ORPHEUS URANIUM LIMITED — Capital/Financing Update 2021

Oct 19, 2021

ASX announcement

20 October 2021

Nyungu Copper-Cobalt Deposit – Significant Eastern Extension and Supplementary Drilling Campaign

Argonaut Resources NL (ASX: ARE) (Argonaut or the Company) is pleased to announce that a potentially significant eastern extension to the Nyungu copper-cobalt deposit, Nyungu East, has been defined by an intense copper in soil anomaly from recent soil sampling.

The Nyungu East anomaly is in three lobes over 900m and has the potential to significantly expand the currently defined Exploration Target of 580,000t to 1,150,000t of contained copper (Table 1). Nyungu East is located approximately one kilometre east of the Nyungu Central copper-cobalt deposit (Figure 2).

A reverse circulation (RC) drilling program will commence within one week to test the Nyungu East anomaly. The Nyungu East drilling program supplements a partially complete, 2,800m diamond drilling program at the Nyungu copper-cobalt deposit.

The Nyungu copper-cobalt deposit is part of Argonaut's 90% held Lumwana West project, located between two world-class copper operations, Barrick Gold's Lumwana mine and First Quantum Mineral's Sentinel mine in Northwestern Zambia (Figure 1).

Highlights

Nyungu East: Supplementary Drilling Program

• Argonaut has recently defined an intense copper anomaly at Nyungu East. The anomaly is defined by elevated copper in soil samples (Figure 2).
• Peak copper in recently acquired soil samples is 0.21% Cu.
• The anomaly is in three lobes over a 900m strike length.
• Argonaut has engaged a contractor to drill up to 1,500m of RC drilling at Nyungu East (the RC Drilling Program).
• The RC Drilling Program will test the three lobes of Nyungu East commencing within a week.
• A commercial copper discovery at Nyungu East will have a significant positive impact on the value of the Lumwana West project.

Nyungu Central: Resource Drilling with Exploration Upside

• In July 2021, Argonaut announced the commencement of a 2,800m diamond drilling at the Nyungu Central and Nyungu South (Figure 2 and Figure 4) (the Diamond Drilling Program).
• Eight drill holes have been completed under the Diamond Drilling Program for a progressive 1,700m. Drilling is continuing.
• This Diamond Drilling Program involves:
  • ¬ Exploration drilling for deposit extensions at Nyungu Central and Nyungu South.
  • ¬ Resource drilling for infill upgrades at Nyungu Central:
    • » Nyungu Central contains high grade intercepts such as 31m at 1.57% copper from 173m including 6m at 5.51% copper.
    • » Infill drilling often intercepts additional high-grade zones which can boost the average grade of the deposit.

Argonaut Resources NL ABN 97 008 084 848

Registered Office Level 6, 100 Pirie Street Adelaide, SA, 5000 AUSTRALIA P +61 8 8231 0382

E adelaide@argonautresources.com

Figure 1 The Nyungu deposit is located near several major copper mines and relevant infrastructure.

Resource Drilling and Exploration Upside

Argonaut is excited to have recommenced drilling at Nyungu. The deposit urgently needs drilling to target extensions and resource drilling infill. Previous intercepts of 176m at 0.55% copper and 31m at 1.57% copper provide the team with plenty of encouragement.

The 2021 Nyungu deposit drilling program has a dual-purpose: exploration drilling that aims to uncover significant new zones of copper and cobalt mineralisation, and infill drilling for Resource estimation purposes. Additionally, infill drilling will provide sample for ongoing metallurgical testwork.

Argonaut has defined exploration drilling targets that have the potential to materially increase the Resource-base at Nyungu.

RC Drilling Program

Nyungu East Anomaly

Since commencing field operations at Nyungu in July 2021, Argonaut undertook a program of soil sampling in the area of the Nyungu deposit. 676 soil samples have been collected and analysed during 20211. These samples are in addition to over 15,000 other soil samples taken and analysed by Argonaut at Lumwana West since 2011.

The Nyungu East soil anomaly (Figure 2) is in three lobes over a strike length of 900m. These lobes are defined by elevated copper soil samples. The peak of the southern lobe is 2,100ppm (0.21%) copper and the peak of the central lobe is 840ppm copper. The Nyungu East copper anomaly is higher in intensity than the Nyungu Central soil anomaly. Nyungu Central hosts a material copper endowment, as described by the JORC Exploration Target shown below at Table 1.

1 Soil samples are sieved, B horizon, residual soil. Samples are typically spaced 25m apart along east-west lines which are 50m apart. The soil samples have been analysed using a handheld XRF analyser. Relevant QA/QC processes included the analyses of appropriate analytical standards and blanks (reference samples) for calibration, plus repeat analysis, and analysis of duplicate soil samples. XRF analytical results for 2021 soil samples were within desired QA/QC thresholds.

"Argonaut is drilling for copper on two fronts at its 90% held Lumwana West project in Zambia at a time of record copper prices. Shareholders can expect some exciting times over the next few months with the potential for a new copper discovery at Nyungu East, in addition to Resource and extensional drilling results from Nyungu Central." Lindsay Owler, Director and CEO, Argonaut Resources NL

Figure 2 Intense, new copper anomaly discovered at Nyungu East.

RC Drilling

Argonaut's Zambian subsidiary, Mwombezhi Resources Ltd, has engaged a drilling contractor to complete up to 1,500m of reverse circulation percussion drilling to test the three lobes of the Nyungu East copper anomaly. Approximately 15 holes ranging in depth from 80m to 130m are planned. This program will be completed prior to mid-November 2021.

Mobilisation of the RC drilling rig to site is imminent. Access tracks and drilling pads have been constructed in preparation for the rig's arrival.

Diamond Drilling Program

The 2021 drilling program is budgeted to cost A$2,000,000 for a total of 2,800m of varying diameter drill core.

The drilling program is being jointly managed by African Mining Consultants (AMC) and Argonaut Resources' staff based in Adelaide, Australia.

Since the commencement of drilling in late July 2021, Argonaut has completed eight diamond drill holes for 1,700m. The remaining 1,100m is expected to take five to six weeks to complete.

The Company is cutting drill core and expects to report initial assay results in December 2021.

Exploration Drilling for Deposit Extensions

Nyungu Central

• The Nyungu deposit is confirmed by 50+ drill holes.
• The deposit has a 1,700m strike length and is open to the north and south (Figure 4).
• The shallower portions of the Nyungu deposit offer potential for low cap-ex, near-term, heap leach operation followed by the long-term production of copper concentrate.

The Nyungu Central deposit is open along-strike to the north and south (Figure 3). Argonaut is testing these potential extensions to known mineralisation with a view to increasing tonnages for future Resource estimation.

Nyungu South

The Nyungu South deposit (Figure 4) sits in a location where a copper soil anomaly and an IP geophysical anomaly (i.e. a zone that may contain disseminated sulphide minerals) are coincident. The IP anomaly continues northwards from the soil anomaly over a significant area. This extension to the IP anomaly is untested and will be drilled by Argonaut in 2021.

Figure 3 Nyungu Central long section showing copper mineralisation.

Figure 4 The Nyungu Central and Nyungu South deposits are defined by broad copper intercepts.

Resource Drilling – Infill Upgrades

Nyungu Central contains high grade intercepts such as 31m at 1.57% copper from 173m including 6m at 5.51% copper. There is a statistical likelihood that infill drilling will intercept additional high-grade zones which can boost the average grade of the deposit.

Indicated JORC Resource

Existing drilling by Argonaut at Nyungu Central and Nyungu South (Figure 4) was conducted using a drill-traverse spacing of approximately 200m. This drilling revealed excellent grade and geometry continuity between traverses at Nyungu Central but was too widely spaced to enable the conversion to Indicated Resource category. The drilling of infill traverses spaced approximately 100m apart is expected to allow Argonaut to estimate the tonnage and grades at Nyungu to JORC Resource standards.

Oxide-Zone Resource

The earlier drilling by Argonaut at Nyungu targeted fresh copper sulphide mineralisation at depth via angled drilling. No early drill holes targeted near-surface oxide mineralisation. This has left a gap in the Company's understanding of the oxide zone and has affected its ability to progress metallurgical testwork on potentially significant parcel of copper ore. The 2021 drilling program aims to address these matters by specifically targeting drilling in interpreted nearsurface oxide zones (Figure 5). Results from this program and metallurgical leach testwork that will follow will affect the economics of production in first 5 to ten years.

Figure 5 Nyungu Central cross sections showing existing and planned drill holes.

Copper and Cobalt Exploration Targets

Argonaut has previously estimated Exploration Targets for both copper and cobalt mineralisation at Nyungu using an independent consultancy. These estimations are shown below in Table 1.

Commodity	Tonnage Range (Mt)	Grade Range (%)	Contained Metal Range (kt)
Copper*	130 to 180	0.45 to 0.65	580 to 1,150
Cobalt^	15 to 20	0.08 to 0.12	12 to 24

Table 1 Nyungu Exploration Target

* Copper Exploration Target announced to the ASX by Argonaut on 9 April 2013.

^ Cobalt Exploration Target announced to the ASX by Argonaut on 27 March 2017.

Both Exploration Targets are estimated to JORC standards.

The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Metallurgical Testwork

Argonaut has been testing the metallurgical properties of oxide, transitional zone and fresh (sulphide) ores for the past 18 months. This information is driving the development of process flowsheets and scoping economic studies into the various processing options.

The metallurgical testwork program is extensive. Argonaut has completed testing of the following properties: mineralogy, comminution, flotation and oxidation (including both roast/leach and Albion process). The Company is currently completing a suite of orientation leach tests on small samples of oxide and transitional ores. Future tests will include large-scale leach tests, bio-leach tests and solvent extraction/electrowinning (SX/EW) tests.

Mining Study

A preliminary open pit optimisation study was conducted for the Nyungu Central and Nyungu South deposits. The modelling was for copper production only, using costs from similar mines. The results were highly encouraging.

Modelling shows excellent deposit geometry via a very low stripping ratio (Figure 6).

• Stripping ratio of 1.5 to 1 for the optimum pit at a copper price of US$7,151; and
• Stripping ratio of 2.3 to 1 for depths greater than 300m at 150% of the current copper price, indicating the deposit has a low sensitivity to stripping ratio.

Mineral Processing

The conceptual mineral processing flowsheets for a two-stage operation are shown in Figure 7. Stage one involves oxide and transitional zone ores. Stage two involves the fresh, predominantly chalcopyrite ore in the deeper primary zone. Two alternative processes are shown for the second stage. One involves the production of copper metal and cobalt hydroxide and the other involves the sale of copper concentrate to local smelters. PROJECT SENSITIVITY TO ECONOMIC FACTORS

• The pit optimisation has Section B:B Figure 6 Nyungu Central long-section, looking east. Preliminary pit optimisation open pit shells. White shell has a stripping ratio of 1.5 to 1 and reflects the optimisation at US$7,151. The light blue shell has a stripping ratio of 2.3 to 1 and is economic at 150% of that price.

Figure 7 Conceptual mineral processing flowsheet for a two-stage operation at Nyungu.

Cobalt Production Impediments – why Zambia?

Recent battery-related demand for cobalt has exposed the fragile nature of cobalt supply. Over 70% of the world's cobalt is coming from the DRC, one of the world's riskiest and most opaquely administered mining jurisdictions.

There are two main reasons why most the world's cobalt supply comes from the DRC: mineral endowment and favourable metallurgy.

Southern DRC and North-western Zambia (including the Zambian Copperbelt) cover the geological domain known as the Central African Copperbelt. Deposits in both countries commonly contain cobalt.

Of the 190 countries assessed for 'ease of doing business' by the World Bank in 2019, Zambia ranked 85. DRC ranked near the bottom at 183. Zambia is a far safer and lower-risk jurisdiction that benefits from politically stability, robust mining law and functioning courts.

Other counties with significant cobalt endowment include Australia (nickel-cobalt laterites) and Canada (polymetallic copper-nickel-cobalt). The main reason cobalt production lags in these countries is metallurgy. The processing of cobalt in Australia and Canada is either metallurgically complex or prohibitively expensive (or both).

Zambia represents a blend of lower political risk, excellent mineral endowment, and favourable metallurgy.

About Argonaut

Argonaut Resources NL is an Australian Securities Exchange listed exploration and development company focused on the Murdie copper project in South Australia and copper development at the Nyungu copper-cobalt deposit at the Lumwana West project in North-western Zambia.

Argonaut has plans to list its uranium subsidiary, Orpheus Minerals Ltd, on the ASX.

This report was authorised for release by:

Lindsay Owler

Director and CEO ARGONAUT RESOURCES NL

Sections of information contained in this report that relate to Exploration Results were compiled or supervised by Mr Lindsay Owler BSc, MAusIMM who is a Member of the Australasian Institute of Mining and Metallurgy and is a full-time employee of Argonaut Resources NL. Mr Owler holds shares and options in Argonaut Resources NL, details of which are disclosed in the Company's 2021 Annual Report. Mr Owler has sufficient experience which is relevant to the style of mineral deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the "Australasian Code for Reporting of Mineral Resources and Ore Reserves". Mr Owler consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.