets, Target 2 has standalone exploration potential.

  • Local Geological Partner Engaged: LLI’s in-country geological partner DGCUSA is now actively assisting with site preparations and the drill program.

  • Targeted Environmental Survey Complete: In early December 2022, an environmental survey was completed via consultants Knight and Levitt. Findings were submitted to the BLM to support the drilling notice.

  • Regulatory Approval Received: A notice to conduct exploration was received from the Bureau of Land Management (BLM), in January 2023

  • Magnetotelluric (MT) geophysics survey and Interpretation completed: The MT survey and interpretation were completed in March with an implied 3.6km[2] sedimentary basin target identified. A Drill program has been finetuned and the basin boundary has been defined to assist with potential maiden resource estimates.

  • Drill and Drill Site Preparation Contractors Mobilising: Mobilisation to commence by the end of March with Boart Longyear sonic drill rig engaged.

This announcement has been authorised for release by Loyal Lithium’s Board of Directors

For more information:

Adam Ritchie

Managing Director [email protected] +61 (0) 403 462 383

Jane Morgan

Investor & Media Relations [email protected] + 61 (0) 405 555 618

About Loyal Lithium

Loyal Lithium Limited (ASX: LLI) is a well-structured listed resource exploration company with projects in Tier 1 North American mining jurisdictions in Nevada, USA and the James Bay Lithium District in Quebec, Canada. Through the efficient exploration of its projects, the Company aims to delineate JORC compliant resources.

Future Performance

This announcement may contain certain forward-looking statements and opinion forward-looking statements, including projections, forecasts and estimates, are provided as a general guide only and should not be relied on as an indication or guarantee of future performance and involve known and unknown risks, uncertainties, assumptions, contingencies and other important factors, many of which are

A: 5/10 Johnston St,

ASX Code: LLI

Peppermint Grove WA, 6011 P: (08) 6245 2490

ACN : 644 564 241 www.loyallithium.com

E: [email protected]

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outside the control of the Company and which are subject to change without notice and could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such statements. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward-looking statements or other forecast. Nothing contained in this announcement, nor any information made available to you is, or shall be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of Loyal Lithium Ltd.

Competent Person Statement

The information in this announcement that relates to Exploration Results and Targets, is based, and fairly reflects, information compiled by Mr Darren Allingham, who is the Company’s geologist. Mr Allingham is a Fellow of the Australian Institute of Geoscientists. Mr Allingham has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results and Mineral Resources (JORC Code). Mr Allingham consents to the inclusion in the announcement of the matters based on the information in the form and context in which it appears.

References

  • 1 Iconic Finds Strong Correlation Between Drill Holes at Bonnie Claire Lithium Project Vancouver, British Columbia–(Newsfile Corp. – December 07, 2022) – Iconic Minerals Ltd. (TSXV: ICM) (OTCQB: BVTEF)

  • 2 ASX Announcement MMG (LLI): Strong Soil Assay Results Define Targets at the Scotty Lithium Project, Nevada USA 21st September 2022

  • 3 ASX Announcement Ioneer (INR): US Dept of Energy Loan Offer of US$700m for Rhyolite Ridge 16th January 2023

4 NYSE Announcement Lithium Amerias Corp. (NYSE:LAC): GM AND LITHIUM AMERICAS TO DEVELOP U.S.SOURCED LITHIUM PRODUCTION THROUGH $650 MILLION EQUITY INVESTMENT AND SUPPLY AGREEMENT 31[st] January 2023

  • 5 NYSE Announcement Lithium Amerias Corp. (NYSE:LAC): LITHIUM AMERICAS RECEIVES FAVORABLE RULING ON RECORD OF DECISION FOR THACKER PASS 7[th] February 2023

  • 6 Iconic Intercepts Lithium Grades up to 5570ppm at Bonnie Claire Project Vancouver, British Columbia– (Newsfile Corp. – September 29, 2022) – Iconic Minerals Ltd. (TSXV: ICM) (OTCQB: BVTEF)

  • 7 Iconic Minerals Receives Additional Drilling Assays for Bonnie Claire Lithium Project Vancouver, British Columbia–(Newsfile Corp. – December 20, 2022) – Iconic Minerals Ltd. (TSXV: ICM) (OTCQB: BVTEF)

JORC Code, 2012 Edition – Table 1 report template Section 1 Sampling Techniques and Data

(Criteria in this table apply to all preceding sections.)

Criteria
JORC Code explanation
Commentary
Sampling
techniques
Nature and quality of sampling
(e.g., cut channels, random chips,
or specific specialised industry
standard measurement tools
appropriate to the minerals
under investigation, such as
down hole gamma sondes, or
handheld XRF instruments, etc).
Specifications Scotty Lithium MT Survey
Parameters
Grid Azimuth 55⁰
Domain Type Frequency Domain .001hz -
10,000hz
ArrayType Tensor(X,Y)
Dipole Size 200m

A: 5/10 Johnston St,

ASX Code: LLI

Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]

ACN : 644 564 241 www.loyallithium.com

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Criteria
JORC Code explanation
Commentary
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
(e.g., ‘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 (e.g.,
submarine nodules) may
warrant disclosure of detailed
information.
Line Spacing Line 1-2 = 7.2km: Line 2-3 =
1.4km: Line 3-4 = 2.3km:
Line 4-5 = 4.5km
Line Length 2800m, 3200m, 3200m,
4800m,5200m
Number of Lines 5
Total Line km per
Grid
19.2km
Total MT Sites 84
Receivers Phoenix MTU-SC
Magnetic Coils Phoenix MTC-155(X,Y)
Personnel 5 man surveycrew
Logging
Whether core and chip samples
have been 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.
Geophysical data sent daily for QC and
processing to licensed geophysicist Sean
Walker (CW Geophysics). Preliminary results of
the raw data were typically available to the
client within 2 days of data acquisition.
Inversions provided within 7 days. All data
processing and inversions were completed.
• Processed data provided in ascii and Geosoft
.gdb format
• Pseudo section plots, Geosoft map and pdf
provided
• 1D and 2D Inversions (Inversion output ascii
format) provided
• Resistivity and Phase section grids and maps
in Geosoft and pdf format provided
• 2D inversion models in Geosoft 3d view and
leapfrog compatible omf format
• Logistical Summarywasprovided
Sub-
sampling
techniques
If core, whether cut or sawn and
whether quarter, half or all cores
taken.
If non-core, whether riffled,
• No sub-samplingoccurred for MT

A: 5/10 Johnston St,

ASX Code: LLI

Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]

ACN : 644 564 241 www.loyallithium.com

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Criteria JORC Code explanation Commentary
and sample tube sampled, rotary split, etc geophysical data.
preparation and whether sampled wet or
dry.
For all sample types, the nature,
quality and 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 being sampled.
The nature, quality and
appropriateness of the assaying
and laboratory procedures used
and whether the technique is
considered partial or total.
For geophysical tools,
spectrometers, handheld XRF
instruments, etc, the
Quality of
assay data
and
laboratory
parameters used in determining
the analysis including
instrument make and model,
reading times, calibrations
• MT Geophysics has been used extensively in
the surrounding areas used to define
sedimentary basins and brines. QA/QC data
examined and approved by interdependent
tests factors applied and their Geophysicist Barry Bourne Terra Geophysics
derivation, etc.
Nature of quality control
procedures adopted (e.g.,
standards, blanks, duplicates,
external laboratory checks) and
whether acceptable levels of
accuracy (i.e., lack of bias) and
precision have been established.
The verification of significant • No verification of anomalies was
intersections by either undertaken as this is geophysical data.
Verification independent or alternative • An independent contractor was used who
of sampling
and
company personnel.
The use of twinned holes.
had a Geophysicist analyse QC data and a
consultant Geophysicist was contracted by
assaying Documentation of primary data,
data entry procedures, data
LLI to analyse the MT contractor’s data.
Data was stored digitally on hard drives,
verification, data storage uploaded to the cloud and analysed by the
(physical and electronic) contractor and consultant.

A: 5/10 Johnston St,

ASX Code: LLI

Peppermint Grove WA, 6011 P: (08) 6245 2490

ACN : 644 564 241 www.loyallithium.com

E: [email protected]

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Criteria JORC Code explanation Commentary
protocols.
Discuss any adjustment to assay
data.
Accuracy and quality of surveys
used to locate drill holes (collar
and down-hole surveys),
Location of trenches, mine workings and
other locations used in Mineral
Location of data points by Differential GPS
data points Resource estimation. accuracy appropriate at 0.05m.
Specification of the grid system
used.
Quality and adequacy of
topographic control.
Data spacing for reporting of
Exploration Results.
Whether the data spacing, and
distribution is sufficient to • Data spacing was selective, along five Lines
Data establish the degree of (traverses) with 200m stations in Lines,
spacing and
distribution


geological and grade continuity
appropriate for the Mineral
where drill holes were planned and
regulatory approval received on LLI claims.
Resource and Ore Reserve • Data spacing is sufficient to imply
estimation procedure(s) and continuity of lake sediments.
classifications applied.
Whether sample compositing
has been applied.
Whether the orientation of
sampling achieves unbiased
Orientation
of data in
relation to
geological
structure

sampling of possible 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
• Appropriate for this style of sub-horizontal
stratigraphy and lithium mineralisation, MT
lines were parallel to the basin margin
designed by a CP with minor revisions by
consultant Geophysicist, to ensure parallel
traverses.
• Vertical Nevada Lithium core drilling was
perpendicular to the horizontal layers.
should be assessed and reported
if material.
Sample The measures taken to ensure • Data was sent daily to a cloud database and
security sample security. downloaded by Geophysicists in main office.
Audits or
reviews
The results of any audits or
reviews of sampling techniques
and data.
• No audit or reviews completed. Historical
MT partially crossing the same areas as near
LLI’s MT traverses found similar inversion
features.

Section 2 Reporting of Exploration Results

A: 5/10 Johnston St,

ASX Code: LLI ACN : 644 564 241 www.loyallithium.com

Peppermint Grove WA, 6011 P: (08) 6245 2490 E: [email protected]

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(Criteria listed in the preceding section also apply to this section.)

Criteria JORC Code explanation Commentary Commentary
Mineral Type, reference name/number, Loyal Lithium Ltd 100% owned
tenement and
location and ownership including
through subsidiary Nevlith LLC and
land tenure agreements or material issues with Playa Minerals Company: unpatented
status third parties such as joint ventures, mining claims located in Sections 19
partnerships, overriding royalties, & 32, Township 8 south, Range 44
native title interests, historical sites, East; Section 04, 10 & 24, Township 9
wilderness or national park and South, Range 44 East; and Sections
environmental settings. 06, 20, 29, 30, 31 & 32, Township 9
The security of the tenure held at the South, Range 45 East, Mount Diablo
time of reporting along with any Meridian, Nye County, Nevada.
known impediments to obtaining a
licence to operate in the area.
Exploration Acknowledgment and appraisal of 2022 drilling by Iconic
done by other
exploration by other parties.
Minerals/Nevada Minerals.
parties Historical MT data partially across
LLI’s claims by Iconic Minerals/
Nevada Lithium was used to confirm
new MT data inversion
interpretations
Geology Deposit type, geological setting and Miocene aged sub-horizontal playa
style of mineralisation. lake clay and sandstones deposited
into basin and range troughs with
lithium compounds concentrated
within horizontal stratigraphy, strata
bound
Data In reporting Exploration Results,
aggregation weighting averaging techniques, Lithium grades in LLI’s soils program
methods maximum and/or minimum grade used arithmetic averages of
truncations (e.g., cutting of high individual sample points within
grades) and cut-off grades are continuous areas above a cut-off-
usually Material and should be grade.
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.
Relationship These relationships are particularly MT geophysics defines resistivity of
between important in the reporting of sub-horizonal strata with low
mineralisation
Exploration Results.
resistive brine aquifers following
widths and If the geometry of the mineralisation strata and lithium in clays with
with respect to the drill hole angle is implied continuitywithin individual

A: 5/10 Johnston St,

ASX Code: LLI

Peppermint Grove WA, 6011 P: (08) 6245 2490

ACN : 644 564 241 www.loyallithium.com

E: [email protected]

==> picture [596 x 102] intentionally omitted <==

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ASX:LLI
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Criteria JORC Code explanation Commentary
intercept known, its nature should be clay sedimentary strata and along
lengths reported. strike within clay beds, so are ideal to
If it is not known and only the down define host layers this orientation
hole lengths are reported, there
should be a clear statement to this
effect (e.g., ‘down hole length, true
_width not known’). _
Diagrams Appropriate maps and sections (with • Appropriate plan and location maps
scales) and tabulations of intercepts on regional and prospect scales are
should be included for any significant
included in this ASX announcement.
discovery being reported These
should include, but not be limited to
a plan view of drill hole collar
locations and appropriate sectional
views.
Balanced Where comprehensive reporting of • All exploration results are reported.
reporting all Exploration Results is not
practicable, representative reporting
of both low and high grades and/or
widths should be practiced avoiding
misleading reporting of Exploration
Results.
Other Other exploration data, if meaningful
• Announced surface auger soils
substantive and material, should be reported sample assays across LLI’s claims.
exploration including (but not limited to): Historical MT geophysics traverses
data geological observations; geophysical partially crossed LLI’s claims, with
survey results; geochemical survey inversion images examined. Core
results; bulk samples – size and drilling to the east of LLI claims
method of treatment; metallurgical completed by Iconic Minerals and
test results; bulk density, Nevada Lithium with weighted
groundwater, geotechnical and rock average Lithium intercepts and
characteristics; potential deleterious single sample boron intercepts
or contaminating substances. announced
Further work The nature and scale of planned • Given the encouraging results from
further work (e.g., tests for lateral this geophysics program and drilling
extensions or depth extensions or within 1km east of LLI’s claims a total
large-scale step-out drilling). of nine drill holes have been
Diagrams clearly highlighting the approved via BLM. Three drill holes
areas of possible extensions, are planned for the first phase of
including the main geological drilling within LLI’s target 2.
interpretations and future drilling
areas, provided this information is
not commercially sensitive.

A: 5/10 Johnston St,

ASX Code: LLI

Peppermint Grove WA, 6011 P: (08) 6245 2490

ACN : 644 564 241 www.loyallithium.com

E: [email protected]