PERPETUAL RESOURCES LIMITED — Capital/Financing Update 2021

Jul 5, 2021

ASX RELEASE

––––––––––––––––––––––

6th July 2021 ASX: PEC

CORPORATE DIRECTORY

Executive Chairman Julian Babarczy

Managing Director Robert Benussi

Non-Executive Director Brett Grosvenor

Non-Executive Director & Company Secretary George Karafotias

––––––––––––––––––––––

––––––––––––––––––––––

PROJECTS

Beharra Silica Sands Sargon Hub Eneabba Hub

CONTACT

223 Liverpool Street

Darlinghurst NSW 2010

George Karafotias +61 042 086 550

Robert Benussi +61 410 415 335

We wish to acknowledge the Traditional Custodians of the land (Yamatji Southern Regional) on which we are developing the Beharra Project, and pay our respects to their Elders past, present and emerging.

Perpetual Signs Option Agreement to acquire Arrowsmith West Silica Sand Tenement

HIGHLIGHTS:

• Perpetual has acquired an option over the Arrowsmith West tenement, prospective for high grade silica sand.
• Total transaction value (including option payment) of A$100,000 (all consideration in Perpetual shares)
• Arrowsmith West considered highly strategic, being located 3.2km west and immediately south of Perpetual's flagship Beharra Mining Lease and is traversed by the sealed Brand Highway and the Geraldton-Eneabba railway line.
• Arrowsmith West contains prospective target areas located entirely within cleared farming land, with potential for minimal or no impact to existing native vegetation.

Perpetual Resources Limited (ASX: PEC, "PEC", "Perpetual" or "the Company") is pleased to announce the signing of an option and acquisition agreement for the acquisition of Arrowsmith West, a tenement located 3.2km west and immediately south of Perpetual's flagship Beharra high grade silica sand project. Arrowsmith West is considered prospective for high grade silica sand and is considered highly strategic, being located proximal to Beharra and located largely within areas of cleared farming land, introducing potential for rapid project development, should exploration and related studies support a viable project.

Mr. Robert Benussi, Managing Director of Perpetual, commented on the acquisition, "Arrowsmith West presents an exciting opportunity for Perpetual, being so close to our Beharra project and having such large portions of the tenement already cleared for farming purposes. It is our intention to rapidly assess this land package, to determine its geological and economic potential and how it could sequence with development of our regionally leading Beharra Project, which continues to go from strength to strength".

Arrowsmith West Location and Access

Figure 1 – Regional location map showing Arrowsmith West (E70/5798) tenement in blue outline and also showing nearby silica sand tenements.

The Arrowsmith West Project is located 270Kms north of Perth and is situated between the regional town of Dongara and Eneabba, in Western Australia. The project is proximal to the Brand Highway and the Geraldton-Eneabba Railway, with a rail connection direct to Geraldton Port.

The Project area lies within the northern Perth Basin, containing a succession of Quaternary to Permian age deposits up to a total of 12,000 meters thick, locally up to 4,000 meters thick. It comprises a topographic high atop an aeolian sand dune system up to 15 meters thick from the western edge of the deposit with a gentle west and east sloping erosional surface from 80mRL to 60mRL.

The surface is leached loose sand with very high transmissivity and drains from the center of the Project to the west and east. To the west is the seasonal Arrowsmith River which flows only during very high rainfall events and to the east are low land swamps.

Tenure

The Arrowsmith West Project is comprised of one exploration license application: E70/5798. The tenement was applied for on the 26th of May 2021, by Mining Equities Pty Ltd. The area is pending with the Department of Mines. The area of the project is 9 blocks (26.9Km2 ). Infrastructure is considered ideal as the tenement is traversed by the sealed Brand Highway and the Geraldton-Eneabba railway line.

Figure 2 – Outline of Arrowsmith West tenement (in white) being acquired by Perpetual also showing areas of cleared land and infrastructure.

Arrowsmith West Geology

Most economically significant silica sand deposits in Western Australia are found in the coastal regions of the Perth Basin, and the targeted silica sand deposits are the aeolian sand dunes that overlie the Pleistocene limestones and paleo-coastline, which also host the regional heavy mineral deposits.

Regional mapping by the Geological Survey of Western Australia (1995) has delineated three discrete areas of exposed Qp formation across the project area, which can host white high purity silica sands in the region. Adjacent deposits have identified the presence of additional white sand formations beneath yellow sand cover, which will be a priority target of exploration efforts by Perpetual.

Figure 3 – Overview of Arrowsmith West geology overlain by tenement outline.

Overview of Option and Acquisition Agreement

Perpetual has entered into an option agreement to acquire the Arrowsmith West tenement, with the following transaction specifics (Option Agreement);

• Initial option payment of $33,334, payable in Perpetual shares issued at 12.5c, being the 5 day VWAP preceding signing of the Option Agreement (5-day VWAP), paid on signing of the option agreement.
• Milestone 1: Payment of $33,333, payable in Perpetual shares issued at 12.5c (the 5-day VWAP), paid on Granting of EL 70/5798.
• Milestone 2: Payment of $33,333, payable in Perpetual shares issued at 12.5c (the 5-day VWAP), paid on confirmation of a single test result showing the sand on E70/5798 can achieve >99.5% SiO2 and <300ppm Fe2O3 using gravity and magnetic beneficiation processes only.
• The grant of a 1% gross revenue royalty in relation to minerals extracted, produced and sold from the Arrowsmith West tenement.

Total potential maximum consideration for the purchase of Arrowsmith West is therefore A$100,000 (all paid for through the issue of 800,000 Perpetual shares a 12.5c), assuming all milestones are achieved), plus the 1% gross revenue royalty should the project advance to mining operations.

The vendor group selling the Arrowsmith West tenement to Perpetual is Mining Equities Pty Ltd (Mining Equities), which is the same vendor group that originally vended the Beharra tenement into Perpetual in 2018. Mining Equities has three shareholders, being Robert Jewson, Tolga Kumova and Peter Gianni (each in equal proportion).

Future Exploration Activities at Arrowsmith West

Given that the Arrowsmith West tenement overlies a significant area of cleared farming land, Perpetual will look to secure access and undertake reconnaissance exploration activities in coming months, with a view to rapidly assessing the geological potential of the tenement. Further updates will be provided once a formal exploration program is commenced.

About Perpetual Resources Limited

Perpetual Resources Limited (Perpetual) is a focused explorer of silica sands, aiming to produce high purity silica and potentially construction sands for domestic and international markets.

Perpetual's flagship asset, the Beharra Project is located 300km north of Perth and is 96km south of the port town of Geraldton in Western Australia. Access to the Project from Geraldton (to the north) and Perth (to the South) is via the sealed Brand Highway, thence approximately 8.5km east on the Mt Adams unsealed road providing access to the center of the tenure.

Mt Adams Road which Intersects the Beharra Tenement

Brand Highway Intersection with Mt Adams Rd

The port of Geraldton is utilised as a bulk material handling facility and is currently utilised for the export of bulk materials, minerals, and concentrates. Grains, copper concentrates, zinc concentrates, nickel concentrates, mineral sands, talc, and iron ore are currently being exported from the port. Extensive heavy mineral sands mining occurs to the south of the Project area, lime sands mining to the west and natural gas production to the south of the Project.

The Beharra Project comprises of a granted mining lease, M70/1406, covering an effective area of 10.4km2 , and a granted exploration license, E70/5221, covering an effective land area of 56.8km2 .

Auger and air core drilling has confirmed the presence of extensive, high purity silica sands, with a maiden Mineral Resource Estimate completed in July 2020. A detailed Pre-Feasibility Study and Maiden Ore Reserve for Beharra was released to the ASX on March 17th, 2021.

Silica Sands Market

Silica sands have an extensive range of uses including lower purity and grade applications such as construction sand, proppant sand used in well fracturing, and foundry sand. With increasing purity (>99.5% SiO2) uses includes glass making including clear glass. Uses for purity >99.8% includes semi-conductor fillers, LCD screens, and optical glass. Significant expansion of solar PV cell manufacturing capacity is also driving demand for silica sand with Fe2O3 content of <200ppm.

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

For enquiries regarding this release please contact:

Mr. George Karafotias Company Secretary +61 421 086 550

Forward-looking statements

Certain statements contained in this document may be 'forward-looking' and may include, amongst other things, statements regarding production targets, economic analysis, resource trends, pricing, recovery costs, and capital expenditure. These 'forward–looking' statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Perpetual, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements.

Forward-looking statements are often, but not always, identified by the use of words such as 'believe', 'expect', 'anticipate', 'indicate', 'target', 'plan', 'intends', 'budget', 'estimate', 'may', 'will', 'schedule' and others of similar nature. Perpetual does not undertake any obligation to update forward-looking statements even if circumstances or management's estimates or opinions should change. Investors should not place undue reliance on forward-looking statements as they are not a guarantee of future performance.

Disclaimer

No representation or warranty, express or implied, is made by Perpetual that the material contained in this document will be achieved or proved correct. Except for statutory liability and the ASX Listing Rules which cannot be excluded, Perpetual and each of its directors, officers, employees, advisors and agents expressly disclaims any responsibility for the accuracy, correctness, reliability or completeness of the material contained in this document and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person through use or reliance on any information contained in or omitted from this document.

COMPETENT PERSONS STATEMENT

The information in this report that relates to exploration activities for the Beharra Project is based on information compiled and fairly represented by Mr Colin Ross Hastings, who is a Member of the Australasian Institute of Mining and Metallurgy and consultant to Perpetual Resources Limited. Mr Hastings is also a shareholder of Perpetual Resources Limited. Mr Hastings has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he has undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Hastings consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears.