ORPHEUS URANIUM LIMITED — Interim / Quarterly Report 2021

Jan 28, 2021

ARGONAUT RESOURCES NL ABN 97 008 084 848

argonautresources.com

ASX: ARE

CAPITAL STRUCTURE: Issued shares: 2,913 million Listed options: None Unlisted options: 99 million Cash on hand: $4,088,000

DIRECTORS:

Patrick Elliott, Non-Exec Chairman

Lindsay Owler, Director/CEO

Andrew Bursill, Non-Exec Director

Malcolm Richmond, Non-Exec Director

COPPER PROJECTS:

Murdie, South Australia Copper, gold (large IOCG) Phase: Exploration Interest: Argonaut 100%

Lumwana West, Zambia Copper, cobalt (shear-hosted) Phase: Economic Study Interest: Argonaut 90% Agreement Phase: Post-Earn-In, Exploration Operator: Argonaut

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

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Quarterly report

FOR THE PERIOD ENDING 31 DECEMBER 2020

Argonaut Resources NL ( Argonaut or the Company ) (ASX: ARE) is pleased to present the following report for the period to 31 December 2020 ( the Quarter ).

Highlights

Murdie, South Australia – Copper -100%

Drilling Authorisation

• The South Australian Government approved an application by Argonaut’s 100% held subsidiary, Kelaray Pty Ltd, under the Aboriginal Heritage Act 1988 (AHA).

• This is the final approval required to undertake a major drilling program around the western shoreline of Lake Torrens, as well as on the lake itself.

• The approval covers exploration drilling plus resource and reserve definition drilling.

• The authorisation area covers all areas within EL5937 and EL5945 that require specific AHA approval, including all iron oxide copper-gold (IOCG) targets within nearshore and offshore domains (Figure 2).

Drilling Contract

• Argonaut has executed a drilling contract for an initial 3,750m of diamond drilling. The first stage program is expected to involve five drill holes to an average depth of 750m.

• The drilling rig will sit on fit-for-purpose, heavy duty, interlocking mats to protect the salt crust. Vehicles will access the drilling rig via temporary tracks covered by ground protection mats.

• Mobilisation to site is expected to occur in late February 2021.

Gravity Survey

• Geophysical crews are conducting a detailed ground gravity survey over selected areas in order to improve the accuracy of drill-target modelling.

• Since October 2020, over 7,000 gravity stations have been surveyed at Murdie including over several confirmed drilling targets. A further 1,800 gravity stations will be surveyed in the coming weeks.

• Argonaut is pleased with both the results of the survey and the resolution of the data.

Drilling Targets

• The Murdie exploration licence covers two largescale, regional gravity anomalies – Murdie and West Lake Torrens (Figure 1). Efforts are being focused on the West Lake Torrens anomaly.

• These anomalies represent locations with significant volumes of high-density rock that could contain economic IOCG deposits.

• Drilling will target specific ‘residual gravity anomalies’. Residual anomalies are volumes of rock with particularly high density, often within broader, regional anomalies.

• Details of these residual anomalies will be released once final processing and modelling has been completed.

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

Registered Office

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

Government Funding

• The SA Government awarded Argonaut a $320,000 grant towards the drilling of IOCG targets at the Murdie copper project under the Accelerated Discovery Initiative.

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Lumwana West – Copper/Cobalt – 90%

• Argonaut has engaged RPM to carry out a Resource estimation to JORC standards for the Nyungu copper-cobalt deposit at Lumwana West.

• A scoping economic study of the Nyungu copper-cobalt deposit recommenced during September 2020. The Company is generating metallurgical, Resource and mining data to assess various mineral processing scenarios.

• A saleable copper concentrate grading 25.6% copper at a recovery of 87% was produced in the laboratory prior to the Quarter.

• A program of oxidation testing, including roast/leach testwork and albion process testing, commenced during the Quarter. This program will be completed during February 2021.

Uranium Assets – 100%

• Argonaut has assembled a package of prospective, 100% held uranium projects in South Australia and the Northern Territory.

Corporate

Argonaut successfully completed a Share Purchase Plan which was open to existing shareholders of Argonaut. The SPP was heavily oversubscribed and closed early. The Share Purchase Plan followed a share placement late in the previous quarter.

Together the placement and SPP raised A$5.2 million before costs.

Outlook

Copper

• The copper price rose to US$3.60/lb during the Quarter and is expected to continue to strengthen due to tightened supply and broadly growing demand.

• This firm upwards trajectory will serve to underpin Argonaut’s planned Murdie project copper drilling as well as the scope feasibility study of a copper-cobalt mine at Argonaut’s Nyungu deposit at Lumwana West in Zambia.

• Medium-term, Argonaut is well placed to benefit from rising copper prices due to its world-class copper assets at Murdie, Torrens and Lumwana West.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

Murdie, South Australia

(Copper – Argonaut 100%)

Highlights:

• The South Australian Government granted approval to undertake a major drilling program.

• Argonaut has executed a drilling contract for 3,750m of diamond drilling.

• Geophysical crews have substantially completed a detailed ground gravity survey over selected areas to improve the accuracy of drill-target modelling.

• Drilling will target specific ‘residual gravity anomalies’ hosted in or at the contact of the Donington Suite Granite.

• The South Australian Government previously awarded Argonaut a $320,000 grant towards drilling of IOCG targets at the Murdie copper project.

The Murdie project is in South Australia near the eastern margin of the Gawler Craton (Figure 1). The project area covers over 1,000 square kilometres of highly prospective Olympic Domain geology and includes more than 50 discrete gravity targets.

Argonaut holds a 100% interest in the Murdie project.

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.

Drilling Contractor

Argonaut has executed a drilling contract for an initial 3,750m of diamond drilling. This first stage program is expected to involve five drill holes to an average depth of 750m.

The track-mounted Sandvik DE740 drilling rig is capable of drilling cored holes to 1,800m. Drill holes are expected to be between 500 and 1,000m in depth.

The contractor is currently sourcing specialist equipment required for drilling in an environmentally sensitive location. Mobilisation is expected to occur in late February 2021.

Ground Gravity Survey

Geophysical crews have been working at the Murdie area since 20 October 2020. The crews are conducting a detailed ground gravity survey over selected areas to improve the accuracy of drill-target modelling.

To date over 7,000 gravity stations have been surveyed including over the area of several confirmed drilling targets. A further 1,800 gravity stations will be surveyed in the coming weeks.

Argonaut is pleased with both the results of the survey and the resolution of the data.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

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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
Island Dam
EL 5945
EL 5937 Murdie
-31° 00' S
Oak Dam West
(BHP discovery) West Lake Torrens
Khamsin Fremantle Doctor
Woomera
Carrapateena
Torrens JV EL EL 6352 -31° 30' S
Argonaut EL
Argonaut EL Murdie Project
Town
Highway
Main road
Gawler Craton
Railway
Major deposit
Significant prospect
Prospect
SOUTH AUSTRALIA
EASTERN GAWLER CRATON -32° 00' S
Location of tenure 0 20 40
Kilometres
January 2021
Torrens_29
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Figure 1 Lake Torrens exploration licences.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

Target Modelling

Argonaut previously geophysically modelled an airborne gravity survey (Barrick, 2010) and an aeromagnetic survey (SA Government, 2017). These data were modelled by 3D inversion and 54 distinctive anomalies were defined (Figure 2). Of these 54 anomalies, eight gravity-only anomalies were modelled by 2D techniques.

This modelling is currently being repeated using the high-resolution ground gravity data.

The Murdie exploration licence covers two largescale, regional gravity anomalies – Murdie and West Lake Torrens (Figure 1). These anomalies represent locations with significant volumes of high-density rock that could contain economic IOCG deposits. Efforts are being focused on the West Lake Torrens anomaly.

Drilling will target specific “residual gravity anomalies”. Residual anomalies are volumes of rock with particularly high density often within broader, regional anomalies. Details of these residual anomalies will be released once final processing and modelling has been completed.

Details of residual gravity anomalies in the area of Carrapateena Well will be released once final processing and modelling has been completed.

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.

Lower Cost Drilling

The Murdie drill targets are in three operational domains (Figure 2): onshore, nearshore and offshore. Each of these domains involves different drilling procedures due to different surface and subsurface conditions. Table 1 below summaries these conditions.

Many of the granite-hosted gravity targets at the Murdie project are located at the shoreline of the Lake Torrens (Figure 2), which means that these targets can be drilled without the cost of helicopter support.

Nearshore targets and the most prospective offshore targets can be drilled without intersecting the artesian aquifer that frustrated 2019 drilling efforts at the neighbouring Torrens anomaly.

Table 1 Murdie Project operational domains and required drilling techniques.

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Drilling Techniques
Helicopter Supported Artesian Groundwater Percussion Pre-Collar
Onshore No No Yes
Nearshore No No Yes
Offshore – No Aquifer Yes No No
Offshore – Aquifer Yes Yes No
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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.

Appropriately, the authorisation requires Argonaut to:

• report regularly to representatives of certain Aboriginal groups;

• facilitate visits by Aboriginal representatives to the authorisation area to observe the results of rehabilitation measures;

• adhere to the Company’s cultural heritage management plan, particularly chance find procedures and the cultural and legal induction process; and

• avoid a sand dune which is located on Andamooka Island outside the boundaries of EL5937 and EL5945.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

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740,000m E 760,000m E
Andamooka
Island
ANDAMOOKA BOSWORTH
EL 6407
Torrens
6,580,000m N
Bosworth
Sketching Pile B
BOSWORTH
White Well
Murdie Island
Borehole Well 2 EL 5945
Carrapateena Hill
6,560,000m N
Sketching Pile A
LAKE TORRENS
Carrapateena Well
Sells Bore
Khamsin
Fremantle Doctor Smith Hill
Carrapateena 0 5 10
Kilometres
6,540,000m N
Homestead
Lake Torrens National Park
Track
PERNATTY
Exploration Licence
Pastoral Lease boundary
Residual Gravity Targets
High Priority
Medium Priority
Low Priority Noltenius Hill EL 5937 Shore Hill SOUTH AUSTRALIA
MURDIE PROJECT
Exploration Domains
Onshore Horse Well Gravity Targets and
Nearshore Exploration Domains
Offshore January 2021
Hatch Hill Torrens 44
T
E
R
TI
A
R
Y
A
Q
UIF
E
R
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Figure 2 Murdie Project gravity targets and exploration domains.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

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.

Lumwana West, Zambia

(Copper-Cobalt – Argonaut 90%)

Highlights

• Argonaut has engaged RPM to carry out a Resource estimation to JORC standards for the Nyungu copper-cobalt deposit at Lumwana West.

• A scoping economic study of the Nyungu copper-cobalt deposit recommenced during September 2020. The Company is generating metallurgical, Resource and mining data to support various mineral processing scenarios.

• A saleable copper concentrate grading 25.6% copper at a recovery 87% was produced in the laboratory prior to the Quarter.

• A program of oxidation testing, including roast/leach testwork and albion process testing commenced during the Quarter. This program will be completed during February 2021.

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. There are several major mines nearby to Lumwana West in similar geological settings (Figure 3).

Argonaut, via its 90% held subsidiary, Mwombezhi Resources Ltd, has been successful in intercepting broad copper and cobalt intercepts at the Nyungu deposit. Argonaut is working on a series of scoping studies to better understand the economics of a potential mine.

Table 2 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 governmental
Jurisdiction
pressures favour the development of new mines.
Infrastructure Lumwana West is located at major electricity and transport corridors (Figure 3).
The Nyungu copper-cobalt deposit has predictable geometry and scope for significant growth with
Resource
contined drilling (Table 3).
Very low stripping ration of 1.5 tonnes of waste rock for every 1 tonne of ore. Resource drilling to
Mining
greater depths is warranted.
Processing Fast, high copper recovery from flotation of both transitional and primary copper ore minerals.
Economics Scoping economic study has commenced.
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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

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350,000 mE 400,000 mE
Location
DEMOCRATIC
REPUBLIC OF
CONGO
ZAMBIA
Kansanshi
8,650,000 mN Lumwana Solwezi
ZAMBIA
Sentinel
Road
Power transmission
Power transmission
under construction
22399-HQ-LEL Aircraft facility
Processing plant
Nyungu Deposit and Targets 0 25 Proposed railwayTenement boundaryMineral deposit
kilometres projected to surface
Target areas
Lumwana12
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Figure 3 Lumwana West licence showing the Nyungu copper-cobalt deposit plus nearby mines and infrastructure.

Resource Estimation

Argonaut has engaged RPM carry out a Resource estimation to JORC standards for the Nyungu copper-cobalt deposit. Argonaut will report on the outcome of this work once a final report has been completed. A Resource estimation would replace the Exploration Target estimation shown below.

Copper and Cobalt Exploration Targets

RPM have previously estimated Exploration Targets for both copper and cobalt mineralisation at Nyungu. These are shown below in Table 3.

Table 3. Nyungu March 2017 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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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.

* 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 2012 standards.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

Mining Study

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

Modelling shows excellent deposit geometry via a very low stripping ratio.

• Stripping ratio of 1.5 to 1 for the optimum pit at the February 2018 copper price; and

• Stripping ratio of 2.3 to 1 to a depth of >300m at 150% of the February 2018 copper price, indicating the deposit has a low sensitivity to stripping ratio.

RPM concluded the project had economic potential and warrants further studies.

Further studies including mining scheduling are being undertaken at present.

Metallurgical Test Work

Argonaut exported metallurgical test samples to Australia for a program of testwork. Mineralogy, comminution and flotation testwork is substantially completed for samples taken from four potential ore types within the Nyungu copper-cobalt deposit.

A saleable copper concentrate grading 25.6% copper at a recovery 87% was produced in the laboratory prior to the Quarter. This copper concentrate is of a specification that can be sold to nearby smelters.

Flotation tests demonstrate that a flotation circuit can achieve high recovery from both transitional zone copper minerals (an average of 78% and up to 88% recovery) and primary zone copper sulphides (an average of 88% and up to 96% recovery). It is unusual and encouraging to achieve such high copper recovery via the flotation of transitional (partially oxidised) mineralisation.

Efficient production of a copper concentrate from transitional zone mineralisation makes strong, positive contribution to project economics.

Various oxidation and leaching tests plus Albion process testing commenced during the Quarter and are schedule for completion during February 2021.

Various solvent extraction and electro-winning (SX/EW) tests will follow. Results from metallurgical studies and the mining study will feed into the scoping economic study.

Torrens, South Australia

(Copper – Argonaut 30%)

Recommencement of Torrens JV exploration

The Torrens joint venture partners previously decided to recommence exploration activities at the Torrens Joint Venture project.

A passive seismic survey was funded by the joint venture during the Quarter. The results of this survey will assist in refining geological and geophysical models used for drill targeting.

General Comments

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.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

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 40km of BHP Group’s Oak Dam copper discovery, 50km of OZ Minerals’ Carrapateena copper-gold deposit and 75km 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.

Red Dam, South Australia

(Copper – Argonaut 100%)

Argonaut holds exploration licence EL6320 located adjacent to the Torrens Project (Figure 1). 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.

Lake Torrens South, South Australia

(Copper – Argonaut 100%)

Argonaut holds exploration licence 6352 located southeast of the Torrens and Murdie projects (Figure 1). The 993 square kilometre licence area covers a portion of southern Lake Torrens. Argonaut now has a commanding 2,501 square kilometre land position.

Kamapanda, Zambia

(Copper-Cobalt – Argonaut 90%)

During the quarter, operational approvals were sought to conduct exploration activities at the Kamapanda project. A program of regional stream sediment sampling is planned to outline both gold and copper potential.

The Kamapanda project is located in the Central African Copperbelt, North-Western Province, Zambia (Figure 4). The area is prospective for large tonnage, low to medium grade copper-cobalt deposits and alluvial gold.

Kalaba East, Zambia

(Copper-Cobalt – Argonaut 90%)

During the Quarter, operational approvals were sought to conduct exploration activities at the Kalaba East project. The Kalaba East project lies adjacent to ARC Minerals’ recent Cheyeza East prospect and Muswema North prospect and west of the 300,000tpa Sentinel copper mine, (Figure 4).

At Cheyeza East ARC Minerals intercepted 18m at 2.35% copper and 39m at 1.47% copper.

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

Musangila, Zambia

(Copper-Cobalt – Argonaut 90%)

During the previous quarter, Argonaut via its 90% held subsidiary, Sunrise Exploration and Mining Limited was successful in acquiring the Musangila project (Figure 4) and is currently awaiting operational approvals and consent from Zambian authorities to conduct reconnaissance exploration activities prior to undertaking a confirmatory geochemical sampling program and RC drilling.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

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----- 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 4 Exploration licences located within the Northwestern Province, Zambia.

Uranium Assets, South Australia and Northern Territory

(Uranium – Argonaut 100%)

Argonaut has assembled a package of prospective, 100% held uranium projects in South Australia and the Northern Territory. Projects were chosen based on a systematic review of uranium deposit-styles and available projects. The review covered uranium opportunities available for application in South Australia or Northern Territory. The four projects selected by Argonaut were on open ground and were secured via application to the relevant department.

The projects secured by Argonaut are (also see Summary of Mining Tenements):

• Frome Embayment, SA – Beverley and Honeymoon-style sandstone-hosted, roll front targets:

• ¬ Frome Downs – 960km[2] ; and

• ¬ Curnamona – 947km[2] ;

• Alligator Rivers Uranium Field, NT – Ranger-style unconformity related targets:

• ¬ Ranger North-East – 64km[2] ;

• South Alligator Valley Mineral Field – unconformity related targets near Coronation Hill deposit:

• ¬ T-Bone – 230km[2] .

In addition to the projects already secured, Argonaut has acted to secure additional exploration projects/deposits. Argonaut has executed an agreement to acquire a Northern Territory exploration licence and a contiguous licence application that cover attractive hard rock uranium targets near the base of the Kombolgie sandstone near Mount Douglas.

Argonaut is actively considering potential corporate structures to house and fund these new assets in a way that compliments the Company’s existing focus on copper and gold.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

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

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.

Argonaut plans to capitalise on its Kroombit holding at a time of higher zinc prices. 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 31 December 2020

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.

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 his 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 nnouncement.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

Tenement Schedule

Table 1 – Summary of mining tenements

South Australian Mineral Exploration Licences

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Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
Coombedown
EL 5998 [3] 21/05/2017 20/05/2020 33 Campfire Bore 10% [1]
Resources Pty Ltd
EL 6199 04/06/2018 03/06/2020 27 Myrtle Springs Kelaray Pty Ltd 100%
EL 6407 18/08/2019 17/08/2022 295 Lake Torrens Kelaray Pty Ltd 30%
Coombedown
EL 5732 18/10/2015 17/10/2020 104 Sandstone 10% [1]
Resources Pty Ltd
EL 5937 30/03/2017 29/03/2021 794 West Lake Torrens Kelaray Pty Ltd 100%
EL 5945 20/04/2017 19/04/2021 221 Murdie Kelaray Pty Ltd 100%
EL 6320 28/02/2019 27/02/2021 198 Andamooka Station Kelaray Pty Ltd 100%
EL 6352 24/06/2019 23/06/2021 993 Lake Torrens Area Kelaray Pty Ltd 100%
EL 6554 7/12/2021 6/12/2022 960 Frome Downs Kelaray Pty Ltd 100%
EL 6555 7/12/2021 6/12/2022 947 Curnamona Kelaray 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 03/08/2016 02/08/2021 0.64 Kroombit Kelaray Pty Ltd 100%
Zambian Large Scale Exploration Licence
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 Licence
Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
23606-HQ- North Western Sunrise Exploration
18/12/2018 17/12/2022 9.4 90%
SEL Province and Mining Limited
26458-HQ- North Western Sunrise Exploration
10/06/2020 9/06/2024 9.72 90%
SEL Province and Mining Limited
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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

Western Australian Mineral Exploration Licences

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Tenement Granted Expiry Area (km [2] ) Locality Licensee Interest
Loded Dog
E15/1484 [2] 18/07/2016 17/07/2021 12 Nawock-Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
P63/2071 [2] 24/04/2017 23/04/2021 1.37 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
P63/2072 [2] 24/04/2017 23/04/2021 1.27 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
P63/2073 [2] 24/04/2017 23/04/2021 1.54 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
E15/1509 [2] 03/05/2017 02/05/2022 3 Eundynie 51%
Prospecting Pty Ltd
Loded Dog
E 15/1510 [2] 08/05/2017 07/05/2022 3 Eundynie 51%
Prospecting Pty Ltd
Loded Dog
E 63/1773 [2] 08/05/2017 07/05/2022 21 Hayes Hill 51%
Prospecting Pty Ltd
Loded Dog
E15/1523 [2] 08/05/2017 07/05/2022 42 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
E 15/1540 [2] 17/05/2017 16/05/2022 9 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P15/6029 [2] 04/07/2017 03/07/2021 1.2 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P15/6030 [2] 25/05/2017 24/05/2021 1.2 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P15/6031 [2] 25/05/2017 24/05/2021 1.2 Higginsville 51%
Prospecting Pty Ltd
Loded Dog
P15/6032 [2] 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 Licence Applications
Tenement Applied Expiry Area (km [2] ) Locality Licensee Interest
EL32445 25/06/2020 - 230.24 T-Bone Kelaray Pty Ltd 100%
EL32446 25/06/2020 - 63.71 Ranger NE Kelaray Pty Ltd 100%
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Table 2 – Summary of mining tenements acquired in Quarter

No tenements were acquired in the December 2020 Quarter.

Table 3 - Summary of mining tenements surrendered in Quarter

No tenements were surrendered in the December 2020 Quarter.

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

• 2 Under option agreement.

• 3 Undergoing renewal.

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Argonaut Resources NL | QUARTERLY REPORT | For the period ending 31 December 2020

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 97 008 084 848

Quarter ended (“current quarter”)

December 2020

Consolidated statement of cash flows	Current quarter $A’000	Year to date 6 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	- - - - (290) (456) - 1 - - 13 -	- - - - (445) (585) - 5 - - 50 -
	(732)	(975)
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	- - - (518) - -	- - - (1,046) - -

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

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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 6 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	- - - - - - - -	- - - - - - - -
	(518)	(1,046)
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 Placement monies received on deposit 3.10 Net cash from / (used in) financing activities	5,204 - - (250) - - - - (965)	5,204 - - (265) - - - - -
	3,989	4,939
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)	1,349 (732) (518) 3,989	1,170 (975) (1,046) 4,939

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

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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 6 months $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	4,088	4,088
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 Placement monies received on deposit 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	13 4,075 - -	24 360 - 965
	4,088	1,349
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 1 306 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, suchpayments. Amounts included at 6.1 are – $A’000 Director fees 189 and wages 117		306
		-

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

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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) (732) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (518) Total relevant outgoings (item 8.1 + item 8.2) (1,250) Cash and cash equivalents at quarter end (item 4.6) 4,088 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 4,088 Estimated quarters of funding available (item 8.6 divided by item 8.3) 3.2 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?	(732) (518) (1,250) 4,088 -
		4,088
	Answer: n/a
	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: n/a

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

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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: n/a

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.

Date: 29[th] January 2021

Authorised by: By the Board

(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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