ORPHEUS URANIUM LIMITED — Interim / Quarterly Report 2022

Oct 27, 2021

ARGONAUT RESOURCES NL ABN 97 008 084 848

argonautresources.com

ASX: ARE

CAPITAL STRUCTURE:

Issued shares: 3,606 million Listed options: None Unlisted options: 99.75 million Cash on hand: $3,160,000

DIRECTORS:

Patrick Elliott, Non-Exec Chairman

Lindsay Owler, Director/CEO

Andrew Bursill, Non-Exec Director

Malcolm Richmond, Non-Exec Director

Mick Billing, Non-Exec Director

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Quarterly report

FOR THE PERIOD ENDING 30 SEPTEMBER 2021

Argonaut Resources NL ( Argonaut or the Company ) (ASX: ARE) is pleased to present the following report for the period to 30 September 2021 (the Quarter ).

Highlights

Lumwana West, Zambia – Copper-Cobalt – 90%

Nyungu Central: Resource Drilling with Exploration Upside

• In July 2021, Argonaut announced the commencement of a 2,800m diamond drilling program at Nyungu Central and Nyungu South (Figure 2 and Figure 4) (the Diamond Drilling Program ).

COPPER PROJECTS:

LUMWANA WEST, ZAMBIA

Copper, cobalt (shear-hosted) Phase: Resource and Exploration rilling Interest: Argonaut 90% Agreement Phase: Post-Earn-In, Exploration Operator: Argonaut

MURDIE, SOUTH AUSTRALIA Copper, gold (large IOCG) Phase: Exploration Interest: Argonaut 100%

TORRENS, SOUTH AUSTRALIA Copper, gold (large IOCG) Interest: Aeris Resources 70%, Argonaut 30% Agreement Phase: Exploration Operator: Aeris

GOLD & NICKEL PROJECT:

HIGGINSVILLE, WESTERN AUSTRALIA

Oxide and primary gold, nickel Phase: Exploration Interest: Argonaut 51%, earning up to 80% Agreement Phase: Earn-in, Phase Two Operator: Argonaut

• Nine drill holes have been completed under the Diamond Drilling Program for a progressive total 2,100m. 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.

Nyungu East: Supplementary Drilling Program

• Subsequent to the Quarter, Argonaut 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 engaged a contractor to drill up to 1,500m of RC drilling at Nyungu East (the RC Drilling Program ).

• The RC Drilling Program commenced in late October 2021 and is testing the three lobes of Nyungu East commencing in October 2021.

• A commercial copper discovery at Nyungu East will have a significant positive impact on the value of the Lumwana West project.

Registered Office

Level 6, 100 Pirie Street Adelaide, SA, 5000, Australia T +61 8 8231 0381 E info@argonautresources.com

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Murdie, South Australia – Copper – 100%

Drilling Program

• In July 2021, Argonaut elected to temporarily suspend drilling operations at the Murdie project in South Australia due to access impediments on to Lake Torrens.

• Access to the third drillhole, WLTD003 which targets the Trimmer anomaly (Figure 8), was hampered by weather, the related wetness of the surface and subsurface of Lake Torrens, and the South Australia COVID lockdown, subsequently the program was suspended.

• Argonaut is in discussions with contractors regarding a potential drilling program using heli-supported equipment.

• Results from the first two drillholes, WLTD001 and WLTD002 have been received. No significant mineralisation was intercepted by these drill holes.

• Drilling at Murdie is targeting IOCG mineralisation defined by large gravity anomalies within the Olympic CopperGold Province of South Australia.

Judicial Review

• On 19-20 July 2021, subsequent to the Quarter, the South Australian Supreme Court part-heard an application for judicial review of the authorisation announced by Argonaut on 4 January 2021. The hearing was adjourned on the morning of Tuesday, 20 July 2021 due to the South Australian COVID lockdown.

Uranium Exploration Assets and IPO Plans

Initial Public Offering

• Argonaut has acquired a substantial package of prospective uranium exploration licences in South Australia and the Northern Territory (Figure 12) via a 100% held, unlisted public company, Orpheus Minerals Ltd (Orpheus).

• Argonaut is planning for Orpheus to list on the Australian Securities Exchange later this year.

• IPO preparations are well advanced.

• The Argonaut board is considering:

• ¬ an entitlement offer of Orpheus shares to Argonaut shareholders as part of the IPO process; and

• ¬ a potential in-specie distribution of Orpheus shares to Argonaut shareholders (subject to statutory escrow provisions).

Uranium Exploration Assets

• Orpheus has 100% ownership or a clear pathway to 100% ownership of all related mineral titles.

• ¬ Orpheus holds a 100% interest in three granted exploration licences and three exploration licence applications.

• ¬ Orpheus has executed option agreements to acquire 100% of one granted exploration licence and one exploration licence application.

Corporate

• During the Quarter, the Company appointed Michael Robert (Mick) Billing as an Independent Non-executive Director of the Company.

• Argonaut is planning to list its uranium subsidiary, Orpheus Minerals Ltd on the Australian Securities Exchange.

• Subsequent to the Quarter, the Company appointed Mr Simon Mitchell as Managing Director of Orpheus Minerals Ltd.

Outlook

• The copper price rose to an all-time high of US$4.80/lb during the year and has remained strong throughout the Quarter.

• The current copper price of approximately US$4.50/lb is a desirable foundation for copper exploration activities, such as those being undertaken at present by Argonaut.

• Argonaut anticipates that the copper market will remain strong for some time due to market fundamentals.

• This strong copper price, tightening supply and a positive demand outlook underpins Argonaut’s efforts at Lumwana West and Murdie.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Lumwana West, Zambia

(Copper-Cobalt – Argonaut 100%)

Lumwana West Project

The Lumwana West Project is in the Central African Copperbelt, North-western Province, Zambia. The area is prospective for large tonnage, low to medium grade copper/cobalt deposits.

Argonaut, via its 90% held subsidiary, Mwombezhi Resources Ltd, has been successful in intercepting broad copper and cobalt intercepts at the Nyungu Central deposit, located between two world-class copper operations, Barrick Gold’s Lumwana mine and First Quantum Mineral’s Sentinel mine in Zambia (Figure 1).

Table 1 summarises elements of a potential mining development at Lumwana West.

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350,000 mE 400,000 mE
Location
DEMOCRATIC
REPUBLIC OF
CONGO
ZAMBIA
ZAMBIA
Kansanshi
First Quantum
Minerals
8,650,000 mN Solwezi
Lumwana
Barrick
Sentinel Road
First Quantum Power transmission
Minerals Power transmission
under construction
22399-HQ-LEL Aircraft facility
Processing plant
Nyungu Deposit Proposed railway
and Targets 0 25 Tenement boundaryMineral deposit
kilometres projected to surface
Target areas
Lumwana12
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Figure 1 Lumwana West licence showing the Nyungu copper-cobalt deposit plus nearby mines and infrastructure.

Table 1 Feasibility factors for a mine development at Lumwana West.

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Zambia has a long and ongoing history of large-scale copper mining. Social and
Jurisdiction
Governmental pressures favour the development of new mines.
Infrastructure Lumwana West is located at major electricity and transport corridors (Figure 1).
The Nyungu copper-cobalt deposit has predicable geometry and scope for significant
Resource
growth with continued drilling (Table 1).
Very low stripping ratio of 1.5 tonnes of waste rock for every 1 tonne of ore. Resource
Mining
drilling to greater depths is warranted.
Processing High copper recovery from flotation copper ore minerals.
Economics Preliminary economic assessment has commenced.
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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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 Nyungu deposit. 676 soil samples have been collected and analysed during 2021[1] , with results received subsequent to the Quarter. 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) has been defined as 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 2.

RC DRILLING

Subsequent to the Quarter, 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.

The RC drilling rig commenced after the Quarter in late October 2021. Access tracks and drilling pads were 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 nine diamond drill holes for 2,100m. The remaining 700m is expected to take four to five weeks to complete.

The Company is progressively cutting drill core samples 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 3).

• 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 5) 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 to the northwards from the soil anomaly over a significant area (Figure 5). This extension to the IP anomaly is untested and will be drilled by Argonaut in 2021.

• 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.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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339,000 mE 339,500 mE 340,000 mE
Soil geochemistry Cu (XRF)
Sample location
250ppm
200ppm
150ppm
100ppm
50ppm
20ppm
8,630,500 mN Drilling
Drill hole collar
NYUNGU EAST
8,630,000 mN
NYUNGU CENTRAL
Flood plain
8,629,500 mN
0 200 400
metres
Nyungu_16
200
100
200
100
150
50
150
150
20
200
200
250
----- End of picture text -----

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

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NORTH SOUTH
1700m
0RL
OPEN
200RL
OPEN
400RL Nyunga Copper-Cobalt Deposit
0 metres200 400 Long section 339,200mE
Looking east
Nyunga 11
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Figure 3 Nyungu Central long section showing copper mineralisation.

Resource Drilling – Infill Upgrades

Nyungu Central contains high grade intercepts such as 31m at 1.57% copper from 173m including 6m 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 5) was conducted using a drill-traverse spacing of 200m. This drilling revealed excellent grade and geometry continuity between traverses at Nyungu Central but was too widely spaced to facilitate the conversion to JORC 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 affected its ability to complete metallurgical testwork on a potentially significant parcel of copper ore. The 2021 drilling program aims to address these matters by specially targeting drilling in interpreted near-surface oxide zones (Figure 4).

Results from this program and metallurgical leach testwork that will follow will inform the economic study into the first five to ten years of production (Figure 7, Stage 1).

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 2.

Table 2 Nyungu Exploration Target

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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
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* 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.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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West 339,100mE 339,200mE 339,300mE 339,400mE 339,500mEEast West 339,100mE 339,200mE 339,300mE 339,400mE 339,500mEEast
Natural surface
Soil and duricrust Natural surface Soil and duricrust
Base of complete oxidation
1,300mRL 1,300mRL
1,200mRL 1,200mRL
1,100mRL 1,100mRL
Existing drillhole Existing drillhole
Planned resource drillhole Planned resource drillhole
Quartz feldspar muscovite schist and gneiss Quartz feldspar muscovite schist and gneiss
1,000mRL 1,000mRL
NYUNGU CENTRAL PROSPECT NYUNGU CENTRAL PROSPECT
100 metres Section 8,630,100mNLooking north 100 metres Section 8,629,830mNLooking north
Nyungu_12 Nyungu_13
339,200mE 339,300mE 339,400mE 339,500mE 339,600mE
West East
Natural surface
Soil and duricrust
1,300mRL
1,200mRL
1,100mRL
Existing drillhole
Planned resource drillhole
Quartz feldspar muscovite schist and gneiss
1,000mRL
NYUNGU CENTRAL PROSPECT
100 metres Section 8,629,470mNLooking north
Nyungu_14
xidation
Base of complete oxidation
esh roc
Top of fresh rock
plete o
esh rock
fr k
f com
Top of fr
of
Base o
Top
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Figure 4 Nyungu Central cross sections showing existing and planned drill holes.

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 the preliminary economic assessment of 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 samples of oxide and transitional ores. Future tests will include large-scale 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 US$10,726, indicating the deposit has a low sensitivity to stripping ratio.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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338,000 mE 340,000 mE 342,000 mE
8,632,000 mN
61m at 0.42% Cu from 184m
47m at 0.57% Cu from 20m
90m at 0.46% Cu from 12m
196m at 0.45% Cu from 69m
71m at 0.61% Cu from 30m
8,630,000 mN
NYUNGU EAST
78m at 0.58% Cu from 217m
NYUNGU CENTRAL 176m at 0.55% Cu from 51m
14m at 0.65% Cu from 147m
31m at 1.57% Cu from 173m
incl. 6m at 5.51% Cu
8,628,000 mN
24m at 0.62% Cu from 31m
NYUNGU SOUTH
Soil geochemistry Cu (XRF)
230ppm
100 ppm
40 ppm
20 ppm
IP chargeability
8,626,000 mN >20ms at -200mRL
0 1000 Drilling
metres Drill hole collar
Nyungu_06
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Figure 5 The Nyungu Central and Nyungu South deposits are defined by broad copper intercepts.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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Section A:A
100% Pit
Shell
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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.

Mineral Processing

The conceptual mineral processing flowsheets for a two-stage operation are shown below (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.

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Stage 1 - Oxide/transition ore
Copper ore Mining and crushing Heap leach SX-EW
Potential for low cap-ex, near-term copper production
Copper cathode
from oxide and transitional zone
Stage 2 - Fresh ore
Copper ore Mining and crushing Milling Flotation Albion process
SX-EW Cobalt plant
Copper cathode Cobalt hydroxide
Stage 2 - Fresh ore - alternative
Copper ore Mining and crushing Milling Flotation
Copper concentrate Third party smelter
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Figure 7 Conceptual mineral processing flowsheet for a two-stage operation at Nyungu.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Murdie, South Australia

(Copper – Argonaut 100%)

The Murdie project is located in South Australia near the eastern margin of the Gawler Craton. The project area covers 1,015 square kilometres of highly prospective Olympic Domain geology and includes more than 50 discrete gravity anomalies that are located immediately south and east of the Torrens project and east of the Carrapateena mine (Figure 8). These anomalies represent locations with significant volumes of high-density rock that could contain economic Iron-Oxide Copper-Gold (IOCG) deposits.

Argonaut holds a 100% interest in the Murdie project.

Highlights

• Drilling is targeting IOCG mineralisation defined by large gravity anomalies within the Olympic Copper-Gold Province of South Australia.

• Critical prerequisites to the discovery of an IOCG deposit have now been confirmed:

• ¬ the same brecciated, hematite alteration system as Olympic Dam, Carrapateena and Oak Dam;

• ¬ preservation, rather than erosion, of the IOCG system; and

• ¬ intersection at approximately the correct level within the system.

WLTD001

• The first drill hole, WLTD001, intercepted an IOCG alteration system which confirms the prospectivity of the West Lake Torrens gravity anomaly (Photo 1).

• The intensity of alteration indicates that WLTD001 is 300 to 1,000 m from possible copper mineralisation.

• WLTD001 intercepted basement at 730m and was drilled to a depth of 924m.

• Analytical results have been received and these confirmed that no significant mineralisation was intersected.

WLTD002

• Drilling of the second drill hole, WLTD002, intercepted further IOCG alteration including breccia zones with moderate to strong hematite and potassic alteration (Photo 2).

• WLTD002 intercepted basement at 645m and was drilled to a depth of 853m.

• Analytical results have been received and these confirmed that no significant mineralisation was intersected.

WLTD003

• Argonaut relocated drilling equipment and protective matting from the West Lake Torrens target area to the southern end of Andamooka Island to drill test the ‘bullseye’ Trimmer anomaly (Figure 8).

• Argonaut laid ground protection matting to access the WLTD003 collar site from the shoreline of Lake Torrens, similar to the accessway which was successful for WLTD002 (Photo 3), however access to the collar site was hampered by:

• ¬ several rain events which have affected access tracks to southern Andamooka Island,

• ¬ related wetness of the surface and subsurface of Lake Torrens, and

• ¬ impaired availability of earthmoving equipment and mechanics due to the South Australia COVID lockdown.

Rain Events

Rain events during the Quarter caused lake surface wetness and pooling of water in certain areas of Lake Torrens. Near-surface geotechnical conditions were unsuitable for accessing drilling areas on the surface of Lake Torrens using protective matting.

A protective matting roadway was used successfully for access to drill hole WLTD002 (Photo 3).

The lake surface in the vicinity of Argonaut’s fourth planned drill hole was subject to flooding. In Argonaut’s experience, standing water on the surface of the lake evaporates slowly during winter months and very quickly during summer. The fourth drilling target area was not accessible at the time drilling contractors were demobilised.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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136° 30' E 137° 00' E 137° 30' E 138° 00' E
-30° 00' S
Olympic
Domain
EL 6320
Olympic Dam Andamooka
-30° 30' S
LAKE TORRENS
Roxby Downs Red Dam EL 6320
Acropolis Wirrda Well EL 6407
Torrens Project
Torrens
Island Dam
EL 5945
Oak Dam West Trimmer
(BHP discovery) EL 5937 Murdie
-31° 00' S
West
Emmie Bluff(COD/TRN) TorrensLake Murdie Project
Fremantle
Khamsin Doctor
Woomera
Carrapateena
Gawler Craton
-31° 30' S
Torrens JV EL
Argonaut EL
Town
Highway
Main road
Railway
Major deposit
Significant prospect
SOUTH AUSTRALIA
EASTERN GAWLER CRATON -32° 00' S
Location of tenure 0 20 40
Kilometres
July 2021
Torrens_48
----- End of picture text -----

Figure 8 Lake Torrens exploration licences.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Alternative Access Methods

Argonaut’s drilling authorisations for the Murdie project contain alternative provisions for accessing drill sites on Lake Torrens. Argonaut has commenced discussions with relevant contractors regarding the continuation of drilling using a heli-supported drilling rig.

Targeting

It is appropriate for Argonaut to review its targeting priorities during this suspension of operations. Targeting to date has been by geophysical modelling of ground gravity survey data. Argonaut is considering the merits of artificial intelligence (AI) and machine learning to provide a prioritisation of its various IOCG gravity targets at the Murdie project.

To this end, the Company has engaged with a leading provider of mineral exploration AI.

Drilling Targets

The Murdie exploration licences covers two largescale, regional gravity anomalies, West Lake Torrens and Murdie (Figure 8). These anomalies represent locations with significant volumes of high-density rock that could contain economic IOCG deposits. Efforts have been focused on the West Lake Torrens anomaly and the newly defined Trimmer anomaly which is located northwest of the Murdie anomaly, near the south-eastern corner of Andamooka Island.

Gravity Anomalies

A volume of high-density rock causes a measurably higher gravitational pull at surface and this manifests as a gravity anomaly. Therefore, mineral explorers can use gravity surveys as a means to define gravity anomalies and potentially discover dense orebodies. IOCG orebodies contain high concentrations of iron and copper minerals making them particularly dense.

Drilling

WLTD001 and WLTD002 targeted residual gravity anomalies referred to on Figure 9 as Smith Dam 1 and Smith Dam 2 respectively. Drill core has been cut and sampled, results were received during the Quarter.

Table 3 Drill hole collar details

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Drill Hole Easting Northing Dip Azimuth Total Depth
WLTD001 757,090mE 6,554,800mN -90 degrees N/A 924m
WLTD002 754,770mE 6,551,950mN -90 degrees N/A 853m
WLTD003 759,030mE 6,575,830mN -90 degrees N/A N/A
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* GDA94, MGA Zone 53

Confirmation of IOCG Geology

The presence of further IOCG alteration in the basement rocks of the West Lake Torrens gravity anomaly continues to provide encouragement to the Argonaut team. The 2021 Murdie drilling program has confirmed the presence of the critical prerequisites to the discovery of an IOCG deposit:

• the same brecciated, hematite alteration system as Olympic Dam, Carrapateena and Oak Dam;

• preservation, rather than erosion, of the IOCG system; and

• intersection at approximately the correct level within the system.

Basement rocks intercepted in drill hole WLTD002 feature breccia zones with moderate to strong hematite and potassic alteration. These observations are supported by portable XRF analysis.

Brecciation is the breaking of rock into fragments that are then re-cemented by a matrix, this case an iron-rich matrix (evident in drill core, Photo 1 and Photo 2). This process is generally considered to be a prerequisite to IOCG mineralisation.

The system appears not to have been subject to destructive, paleo-erosion. The upper, prospective portion of the IOCG system appears to have been preserved.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Drill holes WLTD001 and WLTD002 intercepted IOCG alteration at approximately the level within a system that possible economic IOCG mineralisation would be expected to occur.

The intensity of alteration indicates that the first drill hole, WLTD001, was 300 to 1,000m from possible copper mineralisation.

The host rock of the system is interpreted to be units of the Wallaroo Group. No significant copper mineralisation is visible in WLTD002 drill core although chalcopyrite was noted in the lower part of the cover geology.

The density of this hematite-altered rock intercepted in both drill holes accounts for the residual gravity anomalies.

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Photo 1 WLTD001, 897m to 899m, Murdie Project: IOCG-style hematite alteration and brecciation.

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Photo 2 WLTD002, 770.5m to 772.7m, Murdie Project: IOCG-style hematite alteration and brecciation.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Residual Gravity Targets

Initial 2021, drilling by Argonaut at the Murdie project targeted “residual” gravity anomalies within the wider West Lake Torrens anomaly (Figures 9 and 10). The residual gravity targets shown in Figure 10 are 0.85 to 1.15 milligals above the regional gravity anomaly.

West Lake Torrens Bouguer Anomaly

The West Lake Torrens anomaly is a regional gravity anomaly (Figure 9). This type of anomaly is typically displayed as a “bouguer” gravity anomaly. The peak of the West Lake Torrens bouguer anomaly is 7 milligals above background levels.

Argonaut has identified seven excellent drilling targets at the West Lake Torrens anomaly. Drilling targets located near the shoreline of Lake Torrens are shown on Figures 9 and 10 as Smith Dam 1 to 4. Offshore targets are labelled Crystal Dam 1 to 3.

Argonaut has drilled Smith Dam 1 and Smith Dam 2 first. Other targets will be prioritised on the basis of analytical results, further consideration of geophysical models and access requirements.

Trimmer Bouguer Anomaly

The Trimmer anomaly is a bullseye (single point) gravity target that sits between the south-eastern corner of Andamooka Island and the Murdie gravity anomaly (Figure 8). The gravity anomaly is nearby to an intense, linear magnetic anomaly which is coincident with a regional fault, but the Trimmer anomaly itself does not have a discernible magnetic anomaly.

Highly Compelling Targets

Many of the targets at the Murdie project have two important and sought-after qualities:

• they are within or at the margin of the same Donington Suite granite body that hosts both the Oak Dam and Carrapateena IOCG deposits; and

• the Oak Dam deposit and Argonaut’s targets are defined by ‘gravity only’ geophysical anomalies.

Gravity-only anomalies do not have a significant associated magnetic anomaly and can be indicative of IOCG deposits that have been entirely altered from magnetite-dominant, low-grade systems to high-grade, hematitedominant IOCG systems.

Large, gravity-only anomalies within Donington Suite granite are the most compelling copper exploration targets in the country.

Accelerated Discovery Initiative

Funding in the amount of $320,000 was awarded to Argonaut through the ADI program, which forms part of the South Australian Government’s Growth State Agenda. The ADI aims to accelerate mineral discovery through innovative exploration and research projects in regional and frontier terrains throughout South Australia.

A report on ADI funded activities was submitted by Argonaut during the Quarter and the ADI funds were received from the South Australian Government subsequent to the Quarter.

Authorisations

Authority under the Aboriginal Heritage Act

On 24 February 2020, Kelaray lodged an application under section 23 of the Aboriginal Heritage Act 1988 for areas of exploration licences 5937 and 5945.

On 29 December 2020, the South Australian Government granted an authorisation. The authorisation allows for exploration-phase drilling plus potential resource and reserve definition drilling. The approval covers the parts of exploration licences 5937 and 5945 that overlap with Lake Torrens or are onshore and within 500m of the Lake Torrens shoreline.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

==> picture [455 x 309] intentionally omitted <==

----- Start of picture text -----

750,000m E 755,000m E 760,000m E 750,000m E 755,000m E 760,000m E
Nearshore targets
6,570,000m N 6,570,000m N Ofshore targets
Gravity high
6,565,000m N 6,565,000m N
EL 5945 EL 5945
- Murdie Murdie
Crystal Dam 1
6,560,000m N 6,560,000m N
Crystal Dam 2
Smith Dam 3
Cr y stal Dam 3
6,555,000m N 6,555,000m N
5 Smith Dam 1
7 Smith Dam 2
Smith Dam 4
6,550,000m N 6,550,000m N
0 2.5 5 0 2.5 5
Kilometres Kilometres
GDA 94 Zone 53 GDA 94 Zone 53
Torrens 60
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EL 5937 West Lake Torrens EL 5937 West Lake Torrens
-
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----- End of picture text -----

Figure 9 West Lake Torrens bouguer (regional) gravity anomaly.

Figure 10 West Lake Torrens residual gravity anomalies and drilling targets.

Judicial Review Application

On 16 March 2021, the Barngarla Determination Aboriginal Corporation RNTBC (BDAC) filed an application in the South Australian Supreme Court for a review of the authorisation announced to the ASX by Argonaut on 4 January 2021.

On 19-20 July 2021, the South Australian Supreme Court part-heard this application. The hearing was adjourned on the morning of Tuesday, 20 July 2021 due to the South Australian COVID lockdown.

The Company notes that there are no registered Barngarla heritage sites at Lake Torrens.

Exploration works undertaken at the Murdie project are duly authorised. The Company is confident that the State’s authorisation process was robust.

Operational Approval

The ‘Exploration Program for Environment Protection and Rehabilitation’ for ongoing exploration activities including ground gravity surveys and diamond drilling at exploration licences 5937 and 5945 was approved under the South Australian Mining Act in January 2020.

The approval allows for up to 200 deep diamond drill holes into a string of large and prospective IOCG anomalies from nearshore and offshore locations on the salt crust of Lake Torrens.

Native Title Access

In 2018, the South Australian ERD Court granted native title authority to enter and undertake mining operations (exploration) within the area of EL5937 and EL5945.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

==> picture [455 x 242] intentionally omitted <==

Photo 3 Drilling at WLTD002, Murdie project (Photo courtesy of SA Dept for Energy and Mines).

Torrens, South Australia

(Copper – Argonaut 30%)

The Torrens anomaly is a particularly attractive set of exploration targets hosted in a geological domain that has persistently rewarded explorers with large, high-grade copper discoveries. The discovery of an IOCG deposit by a listed junior exploration company creates a once-in-a-lifetime opportunity for shareholders. Argonaut continues to work towards this goal.

Exploration in the Olympic Domain has historically been hindered by two factors: the thickness of cover formations, and difficulties securing access. These factors, although frustrating, have preserved exploration targets that would have otherwise been tested.

Statistically, the drill testing of gravity targets in the Olympic Domain has delivered a higher than average discovery rate. It makes commercial sense to invest copper exploration budgets into drilling well defined gravity targets in the Eastern Gawler Craton.

Major, diversified miners and mid-cap copper miners are specifically seeking to increase copper production due to forecast copper supply shortages. There was an underinvestment in copper exploration between 2012 and 2017, consequentially there are relatively few copper deposits available to acquire. Copper discoveries are necessary and copper deposits are in-demand.

The combination of geological prospectivity, access rights and a global appetite for new copper deposits make the Torrens Joint Venture project a compelling investment opportunity.

Torrens Project

The Torrens Joint Venture project is located within the globally recognised Olympic Domain, at the eastern margin of South Australia’s Gawler Craton, within 40 kilometres of BHP Group’s Oak Dam copper discovery, 50 kilometres of OZ Minerals’ Carrapateena copper-gold deposit and 75 kilometres from BHP’s Olympic Dam mine. BHP’s recent discovery at Oak Dam has confirmed the validity of the Torrens target and the copper endowment of the Eastern Gawler Craton.

Torrens Anomaly

The Torrens anomaly is a coincident magnetic and gravity anomaly with a footprint larger than that of Olympic Dam. The anomaly is located at the Torrens Hinge Zone, a continent-scale zone of crustal weakness that appears to have been a conduit for mineralising fluids from the Earth’s mantle.

Drilling at Torrens to date has confirmed the existence of a major IOCG mineralising system beneath several hundred metres of sedimentary cover. Further drilling is required to intercept the modelled copper-gold mineralisation. In the event of a discovery, the Torrens anomaly has the scale to host a world-class copper-gold deposit.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Red Dam, South Australia

(Copper – Argonaut 100%)

Argonaut holds exploration licence EL6320 located adjacent to the Torrens Project (Figure 8). The 198 square kilometre licence area is in three parts and encompasses the Red Dam IOCG target, previously identified by WMC.

The licence areas were relinquished by BHP prior to the announcement of the Oak Dam discovery.

Argonaut has assessed the relevant, historical drill core and conducted a ground gravity survey in 2020 to improve resolution for geophysical modelling and target generation.

Kamapanda, Zambia

(Copper-Cobalt – Argonaut 90%)

The Kamapanda project is located in the Central African Copperbelt, North-western Province, Zambia (Figure 11). The large-scale exploration licence covers an area of 225 square kilometres and extends to the Angolan border. The area is remote, with limited access and is largely underexplored.

The area is situated adjacent to the Domes Region, on the southwestern flank of the Kabompo Dome and is prospective for copper-cobalt mineralisation within units of the Lower Roan Group of the Katanga Supergroup.

Argonaut via its 90% held subsidiary, Sunrise Exploration and Mining Limited has been successful in acquiring the licence and has now received operational approvals and consent from Zambian authorities to commence exploration activities.

A program of regional stream sediment sampling is planned to outline both gold and copper potential.

==> picture [455 x 312] intentionally omitted <==

----- Start of picture text -----

200,000m E 250,000m E 300,000m E 350,000m E 400,000m E
DEMOCRATIC REPUBLIC OF CONGO Copper DepositsCu giant deposit REPUBLIC OF CONGODEMOCRATIC TANZANIA
Cu deposit
8,750,000m N Cu occurrence ANGOLA ZAMBIA MALAWI
Major town NAMIBIA ZIMBABWE MOZAMBIQUE
ANGOLA Road BOTSWANA
Exploration Licence LESOTHOSWAZILAND
SOUTH AFRICA
Location
26458-HQ-SELMusangila ZAMBIA
8,700,000m N
Mwinilunga
Luamata
Cheyeza - ARC discovery Kansanshi
Solwezi
8,650,000m N
Mwinilunga Gold Rush Kalaba Mine Sentinel Malundwe
Kalaba East
23474-HQ-LEL Chimiwungo
23606-HQ-SEL
Kamapanda
23232-HQ-LEL Nyungu 22399-HQ-LEL
Lumwana West
22399-HQ-LEL
ZAMBIA
8,600,000m N NORTH WEST PROVINCEMWINILUNGA DISTRICT
0 20 40 Zambian Exploration
kilometres Licence areas
29 october 2020
Kalaba_East_01
----- End of picture text -----

Figure 11 Exploration licences located within the Northwestern Province, Zambia.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Kalaba East, Zambia

(Copper-Cobalt – Argonaut 90%)

The Kalaba East project is located in the Central African Copperbelt, North-western Province, Zambia (Figure 11). The area is prospective for large tonnage, low to medium grade copper-cobalt deposits.

The Kalaba East project lies adjacent to ARC Minerals’ recent Cheyeza East Prospect and Muswema North Prospect discovery and west of the world-class copper mine Sentinel, operated by First Quantum Minerals (Figure 8). At Cheyeza East, ARC Minerals intercepted 18m at 2.35% copper and 39m at 1.47% copper.

Argonaut via its 90% held subsidiary, Sunrise Exploration and Mining Limited has been successful in acquiring two contiguous licences and has now received operational approvals and consent from Zambian authorities to commence exploration activities.

Argonaut plans to conduct a regional geochemical sampling program at Kalaba East.

Musangila, Zambia

(Copper-Cobalt – Argonaut 90%)

The Musangila project is located in the Central African Copperbelt, North-western Province, Zambia (Figure 11). The area is prospective for large tonnage, low to medium grade copper-cobalt deposits and alluvial gold.

The area is situated adjacent to the Domes Region, on the northwestern flank of the Kabompo Dome and is prospective for copper-cobalt mineralisation within units of the Lower Roan Group of the Katanga Supergroup.

Argonaut via its 90% held subsidiary, Sunrise Exploration and Mining Limited has been successful in acquiring the licence and is waiting for operational approvals and consent from Zambian authorities to commence exploration activities.

Argonaut plans to conduct a geochemical sampling program followed by RC drilling.

Uranium Assets, South Australia and Northern Territory

(Uranium – Argonaut 100%)

Argonaut has acquired a substantial package of prospective uranium exploration licences in South Australia and the Northern Territory (Figure 12). Argonaut holds these assets via a 100% held, unlisted public company called Orpheus Minerals Ltd (Orpheus).

Projects were chosen following a systematic review of uranium deposit-styles and available projects over the past two years. The review covered uranium opportunities available for application in South Australia or Northern Territory where the majority of permitted Australian mines are located. Three of the five projects selected were on open ground and were secured via application to the relevant department. The Mount Douglas project was purchased via a twostage payment.

Highlights

Initial Public Offering

Argonaut plans to list Orpheus on the Australian Securities Exchange later this year.

• IPO preparations are well advanced.

• The Argonaut board is considering:

• an entitlement offer of Orpheus shares to Argonaut shareholders as part of the IPO process; and

• a potential in-specie distribution of Orpheus shares to Argonaut shareholders (subject to statutory escrow provisions).

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

==> picture [349 x 303] intentionally omitted <==

----- Start of picture text -----

Ranger North-East
Darwin Ranger
Mt Douglas T-Bone
NORTHERN
TERRITORY
QUEENSLAND
WESTERN
AUSTRALIA
SOUTH AUSTRALIA
Four Mile Brisbane
Beverley
Frome
Honeymoon
Goulds Dam
Perth NEW SOUTH WALES
Cummins
Adelaide Sydney
VICTORIA
Approved uranium mine Melbourne
Argonaut uranium project
TASMANIA
Hobart
----- End of picture text -----

Figure 12 Location map of Orpheus Minerals’ uranium assets.

South Australian Projects

• South Australian uranium exploration projects are sandstone-hosted, roll front uranium targets.

• These projects have potential for in-situ recovery (ISR) production.

• ¬ Frome project:

  • 2,894km[2] tenement package;

  • advanced exploration with drill-ready targets; and

  • nearby to existing producing uranium mines at:

    • Honeymoon (Boss Energy Ltd) and

    • Beverley/Four Mile (Heathgate Resources).

• ¬ Cummins project:

  • 953km[2] tenement;

  • multiple uranium targets; and

  • shallow, drill-ready paleochannel targets.

Northern Territory Projects

Northern Territory uranium exploration projects are hard rock, unconformity related uranium targets.

• Mount Douglas project:

• ¬ 601km[2] tenement package;

• ¬ drill-ready targets.

• Ranger North-East project:

• ¬ 64km[2] tenement;

• ¬ uranium anomaly adjacent to Ranger uranium mine and Jabiluka (Energy Resources of Australia); and

• ¬ located outside Kakadu National Park.

• T-Bone project:

• ¬ 230km[2] tenement; and

• ¬ prospective uranium anomaly on a major structure that hosts other deposits.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

South Australian Projects

South Australia hosts four out of six approved Australian uranium mines: Olympic Dam, Beverley, Four Mile and Honeymoon. Three of these mines are nearby to the Frome project. Uranium production at these existing, nearby mines is by in-situ recovery.

Frome Project, SA

In South Australia, the Frome project involves three highly prospective exploration licences in the Frome Embayment area of South Australia which is arguably the most prospective region in Australia for sandstone-hosted uranium deposits. The area hosts the Beverley deposit and the Four Mile in the northwest and the Honeymoon, Goulds Dam and Oban deposits in the southeast (Figure 13).

The Frome project comprises:

• Substantial landholding of 2,894 square kilometres covering:

• ¬ a network of sandstone paleochannels containing groundwater that drains from uranium-bearing granite source rocks (Figure 13);

• ¬ existing drilling with downhole gamma logs that defines 12 line-kilometres of “redox fronts” within thick sandstone units; and

• ¬ two walk-up, high priority drilling targets plus at least 6 early-stage drilling targets.

• The Frome project is nearby to the Honeymoon, Four Mile and Beverley uranium mines and is immediately adjacent to the Goulds Dam uranium deposit (Figure 13).

• Argonaut will base exploration works on the “two fluids” model for uranium roll front deposits (Figure 14).

The recently acquired landholding of 2,894 square kilometres covers:

• a network of sandstone palaeochannels containing groundwater that drains from uranium-bearing granite source rocks;

• existing drilling with downhole gamma logs that defines 12 line-kilometres of redox fronts within thick sandstone units; and

• two walk-up, high priority drilling targets plus at least size early-stage drilling targets.

PROSPECTIVITY

These licences cover sandstone-bearing palaeochannels that contain groundwater that drains from uranium-bearing granite. Previous drilling of these palaeochannels confirms the presence of excellent sandstone aquifers at or near the base of the channels. These sandstone aquifers are 4m to 20m thick (typically 10–12m) and contain the necessary permeable coarse sands.

These basal sandstones have been shown to contain both oxidised, uranium-bearing zones and reduced zones. Work by Argonaut has confirmed 12 kilometres of redox front within palaeochannels along which high priority exploration is necessary.

Argonaut is applying the “two fluids” model for uranium roll front deposits (Figure 14) which involves oxidised, uranium bearing groundwater (Fluid 1) flowing along the permeable sandstone units until it encounters reducing groundwaters which have leaked upwards through faults from deeper, hydrocarbon-bearing aquifers (Fluid 2). The interface of these fluids creates a redox front that can trap and concentrate uranium.

GEOLOGY

As stated above, uranium accumulation as a consequence of the two fluids model requires three principal elements: uranium rich source rocks, a permeable sandstone aquifer to carry the oxidised, uranium bearing groundwater, and the introduction of a reductant up faults from a lower, hydrocarbon-bearing aquifer.

At the Frome project area, we see the following geological units:

1. The Eyre Formation (Honeymoon and Goulds Dam deposits) and Namba Formation (Beverley deposit) palaeochannels. These units are contained in the Callabonna Sub-basin of the Lake Eyre Basin.

2. The underlying Arrowie Basin, which includes the hydrocarbon-bearing Wilkawillina Limestone unit.

3. The Crocker Well Suite granite (Figure 15) which is an excellent uranium source rock and displays a strong radiometric anomaly where it outcrops.

4. Faults that cut both the Arrowie basin sediments and the overlying Eyre or Namba formations.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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----- Start of picture text -----

300,000m E 400,000m E 500,000m E
Sandstone palaeochannel
Four Mile
Croker Well Suite Granite
Beverley
Exploration tenure
Major uranium deposit
SOUTH AUSTRALIA
FROME PROJECT
6,600,000m N Regional summary map February 2021
Lake Frome
EL 6554
Oban
ELA2021/003 Goulds Dam
EL 6555
6,500,000m N
Junction Dam
Honeymoon
0 25 50 Croker Well
Kilometres
GDA 94 Zone 54 White Dam
Frome 02
----- End of picture text -----

Figure 13 Frome project tenement locations and major uranium deposits.

==> picture [454 x 203] intentionally omitted <==

----- Start of picture text -----

Two fluid model for Uranium Roll Front Deposits
Fluid 1
Uranium enriched
Oxidised waters
dissolved U
Roll front Reducing groundwater
bodies Tabular
bodies
U-rich Playa lake
source
rocks
Sandstone palaeochannel
Gas
Fluid 2 Oil
Reductant
After Jaireth et al 2008 Arg_Dia_01
----- End of picture text -----

Figure 14 Diagram showing two fluid model. Uranium is carried in oxidised groundwaters and reduced by hydrocarbons and/ or H²S released from the underlying hydrocarbons. Both roll–front and tabular ore bodies can result from the process. After Jaireth et al 2008.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

EXPLORATION

Argonaut has compiled and interpreted all existing data. The data is encouraging in that it points towards numerous opportunities for the discovery of sandstone-hosted uranium. Work will proceed in several phases:

1. Palaeochannel and fault interpretation via existing aeromagnetic and airborne EM data.

2. Acquisition and interpretation of new, detailed airborne EM data.

3. Drilling of high priority targets (Figure 15).

4. Drilling of regional, early-stage targets (Figure 15).

Argonaut is currently commencing the permitting process required for drilling.

FROME TENURE

Argonaut holds a 100% interest in two large exploration licences – both greater than 950 square kilometres and a third exploration licence via an option, sale and milestone agreement. This agreement provides for the acquisition by Argonaut of a 100% interest of a third similarly large exploration licence, currently in the application stage. Frome project exploration licences are described in detail below.

Frome project exploration licences:

• EL6554, Frome Downs – 960km[2] (100%);

• EL6555, Curnamona – 947km[2] (100%); and

• ELA 2021/003, Erudina – 987km[2] (option to acquire 100%).

==> picture [457 x 372] intentionally omitted <==

----- Start of picture text -----

350,000m E 400,000m E 450,000m E
Lake Frome
Sandstone palaeochannel
Croker Well Suite Granite
Direction of uranium rich
groundwater flow
EL 6554 Exploration tenure
6,550,000m N Major uranium deposit
Uranium Targets
High priority
Medium priority
Low priority
ELA2021/003
Goulds Dam
EL 6555
6,500,000m N
Honeymoon
SOUTH AUSTRALIA
FROME PROJECT
6,450,000m N 0 25 50 Summary map
White Dam
Kilometres February 2021
GDA 94 Zone 54
Frome 01
----- End of picture text -----

Figure 15 Frome Project licences with Eyre Formation sandstone palaeochannels – which have been shown to host uranium deposits – and the Crocker Well Suite granite which is a uranium-bearing source rock from which oxidised groundwater can flow through the palaeochannels until it encounters a reducing environment where it can form concentrated deposits.

22 Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Cummins Project, SA

The Cummins project area is located on the southern Eyre Peninsula, South Australia. The area features Tertiary age paleochannels that have been demonstrated by historic drilling to contain concentrations of uranium. The paleochannels have upper and lower units that are similarly prospective. The upper unit is very close to surface and presents as a walk-up drilling target in urgent need of further drilling.

Uranium contained in these subsurface channels is interpreted to have been sourced from two adjacent uraniumbearing granites (Figure 16).

The Cummins licence area also contains prospective calcrete-hosted uranium targets and dissolved uranium in groundwater.

PROSPECTIVITY

Four distinct uranium exploration targets have been identified within the Cummins exploration licence. These targets are:

• Target A: upper paleochannel unit (20-30m depth) defined by a consistently high gamma ray response from wireline logs of historic drill holes.

• Target B: lower paleochannel unit (60-70m depth) containing reduced, pyritic sands, also defined by gamma ray logs of historic drilling.

• Target C: dissolved uranium in groundwater defined by a groundwater sampling program undertaken in the 1970s.

• Target D: potential near-surface calcrete-hosted uranium deposits defined by unusually high uranium channel responses in a modern (2011) airborne radiometric survey.

==> picture [456 x 342] intentionally omitted <==

----- Start of picture text -----

550,000m E 600,000m E 650,000m E
Yeelanna Palaeogene sediments
EL 6624 Uranium-bearing
granite
Cummins Exploration tenure
Direction of uranium
6,200,000m N rich groundwater flow
Tumby
Coffin Bay
Port Lincoln
6,150,000m N
SOUTH AUSTRALIA
0 25 50 CUMMINS PROJECT
Kilometres Regional summary map
GDA 94 Zone 53
September 2021
Cummins 01
----- End of picture text -----

Figure 16 The Cummins project licence showing palaeochannels with demonstrated uranium content within the area of the licence and the granite bodies which are interpreted to have provided the uranium source material.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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----- Start of picture text -----

540,000m E 560,000m E
Yeltukka
6,220,000m N
EL 6624
Cummins
6,200,000m N
Warrow
Coulta
Palaeogene sediments
Uranium-bearing granite
Edillilie
Exploration tenure
Target A - Upper paleochannel
Target B - Lower paleochannel
Target C - Uranium in
groundwater
Target D - Calcrete hosted
uranium
SOUTH AUSTRALIA
CUMMINS URANIUM PROJECT Wanilla
Uranium targetsWangary 0 5 10
September 2021 Kilometres
GDA 94 Zone 53
Cummins 02
C UM
MIN
S
-
W
A
N
I
L
L
A
B
A
S
I
N
----- End of picture text -----

Figure 17 Cummins uranium exploration project – target locations.

Orpheus has developed exploration programs designed to test all targets and it plans to execute these programs following the successful completion of the proposed IPO.

Targets A and B relate to a sandstone-bearing paleochannel that contains groundwater that drains from uraniumbearing granites (Figure 17). Previous drilling of these paleochannels confirms the presence of sandstone aquifers within the channels. These sandstone aquifers contain the necessary permeable coarse sands and have been shown by gamma ray logging of historic drill holesto contain uranium.

OPTION, SALE AND MILESTONE AGREEMENT

Orpheus holds its interest in the Cummins licence via an option, sale and milestone agreement. This agreement provides for the acquisition by Orpheus of a 100% interest of this large, recently granted exploration licence.

24 Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Northern Territory Projects

Most of the historic uranium production in the Northern Territory has been from the Alligator Rivers Uranium Field (Figure 18). The Alligator Rivers field contains unconformity-related uranium deposits that locally contain more than 100,000 tonne contained U3O8, with grades generally in the range 0.2–2% U3O8. These deposits, which include Ranger, Jabiluka, Koongarra and Nabarlek, are typically hosted close to the unconformity at the base of the MacArthur Basin.

In January 2021, production at the Ranger uranium mine ceased after 40 years. The Ranger mine produced over 132,000 tonnes of U3O8.

Mount Douglas, NT

The Mount Douglas area covers several geological settings that are significantly prospective for deposits of gold, base metals and uranium. These targets have received less attention than surrounding areas during historic exploration efforts due to thin sedimentary cover of the rocks favourable for mineralisation. The area covers portions of the drainage of the Margaret River (part of the Adelaide River system), and the McKinlay/Mary Rivers catchments. The licence areas are centred about 130 kilometres southeast of Darwin (Figure 18) and extend south from the Rustlers Roost Mine near Mount Bundey.

PROPECTIVITY

Mount Douglas features a recent discovery of outcropping uranium-bearing rocks near the base of the Kombolgie Sandstone. Surface sampling return assays of 750 to 1,000ppm uranium, possibly the highest uranium values yet obtained around the Mount Douglas Outlier. These unconformity-related uranium deposits are the most important uranium deposit styles in the Northern Territory.

The discovery was made as a result of a detailed airborne radiometric survey that became available in recent years. This uranium discovery clearly warrants follow-up drilling to test the extent of mineralisation. Orpheus has plans to drill at Mount Douglas shortly after the proposed IPO.

TENURE

The Mount Douglas project was purchased by Orpheus via a two-stage payment of $80,000 (paid in 2021) and $120,000.

• Mount Douglas, NT – unconformity-related uranium covered by one granted licence and one licence application.

• ¬ EL31451, Mount Douglas – 474km[2] – 100%; and

• ¬ ELA32038, Mount Douglas – 127km[2] – 100%.

Ranger North-East, NT

The Ranger North-East uranium exploration project is located within the Alligator Rivers Uranium Field, nearby to the Ranger and Jabiluka uranium deposits in the Northern Territory. The project area is covered by a single exploration licence application held by Orpheus.

PROSPECTIVITY

The Ranger North-East application area features an unconformity-style, hard rock uranium target defined by a strong radiometric (uranium/thorium) anomaly. Geologically, the anomaly sits at the base of the Kombolgie sandstone unit which is prospective for uranium in this area, and is at the intersection of a major northwest trending fault and an intersecting east-northeast structure.

Open file records show limited historic exploration at the site.

TENURE

Orpheus holds a 100% interest in an exploration licence application.

• Ranger North-East, NT – Ranger-style unconformity related targets, Alligator Rivers Uranium Field.

• ¬ ELA32446, Ranger North-East – 64km[2] – 100%.

25

Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

==> picture [455 x 342] intentionally omitted <==

----- Start of picture text -----

Major road / road
National Park
Exploration tenure
Uranium occurrence
Darwin
Howard Springs
Ranger North-East
Jabiru
Batchelor Mount Douglas
Adelaide River
NORTHERN TERRITORY
T-Bone
NORTHERN TERRITORY
NORTHERN TERRITORY Pine Creek
PROJECTS 0 25 50
Location map Kilometres
September 2021
NT 01
----- End of picture text -----

Figure 17 Location of Orpheus Minerals uranium exploration projects in the Northern Territory.

T-Bone, NT

The T-Bone uranium exploration project is located northwest of Katherine, within the South Alligator Valley Mineral Field which contains the Coronation Hill uranium deposit. The Coronation Hill mine produced 26,000 tonnes of uranium ore at 2.6kg/t U3O8 during the 1950s and 1960s.

PROSPECTIVITY

The T-Bone area is defined by uranium/thorium radiometric anomaly that sits on a regional, northwest striking fault zone. Orpheus has identified a possible unconformity-style uranium target beneath alluvium to the north of this structure.

No significant uranium exploration has been undertaken at the target area and Orpheus has plans for a grassroots exploration program at the site following the licence grant and the potential IPO.

TENURE

Orpheus holds a 100% interest in an exploration licence application.

• T-Bone, NT – South Alligator Valley Mineral Field – unconformity related targets near Coronation Hill deposit:

• ¬ ELA32445, T-Bone – 230km[2] – 100%.

26 Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Higginsville, Western Australia

(Gold and Nickel – Argonaut 51%, earning up to 80%)

Agreement Terms

Argonaut and Loded Dog Prospecting Pty Ltd executed the Eastern Goldfields Earn-In Joint Venture and Royalty Agreement on 7 February 2017. Under the agreement, Argonaut has the right to earn an 80% interest in the tenement package according to the following terms:

• Argonaut earned a 51% interest in the tenement package by completing $500,000 in exploration expenditure within two years of commencement; and

• Argonaut may earn a further 29% interest, for a total of 80%, for completing an additional $1,500,000 in exploration expenditure within a further three years.

• Reimbursement of tenement acquisition expenses totalling $250,000 was paid by Argonaut progressively under the agreement.

• An issue of ordinary fully paid Argonaut shares valued at $50,000 was issued on execution of the definitive earn-in agreement.

The earn-in agreement is currently in the second phase.

Work Program

Argonaut is conducting a review of both recently acquired and historic exploration data in order to prioritise prospects within the Higginsville licences for future exploration campaigns.

No field-based work was undertaken at Higginsville during the Quarter.

Kroombit, Queensland

(Zinc-Copper – Argonaut 100%)

Argonaut holds a 100% interest in the Kroombit zinc-copper deposit in Central Queensland via its interest in ML5631 and MDL2002. Mining on ML5631 is subject to a 2% net smelter royalty, payable to Aeris Resources Ltd.

On 11 June 2009 Argonaut announced a maiden resource estimation for the Kroombit deposit. The Indicated and Inferred Resources at Kroombit comprise:

• a Zinc Resource of 5.2 million tonnes at 1.9% zinc and 0.15% copper using a cut-off of 1.0% zinc, for 98,800 tonnes of zinc and 7,800 tonnes of copper; and

• a Copper Resource of 0.9 million tonnes at 1.0% copper at a cut-off of 0.5% copper for 9,000 tonnes of copper.

In addition, Exploration Results are reported comprising a defined Exploration Potential of between:

• 1 million and 1.5 million tonnes at 1.5% to 2.0% zinc, and between

• 0.5 million and 1 million tonnes at 0.7% to 1.3% copper.

No field-based work was undertaken at Kroombit during the Quarter.

Aroona, South Australia

(Zinc – Argonaut 100%)

EL5336, Aroona, is subject to a joint venture agreement with Perilya Limited.

No field-based work was undertaken at Aroona during the Quarter.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Corporate

Exploration and Evaluation expenditure during the quarter comprised:

==> picture [223 x 107] intentionally omitted <==

----- Start of picture text -----

$A’000
Drilling and onsite costs 869
Field support, hire of labour and equipement 425
Government, tenement, community 188
Metallurgy, assaying, gravity 52
Other 65
Total at 2.2 in Appendix 5B 1,599
----- End of picture text -----

Related party payments for the quarter totalled A$180k, comprising the salary to the Managing Director and director fees for the non-executive directors.

There was no production or development expenditure during the quarter.

2021 Annual General Meeting

The Argonaut 2021 annual general meeting will be held on Tuesday 30th November 2021 at 12:00PM ACDT at Argonaut’s office at Level 6, 100 Pirie Street, Adelaide SA 5000[2] .

Appointment of Mr Mick Billing as Non-executive Director of Argonaut

During the Quarter, the Company appointed Michael Robert (Mick) Billing as Non-executive Director of the Company.

Mr Billing has over 40 years of mining and agri-business experience and a background in finance, specialising in recent years in assisting in the establishment and management of junior companies. His career includes experience in company secretarial, senior commercial, and CFO roles including lengthy periods with Bougainville Copper Ltd and WMC Resources Ltd. He has worked extensively with junior resource companies over the past 15 years and was previously Chairman of Thor Mining PLC (AIM & ASX: THR).

Orpheus Minerals Ltd

Argonaut is planning for Orpheus to list on the Australian Securities Exchange.

• IPO preparations are well advanced.

• The Argonaut board is considering:

• ¬ an entitlement offer of Orpheus shares to Argonaut shareholders as part of the IPO process; and

• ¬ a potential in-specie distribution of Orpheus shares to Argonaut shareholders (subject to statutory escrow provisions).

Appointment of Mr Simon Mitchell as Managing Director of Orpheus

Subsequent to the Quarter, the Company appointed Mr Simon Mitchell as Managing Director of Orpheus Minerals Ltd.

Mr Mitchell is a geologist by training who has a significant history working in uranium and precious metals exploration and development, capital markets, and investment banking. Accordingly, his expertise is well suited to leading an ASX listed uranium exploration and development company.

Mr Mitchell was General Manager of Business Development, responsible for mergers and acquisitions, corporate and project financing, and strategy for uranium developer and explorer, Toro Energy Ltd, for seven years from 2006 to 2013. Simon has worked with numerous other companies including Aurora Gold, North Flinders Mines (ultimately Normandy NFM) and Commonwealth Bank. He negotiated acquisitions that led to the consolidation in ownership of the Wiluna uranium mine and was the lead executive in the takeover by Toro of Nova Energy. Mr Mitchell is currently Managing Director of Southern Gold Ltd, a role he will depart from on 29 October 2021.

2 ASX release dated 9 October 2021, Annual General Meeting and Proxy Form.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

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.

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 2020 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 this information in the form and context in which it appears.

The information regarding Resource definition and Exploration Potential for the Kroombit deposit is extracted from a report entitled ‘Maiden resource estimate announced for Queensland zinc-copper project‘. This report was released on 11 June 2009 and is available to view on www.asx.com.au. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

29

Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Tenement Schedule

Table 1 - Summary of mining tenements

==> picture [455 x 196] intentionally omitted <==

----- Start of picture text -----

SOUTH AUSTRALIAN MINERAL EXPLORATION LICENCES
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
Campfire Bore / Coombedown
EL 6569 18/10/2020 17/10/2022 104 10%1
Sandstone Resources Pty Ltd
EL 6199 04/06/2018 03/06/2023 27 Myrtle Springs Kelaray Pty Ltd 100%
EL 6407 18/08/2019 17/08/2022 295 Lake Torrens Kelaray Pty Ltd 30%
EL 5937 [3] 30/03/2017 29/03/2021 794 West Lake Torrens Kelaray Pty Ltd 100%
EL 5945 [3] 20/04/2017 19/04/2021 221 Murdie Kelaray Pty Ltd 100%
EL 6320 [3] 28/02/2019 27/02/2021 198 Andamooka Station Kelaray Pty Ltd 100%
EL 6554 07/12/2020 06/12/2022 960 Frome Downs Trachre Pty Ltd 100%
EL 6555 07/12/2020 06/12/2022 947 Curnamona Trachre Pty Ltd 100%
Option to
Groundwater
EL 6624 23/07/2021 22/07/2027 952 Cummins acquire
Science Pty Ltd
100%
----- End of picture text -----

==> picture [455 x 399] intentionally omitted <==

----- Start of picture text -----

SOUTH AUSTRALIAN MINERAL EXPLORATION LICENCE APPLICATIONS
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
Option to
ELA 29/01/2021 - 987 Erudina Groundwater acquire
2021/00003 [2] Science Pty Ltd
100%
QUEENSLAND MINING LEASE
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
ML 5631 16/05/1974 31/05/2026 0.32 Kroombit Kelaray Pty Ltd 100%
QUEENSLAND MINERAL DEVELOPMENT LICENCE
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
MDL 2002 [3] 03/08/2016 02/08/2021 0.64 Kroombit Kelaray Pty Ltd 100%
ZAMBIAN LARGE SCALE EXPLORATION LICENCES
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
22399-HQ- North Western Mwombezhi
29/12/2017 28/12/2021 521 90%
LEL Province Resources Ltd
23232-HQ- North Western Sunrise Exploration
10/04/2019 09/04/2023 226 90%
LEL Province and Mining Limited
23474-HQ- North Western Sunrise Exploration
18/12/2018 17/12/2022 41.58 90%
LEL Province and Mining Limited
ZAMBIAN SMALL SCALE EXPLORATION LICENCES
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
North Western Sunrise Exploration
23606-HQ-SEL 18/12/2018 17/12/2022 9.4 90%
Province and Mining Limited
North Western Sunrise Exploration
26458-HQ-SEL 10/06/2020 09/06/2024 9.72 90%
Province and Mining Limited
----- End of picture text -----

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

==> picture [455 x 578] intentionally omitted <==

----- Start of picture text -----

WESTERN AUSTRALIAN MINERAL EXPLORATION LICENCES
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
Nawock Loded Dog
E15/1484 [2,3] 18/07/2016 17/07/2021 12 51%
Hayes Hill Prospecting Pty Ltd
Loded Dog
P63/2071 [2,3] 24/04/2017 23/04/2021 1.37 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
P63/2072 [2,3] 24/04/2017 23/04/2021 1.27 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
P63/2073 [2,3] 24/04/2017 23/04/2021 1.54 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
E15/1509 [2,3] 03/05/2017 02/05/2022 3 Eundynie 51%
Prospecting Pty Ltd
Loded Dog
E 15/1510 [2,3] 08/05/2017 07/05/2022 3 Eundynie 51%
Prospecting Pty Ltd
Loded Dog
E 63/1773 [2,3] 08/05/2017 07/05/2022 21 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
E15/1523 [2,3] 08/05/2017 07/05/2022 42 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
E 15/1540 [2,3] 17/05/2017 16/05/2022 9 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P15/6029 [2,3] 04/07/2017 03/07/2021 1.2 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P15/6030 [2,3] 25/05/2017 24/05/2021 1.2 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P15/6031 [2,3] 25/05/2017 24/05/2021 1.2 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P15/6032 [2,3] 25/05/2017 24/05/2021 1.2 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
E15/1489 [2] 14/08/2017 13/08/2022 52 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P63/2077 [2] 26/10/2017 25/10/2021 0.7 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
E15/1588 [2] 01/12/2017 30/11/2022 61 Higginsville 51%
Prospecting Pty Ltd
NORTHERN TERRITORY MINERAL EXPLORATION LICENCES
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
EL 31451 08/09/2017 07/09/2023 466.9 Mount Douglas Trachre Pty Ltd 100%
NORTHERN TERRITORY MINERAL EXPLORATION LICENCE APPLICATIONS
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
ELA 32445 25/06/2020 - 230.24 T-Bone Trachre Pty Ltd 100%
ELA 32446 25/06/2020 - 63.71 Ranger NE Trachre Pty Ltd 100%
ELA 32038 22/11/2018 - 127.49 Mount Douglas Trachre Pty Ltd 100%
----- End of picture text -----

Table 2 – Summary of mining tenements acquired in Quarter

No tenements were acquired in the September 2021 Quarter.

Table 3 – Summary of mining tenements surrendered in Quarter

No tenements were surrendered in the September 2021 Quarter.

1 Kelaray holds a 33% interest in Coombedown Resources Pty. Ltd.

2 Under option agreement.

3 Undergoing renewal.

31

Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2021

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity Argonaut Resources NL ABN Quarter ended (“current quarter”) 97 008 084 848 September 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date 3 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 (provide details if material) 1.9 Net cash from / (used in) operating activities	- - - - (195) (368) - 1 - - - -	- - - - (195) (368) - 1 - - - -
	(562)	(562)
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	- - - (1,599) - -	- - - (1,599) - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 1

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 3 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	- - - - - - - -	- - - - - - - -
	(1,599)	(1,599)
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	- - - (24) - - - - -	- - - (24) - - - - -
	(24)	(24)
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)	5,345 (562) (1,599) (24)	5,345 (562) (1,599) (24)

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 2

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 3 months $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	3,160	3,160
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 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	3,010 150 - -	5,195 150 - -
	3,160	5,345
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 1 180 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.		180
		-

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 3

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) (562) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (1,599) Total relevant outgoings (item 8.1 + item 8.2) (2,161) Cash and cash equivalents at quarter end (item 4.6) 3,160 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 3,160 Estimated quarters of funding available (item 8.6 divided by item 8.3) 1.5 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?		(562) (1,599) (2,161) 3,160 -
			3,160
	Answer: No. Expenditure during this quarter reflects the payment of annual prepayments. Post 30 September the company received the SA Government grant of $330,000
	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: The Board is currently reviewing the rolling forward cash flow budgets to weigh up all funding options. The Board are confident that they will be in a position to achieve further funding.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 4

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: Yes. The Company may raise further capital in the future via the issue of new shares and/or the sale of non-core assets for the purpose funding of its planned mining exploration operations. 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.

28 October 2021 Date: ...................................................................................

The Board of Argonaut Resources NL Authorised by: ...................................................................................

(Name of body or officer authorising release – see note 4)

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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